Page 47 - 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)

2015
2015 Estimated Fair Values
Carrying
Amount Level 1 Level 2 Level 3 Totals
Financial Assets
Cash and cash equivalents $ 7,618 $ 7,022 $ - $ 596 $ 7,618
Securities available for sale 172,852 - 172,852 - 172,852
Restricted stock 1,527 - - 1,527 1,527
Servicing assets 81 - - 81 81
Loans, net 344,159 - - 350,201 350,201
Total Financial Assets $ 526,237 $ 7,022 $ 172,852 $ 352,405 $ 532,279

Financial Liabilities
Noninterest-bearing deposits $ 142,385 $ 142,385 $ - $ - $ 142,385
Interest-bearing deposits 232,026 - 232,026 - 232,026
Time deposits 91,945 - 92,529 - 92,529
FHLB advances 16,600 - 16,600 - 16,600

Total Financial Liabilities $ 482,956 $ 142,385 $ 341,155 $ - $ 483,540

The estimated fair value amounts of financial instruments have been determined by the
Company using available market information and appropriate valuation methodologies.
However, considerable judgment is required to interpret data to develop the estimates of fair
value. Accordingly, the estimates presented herein are not necessarily indicative of the
amounts the Company could realize in a current market exchange. The use of different
market assumptions and/or estimation methodologies may have a material effect on the
estimated fair value amounts. The fair values of all financial instruments have been
determined as follows:

Cash and Cash Equivalents - For these short-term liquid instruments, the carrying amount is
a reasonable estimate of fair value.

Securities Available for Sale - For securities available for sale, fair value equals quoted market
price, if available. If a quoted market price is not available, management’s estimate of fair
value considers measurements from an independent pricing service that may consider dealer
quotes, market spreads, and cash flows, and certain credit quality factors, as applicable.

Restricted Stock - Restricted Stock consists of Federal Reserve Bank Stock and Federal Home
Loan Bank Stock. For these investments, cost which is generally the carrying amount is a
reasonable estimate of fair value.

Servicing Assets - For these assets, carrying value is considered a reasonable estimate of fair
value, as management considers impairment of the asset on a periodic basis.

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