Fair Value (Tables)

6 Months Ended

Jun. 30, 2016

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 June 30, 2016 and December 31, 2015:


				Fair Value Measurements at June 30, 2016 Using
				Quoted Prices in					Significant
				Active Markets for		Significant Other			Unobservable
				Identical Assets		Observable Inputs			Inputs
Description	Total			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities Available For Sale:
U.S. Government sponsored entities	$	141,789		$	0	$	141,789		$	0
States and political subdivisions		164,645			0		164,645			0
Residential and multi-family mortgage		146,858			0		146,858			0
Corporate notes and bonds		16,924			0		16,924			0
Pooled trust preferred		1,702			0		0			1,702
Pooled SBA		48,087			0		48,087			0
Other equity securities		996			996		0			0

Total Securities Available For Sale	$	521,001		$	996	$	518,303		$	1,702

Interest rate swaps	$	648		$	0	$	648		$	0

Trading Securities:
Corporate equity securities	$	3,037		$	3,037	$	0		$	0
Mutual funds		888			888		0			0
Certificates of deposit		255			255		0			0
Corporate notes and bonds		202			202		0			0
U.S. Government sponsored entities		56			0		56			0

Total Trading Securities	$	4,438		$	4,382	$	56		$	0

Liabilities,
Interest rate swaps	$	(1,376	)	$	0	$	(1,376	)	$	0


				Fair Value Measurements at December 31, 2015 Using
				Quoted Prices in					Significant
				Active Markets for		Significant Other			Unobservable
				Identical Assets		Observable Inputs			Inputs
Description	Total			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities Available For Sale:
U.S. Government sponsored entities	$	141,751		$	0	$	141,751		$	0
States and political subdivisions		171,819			0		171,819			0
Residential and multi-family mortgage		157,982			0		157,982			0
Corporate notes and bonds		18,688			0		18,688			0
Pooled trust preferred		3,413			0		0			3,413
Pooled SBA		51,409			0		51,409			0
Other equity securities		981			981		0			0

Total Securities Available For Sale	$	546,043		$	981	$	541,649		$	3,413

Interest rate swaps	$	131		$	0	$	131		$	0

Trading Securities:
Corporate equity securities	$	3,389		$	3,389	$	0		$	0
Mutual funds		750			750		0			0
Certificates of deposit		253			253		0			0
Corporate notes and bonds		130			130		0			0
U.S. Government sponsored entities		54			0		54			0

Total Trading Securities	$	4,576		$	4,522	$	54		$	0

Liabilities,
Interest rate swaps	$	(867	)	$	0	$	(867	)	$	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 June 30, 2016 and June 30, 2015:


	2016			2015
Balance, April 1	$	3,109		$	905
Proceeds from sale of securities		(922	)		0
Total gains or (losses):
Included in other comprehensive income (unrealized)		(485	)		255

Balance, June 30	$	1,702		$	1,160


	2016			2015
Balance, January 1	$	3,413		$	905
Proceeds from sale of securities		(922	)		0
Total gains or (losses):
Included in other comprehensive income (unrealized)		(789	)		255

Balance, June 30	$	1,702		$	1,160

Quantitative Information about Level 3 Fair Value Measurements

The following table presents quantitative information about Level 3 fair value measurements at June 30, 2016:


	Fair value		Valuation Technique	Unobservable Inputs	Input Utilized
Pooled trust preferred	$	1,702	Discounted cash flow	Collateral default rate	0.5% in 2016 and thereafter
				Yield (weighted average) Prepayment speed	10.0% 2.0% constant prepayment rate in 2016 and thereafter

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


	Fair value		Valuation Technique	Unobservable Inputs	Input Utilized
Pooled trust preferred	$	3,413	Discounted cash flow	Collateral default rate	1% in 2015; 0.5% in 2016 and thereafter
				Yield (weighted average) Prepayment speed	9.0% 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 June 30, 2016 and December 31, 2015:

Fair Value Measurements at June 30, 2016 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Description

Total

(Level 1)

(Level 2)

(Level 3)

Assets:

Impaired loans:

Commercial mortgages

2,030

$2,030

Fair Value Measurements at December 31, 2015 Using

Quoted Prices in

Significant

Active Markets for

Significant Other

Unobservable

Identical Assets

Observable Inputs

Inputs

Description

Total

(Level 1)

(Level 2)

(Level 3)

Assets:

Impaired loans:

Commercial mortgages

2,247

$2,247

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 June 30, 2016:


	Fair value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans – commercial mortgages		$2,030	Sales comparison approach	Adjustment for differences between the comparable sales	21% - 99% (39%)

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, 2015:


	Fair value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans – commercial mortgages		$2,247	Sales comparison approach	Adjustment for differences between the comparable sales	25% - 69% (36%)

Carrying Amount and Fair Value of Financial Instruments

The following table presents the carrying amount and fair value of financial instruments at June 30, 2016:


	Carrying			Fair Value Measurement Using:								Total
	Amount			Level 1			Level 2			Level 3		Fair Value
ASSETS
Cash and cash equivalents	$	23,926		$	23,926		$	0		$	0	$	23,926
Securities available for sale		521,001			996			518,303			1,702		521,001
Trading securities		4,438			4,382			56			0		4,438
Loans held for sale		863			0			888			0		888
Net loans		1,639,856			0			0			1,638,624		1,638,624
FHLB and other equity interests		16,023			n/a			n/a			n/a		n/a
Interest rate swaps		648			0			648			0		648
Accrued interest receivable		7,518			6			3,096			4,416		7,518

LIABILITIES
Deposits	$	(1,890,595	)	$	(1,702,622	)	$	(187,606	)	$	0	$	(1,890,228	)
FHLB and other borrowings		(185,653	)		0			(184,850	)		0		(184,850	)
Subordinated debentures		(20,620	)		0			(12,029	)		0		(12,029	)
Interest rate swaps		(1,376	)		0			(1,376	)		0		(1,376	)
Accrued interest payable		(296	)		0			(296	)		0		(296	)

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


	Carrying			Fair Value Measurement Using:								Total
	Amount			Level 1			Level 2			Level 3		Fair Value
ASSETS
Cash and cash equivalents	$	27,261		$	27,261		$	0		$	0	$	27,261
Securities available for sale		546,043			981			541,649			3,413		546,043
Trading securities		4,576			4,522			54			0		4,576
Loans held for sale		1,381			0			1,438			0		1,438
Net loans		1,561,061			0			0			1,554,502		1,554,502
FHLB and other equity interests		15,921			n/a			n/a			n/a		n/a
Interest rate swaps		131			0			131			0		131
Accrued interest receivable		7,312			5			2,875			4,432		7,312

LIABILITIES
Deposits	$	(1,815,053	)	$	(1,630,888	)	$	(183,028	)	$	0		(1,813,916	)
FHLB and other borrowings		(220,515	)		0			(218,808	)		0		(218,808	)
Subordinated debentures		(20,620	)		0			(11,761	)		0		(11,761	)
Interest rate swaps		(867	)		0			(867	)		0		(867	)
Accrued interest payable		(766	)		(344	)		(422	)		0		(766	)