Fair Value Measurements and Disclosure (Tables)

9 Months Ended

Sep. 30, 2015

The table below is a summary of fair value estimates for financial instruments and the level of the fair value hierarchy within which the fair value measurements are categorized at the periods indicated:



September 30, 2015
(in 000's)	Carrying Amount		Estimated Fair Value		Quoted Prices In Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Financial Assets:
Cash and cash equivalents	$	116,388	$	116,388	$	116,388	$	—	$	—
Interest-bearing deposits	1,526		1,526		—		1,526		—
Investment securities	34,423		34,423		3,847		30,576		—
Loans	504,273		516,769		—		—		516,769
Accrued interest receivable	2,172		2,172		—		2,172		—
Financial Liabilities:
Deposits:
Noninterest-bearing	258,678		258,678		258,678		—		—
NOW and money market	221,917		221,917		221,917		—		—
Savings	64,865		64,865		64,865		—		—
Time deposits	71,175		71,170		—		—		71,170
Total deposits	616,635		616,630		545,460				71,170
Junior subordinated debt	7,880		7,880		—		—		7,880
Accrued interest payable	30		30		—		30		—



December 31, 2014
(in 000's)	Carrying Amount		Estimated Fair Value		Quoted Prices In Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Financial Assets:
Cash and cash equivalents	$	103,577	$	103,577	$	103,577	$	—	$	—
Interest-bearing deposits	1,522		1,522		—		1,522		—
Investment securities	48,301		48,301		3,823		44,478		—
Loans	446,824		441,186		—		—		441,186
Accrued interest receivable	1,927		1,927		—		1,927		—
Financial Liabilities:
Deposits:
Noninterest-bearing	215,439		215,439		215,439		—		—
NOW and money market	211,290		211,290		211,290		—		—
Savings	60,499		60,499		60,499		—		—
Time deposits	78,145		78,239		—		—		78,239
Total deposits	565,373		565,467		487,228		—		78,239
Junior subordinated debt	10,115		10,115		—		—		10,115
Accrued interest payable	40		40		—		40		—

Description of the Valuation Technique, Unobservable Input, and Qualitative Information about the Unobservable Inputs for the Company's Assets and Liabilities Classified as Level 3 and Measured at Fair Value on a Recurring Basis

The following table provides a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring basis at September 30, 2015 and 2014:



September 30, 2015				December 31, 2014
Financial Instrument	Valuation Technique	Unobservable Input	Weighted Average	Financial Instrument	Valuation Technique	Unobservable Input	Weighted Average
Junior Subordinated Debt	Discounted cash flow	Discount Rate	6.9%	Junior Subordinated Debt	Discounted cash flow	Discount Rate	6.87%

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

The following tables summarize the Company’s assets and liabilities that were measured at fair value on a recurring and non-recurring basis as of September 30, 2015 (in 000’s):



Description of Assets	September 30, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
AFS Securities (2):
U.S. Government agencies	$	10,602	$	—	$	10,602	$	—
U.S. Government collateralized mortgage obligations	19,974		—		19,974		—
Mutual Funds	3,847		3,847		—		—
Total AFS securities	$	34,423	$	3,847	$	30,576	$	—
Impaired loans (1):
Commercial and industrial	—		—		—		—
Real estate mortgage	—		—		—		—
RE construction & development	—		—		—		—
Agricultural	—		—		—		—
Installment/Other	—		—		—		—
Total impaired loans	$	—	$	—	$	—	$	—
Other real estate owned (1)	—		—		—		—
Total	$	34,423	$	3,847	$	30,576	$	—



Description of Liabilities	September 30, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Junior subordinated debt (2)	$	7,880	—	—	$	7,880
Total	$	7,880	—	—	$	7,880

(1)Nonrecurring

(2)Recurring

The following tables summarize the Company’s assets and liabilities that were measured at fair value on a recurring and non-recurring basis as of December 31, 2014 (in 000’s):



Description of Assets	December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
AFS Securities (2):
U.S. Government agencies	$	12,496	$	—	$	12,496	$	—
U.S. Government collateralized mortgage obligations	31,982		—		31,982		—
Mutual Funds	3,823		3,823		—		—
Total AFS securities	48,301		3,823		44,478		$	—
Impaired Loans (1):
Commercial and industrial	—		—		—		—
Real estate mortgage	42		—		—		42
RE construction & development	—		—		—		—
Agricultural	—		—		—		—
Installment/Other	—		—		—		—
Total impaired loans	$	42	$	—	$	—	$	42
Other real estate owned (1)	—		—		—		—
Total	$	48,343	$	3,823	$	44,478	$	42



Description of Liabilities	December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Junior subordinated debt (2)	$	10,115	$	—	$	—	$	10,115
Total	$	10,115	$	—	$	—	$	10,115

(1)Nonrecurring

(2)Recurring

Fair Value Inputs, Assets, Quantitative Information

The following table presents quantitative information about Level 3 fair value measurements for the Company's assets measured at fair value on a non-recurring basis at December 31, 2014. The Company had no assets measured at fair value on a non-recurring basis at September 30, 2015 (in 000's).



December 31, 2014
Financial Instrument	Fair Value	Valuation Technique	Unobservable Input	Range, Weighted Average
Impaired Loans:
Real estate mortgage	42	Sales Comparison Approach	Adjustment for difference between comparable sales	1%-16%, 13.2%

Significant Unobservable Inputs (Level 3) on a Recurring Basis

The following tables provide a reconciliation of assets and liabilities at fair value using significant unobservable inputs (Level 3) on a recurring basis during the nine months ended September 30, 2015 and 2014 (in 000’s):



	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015			Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
Reconciliation of Liabilities:	Junior Subordinated Debt			Junior Subordinated Debt			Junior Subordinated Debt			Junior Subordinated Debt
Beginning balance	$	10,238		$	10,115		$	11,532		$	11,125
Total gains (losses) included in earnings	148			346			95			(34		)
Canceled debt	(1,122		)	(1,122		)	—			—
Capitalized interest	(1,384		)	(1,459		)	(1,390		)	(1,112		)
Ending balance	$	7,880		$	7,880		$	10,047		$	10,047
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to liabilities still held at the reporting date	$	148		$	267		$	95		$	(34	)