Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the financial instruments carried at fair value as of September 30, 2015 and December 31, 2014, by caption on the consolidated balance sheet and by FASB ASC 820 valuation hierarchy (as described above) (in thousands):



	Assets and Liabilities Measured at Fair Value on a Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)	Models with Significant Observable Market Parameters (Level 2)	Models with Significant Unobservable Market Parameters (Level 3)
September 30, 2015
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	94,287	—	94,287	—
Mortgage-backed securities	147,646		—	147,646	—
Asset-backed securities	27,823		—	27,823	—
State and municipal securities	23,295		—	23,295	—
Total investment securities available-for-sale	293,051		—	293,051	—
Loans held for sale	13,437		—	13,437	—
Other assets	26,560		—	—	26,560
Total assets at fair value	$	333,048	—	306,488	26,560
December 31, 2014
Investment securities available-for-sale:
U.S. Government sponsored enterprises	$	130,567	—	130,567	—
Mortgage-backed securities	171,069		—	171,069	—
Asset-backed securities	30,520		—	30,520	—
State and municipal securities	14,264		—	14,264	—
Total investment securities available-for-sale	346,420		—	346,420	—
Loans held for sale	9,466		—	9,466	—
Other assets	17,331		—	—	17,331
Total assets at fair value	$	373,217	—	355,886	17,331

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



	Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
	Total Carrying Value in the Consolidated Balance Sheet		Quoted Market Prices in an Active Market (Level 1)	Models with Significant Observable Market Parameters (Level 2)	Models with Significant Unobservable Market Parameters (Level 3)
September 30, 2015
Other real estate owned	$	6,533	—	—	6,533
Impaired loans, net (¹)	9,737		—	—	9,737
Total	$	16,270	—	—	16,270
December 31, 2014
Other real estate owned	$	7,298	—	—	7,298
Impaired loans, net (¹)	8,866		—	—	8,866
Total	$	16,164	—	—	16,164


⁽¹⁾	Amount is net of a valuation allowance of $0.9 million at September 30, 2015 and $1.6 million at December 31, 2014 as required by ASC 310, “Receivables.”

Changes in Fair Value Due to Observable Factors

The table below includes a rollforward of the balance sheet amounts for the nine months ended September 30, 2015 and 2014 (including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis. When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, since Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources), the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology (in thousands):



	For the Nine Months Ended September 30,
	2015			2014
	Other Assets		Other Liabilities	Other Assets		Other Liabilities
Fair value, January 1	$	17,331	—	$	11,390	—
Total realized gains included in income	765		—	306		—
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at June 30	—		—	—		—
Purchases, issuances and settlements, net	8,464		—	5,000		—
Transfers out of Level 3	—		—	—		—
Fair Value September 30,	$	26,560	—	$	16,696	—
Total realized gains included in income related to financial assets and liabilities still on the consolidated balance sheet at June 30	$	765	—	306		—

Carrying Value and Estimated Fair Value of Financial Instruments

The following table presents the carrying amounts, estimated fair value and placement in the fair valuation hierarchy of the Company’s financial instruments at September 30, 2015 and December 31, 2014. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization.



	Carrying/ Notional		Estimated	Quoted Market Prices in an Active Market	Models with Significant Observable Market Parameters	Models with Significant Unobservable Market Parameters
(in Thousands)	Amount		Fair Value (¹)	(Level 1)	(Level 2)	(Level 3)
September 30, 2015
Financial assets:
Securities held-to-maturity	$	25,790	25,958	—	25,958	—
Loans, net	1,444,334		1,457,511	—	—	1,457,511
Financial liabilities:
Deposits and securities sold under agreements to repurchase	1,726,861		1,506,229	—	—	1,506,229
Off-balance sheet instruments:
Commitments to extend credit	—		—	—	—	—
Standby letters of credit	—		—	—	—	—
December 31, 2014
Financial assets:
Securities held-to-maturity	$	28,123	28,400	—	28,400	—
Loans, net	1,329,865		1,346,569	—	—	1,346,569
Financial liabilities:
Deposits and securities sold under agreements to repurchase	1,663,707		1,530,607	—	—	1,530,607
Off-balance sheet instruments:
Commitments to extend credit	—		—	—	—	—
Standby letters of credit	—		—	—	—	—


⁽¹⁾	Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market-participant would realize in a hypothetical orderly transaction.