Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Fair value of assets and liabilities

Schedule of quantitative information about assets measured at fair value on a non-recurring basis

	Quantitative Information about Level 3 Fair Value Measurements
			Valuation	Unobservable
(Dollars in thousands)	Fair Value		Technique	Input	Range
September 30, 2014:
Impaired loans	$	5,436	Appraisal of collateral (1)	Appraisal adjustments(2)	20% - 30%
				Liquidation expense (2)	5% - 10%
Other real estate owned	$	702	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 10%
Derivative on loans held for sale	$	2,819	Market or Committed Sale Price	Expected Funding Percentage	77%

	Quantitative Information about Level 3 Fair Value Measurements
			Valuation	Unobservable
(Dollars in thousands)	Fair Value		Technique	Input	Range
December 31, 2013:
Impaired loans	$	5,178	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 0%
Other real estate owned	$	375	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 10%
Derivative on loans held for sale	$	2,271	Market or Committed Sale Price	Expected Funding Percentage	80%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not observable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.  The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

Fair Value, Measurements, Recurring [Member]

Fair value of assets and liabilities

Schedule of assets measured at fair value

	September 30, 2014
(in thousands)	Level I		Level II		Level III		Total
Assets:
U.S. Government Agency Securities	$	—	$	44,046	$	—	$	44,046
U.S. Sponsored Mortgage backed securities		—		26,316		—		26,316
Municipal securities		—		—		—		—
Equity and Other Securities		220		810				1,030

	December 31, 2013
(in thousands)	Level I		Level II		Level III		Total
Assets:
U.S. Government Agency Securities	$	—	$	58,822	$	—	$	58,822
U.S. Sponsored Mortgage backed securities		—		46,592		—		46,592
Equity and Other Securities		187		810		—		997

Fair Value, Measurements, Nonrecurring [Member]

Fair value of assets and liabilities

Schedule of assets measured at fair value

	September 30, 2014
(in thousands)	Level I		Level II		Level III		Total
Assets:
Derivative on loans held for sale	$	—	$	1,014	$	1,805	$	2,819
Impaired loans		—		—		5,436		5,436
Other real estate owned		—		—		702		702

	December 31, 2013
(in thousands)	Level I		Level II		Level III		Total
Assets:
Derivative on loans held for sale	$	—	$	—	$	2,271	$	2,271
Impaired loans		—		—		5,178		5,178
Other real estate owned		—		—		375		375

Schedule of carrying values and estimated fair values of the Company's financial instruments

The carrying values and estimated fair values of the Company’s financial instruments are summarized as follows (in thousands):

Fair Value Measurements at:

					Quoted Prices in		Significant		Significant
					Active Markets For		Other		Unobservable
	Carrying		Estimated		Identical Assets		Observable		Inputs
	Value		Fair Value		(Level 1)		Inputs (Level 2)		(Level 3)
September 30, 2014
Financial assets:
Cash and cash equivalents	$	62,509	$	62,509	$	62,509	$	—	$	—
Certificates of deposits with other banks		9,427		9,523		—		9,523		—
Securities available-for-sale		71,392		71,392		220		71,172		—
Securities held-to-maturity		55,633		56,328		—		56,328		—
Loans held for sale		50,616		50,616		—		50,616		—
Loans, net		756,562		764,194		—		—		764,194
Derivative on loans held for sale		2,819		2,819		—		1,014		1,805
Accrued interest receivable		2,808		2,808		—		2,808		—
Financial liabilities:
Deposits	$	846,321	$	847,690		—	$	847,690	$	—
Repurchase agreements		33,894		33,894		—		33,894		—
FHLB and other borrowings		55,465		55,490		—		55,490		—
Accrued interest payable		348		348		—		348		—
Subordinated debt		33,524		31,172		—		31,172		—
December 31, 2013
Financial assets:
Cash and cash equivalents	$	39,843	$	39,843	$	39,843	$	—	$	—
Certificates of deposits with other banks		9,427		9,616		—		9,616		—
Securities available-for-sale		106,411		106,411		187		106,224		—
Securities held-to-maturity		56,670		54,118		—		54,118		—
Loans held for sale		89,186		89,186		—		89,186		—
Loans, net		617,370		620,295		—		—		620,295
Derivative on loans held for sale		2,271		2,271		—		—		2,271
Accrued interest receivable		2,764		2,764		—		2,764		—
Financial liabilities:
Deposits	$	695,811	$	697,301	$	—	$	697,301	$	—
Repurchase agreements		81,578		81,578		—		81,578		—
FHLB and other borrowings		104,647		104,742		—		104,742		—
Accrued interest payable		327		327		—		327		—
Subordinated debt		4,124		4,124		—		4,124		—