Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2015

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

The following table summarizes our assets and liabilities that were required to be recorded at fair value on a recurring basis.



(in thousands) Description of Financial Instruments	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At September 30, 2015:
Securities available-for-sale:
Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government-sponsored agencies	$	171,417	$	—	$	169,677	$	1,740
Debentures of government-sponsored agencies	$	102,165	$	—	$	102,165	$	—
Privately-issued collateralized mortgage obligations	$	4,891	$	—	$	4,891	$	—
Obligations of state and political subdivisions	$	50,377	$	—	$	50,377	$	—
Corporate bonds	$	5,006	$	—	5,006		$	—
Derivative financial liabilities (interest rate contracts)	$	2,328	$	—	$	2,328	$	—
At December 31, 2014:
Securities available-for-sale:
Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government-sponsored agencies	$	158,119	$	—	$	155,421	$	2,698
Debentures of government-sponsored agencies	$	14,557	$	—	$	14,557	$	—
Privately-issued collateralized mortgage obligations	$	7,294	$	—	$	7,294	$	—
Obligations of state and political subdivisions	$	15,880	$	—	$	15,771	$	—
Corporate bonds	$	4,998	$	—	$	5,437	$	—
Derivative financial assets (interest rate contracts)	$	61	$	—	$	61	$	—
Derivative financial liabilities (interest rate contracts)	$	1,996	$	—	$	1,996	$	—

Fair Value Measurements, Nonrecurring

The following table presents the carrying value of assets and liabilities measured at fair value on a non-recurring basis and that were held in the consolidated statements of condition at each respective period end, by level within the fair value hierarchy as of September 30, 2015 and December 31, 2014. Impaired loans are only included in the following table when they are collateral dependent and the recorded investments of these loans are at the net realizable value of the collateral based on an impairment analysis.



(in thousands)	Carrying Value¹		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At September 30, 2015:
Other real estate	$	421	$	—	$	—	$	421
At December 31, 2014:
Impaired loans:
Installment and other consumer ¹	$	77	$	—	$	—	$	77
Other real estate	$	461	$	—	$	—	$	461

¹ Represents collateral-dependent loan principal balances that had been generally written down to the values of the underlying collateral, net of specific valuation allowances. At December 31, 2014, the $77 thousand carrying value of a consumer loan was net of a $26 thousand specific valuation allowance. The carrying value of loans fully charged-off, which includes unsecured lines of credit, overdrafts and all other loans, is zero.

Fair Value, by Balance Sheet Grouping

The table below is a summary of fair value estimates for financial instruments as of September 30, 2015 and December 31, 2014, excluding financial instruments recorded at fair value on a recurring basis (summarized in the first table in this note). The carrying amounts in the following table are recorded in the consolidated statements of condition under the indicated captions. We have excluded non-financial assets and non-financial liabilities defined by the Codification (ASC 820-10-15-1A), such as Bank premises and equipment, deferred taxes and other liabilities. In addition, we have not disclosed the fair value of financial instruments specifically excluded from disclosure requirements of the Financial Instruments Topic of the Codification (ASC 825-10-50-8), such as Bank-owned life insurance policies.



	September 30, 2015					December 31, 2014
(in thousands)	Carrying Amounts		Fair Value		Fair Value Hierarchy	Carrying Amounts		Fair Value		Fair Value Hierarchy
Financial assets
Cash and cash equivalents	$	35,315	$	35,315	Level 1	$	41,367	$	41,367	Level 1
Investment securities held-to-maturity	86,471		88,104		Level 2	116,437		118,643		Level 2
Loans, net	1,348,743		1,364,940		Level 3	1,348,252		1,361,244		Level 3
Interest receivable	5,606		5,606		Level 2	5,909		5,909		Level 2
Financial liabilities
Deposits	1,635,482		1,636,088		Level 2	1,551,619		1,552,446		Level 2
Federal Home Loan Bank borrowings	15,000		15,437		Level 2	15,000		15,484		Level 2
Subordinated debentures	5,343		5,178		Level 3	5,185		5,290		Level 3
Interest payable	200		200		Level 2	213		213		Level 2