Fair Value (Tables)

3 Months Ended

Mar. 31, 2016

Assets Measured at Fair Value on Recurring Basis

Assets measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at March 31, 2016 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	10,294	$	0	$	10,294	$	0
State and political subdivisions		139,095		0		139,095		0
Corporate bonds		1,149		0		1,149		0
Mortgage-backed securities-residential		190,734		0		190,720		14
Collateralized mortgage obligations		26,476		0		26,476		0
Small Business Administration		19,056		0		19,056		0
Equity securities		289		289		0		0
Total investment securities	$	387,093	$	289	$	386,790	$	14
Yield maintenance provisions	$	1,563	$	0	$	1,563	$	0
Financial Liabilities
Interest rate swaps	$	1,563	$	0	$	1,563	$	0

	Fair Value Measurements at December 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	11,106	$	0	$	11,106	$	0
State and political subdivisions		138,723		0		138,723		0
Corporate bonds		1,134		0		1,134		0
Mortgage-backed securities-residential		196,587		0		196,572		15
Collateralized mortgage obligations		27,165		0		27,165		0
Small Business Administration		19,299		0		19,299		0
Equity securities		298		298		0		0
Total investment securities	$	394,312	$	298	$	393,999	$	15
Yield maintenance provisions	$	789	$	0	$	789	$	0
Financial Liabilities
Interest rate swaps	$	789	$	0	$	789	$	0

Reconciliation for All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Three Months ended March 31,
(In Thousands of Dollars)	2016			2015
Beginning Balance	$	15		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0
Repayments		(1	)		(1	)
Acquired and/or purchased		0			0
Ending Balance	$	14		$	9

Assets Measured at Fair Value on Non-Recurring Basis

Assets measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at March 31, 2016 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	1,448	$	0	$	0	$	1,448
Commercial		252		0		0		252
1–4 family residential		42		0		0		42

	Fair Value Measurements at December 31, 2015 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	1,448	$	0	$	0	$	1,448
Commercial		1,514		0		0		1,514
1–4 family residential		42		0		0		42
Consumer		13		0		0		13

Fair Value Measurements for Financial Instruments

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods ended March 31, 2016 and December 31, 2015:

March 31, 2016	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	31	Sales Comparison	Adjustment for differences between comparable sales	(24.02%)
Commercial real estate		1,417	Quoted price for loan relationship	Offer Price	1% - 15% 8.40%
Commercial		252	Quoted price for loan relationship	Offer Price	(3.01%)
Residential		42	Sales comparison	Adjustment for differences between comparable sales	(13.49%) - 15.90% (10.65%)

December 31, 2015	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	701	Income approach	Adjustment for differences between earning multiplier	(49.42%) - 40.89% 35.33%
		747	Quoted price for loan relationship	Offer price	1.01%
Commercial		252	Quoted price for loan relationship	Offer price	(3.01%)
		1,262	Income approach	Adjustment for differences between earning multiplier	(29.77%)
Residential		42	Sales comparison	Adjustment for differences between comparable sales	(18.32%) - 24.16% (14.02%)
Consumer		13	Sales comparison	Adjustment for differences between comparable sales	(12.86%) - 11.97% (5.79%)

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously disclosed at March 31, 2016 and December 31, 2015 are as follows:

			Fair Value Measurements at March 31, 2016 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	34,619	$	19,771	$	14,848	$	0	$	34,619
Restricted stock		9,438	n/a		n/a		n/a		n/a
Loans held for sale		488		0		502		0		502
Loans, net		1,306,111		0		0		1,329,084		1,329,084
Mortgage servicing rights		482		0		482		0		482
Accrued interest receivable		5,070		0		1,663		3,407		5,070
Financial liabilities
Deposits		1,445,882		1,200,532		244,965		0		1,445,497
Short-term borrowings		175,617		0		175,617		0		175,617
Long-term borrowings		21,961		0		22,217		0		22,217
Accrued interest payable		470		27		443		0		470

			Fair Value Measurements at December 31, 2015 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	56,014	$	22,500	$	33,514	$	0	$	56,014
Restricted stock		9,384	n/a		n/a		n/a		n/a
Loans held for sale		1,769		0		1,813		0		1,813
Loans, net		1,287,887		0		0		1,296,075		1,296,075
Mortgage servicing rights		453		0		453		0		453
Accrued interest receivable		5,158		0		2,011		3,147		5,158
Financial liabilities
Deposits		1,409,047		1,164,506		241,909		0		1,406,415
Short-term borrowings		225,832		0		225,832		0		225,832
Long-term borrowings		22,153		0		22,306		0		22,306
Accrued interest payable		445		26		419		0		445