Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 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 September 30, 2015 Using
	Balance at September 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	$	104,246	$	—	$	104,246	$	—
Mortgage-backed and CMOs	55,699		—		55,699		—
State and municipal	186,356		—		186,356		—
Corporate	10,708		—		10,708		—
Equity	1,297		—		—		1,297
Total	$	358,306	$	—	$	357,009	$	1,297



	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 September 30, 2015
Securities available for sale:
Equity	$	1,313	$	—	$	(16	)	$	—	$	—	$	1,297

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 September 30, 2015 Using
	Balance at September 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	$	2,998	$	—	$	2,998	$	—
Impaired loans, net of valuation allowance	1,113		—		—		1,113
Other real estate owned	1,333		—		—		1,333



	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 at September 30, 2015



Assets	Valuation Technique	Unobservable Input	Weighted Rate

Securities available for sale	Consideration of equity conversion options	Stock price in different rate environments	30	%

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



	Fair Value Measurements at September 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	$	65,917	$	65,917	$	—	$	—	$	65,917
Securities available for sale	358,306		—		357,009		1,297		358,306
Restricted stock	5,308		—		5,308		—		5,308
Loans held for sale	2,998		—		2,998		—		2,998
Loans, net of allowance	968,373		—		—		976,432		976,432
Bank owned life insurance	17,491		—		17,491		—		17,491
Accrued interest receivable	4,462		—		4,462		—		4,462

Financial Liabilities:
Deposits	$	1,226,521	$	—	$	826,198	$	402,079	$	1,228,277
Repurchase agreements	43,579		—		43,579		—		43,579
Other borrowings	9,952		—		—		10,414		10,414
Trust preferred capital notes	27,597		—		—		22,475		22,475
Accrued interest payable	642		—		642		—		642

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	$	—	$	712,020	$	365,309	$	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