Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Measurements [Abstract]

Schedule of unobservable inputs used to measure fair value included

Direct annual servicing cost per loan	$	60
Direct annual servicing cost per loan in process of foreclosure	$	600
Weighted average prepayment speed: CPR		23.11	%
Weighted average prepayment speed: PSA		478.10	%
Weighted average cash flow discount rate		7.91	%
Asset reinvestment rate		4.00	%
Short-term cost of funds		0.25	%
Escrow inflation adjustment		1.00	%
Servicing cost inflation adjustment		1.00	%

Schedule of fair value assets 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 September 30, 2014:
Securities available for sale:
U.S. agency issued residential MBS and CMO	$	72,147		–	$	72,147		$–
Privately issued residential MBS and CMO		30		–		30		–
Solomon Hess SBA loan fund (CDFI Fund)		950		–		950		–
Other equity securities		47		–		–		47
Total securities available for sale		73,174		–		73,127		47
Loans held for sale		999				999
Mortgage rate lock commitments		21		–		21		–
Interest rate swap agreements		193		–		193		–
Total assets	$	74,387		–	$	74,340	$	47
Liabilities – Interest rate swap agreements	$	520	$	–	$	520	$	–

Assets measured at fair value on a recurring basis at December 31, 2013:
Securities available for sale:
U.S. Treasury and agency debentures	$	999	$	–	$	999	$	–
Obligations of states and political subdivisions		159				159		–
U.S. agency issued residential MBS and CMO		59,390		–		59,390		–
Privately issued residential MBS and CMO		105		–		105		–
Solomon Hess SBA loan fund (CDFI Fund)		950				950		–
Other equity securities		47		–		–		47
Total securities available for sale		61,650		–		61,603		47
Loans held for sale		150		–		150		–
Mortgage rate lock commitments		14		–		14		–
Interest rate swap agreements		276		–		276		–
Total assets	$	62,090	$	–	$	62,043	$	47
Liabilities – Interest rate swap agreements	$	714	$	–	$	714	$	–

Summary of reconciliation of fair value measurements using significant unobservable inputs

	Securities
	Available
(dollars in thousands)	For Sale
Balance at January 1, 2013:	$	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 September 30, 2013	$	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 September 30, 2013	$	–
Balance at January 1, 2014	$	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 September 30, 2014	$	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 September 30, 2014	$	–

Schedule of assets measured at fair value on a non recurring 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 September 30, 2014:
Impaired loans	$	2,059	$	–	$	644	$	1,415
Foreclosed assets		1,724		–		509		1,215
Mortgage servicing rights		1,734		–		–		1,734
Other intangible assets		297		–		–		297
Total assets	$	5,814	$	–	$	1,153	$	4,661
Assets measured at fair value on a nonrecurring basis at December 31, 2013:
Impaired loans	$	1,720	$	–	$	–	$	1,720
Foreclosed assets		1,750		–		792		958
Mortgage servicing rights		1,696		–		–		1,696
Total assets	$	5,166	$	–	$	792	$	4,374

Schedule of carrying amounts and fair values of PSB's financial instruments

	September 30, 2014
		Carrying		Estimated		Fair Value Hierarchy Level
		Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets ($000s):
Cash and cash equivalents		$	12,817	$	12,817	$	12,817	$	–	$	–
Securities			143,576		144,819		–		142,955		1,864
Bank certificates of deposit			3,424		3,452		–		–		3,452
Net loans receivable and loans held for sale			534,087		536,240		–		1,643		534,597
Accrued interest receivable			2,165		2,165		–		–		2,165
Mortgage servicing rights			1,734		1,734		–		–		1,734
Mortgage rate lock commitments			21		21		–		21		–
FHLB stock			2,556		2,556		–		–		2,556
Cash surrender value of life insurance			13,127		13,127		–		13,127		–
Interest rate swap agreements			193		193		–		193		–
Financial liabilities ($000s):
Deposits		$	602,077	$	599,665	$	–	$	–	$	599,665
FHLB advances			31,372		31,421		–		31,421		–
Other borrowings			18,211		18,703		–		13,992		4,711
Senior subordinated notes			4,000		3,563		–		–		3,563
Junior subordinated debentures			7,732		7,186		–		–		7,186
Interest rate swap agreements			520		520		–		520		–
Accrued interest payable			411		411		–		–		411

The carrying amounts and fair values of PSB’s financial instruments consisted of the following at December 31, 2013:

	December 31, 2013
	Carrying		Estimated		Fair Value Hierarchy Level
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets ($000s):
Cash and cash equivalents	$	31,522	$	31,522	$	31,522	$	–	$	–
Securities		133,279		133,322		–		131,479		1,843
Bank certificates of deposit		2,236		2,280		–		–		2,280
Net loans receivable and loans held for sale		510,030		514,309		–		150		514,159
Accrued interest receivable		2,076		2,076		–		–		2,076
Mortgage servicing rights		1,696		1,696		–		–		1,696
Mortgage rate lock commitments		14		14		–		14		–
FHLB stock		2,556		2,556		–		–		2,556
Cash surrender value of life insurance		12,826		12,826		–		12,826		–
Interest rate swap agreements		276		276		–		276		–
Financial liabilities ($000s):
Deposits	$	577,514	$	578,387	$	–	$	–	$	578,387
FHLB advances		38,049		38,511		–		38,511		–
Other borrowings		20,441		21,251		–		14,364		6,887
Senior subordinated notes		4,000		3,489		–		–		3,489
Junior subordinated debentures		7,732		7,085		–		–		7,085
Interest rate swap agreements		714		714		–		714		–
Accrued interest payable		477		477		–		–		477