Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value

Assets measured at fair value are summarized below.

	Fair Value Measurements at September 30, 2013 Using:
	(Level 1)		(Level 2)		(Level 3)
Assets:
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	53,964	$	—
Obligations of states and political subdivisions		—		81,475		—
Mortgage-backed securities in government sponsored entities		—		64,484		—
Equity securities in financial institutions		—		433		—
Assets measured at fair value on a nonrecurring basis:
Impaired loans	$	—	$	—	$	16,066
Other real estate owned		—		—		158

	Fair Value Measurements at December 31, 2012 Using:
	(Level 1)		(Level 2)		(Level 3)
Assets:
Assets measured at fair value on a recurring basis:
U.S. Treasury securities and obligations of U.S. Government agencies	$	—	$	54,286	$	—
Obligations of states and political subdivisions		—		79,338		468
Mortgage-backed securities in government sponsored entities		—		69,435		—
Equity securities in financial institutions		—		434		—
Assets measured at fair value on a nonrecurring basis:
Impaired loans	$	—	$	—	$	22,084
Other real estate owned		—		—		471

Quantitative Information about Level 3 Fair Value Measurements

The following table presents quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis at September 30, 2013.

	Quantitative Information about Level 3 Fair Value Measurements
September 30, 2013	Fair Value Estimate		Valuation Technique	Unobservable Input	Range
Impaired loans	$	16,066	Appraisal of collateral	Appraisal adjustments	10% - 30%
				Liquidation expense	0% - 10%
				Holding period	0 -30 months
			Discounted cash flows	Discount rates	3.8% - 8.3%
Other real estate owned	$	158	Appraisal of collateral	Appraisal adjustments	10% - 30%
				Liquidation expense	0% - 10%

The following table presents quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2012.

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2012	Fair Value Estimate		Valuation Technique	Unobservable Input	Range
Obligations of states and political subdivisions	$	468	Appraisal of collateral	Appraisal adjustments	20% - 30%
				Liquidation expense	8% - 12%
Impaired loans	$	22,084	Appraisal of collateral	Appraisal adjustments	10% - 30%
				Liquidation expense	0% - 10%
				Holding period	0 -30 months
			Discounted cash flows	Discount rates	2% - 8.5%
Other real estate owned	$	471	Appraisal of collateral	Appraisal adjustments	10% - 30%
				Liquidation expense	0% - 10%

Summary of Changes in Level 3 Fair-Value Category in Securities Available for Sale

The following table presents the changes in the Level 3 fair-value category for the period ended September 30, 2013. The Corporation classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to the unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly.

Securities available for sale
Beginning balance January 1, 2013	$	468
Settlements		(468	)
Ending balance September 30, 2013	$	—

Carrying Amount and Fair Values of Financial Instruments

The carrying amount and fair values of financial instruments are as follows.

September 30, 2013	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	50,093	$	50,093	$	50,093	$	—	$	—
Securities available for sale		200,356		200,356		—		200,356		—
Other securities		15,433		15,433		15,433		—		—
Loans, available for sale		4,891		4,891		4,891		—		—
Loans, net of allowance for loan losses		802,274		821,717		—		—		821,717
Bank owned life insurance		19,013		19,013		19,013		—		—
Accrued interest receivable		4,540		4,540		4,540		—		—
Mortgage servicing rights		454		454		—		—		454
Financial Liabilities:
Nonmaturing deposits		702,215		702,215		702,215		—		—
Time deposits		240,243		242,067		—		—		242,067
Federal Home Loan Bank advances		37,735		38,710		—		—		38,710
Securities sold under agreement to repurchase		20,810		20,810		20,810		—		—
Subordinated debentures		29,427		21,412		—		—		21,412
Accrued interest payable		159		159		159		—		—

December 31, 2012	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from financial institutions	$	46,131	$	46,131	$	46,131	$	—	$	—
Securities available for sale		203,961		203,961		—		203,493		468
Other securities		15,567		15,567		15,567		—		—
Loans, available for sale		1,873		1,873		1,873		—		—
Loans, net of allowance for loan losses		795,811		812,950		—		—		812,950
Bank owned life insurance		18,590		18,590		18,590		—		—
Accrued interest receivable		3,709		3,709		3,709		—		—
Mortgage servicing rights		308		308		—		—		308
Financial Liabilities:
Nonmaturing deposits		662,387		662,387		662,387		—		—
Time deposits		264,002		265,974		—		—		265,974
Federal Home Loan Bank advances		40,261		41,658		—		—		41,658
Securities sold under agreement to repurchase		23,219		23,219		23,219		—		—
Subordinated debentures		29,427		26,855		—		—		26,855
Accrued interest payable		185		185		185		—		—