Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 07, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ISABELLA BANK CORP | ||
Entity Central Index Key | 842,517 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 7,804,287 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 185,183 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents | ||
Cash and demand deposits due from banks | $ 18,810 | $ 18,058 |
Interest bearing balances due from banks | 2,759 | 1,848 |
Total cash and cash equivalents | 21,569 | 19,906 |
AFS securities (amortized cost of $572,087 in 2014 and $517,614 in 2013) | 660,136 | 567,534 |
Mortgage loans AFS | 1,187 | 901 |
Loans | ||
Commercial | 448,381 | 433,270 |
Agricultural | 115,911 | 104,721 |
Residential real estate | 251,501 | 266,155 |
Consumer | 34,699 | 32,404 |
Gross loans | 850,492 | 836,550 |
Less allowance for loan losses | 7,400 | 10,100 |
Net loans | 843,092 | 826,450 |
Premises and equipment | 28,331 | 25,881 |
Corporate owned life insurance | 26,423 | 25,152 |
Accrued interest receivable | 6,269 | 5,851 |
Equity securities without readily determinable fair values | 22,286 | 20,076 |
Goodwill and other intangible assets | 48,828 | 46,128 |
Other assets | 9,991 | 11,664 |
TOTAL ASSETS | 1,668,112 | 1,549,543 |
Deposits | ||
Noninterest bearing | 191,376 | 181,826 |
NOW accounts | 212,666 | 190,984 |
Certificates of deposit under $100 and other savings | 521,793 | 456,774 |
Certificates of deposit over $100 | 238,728 | 244,900 |
Total deposits | 1,164,563 | 1,074,484 |
Borrowed funds | 309,732 | 289,709 |
Accrued interest payable and other liabilities | 9,846 | 10,756 |
Total liabilities | 1,484,141 | 1,374,949 |
Shareholders' equity | ||
Common stock — no par value 15,000,000 shares authorized; issued and outstanding 7,741,530 shares (including 10,579 shares held in the Rabbi Trust) in 2014 and 7,723,023 shares (including 12,761 shares held in the Rabbi Trust) in 2013 | 139,198 | 138,755 |
Shares to be issued for deferred compensation obligations | 4,592 | 4,242 |
Retained earnings | 39,960 | 32,103 |
Accumulated other comprehensive income | 221 | (506) |
Total shareholders' equity | 183,971 | 174,594 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,668,112 | $ 1,549,543 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Available-for-sale securities, amortized cost | $ 654,348 | $ 561,893 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 7,799,867 | 7,776,274 |
Common stock, shares outstanding | 7,799,867 | 7,776,274 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Shares to be Issued for Deferred Compensation Obligations | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balances at Dec. 31, 2012 | $ 164,489 | $ 136,580 | $ 3,734 | $ 19,168 | $ 5,007 |
Beginning balances, shares at Dec. 31, 2012 | 7,671,846 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | 1,162 | 12,510 | (11,348) | ||
Issuance of common stock | 3,618 | $ 3,618 | |||
Issuance of common stock, shares | 149,191 | ||||
Common stock issued for deferred compensation obligations | 0 | $ 0 | 0 | ||
Common stock issued for deferred compensation obligations, shares | 0 | ||||
Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations | 0 | $ 140 | (140) | ||
Share based payment awards under equity compensation plan | 554 | 554 | |||
Common stock purchased for deferred compensation obligations | (383) | (383) | |||
Common stock repurchased pursuant to publicly announced repurchase plan | (2,375) | $ (2,375) | |||
Common stock repurchased pursuant to publicly announced repurchase plan, shares | (98,014) | ||||
Cash dividends | (6,456) | (6,456) | |||
Ending balances at Dec. 31, 2013 | 160,609 | $ 137,580 | 4,148 | 25,222 | (6,341) |
Ending balances, shares at Dec. 31, 2013 | 7,723,023 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | 19,559 | 13,724 | 5,835 | ||
Issuance of common stock | 4,227 | $ 4,227 | |||
Issuance of common stock, shares | 182,755 | ||||
Common stock issued for deferred compensation obligations | 0 | $ 143 | (143) | ||
Common stock issued for deferred compensation obligations, shares | 6,126 | ||||
Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations | 0 | $ 258 | (258) | ||
Share based payment awards under equity compensation plan | 495 | 495 | |||
Common stock purchased for deferred compensation obligations | (331) | (331) | |||
Common stock repurchased pursuant to publicly announced repurchase plan | (3,122) | $ (3,122) | |||
Common stock repurchased pursuant to publicly announced repurchase plan, shares | (135,630) | ||||
Cash dividends | (6,843) | (6,843) | |||
Ending balances at Dec. 31, 2014 | $ 174,594 | $ 138,755 | 4,242 | 32,103 | (506) |
Ending balances, shares at Dec. 31, 2014 | 7,776,274 | 7,776,274 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | $ 15,857 | 15,130 | 727 | ||
Issuance of common stock | 5,201 | $ 5,201 | |||
Issuance of common stock, shares | 216,700 | ||||
Common stock issued for deferred compensation obligations | 0 | $ 0 | 0 | ||
Common stock issued for deferred compensation obligations, shares | 0 | ||||
Common stock transferred from the Rabbi Trust to satisfy deferred compensation obligations | 0 | $ 200 | (200) | ||
Share based payment awards under equity compensation plan | 550 | 550 | |||
Common stock purchased for deferred compensation obligations | (368) | (368) | |||
Common stock repurchased pursuant to publicly announced repurchase plan | (4,590) | $ (4,590) | |||
Common stock repurchased pursuant to publicly announced repurchase plan, shares | (193,107) | ||||
Cash dividends | (7,273) | (7,273) | |||
Ending balances at Dec. 31, 2015 | $ 183,971 | $ 139,198 | $ 4,592 | $ 39,960 | $ 221 |
Ending balances, shares at Dec. 31, 2015 | 7,799,867 | 7,799,867 |
Consolidated Statements of Cha5
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends per share (in dollars per share) | $ 0.94 | $ 0.89 | $ 0.84 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest income | |||
Loans, including fees | $ 35,853 | $ 36,629 | $ 37,575 |
AFS securities | |||
Taxable | 9,053 | 8,092 | 7,228 |
Nontaxable | 5,996 | 5,911 | 5,132 |
Federal funds sold and other | 600 | 516 | 483 |
Total interest income | 51,502 | 51,148 | 50,418 |
Interest expense | |||
Deposits | 5,850 | 6,295 | 7,140 |
Borrowings | 4,313 | 3,675 | 3,881 |
Total interest expense | 10,163 | 9,970 | 11,021 |
Net interest income | 41,339 | 41,178 | 39,397 |
Provision for loan losses | (2,771) | (668) | 1,111 |
Net interest income after provision for loan losses | 44,110 | 41,846 | 38,286 |
Noninterest income | |||
Service charges and fees | 5,437 | 5,411 | 5,682 |
Net gain on sale of mortgage loans | 573 | 514 | 962 |
Earnings on corporate owned life insurance policies | 771 | 751 | 732 |
Gross realized gains (losses) | 163 | 97 | 171 |
Other | 3,415 | 2,552 | 2,628 |
Total noninterest income | 10,359 | 9,325 | 10,175 |
Noninterest expenses | |||
Compensation and benefits | 19,068 | 18,502 | 17,807 |
Furniture and equipment | 5,739 | 5,173 | 4,945 |
Occupancy | 2,834 | 2,798 | 2,653 |
Other | 8,410 | 8,630 | 8,350 |
Total noninterest expenses | 36,051 | 35,103 | 33,755 |
Income before federal income tax expense | 18,418 | 16,068 | 14,706 |
Federal income tax expense | 3,288 | 2,344 | 2,196 |
NET INCOME | $ 15,130 | $ 13,724 | $ 12,510 |
Earnings per share | |||
Basic (in dollars per share) | $ 1.95 | $ 1.77 | $ 1.63 |
Diluted (in dollars per share) | 1.90 | 1.74 | 1.59 |
Cash dividends per basic share (in dollars per share) | $ 0.94 | $ 0.89 | $ 0.84 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 15,130 | $ 13,724 | $ 12,510 | |
Unrealized gains (losses) on AFS securities | ||||
Unrealized gains (losses) arising during the period | 310 | 11,290 | (18,971) | |
Reclassification adjustment for net realized (gains) losses included in net income | (163) | (97) | (171) | |
Net unrealized gains (losses) | 147 | 11,193 | (19,142) | |
Tax effect | [1] | 87 | (3,684) | 6,257 |
Unrealized gains (losses), net of tax | 234 | 7,509 | (12,885) | |
Change in unrecognized pension cost on defined benefit pension plan | ||||
Change in unrecognized pension cost arising during the year | 255 | (2,836) | 2,120 | |
Reclassification adjustment for net periodic benefit cost included in net income | 492 | 300 | 208 | |
Net change in unrecognized actuarial loss and prior service cost | 747 | (2,536) | 2,328 | |
Tax effect | (254) | 862 | (791) | |
Change in unrealized pension cost, net of tax | 493 | (1,674) | 1,537 | |
Other comprehensive income (loss), net of tax | 727 | 5,835 | (11,348) | |
Comprehensive income (loss) | $ 15,857 | $ 19,559 | $ 1,162 | |
[1] | See “Note 18 – Accumulated Other Comprehensive Income (Loss)” in the accompanying notes to consolidated financial statements for tax effect reconciliation. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
OPERATING ACTIVITIES | |||
Net income | $ 15,130 | $ 13,724 | $ 12,510 |
Reconciliation of net income to net cash provided by operating activities: | |||
Provision for loan losses | (2,771) | (668) | 1,111 |
Impairment of foreclosed assets | 99 | 123 | 156 |
Depreciation | 2,677 | 2,551 | 2,556 |
Amortization of OMSR | 340 | 265 | 522 |
Amortization of acquisition intangibles | 169 | 183 | 221 |
Net amortization of AFS securities | 2,074 | 1,830 | 2,028 |
Net (gains) losses on sale of AFS securities | (163) | (97) | (171) |
Net gain on sale of mortgage loans | (573) | (514) | (962) |
Increase in cash value of corporate owned life insurance policies | (771) | (751) | (732) |
Share-based payment awards under equity compensation plan | 550 | 495 | 554 |
Deferred income tax (benefit) expense | 1,692 | 207 | (1,208) |
Origination of loans held for sale | (42,887) | (28,135) | (53,632) |
Proceeds from loan sales | 43,174 | 28,852 | 57,123 |
Net changes in operating assets and liabilities which provided (used) cash: | |||
Accrued interest receivable | (418) | (409) | (215) |
Other assets | (5,322) | (1,392) | 1,792 |
Accrued interest payable and other liabilities | (910) | 1,298 | 1,954 |
Net cash provided by (used in) operating activities | 12,090 | 17,562 | 23,607 |
Activity in AFS securities | |||
Sales | 1,319 | 13,362 | 16,229 |
Maturities, calls, and principal payments | 90,036 | 68,188 | 86,225 |
Purchases | (185,721) | (127,562) | (131,505) |
Loan principal (originations) collections, net | (15,029) | (27,876) | (39,369) |
Proceeds from sales of foreclosed assets | 1,523 | 1,775 | 2,122 |
Purchases of premises and equipment | (5,127) | (2,713) | (2,488) |
Purchases of corporate owned life insurance policies | (500) | 0 | (1,092) |
Proceeds from the redemption of corporate owned life insurance policies | 0 | 0 | 196 |
Net cash provided by (used in) investing activities | (113,499) | (74,826) | (69,682) |
FINANCING ACTIVITIES | |||
Net increase (decrease) in deposits | 90,079 | 30,718 | 26,099 |
Net increase (decrease) in borrowed funds | 20,023 | 10,383 | 38,325 |
Cash dividends paid on common stock | (7,273) | (6,843) | (6,456) |
Proceeds from issuance of common stock | 5,201 | 4,227 | 3,618 |
Common stock repurchased | (4,590) | (3,122) | (2,375) |
Common stock purchased for deferred compensation obligations | (368) | (331) | (383) |
Net cash provided by (used in) financing activities | 103,072 | 35,032 | 58,828 |
Increase (decrease) in cash and cash equivalents | 1,663 | (22,232) | 12,753 |
Cash and cash equivalents at beginning of period | 19,906 | 42,138 | 29,385 |
Cash and cash equivalents at end of period | 21,569 | 19,906 | 42,138 |
SUPPLEMENTAL CASH FLOWS INFORMATION: | |||
Interest paid | 10,176 | 10,045 | 11,139 |
Federal income taxes paid | 3,493 | 1,454 | 2,093 |
SUPPLEMENTAL NONCASH INFORMATION: | |||
Transfers of loans to foreclosed assets | $ 1,158 | $ 1,371 | $ 1,672 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies BASIS OF PRESENTATION AND CONSOLIDATION: The consolidated financial statements include the accounts of Isabella Bank Corporation, a financial services holding company, and its wholly owned subsidiary, Isabella Bank. All intercompany balances and accounts have been eliminated in consolidation. References to "the Corporation," “Isabella,” “we,” “our,” “us,” and similar terms refer to the consolidated entity consisting of Isabella Bank Corporation and its subsidiary. Isabella Bank Corporation refers solely to the parent holding company, and Isabella Bank or the “Bank” refer to Isabella Bank Corporation’s subsidiary, Isabella Bank. For additional information, see “ Note 19 – Related Party Transactions .” NATURE OF OPERATIONS: Isabella Bank Corporation is a financial services holding company offering a wide array of financial products and services in several mid-Michigan counties. Our banking subsidiary, Isabella Bank, offers banking services through 29 locations, 24 hour banking services locally and nationally through shared automatic teller machines, 24 hour online banking, mobile banking, and direct deposits to businesses, institutions, and individuals. Lending services offered include commercial loans, agricultural loans, residential real estate loans, and consumer loans. Deposit services include interest and noninterest bearing checking accounts, savings accounts, money market accounts, and certificates of deposit. Other related financial products include trust and investment services, safe deposit box rentals, and credit life insurance. Active competition, principally from other commercial banks, savings banks and credit unions, exists in all of our principal markets. Our results of operations can be significantly affected by changes in interest rates and changes in the local economic environment. USE OF ESTIMATES: In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, we make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet and reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the ALLL , the fair value of AFS investment securities, and the valuation of goodwill and other intangible assets. FAIR VALUE MEASUREMENTS : Fair value refers to the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the market in which the reporting entity transacts such sales or transfers based on the assumptions market participants would use when pricing an asset or liability. Assumptions are developed based on prioritizing information within a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data. We may choose to measure eligible items at fair value at specified election dates. For assets and liabilities recorded at fair value, it is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements for those financial instruments for which there is an active market. In cases where the market for a financial asset or liability is not active, we include appropriate risk adjustments that market participants would make for nonperformance and liquidity risks when developing fair value measurements. Fair value measurements for assets and liabilities for which limited or no observable market data exists are accordingly based primarily upon estimates, are often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Investment securities AFS are recorded at fair value on a recurring basis. Additionally, from time-to-time , we may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as mortgage loans AFS , impaired loans, foreclosed assets, OMSR , goodwill, and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets. Fair Value Hierarchy Under fair value measurement and disclosure authoritative guidance, we group assets and liabilities measured at fair value into three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value, based on the prioritization of inputs in the valuation techniques. These levels are: Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model based valuation techniques for which all significant assumptions are observable in the market. Level 3: Valuation is generated from model based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. Transfers between measurement levels are recognized at the end of reporting periods. For further discussion of fair value considerations, refer to “ Note 20 – Fair Value .” SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK : Most of our activities conducted are with customers located within the central Michigan area. A significant amount of our outstanding loans are secured by commercial and residential real estate. Other than these types of loans, there is no significant concentration to any other industry or any one customer. CASH AND CASH EQUIVALENTS: For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks, federal funds sold, and other deposit accounts. Generally, federal funds sold are for a one day period. We maintain deposit accounts in various financial institutions which generally exceed federally insured limits or are not insured. We do not believe we are exposed to any significant interest, credit or other financial risk as a result of these deposits. AFS SECURITIES: Purchases of investment securities are generally classified as AFS . However, we may elect to classify securities as either held to maturity or trading. Securities classified as AFS are recorded at fair value, with unrealized gains and losses, net of the effect of deferred income taxes, excluded from earnings and reported in other comprehensive income. Included in AFS securities are auction rate money market preferreds and preferred stocks. These investments are considered equity securities for federal income tax purposes, and as such, no estimated federal income tax impact is expected or recorded. Auction rate money market preferred securities and preferred stocks are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Realized gains and losses on the sale of AFS securities are determined using the specific identification method. AFS securities are reviewed quarterly for possible OTTI . In determining whether an OTTI exists for debt securities, we assert that: (a) we do not have the intent to sell the security; and (b) it is more likely than not we will not have to sell the security before recovery of its cost basis. If these conditions are not met, we recognize an OTTI charge through earnings for the difference between the debt security’s amortized cost basis and its fair value, and such amount is included in noninterest income. For debt securities that do not meet the above criteria, and we do not expect to recover the security’s amortized cost basis, the security is considered other-than-temporarily impaired. For these debt securities, we separate the total impairment into the credit risk loss component and the amount of the loss related to market and other risk factors. In order to determine the amount of the credit loss for a debt security, we calculate the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. The amount of the total OTTI related to the credit risk is recognized in earnings and is included in noninterest income. The amount of the total OTTI related to other risk factors is recognized as a component of other comprehensive income. For debt securities that have recognized an OTTI through earnings, if through subsequent evaluation there is a significant increase in the cash flow expected, the difference between the amortized cost basis and the cash flows expected to be collected is accreted as interest income. AFS equity securities are reviewed for OTTI at each reporting date. This evaluation considers a number of factors including, but not limited to, the length of time and extent to which the fair value has been less than cost, the financial condition and near term prospects of the issuer, and our ability and intent to hold the securities until fair value recovers. If it is determined that we do not have the ability and intent to hold the securities until recovery or that there are conditions that indicate that a security may not recover in value then the difference between the fair value and the cost of the security is recognized in earnings and is included in noninterest income. LOANS: Loans that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balance adjusted for any charge-offs , the ALLL , and any deferred fees or costs on originated loans. Interest income on loans is accrued over the term of the loan based on the principal amount outstanding. Loan origination fees and certain direct loan origination costs are capitalized and recognized as a component of interest income over the term of the loan using the level yield method. The accrual of interest on agricultural, commercial and mortgage loans is discontinued at the time the loan is 90 days or more past due unless the credit is well secured and in the process of collection. Consumer loans are typically charged-off no later than 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. For loans that are placed on nonaccrual status or charged-off , all interest accrued in the current calendar year, but not collected, is reversed against interest income while interest accrued in prior calendar years, but not collected is charged against the ALLL . The interest on these loans is accounted for on the cash-basis, until qualifying for return to accrual status. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. For impaired loans not classified as nonaccrual , interest income continues to be accrued over the term of the loan based on the principal amount outstanding. ALLOWANCE FOR LOAN LOSSES: The ALLL is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when we believe the uncollectability of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. We evaluate the ALLL on a regular basis which is based upon our periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The ALLL consists of specific, general, and unallocated components. The specific component relates to loans that are deemed to be impaired. For such loans that are also analyzed for specific allowance allocations, an allowance is established when the discounted cash flows or collateral value or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers non classified loans and is based on historical loss experience. An unallocated component is maintained to cover uncertainties that we believe affect our estimate of probable losses based on qualitative factors. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. Loans may be classified as impaired if they meet one or more of the following criteria: 1. There has been a charge-off of its principal balance; 2. The loan has been classified as a TDR ; or 3. The loan is in nonaccrual status. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, less cost to sell, if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. LOANS HELD FOR SALE: Mortgage loans held for sale on the secondary market are carried at the lower of cost or fair value as determined by aggregating outstanding commitments from investors or current investor yield requirements. Net unrealized losses, if any, would be recognized as a component of other noninterest expenses. Mortgage loans held for sale are sold with the mortgage servicing rights retained by us. The carrying value of mortgage loans sold is reduced by the cost allocated to the associated mortgage servicing rights. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold. TRANSFERS OF FINANCIAL ASSETS: Transfers of financial assets, including mortgage loans and participation loans, are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is determined to be surrendered when 1) the assets have been legally isolated from us, 2) the transferee obtains the right (free of conditions that constrain it from taking advantage of the right) to pledge or exchange the transferred assets, and 3) we do not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Other than servicing, we have no substantive continuing involvement related to these loans. SERVICING: Servicing assets are recognized as separate assets when rights are acquired through purchase or through sale of financial assets. We have no purchased servicing rights. For sales of mortgage loans, a portion of the cost of originating the loan is allocated to the servicing right based on relative fair value. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights into tranches based on predominant risk characteristics, such as interest rate, loan type, and investor type. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranche. If we later determine that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the valuation allowance may be recorded as an increase to income. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. The unpaid principal balance of mortgages serviced for others was $287,029 and $288,639 with capitalized servicing rights of $2,505 and $2,519 at December 31, 2015 and 2014 , respectively. Servicing fee income is recorded for fees earned for servicing loans for others. The fees are based on a contractual percentage of the outstanding principal; or a fixed amount per loan and are recorded as income when earned. We recorded servicing fee revenue of $712 , $720 , and $737 related to residential mortgage loans serviced for others during 2015 , 2014 , and 2013 , respectively, which is included in other noninterest income. FORECLOSED ASSETS: Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at the lower of our carrying amount or fair value less estimated selling costs at the date of transfer, establishing a new cost basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the ALLL . After foreclosure, property held for sale is carried at the lower of the new cost basis or fair value less costs to sell. Impairment losses on property to be held and used are measured at the amount by which the carrying amount of property exceeds its fair value. Costs relating to holding these assets are expensed as incurred. We periodically perform valuations and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to the lower of our carrying amount or fair value less costs to sell. Foreclosed assets of $421 and $885 as of December 31, 2015 and 2014 , respectively, are included in other assets. PREMISES AND EQUIPMENT: Land is carried at cost. Buildings and equipment are carried at cost, less accumulated depreciation which is computed principally by the straight-line method based upon the estimated useful lives of the related assets, which range from 3 to 40 years. Major improvements are capitalized and appropriately amortized based upon the useful lives of the related assets or the expected terms of the leases, if shorter, using the straight-line method. Maintenance, repairs and minor alterations are charged to current operations as expenditures occur. We annually review these assets to determine whether carrying values have been impaired. EQUITY SECURITIES WITHOUT READILY DETERMINABLE FAIR VALUES: Included in equity securities without readily determinable fair values are our holdings in FHLB stock and FRB stock as well as our ownership interests in Corporate Settlement Solutions, LLC and Valley Financial Corporation . Our investment in Corporate Settlement Solutions, LLC , a title insurance company, was made in the 1st quarter of 2008. We are not the managing entity of Corporate Settlement Solutions, LLC , and account for our investment in that entity under the equity method of accounting. Valley Financial Corporation is the parent company of 1st State Bank in Saginaw, Michigan, which is a bank that opened in 2005. We made investments in Valley Financial Corporation in 2004 and in 2007 . Equity securities without readily determinable fair values consist of the following as of December 31 : 2015 2014 FHLB Stock $ 11,700 $ 9,800 Corporate Settlement Solutions, LLC 7,249 6,936 FRB Stock 1,999 1,999 Valley Financial Corporation 1,000 1,000 Other 338 341 Total $ 22,286 $ 20,076 EQUITY COMPENSATION PLAN: At December 31, 2015 , the Directors Plan had 200,017 shares eligible to be issued to participants, for which the Rabbi Trust held 19,401 shares. We had 187,369 shares to be issued in 2014 , with 13,934 shares held in the Rabbi Trust . Compensation costs relating to share based payment transactions are recognized as the services are rendered, with the cost measured based on the fair value of the equity or liability instruments issued (see “ Note 17 – Benefit Plans ”). We have no other equity-based compensation plans. CORPORATE OWNED LIFE INSURANCE: We have purchased life insurance policies on key members of management. In the event of death of one of these individuals, we would receive a specified cash payment equal to the face value of the policy. Such policies are recorded at their cash surrender value, or the amount that can be realized on the balance sheet dates. Increases in cash surrender value in excess of single premiums paid are reported as other noninterest income. As of December 31, 2015 and 2014 , the present value of the post retirement benefits payable by us to the covered employees was estimated to be $2,853 and $2,782 , respectively, and is included in accrued interest payable and other liabilities. The periodic policy maintenance costs were $71 , $83 , and $75 for 2015 , 2014 , and 2013 , respectively and are included in other noninterest expenses. ACQUISITION INTANGIBLES AND GOODWILL: We previously acquired branch facilities and related deposits in business combinations accounted for as a purchase. The acquisitions included amounts related to the valuation of customer deposit relationships (core deposit intangibles). Core deposit intangibles arising from acquisitions are included in goodwill and other intangible assets are being amortized over their estimated lives and evaluated for potential impairment on at least an annual basis. Goodwill, which represents the excess of the purchase price over identifiable assets, is not amortized but is evaluated for impairment on at least an annual basis. Acquisition intangibles and goodwill are typically qualitatively evaluated to determine if it is more likely than not that the carrying balance is impaired. If it is determined that the carrying balance is more likely than not to be impaired, we perform a cash flow valuation to determine the extent of the potential impairment. This valuation method requires a significant degree of our judgment. In the event the projected undiscounted net operating cash flows for these intangible assets are less than the carrying value, the asset is recorded at fair value as determined by the valuation model. OFF BALANCE SHEET CREDIT RELATED FINANCIAL INSTRUMENTS: In the ordinary course of business, we have entered into commitments to extend credit, including commitments under credit card arrangements, home equity lines of credit, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded only when funded. FEDERAL INCOME TAXES: Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax assets or liability is determined based on the tax effects of the temporary differences between the book and tax basis on the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. Valuation allowances are established, where necessary, to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the year plus or minus the change during the year in deferred tax assets and liabilities. We analyze our filing positions in the jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have also elected to retain our existing accounting policy with respect to the treatment of interest and penalties attributable to income taxes, and continue to reflect any charges for such, to the extent they arise, as a component of our noninterest expenses. DEFINED BENEFIT PENSION PLAN: We maintain a noncontributory defined benefit pension plan, which was curtailed effective March 1, 2007. Defined benefit pension plan expenses are included in “compensation and benefits" on the consolidated statements of income and are funded consistent with the requirements of federal laws and regulations. The current benefit obligation is included in "accrued interest payable and other liabilities" on the consolidated balance sheets. Inherent in the determination of defined benefit pension costs are assumptions concerning future events that will affect the amount and timing of required benefit payments under the plan. These assumptions include demographic assumptions such as mortality, a discount rate used to determine the current benefit obligation and a long-term expected rate of return on plan assets. Net periodic benefit cost includes interest cost based on the assumed discount rate, an expected return on plan assets based on an actuarially derived market-related value of assets, and amortization of unrecognized net actuarial gains or losses. Actuarial gains and losses result from experience different from that assumed and from changes in assumptions (excluding asset gains and losses not yet reflected in market-related value). Amortization of actuarial gains and losses is included as a component of net periodic defined benefit pension cost. For additional information, see " Note 17 – Benefit Plans ." MARKETING COSTS: Marketing costs are expensed as incurred (see “ Note 11 – Other Noninterest Expenses ”). RECLASSIFICATIONS: Certain amounts reported in the 2014 and 2013 consolidated financial statements have been reclassified to conform with the 2015 presentation. RESTATEMENTS: In this Annual Report on Form 10-K , certain prior period financial information has been restated due to an accounting correction. Impacted sections of the Consolidated Financial Statements include: 1. Consolidated Balance Sheet as of December 31, 2014, Consolidated Statements of Income for the years ended December 31, 2014 and 2013, and Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013; and 2. Notes to Consolidated Financial Statements as of, and for the years ended, December 31, 2014 and 2013. Background of Restatement The necessary restatement was identified by management in the fourth quarter of 2015 during the course of our preparation of the consolidated financial statements and evaluation of financial results as of and for the year ended December 31, 2015. The restatements relate to the accounting for deferred costs associated with originating loans (under ASC 310-20) and the proper classification of the net deferred costs recorded in gross loans within the consolidated balance sheets and as a deferral of compensation expenses within the consolidated statements of income. Prior to December 31, 2015, loan origination cost deferrals (under ASC 310-20) were reported in loan interest and fee income instead of as a reduction of compensation and benefits, which is included in other noninterest expenses. Additionally, net deferred asset balances (under ASC 310-20) prior to December 31, 2015 were reported in other assets on the consolidated balance sheets instead of reported in gross loans. Amortization of the net deferred asset balance was recognized appropriately in loan interest and fee income. Impact of Restatement The overall impact of the restatement on our consolidated financial position and results of operations is not believed to be material and as such, previously filed Annual Reports on Form 10-K and Quarterly reports on Form 10-Q for the periods affected by the restatement have not been amended. The determination of materiality was, in part, concluded based on the following observations: • No impact to net income for any prior periods; • No impact to earnings per share, other stock data, or dividend data for any prior periods; • No impact on total assets for any prior periods; and • No impact on retained earnings or total equity for any prior periods. The impact to the consolidated balance sheet as of December 31, 2014 was a $2,968 increase in gross loans and a $2,968 decline in other assets. There were no other changes to the consolidated balance sheets for any prior periods. The following table sets forth the effects of the restatement on items within the Consolidated Statements of Income. Since the restatement did not impact net income, pre-tax and adjustments net of tax are not included. December 31, 2014 December 31, 2013 Previously Reported Restated Previously Reported Restated Interest income Loans, including fees $ 39,432 $ 36,629 $ 41,233 $ 37,575 All other interest income 14,519 14,519 12,843 12,843 Total interest income 53,951 51,148 54,076 50,418 Total interest expense 9,970 9,970 11,021 11,021 Net interest income 43,981 41,178 43,055 39,397 Provision for loan losses (668 ) (668 ) 1,111 1,111 Net interest income after provision for loan losses 44,649 41,846 41,944 38,286 Total noninterest income 9,325 9,325 10,175 10,175 Noninterest expenses Compensation and benefits 21,305 18,502 21,465 17,807 All other noninterest expenses 16,601 16,601 15,948 15,948 Total noninterest expenses 37,906 35,103 37,413 33,755 Federal income tax expense 2,344 2,344 2,196 2,196 Net income $ 13,724 $ 13,724 $ 12,510 $ 12,510 As demonstrated above, loan interest and fee income and compensation and benefits were reduced by $2,803 and $3,658 during the years ended December 31, 2014 and 2013, respectively. All amounts in this Annual Report on Form 10-K affected by the restatement adjustments reflect such amounts as restated. |
Computation of Earnings Per Com
Computation of Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Common Share | Computation of Earnings Per Common Share Basic earnings per common share represents income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued relate solely to outstanding shares in the Directors Plan , see “ Note 17 – Benefit Plans .” Earnings per common share have been computed based on the following: 2015 2014 2013 Average number of common shares outstanding for basic calculation 7,775,988 7,734,161 7,694,392 Average potential effect of common shares in the Directors Plan (1) 177,988 171,393 168,948 Average number of common shares outstanding used to calculate diluted earnings per common share 7,953,976 7,905,554 7,863,340 Net income $ 15,130 $ 13,724 $ 12,510 Earnings per common share Basic $ 1.95 $ 1.77 $ 1.63 Diluted $ 1.90 $ 1.74 $ 1.59 (1) Exclusive of shares held in the Rabbi Trust |
Pending Accounting Standards Up
Pending Accounting Standards Updates | 12 Months Ended |
Dec. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Pending Accounting Standards Updates | Accounting Standards Updates Recently Adopted Accounting Standards Updates ASU No. 2014-04: “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force) ” In January 2014, ASU No. 2014-04 amended ASC Topic 310, "Receivables" to provide clarification as to when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. Specifically, the update defined physical possession to appropriately derecognize the loan and recognize the real estate as OREO. The adoption of this ASU did not have a significant impact on our operations or financial statement disclosures. ASU No. 2014-11: “Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures ” In June 2014, ASU No. 2014-11 amended ASC Topic 860, “Transfers and Servicing” to address concerns that current accounting guidance distinguishes between repurchase agreements that settle at the same time as the maturity of the transferred financial asset and those that settle any time before maturity. The update changed the accounting for repurchase-to-maturity transactions to secured borrowing accounting and, for repurchase financing arrangements, separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, which resulted in secured borrowing accounting for the repurchase agreement. The adoption of this ASU did not have a significant impact on our operations or financial statement disclosures. Pending Accounting Standards Updates ASU No. 2015-01: “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items ” In January 2015, ASU No. 2015-01 amended ASC Topic 225, “Income Statement” to eliminate the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2015 and is not expected to have a significant impact on our operations or financial statement disclosures. ASU No. 2015-02: “Consolidation (Topic 810): Amendments to the Consolidation Analysis ” In February 2015, ASU No. 2015-02 amended ASC Topic 810, “Consolidation” to provide consolidation guidance on legal entities when the reporting entity’s contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entity’s voting rights, or the reporting entity is not exposed to a majority of the legal entity’s economic benefits or obligations. The amendments in this update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments: 1. Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities. 2. Eliminate the presumption that a general partner should consolidate a limited partnership. 3. Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. 4. Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments of this update affect limited partnerships and similar legal entities including fees paid and fee arrangements on the primary beneficiary. The following three main provisions affect limited partnerships and similar legal entities: 1. There is an additional requirement that limited partnerships and similar legal entities must meet to qualify as voting interest entities. A limited partnership must provide partners with either substantive kick-out rights or substantive participating rights over the general partner to meet this requirement. 2. The specialized consolidation model and guidance for limited partnerships and similar legal entities have been eliminated. There is no longer a presumption that a general partner should consolidate a limited partnership. 3. For limited partnerships and similar legal entities that qualify as voting interest entities, a limited partner with a controlling financial interest should consolidate a limited partnership. A controlling financial interest may be achieved through holding a limited partner interest that provides substantive kick-out rights. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2015 and is not expected to have a significant impact on our operations or financial statement disclosures. ASU No. 2015-05: “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement“ In April 2015, ASU No. 2015-05 amended ASC Topic 350, “Goodwill and Other” to provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2015 and is not expected to have a significant impact on our operations or financial statement disclosures. ASU No. 2015-07: “Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)“ In May 2015, ASU No. 2015-07 amended ASC Topic 820, “Fair Value Measurement” to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2015 and is not expected to have a significant impact on our operations or financial statement disclosures. ASU No. 2015-14: “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date“ In August 2015, ASU No. 2015-14 was issued to defer the effective date of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” by one year. The new authoritative guidance is now effective for interim and annual periods beginning after December 15, 2017. The new authoritative guidance is not expected to have a significant impact on our operations or financial statement disclosures. ASU No. 2015-16: “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments“ In September 2015, ASU No. 2015-16 was issued to require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The update requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this update eliminate the requirement to retrospectively account for those adjustments. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2015 and is not expected to have a significant impact on our operations or financial statement disclosures. ASU No. 2016-01: “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities“ In January 2016, ASU No. 2016-01 set forth the following: 1) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; 2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment and when an impairment exists, an entity is required to measure the investment at fair value; 3) for public entities, eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (4) for public entities, requires the use of exit price notion when measuring the fair value of financial instruments for disclosure purposes; (5) requires an entity to present separately in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (6) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and (8) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2017 and is not expected to have a significant impact on our operations or financial statement disclosures. |
AFS Securities
AFS Securities | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
AFS Securities | AFS Securities The amortized cost and fair value of AFS securities , with gross unrealized gains and losses, are as follows as of December 31 : 2015 Amortized Gross Gross Fair Government sponsored enterprises $ 24,407 $ 13 $ 75 $ 24,345 States and political subdivisions 224,752 7,511 46 232,217 Auction rate money market preferred 3,200 — 334 2,866 Preferred stocks 3,800 — 501 3,299 Mortgage-backed securities 264,109 1,156 1,881 263,384 Collateralized mortgage obligations 134,080 1,136 1,191 134,025 Total $ 654,348 $ 9,816 $ 4,028 $ 660,136 2014 Amortized Gross Gross Fair Government sponsored enterprises $ 24,597 $ 10 $ 471 $ 24,136 States and political subdivisions 209,153 6,986 794 215,345 Auction rate money market preferred 3,200 — 581 2,619 Preferred stocks 6,800 31 691 6,140 Mortgage-backed securities 165,888 2,042 1,004 166,926 Collateralized mortgage obligations 152,255 1,533 1,420 152,368 Total $ 561,893 $ 10,602 $ 4,961 $ 567,534 The amortized cost and fair value of AFS securities by contractual maturity at December 31, 2015 are as follows: Maturing Securities with Variable Monthly Payments or Noncontractual Maturities Due in After One After Five After Total Government sponsored enterprises $ — $ 24,029 $ 378 $ — $ — $ 24,407 States and political subdivisions 30,174 69,245 92,561 32,772 — 224,752 Auction rate money market preferred — — — — 3,200 3,200 Preferred stocks — — — — 3,800 3,800 Mortgage-backed securities — — — — 264,109 264,109 Collateralized mortgage obligations — — — — 134,080 134,080 Total amortized cost $ 30,174 $ 93,274 $ 92,939 $ 32,772 $ 405,189 $ 654,348 Fair value $ 30,217 $ 95,452 $ 96,871 $ 34,022 $ 403,574 $ 660,136 Expected maturities for government sponsored enterprises and states and political subdivisions may differ from contractual maturities because issuers may have the right to call or prepay obligations. As the auction rate money market preferred and preferred stocks have continual call dates, they are not reported by a specific maturity group. Because of their variable monthly payments, mortgage-backed securities and collateralized mortgage obligations are not reported by a specific maturity group. A summary of the sales activity of AFS securities was as follows during the years ended December 31 : 2015 2014 2013 Proceeds from sales of AFS securities $ 1,319 $ 13,362 $ 16,229 Gross realized gains (losses) $ 163 $ 97 $ 171 Applicable income tax expense (benefit) $ 55 $ 33 $ 58 The cost basis used to determine the realized gains or losses of AFS securities sold was the amortized cost of the individual investment security as of the trade date. Information pertaining to AFS securities with gross unrealized losses at December 31 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: 2015 Less Than Twelve Months Twelve Months or More Gross Fair Gross Fair Total Government sponsored enterprises $ — $ — $ 75 $ 4,925 $ 75 States and political subdivisions 14 3,355 32 2,623 46 Auction rate money market preferred — — 334 2,866 334 Preferred stocks — — 501 3,299 501 Mortgage-backed securities 882 131,885 999 37,179 1,881 Collateralized mortgage obligations 415 53,441 776 26,717 1,191 Total $ 1,311 $ 188,681 $ 2,717 $ 77,609 $ 4,028 Number of securities in an unrealized loss position: 36 26 62 2014 Less Than Twelve Months Twelve Months or More Gross Fair Gross Fair Total Government sponsored enterprises $ — $ — $ 471 $ 23,525 $ 471 States and political subdivisions 48 5,323 746 17,416 794 Auction rate money market preferred — — 581 2,619 581 Preferred stocks — — 691 3,109 691 Mortgage-backed securities 5 9,456 999 52,407 1,004 Collateralized mortgage obligations 105 29,435 1,315 39,540 1,420 Total $ 158 $ 44,214 $ 4,803 $ 138,616 $ 4,961 Number of securities in an unrealized loss position: 22 72 94 As of December 31, 2015 and 2014 , we conducted an analysis to determine whether any securities currently in an unrealized loss position, should be other-than-temporarily impaired. Such analyses considered, among other factors, the following criteria: • Has the value of the investment declined more than what is deemed to be reasonable based on a risk and maturity adjusted discount rate? • Is the investment credit rating below investment grade? • Is it probable the issuer will be unable to pay the amount when due? • Is it more likely than not that we will have to sell the security before recovery of its cost basis? • Has the duration of the investment been extended? During the three month period ended March 31, 2012 , we had one state issued student loan auction rate AFS investment security (which is included in states and political subdivisions) that was downgraded by Moody's from A3 to Caa3 . As a result of this downgrade, we engaged the services of an independent investment valuation firm to estimate the amount of credit losses (if any) related to this particular issue as of March 31, 2012 . The evaluation calculated a range of estimated credit losses utilizing two different bifurcation methods: 1) Discounted Cash Flow Method 2) Credit Yield Analysis Method The two methods were then weighted, with a higher weighting applied to the Discounted Cash Flow Method , to determine the estimated credit related impairment. As a result of this analysis, we recognized an OTTI of $282 in earnings in the three month period ended March 31, 2012 . A summary of key valuation assumptions used in the aforementioned analysis as of March 31, 2012 , follows: Discounted Cash Flow Method Ratings Fitch Not Rated Moody's Caa3 S&P A Seniority Senior Discount rate LIBOR + 6.35% Credit Yield Analysis Method Credit discount rate LIBOR + 4.00% Average observed discounts based on closed transactions 14.00% To test for additional impairment of this security, we obtained investment valuations (from the same firm engaged to perform the initial valuation as of March 31, 2012 ) on a quarterly basis until the security was sold on November 25, 2015. Based on our analyses, no additional OTTI was recorded while the security was held. The following table provides a roll-forward of credit related impairment recognized in earnings for the years ended December 31 : 2015 2014 2013 Balance at beginning of year $ 282 $ 282 $ 282 Additions to credit losses for which no previous OTTI was recognized — — — Reductions for credit losses realized on securities sold during the quarter (282 ) — — Balance at end of year $ — $ 282 $ 282 Based on our analyses, the fact that we have asserted that we do not have the intent to sell AFS securities in an unrealized loss position, and considering it is unlikely that we will have to sell any AFS securities in an unrealized loss position before recovery of their cost basis, we do not believe that the values of any AFS securities were other-than-temporarily impaired as of December 31, 2015 , or December 31, 2014 . |
Loans and ALLL
Loans and ALLL | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Loans and ALLL | Loans and ALLL We grant commercial, agricultural, residential real estate, and consumer loans to customers situated primarily in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties in Michigan. The ability of the borrowers to honor their repayment obligations is often dependent upon the real estate, agricultural, manufacturing, retail, gaming, tourism, higher education, and general economic conditions of this region. Substantially all of our consumer and residential real estate loans are secured by various items of property, while commercial loans are secured primarily by real estate, business assets, and personal guarantees; a portion of loans are unsecured. Loans that we have the intent and ability to hold in our portfolio are reported at their outstanding principal balance adjusted for any charge-offs , the ALLL , and any deferred fees or costs. Interest income is accrued over the term of the loan based on the principal amount outstanding. Loan origination fees and certain direct loan origination costs are capitalized and recognized as a component of interest income over the term of the loan using the level yield method. The accrual of interest on commercial, agricultural, and residential real estate loans is discontinued at the time the loan is 90 days or more past due unless the credit is well-secured and in the process of collection. Upon transferring the loans to nonaccrual status, we perform an evaluation to determine the net realizable value of the underlying collateral. This evaluation is used to help determine if any charge-offs are necessary. Consumer loans are typically charged-off no later than 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. For loans that are placed on nonaccrual status or charged-off , all interest accrued in the current calendar year, but not collected, is reversed against interest income while interest accrued in prior calendar years, but not collected, is charged against the ALLL . Loans may be returned to accrual status after six months of continuous performance. Commercial and agricultural loans include loans for commercial real estate, commercial operating loans, farmland and agricultural production, and states and political subdivisions. Repayment of these loans is dependent upon the successful operation and management of a business. We minimize our risk by limiting the amount of direct credit exposure to any one borrower to $15,000 . Borrowers with direct credit needs of more than $15,000 are serviced through the use of loan participations with other commercial banks. Commercial and agricultural real estate loans commonly require loan-to-value limits of 80% or less. Depending upon the type of loan, past credit history, and current operating results, we may require the borrower to pledge accounts receivable, inventory, and property and equipment. Personal guarantees are generally required from the owners of closely held corporations, partnerships, and sole proprietorships. In addition, we require annual financial statements, prepare cash flow analyses, and review credit reports. We offer adjustable rate mortgages, construction loans, and fixed rate residential real estate loans which have amortization periods up to a maximum of 30 years. We consider the anticipated direction of interest rates, balance sheet duration, the sensitivity of our balance sheet to changes in interest rates, and overall loan demand to determine whether or not to sell fixed rate loans to Freddie Mac . Our lending policies generally limit the maximum loan-to-value ratio on residential real estate loans to 97% of the lower of the appraised value of the property or the purchase price, with the condition that private mortgage insurance is required on loans with loan-to-value ratios in excess of 80% . Underwriting criteria for residential real estate loans include: • Evaluation of the borrower’s ability to make monthly payments. • Evaluation of the value of the property securing the loan. • Ensuring the payment of principal, interest, taxes, and hazard insurance does not exceed 28% of a borrower’s gross income. • Ensuring all debt servicing does not exceed 36% of income. • Verification of acceptable credit reports. • Verification of employment, income, and financial information. Appraisals are performed by independent appraisers and reviewed for appropriateness. All mortgage loan requests are reviewed by our mortgage loan committee or through a secondary market underwriting system; loans in excess of $500 require the approval of our Internal Loan Committee, the Executive Loan Committee, the Board of Directors’ Loan Committee, or the Board of Directors. Consumer loans include secured and unsecured personal loans. Loans are amortized for a period of up to 12 years based on the age and value of the underlying collateral. The underwriting emphasis is on a borrower’s perceived intent and ability to pay rather than collateral value. No consumer loans are sold to the secondary market. The ALLL is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the ALLL when we believe the uncollectability of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the ALLL . The appropriateness of the ALLL is evaluated on a quarterly basis and is based upon a periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The primary factors behind the determination of the level of the ALLL are specific allocations for impaired loans, historical loss percentages, as well as unallocated components. Specific allocations for impaired loans are primarily determined based on the difference between the loan’s outstanding balance to the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, less cost to sell. Historical loss allocations are calculated at the loan class and segment levels based on a migration analysis of the loan portfolio over the preceding five years. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A summary of changes in the ALLL and the recorded investment in loans by segments follows: Allowance for Loan Losses Year Ended December 31, 2015 Commercial Agricultural Residential Real Estate Consumer Unallocated Total January 1, 2015 $ 3,821 $ 216 $ 4,235 $ 645 $ 1,183 $ 10,100 Charge-offs (89 ) (45 ) (397 ) (373 ) — (904 ) Recoveries 477 72 220 206 — 975 Provision for loan losses (2,038 ) 86 (728 ) 44 (135 ) (2,771 ) December 31, 2015 $ 2,171 $ 329 $ 3,330 $ 522 $ 1,048 $ 7,400 Allowance for Loan Losses and Recorded Investment in Loans As of December 31, 2015 Commercial Agricultural Residential Real Estate Consumer Unallocated Total ALLL Individually evaluated for impairment $ 829 $ 2 $ 1,989 $ — $ — $ 2,820 Collectively evaluated for impairment 1,342 327 1,341 522 1,048 4,580 Total $ 2,171 $ 329 $ 3,330 $ 522 $ 1,048 $ 7,400 Loans Individually evaluated for impairment $ 7,969 $ 4,068 $ 10,266 $ 35 $ 22,338 Collectively evaluated for impairment 440,412 111,843 241,235 34,664 828,154 Total $ 448,381 $ 115,911 $ 251,501 $ 34,699 $ 850,492 Allowance for Loan Losses Year Ended December 31, 2014 Commercial Agricultural Residential Real Estate Consumer Unallocated Total January 1, 2014 $ 6,048 $ 434 $ 3,845 $ 639 $ 534 $ 11,500 Charge-offs (559 ) (31 ) (722 ) (316 ) — (1,628 ) Recoveries 550 — 197 149 — 896 Provision for loan losses (2,218 ) (187 ) 915 173 649 (668 ) December 31, 2014 $ 3,821 $ 216 $ 4,235 $ 645 $ 1,183 $ 10,100 Allowance for Loan Losses and Recorded Investment in Loans As of December 31, 2014 Commercial Agricultural Residential Real Estate Consumer Unallocated Total ALLL Individually evaluated for impairment $ 1,283 $ — $ 2,143 $ 1 $ — $ 3,427 Collectively evaluated for impairment 2,538 216 2,092 644 1,183 6,673 Total $ 3,821 $ 216 $ 4,235 $ 645 $ 1,183 $ 10,100 Loans Individually evaluated for impairment $ 12,029 $ 1,595 $ 12,160 $ 64 $ 25,848 Collectively evaluated for impairment 421,241 103,126 253,995 32,340 810,702 Total $ 433,270 $ 104,721 $ 266,155 $ 32,404 $ 836,550 The following table displays the credit quality indicators for commercial and agricultural credit exposures based on internally assigned credit risk ratings as of December 31 : 2015 Commercial Agricultural Real Estate Other Total Real Estate Other Total Rating 1 - Excellent $ — $ 499 $ 499 $ — $ — $ — 2 - High quality 7,397 11,263 18,660 4,647 2,150 6,797 3 - High satisfactory 99,136 29,286 128,422 28,886 13,039 41,925 4 - Low satisfactory 222,431 62,987 285,418 37,279 22,166 59,445 5 - Special mention 4,501 473 4,974 3,961 1,875 5,836 6 - Substandard 9,941 256 10,197 1,623 139 1,762 7 - Vulnerable 211 — 211 146 — 146 8 - Doubtful — — — — — — Total $ 343,617 $ 104,764 $ 448,381 $ 76,542 $ 39,369 $ 115,911 2014 Commercial Agricultural Real Estate Other Total Real Estate Other Total Rating 1 - Excellent $ — $ 492 $ 492 $ — $ — $ — 2 - High quality 13,620 14,423 28,043 5,806 3,582 9,388 3 - High satisfactory 94,556 51,230 145,786 28,715 12,170 40,885 4 - Low satisfactory 184,000 51,178 235,178 33,361 17,560 50,921 5 - Special mention 8,456 1,322 9,778 1,607 65 1,672 6 - Substandard 11,055 123 11,178 1,602 147 1,749 7 - Vulnerable 2,687 116 2,803 106 — 106 8 - Doubtful — 12 12 — — — Total $ 314,374 $ 118,896 $ 433,270 $ 71,197 $ 33,524 $ 104,721 Internally assigned credit risk ratings are reviewed, at a minimum, when loans are renewed or when management has knowledge of improvements or deterioration of the credit quality of individual credits. Descriptions of the internally assigned credit risk ratings for commercial and agricultural loans are as follows: 1. EXCELLENT – Substantially Risk Free Credit has strong financial condition and solid earnings history, characterized by: • High liquidity, strong cash flow, low leverage. • Unquestioned ability to meet all obligations when due. • Experienced management, with management succession in place. • Secured by cash. 2. HIGH QUALITY – Limited Risk Credit with sound financial condition and a positive trend in earnings supplemented by: • Favorable liquidity and leverage ratios. • Ability to meet all obligations when due. • Management with successful track record. • Steady and satisfactory earnings history. • If loan is secured, collateral is of high quality and readily marketable. • Access to alternative financing. • Well defined primary and secondary source of repayment. • If supported by guaranty, the financial strength and liquidity of the guarantor(s) are clearly evident. 3. HIGH SATISFACTORY – Reasonable Risk Credit with satisfactory financial condition and further characterized by: • Working capital adequate to support operations. • Cash flow sufficient to pay debts as scheduled. • Management experience and depth appear favorable. • Loan performing according to terms. • If loan is secured, collateral is acceptable and loan is fully protected. 4. LOW SATISFACTORY – Acceptable Risk Credit with bankable risks, although some signs of weaknesses are shown: • Would include most start-up businesses. • Occasional instances of trade slowness or repayment delinquency – may have been 10 - 30 days slow within the past year. • Management’s abilities are apparent, yet unproven. • Weakness in primary source of repayment with adequate secondary source of repayment. • Loan structure generally in accordance with policy. • If secured, loan collateral coverage is marginal. • Adequate cash flow to service debt, but coverage is low. To be classified as less than satisfactory, only one of the following criteria must be met. 5. SPECIAL MENTION – Criticized Credit constitutes an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances surrounding a specific loan: • Downward trend in sales, profit levels, and margins. • Impaired working capital position. • Cash flow is strained in order to meet debt repayment. • Loan delinquency ( 30 - 60 days) and overdrafts may occur. • Shrinking equity cushion. • Diminishing primary source of repayment and questionable secondary source. • Management abilities are questionable. • Weak industry conditions. • Litigation pending against the borrower. • Collateral or guaranty offers limited protection. • Negative debt service coverage, however the credit is well collateralized and payments are current. 6. SUBSTANDARD – Classified Credit where the borrower’s current net worth, paying capacity, and value of the collateral pledged is inadequate. There is a distinct possibility that we will implement collection procedures if the loan deficiencies are not corrected. In addition, the following characteristics may apply: • Sustained losses have severely eroded the equity and cash flow. • Deteriorating liquidity. • Serious management problems or internal fraud. • Original repayment terms liberalized. • Likelihood of bankruptcy. • Inability to access other funding sources. • Reliance on secondary source of repayment. • Litigation filed against borrower. • Collateral provides little or no value. • Requires excessive attention of the loan officer. • Borrower is uncooperative with loan officer. 7. VULNERABLE – Classified Credit is considered “Substandard” and warrants placing on nonaccrual status. Risk of loss is being evaluated and exit strategy options are under review. Other characteristics that may apply: • Insufficient cash flow to service debt. • Minimal or no payments being received. • Limited options available to avoid the collection process. • Transition status, expect action will take place to collect loan without immediate progress being made. 8. DOUBTFUL – Workout Credit has all the weaknesses inherent in a “Substandard” loan with the added characteristic that collection and/or liquidation is pending. The possibility of a loss is extremely high, but its classification as a loss is deferred until liquidation procedures are completed, or reasonably estimable. Other characteristics that may apply: • Normal operations are severely diminished or have ceased. • Seriously impaired cash flow. • Original repayment terms materially altered. • Secondary source of repayment is inadequate. • Survivability as a “going concern” is impossible. • Collection process has begun. • Bankruptcy petition has been filed. • Judgments have been filed. • Portion of the loan balance has been charged-off . Our primary credit quality indicator for residential real estate and consumer loans is the individual loan’s past due aging. The following tables summarize the past due and current loans as of December 31 : 2015 Accruing Interest Total Past Due and Nonaccrual 30-59 60-89 90 Days Nonaccrual Current Total Commercial Commercial real estate $ 505 $ 281 $ — $ 211 $ 997 $ 342,620 $ 343,617 Commercial other 18 — — — 18 104,746 104,764 Total commercial 523 281 — 211 1,015 447,366 448,381 Agricultural Agricultural real estate 196 890 — 146 1,232 75,310 76,542 Agricultural other — — — — — 39,369 39,369 Total agricultural 196 890 — 146 1,232 114,679 115,911 Residential real estate Senior liens 1,551 261 — 429 2,241 199,622 201,863 Junior liens 40 8 — 6 54 9,325 9,379 Home equity lines of credit 225 — — — 225 40,034 40,259 Total residential real estate 1,816 269 — 435 2,520 248,981 251,501 Consumer Secured 27 — — — 27 30,839 30,866 Unsecured 4 — — — 4 3,829 3,833 Total consumer 31 — — — 31 34,668 34,699 Total $ 2,566 $ 1,440 $ — $ 792 $ 4,798 $ 845,694 $ 850,492 2014 Accruing Interest Total Past Due and Nonaccrual 30-59 60-89 90 Days Nonaccrual Current Total Commercial Commercial real estate $ 1,155 $ 282 $ — $ 2,764 $ 4,201 $ 310,173 $ 314,374 Commercial other 153 24 2 116 295 118,601 118,896 Total commercial 1,308 306 2 2,880 4,496 428,774 433,270 Agricultural Agricultural real estate 101 — — 106 207 70,990 71,197 Agricultural other 102 — — — 102 33,422 33,524 Total agricultural 203 — — 106 309 104,412 104,721 Residential real estate Senior liens 1,821 425 146 668 3,060 211,698 214,758 Junior liens 235 18 — 130 383 10,750 11,133 Home equity lines of credit 468 20 — 250 738 39,526 40,264 Total residential real estate 2,524 463 146 1,048 4,181 261,974 266,155 Consumer Secured 107 2 — 10 119 28,328 28,447 Unsecured 19 — — — 19 3,938 3,957 Total consumer 126 2 — 10 138 32,266 32,404 Total $ 4,161 $ 771 $ 148 $ 4,044 $ 9,124 $ 827,426 $ 836,550 Impaired Loans Loans may be classified as impaired if they meet one or more of the following criteria: 1. There has been a charge-off of its principal balance (in whole or in part); 2. The loan has been classified as a TDR ; or 3. The loan is in nonaccrual status. Impairment is measured on a loan-by-loan basis for commercial and agricultural loans by comparing the loan’s outstanding balance to the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, less cost to sell, if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Impairment is measured on a loan-by-loan basis for residential real estate and consumer loans by comparing the loan’s unpaid principal balance to the present value of expected future cash flows discounted at the loan’s effective interest rate. We do not recognize interest income on impaired loans in nonaccrual status. For impaired loans not classified as nonaccrual , interest income is recognized daily, as earned, according to the terms of the loan agreement and the principal amount outstanding. The following summarizes information pertaining to impaired loans as of, and for the years ended, December 31 : 2015 Outstanding Balance Unpaid Principal Balance Valuation Allowance Average Outstanding Balance Interest Income Recognized Impaired loans with a valuation allowance Commercial real estate $ 5,659 $ 5,777 $ 818 $ 7,221 $ 376 Commercial other 8 8 11 362 19 Agricultural real estate — — — 22 1 Agricultural other 335 335 2 126 8 Residential real estate senior liens 9,996 10,765 1,959 10,610 425 Residential real estate junior liens 143 163 30 183 16 Home equity lines of credit — — — 31 — Consumer secured — — — 39 3 Total impaired loans with a valuation allowance 16,141 17,048 2,820 18,594 848 Impaired loans without a valuation allowance Commercial real estate 2,122 2,256 2,170 201 Commercial other 180 191 106 11 Agricultural real estate 3,549 3,549 1,903 95 Agricultural other 184 184 290 15 Home equity lines of credit 127 434 144 18 Consumer secured 35 35 6 1 Total impaired loans without a valuation allowance 6,197 6,649 4,619 341 Impaired loans Commercial 7,969 8,232 829 9,859 607 Agricultural 4,068 4,068 2 2,341 119 Residential real estate 10,266 11,362 1,989 10,968 459 Consumer 35 35 — 45 4 Total impaired loans $ 22,338 $ 23,697 $ 2,820 $ 23,213 $ 1,189 2014 Outstanding Balance Unpaid Principal Balance Valuation Allowance Average Outstanding Balance Interest Income Recognized Impaired loans with a valuation allowance Commercial real estate $ 7,115 $ 7,234 $ 1,279 $ 6,958 $ 392 Commercial other 609 828 4 704 51 Agricultural real estate — — — 85 — Agricultural other — — — — — Residential real estate senior liens 11,645 12,782 2,015 12,713 509 Residential real estate junior liens 265 275 53 133 — Home equity lines of credit 250 650 75 229 21 Consumer secured 54 54 1 68 4 Total impaired loans with a valuation allowance 19,938 21,823 3,427 20,890 977 Impaired loans without a valuation allowance Commercial real estate 4,116 4,462 4,997 309 Commercial other 189 212 360 17 Agricultural real estate 1,529 1,529 1,455 89 Agricultural other 66 186 100 30 Home equity lines of credit — — 24 — Consumer secured 10 10 6 — Total impaired loans without a valuation allowance 5,910 6,399 6,942 445 Impaired loans Commercial 12,029 12,736 1,283 13,019 769 Agricultural 1,595 1,715 — 1,640 119 Residential real estate 12,160 13,707 2,143 13,099 530 Consumer 64 64 1 74 4 Total impaired loans $ 25,848 $ 28,222 $ 3,427 $ 27,832 $ 1,422 We had committed to advance $0 in connection with impaired loans, which include TDRs , as of December 31, 2015 and 2014 . Troubled Debt Restructurings Loan modifications are considered to be TDRs when the modification includes terms outside of normal lending practices to a borrower who is experiencing financial difficulties. Typical concessions granted include, but are not limited to: 1. Agreeing to interest rates below prevailing market rates for debt with similar risk characteristics. 2. Extending the amortization period beyond typical lending guidelines for loans with similar risk characteristics. 3. Forgiving principal. 4. Forgiving accrued interest. To determine if a borrower is experiencing financial difficulties, factors we consider include: 1. The borrower is currently in default on any of their debt. 2. The borrower would likely default on any of their debt if the concession was not granted. 3. The borrower’s cash flow was insufficient to service all of their debt if the concession was not granted. 4. The borrower has declared, or is in the process of declaring, bankruptcy. 5. The borrower is unlikely to continue as a going concern (if the entity is a business). The following is a summary of information pertaining to TDRs granted in the years ended December 31 : 2015 2014 Number of Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Commercial other 13 $ 3,073 $ 3,073 9 $ 1,533 $ 1,533 Agricultural other 11 3,106 3,106 1 49 49 Residential real estate Senior liens 6 678 678 15 1,011 1,011 Junior liens 1 30 30 4 233 233 Home equity lines of credit 1 94 94 1 160 160 Total residential real estate 8 802 802 20 1,404 1,404 Consumer unsecured — — — 4 18 18 Total 32 $ 6,981 $ 6,981 34 $ 3,004 $ 3,004 The following tables summarize concessions we granted to borrowers in financial difficulty in the years ended December 31 : 2015 2014 Below Market Interest Rate Below Market Interest Rate and Extension of Amortization Period Below Market Interest Rate Below Market Interest Rate and Extension of Amortization Period Number of Loans Pre-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Commercial other 11 $ 2,742 2 $ 331 8 $ 1,525 1 $ 8 Agricultural other 9 1,360 2 1,746 — — 1 49 Residential real estate Senior liens 3 280 3 398 3 97 12 914 Junior liens — — 1 30 2 152 2 81 Home equity lines of credit — — 1 94 1 160 — — Total residential real estate 3 280 5 522 6 409 14 995 Consumer unsecured — — — — 3 15 1 3 Total 23 $ 4,382 9 $ 2,599 17 $ 1,949 17 $ 1,055 We did not restructure any loans by forgiving principal or accrued interest during 2015 or 2014 . Based on our historical loss experience, losses associated with TDRs are not significantly different than other impaired loans within the same loan segment. As such, TDRs , including TDRs that have been modified in the past 12 months that subsequently defaulted, are analyzed in the same manner as other impaired loans within their respective loan segment. Following is a summary of loans that defaulted in the years ended December 31, which were modified within 12 months prior to the default date: 2015 2014 Number of Loans Pre- Charge-Off Post- Number of Loans Pre- Charge-Off Post- Commercial other 1 $ 216 $ 25 $ 191 — $ — $ — $ — Residential real estate junior liens 1 39 39 — — — — — Consumer unsecured — — — — 2 7 7 — Total 2 $ 255 $ 64 $ 191 2 $ 7 $ 7 $ — The following is a summary of TDR loan balances as of December 31 : 2015 2014 TDRs $ 21,325 $ 23,341 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Premises and Equipment A summary of premises and equipment at December 31 follows: 2015 2014 Land $ 6,190 $ 5,429 Buildings and improvements 27,580 25,441 Furniture and equipment 31,568 31,011 Total 65,338 61,881 Less: accumulated depreciation 37,007 36,000 Premises and equipment, net $ 28,331 $ 25,881 Depreciation expense amounted to $ 2,677 , $ 2,551 , and $ 2,556 in 2015 , 2014 , and 2013 , respectively. |
Foreclosed Assets (Notes)
Foreclosed Assets (Notes) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Foreclosed Assets | Foreclosed Assets The following is a summary of foreclosed assets as of December 31 : 2015 2014 Consumer mortgage loans collateralized by residential real estate foreclosed as a result of obtaining physical possession (1) $ — N/A All other foreclosed assets 421 885 Total $ 421 $ 885 (1) Disclosure requirement from the adoption of ASU No. 2014-04 on January 1, 2015. As such, measurement was not applicable for December 31, 2014. Changes in foreclosed assets are summarized as follows during the years ended December 31 : 2015 2014 Balance, January 1 $ 885 $ 1,412 Properties transferred 1,158 1,371 Impairments (99 ) (123 ) Proceeds from sale (1,523 ) (1,775 ) Balance, December 31 $ 421 $ 885 Consumer mortgage loans collateralized by residential real estate in the process of foreclosure were $ 56 as of December 31, 2015 . |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The carrying amount of goodwill was $48,282 at December 31, 2015 and $45,618 at December 31, 2014 . Branch acquisitions during 2015 provided $2,664 of additional goodwill. Identifiable intangible assets were as follows as of December 31 : 2015 Gross Accumulated Net Core deposit premium resulting from acquisitions $ 5,579 $ 5,033 $ 546 2014 Gross Accumulated Net Core deposit premium resulting from acquisitions $ 5,373 $ 4,863 $ 510 Branch acquisitions during 2015 resulted in $206 of core deposit premiums. Amortization expense associated with identifiable intangible assets was $ 169 , $ 183 , and $ 221 in 2015 , 2014 , and 2013 , respectively. Estimated amortization expense associated with identifiable intangibles for each of the next five years succeeding December 31, 2015 , and thereafter is as follows: Estimated Amortization Expense 2016 $ 163 2017 119 2018 96 2019 71 2020 48 Thereafter 49 Total $ 546 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Deposits | Deposits Scheduled maturities of time deposits for the next five years, and thereafter, are as follows: Scheduled Maturities of Time Deposits 2016 $ 191,858 2017 89,932 2018 63,167 2019 23,883 2020 33,012 Thereafter 21,028 Total $ 422,880 Interest expense on time deposits greater than $100 was $ 2,806 in 2015 , $ 2,920 in 2014 and $ 3,203 in 2013 . |
Borrowed Funds
Borrowed Funds | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Borrowed Funds | Borrowed Funds Borrowed funds consist of the following obligations at December 31 : 2015 2014 Amount Rate Amount Rate FHLB advances $ 235,000 1.93 % $ 192,000 2.05 % Securities sold under agreements to repurchase without stated maturity dates 70,532 0.12 % 95,070 0.14 % Securities sold under agreements to repurchase with stated maturity dates — — 439 3.25 % Federal funds purchased 4,200 0.75 % 2,200 0.50 % Total $ 309,732 1.50 % $ 289,709 1.41 % FHLB advances are collateralized by a blanket lien on all qualified 1-4 family residential real estate loans, specific AFS securities, and FHLB stock. The following table lists the maturities and weighted average interest rates of FHLB advances as of December 31 : 2015 2014 Amount Rate Amount Rate Fixed rate due 2015 $ — — $ 42,000 0.72 % Fixed rate due 2016 30,000 1.25 % 10,000 2.15 % Variable rate due 2016 15,000 0.62 % — — Fixed rate due 2017 50,000 1.56 % 30,000 1.95 % Fixed rate due 2018 50,000 2.16 % 40,000 2.35 % Fixed rate due 2019 40,000 2.35 % 20,000 3.11 % Fixed rate due 2020 10,000 1.98 % 10,000 1.98 % Fixed rate due 2021 30,000 2.26 % 30,000 2.26 % Fixed rate due 2023 10,000 3.90 % 10,000 3.90 % Total $ 235,000 1.93 % $ 192,000 2.05 % Securities sold under agreements to repurchase are classified as secured borrowings and are reflected at the amount of cash received in connection with the transaction. The securities underlying the agreements have a carrying value and a fair value of $70,555 and $94,537 at December 31, 2015 and 2014 , respectively. Such securities remain under our control. We may be required to provide additional collateral based on the fair value of underlying securities. The following table lists the maturity and weighted average interest rates of securities sold under agreements to repurchase with stated maturity dates at December 31 : 2015 2014 Amount Rate Amount Rate Repurchase agreements due 2015 — — 439 3.25 % Total $ — — $ 439 3.25 % Securities sold under repurchase agreements without stated maturity dates, federal funds purchased, and FRB Discount Window advances generally mature within one to four days from the transaction date. The following table provides a summary of securities sold under repurchase agreements without stated maturity dates, federal funds purchased, and FRB Discount Window advances for the years ended December 31 : 2015 2014 Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period Securities sold under agreements to repurchase without stated maturity dates $ 84,859 $ 70,368 0.13 % $ 95,070 $ 91,422 0.13 % Federal funds purchased 13,100 5,783 0.50 % 17,700 4,589 0.48 % We had pledged AFS securities and 1-4 family residential real estate loans in the following amounts at December 31 : 2015 2014 Pledged to secure borrowed funds $ 339,078 $ 324,584 Pledged to secure repurchase agreements 70,555 94,537 Pledged for public deposits and for other purposes necessary or required by law 39,038 19,851 Total $ 448,671 $ 438,972 AFS securities pledged to repurchase agreements without stated maturity dates consisted of the following at December 31 : 2015 2014 States and political subdivisions $ 3,639 $ 6,643 Mortgage-backed securities 23,075 29,655 Collateralized mortgage obligations 43,841 58,239 Total $ 70,555 $ 94,537 AFS securities pledged to repurchase agreements are monitored to ensure the appropriate level is collateralized. In the event of maturities, calls, significant principal repayments, or significant decline in market values, we have adequate levels of available AFS securities to pledge to satisfy required collateral. As of December 31, 2015 , we had the ability to borrow up to an additional $121,960 , based on assets pledged as collateral. We had no investment securities that are restricted to be pledged for specific purposes. |
Other Noninterest Expenses
Other Noninterest Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Other Noninterest Expenses | Other Noninterest Expenses A summary of expenses included in other noninterest expenses is as follows for the years ended December 31 : 2015 2014 2013 Director fees $ 827 $ 775 $ 819 Audit and related fees 821 809 738 FDIC insurance premiums 813 842 1,082 Donations and community relations 808 1,004 715 Marketing costs 491 427 416 Legal fees 464 320 359 Education and travel 442 625 502 Printing and supplies 405 367 396 Postage and freight 377 397 387 Consulting fees 364 349 315 Loan underwriting fees 347 361 423 State taxes 218 171 140 Amortization of deposit premium 169 183 221 Other losses 150 250 109 Foreclosed asset and collection 53 122 211 All other 1,661 1,628 1,517 Total other $ 8,410 $ 8,630 $ 8,350 |
Federal Income Taxes
Federal Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Federal Income Taxes | Federal Income Taxes Components of the consolidated provision for federal income taxes are as follows for the years ended December 31 : 2015 2014 2013 Currently payable $ 1,596 $ 2,159 $ 3,404 Deferred expense (benefit) 1,692 185 (1,208 ) Income tax expense $ 3,288 $ 2,344 $ 2,196 The reconciliation of the provision for federal income taxes and the amount computed at the federal statutory tax rate of 34% of income before federal income tax expense is as follows for the year ended December 31 : 2015 2014 2013 Income taxes at 34% statutory rate $ 6,262 $ 5,463 $ 5,000 Effect of nontaxable income Interest income on tax exempt municipal securities (2,026 ) (1,999 ) (1,746 ) Earnings on corporate owned life insurance policies (262 ) (255 ) (249 ) Other (88 ) (263 ) (154 ) Total effect of nontaxable income (2,376 ) (2,517 ) (2,149 ) Effect of nondeductible expenses 157 156 146 Effect of tax credits (755 ) (758 ) (801 ) Federal income tax expense $ 3,288 $ 2,344 $ 2,196 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for federal income tax purposes. Significant components of our deferred tax assets and liabilities, included in other assets in the accompanying consolidated balance sheets, are as follows as of December 31 : 2015 2014 Deferred tax assets Allowance for loan losses $ 1,582 $ 2,507 Deferred directors’ fees 2,549 2,414 Employee benefit plans 229 255 Core deposit premium and acquisition expenses 1,098 1,037 Net unrecognized actuarial losses on pension plan 1,708 1,962 Life insurance death benefit payable 804 804 Alternative minimum tax 650 650 Other 53 564 Total deferred tax assets 8,673 10,193 Deferred tax liabilities Prepaid pension cost 890 989 Premises and equipment 166 247 Accretion on securities 55 49 Core deposit premium and acquisition expenses 1,289 1,229 Net unrealized gains on available-for-sale securities 2,252 2,339 Other 989 449 Total deferred tax liabilities 5,641 5,302 Net deferred tax assets $ 3,032 $ 4,891 We are subject to U.S. federal income tax; however, we are no longer subject to examination by taxing authorities for years before 2012 . There are no material uncertain tax positions requiring recognition in our consolidated financial statements . We do not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months. We recognize interest and/or penalties related to income tax matters in income tax expense. We do not have any amounts accrued for interest and penalties at December 31, 2015 and 2014 and we not aware of any claims for such amounts by federal income tax authorities. |
