Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Schedule of fair value assets and liabilities measured on recurring basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated (dollars in thousands):



	Fair Value Measurements at June 30, 2015 Using
	Balance at June 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2015		Level 1		Level 2		Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs	$	96,366	$	—	$	96,366	$	—
Mortgage-backed and CMOs	60,401		—		60,401		—
State and municipal	188,669		—		188,669		—
Corporate	8,789		—		8,789		—
Equity	1,370		—		—		1,370
Total	$	355,595	$	—	$	354,225	$	1,370



	Fair Value Measurements at December 31, 2014 Using
	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2014		Level 1		Level 2		Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs	$	82,106	$	2,995	$	79,111	$	—
Mortgage-backed and CMOs	57,425		—		57,425		—
State and municipal	195,493		1,172		194,321		—
Corporate	8,379		—		8,379		—
Equity	1,313		—		—		1,313
Total	$	344,716	$	4,167	$	339,236	$	1,313

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, 2015		Net Income		Other Comprehensive Income		Purchases, Sales, Issuances and Settlements, Net		Transfer In (Out) of Level 3		Balances as of June 30, 2015
Securities available for sale:
Equity	$	1,313	$	—	$	57	$	—	$	—	$	1,370

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 (dollars in thousands):



	Fair Value Measurements at June 30, 2015 Using
	Balance at June 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2015		Level 1		Level 2		Level 3
Assets:
Loans held for sale	$	2,720	$	—	$	2,720	$	—
Impaired loans, net of valuation allowance	1,835		—		—		1,835
Other real estate owned	2,113		—		—		2,113



	Fair Value Measurements at December 31, 2014 Using
	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2014		Level 1		Level 2		Level 3
Assets:
Loans held for sale	$	616	$	—	$	616	$	—
Impaired loans, net of valuation allowance	1,705		—		—		1,705
Other real estate owned	2,119		—		—		2,119

Schedule of quantitative information of assets measured at Level 3

The following tables summarize the Company's quantitative information about Level 3 fair value measurements at the dates indicated:

Quantitative Information About Level 3 Fair Value Measurements for June 30, 2015



Assets	Valuation Technique	Unobservable Input	Weighted Rate

Securities available for sale	Consideration of equity conversion options	Stock price in different rate environments	37	%

Impaired loans	Discounted appraised value	Selling cost	6	%
	Discounted cash flows	Market rate for borrower (discount rate)	6	%

Other real estate owned	Discounted appraised value	Selling cost	6	%

Quantitative Information About Level 3 Fair Value Measurements for December 31, 2014



Assets	Valuation Technique	Unobservable Input	Weighted Rate

Securities available for sale	Consideration of equity conversion options	Stock price in different rate environments	31	%

Impaired loans	Discounted appraised value	Selling cost	6	%
	Discounted cash flows	Market rate for borrower (discount rate)	4	%

Other real estate owned	Discounted appraised value	Selling cost	6	%

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 June 30, 2015 are as follows (dollars in thousands):



	Fair Value Measurements at June 30, 2015 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	$	75,714	$	75,714	$	—	$	—	$	75,714
Securities available for sale	355,595		—		354,225		1,370		355,595
Restricted stock	5,329		—		5,329		—		5,329
Loans held for sale	2,720		—		2,720		—		2,720
Loans, net of allowance	970,112		—		—		976,220		976,220
Bank owned life insurance	17,376		—		17,376		—		17,376
Accrued interest receivable	4,562		—		4,562		—		4,562

Financial Liabilities:
Deposits	$	1,234,018	$	—	$	834,455	$	400,782	$	1,235,237
Repurchase agreements	50,123		—		50,123		—		50,123
Other borrowings	9,947		—		—		40,425		40,425
Trust preferred capital notes	27,571		—		—		21,353		21,353
Accrued interest payable	598		—		598		—		598

The carrying values and estimated fair values of the Company's financial instruments at December 31, 2014 are as follows (dollars in thousands):



	Fair Value Measurements at December 31, 2014 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	$	67,303	$	67,303	$	—	$	—	$	67,303
Securities available for sale	344,716		4,167		339,236		1,313		344,716
Restricted stock	4,367		—		4,367		—		4,367
Loans held for sale	616		—		616		—		616
Loans, net of allowance	828,498		—		—		832,708		832,708
Bank owned life insurance	15,193		—		15,193		—		15,193
Accrued interest receivable	4,534		—		4,534		—		4,534
Financial Liabilities:
Deposits	$	1,075,837	$	—	$	712,019	$	365,310	$	1,077,329
Repurchase agreements	53,480		—		53,480		—		53,480
Other borrowings	9,935		—		—		10,432		10,432
Trust preferred capital notes	27,521		—		—		22,009		22,009
Accrued interest payable	587		—		587		—		587