Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value of Financial Instruments [Abstract]

Schedule of fair value assets and liabilities measured on recurring basis

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis during the period (in thousands):

	Fair Value Measurements at September 30, 2013 Using
	Balance as of September 30,			Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
Description	2013			Level 1			Level 2			Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs		$	59,792		$	-		$	59,792		$	-
Mortgage-backed and CMOs			69,887			-			69,887			-
State and municipal			205,952			-			205,952			-
Corporate			10,877			-			10,877			-
Equity			1,110			-			-			1,110
Total		$	347,618		$	-		$	346,508		$	1,110

	Fair Value Measurements at December 31, 2012 Using
	Balance as of December 31,			Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
Description	2012			Level 1			Level 2			Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs		$	42,759		$	-		$	42,759		$	-
Mortgage-backed and CMOs			83,308			-			83,308			-
State and municipal			202,731			2,110			200,621			-
Corporate			6,448			-			6,097			351
Total		$	335,246		$	2,110		$	332,785		$	351

Schedule of fair value measurements using significant unobservable inputs (Level 3)

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
				Total Realized / Unrealized Gains (Losses) Included in
	Balances as of January 1, 2013			Net Income			Other Comprehensive Income			Purchases, Sales, Issuances and Settlements, Net				Transfer In (Out) of Level 3			Balances as of September 30, 2013
Securities available for sale:

Corporate		$	351		$	136		$	-		$	(487	)		$	-		$	-
Equity			-			-			-			1,110				-			1,110
Total assets		$	351		$	136		$	-		$	623			$	-		$	1,110

Schedule of assets that were measured at fair value on a nonrecurring basis

The following table summarizes the Company's assets that were measured at fair value on a nonrecurring basis at the dates indicated (in thousands):

	Fair Value Measurements at September 30, 2013 Using
	Balance as of September 30,			Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
Description	2013			Level 1			Level 2			Level 3
Assets:
Loans held for sale		$	3,919		$	-		$	3,919		$	-
Impaired loans, net of valuation allowance			1,147			-			-			1,147
Other real estate owned			4,215			-			-			4,215

	Fair Value Measurements at December 31, 2012 Using
	Balance as of December 31,			Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
Description	2012			Level 1			Level 2			Level 3
Assets:
Loans held for sale		$	13,852		$	-		$	13,852		$	-
Impaired loans, net of valuation allowance			3			-			-			3
Other real estate owned			6,193			-			-			6,193

Schedule of quantitative information of assets measured at Level 3

The following tables present quantitative information about Level 3 Fair Value Measurements as of September 30, 2013 and December 31, 2012.

Quantitative Information About Level 3 Fair Value Measurements for September 30, 2013

Assets	Valuation Technique	Unobservable Input	Weighted Rate

Securities available for sale	Consideration of equity conversion options	Stock price in different rate environments	11%

Impaired loans	Discounted appraised value	Selling cost	6 %

Other real estate owned	Discounted appraised value	Discount for lack of marketability and age of appraisal	6 %
Other real estate owned	Discounted appraised value	Discount for lack of marketability and age of appraisal	9 %

Quantitative Information About Level 3 Fair Value Measurements for December 31, 2012

Assets	Valuation Technique	Unobservable Input	Weighted Rate

Securities available for sale	Discounted cash flow analysis	Discount rate	38%

Impaired loans	Discounted appraised value	Selling cost	6%

Other real estate owned	Discounted appraised value	Selling cost	6%
Other real estate owned	Discounted appraised value	Discount for lack of marketability and age of appraisal	9%

Schedule of carrying values and estimated fair values of the entity's financial instruments

The carrying values and estimated fair values of the Company's financial instruments at September 30, 2013 are as follows (in thousands):

	Fair Value Measurements at September 30, 2013 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
Financial Assets:
Cash and cash equivalents	$	78,269	$	-	$	78,269	$	-	$	78,269
Securities available for sale		347,618		-		346,508		1,110		347,618
Loans held for sale		3,919		-		3,919		-		3,919
Loans, net of allowance		786,312		-		-		781,766		781,766
Bank owned life insurance		14,597		-		14,597		-		14,597
Accrued interest receivable		4,604		-		4,604		-		4,604

Financial Liabilities:
Deposits	$	1,071,083	$	-	$	604,281	$	405,777	$	1,010,058
Repurchase agreements		44,026		-		44,026		-		44,026
Other borrowings		9,983		-		-		10,625		10,625
Trust preferred capital notes		27,394		-		-		18,817		18,817
Accrued interest payable		655		-		655		-		655

The carrying values and estimated fair values of the Company's financial instruments at December 31, 2012 are as follows (in thousands):

	Fair Value Measurements at December 31, 2012 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
Financial Assets:
Cash and cash equivalents	$	47,442	$	-	$	47,442	$	-	$	47,442
Securities available for sale		335,246		2,110		332,785		351		335,246
Loans held for sale		13,852		-		13,852		-		13,852
Loans, net of allowance		776,587		-		-		777,761		777,761
Bank owned life insurance		14,289		-		14,289		-		14,289
Accrued interest receivable		4,711		-		4,711		-		4,711

Financial Liabilities:
Deposits	$	1,027,667	$	-	$	582,633	$	424,378	$	1,007,011
Repurchase agreements		49,942		-		49,942		-		49,942
Other borrowings		10,079		-		-		11,062		11,062
Trust preferred capital notes		27,317		-		-		22,524		22,524
Accrued interest payable		755		-		755		-		755

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 10

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details