Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

The estimated fair value of the instruments as of December 31, 2012 and December 31, 2011 are as follows (in thousands):

	Fair Value Measurements as of
		December 31, 2012				December 31, 2011
	Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash, cash equivalents and restricted cash	1	$	80,085	$	80,085	$	109,868	$	109,868
Available-for-sale securities	2 & 3	280,169		280,169		219,039		219,039
Held-to-maturity securities	2	14,826		16,344		16,143		17,471
Loans held for sale	2	1,684		1,684		5,561		5,561
Loans receivable, net	3	520,768		536,003		502,252		515,737
Accrued interest receivable	2	4,320		4,320		4,100		4,100
BOLI	1	9,472		9,472		9,127		9,127
Other assets	2	2,024		2,024		2,095		2,095
Financial liabilities:
Deposit liabilities	3	748,934		751,755		729,373		709,534
Borrowings	3	97,265		94,673		130,631		131,202
Accrued interest payable	2	1,185		1,185		1,676		1,676
Unexercised warrants	3	828		828		—		—
Other liabilities	2	328		328		635		635

Fair Value Measurements, Recurring and Nonrecurring

The following tables present information about the Company’s assets measured at fair value on a recurring basis as of December 31, 2012 and 2011, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands).

Description	Total			Level 1		Level 2		Level 3
Balance, 12/31/2012
Available-for-Sale Securities:
State and municipal bonds	$	63,649		$	—	$	63,649	$	—
Residential mortgage backed securities and SBA Pools	216,520			—		206,278		10,242
Other Assets — Derivative	(245		)	—		—		(245		)
Total Assets Measured at Fair Value	$	279,924		$	—	$	269,927	$	9,997
Other Liabilities — Derivatives	$	328		$	—	$	—	$	328
Unexercised Warrants	828			—		—		828
Total Liabilities Measured at Fair Value	$	1,156		$	—	$	—	$	1,156
Balance, 12/31/2011
Available-for-Sale Securities:
State and municipal bonds	$	37,135		$	—	$	37,135	$	—
Residential mortgage backed securities and SBA Pools	181,904			—		167,130		14,774
Other Assets — Derivative	(215		)	—		—		(215		)
Total Assets Measured at Fair Value	$	218,824		$	—	$	204,265	$	14,559
Other Liabilities — Derivatives	$	635		$	—	$	—	$	635
Total Liabilities Measured at Fair Value	$	635		$	—	$	—	$	635

Fair Value Assets And Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs ( Level 3) Year to Date
	2012									2011
Description	Residential MBS			Derivatives (net)			Unexercised Warrants			Residential MBS			Derivatives (net)			Unexercised Warrants
January 1, Balance	$	14,774		$	(850	)	$	—		$	29,514		$	(930	)	$	—
Total gains or losses (realized/unrealized):							—
Included in earnings	(250		)	(269		)	179			(1,273		)	(91		)	—
Included in other comprehensive income	1,362			546			—			2,338			171			—
Principal Payments	(3,048		)	—			—			(3,874		)	—			—
Sales of Securities	(2,596		)	—			—			(11,931		)	—			—
Unexercised warrants issued in capital raise	—			—			(1,007		)	—			—			—
Transfers in and /or out of Level 3	—			—			—			—			—			—
December 31, Balance	$	10,242		$	(573	)	$	(828	)	$	14,774		$	(850	)	$	—

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

The following tables present additional quantitative information about assets and liabilities measured at fair value on a recurring basis and for which the company has utilized Level 3 inputs to determine fair value, as of December 31, 2012:

	Valuation Techniques	Unobservable Input	Range of Inputs
Residential mortgage-backed securities	Discounted cash flow and consensus pricing	Prepayment	7.0 to 39.8 CPR (1)
		Default rates	0 to 15.88 CDR (2)
		Loss severities	0% to 131.78%
Interest Rate Derivatives	Discounted cash flow modeling and market indications	Cash flows of underlying instruments	Various payment mismatches based on characteristics of underlying loans
		Swap rates	0.50% to 1.00%
		LIBOR rates	0.20% to 0.85%
Unexercised Warrants	Warrant valuation models	Estimated underlying stock price volatility	90% to 100%
		Duration	2.0 to 2.5 years
		Risk-free rate	0.30% to 1.00%
(1) CPR: Constant prepayment rate
(2) CDR: Constant default rate

Fair Value Measurements, Nonrecurring

Intermountain may be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis. The following table presents the carrying value for these financial assets as of dates indicated (in thousands):

Description	Total		Level 1		Level 2		Level 3
Balance, 12/31/2012
Loans(1)	$	14,629	$	—	$	—	$	14,629
OREO	4,951		—		—		4,951
Total Assets Measured at Fair Value	$	19,580	$	—	$	—	$	19,580
Balance, 12/31/2011
Loans(1)	$	25,885	$	—	$	—	$	25,885
OREO	6,650		—		—		6,650
Total Assets Measured at Fair Value	$	32,535	$	—	$	—	$	32,535

_____________________________

(1) Represents impaired loans, net of allowance for loan loss, which are included in loans.

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the company has utilized Level 3 inputs to determine fair value at December 31, 2012:

	Valuation Techniques	Unobservable Input	Range of Inputs
Impaired Loans	Discounted cash flows and appraisal of collateral	Amount and timing of cash flows	No payment deferral to indefinite payment deferral
		Discount Rate	4% to 9%
		Appraisal adjustments	10% to 35%
		Liquidation Expenses	10% to 15%
OREO	Appraisal of collateral	Appraisal adjustments	10% to 35%
		Liquidation Expenses	10% to 15%