FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing observations are as follows:

Level I:	Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
Level II:	Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.
Level III:	Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

This hierarchy requires the use of observable market data when available.

The following table presents the assets reported on the balance sheet at their fair value on a recurring basis as of December 31, 2015 and 2014, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	2015
(In Thousands)	Level I		Level II		Level III		Total
Assets measured on a recurring basis:
Investment securities, available for sale:
U.S. Government and agency securities	$	—	$	3,549	$	—	$	3,549
Mortgage-backed securities	—		10,009		—		10,009
Asset-backed securities	—		1,940		—		1,940
State and political securities	—		86,555		—		86,555
Other debt securities	—		57,772		—		57,772
Financial institution equity securities	11,483		—		—		11,483
Other equity securities	4,849		—		—		4,849
Investment securities, trading:
Financial institution equity securities	73		—		—		73
Total assets measured on a recurring basis	$	16,405	$	159,825	$	—	$	176,230

	2014
(In Thousands)	Level I		Level II		Level III		Total
Assets measured on a recurring basis:
Investment securities, available for sale:
U.S. Government and agency securities	$	—	$	3,841	$	—	$	3,841
Mortgage-backed securities	—		12,697		—		12,697
Asset-backed securities	—		2,492		—		2,492
State and political securities	—		108,116		—		108,116
Other debt securities	—		89,463		—		89,463
Financial institution equity securities	9,915		—		—		9,915
Other equity securities	5,689		—		—		5,689
Total assets measured on a recurring basis	$	15,604	$	216,609	$	—	$	232,213

The following table presents the assets reported on the balance sheet at their fair value on a non-recurring basis as of December 31, 2015 and 2014, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	2015
(In Thousands)	Level I		Level II		Level III		Total
Assets measured on a non-recurring basis:
Impaired loans	$	—	$	—	$	13,779	$	13,779
Other real estate owned	—		—		1,696		1,696
Total assets measured on a non-recurring basis	$	—	$	—	$	15,475	$	15,475

	2014
(In Thousands)	Level I		Level II		Level III		Total
Assets measured on a non-recurring basis:
Impaired loans	$	—	$	—	$	15,483	$	15,483
Other real estate owned	—		—		3,241		3,241
Total assets measured on a non-recurring basis	$	—	$	—	$	18,724	$	18,724

The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques as of December 31, 2015 and 2014:

	2015
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Technique(s)	Unobservable Inputs	Range	Weighted Average
Impaired loans	$	5,696	Discounted cash flow	Temporary reduction in payment amount	0 to (70)%	(17	)%
				Probability of default	—%
	8,083		Appraisal of collateral	Appraisal adjustments (1)	0 to (20)%	(15	)%
Other real estate owned	$	1,696	Appraisal of collateral (1)

	2014
	Quantitative Information About Level III Fair Value Measurements
(In Thousands)	Fair Value		Valuation Technique(s)	Unobservable Inputs	Range	Weighted Average
Impaired loans	$	4,749	Discounted cash flow	Temporary reduction in payment amount	0 to (91)%	(12	)%
				Probability of default	—%
	10,734		Appraisal of collateral	Appraisal adjustments (1)	0 to (20)%	(15	)%
Other real estate owned	$	3,241	Appraisal of collateral (1)

(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

The significant unobservable inputs used in the fair value measurement of the Company’s impaired loans using the discounted cash flow valuation technique include temporary changes in payment amounts and the probability of default.  Significant increases (decreases) in payment amounts would result in significantly higher (lower) fair value measurements.  The probability of default is 0% for impaired loans using the discounted cash flow valuation technique because all defaulted impaired loans are valued using the appraisal of collateral valuation technique.

The significant unobservable input used in the fair value measurement of the Company’s impaired loans using the appraisal of collateral valuation technique include appraisal adjustments, which are adjustments to appraisals by management for qualitative factors such as economic conditions and estimated liquidation expenses.  The significant unobservable input used in the fair value measurement of the Company’s other real estate owned are the same inputs used to value impaired loans using the appraisal of collateral valuation technique.