Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

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
March 31, 2015:
Impaired loans	$	13,296	Appraisal of collateral (1)	Appraisal adjustments(2)	20% - 30%
				Liquidation expense (2)	5% - 10%
Other real estate owned	$	575	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 10%
Mortgage servicing rights	$	1,315	Discounted cash flows	Constant prepayment rate	12%
				Cost of service	0.25%
				Discount rate	12%

	Quantitative Information about Level 3 Fair Value Measurements
			Valuation	Unobservable
(Dollars in thousands)	Fair Value		Technique	Input	Range
December 31, 2014:
Impaired loans	$	14,091	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 10%
Other real estate owned	$	575	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 10%
Mortgage servicing rights	$	1,423	Discounted cash flows	Constant prepayment rate	12%
				Cost of service	0.25%
				Discount rate	12%

(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.

Recurring

Fair value of assets and liabilities

Schedule of assets measured at fair value

	March 31, 2015
(in thousands)	Level I		Level II		Level III		Total
Assets:
U.S. Government Agency Securities	$	—	$	30,779	$	—	$	30,779
U.S. Sponsored Mortgage backed securities		—		35,668		—		35,668
Equity and Other Securities		87		670		—		757
Loans held for sale		—		125,802		—		125,802
Interest rate lock commitment		—		—		1,790		1,790
Interest rate cap		—		987		—		987
Liability:
Forward sales commitments		—		(150)		—		(150)

	December 31, 2014
(in thousands)	Level I		Level II		Level III		Total
Assets:
U.S. Government Agency Securities	$	—	$	37,534	$	—	$	37,534
U.S. Sponsored Mortgage backed securities		—		29,932		—		29,932
Equity and Other Securities		77		670		—		747
Loans held for sale		—		69,527		—		69,527
Interest rate lock commitment		—		—		1,020		1,020
Interest rate cap		—		1,423		—		1,423
Liability:
Forward sales commitments		—		(431)		—		(431)

Non-recurring

Fair value of assets and liabilities

Schedule of assets measured at fair value

	March 31, 2015
(in thousands)	Level I		Level II		Level III		Total
Assets:
Impaired loans	$	—	$	—	$	13,296	$	13,296
Other real estate owned		—		—		575		575
Mortgage servicing rights		—		—		1,315		1,315

	December 31, 2014
(in thousands)	Level I		Level II		Level III		Total
Assets:
Impaired loans	$	—	$	—	$	14,091	$	14,091
Other real estate owned		—		—		575		575
Mortgage servicing rights		—		—		1,423		1,423

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)
March 31, 2015:
Financial assets:
Cash and cash equivalents	$	26,545	$	26,545	$	26,545	$	—	$	—
Certificates of deposits with other banks		11,659		11,830		—		11,830		—
Securities available-for-sale		67,204		67,204		87		67,117		—
Securities held-to-maturity		53,903		55,412		—		55,412		—
Loans held for sale		125,802		125,802		—		125,802		—
Loans, net		824,804		833,854		—		—		833,854
Mortgage servicing rights		1,315		1,315		—		—		1,315
Interest rate lock commitment		1,790		1,790		—		—		1,790
Interest rate cap		987		987		—		987		—
Accrued interest receivable		2,828		2,828		—		808		2,020
Financial liabilities:
Deposits	$	866,308	$	867,410	$	—	$	867,410	$	—
Repurchase agreements		26,122		26,122		—		26,122		—
FHLB and other borrowings		145,243		145,271		—		145,271		—
Forward sales commitments		150		150		—		150		—
Accrued interest payable		368		368		—		368		—
Subordinated debt		33,524		31,172		—		31,172		—
December 31, 2014
Financial assets:
Cash and cash equivalents	$	30,077	$	30,077	$	30,077	$	—	$	—
Certificates of deposits with other banks		11,907		12,035		—		12,035		—
Securities available-for-sale		68,213		68,213		77		68,136		—
Securities held-to-maturity		54,538		55,871		—		55,871		—
Loans held for sale		69,527		69,527		—		69,527		—
Loans, net		792,074		803,036		—		—		803,036
Mortgage servicing rights		1,423		1,423		—		—		1,423
Interest rate lock commitment		1,020		1,020		—		—		1,020
Interest rate cap		1,423		1,423		—		1,423		—
Accrued interest receivable		2,387		2,387		—		728		1,659
Financial liabilities:
Deposits	$	823,227	$	824,078	$	—	$	824,078	$	—
Repurchase agreements		32,673		32,673		—		32,673		—
FHLB and other borrowings		101,287		101,338		—		101,338		—
Forward sales commitments		431		431		—		431		—
Accrued interest payable		376		376		—		376		—
Subordinated debt		33,524		31,172		—		31,172		—