XML 27 R15.htm IDEA: XBRL DOCUMENT
v3.10.0.1

FAIR VALUE MEASUREMENTS | 9 Months Ended
--- | ---
Sep. 30, 2018
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | NOTE 7 – FAIR VALUE MEASUREMENTS The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techn iques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest prior ity to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabili ties that the reporting entity has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quote d prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rate s, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from, or corroborated, by market data by correlation or other means. Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Assets and Liabilities Measured at Fair Value on a Recurring Basis Securities Available for Sale. U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. Other securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer q uotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, credit information and the bond’s terms and conditions, among other things. In general, the Company does not purchase securities that have a compl icated structure. The Company’s entire portfolio consists of traditional investments, nearly all of which are U.S. Treasury obligations, federal agency bullet or mortgage pass-through securities, or general obligation or revenue based municipal bonds. Pr icing for such instruments is easily obtained. Quarterly, the Company will validate, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models. Fair Value Swap. The Company entered into a stand-alone derivative contract with the purchaser of its Visa Class B shares. The valuation represents the amount due and payable to the counterparty based upon the revised share conversion rate, if any, duri ng the period. At September 30, 2018, there were no amounts payable. A summary of fair values for assets and liabilities consisted of the following:
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total Fair
(Dollars in Thousands) | Inputs |  | Inputs |  | Inputs |  | Value
September 30, 2018 |  |  |  |  |  |  |  |  |  |  |
ASSETS: |  |  |  |  |  |  |  |  |  |  |
Securities Available for Sale: |  |  |  |  |  |  |  |  |  |  |
| U.S. Government Treasury | $ | 268,113 |  | $ | - |  | $ | - |  | $ | 268,113
| U.S. Government Agency |  | - |  |  | 153,091 |  |  | - |  |  | 153,091
| States and Political Subdivisions |  | - |  |  | 53,839 |  |  | - |  |  | 53,839
| Mortgage-Backed Securities |  | - |  |  | 972 |  |  | - |  |  | 972
| Equity Securities |  | - |  |  | 8,228 |  |  | - |  |  | 8,228
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |
ASSETS: |  |  |  |  |  |  |  |  |  |  |
Securities Available for Sale: |  |  |  |  |  |  |  |  |  |  |
| U.S. Government Treasury | $ | 235,341 |  | $ | - |  | $ | - |  | $ | 235,341
| U.S. Government Agency |  | - |  |  | 144,644 |  |  | - |  |  | 144,644
| States and Political Subdivisions |  | - |  |  | 91,157 |  |  | - |  |  | 91,157
| Mortgage-Backed Securities |  | - |  |  | 1,185 |  |  | - |  |  | 1,185
| Equity Securities |  | - |  |  | 8,584 |  |  | - |  |  | 8,584
Assets Measured at Fair Value on a Non-Recurring Basis Certain assets are measured at fair value on a non-recurring basis (i.e., the assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances). An example would be assets exhibiting evidence of impairment. The following is a description of valuation methodologies used for assets measured on a non-recurring basis. Impaired Loans. Impairment for collateral dependent loans is measured using the fair value of the collateral less selling costs. The fair value of collateral is determined by an independent valuation or professional appraisal in conformance with banking regulations. Collateral values are estimated using Level 3 inputs due to the volatility in the real estate market, and the judgmen t and estimation involved in the real estate appraisal process. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly. Valuation techniques are consistent with those techniques applied in prior periods. Impaired collateral dependent loans had a carrying value of $6.3 million with a valuation allowance of $0.8 million at September 30, 2018 and $6.1 million and $1.1 million, respectively, at December 31, 2017. Loans Held for Sale. These loans are carried at the lower of cost or fair value and are adjusted to fair value on a non-recurring basis. Fair value is based on observable markets rates for comparable loan products, which is considered a Level 2 fair value measurement. Othe r Real Estate Owned. During the first nine months of 2018, certain foreclosed assets, upon initial recognition, were measured and reported at fair value through a charge-off to the allowance for loan losses based on the fair value of the forec losed asset less estimated cost to sell. The fair value of the foreclosed asset is determined by an independent valuation or professional appraisal in conformance with banking