Fair Value (Tables)

3 Months Ended

Mar. 31, 2015

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2015 and December 31, 2014:


				Fair Value Measurements at March 31, 2015 Using
Description	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Securities Available For Sale:
U.S. Government sponsored entities	$	148,633		$	0	$	148,633		$	0
States and political subdivisions		180,697			0		180,697			0
Residential and multi-family mortgage		242,952			0		242,952			0
Corporate notes and bonds		19,536			0		19,536			0
Pooled trust preferred		905			0		0			905
Pooled SBA		61,672			0		61,672			0
Other securities		1,005			1,005		0			0

Total Securities Available For Sale	$	655,400		$	1,005	$	653,490		$	905

Trading Securities:
Corporate equity securities	$	3,034		$	3,034	$	0		$	0
Mutual funds		1,000			1,000		0			0
Certificates of deposit		256			256		0			0
Corporate notes and bonds		157			0		157			0
U.S. Government sponsored entities		55			0		55			0

Total Trading Securities	$	4,502		$	4,290	$	212		$	0

Liabilities,
Interest rate swaps	$	(974	)	$	0	$	(974	)	$	0


				Fair Value Measurements at December 31, 2014 Using
Description	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets:
Securities Available For Sale:
U.S. Government sponsored entities	$	155,564		$	0	$	155,564		$	0
States and political subdivisions		181,002			0		181,002			0
Residential and multi-family mortgage		265,164			0		265,164			0
Corporate notes and bonds		19,430			0		19,430			0
Pooled trust preferred		905			0		0			905
Pooled SBA		62,653			0		62,653			0
Other securities		1,002			1,002		0			0

Total Securities Available For Sale	$	685,720		$	1,002	$	683,813		$	905

Trading Securities:
Corporate equity securities	$	3,044		$	3,044	$	0		$	0
Mutual funds		997			997		0			0
Certificates of deposit		253			253		0			0
Corporate notes and bonds		157			0		157			0
U.S. Government sponsored entities		54			0		54			0

Total Trading Securities	$	4,505		$	4,294	$	211		$	0

Liabilities,
Interest rate swaps	$	(946	)	$	0	$	(946	)	$	0

Securities Available for Sale Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of the fair value of securities available for sale measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2015 and March 31, 2014:


	2015		2014
Balance, January 1	$	905	$	661
Total gains or (losses):
Included in other comprehensive income (unrealized)		0		137

Balance, March 31	$	905	$	798

Quantitative Information about Level 3 Fair Value Measurements

The following table presents quantitative information about Level 3 fair value measurements at March 31, 2015:


	Fair value		Valuation Technique	Unobservable Inputs	Input Utilized
Pooled trust preferred	$	905	Discounted cash flow	Collateral default rate	0.83% in 2015; 0.5% in 2016 and thereafter
				Yield Prepayment speed	13% 2.0% constant prepayment rate in 2015 and thereafter

The following table presents quantitative information about Level 3 fair value measurements at December 31, 2014:


	Fair value		Valuation Technique	Unobservable Inputs	Input Utilized
Pooled trust preferred	$	905	Discounted cash flow	Collateral default rate	1% in 2015; 0.5% in 2016 and thereafter
				Yield Prepayment speed	11% 2.0% constant prepayment rate in 2015 and thereafter

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

Assets and liabilities measured at fair value on a non-recurring basis are as follows at March 31, 2015 and December 31, 2014:


			Fair Value Measurements at March 31, 2015 Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Commercial mortgages	$	2,431		0		0	$	2,431
Commercial, industrial, and agricultural		2,563		0		0		2,563


			Fair Value Measurements at December 31, 2014 Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Commercial mortgages	$	2,353		0		0	$	2,353
Commercial, industrial, and agricultural		2,820		0		0		2,820

Quantitative Information about Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value on Non Recurring Basis

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, 2015:


	Fair value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans – commercial mortgages	$	2,431	Sales comparison approach	Adjustment for differences between the comparable sales	33% - 83% (44%)

Impaired loans – commercial, industrial, and agricultural	$	2,563	Sales comparison approach	Adjustment for differences between the comparable sales	7%

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, 2014:


	Fair value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans – commercial mortgages	$	2,353	Sales comparison approach	Adjustment for differences between the comparable sales	34% - 100% (44%)

Impaired loans – commercial, industrial, and agricultural	$	2,820	Sales comparison approach	Adjustment for differences between the comparable sales	8% - 49% (13%)

Carrying Amount and Fair Value of Financial Instruments

The following table presents the carrying amount and fair value of financial instruments at March 31, 2015:


	Carrying			Fair Value Measurement Using:									Total
	Amount			Level 1			Level 2			Level 3			Fair Value
ASSETS
Cash and cash equivalents	$	51,635		$	51,635		$	0		$	0		$	51,635
Interest bearing time deposits with other banks		225			0			225			0			225
Securities available for sale		655,400			1,005			653,490			905			655,400
Trading securities		4,502			4,290			212			0			4,502
Loans held for sale		1,661			0			1,712			0			1,712
Net loans		1,338,444			0			0			1,356,178			1,356,178
FHLB and other equity interests		4,923			n/a			n/a			n/a			n/a
Accrued interest receivable		7,667			6			3,850			3,811			7,667

LIABILITIES
Deposits	$	(1,867,381	)	$	(1,655,195	)	$	(212,358	)	$	0		$	(1,867,553	)
FHLB and other borrowings		(75,652	)		0			(76,217	)		0			(76,217	)
Subordinated debentures		(20,620	)		0			(11,415	)		0			(11,415	)
Interest rate swaps		(974	)		0			(974	)		0			(974	)
Accrued interest payable		(923	)		(362	)		(545	)		(16	)		(923	)

The following table presents the carrying amount and fair value of financial instruments at December 31, 2014:


	Carrying			Fair Value Measurement Using:									Total
	Amount			Level 1			Level 2			Level 3			Fair Value
ASSETS
Cash and cash equivalents	$	27,928		$	27,928		$	0		$	0		$	27,928
Interest bearing time deposits with other banks		225			0			224			0			224
Securities available for sale		685,720			1,002			683,813			905			685,720
Trading securities		4,505			4,296			209			0			4,505
Loans held for sale		887			0			938			0			938
Net loans		1,337,916			0			0			1,337,537			1,337,537
FHLB and other equity interests		6,695			n/a			n/a			n/a			n/a
Accrued interest receivable		7,441			5			3,503			3,933			7,441

LIABILITIES
Deposits	$	(1,847,079	)	$	(1,670,172	)	$	(176,036	)	$	0			(1,846,208	)
FHLB and other borrowings		(111,695	)		0			(111,821	)		0			(111,821	)
Subordinated debentures		(20,620	)		0			(11,395	)		0			(11,395	)
Interest rate swaps		(946	)		0			(946	)		0			(946	)
Accrued interest payable		(804	)		(358	)		(430	)		(16	)		(804	)

- 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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