Fair Value (Tables)

12 Months Ended

Dec. 31, 2013

Rollforward of interest rate swaps and interest rate lock commitments

The following tables present a rollforward of interest rate swaps for the years ended December 31, 2013 and 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	(20		)	(20		)
Balance, December 31, 2012	$	196		$	196

Balance, December 31, 2012	$	196		$	196
Purchases, sales, issuances and settlements	—			—
Gains (losses) included in other income	(64		)	(64		)
Balance, December 31, 2013	$	132		$	132

The following table presents a rollforward of interest rate lock commitments for the years ended December 31, 2013 and 2012, respectively.




	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	(896		)	743
Transfer in and out	—			—
Balance, December 31, 2013 and 2012	$	(23	)	$	873

Rollforward of mortgage servicing rights

The following table presents a rollforward of mortgage servicing rights for the years ended December 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	1,387		1,101
Gains (losses) included in other income	624		(447		)
Balance, December 31, 2013 and 2012	$	4,536	$	2,525

Assets and (liabilities) measured at fair value on a recurring basis

The following table presents assets and (liabilities) measured at fair value on a recurring basis:



December 31, 2013 (in thousands)	Fair Value			Level 1		Level 2		Level 3
Available-for-sale securities:
U.S. government agencies	$	16,392		$	—	$	16,392	$	—
Government sponsored agencies:
Residential mortgage-backed securities	103,441			—		103,441		—
Collateralized mortgage obligations	52,743			—		52,743		—
Private label collateralized mortgage obligations	14,491			—		14,491		—
State and municipal securities	98,704			—		98,704		—
Common and preferred stocks	3,151			3,151		—		—
Interest rate swap agreements	132			—		—		132
Interest rate swap agreements	(132		)	—		—		(132		)
Interest rate lock commitments	(23		)	—		—		(23		)
Forward loan sale commitments	147			—		147		—
Mortgage servicing rights	4,536			—		—		4,536



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	84,564			—		84,564			—
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 quantitative information



	Fair Value at December 31, 2013 (in thousands)			Valuation Technique	Unobservable Input	Range (Weighted Avg)
Recurring measurements:
Interest Rate Swaps	$	132		Discounted cash flow	Discount rate	0.5	%
Interest Rate Lock Commitments	(23		)	Pricing model	Pull through rates	86.4	%
Mortgage Servicing Rights	4,536			Discounted cash flow	Constant prepayment rate	9.72	%
					Cost of service	$50
					Discount rate	8	%
Nonrecurring measurements:
Impaired loans	$	6,058		Discounted appraisals	Collateral discounts and discounted cash flows	15-50%
Other real estate owned	1,034			Discounted appraisals	Collateral discounts	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	1.0	%
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 and discounted cash flows	10-50%
Other real estate owned	5,281		Discounted appraisals	Collateral discounts	15	%

Assets measured at fair value 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
December 31, 2013	(Amounts in thousands)
Other real estate owned	$	1,034	$	—	$	—	$	1,034
Impaired loans:
Construction	160		—		—		160
Commercial real estate:
Owner occupied	4,930		—		—		4,930
Non-owner occupied	595		—		—		595
Commercial	203		—		—		203
Mortgages:
Secured 1-4 family real estate	170		—		—		170
Multifamily	—		—		—		—
Home equity lines of credit	—		—		—		—
Consumer and other	—		—		—		—



	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
Mortgages:
Secured 1-4 family real estate	—		—		—		—
Multifamily	—		—		—		—
Home equity lines of credit	—		—		—		—
Consumer and other	—		—		—		—

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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