Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Information about the Company's assets and liabilities measured at fair value on a recurring basis

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated.

			Fair Value Measurements At September 30, 2014, Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-Sale Securities:
Government Agency & Government-Sponsored Entities	$	13,361	$	13,361	$	-	$	-
Mortgage Backed Securities		322,680		39,566		283,114		-
Other		485		175		310		-
Total Assets Measured at Fair Value On a Recurring Basis	$	336,526	$	53,102	$	283,424	$	-

			Fair Value Measurements At December 31, 2013, Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-Sale Securities:
Government Agency & Government-Sponsored Entities	$	28,436	$	23,394	$	5,042	$	-
Mortgage Backed Securities		324,929		-		324,929		-
Corporate Securities		49,380		8,191		41,189		-
Other		1,894		1,584		310		-
Total Assets Measured at Fair Value On a Recurring Basis	$	404,639	$	33,169	$	371,470	$	-

			Fair Value Measurements At September 30, 2013, Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-Sale Securities:
Government Agency & Government-Sponsored Entities	$	28,643	$	23,587	$	5,056	$	-
Mortgage Backed Securities		342,077		-		342,077		-
Corporate Securities		49,761		8,171		41,590		-
Other		1,284		974		310		-
Total Assets Measured at Fair Value On a Recurring Basis	$	421,765	$	32,732	$	389,033	$	-

Changes in level 3 assets measured at fair value on a recurring basis

The following table presents changes in level 3 assets measured at fair value on a recurring basis.

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2014		2013			2014		2013
Balance at Beginning of Period	$	-	$	5,612		$	-	$	5,665
Total Realized and Unrealized Gains/(Losses) Included in Income		-		-			-		-
Total Unrealized Gains/(Losses) Included in Other Comprehensive Income		-		-			-		-
Purchase of Securities		-		-			-		-
Sales, Maturities, and Calls of Securities		-		(31	)		-		(84	)
Net Transfers out of Available for Sale Securities		-		(5,581	)		-		(5,581	)
Balance at End of Period	$	-	$	-		$	-	$	-

Information about the Company's assets and liabilities measured at fair value on a non-recurring basis

The following tables present information about the Company’s impaired loans & leases and other real estate, classes of assets or liabilities that the Company carries at fair value on a non-recurring basis, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated. Not all impaired loans & leases are carried at fair value. Impaired loans & leases are only included in the following tables when their fair value is based upon an appraisal of the collateral, and if that appraisal results in a partial charge-off or the establishment of a specific reserve.

			Fair Value Measurements At September 30, 2014, Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Impaired Loans
Commercial Real Estate	$	92	$	-	$	-	$	92
Residential 1st Mortgages		526		-		-		526
Home Equity Lines and Loans		763		-		-		763
Agricultural		363		-		-		363
Commercial		3,836		-		-		3,836
Total Impaired Loans		5,580		-		-		5,580
Other Real Estate
Real Estate Construction		2,441		-		-		2,441
Agricultural Real Estate		858		-		-		858
Total Other Real Estate		3,299		-		-		3,299
Total Assets Measured at Fair Value On a Non-Recurring Basis	$	8,879	$	-	$	-	$	8,879

			Fair Value Measurements At December 31, 2013, Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Impaired Loans
Residential 1st Mortgages	$	614	$	-	$	-	$	614
Home Equity Lines and Loans		551		-		-		551
Agricultural		366		-		-		366
Commercial		820		-		-		820
Total Impaired Loans		2,351		-		-		2,351
Other Real Estate
Real Estate Construction		2,399		-		-		2,399
Agricultural Real Estate		2,212		-		-		2,212
Total Other Real Estate		4,611		-		-		4,611
Total Assets Measured at Fair Value On a Non-Recurring Basis	$	6,962	$	-	$	-	$	6,962

			Fair Value Measurements At September 30, 2013, Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets		Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Impaired Loans
Residential 1st Mortgages	$	477	$	-	$	-	$	477
Home Equity Lines and Loans		293		-		-		293
Agricultural		366		-		-		366
Commercial		228		-		-		228
Total Impaired Loans		1,364		-		-		1,364
Other Real Estate
Real Estate Construction		2,398		-		-		2,398
Agricultural Real Estate		1,268		-		-		1,268
Total Other Real Estate		3,666		-		-		3,666
Total Assets Measured at Fair Value On a Non-Recurring Basis	$	5,030	$	-	$	-	$	5,030

Quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at September 30, 2014:

(in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range, Weighted Avg.
Impaired Loans
Commercial Real Estate	$	92	Sales Comparison Approach	Adjustment for Difference Between Comparable Sales		1% -1%, 1	%
Residential 1st Mortgages	$	526	Sales Comparison Approach	Adjustment for Difference Between Comparable Sales		11% -24%, 17	%
Home Equity Lines and Loans	$	763	Sales Comparison Approach	Adjustment for Difference Between Comparable Sales		1% - 14%, 11	%
Agricultural	$	343	Income Approach	Capitalization Rate		14% - 14%, 14	%
Agricultural	$	20	Sales Comparison Approach	Adjustment for Difference Between Comparable Sales		1% -1%, 1	%
Commercial	$	3,836	Sales Comparison Approach	Adjustment for Difference Between Comparable Sales		1% - 13%, 4	%

Other Real Estate
Real Estate Construction	$	2,441	Sales Comparison Approach	Adjustment for Difference Between Comparable Sales		10% - 10%, 10	%
Agricultural Real Estate	$	858	Sales Comparison Approach	Adjustment for Difference Between Comparable Sales		10% - 10%, 10	%

- Definition

Tabular disclosure of the fair value measurement of assets 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 (loss), 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, issues, 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.

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