Fair Value Measurement | 9 Months Ended |
Sep. 30, 2013 |
Fair Value Disclosures [Abstract] | ' |
FAIR VALUE MEASUREMENT | ' |
NOTE 9–FAIR VALUE MEASUREMENT: |
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For a further discussion of fair value measurements, including information regarding the Company’s valuation methodologies and the fair value hierarchy, see Note 17, Fair Value Measurement within the 2012 Annual Report on Form 10-K. |
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Valuation Processes |
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The Company has various processes and controls in place to ensure that fair value measurements are reasonably estimated. The Finance Committee provides oversight and approves the Company’s Asset/Liability Management Policy ("ALMP"). The Company's ALMP governs, among other things, the application and control of the valuation models used to measure fair value. On a quarterly basis, the Company’s Asset/Liability Management Committee ("ALCO") and the Finance Committee of the Board review significant modeling variables used to measure the fair value of the Company’s financial instruments, including the significant inputs used in the valuation of single family MSRs. Additionally, at least annually ALCO obtains an independent review of the MSR valuation process and procedures, including a review of the model architecture and the valuation assumptions. The Company obtains an MSR valuation from an independent valuation firm monthly to assist with the validation of the results and the reasonableness of the assumptions used in measuring fair value. |
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The Company’s real estate valuations are overseen by the Company’s appraisal department, which is independent of the Company’s lending and credit administration functions. The appraisal department maintains the Company’s appraisal policy and recommends changes to the policy subject to approval by the Company’s Loan Committee and the Credit Committee of the Board. The Company’s appraisals are prepared by independent third-party appraisers and the Company’s internal appraisers. Single family appraisals are generally reviewed by the Company’s single family loan underwriters. Single family appraisals with unusual, higher risk or complex characteristics, as well as commercial real estate appraisals, are reviewed by the Company’s appraisal department. |
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We obtain pricing from third party service providers for determining the fair value of a substantial portion of our investment securities available for sale. We have processes in place to evaluate such third party pricing services to ensure information obtained and valuation techniques used are appropriate. For fair value measurements obtained from third party services, we monitor and review the results to ensure the values are reasonable and in line with market experience for similar classes of securities. While the inputs used by the pricing vendor in determining fair value are not provided, and therefore unavailable for our review, we do perform certain procedures to validate the values received, including comparisons to other sources of valuation (if available), comparisons to other independent market data and a variance analysis of prices by Company personnel that are not responsible for the performance of the investment securities. |
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Estimation of Fair Value |
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Fair value is based on quoted market prices, when available. In certain cases where a quoted price for an asset or liability is not available, the Company uses valuation models to estimate fair value. These models incorporate inputs such as forward yield curves, loan prepayment assumptions, expected loss assumptions, market volatilities, and pricing spreads utilizing market-based inputs where readily available. The Company believes its valuation methods are appropriate and consistent with those that would be used by other market participants. However, imprecision in estimating unobservable inputs and other factors may result in these fair value measurements not reflecting the amount realized in an actual sale or transfer of the asset or liability in a current market exchange. |
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The following table summarizes the fair value measurement methodologies, including significant inputs and assumptions, and classification of the Company’s assets and liabilities. |
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Asset/Liability class | | Valuation methodology, inputs and assumptions | | Classification | | | | | | | | | | | | | | | |
Cash and cash equivalents | | Carrying value is a reasonable estimate of fair value based on the short-term nature of the instruments. | | Estimated fair value classified as Level 1. | | | | | | | | | | | | | | | |
