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FAIR VALUE MEASUREMENTS (Tables)
 6 Months Ended
Jun. 30, 2012
Fair Value Measurements Tables  
Significant unobservable inputs used to measure fair value

 Significant unobservable inputs at June 30, 2012 used to measure fair value included:

Direct annual servicing cost per loan  $50 
Direct annual servicing cost per loan in process of foreclosure  $500 
Weighted average prepayment speed: CPR   1.32%
Weighted average prepayment speed: PSA   276%
Weighted average discount rate   9.30%
Asset reinvestment rate   4.00%
Short-term cost of funds   0.25%
Escrow inflation adjustment   1.00%
Servicing cost inflation adjustment   1.00%

 
Fair value measured on a recurring basis

 

      Recurring Fair Value Measurements Using
      Quoted Prices in Active Markets  Significant Other  Significant
      for Identical  Observable  Unobservable
      Assets  Inputs  Inputs
(dollars in thousands)     (Level 1)  (Level 2)  (Level 3)
             
Assets measured at fair value on a recurring basis at June 30, 2012:      
             
Securities available for sale:            
             
U.S. Treasury and agency debentures  $32,550   $—   $32,550   $— 
U.S. agency issued residential MBS and CMO   60,675    —    60,675    — 
Privately issued residential MBS and CMO   293    —    293    — 
Other equity securities   47    —    —    47 
                     
Total securities available for sale   93,565    —    93,518    47 
Loans held for sale   452    —    452    — 
Mortgage rate lock commitments   143    —    143    — 
Interest rate swap agreements   702    —    702    — 
                     
Total assets  $94,862   $—   $94,815   $47 
                     
Liabilities – Interest rate swap agreements  $1,381   $—   $1,381   $— 
                     
Assets measured at fair value on a recurring basis at December 31, 2011: 
                     
Securities available for sale:                    
                     
U.S. Treasury and agency debentures  $518   $—   $518   $— 
U.S. agency issued residential MBS and CMO   58,389    —    58,389    — 
Privately issued residential MBS and CMO   429    —    429    — 
Other equity securities   47    —    —    47 
                     
Total securities available for sale   59,383    —    59,336    47 
Loans held for sale   39    —    39    — 
Mortgage rate lock commitments   60    —    60    — 
Interest rate swap agreements   555    —    555    — 
                     
Total assets  $60,037   $—   $59,990   $47 
                     
Liabilities – Interest rate swap agreements  $1,131   $—   $1,131   $— 

 
Reconciliation of fair value measurements using significant unobservable inputs

 

Reconciliation of fair value measurements using significant unobservable inputs:

 

   Securities
   Available
(dollars in thousands)  For Sale
      
Balance at January 1, 2011:  $51 
Total realized/unrealized gains and (losses):     
Included in earnings   — 
Included in other comprehensive income   — 
Purchases, maturities, and sales   — 
Transferred from Level 2 to Level 3   — 
Transferred to held to maturity classification   — 
      
Balance at June 30, 2011  $51 
      
Total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2011  $— 
      
Balance at January 1, 2012  $47 
Total realized/unrealized gains and (losses):     
Included in earnings   — 
Included in other comprehensive income   — 
Purchases, maturities, and sales   — 
Transferred from Level 2 to Level 3   — 
Transferred to held to maturity classification   — 
      
Balance at December 31, 2012  $47 
      
Total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2012  $— 

 
Fair value measured on nonrecurring basis

 

      Nonrecurring Fair Value Measurements Using
      Quoted Prices in      
      Active Markets  Significant Other  Significant
      for Identical  Observable  Unobservable
      Assets  Inputs  Inputs
   ($000s)  (Level 1)  (Level 2)  (Level 3)
             
Assets measured at fair value on a nonrecurring basis at June 30, 2012: 
                     
Impaired loans  $2,907   $—   $—   $2,907 
Foreclosed assets   2,642    —    450    2,192 
Mortgage servicing rights   1,110    —    —    1,110 
                     
Total assets  $6,659   $—   $450   $6,209 
                     
Assets measured at fair value on a nonrecurring basis at December 31, 2011: 
                     
Impaired loans  $4,086   $—   $—   $4,086 
Foreclosed assets   2,939    —    587    2,352 
Mortgage servicing rights   1,205    —    —    1,205 
                     
Total assets  $8,230   $—   $587   $7,643 

 
Schedule of Carrying Value and Estimated Fair Values of Financial Instruments

 

The carrying amounts and fair values of PSB’s financial instruments consisted of the following:

 

   June 30, 2012
   Carrying  Estimated  Fair Value Hierarchy Level
   Amount  Fair Value  Level 1  Level 2  Level 3
Financial assets ($000s):               
                
Cash and cash equivalents  $39,751   $39,751   $39,751   $—   $— 
Securities   164,008    166,129    —    164,251    1,878 
Bank certificates of deposit   2,484    2,556    —    —    2,556 
Net loans receivable and loans held for sale   466,782    472,642    —    897    471,745 
Accrued interest receivable   2,366    2,366    —    —    2,366 
Mortgage servicing rights   1,110    1,110    —    —    1,110 
Mortgage rate lock commitments   143    143    —    143    — 
FHLB stock   2,761    2,761    —    —    2,761 
Cash surrender value of life insurance   11,608    11,608    11,608    —    — 
Interest rate swap agreements   702    702    —    702    — 
                          
Financial liabilities ($000s):                         
                          
Deposits  $557,407   $560,131   $—   $—   $560,131 
FHLB advances   55,124    57,074    —    57,074    — 
Other borrowings   18,086    19,608    —    15,022    4,586 
Senior subordinated notes   7,000    7,234    —    —    7,234 
Junior subordinated debentures   7,732    4,961    —    —    4,961 
Interest rate swap agreements   1,381    1,381    —    1,381    — 
Accrued interest payable   640    640    —    —    640 

 

The carrying amounts and fair values of PSB’s financial instruments consisted of the following at December 31, 2011:

 

   December 31, 2011
   Carrying  Estimated  Fair Value Hierarchy Level
   Amount  Fair Value  Level 1  Level 2  Level 3
Financial assets ($000s):               
                
Cash and cash equivalents  $38,205   $38,205   $38,205   $—   $— 
Securities   108,677    110,134    —    108,346    1,788 
Bank certificates of deposit   2,484    2,577    —    —    2,577 
Net loans receivable and loans held for sale   437,596    444,799    —    39    444,760 
Accrued interest receivable   2,068    2,068    —    —    2,068 
Mortgage servicing rights   1,205    1,205    —    —    1,205 
Mortgage rate lock commitments   60    60    —    60    — 
FHLB stock   3,250    3,250    —    —    3,250 
Cash surrender value of life insurance   11,406    11,406    11,406    —    — 
Interest rate swap agreements   555    555    —    555    — 
                          
Financial liabilities ($000s):                         
                          
Deposits  $481,509   $484,640   $—   $—   $484,640 
FHLB advances   50,124    52,547    —    52,547    — 
Other borrowings   19,691    21,454    —    15,163    6,291 
Senior subordinated notes   7,000    7,120    —    —    7,120 
Junior subordinated debentures   7,732    4,849    —    —    4,849 
Interest rate swap agreements   1,131    1,131    —    1,131    — 
Accrued interest payable   623    623    —    —    623