Fair Value Measurements

3 Months Ended

Mar. 31, 2012

6.	*Fair Value Measurements.* Our listing of financial assets subject to fair value measurements on a recurring basis are as follows (in thousands):


			Fair Value Measurements at Reporting Date Using
	Fair Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
*As of March 31, 2012:*
U.S. Government agency securities	$	1,048		—		1,048		—
Mortgage-backed securities		38,482		—		38,482		—
Municipal bonds		4,737		—		4,737		—
Corporate bonds		2,093		—		2,093		—


	$	46,360		—		46,360		—


*As of December 31, 2011:*
U.S. Government agency securities		1,059		—		1,059		—
Mortgage-backed securities		47,164		—		47,164		—
Corporate bonds		1,993		—		1,993		—


	$	50,216		—		50,216		—

There were no transfers of securities between levels of inputs during the three months ended March 31, 2012 and during the year ended December 31, 2011.

Impaired collateral-dependent loans are carried at fair value when the current collateral value is lower than the carrying value of the loan. Impaired collateral-dependent loans are evaluated individually according to an appraised value obtained at least annually. Those impaired collateral-dependent loans which are measured at fair value or a nonrecurring basis are as follows (in thousands):

		00000000		00000000		00000000		00000000		00000000		00000000
	Fair Value		Level 1		Level 2		Level 3		Total Losses		Losses Recorded in Operations for the Three-Month Period Ended March 31, 2012
*At March 31, 2012:*
Real estate mortgage:
Office/retail/other	$	2,155		—		—		2,155		1,582		109
Multi-family		—		—		—		—		—		—
Land		3,072		—		—		3,072		2,836		36
Commercial real estate		—		—		—		—		—		—
Residential nonowner		—		—		—		—		—		—
Residential owner		342		—		—		342		75		55
Construction and development		1,554		—		—		1,554		600		—
Home equity and line of credit		—		—		—		—		127		127
Commercial		65		—		—		65		5		—
Consumer		82		—		—		82		176		(3	)


Total	$	7,270		—		—		7,270		5,401		324

		00000000		00000000		00000000		00000000		00000000		00000000
	Fair Value		Level 1		Level 2		Level 3		Total Losses		Losses Recorded in Operations for the Year Ended December 31, 2011
*At December 31, 2011:*
Real estate mortgage:
Office/retail/other		2,906		—		—		2,906		1,473		1,213
Multi-family		—		—		—		—		—		—
Land		3,466		—		—		3,466		2,801		1,422
Commercial real estate		—		—		—		—		—		—
Residential nonowner		91		—		—		91		20		(6	)
Residential owner		121		—		—		121		40		20
Construction and development		1,554		—		—		1,554		600		600
Home equity and line of credit		—		—		—		—		—		—
Commercial		65		—		—		65		5		5
Consumer		96		—		—		96		179		84


Total	$	8,299		—		—		8,299		5,118		3,338

In addition, loans with a carrying value of $2,519,000 at March 31, 2012 were measured for impairment using Level 3 inputs and had a fair value in excess of carrying value.

In addition, loans with a carrying value of $2,269,000 at December 31, 2011 were measured for impairment using Level 3 inputs and had a fair value in excess of carrying value.

Other real estate owned is recorded at fair value less estimated costs to sell. Other real estate owned which is measured at fair value on a nonrecurring basis is as follows (in thousands):

		000000		000000		000000		000000		000000		000000
	Fair Value		Level 1		Level 2		Level 3		Total Losses		Losses Recorded in Operations for the Three-Month Period Ended March 31, 2012

At March 31, 2012	$	3,868		—		—		3,868		1,039		99

		000000		000000		000000		000000		000000		000000
	Fair Value		Level 1		Level 2		Level 3		Total Losses		Losses Recorded in Operations for the Year Ended December 31, 2011

At December 31, 2011	$	4,523		—		—		4,523		2,128		1,522

- 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

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+ Details

Alarion Financial Services Inc 10-Q