FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

FAIR VALUE MEASUREMENT

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. For example, investment securities available for sale are recorded at fair value on a recurring basis. Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, impaired loans and certain other assets. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value.

Investment Securities Available for Sale. Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market exchange prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include residential mortgage-backed securities issued by government sponsored entities, commercial mortgage-backed securities, both municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. The Company had no Level 3 securities as of December 31, 2012 or 2011.

Derivatives. Derivative instruments include interest rate swaps and caps and are valued on a recurring basis using models developed by third-party providers. This type of derivative is classified as Level 2 within the hierarchy.

Loans Held for Sale. Mortgage loans held for sale are carried at the lower of cost or estimated fair value. The fair values of mortgage loans held for sale are based on commitments on hand from investors within the secondary market for loans with similar characteristics. As a result, any fair value adjustments for mortgage loans held for sale are classified as nonrecurring Level 2.  Related to the mortgage lending program, the Company enters into interest rate lock commitments with customers and commitments to sell mortgages to various investors. Interest rate lock commitments are recorded at estimated fair value based on current secondary market pricing and are included in mortgage loans held for sale on the consolidated balance sheet. Interest rate lock commitments are classified as recurring Level 3.

Loans. Loans are not recorded at fair value on a recurring basis. However, certain loans are determined to be impaired, and those loans are charged down to estimated fair value. The fair value of impaired loans that are collateral dependent is based on collateral value. For impaired loans that are not collateral dependent, estimated value is based on either an observable market price, if available, or the present value of expected future cash flows. Those impaired loans not requiring a charge-off represent loans for which the estimated fair value exceeds the recorded investments in such loans. When the fair value of an impaired loan is based on an observable market price or a current appraised value with no adjustments, the Company records the impaired loan as nonrecurring Level 2. When an appraised value is not available, or the Company determines the fair value of the collateral is further impaired below the appraised value, and there is no observable market price, the impaired loan is classified as nonrecurring Level 3.

Interest Rate Lock Commitments. The fair value of interest rate lock commitments is based on servicing rate premium, origination income net of origination costs, fall out rates and changes in loan pricing between the commitment date and period end. The Company classifies interest rate lock commitments as Level 3. There have been no changes in valuation techniques during the year ended December 31, 2012.

The following table provides the components of the change in fair value of interest rate lock commitments for the years ended December 31, 2012 and 2011. Interest rate lock commitments are measured at fair value on a recurring basis and classified as Level 3.

	Successor Company			Predecessor Company
Interest Rate Lock Commitments Level 3	February 1 to December 31, 2012			January 1 to January 31, 2012			Year Ended December 31, 2011
Balance at January 1	$	268		$	212		$	53
Issuances	2,465			134			1,227
Settlements	(1,939		)	(78		)	(1,068		)
Balance at December 31	$	794		$	268		$	212

The difference between the gross issuances and settlements for the period is included in mortgage banking income within non-interest income.

Foreclosed Assets. Foreclosed assets are adjusted to fair value upon transfer of loans to foreclosed assets. Subsequently, foreclosed assets are carried at lower of cost or net realizable value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. Given the lack of observable market prices for identical properties, the Company classifies foreclosed assets as nonrecurring Level 3.

The following tables summarize information about assets and liabilities measured at fair value as of December 31, 2012 and 2011:

				Successor Company
				Fair Value Measurements at December 31, 2012, Using
	Assets/(Liabilities) Measured at Fair Value			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description				(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities	$	76,777		$	—	$	76,777		$	—
Commercial mortgage-backed securities	6,885			—		6,885			—
Municipal bonds	18,926			—		18,926			—
Corporate bonds	32,508			—		32,508			—
Other debt securities	1,157			—		1,157			—
Marketable equity securities	58			58		—			—
Foreclosed assets	5,837			—		—			5,837
Impaired loans	5,084			—		—			5,084
Interest rate lock commitments	795			—		—			795
Derivative assets	210			—		210			—
Derivative liabilities	(103		)	—		(103		)	—

				Predecessor Company
				Fair Value Measurements at December 31, 2011, Using
	Assets/(Liabilities) Measured at Fair Value			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs			Significant Unobservable Inputs
Description				(Level 1)		(Level 2)			(Level 3)
Securities available for sale:
Residential mortgage-backed securities	$	121,901		$	—	$	121,901		$	—
Municipal bonds	15,146			—		15,146			—
Corporate bonds	27,966			—		27,966			—
Other debt securities	4,004			—		4,004			—
Marketable equity securities	566			566		—			—
Foreclosed assets	11,066			—		—			11,066
Impaired loans	2,474			—		—			2,474
Interest rate lock commitments	212			—		—			212
Derivative assets	—			—		—			—
Derivative liabilities	(330		)	—		(330		)	—