Off-Balance-Sheet Activities
Off-Balance-Sheet Activities | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Off-Balance-Sheet Activities | Off-Balance-Sheet Activities Credit-Related Financial Instruments We are party to credit related financial instruments with off-balance-sheet risk. These financial instruments are entered into in the normal course of business to meet the financing needs of our customers. These financial instruments, which include commitments to extend credit and standby letters of credit, involve, to varying degrees, elements of credit and IRR in excess of the amounts recognized in the consolidated balance sheets. The contract or notional amounts of these instruments reflect the extent of involvement we have in a particular class of financial instrument. December 31 2015 2014 Unfunded commitments under lines of credit $ 134,412 $ 116,935 Commercial and standby letters of credit 915 4,985 Commitments to grant loans 53,946 13,988 Unfunded commitments under lines of credit are commitments for possible future extensions of credit to existing customers. These commitments may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. Commercial and standby letters of credit are conditional commitments we issued to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements, including commercial paper, bond financing, and similar transactions. These commitments to extend credit and letters of credit mature within one year . The credit risk involved in these transactions is essentially the same as that involved in extending loans to customers. We evaluate each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if we deem necessary upon the extension of credit, is based on our credit evaluation of the borrower. While we consider standby letters of credit to be guarantees, the amount of the liability related to such guarantees on the commitment date is not significant and a liability related to such guarantees is not recorded on the consolidated balance sheets. Commitments to grant loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The amount of collateral obtained, if we deem necessary, is based on our credit evaluation of the customer. Commitments to grant loans include loans committed to be sold to the secondary market. Our exposure to credit-related loss in the event of nonperformance by the counter parties to the financial instruments for commitments to extend credit and standby letters of credit could be up to the contractual notional amount of those instruments. We use the same credit policies in deciding to make these commitments as we do for extending loans to customers. No significant losses are anticipated as a result of these commitments. Commitments and Other Matters Banking regulations require us to maintain cash reserve balances in currency or as deposits with the FRB . At December 31, 2015 and 2014 , the reserve balances amounted to $ 1,169 and $ 963 , respectively. Banking regulations limit the transfer of assets in the form of dividends, loans, or advances from the Bank to the Corporation. At December 31, 2015 , substantially all of the Bank’s assets were restricted from transfer to the Corporation in the form of loans or advances. Consequently, Bank dividends are the principal source of funds for the Corporation. Payment of dividends without regulatory approval is limited to the current year’s retained net income plus retained net income for the preceding two years, less any required transfers to common stock. At January 1, 2015 , the amount available to the Corporation for dividends from the Bank, without regulatory approval, was approximately $ 24,700 . |
On-Balance Sheet Activities
On-Balance Sheet Activities | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
On-Balance Sheet Activities | On-Balance Sheet Activities Derivative Loan Commitments Mortgage loan commitments are referred to as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. We enter into commitments to fund residential mortgage loans at specific times in the future, with the intention that these loans will subsequently be sold in the secondary market. A mortgage loan commitment binds us to lend funds to a potential borrower at a specified interest rate within a specified period of time, generally up to 60 days after inception of the rate lock. Outstanding derivative loan commitments expose us to the risk that the price of the loans arising from the exercise of the loan commitment might decline from the inception of the rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increase. The notional amount of undesignated interest rate lock commitments was $ 234 and $ 632 at December 31, 2015 and 2014 , respectively. Forward Loan Sale Commitments To protect against the price risk inherent in derivative loan commitments, we utilize both “mandatory delivery” and “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loan that would result from the exercise of the derivative loan commitments. With a “mandatory delivery” contract, we commit to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If we fail to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, we are obligated to pay a “pair-off” fee, based on then current market prices, to the investor to compensate the investor for the shortfall. With a “best efforts” contract, we commit to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded (e.g. on the same day the lender commits to lend funds to a potential borrower). We expect that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. The notional amount of undesignated forward loan sale commitments was $ 1,421 and $ 1,533 at December 31, 2015 and 2014 , respectively. The fair values of the rate lock loan commitments related to the origination of mortgage loans that will be held for sale and the forward loan sale commitments are deemed insignificant by management and, accordingly, are not recorded in our consolidated financial statements . |
Commitments and Other Matters
Commitments and Other Matters | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Other Matters | Off-Balance-Sheet Activities Credit-Related Financial Instruments We are party to credit related financial instruments with off-balance-sheet risk. These financial instruments are entered into in the normal course of business to meet the financing needs of our customers. These financial instruments, which include commitments to extend credit and standby letters of credit, involve, to varying degrees, elements of credit and IRR in excess of the amounts recognized in the consolidated balance sheets. The contract or notional amounts of these instruments reflect the extent of involvement we have in a particular class of financial instrument. December 31 2015 2014 Unfunded commitments under lines of credit $ 134,412 $ 116,935 Commercial and standby letters of credit 915 4,985 Commitments to grant loans 53,946 13,988 Unfunded commitments under lines of credit are commitments for possible future extensions of credit to existing customers. These commitments may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. Commercial and standby letters of credit are conditional commitments we issued to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements, including commercial paper, bond financing, and similar transactions. These commitments to extend credit and letters of credit mature within one year . The credit risk involved in these transactions is essentially the same as that involved in extending loans to customers. We evaluate each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if we deem necessary upon the extension of credit, is based on our credit evaluation of the borrower. While we consider standby letters of credit to be guarantees, the amount of the liability related to such guarantees on the commitment date is not significant and a liability related to such guarantees is not recorded on the consolidated balance sheets. Commitments to grant loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The amount of collateral obtained, if we deem necessary, is based on our credit evaluation of the customer. Commitments to grant loans include loans committed to be sold to the secondary market. Our exposure to credit-related loss in the event of nonperformance by the counter parties to the financial instruments for commitments to extend credit and standby letters of credit could be up to the contractual notional amount of those instruments. We use the same credit policies in deciding to make these commitments as we do for extending loans to customers. No significant losses are anticipated as a result of these commitments. Commitments and Other Matters Banking regulations require us to maintain cash reserve balances in currency or as deposits with the FRB . At December 31, 2015 and 2014 , the reserve balances amounted to $ 1,169 and $ 963 , respectively. Banking regulations limit the transfer of assets in the form of dividends, loans, or advances from the Bank to the Corporation. At December 31, 2015 , substantially all of the Bank’s assets were restricted from transfer to the Corporation in the form of loans or advances. Consequently, Bank dividends are the principal source of funds for the Corporation. Payment of dividends without regulatory approval is limited to the current year’s retained net income plus retained net income for the preceding two years, less any required transfers to common stock. At January 1, 2015 , the amount available to the Corporation for dividends from the Bank, without regulatory approval, was approximately $ 24,700 . |
Minimum Regulatory Capital Requ
Minimum Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Minimum Regulatory Capital Requirements | Minimum Regulatory Capital Requirements The Corporation (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the FRB and the FDIC . Failure to meet minimum capital requirements can initiate mandatory and possibly additional discretionary actions by the FRB and the FDIC that if undertaken, could have a material effect on our financial statements. Under regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that include quantitative measures of assets, liabilities, capital, and certain off-balance-sheet items, as calculated under regulatory accounting standards. Our capital amounts and classifications are also subject to qualitative judgments by the FRB and the FDIC about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies. Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios (set forth in the following table) of total, tier 1 capital, and common equity tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and tier 1 capital to average assets (as defined). We believe, as of December 31, 2015 and 2014 , that we met all capital adequacy requirements. The FRB has established minimum risk based capital guidelines. Pursuant to these guidelines, a framework has been established that assigns risk weights to each category of on and off-balance-sheet items to arrive at risk adjusted total assets. Regulatory capital is divided by the risk adjusted assets with the resulting ratio compared to the minimum standard to determine whether a corporation has adequate capital. On July 2, 2013, the FRB published revised BASEL III Capital standards for banks. The final rules redefine what is included or deducted from equity capital, changes risk weighting for certain on and off-balance sheet assets, increases the minimum required equity capital to be considered well capitalized, and introduces a capital cushion buffer. The rules, which are being gradually phased in between 2015 and 2019, are not expected to have a material impact on the Corporation but will require us to hold more capital than we have historically. Effective January 1, 2015, the minimum standard for primary, or tier 1, capital increased from 4.00% to 6.00% . The minimum standard for total capital remains at 8.00% . Also effective January 1, 2015 is the new common equity tier 1 capital ratio which has a minimum requirement of 4.50% . As of December 31, 2015 and 2014 , the most recent notifications from the FRB and the FDIC categorized us as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain total risk-based, Tier 1 risk-based, Common Equity Tier 1, and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notifications that we believe have changed our categories. Our actual capital amounts and ratios are also presented in the table. Actual Minimum Minimum Amount Ratio Amount Ratio Amount Ratio December 31, 2015 Common Equity Tier 1 capital to risk weighted assets Isabella Bank $ 124,917 12.31 % $ 40,589 4.50 % $ 60,883 6.50 % Consolidated 135,250 13.24 % 40,886 4.50 % N/A N/A Tier 1 capital to risk weighted assets Isabella Bank 124,917 12.31 % 40,589 6.00 % 60,883 8.00 % Consolidated 135,250 13.24 % 40,886 6.00 % N/A N/A Total capital to risk weighted assets Isabella Bank 132,317 13.04 % 81,178 8.00 % 101,472 10.00 % Consolidated 142,650 13.96 % 81,772 8.00 % N/A N/A Tier 1 capital to average assets Isabella Bank 124,917 7.93 % 63,032 4.00 % 78,790 5.00 % Consolidated 135,250 8.52 % 63,524 4.00 % N/A N/A Actual Minimum Minimum Amount Ratio Amount Ratio Amount Ratio December 31, 2014 Total capital to risk weighted assets Isabella Bank $ 128,074 14.18 % $ 72,278 8.00 % $ 90,348 10.00 % Consolidated 138,820 15.19 % 73,108 8.00 % N/A N/A Tier 1 capital to risk weighted assets Isabella Bank 117,974 13.06 % 36,139 4.00 % 54,209 6.00 % Consolidated 128,720 14.08 % 36,554 4.00 % N/A N/A Tier 1 capital to average assets Isabella Bank 117,974 7.96 % 59,297 4.00 % 74,121 5.00 % Consolidated 128,720 8.59 % 59,908 4.00 % N/A N/A |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans 401(k) Plan We have a 401(k) plan in which substantially all employees are eligible to participate. Employees may contribute up to 100% of their compensation subject to certain limits based on federal tax laws. The plan was amended in 2013 to provide a matching safe harbor contribution for all eligible employees equal to 100% of the first 5.0% of an employee's compensation contributed to the Plan during the year. Employees are 100% vested in the safe harbor matching contributions. For 2012, we made a 3.0% safe harbor contribution for all eligible employees and matching contributions equal to 50% of the first 4.0% of an employee’s compensation contributed to the Plan during the year. Employees were 100% vested in the safe harbor contributions and were 0% vested through their first two years of employment and were 100% vested after 6 years of service for matching contributions. For 2015 , 2014 and 2013 , expenses attributable to the Plan were $ 664 , $ 655 , and $ 608 , respectively. Defined Benefit Pension Plan We maintain a noncontributory defined benefit pension plan, which was curtailed effective March 1, 2007 . As a result of the curtailment, future salary increases are no longer considered (the projected benefit obligation is equal to the accumulated benefit obligation), and plan benefits are based on years of service and the individual employee’s five highest consecutive years of compensation out of the last ten years of service through March 1, 2007 . Changes in the projected benefit obligation and plan assets during each year, the funded status of the plan, and the net amount recognized in our consolidated balance sheets using an actuarial measurement date of December 31 , are summarized as follows during the years ended December 31 : 2015 2014 Change in benefit obligation Benefit obligation, January 1 $ 13,250 $ 10,732 Interest cost 494 486 Actuarial (gain) loss (744 ) 3,049 Benefits paid, including plan expenses (1,023 ) (1,017 ) Benefit obligation, December 31 11,977 13,250 Change in plan assets Fair value of plan assets, January 1 10,390 10,508 Investment return 5 699 Contributions 200 200 Benefits paid, including plan expenses (1,023 ) (1,017 ) Fair value of plan assets, December 31 9,572 10,390 Deficiency in funded status at December 31, included on the consolidated balance sheets in accrued interest payable and other liabilities $ (2,405 ) $ (2,860 ) 2015 2014 Change in accrued pension benefit costs Accrued benefit cost at January 1 $ (2,860 ) $ (224 ) Contributions 200 200 Net periodic benefit cost (492 ) (300 ) Net change in unrecognized actuarial loss and prior service cost 747 (2,536 ) Accrued pension benefit cost at December 31 $ (2,405 ) $ (2,860 ) We have recorded the funded status of the Plan in our consolidated balance sheets. We adjust the underfunded status in a liability account to reflect the current funded status of the plan. Our liability increased in 2014 as a result of changes in mortality tables and discount rates used to determine the current benefit obligation. Any gains or losses that arise during the year but are not recognized as components of net periodic benefit cost are recognized as a component of other comprehensive income (loss). The components of net periodic benefit cost are as follows for the years ended December 31 : 2015 2014 2013 Interest cost on benefit obligation $ 494 $ 486 $ 450 Expected return on plan assets (607 ) (615 ) (572 ) Amortization of unrecognized actuarial net loss 355 169 330 Settlement loss 250 260 — Net periodic benefit cost $ 492 $ 300 $ 208 During 2015 and 2014, additional settlement loss of $250 and $260 were recognized in connection with lump-sum benefits distributions. Many plan participants elect to receive their retirement benefit payments in the form of lump-sum settlements. Pro rata settlement losses, which can occasionally occur as a result of these lump sum distributions, are recognized only in years when the total of such distributions exceed the sum of the service and interest expense components of net periodic benefit cost. Accumulated other comprehensive income at December 31, 2015 includes net unrecognized pension costs before income taxes of $ 5,022 , of which $ 238 is expected to be amortized into benefit cost during 2016 . The actuarial assumptions used in determining the benefit obligation are as follows for the years ended December 31 : 2015 2014 2013 Discount rate 4.13 % 3.80 % 4.64 % Expected long-term rate of return 6.00 % 6.00 % 6.00 % The actuarial weighted average assumptions used in determining the net periodic pension costs are as follows for the years ended December 31 : 2015 2014 2013 Discount rate 3.80 % 4.64 % 3.75 % Expected long-term return on plan assets 6.00 % 6.00 % 6.00 % As a result of the curtailment of the Plan, there is no rate of compensation increase considered in the above assumptions. The expected long term rate of return is an estimate of anticipated future long term rates of return on plan assets as measured on a market value basis. Factors considered in arriving at this assumption include: • Historical long term rates of return for broad asset classes. • Actual past rates of return achieved by the plan. • The general mix of assets held by the plan. • The stated investment policy for the plan. The selected rate of return is net of anticipated investment related expenses. Plan Assets Our overall investment strategy is to moderately grow the portfolio by investing 50% of the portfolio in equity securities and 50% in fixed income securities. This strategy is designed to generate a long term rate of return of 6.00% . Equity securities primarily consist of the S&P 500 Index with a smaller allocation to the Small Cap and International Index. Fixed income securities are invested in the Bond Market Index. The Plan has appropriate assets invested in short term investments to meet near-term benefit payments. The asset mix and the sector weighting of the investments are determined by our pension committee, which is comprised of members of our management. To manage the Plan, we retain a third party investment advisor to conduct consultations. We review the performance of the advisor at least annually. The fair values of our pension plan assets by asset category were as follows as of December 31 : 2015 2014 Total (Level 2) Total (Level 2) Short-term investments $ 157 $ 157 $ 804 $ 804 Common collective trusts Fixed income 4,662 4,662 4,738 4,738 Equity investments 4,753 4,753 4,848 4,848 Total $ 9,572 $ 9,572 $ 10,390 $ 10,390 The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2015 and 2014 : • Short-term investments: Shares of a money market portfolio, which is valued using amortized cost, which approximates fair value. • Common collective trusts: These investments are public investment securities valued using the NAV provided by a third party investment advisor. The NAV is quoted on a private market that is not active; however, the unit price is based on underlying investments which are traded on an active market. We anticipate contributions to the Plan in 2016 to approximate net contribution costs. The components of projected net periodic benefit cost are as follows for the year ending: December 31, 2016 Interest cost on projected benefit obligation $ 484 Expected return on plan assets (559 ) Amortization of unrecognized actuarial net loss 313 Net periodic benefit cost $ 238 Estimated future benefit payments are as follows for the next ten years: Estimated Benefit Payments 2016 $ 500 2017 527 2018 529 2019 570 2020 614 2021 - 2025 3,290 Equity Compensation Plan Pursuant to the terms of the Directors Plan , our directors are required to invest at least 25% of their board fees in our common stock. These stock investments can be made either through deferred fees or through the purchase of shares through the Dividend Reinvestment Plan . Deferred fees, under the Directors Plan , are converted on a quarterly basis into shares of our common stock based on the fair value of a share of common stock as of the relevant valuation date. Stock credited to a participant’s account is eligible for stock and cash dividends as declared. Dividend Reinvestment Plan shares are purchased on a monthly basis pursuant to the Dividend Reinvestment Plan . Distribution of deferred fees from the Directors Plan occurs when the participant retires from the Board or upon the occurrence of certain other events. The participant is eligible to receive a lump-sum, in-kind, distribution of all of the stock that is then in his or her account, and any unconverted cash will be converted to and rounded up to whole shares of stock and distributed, as well. The Directors Plan does not allow for cash settlement, and therefore, such share-based payment awards qualify for classification as equity. We may use authorized but unissued shares or purchase shares of common stock on the open market to meet our obligations under the Directors Plan . We maintain the Rabbi Trust to fund the Directors Plan . The Rabbi Trust is an irrevocable grantor trust to which we may contribute assets for the limited purpose of funding a nonqualified deferred compensation plan. Although we may not reach the assets of the Rabbi Trust for any purpose other than meeting our obligations under the Directors Plan , the assets of the Rabbi Trust remain subject to the claims of our creditors and are included in the consolidated financial statements . We may contribute cash or common stock to the Rabbi Trust from time-to-time for the sole purpose of funding the Directors Plan . The Rabbi Trust will use any cash that we contributed to purchase shares of our common stock on the open market through our brokerage services department. Shares held in the Rabbi Trust are included in the calculation of earnings per share. The components of shares eligible to be issued under the Directors Plan were as follows as of December 31 : 2015 2014 Eligible Market Eligible Market Unissued 180,616 $ 5,400 173,435 $ 3,902 Shares held in Rabbi Trust 19,401 580 13,934 314 Total 200,017 $ 5,980 187,369 $ 4,216 Other Employee Benefit Plans We maintain two nonqualified supplementary employee retirement plans to provide supplemental retirement benefits to specified participants. Expenses related to these programs for 2015 , 2014 and 2013 were $ 379 , $ 372 , and $ 375 , respectively, and are being recognized over the participants’ expected years of service. We maintain a non-leveraged ESOP which was frozen to new participants on December 31, 2006. Contributions to the plan are discretionary and are approved by the Board of Directors and recorded as compensation expense. We made no contributions to the ESOP in 2015 , 2014 and 2013 . Compensation cost related to the plan for 2015 , 2014 and 2013 was $32 , $ 23 , and $ 29 , respectively. Total allocated shares outstanding related to the ESOP at December 31, 2015 , 2014 , and 2013 were 217,064 , 241,958 , and 241,958 , respectively. Such shares are included in the computation of dividends and earnings per share in each of the respective years. We maintain a self-funded medical plan under which we are responsible for the first $ 75 per year of claims made by a covered family. Expenses are accrued based on estimates of the aggregate liability for claims incurred and our experience. Expenses were $ 1,695 in 2015 , $ 1,786 in 2014 and $ 2,698 in 2013 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) AOCI includes net income as well as unrealized gains and losses, net of tax, on AFS investment securities owned and changes in the funded status of our defined benefit pension plan, which are excluded from net income. Unrealized AFS securities gains and losses and changes in the funded status of the pension plan, net of tax, are excluded from net income, and are reflected as a direct charge or credit to shareholders’ equity. Comprehensive income (loss) and the related components are disclosed in the consolidated statements of comprehensive income. The following table summarizes the changes in AOCI by component for the years ended December 31 (net of tax): Unrealized Change in Unrecognized Pension Cost on Defined Total Balance, January 1, 2013 $ 8,678 $ (3,671 ) $ 5,007 OCI before reclassifications (18,971 ) 2,120 (16,851 ) Amounts reclassified from AOCI (171 ) 208 37 Subtotal (19,142 ) 2,328 (16,814 ) Tax effect 6,257 (791 ) 5,466 OCI, net of tax (12,885 ) 1,537 (11,348 ) Balance, December 31, 2013 (4,207 ) (2,134 ) (6,341 ) OCI before reclassifications 11,290 (2,836 ) 8,454 Amounts reclassified from AOCI (97 ) 300 203 Subtotal 11,193 (2,536 ) 8,657 Tax effect (3,684 ) 862 (2,822 ) OCI, net of tax 7,509 (1,674 ) 5,835 Balance, December 31, 2014 3,302 (3,808 ) (506 ) OCI before reclassifications 310 255 565 Amounts reclassified from AOCI (163 ) 492 329 Subtotal 147 747 894 Tax effect 87 (254 ) (167 ) OCI, net of tax 234 493 727 Balance, December 31, 2015 $ 3,536 $ (3,315 ) $ 221 Included in OCI for the years ended December 31, 2015 and 2014 are changes in unrealized holding gains and losses related to auction rate money market preferred and preferred stocks. For federal income tax purposes, these securities are considered equity investments. As such, no deferred federal income taxes related to unrealized holding gains or losses are expected or recorded. A summary of the components of unrealized holding gains on AFS securities included in OCI follows for the years ended December 31 : 2015 2014 2013 Auction Rate Money Market Preferred and Preferred Stocks All Other AFS Securities Total Auction Rate Money Market Preferred and Preferred Stocks All Other AFS Securities Total Auction Rate Money Market Preferred and Preferred Stocks All Other AFS securities Total Unrealized gains (losses) arising during the period $ 406 $ (96 ) $ 310 $ 355 $ 10,935 $ 11,290 $ (737 ) $ (18,234 ) $ (18,971 ) Reclassification adjustment for net realized (gains) losses included in net income — (163 ) (163 ) — (97 ) (97 ) — (171 ) (171 ) Net unrealized gains (losses) 406 (259 ) 147 355 10,838 11,193 (737 ) (18,405 ) (19,142 ) Tax effect — 87 87 — (3,684 ) (3,684 ) — 6,257 6,257 Unrealized gains (losses), net of tax $ 406 $ (172 ) $ 234 $ 355 $ 7,154 $ 7,509 $ (737 ) $ (12,148 ) $ (12,885 ) The following table details reclassification adjustments and the related affected line items in our consolidated statements of income for the years ended December 31 : Details about AOCI components Amount Affected Line Item in the 2015 2014 2013 Unrealized holding gains (losses) on AFS securities $ 163 $ 97 $ 171 Net gains (losses) on sale of AFS securities 55 33 58 Federal income tax expense $ 108 $ 64 $ 113 Net income Change in unrecognized pension cost on defined benefit pension plan $ 492 $ 300 $ 208 Compensation and benefits 167 102 71 Federal income tax expense $ 325 $ 198 $ 137 Net income |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In the ordinary course of business, we grant loans to principal officers and directors and their affiliates (including their families and companies in which they have 10% or more ownership). Annual activity consisted of the following for the years ended December 31 : 2015 2014 Balance, January 1 $ 3,822 $ 4,178 New loans 2,779 1,475 Repayments (2,580 ) (1,831 ) Balance, December 31 $ 4,021 $ 3,822 Total deposits of these principal officers and directors and their affiliates amounted to $ 5,625 and $ 5,861 at December 31, 2015 and 2014 , respectively. In addition, the ESOP held deposits with the Bank aggregating $ 143 and $ 392 , respectively, at December 31, 2015 and 2014 . From time-to-time , we make charitable donations to the Isabella Bank & Trust Foundation (the “Foundation”), which is an affiliated nonprofit entity formed for the purpose of distributing charitable donations to recipient organizations generally located in the communities we service. Our donations are expensed when committed to the Foundation. The assets and transactions of the Foundation are not included in our consolidated financial statements . Assets of the Foundation include cash and cash equivalents, certificates of deposit, and shares of Isabella Bank Corporation common stock. The Foundation owned 44,350 and 34,350 shares of our common stock as of December 31, 2015 and 2014 , respectively. Such shares are included in the computation of dividends and earnings per share. The following table displays total asset balances of, and our donations to, the Foundation as of, and for the years ended, December 31 : 2015 2014 2013 Total assets $ 2,435 $ 2,090 $ 1,815 Donations $ 258 $ 500 $ 200 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Following is a description of the valuation methodologies, key inputs, and an indication of the level of the fair value hierarchy in which the assets or liabilities are classified. Cash and cash equivalents : The carrying amounts of cash and demand deposits due from banks and interest bearing balances due from banks approximate fair values. As such, we classify cash and cash equivalents as Level 1. AFS securities: AFS securities are recorded at fair value on a recurring basis. Level 1 fair value measurement is based upon quoted prices for identical instruments. Level 2 fair value measurement is based upon quoted prices for similar instruments. If quoted prices are not available, fair values are measured using independent pricing models or other model based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss and liquidity assumptions. The values for Level 1 and Level 2 investment securities are generally obtained from an independent third party. On a quarterly basis, we compare the values provided to alternative pricing sources. Mortgage loans AFS : Mortgage loans AFS are carried at the lower of cost or fair value. The fair value of Mortgage loans AFS are based on the price secondary markets are currently offering for portfolios with similar characteristics. As such, we classify Mortgage loans AFS subject to nonrecurring fair value adjustments as Level 2. Loans : For variable rate loans with no significant change in credit risk, fair values are based on carrying values. Fair values for fixed rate loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. The resulting amounts are adjusted to estimate the effect of changes in the credit quality of borrowers since the loans were originated. As such, we classify loans as Level 3 assets. We do not record loans at fair value on a recurring basis. However, from time-to-time , loans are classified as impaired and a specific allowance for loan loss may be established. Loans for which it is probable that payment of interest and principal will be significantly different than the contractual terms of the original loan agreement are considered impaired. Once a loan is identified as impaired, we measure the estimated impairment. The fair value of impaired loans is estimated using one of several methods, including the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, less cost to sell, if the loan is collateral dependent. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. We review the net realizable values of the underlying collateral for collateral dependent impaired loans on at least a quarterly basis for all loan types. To determine the collateral value, we utilize independent appraisals, broker price opinions, or internal evaluations. We review these valuations to determine whether an additional discount should be applied given the age of market information that may have been considered as well as other factors such as costs to sell an asset if it is determined that the collateral will be liquidated in connection with the ultimate settlement of the loan. We use these valuations to determine if any specific reserves or charge-offs are necessary. We may obtain new valuations in certain circumstances, including when there has been significant deterioration in the condition of the collateral, if the foreclosure process has begun, or if the existing valuation is deemed to be outdated. The following tables list the quantitative fair value information about impaired loans as of December 31 : 2015 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Real Estate 20% - 30% Equipment 20% - 35% Discounted appraisal value $9,301 Cash crop inventory 40% Other inventory 50% Accounts receivable 50% Liquor license 75% Furniture, fixtures & equipment 35% - 45% 2014 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Real Estate 20% - 25% Equipment 30% - 40% Discounted appraisal value $8,720 Cash crop inventory 40% Other inventory 75% Accounts receivable 50% Liquor license 75% Discount factors with ranges are based on the age of the independent appraisal, broker price opinion, or internal evaluation. Accrued interest receivable : The carrying amounts of accrued interest receivable approximate fair value. As such, we classify accrued interest receivable as Level 1. Equity securities without readily determinable fair values : Included in equity securities without readily determinable fair values are FHLB stock and FRB stock as well as our ownership interests in Corporate Settlement Solutions, LLC and Valley Financial Corporation . The investment in Corporate Settlement Solutions, LLC , a title insurance company, was made in the first quarter 2008 and we account for our investment under the equity method of accounting. Valley Financial Corporation is the parent company of 1st State Bank in Saginaw, Michigan, which is a community bank that opened in 2005. We made investments in Valley Financial Corporation in 2004 and in 2007 and we account for our investment under the equity method of accounting. The lack of an active market, or other independent sources to validate fair value estimates coupled with the impact of future capital calls and transfer restrictions, is an inherent limitation in the valuation process. As the fair values of these investments are not readily determinable, they are not disclosed under a specific fair value hierarchy; however, they are reviewed quarterly for impairment. If we were to record an impairment adjustment related to these securities, it would be classified as a nonrecurring Level 3 fair value adjustment. During 2015 and 2014 , there were no impairments recorded on equity securities without readily determinable fair values. Foreclosed assets : Upon transfer from the loan portfolio, foreclosed assets (which are included in other assets) are adjusted to and subsequently carried at the lower of carrying value or fair value less costs to sell. Net realizable value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. Due to the inherent level of estimation in the valuation process, we classify foreclosed assets as nonrecurring Level 3. The table below lists the quantitative fair value information related to foreclosed assets as of: December 31, 2015 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Discounted appraisal value $ 421 Real Estate 20% - 30% December 31, 2014 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Discounted appraisal value $ 885 Real Estate 20% - 25% Discount factors with ranges are based on the age of the independent appraisal, broker price opinion, or internal evaluations. Goodwill and other intangible assets : Acquisition intangibles and goodwill are evaluated for potential impairment on at least an annual basis. Acquisition intangibles and goodwill are typically qualitatively evaluated to determine if it is more likely than not that the carrying balance is impaired. If it is determined that the carrying balance of acquisition intangibles or goodwill is more likely than not to be impaired, we perform a cash flow valuation to determine the extent of the potential impairment. If the testing resulted in impairment, we would classify goodwill and other acquisition intangibles subjected to nonrecurring fair value adjustments as Level 3. During 2015 and 2014 , there were no impairments recorded on goodwill and other acquisition intangibles. OMSR : OMSR (which are included in other assets) are subject to impairment testing. To test for impairment, we utilize a discounted cash flow analysis using interest rates and prepayment speed assumptions currently quoted for comparable instruments and discount rates. If the valuation model reflects a value less than the carrying value, OMSR are adjusted to fair value through a valuation allowance as determined by the model. As such, we classify OMSR subject to nonrecurring fair value adjustments as Level 2. Deposits : The fair value of demand, savings, and money market deposits are equal to their carrying amounts and are classified as Level 1. Fair values for variable rate certificates of deposit approximate their carrying value. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits. As such, fixed rate certificates of deposit are classified as Level 2. Borrowed funds : The carrying amounts of federal funds purchased, borrowings under overnight repurchase agreements, and other short-term borrowings maturing within ninety days approximate their fair values. The fair values of other borrowed funds are estimated using discounted cash flow analyses based on current incremental borrowing arrangements. As such, borrowed funds are classified as Level 2. Accrued interest payable: The carrying amounts of accrued interest payable approximate fair value. As such, we classify accrued interest payable as Level 1. Commitments to extend credit, standby letters of credit, and undisbursed loans: Our commitments to extend credit, standby letters of credit, and undisbursed funds have no carrying amount and are estimated to have no realizable fair value. Historically, a majority of the unused commitments to extend credit have not been drawn upon and, generally, we do not receive fees in connection with these commitments other than standby letter of credit fees, which are not significant. The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Although we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement. Estimated Fair Values of Financial Instruments Not Recorded at Fair Value in their Entirety on a Recurring Basis Disclosure of the estimated fair values of financial instruments, which differ from carrying values, often requires the use of estimates. In cases where quoted market values in an active market are not available, we use present value techniques and other valuation methods to estimate the fair values of our financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis were as follows as of December 31 : 2015 Carrying Estimated (Level 1) (Level 2) (Level 3) ASSETS Cash and cash equivalents $ 21,569 $ 21,569 $ 21,569 $ — $ — Mortgage loans AFS 1,187 1,210 — 1,210 — Gross loans 850,492 839,398 — — 839,398 Less allowance for loan and lease losses 7,400 7,400 — — 7,400 Net loans 843,092 831,998 — — 831,998 Accrued interest receivable 6,269 6,269 6,269 — — Equity securities without readily determinable fair values (1) 22,286 N/A — — — OMSR 2,505 2,518 — 2,518 — LIABILITIES Deposits without stated maturities 741,683 741,683 741,683 — — Deposits with stated maturities 422,880 421,429 — 421,429 — Borrowed funds 309,732 297,495 — 297,495 — Accrued interest payable 545 545 545 — — 2014 Carrying Estimated (Level 1) (Level 2) (Level 3) ASSETS Cash and cash equivalents $ 19,906 $ 19,906 $ 19,906 $ — $ — Mortgage loans AFS 901 911 — 911 — Gross loans 836,550 830,417 — — 830,417 Less allowance for loan and lease losses 10,100 10,100 — — 10,100 Net loans 826,450 820,317 — — 820,317 Accrued interest receivable 5,851 5,851 5,851 — — Equity securities without readily determinable fair values (1) 20,076 N/A — — — OMSR 2,519 2,554 — 2,554 — LIABILITIES Deposits without stated maturities 634,222 634,222 634,222 — — Deposits with stated maturities 440,262 440,964 — 440,964 — Borrowed funds 289,709 293,401 — 293,401 — Accrued interest payable 558 558 558 — — (1) Due to the characteristics of equity securities without readily determinable fair values, they are not disclosed under a specific fair value hierarchy. If we were to record an impairment adjustment related to these securities, such amount would be classified as a nonrecurring Level 3 fair value adjustment. Financial Instruments Recorded at Fair Value The table below presents the recorded amount of assets and liabilities measured at fair value on December 31 : 2015 2014 Total (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Recurring items AFS securities Government-sponsored enterprises $ 24,345 $ — $ 24,345 $ — $ 24,136 $ — $ 24,136 $ — States and political subdivisions 232,217 — 232,217 — 215,345 — 215,345 — Auction rate money market preferred 2,866 — 2,866 — 2,619 — 2,619 — Preferred stocks 3,299 3,299 — — 6,140 6,140 — — Mortgage-backed securities 263,384 — 263,384 — 166,926 — 166,926 — Collateralized mortgage obligations 134,025 — 134,025 — 152,368 — 152,368 — Total AFS securities 660,136 3,299 656,837 — 567,534 6,140 561,394 — Nonrecurring items Impaired loans (net of the ALLL) 9,301 — — 9,301 8,720 — — 8,720 Foreclosed assets 421 — — 421 885 — — 885 Total $ 669,858 $ 3,299 $ 656,837 $ 9,722 $ 577,139 $ 6,140 $ 561,394 $ 9,605 Percent of assets and liabilities measured at fair value 0.49 % 98.06 % 1.45 % 1.06 % 97.27 % 1.67 % The following table provides a summary of the changes in fair value of assets and liabilities recorded at fair value, for which gains or losses were recognized through earnings on a nonrecurring basis, in the years ended December 31 : 2015 2014 Nonrecurring items Foreclosed assets $ (99 ) $ (123 ) We had no assets or liabilities recorded at fair value with changes in fair value recognized through earnings, on a recurring basis, as of December 31, 2015 . |
Parent Company Only Financial I
Parent Company Only Financial Information | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Parent Company Only Financial Information | Parent Company Only Financial Information Condensed Balance Sheets December 31 2015 2014 ASSETS Cash on deposit at the Bank $ 4,125 $ 1,035 AFS securities 257 3,294 Investments in subsidiaries 133,883 124,827 Premises and equipment 2,014 1,982 Other assets 53,396 53,228 TOTAL ASSETS $ 193,675 $ 184,366 LIABILITIES AND SHAREHOLDERS’ EQUITY Other liabilities $ 9,704 $ 9,772 Shareholders' equity 183,971 174,594 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 193,675 $ 184,366 Condensed Statements of Income Year Ended December 31 2015 2014 2013 Income Dividends from subsidiaries $ 8,000 $ 7,000 $ 7,000 Interest income 78 150 161 Management fee and other 6,331 3,665 2,146 Total income 14,409 10,815 9,307 Expenses Compensation and benefits 5,110 3,688 2,811 Occupancy and equipment 1,634 1,082 476 Audit and related fees 452 404 345 Other 2,160 1,395 958 Total expenses 9,356 6,569 4,590 Income before income tax benefit and equity in undistributed earnings of subsidiaries 5,053 4,246 4,717 Federal income tax benefit 991 940 790 Income before equity in undistributed earnings of subsidiaries 6,044 5,186 5,507 Undistributed earnings of subsidiaries 9,086 8,538 7,003 Net income $ 15,130 $ 13,724 $ 12,510 Condensed Statements of Cash Flows Year Ended December 31 2015 2014 2013 Operating activities Net income $ 15,130 $ 13,724 $ 12,510 Adjustments to reconcile net income to cash provided by operations Undistributed earnings of subsidiaries (9,086 ) (8,538 ) (7,003 ) Undistributed earnings of equity securities without readily determinable fair values (310 ) 37 74 Share-based payment awards under equity compensation plan 550 495 554 Depreciation 154 144 174 Net amortization of AFS securities — 1 2 Deferred income tax expense (benefit) 131 (159 ) (305 ) Changes in operating assets and liabilities which provided (used) cash Other assets 506 145 (51 ) Accrued interest and other liabilities 142 1,516 1,238 Net cash provided by (used in) operating activities 7,217 7,365 7,193 Investing activities Maturities, calls, principal payments, and sales of AFS securities 3,000 250 395 Purchases of premises and equipment (186 ) (81 ) (146 ) Net (advances to) repayments from subsidiaries 300 641 (299 ) Net cash provided by (used in) investing activities 3,114 810 (50 ) Financing activities Net increase (decrease) in borrowed funds (211 ) (1,600 ) (1,350 ) Cash dividends paid on common stock (7,273 ) (6,843 ) (6,456 ) Proceeds from the issuance of common stock 5,201 4,227 3,618 Common stock repurchased (4,590 ) (3,122 ) (2,375 ) Common stock purchased for deferred compensation obligations (368 ) (331 ) (383 ) Net cash provided by (used in) financing activities (7,241 ) (7,669 ) (6,946 ) Increase (decrease) in cash and cash equivalents 3,090 506 197 Cash and cash equivalents at beginning of period 1,035 529 332 Cash and cash equivalents at end of period $ 4,125 $ 1,035 $ 529 |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating Segments Our reportable segments are based on legal entities that account for at least 10% of net operating results. The operations of the Bank as of December 31, 2015 , 2014 , and 2013 represent approximately 90% or more of our consolidated total assets and operating results. As such, no additional segment reporting is presented. |
Nature of Operations and Summ31
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND CONSOLIDATION | BASIS OF PRESENTATION AND CONSOLIDATION: The consolidated financial statements include the accounts of Isabella Bank Corporation, a financial services holding company, and its wholly owned subsidiary, Isabella Bank. All intercompany balances and accounts have been eliminated in consolidation. |
USE OF ESTIMATES | USE OF ESTIMATES: In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, we make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet and reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the ALLL , the fair value of AFS investment securities, and the valuation of goodwill and other intangible assets. |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS : Fair value refers to the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants in the market in which the reporting entity transacts such sales or transfers based on the assumptions market participants would use when pricing an asset or liability. Assumptions are developed based on prioritizing information within a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data. We may choose to measure eligible items at fair value at specified election dates. For assets and liabilities recorded at fair value, it is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements for those financial instruments for which there is an active market. In cases where the market for a financial asset or liability is not active, we include appropriate risk adjustments that market participants would make for nonperformance and liquidity risks when developing fair value measurements. Fair value measurements for assets and liabilities for which limited or no observable market data exists are accordingly based primarily upon estimates, are often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Investment securities AFS are recorded at fair value on a recurring basis. Additionally, from time-to-time , we may be required to record other assets and liabilities at fair value on a nonrecurring basis, such as mortgage loans AFS , impaired loans, foreclosed assets, OMSR , goodwill, and certain other assets and liabilities. These nonrecurring fair value adjustments typically involve the application of lower of cost or market accounting or write-downs of individual assets. Fair Value Hierarchy Under fair value measurement and disclosure authoritative guidance, we group assets and liabilities measured at fair value into three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value, based on the prioritization of inputs in the valuation techniques. These levels are: Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model based valuation techniques for which all significant assumptions are observable in the market. Level 3: Valuation is generated from model based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. Transfers between measurement levels are recognized at the end of reporting periods. For further discussion of fair value considerations, refer to “ Note 20 – Fair Value .” |
SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK | SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK : Most of our activities conducted are with customers located within the central Michigan area. A significant amount of our outstanding loans are secured by commercial and residential real estate. Other than these types of loans, there is no significant concentration to any other industry or any one customer. Internally assigned credit risk ratings are reviewed, at a minimum, when loans are renewed or when management has knowledge of improvements or deterioration of the credit quality of individual credits. Descriptions of the internally assigned credit risk ratings for commercial and agricultural loans are as follows: 1. EXCELLENT – Substantially Risk Free Credit has strong financial condition and solid earnings history, characterized by: • High liquidity, strong cash flow, low leverage. • Unquestioned ability to meet all obligations when due. • Experienced management, with management succession in place. • Secured by cash. 2. HIGH QUALITY – Limited Risk Credit with sound financial condition and a positive trend in earnings supplemented by: • Favorable liquidity and leverage ratios. • Ability to meet all obligations when due. • Management with successful track record. • Steady and satisfactory earnings history. • If loan is secured, collateral is of high quality and readily marketable. • Access to alternative financing. • Well defined primary and secondary source of repayment. • If supported by guaranty, the financial strength and liquidity of the guarantor(s) are clearly evident. 3. HIGH SATISFACTORY – Reasonable Risk Credit with satisfactory financial condition and further characterized by: • Working capital adequate to support operations. • Cash flow sufficient to pay debts as scheduled. • Management experience and depth appear favorable. • Loan performing according to terms. • If loan is secured, collateral is acceptable and loan is fully protected. 4. LOW SATISFACTORY – Acceptable Risk Credit with bankable risks, although some signs of weaknesses are shown: • Would include most start-up businesses. • Occasional instances of trade slowness or repayment delinquency – may have been 10 - 30 days slow within the past year. • Management’s abilities are apparent, yet unproven. • Weakness in primary source of repayment with adequate secondary source of repayment. • Loan structure generally in accordance with policy. • If secured, loan collateral coverage is marginal. • Adequate cash flow to service debt, but coverage is low. To be classified as less than satisfactory, only one of the following criteria must be met. 5. SPECIAL MENTION – Criticized Credit constitutes an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances surrounding a specific loan: • Downward trend in sales, profit levels, and margins. • Impaired working capital position. • Cash flow is strained in order to meet debt repayment. • Loan delinquency ( 30 - 60 days) and overdrafts may occur. • Shrinking equity cushion. • Diminishing primary source of repayment and questionable secondary source. • Management abilities are questionable. • Weak industry conditions. • Litigation pending against the borrower. • Collateral or guaranty offers limited protection. • Negative debt service coverage, however the credit is well collateralized and payments are current. 6. SUBSTANDARD – Classified Credit where the borrower’s current net worth, paying capacity, and value of the collateral pledged is inadequate. There is a distinct possibility that we will implement collection procedures if the loan deficiencies are not corrected. In addition, the following characteristics may apply: • Sustained losses have severely eroded the equity and cash flow. • Deteriorating liquidity. • Serious management problems or internal fraud. • Original repayment terms liberalized. • Likelihood of bankruptcy. • Inability to access other funding sources. • Reliance on secondary source of repayment. • Litigation filed against borrower. • Collateral provides little or no value. • Requires excessive attention of the loan officer. • Borrower is uncooperative with loan officer. 7. VULNERABLE – Classified Credit is considered “Substandard” and warrants placing on nonaccrual status. Risk of loss is being evaluated and exit strategy options are under review. Other characteristics that may apply: • Insufficient cash flow to service debt. • Minimal or no payments being received. • Limited options available to avoid the collection process. • Transition status, expect action will take place to collect loan without immediate progress being made. 8. DOUBTFUL – Workout Credit has all the weaknesses inherent in a “Substandard” loan with the added characteristic that collection and/or liquidation is pending. The possibility of a loss is extremely high, but its classification as a loss is deferred until liquidation procedures are completed, or reasonably estimable. Other characteristics that may apply: • Normal operations are severely diminished or have ceased. • Seriously impaired cash flow. • Original repayment terms materially altered. • Secondary source of repayment is inadequate. • Survivability as a “going concern” is impossible. • Collection process has begun. • Bankruptcy petition has been filed. • Judgments have been filed. • Portion of the loan balance has been charged-off . |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS: For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks, federal funds sold, and other deposit accounts. Generally, federal funds sold are for a one day period. We maintain deposit accounts in various financial institutions which generally exceed federally insured limits or are not insured. We do not believe we are exposed to any significant interest, credit or other financial risk as a result of these deposits. |
