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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2015
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The following tables present the assets reported on the consolidated balance sheet at their estimated fair value as of June 30, 2015, and December 31, 2014, by level within the fair value hierarchy as required by the Fair Value Measurements and Disclosures Topic of the FASB ASC. Financial assets and liabilities are classified in their entirety based on the level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:
• | Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
• | Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlations or other means.
• | Level 3 Inputs – Significant unobservable inputs that reflect the Company’s own assumptions that market participants would use in pricing the assets or liabilities.
| Fair Value Measurements at June 30, 2015 Using:
| Carrying Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (in thousands)
Measured on a recurring basis: |
Assets: |  |  |  |  |  |  |
Investment securities: |  |  |  |  |  |  |
Available-for-sale: |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |
GSE | $ | 606,332 |  |  | $ | — |  |  | $ | 606,332 |  |  | $ | — |
Non-GSE | 811 |  |  | — |  |  | 811 |  |  | — |
Other securities: |  |  |  |  |  |  |
Corporate bonds | 32,740 |  |  | — |  |  | 32,740 |  |  | — |
Equities | 329 |  |  | 329 |  |  | — |  |  | — |
Total available-for-sale | 640,212 |  |  | 329 |  |  | 639,883 |  |  | — |
Trading securities | 6,799 |  |  | 6,799 |  |  | — |  |  | — |
Total | $ | 647,011 |  |  | $ | 7,128 |  |  | $ | 639,883 |  |  | $ | — |
Measured on a non-recurring basis: |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Impaired loans: |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |
Commercial real estate | $ | 15,704 |  |  | $ | — |  |  | $ | — |  |  | $ | 15,704 |
One-to-four family residential mortgage | 1,745 |  |  | — |  |  | — |  |  | 1,745 |
Multifamily | 1,294 |  |  | — |  |  | — |  |  | 1,294 |
Home equity and lines of credit | 287 |  |  | — |  |  | — |  |  | 287 |
Total impaired real estate loans | 19,030 |  |  | — |  |  | — |  |  | 19,030 |
Other real estate owned | 423 |  |  | — |  |  | — |  |  | 423 |
Total | $ | 19,453 |  |  | $ | — |  |  | $ | — |  |  | $ | 19,453 |
| Fair Value Measurements at December 31, 2014 Using:
| Carrying Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (in thousands)
Measured on a recurring basis: |
Assets: |  |  |  |  |  |  |
Investment securities: |  |  |  |  |  |  |
Available-for-sale: |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |
GSE | $ | 699,790 |  |  | $ | — |  |  | $ | 699,790 |  |  | $ | — |
Non-GSE | 1,026 |  |  | — |  |  | 1,026 |  |  | — |
Other securities: |  |  |  |  |  |  |
Corporate bonds | 70,013 |  |  | — |  |  | 70,013 |  |  | — |
Equities | 410 |  |  | 410 |  |  | — |  |  | — |
Total available-for-sale | 771,239 |  |  | 410 |  |  | 770,829 |  |  | — |
Trading securities | 6,422 |  |  | 6,422 |  |  | — |  |  | — |
Total | $ | 777,661 |  |  | $ | 6,832 |  |  | $ | 770,829 |  |  | $ | — |
Measured on a non-recurring basis: |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Impaired loans: |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |
Commercial real estate | $ | 17,438 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,438 |
One-to-four family residential mortgage | 672 |  |  | — |  |  | — |  |  | 672 |
Multifamily | 1,513 |  |  | — |  |  | — |  |  | 1,513 |
Home equity and lines of credit | 278 |  |  | — |  |  | — |  |  | 278 |
Total impaired real estate loans | 19,901 |  |  | — |  |  | — |  |  | 19,901 |
Commercial and industrial loans | 440 |  |  | — |  |  | — |  |  | 440 |
Other real estate owned | 752 |  |  | — |  |  | — |  |  | 752 |
Total | $ | 21,093 |  |  | $ | — |  |  | $ | — |  |  | $ | 21,093 |
The following table presents qualitative information for Level 3 assets measured at fair value on a non-recurring basis at June 30, 2015 and December 31, 2014 (dollars in thousands).
