Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Schedule of Balances of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013:

(Dollars in thousands)			Fair Value Measurements at June 30, 2014 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
U. S. Government agencies	$	10,007	$	—	$	10,007	$	—
State and municipal obligations		24,825		—		24,825		—
Certificates of deposit		1,994		—		1,994		—
Total securities available-for-sale:	$	36,826	$	—	$	36,826	$	—
Mortgage servicing rights	$	582	$	—	$	—	$	582
Defined benefit plan assets:
Cash and cash equivalents	$	3	$	3	$	—	$	—
Mutual funds - fixed income		1,070		1,070		—		—
Mutual funds - equity		1,747		1,747		—		—
Total defined benefit plan assets	$	2,820	$	2,820	$	—	$	—
			Fair Value Measurements at December 31, 2013 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
U. S. Government agencies	$	9,308	$	—	$	9,308	$	—
State and municipal obligations		26,557		—		26,557		—
Certificates of deposit		1,745		—		1,745		—
Auction rate securities		912		—		—		912
Total securities available-for-sale:	$	38,522	$	—	$	37,610	$	912
Mortgage servicing rights	$	579	$	—	$	—	$	579
Defined benefit plan assets:
Cash and cash equivalents	$	3	$	3	$	—	$	—
Mutual funds - fixed income		1,070		1,070		—		—
Mutual funds - equity		1,747		1,747		—		—
Total defined benefit plan assets	$	2,820	$	2,820	$	—	$	—

Reconciliation of Items Using Level Three Inputs

The reconciliation of items using Level 3 inputs is as follows:

(Dollars in thousands)	Auction Rate Security			MSRs
Balance, January 1, 2014	$	912		$	579
Impairments		—			—
Fair value adjustments		—			3
Sales		(912	)		—
Balance, June 30, 2014	$	—		$	582

Summary of Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes the Company’s assets that were measured at fair value on a nonrecurring basis at the end of the respective period.

			Fair Value Measurements at June 30, 2014 Using
(Dollars in thousands)	Balance as of June 30, 2014		Level 1		Level 2		Level 3
Description
Impaired Loans, net	$	2,069	$	—	$	—	$	2,069
Other real estate owned, net		2,899		—		—		2,899
			Fair Value Measurements at December 31, 2013 Using
	Balance as of December 31, 2013		Level 1		Level 2		Level 3
Description
Impaired Loans, net	$	2,077	$	—	$	—	$	2,077
Other real estate owned, net		3,897		—		—		3,897

Summary of Quantitative Fair Value Measurements for Level 3

The following table displays quantitative information about Level 3 Fair Value Measurements as of June, 2014:

(Dollars in thousands)	Balance as of June 30, 2014		Valuation Technique		Unobservable Input		Range (Weighted Average)
Impaired Loans, net	$	2,069		Discounted appraised value		Selling Cost	10% - 20%(10%)
						Lack of Marketability	25% - 100%(56%)
Other real estate owned, net		2,899		Discounted appraised value		Selling Cost	3% - 13%(5%)
						Lack of Marketability	7% - 20%(11%)

The following table displays quantitative information about Level 3 Fair Value Measurements as of December, 2013:

(Dollars in thousands)	Balance as of December 31, 2013		Valuation Technique		Unobservable Input		Range (Weighted Average)
Impaired Loans, net	$	2,077		Discounted appraised value		Selling Cost	10% - 20%(10%)
						Lack of Marketability	25% - 100%(54%)
Other real estate owned, net		3,897		Discounted appraised value		Selling Cost	3% - 13%(6%)
						Lack of Marketability	7% - 30%(15%)

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments are shown in the following table. The carrying amounts in the table are included in the balance sheet under the applicable captions.

			Fair Value Measurements at June 30, 2014 Using
(Dollars in thousands)	Balance as of June 30,2014		Level 1		Level 2		Level 3
Description
Financial Assets:
Cash and due from banks	$	6,793	$	6,793	$	—	$	—
Interest-bearing deposits		10,819		10,819		—		—
Federal funds sold		204		204		—		—
Securities available-for-sale		36,826		—		36,826		—
Restricted securities		1,980		—		—		1,980
Loans, net		256,345		—		—		262,561
Loans held for sale		390		—		—		390
Accrued interest receivable		1,112		—		1,112		—
Mortgage servicing rights		582		—		—		582
Financial Liabilities:
Non-interest-bearing liabilities	$	58,813	$	58,813	$	—	$	—
Savings and other interest-bearing deposits		113,403		—		113,403		—
Time deposits		94,870		—		—		96,065
Securities sold under repurchase agreements		8,990		—		8,990		—
FHLB advances		25,000		15,000		10,984		—
Accrued interest payable		134		—		134		—
			Fair Value Measurements at December 31, 2013 Using
	Balance as of December 31, 2013		Level 1		Level 2		Level 3
Description
Financial Assets:
Cash and due from banks	$	6,789	$	6,789	$	—	$	—
Interest-bearing deposits		8,900		8,900		—		—
Federal funds sold		120		120		—		—
Securities available-for-sale		38,522		—		37,610		912
Restricted securities		1,638		—		—		1,638
Loans, net		247,912		—		—		253,139
Loans held for sale		196		—		—		196
Accrued interest receivable		1,124		—		1,124		—
Mortgage servicing rights		579		—		—		579
Financial Liabilities:
Non-interest-bearing liabilities	$	57,805	$	57,805	$	—	$	—
Savings and other interest-bearing deposits		114,056		—		114,056		—
Time deposits		96,486		—		—		98,049
Securities sold under repurchase agreements		9,118		—		9,118		—
FHLB advances		15,000		—		15,923		—
Accrued interest payable		167		—		167		—