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Note 21 - Disclosures Regarding Fair Value

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

21. Disclosures Regarding Fair 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).

		June 30, 2015
		Level 1				Level 2				Level 3				Total
Assets
Trading account assets		$	1,942			$	8,148			$	-			$	10,090
Investment securities available for sale
U.S. agency			-				3,203				-				3,203
State and municipal			-				6,477				-				6,477
Collateralized mortgage obligations (federal agencies)			-				86,713				-				86,713
Other mortgage-backed (federal agencies)			-				75,958				-				75,958
SBA loan-backed (federal agency)			17,371				13,326				-				30,697
Derivative financial instruments			-				278				-				278
Total assets measured at fair value on a recurring basis		$	19,313			$	191,985			$	2,118			$	213,416

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

		December 31, 2014
		Level 1				Level 2				Level 3				Total
Assets
Trading account assets		$	1,397			$	4,116			$	-			$	5,513
Investment securities available for sale
U.S. agency			-				3,965				-				3,965
State and municipal			572				6,160				-				6,732
Collateralized mortgage obligations (federal agencies)			-				87,774				-				87,774
Other mortgage-backed (federal agencies)			-				78,503				-				78,503
SBA loan-backed (federal agency)			19,675				14,862				-				34,537
Derivative financial instruments			-				85				-				85
Total assets measured at fair value on a recurring basis		$	21,644			$	195,465			$	-			$	217,109

Liabilities
Derivative financial instruments		$	-			$	18			$	-			$	18

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 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 June 30, 2015 or December 31, 2014.

		June 30, 2015
		Level 1				Level 2				Level 3				Total
Assets
Mortgage loans held for sale		$	-			$	3,178			$	-			$	3,178
Impaired loans			-				6,699				-				6,699
Foreclosed real estate			254				420				3,989				4,663
Total assets measured at fair value on a nonrecurring basis		$	254			$	10,297			$	3,989			$	14,540

		December 31, 2014
		Level 1				Level 2				Level 3				Total
Assets
Mortgage loans held for sale		$	-			$	1,125			$	-			$	1,125
Impaired loans			-				5,709				-				5,709
Foreclosed real estate			82				-				4,717				4,799
Total assets measured at fair value on a nonrecurring basis		$	82			$	6,834			$	4,717			$	11,633

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 the dates indicated (in thousands).

June 30, 2015		Fair value			Valuation technique	Significant unobservable inputs
Assets
Foreclosed real estate		$	3,989		Appraisals of collateral value	Adjustments to appraisal for age of comparable sales

December 31, 2014		Fair value			Valuation technique	Significant unobservable inputs
Assets
Foreclosed real estate		$	4,717		Appraisals of collateral value	Adjustments to appraisal for age of comparable sales

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

Certain of the Company’s assets and liabilities are financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following Consolidated Balance Sheet captions: cash and cash equivalents, retail repurchase agreements, FHLB advances and other borrowings.

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
June 30, 2015
Financial instruments - assets
Loans (1)		$	807,497			$	809,314

Financial instruments - liabilities
Deposits			977,038				927,037

December 31, 2014
Financial instruments - assets
Loans (1)		$	788,228			$	788,334

Financial instruments - liabilities
Deposits			928,320				885,100

(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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