FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2014

FAIR VALUE [Abstract]

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments at September 30, 2014 were as follows:

				Fair Value Measurements at September 30, 2014 Using
	Carrying Amount			Level 1			Level 2			Level 3			Total
Financial assets
Cash and due from banks	$	74,040		$	74,040		$	-		$	-		$	74,040
Federal funds sold		7,877			7,877			-			-			7,877
Securities available for sale		253,559			-			253,419			140			253,559
Loans held for sale		395			-			-			395			395
Loans, net		844,214			-			-			845,396			845,396
Federal Home Loan Bank stock		3,895			n/	a		n/	a		n/	a		n/	a
Interest receivable		3,342			-			822			2,520			3,342
Financial liabilities
Deposits	$	(1,076,996	)	$	(703,039	)	$	(373,551	)	$	-		$	(1,076,590	)
Securities sold under agreements to repurchase		(13,155	)		-			(13,155	)		-			(13,155	)
FHLB advances		(5,000	)		(5,000	)		-			-			(5,000	)
Other borrowed funds		(12,330	)		-			(12,373	)		-			(12,373	)
Interest payable		(443	)		(6	)		(437	)		-			(443	)

The carrying amounts and estimated fair values of financial instruments at December 31, 2013 were as follows:

				Fair Value Measurements at December 31, 2013 Using
	Carrying Amount			Level 1			Level 2			Level 3			Total
Financial assets
Cash and due from banks	$	63,984		$	63,984		$	-		$	-		$	63,984
Federal funds sold		12,777			12,777			-			-			12,777
Securities available for sale		218,066			-			217,926			140			218,066
Loans held for sale		77			-			-			77			77
Loans, net		729,743			-			-			725,588			725,588
Federal Home Loan Bank stock		4,183			n/	a		n/	a		n/	a		n/	a
Interest receivable		3,132			-			593			2,539			3,132
Financial liabilities
Deposits	$	(924,023	)	$	(592,664	)	$	(332,475	)	$	-		$	(925,139	)
Securities sold under agreements to repurchase		(11,319	)		-			(11,319	)		-			(11,319	)
Other borrowed funds		(13,800	)		-			(13,811	)		-			(13,811	)
Interest payable		(383	)		(5	)		(378	)		-			(383	)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

			Fair Value Measurements at September 30, 2014 Using:
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale
Mortgage-backed securities
U. S. agency MBS - residential	$	54,855	$	-	$	54,855	$	-
U. S. agency CMO’s - residential		152,800		-		152,800		-
Total mortgage-backed securities of government sponsored agencies		207,655		-		207,655		-
U. S. government sponsored agency securities		34,836		-		34,836		-
Obligations of states and political subdivisions		11,068		-		10,928		140
Total available for sale	$	253,559	$	-	$	253,419	$	140

			Fair Value Measurements at December 31, 2013 Using:
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale
Mortgage-backed securities
U. S. agency MBS - residential	$	27,823	$	-	$	27,823	$	-
U. S. agency CMO’s		176,722		-		176,722		-
Total mortgage-backed securities of government sponsored agencies		204,545		-		204,545		-
U. S. government sponsored agency securities		6,981		-		6,981		-
Obligations of states and political subdivisions		6,540		-		6,400		140
Total securities available for sale	$	218,066	$	-	$	217,926	$	140
Mortgage-backed securities

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis at September 30, 2014 are summarized below:

			Fair Value Measurements at September 30, 2014 Using
	Carrying Value		Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Multifamily residential	$	332	$	-	$	-	$	332
Commercial real estate
Owner occupied		390		-		-		390
Non-owner occupied		588		-		-		588
Commercial and industrial		689		-		-		689
All other		4,218		-		-		4,218
Total impaired loans		6,217	$	-	$	-	$	6,217
Other real estate owned:
Commercial real estate
Non-owner occupied	$	2,003		-		-	$	2,003
All other		8,353		-		-		8,353
Total OREO	$	10,356	$	-	$	-	$	10,356

Assets and liabilities measured at fair value on a non-recurring basis at December 31, 2013 are summarized below:

			Fair Value Measurements at December 31, 2013 Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Residential real estate	$	1,518	$	-	$	-	$	1,518
Commercial real estate
Owner occupied		345		-		-		345
Non-owner occupied		428		-		-		428
Commercial and industrial		3,384		-		-		3,384
All other		4,133		-		-		4,133
Total impaired loans		9,808	$	-	$	-	$	9,808
Other real estate owned:
Commercial real estate
Non-owner occupied		290		-		-		290
All other		8,496		-		-		8,496
Total OREO	$	8,786	$	-	$	-	$	8,786

Fair Value Inputs, Assets, Quantitative Information

The significant unobservable inputs related to assets and liabilities measured at fair value on a non-recurring basis at September 30, 2014 are summarized below:

	September 30, 2014		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired loans:
Multifamily residential	$	332	sales comparison	adjustment for differences between the comparable sales		36.8%-36.8% (36.8	%)
Commercial real estate
Owner occupied		390	sales comparison	adjustment for limited salability of specialized property		44.8%-72.4% (64.4	%)
Non-owner occupied		588	sales comparison	adjustment for differences between the comparable sales		16.9%-16.9% (16.9	%)
Commercial and industrial		689	sales comparison	adjustment for limited salability of specialized property		8.0%-41.2% (26.5	%)
All other		4,218	sales comparison	adjustment for percentage of completion of construction		56.8%-56.8% (56.8	%)
Total impaired loans		6,217
Other real estate owned:
Commercial real estate
Non-owner occupied	$	2,003	sales comparison	adjustment for differences between the comparable sales		29.6%-29.6% (29.6	%)
All other		8,353	sales comparison	adjustment for estimated realizable value		24.6%-50.2% (45.0	%)
Total OREO	$	10,356

The significant unobservable inputs related to assets and liabilities measured at fair value on a non-recurring basis at December 31, 2013 are summarized below:

	December 31, 2013		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired loans:
Residential real estate	$	1,518	sales comparison	adjustment for differences between the comparable sales		0.8%-63.5% (11.9	%)
Commercial real estate
Owner occupied		345	sales comparison	adjustment for limited salability of specialized property		62.5%-70.0% (64.0	%)
Non-owner occupied		428	sales comparison	adjustment for limited salability of specialized property		50.6%-50.6% (50.6	%)
Commercial and industrial		3,384	sales comparison	adjustment for limited salability of specialized property		25.0%-65.5% (57.8	%)
All other		4,133	sales comparison	adjustment for percentage of completion of construction		57.6%-99.3% (57.7	%)
Total impaired loans		9,808
Other real estate owned:
Commercial real estate
Non-owner occupied		290	sales comparison	adjustment for differences between the comparable sales		42.7%-42.7% (42.7	%)
All other		8,496	sales comparison	adjustment for estimated realizable value		9.5%-24.6% (12.5	%)
Total OREO	$	8,786