Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and liabilities carried at fair value on a recurring basis at December 31, 2015 are summarized in the following table:



(dollars in thousands)	Total			Level 1		Level 2			Level 3
Assets:
Available-for-sale debt securities:
U.S. government sponsored agencies	$	2,008		$	—	$	2,008		$	—
Residential mortgage-backed securities-GSE	278,107			—		278,107			—
Residential mortgage-backed securities-Private	33,578			—		33,577			—
Commercial mortgage-backed securities-GSE	21,611			—		21,611			—
Commercial mortgage-backed securities-Private	17,575			—		17,575			—
Corporate notes	37,555			—		37,555			—
Total available-for-sale debt securities	390,434			—		390,433			—
Mortgage servicing rights	2,231			—		—			2,231
Interest rate swaps	(755		)	$	—	(755		)	$	—
Total assets at fair value	$	391,910		$	—	$	389,678		$	2,231

Assets and liabilities carried at fair value on a recurring basis at December 31, 2014 are summarized in the following table:



(dollars in thousands)	Total			Level 1		Level 2			Level 3
Assets:
Available-for-sale debt securities:
U.S. government sponsored agencies	$	2,044		$	—	$	2,044		$	—
Residential mortgage-backed securities-GSE	290,145			—		290,145			—
Residential mortgage-backed securities-Private	17,271			—		17,271			—
Commercial mortgage-backed securities-GSE	21,957			—		21,957			—
Commercial mortgage-backed securities-Private	10,215			—		10,215			—
Corporate notes	8,407			—		8,407			—
Total available-for-sale debt securities	350,039			—		350,039			—
Mortgage servicing rights	1,726			—		—			1,726
Interest rate swaps	(525		)	—		(525		)	—
Total assets at fair value	$	351,240		$	—	$	349,514		$	1,726

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables present a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the periods indicated:



	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Mortgage Servicing Rights
(dollars in thousands)	Twelve Months Ended December 31,
	2015			2014
Beginning balance at January 1,	$	1,726		$	1,552
Total gains or losses (realized/unrealized):
Included in earnings, gross	1,088			644
Less amortization	(583		)	(470		)
Balance, end of period	$	2,231		$	1,726

Fair Value Measurements, Nonrecurring

Assets measured at fair value on a nonrecurring basis are included in the following table at December 31, 2015:



(dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans, net	$	3,418	$	—	$	—	$	3,418
Other real estate owned	10,630		—		—		10,630
Total assets at fair value	$	14,048	$	—	$	—	$	14,048

Assets measured at fair value on a nonrecurring basis are included in the following table at December 31, 2014:



(dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans, net	$	7,433	$	—	$	—	$	7,433
Other real estate owned	15,579		—		—		15,579
Total assets at fair value	$	23,012	$	—	$	—	$	23,012

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

Quantitative Information about Level 3 Fair Value Measurements



(dollars in thousands)	Fair Value at December 31, 2015		Valuation Techniques	Unobservable Input	Range

Impaired loans, net	$	3,418	Discounted appraisals	Collateral discounts	1.00% - 30.00%
Other real estate owned	10,630		Discounted appraisals	Collateral discounts	1.00% - 30.00%
Mortgage servicing rights	2,231		Discounted cash flows	Prepayment rate	10.00% - 25.00%
Mortgage servicing rights				Discount rate	6.00% - 10.00%



(dollars in thousands)	Fair Value at December 31, 2014		Valuation Techniques	Unobservable Input	Range

Impaired loans, net	$	7,433	Discounted appraisals	Collateral discounts	1.00%-30.00%
Other real estate owned	15,579		Discounted appraisals	Collateral discounts	1.00%-30.00%
Mortgage servicing rights	1,726		Discounted cash flows	Prepayment rate	10.00% - 25.00%
Mortgage servicing rights				Discount rate	6.00% - 10.00%

Fair Value, by Balance Sheet Grouping

The estimated fair values of financial instruments for continuing operations are as follows at the periods indicated:



	At December 31, 2015
(dollars in thousands)	Carrying Value			Estimated Fair Value			Level 1		Level 2			Level 3
Financial Assets of Operations:
Cash and cash equivalents	$	39,175		$	39,175		$	39,175	$	—		$	—
Investment securities: Available-for-sale	390,434			390,434			—		390,434			—
Investment securities: Held-to-maturity	147,967			145,184			—		145,184			—
Loans held for sale	5,403			5,403			—		5,403			—
Loans, net	1,528,600			1,513,226			—		—			1,513,226
Accrued interest receivable	5,305			5,305			—		1,630			3,675
Interest rate swaps	(755		)	(755		)	—		(755		)	—
Financial Liabilities of Operations:
Deposits	1,947,537			1,945,691			—		1,945,691			—
Retail repurchase agreements	7,219			7,219			—		7,219			—
Federal Home Loan Bank advances	93,681			95,781			—		95,781			—
Long-term notes payable	5,415			5,415			—		—			5,415
Junior subordinated debentures	56,702			32,536			—		—			32,536
Accrued interest payable	367			367			—		349			18



	At December 31, 2014
(dollars in thousands)	Carrying Value			Estimated Fair Value			Level 1		Level 2			Level 3
Financial Assets of Operations:
Cash and cash equivalents	$	95,882		$	95,882		$	95,882	$	—		$	—
Investment securities: Available-for-sale	350,040			350,040			—		350,040			—
Investment securities: Held-to-maturity	142,461			140,875			—		140,875			—
Loans held for sale	2,796			2,796			—		2,796			—
Loans, net	1,337,443			1,328,895			—		—			1,328,895
Accrued interest receivable	4,885			4,885			—		1,262			3,623
Interest rate swaps	(525		)	(525		)	—		(525		)	—
Financial Liabilities of Operations:
Deposits	1,794,420			1,793,205			—		1,793,205			—
Retail repurchase agreements	9,076			9,076			—		9,076			—
Federal Home Loan Bank advances	68,234			71,462			—		71,462			—
Long-term notes payable	5,338			5,338			—		—			5,338
Junior subordinated debentures	56,702			32,341			—		—			32,341
Accrued interest payable	3,624			3,624			—		321			3,303