XML 40 R29.htm IDEA: XBRL DOCUMENT v3.5.0.2
FAIR VALUE MEASUREMENT (Tables)
 9 Months Ended
Sep. 30, 2016
Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and Liabilities Measured on a Recurring Basis: Assets and liabilities measured at fair value on a recurring basis are summarized below:

 

 

 

 

 

 

Fair Value Measurements at September 30, 2016 Using:

 

 

 

 

 

 

Quoted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

 

Significant

 

 

 

 

 

 

 

 

 

 

Markets for

 

 

Other

 

 

Significant

 

 

 

 

 

 

Identical

 

 

Observable

 

 

Unobservable

 

 

September 30,

 

 

Assets

 

 

Inputs

 

 

Inputs

 

 

2016

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and government sponsored entities' securities

$

195,727

 

 

$

—

 

 

$

195,727

 

 

$

—

 

States of the U.S. and political subdivisions

 

50,765

 

 

 

—

 

 

 

50,765

 

 

 

 

 

Mortgage-backed GSE securities: residential

 

107,977

 

 

 

—

 

 

 

107,977

 

 

 

—

 

Loans held for sale, at fair value

 

59,967

 

 

 

—

 

 

 

12,831

 

 

 

47,136

 

Purchased certificate of deposit option

 

888

 

 

 

—

 

 

 

888

 

 

 

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Written certificate of deposit option

 

888

 

 

 

—

 

 

 

888

 

 

 

—

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2015 Using:

 

 

 

 

 

 

Quoted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

 

Significant

 

 

 

 

 

 

 

 

 

 

Markets for

 

 

Other

 

 

Significant

 

 

 

 

 

 

Identical

 

 

Observable

 

 

Unobservable

 

 

December 31,

 

 

Assets

 

 

Inputs

 

 

Inputs

 

 

2015

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and government sponsored entities' securities

$

218,650

 

 

$

—

 

 

$

218,650

 

 

$

—

 

States of the U.S. and political subdivisions

 

11,040

 

 

 

—

 

 

 

11,040

 

 

 

—

 

Mortgage-backed GSE securities: residential

 

127,980

 

 

 

—

 

 

 

127,980

 

 

 

—

 

Loans held for sale, at fair value

 

26,716

 

 

 

—

 

 

 

—

 

 

 

26,716

 

Interest rate caps

 

3

 

 

 

—

 

 

 

—

 

 

 

3

 

Purchased certificate of deposit option

 

805

 

 

 

—

 

 

 

805

 

 

 

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Written certificate of deposit option

 

805

 

 

 

—

 

 

 

805

 

 

 

—

 

 
Reconciliation of All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 and 2015.  

 

 

Loans Held for Sale, At Fair Value

 

 

Loans Held for Sale, At Fair Value

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

Balance of recurring Level 3 assets at beginning of period

$

33,605

 

 

$

9,839

 

 

$

26,716

 

 

$

—

 

Total gains (losses) for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in change in fair value of loans held for sale

 

414

 

 

 

1,421

 

 

 

1,705

 

 

 

1,836

 

Included in other comprehensive income

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Originations/Draws on construction perm loans

 

25,464

 

 

 

15,655

 

 

 

60,925

 

 

 

25,079

 

Amortization

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Sales

 

(12,347

)

 

 

(2,836

)

 

 

(42,210

)

 

 

(2,836

)

Balance of recurring Level 3 assets at end of period

$

47,136

 

 

$

24,079

 

 

$

47,136

 

 

$

24,079

 

 

 

Interest Rate Caps

 

 

Interest Rate Caps

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

(Dollars in thousands)

 

Balance of recurring Level 3 assets at beginning of period

$

—

 

 

$

24

 

 

$

3

 

 

$

180

 

Total gains (losses) for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Included in other income

 

129

 

 

 

111

 

 

 

385

 

 

 

214

 

Included in other comprehensive income

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Purchases

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Amortization

 

(129

)

 

 

(130

)

 

 

(388

)

 

 

(389

)

Sales

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance of recurring Level 3 assets at end of period

$

—

 

 

$

5

 

 

$

—

 

 

$

5

 

 
Assets and Liabilities Measured on Non-recurring Basis

Assets and Liabilities Measured on a Non-Recurring Basis: Assets and liabilities measured at fair value on a non-recurring basis are summarized below:

 

 

 

 

 

 

Fair Value Measurements at September 30, 2016 Using:

 

 

 

 

 

 

Quoted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

 

Significant

 

 

 

 

 

 

 

 

 

 

Markets for

 

 

Other

 

 

Significant

 

 

 

 

 

 

Identical

 

 

Observable

 

 

Unobservable

 

 

September 30,

 

 

Assets

 

 

Inputs

 

 

Inputs

 

 

2016

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impaired loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonresidential

$

6,038

 

 

$

—

 

 

$

—

 

 

$

6,038

 

Secured

 

148

 

 

 

—

 

 

 

—

 

 

 

148

 

Residential loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

847

 

 

 

—

 

 

 

—

 

 

 

847

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Equity

 

208

 

 

 

—

 

 

 

—

 