Investment securities available for sale | | Observable market prices of identical or similar securities are used where available. | | Level 2 recurring fair value measurement | | | | | | | | | | | | | | | |
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If market prices are not readily available, value is based on discounted cash flows using the following significant inputs: | | | | | | | | | | | | | | | |
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• Expected prepayment speeds | | | | | | | | | | | | | | | |
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• Estimated credit losses | | | | | | | | | | | | | | | |
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• Market liquidity adjustments | | | | | | | | | | | | | | | |
Loans held for sale | | | | | | | | | | | | | | | | | | | |
Single-family loans | | Fair value is based on observable market data, including: | | Level 2 recurring fair value measurement | | | | | | | | | | | | | | | |
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• Quoted market prices, where available | | | | | | | | | | | | | | | |
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• Dealer quotes for similar loans | | | | | | | | | | | | | | | |
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• Forward sale commitments | | | | | | | | | | | | | | | |
Multifamily loans | | The sale price is set at the time the loan commitment is made, and as such subsequent changes in market conditions have a very limited effect, if any, on the value of these loans carried on the consolidated statements of financial condition, which are typically sold within 30 days of origination. | | Carried at lower of amortized cost or fair value. | | | | | | | | | | | | | | | |
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Estimated fair value classified as Level 2. | | | | | | | | | | | | | | | |
Loans held for investment | | | | | | | | | | | | | | | | | | | |
Loans held for investment, excluding collateral dependent loans | | Fair value is based on discounted cash flows, which considers the following inputs: | | For the carrying value of loans see Note 1–Summary of Significant Accounting Policies within the 2012 Annual Report on Form 10-K. | | | | | | | | | | | | | | | |
• Current lending rates for new loans | | | | | | | | | | | | | | | | |
• Expected prepayment speeds | Estimated fair value classified as Level 3. | | | | | | | | | | | | | | | |
• Estimated credit losses | | | | | | | | | | | | | | | | |
• Market liquidity adjustments | | | | | | | | | | | | | | | | |
Loans held for investment, collateral dependent | | Fair value is based on appraised value of collateral, which considers sales comparison and income approach methodologies. Adjustments are made for various factors, which may include: | | Carried at lower of amortized cost or fair value of collateral, less the estimated cost to sell. | | | | | | | | | | | | | | | |
• Adjustments for variations in specific property qualities such as location, physical dissimilarities, market conditions at the time of sale, income producing characteristics and other factors | | | | | | | | | | | | | | | | |
• Adjustments to obtain “upon completion” and “upon stabilization” values (e.g., property hold discounts where the highest and best use would require development of a property over time) | Classified as a Level 3 nonrecurring fair value measurement in periods where carrying value is adjusted to reflect the fair value of collateral. | | | | | | | | | | | | | | | |
• Bulk discounts applied for sales costs, holding costs and profit for tract development and certain other properties | | | | | | | | | | | | | | | | |
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Asset/Liability class | | Valuation methodology, inputs and assumptions | | Classification | | | | | | | | | | | | | | | |
Mortgage servicing rights | | | | | | | | | | | | | | | | | | | |
Single family MSRs | | For information on how the Company measures the fair value of its single family MSRs, including key economic assumptions and the sensitivity of fair value to changes in those assumptions, see Note 7, Mortgage Banking Operations. | | Level 3 recurring fair value measurement | | | | | | | | | | | | | | | |
Multifamily MSRs | | Fair value is based on discounted estimated future servicing fees and other revenue, less estimated costs to service the loans. | | Carried at lower of amortized cost or fair value | | | | | | | | | | | | | | | |
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Estimated fair value classified as Level 3. | | | | | | | | | | | | | | | |
Derivatives | | | | | | | | | | | | | | | | | | | |
Interest rate swaps | | Fair value is based on quoted prices for identical or similar instruments, when available. | | Level 2 recurring fair value measurement | | | | | | | | | | | | | | | |
Interest rate swaptions | | | | | | | | | | | | | | | | |
Forward sale commitments | When quoted prices are not available, fair value is based on internally developed modeling techniques, which require the use of multiple observable market inputs including: | | | | | | | | | | | | | | | |
