XML 45 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6

Fair Value of Instruments (Policies)

3 Months Ended

Mar. 31, 2013

Fair Value of Instruments [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents

The carrying amounts reported in the balance sheet for cash, cash equivalents and federal funds sold approximate their fair values. Also included in this line item are the carrying amounts of interest-bearing deposits maturing within ninety days which approximate their fair values. Fair values of other interest-bearing deposits are estimated using discounted cash flow analyses based on current rates for similar types of deposits.

Securities

Securities

Fair values for securities, excluding Federal Home Loan Bank stock, are based on quoted market price, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Other Securities

Other Securities

The carrying value of Federal Home Loan Bank stock, listed as “other securities”, approximates fair value based on the redemption provisions of the Federal Home Loan Bank.

Loans

Loans

For those variable-rate loans that re-price frequently, and with no significant change in credit risk, fair values are based on carrying values. The fair values of the fixed rate and all other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality.

Deposits - Interest Bearing, Non-interest Bearing and Time

Deposits - Interest Bearing, Non-interest Bearing and Time

The fair values disclosed for deposits with no defined maturities are equal to their carrying amounts, which represent the amount payable on demand. The carrying amounts for variable-rate, fixed term money market accounts and certificates of deposit approximate their fair value at the reporting date. Fair value for fixed-rate certificates of deposit are estimated using a discounted cash flow analysis that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Short-Term Borrowings

Short-Term Borrowings

The carrying value of short-term borrowings approximates fair values.

FHLB Advances

FHLB Advances

Fair values of FHLB advances are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rates for similar types or borrowing arrangements.

Accrued Interest Receivable and Payable

Accrued Interest Receivable and Payable

The carrying amounts of accrued interest approximate their fair values.

Dividends Payable

Dividends Payable

The carrying amounts of dividends payable approximate their fair values and are generally paid within forty days of declaration.

Off Balance Sheet Financial Instruments

Off Balance Sheet Financial Instruments

Fair values for off-balance sheet, credit related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counter- parties’ credit standing.

The estimated fair values, and related carrying or notional amounts, for on and off-balance sheet financial instruments as of March 31, 2013 and December 31, 2012 are reflected below.

		(In Thousands)
		March 2013
		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and Cash Equivalents		$	57,529			$	57,529			$	57,529			$	—			$	—
Securities - available for sale			360,821				360,821				26,239				323,333				11,249
Other Securities			4,216				4,216				—				—				4,216
Loans, net			479,484				486,768				—				—				486,768
Interest receivable			4,322				4,322				—				—				4,322
Total Assets		$	906,372			$	913,656			$	83,768			$	323,333			$	506,555
Financial Liabilities:
Interest bearing Deposits		$	411,564			$	412,512			$	—			$	—			$	412,512
Non-interest bearing Deposits			99,027				99,662				—				99,662				—
Time Deposits			261,855				263,574				—				—				263,574
Total Deposits		$	772,446			$	775,748			$	—			$	99,662			$	676,086
Short-term debt			49,087				49,087				—				—				49,087
Federal Home Loan Bank advances			7,100				6,610				—				—				6,610
Interest payable			287				287				—				—				287
Dividends payable			931				931				—				931				—
Total Liabilities		$	829,851			$	832,663			$	—			$	100,593			$	732,070

		(In Thousands)
		December 2012
		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and Cash Equivalents		$	44,092			$	44,092			$	44,092			$	—			$	—
Securities - available for sale			355,905				355,905				10,568				328,929				16,408
Other Securities			4,365				4,365				—				—				4,365
Loans, net			496,178				501,160				—				—				501,160
Interest receivable			3,603				3,603				—				—				3,603
Total Assets		$	904,143			$	909,125			$	54,660			$	328,929			$	525,536
Financial Liabilities:
Interest bearing Deposits		$	389,779			$	390,066			$	—			$	—			$	390,066
Non-interest bearing Deposits			103,966				104,529				—				104,529				—
Time Deposits			269,507				272,591				—				—				272,591
Total Deposits		$	763,252			$	767,186			$	—			$	104,529			$	662,657
Short-term debt			51,312				51,312				—				—				51,312
Federal Home Loan Bank advances			11,600				11,012				—				—				11,012
Interest payable			288				288				—				—				288
Dividends payable			931				931				—				931				—
Total Liabilities		$	827,383			$	830,729			$	—			$	105,460			$	725,269

Fair Value Measurements

Fair Value Measurements

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities in active markets that the Company has the ability to access.

