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Note 21 - Disclosures Regarding Fair Value

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

21.

Disclosures RegardingFair Value

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize assets and liabilities measured at fair value on a recurring basis at the dates indicated aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands).

		September 30, 2014
		Level 1				Level 2				Level 3				Total
Assets
Trading account assets		$	655			$	4,803			$	-			$	5,458
Investment securities available for sale
U.S. agency			-				1,925				-				1,925
State and municipal			-				5,763				-				5,763
Collateralized mortgage obligations (federal agencies)			1,079				89,731				-				90,810
Other mortgage-backed (federal agencies)			1,300				78,434				-				79,734
SBA loan-backed (federal agency)			20,825				15,525				-				36,350
Derivative financial instruments			-				9				-				9
Total assets measured at fair value on a recurring basis		$	23,859			$	196,190			$	-			$	220,049

Liabilities
Derivative financial instruments		$	-			$	2			$	-			$	2

		December 31, 2013
		Level 1				Level 2				Level 3				Total
Assets
Trading account assets		$	1,347			$	3,771			$	-			$	5,118
Investment securities available for sale
State and municipal			-				7,460				-				7,460
Collateralized mortgage obligations (federal agencies)			-				93,132				-				93,132
Other mortgage-backed (federal agencies)			1,188				74,832				-				76,020
SBA loan-backed (federal agency)			20,457				17,314				-				37,771
Derivative financial instruments			-				204				-				204
Total assets measured at fair value on a recurring basis		$	22,992			$	196,713			$	-			$	219,705

Liabilities
Derivative financial instruments		$	-			$	7			$	-			$	7

For disclosure regarding the fair value of Pension Plan assets, see Note 16, Benefit Plans.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

For financial assets measured at fair value on a nonrecurring basis that are recorded in the Consolidated Balance Sheets, the following tables summarize the level of valuation assumptions used to determine fair value of the related individual assets at the dates indicated (in thousands). There were no liabilities measured at fair value on a nonrecurring basis at September 30, 2014 or December 31, 2013.

		September 30, 2014
		Level 1				Level 2				Level 3				Total
Assets
Mortgage loans held for sale		$	-			$	268			$	-			$	268
Impaired loans			-				5,549				-				5,549
Foreclosed real estate			414				508				5,401				6,323
Long-lived assets held for sale			-				333				99				432
Total assets measured at fair value on a nonrecurring basis		$	414			$	6,658			$	5,500			$	12,572

		December 31, 2013
		Level 1				Level 2				Level 3				Total
Assets
Mortgage loans held for sale		$	-			$	1,722			$	-			$	1,722
Impaired loans			-				5,588				25				5,613
Foreclosed real estate			34				31				6,595				6,660
Long-lived assets held for sale			-				-				685				685
Total assets measured at fair value on a nonrecurring basis		$	34			$	7,341			$	7,305			$	14,680

Level 3 Valuation Methodologies. The following table summarizes the significant unobservable inputs used in the fair value measurements for Level 3 assets measured at fair value on a nonrecurring basis at September 30, 2014 (in thousands).

		Fair value			Valuation technique		Significant unobservable inputs
Assets
Foreclosed real estate		$	5,401		Appraisals of collateral value		Adjustments to appraisal for age of comparable sales

Long-lived assets held for sale			432		Internal valuation		Appraisals and/or sales of comparable properties

Carrying Amounts and Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value

The following table summarizes the carrying amount and fair value of other financial instruments included in the Consolidated Balance Sheets at the dates indicated (in thousands) all of which are considered Level 3 fair value estimates. These fair value estimates are subject to fluctuation based on the amount and timing of expected cash flows as well as the choice of discount rate used in the present value calculation. The Company used management's best estimate of fair value. Thus, the fair values presented may not be the amounts that could be realized in an immediate sale or settlement of the instrument. In addition, any income taxes or other expenses that would be incurred in an actual sale or settlement are not taken into consideration in the fair values presented.

		Carrying amount				Fair value
September 30, 2014
Financial instruments - assets
Loans (1)		$	758,595			$	757,336

Financial instruments - liabilities
Deposits			936,289				920,135

December 31, 2013
Financial instruments - assets
Loans (1)		$	748,243			$	748,330

Financial instruments - liabilities
Deposits			907,360				896,858

(1) Includes gross loans less impaired loans for which fair value exceeds carrying value and allowance for loan losses relative to loans collectively evaluated for impairment.

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.

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