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| • Forward interest rates | | | | | | | | | | | | | | | |
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| • Interest rate volatilities | | | | | | | | | | | | | | | |
Interest rate lock commitments | | The fair value considers several factors including: | | Level 3 recurring fair value measurement effective December 31, 2012. | | | | | | | | | | | | | | | |
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• Fair value of the underlying loan based on quoted prices in the secondary market, when available. | | | | | | | | | | | | | | | |
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• Value of servicing | | | | | | | | | | | | | | | |
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• Fall-out factor | | | | | | | | | | | | | | | |
Other real estate owned (“OREO”) | | Fair value is based on appraised value of collateral. See discussion of "loans held for investment, collateral dependent" above for further information on appraisals. | | Carried at lower of amortized cost or fair value of collateral (Level 3), less the estimated cost to sell. | | | | | | | | | | | | | | | |
Federal Home Loan Bank stock | | Carrying value approximates fair value as FHLB stock can only be purchased or redeemed at par value. | | Carried at par value. | | | | | | | | | | | | | | | |
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Estimated fair value classified as Level 2. | | | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | | | | | | | |
Demand deposits | | Fair value is estimated as the amount payable on demand at the reporting date. | | Carried at historical cost. | | | | | | | | | | | | | | | |
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Estimated fair value classified as Level 2. | | | | | | | | | | | | | | | |
Fixed-maturity certificates of deposit | | Fair value is estimated using discounted cash flows based on market rates currently offered for deposits of similar remaining time to maturity. | | Carried at historical cost. | | | | | | | | | | | | | | | |
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Estimated fair value classified as Level 2. | | | | | | | | | | | | | | | |
Federal Home Loan Bank advances | | Fair value is estimated using discounted cash flows based on rates currently available for advances with similar terms and remaining time to maturity. | | Carried at historical cost. | | | | | | | | | | | | | | | |
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Estimated fair value classified as Level 2. | | | | | | | | | | | | | | | |
Long-term debt | | Fair value is estimated using discounted cash flows based on current lending rates for similar long-term debt instruments with similar terms and remaining time to maturity. | | Carried at historical cost. | | | | | | | | | | | | | | | |
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Estimated fair value classified as Level 2. | | | | | | | | | | | | | | | |
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The following table presents the levels of the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis. |
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(in thousands) | Fair Value at September 30, 2013 | | Level 1 | | Level 2 | | Level 3 | | | | |
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Assets: | | | | | | | | | | | |
Investment securities available for sale | | | | | | | | | | | |
Mortgage backed securities: | | | | | | | | | | | |
Residential | $ | 144,263 | | | $ | — | | | $ | 144,263 | | | $ | — | | | | | |
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Commercial | 13,720 | | | — | | | 13,720 | | | — | | | | | |
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Municipal bonds | 147,441 | | | — | | | 147,441 | | | — | | | | | |
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Collateralized mortgage obligations: | | | | | | | | | | | |
Residential | 153,466 | | | — | | | 153,466 | | | — | | | | | |
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Commercial | 16,991 | | | — | | | 16,991 | | | — | | | | | |
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Corporate debt securities | 69,963 | | | — | | | 69,963 | | | — | | | | | |
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U.S. Treasury securities | 27,747 | | | — | | | 27,747 | | | — | | | | | |
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Single family mortgage servicing rights | 136,897 | | | — | | | — | | | 136,897 | | | | | |
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Single family loans held for sale | 385,110 | | | — | | | 385,110 | | | — | | | | | |
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Derivatives | | | | | | | | | | | |
Forward sale commitments | 2,357 | | | — | | | 2,357 | | | — | | | | | |
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Interest rate swaptions | 136 | | | — | | | 136 | | | — | | | | | |
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Interest rate lock commitments | 13,753 | | | — | | | — | | | 13,753 | | | | | |
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Interest rate swaps | 4,611 | | | — | | | 4,611 | | | — | | | | | |
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Total assets | $ | 1,116,455 | | | $ | — | | | $ | 965,805 | | | $ | 150,650 | | | | | |
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Liabilities: | | | | | | | | | | | |
Derivatives | | | | | | | | | | | |
Forward sale commitments | $ | 10,871 | | | $ | — | | | $ | 10,871 | | | $ | — | | | | | |
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Interest rate lock commitments | 76 | | | — | | | — | | | 76 | | | | | |
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Interest rate swaps | 13,176 | | | — | | | 13,176 | | | — | | | | | |
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Total liabilities | $ | 24,123 | | | $ | — | | | $ | 24,047 | | | $ | 76 | | | | | |
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(in thousands) | Fair Value at December 31, 2012 | | Level 1 | | Level 2 | | Level 3 | | | | |
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Assets: | | | | | | | | | | | |
Investment securities available for sale | | | | | | | | | | | |
Mortgage backed securities: | | | | | | | | | | | |
Residential | $ | 62,853 | | | $ | — | | | $ | 62,853 | | | $ | — | | | | | |
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Commercial | 14,380 | | | — | | | 14,380 | | | — | | | | | |
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Municipal bonds | 129,175 | | | — | | | 129,175 | | | — | | | | | |
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Collateralized mortgage obligations: | | | | | | | | | | | |
Residential | 170,199 | | | — | | | 170,199 | | | — | | | | | |
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Commercial | 9,043 | | | — | | | 9,043 | | | — | | | | | |
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U.S. Treasury securities | 30,679 | | | — | | | 30,679 | | | — | | | | | |
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Single family mortgage servicing rights | 87,396 | | | — | | | — | | | 87,396 | | | | | |
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Single family loans held for sale | 607,578 | | | — | | | 607,578 | | | — | | | | | |
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Derivatives | | | | | | | | | | | |
Forward sale commitments | 621 | | | — | | | 621 | | | — | | | | | |
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Interest rate lock commitments | 22,548 | | | — | | | — | | | 22,548 | | | | | |
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Interest rate swaps | 538 | | | — | | | 538 | | | — | | | | | |
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Total assets | $ | 1,135,010 | | | $ | — | | | $ | 1,025,066 | | | $ | 109,944 | | | | | |
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Liabilities: | | | | | | | | | | | |
Derivatives | | | | | | | | | | | |
Forward sale commitments | $ | 2,743 | | | $ | — | | | $ | 2,743 | | | $ | — | | | | | |
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Interest rate lock commitments | 20 | | | — | | | — | | | 20 | | | | | |
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Interest rate swaps | 9,358 | | | — | | | 9,358 | | | — | | | | | |
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Total liabilities | $ | 12,121 | | | $ | — | | | $ | 12,101 | | | $ | 20 | | | | | |
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There were no transfers between levels of the fair value hierarchy during the three and nine months ended September 30, 2013 and 2012. |
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Level 3 Recurring Fair Value Measurements |
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The Company's level 3 recurring fair value measurements consist of single family mortgage servicing rights and, as of December 31, 2012, interest rate lock commitments, which are accounted for as derivatives. For information regarding fair value changes and activity for single family MSRs during the three and nine months ended September 30, 2013 and 2012, see Note 7, Mortgage Banking Operations. |
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The following table presents fair value changes and activity for level 3 interest rate lock commitments. |
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(in thousands) | Three Months Ended | | Nine Months Ended | | | | | | | | | | | | |
September 30, | September 30, | | | | | | | | | | | | |
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Beginning balance, net | $ | 406 | | | $ | 22,528 | | | | | | | | | | | | | |
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Total realized/unrealized gains(1) | 28,538 | | | 102,231 | | | | | | | | | | | | | |
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Settlements | (15,267 | ) | | (111,082 | ) | | | | | | | | | | | | |
Ending balance, net | $ | 13,677 | | | $ | 13,677 | | | | | | | | | | | | | |
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-1 | All realized and unrealized gains and losses are recognized in earnings as net gain from mortgage loan origination and sale activities on the consolidated statement of operations. For the three and nine months ended September 30, 2013 there were net unrealized (losses) gains of $13.3 million and $13.7 million , respectively, recognized on interest rate lock commitments still outstanding at September 30, 2013. | | | | | | | | | | | | | | | | | | |
In the first quarter of 2013, the Company refined the valuation methodology used for interest rate lock commitments to reflect assumptions that the Company believes a market participant would consider under current market conditions. This change in accounting estimate resulted in an increase in fair value of $4.3 million to the Company's interest rate lock commitments outstanding at March 31, 2013. |
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The following information presents significant Level 3 unobservable inputs used to measure fair value of interest rate lock commitments. |
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(dollars in thousands) | At September 30, 2013 | | | | | | |
Fair Value | | Valuation | | Significant Unobservable | | Low | | High | | Weighted Average | | | | | | |
Technique | Input | | | | | | |
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Interest rate lock commitments, net | $ | 13,677 | | | Income approach | | Fall out factor | | 0.50% | | 100.00% | | 16.40% | | | | | | |
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| | | | | Value of servicing | | 0.36% | | 2.14% | | 0.98% | | | | | | |
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(dollars in thousands) | At December 31, 2012 | | | | | | |
Fair Value | | Valuation | | Significant Unobservable | | Low | | High | | Weighted Average | | | | | | |
Technique | Input | | | | | | |
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Interest rate lock commitments, net | $ | 22,528 | | | Income Approach | | Fall out factor | | 0.40% | | 59.30% | | 16.80% | | | | | | |
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| | | | | Value of servicing | | 0.50% | | 2.18% | | 1.04% | | | | | | |
The fair value of interest rate lock commitments decreases in value upon an increase in the fall-out factor and increases in value upon an increase in the value of servicing. Changes in the fall-out factor and value of servicing do not increase or decrease based on movements in the other significant unobservable input. |
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Nonrecurring Fair Value Measurements |
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Certain assets held by the Company are not included in the tables above, but are measured at fair value on a nonrecurring basis. These assets include certain loans held for investment and other real estate owned that are carried at the lower of cost or fair value, less the estimated cost to sell. The following tables present assets that were recorded at fair value during the three and nine months ended September 30, 2013 and 2012 and still held at the end of the respective reporting period. |
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| Three Months Ended September 30, 2013 |
(in thousands) | Fair Value of Assets Held at September 30, 2013 | | Level 1 | | Level 2 | | Level 3 | | Total Gains (Losses) |
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Loans held for investment(1) | $ | 37,853 | | | $ | — | | | $ | — | | | $ | 37,853 | | | $ | (760 | ) |
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Other real estate owned(2) | 1,847 | | | — | | | — | | | 1,847 | | | (174 | ) |
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Total | $ | 39,700 | | | $ | — | | | $ | — | | | $ | 39,700 | | | $ | (934 | ) |
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| Three Months Ended September 30, 2012 |
(in thousands) | Fair Value of Assets Held at September 30, 2012 | | Level 1 | | Level 2 | | Level 3 | | Total Losses |
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Loans held for investment(1) | $ | 34,699 | | | $ | — | | | $ | — | | | $ | 34,699 | | | $ | (1,817 | ) |
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Other real estate owned(2) | 5,738 | | | — | | | — | | | 5,738 | | | (2,464 | ) |
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Total | $ | 40,437 | | | $ | — | | | $ | — | | | $ | 40,437 | | | $ | (4,281 | ) |
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| Nine Months Ended September 30, 2013 |
(in thousands) | Fair Value of Assets Held at September 30, 2013 | | Level 1 | | Level 2 | | Level 3 | | Total Gains (Losses) |
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Loans held for investment(1) | $ | 37,853 | | | $ | — | | | $ | — | | | $ | 37,853 | | | $ | (1,510 | ) |
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Other real estate owned(2) | 10,398 | | | — | | | — | | | 10,398 | | | (2,589 | ) |
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Total | $ | 48,251 | | | $ | — | | | $ | — | | | $ | 48,251 | | | $ | (4,099 | ) |
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| Nine Months Ended September 30, 2012 |
(in thousands) | Fair Value of Assets Held at September 30, 2012 | | Level 1 | | Level 2 | | Level 3 | | Total Losses |
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Loans held for investment(1) | $ | 35,659 | | | $ | — | | | $ | — | | | $ | 35,659 | | | $ | (5,324 | ) |
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Other real estate owned(2) | 11,035 | | | — | | | — | | | 11,035 | | | (5,554 | ) |
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Total | $ | 46,694 | | | $ | — | | | $ | — | | | $ | 46,694 | | | $ | (10,878 | ) |
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-1 | Represents the carrying value of loans for which adjustments are based on the fair value of the collateral. | | | | | | | | | | | | | | | | | | |
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-2 | Represents other real estate owned where an updated fair value of collateral is used to adjust the carrying amount subsequent to the initial classification as other real estate owned. | | | | | | | | | | | | | | | | | | |
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The following table presents significant Level 3 unobservable inputs used to measure fair value on a nonrecurring basis during the nine months ended September 30, 2013 and the three and nine months ended September 30, 2012 for assets still held at the end of the period. For the three months ended September 30, 2013 there were no significant unobservable inputs used to measure fair value on a nonrecurring basis. |
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(dollars in thousands) | Fair Value of Assets Held at September 30, 2013 (1) | | Valuation | | Significant Unobservable | | Nine Months Ended September 30, | | | |
Technique | Input | 2013 | | | |
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Loans held for investment | $ | 14,605 | | | Market approach | | Comparable sale adjustments(2) | | 0 | % | | 45 | % | | 20 | % | | | |
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| 14,605 | | | Income approach | | Capitalization rate | | 6.4 | % | | 10.8 | % | | 8.2 | % | | | |
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| | | | | Discount rate | | 8.2 | % | | 9.5 | % | | 8.9 | % | | | |
Other real estate owned | $ | 5,814 | | | Market approach | | Comparable sale adjustments(2) | | 0 | % | | 50 | % | | 25 | % | | | |
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(dollars in thousands) | Fair Value of Assets Held at September 30, 2012 (1) | | Valuation | | Significant Unobservable | | Three Months Ended September 30, | | | |
Technique | Input | 2012 | | | |
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Loans held for investment | $ | 34,699 | | | Market approach | | Comparable sale adjustments(2) | | 3 | % | | 45 | % | | 24 | % | | | |
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| 10,462 | | | Income approach | | Capitalization rate | | 5 | % | | 9 | % | | 7 | % | | | |
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Other real estate owned | $ | 5,738 | | | Market approach | | Comparable sale adjustments(2) | | 1 | % | | 13 | % | | 7 | % | | | |
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(dollars in thousands) | Fair Value of Assets Held at September 30, 2012 (1) | | Valuation | | Significant Unobservable | | Nine Months Ended September 30, | | | |
Technique | Input | 2012 | | | |
| | | | | Low | | High | | Weighted Average | | | |
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Loans held for investment | $ | 35,659 | | | Market approach | | Comparable sale adjustments(2) | | 1 | % | | 45 | % | | 23 | % | | | |
| | |
| | | | | Other discounts(3) | | 28 | % | | 74 | % | | 51 | % | | | |
| 10,975 | | | Income approach | | Capitalization rate | | 6 | % | | 11 | % | | 8.5 | % | | | |
| | |
Other real estate owned | $ | 11,035 | | | Market approach | | Comparable sale adjustments(2) | | 0 | % | | 70 | % | | 35 | % | | | |
| | |
| | | | | Other discounts(3) | | 4 | % | | 64 | % | | 34 | % | | | |
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-1 | Assets that are valued using more than one valuation technique are presented within multiple categories for each valuation technique used. Excludes unobservable inputs that we consider, both individually and in the aggregate, to have been insignificant relative to our overall nonrecurring Level 3 measurements recorded during the period. | | | | | | | | | | | | | | | | | | |
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-2 | Represents the range of net adjustments reflecting differences between a comparable sale and the property being appraised, expressed as an absolute value. | | | | | | | | | | | | | | | | | | |
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-3 | Includes bulk sale discounts applied to the aggregate retail value of tract development properties, accelerated marketing period discounts and time-hold or other discounts applied to derive the “as is” market value of certain properties requiring a holding period before reaching a state of feasibility or completion (e.g., “upon completion” or "upon stabilization" value) and management discounts based on the Company's experience with actual liquidation values. | | | | | | | | | | | | | | | | | | |
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The Company's property appraisals are primarily based on the market approach and income approach methodologies, which consider recent sales of comparable properties, including their income generating characteristics, and then make adjustments to reflect the general assumptions that a market participant would make when analyzing the property for purchase. These adjustments may increase or decrease an appraised value and can vary significantly depending on the location, physical characteristics and income producing potential of each individual property. Additionally, the quality and volume of market information available at the time of the appraisal can vary from period-to-period and cause significant changes to the nature and magnitude of comparable sale adjustments. Given these variations, comparable sale adjustments are generally not a reliable indicator for how fair value will increase or decrease from period to period. Under certain circumstances, management discounts are applied based on specific characteristics of an individual property and the Company's experience with actual liquidation values. |
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In addition to the instruments disclosed in the table above, certain nonrecurring fair value measurements of residential |
properties were based on unadjusted third-party appraisals. Factors considered in determining the fair value include geographic |
sales trends, the value of comparable surrounding properties as well as the condition of the property. |
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Fair Value of Financial Instruments |
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The following presents the carrying value, estimated fair value and the levels of the fair value hierarchy for the Company’s financial instruments other than assets and liabilities measured at fair value on a recurring basis. |
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| | | | | | | | | | | | | | | | | | | |
| At September 30, 2013 |
(in thousands) | Carrying | | Fair | | Level 1 | | Level 2 | | Level 3 |
Value | Value |
| | | | | | | | | |
Assets: | | | | | | | | | |
Cash and cash equivalents | $ | 37,906 | | | $ | 37,906 | | | $ | 37,906 | | | $ | — | | | $ | — | |
|
Loans held for investment | 1,510,169 | | | 1,525,432 | | | — | | | — | | | 1,525,432 | |
|
Mortgage servicing rights – multifamily | 9,403 | | | 10,899 | | | — | | | — | | | 10,899 | |
|
Federal Home Loan Bank stock | 35,370 | | | 35,370 | | | — | | | 35,370 | | | — | |
|
Liabilities: | | | | | | | | | |
Deposits | $ | 2,098,076 | | | $ | 1,982,714 | | | $ | — | | | $ | 1,982,714 | | | $ | — | |
|
Federal Home Loan Bank advances | 338,690 | | | 341,555 | | | — | | | 341,555 | | | — | |
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Long-term debt | 61,857 | | | 60,239 | | | — | | | 60,239 | | | — | |
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| At December 31, 2012 |
(in thousands) | Carrying | | Fair | | Level 1 | | Level 2 | | Level 3 |
Value | Value |
| | | | | | | | | |
Assets: | | | | | | | | | |
Cash and cash equivalents | $ | 25,285 | | | $ | 25,285 | | | $ | 25,285 | | | $ | — | | | $ | — | |
|
Loans held for investment | 1,308,974 | | | 1,340,882 | | | — | | | — | | | 1,340,882 | |
|
Loans held for sale – multifamily | 13,221 | | | 14,810 | | | — | | | 14,810 | | | — | |
|
Mortgage servicing rights – multifamily | 8,097 | | | 9,497 | | | — | | | — | | | 9,497 | |
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Federal Home Loan Bank stock | 36,367 | | | 36,367 | | | — | | | 36,367 | | | — | |
|
Liabilities: | | | | | | | | | |
Deposits | $ | 1,976,835 | | | $ | 1,979,925 | | | $ | — | | | $ | 1,979,925 | | | $ | — | |
|
Federal Home Loan Bank advances | 259,090 | | | 263,209 | | | — | | | 263,209 | | | — | |
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Long-term debt | 61,857 | | | 60,241 | | | — | | | 60,241 | | | — | |
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Excluded from the fair value tables above are certain off-balance sheet loan commitments such as unused home equity lines of credit, business banking line funds and undisbursed construction funds. A reasonable estimate of the fair value of these instruments is the carrying value of deferred fees plus the related allowance for credit losses, which amounted to $440 thousand and $216 thousand at September 30, 2013 and December 31, 2012, respectively. |