AFS SECURITIES | AFS SECURITIES: Purchases of investment securities are generally classified as AFS . However, we may elect to classify securities as either held to maturity or trading. Securities classified as AFS are recorded at fair value, with unrealized gains and losses, net of the effect of deferred income taxes, excluded from earnings and reported in other comprehensive income. Included in AFS securities are auction rate money market preferreds and preferred stocks. These investments are considered equity securities for federal income tax purposes, and as such, no estimated federal income tax impact is expected or recorded. Auction rate money market preferred securities and preferred stocks are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Realized gains and losses on the sale of AFS securities are determined using the specific identification method. AFS securities are reviewed quarterly for possible OTTI . In determining whether an OTTI exists for debt securities, we assert that: (a) we do not have the intent to sell the security; and (b) it is more likely than not we will not have to sell the security before recovery of its cost basis. If these conditions are not met, we recognize an OTTI charge through earnings for the difference between the debt security’s amortized cost basis and its fair value, and such amount is included in noninterest income. For debt securities that do not meet the above criteria, and we do not expect to recover the security’s amortized cost basis, the security is considered other-than-temporarily impaired. For these debt securities, we separate the total impairment into the credit risk loss component and the amount of the loss related to market and other risk factors. In order to determine the amount of the credit loss for a debt security, we calculate the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. The amount of the total OTTI related to the credit risk is recognized in earnings and is included in noninterest income. The amount of the total OTTI related to other risk factors is recognized as a component of other comprehensive income. For debt securities that have recognized an OTTI through earnings, if through subsequent evaluation there is a significant increase in the cash flow expected, the difference between the amortized cost basis and the cash flows expected to be collected is accreted as interest income. AFS equity securities are reviewed for OTTI at each reporting date. This evaluation considers a number of factors including, but not limited to, the length of time and extent to which the fair value has been less than cost, the financial condition and near term prospects of the issuer, and our ability and intent to hold the securities until fair value recovers. If it is determined that we do not have the ability and intent to hold the securities until recovery or that there are conditions that indicate that a security may not recover in value then the difference between the fair value and the cost of the security is recognized in earnings and is included in noninterest income. As of December 31, 2015 and 2014 , we conducted an analysis to determine whether any securities currently in an unrealized loss position, should be other-than-temporarily impaired. Such analyses considered, among other factors, the following criteria: • Has the value of the investment declined more than what is deemed to be reasonable based on a risk and maturity adjusted discount rate? • Is the investment credit rating below investment grade? • Is it probable the issuer will be unable to pay the amount when due? • Is it more likely than not that we will have to sell the security before recovery of its cost basis? • Has the duration of the investment been extended? The cost basis used to determine the realized gains or losses of AFS securities sold was the amortized cost of the individual investment security as of the trade date. |
LOANS | LOANS: Loans that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balance adjusted for any charge-offs , the ALLL , and any deferred fees or costs on originated loans. Interest income on loans is accrued over the term of the loan based on the principal amount outstanding. Loan origination fees and certain direct loan origination costs are capitalized and recognized as a component of interest income over the term of the loan using the level yield method. The accrual of interest on agricultural, commercial and mortgage loans is discontinued at the time the loan is 90 days or more past due unless the credit is well secured and in the process of collection. Consumer loans are typically charged-off no later than 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. For loans that are placed on nonaccrual status or charged-off , all interest accrued in the current calendar year, but not collected, is reversed against interest income while interest accrued in prior calendar years, but not collected is charged against the ALLL . The interest on these loans is accounted for on the cash-basis, until qualifying for return to accrual status. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. For impaired loans not classified as nonaccrual , interest income continues to be accrued over the term of the loan based on the principal amount outstanding. Commercial and agricultural loans include loans for commercial real estate, commercial operating loans, farmland and agricultural production, and states and political subdivisions. Repayment of these loans is dependent upon the successful operation and management of a business. We minimize our risk by limiting the amount of direct credit exposure to any one borrower to $15,000 . Borrowers with direct credit needs of more than $15,000 are serviced through the use of loan participations with other commercial banks. Commercial and agricultural real estate loans commonly require loan-to-value limits of 80% or less. Depending upon the type of loan, past credit history, and current operating results, we may require the borrower to pledge accounts receivable, inventory, and property and equipment. Personal guarantees are generally required from the owners of closely held corporations, partnerships, and sole proprietorships. In addition, we require annual financial statements, prepare cash flow analyses, and review credit reports. We offer adjustable rate mortgages, construction loans, and fixed rate residential real estate loans which have amortization periods up to a maximum of 30 years. We consider the anticipated direction of interest rates, balance sheet duration, the sensitivity of our balance sheet to changes in interest rates, and overall loan demand to determine whether or not to sell fixed rate loans to Freddie Mac . Our lending policies generally limit the maximum loan-to-value ratio on residential real estate loans to 97% of the lower of the appraised value of the property or the purchase price, with the condition that private mortgage insurance is required on loans with loan-to-value ratios in excess of 80% . Underwriting criteria for residential real estate loans include: • Evaluation of the borrower’s ability to make monthly payments. • Evaluation of the value of the property securing the loan. • Ensuring the payment of principal, interest, taxes, and hazard insurance does not exceed 28% of a borrower’s gross income. • Ensuring all debt servicing does not exceed 36% of income. • Verification of acceptable credit reports. • Verification of employment, income, and financial information. Appraisals are performed by independent appraisers and reviewed for appropriateness. All mortgage loan requests are reviewed by our mortgage loan committee or through a secondary market underwriting system; loans in excess of $500 require the approval of our Internal Loan Committee, the Executive Loan Committee, the Board of Directors’ Loan Committee, or the Board of Directors. Consumer loans include secured and unsecured personal loans. Loans are amortized for a period of up to 12 years based on the age and value of the underlying collateral. The underwriting emphasis is on a borrower’s perceived intent and ability to pay rather than collateral value. No consumer loans are sold to the secondary market. |
ALLOWANCE FOR LOAN LOSSES | ALLOWANCE FOR LOAN LOSSES: The ALLL is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when we believe the uncollectability of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. We evaluate the ALLL on a regular basis which is based upon our periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The ALLL consists of specific, general, and unallocated components. The specific component relates to loans that are deemed to be impaired. For such loans that are also analyzed for specific allowance allocations, an allowance is established when the discounted cash flows or collateral value or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers non classified loans and is based on historical loss experience. An unallocated component is maintained to cover uncertainties that we believe affect our estimate of probable losses based on qualitative factors. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. Loans may be classified as impaired if they meet one or more of the following criteria: 1. There has been a charge-off of its principal balance; 2. The loan has been classified as a TDR ; or 3. The loan is in nonaccrual status. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, less cost to sell, if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. The primary factors behind the determination of the level of the ALLL are specific allocations for impaired loans, historical loss percentages, as well as unallocated components. Specific allocations for impaired loans are primarily determined based on the difference between the loan’s outstanding balance to the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, less cost to sell. Historical loss allocations are calculated at the loan class and segment levels based on a migration analysis of the loan portfolio over the preceding five years. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. |
LOANS HELD FOR SALE | LOANS HELD FOR SALE: Mortgage loans held for sale on the secondary market are carried at the lower of cost or fair value as determined by aggregating outstanding commitments from investors or current investor yield requirements. Net unrealized losses, if any, would be recognized as a component of other noninterest expenses. Mortgage loans held for sale are sold with the mortgage servicing rights retained by us. The carrying value of mortgage loans sold is reduced by the cost allocated to the associated mortgage servicing rights. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold. |
TRANSFERS OF FINANCIAL ASSETS | TRANSFERS OF FINANCIAL ASSETS: Transfers of financial assets, including mortgage loans and participation loans, are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is determined to be surrendered when 1) the assets have been legally isolated from us, 2) the transferee obtains the right (free of conditions that constrain it from taking advantage of the right) to pledge or exchange the transferred assets, and 3) we do not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Other than servicing, we have no substantive continuing involvement related to these loans. |
SERVICING | SERVICING: Servicing assets are recognized as separate assets when rights are acquired through purchase or through sale of financial assets. We have no purchased servicing rights. For sales of mortgage loans, a portion of the cost of originating the loan is allocated to the servicing right based on relative fair value. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights into tranches based on predominant risk characteristics, such as interest rate, loan type, and investor type. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranche. If we later determine that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the valuation allowance may be recorded as an increase to income. Capitalized servicing rights are reported in other assets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. The unpaid principal balance of mortgages serviced for others was $287,029 and $288,639 with capitalized servicing rights of $2,505 and $2,519 at December 31, 2015 and 2014 , respectively. Servicing fee income is recorded for fees earned for servicing loans for others. The fees are based on a contractual percentage of the outstanding principal; or a fixed amount per loan and are recorded as income when earned. We recorded servicing fee revenue of $712 , $720 , and $737 related to residential mortgage loans serviced for others during 2015 , 2014 , and 2013 , respectively, which is included in other noninterest income. |
FORECLOSED ASSETS | FORECLOSED ASSETS: Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at the lower of our carrying amount or fair value less estimated selling costs at the date of transfer, establishing a new cost basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the ALLL . After foreclosure, property held for sale is carried at the lower of the new cost basis or fair value less costs to sell. Impairment losses on property to be held and used are measured at the amount by which the carrying amount of property exceeds its fair value. Costs relating to holding these assets are expensed as incurred. We periodically perform valuations and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to the lower of our carrying amount or fair value less costs to sell. Foreclosed assets of $421 and $885 as of December 31, 2015 and 2014 , respectively, are included in other assets. |
PREMISES AND EQUIPMENT | PREMISES AND EQUIPMENT: Land is carried at cost. Buildings and equipment are carried at cost, less accumulated depreciation which is computed principally by the straight-line method based upon the estimated useful lives of the related assets, which range from 3 to 40 years. Major improvements are capitalized and appropriately amortized based upon the useful lives of the related assets or the expected terms of the leases, if shorter, using the straight-line method. Maintenance, repairs and minor alterations are charged to current operations as expenditures occur. We annually review these assets to determine whether carrying values have been impaired. |
EQUITY SECURITIES WITHOUT READILY DETERMINABLE FAIR VALUES | EQUITY SECURITIES WITHOUT READILY DETERMINABLE FAIR VALUES: Included in equity securities without readily determinable fair values are our holdings in FHLB stock and FRB stock as well as our ownership interests in Corporate Settlement Solutions, LLC and Valley Financial Corporation . Our investment in Corporate Settlement Solutions, LLC , a title insurance company, was made in the 1st quarter of 2008. We are not the managing entity of Corporate Settlement Solutions, LLC , and account for our investment in that entity under the equity method of accounting. Valley Financial Corporation is the parent company of 1st State Bank in Saginaw, Michigan, which is a bank that opened in 2005. We made investments in Valley Financial Corporation in 2004 and in 2007 . Equity securities without readily determinable fair values consist of the following as of December 31 : 2015 2014 FHLB Stock $ 11,700 $ 9,800 Corporate Settlement Solutions, LLC 7,249 6,936 FRB Stock 1,999 1,999 Valley Financial Corporation 1,000 1,000 Other 338 341 Total $ 22,286 $ 20,076 |
EQUITY COMPENSATION PLAN | EQUITY COMPENSATION PLAN: At December 31, 2015 , the Directors Plan had 200,017 shares eligible to be issued to participants, for which the Rabbi Trust held 19,401 shares. We had 187,369 shares to be issued in 2014 , with 13,934 shares held in the Rabbi Trust . Compensation costs relating to share based payment transactions are recognized as the services are rendered, with the cost measured based on the fair value of the equity or liability instruments issued (see “ Note 17 – Benefit Plans ”). We have no other equity-based compensation plans. |
CORPORATE OWNED LIFE INSURANCE | CORPORATE OWNED LIFE INSURANCE: We have purchased life insurance policies on key members of management. In the event of death of one of these individuals, we would receive a specified cash payment equal to the face value of the policy. Such policies are recorded at their cash surrender value, or the amount that can be realized on the balance sheet dates. Increases in cash surrender value in excess of single premiums paid are reported as other noninterest income. As of December 31, 2015 and 2014 , the present value of the post retirement benefits payable by us to the covered employees was estimated to be $2,853 and $2,782 , respectively, and is included in accrued interest payable and other liabilities. The periodic policy maintenance costs were $71 , $83 , and $75 for 2015 , 2014 , and 2013 , respectively and are included in other noninterest expenses. |
ACQUISITION INTANGIBLES AND GOODWILL | ACQUISITION INTANGIBLES AND GOODWILL: We previously acquired branch facilities and related deposits in business combinations accounted for as a purchase. The acquisitions included amounts related to the valuation of customer deposit relationships (core deposit intangibles). Core deposit intangibles arising from acquisitions are included in goodwill and other intangible assets are being amortized over their estimated lives and evaluated for potential impairment on at least an annual basis. Goodwill, which represents the excess of the purchase price over identifiable assets, is not amortized but is evaluated for impairment on at least an annual basis. Acquisition intangibles and goodwill are typically qualitatively evaluated to determine if it is more likely than not that the carrying balance is impaired. If it is determined that the carrying balance is more likely than not to be impaired, we perform a cash flow valuation to determine the extent of the potential impairment. This valuation method requires a significant degree of our judgment. In the event the projected undiscounted net operating cash flows for these intangible assets are less than the carrying value, the asset is recorded at fair value as determined by the valuation model. |
OFF BALANCE SHEET CREDIT RELATED FINANCIAL INSTRUMENTS | OFF BALANCE SHEET CREDIT RELATED FINANCIAL INSTRUMENTS: In the ordinary course of business, we have entered into commitments to extend credit, including commitments under credit card arrangements, home equity lines of credit, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded only when funded. |
FEDERAL INCOME TAXES | FEDERAL INCOME TAXES: Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax assets or liability is determined based on the tax effects of the temporary differences between the book and tax basis on the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. Valuation allowances are established, where necessary, to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the year plus or minus the change during the year in deferred tax assets and liabilities. We analyze our filing positions in the jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have also elected to retain our existing accounting policy with respect to the treatment of interest and penalties attributable to income taxes, and continue to reflect any charges for such, to the extent they arise, as a component of our noninterest expenses. |
DEFINED BENEFIT PENSION PLAN | DEFINED BENEFIT PENSION PLAN: We maintain a noncontributory defined benefit pension plan, which was curtailed effective March 1, 2007. Defined benefit pension plan expenses are included in “compensation and benefits" on the consolidated statements of income and are funded consistent with the requirements of federal laws and regulations. The current benefit obligation is included in "accrued interest payable and other liabilities" on the consolidated balance sheets. Inherent in the determination of defined benefit pension costs are assumptions concerning future events that will affect the amount and timing of required benefit payments under the plan. These assumptions include demographic assumptions such as mortality, a discount rate used to determine the current benefit obligation and a long-term expected rate of return on plan assets. Net periodic benefit cost includes interest cost based on the assumed discount rate, an expected return on plan assets based on an actuarially derived market-related value of assets, and amortization of unrecognized net actuarial gains or losses. Actuarial gains and losses result from experience different from that assumed and from changes in assumptions (excluding asset gains and losses not yet reflected in market-related value). Amortization of actuarial gains and losses is included as a component of net periodic defined benefit pension cost. For additional information, see " Note 17 – Benefit Plans ." We maintain a noncontributory defined benefit pension plan, which was curtailed effective March 1, 2007 . As a result of the curtailment, future salary increases are no longer considered (the projected benefit obligation is equal to the accumulated benefit obligation), and plan benefits are based on years of service and the individual employee’s five highest consecutive years of compensation out of the last ten years of service through March 1, 2007 . |
MARKETING COSTS | MARKETING COSTS: Marketing costs are expensed as incurred (see “ Note 11 – Other Noninterest Expenses ”). |
RECLASSIFICATIONS | RECLASSIFICATIONS: Certain amounts reported in the 2014 and 2013 consolidated financial statements have been reclassified to conform with the 2015 presentation. |
EARNINGS PER SHARE | Basic earnings per common share represents income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued relate solely to outstanding shares in the Directors Plan , see “ Note 17 – Benefit Plans .” |
NONACCRUAL LOAN STATUS | The accrual of interest on commercial, agricultural, and residential real estate loans is discontinued at the time the loan is 90 days or more past due unless the credit is well-secured and in the process of collection. Upon transferring the loans to nonaccrual status, we perform an evaluation to determine the net realizable value of the underlying collateral. This evaluation is used to help determine if any charge-offs are necessary. Consumer loans are typically charged-off no later than 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. For loans that are placed on nonaccrual status or charged-off , all interest accrued in the current calendar year, but not collected, is reversed against interest income while interest accrued in prior calendar years, but not collected, is charged against the ALLL . Loans may be returned to accrual status after six months of continuous performance. |
IMPAIRED LOANS | Loans may be classified as impaired if they meet one or more of the following criteria: 1. There has been a charge-off of its principal balance (in whole or in part); 2. The loan has been classified as a TDR ; or 3. The loan is in nonaccrual status. Impairment is measured on a loan-by-loan basis for commercial and agricultural loans by comparing the loan’s outstanding balance to the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, less cost to sell, if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Impairment is measured on a loan-by-loan basis for residential real estate and consumer loans by comparing the loan’s unpaid principal balance to the present value of expected future cash flows discounted at the loan’s effective interest rate. We do not recognize interest income on impaired loans in nonaccrual status. For impaired loans not classified as nonaccrual , interest income is recognized daily, as earned, according to the terms of the loan agreement and the principal amount outstanding. |
TROUBLED DEBT RESTRUCTURINGS | Loan modifications are considered to be TDRs when the modification includes terms outside of normal lending practices to a borrower who is experiencing financial difficulties. Typical concessions granted include, but are not limited to: 1. Agreeing to interest rates below prevailing market rates for debt with similar risk characteristics. 2. Extending the amortization period beyond typical lending guidelines for loans with similar risk characteristics. 3. Forgiving principal. 4. Forgiving accrued interest. To determine if a borrower is experiencing financial difficulties, factors we consider include: 1. The borrower is currently in default on any of their debt. 2. The borrower would likely default on any of their debt if the concession was not granted. 3. The borrower’s cash flow was insufficient to service all of their debt if the concession was not granted. 4. The borrower has declared, or is in the process of declaring, bankruptcy. 5. The borrower is unlikely to continue as a going concern (if the entity is a business). |
Nature of Operations and Summ32
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of equity method and other investments | Equity securities without readily determinable fair values consist of the following as of December 31 : 2015 2014 FHLB Stock $ 11,700 $ 9,800 Corporate Settlement Solutions, LLC 7,249 6,936 FRB Stock 1,999 1,999 Valley Financial Corporation 1,000 1,000 Other 338 341 Total $ 22,286 $ 20,076 |
Restatement to Prior Year Income | The following table sets forth the effects of the restatement on items within the Consolidated Statements of Income. Since the restatement did not impact net income, pre-tax and adjustments net of tax are not included. December 31, 2014 December 31, 2013 Previously Reported Restated Previously Reported Restated Interest income Loans, including fees $ 39,432 $ 36,629 $ 41,233 $ 37,575 All other interest income 14,519 14,519 12,843 12,843 Total interest income 53,951 51,148 54,076 50,418 Total interest expense 9,970 9,970 11,021 11,021 Net interest income 43,981 41,178 43,055 39,397 Provision for loan losses (668 ) (668 ) 1,111 1,111 Net interest income after provision for loan losses 44,649 41,846 41,944 38,286 Total noninterest income 9,325 9,325 10,175 10,175 Noninterest expenses Compensation and benefits 21,305 18,502 21,465 17,807 All other noninterest expenses 16,601 16,601 15,948 15,948 Total noninterest expenses 37,906 35,103 37,413 33,755 Federal income tax expense 2,344 2,344 2,196 2,196 Net income $ 13,724 $ 13,724 $ 12,510 $ 12,510 |
Computation of Earnings Per C33
Computation of Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Computation of earnings per common share | Earnings per common share have been computed based on the following: 2015 2014 2013 Average number of common shares outstanding for basic calculation 7,775,988 7,734,161 7,694,392 Average potential effect of common shares in the Directors Plan (1) 177,988 171,393 168,948 Average number of common shares outstanding used to calculate diluted earnings per common share 7,953,976 7,905,554 7,863,340 Net income $ 15,130 $ 13,724 $ 12,510 Earnings per common share Basic $ 1.95 $ 1.77 $ 1.63 Diluted $ 1.90 $ 1.74 $ 1.59 (1) Exclusive of shares held in the Rabbi Trust |
AFS Securities (Tables)
AFS Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized cost and fair value of available-for-sale securities | The amortized cost and fair value of AFS securities , with gross unrealized gains and losses, are as follows as of December 31 : 2015 Amortized Gross Gross Fair Government sponsored enterprises $ 24,407 $ 13 $ 75 $ 24,345 States and political subdivisions 224,752 7,511 46 232,217 Auction rate money market preferred 3,200 — 334 2,866 Preferred stocks 3,800 — 501 3,299 Mortgage-backed securities 264,109 1,156 1,881 263,384 Collateralized mortgage obligations 134,080 1,136 1,191 134,025 Total $ 654,348 $ 9,816 $ 4,028 $ 660,136 2014 Amortized Gross Gross Fair Government sponsored enterprises $ 24,597 $ 10 $ 471 $ 24,136 States and political subdivisions 209,153 6,986 794 215,345 Auction rate money market preferred 3,200 — 581 2,619 Preferred stocks 6,800 31 691 6,140 Mortgage-backed securities 165,888 2,042 1,004 166,926 Collateralized mortgage obligations 152,255 1,533 1,420 152,368 Total $ 561,893 $ 10,602 $ 4,961 $ 567,534 |
