Fair Value (Tables)

9 Months Ended

Sep. 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 September 30, 2016 and December 31, 2015:


				Fair Value Measurements at September 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	$	139,902		$	0	$	139,902		$	0
States and political subdivisions		161,210			0		161,210			0
Residential and multi-family mortgage		139,022			0		139,022			0
Corporate notes and bonds		17,279			0		17,279			0
Pooled trust preferred		1,702			0		0			1,702
Pooled SBA		46,635			0		46,635			0
Other equity securities		994			994		0			0

Total Securities Available For Sale	$	506,744		$	994	$	504,048		$	1,702

Interest rate swaps	$	766		$	0	$	766		$	0

Trading Securities:
Corporate equity securities	$	3,148		$	3,148	$	0		$	0
Mutual funds		964			964		0			0
Certificates of deposit		255			255		0			0
Corporate notes and bonds		221			221		0			0
U.S. Government sponsored entities		55			0		55			0

Total Trading Securities	$	4,644		$	4,589	$	55		$	0

Liabilities,
Interest rate swaps	$	(1,361	)	$	0	$	(1,361	)	$	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 September 30, 2016 and September 30, 2015:


	2016		2015
Balance, July 1	$	1,702	$	1,160
Proceeds from sale of securities		0		0
Total gains or (losses):
Included in other comprehensive income (unrealized)		0		0

Balance, September 30	$	1,702	$	1,160

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 nine months ended September 30, 2016 and September 30, 2015:


	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, September 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 September 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 September 30, 2016 and December 31, 2015:

Fair Value Measurements at September 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

2,002

$2,002

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 September 30, 2016:


	Fair value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans – commercial mortgages		$2,002	Sales comparison approach	Adjustment for differences between the comparable sales	19% - 99% (37%)

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 September 30, 2016:


	Carrying			Fair Value Measurement Using:								Total
	Amount			Level 1			Level 2			Level 3		Fair Value
ASSETS
Cash and cash equivalents	$	36,904		$	36,904		$	0		$	0	$	36,904
Securities available for sale		506,744			994			504,048			1,702		506,744
Trading securities		4,644			4,589			55			0		4,644
Loans held for sale		2,814			0			2,829			0		2,829
Net loans		1,785,155			0			0			1,783,814		1,783,814
FHLB and other equity interests		18,334			n/a			n/a			n/a		n/a
Interest rate swaps		766			0			766			0		766
Accrued interest receivable		8,387			6			3,105			5,276		8,387

LIABILITIES
Deposits	$	(2,023,781	)	$	(1,783,037	)	$	(240,275	)	$	0	$	(2,023,312	)
FHLB and other borrowings		(205,202	)		0			(204,314	)		0		(204,314	)
Subordinated debentures		(70,620	)		0			(61,432	)		0		(61,432	)
Interest rate swaps		(1,361	)		0			(1,361	)		0		(1,361	)
Accrued interest payable		(479	)		0			(479	)		0		(479	)

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	)