| Fair Value |  | Valuation Methodology |  | Unobservable Inputs |  | Range of Inputs
| June 30, 2015 |  | December 31, 2014 |  |  |  |  |  | June 30, 2015 |  | December 31, 2014
Impaired loans | $ | 19,030 |  |  | $ | 20,341 |  |  | Appraisals |  | Discount for costs to sell |  | 7.0% |  | 7.0%
|  |  |  |  |  |  | Discount for quick sale |  | 10.0% - 40.0% |  | 10.0% - 40.0%
|  |  |  |  | Discounted cash flows |  | Interest rates |  | 4.6% to 7.5% |  | 4.6% to 7.5%
Other real estate owned | $ | 423 |  |  | $ | 752 |  |  | Appraisals |  | Discount for costs to sell |  | 7.0% |  | 7.0%
Available for Sale Securities: The estimated fair values for mortgage-backed and corporate securities are obtained from an independent nationally recognized third-party pricing service. The estimated fair values are derived primarily from cash flow models, which include assumptions for interest rates, credit losses, and prepayment speeds. Broker/dealer quotes are utilized as well, when such quotes are available and deemed representative of the market. The significant inputs utilized in the cash flow models are based on market data obtained from sources independent of the Company (Observable Inputs), and are therefore classified as Level 2 within the fair value hierarchy. The estimated fair values of equity securities, classified as Level 1, are derived from quoted market prices in active markets. Equity securities consist of publicly traded mutual funds. There were no transfers of securities between Level 1 and Level 2 during the six months ended June 30, 2015. Trading Securities: Fair values are derived from quoted market prices in active markets. The assets consist of publicly traded mutual funds. Impaired Loans: At June 30, 2015, and December 31, 2014, the Company had impaired originated loans held-for-investment with outstanding principal balances of $23.2 million and $23.7 million, respectively, that were recorded at their estimated fair value of $19.0 million and $20.3 million, respectively. The Company recorded net impairment recoveries of $558,000 and $28,000 for the six months ended June 30, 2015, and June 30, 2014, respectively, utilizing Level 3 inputs. For purposes of estimating fair value of impaired loans, management utilizes independent appraisals, if the loan is collateral dependent, adjusted downward by management, as necessary, for changes in relevant valuation factors subsequent to the appraisal date, or the present value of expected future cash flows for non-collateral dependent loans and TDRs. Other Real Estate Owned (OREO): At June 30, 2015, and December 31, 2014, the Company had assets acquired through foreclosure, or deed in lieu of foreclosure, of $423,000 and $752,000, respectively. These assets are recorded at estimated fair value, less estimated selling costs when acquired, establishing a new cost basis. Estimated fair value is generally based on independent appraisals. These appraisals include adjustments to comparable assets based on the appraisers’ market knowledge and experience, and are considered Level 3 inputs. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If the estimated fair value of the asset declines, a write-down is recorded through non-interest expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in economic conditions. There was a $71,000 subsequent valuation adjustment to one OREO property for the six months ended June 30, 2015. Operating costs after acquisition are expensed. In addition, the Company may be required, from time to time, to measure the fair value of certain other financial assets on a nonrecurring basis in accordance with U.S. GAAP. The adjustments to fair value usually result from the application of lower-of-cost-or-market accounting or write downs of individual assets. Fair Value of Financial Instruments The FASB ASC Topic for Financial Instruments requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The following methods and assumptions were used to estimate the fair value of other financial assets and financial liabilities not already discussed above:
(a) | Cash, Cash Equivalents, and Certificates of Deposit
Cash and cash equivalents are short-term in nature with original maturities of six months or less; the carrying amount approximates fair value. Certificates of deposit having original terms of six-months or less; the carrying value generally approximates fair value. Certificates of deposit with an original maturity of six months or greater; the fair value is derived from discounted cash flows.
(b) | Securities (Held to Maturity)
The estimated fair values for substantially all of our securities are obtained from an independent nationally recognized pricing service. The independent pricing service utilizes market prices of same or similar securities whenever such prices are available. Prices involving distressed sellers are not utilized in determining fair value. Where necessary, the independent third-party pricing service estimates fair value using models employing techniques such as discounted cash flow analyses. The assumptions used in these models typically include assumptions for interest rates, credit losses, and prepayments, utilizing market observable data where available.
