Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2014

Assets measured at fair value are summarized below.


	Fair Value Measurements at September 30, 2014 Using:
	(Level 1)		(Level 2)		(Level 3)

Assets:

Assets measured at fair value on a recurring basis:

U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	44,739	$	—
Obligations of states and political subdivisions		—		87,253		—
Mortgage-backed securities in government sponsored entities		—		68,366		—
Equity securities in financial institutions		—		533		—
Fair value of swap asset		—		1,078		—
Fair value of swap liability		—		1,078		—

Assets measured at fair value on a nonrecurring basis:

Impaired loans	$	—	$	—	$	10,863
Other real estate owned		—		—		266


	Fair Value Measurements at December 31, 2013 Using:
	(Level 1)		(Level 2)		(Level 3)

Assets:

Assets measured at fair value on a recurring basis:

U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	51,560	$	—
Obligations of states and political subdivisions		—		80,625		—
Mortgage-backed securities in government sponsored entities		—		66,979		—
Equity securities in financial institutions		—		449		—
Fair value of swap asset		—		286		—
Fair value of swap liability		—		286		—

Assets measured at fair value on a nonrecurring basis:

Impaired loans	$	—	$	—	$	15,548
Other real estate owned		—		—		173

Quantitative Information about Level 3 Fair Value Measurements

The following table presents quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis at September 30, 2014.


	Quantitative Information about Level 3 Fair Value Measurements
September 30, 2014	Fair Value Estimate		Valuation Technique	Unobservable Input	Range

Impaired loans	$	10,863	Appraisal of collateral	Appraisal adjustments	10% - 30%

				Liquidation expense	5% - 10%

				Holding period	0 - 30 months

			Discounted cash flows	Discount rates	3.8% - 8.0%

Other real estate owned	$	266	Appraisal of collateral	Appraisal adjustments	10% - 30%

				Liquidation expense	5% - 10%

The following table presents quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2013.


	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2013	Fair Value Estimate		Valuation Technique	Unobservable Input	Range

Impaired loans	$	15,548	Appraisal of collateral	Appraisal adjustments	10% - 30%

				Liquidation expense	0% - 10%

				Holding period	0 - 30 months

			Discounted cash flows	Discount rates	2% - 8.5%

Other real estate owned	$	173	Appraisal of collateral	Appraisal adjustments	10% - 30%

				Liquidation expense	0% - 10%

Carrying Amount and Fair Values of Financial Instruments

The carrying amount and fair values of financial instruments are as follows.


September 30, 2014	Carrying		Total
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	24,128	$	24,128	$	24,128	$	—	$	—
Securities available for sale		200,891		200,891		—		200,891		—
Loans, held for sale		1,399		1,399		1,399		—		—
Loans, net of allowance for loan losses		871,573		884,219		—		—		884,219
Other securities		12,554		12,554		12,554		—		—
Bank owned life insurance		19,518		19,518		19,518		—		—
Accrued interest receivable		4,523		4,523		4,523		—		—
Fair value swap asset		1,078		1,078		—		1,078		—

Financial Liabilities:
Nonmaturing deposits		750,590		750,590		750,590		—		—
Time deposits		230,044		231,510		—		—		231,510
Federal Home Loan Bank advances long term		17,500		17,954		—		—		17,954
Federal Home Loan Bank advances short term		8,700		8,669		8,669		—		—
Securities sold under agreement to repurchase		20,128		20,128		20,128		—		—
Subordinated debentures		29,427		23,635		—		—		23,635
Accrued interest payable		134		134		134		—		—
Fair value swap liability		1,078		1,078		—		1,078		—


December 31, 2013	Carrying		Total
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	34,186	$	34,186	$	34,186	$	—	$	—
Securities available for sale		199,613		199,613		—		199,613		—
Loans, held for sale		438		438		438		—		—
Loans, net of allowance for loan losses		844,713		861,252		—		—		861,252
Other securities		15,424		15,424		15,424		—		—
Bank owned life insurance		19,145		19,145		19,145		—		—
Accrued interest receivable		3,881		3,881		3,881		—		—
Fair value swap asset		286		286		—		286		—

Financial Liabilities:
Nonmaturing deposits		706,126		706,126		706,126		—		—
Time deposits		236,349		237,837		—		—		237,837
Federal Home Loan Bank advances		37,726		38,767		—		—		38,767
Securities sold under agreement to repurchase		20,053		20,053		20,053		—		—
Subordinated debentures		29,427		20,605		—		—		20,605
Accrued interest payable		156		156		156		—		—
Fair value swap liability		286		286		—		286		—

- 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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