Note 19 - Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2015

Disclosure Text Block Supplement [Abstract]

Financial Instruments Disclosure [Text Block]

19. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The estimated fair values of financial instruments that are reported at amortized cost in the Company’s statement of financial condition, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value, are as follows (in thousands):

	December 31, 2015				December 31, 2014
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
FINANCIAL ASSETS:
Level 1 inputs:
Cash and cash equivalents	$	52,131	$	52,131	$	113,086	$	113,086
Federal funds sold		18		18		--		--
Level 2 inputs:
Interest-bearing time deposits in banks		10,930		11,016		12,421		12,663
Other investment securities		9,563		9,563		5,864		5,864
Loans held for sale		7,326		7,326		6,409		6,409
Cash surrender value of life insurance		52,602		52,602		44,130		44,130
Accrued interest receivable		6,157		6,157		4,485		4,485
Level 3 inputs:
Loans receivable—net		1,444,102		1,462,669		1,041,222		1,063,529
FINANCIAL LIABILITIES:
Level 1 inputs:
Short term borrowings		12,075		12,075		12,083		12,083
Level 2 inputs:
Checking, money market and savings accounts		1,094,442		1,094,442		800,203		800,203
Other borrowings		72,380		73,335		61,258		62,175
Accrued interest payable		292		292		304		304
Level 3 inputs:
Certificates of deposit		513,241		512,430		463,594		464,650

For cash and cash equivalents and federal funds sold, the carrying amount approximates fair value (level 1). For other investment securities, loans held for sale, cash surrender value of life insurance and accrued interest receivable, the carrying value is a reasonable estimate of fair value, primarily because of the short-term nature of the instruments or, as to other investment securities, the ability to sell the stock back to the issuer at cost (level 2). Interest bearing time deposits in banks were valued using discounted cash flows based on current rates for similar types of deposits (level 2). Fair values of impaired loans are estimated as described in Note 15. Non-impaired loans were valued using discounted cash flows. The discount rates used to determine the present value of these loans were based on interest rates currently being charged by the Bank on comparable loans (level 3).

For securities sold under agreements to repurchase, the carrying amount approximates fair value (level 1). The fair value of checking accounts, savings accounts and money market deposits is the amount payable on demand at the reporting date (level 2). The fair value of fixed-maturity certificates of deposit is estimated using the discount rates currently offered by the Bank for deposits of similar terms (level 3). The fair value of other borrowings is estimated using the rates for borrowings of similar remaining maturities at the reporting date (level 2). For accrued interest payable the carrying value is a reasonable estimate of fair value, primarily because of the short-term nature of the instruments (level 2).

The fair value estimates presented herein are based on pertinent information available to management as of December 31, 2015 and December 31, 2014. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since the reporting date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.