Disclosures of Fair Values of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Assets Measured at Fair Value on Recurring Basis

The following table presents the Company’s assets that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of December 31, 2013 and 2012 (in thousands):



			Fair Value Measurements Using:
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	190,368	$	—	$	190,368	$	—
Obligations of states and political subdivisions	64,562		—		64,562		—
Mortgage-backed securities	227,601		—		227,601		—
Trust preferred securities	191		—		—		191
Other securities	6,002		67		5,935		—
Total available-for-sale securities	$	488,724	$	67	$	488,466	$	191
December 31, 2012
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	182,169	$	—	$	182,169	$	—
Obligations of states and political subdivisions	56,207		—		56,207		—
Mortgage-backed securities	259,460		—		259,460		—
Trust preferred securities	585		—		—		585
Other securities	9,888		60		9,828		—
Total available-for-sale securities	$	508,309	$	60	$	507,664	$	585

Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2013 and 2012 is summarized as follows (in thousands):



	Available for Sale Securities
	Trust Preferred Securities
December 31, 2013
Beginning balance	$	585
Transfers into Level 3	—
Transfers out of Level 3	—
Total gains or losses
Included in net income	—
Included in other comprehensive income (loss)	928
Purchases, issuances, sales and settlements
Purchases	—
Issuances	—
Sales	(1,138		)
Settlements	(184		)
Ending balance	$	191
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—



	Available-for-Sale Securities
	Mortgage-backed Securities			Trust Preferred Securities			Total
December 31, 2012
Beginning balance	$	58		$	719		$	777
Transfers into Level 3	—			—			—
Transfers out of Level 3	(58		)	—			(58		)
Total gains or losses
Included in net income	—			127			127
Included in other comprehensive income (loss)	—			517			517
Purchases, issuances, sales and settlements
Purchases	—			—			—
Issuances	—			—			—
Sales	—			—			—
Settlements	—			(778		)	(778		)
Ending balance	$	—		$	585		$	585
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—		$	—		$	—

Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2013 and 2012 (in thousands):



	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013
Impaired loans (collateral dependent)	$	1,383	$	—	$	—	$	1,383
Foreclosed assets held for sale	172		—		—		172
December 31, 2012
Impaired loans (collateral dependent)	$	2,681	$	—	$	—	$	2,681
Foreclosed assets held for sale	70		—		—		70

Significant Assumptions Used in Valuation of Level 3 Financial Instruments

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than goodwill at December 31, 2013.



	Fair Value (in thousands)		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Trust Preferred Securities	$	191	Discounted cash flow	Discount rate	15.5	%
				Constant prepayment rate (1)	1.3	%
				Cumulative projected prepayments	23.5	%
				Probability of default	0.2	%
				Projected cures given deferral	50.65	%
				Loss severity	96.1	%
Impaired loans (collateral dependent)	$	1,383	Third party valuations	Discount to reflect realizable value	0	%	40%	(	20	%	)
Foreclosed assets held for sale	$	172	Third party valuations	Discount to reflect realizable value less estimated selling costs	0	%	40%	(	35	%	)


(1)	Every five years

Carrying Amounts and Estimated Fair Values of Financial Instruments Not Carried at Fair Value

The following tables present estimated fair values of the Company’s financial instruments at December 31, 2013 and 2012 in accordance with FAS 107-1 and APB 28-1, codified with ASC 805 (in thousands):



	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
December 31, 2013
Financial Assets
Cash and due from banks	$	64,605	$	64,605	$	64,605	$	—	$	—
Federal funds sold	497		497		497		—		—
Available-for-sale securities	488,724		488,724		67		488,466		191
Loans held for sale	514		514		—		514		—
Loans net of allowance for loan losses	969,041		964,253		—		—		964,253
Interest receivable	6,614		6,614		—		6,614		—
Federal Reserve Bank stock	1,522		1,522		—		1,522		—
Federal Home Loan Bank stock	3,391		3,391		—		3,391		—
Financial Liabilities
Deposits	$	1,287,616	$	1,287,887	$	—	$	1,058,965	$	228,922
Securities sold under agreements to repurchase	119,187		119,190		—		119,190		—
Interest payable	277		277		—		277		—
Federal Home Loan Bank borrowings	20,000		20,530		—		20,530		—
Junior subordinated debentures	20,620		12,041		—		12,041		—



	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
December 31, 2012
Financial Assets
Cash and due from banks	$	62,213	$	62,213	$	62,213	$	—	$	—
Federal funds sold	20,499		$	20,499	20,499		—		—
Certificates of deposit investments	6,665		$	6,669	6,669		—		—
Available-for-sale securities	508,309		$	508,309	60		507,664		585
Loans held for sale	212		$	212	—		212		—
Loans net of allowance for loan losses	899,077		$	908,281	—		—		908,281
Interest receivable	6,775		$	6,775	—		6,775		—
Federal Reserve Bank stock	1,522		$	1,522	—		1,522		—
Federal Home Loan Bank stock	3,293		$	3,293	—		3,293		—
Financial Liabilities
Deposits	$	1,274,065	$	1,275,127	$	—	$	1,066,788	$	208,339
Securities sold under agreements to repurchase	113,484		$	113,490	—		113,490		—
Interest payable	341		$	341	—		341		—
Federal Home Loan Bank borrowings	5,000		$	5,719	—		5,719		—
Junior subordinated debentures	20,620		$	11,386	—		11,386		—

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring and/or nonrecurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 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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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

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-Publisher FASB

-Name Accounting Standards Codification

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-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

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Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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