Fair Value and Interest Rate Risk (Tables)

3 Months Ended

Mar. 31, 2014

Financial Assets Measured at Fair Value on Recurring Basis

The following table details the financial assets measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine fair value:


(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of March 31, 2014
March 31, 2014
U.S. Government agency mortgage- backed securities	$	—	$	20,632	$	—	$	20,632
U.S. Government agency bonds		—		7,245		—		7,245
Corporate bonds		—		8,938		—		8,938

Securities available for sale	$	—	$	36,815	$	—	$	36,815


	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2013
December 31, 2013
U.S. Government agency mortgage- backed securities	$	—	$	21,752	$	—	$	21,752
U.S. Government agency bonds				7,079				7,079
Corporate bonds		—		8,870		—		8,870

Securities available for sale	$	—	$	37,701	$	—	$	37,701

Financial Assets Measured at Fair Value on Non-Recurring Basis

The following tables reflect financial assets measured at fair value on a non-recurring basis as of March 31, 2014 and December 31, 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
March 31, 2014
Impaired Loans ⁽¹⁾	$	—	$	—	$	6,855	$	6,855

Other real estate owned ⁽²⁾	$	—	$	—	$	264	$	264

December 31, 2013
Impaired Loans ⁽¹⁾	$	—	$	—	$	7,508	$	7,508

Other real estate owned ⁽²⁾	$	—	$	—	$	—	$	—

⁽¹⁾	Represents carrying value for which adjustments are based on the appraised value of the collateral.

⁽²⁾	Represents carrying value for which adjustments are based on the appraised value of the property.

Carrying Amounts and Estimated Fair Values of Financial Instruments

The following is a summary of the carrying amounts and estimated fair values of the Company’s financial instruments not measured and not reported at fair value on the consolidated balance sheets at March 31, 2014 and December 31, 2013 (in thousands):


	March 31, 2014						December 31, 2013
(in thousands)	Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial Assets:
Cash and noninterest bearing balances due from banks		Level 1	$	1,503	$	1,503	$	1,570	$	1,570
Interest-bearing deposits due from banks		Level 1		58,254		58,254		33,295		33,295
Other investments		Level 2		4,450		4,450		4,450		4,450
Federal Reserve Bank stock		Level 1		1,444		1,444		1,444		1,444
Federal Home Loan Bank stock		Level 1		4,143		4,143		4,143		4,143
Loans receivable, net		Level 3		415,123		420,486		418,148		424,831
Accrued interest receivable		Level 1		1,578		1,578		1,566		1,566
Financial Liabilities:
Demand deposits		Level 1	$	57,967	$	57,967	$	55,358	$	55,358
Savings deposits		Level 1		86,409		86,409		80,983		80,983
Money market deposits		Level 1		29,502		29,502		29,310		29,310
NOW accounts		Level 1		25,464		25,464		28,618		28,618
Time deposits		Level 2		228,627		229,231		235,935		236,602
FHLB Borrowings		Level 2		80,000		80,000		57,000		57,000
Subordinated debentures		Level 2		8,248		8,248		8,248		8,248
Accrued interest payable		Level 1		1,589		1,589		1,388		1,388