regulations. On an ongoing basis, we obtain updated appraisals on foreclosed a ssets and realize valuation adjustments as necessary. The fair value of foreclosed assets is estimated using Level 3 inputs due to the judgment and estimation involved in the real estate valuation process. Assets and Liabilities Disclosed at Fair Value The Company is required to disclose the estimated fair value of financial instruments, both assets and liabilities, for which it is practical to estimate fair value and the following is a description of valuation methodologies used for those assets and l iabilities. Cash and Short-Term Investments. The carrying amount of cash and short-term investments is used to approximate fair value, given the short time frame to maturity and as such assets do not present unanticipated credit concerns. Securities He ld to Maturity. Securities held to maturity are valued in accordance with the methodology previously noted in this footnote under the caption “Assets and Liabilities Measured at Fair Value on a Recurring Basis – Securities Available for Sale”. Loans. The loan portfolio is segregated into categories and the fair value of each loan category is calculated using present value techniques based upon projected cash flows and estimated discount rates. For values reported prior to 2018, the discount rates use d to projecting cash flows reflected the credit and interest rate risks inherent in each loan category. The calculated present values are then reduced by an allocation of the allowance for loan losses against each respective loan category. Pursuant to the adoption of ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, for values reported for the 2018 period, fair value reflects the incorporation of a liquidity discount to meet the objective of “exit price” valuation. Deposits. The fair value of Noninterest Bearing Deposits, NOW Accounts, Money Market Accounts and Savings Accounts are the amounts payable on demand at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using prese nt value techniques and rates currently offered for deposits of similar remaining maturities. Subordinated Notes Payable. The fair value of each note is calculated using present value techniques, based upon projected cash flows and estimated discount rat es as well as rates being offered for similar obligations. Short-Term and Long-Term Borrowings. The fair value of each note is calculated using present value techniques, based upon projected cash flows and estimated discount rates as well as rates being offered for similar debt. A summary of estimated fair values of significant financial instruments consisted of the following:
|  | September 30, 2018
|  | Carrying |  | Level 1 |  | Level 2 |  | Level 3
(Dollars in Thousands) |  | Value |  | Inputs |  | Inputs |  | Inputs
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 48,423 |  | $ | 48,423 |  | $ | - |  | $ | -
Short-Term Investments |  |  | 26,839 |  |  | 26,839 |  |  | - |  |  | -
Investment Securities, Available for Sale |  |  | 484,243 |  |  | 268,113 |  |  | 216,130 |  |  | -
Investment Securities, Held to Maturity |  |  | 227,923 |  |  | 34,401 |  |  | 189,130 |  |  | -
Equity Securities(1) |  |  | 3,600 |  |  | - |  |  | 3,600 |  |  | -
Loans Held for Sale |  |  | 8,297 |  |  | - |  |  | 8,297 |  |  | -
Loans, Net of Allowance for Loan Losses |  |  | 1,759,535 |  |  | - |  |  | - |  |  | 1,723,355
LIABILITIES: |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 2,381,216 |  | $ | - |  | $ | 2,379,106 |  | $ | -
Short-Term Borrowings |  |  | 16,644 |  |  | - |  |  | 16,644 |  |  | -
Subordinated Notes Payable |  |  | 52,887 |  |  | - |  |  | 41,575 |  |  | -
Long-Term Borrowings |  |  | 12,456 |  |  | - |  |  | 12,330 |  |  | -
|  | December 31, 2017
|  | Carrying |  | Level 1 |  | Level 2 |  | Level 3
(Dollars in Thousands) |  | Value |  | Inputs |  | Inputs |  | Inputs
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 58,419 |  | $ | 58,419 |  | $ | - |  | $ | -
Short-Term Investments |  |  | 227,023 |  |  | 227,023 |  |  | - |  |  | -
Investment Securities, Available for Sale |  |  | 480,911 |  |  | 235,341 |  |  | 245,570 |  |  | -
Investment Securities, Held to Maturity |  |  | 216,679 |  |  | 97,815 |  |  | 117,192 |  |  | -
Loans Held for Sale |  |  | 4,817 |  |  | - |  |  | 4,817 |  |  | -
Loans, Net of Allowance for Loan Losses |  |  | 1,640,185 |  |  | - |  |  | - |  |  | 1,625,310
LIABILITIES: |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 2,469,877 |  | $ | - |  | $ | 2,382,818 |  | $ | -
Short-Term Borrowings |  |  | 7,480 |  |  | - |  |  | 7,482 |  |  | -
Subordinated Notes Payable |  |  | 52,887 |  |  | - |  |  | 41,718 |  |  | -
Long-Term Borrowings |  |  | 13,967 |  |  | - |  |  | 14,081 |  |  | -
(1) Not readily marketable securiti es - reflected in other assets. All non-financial instruments are excluded from the above table. The disclosures also do not include goodwill. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration