Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Estimated Fair Values and Related Carrying or Notional Amounts

The estimated fair values, and related carrying or notional amounts, for on and off-balance sheet financial instruments as of March 31, 2016 and December 31, 2015 are reflected below.


	(In Thousands)
	March 31, 2016
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and Cash Equivalents	$	25,908	$	25,908	$	25,908	$	—	$	—
Interest-bearing time deposits		1,960		1,960		—		1,960		—
Securities - available-for-sale		226,512		226,512		33,721		185,676		7,115
Other Securities		3,717		3,717		—		—		3,717
Loans, net		701,375		704,996		—		—		704,996
Interest receivable		4,112		4,112		—		—		4,112
Financial Liabilities:
Interest bearing Deposits	$	449,641	$	449,641	$	—	$	—	$	449,641
Non-interest bearing Deposits		163,769		163,769		—		163,769		—
Time Deposits		184,722		184,843		—		—		184,843

Total Deposits	$	798,132	$	798,253	$	—	$	163,769	$	634,484

Fed Funds purchased and Securities sold under agreement to repurchase	$	69,390	$	69,390	$	—	$	—	$	69,390
Federal Home Loan Bank advances		10,000		9,822		—		—		9,822
Interest payable		222		222		—		—		222


	(In Thousands)
	December 31, 2015
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and Cash Equivalents	$	22,018	$	22,018	$	22,018	$	—	$	—
Securities—available-for-sale		235,115		235,115		38,505		189,258		7,352
Other Securities		3,717		3,717		—		—		3,717
Loans, net		679,821		683,332		—		—		683,332
Interest receivable		3,589		3,589		—		—		3,589
Financial Liabilities:
Interest bearing Deposits	$	415,942	$	415,942	$	—	$	—	$	415,942
Non-interest bearing Deposits		171,112		171,112		—		171,112		—
Time Deposits		184,285		184,308		—		—		184,308

Total Deposits	$	771,339	$	771,362	$	—	$	171,112	$	600,250

Federal Funds Purchased and Securities Sold Under Agreement to Repurchase	$	78,815	$	78,815	$	—	$	—	$	78,815
Federal Home Loan Bank advances		10,000		9,986		—		—		9,986
Interest payable		185		185		—		—		185

Financial Assets Measured at Fair Value on Recurring Basis

The following summarizes financial assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015, 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)
	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Observable
	for Identical		Inputs		Inputs
March 31, 2016	Assets (Level 1)		(Level 2)		(Level 3)
Assets—(Securities Available-for-Sale)
U.S. Treasury	$	33,721	$	—	$	—
U.S. Government agencies		—		102,814		—
Mortgage-backed securities		—		25,147		—
State and local governments		—		57,715		7,115

Total Securities Available-for-Sale	$	33,721	$	185,676	$	7,115


	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Observable
	for Identical		Inputs		Inputs
December 31, 2015	Assets (Level 1)		(Level 2)		(Level 3)
Assets—(Securities Available-for-Sale)
U.S. Treasury	$	38,505	$	—	$	—
U.S. Government agencies		—		98,220		—
Mortgage-backed securities		—		26,324		—
State and local governments		—		64,714		7,352

Total Securities Available-for-Sale	$	38,505	$	189,258	$	7,352

Changes in the Level 3 Fair-Value Category of Which Unobservable Inputs

The following table represents the changes in the Level 3 fair-value category of which unobservable inputs are relied upon as of March 31, 2016 and March 31, 2015.


	(In Thousands)
	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	State and Local			State and Local		State and Local
	Governments			Governments		Governments
	Tax-Exempt			Taxable		Total
Balance at January 1, 2016	$	5,904		$	1,448	$	7,352
Change in Market Value		—			33		33
Payments & Maturities		(270	)		—		(270	)

Balance at March 31, 2016	$	5,634		$	1,481	$	7,115


	(In Thousands)
	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	State and Local			State and Local		State and Local
	Governments			Governments		Governments
	Tax-Exempt			Taxable		Total
Balance at January 1, 2015	$	6,638		$	1,293	$	7,931
Change in Market Value		(3	)		109		106
Payments & Maturities		(200	)		—		(200	)

Balance at March 31, 2015	$	6,435		$	1,402	$	7,837

Quantitative Information about Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements:


	Fair Value at March 31, 2016		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
State and local government	$	7,115	Discounted cash flow	Credit strength of underlying project or entity / Discount rate		0-5	%
Collateral dependent Impaired loans	$	743	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability		0-50	%
Other real estate owned—commercial	$	—	Appraisals	Discount to reflect current market		0-20	%


	Fair Value at December 31, 2015		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
State and local government	$	7,352	Discounted cash flow	Credit strength of underlying project or entity / Discount rate		0-5	%
Collateral dependent Impaired loans	$	549	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability		0-50	%
Other real estate owned—commercial	$	216	Appraisals	Discount to reflect current market		0-20	%

Impaired Loans and Other Real Estate

The following table presents impaired loans and other real estate owned as recorded at fair value on March 31, 2016 and December 31, 2015:


	Assets Measured at Fair Value on a Nonrecurring Basis at March 31, 2016
	Quoted Prices in Active
(In Thousands)	Balance at March 31, 2016		Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral dependent impaired loans	$	743	$	—	$	—	$	743
Total change in fair value							$	743


	Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2015
	Quoted Prices in Active
(In Thousands)	Balance at December 31, 2015		Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateral dependent impaired loans	$	549	$	—	$	—	$	549
Other real estate owned—commercial	$	216	$	—	$	—	$	216

Total change in fair value							$	765