Fair Value (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2013

Dec. 31, 2012

Assets and Liabilities Measured at Fair Value on Recurring Basis

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

	Fair Value Measurements at June 30, 2013 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	22,361	$	—	$	22,361
Corporate Securities		—		—		—		—
Obligations of State and
Political Subdivisions		—		67,326		11,439		78,765
Mortgage-backed Securities-Residential		—		510,679		—		510,679
Equity Securities		411		—		353		764
Total Securities	$	411	$	600,366	$	11,792	$	612,569

Loans Held-for-Sale	$	—	$	19,435	$	—	$	19,435

Derivatives	$	—	$	508	$	—	$	508

Financial Liabilities Derivatives	$	—	$	355	$	—	$	355

	Fair Value Measurements at December 31, 2012 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	23,472	$	—	$	23,472
Corporate Securities		—		—		—		—
Obligations of State and
Political Subdivisions		—		64,316		12,169		76,485
Mortgage-backed Securities-Residential		—		486,912		—		486,912
Equity Securities		380		—		353		733
Total Securities	$	380	$	574,700	$	12,522	$	587,602

Loans Held-for-Sale	$	—	$	16,641	$	—	$	16,641

Derivatives	$	—	$	187	$	—	$	187

Financial Liabilities Derivatives	$	—	$	178	$	—	$	178

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

	Fair Value Measurements at December 31, 2012 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	23,472	$	—	$	23,472
Corporate Securities		—		—		—		—
Obligations of State and Political Subdivisions		—		64,316		12,169		76,485
Mortgage-backed Securities-Residential		—		486,912		—		486,912
Equity Securities		380		—		353		733
Total Securities	$	380	$	574,700	$	12,522	$	587,602

Loans Held-for-Sale	$	—	$	16,641	$	—	$	16,641

Derivative Assets	$	—	$	187	$	—	$	187

Derivative Liabilities	$	—	$	178	$	—	$	178

	Fair Value Measurements at December 31, 2011 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	6,422	$	—	$	6,422
Corporate Securities		—		—		1,005		1,005
Obligations of State and Political Subdivisions		—		60,724		4,075		64,799
Mortgage-backed Securities-Residential		—		443,934		—		443,934
Equity Securities		331		—		353		684
Total Securities	$	331	$	511,080	$	5,433	$	516,844

Loans Held-for-Sale	$	—	$	21,485	$	—	$	21,485

Derivative Assets	$	—	$	—	$	—	$	—

Derivative Liabilities	$	—	$	—	$	—	$	—

Reconciliation of all Assets Measured at Fair Value on Recurring Basis, Using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2013 and 2012:

	Obligations of State
	and Political
	Subdivisions					Equity Securities				Corporate Securities
	2013			2012		2013		2012		2013		2012

Balance of Recurring Level 3 Assets at March 31	$	11,728		$	4,075	$	353	$	353	$	—	$	—
Total Gains or Losses (realized/unrealized)
Included in Earnings		(129	)		51		—		—		—		—
Maturities / Calls		(160	)		—		—		—		—		—
Purchases		—			7,665		—		—		—		—
Balance of Recurring Level 3 Assets at June 30	$	11,439		$	11,791	$	353	$	353	$	—	$	—

	Obligations of State
	and Political
	Subdivisions						Equity Securities				Corporate Securities
	2013			2012			2013		2012		2013		2012

Balance of Recurring Level 3 Assets at December 31	$	12,169		$	4,772		$	353	$	353	$	—	$	1,005
Total Gains or Losses (realized/unrealized)
Included in Earnings		(150	)		51			—		—		—		—
Maturities / Calls		(580	)		(697	)		—		—		—		(1,005	)
Purchases		—			7,665			—		—		—		—
Balance of Recurring Level 3 Assets at June 30	$	11,439		$	11,791		$	353	$	353	$	—	$	—

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2012 and 2011:

	Obligations of State
	and Political
	Subdivisions				Equity Securities				Corporate Securities
	2012		2011		2012		2011		2012			2011

