Page 46 - Annual Report 2017

TEXAS GULF BANCSHARES, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements
December 31, 2016 and 2015

NOTE Q FAIR VALUE DISCLOSURES (CONTINUED)

Nonfinancial Assets and Nonfinancial Liabilities Recorded at Fair Value

The Company has no nonfinancial assets or nonfinancial liabilities measured at fair value on a
recurring basis. The Company has certain nonfinancial assets that are measured at fair value
on a nonrecurring basis which include foreclosed assets (upon initial recognition or
subsequent impairment), and intangible assets that are measured to determine impairment.

The fair value of the Company’s foreclosed assets, upon initial recognition, are estimated
using Level 2 inputs, based upon observable market input data and the goodwill is evaluated
for impairment using Level 3 inputs.

Fair Value Disclosure for all Financial Instruments

The Company is required to disclose the fair value of all financial instruments, including those
financial assets and financial liabilities not recorded at fair value in its consolidated balance
sheets, for which it is practicable to estimate fair value. Below is a table that summarizes the
estimated fair market values of all financial instruments of the Company at December 31,
2016 and 2015, followed by methods and assumptions that were used by the Company in
estimating the fair value.

The estimated fair values of the Company's financial instruments are as follows at December
31, 2016 and 2015 (in thousands):

2016
2016 Estimated Fair Values
Carrying
Amount Level 1 Level 2 Level 3 Totals
Financial Assets
Cash and cash equivalents $ 11,045 $ 3,034 $ - $ 8,011 $ 11,045
Securities available for sale 158,347 - 158,347 - 158,347
Restricted stock 1,720 - - 1,720 1,720
Servicing assets 135 - - 135 135
Loans, net 383,791 - - 387,649 387,649

Total Financial Assets $ 555,038 $ 3,034 $ 158,347 $ 397,515 $ 558,896

Financial Liabilities
Noninterest-bearing deposits $ 148,802 $ 148,802 $ - $ - $ 148,802
Interest-bearing deposits 227,683 - 227,683 - 227,683
Time deposits 109,183 - 110,053 - 110,053
FHLB advances 24,500 - 24,500 - 24,500
Total Financial Liabilities $ 510,168 $ 148,802 $ 362,236 $ - $ 511,038

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