Amortized cost and fair value of available-for-sale securities by contractual maturity | The amortized cost and fair value of AFS securities by contractual maturity at December 31, 2015 are as follows: Maturing Securities with Variable Monthly Payments or Noncontractual Maturities Due in After One After Five After Total Government sponsored enterprises $ — $ 24,029 $ 378 $ — $ — $ 24,407 States and political subdivisions 30,174 69,245 92,561 32,772 — 224,752 Auction rate money market preferred — — — — 3,200 3,200 Preferred stocks — — — — 3,800 3,800 Mortgage-backed securities — — — — 264,109 264,109 Collateralized mortgage obligations — — — — 134,080 134,080 Total amortized cost $ 30,174 $ 93,274 $ 92,939 $ 32,772 $ 405,189 $ 654,348 Fair value $ 30,217 $ 95,452 $ 96,871 $ 34,022 $ 403,574 $ 660,136 |
Summary of the activity related to sales of available-for-sale securities | A summary of the sales activity of AFS securities was as follows during the years ended December 31 : 2015 2014 2013 Proceeds from sales of AFS securities $ 1,319 $ 13,362 $ 16,229 Gross realized gains (losses) $ 163 $ 97 $ 171 Applicable income tax expense (benefit) $ 55 $ 33 $ 58 |
Available-for-sale securities with gross unrealized losses | Information pertaining to AFS securities with gross unrealized losses at December 31 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: 2015 Less Than Twelve Months Twelve Months or More Gross Fair Gross Fair Total Government sponsored enterprises $ — $ — $ 75 $ 4,925 $ 75 States and political subdivisions 14 3,355 32 2,623 46 Auction rate money market preferred — — 334 2,866 334 Preferred stocks — — 501 3,299 501 Mortgage-backed securities 882 131,885 999 37,179 1,881 Collateralized mortgage obligations 415 53,441 776 26,717 1,191 Total $ 1,311 $ 188,681 $ 2,717 $ 77,609 $ 4,028 Number of securities in an unrealized loss position: 36 26 62 2014 Less Than Twelve Months Twelve Months or More Gross Fair Gross Fair Total Government sponsored enterprises $ — $ — $ 471 $ 23,525 $ 471 States and political subdivisions 48 5,323 746 17,416 794 Auction rate money market preferred — — 581 2,619 581 Preferred stocks — — 691 3,109 691 Mortgage-backed securities 5 9,456 999 52,407 1,004 Collateralized mortgage obligations 105 29,435 1,315 39,540 1,420 Total $ 158 $ 44,214 $ 4,803 $ 138,616 $ 4,961 Number of securities in an unrealized loss position: 22 72 94 |
Schedule of Available-for-sale Securities [Line Items] | |
Roll-forward of credit related impairment recognized in earnings | The following table provides a roll-forward of credit related impairment recognized in earnings for the years ended December 31 : 2015 2014 2013 Balance at beginning of year $ 282 $ 282 $ 282 Additions to credit losses for which no previous OTTI was recognized — — — Reductions for credit losses realized on securities sold during the quarter (282 ) — — Balance at end of year $ — $ 282 $ 282 |
Auction Rate Securities [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Key valuation assumptions | A summary of key valuation assumptions used in the aforementioned analysis as of March 31, 2012 , follows: Discounted Cash Flow Method Ratings Fitch Not Rated Moody's Caa3 S&P A Seniority Senior Discount rate LIBOR + 6.35% Credit Yield Analysis Method Credit discount rate LIBOR + 4.00% Average observed discounts based on closed transactions 14.00% |
Loans and ALLL (Tables)
Loans and ALLL (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Summary of changes in the ALLL and the recorded investment in loans by segments | Allowance for Loan Losses Year Ended December 31, 2014 Commercial Agricultural Residential Real Estate Consumer Unallocated Total January 1, 2014 $ 6,048 $ 434 $ 3,845 $ 639 $ 534 $ 11,500 Charge-offs (559 ) (31 ) (722 ) (316 ) — (1,628 ) Recoveries 550 — 197 149 — 896 Provision for loan losses (2,218 ) (187 ) 915 173 649 (668 ) December 31, 2014 $ 3,821 $ 216 $ 4,235 $ 645 $ 1,183 $ 10,100 A summary of changes in the ALLL and the recorded investment in loans by segments follows: Allowance for Loan Losses Year Ended December 31, 2015 Commercial Agricultural Residential Real Estate Consumer Unallocated Total January 1, 2015 $ 3,821 $ 216 $ 4,235 $ 645 $ 1,183 $ 10,100 Charge-offs (89 ) (45 ) (397 ) (373 ) — (904 ) Recoveries 477 72 220 206 — 975 Provision for loan losses (2,038 ) 86 (728 ) 44 (135 ) (2,771 ) December 31, 2015 $ 2,171 $ 329 $ 3,330 $ 522 $ 1,048 $ 7,400 |
Allowance for Loan Losses and Recorded Investment in Loans | Allowance for Loan Losses and Recorded Investment in Loans As of December 31, 2014 Commercial Agricultural Residential Real Estate Consumer Unallocated Total ALLL Individually evaluated for impairment $ 1,283 $ — $ 2,143 $ 1 $ — $ 3,427 Collectively evaluated for impairment 2,538 216 2,092 644 1,183 6,673 Total $ 3,821 $ 216 $ 4,235 $ 645 $ 1,183 $ 10,100 Loans Individually evaluated for impairment $ 12,029 $ 1,595 $ 12,160 $ 64 $ 25,848 Collectively evaluated for impairment 421,241 103,126 253,995 32,340 810,702 Total $ 433,270 $ 104,721 $ 266,155 $ 32,404 $ 836,550 Allowance for Loan Losses and Recorded Investment in Loans As of December 31, 2015 Commercial Agricultural Residential Real Estate Consumer Unallocated Total ALLL Individually evaluated for impairment $ 829 $ 2 $ 1,989 $ — $ — $ 2,820 Collectively evaluated for impairment 1,342 327 1,341 522 1,048 4,580 Total $ 2,171 $ 329 $ 3,330 $ 522 $ 1,048 $ 7,400 Loans Individually evaluated for impairment $ 7,969 $ 4,068 $ 10,266 $ 35 $ 22,338 Collectively evaluated for impairment 440,412 111,843 241,235 34,664 828,154 Total $ 448,381 $ 115,911 $ 251,501 $ 34,699 $ 850,492 |
Credit quality indicators for commercial and agricultural credit exposures | The following table displays the credit quality indicators for commercial and agricultural credit exposures based on internally assigned credit risk ratings as of December 31 : 2015 Commercial Agricultural Real Estate Other Total Real Estate Other Total Rating 1 - Excellent $ — $ 499 $ 499 $ — $ — $ — 2 - High quality 7,397 11,263 18,660 4,647 2,150 6,797 3 - High satisfactory 99,136 29,286 128,422 28,886 13,039 41,925 4 - Low satisfactory 222,431 62,987 285,418 37,279 22,166 59,445 5 - Special mention 4,501 473 4,974 3,961 1,875 5,836 6 - Substandard 9,941 256 10,197 1,623 139 1,762 7 - Vulnerable 211 — 211 146 — 146 8 - Doubtful — — — — — — Total $ 343,617 $ 104,764 $ 448,381 $ 76,542 $ 39,369 $ 115,911 2014 Commercial Agricultural Real Estate Other Total Real Estate Other Total Rating 1 - Excellent $ — $ 492 $ 492 $ — $ — $ — 2 - High quality 13,620 14,423 28,043 5,806 3,582 9,388 3 - High satisfactory 94,556 51,230 145,786 28,715 12,170 40,885 4 - Low satisfactory 184,000 51,178 235,178 33,361 17,560 50,921 5 - Special mention 8,456 1,322 9,778 1,607 65 1,672 6 - Substandard 11,055 123 11,178 1,602 147 1,749 7 - Vulnerable 2,687 116 2,803 106 — 106 8 - Doubtful — 12 12 — — — Total $ 314,374 $ 118,896 $ 433,270 $ 71,197 $ 33,524 $ 104,721 |
Summary of past due and current loans | The following tables summarize the past due and current loans as of December 31 : 2015 Accruing Interest Total Past Due and Nonaccrual 30-59 60-89 90 Days Nonaccrual Current Total Commercial Commercial real estate $ 505 $ 281 $ — $ 211 $ 997 $ 342,620 $ 343,617 Commercial other 18 — — — 18 104,746 104,764 Total commercial 523 281 — 211 1,015 447,366 448,381 Agricultural Agricultural real estate 196 890 — 146 1,232 75,310 76,542 Agricultural other — — — — — 39,369 39,369 Total agricultural 196 890 — 146 1,232 114,679 115,911 Residential real estate Senior liens 1,551 261 — 429 2,241 199,622 201,863 Junior liens 40 8 — 6 54 9,325 9,379 Home equity lines of credit 225 — — — 225 40,034 40,259 Total residential real estate 1,816 269 — 435 2,520 248,981 251,501 Consumer Secured 27 — — — 27 30,839 30,866 Unsecured 4 — — — 4 3,829 3,833 Total consumer 31 — — — 31 34,668 34,699 Total $ 2,566 $ 1,440 $ — $ 792 $ 4,798 $ 845,694 $ 850,492 2014 Accruing Interest Total Past Due and Nonaccrual 30-59 60-89 90 Days Nonaccrual Current Total Commercial Commercial real estate $ 1,155 $ 282 $ — $ 2,764 $ 4,201 $ 310,173 $ 314,374 Commercial other 153 24 2 116 295 118,601 118,896 Total commercial 1,308 306 2 2,880 4,496 428,774 433,270 Agricultural Agricultural real estate 101 — — 106 207 70,990 71,197 Agricultural other 102 — — — 102 33,422 33,524 Total agricultural 203 — — 106 309 104,412 104,721 Residential real estate Senior liens 1,821 425 146 668 3,060 211,698 214,758 Junior liens 235 18 — 130 383 10,750 11,133 Home equity lines of credit 468 20 — 250 738 39,526 40,264 Total residential real estate 2,524 463 146 1,048 4,181 261,974 266,155 Consumer Secured 107 2 — 10 119 28,328 28,447 Unsecured 19 — — — 19 3,938 3,957 Total consumer 126 2 — 10 138 32,266 32,404 Total $ 4,161 $ 771 $ 148 $ 4,044 $ 9,124 $ 827,426 $ 836,550 |
Information pertaining to impaired loans | The following summarizes information pertaining to impaired loans as of, and for the years ended, December 31 : 2015 Outstanding Balance Unpaid Principal Balance Valuation Allowance Average Outstanding Balance Interest Income Recognized Impaired loans with a valuation allowance Commercial real estate $ 5,659 $ 5,777 $ 818 $ 7,221 $ 376 Commercial other 8 8 11 362 19 Agricultural real estate — — — 22 1 Agricultural other 335 335 2 126 8 Residential real estate senior liens 9,996 10,765 1,959 10,610 425 Residential real estate junior liens 143 163 30 183 16 Home equity lines of credit — — — 31 — Consumer secured — — — 39 3 Total impaired loans with a valuation allowance 16,141 17,048 2,820 18,594 848 Impaired loans without a valuation allowance Commercial real estate 2,122 2,256 2,170 201 Commercial other 180 191 106 11 Agricultural real estate 3,549 3,549 1,903 95 Agricultural other 184 184 290 15 Home equity lines of credit 127 434 144 18 Consumer secured 35 35 6 1 Total impaired loans without a valuation allowance 6,197 6,649 4,619 341 Impaired loans Commercial 7,969 8,232 829 9,859 607 Agricultural 4,068 4,068 2 2,341 119 Residential real estate 10,266 11,362 1,989 10,968 459 Consumer 35 35 — 45 4 Total impaired loans $ 22,338 $ 23,697 $ 2,820 $ 23,213 $ 1,189 2014 Outstanding Balance Unpaid Principal Balance Valuation Allowance Average Outstanding Balance Interest Income Recognized Impaired loans with a valuation allowance Commercial real estate $ 7,115 $ 7,234 $ 1,279 $ 6,958 $ 392 Commercial other 609 828 4 704 51 Agricultural real estate — — — 85 — Agricultural other — — — — — Residential real estate senior liens 11,645 12,782 2,015 12,713 509 Residential real estate junior liens 265 275 53 133 — Home equity lines of credit 250 650 75 229 21 Consumer secured 54 54 1 68 4 Total impaired loans with a valuation allowance 19,938 21,823 3,427 20,890 977 Impaired loans without a valuation allowance Commercial real estate 4,116 4,462 4,997 309 Commercial other 189 212 360 17 Agricultural real estate 1,529 1,529 1,455 89 Agricultural other 66 186 100 30 Home equity lines of credit — — 24 — Consumer secured 10 10 6 — Total impaired loans without a valuation allowance 5,910 6,399 6,942 445 Impaired loans Commercial 12,029 12,736 1,283 13,019 769 Agricultural 1,595 1,715 — 1,640 119 Residential real estate 12,160 13,707 2,143 13,099 530 Consumer 64 64 1 74 4 Total impaired loans $ 25,848 $ 28,222 $ 3,427 $ 27,832 $ 1,422 |
Information pertaining to TDR's | Following is a summary of loans that defaulted in the years ended December 31, which were modified within 12 months prior to the default date: 2015 2014 Number of Loans Pre- Charge-Off Post- Number of Loans Pre- Charge-Off Post- Commercial other 1 $ 216 $ 25 $ 191 — $ — $ — $ — Residential real estate junior liens 1 39 39 — — — — — Consumer unsecured — — — — 2 7 7 — Total 2 $ 255 $ 64 $ 191 2 $ 7 $ 7 $ — The following is a summary of TDR loan balances as of December 31 : 2015 2014 TDRs $ 21,325 $ 23,341 The following is a summary of information pertaining to TDRs granted in the years ended December 31 : 2015 2014 Number of Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Post-Modification Recorded Investment Commercial other 13 $ 3,073 $ 3,073 9 $ 1,533 $ 1,533 Agricultural other 11 3,106 3,106 1 49 49 Residential real estate Senior liens 6 678 678 15 1,011 1,011 Junior liens 1 30 30 4 233 233 Home equity lines of credit 1 94 94 1 160 160 Total residential real estate 8 802 802 20 1,404 1,404 Consumer unsecured — — — 4 18 18 Total 32 $ 6,981 $ 6,981 34 $ 3,004 $ 3,004 The following tables summarize concessions we granted to borrowers in financial difficulty in the years ended December 31 : 2015 2014 Below Market Interest Rate Below Market Interest Rate and Extension of Amortization Period Below Market Interest Rate Below Market Interest Rate and Extension of Amortization Period Number of Loans Pre-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Number of Loans Pre-Modification Recorded Investment Commercial other 11 $ 2,742 2 $ 331 8 $ 1,525 1 $ 8 Agricultural other 9 1,360 2 1,746 — — 1 49 Residential real estate Senior liens 3 280 3 398 3 97 12 914 Junior liens — — 1 30 2 152 2 81 Home equity lines of credit — — 1 94 1 160 — — Total residential real estate 3 280 5 522 6 409 14 995 Consumer unsecured — — — — 3 15 1 3 Total 23 $ 4,382 9 $ 2,599 17 $ 1,949 17 $ 1,055 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of premises and equipment | A summary of premises and equipment at December 31 follows: 2015 2014 Land $ 6,190 $ 5,429 Buildings and improvements 27,580 25,441 Furniture and equipment 31,568 31,011 Total 65,338 61,881 Less: accumulated depreciation 37,007 36,000 Premises and equipment, net $ 28,331 $ 25,881 |
Foreclosed Assets (Tables)
Foreclosed Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Schedule of Foreclosed Assets | The following is a summary of foreclosed assets as of December 31 : 2015 2014 Consumer mortgage loans collateralized by residential real estate foreclosed as a result of obtaining physical possession (1) $ — N/A All other foreclosed assets 421 885 Total $ 421 $ 885 (1) Disclosure requirement from the adoption of ASU No. 2014-04 on January 1, 2015. As such, measurement was not applicable for December 31, 2014. Changes in foreclosed assets are summarized as follows during the years ended December 31 : 2015 2014 Balance, January 1 $ 885 $ 1,412 Properties transferred 1,158 1,371 Impairments (99 ) (123 ) Proceeds from sale (1,523 ) (1,775 ) Balance, December 31 $ 421 $ 885 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of identifiable intangible assets | Identifiable intangible assets were as follows as of December 31 : 2015 Gross Accumulated Net Core deposit premium resulting from acquisitions $ 5,579 $ 5,033 $ 546 2014 Gross Accumulated Net Core deposit premium resulting from acquisitions $ 5,373 $ 4,863 $ 510 |
Summary of estimated amortization expense associated with identifiable intangibles | Estimated amortization expense associated with identifiable intangibles for each of the next five years succeeding December 31, 2015 , and thereafter is as follows: Estimated Amortization Expense 2016 $ 163 2017 119 2018 96 2019 71 2020 48 Thereafter 49 Total $ 546 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Scheduled maturities of time deposits | Scheduled maturities of time deposits for the next five years, and thereafter, are as follows: Scheduled Maturities of Time Deposits 2016 $ 191,858 2017 89,932 2018 63,167 2019 23,883 2020 33,012 Thereafter 21,028 Total $ 422,880 |
Borrowed Funds (Tables)
Borrowed Funds (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Summary of borrowed funds | Borrowed funds consist of the following obligations at December 31 : 2015 2014 Amount Rate Amount Rate FHLB advances $ 235,000 1.93 % $ 192,000 2.05 % Securities sold under agreements to repurchase without stated maturity dates 70,532 0.12 % 95,070 0.14 % Securities sold under agreements to repurchase with stated maturity dates — — 439 3.25 % Federal funds purchased 4,200 0.75 % 2,200 0.50 % Total $ 309,732 1.50 % $ 289,709 1.41 % |
Federal home loan bank, advances | The following table lists the maturities and weighted average interest rates of FHLB advances as of December 31 : 2015 2014 Amount Rate Amount Rate Fixed rate due 2015 $ — — $ 42,000 0.72 % Fixed rate due 2016 30,000 1.25 % 10,000 2.15 % Variable rate due 2016 15,000 0.62 % — — Fixed rate due 2017 50,000 1.56 % 30,000 1.95 % Fixed rate due 2018 50,000 2.16 % 40,000 2.35 % Fixed rate due 2019 40,000 2.35 % 20,000 3.11 % Fixed rate due 2020 10,000 1.98 % 10,000 1.98 % Fixed rate due 2021 30,000 2.26 % 30,000 2.26 % Fixed rate due 2023 10,000 3.90 % 10,000 3.90 % Total $ 235,000 1.93 % $ 192,000 2.05 % |
Schedule of maturity and weighted average interest rates | The following table lists the maturity and weighted average interest rates of securities sold under agreements to repurchase with stated maturity dates at December 31 : 2015 2014 Amount Rate Amount Rate Repurchase agreements due 2015 — — 439 3.25 % Total $ — — $ 439 3.25 % |
Summary of short term borrowings | The following table provides a summary of securities sold under repurchase agreements without stated maturity dates, federal funds purchased, and FRB Discount Window advances for the years ended December 31 : 2015 2014 Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period Maximum Month End Balance Average Balance Weighted Average Interest Rate During the Period Securities sold under agreements to repurchase without stated maturity dates $ 84,859 $ 70,368 0.13 % $ 95,070 $ 91,422 0.13 % Federal funds purchased 13,100 5,783 0.50 % 17,700 4,589 0.48 % |
Summary of pledged financial instruments | We had pledged AFS securities and 1-4 family residential real estate loans in the following amounts at December 31 : 2015 2014 Pledged to secure borrowed funds $ 339,078 $ 324,584 Pledged to secure repurchase agreements 70,555 94,537 Pledged for public deposits and for other purposes necessary or required by law 39,038 19,851 Total $ 448,671 $ 438,972 AFS securities pledged to repurchase agreements without stated maturity dates consisted of the following at December 31 : 2015 2014 States and political subdivisions $ 3,639 $ 6,643 Mortgage-backed securities 23,075 29,655 Collateralized mortgage obligations 43,841 58,239 Total $ 70,555 $ 94,537 |
Other Noninterest Expenses (Tab
Other Noninterest Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Summary of expenses included in other noninterest expenses | A summary of expenses included in other noninterest expenses is as follows for the years ended December 31 : 2015 2014 2013 Director fees $ 827 $ 775 $ 819 Audit and related fees 821 809 738 FDIC insurance premiums 813 842 1,082 Donations and community relations 808 1,004 715 Marketing costs 491 427 416 Legal fees 464 320 359 Education and travel 442 625 502 Printing and supplies 405 367 396 Postage and freight 377 397 387 Consulting fees 364 349 315 Loan underwriting fees 347 361 423 State taxes 218 171 140 Amortization of deposit premium 169 183 221 Other losses 150 250 109 Foreclosed asset and collection 53 122 211 All other 1,661 1,628 1,517 Total other $ 8,410 $ 8,630 $ 8,350 |
Federal Income Taxes (Tables)
Federal Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of the consolidated provision for federal income taxes | Components of the consolidated provision for federal income taxes are as follows for the years ended December 31 : 2015 2014 2013 Currently payable $ 1,596 $ 2,159 $ 3,404 Deferred expense (benefit) 1,692 185 (1,208 ) Income tax expense $ 3,288 $ 2,344 $ 2,196 |
Summary of federal income tax expense | The reconciliation of the provision for federal income taxes and the amount computed at the federal statutory tax rate of 34% of income before federal income tax expense is as follows for the year ended December 31 : 2015 2014 2013 Income taxes at 34% statutory rate $ 6,262 $ 5,463 $ 5,000 Effect of nontaxable income Interest income on tax exempt municipal securities (2,026 ) (1,999 ) (1,746 ) Earnings on corporate owned life insurance policies (262 ) (255 ) (249 ) Other (88 ) (263 ) (154 ) Total effect of nontaxable income (2,376 ) (2,517 ) (2,149 ) Effect of nondeductible expenses 157 156 146 Effect of tax credits (755 ) (758 ) (801 ) Federal income tax expense $ 3,288 $ 2,344 $ 2,196 |
Summary of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities, included in other assets in the accompanying consolidated balance sheets, are as follows as of December 31 : 2015 2014 Deferred tax assets Allowance for loan losses $ 1,582 $ 2,507 Deferred directors’ fees 2,549 2,414 Employee benefit plans 229 255 Core deposit premium and acquisition expenses 1,098 1,037 Net unrecognized actuarial losses on pension plan 1,708 1,962 Life insurance death benefit payable 804 804 Alternative minimum tax 650 650 Other 53 564 Total deferred tax assets 8,673 10,193 Deferred tax liabilities Prepaid pension cost 890 989 Premises and equipment 166 247 Accretion on securities 55 49 Core deposit premium and acquisition expenses 1,289 1,229 Net unrealized gains on available-for-sale securities 2,252 2,339 Other 989 449 Total deferred tax liabilities 5,641 5,302 Net deferred tax assets $ 3,032 $ 4,891 |
Off-Balance-Sheet Activities (T
Off-Balance-Sheet Activities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Notional amount of financial instrument | The contract or notional amounts of these instruments reflect the extent of involvement we have in a particular class of financial instrument. December 31 2015 2014 Unfunded commitments under lines of credit $ 134,412 $ 116,935 Commercial and standby letters of credit 915 4,985 Commitments to grant loans 53,946 13,988 |
Minimum Regulatory Capital Re44
Minimum Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Summary of compliance with regulatory capital requirements | Our actual capital amounts and ratios are also presented in the table. Actual Minimum Minimum Amount Ratio Amount Ratio Amount Ratio December 31, 2015 Common Equity Tier 1 capital to risk weighted assets Isabella Bank $ 124,917 12.31 % $ 40,589 4.50 % $ 60,883 6.50 % Consolidated 135,250 13.24 % 40,886 4.50 % N/A N/A Tier 1 capital to risk weighted assets Isabella Bank 124,917 12.31 % 40,589 6.00 % 60,883 8.00 % Consolidated 135,250 13.24 % 40,886 6.00 % N/A N/A Total capital to risk weighted assets Isabella Bank 132,317 13.04 % 81,178 8.00 % 101,472 10.00 % Consolidated 142,650 13.96 % 81,772 8.00 % N/A N/A Tier 1 capital to average assets Isabella Bank 124,917 7.93 % 63,032 4.00 % 78,790 5.00 % Consolidated 135,250 8.52 % 63,524 4.00 % N/A N/A Actual Minimum Minimum Amount Ratio Amount Ratio Amount Ratio December 31, 2014 Total capital to risk weighted assets Isabella Bank $ 128,074 14.18 % $ 72,278 8.00 % $ 90,348 10.00 % Consolidated 138,820 15.19 % 73,108 8.00 % N/A N/A Tier 1 capital to risk weighted assets Isabella Bank 117,974 13.06 % 36,139 4.00 % 54,209 6.00 % Consolidated 128,720 14.08 % 36,554 4.00 % N/A N/A Tier 1 capital to average assets Isabella Bank 117,974 7.96 % 59,297 4.00 % 74,121 5.00 % Consolidated 128,720 8.59 % 59,908 4.00 % N/A N/A |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Changes in the projected benefit obligation, plan assets and Accrued pension benefit costs | Changes in the projected benefit obligation and plan assets during each year, the funded status of the plan, and the net amount recognized in our consolidated balance sheets using an actuarial measurement date of December 31 , are summarized as follows during the years ended December 31 : 2015 2014 Change in benefit obligation Benefit obligation, January 1 $ 13,250 $ 10,732 Interest cost 494 486 Actuarial (gain) loss (744 ) 3,049 Benefits paid, including plan expenses (1,023 ) (1,017 ) Benefit obligation, December 31 11,977 13,250 Change in plan assets Fair value of plan assets, January 1 10,390 10,508 Investment return 5 699 Contributions 200 200 Benefits paid, including plan expenses (1,023 ) (1,017 ) Fair value of plan assets, December 31 9,572 10,390 Deficiency in funded status at December 31, included on the consolidated balance sheets in accrued interest payable and other liabilities $ (2,405 ) $ (2,860 ) 2015 2014 Change in accrued pension benefit costs Accrued benefit cost at January 1 $ (2,860 ) $ (224 ) Contributions 200 200 Net periodic benefit cost (492 ) (300 ) Net change in unrecognized actuarial loss and prior service cost 747 (2,536 ) Accrued pension benefit cost at December 31 $ (2,405 ) $ (2,860 ) |
Components of net periodic benefit cost | The components of projected net periodic benefit cost are as follows for the year ending: December 31, 2016 Interest cost on projected benefit obligation $ 484 Expected return on plan assets (559 ) Amortization of unrecognized actuarial net loss 313 Net periodic benefit cost $ 238 The components of net periodic benefit cost are as follows for the years ended December 31 : 2015 2014 2013 Interest cost on benefit obligation $ 494 $ 486 $ 450 Expected return on plan assets (607 ) (615 ) (572 ) Amortization of unrecognized actuarial net loss 355 169 330 Settlement loss 250 260 — Net periodic benefit cost $ 492 $ 300 $ 208 |
Actuarial assumptions used | The actuarial assumptions used in determining the benefit obligation are as follows for the years ended December 31 : 2015 2014 2013 Discount rate 4.13 % 3.80 % 4.64 % Expected long-term rate of return 6.00 % 6.00 % 6.00 % The actuarial weighted average assumptions used in determining the net periodic pension costs are as follows for the years ended December 31 : 2015 2014 2013 Discount rate 3.80 % 4.64 % 3.75 % Expected long-term return on plan assets 6.00 % 6.00 % 6.00 % |
Fair values of the Corporations pension plan assets by asset category | The fair values of our pension plan assets by asset category were as follows as of December 31 : 2015 2014 Total (Level 2) Total (Level 2) Short-term investments $ 157 $ 157 $ 804 $ 804 Common collective trusts Fixed income 4,662 4,662 4,738 4,738 Equity investments 4,753 4,753 4,848 4,848 Total $ 9,572 $ 9,572 $ 10,390 $ 10,390 |
Summary of Estimated future benefit payments | Estimated future benefit payments are as follows for the next ten years: Estimated Benefit Payments 2016 $ 500 2017 527 2018 529 2019 570 2020 614 2021 - 2025 3,290 |
Components of shares eligible to be issued under the Directors Plan | The components of shares eligible to be issued under the Directors Plan were as follows as of December 31 : 2015 2014 Eligible Market Eligible Market Unissued 180,616 $ 5,400 173,435 $ 3,902 Shares held in Rabbi Trust 19,401 580 13,934 314 Total 200,017 $ 5,980 187,369 $ 4,216 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of the components of accumulated other comprehensive income | A summary of the components of unrealized holding gains on AFS securities included in OCI follows for the years ended December 31 : 2015 2014 2013 Auction Rate Money Market Preferred and Preferred Stocks All Other AFS Securities Total Auction Rate Money Market Preferred and Preferred Stocks All Other AFS Securities Total Auction Rate Money Market Preferred and Preferred Stocks All Other AFS securities Total Unrealized gains (losses) arising during the period $ 406 $ (96 ) $ 310 $ 355 $ 10,935 $ 11,290 $ (737 ) $ (18,234 ) $ (18,971 ) Reclassification adjustment for net realized (gains) losses included in net income — (163 ) (163 ) — (97 ) (97 ) — (171 ) (171 ) Net unrealized gains (losses) 406 (259 ) 147 355 10,838 11,193 (737 ) (18,405 ) (19,142 ) Tax effect — 87 87 — (3,684 ) (3,684 ) — 6,257 6,257 Unrealized gains (losses), net of tax $ 406 $ (172 ) $ 234 $ 355 $ 7,154 $ 7,509 $ (737 ) $ (12,148 ) $ (12,885 ) The following table summarizes the changes in AOCI by component for the years ended December 31 (net of tax): Unrealized Change in Unrecognized Pension Cost on Defined Total Balance, January 1, 2013 $ 8,678 $ (3,671 ) $ 5,007 OCI before reclassifications (18,971 ) 2,120 (16,851 ) Amounts reclassified from AOCI (171 ) 208 37 Subtotal (19,142 ) 2,328 (16,814 ) Tax effect 6,257 (791 ) 5,466 OCI, net of tax (12,885 ) 1,537 (11,348 ) Balance, December 31, 2013 (4,207 ) (2,134 ) (6,341 ) OCI before reclassifications 11,290 (2,836 ) 8,454 Amounts reclassified from AOCI (97 ) 300 203 Subtotal 11,193 (2,536 ) 8,657 Tax effect (3,684 ) 862 (2,822 ) OCI, net of tax 7,509 (1,674 ) 5,835 Balance, December 31, 2014 3,302 (3,808 ) (506 ) OCI before reclassifications 310 255 565 Amounts reclassified from AOCI (163 ) 492 329 Subtotal 147 747 894 Tax effect 87 (254 ) (167 ) OCI, net of tax 234 493 727 Balance, December 31, 2015 $ 3,536 $ (3,315 ) $ 221 |