Beginning Balance of Recurring Level 3
Assets at January 1	$	4,075	$	—	$	353	$	353	$	1,005		$	—
Total Gains or Losses (realized/unrealized)
Included in earnings		156		—		—		—		—			—
Maturities / Calls		—		—		—		—		(1,005	)		—
Purchases		7,938		4,075		—		—		—			1,005
Ending Balance of Recurring Level 3 Assets at December 31	$	12,169	$	4,075	$	353	$	353	$	—		$	1,005

Assets and Liabilities Measured at Fair Value on Non-Recurring Basis

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

	Fair Value Measurements at June 30, 2013 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Impaired Loans with Specific Allocations
Commercial and Industrial Loans	$	—	$	—	$	20	$	20
Commercial Real Estate Loans		—		—		2,101		2,101
Agricultural Loans		—		—		—		—
Other Real Estate
Commercial Real Estate		—		—		723		723

	Fair Value Measurements at December 31, 2012 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Impaired Loans with Specific Allocations
Commercial and Industrial Loans	$	—	$	—	$	1,231	$	1,231
Commercial Real Estate Loans		—		—		1,497		1,497
Agricultural Loans		—		—		135		135
Other Real Estate
Commercial Real Estate		—		—		150		150

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

	Fair Value Measurements at December 31, 2012 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Impaired Loans with Specific Allocations
Commercial and Industrial Loans	$	—	$	—	$	1,231	$	1,231
Commercial Real Estate Loans		—		—		1,497		1,497
Agricultural Loans		—		—		135		135
Other Real Estate
Commercial Real Estate		—		—		150		150

	Fair Value Measurements at December 31, 2011 Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Impaired Loans with Specific Allocations
Commercial and Industrial Loans	$	—	$	—	$	2,035	$	2,035
Commercial Real Estate Loans		—		—		2,783		2,783
Agricultural Loans		—		—		—		—
Other Real Estate
Commercial Real Estate		—		—		250		250

Fair Value Assets and Liabilities Measured on Nonrecurring Basis Valuation Techniques

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 June 30, 2013:

					Range
			Valuation		(Weighted
	Fair Value		Technique(s)	Unobservable Input(s)	Average)
Impaired Loans - Commercial and Industrial Loans	$	20	Sales comparison approach	Adjustment for differences between the comparable sales	10%-90% (22)%

Impaired Loans - Commercial Real Estate Loans	$	2,101	Sales comparison approach Income approach Cost approach	Adjustment for physical condition of comparable properties sold Adjustment for net operating income generated by the property Adjustment for investor rates of return	15%-78% (57)%

Other Real Estate - Commercial Real Estate Loans	$	723	Sales comparison approach Income approach Cost approach	Adjustment for physical condition of comparable properties sold Adjustment for net operating income generated by the Property Adjustment for investor rates of return	2%-50% (29)%

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 December 31, 2012:

Range

Valuation

(Weighted

Fair Value

Technique(s)

Unobservable Input(s)

Average)

Impaired Loans - Commercial

1,231

Sales comparison

Adjustment for differences

4%-68%

and Industrial Loans

approach

between the comparable

(8%)

sales

Impaired Loans - Commercial

1,497

Sales comparison

Adjustment for physical

15%-78%

Real Estate Loans

approach

condition of comparable

(48%)

Income approach

properties sold

Cost approach

Adjustment for net operating

income generated by the

property

Adjustment for investor rates

of return

Impaired Loans – Agricultural

135

Sales comparison

Adjustment for physical

76%

Loans

approach

condition of comparable

(76%)

Income approach

properties sold

Adjustment for net operating

income generated by the

property

Carrying Amounts and Estimated Fair Values of Company's Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments not previously presented are provided in the table below for the periods ending June 30, 2013 and December 31, 2012. Not all of the Company’s assets and liabilities are considered financial instruments, and therefore are not included in the table. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates were based on subjective judgments, and therefore cannot be determined with precision.

