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Fair Value (Tables)
 3 Months Ended
Mar. 31, 2013
Fair Value Disclosures [Abstract]  
Level 3 Fair Value Reconciliation
The following table presents a rollforward of interest rate swaps from December 31, 2012 to March 31, 2013, and from December 31, 2011 to March 31, 2012.
 
Level 3
 
Fair Value- Assets
 
Fair Value- Liabilities
 
(Amounts in thousands)
Balance, December 31, 2011
$
216

 
$
216

Purchases, sales, issuances and settlements
—

 
—

Gains/losses included in other income
(7
)
 
(7
)
Balance, March 31, 2012
$
209

 
$
209

 
 
 
 
Balance, December 31, 2012
$
196

 
$
196

Purchases, sales, issuances and settlements
—

 
—

Gains/losses included in other income
(16
)
 
(16
)
Balance, March 31,2013
$
180

 
$
180

 
 
 
 
Level 3 Fair Value Reconciliation
The following table presents a rollforward of mortgage servicing rights from December 31, 2012 and 2011 to March 31, 2013 and 2012 and shows that the mortgage servicing rights are classified as Level 3 as discussed above.

 
Level 3
 
Fair Value
 
Fair Value
 
(In thousands)
Balance, December 31, 2012 and 2011
$
2,525

 
$
1,871

Capitalized
418

 
167

Gains/losses included in other income
102

 
113

Balance, March 31, 2013 and 2012
$
3,045

 
$
2,151

 
Interest Rate Lock Commitments
 
Level 3
 
Fair Value
 
Fair Value
 
(In thousands)
Balance, December 31, 2012 and 2011
$
873

 
$
130

Gains/losses included in other income
(66
)
 
(289
)
Transfer in and out
—

 
—

Balance, March 31, 2013 and 2012
$
807

 
$
(159
)
 
 
 
 
Assets and Liabilities Measured on a Recurring Basis
The following table presents assets and (liabilities) measured at fair value on a recurring basis:

March 31, 2013 (in thousands)
Fair Value
 
Level 1
 
Level 2
 
Level 3
Available-for-sale securities:
 
 
 
 
 
 
 
U.S. government agencies
$
17,232

 
$
—

 
$
17,232

 
$
—

Government sponsored agencies:
 
 
 
 
 
 
 
Residential mortgage-backed securities
132,424

 
—

 
132,424

 
—

Collateralized mortgage obligations
104,950

 
—

 
104,950

 
—

Private label collateralized mortgage obligations
10,656

 
—

 
10,656

 
—

State and municipal securities
115,435

 
—

 
115,435

 
—

Common and preferred stocks
149

 
149

 
—

 
—

Interest rate swap agreements
180

 
—

 
—

 
180

Interest rate swap agreements
(180
)
 
—

 
—

 
(180
)
Interest rate lock commitments
807

 
—

 
—

 
807

Forward loan sale commitments
(425
)
 
—

 
(425
)
 
—

Mortgage servicing rights
3,045

 
—

 
—

 
3,045


December 31, 2012 (in thousands)
Fair Value
 
Level 1
 
Level 2
 
Level 3
Available-for-sale securities:
 
 
 
 
 
 
 
U.S. government agencies
$
27,527

 
$
—

 
$
27,527

 
$
—

Government sponsored agencies:
 
 
 
 
 
 
 
Residential mortgage-backed securities
107,257

 
—

 
107,257

 
—

Collateralized mortgage obligations
122,593

 
—

 
122,593

 
—

Private label collateralized mortgage obligations
1,045

 
—

 
1,045

 
—

State and municipal securities
84,565

 
—

 
84,565

 
—

Common and preferred stocks
133

 
133

 
—

 
—

Interest rate swap agreements
196

 
—

 
—

 
196

Interest rate swap agreements
(196
)
 
—

 
—

 
(196
)
Interest rate lock commitments
873

 
—

 
—

 
873

Forward loan sale commitments
(481
)
 
—

 
(481
)
 
—

Mortgage servicing rights
2,525

 
—

 
—

 
2,525
Level 3 Inputs, Quantitative Information
 
Fair Value at March 31, 2013 (in thousands)
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Avg)
Recurring measurements:
 
 
 
 
 
 
 
Interest Rate Swaps
$
180

 
Discounted cash flow
 
Discount rate
 
1.00%
Interest Rate Lock Commitments
807

 
Pricing model
 
Pull through rates
 
88-90%
Mortgage Servicing Rights
3,045

 
Discounted cash flow
 
Constant prepayment rate
 
15.91%
 
 
 
 
 
Cost of service
 
$50
 
 
 
 
 
Discount rate
 
8%
Nonrecurring measurements:
 
 
 
 
 
 
 
Impaired loans
$
11,145

 
Discounted appraisals
 
Collateral discounts
 
15-50%
Other real estate owned
5,449

 
Discounted appraisals
 
Collateral discounts
 
6-15%
 
 
Fair Value at December 31, 2012 (in thousands)
 
Valuation Technique
 
Unobservable Input
 
Range (Weighted Avg)
Recurring measurements:
 
 
 
 
 
 
 
Interest Rate Swaps
$
196

 
Discounted cash flow
 
Discount rate
 
1.00%
Interest Rate Lock Commitments
873

 
Pricing model
 
Pull through rates
 
83.9%
Mortgage Servicing Rights
2,525

 
Discounted cash flow
 
Constant prepayment rate
 
17.96%
 
 
 
 
 
Cost of service
 
$50
 
 
 
 
 
Discount rate
 
8%
Nonrecurring measurements:
 
 
 
 
 
 
 
Impaired loans
$
7,276

 
Discounted appraisals
 
Collateral discounts
 
10-15%
Other real estate owned
5,281

 
Discounted appraisals
 
Collateral discounts
 
15%
Assets measured on a nonrecurring basis
The following table presents assets measured at fair value on a nonrecurring basis:
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
March 31, 2013
(Amounts in thousands)
Other real estate owned
$
5,449

 
$
—

 
$
—

 
$
5,449

Impaired loans:
 
 
 
 
 
 
 
Construction
2,390

 
—

 
—

 
2,390

Commercial real estate:
 
 
 
 
 
 
 
Owner occupied
7,248

 
—

 
—

 
7,248

Non-owner occupied
385

 
—

 
—

 
385

Commercial
394

 
—

 
—

 
394

Mortgages:
 
 
 
 
 
 
 
Secured 1-4 family real estate
555

 
—

 
—

 
555

Home equity lines of credit
173

 
—

 
—

 
173


 
Fair Value
 
Level 1
 
Level 2
 
Level 3
December 31, 2012
(Amounts in thousands)
Other real estate owned
$
5,281

 
$
—

 
$
—

 
$
5,281

Impaired loans:
 
 
 
 
 
 
 
Construction
1,767

 
—

 
—

 
1,767

Commercial real estate:
 
 
 
 
 
 
 
Owner occupied
4,772

 
—

 
—

 
4,772

Non-owner occupied
472

 
—

 
—

 
472

Commercial
265

 
—

 
—

 
265