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Fair Value (Tables)
3 Months Ended
Mar. 31, 2014
Fair Value Disclosures [Abstract]  
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 March 31, 2014 Using
 
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
 
Total
Assets:
 
 

 
 

 
 

 
 

U.S. Treasury and Agency Securities
 
$

 
$
19,129

 
$

 
$
19,129

Corporate Securities
 

 

 

 

Obligations of State and Political Subdivisions
 

 
106,080

 
10,476

 
116,556

Mortgage-backed Securities-Residential
 

 
477,132

 

 
477,132

Equity Securities
 

 

 
353

 
353

Total Securities
 
$

 
$
602,341

 
$
10,829

 
$
613,170

 
 
 
 
 
 
 
 
 
Loans Held-for-Sale
 
$

 
$
9,844

 
$

 
$
9,844

 
 
 
 
 
 
 
 
 
Derivative Assets
 
$

 
$
536

 
$

 
$
536

 
 
 
 
 
 
 
 
 
Derivative Liabilities
 
$

 
$
444

 
$

 
$
444

 
 
 
Fair Value Measurements at December 31, 2013 Using
 
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable  Inputs (Level 3)
 
Total
Assets:
 
 

 
 

 
 

 
 

U.S. Treasury and Agency Securities
 
$

 
$
18,952

 
$

 
$
18,952

Corporate Securities
 

 

 

 

Obligations of State and Political Subdivisions
 

 
102,665

 
10,832

 
113,497

Mortgage-backed Securities-Residential
 

 
473,230

 

 
473,230

Equity Securities
 

 

 
353

 
353

Total Securities
 
$

 
$
594,847

 
$
11,185

 
$
606,032

 
 
 
 
 
 
 
 
 
Loans Held-for-Sale
 
$

 
$
9,265

 
$

 
$
9,265

 
 
 
 
 
 
 
 
 
Derivative Assets
 
$

 
$
866

 
$

 
$
866

 
 
 
 
 
 
 
 
 
Derivative Liabilities
 
$

 
$
737

 
$

 
$
737

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 months ended March 31, 2014 and 2013:
 
 
Obligations of State and Political Subdivisions
 
Equity Securities
 
Corporate Securities
 
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance of Recurring Level 3 Assets at January 1
 
$
10,832

 
$
12,169

 
$
353

 
$
353

 
$

 
$

Total Gains or Losses (realized/unrealized) Included in Earnings
 
69

 
(21
)
 

 

 

 

Maturities / Calls
 
(425
)
 
(420
)
 

 

 

 

Purchases
 

 

 

 

 

 

Balance of Recurring Level 3 Assets at March 31
 
$
10,476

 
$
11,728

 
$
353

 
$
353

 
$

 
$

 
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 March 31, 2014 Using
 
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable 
Inputs (Level 3)
 
Total
Assets:
 
 

 
 

 
 

 
 

Impaired Loans with Specific Allocations
 
 

 
 

 
 

 
 

Commercial and Industrial Loans
 
$

 
$

 
$
2,811

 
$
2,811

Commercial Real Estate Loans
 

 

 
1,311

 
1,311

Agricultural Loans
 

 

 

 

Other Real Estate
 
 

 
 

 
 

 
 

Commercial Real Estate
 

 

 

 

 
 
 
Fair Value Measurements at December 31, 2013 Using
 
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable 
Inputs (Level 3)
 
Total
Assets:
 
 

 
 

 
 

 
 

Impaired Loans with Specific Allocations
 
 

 
 

 
 

 
 

Commercial and Industrial Loans
 
$

 
$

 
$

 
$

Commercial Real Estate Loans
 

 

 
1,346

 
1,346

Agricultural Loans
 

 

 

 

Other Real Estate
 
 

 
 

 
 

 
 

Commercial Real Estate
 

 

 
20

 
20

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 March 31, 2014 and December 31, 2013:
March 31, 2014 
 
Fair Value

Valuation Technique(s)

Unobservable Input(s)

Range (Weighted Average)

 








Impaired Loans - Commercial and Industrial Loans
 
$
2,811

 
Sales comparison approach
 
Adjustment for differences between comparable sales
 
41%-90% (42%)
Impaired Loans - Commercial Real Estate Loans
 
$
1,311


Sales comparison approach

Adjustment for physical condition of comparable properties sold

12%-80% (53%)

