Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of fair value assets and liabilities measured on recurring basis

The following table presents the balances of financial assets measured at fair value on a recurring basis at the dates indicated (dollars in thousands):



	Fair Value Measurements at June 30, 2016 Using
	Balance at June 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2016		Level 1		Level 2		Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs	$	100,728	$	—	$	100,728	$	—
Mortgage-backed and CMOs	82,396		—		82,396		—
State and municipal	168,935		—		168,935		—
Corporate	8,839		—		8,839		—
Equity securities	1,902		—		1,902		—
Total	$	362,800	$	—	$	362,800	$	—



	Fair Value Measurements at December 31, 2015 Using
	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2015		Level 1		Level 2		Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs	$	81,452	$	—	$	81,452	$	—
Mortgage-backed and CMOs	70,930		—		70,930		—
State and municipal	175,891		—		175,891		—
Corporate	10,590		—		10,590		—
Equity securities	1,486		—		—		1,486
Total	$	340,349	$	—	$	338,863	$	1,486

Schedule of fair value measurements using significant unobservable inputs (Level 3)



	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Total Realized / Unrealized Gains (Losses) Included in
	Balances as of January 1, 2016		Net Income		Other Comprehensive Income		Purchases, Sales, Issuances and Settlements, Net		Transfer In (Out) of Level 3			Balances as of June 30, 2016
Securities available for sale:
Equity	$	1,486	$	—	$	93	$	—	$	(1,579	)	$	—

Schedule of assets that were measured at fair value on a nonrecurring basis

The following table summarizes the Company's assets that were measured at fair value on a nonrecurring basis at the dates indicated (dollars in thousands):



	Fair Value Measurements at June 30, 2016 Using
	Balance at June 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2016		Level 1		Level 2		Level 3
Assets:
Loans held for sale	$	4,692	$	—	$	4,692	$	—
Impaired loans, net of valuation allowance	2,432		—		—		2,432
Other real estate owned, net	1,289		—		—		1,289



	Fair Value Measurements at December 31, 2015 Using
	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2015		Level 1		Level 2		Level 3
Assets:
Loans held for sale	$	3,266	$	—	$	3,266	$	—
Impaired loans, net of valuation allowance	2,948		—		—		2,948
Other real estate owned, net	2,184		—		—		2,184

Schedule of quantitative information of assets measured at Level 3

The following tables summarize the Company's quantitative information about Level 3 fair value measurements at the dates indicated:

Quantitative Information About Level 3 Fair Value Measurements at June 30, 2016



Assets	Valuation Technique	Unobservable Input	Weighted Rate

Impaired loans	Discounted appraised value	Selling cost	8	%

Other real estate owned, net	Discounted appraised value	Selling cost	6	%

Quantitative Information About Level 3 Fair Value Measurements at December 31, 2015



Assets	Valuation Technique	Unobservable Input	Weighted Rate

Securities available for sale	Third party model based techniques	Stock price in different rate environments	49	%

Impaired loans	Discounted appraised value	Selling cost	6	%
	Discounted cash flow analysis	Market rate for borrower (discount rate)	4	%

Other real estate owned, net	Discounted appraised value	Selling cost	6	%

Schedule of carrying values and estimated fair values of the entity's financial instruments

The carrying values and estimated fair values of the Company's financial instruments at June 30, 2016 are as follows (dollars in thousands):



	Fair Value Measurements at June 30, 2016 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
Financial Assets:
Cash and cash equivalents	$	73,341	$	73,341	$	—	$	—	$	73,341
Securities available for sale	362,800				362,477		—		362,477
Restricted stock	5,362		—		5,362		—		5,362
Loans held for sale	4,692		—		4,692		—		4,692
Loans, net of allowance	1,045,285		—		—		1,048,001		1,048,001
Bank owned life insurance	17,885		—		17,885		—		17,885
Accrued interest receivable	4,974		—		4,974		—		4,974

Financial Liabilities:
Deposits	$	1,298,385	$	—	$	895,047	$	405,688	$	1,300,735
Repurchase agreements	53,369		—		53,369		—		53,369
Other borrowings	9,969		—		—		10,285		10,285
Junior subordinated debt	27,673		—		—		26,856		26,856
Accrued interest payable	668		—		668		—		668

The carrying values and estimated fair values of the Company's financial instruments at December 31, 2015 are as follows (dollars in thousands):



	Fair Value Measurements at December 31, 2015 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
Financial Assets:
Cash and cash equivalents	$	95,337	$	95,337	$	—	$	—	$	95,337
Securities available for sale	340,349		—		338,863		1,486		340,349
Restricted stock	5,312		—		5,312		—		5,312
Loans held for sale	3,266		—		3,266		—		3,266
Loans, net of allowance	992,924		—		—		994,808		994,808
Bank owned life insurance	17,658		—		17,658		—		17,658
Accrued interest receivable	4,116		—		4,116		—		4,116

Financial Liabilities:
Deposits	$	1,262,660	$	—	$	865,350	$	396,551	$	1,261,901
Repurchase agreements	40,611		—		40,611		—		40,611
Other borrowings	9,958		—		—		10,293		10,293
Junior subordinated debt	27,622		—		—		22,940		22,940
Accrued interest payable	655		—		655		—		655