Fair Value (Tables)

9 Months Ended

Sep. 30, 2017

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, 2017 and December 31, 2016:


				Fair Value Measurements at September 30, 2017 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	$	121,596		$	0	$	121,596		$	0
States and political subdivisions		143,470			0		143,470			0
Residential and multi-family mortgage		103,253			0		103,253			0
Corporate notes and bonds		17,269			0		17,269			0
Pooled SBA		38,204			0		38,204			0
Other equity securities		969			969		0			0

Total Securities Available For Sale	$	424,761		$	969	$	423,792		$	0

Interest Rate swaps	$	233		$	0	$	233		$	0

Trading Securities:
Corporate equity securities	$	4,095		$	4,095	$	0		$	0
Mutual funds		1,371			1,371		0			0
Certificates of deposit		205			205		0			0
Corporate notes and bonds		257			257		0			0
U.S. Government sponsored entities		53			0		53			0

Total Trading Securities	$	5,981		$	5,928	$	53		$	0

Liabilities,
Interest rate swaps	$	(475	)	$	0	$	(475	)	$	0


				Fair Value Measurements at December 31, 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	$	140,351		$	0	$	140,351		$	0
States and political subdivisions		157,037			0		157,037			0
Residential and multi-family mortgage		134,976			0		134,976			0
Corporate notes and bonds		17,414			0		17,414			0
Pooled trust preferred		2,049			0		0			2,049
Pooled SBA		43,037			0		43,037			0
Other equity securities		971			971		0			0

Total Securities Available For Sale	$	495,835		$	971	$	492,815		$	2,049

Interest Rate swaps	$	211		$	0	$	211		$	0

Trading Securities:
Corporate equity securities	$	3,312		$	3,312	$	0		$	0
Mutual funds		1,037			1,037		0			0
Certificates of deposit		202			202		0			0
Corporate notes and bonds		254			254		0			0
U.S. Government sponsored entities		53			0		53			0

Total Trading Securities	$	4,858		$	4,805	$	53		$	0

Liabilities,
Interest rate swaps	$	(670	)	$	0	$	(670	)	$	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, 2017 and 2016:


	2017		2016
Balance, July 1	$	0	$	1,702
Total gains or (losses):
Included in other comprehensive income (unrealized)		0		0
Sale of available-for-sale securities		0		0

Balance, September 30	$	0	$	1,702


	2017			2016
Balance, January 1	$	2,049		$	3,413
Total gains or (losses):
Included in other comprehensive income (unrealized)		134			(922	)
Sale of available-for-sale securities		(2,183	)		(789	)

Balance, September 30	$	0		$	1,702

Quantitative Information about Level 3 Fair Value Measurements

The following table presents quantitative information about Level 3 fair value measurements at December 31, 2016:


	Fair value		Valuation Technique	Unobservable Inputs	Input Utilized
Pooled trust preferred	$	2,049	Discounted cash flow	Collateral default rate	0.5% in 2016 and thereafter
				Yield (weighted average)	10%
				Prepayment speed	2.0% constant prepayment rate in 2016 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, 2017 and December 31, 2016:

Fair Value Measurements at September 30, 2017 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

Fair Value Measurements at December 31, 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

2,067

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, 2017:


	Fair value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans – commercial mortgages	$	11	Discounted cash flow method	Discount used in discounted cash flow method	10% (10%)

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, 2016:


	Fair value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)

Impaired loans – commercial mortgages	$	2,067	Sales comparison approach and discounted cash flow method	Adjustment for differences between the comparable sales and discount used in discounted cash flow method	10% - 14% (13%)

Carrying Amount and Fair Value of Financial Instruments

The following table presents the carrying amount and fair value of financial instruments at September 30, 2017:


	Carrying			Fair Value Measurement Using:								Total
	Amount			Level 1			Level 2			Level 3		Fair Value
ASSETS
Cash and cash equivalents	$	35,675		$	35,675		$	0		$	0	$	35,675
Securities available for sale		424,761			969			423,792			0		424,761
Trading securities		5,981			5,928			53			0		5,981
Loans held for sale		1,672			0			1,673			0		1,673
Net loans		2,080,725			0			0			2,056,755		2,056,755
FHLB and other equity interests		26,145			n/a			n/a			n/a		n/a
Interest rate swaps		233			0			233			0		233
Accrued interest receivable		9,378			7			3,167			6,204		9,378

LIABILITIES
Deposits	$	(2,060,610	)	$	(1,820,972	)	$	(237,587	)	$	0	$	(2,058,559	)
FHLB and other borrowings		(342,158	)		0			(337,913	)		0		(337,913	)
Subordinated debentures		(70,620	)		0			(62,923	)		0		(62,923	)
Interest rate swaps		(475	)		0			(475	)		0		(475	)
Accrued interest payable		(279	)		0			(279	)		0		(279	)

The following table presents the carrying amount and fair value of financial instruments at December 31, 2016:


	Carrying			Fair Value Measurement Using:								Total
	Amount			Level 1			Level 2			Level 3		Fair Value
ASSETS
Cash and cash equivalents	$	29,183		$	29,183		$	0		$	0	$	29,183
Securities available for sale		495,835			971			492,815			2,049		495,835
Trading securities		4,858			4,805			53			0		4,858
Loans held for sale		7,528			0			7,553			0		7,553
Net loans		1,857,206			0			0			1,817,341		1,817,341
FHLB and other equity interests		19,186			n/a			n/a			n/a		n/a
Interest rate swaps		211			0			211			0		211
Accrued interest receivable		8,264			6			3,014			5,244		8,264
LIABILITIES
Deposits	$	(2,017,522	)	$	(1,786,748	)	$	(219,765	)	$	0		(2,006,513	)
FHLB and other borrowings		(237,004	)		0			(226,769	)		0		(226,769	)
Subordinated debentures		(70,620	)		0			(61,831	)		0		(61,831	)
Deposits held for sale		(6,456	)		0			(6,417	)		0		(6,417	)
Interest rate swaps		(670	)		0			(670	)		0		(670	)
Accrued interest payable		(510	)		0			(510	)		0		(510	)