Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and liabilities carried at fair value on a recurring basis at December 31, 2014 for continuing operations are summarized in the following table:



(dollars in thousands)	Total			Level 1		Level 2			Level 3
Assets:
Available-for-sale debt securities:
U.S. government sponsored agencies	$	2,044		$	—	$	2,044		$	—
Residential mortgage-backed securities-GSE	290,145			—		290,145			—
Residential mortgage-backed securities-Private	17,271			—		17,271			—
Commercial mortgage-backed securities-GSE	21,957					21,957
Commercial mortgage-backed securities-Private	10,215			—		10,215			—
Corporate notes	8,407			—		8,407			—
Total available-for-sale debt securities	350,039			—		350,039			—
Mortgage servicing rights	1,726			—		—			1,726
Interest rate swaps	(525		)	$	—	(525		)	$	—
Total assets at fair value from continuing operations	$	351,765		$	—	$	350,039		$	1,726

Assets and liabilities carried at fair value on a recurring basis at December 31, 2013 for continuing operations are summarized in the following table:



(dollars in thousands)	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale debt securities:
U.S. government sponsored agencies	$	2,077	$	—	$	2,077	$	—
Business Development Company investment	2,737		2,737		—		—
Residential mortgage-backed securities-GSE	341,147		—		341,147		—
Residential mortgage-backed securities-Private	20,752		—		20,752		—
Commercial mortgage-backed securities-GSE	21,439		—		21,439		—
Commercial mortgage-backed securities-Private	9,585		—		9,585		—
Corporate notes	16,877		—		16,877		—
Total available-for-sale debt securities	414,614		2,737		411,877		—
Mortgage servicing rights	1,552		—		—		1,552
Total assets at fair value from continuing operations	$	416,166	$	2,737	$	411,877	$	1,552

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables present a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the periods indicated:



	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Mortgage Servicing Rights
(dollars in thousands)	Twelve Months Ended December 31,
	2014			2013
Beginning balance at January 1,	$	1,552		$	726
Total gains or losses (realized/unrealized):
Included in earnings, gross	644			1,131
Less amortization	(470		)	(305		)
Balance, end of period	$	1,726		$	1,552

Fair Value Measurements, Nonrecurring

Assets measured at fair value on a nonrecurring basis are included in the following table at December 31, 2014 for continuing operations:



(dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans, net	$	7,433	$	—	$	—	$	7,433
Other real estate owned	15,579		—		—		15,579
Total assets at fair value from continuing operations	$	23,012	$	—	$	—	$	23,012

Assets measured at fair value on a nonrecurring basis are included in the following table at December 31, 2013 for continuing operations:



(dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans, net	$	2,038	$	—	$	—	$	2,038
Other real estate owned	18,263		—		—		18,263
Total assets at fair value from continuing operations	$	20,301	$	—	$	—	$	20,301

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques



(dollars in thousands)	Fair Value at December 31, 2014		Valuation Techniques	Unobservable Input	Range

Impaired loans, net	$	7,433	Discounted appraisals	Collateral discounts	1.00% - 30.00%
Other real estate owned	15,579		Discounted appraisals	Collateral discounts	1.00% - 30.00%
Mortgage servicing rights	1,726		Discounted cash flows	Prepayment rate	10.00% - 25.00%
Mortgage servicing rights				Discount rate	6.00% - 10.00%



(dollars in thousands)	Fair Value at December 31, 2013		Valuation Techniques	Unobservable Input	Range

Impaired loans, net	$	2,038	Discounted appraisals	Collateral discounts	1.00%-30.00%
Other real estate owned	18,263		Discounted appraisals	Collateral discounts	1.00%-30.00%
Mortgage servicing rights	1,552		Discounted cash flows	Prepayment rate	10.00% - 25.00%
Mortgage servicing rights				Discount rate	6.00% - 10.00%

Fair Value, by Balance Sheet Grouping

The estimated fair values of financial instruments for continuing operations are as follows at the periods indicated:



	At December 31, 2014
(dollars in thousands)	Carrying Value			Estimated Fair Value			Level 1		Level 2			Level 3
Financial Assets of Continuing Operations:
Cash and cash equivalents	$	95,882		$	95,882		$	95,882	$	—		$	—
Investment securities: Available-for-sale	350,040			350,040			—		350,040			—
Investment securities: Held-to-maturity	142,461			140,875			—		140,875			—
Loans held for sale	2,796			2,796			—		2,796			—
Loans, net	1,337,443			1,328,895			—		—			1,328,895
Accrued interest receivable	4,885			4,885			—		1,262			3,623
Interest rate swaps	(525		)	(525		)	—		(525		)	—
Financial Liabilities of Continuing Operations:
Deposits	1,794,420			1,793,205			—		1,793,205			—
Retail repurchase agreements	9,076			9,076			—		9,076			—
Federal Home Loan Bank advances	68,234			71,462			—		71,462			—
Long-term notes payable	5,338			5,338			—		—			5,338
Junior subordinated debentures	56,702			32,341			—		—			32,341
Accrued interest payable	3,624			3,624			—		321			3,303



	At December 31, 2013
(dollars in thousands)	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial Assets of Continuing Operations:
Cash and cash equivalents	$	67,430	$	67,430	$	67,430	$	—	$	—
Investment securities: Available-for-sale	414,614		414,614		2,737		411,877		—
Investment securities: Held-to-maturity	151,795		141,125		—		141,125		—
Loans held for sale	1,836		1,836		—		1,836		—
Loans, net	1,185,463		1,129,826		—		—		1,129,826
Accrued interest receivable	6,283		6,283		—		1,583		4,700
Financial Liabilities of Continuing Operations:
Deposits	1,748,705		1,748,685		—		1,748,685		—
Retail repurchase agreements	6,917		6,917		—		6,917		—
Federal Home Loan Bank advances	73,283		75,663		—		75,663		—
Long-term notes payable	5,263		5,263		—		—		5,263
Junior subordinated debentures	56,702		22,316		—		—		22,316
Accrued interest payable	2,624		2,624		—		389		2,235

- 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, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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