Fair Value (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:



	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
December 31, 2015
Financial assets:
Loans held for sale	$	10,958	$	—	$	10,958	$	—
AFS securities:
Obligations of U.S. government-sponsored enterprises	5,040		—		5,040		—
Obligations of states and political subdivisions	17,694		—		17,694		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	419,046		—		419,046		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	306,857		—		306,857		—
Subordinated corporate bonds	996		—		996		—
Equity securities	705		—		705		—
Customer interest rate swaps	3,166		—		3,166		—
Financial liabilities:
Interest rate swaps	9,229		—		9,229		—
Forward-starting interest rate swaps	576		—		576		—
Customer interest rate swaps	3,166		—		3,166		—
December 31, 2014
Financial assets:
AFS securities:
Obligations of U.S. government-sponsored enterprises	$	5,027	$	—	$	5,027	$	—
Obligations of states and political subdivisions	26,777		—		26,777		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	381,308		—		381,308		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	343,897		—		343,897		—
Private issue collateralized mortgage obligations	6,054		—		6,054		—
Customer interest rate swap agreements	1,140		—		1,140		—
Financial liabilities:
Interest rate swaps	9,143		—		9,143		—
Customer interest rate swaps	1,140		—		1,140		—

Summary of Assets Measured at Fair Value on Non Recurring Basis

The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis as of December 31, 2015 and 2014:



	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
December 31, 2015
Financial assets:
Collateral-dependent impaired loans	$	1,971	$	—	$	—	$	1,971
MSRs⁽¹⁾	440		—		440		—
Non-financial assets:
OREO	1,304		—		—		1,304
December 31, 2014
Financial assets:
Collateral-dependent impaired loans	$	3,581	$	—	$	—	$	3,581
MSRs⁽¹⁾	173		—		173		—
Non-financial assets:
OREO	1,282		—		—		1,282


(1)	Represents MSRs deemed to be impaired and a valuation allowance was established to carry at fair value at December 31, 2015 and 2014.

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2015 and 2014:



	Fair Value		Valuation Methodology	Unobservable input	Discount Range (Weighted-Average)
December 31, 2015
Collateral-dependent impaired loans:
Partially charged-off	$	399	Market approach appraisal of collateral	Management adjustment of appraisal	0%	(0%)
				Estimated selling costs	0 - 10%	(7%)
Specifically reserved	1,572		Market approach appraisal of collateral	Management adjustment of appraisal	0 - 57%	(45%)
				Estimated selling costs	10%	(10%)
OREO	1,304		Market approach appraisal of collateral	Management adjustment of appraisal	0 - 43%	(18%)
				Estimated selling costs	10%	(10%)
December 31, 2014
Collateral-dependent impaired loans:
Partially charged-off	$	1,569	Market approach appraisal of collateral	Management adjustment of appraisal	0 - 17%	(0%)
				Estimated selling costs	10%	(10%)
Specifically reserved	2,012		Market approach appraisal of collateral	Management adjustment of appraisal	0 - 50%	(22%)
				Estimated selling costs	10%	(10%)
OREO	1,282		Market approach appraisal of collateral	Management adjustment of appraisal	0 - 68%	(21%)
				Estimated selling costs	6 - 10%	(9%)

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The following table presents the carrying amounts and estimated fair value for financial instrument assets and liabilities at December 31, 2015:



	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
Financial assets:
Cash and due from banks	$	79,488	$	79,488	$	79,488	$	—	$	—
AFS securities	750,338		750,338		—		750,338		—
HTM securities	84,144		85,647		—		85,647		—
Loans held for sale	10,958		10,958		—		10,958		—
Residential real estate loans	808,180		820,774		—		—		820,774
Commercial real estate loans	922,257		911,316		—		—		911,316
Commercial loans	371,684		371,854		—		—		371,854
Home equity loans	349,215		348,963		—		—		348,963
Consumer loans	17,704		18,163		—		—		18,163
MSRs⁽¹⁾	2,161		2,947		—		2,947		—
Interest receivable	7,985		7,985		—		7,985		—
Customer interest rate swaps	3,166		3,166		—		3,166		—
Financial liabilities:
Deposits	$	2,726,379	$	2,726,300	$	—	$	2,726,300	$	—
FHLB advances	55,000		56,001		—		56,001		—
Commercial repurchase agreements	30,052		30,931		—		30,931		—
Other borrowed funds	428,711		428,778		—		428,778		—
Subordinated debentures	59,126		42,950		—		42,950		—
Interest payable	641		641		—		641		—
Interest rate swaps	9,229		9,229		—		9,229		—
Forward-starting interest rate swaps	576		576		—		576		—
Customer interest rate swaps	3,166		3,166		—		3,166		—


(1)	Reported fair value represents all MSRs currently being serviced by the Company at December 31, 2015, regardless of carrying amount.

The following table presents the carrying amounts and estimated fair value for financial instrument assets and liabilities at December 31, 2014:



	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
Financial assets:
Cash and due from banks	$	60,813	$	60,813	$	60,813	$	—	$	—
AFS securities	763,063		763,063		—		763,063		—
HTM securities	20,179		20,425		—		20,425		—
Residential real estate loans	579,946		596,172		—		—		596,172
Commercial real estate loans	635,609		631,434		—		—		631,434
Commercial loans	249,823		244,713		—		—		244,713
Home equity loans	269,176		270,904		—		—		270,904
Consumer loans	16,940		17,007		—		—		17,007
MSRs⁽¹⁾	493		1,447		—		1,447		—
Interest receivable	6,017		6,017		—		6,017		—
Customer interest rate swaps	1,140		1,140		—		1,140		—
Financial liabilities:
Deposits	$	1,932,097	$	1,933,805	$	—	$	1,933,805	$	—
FHLB advances	56,039		57,986		—		57,986		—
Commercial repurchase agreements	30,097		31,395		—		31,395		—
Other borrowed funds	446,842		446,909		—		446,909		—
Junior subordinated debentures	44,024		44,024		—		44,024		—
Interest payable	537		537		—		537		—
Interest rate swaps	9,143		9,143		—		9,143		—
Customer interest rate swaps	1,140		1,140		—		1,140		—


(1)	Reported fair value represents all MSRs currently being serviced by the Company at December 31, 2014, regardless of carrying amount.