 

 

208

 

Auto

 

2

 

 

 

—

 

 

 

—

 

 

 

2

 

Marine

 

163

 

 

 

—

 

 

 

—

 

 

 

163

 

Recreational vehicle

 

200

 

 

 

—

 

 

 

—

 

 

 

200

 

Mortgage servicing rights

 

3,280

 

 

 

—

 

 

 

3,280

 

 

 

—

 

Other real estate owned, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

748

 

 

 

—

 

 

 

—

 

 

 

748

 

One-to four-family residential

 

290

 

 

 

—

 

 

 

—

 

 

 

290

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2015 Using:

 

 

 

 

 

 

Quoted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active

 

 

Significant

 

 

 

 

 

 

 

 

 

 

Markets for

 

 

Other

 

 

Significant

 

 

 

 

 

 

Identical

 

 

Observable

 

 

Unobservable

 

 

December 31,

 

 

Assets

 

 

Inputs

 

 

Inputs

 

 

2015

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impaired loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonresidential

$

2,857

 

 

$

—

 

 

$

—

 

 

$

2,857

 

Land

 

175

 

 

 

—

 

 

 

—

 

 

 

175

 

Residential loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

1,493

 

 

 

—

 

 

 

—

 

 

 

1,493

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Equity

 

392

 

 

 

—

 

 

 

—

 

 

 

392

 

Auto

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

Mortgage servicing rights

 

604

 

 

 

—

 

 

 

604

 

 

 

—

 

Other real estate owned, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

785

 

 

 

—

 

 

 

—

 

 

 

785

 

Nonresidential

 

175

 

 

 

—

 

 

 

—

 

 

 

175

 

One-to four-family residential

 

1,088

 

 

 

—

 

 

 

—

 

 

 

1,088

 

 
Fair Value Option for Newly Originated Permanent Construction Loans Held for Sale

The Company has elected the fair value option for newly originated residential mortgage and permanent construction loans held for sale.  These loans are intended for sale and the Company believes that fair value is the best indicator of the resolution of these loans.  Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment.  None of these loans are 90 or more days past due nor on nonaccrual status as of September 30, 2016.  

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Dollars in thousands)

 

Aggregate fair value

 

$

59,967

 

 

$

26,716

 

Contractual balance

 

 

56,242

 

 

 

25,197

 

Gain (loss)

 

 

3,725

 

 

 

1,519

 

 
Amount of Gains and Losses from Changes in Fair Value Included in Earnings

The total amount of gains and losses from changes in fair value included in earnings for the three and nine months ended September 30, 2016 and 2015 for loans held for sale, at fair value were:

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30, 2016

 

 

September 30, 2015

 

 

September 30, 2016

 

 

September 30, 2015

 

 

 

(Dollars in thousands)

 

Interest  income

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Interest expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Change in fair value

 

 

556

 

 

 

1,421

 

 

 

2,205

 

 

 

1,836

 

Total change in fair value

 

$

556

 

 

$

1,421

 

 

$

2,205

 

 

$

1,836

 

 
Carrying Value and Estimated Fair Values of Financial Instruments

In accordance with U.S. GAAP, the carrying value and estimated fair values of financial instruments at September 30, 2016 and December 31, 2015, were as follows:

 

 

 

 

 

 

Fair Value Measurements at September 30, 2016 Using:

 

 

September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

43,948

 

 

$

43,948

 

 

$

—

 

 

$

—

 

Available for sale securities

 

354,469

 

 

 

—

 

 

 

354,469

 

 

 

—

 

Held to maturity securities

 

103,202

 

 

 

—

 

 

 

100,891

 

 

 

4,318

 

Loans held for sale

 

378

 

 

 

—

 

 

 

403

 

 

 

—

 

Loans held for sale, at fair value

 

59,967

 

 

 

—

 

 

 

12,831

 

 

 

47,136

 

Loans, net

 

1,473,949

 

 

 

—

 

 

 

—

 

 

 

1,483,242

 

FHLB stock

 

18,068

 

 

n/a

 

 

n/a

 

 

n/a

 

Accrued interest receivable

 

6,066

 

 

 

—

 

 

 

2,053

 

 

 

4,013

 

Interest rate caps

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Purchased certificate of deposit option

 

888

 

 

 

—

 

 

 

888

 

 

 

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking, savings and money market accounts

 

(1,025,720

)

 

 

(1,025,720

)

 

 

—

 

 

 

—

 

Certificates of deposit

 

(447,323

)

 

 

—

 

 

 

(450,687

)

 

 

—

 

FHLB advances

 

(405,561

)

 

 

—

 

 

 

(405,603

)

 

 

—

 

Repurchase agreements and other

 

(517

)

 

 

—

 

 

 

(520

)

 

 

—

 

Advance payments by borrowers for taxes and insurance

 

(14,758

)

 

 

(14,758

)

 

 

—

 

 

 

—

 

Accrued interest payable

 

(117

)

 

 

—

 

 

 

(117

)

 

 

—

 

Written certificate of deposit option

 

(888

)

 

 

—

 

 

 

(888

)

 

 

—

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2015 Using:

