Fair Value of Financial Instruments and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

Carrying amount and estimated fair values of financial instruments

The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2015 and December 31, 2014 are as follows:

	Fair Value Measurements at March 31, 2015
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Assets
Cash and Short-Term Investments	$	62,719	$	62,719	$	62,719	$	-	$	-
Investment Securities Available for Sale		279,139		279,139		-		278,192		947
Investment Securities Held to Maturity		31		31		-		31		-
Federal Home Loan Bank Stock		2,731		2,731		2,731		-		-
Loans, Net		744,866		746,714		-		740,261		6,453
Bank-Owned Life Insurance		14,648		14,648		14,648		-		-
Liabilities
Deposits		985,856		987,595		560,599		426,996		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		40,000		42,395		-		42,395		-

	Fair Value Measurements at December 31, 2014
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Assets
Cash and Short-Term Investments	$	65,811	$	65,811	$	65,811	$	-	$	-
Investment Securities Available for Sale		274,594		274,594		-		273,646		948
Investment Securities Held to Maturity		30		30		-		30		-
Federal Home Loan Bank Stock		2,831		2,831		2,831		-		-
Loans, Net		736,930		738,948		-		731,170		7,778
Bank-Owned Life Insurance		14,531		14,531		14,531		-		-
Liabilities
Deposits		979,303		980,874		551,057		429,817		-
Subordinated Debentures		24,229		24,229		24,229		-		-
Other Borrowed Money		40,000		41,962		-		41,962		-

Assets and liabilities measured at fair value on a recurring and non recurring basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis – The following table presents the recorded amount of the Company’s assets measured at fair value on a recurring and nonrecurring basis as of March 31, 2015 and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall.  The table below includes only impaired loans with a specific reserve and only other real estate properties with a valuation allowance at March 31 2015.  Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
March 31, 2015	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	275,971	$	-	$	275,971	$	-
State, County and Municipal		3,168		-		2,221		947
	$	279,139	$	-	$	278,192	$	947
Nonrecurring
Impaired Loans	$	6,453	$	-	$	-	$	6,453
Other Real Estate	$	5,985	$	-	$	-	$	5,985

			Fair Value Measurements at Reporting Date Using
December 31, 2014	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	271,064	$	-	$	271,064	$	-
State, County and Municipal		3,530		-		2,582		948
	$	274,594	$	-	$	273,646	$	948
Nonrecurring
Impaired Loans	$	7,778	$	-	$	-	$	7,778
Other Real Estate	$	6,128	$	-	$	-	$	6,128

Quantitative information for financial instruments measured at fair value

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at March 31, 2015 and December 31, 2014.  This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

	March 31, 2015		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Impaired Loans
Real Estate
Commercial Construction	$	85	Sales Comparison	Adjustment for Differences		(56.60%) - 20.10%
				Between the Comparable Sales		(18.25%)
				Management Adjustments for		0.00% - 10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
Residential Real Estate		773	Sales Comparison	Adjustment for Differences		(15.00%) - 191.70%
				Between the Comparable Sales		88.35%
				Management Adjustments for		10.00% - 25.00%
				Age of Appraisals and/or Current		17.50%
				Market Conditions
			Income Approach	Capitalization Rate		12.50%
Commercial Real Estate		5,254	Sales Comparison	Management Adjustment for		0.00% - 10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		11.00%
Farmland		341	Sales Comparison	Adjustment for Differences		(8.30%) - 252.50%
				Between the Comparable Sales		122.10%
				Management Adjustment for		10.00% - 75.00%
				Age of Appraisals and/or Current		42.50%
				Market Conditions
Other Real Estate Owned		5,985	Sales Comparison	Adjustment for Differences		(55.00%) - 45.00%
				Between the Comparable Sales		(5.00%)
				Management Adjustment for		0.33% - 69.36%
				Age of Appraisals and/or Current		29.58%
				Market Conditions
			Income Approach	Discount Rate		9.00%
				Capitalization Rate		10.00%

	December 31, 2014		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Real Estate
Commercial Construction	$	82	Sales Comparison	Adjustment for Differences		(22.00%) - 38.10%
				Between the Comparable Sales		8.05%
				Management Adjustments for		0.00% - 10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
Residential Real Estate		1,651	Sales Comparison	Adjustment for Differences		(2.30%) - 191.70%
				Between the Comparable Sales		94.70%
				Management Adjustments for		0.00% - 10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		13.75%
Commercial Real Estate		5,678	Sales Comparison	Adjustment for differences		0.00% - 0.00%
				Between the comparable Sales		0.00%
				Management Adjustments for		0.00% - 90.00%
				Age of Appraisals and/or Current		45.00%
				Market Conditions
			Income Approach	Capitalization Rate		11.00%
Farmland		367	Sales Comparison	Adjustment for Differences		(8.30%) - 252.50%
				Between the Comparable Sales		122.10%
				Management Adjustments for		10.00% - 50.00%
				Age of Appraisals and/or Current		30.00%
				Market Conditions
Other Real Estate Owned		6,128	Sales Comparison	Adjustment for Differences		(40.00%) - 45.00%
				Between the Comparable Sales		2.50%
				Management Adjustment for		0.33% - 69.36%
				Age of Appraisals and/or Current		31.88%
				Market Conditions
			Income Approach	Discount Rate		9.00%
				Capitalization Rate		10.00%

Fair value measurement using significant unobservable inputs (Level 3)

The table below presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the three months ended March 31, 2015 and the twelve months ended December 31, 2014.

	Available for Sale Securities
	March 31, 2015			December 31, 2014
Balance, Beginning	$	948		$	941
Transfers out of Level 3		-			-
Loss on OTTI Impairment Included in Noninterest Income		-			-
Unrealized Gains included in Other Comprehensive Income (Loss)		(1	)		7
Balance, Ending	$	947		$	948

The Company’s policy is to recognize transfers in and transfers out of levels 1, 2 and 3 as of the end of a reporting period.  There were no transfers of securities between levels for the three months ended March 31, 2015 and the twelve months ended December 31, 2014.

The following table presents quantitative information about recurring level 3 fair value measurements as of March 31, 2015.

	Fair Value		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
State, County and Municipal	$	947	Discounted Cash Flow	Discount Rate		N/A	*

* The Company relies on a third-party pricing service to value its municipal securities.  The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.