XML 84 R23.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Fair Value of Financial Instruments | 12 Months Ended
--- | ---
Dec. 31, 2013
Fair Value Disclosures [Abstract] |
Fair Value Disclosures [Text Block] |
Note 15: | Fair Value of Financial Instruments
ASC Topic 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
| Level 1 | Quoted prices in active markets for identical assets or liabilities
| Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
| Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. Securities Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid mutual funds. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Government-sponsored enterprises, mortgage and asset-backed securities and obligations of state, municipals and certain corporate securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and include certain other securities. Fair values are calculated using discounted cash flows. Discounted cash flows are calculated based off of the anticipated future cash flows updated to incorporate loss severities and volatility. Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation. Loans Held for Sale The fair value of loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2). Forward Contracts The fair values of forward contracts on to-be-announced securities are determined using quoted prices in active markets, or benchmarked thereto (Level 1). Interest Rate Lock Commitments The fair value of interest rate lock commitments (IRLCs) are determined using the projected sale price of individual loans based on changes in market interest rates, projected pull-through rates (the probability that an IRLC will ultimately result in an originated loan), the reduction in the value of the applicant’s option due to the passage of time, and the remaining origination costs to be incurred based on management’s estimate of market costs (Level 3). The following tables present the fair value measurements of securities available for sale recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2013 and 2012:
|  |  |  |  | 2013 |
|  |  |  |  | Fair Value Measurements Using |
|  |  |  |  | Quoted Prices |  |  |  |  |  |  |
|  |  |  |  | in Active |  | Significant |  |  |  |
|  |  |  |  | Markets for |  | Other |  | Significant |
|  |  |  |  | Identical |  | Observable |  | Unobservable |
|  | Fair |  | Assets |  | Inputs |  | Inputs |
|  | Value |  | (Level 1) |  | (Level 2) |  | (Level 3) |
U.S. Government-sponsored enterprises |  | $ | 56,277 |  | $ | — |  | $ | 56,277 |  | $ | — |
Municipals |  |  | 46,323 |  |  | — |  |  | 46,323 |  |  | — |
Mortgage-backed and asset-backed securities - government- sponsored enterprises |  |  | 73,941 |  |  | — |  |  | 73,941 |  |  | — |
Mortgage-backed and asset-backed securities - private labeled |  |  | 1,232 |  |  | — |  |  | 1,232 |  |  | — |
Other securities |  |  | 3,636 |  |  | 1,963 |  |  | — |  |  | 1,673 |
Total available for sale securities |  | $ | 181,409 |  | $ | 1,963 |  | $ | 177,773 |  | $ | 1,673 |
Loans held for sale (mandatory pricing agreements) |  |  | 24,254 |  |  | — |  |  | 24,254 |  |  | — |
Forward contracts |  |  | 227 |  |  | 227 |  |  | — |  |  | — |
Interest rate lock commitments |  |  | 79 |  |  | — |  |  | — |  |  | 79 |
|  |  |  |  | 2012 |
|  |  |  |  | Fair Value Measurements Using |
|  |  |  |  | Quoted Prices |  |  |  |  |  |
|  |  |  |  | in Active |  | Significant |  |  |  |
|  |  |  |  | Markets for |  | Other |  | Significant |
|  |  |  |  | Identical |  | Observable |  | Unobservable |
|  | Fair |  | Assets |  | Inputs |  | Inputs |
|  | Value |  | (Level 1) |  | (Level 2) |  | (Level 3) |
U.S. Government-sponsored enterprises |  | $ | 19,618 |  | $ | — |  | $ | 19,618 |  | $ | — |
Municipals |  |  | 42,540 |  |  | — |  |  | 42,540 |  |  | — |
Mortgage-backed and asset-backed securities - government- sponsored enterprises |  |  | 77,489 |  |  | — |  |  | 77,489 |  |  | — |
Mortgage-backed and asset-backed securities - private labeled |  |  | 2,453 |  |  | — |  |  | 2,453 |  |  | — |