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

35,910

 

 

$

35,910

 

 

$

—

 

 

$

—

 

Available for sale securities

 

357,670

 

 

 

—

 

 

 

357,670

 

 

 

—

 

Held to maturity securities

 

110,699

 

 

 

—

 

 

 

108,536

 

 

 

1,108

 

Loans held for sale

 

9,085

 

 

 

—

 

 

 

9,207

 

 

 

—

 

Loans held for sale, at fair value

 

26,716

 

 

 

—

 

 

 

—

 

 

 

26,716

 

Loans, net

 

1,316,192

 

 

 

—

 

 

 

—

 

 

 

1,322,338

 

FHLB stock

 

18,068

 

 

n/a

 

 

n/a

 

 

n/a

 

Accrued interest receivable

 

5,978

 

 

 

—

 

 

 

2,276

 

 

 

3,702

 

Interest rate caps

 

3

 

 

 

—

 

 

 

—

 

 

 

3

 

Purchased certificate of deposit option

 

805

 

 

 

—

 

 

 

805

 

 

 

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking, savings and money market accounts

 

(980,783

)

 

 

(980,783

)

 

 

—

 

 

 

—

 

Certificates of deposit

 

(454,960

)

 

 

—

 

 

 

(459,433

)

 

 

—

 

FHLB advances

 

(278,975

)

 

 

—

 

 

 

(279,053

)

 

 

—

 

Repurchase agreements and other

 

(535

)

 

 

—

 

 

 

(548

)

 

 

—

 

Advance payments by borrowers for taxes and insurance

 

(21,174

)

 

 

(21,174

)

 

 

—

 

 

 

—

 

Accrued interest payable

 

(53

)

 

 

—

 

 

 

(53

)

 

 

—

 

Written certificate of deposit option

 

(805

)

 

 

—

 

 

 

(805

)

 

 

—

 

 
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member]  
Quantitative Information About Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value

The following table presents quantitative information about recurring Level 3 fair value measurements at September 30, 2016:

 

 

 

 

 

 

Valuation

 

Unobservable

 

 

 

 

 

Fair Value

 

 

Technique(s)

 

Input(s)

 

Range

 

Loans held for sale, at fair value

$

47,136

 

 

Comparable sales

 

Time discount

 

0.00-1.80%

 

Interest rate caps

 

—

 

 

Discounted cash flow

 

Discount rate

 

 

—

 

 

The following table presents quantitative information about recurring Level 3 fair value measurements at December 31, 2015:

 

 

 

 

 

 

Valuation

 

Unobservable

 

 

 

Fair Value

 

 

Technique(s)

 

Input(s)

 

Range

Loans held for sale, at fair value

$

26,716

 

 

Comparable sales

 

Time discount

 

0.00-1.80%

Interest rate caps

 

3

 

 

Discounted cash flow

 

Discount rate

 

0.49-1.18%

 
Significant Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Nonrecurring [Member]  
Quantitative Information About Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at September 30, 2016:

 

 

 

Fair Value

 

 

Valuation Technique(s)

 

Unobservable Input(s)

 

Range     (Weighted Average)

Impaired loans:

 

 

 

 

 

 

 

 

 

 

Commercial loans

 

 

 

 

 

 

 

 

 

 

Nonresidential

 

$

6,038

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-35.00%  (15.00%)

Secured

 

 

148

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-31.00%  (12.75%)

Residential loans

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

 

847

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-10.77%  (4.27%)

Consumer loans

 

 

 

 

 

 

 

 

 

 

Home Equity

 

 

208

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-17.85%  (8.93%)

Auto

 

 

2

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-10.00%  (10.00%)

Marine

 

 

163

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-37.00%  (37.00%)

Recreational vehicle

 

 

200

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-37.00%  (37.00%)

Other real estate owned, net

 

 

 

 

 

 

 

 

 

 

Commercial loans

 

 

 

 

 

 

 

 

 

 

Construction loans

 

 

748

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-25.00%  (10.875%)

Residential loans

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

 

290

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-37.10%  (29.05%)

 

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2015:

 

 

 

Fair Value

 

 

Valuation Technique(s)

 

Unobservable Input(s)

 

Range     (Weighted Average)

Impaired loans:

 

 

 

 

 

 

 

 

 

 

Commercial loans

 

 

 

 

 

 

 

 

 

 

Nonresidential

 

$

2,857

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

9.19%-12.38%  (10.79%)

Land

 

 

175

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-27.47%  (13.74%)

Residential loans

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

 

1,493

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-10.77%  (4.27%)

Consumer loans

 

 

 

 

 

 

 

 

 

 

Home Equity

 

 

392

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-17.85%  (8.93%)

Other real estate owned:

 

 

 

 

 

 

 

 

 

 

Commercial loans

 

 

 

 

 

 

 

 

 

 

Construction loans

 

 

785

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-50.00%  (21.71%)

Nonresidential loans

 

 

175

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

40.00%-60.00%  (50.00%)

Residential loans

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

 

1,088

 

 

Sales comparison approach

 

Adjustment for differences between comparable sales

 

0.00%-40.50%  (15.51%)