Fair Value (Tables)

6 Months Ended

Jun. 30, 2016

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes, by measurement hierarchy, the various assets and liabilities of the Company that are measured at fair value on a recurring basis:



	Carrying Amount		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2016
U.S. government agencies	$	—	$	—	$	—	$	—
State and political subdivisions	13,130		—		8,114		5,016
U.S. government agency residential
mortgage-backed securities	128,088		—		128,088		—
Collateralized mortgage obligations:
Agency	16,453		—		16,453		—
Equities	2,911		—		2,911		—
Available-for-sale securities	$	160,582	$	—	$	155,566	$	5,016




	Carrying Amount		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2015
U.S. government agencies	$	14,607	$	—	$	14,607	$	—
State and political subdivisions	10,181		—		5,160		5,021
U.S. government agency residential
mortgage-backed securities	126,029		—		126,029		—
Collateralized mortgage obligations:
Agency	17,833		—		17,833		—
Equities	2,790		—		2,790		—
Available-for-sale securities	$	171,440	$	—	$	166,419	$	5,021

Reconciliation of Assets Measured at Fair Value on a Recurring Basis

The following table reconciles the beginning and ending balances of the assets of the Company that are measured at fair value on a recurring basis using significant unobservable inputs.



	Securities Available for Sale
	2016
Beginning balance, January 1	$	5,021
Transfers into Level 3	—
Total gains or losses (realized/unrealized) included in earnings
Sales	—
Security impairment	—
Payment received	—
Other changes in fair value	(5		)
Included in other comprehensive income	—
Ending Balance, June 30	$	5,016

Summary of Assets Measured at Fair Value on a Nonrecurring Basis

The following table summarizes, by measurement hierarchy, financial assets of the Company that are measured at fair value on a non-recurring basis.



	Carrying Amount		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2016
Impaired loans
Commercial
Closed-end	$	92	$	—	$	—	$	92
1-4 family residential
Senior lien	396		—		—		396
OREO property
CRE - construction, land & development	1,744		—		—		1,744
CRE - all other
Owner occupied	183		—		—		183
Non-owner occupied	880		—		—		880
1-4 family residential
Senior lien	64		—		—		64



	Carrying Amount		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2015
Impaired loans
1-4 family residential
Senior lien	$	572	$	—	$	—	$	572
OREO property
CRE - construction, land & development	1,140		—		—		1,140
CRE - all other
Non-owner occupied	468		—		—		468
1-4 family residential
Senior lien	131		—		—		131

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2016 and December 31, 2015:



June 30, 2016	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans			Sales comparison approach	Adjustment for differences between comparable sales
Commercial
Closed-end	$	92			20% - 100% (82%)
1-4 family residential
Senior lien	396				10% - 60% (32%)
OREO property
CRE - construction, land & development	1,744				5% - 70% (26%)
CRE - all other
Owner occupied	183				5% - 50% (15%)
Non-owner occupied	880				5% - 50% (21%)
1-4 family residential
Senior lien	64				6% - 55% (23%)



December 31, 2015	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans			Sales comparison approach	Adjustment for differences between comparable sales
1-4 family residential
Senior lien	$	572			10% - 60% (17%)
OREO property
CRE - construction, land & development	1,140				5% - 70% (27%)
CRE - all other
Non-owner occupied	468				5% - 50% (16%)
1-4 family residential
Senior lien	131				6% - 55% (30%)

Schedule of Financial Instruments Estimated at Fair Value

The estimated fair values of the Company’s financial instruments are as follows:



			Fair Value measurements at June 30, 2016 Using
	Carrying Value		Level 1		Level 2		Level 3		Total

Financial assets
Cash and cash equivalents	$	27,024	$	27,024	$	—	$	—	$	27,024
Securities	160,582		—		155,566		5,016		160,582
Restricted securities	10,027		—		—		—		NA
Loans held for sale	187		—		193		—		193
Net loans	648,829		—		—		655,336		655,336
Accrued interest receivable	2,279		—		428		1,851		2,279
Financial liabilities
Deposits	$	716,424	$	—	$	716,732	$	—	$	716,732
Federal funds purchased and
securities sold under
agreements to repurchase	10,605		—		10,605		—		10,605
Federal Home Loan Bank advances	75,000		—		75,475		—		75,475
Subordinated debentures	20,620		—		—		15,671		15,671
Series B mandatory redeemable
preferred stock	209		—		210		—		210
Accrued interest payable	253		—		237		16		253



			Fair Value measurements at December 31, 2015 Using
	Carrying Value		Level 1		Level 2		Level 3		Total

Financial assets
Cash and cash equivalents	$	27,655	$	27,655	$	—	$	—	$	27,655
Securities	171,440		—		166,419		5,021		171,440
Restricted securities	9,116		—		—		—		NA
Loans held for sale	735		—		760		—		760
Net loans	624,956		—		—		629,017		629,017
Accrued interest receivable	3,012		—		402		2,610		3,012
Financial liabilities
Deposits	$	718,504	$	—	$	718,689	$	—	$	718,689
Federal funds purchased and
securities sold under
agreements to repurchase	18,730		—		18,730		—		18,730
Federal Home Loan Bank advances	76,000		—		76,271		—		76,271
Notes payable	—		—		—		—		—
Subordinated debentures	20,620		—		—		13,933		13,933
Series B mandatory redeemable
preferred stock	268		—		273		—		273
Accrued interest payable	235		—		169		66		235