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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Schedule of Assets Measured at Fair Value on Recurring Basis

The following table presents assets measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014. There were no liabilities measured at fair value on a recurring basis for either period presented.

	Fair Value Measurements as of March 31, 2015 Using
	Totals At March 31, 2015		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in Thousands)
Investment securities, available-for-sale
Mortgage-backed securities:
Residential	$	137,761	$	—	$	137,761	$	—
Commercial		48,551	—			48,551	—
Obligations of states and political subdivisions		16,240	—			16,240	—
Obligations of U.S. government-sponsored agencies		6,362	—			6,362	—
Corporate Notes		796	—			796	—
U.S. Treasury securities		80	—			80	—
Other assets - derivatives		28	—			28	—

	Fair Value Measurements as of December 31, 2014 Using
	Totals At December 31, 2014		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in Thousands)
Investment securities, available-for-sale
Mortgage-backed securities:
Residential	$	141,684	$	—	$	141,684	$	—
Commercial		35,944		—		35,944		—
Obligations of states and political subdivisions		16,914		—		16,914		—
Obligations of U.S. government-sponsored agencies		6,364		—		6,364		—
U.S. Treasury securities		4,060		—		4,060		—
Other assets - derivatives		68		—		68		—

Balances of Impaired Loans and OREO Measured at Fair Value on Nonrecurring Basis

The following table presents the balances of impaired loans and OREO measured at fair value on a non-recurring basis as of March 31, 2015 and December 31, 2014.

	Fair Value Measurements as of March 31, 2015 Using
	Totals At March 31, 2015		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in Thousands)
Impaired loans	$	1,048	$	—	$	—	$	1,048
OREO		8,608	—		—			8,608

	Fair Value Measurements as of December 31, 2014 Using
	Totals At December 31, 2014		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in Thousands)
Impaired loans	$	1,456	$	—	$	—	$	1,456
OREO		7,735		—		—		7,735

Summary of Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

Following the table is a description of the valuation technique and the sensitivity of the technique to changes in the significant unobservable input.

	Level 3 Significant Unobservable Input Assumptions
	Fair Value March 31, 2015		Valuation Technique	Unobservable Input	Quantitative Range of Unobservable Inputs (Weighted Average)
	(Dollars in Thousands)
Non-recurring fair value measurements:

Impaired loans	$	1,048	Multiple data points, including discount to appraised value of collateral based on recent market activity	Appraisal comparability adjustment (discount)	9% - 10% (9.0%)

OREO	$	8,608	Discount to appraised value of property based on recent market activity for sales of similar properties	Appraisal comparability adjustment (discount)	9% - 10% (9.0%)

Schedule of Estimated Fair Value and Related Carrying or Notional Amounts of Company's Financial Instruments

The estimated fair value and related carrying or notional amounts, as well as the level within the fair value hierarchy, of the Company’s financial instruments as of March 31, 2015 and December 31, 2014, were as follows:

	March 31, 2015
	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	30,317	$	30,317	$	30,317	$	—	$	—
Investment securities available-for-sale		209,790		209,790	—			209,790	—
Investment securities held-to-maturity		40,074		40,033	—			40,033	—
Federal Home Loan Bank stock		740		740	—		—			740
Loans, net of allowance for loan losses		239,218		239,740	—		—			239,740
Other assets – derivatives		28		28	—			28	—
Liabilities:
Deposits		475,288		476,009	—			476,009	—
Short-term borrowings		680		680	—			680	—
Long-term debt		5,000		5,005	—			5,005	—

	December 31, 2014
	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	34,166	$	34,166	$	34,166	$	—	$	—
Investment securities available-for-sale		204,966		204,966		—		204,966		—
Investment securities held-to-maturity		29,120		29,154		—		29,154		—
Federal Home Loan Bank stock		738		738		—		—		738
Loans, net of allowance for loan losses		259,516		259,337		—		—		259,337
Other assets – derivatives		68		68		—		68		—
Liabilities:
Deposits		483,659		484,108		—		484,108		—
Short-term borrowings		436		436		—		436		—
Long-term debt		5,000		5,007		—		5,007		—

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- 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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