Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Balances of Assets Measured at Fair Value on a Recurring Basis

The following tables present the balances of financial assets measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012.


			Fair Value Measurements at June 30, 2013 (in thousands)
Description	Balance as of June 30, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Assets
Securities available for sale
U.S. agency and mortgage-backed securities	$	86,583	$	—	$	86,583	$	—
Obligations of states and political subdivisions		18,577		—		18,577		—
Corporate equity securities		3		3		—		—

	$	105,163	$	3	$	105,160	$	—


			Fair Value Measurements at December 31, 2012 (in thousands)
Description	Balance as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Assets
Securities available for sale
U.S. agency and mortgage-backed securities	$	73,218	$	—	$	73,218	$	—
Obligations of states and political subdivisions		16,235		—		16,235		—
Corporate equity securities		3		3		—		—

	$	89,456	$	3	$	89,453	$	—

Summary of Assets Measured at Fair Value on a Nonrecurring Basis

The following tables summarize the Company’s assets that were measured at fair value on a nonrecurring basis during the periods:


			Carrying Value at June 30, 2013 (in thousands)
Description	Balance as of June 30, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Assets
Impaired loans, net	$	2,311	$	—	$	—	$	2,311
Other real estate owned, net		4,084		—		—		4,084


			Carrying Value at December 31, 2012 (in thousands)
Description	Balance as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Assets
Impaired loans, net	$	7,944	$	—	$	—	$	7,944
Other real estate owned, net		5,590		—		—		5,590

Quantitative Information about Level 3 Fair Value Measurements

The following table displays quantitative information about Level 3 Fair Value Measurements for June 30, 2013 and December 31, 2012:

Quantitative information about Level 3 Fair Value Measurements for June 30, 2013

(dollars in thousands)

Fair
Value

Valuation Technique

Unobservable Input

Range

Assets

Impaired loans

2,311

Property appraisals

Selling cost

Other real estate owned

4,084

Property appraisals

Selling cost


	Quantitative information about Level 3 Fair Value Measurements for December 31, 2012
	(dollars in thousands)
	Fair Value		Valuation Technique	Unobservable Input	Range
Assets
Impaired loans	$	7,944	Property appraisals	Selling cost		10	%
				Discount for lack of marketability and age of appraisal		0%-30	%

Other real estate owned	$	5,590	Property appraisals	Selling cost		7	%
				Discount for lack of marketability and age of appraisal		0%-25	%

Carrying Values and Estimated Fair Values of Company's Financial Instruments

The carrying values and estimated fair values of the Company’s financial instruments at June 30, 2013 and December 31, 2012 are as follows:


	(in thousands)
	Fair Value Measurements at June 30, 2013 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value

Financial Assets
Cash and short-term investments	$	31,149	$	31,149	$	—	$	—	$	31,149
Securities		105,163		3		105,160		—		105,163
Loans, net		365,035		—		—		370,775		370,775
Bank owned life insurance		9,144		9,144		—		—		9,144
Accrued interest receivable		1,425		1,425		—		—		1,425
Financial Liabilities
Deposits	$	475,958	$	324,709	$	—	$	152,552	$	477,261
Other borrowings		6,064		—		—		5,837		5,837
Trust preferred capital notes		9,279		—		—		8,738		8,738
Accrued interest payable		254		254		—		—		254


	(in thousands)
	Fair Value Measurements at December 31, 2012 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value

Financial Assets
Cash and short-term investments	$	31,028	$	31,028	$	—	$	—	$	31,028
Securities		89,456		3		89,453		—		89,456
Loans held for sale		503		—		503		—		503
Loans, net		370,519		—		—		375,941		375,941
Bank owned life insurance		9,014		9,014		—		—		9,014
Accrued interest receivable		1,459		1,459		—		—		1,459

Financial Liabilities
Deposits	$	466,917	$	306,719	$	—	$	162,151	$	468,870
Other borrowings		6,076		—		—		6,220		6,220
Trust preferred capital notes		9,279		—		—		8,735		8,735
Accrued interest payable		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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