Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2014

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents information about certain assets and liabilities measured at fair value on a recurring basis (in thousands):

	Assets / Liabilities		Fair Value Measurements
	Measured at Fair Value		at September 30, 2014
Description	at September 30, 2014		Level 1		Level 2		Level 3
Available-for-sale securities:
U.S. Government sponsored enterprises	$	10,292	$	-	$	10,292	$	-
Obligations of state and political subdivisions		49,847		-		49,847		-
GSE mortgage-backed securities		112,646		-		112,646		-
Collateralized mortgage obligations: residential		63,373		-		63,373		-
Collateralized mortgage obligations: commercial		25,994		-		25,994		-
Other asset-backed securities		24,817		-		24,817		-
Collateralized debt obligation		1,428		-		1,428		-

	Assets / Liabilities		Fair Value Measurements
	Measured at Fair Value		at December 31, 2013
Description	at December 31, 2013		Level 1		Level 2		Level 3
Available-for-sale securities:
U.S. Government sponsored enterprises	$	11,265	$	-	$	11,265	$	-
Obligations of state and political subdivisions		59,978		-		59,978		-
GSE mortgage-backed securities		145,965		-		145,965		-
Collateralized mortgage obligations: residential		70,887		-		70,887		-
Collateralized mortgage obligations: commercial		27,346		-		27,346		-
Other asset-backed securities		25,489		-		25,489		-
Collateralized debt obligation		735		-		735		-

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis and are included in the table below (in thousands). Impaired loans are Level 2 assets measured using appraisals from external parties of the collateral less any prior liens. Other real estate properties are also Level 2 assets measured using appraisals from external parties.

			Fair Value Measurements at September 30, 2014
Description	Assets / Liabilities Measured at Fair Value at September 30, 2014		Level 1		Level 2		Level 3
Impaired loans	$	2,529	$	-	$	2,529	$	-
Other real estate		4,663		-		4,663		-

			Fair Value Measurements at December 31, 2013
Description	Assets / Liabilities Measured at Fair Value at December 31, 2013		Level 1		Level 2		Level 3
Impaired loans	$	1,973	$	-	$	1,973	$	-
Other real estate		6,687		-		6,687		-

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments are as follows at September 30, 2014 and December 31, 2013 (in thousands):

			Fair Value Measurements at September 30, 2014 Using:
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	54,215	$	54,215	$	-	$	-
Securities available-for-sale		288,397		-		288,397		-
Securities held-to-maturity		145,030		-		144,597		-
Other investments		12,091		12,091		-		-
Loans, net		1,238,948		-		-		1,247,751
Cash surrender value of life insurance policies		13,565		-		13,565		-
Financial liabilities:
Non-interest-bearing deposits		396,263		-		396,263		-
Interest-bearing deposits		1,124,581		-		909,014		215,623
Securities sold under agreements to repurchase		70,964		70,964		-		-
Short-term Federal Home Loan Bank advances		35,000		-		35,000		-
Notes payable		26,384		-		-		27,297
Junior subordinated debentures		22,167		-		22,167		-

			Fair Value Measurements at December 31, 2013 Using:
	Carrying Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	59,731	$	59,731	$	-	$	-
Securities available-for-sale		341,665		-		341,665		-
Securities held-to-maturity		155,523		-		151,168		-
Other investments		11,526		11,526		-		-
Loans, net		1,128,775		-		-		1,139,740
Cash surrender value of life insurance policies		13,450		-		13,450		-
Financial liabilities:
Non-interest-bearing deposits		383,257		-		383,257		-
Interest-bearing deposits		1,135,546		-		895,346		241,359
Securities sold under agreements to repurchase		53,916		53,916		-		-
Short-term Federal Home Loan Bank advances		25,000		-		25,000		-
Notes payable		27,703		-		-		28,813
Junior subordinated debentures		29,384		-		22,167		7,776

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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