				Fair Value Measurements at
				June 30, 2013 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	39,748		$	28,390		$	11,358		$	—		$	39,748
Securities Held-to-Maturity		268			—			271			—			271
FHLB Stock and Other Restricted Stock		8,340			N/A			N/A			N/A			N/A
Loans, Net		1,225,580			—			—			1,233,278			1,233,278
Accrued Interest Receivable		6,886			—			1,762			5,124			6,886
Financial Liabilities:
Demand, Savings, and Money Market Deposits		(1,314,236	)		(1,314,236	)		—			—			(1,314,236	)
Time Deposits		(327,673	)		—			(330,899	)		—			(330,899	)
Short-term Borrowings		(106,905	)		—			(106,905	)		—			(106,905	)
Long-term Debt		(68,735	)		—			(64,982	)		(4,771	)		(69,753	)
Accrued Interest Payable		(817	)		—			(741	)		(76	)		(817	)
Unrecognized Financial Instruments:
Commitments to Extend Credit		—			—			—			—			—
Standby Letters of Credit		—			—			—			—			—
Commitments to Sell Loans		—			—			—			—			—

				Fair Value Measurements at
				December 31, 2012 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	51,794		$	41,624		$	10,170		$	—		$	51,794
Securities Held-to-Maturity		346			—			351			—			351
FHLB Stock and Other Restricted Stock		8,340			N/A			N/A			N/A			N/A
Loans, Net		1,186,483			—			—			1,199,566			1,199,566
Accrued Interest Receivable		7,419			—			1,893			5,526			7,419
Financial Liabilities:
Demand, Savings, and Money Market Deposits		(1,311,748	)		(1,311,748	)		—			—			(1,311,748	)
Time Deposits		(329,183	)		—			(333,170	)		—			(333,170	)
Short-term Borrowings		(71,534	)		—			(71,534	)		—			(71,534	)
Long-term Debt		(89,472	)		—			(66,892	)		(28,872	)		(95,764	)
Accrued Interest Payable		(1,275	)		—			(829	)		(446	)		(1,275	)
Unrecognized Financial Instruments:
Commitments to Extend Credit		—			—			—			—			—
Standby Letters of Credit		—			—			—			—			—
Commitments to Sell Loans		—			—			—			—			—

The carrying amounts and estimated fair values of the Company’s financial instruments not previously presented are provided in the table below for the periods ending December 31, 2012 and 2011. Not all of the Company’s assets and liabilities are considered financial instruments, and therefore are not included in the table. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates were based on subjective judgments, and therefore cannot be determined with precision.

				Fair Value Measurements at
				December 31, 2012 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	51,794		$	41,624		$	10,170		$	—		$	51,794
Securities Held-to-Maturity		346			—			351			—			351
FHLB Stock and Other Restricted Stock		8,340			N/A			N/A			N/A			N/A
Loans, Net		1,186,483			—			—			1,199,566			1,199,566
Accrued Interest Receivable		7,419			—			1,893			5,526			7,419
Financial Liabilities:
Demand, Savings, and Money Market Deposits		(1,311,748	)		(1,311,748	)		—			—			(1,311,748	)
Time Deposits		(329,183	)		—			(333,170	)		—			(333,170	)
Short-term Borrowings		(71,534	)		—			(71,534	)		—			(71,534	)
Long-term Debt		(89,472	)		—			(66,892	)		(28,872	)		(95,764	)
Accrued Interest Payable		(1,275	)		—			(829	)		(446	)		(1,275	)
Unrecognized Financial Instruments:
Commitments to Extend Credit		—			—			—			—			—
Standby Letters of Credit		—			—			—			—			—
Commitments to Sell Loans		—			—			—			—			—

	December 31, 2011
	Carrying			Fair
	Value			Value
Financial Assets:
Cash and Short-term Investments	$	67,089		$	67,089
Securities Held-to-Maturity		690			697
FHLB Stock and Other Restricted Stock		8,340			N/A
Loans, Net		1,100,863			1,111,532
Accrued Interest Receivable		7,793			7,793
Financial Liabilities:
Demand, Savings, and Money Market Deposits		(1,181,919	)		(1,181,919	)
Time Deposits		(374,279	)		(380,584	)
Short-term Borrowings		(40,019	)		(40,019	)
Long-term Debt		(90,974	)		(96,047	)
Accrued Interest Payable		(1,884	)		(1,884	)
Unrecognized Financial Instruments:
Commitments to Extend Credit		—			—
Standby Letters of Credit		—			—
Commitments to Sell Loans		—			—

- 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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