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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Measurements

Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis

		September 30, 2016
		Level 1			Level 2			Level 3			Total
Assets:
Securities available-for-sale
U.S. government agencies		$	-		$	1,503		$	-		$	1,503
U.S. government agencies mortgage-backed			-			43,723			-			43,723
States and political subdivisions			-			22,254			-			22,254
Corporate bonds			-			10,730			-			10,730
Collateralized mortgage obligations			-			204,390			-			204,390
Asset-backed securities			-			140,173			-			140,173
Collateralized loan obligations			-			108,284			-			108,284
Loans held-for-sale			-			3,750			-			3,750
Mortgage servicing rights			-			-			5,075			5,075
Other assets (Interest rate swap agreements)			-			788			-			788
Other assets (Mortgage banking derivatives)			-			293			-			293
Total		$	-		$	535,888		$	5,075		$	540,963
Liabilities:
Other liabilities (Interest rate swap agreements)		$	-		$	5,698		$	-		$	5,698
Total		$	-		$	5,698		$	-		$	5,698

		December 31, 2015
		Level 1			Level 2			Level 3			Total
Assets:
Securities available-for-sale
U.S. Treasury		$	1,509		$	-		$	-		$	1,509
U.S. government agencies			-			1,556			-			1,556
U.S. government agencies mortgage-backed			-			1,996			-			1,996
States and political subdivisions			-			30,415			111			30,526
Corporate bonds			-			29,400			-			29,400
Collateralized mortgage obligations			-			66,920			-			66,920
Asset-backed securities			-			231,908			-			231,908
Collateralized loan obligations			-			92,251			-			92,251
Loans held-for-sale			-			2,849			-			2,849
Mortgage servicing rights			-			-			5,847			5,847
Other assets (Interest rate swap agreements net of swap credit valuation)			-			114			-			114
Other assets (Mortgage banking derivatives)			-			188			-			188
Total		$	1,509		$	457,597		$	5,958		$	465,064
Liabilities:
Other liabilities (Interest rate swap agreements)		$	-		$	745		$	-		$	745
Total		$	-		$	745		$	-		$	745

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

		Nine Months Ended September 30, 2016
		Securities available-for-sale
		States and			Mortgage
		Political			Servicing
		Subdivisions			Rights
Beginning balance January 1, 2016		$	111		$	5,847
Transfers out of Level 3			(42)			-
Total gains or losses
Included in earnings (or changes in net assets)			-			(1,394)
Included in other comprehensive income			9			-
Purchases, issuances, sales, and settlements
Issuances			-			1,148
Settlements			(78)			(526)
Sales			-			-
Ending balance September 30, 2016		$	-		$	5,075

		Nine Months Ended September 30, 2015
		Securities available-for-sale
					States and			Mortgage
		Asset-			Political			Servicing
		backed			Subdivisions			Rights
Beginning balance January 1, 2015		$	52,941		$	118		$	5,462
Transfers out of Level 3			(24,917)			-			-
Total gains or losses
Included in earnings (or changes in net assets)			(28)			-			(668)
Included in other comprehensive income			(541)			-			-
Purchases, issuances, sales, and settlements
Issuances			-			-			1,209
Settlements			-			-			(533)
Sales			(27,455)			-			-
Ending balance September 30, 2015		$	-		$	118		$	5,470

Schedule of quantitative information about level 3 fair value measurements

The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of September 30, 2016:

Weighted

Measured at fair value

Unobservable

Average

on a recurring basis:

Fair Value

Valuation Methodology

Inputs

Range of Input

of Inputs

Mortgage Servicing rights

$

5,075

Discounted Cash Flow

Discount Rate

10.0-17.0%

10.2

%

Prepayment Speed

6.0-40.2%

14.1

%

The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 2015:

Weighted

Measured at fair value

Unobservable

Average

on a recurring basis:

Fair Value

Valuation Methodology

Inputs

Range of Input

of Inputs

Mortgage Servicing rights

$

5,847

Discounted Cash Flow

Discount Rate

10.0-15.5%

10.2

%

Prepayment Speed

6.0-35.2%

10.1

%

Schedule of assets and liabilities measured at fair value on a nonrecurring basis

		September 30, 2016
		Level 1			Level 2			Level 3			Total
Impaired loans1		$	-		$	-		$	350		$	350
Other real estate owned, net2			-			-			14,144			14,144
Total		$	-		$	-		$	14,494		$	14,494

1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount of $864,000 with a valuation allowance of $514,000 resulting in an increase of specific allocations within the allowance for loan losses of $480,000 for the nine months ending September 30, 2016.

2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $14.1 million, which is made up of the outstanding balance of $29.1 million, net of a valuation allowance of $13.3 million and participations of $1.7 million, at September 30, 2016.

		December 31, 2015
		Level 1			Level 2			Level 3			Total
Impaired loans1		$	-		$	-		$	81		$	81
Other real estate owned, net2			-			-			19,141			19,141
Total		$	-		$	-		$	19,222		$	19,222

1 Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, had a carrying amount of $115,000, with a valuation allowance of $34,000, resulting in a decrease of specific allocations within the provision for loan losses of $243,000 for the year ending December 31, 2015.

2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $19.1 million, which is made up of the outstanding balance of $34.9 million, net of a valuation allowance of $14.1 million and participations of $1.7 million, at December 31, 2015.

X

- Definition

Tabular disclosure of the fair value measurement of assets and liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income, and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issuances, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset or liability.

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- Definition

Tabular disclosure of the inputs and valuation techniques used to measure fair value, and a discussion of changes in valuation techniques and related inputs, if any, applied during the period to each separate class of assets, liabilities, and financial instruments classified in shareholders' equity that are measured on a recurring and/or nonrecurring basis.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
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Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
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