Note 20 Fair Value of Financial Instruments

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal market at the measurement date under current market conditions. The fair value of the financial instruments listed below does not reflect a premium or discount that could result from offering all of the Company’s holdings of financial instruments at one time, nor does it reflect the underlying value of the Company, as ASC Topic 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies and are based on the exit price notion set forth by ASU 2016-01 effective January 1, 2018 and applied to this disclosure on a prospective basis. Considerable judgment is required to interpret market data in order 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 fair value of financial instruments at March 31, 2018 and December 31, 2017, including methods and assumptions utilized for determining fair value of financial instruments, are set forth below:


	Level in fair value	March 31, 2018				December 31, 2017
	measurement	Carrying		Estimated		Carrying		Estimated
	hierarchy	amount		fair value		amount		fair value
ASSETS
Cash and cash equivalents	Level 1	$	286,870	$	286,870	$	257,364	$	257,364
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		188,630		188,630		168,648		168,648
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		727,729		727,729		685,230		685,230
Municipal securities	Level 2		818		818		829		829
Municipal securities	Level 3		219		219		219		219
Other available-for-sale securities	Level 3		469		469		419		419
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		191,136		188,609		204,352		204,048
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		92,233		90,107		54,378		52,723
Non-marketable securities	Level 2		14,088		14,088		15,030		15,030
Loans receivable	Level 3		3,702,334		3,670,007		3,178,947		3,167,508
Loans held for sale	Level 2		51,050		51,050		4,629		4,629
Accrued interest receivable	Level 2		18,343		18,343		14,255		14,255
Interest rate swap derivatives	Level 2		24,695		24,695		12,972		12,972
Mortgage banking derivatives	Level 3		1,316		1,316		133		133
LIABILITIES
Deposit transaction accounts	Level 2		3,561,858		3,561,858		2,861,509		2,861,509
Time deposits	Level 2		1,147,452		1,147,452		1,118,050		1,118,050
Securities sold under agreements to repurchase	Level 2		141,187		141,187		130,463		130,463
Federal Home Loan Bank advances	Level 2		77,335		77,647		129,115		130,300
Accrued interest payable	Level 2		7,198		7,198		5,776		5,776
Interest rate swap derivatives	Level 2		3,300		3,300		3,751		3,751
Mortgage banking derivatives	Level 3		601		601		7		7