Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Estimated fair values as of the periods indicated are as follows:



	December 31, 2013				December 31, 2012
(In Thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Level 1 inputs:
Cash, due from banks and deposits in other banks		$99,091		$99,091		$154,813		$154,813
Investment securities	20,487		20,487		—		—

Level 2 inputs:
Investment securities	232,305		232,458		208,634		208,863
Accrued interest receivable	2,729		2,729		2,618		2,618
Interest rate contracts	186		186		—		—

Level 3 inputs:
Loans and loans held for sale, net	765,035		769,570		699,510		696,951
Purchased receivables, net	16,025		16,025		19,022		19,022

Financial liabilities:
Level 2 inputs:
Deposits		$1,003,723		$1,003,816		$970,129		$969,958
Securities sold under repurchase agreements	21,143		21,143		19,038		19,038
Borrowings	6,527		6,448		4,479		4,193
Accrued interest payable	52		52		47		47
Interest rate contracts	186		186		—		—
Level 3 inputs:
Junior subordinated debentures	18,558		15,456		18,558		18,590

Unrecognized financial instruments:
Commitments to extend credit⁽¹⁾		$187,931		$1,879		$208,328		$2,083
Standby letters of credit⁽¹⁾	6,463		65		22,132		221

Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following table sets forth the balances as of the periods indicated of assets measured at fair value on a recurring basis:



(In Thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities		$168,702		$5,538		$163,164		$—
Municipal securities	20,149		419		19,730		—
U.S. Agency mortgage-backed securities	25		—		25		—
Corporate bonds	56,778		11,496		45,282		—
Preferred stock	3,034		3,034		—		—
Total available for sale securities		$248,688		$20,487		$228,201		$—
Other assets (interest rate contracts)		$186		$—		$186		$—
Liabilities:
Other liabilities (interest rate contracts)		$186		$—		$186		$—
December 31, 2012
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities		$124,414		$—		$124,414		$—
Municipal securities	21,728		—		21,728		—
U.S. Agency mortgage-backed securities	36		—		36		—
Corporate bonds	53,982		—		53,982		—
Preferred stock	3,758		—		3,758		—
Total		$203,918		$—		$203,918		$—

Schedule Of Asset Impairment Or Valuation Adjustment Recognized At Fair Value On A Nonrecurring Basis

2013 and 2012, no impairment or valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis, except for certain assets as shown in the following table. For loans measured for impairment, the Company classifies fair value measurements using observable inputs, such as external appraisals, as Level 2 valuations in the fair value hierarchy, and unobservable inputs, such as in-house evaluations, as Level 3 valuations in the fair value hierarchy.



(In Thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total (gains) losses
December 31, 2013
Loans measured for impairment		$187		$—		$—		$187		$11
Other real estate owned	736		—		—		736		112
Total		$923		$—		$—		$923		$123
December 31, 2012
Loans measured for impairment		$105		$—		$—		$105		$39
Other real estate owned	1,536		—		—		1,536		469
Total		$1,641		$—		$—		$1,641		$508

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

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 nonrecurring basis at December 31, 2013:



Financial Instrument	Valuation Technique	Unobservable Input	Weighted Average Rate Range
Loans measured for impairment	In-house valuation of real estate; discounted cash flow	Discount rate	25	%
		Cash flows	NA⁽¹⁾
Other real estate owned	Fair value of collateral	Estimated capital costs to complete improvements	10% - 25%

⁽¹⁾ Fair value of impaired collateral dependent loans was calculated using contractual cash flows for specific impaired loan.

- 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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