Fair Value (Tables)

3 Months Ended

Mar. 31, 2015

Assets Measured at Fair Value on Recurring Basis

Assets measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	19,206	$	0	$	19,206	$	0
State and political subdivisions		95,578		0		95,578		0
Corporate bonds		941		0		941		0
Mortgage-backed securities-residential		218,304		0		218,295		9
Collateralized mortgage obligations		14,365		0		14,365		0
Small Business Administration		21,283		0		21,283		0
Equity securities		242		242		0		0
Total investment securities	$	369,919	$	242	$	369,668	$	9
Yield maintenance provisions	$	1,012	$	0	$	1,012	$	0
Financial Liabilities
Interest rate swaps	$	1,012	$	0	$	1,012	$	0

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	24,821	$	0	$	24,821	$	0
State and political subdivisions		91,881		0		91,881		0
Corporate bonds		931		0		931		0
Mortgage-backed securities-residential		224,362		0		224,352		10
Collateralized mortgage obligations		25,175		0		25,175		0
Small Business Administration		22,419		0		22,419		0
Equity securities		240		240		0		0
Total investment securities	$	389,829	$	240	$	389,579	$	10
Yield maintenance provisions	$	638	$	0	$	638	$	0
Financial Liabilities
Interest rate swaps	$	638	$	0	$	638	$	0

Reconciliation for All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
(In Thousands of Dollars)	Three Months ended March 31,
	2015			2014
Beginning Balance	$	10		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0
Repayments		(1	)		0
Transfers in and/or out of Level 3		0			0
Ending Balance	$	9		$	10

Assets Measured at Fair Value on Non-Recurring Basis

Assets measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	668	$	0	$	0	$	668
Commercial		373		0		0		373
1–4 family residential		266		0		0		266

	Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial	$	807	$	0	$	0	$	807
1–4 family residential		63		0		0		63
Other real estate owned
Commercial real estate		45		0		0		45

Fair Value Measurements for Financial Instruments

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at period ended March 31, 2015 and December 31, 2014:

March 31, 2015	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	668	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-41.21% (-41.21%)
Commercial		230	Quoted price for loan relationship	Adjustment for differences between earning multiplier	-39.80% (-39.80%)
Commercial		143	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (23.48%)
Residential		266	Sales comparison	Adjustment for differences between comparable sales	-26.81% - 28.82% (9.45%)

December 31, 2014	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial	$	807	Sales comparison	Adjustment for differences between comparable sales	-27.43% - 32.86% (9.96%)
Residential		63	Sales comparison	Adjustment for differences between comparable sales	-18.32% - 24.16% (-14.02%)
Other real estate owned		45	Sales comparison	Adjustment for differences between comparable sales	-12.86% - 11.97% (-5.79%)

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously disclosed at March 31, 2015 and December 31, 2014 are as follows:

			Fair Value Measurements at March 31, 2015 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	26,929	$	11,800	$	15,129	$	0	$	26,929
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		146		0		150		0		150
Loans, net		666,061		0		0		668,763		668,763
Accrued interest receivable		3,583		0		1,822		1,761		3,583
Financial liabilities
Deposits		909,408		712,362		197,029		0		909,391
Short-term borrowings		62,218		0		62,218		0		62,218
Long-term borrowings		18,120		0		18,612		0		18,612
Accrued interest payable		379		2		377		0		379

			Fair Value Measurements at December 31, 2014 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	27,428	$	11,410	$	16,018	$	0	$	27,428
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		511		0		523		0		523
Loans, net		656,220		0		0		658,993		658,993
Accrued interest receivable		3,237		0		1,645		1,592		3,237
Financial liabilities
Deposits		915,703		708,752		206,708		0		915,460
Short-term borrowings		59,136		0		59,136		0		59,136
Long-term borrowings		28,381		0		28,837		0		28,837
Accrued interest payable		402		2		400		0		402

- 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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