Fair Value Measurements and Fair Values of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Financial Assets Measured at Fair Value on Recurring Basis

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2016 and December 31, 2015 were as follows:


Description	Balance		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In thousands)
June 30, 2016:
U.S. Government agency securities	$	2,263	$	—	$	2,263	$	—
State and municipal		45,183	$	—		45,183		—
U.S. Government agencies and sponsored enterprises (GSEs) – residential:
Mortgage-backed securities		16,373		—		16,373		—
Corporate debt obligations		10,254		—		10,254		—
Equity securities, financial services		180		180		—		—

Securities available-for- sale	$	74,253	$	180	$	74,073	$	—

December 31, 2015:
U.S. Treasuries	$	103	$	—	$	103	$	—
U.S. Government agency securities		4,737	$	—		4,737		—
State and municipal		34,770		—		34,770		—
U.S. Government agencies and sponsored enterprises (GSEs) – residential:
Mortgage-backed securities		26,023		—		26,023		—
Collateralized mortgage obligations (CMOs)		1,773		—		1,773		—
Corporate debt obligations		7,945		—		7,945		—
Equity securities, financial services		499		499		—		—

Securities available-for- sale	$	75,850	$	499	$	75,351	$	—

Summary of Assets Measured at Estimated Fair Value on Nonrecurring Basis

A summary of assets at June 30, 2016 and December 31, 2015, measured at estimated fair value on a nonrecurring basis follows:


	Level 1		Level 2		Level 3		Total		Total Gains/(Losses)
	(In thousands)
June 30, 2016:
Loans held for sale	$	—	$	318	$	—	$	318	$	—
Other real estate owned		—		842		—		842		—
Impaired loans, net of related allowance		—		421		—		421		—

Total	$	—	$	1,581	$	—	$	1,581	$	—


	Level 1		Level 2		Level 3		Total		Total Gains/(Losses)
	(In thousands)
December 31, 2015:
Loans held for sale	$	—	$	1,094	$	—	$	1,094	$	—
Other real estate owned		—		885		—		885		(220	)
Impaired loans, net of related allowance		—		316		93		409		—

Total	$	—	$	2,295	$	93	$	2,388	($	220	)

Additional Quantitative Information about Assets Measured at Fair Value on Nonrecurring Basis

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs have been used to determine fair value (in thousands):

There were no Level 3 inputs at June 30, 2016.


December 31, 2015	Fair Value Estimate		Valuation Technique	Unobservable Input	Range
Inventory	$	93	Estimated salvage ⁽¹⁾	Salvage valuation and liquidation adjustments⁽²⁾	88% - 90%

⁽¹⁾	Fair value is generally determined through estimated values of the underlying collateral.

⁽²⁾	Values may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and adjustments are presented as a percent of the original inventory value.

Estimated Fair Values of Riverview's Financial Instruments

The estimated fair values of the Company’s financial instruments at June 30, 2016 and December 31, 2015 are presented as follows:

Fair Value Measurements at June 30, 2016 Using:

(In thousands)

Carrying
Amount

Fair Value

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Financial assets:

Cash and cash equivalents

14,799

—

Investment securities

74,253

180

74,073

—

Mortgage loans held for sale

318

—

318

—

Loans, net

394,884

398,827

—

398,827

—

Accrued interest receivable

1,586

—

Restricted investments in bank stocks

588

—

588

Financial liabilities:

Deposits

461,447

467,865

—

467,865

—

Short-term borrowings

4,069

4,070

—

4,070

—

Long-term borrowings

11,335

11,317

—

11,317

—

Accrued interest payable

221

—

Off balance sheet financial instruments

—


			Fair Value Measurements at December 31, 2015 Using:
(In thousands)	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	21,697	$	21,697	$	21,697	$	—	$	—
Interest-bearing time deposits		991		991		991		—		—
Investment securities		75,850		75,850		499		75,351		—
Mortgage loans held for sale		1,094		1,094		—		1,094		—
Loans, net		405,480		411,521		—		411,428		93
Accrued interest receivable		1,594		1,594		1,594		—		—
Restricted investments in bank stocks		2,315		2,315		—		—		2,315
Financial liabilities:
Deposits		448,342		441,413		—		441,413		—
Short-term borrowings		42,275		42,275		—		42,275		—
Long-term borrowings		9,350		9,343		—		9,343		—
Accrued interest payable		236		236		236		—		—
Off balance sheet financial instruments		—		—		—		—		—