Available-for-sale securities- When quoted prices are available in an active market, securities are valued using the quoted price and are classified as Level 1. The quoted prices are not adjusted.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Available-for-sale securities classified as Level 2 are valued using the prices obtained from an independent pricing service. The prices are not adjusted. Securities of obligations of state and political subdivisions are valued using a type of matrix, or grid, pricing in which securities are benchmarked against the treasury rate based on credit rating. Substantially all assumptions used by the independent pricing service are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the market place.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. Local municipals have been purchased that the Bank evaluates based on the credit strength of the underlying project such as the hospital or retirement home. The fair value is determined by valuing similar credit payment streams at similar rates.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset.

The following summarizes financial assets measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012, segregated by level or the valuation inputs within the fair value hierarchy utilized to measure fair value:

		Assets and Liabilities Measured at Fair Value on a Recurring Basis
(In Thousands) March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets-Securities Available for Sale
U.S. Treasury		$	26,239			$	—			$	—
U.S. Government agency			—				216,549				—
Mortgage-backed securities			—				49,696				—
State and local governments			—				57,088			$	11,249
Total Securities Available for Sale		$	26,239			$	323,333			$	11,249

(In Thousands) December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets-Securities Available for Sale
U.S. Treasury		$	10,568			$	—			$	—
U.S. Government agency			—				220,200				—
Mortgage-backed securities			—				53,006				—
State and local governments			—				55,723				16,408
Total Securities Available for Sale		$	10,568			$	328,929			$	16,408

Most of the Company’s available for sale securities, including any bonds issued by local municipalities, have CUSIP numbers or have similar characteristics of those in the municipal markets, making them marketable and comparable as Level 2.

The Company also has assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis. At March 31, 2013 and December 31, 2012, such assets consist primarily of impaired loans. Impaired loans categorized as Level 3 assets consist of non-homogeneous loans that are considered impaired. The Company estimates the fair value of the loans based on the present value of expected future cash flows using management’s best estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated realizable values of available collateral (typically based on outside appraisals.)

At March 31, 2013 and December 31, 2012, impaired loans categorized as Level 3 were $4.1 and $4.6 million, respectively.

The specific allocation for impaired loans was $860 and $865 thousand as of March 31, 2013 and December 31, 2012, respectively, which are accounted for in the allowance for loan losses (see Note 4).

Other real estate is reported at either the lower of the fair value of the real estate minus the estimated costs to sell the asset or the cost of the asset. The determination of fair value of the real estate relies primarily on appraisals from third parties. If the fair value of the real estate, minus the estimated costs to sell the asset, is less than the asset’s cost, the deficiency is recognized as a valuation allowance against the asset through a charge to expense. The valuation allowance is therefore increased or decreased, through charges or credits to expense, for changes in the asset’s fair value or estimated selling costs.

The following table presents impaired loans and other real estate owned as recorded at fair value on March 31, 2013 and December 31, 2012:

		Assets Measured at Fair Value on a Nonrecurring Basis at  March 31, 2013
(in Thousands)		Balance at March 31, 2013				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable  Inputs (Level 3)				Change in fair value for three-month period ended March 31, 2013
Impaired loans		$	4,144			$	—			$	—			$	4,144			$	(20	)
Other real estate owned - residential mortgages		$	817			$	—			$	—			$	817			$	—
Other real estate owned - commercial		$	1,409			$	—			$	—			$	1,409			$	—
																		$	(20	)

		Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2012
(in Thousands)		Balance at December 31, 2012				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable  Inputs (Level 3)				Change in fair value for twelve-month period ended Dec. 31, 2012
Impaired loans		$	4,591			$	—			$	—			$	4,591			$	(76	)
Other real estate owned - residential mortgages		$	783			$	—			$	—			$	783			$	(62	)
Other real estate owned commercial		$	1,526			$	—			$	—			$	1,526			$	(214	)
																		$	(352	)

The Company also has other assets, which under certain conditions, are subject to measurement at fair value. These assets include loans held for sale, bank owned life insurance, and mortgage servicing rights. The Company estimated the fair values of these assets utilizing Level 3 inputs, including, the discounted present value of expected future cash flows. At March 31, 2013 and December 31, 2012, the Company estimates that there is no impairment of these assets, with the exception of mortgage servicing rights. Mortgage servicing rights recognized impairment in one stratum with a charge of $16 thousand in 2012 to expense with the impairment remaining, however unchanged, as of March 31, 2013. Therefore, no impairment charge to other expense was required to adjust these assets to their estimated fair values.

X

- Definition

Accrued interest receivable and payable.

+ References

No definition available.

+ Details

Name:	fmao_AccruedInterestReceivableAndPayablePolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Deposits.

+ References

No definition available.

+ Details

Name:	fmao_DepositsPolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Dividends payable.

+ References

No definition available.

+ Details

Name:	fmao_DividendsPayablePolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

FHLB Advances.

+ References

No definition available.

+ Details

Name:	fmao_FhlbAdvancesPolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Loans.

+ References

No definition available.

+ Details

Name:	fmao_LoansPolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Off balance sheet financial instruments.

+ References

No definition available.

+ Details

Name:	fmao_OffBalanceSheetFinancialInstrumentsPolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Disclosure of accounting policy for other securities.

+ References

No definition available.

+ Details

Name:	fmao_OtherSecuritiesPolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Short term borrowings.

+ References

No definition available.

+ Details

Name:	fmao_ShortTermBorrowingsPolicyTextBlock
Namespace Prefix:	fmao_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Financial Reporting Release (FRR)

-Number 203

-Paragraph 02-03



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Cash

-URI http://asc.fasb.org/extlink&oid=6506951



Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Cash Equivalents

-URI http://asc.fasb.org/extlink&oid=6507016



Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 7, 8, 9, 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790



Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Technical Practice Aid (TPA)

-Number 2110

-Paragraph 6

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 1

-Article 5



Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 230

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6367179&loc=d3e4273-108586



Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 305

-SubTopic 10

-URI http://asc.fasb.org/subtopic&trid=2122427

+ Details

Name:	us-gaap_CashAndCashEquivalentsPolicyTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Details

Name:	us-gaap_FairValueDisclosuresAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Disclosure of accounting policy for fair value measurements, which may include, but is not limited to, how an entity that manages a group of financial assets and liabilities on the basis of its net exposure measures the fair value of those assets and liabilities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 35

-Paragraph 18G

-URI http://asc.fasb.org/extlink&oid=15229074&loc=SL7494712-110257

+ Details

Name:	us-gaap_FairValueMeasurementPolicyPolicyTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- Definition

Disclosure of accounting policy for investments in debt and equity securities that have readily determinable fair values (marketable securities). At a minimum, the disclosure might address accounting policies for investments classified as trading, available for sale, or held to maturity and may include how the entity determines whether impairments of available for sale or held to maturity investments are other than temporary, how the fair values of the entity's securities are determined, and the entity's accounting treatment for transfers between investment categories.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Staff Position (FSP)

-Number FAS115-1/124-1

-Paragraph 7, 8, 9, 13, 14, 15, 16, 17

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 320

-SubTopic 10

-URI http://asc.fasb.org/subtopic&trid=2196929



Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 5

-Section M



Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790



Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 942

-SubTopic 320

-Section 50

-Paragraph 5

-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62652-112803



Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 115

-Paragraph 7-16

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 2, 12

-Article 5



Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10, 11

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Name:	us-gaap_MarketableSecuritiesPolicy
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration