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Fair Value Measurement | 9 Months Ended
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Sep. 30, 2015
Fair Value Disclosures [Abstract] |
Fair Value Measurement | (14) Fair Value Measurement The Company uses a fair value hierarchy to measure fair value. This hierarchy describes three levels of inputs that may be used to measure fair value. Level 1: Quoted prices for identical assets in active markets that are identifiable on the measurement date; Level 2: Significant other observable inputs, such as quoted prices for similar assets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data; Level 3: Significant unobservable inputs that reflect the Company’s own view about the assumptions that market participants would use in pricing an asset. Debt securities: The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Equity securities: The Company’s equity securities are not actively traded in an open market. The fair values of these equity securities available for sale is determined by using market data inputs for similar securities that are observable (Level 2 inputs). The fair value of the swap asset/liability: The fair value of the swap asset and liability is based on an external derivative model using data inputs as of the valuation date and classified Level 2. Impaired loans: The fair values of impaired loans are determined using the fair values of collateral for collateral dependent loans, or discounted cash flows. The Company uses independent appraisals, discounted cash flow models and other available data to estimate the fair value of collateral (Level 3 inputs). Other real estate owned: The fair value of other real estate owned is determined using the fair value of collateral. The Company uses appraisals and other available data to estimate the fair value of collateral (Level 3 inputs). The appraised values are discounted to represent an estimated value in a distressed sale. Additionally, estimated costs to sell the property are used to further adjust the value. Assets measured at fair value are summarized below.
|  | Fair Value Measurements at September 30, 2015 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 |  | $ | — |  |  | $ | 39,492 |  |  | $ | — |
Obligations of states and political subdivisions |  |  | — |  |  |  | 92,379 |  |  |  | — |
Mortgage-backed securities in government sponsored entities |  |  | — |  |  |  | 66,197 |  |  |  | — |
Equity securities in financial institutions |  |  | — |  |  |  | 587 |  |  |  | — |
Fair value of swap asset |  |  | — |  |  |  | 2,379 |  |  |  | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Fair value of swap liability |  |  | — |  |  |  | 2,379 |  |  |  | — |
Assets measured at fair value on a nonrecurring basis: |  |  |  |  |  |  |  |  |  |  |  |
Impaired loans |  | $ | — |  |  | $ | — |  |  | $ | 7,142 |
Other real estate owned |  |  | — |  |  |  | — |  |  |  | 494 |
|  | Fair Value Measurements at December 31, 2014 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 |  | $ | — |  |  | $ | 42,902 |  |  | $ | — |
Obligations of states and political subdivisions |  |  | — |  |  |  | 88,021 |  |  |  | — |
Mortgage-backed securities in government sponsored entities |  |  | — |  |  |  | 66,442 |  |  |  | — |
Equity securities in financial institutions |  |  | — |  |  |  | 540 |  |  |  | — |
Fair value of swap asset |  |  | — |  |  |  | 1,721 |  |  |  | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Fair value of swap liability |  |  | — |  |  |  | 1,721 |  |  |  | — |
Assets measured at fair value on a nonrecurring basis: |  |  |  |  |  |  |  |  |  |  |  |
Impaired loans |  | $ | — |  |  | $ | — |  |  | $ | 10,126 |
Other real estate owned |  |  | — |  |  |  | — |  |  |  | 560 |
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, 2015.
|  | Quantitative Information about Level 3 Fair Value Measurements
September 30, 2015 |  | Fair Value Estimate |  |  | Valuation Technique |  | Unobservable Input |  | Range
Impaired loans |  | $ | 7,142 |  |  | Appraisal of collateral |  | Appraisal adjustments |  | 10% - 30%
|  |  |  |  |  |  |  | Liquidation expense |  | 0% - 10%
|  |  |  |  |  |  |  | Holding period |  | 0 -30 months
|  |  |  |  |  | Discounted cash flows |  | Discount rates |  | 3.8% - 8.0%
Other real estate owned |  | $ | 494 |  |  | 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, 2014.
|  | Quantitative Information about Level 3 Fair Value Measurements
December 31, 2014 |  | Fair Value Estimate |  |  | Valuation Technique |  | Unobservable Input |  | Range
Impaired loans |  | $ | 10,126 |  |  | Appraisal of collateral |  | Appraisal adjustments |  | 10% - 30%
|  |  |  |  |  |  |  | Liquidation expense |  | 0% - 10%
|  |  |  |  |  |  |  | Holding period |  | 0 -30 months
|  |  |  |  |  | Discounted cash flows |  | Discount rates |  | 3.8% - 8.0%
Other real estate owned |  | $ | 560 |  |  | Appraisal of collateral |  | Appraisal adjustments |  | 10% - 30%
|  |  |  |  |  |  |  | Liquidation expense |  | 0% - 10%
The carrying amount and fair values of financial instruments are as follows.
September 30, 2015 |  | Carrying Amount |  |  | Total Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 33,619 |  |  | $ | 33,619 |  |  | $ | 33,619 |  |  | $ | — |  |  | $ | — |
Securities available for sale |  |  | 198,655 |  |  |  | 198,655 |  |  |  | — |  |  |  | 198,655 |  |  |  | — |
Other securities |  |  | 13,324 |  |  |  | 13,324 |  |  |  | 13,324 |  |  |  | — |  |  |  | — |
Loans, held for sale |  |  | 1,223 |  |  |  | 1,223 |  |  |  | 1,223 |  |  |  | — |  |  |  | — |
Loans, net of allowance for loan losses |  |  | 985,515 |  |  |  | 991,870 |  |  |  | — |  |  |  | — |  |  |  | 991,870 |
Bank owned life insurance |  |  | 19,987 |  |  |  | 19,987 |  |  |  | 19,987 |  |  |  | — |  |  |  | — |
Accrued interest receivable |  |  | 4,880 |  |  |  | 4,880 |  |  |  | 4,880 |  |  |  | — |  |  |  | — |
Fair value swap asset |  |  | 2,379 |  |  |  | 2,379 |  |  |  | — |  |  |  | 2,379 |  |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonmaturing deposits |  |  | 839,822 |  |  |  | 839,822 |  |  |  | 839,822 |  |  |  | — |  |  |  | — |
Time deposits |  |  | 216,137 |  |  |  | 216,839 |  |  |  | — |  |  |  | — |  |  |  | 216,839 |
Short-term FHLB advances |  |  | 54,700 |  |  |  | 54,700 |  |  |  | 54,700 |  |  |  | — |  |  |  | — |
Long-term FHLB advances |  |  | 17,500 |  |  |  | 17,644 |  |  |  | — |  |  |  | — |  |  |  | 17,644 |
Securities sold under agreement to repurchase |  |  | 20,887 |  |  |  | 20,887 |  |  |  | 20,887 |  |  |  | — |  |  |  | — |
Subordinated debentures |  |  | 29,427 |  |  |  | 24,949 |  |  |  | — |  |  |  | — |  |  |  | 24,949 |
Accrued interest payable |  |  | 152 |  |  |  | 152 |  |  |  | 152 |  |  |  | — |  |  |  | — |
Fair value swap liability |  |  | 2,379 |  |  |  | 2,379 |  |  |  | — |  |  |  | 2,379 |  |  |  | — |
December 31, 2014 |  | Carrying Amount |  |  | Total Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 29,858 |  |  | $ | 29,858 |  |  | $ | 29,858 |  |  | $ | — |  |  | $ | — |
Securities available for sale |  |  | 197,905 |  |  |  | 197,905 |  |  |  | — |  |  |  | 197,905 |  |  |  | — |
Other securities |  |  | 12,586 |  |  |  | 12,586 |  |  |  | 12,586 |  |  |  | — |  |  |  | — |
Loans, held for sale |  |  | 2,410 |  |  |  | 2,410 |  |  |  | 2,410 |  |  |  | — |  |  |  | — |
Loans, net of allowance for loan losses |  |  | 900,589 |  |  |  | 908,118 |  |  |  | — |  |  |  | — |  |  |  | 908,118 |
Bank owned life insurance |  |  | 19,637 |  |  |  | 19,637 |  |  |  | 19,637 |  |  |  | — |  |  |  | — |
Accrued interest receivable |  |  | 3,852 |  |  |  | 3,852 |  |  |  | 3,852 |  |  |  | — |  |  |  | — |
Fair value swap asset |  |  | 1,721 |  |  |  | 1,721 |  |  |  | — |  |  |  | 1,721 |  |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonmaturing deposits |  |  | 748,948 |  |  |  | 748,948 |  |  |  | 748,948 |  |  |  | — |  |  |  | — |
Time deposits |  |  | 219,970 |  |  |  | 221,263 |  |  |  | — |  |  |  | — |  |  |  | 221,263 |
Short-term FHLB advances |  |  | 42,700 |  |  |  | 42,700 |  |  |  | 42,700 |  |  |  | — |  |  |  | — |
Long-term FHLB advances |  |  | 22,500 |  |  |  | 22,699 |  |  |  | — |  |  |  | — |  |  |  | 22,699 |
Securities sold under agreement to repurchase |  |  | 21,613 |  |  |  | 21,613 |  |  |  | 21,613 |  |  |  | — |  |  |  | — |
Subordinated debentures |  |  | 29,427 |  |  |  | 24,688 |  |  |  | — |  |  |  | — |  |  |  | 24,688 |
Accrued interest payable |  |  | 126 |  |  |  | 126 |  |  |  | 126 |  |  |  | — |  |  |  | — |
Fair value swap liability |  |  | 1,721 |  |  |  | 1,721 |  |  |  | — |  |  |  | 1,721 |  |  |  | — |
Cash and due from financial institutions: The carrying amounts for cash and due from financial institutions approximate fair value because they have original maturities of less than 90 days and do not present unanticipated credit concerns. Securities available for sale: The fair value of securities are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). For equity securities, management uses market information related to the value of similar institutions to determine the fair value (Level 2 inputs). Other securities: The carrying value of regulatory stock approximates fair value based on applicable redemption provisions. Loans, held-for-sale: Loans held for sale are priced individually at market rates on the day that the loan is locked for commitment to an investor. Because the holding period of such loans is typically short, the carrying value generally approximates the fair value at the time the commitment is received. All loans in the held-for-sale account conform to Fannie Mae underwriting guidelines, with specific intent of the loan being purchased by an investor at the predetermined rate structure. Loans, net of allowance for loan losses: Fair values for loans, other than impaired, are estimated for portfolios of loans with similar financial characteristics. The fair value of performing loans has been estimated by discounting expected future cash flows of the underlying portfolios. The discount rates used in these calculations are generally derived from the treasury yield curve and are calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate inherent in the loan. The estimated maturity is based on the Company’s historical experience with repayments for each loan classification. Changes in these significant unobservable inputs used in discounted cash flow analysis, such as the discount rate or prepayment speeds, could lead to changes in the underlying fair value. Bank owned life insurance: The carrying value of bank owned life insurance approximates the fair value based on applicable redemption provisions. Accrued interest receivable and payable and securities sold under agreements to repurchase: The carrying amounts for accrued interest receivable, accrued interest payable and securities sold under agreements to repurchase approximate fair value because they are generally received or paid in 90 days or less and do not present unanticipated credit concerns. Deposits: The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings and NOW accounts, and money market accounts, is equal to the amount payable on demand. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the current market rates currently offered for deposits of similar remaining maturities. The deposits’ fair value estimates do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market, commonly referred to as the core deposit intangible. Federal Home Loan Bank (“FHLB”) advances: Rates available to the Company for borrowed funds with similar terms and remaining maturities are used to estimate the fair value of borrowed funds. Subordinated debentures: The fair value of subordinated debentures is based on the discounted value of contractual cash flows of the underlying debt agreements. The discount rate is estimated using the current rate for the borrowing from the FHLB with the most similar terms. Fair value swap asset and liability: The fair value of the swap asset and liability is based on an external derivative model using data inputs as of the valuation date.

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- 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 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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