The Company follows FASB ASC 820 “Fair Value Measurements and Disclosures,” which defines fair value,  establishes a framework for measuring fair value and outlines the disclosures about fair value measurements. ASC Topic  820-10-55 requires the use of a hierarchy of fair value techniques based upon whether the inputs to those fair values reflect  assumptions other market participants would use based upon market data obtained from independent sources or reflect the  Company’s own assumptions of market participant valuation. The Company applies FASB ASC 820 to certain nonfinancial  assets and liabilities, which include foreclosed real estate, long-lived assets, goodwill, mortgage servicing rights and core  deposit premium, which are recorded at fair value only upon impairment. The fair value hierarchy is as follows:  Fair value estimates of the Company’s financial instruments as of December 31, 2012 and 2011, including methods  and assumptions utilized, are set forth below:  (Dollars in thousands) Carrying Estimated Carrying Estimated amount fair value amount fair value Financial assets: Cash and cash equivalents 14,920 $ 14,920 $ 17,501 $ 17,501 $ Investment securities: Available-for-sale 213,300 213,300 198,214 198,214 Other securities 5,238 5,238 6,671 6,671 Loans, net 315,914 317,335 310,081 309,927 Loans held for sale, net 7,163 7,179 9,754 9,846 Mortgage servicing rights 1,679 1,859 1,160 1,319 Derivative financial instruments 334 334 255 255 Accrued interest receivable 2,589 2,589 2,468 2,468 Financial liabilities: Non-maturity deposits 311,565 $ 311,565 $ 274,301 $ 274,301 $ Time deposits 170,935 171,961 179,833 181,280 FHLB borrowings 38,426 42,904 49,163 53,376 Other borrowings 21,541 19,273 27,434 25,200 Derivative financial instruments 28 28 - - Accrued interest payable 410 410 532 532 As of December 31, 2012 2011 • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical,  unrestricted assets or liabilities.  • Level 2: Quoted prices for similar assets in active markets or quoted prices that contain observable inputs such as  yield curves, volatilities, prepayment speeds and other inputs derived from market data. • Level 3: Quoted prices in markets that are not active or valuation techniques that require inputs that are both  significant to the fair value measurement and unobservable.  91  (12) Fair Value of Financial Instruments and Fair Value Measurements 