Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Balances of Assets Measured at Fair Value on a Recurring Basis

The following tables present the balances of assets measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 (in thousands).


			Fair Value Measurements at September 30, 2014
Description	Balance as of September 30, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Securities available for sale
U.S. agency and mortgage-backed securities	$	83,380	$	—	$	83,380	$	—
Obligations of states and political subdivisions		21,325		—		21,325		—
Corporate equity securities		5		5		—		—

	$	104,710	$	5	$	104,705	$	—


			Fair Value Measurements at December 31, 2013
Description	Balance as of December 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Securities available for sale
U.S. agency and mortgage-backed securities	$	84,897	$	—	$	84,897	$	—
Obligations of states and political subdivisions		18,399		—		18,399		—
Corporate equity securities		5		5		—		—

	$	103,301	$	5	$	103,296	$	—

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 (dollars in thousands):


			Fair Value Measurements at September 30, 2014
Description	Balance as of September 30, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Impaired loans, net	$	2,812	$	—	$	—	$	2,812
Other real estate owned, net		1,807		—		—		1,807


			Fair Value Measurements at December 31, 2013
Description	Balance as of December 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Impaired loans, net	$	3,972	$	—	$	—	$	3,972
Other real estate owned, net		3,030		—		—		3,030


	Quantitative information about Level 3 Fair Value Measurements for September 30, 2014
	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted- Average)

Impaired loans, net	$	2,812	Property appraisals	Selling cost		10	%

Other real estate owned, net	$	1,807	Property appraisals	Selling cost		7	%

Quantitative Information about Level 3 Fair Value Measurements


	Quantitative information about Level 3 Fair Value Measurements for September 30, 2014
	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted- Average)
Assets
Impaired loans, net	$	2,812	Property appraisals	Selling cost	10%
				Discount for lack of marketability and age of appraisal	0-TBD% (TBD%)

Other real estate owned, net	$	1,807	Property appraisals	Selling cost	7%

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 September 30, 2014 and December 31, 2013 are as follows (in thousands):


	Fair Value Measurements at September 30, 2014 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	$	10,747	$	10,747	$	—	$	—	$	10,747
Securities		104,710		5		104,705		—		104,710
Restricted securities		1,636		—		1,636		—		1,636
Loans held for sale		181		—		181		—		181
Loans, net		364,974		—		—		371,773		371,773
Bank owned life insurance		11,244		—		11,244		—		11,244
Accrued interest receivable		1,327		—		1,327		—		1,327

Financial Liabilities
Deposits	$	438,919	$	—	$	327,674	$	111,148	$	438,822
Federal funds purchased		5,325		—		5,325		—		5,325
Other borrowings		6,033		—		—		6,093		6,093
Trust preferred capital notes		9,279		—		—		10,028		10,028
Accrued interest payable		143		—		143		—		143


	Fair Value Measurements at December 31, 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	$	31,508	$	31,508	$	—	$	—	$	31,508
Securities		103,301		5		103,296		—		103,301
Restricted securities		1,804		—		1,804		—		1,804
Loans, net		346,449		—		—		353,874		353,874
Bank owned life insurance		10,978		—		10,978		—		10,978
Accrued interest receivable		1,302		—		1,302		—		1,302

Financial Liabilities
Deposits	$	450,711	$	—	$	326,955	$	124,422	$	451,377
Other borrowings		6,052		—		—		6,095		6,095
Trust preferred capital notes		9,279		—		—		9,399		9,399
Accrued interest payable		177		—		177		—		177

- 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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