(c) | Federal Home Loan Bank of New York Stock
The fair value for Federal Home Loan Bank of New York (FHLB) stock is its carrying value, since this is the amount for which it could be redeemed and there is no active market for this stock.
(d) | Loans (Held-for-Investment)
Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as originated and purchased, and further segregated by residential mortgage, construction, land, multifamily, commercial and consumer. Each loan category is further segmented into amortizing and non-amortizing and fixed and adjustable rate interest terms and by performing and nonperforming categories. The fair value of loans is estimated by discounting the future cash flows using current prepayment assumptions and current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. This method of estimating fair value does not fully incorporate the exit price approach to fair value, but instead uses a comparison to current market rates for comparable loans.
(e) | Loans (Held-for-Sale)
Held-for-sale loans are carried at the lower of aggregate cost or estimated fair value, less costs to sell, and therefore fair value is equal to carrying value.
(f) | Deposits
The fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings, NOW and money market accounts, is equal to the amount payable on demand. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.
(g) | Commitments to Extend Credit and Standby Letters of Credit
The fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of off‑balance sheet commitments is insignificant and therefore not included in the following table.
(h) | Borrowings
The fair value of borrowings is estimated by discounting future cash flows based on rates currently available for debt with similar terms and remaining maturity.
(i) | Advance Payments by Borrowers
Advance payments by borrowers for taxes and insurance have no stated maturity; the fair value is equal to the amount currently payable. The estimated fair value of the Company’s significant financial instruments at June 30, 2015, and December 31, 2014, is presented in the following tables (in thousands).
| June 30, 2015
|  |  | Estimated Fair Value
| Carrying Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 75,785 |  |  | $ | 75,785 |  |  | $ | — |  |  | $ | — |  |  | $ | 75,785 |
Trading securities | 6,799 |  |  | 6,799 |  |  | — |  |  | — |  |  | 6,799 |
Securities available-for-sale | 640,212 |  |  | 329 |  |  | 639,883 |  |  | — |  |  | 640,212 |
Securities held-to-maturity | 3,921 |  |  | — |  |  | 3,965 |  |  | — |  |  | 3,965 |
Federal Home Loan Bank of New York stock, at cost | 25,353 |  |  | — |  |  | 25,353 |  |  | — |  |  | 25,353 |
Loans held-for-sale | 325 |  |  | — |  |  | — |  |  | 325 |  |  | — |
Net loans held-for-investment | 2,178,118 |  |  | — |  |  | — |  |  | 2,203,946 |  |  | 2,203,946 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Deposits | $ | 1,980,099 |  |  | $ | — |  |  | $ | 1,984,059 |  |  | $ | — |  |  | $ | 1,984,059 |
Repurchase agreements, Federal Home Loan Bank advances and and other borrowings | 579,078 |  |  | — |  |  | 581,642 |  |  | — |  |  | 581,642 |
Advance payments by borrowers | 9,696 |  |  | — |  |  | 9,696 |  |  | — |  |  | 9,696 |
| December 31, 2014
|  |  | Estimated Fair Value
| Carrying Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 76,709 |  |  | $ | 76,709 |  |  | $ | — |  |  | $ | — |  |  | $ | 76,709 |
Trading securities | 6,422 |  |  | 6,422 |  |  | — |  |  | — |  |  | 6,422 |
Securities available-for-sale | 771,239 |  |  | 410 |  |  | 770,829 |  |  | — |  |  | 771,239 |
Securities held-to-maturity | 3,609 |  |  | — |  |  | 3,691 |  |  | — |  |  | 3,691 |
Federal Home Loan Bank of New York stock, at cost | 29,219 |  |  | — |  |  | 29,219 |  |  | — |  |  | 29,219 |
Net loans held-for-investment | 1,916,703 |  |  | — |  |  | — |  |  | 1,949,511 |  |  | 1,949,511 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Deposits | $ | 1,620,665 |  |  | $ | — |  |  | $ | 1,622,536 |  |  | $ | — |  |  | $ | 1,622,536 |
Repurchase agreements, Federal Home Loan Bank advances and and other borrowings | 778,658 |  |  | — |  |  | 781,196 |  |  | — |  |  | 781,196 |
Advance payments by borrowers | 7,792 |  |  | — |  |  | 7,792 |  |  | — |  |  | 7,792 |
Limitations Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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