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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Measurements

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

		September 30, 2017
		Level 1			Level 2			Level 3			Total
Assets:
Securities available-for-sale
U.S. Treasury		$	3,990		$	-		$	-		$	3,990
U.S. government agencies			-			13,451			-			13,451
U.S. government agencies mortgage-backed			-			11,030			-			11,030
States and political subdivisions			-			216,672			12,360			229,032
Corporate bonds			-			10,577			-			10,577
Collateralized mortgage obligations			-			77,894			2,492			80,386
Asset-backed securities			-			131,759			-			131,759
Collateralized loan obligations			-			53,259			-			53,259
Loans held-for-sale			-			1,641			-			1,641
Mortgage servicing rights			-			-			6,684			6,684
Interest rate swap agreements			-			128			-			128
Mortgage banking derivatives			-			289			-			289
Total		$	3,990		$	516,700		$	21,536		$	542,226
Liabilities:
Interest rate swap agreements, including risk participation agreements		$	-		$	1,566		$	-		$	1,566
Total		$	-		$	1,566		$	-		$	1,566

		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
Interest rate swap agreements			-			673			-			673
Mortgage banking derivatives			-			287			-			287
Total		$	-		$	512,371		$	31,834		$	544,205
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

		Nine Months Ended September 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)			32			-			(354)
Included in other comprehensive income			7			(501)			-
Purchases, issuances, sales, and settlements
Purchases			-			10,994			-
Issuances			-			-			951
Settlements			(666)			(20,359)			(402)
Ending balance September 30, 2017		$	2,492		$	12,360		$	6,684

		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)
Ending balance September 30, 2016		$	-		$	5,075

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, 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

$

6,684

Discounted Cash Flow

Discount Rate

10.0 - 1576.2%

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

%

Schedule of assets measured at fair value on a nonrecurring basis

		September 30, 2017
		Level 1			Level 2			Level 3			Total
Impaired loans1		$	-		$	-		$	45		$	45
Other real estate owned, net2			-			-			9,024			9,024
Total		$	-		$	-		$	9,069		$	9,069

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 $51,000 and a valuation allowance of $6,000 resulting in a decrease of specific allocations within the allowance for loan losses of $92,000 for the nine months ended September 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 $9.0 million, which is made up of the outstanding balance of $18.7 million, net of a valuation allowance of $8.8 million and participations of $900,000 at September 30, 2017.

		December 31, 2016
		Level 1			Level 2			Level 3			Total
Impaired loans1		$	-		$	-		$	-		$	-
Other real estate owned, net2			-			-			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 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.

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

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (bbb)
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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

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-Publisher FASB
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