Other securities |  |  | 14,593 |  |  | 1,553 |  |  | 12,200 |  |  | 840 |
Total available for sale securities |  | $ | 156,693 |  | $ | 1,553 |  | $ | 154,300 |  | $ | 840 |
The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying consolidated balance sheets using significant unobservable (Level 3) inputs:
|  | Securities |  | Interest Rate |
|  | Available for |  | Lock |
|  | Sale |  | Commitments |
Balance, January 1, 2012 |  | $ | 470 |  | $ | — |
Total realized and unrealized gains and losses |  |  |  |  |  |  |
Included in net income |  |  | (112) |  |  | — |
Included in other comprehensive income |  |  | 482 |  |  | — |
Balance, December 31, 2012 |  |  | 840 |  |  | — |
Total realized and unrealized gains and losses |  |  |  |  |  |  |
Included in net income |  |  | — |  |  | 79 |
Included in other comprehensive income |  |  | 833 |  |  | — |
Balance, December 31, 2013 |  | $ | 1,673 |  | $ | 79 |
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. Impaired Loans (Collateral Dependent) Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral dependent loans. If the impaired loan is identified as collateral dependent, then the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Impaired loans that are collateral dependent are classified within Level 3 of the fair value hierarchy when impairment is determined using the fair value method. The following tables present the fair value measurements recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2013 and 2012:
|  |  |  |  | 2013 |
|  |  |  |  | Fair Value Measurements Using |
|  |  |  |  | Quoted Prices |  |  |  |  |  |  |
|  |  |  |  | in Active |  | Significant |  |  |  |
|  |  |  |  | Markets for |  | Other |  | Significant |
|  |  |  |  | Identical |  | Observable |  | Unobservable |
|  | Fair |  | Assets |  | Inputs |  | Inputs |
|  | Value |  | (Level 1) |  | (Level 2) |  | (Level 3) |
Impaired loans |  | $ | 137 |  | $ | — |  | $ | — |  | $ | 137 |
|  |  |  |  | 2012 |
|  |  |  |  | Fair Value Measurements Using |
|  |  |  |  | Quoted Prices |  |  |  |  |  |  |
|  |  |  |  | in Active |  | Significant |  |  |  |
|  |  |  |  | Markets for |  | Other |  | Significant |
|  |  |  |  | Identical |  | Observable |  | Unobservable |
|  | Fair |  | Assets | Inputs |  | Inputs |
|  | Value |  | (Level 1) |  | (Level 2) |  | (Level 3) |
Impaired loans |  | $ | 1,481 |  | $ | — |  | $ | — |  | $ | 1,481 |
Unobservable (Level 3) Inputs The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill.
|  |  | Fair Value at |  |  |  |  |  |  |
|  |  | December 31, |  | Valuation |  | Unobservable |  |  |
|  |  | 2013 |  | Technique |  | Inputs |  | Range |
|  |  |  |  |  |  | Discount margin |  | 6% - 12.5% |
|  |  |  |  |  |  | Cumulative default % |  | 2% - 100% |
|  |  |  |  |  |  | Loss given default % |  | 85% - 100% |
Other securities |  | $ | 1,673 |  | Discounted cash flow |  | Cumulative prepayment % |  | 0% - 100% |
Collateral dependent impaired loans |  | $ | 137 |  | Fair value of collateral |  | Discount for type of property and current market conditions |  | 0% - 54% |
IRLCs |  | $ | 79 |  | Discounted cash flow |  | Loan closing rates |  | 53% - 97% |
|  |  | Fair Value at |  |  |  |  |  |  |
|  |  | December 31, |  | Valuation |  | Unobservable |  |  |
|  |  | 2012 |  | Technique |  | Inputs |  | Range |
|  |  |  |  |  |  | Discount margin |  | 7% - 14.25% |
|  |  |  |  |  |  | Cumulative default % |  | 2% - 100% |
|  |  |  |  |  |  | Loss given default % |  | 85% - 100% |
Other securities |  | $ | 840 |  | Discounted cash flow |  | Cumulative prepayment % |  | 0% - 100% |
Collateral dependent impaired loans |  | $ | 1,481 |  | Market comparable properties |  | Marketability discount |  | 12% |
