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Fair Value Measurements (Tables) | 6 Months Ended
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Jun. 30, 2017
Fair Value Measurements |
Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis |
|  | June 30, 2017
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies mortgage-backed |  | $ | - |  | $ | 20,846 |  | $ | - |  | $ | 20,846
States and political subdivisions |  |  | - |  |  | 205,170 |  |  | 20,348 |  |  | 225,518
Corporate bonds |  |  | - |  |  | 12,616 |  |  | - |  |  | 12,616
Collateralized mortgage obligations |  |  | - |  |  | 98,235 |  |  | 2,678 |  |  | 100,913
Asset-backed securities |  |  | - |  |  | 140,385 |  |  | - |  |  | 140,385
Collateralized loan obligations |  |  | - |  |  | 67,949 |  |  | - |  |  | 67,949
Loans held-for-sale |  |  | - |  |  | 5,440 |  |  | - |  |  | 5,440
Mortgage servicing rights |  |  | - |  |  | - |  |  | 6,528 |  |  | 6,528
Other assets (Interest rate swap agreements) |  |  | - |  |  | 385 |  |  | - |  |  | 385
Other assets (Mortgage banking derivatives) |  |  | - |  |  | 319 |  |  | - |  |  | 319
Total |  | $ | - |  | $ | 551,345 |  | $ | 29,554 |  | $ | 580,899
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Other liabilities (Interest rate swap agreements, including risk participation agreements) |  | $ | - |  | $ | 1,843 |  | $ | - |  | $ | 1,843
Total |  | $ | - |  | $ | 1,843 |  | $ | - |  | $ | 1,843
|  | December 31, 2016
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies mortgage-backed |  | $ | - |  | $ | 41,534 |  | $ | - |  | $ | 41,534
States and political subdivisions |  |  | - |  |  | 46,477 |  |  | 22,226 |  |  | 68,703
Corporate bonds |  |  | - |  |  | 10,630 |  |  | - |  |  | 10,630
Collateralized mortgage obligations |  |  | - |  |  | 167,808 |  |  | 3,119 |  |  | 170,927
Asset-backed securities |  |  | - |  |  | 138,407 |  |  | - |  |  | 138,407
Collateralized loan obligations |  |  | - |  |  | 101,637 |  |  | - |  |  | 101,637
Loans held-for-sale |  |  | - |  |  | 4,918 |  |  | - |  |  | 4,918
Mortgage servicing rights |  |  | - |  |  | - |  |  | 6,489 |  |  | 6,489
Other assets (Interest rate swap agreements) |  |  | - |  |  | 673 |  |  | - |  |  | 673
Other assets (Mortgage banking derivatives) |  |  | - |  |  | 287 |  |  | - |  |  | 287
Total |  | $ | - |  | $ | 512,371 |  | $ | 31,834 |  | $ | 544,205
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Other liabilities (Interest rate swap agreements, including risk participation agreements) |  | $ | - |  | $ | 1,667 |  | $ | - |  | $ | 1,667
Total |  | $ | - |  | $ | 1,667 |  | $ | - |  | $ | 1,667
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis |
|  | Six Months Ended June 30, 2017
|  | Securities available-for-sale |  |  |
|  | Collateralized |  | States and |  | Mortgage
|  | Mortgage |  | Political |  | Servicing
|  | Obligation |  | Subdivisions |  | Rights
Beginning balance January 1, 2017 |  | $ | 3,119 |  | $ | 22,226 |  | $ | 6,489
Total gains or losses |  |  |  |  |  |  |  |  |
Included in earnings (or changes in net assets) |  |  | 23 |  |  | - |  |  | (280)
Included in other comprehensive income |  |  | (1) |  |  | (289) |  |  | -
Purchases, issuances, sales, and settlements |  |  |  |  |  |  |  |  |
Purchases |  |  | - |  |  | 10,456 |  |  | -
Issuances |  |  | - |  |  | - |  |  | 601
Settlements |  |  | (463) |  |  | (12,045) |  |  | (282)
Ending balance June 30, 2017 |  | $ | 2,678 |  | $ | 20,348 |  | $ | 6,528
|  | Six Months Ended June 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) |  |  | - |  |  | (1,464)
Included in other comprehensive income |  |  | 9 |  |  | -
Purchases, issuances, sales, and settlements |  |  |  |  |  |
Issuances |  |  | - |  |  | 625
Settlements |  |  | (78) |  |  | (310)
Ending balance June 30, 2016 |  | $ | - |  | $ | 4,698
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 June 30, 2017:
|  |  |  |  |  |  |  |  |  |  | Weighted
Measured at fair value |  |  |  |  |  |  | Unobservable |  |  |  | Average
on a recurring basis: |  | Fair Value |  | Valuation Methodology |  | Inputs |  | Range of Input |  | of Inputs
Mortgage servicing rights |  | $ | 6,528 |  | Discounted Cash Flow |  | Discount Rate |  | 10.0 - 206.3% |  | 10.2 | %
|  |  |  |  |  |  | Prepayment Speed |  | 7.0 - 68.3% |  | 10.0 | %
The following table and commentary presents quantitative and qualitative information about Level 3 fair value measurements as of December 31, 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 |  | $ | 6,489 |  | Discounted Cash Flow |  | Discount Rate |  | 10.0 - 17.0% |  | 10.2 | %
|  |  |  |  |  |  | Prepayment Speed |  | 6.5 - 77.8% |  | 9.6 | %
In addition to the above, Level 3 fair value measurement included $20.3 million for state and political subdivisions representing various local municipality securities and $2.7 million of collateralized mortgage obligations at June 30, 2017. Both of these were classified as securities available-for-sale, and were valued using a discount based on market spreads of similar assets, but the liquidity premium was an unobservable input. The state and political subdivisions securities balance in Level 3 fair value at June 30, 2016, was zero; the securities were transferred to Level 3 in the fourth quarter of 2016. Given the small dollar amount and size of the municipality involved, this is categorized as Level 3 based on the payment stream received by the Company from the municipality. That payment stream is otherwise an unobservable input.
Schedule of assets measured at fair value on a nonrecurring basis |
|  | June 30, 2017
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Impaired loans 1 |  | $ | - |  | $ | - |  | $ | 142 |  | $ | 142
Other real estate owned, net 2 |  |  | - |  |  | - |  |  | 11,724 |  |  | 11,724
Total |  | $ | - |  | $ | - |  | $ | 11,866 |  | $ | 11,866
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 and a valuation allowance of $98,000 resulting in a decrease of specific allocations within the allowance for loan losses of $705,000 for the six months ended June 30, 2017. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $11.7 million, which is made up of the outstanding balance of $21.6 million, net of a valuation allowance of $8.3 million and participations of $1.6 million, at June 30, 2017.
|  | December 31, 2016
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Impaired loans 1 |  | $ | - |  | $ | - |  | $ | - |  | $ | -
Other real estate owned, net 2 |  |  | - |  |  | - |  |  | 11,916 |  |  | 11,916
Total |  | $ | - |  | $ | - |  | $ | 11,916 |  | $ | 11,916
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 and a valuation allowance of $1.0 million, resulting in an increase of specific allocations within the allowance for loan losses of $1.0 million for the year ended December 31, 2016. 2 OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $11.9 million, which is made up of the outstanding balance of $23.5 million, net of a valuation allowance of $10.0 million and participations of $1.6 million, at December 31, 2016.

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- 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. + References No definition available. + Details
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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 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258 + Details
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- Definition 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 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19190-110258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258 + Details
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- Definition 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 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19190-110258 + Details
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