Estimated Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Summary of Financial Instruments

The estimated fair values of the Corporation’s financial instruments at September 30, 2014 and December 31, 2013 are summarized as follows:

	September 30, 2014										December 31, 2013
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3		Carrying Value		Estimated Fair Value
	(Dollars in thousands)
Financial assets
Cash and due from banks, Federal funds sold and interest bearing deposits in other banks	$	36,167	$	36,167	$	36,167	$	—	$	—	$	52,272	$	52,272
Securities	218,847		218,847		—		218,847		—		216,122		216,122
Restricted stock	5,741		5,741		N/A		N/A		N/A		5,741		N/A
Portfolio loans, net	905,082		913,057		—		—		913,057		884,794		884,211
Loans held for sale	1,497		1,523		—		1,541		—		4,483		4,487
Accrued interest receivable	3,714		3,714		—		961		2,753		3,621		3,621
Financial liabilities
Deposits:
Demand, savings and money market	605,102		585,468		—		585,468		—		542,739		542,739
Certificates of deposit	451,682		453,489		—		453,489		—		502,850		504,381
Short-term borrowings	2,674		2,674		—		2,674		—		4,576		4,576
Federal Home Loan Bank advances	46,867		47,413		—		47,413		—		46,708		46,923
Junior subordinated debentures	16,238		21,534		—		21,534		—		16,238		16,778
Accrued interest payable	674		674		—		—		674		789		789

Assets Measured by Fair Value on a Recurring Basis

The following table presents information about the Corporation’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013, and the valuation techniques used by the Corporation to determine those fair values.

Description	Fair Value as of September 30, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	59,330	$	—	$	59,330	$	—
Mortgage backed securities: residential	98,554		—		98,554		—
Residential collateralized mortgage obligations	25,152		—		25,152		—
State and political subdivisions	35,811		—		35,811		—
Total	$	218,847	$	—	$	218,847	$	—
Description	Fair Value as of December 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in thousands)
Securities available for sale:
U.S. Government agencies and corporations	$	65,388	$	—	$	65,388	$	—
Mortgage backed securities: residential	94,430		—		94,430		—
Residential collateralized mortgage obligations	18,655		—		18,655		—
State and political subdivisions	32,965		—		32,965		—
Preferred Securities	4,684		—		—		4,684
Interest rate swaps	222		—		222		—
Total	$	216,344	$	—	$	211,660	$	4,684

Balances of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table presents the balances of assets and liabilities measured at fair value on a nonrecurring basis:

September 30, 2014	Quoted Market Prices in Active Markets (Level 1)	Internal Models with Significant Observable Market Parameters (Level 2)	Internal Models with Significant Unobservable Market Parameters (Level 3)
	(Dollars in thousands)
Impaired Loans:
Commercial real estate			$	1,334
Total			$	1,334

December 31, 2013	Quoted Market Prices in Active Markets (Level 1)	Internal Models with Significant Observable Market Parameters (Level 2)	Internal Models with Significant Unobservable Market Parameters (Level 3)
	(Dollars in thousands)
Impaired Loans:
Commercial real estate			$	11,241
Commercial			289
Residential real estate			5,231
Home equity loans			4,464
Indirect			443
Consumer			318
Total			$	21,986
Other real estate owned:
Commercial real estate			$	304
Residential real estate			275
Total			$	579

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

The following table presents additional quantitative information about assets measured at fair value on a

nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value (dollars in thousands).

Asset	Fair Value	Valuation Technique	Unobservable Input
Collateral dependent impaired loans	$1,334	Sales comparison approach	Adjustment for differences between the comparable sales with a 15% 20% cost to sell adjustment