 
 


Income approach

Adjustment for net operating income generated by the property


 
 
 


Cost approach

Adjustment for investor rates of return

 

December 31, 2013 
 
Fair Value
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range (Weighted Average)
 
 
 
 
 
 
 
 
 
Impaired Loans - Commercial Real Estate Loans
 
$
1,346

 
Sales comparison approach
 
Adjustment for physical condition of comparable properties sold
 
12%-80% (53%)
 
 
 

 
Income approach
 
Adjustment for net operating income generated by the property
 
 
 
 
 

 
Cost approach
 
Adjustment for investor rates of return
 
 
Other Real Estate - Commercial Real Estate Loans
 
$
20

 
Sales comparison approach
 
Adjustment for physical condition of comparable properties sold
 
50% (50%)
 
 
 

 
Income approach
 
Adjustment for net operating income generated by the property
 
 
 
 
 

 
Cost approach
 
Adjustment for investor rates of return
 
 
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 March 31, 2014 and December 31, 2013. 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
 March 31, 2014 Using
 
 
Carrying Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Financial Assets:
 
 

 
 

 
 

 
 

 
 

Cash and Short-term Investments
 
$
53,250

 
$
44,159

 
$
9,091

 
$

 
$
53,250

Securities Held-to-Maturity
 
184

 

 
186

 

 
186

FHLB Stock and Other Restricted Stock
 
9,004

 
N/A

 
N/A

 
N/A

 
N/A

Loans, Net
 
1,344,899

 

 

 
1,346,930

 
1,346,930

Accrued Interest Receivable
 
7,573

 

 
2,195

 
5,378

 
7,573

Financial Liabilities:
 
 

 
 

 
 

 
 

 
 

Demand, Savings, and Money Market Deposits
 
(1,425,341
)
 
(1,425,341
)
 

 

 
(1,425,341
)
Time Deposits
 
(342,434
)
 

 
(345,169
)
 

 
(345,169
)
Short-term Borrowings
 
(72,774
)
 

 
(72,774
)
 

 
(72,774
)
Long-term Debt
 
(87,217
)
 

 
(83,258
)
 
(5,330
)
 
(88,588
)
Accrued Interest Payable
 
(675
)
 

 
(627
)
 
(48
)
 
(675
)
Unrecognized Financial Instruments:
 
 

 
 

 
 

 
 

 
 

Commitments to Extend Credit
 

 

 

 

 

Standby Letters of Credit
 

 

 

 

 

Commitments to Sell Loans
 

 

 

 

 

 
 
 
 
 
Fair Value Measurements at
December 31, 2013 Using
 
 
Carrying Value
 
Level 1
 
Level 2
 
Level 3
 
Total
Financial Assets:
 
 

 
 

 
 

 
 

 
 

Cash and Short-term Investments
 
$
60,232

 
$
37,370

 
$
22,862

 
$

 
$
60,232

Securities Held-to-Maturity
 
268

 

 
271

 

 
271

FHLB Stock and Other Restricted Stock
 
9,004

 
N/A

 
N/A

 
N/A

 
N/A

Loans, Net
 
1,366,452

 

 

 
1,370,339

 
1,370,339

Accrued Interest Receivable
 
7,470

 

 
1,918

 
5,552

 
7,470

Financial Liabilities:
 
 

 
 

 
 

 
 

 
 

Demand, Savings, and Money Market Deposits
 
(1,463,122
)
 
(1,463,122
)
 

 

 
(1,463,122
)
Time Deposits
 
(349,034
)
 

 
(351,707
)
 

 
(351,707
)
Short-term Borrowings
 
(53,533
)
 

 
(53,533
)
 

 
(53,533
)
Long-term Debt
 
(87,237
)
 

 
(83,329
)
 
(5,311
)
 
(88,640
)
Accrued Interest Payable
 
(777
)
 

 
(732
)
 
(45
)
 
(777
)
Unrecognized Financial Instruments:
 
 

 
 

 
 

 
 

 
 

Commitments to Extend Credit
 

 

 

 

 

Standby Letters of Credit
 

 

 

 

 

Commitments to Sell Loans