Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Measurements [Abstract]

Summary of Assets Measured at Fair Value on a Recurring Basis

The following tables present the assets and liabilities reported on the consolidated balance sheet at their fair value on a recurring basis as of June 30, 2014 and December 31, 2013 by level within the fair value hierarchy (in thousands). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

June 30, 2014	Level I		Level II		Level III		Total
Fair value measurements on a recurring basis:
Assets
Securities available for sale:
U.S. agency securities	$	-	$	147,335	$	-	$	147,335
U.S. treasury securities		-		11,504		-		11,504
Obligations of state and political subdivisions		-		101,627		-		101,627
Corporate obligations		-		14,215		-		14,215
Mortgage-backed securities in government sponsored entities		-		35,768		-		35,768
Equity securities in financial institutions		1,873		-		-		1,873
December 31, 2013
Fair value measurements on a recurring basis:
Securities available for sale:
U.S. agency securities	$	-	$	152,189	$	-	$	152,189
U.S. treasuries securities		-		11,309		-		11,309
Obligations of state and political subdivisions		-		95,005		-		95,005
Corporate obligations		-		16,802		-		16,802
Mortgage-backed securities in government sponsored entities		-		40,671		-		40,671
Equity securities in financial institutions		1,325		-		-		1,325

Summary of Assets Measured at Fair Value on Non-recurring Basis

Assets measured at fair value on a nonrecurring basis as of June 30, 2014 and December 31, 2013 are included in the table below (in thousands):

June 30, 2014	Level I		Level II		Level III		Total
Impaired Loans	$	-	$	-	$	9,579	$	9,579
Other real estate owned		-		-		1,295		1,295
December 31, 2013
Impaired Loans	$	-	$	-	$	10,067	$	10,067
Other real estate owned		-		-		1,360		1,360

Significant Unobservable Inputs Used in Fair Value Measurement Process

The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques.

	Fair Value at June 30, 2014		Fair Value at December 31, 2013		Valuation Technique(s)	Unobservable input	Range
Impaired Loans	$	253	$	263	Discounted Cash Flows	Probability of Default		0	%
						Change in interest rates		0-7	%
		9,326		9,804	Appraised Collateral Values	Discount for time since appraisal		0-30	%
						Selling costs		4%-10	%
						Holding period	0 - 18 months
Other real estate owned		1,295		1,360	Appraised Collateral Values	Discount for time since appraisal		0-30	%
						Selling costs		4%-10	%
						Holding period	0 - 18 months

Fair Value of Financial Instruments

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

	Carrying
June 30, 2014	Amount		Fair Value		Level I		Level II		Level III
Financial assets:
Cash and due from banks	$	15,740	$	15,740	$	15,740	$	-	$	-
Interest bearing time deposits with other banks		2,480		2,484		-		-		2,484
Available-for-sale securities		312,322		312,322		1,873		310,449		-
Loans held for sale		545		545		545		-		-
Net loans		533,126		549,986		-		-		540,585
Bank owned life insurance		14,921		14,921		14,921		-		-
Regulatory stock		3,195		3,195		3,195		-		-
Accrued interest receivable		3,557		3,557		3,557		-		-
Financial liabilities:
Deposits	$	765,456	$	766,870	$	508,041	$	-	$	258,829
Borrowed funds		43,075		39,867		-		39,867		-
Accrued interest payable		735		735		735		-		-
December 31, 2013
Financial assets:
Cash and due from banks	$	10,083	$	10,083	$	10,083	$	-	$	-
Interest bearing time deposits with other banks		2,480		2,474		-		-		2,474
Available-for-sale securities		317,301		317,301		1,325		315,976		-
Loans held for sale		278		278		278		-		-
Net loans		533,514		547,405		-		-		547,405
Bank owned life insurance		14,679		14,679		14,679		-		-
Regulatory stock		3,926		3,926		3,926		-		-
Accrued interest receivable		3,728		3,728		3,728		-		-
Financial liabilities:
Deposits	$	748,316	$	750,172	$	481,957	$	-	$	268,215
Borrowed funds		66,932		63,500		-		63,500		-
Accrued interest payable		895		895		895		-		-