The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value: Cash and Cash Equivalents For these instruments, the carrying amount is a reasonable estimate of fair value. Interest Bearing Time Deposits The fair value of these financial instruments approximates carrying value. Loans Held For Sale The fair value of these financial instruments approximates carrying value. Loans Receivable The fair value of loans receivable is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. Accrued Interest Receivable The fair value of these financial instruments approximates carrying value. Federal Home Loan Bank Stock The carrying amount approximates fair value. Deposits The fair value of noninterest-bearing demand deposits and savings and NOW accounts is the amount payable as of the reporting date. The fair value of fixed maturity certificates of deposit is estimated using rates currently offered for deposits of similar remaining maturities. FHLB Advances The fair value of fixed rate advances is estimated using rates currently offered for similar remaining maturities. Accrued Interest Payable The fair value of these financial instruments approximates carrying value. Subordinated Debt The fair value of our subordinated debt is estimated using discounted cash flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements. Commitments The fair value of commitments to extend credit are based on fees currently charged to enter into similar agreements with similar maturities and interest rates. The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at December 31, 2013 and 2012. The following schedule includes the carrying value and estimated fair value of all financial assets and liabilities at December 31, 2013 and 2012:
|  | 2013 |
|  | Fair Value Measurements Using |
|  |  |  |  | Quoted Prices |  |  |  |  |  |  |
|  |  |  |  | In Active |  | Significant |  |  |  |
|  |  |  |  | Market for |  | Other |  | Significant |
|  |  |  |  | Identical |  | Observable |  | Unobservable |
|  | Carrying |  | Assets |  | Inputs |  | Inputs |
|  | Amount |  | (Level 1) |  | (Level 2) |  | (Level 3) |
Cash and cash equivalents |  | $ | 53,690 |  | $ | 53,690 |  | $ | — |  | $ | — |
Interest bearing time deposits |  |  | 2,500 |  |  | 2,500 |  |  | — |  |  | — |
Loans held for sale (best efforts pricing agreements) |  |  | 4,356 |  |  | — |  |  | 4,356 |  |  | — |
Loans receivable - net |  |  | 495,727 |  |  | — |  |  | — |  |  | 500,447 |
Accrued interest receivable |  |  | 2,904 |  |  | 2,904 |  |  | — |  |  | — |
FHLB stock |  |  | 2,943 |  |  | — |  |  | 2,943 |  |  | — |
Deposits |  |  | 673,095 |  |  | 362,634 |  |  | — |  |  | 315,179 |
FHLB advances |  |  | 31,793 |  |  | — |  |  | 33,415 |  |  | — |
Accrued interest payable |  |  | 102 |  |  | 102 |  |  | — |  |  | — |
Subordinated debt |  |  | 2,789 |  |  | — |  |  | 2,978 |  |  | — |
|  | 2012
|  | Fair Value Measurements Using
|  |  |  |  | Quoted Prices |  |  |  |  |  |
|  |  |  |  | In Active |  | Significant |  |  |  |
|  |  |  |  | Market for |  | Other |  | Significant |
|  |  |  |  | Identical |  | Observable |  | Unobservable |
|  | Carrying |  | Assets |  | Inputs |  | Inputs |
|  | Amount |  | (Level 1) |  | (Level 2) |  | (Level 3) |
Cash and cash equivalents |  | $ | 32,513 |  | $ | 32,513 |  | $ | — |  | $ | — |
Loans held for sale (best efforts pricing agreements) |  |  | 63,234 |  |  | — |  |  | 63,234 |  |  | — |
Loans receivable - net |  |  | 352,328 |  |  | — |  |  | — |  |  | 351,194 |
Accrued interest receivable |  |  | 2,196 |  |  | 2,196 |  |  | — |  |  | — |
FHLB stock |  |  | 2,943 |  |  | — |  |  | 2,943 |  |  | — |
Deposits |  |  | 530,691 |  |  | 300,818 |  |  | — |  |  | 236,375 |
FHLB advances |  |  | 40,686 |  |  | — |  |  | 42,986 |  |  | — |
Accrued interest payable |  |  | 120 |  |  | 120 |  |  | — |  |  | — |

X
- Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: 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=28364263&loc=d3e13433-108611 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 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: 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 6: 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=28364263&loc=d3e13504-108611 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration