Fair Value Measurements (Tables)
|
9 Months Ended |
Sep. 30, 2014
|
Fair Value Disclosures [Abstract] |
|
Assets and Liabilities Measured at Fair Value on Recurring Basis |
As of September 30, 2014 and December 31, 2013, assets
and liabilities measured at fair value on a recurring basis are as
follows:
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|
Level 1 |
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Level 2 |
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Level 3 |
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|
Quoted Prices in
Active Markets
for Identical
Assets |
|
|
Significant
Observable
Inputs with No
Active Market
with Identical
Characteristics |
|
|
Significant
Unobservable
Inputs |
|
|
Balance |
|
|
|
(In
thousands) |
|
September 30, 2014
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Assets:
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|
|
|
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|
Securities available for sale:
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|
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|
Mortgage-backed securities
|
|
$ |
— |
|
|
$ |
584,157 |
|
|
$ |
— |
|
|
$ |
584,157 |
|
Collateralized mortgage obligations
|
|
|
— |
|
|
|
196,211 |
|
|
|
— |
|
|
|
196,211 |
|
U.S. government agency securities
|
|
|
172,793 |
|
|
|
— |
|
|
|
— |
|
|
|
172,793 |
|
SBA loan pools securities
|
|
|
— |
|
|
|
114,117 |
|
|
|
— |
|
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|
114,117 |
|
Municipal bonds-tax exempt
|
|
|
— |
|
|
|
3,711 |
|
|
|
718 |
|
|
|
4,429 |
|
Municipal bonds-taxable
|
|
|
— |
|
|
|
16,660 |
|
|
|
— |
|
|
|
16,660 |
|
Corporate bonds
|
|
|
— |
|
|
|
16,940 |
|
|
|
— |
|
|
|
16,940 |
|
U.S. treasury securities
|
|
|
163 |
|
|
|
— |
|
|
|
— |
|
|
|
163 |
|
Other securities
|
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|
— |
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|
22,704 |
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|
— |
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|
22,704 |
|
Equity security
|
|
|
— |
|
|
|
— |
|
|
|
450 |
|
|
|
450 |
|
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|
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|
|
|
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|
|
|
|
|
|
|
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|
Total securities available for sale
|
|
$ |
172,956 |
|
|
$ |
954,500 |
|
|
$ |
1,168 |
|
|
$ |
1,128,624 |
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December 31, 2013
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Assets:
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|
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|
|
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|
Securities available for sale:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities
|
|
$ |
— |
|
|
$ |
217,059 |
|
|
$ |
— |
|
|
$ |
217,059 |
|
Collateralized mortgage obligations
|
|
|
— |
|
|
|
127,693 |
|
|
|
— |
|
|
|
127,693 |
|
U.S. government agency securities
|
|
|
83,536 |
|
|
|
— |
|
|
|
— |
|
|
|
83,536 |
|
SBA loan pools securities
|
|
|
— |
|
|
|
12,629 |
|
|
|
— |
|
|
|
12,629 |
|
Municipal bonds-tax exempt
|
|
|
— |
|
|
|
13,189 |
|
|
|
748 |
|
|
|
13,937 |
|
Municipal bonds-taxable
|
|
|
— |
|
|
|
32,354 |
|
|
|
— |
|
|
|
32,354 |
|
Corporate bonds
|
|
|
— |
|
|
|
20,835 |
|
|
|
— |
|
|
|
20,835 |
|
U.S. treasury securities
|
|
|
19,997 |
|
|
|
— |
|
|
|
— |
|
|
|
19,997 |
|
Other securities
|
|
|
— |
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|
2,886 |
|
|
|
— |
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|
2,886 |
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Total securities available for sale
|
|
$ |
103,533 |
|
|
$ |
426,645 |
|
|
$ |
748 |
|
|
$ |
530,926 |
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|
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Liabilities:
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Stock warrants
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$ |
— |
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|
$ |
— |
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|
$ |
2 |
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|
$ |
2 |
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Reconciliation and Income Statement Classification of Gains and Losses for All Assets and Liabilities |
The table below presents a reconciliation and income statement
classification of gains and losses for all assets and liabilities
measured at fair value on a recurring basis using significant
unobservable inputs (Level 3) for the nine months ended
September 30, 2014:
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Beginning
Balance as of
January 1,
2014 |
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|
Purchases,
Issuances
and
Settlement |
|
|
Realized
Gains or
Losses
in Earnings |
|
|
Unrealized
Gains or
Losses
in Other
Comprehensive
Income
|
|
|
Ending
Balance as of
September 30,
2014 |
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|
(In
thousands) |
|
Assets:
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|
|
|
|
|
|
|
|
|
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|
|
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|
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|
Municipal bonds-tax exempt (1)
|
|
$ |
748 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(30 |
) |
|
$ |
718 |
|
Equity securities (2)
|
|
$ |
— |
|
|
$ |
450 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
450 |
|
Liabilities:
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|
|
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Stock warrants (3)
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|
$ |
2 |
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|
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
(1) |
Reflects a zero coupon tax credit
municipal bond. As the Company was not able to obtain a price from
independent external pricing service providers, the discounted cash
flow method was used to determine its fair value. The bond carried
a par value of $700,000 and an amortized value of $700,000 with a
remaining life of 0.48 year at September 30, 2014. |
(2) |
Reflects two equity securities
that are not actively traded. The fair value of one equity security
with a fair value of $250,000 was computed using valuation
multiples (price to book and price to earnings) derived from market
transactions for comparable companies. The other equity security
with a fair value of $200,000 was computed using valuation
multiples (price to book and price to earnings) derived from 1)
market transactions for comparable companies, and 2)
publicly-traded comparable companies. In addition to these
approaches, the Company considered a discounted cash flow approach,
which cash flows, calculated based on a redemption or liquidation
policy of the equity issuer, are discounted back to the present
using a 10.5% discount rate. |
(3) |
Reflects warrants for our common
stock issued in connection with services Cappello Capital Corp.
provided to us as a placement agent in connection with our best
efforts public offering and as our financial adviser in connection
with our completed rights offering. The warrants were immediately
exercisable when issued at an exercise price of $9.60 per share of
our common stock and expire on October 14, 2015. There were no
outstanding stock warrants as of September 30, 2014. See
“Note 9 – Stockholders’ Equity” for more
details. |
|
Assets and Liabilities Measured at Fair Value on Non-Recurring Basis |
As of September 30, 2014 and December 31, 2013, assets
and liabilities measured at fair value on a non-recurring basis are
as follows:
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|
Level 1 |
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|
Level 2 |
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|
Level 3 |
|
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|
|
|
|
Quoted Prices in
Active Markets
for Identical
Assets |
|
|
Significant
Observable
Inputs With No
Active Market
With Identical
Characteristics |
|
|
Significant
Unobservable
Inputs |
|
|
Loss During the
Nine Months Ended
September 30, 2014 |
|
|
|
(In
thousands) |
|
September 30, 2014
|
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Assets:
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Impaired loans (excluding PCI loans) (1)
|
|
$ |
— |
|
|
$ |
34,373 |
|
|
$ |
2,199 |
|
|
$ |
2,905 |
|
Other real estate owned (2)
|
|
|
— |
|
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|
24,781 |
|
|
|
— |
|
|
|
— |
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|
Level 1 |
|
|
Level 2 |
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|
Level 3 |
|
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|
|
|
|
Quoted Prices in
Active Markets
for Identical
Assets |
|
|
Significant
Observable
Inputs With No
Active Market
With Identical
Characteristics |
|
|
Significant
Unobservable
Inputs |
|
|
Loss During the
Twelve Months Ended
December 31, 2013 |
|
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|
(In
thousands) |
|
December 31, 2013
|
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Assets:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired loans (3)
|
|
$ |
— |
|
|
$ |
36,254 |
|
|
$ |
1,738 |
|
|
$ |
2,431 |
|
Other real estate owned (4)
|
|
|
— |
|
|
|
756 |
|
|
|
— |
|
|
|
10 |
|
(1) |
Include real estate loans of $33.6
million, commercial and industrial loans of $1.2 million, and
consumer loans of $1.8 million. |
(2) |
Includes properties from the
foreclosure of real estate loans of $24.8 million of which $22.3
million was acquired from CBI. |
(3) |
Include real estate loans of $32.2
million, commercial and industrial loans of $2.8 million, and
consumer loans of $1.3 million. |
(4) |
Includes properties from the
foreclosure of real estate loans of $756,000. |
|
Estimated Fair Values of Financial Instruments |
The estimated fair values of financial instruments were as
follows:
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September 30, 2014 |
|
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|
Carrying |
|
|
Fair Value |
|
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|
Amount |
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|
Level 1 |
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|
Level 2 |
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|
Level 3 |
|
Financial assets:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
197,016 |
|
|
$ |
197,016 |
|
|
$ |
— |
|
|
$ |
— |
|
Securities available for sale
|
|
|
1,128,624 |
|
|
|
172,956 |
|
|
|
954,500 |
|
|
|
1,168 |
|
Loans receivable, net of allowance for loan losses
|
|
|
2,628,091 |
|
|
|
— |
|
|
|
— |
|
|
|
2,686,838 |
|
Loans held for sale
|
|
|
7,757 |
|
|
|
— |
|
|
|
7,757 |
|
|
|
— |
|
Accrued interest receivable
|
|
|
9,880 |
|
|
|
9,880 |
|
|
|
— |
|
|
|
— |
|
Servicing assets
|
|
|
7,844 |
|
|
|
— |
|
|
|
— |
|
|
|
7,844 |
|
Investment in federal home loan bank stock
|
|
|
17,579 |
|
|
|
17,579 |
|
|
|
— |
|
|
|
— |
|
Investment in federal reserve bank stock
|
|
|
12,273 |
|
|
|
12,273 |
|
|
|
— |
|
|
|
— |
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
|
|
1,029,343 |
|
|
|
— |
|
|
|
1,029,343 |
|
|
|
— |
|
Interest-bearing deposits
|
|
|
2,568,811 |
|
|
|
— |
|
|
|
— |
|
|
|
2,565,504 |
|
Borrowings
|
|
|
128,509 |
|
|
|
— |
|
|
|
— |
|
|
|
128,509 |
|
Accrued interest payable
|
|
|
3,030 |
|
|
|
3,030 |
|
|
|
— |
|
|
|
— |
|
Off-balance sheet items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments to extend credit
|
|
|
327,381 |
|
|
|
— |
|
|
|
— |
|
|
|
327,381 |
|
Standby letters of credit
|
|
|
9,140 |
|
|
|
— |
|
|
|
— |
|
|
|
9,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
December 31, 2013 |
|
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|
Carrying |
|
|
Fair Value |
|
|
|
Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
179,357 |
|
|
$ |
179,357 |
|
|
$ |
— |
|
|
$ |
— |
|
Securities available for sale
|
|
|
530,926 |
|
|
|
103,533 |
|
|
|
426,645 |
|
|
|
748 |
|
Loans receivable, net of allowance for loan losses
|
|
|
2,177,498 |
|
|
|
— |
|
|
|
— |
|
|
|
2,204,069 |
|
Loans held for sale
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Accrued interest receivable
|
|
|
7,055 |
|
|
|
7,055 |
|
|
|
— |
|
|
|
— |
|
Servicing assets
|
|
|
6,833 |
|
|
|
— |
|
|
|
— |
|
|
|
6,833 |
|
Investment in federal home loan bank stock
|
|
|
14,060 |
|
|
|
14,060 |
|
|
|
— |
|
|
|
— |
|
Investment in federal reserve bank stock
|
|
|
11,196 |
|
|
|
11,196 |
|
|
|
— |
|
|
|
— |
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
|
|
819,015 |
|
|
|
— |
|
|
|
819,015 |
|
|
|
— |
|
Interest-bearing deposits
|
|
|
1,693,310 |
|
|
|
— |
|
|
|
— |
|
|
|
1,693,739 |
|
Borrowings
|
|
|
127,546 |
|
|
|
— |
|
|
|
— |
|
|
|
247,249 |
|
Accrued interest payable
|
|
|
3,366 |
|
|
|
3,366 |
|
|
|
— |
|
|
|
— |
|
Off-balance sheet items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments to extend credit
|
|
|
246,161 |
|
|
|
— |
|
|
|
— |
|
|
|
246,161 |
|
Standby letters of credit
|
|
|
8,926 |
|
|
|
— |
|
|
|
— |
|
|
|
8,926 |
|
|