Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 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.

September 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	$                -	$             146,485	$                    -	$             146,485
U.S. treasury securities	-	11,530	-	11,530
Obligations of state and
political subdivisions	-	100,423	-	100,423
Corporate obligations	-	14,100	-	14,100
Mortgage-backed securities in
government sponsored entities	-	33,982	-	33,982
Equity securities in financial institutions	1,763	-	-	1,763
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 September 30, 2014 and December 31, 2013 are included in the table below (in thousands):

September 30, 2014	Level I	Level II	Level III	Total
Impaired Loans	$                -	$                         -	$            8,441	$                 8,441
Other real estate owned	-	-	1,564	1,564
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 September 30, 2014		Valuation Technique(s)	Unobservable input	Range
Impaired Loans	$            241	Discounted Cash Flows	Probability of Default	0%
			Change in interest rates	0-7%
	8,200	Appraised Collateral Values	Discount for time since appraisal	0-60%
			Selling costs	4%-10%
			Holding period	0 - 18 months
Other real estate owned	1,564	Appraised Collateral Values	Discount for time since appraisal	0-30%
			Selling costs	4%-10%
			Holding period	0 - 18 months

Fair Value at December 31, 2013		Valuation Technique(s)	Unobservable input	Range
Impaired Loans	$            263	Discounted Cash Flows	Probability of Default	0%
			Change in interest rates	0-7%
	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	1,360	Appraised Collateral Values	Discount for time since appraisal	0-20%
			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
September 30, 2014	Amount	Fair Value	Level I	Level II	Level III
Financial assets:
Cash and due from banks	$   11,323	$   11,323	$   11,323	$          -	$             -
Interest bearing time deposits with other banks	5,712	5,721			5,721
Available-for-sale securities	308,283	308,283	1,763	306,520
Loans held for sale	753	753	753
Net loans	536,939	552,458	-	-	552,458
Bank owned life insurance	15,045	15,045	15,045	-	-
Regulatory stock	2,930	2,930	2,930	-	-
Accrued interest receivable	3,689	3,689	3,689	-	-
Financial liabilities:
Deposits	$ 768,042	$ 768,624	$ 514,468	$          -	$ 254,156
Borrowed funds	37,729	34,363	-	34,363	-
Accrued interest payable	753	753	753	-	-

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	-	-