Quantitative Information about Level 3 Fair Value Measurements

	Fair Value at December 31, 2012		Valuation Technique	Unobservable Input	Range
Recurring measurements:
Interest rate lock commitments	$	795	Pricing model	Pull through rates	80-85%
Nonrecurring measurements:
Foreclosed assets	$	5,837	Discounted appraisals	Collateral discounts	15-50%
Impaired loans	$	5,084	Discounted Appraisals	Collateral discounts	15-50%

The significant unobservable input used in the fair value measurement of the Company’s interest rate lock commitments is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. Generally, the fair value of an interest rate lock commitment is positive (negative) if the prevailing interest rate is lower (higher) than the interest rate lock commitment rate. Therefore, an increase in the pull through rates (i.e., higher percentage of loans estimated to close) will result in the fair value of the interest rate lock commitments increasing in a gain position, or decreasing in a loss position. The pull through ratio is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock. The pull through rate is computed based on historical internal data and the ratio is periodically reviewed by the Company’s mortgage banking function.

Due to the nature of the Company’s business, a significant portion of its assets and liabilities consist of financial instruments. Accordingly, the estimated fair values of these financial instruments are disclosed. Quoted market prices, if available, are utilized as an estimate of the fair value of financial instruments. The fair value of such instruments has been derived based on assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net amounts ultimately collected could be materially different from the estimates presented below. In addition, these estimates are only indicative of the values of individual financial instruments and should not be considered an indication of the fair value of the Company taken as a whole.

Cash and Cash Equivalents. The carrying amounts for cash and cash equivalents are equal to fair value.

Investment Securities Available for Sale. See discussion related to fair value estimates for securities available for sale in the fair value hierarchy section above.

Investment Securities Held to Maturity. The fair value of the one corporate bond classified as held to maturity is estimated based on recent issuance prices on subordinated debt from companies with a similar credit and liquidity profile. Due to the non-marketable nature of this bond, it is classified as Level 3.

Loans Held For Sale. The fair value of mortgage loans held for sale is based on commitments from investors within the secondary market for loans with similar characteristics.

Loans. Expected cash flows are forecasted over the remaining life of each loan and are discounted to present value at current market interest rates for similar loans considering loan collateral type and credit quality.

Federal Home Loan Bank Stock. Given the option to redeem this stock at par through the FHLB, the carrying value of FHLB stock approximates fair value.

Bank-Owned Life Insurance. Bank-owned life insurance investments are recorded at their cash surrender value, or the amount that can be realized upon surrender. Therefore, carrying value approximates fair value.

Deposits. The fair value of demand deposits, savings, money market and NOW accounts represents the amount payable on demand. The fair value of time deposits is estimated by calculating the present value of cash flows on the time deposit portfolio using interest rates currently offered for instruments of similar remaining maturities as the discount rate.

Short-term Borrowings and Long-term Debt. The fair value of short-term borrowings and long-term debt are based upon the discounted value when using current rates at which borrowings of similar maturity could be obtained.

Accrued Interest Receivable and Accrued Interest Payable. The carrying amounts of accrued interest receivable and payable approximate fair value due to the short maturities of these instruments.

Derivative Instruments. See discussion related to fair value estimates for derivative instruments in the fair value hierarchy section above.

The following table summarizes the carrying amounts and estimated fair values of our financial instruments, none of which are held for trading purposes, at December 31, 2012 and 2011:

	Successor Company
	2012
	Carrying amount		Estimated fair value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	50,463	$	50,463	$	50,463	$	—	—
Investment securities available for sale	136,311		136,311		58		136,253		—
Investment securities held to maturity	180		410		—		—		410
FHLB stock	2,307		2,307		—		2,307		—
Loans held for sale	16,439		16,439		—		16,439		—
Loans, net	759,418		763,572		—		—		763,572
Bank-owned life insurance	19,976		19,976		—		19,976		—
Interest rate caps	210		210		—		210		—
Accrued interest receivable	5,154		5,154		—		5,154		—
Financial liabilities:
Deposits	873,222		876,674		—		876,674		—
Short-term borrowings	7,500		7,456		—		—		7,456
Long-term debt	19,864		19,821		—		—		19,821
Interest rate swaps	258		258		—		258		—
Accrued interest payable	476		476		—		476		—

	Predecessor Company
	2011
	Carrying amount		Estimated fair value
Financial assets:
Cash and cash equivalents	$	46,472	$	46,472
Investment securities available for sale	169,583		169,583
Investment securities held to maturity	421		421
Federal Home Loan Bank stock	9,899		9,899
Loans held for sale	4,214		4,214
Loans, net	733,958		734,673
Bank-owned life insurance	19,261		19,261
Accrued interest receivable	3,637		3,637
Financial liabilities:
Deposits	886,244		886,120
Short-term borrowings	—		—
Long-term debt	24,216		24,232
Interest rate swaps	330		330
Accrued interest payable	854		854