Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Assets measured at fair value on a recurring basis

The following table presents the balances of certain assets measured at fair value on a recurring basis as of the dates indicated:

			Fair Value Measurements at June 30, 2013 Using
			(in thousands)
Description	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S. Government agencies	$	25,805	$	0	$	25,805	$	0
Obligations of state and political subdivisions		48,764		0		48,764		0
Mortgage-backed securities		181,843		0		181,843		0
Money market investments		801		0		801		0
Corporate bonds		1,370		0		1,370		0
Total available-for-sale securities	$	258,583	$	0	$	258,583	$	0

			Fair Value Measurements at December 31, 2012 Using
			(in thousands)
Description	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available-for-sale securities
Obligations of U.S. Government agencies		37,088		0		37,088		0
Obligations of state and political subdivisions		43,774		0		43,774		0
Mortgage-backed securities		247,355		0		247,355		0
Money market investments		541		0		541		0
Corporate bonds		698		0		698		0
Total available-for-sale securities	$	329,456	$	0	$	329,456	$	0

Assets measured at fair value on a nonrecurring basis

The following table presents the assets carried on the consolidated balance sheets for which a nonrecurring change in fair value has been recorded. Assets are shown by class of loan and by level in the fair value hierarchy, as of the dates indicated. Certain impaired loans are valued by the present value of the loan’s expected future cash flows, discounted at the interest rate of the loan rather than at a market rate. These loans are not carried on the consolidated balance sheets at fair value and, as such, are not included in the table below.

			Carrying Value at June 30, 2013 Using
			(in thousands)
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans
Mortgage loans on real estate:
Residential 1-4 family	$	3,006	$	0	$	0	$	3,006
Commercial		2,776		0		0		2,776
Construction		2,520		0		0		2,520
Second mortgages		88		0		0		88
Total	$	8,390	$	0	$	0	$	8,390

Foreclosed assets
Residential 1-4 family	$	521	$	0	$	0	$	521
Commercial		2,286		0		0		2,286
Construction		3,752		0		0		3,752
Total	$	6,559	$	0	$	0	$	6,559

			Carrying Value at December 31, 2012 Using
			(in thousands)
Description	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans
Mortgage loans on real estate:
Residential 1-4 family	$	3,009	$	0	$	0	$	3,009
Commercial		2,271		0		0		2,271
Second mortgages		42		0		0		42
Total mortgage loans on real estate	$	5,322	$	0	$	0	$	5,322
Commercial loans		64		0		0		64
Total	$	5,386	$	0	$	0	$	5,386

Foreclosed assets
Residential 1-4 family	$	676	$	0	$	0	$	676
Commercial		2,094		0		0		2,094
Construction		3,804		0		0		3,804
Total	$	6,574	$	0	$	0	$	6,574

Fair Value Inputs, Assets, Quantitative Information

The following table displays quantitative information about Level 3 Fair Value Measurements as of the date indicated (dollars in thousands):

			Quantitative Information About Level 3 Fair Value Measurements
Description	Fair Value at June 30, 2013 (in thousands)		Valuation Techniques	Unobservable Input	Range (Average)
Impaired loans
Residential 1-4 family real estate		3,006	Market comparables	Selling costs		5% - 6% (5%)
				Liquidation discount		1.25%
Commercial real estate		2,776	Market comparables	Selling costs		6% - 20% (10%)
				Age of appraisal		46%
Construction		2,520	Market comparables	Selling costs		20%
				Liquidation discount		1.25%
Second mortgages		88	Market comparables	Selling costs		6%
				Liquidation discount		1.25%

Foreclosed assets
Residential 1-4 family		521	Market comparables	Selling costs		6% - 10% (6%)
Commercial		2,286	Market comparables	Selling costs		6% - 10% (6%)
Construction		3,752	Market comparables	Selling costs		6% - 10% (6%)

			Quantitative Information About Level 3 Fair Value Measurements
Description	Fair Value at December 31, 2012 (in thousands)		Valuation Techniques	Unobservable Input	Range (Average)
Impaired loans
Residential 1-4 family real estate		3,009	Market comparables	Differences in comparables		0% - 5% (5%)
				Selling costs		4.75% - 6% (6%)
Commercial real estate		2,271	Market comparables	Selling costs		0% - 6% (4%)
Second mortgages		42	Market comparables	Selling costs		6%
Commercial loans		64	Market comparables	Differences in comparables		25%


Foreclosed assets
Residential 1-4 family		676	Market comparables	Selling costs		6% - 10% (6%)
Commercial		2,094	Market comparables	Selling costs		6% - 10% (6%)
Construction		3,804	Market comparables	Selling costs		6% - 10% (6%)

Estimated fair values and related carrying or notional amounts of financial instruments

The estimated fair values, and related carrying or notional amounts, of the Company's financial instruments as of the dates indicated are as follows:

			Fair Value Measurements at June 30, 2013 Using
			(in thousands)
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents	$	55,171	$	55,171	$	0	$	0
Securities available-for-sale		258,583		0		258,583		0
Securities held-to-maturity		11,413		0		11,403		0
Restricted securities		2,378		0		2,378		0
Loans, net of allowances for loan losses		462,212		0		0		467,676
Bank owned life insurance		22,257		0		22,257		0
Accrued interest receivable		2,593		0		2,593		0

Liabilities
Deposits	$	730,368	$	0	$	734,412	$	0
Overnight repurchase agreements		25,642		0		25,642		0
Term repurchase agreements		411		0		411		0
Federal Home Loan Bank advances		25,000		0		27,992		0
Accrued interest payable		366		0		366		0

			Fair Value Measurements at December 31, 2012 Using
			(in thousands)
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents	$	42,317	$	42,317	$	0	$	0
Securities available-for-sale		329,456		0		329,456		0
Securities held-to-maturity		570		0		574		0
Restricted securities		2,562		0		2,562		0
Loans, net of allowances for loan losses		463,809		0		0		466,492
Bank owned life insurance		21,824		0		21,824		0
Accrued interest receivable		2,420		0		2,420		0

Liabilities
Deposits	$	753,816	$	0	$	757,923	$	0
Overnight repurchase agreements		35,946		0		35,946		0
Term repurchase agreements		1,280		0		1,282		0
Federal Home Loan Bank advances		25,000		0		28,681		0
Accrued interest payable		439		0		439		0

- 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 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 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.

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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

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

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-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-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

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

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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