Details about accumulated other comprehensive income components | The following table details reclassification adjustments and the related affected line items in our consolidated statements of income for the years ended December 31 : Details about AOCI components Amount Affected Line Item in the 2015 2014 2013 Unrealized holding gains (losses) on AFS securities $ 163 $ 97 $ 171 Net gains (losses) on sale of AFS securities 55 33 58 Federal income tax expense $ 108 $ 64 $ 113 Net income Change in unrecognized pension cost on defined benefit pension plan $ 492 $ 300 $ 208 Compensation and benefits 167 102 71 Federal income tax expense $ 325 $ 198 $ 137 Net income |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Annual activity consisted of the following for the years ended December 31 : 2015 2014 Balance, January 1 $ 3,822 $ 4,178 New loans 2,779 1,475 Repayments (2,580 ) (1,831 ) Balance, December 31 $ 4,021 $ 3,822 The following table displays total asset balances of, and our donations to, the Foundation as of, and for the years ended, December 31 : 2015 2014 2013 Total assets $ 2,435 $ 2,090 $ 1,815 Donations $ 258 $ 500 $ 200 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Quantitative information about assets measured utilizing Level 3 fair value measurement | The table below lists the quantitative fair value information related to foreclosed assets as of: December 31, 2015 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Discounted appraisal value $ 421 Real Estate 20% - 30% December 31, 2014 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Discounted appraisal value $ 885 Real Estate 20% - 25% The following tables list the quantitative fair value information about impaired loans as of December 31 : 2015 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Real Estate 20% - 30% Equipment 20% - 35% Discounted appraisal value $9,301 Cash crop inventory 40% Other inventory 50% Accounts receivable 50% Liquor license 75% Furniture, fixtures & equipment 35% - 45% 2014 Valuation Technique Fair Value Unobservable Input Range Discount applied to collateral appraisal: Real Estate 20% - 25% Equipment 30% - 40% Discounted appraisal value $8,720 Cash crop inventory 40% Other inventory 75% Accounts receivable 50% Liquor license 75% |
Carrying amount and estimated fair value of financial instruments not recorded at fair value | The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis were as follows as of December 31 : 2015 Carrying Estimated (Level 1) (Level 2) (Level 3) ASSETS Cash and cash equivalents $ 21,569 $ 21,569 $ 21,569 $ — $ — Mortgage loans AFS 1,187 1,210 — 1,210 — Gross loans 850,492 839,398 — — 839,398 Less allowance for loan and lease losses 7,400 7,400 — — 7,400 Net loans 843,092 831,998 — — 831,998 Accrued interest receivable 6,269 6,269 6,269 — — Equity securities without readily determinable fair values (1) 22,286 N/A — — — OMSR 2,505 2,518 — 2,518 — LIABILITIES Deposits without stated maturities 741,683 741,683 741,683 — — Deposits with stated maturities 422,880 421,429 — 421,429 — Borrowed funds 309,732 297,495 — 297,495 — Accrued interest payable 545 545 545 — — 2014 Carrying Estimated (Level 1) (Level 2) (Level 3) ASSETS Cash and cash equivalents $ 19,906 $ 19,906 $ 19,906 $ — $ — Mortgage loans AFS 901 911 — 911 — Gross loans 836,550 830,417 — — 830,417 Less allowance for loan and lease losses 10,100 10,100 — — 10,100 Net loans 826,450 820,317 — — 820,317 Accrued interest receivable 5,851 5,851 5,851 — — Equity securities without readily determinable fair values (1) 20,076 N/A — — — OMSR 2,519 2,554 — 2,554 — LIABILITIES Deposits without stated maturities 634,222 634,222 634,222 — — Deposits with stated maturities 440,262 440,964 — 440,964 — Borrowed funds 289,709 293,401 — 293,401 — Accrued interest payable 558 558 558 — — (1) Due to the characteristics of equity securities without readily determinable fair values, they are not disclosed under a specific fair value hierarchy. If we were to record an impairment adjustment related to these securities, such amount would be classified as a nonrecurring Level 3 fair value adjustment. |
Assets and liabilities measured at fair value | The table below presents the recorded amount of assets and liabilities measured at fair value on December 31 : 2015 2014 Total (Level 1) (Level 2) (Level 3) Total (Level 1) (Level 2) (Level 3) Recurring items AFS securities Government-sponsored enterprises $ 24,345 $ — $ 24,345 $ — $ 24,136 $ — $ 24,136 $ — States and political subdivisions 232,217 — 232,217 — 215,345 — 215,345 — Auction rate money market preferred 2,866 — 2,866 — 2,619 — 2,619 — Preferred stocks 3,299 3,299 — — 6,140 6,140 — — Mortgage-backed securities 263,384 — 263,384 — 166,926 — 166,926 — Collateralized mortgage obligations 134,025 — 134,025 — 152,368 — 152,368 — Total AFS securities 660,136 3,299 656,837 — 567,534 6,140 561,394 — Nonrecurring items Impaired loans (net of the ALLL) 9,301 — — 9,301 8,720 — — 8,720 Foreclosed assets 421 — — 421 885 — — 885 Total $ 669,858 $ 3,299 $ 656,837 $ 9,722 $ 577,139 $ 6,140 $ 561,394 $ 9,605 Percent of assets and liabilities measured at fair value 0.49 % 98.06 % 1.45 % 1.06 % 97.27 % 1.67 % The following table provides a summary of the changes in fair value of assets and liabilities recorded at fair value, for which gains or losses were recognized through earnings on a nonrecurring basis, in the years ended December 31 : 2015 2014 Nonrecurring items Foreclosed assets $ (99 ) $ (123 ) |
Parent Company Only Financial49
Parent Company Only Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Interim Condensed Balance Sheets | Condensed Balance Sheets December 31 2015 2014 ASSETS Cash on deposit at the Bank $ 4,125 $ 1,035 AFS securities 257 3,294 Investments in subsidiaries 133,883 124,827 Premises and equipment 2,014 1,982 Other assets 53,396 53,228 TOTAL ASSETS $ 193,675 $ 184,366 LIABILITIES AND SHAREHOLDERS’ EQUITY Other liabilities $ 9,704 $ 9,772 Shareholders' equity 183,971 174,594 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 193,675 $ 184,366 |
Interim Condensed Statements of Income | Condensed Statements of Income Year Ended December 31 2015 2014 2013 Income Dividends from subsidiaries $ 8,000 $ 7,000 $ 7,000 Interest income 78 150 161 Management fee and other 6,331 3,665 2,146 Total income 14,409 10,815 9,307 Expenses Compensation and benefits 5,110 3,688 2,811 Occupancy and equipment 1,634 1,082 476 Audit and related fees 452 404 345 Other 2,160 1,395 958 Total expenses 9,356 6,569 4,590 Income before income tax benefit and equity in undistributed earnings of subsidiaries 5,053 4,246 4,717 Federal income tax benefit 991 940 790 Income before equity in undistributed earnings of subsidiaries 6,044 5,186 5,507 Undistributed earnings of subsidiaries 9,086 8,538 7,003 Net income $ 15,130 $ 13,724 $ 12,510 |
Interim Condensed Statements of Cash Flows | Condensed Statements of Cash Flows Year Ended December 31 2015 2014 2013 Operating activities Net income $ 15,130 $ 13,724 $ 12,510 Adjustments to reconcile net income to cash provided by operations Undistributed earnings of subsidiaries (9,086 ) (8,538 ) (7,003 ) Undistributed earnings of equity securities without readily determinable fair values (310 ) 37 74 Share-based payment awards under equity compensation plan 550 495 554 Depreciation 154 144 174 Net amortization of AFS securities — 1 2 Deferred income tax expense (benefit) 131 (159 ) (305 ) Changes in operating assets and liabilities which provided (used) cash Other assets 506 145 (51 ) Accrued interest and other liabilities 142 1,516 1,238 Net cash provided by (used in) operating activities 7,217 7,365 7,193 Investing activities Maturities, calls, principal payments, and sales of AFS securities 3,000 250 395 Purchases of premises and equipment (186 ) (81 ) (146 ) Net (advances to) repayments from subsidiaries 300 641 (299 ) Net cash provided by (used in) investing activities 3,114 810 (50 ) Financing activities Net increase (decrease) in borrowed funds (211 ) (1,600 ) (1,350 ) Cash dividends paid on common stock (7,273 ) (6,843 ) (6,456 ) Proceeds from the issuance of common stock 5,201 4,227 3,618 Common stock repurchased (4,590 ) (3,122 ) (2,375 ) Common stock purchased for deferred compensation obligations (368 ) (331 ) (383 ) Net cash provided by (used in) financing activities (7,241 ) (7,669 ) (6,946 ) Increase (decrease) in cash and cash equivalents 3,090 506 197 Cash and cash equivalents at beginning of period 1,035 529 332 Cash and cash equivalents at end of period $ 4,125 $ 1,035 $ 529 |
Nature of Operations and Summ50
Nature of Operations and Summary of Significant Accounting Policies (Equity Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
FHLB Stock | $ 11,700 | $ 9,800 |
FRB Stock | 1,999 | 1,999 |
Other | 338 | 341 |
Total | 22,286 | 20,076 |
Investment in Corporate Settlement Solutions [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | 7,249 | 6,936 |
Investment in Valley Financial Corporation [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 1,000 | $ 1,000 |
Nature of Operations and Summ51
Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Locationshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) | |
Accounting Policies [Abstract] | |||
Number of location of banking operations | Location | 29 | ||
Period for federal fund sold | 1 day | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unpaid principal balance of mortgages serviced for others | $ 287,029 | $ 288,639 | |
Capitalized mortgage loans on real estate carrying amount | 2,505 | 2,519 | |
Corporation recorded servicing fee revenue | 712 | 720 | $ 737 |
Foreclosed assets included in Other Assets on the accompanying consolidated balance sheets | 421 | 885 | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Present value of the post retirement benefits payable | 2,853 | 2,782 | |
Periodic policy maintenance costs | $ 71 | $ 83 | $ 75 |
Director [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Eligible shares, total | shares | 200,017 | 187,369 | |
Common stock, shares held in Rabbi Trust | shares | 19,401 | 13,934 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of the related assets | 3 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of the related assets | 40 years | ||
Commercial, Agricultural, and Residential Portfolio Segments [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of days past due (or more), accrual of interest discontinued | 90 days | ||
Consumer [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Maximum days of consumer loan charged off | 180 days |
Nature of Operations and Summ52
Nature of Operations and Summary of Significant Accounting Policies (Restatement) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Gross loans | $ 850,492 | $ 836,550 | |
Other assets | 9,991 | 11,664 | |
Loans, including fees | 35,853 | 36,629 | $ 37,575 |
All other interest income | 14,519 | 12,843 | |
Total interest income | 51,502 | 51,148 | 50,418 |
Total interest expense | 10,163 | 9,970 | 11,021 |
Net interest income | 41,339 | 41,178 | 39,397 |
Provision for loan losses | (2,771) | (668) | 1,111 |
Net interest income after provision for loan losses | 44,110 | 41,846 | 38,286 |
Total noninterest income | 10,359 | 9,325 | 10,175 |
Compensation and benefits | 19,068 | 18,502 | 17,807 |
All other noninterest expenses | 16,601 | 15,948 | |
Total noninterest expenses | 36,051 | 35,103 | 33,755 |
Federal income tax expense | 3,288 | 2,344 | 2,196 |
NET INCOME | $ 15,130 | 13,724 | 12,510 |
Previously Reported [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Loans, including fees | 39,432 | 41,233 | |
All other interest income | 14,519 | 12,843 | |
Total interest income | 53,951 | 54,076 | |
Total interest expense | 9,970 | 11,021 | |
Net interest income | 43,981 | 43,055 | |
Provision for loan losses | (668) | 1,111 | |
Net interest income after provision for loan losses | 44,649 | 41,944 | |
Total noninterest income | 9,325 | 10,175 | |
Compensation and benefits | 21,305 | 21,465 | |
All other noninterest expenses | 16,601 | 15,948 | |
Total noninterest expenses | 37,906 | 37,413 | |
Federal income tax expense | 2,344 | 2,196 | |
NET INCOME | 13,724 | 12,510 | |
Restatement effect [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Gross loans | 2,968 | ||
Other assets | (2,968) | ||
Total interest income | $ 2,803 | $ 3,658 |
Computation of Earnings Per C53
Computation of Earnings Per Common Share (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Earnings Per Share [Abstract] | ||||
Average number of common shares outstanding for basic calculation | 7,775,988 | 7,734,161 | 7,694,392 | |
Average potential effect of common shares in the Directors Plan | 177,988 | 171,393 | 168,948 | [1] |
Average number of common shares outstanding used to calculate diluted earnings per common share | 7,953,976 | 7,905,554 | 7,863,340 | |
NET INCOME | $ 15,130 | $ 13,724 | $ 12,510 | |
Basic (in dollars per share) | $ 1.95 | $ 1.77 | $ 1.63 | |
Diluted (in dollars per share) | $ 1.90 | $ 1.74 | $ 1.59 | |
[1] | Exclusive of shares held in the Rabbi Trust |
AFS Securities (Amortized cost
AFS Securities (Amortized cost and fair value of AFS securities, with gross unrealized gains and losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 654,348 | $ 561,893 |
Gross Unrealized Gains | 9,816 | 10,602 |
Gross Unrealized Losses | 4,028 | 4,961 |
AFS securities | 660,136 | 567,534 |
Government sponsored enterprises [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 24,407 | 24,597 |
Gross Unrealized Gains | 13 | 10 |
Gross Unrealized Losses | 75 | 471 |
AFS securities | 24,345 | 24,136 |
States and political subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 224,752 | 209,153 |
Gross Unrealized Gains | 7,511 | 6,986 |
Gross Unrealized Losses | 46 | 794 |
AFS securities | 232,217 | 215,345 |
Auction rate money market preferred [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,200 | 3,200 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 334 | 581 |
AFS securities | 2,866 | 2,619 |
Preferred stocks [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,800 | 6,800 |
Gross Unrealized Gains | 0 | 31 |
Gross Unrealized Losses | 501 | 691 |
AFS securities | 3,299 | 6,140 |
Mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 264,109 | 165,888 |
Gross Unrealized Gains | 1,156 | 2,042 |
Gross Unrealized Losses | 1,881 | 1,004 |
AFS securities | 263,384 | 166,926 |
Collateralized mortgage obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 134,080 | 152,255 |
Gross Unrealized Gains | 1,136 | 1,533 |
Gross Unrealized Losses | 1,191 | 1,420 |
AFS securities | $ 134,025 | $ 152,368 |
AFS Securities (Amortized cos55
AFS Securities (Amortized cost and fair value of AFS securities by contractual maturity) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less | $ 30,174 | |
Maturing, After One Year But Within Five Years | 93,274 | |
Maturing, After Five Years But Within Ten Years | 92,939 | |
Maturing, After Ten Years | 32,772 | |
Securities With Variable Monthly Payments or Noncontractual Maturities | 405,189 | |
Amortized Cost | 654,348 | $ 561,893 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less, Fair value | 30,217 | |
Maturing, After One Year But Within Five Years, Fair value | 95,452 | |
Maturing, After Five Years But Within Ten Years, Fair value | 96,871 | |
Maturing, After Ten Years, Fair value | 34,022 | |
Securities With Variable Monthly Payments or Noncontractual Maturities, Fair value | 403,574 | |
Total, Fair value | 660,136 | 567,534 |
Government sponsored enterprises [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less | 0 | |
Maturing, After One Year But Within Five Years | 24,029 | |
Maturing, After Five Years But Within Ten Years | 378 | |
Maturing, After Ten Years | 0 | |
Securities With Variable Monthly Payments or Noncontractual Maturities | 0 | |
Amortized Cost | 24,407 | 24,597 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Total, Fair value | 24,345 | 24,136 |
States and political subdivisions [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less | 30,174 | |
Maturing, After One Year But Within Five Years | 69,245 | |
Maturing, After Five Years But Within Ten Years | 92,561 | |
Maturing, After Ten Years | 32,772 | |
Securities With Variable Monthly Payments or Noncontractual Maturities | 0 | |
Amortized Cost | 224,752 | 209,153 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Total, Fair value | 232,217 | 215,345 |
Auction rate money market preferred [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less | 0 | |
Maturing, After One Year But Within Five Years | 0 | |
Maturing, After Five Years But Within Ten Years | 0 | |
Maturing, After Ten Years | 0 | |
Securities With Variable Monthly Payments or Noncontractual Maturities | 3,200 | |
Amortized Cost | 3,200 | 3,200 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Total, Fair value | 2,866 | 2,619 |
Preferred stocks [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less | 0 | |
Maturing, After One Year But Within Five Years | 0 | |
Maturing, After Five Years But Within Ten Years | 0 | |
Maturing, After Ten Years | 0 | |
Securities With Variable Monthly Payments or Noncontractual Maturities | 3,800 | |
Amortized Cost | 3,800 | 6,800 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Total, Fair value | 3,299 | 6,140 |
Mortgage-backed securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less | 0 | |
Maturing, After One Year But Within Five Years | 0 | |
Maturing, After Five Years But Within Ten Years | 0 | |
Maturing, After Ten Years | 0 | |
Securities With Variable Monthly Payments or Noncontractual Maturities | 264,109 | |
Amortized Cost | 264,109 | 165,888 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Total, Fair value | 263,384 | 166,926 |
Collateralized mortgage obligations [Member] | ||
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity [Abstract] | ||
Maturing, Due in One Year or Less | 0 | |
Maturing, After One Year But Within Five Years | 0 | |
Maturing, After Five Years But Within Ten Years | 0 | |
Maturing, After Ten Years | 0 | |
Securities With Variable Monthly Payments or Noncontractual Maturities | 134,080 | |
Amortized Cost | 134,080 | 152,255 |
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity [Abstract] | ||
Total, Fair value | $ 134,025 | $ 152,368 |
AFS Securities (Activity relate
AFS Securities (Activity related to sales of AFS securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sales of AFS of securities | $ 1,319 | $ 13,362 | $ 16,229 |
Gross realized gains (losses) | 163 | 97 | 171 |
Applicable income tax expense | $ 55 | $ 33 | $ 58 |
AFS Securities (AFS securities
AFS Securities (AFS securities with gross unrealized losses) (Details) $ in Thousands | Dec. 31, 2015USD ($)Securities | Dec. 31, 2014USD ($)Securities |
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses, Less Than Twelve Months | $ 1,311 | $ 158 |
Fair Value, Less Than Twelve Months | 188,681 | 44,214 |
Gross Unrealized Losses, Twelve Months or More | 2,717 | 4,803 |
Fair Value, Twelve Months or More | 77,609 | 138,616 |
Total Unrealized Losses | $ 4,028 | $ 4,961 |
Number of Securities in an unrealized loss position, Less Than Twelve Months, Fair Value | Securities | 36 | 22 |
Number of Securities in an unrealized loss position, Twelve Months or More, Fair Value | Securities | 26 | 72 |
Number of Securities in an unrealized loss position, Total Unrealized Losses | Securities | 62 | 94 |
Government sponsored enterprises [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses, Less Than Twelve Months | $ 0 | $ 0 |
Fair Value, Less Than Twelve Months | 0 | 0 |
Gross Unrealized Losses, Twelve Months or More | 75 | 471 |
Fair Value, Twelve Months or More | 4,925 | 23,525 |
Total Unrealized Losses | 75 | 471 |
States and political subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses, Less Than Twelve Months | 14 | 48 |
Fair Value, Less Than Twelve Months | 3,355 | 5,323 |
Gross Unrealized Losses, Twelve Months or More | 32 | 746 |
Fair Value, Twelve Months or More | 2,623 | 17,416 |
Total Unrealized Losses | 46 | 794 |
Auction rate money market preferred [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses, Less Than Twelve Months | 0 | 0 |
Fair Value, Less Than Twelve Months | 0 | 0 |
Gross Unrealized Losses, Twelve Months or More | 334 | 581 |
Fair Value, Twelve Months or More | 2,866 | 2,619 |
Total Unrealized Losses | 334 | 581 |
Preferred stocks [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses, Less Than Twelve Months | 0 | 0 |
Fair Value, Less Than Twelve Months | 0 | 0 |
Gross Unrealized Losses, Twelve Months or More | 501 | 691 |
Fair Value, Twelve Months or More | 3,299 | 3,109 |
Total Unrealized Losses | 501 | 691 |
Mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses, Less Than Twelve Months | 882 | 5 |
Fair Value, Less Than Twelve Months | 131,885 | 9,456 |
Gross Unrealized Losses, Twelve Months or More | 999 | 999 |
Fair Value, Twelve Months or More | 37,179 | 52,407 |
Total Unrealized Losses | 1,881 | 1,004 |
Collateralized mortgage obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Gross Unrealized Losses, Less Than Twelve Months | 415 | 105 |
Fair Value, Less Than Twelve Months | 53,441 | 29,435 |
Gross Unrealized Losses, Twelve Months or More | 776 | 1,315 |
Fair Value, Twelve Months or More | 26,717 | 39,540 |
Total Unrealized Losses | $ 1,191 | $ 1,420 |
AFS Securities (Key valuation a
AFS Securities (Key valuation assumptions) (Details) - Auction Rate Securities [Member] | Mar. 31, 2012 |
Discounted Cash Flow [Member] | London Interbank Offered Rate (LIBOR) [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Discount rate, basis spread on valuation | 6.35% |
Credit Yield Analysis [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Average observed discounts based on closed transactions | 14.00% |
Credit Yield Analysis [Member] | London Interbank Offered Rate (LIBOR) [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Discount rate, basis spread on valuation | 4.00% |
AFS Securities (Roll-forward of
AFS Securities (Roll-forward of credit related impairment recognized in earnings) (Details) - Available-for-sale Securities [Member] - Auction Rate Securities [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities [Abstract] | |||
Balance at beginning of year | $ 282 | $ 282 | $ 282 |
Additions to credit losses for which no previous OTTI was recognized | 0 | 0 | 0 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Reductions, Securities Sold | (282) | 0 | 0 |
Balance at end of year | $ 0 | $ 282 | $ 282 |
AFS Securities (Narrative) (Det
AFS Securities (Narrative) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2012USD ($)Securities | |
Investments, Debt and Equity Securities [Abstract] | |
Number of state issued student loan | Securities | 1 |
AFS securities impairment loss | $ | $ 282 |
Loans and ALLL (Summary of chan
Loans and ALLL (Summary of changes in ALLL by segments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans and Leases Receivable, Allowance | $ 7,400 | $ 10,100 | |
Summary of changes in the ALLL and the recorded investment in loans by segments | |||
Allowance for loan losses, Beginning Balance | 10,100 | 11,500 | |
Allowance for loan losses, Charge-offs | (904) | (1,628) | |
Allowance for loan losses, Recoveries | 975 | 896 | |
Allowance for loan losses, Provision for loan losses | (2,771) | (668) | $ 1,111 |
Allowance for loan losses, Ending Balance | 7,400 | 10,100 | 11,500 |
Commercial [Member] | |||
Summary of changes in the ALLL and the recorded investment in loans by segments | |||
Allowance for loan losses, Beginning Balance | 3,821 | 6,048 | |
Allowance for loan losses, Charge-offs | (89) | (559) | |
Allowance for loan losses, Recoveries | 477 | 550 | |
Allowance for loan losses, Provision for loan losses | (2,038) | (2,218) | |
Allowance for loan losses, Ending Balance | 2,171 | 3,821 | 6,048 |
Agricultural [Member] | |||
Summary of changes in the ALLL and the recorded investment in loans by segments | |||
Allowance for loan losses, Beginning Balance | 216 | 434 | |
Allowance for loan losses, Charge-offs | (45) | (31) | |
Allowance for loan losses, Recoveries | 72 | 0 | |
Allowance for loan losses, Provision for loan losses | 86 | (187) | |
Allowance for loan losses, Ending Balance | 329 | 216 | 434 |
Residential Real Estate [Member] | |||
Summary of changes in the ALLL and the recorded investment in loans by segments | |||
Allowance for loan losses, Beginning Balance | 4,235 | 3,845 | |
Allowance for loan losses, Charge-offs | (397) | (722) | |
Allowance for loan losses, Recoveries | 220 | 197 | |
Allowance for loan losses, Provision for loan losses | (728) | 915 | |
Allowance for loan losses, Ending Balance | 3,330 | 4,235 | 3,845 |
Consumer [Member] | |||
Summary of changes in the ALLL and the recorded investment in loans by segments | |||
Allowance for loan losses, Beginning Balance | 645 | 639 | |
Allowance for loan losses, Charge-offs | (373) | (316) | |
Allowance for loan losses, Recoveries | 206 | 149 | |
Allowance for loan losses, Provision for loan losses | 44 | 173 | |
Allowance for loan losses, Ending Balance | 522 | 645 | 639 |
Unallocated [Member] | |||
Summary of changes in the ALLL and the recorded investment in loans by segments | |||
Allowance for loan losses, Beginning Balance | 1,183 | 534 | |
Allowance for loan losses, Charge-offs | 0 | 0 | |
Allowance for loan losses, Recoveries | 0 | 0 | |
Allowance for loan losses, Provision for loan losses | (135) | 649 | |
Allowance for loan losses, Ending Balance | $ 1,048 | $ 1,183 | $ 534 |
Loans and ALLL (Summary of reco
Loans and ALLL (Summary of recorded investment in loans by segments) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Individually evaluated for impairment, ALLL | $ 2,820 | $ 3,427 | |
Collectively evaluated for impairment, ALLL | 4,580 | 6,673 | |
Total, ALLL | 7,400 | 10,100 | $ 11,500 |
Individually evaluated for impairment, Loans | 22,338 | 25,848 | |
Collectively evaluated for impairment, Loans | 828,154 | 810,702 | |
Total | 850,492 | 836,550 | |
Commercial [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Individually evaluated for impairment, ALLL | 829 | 1,283 | |
Collectively evaluated for impairment, ALLL | 1,342 | 2,538 | |
Total, ALLL | 2,171 | 3,821 | 6,048 |
Individually evaluated for impairment, Loans | 7,969 | 12,029 | |
Collectively evaluated for impairment, Loans | 440,412 | 421,241 | |
Total | 448,381 | 433,270 | |
Agricultural [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Individually evaluated for impairment, ALLL | 2 | 0 | |
Collectively evaluated for impairment, ALLL | 327 | 216 | |
Total, ALLL | 329 | 216 | 434 |
Individually evaluated for impairment, Loans | 4,068 | 1,595 | |
Collectively evaluated for impairment, Loans | 111,843 | 103,126 | |
Total | 115,911 | 104,721 | |
Residential Real Estate [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Individually evaluated for impairment, ALLL | 1,989 | 2,143 | |
Collectively evaluated for impairment, ALLL | 1,341 | 2,092 | |
Total, ALLL | 3,330 | 4,235 | 3,845 |
Individually evaluated for impairment, Loans | 10,266 | 12,160 | |
Collectively evaluated for impairment, Loans | 241,235 | 253,995 | |
Total | 251,501 | 266,155 | |
Consumer [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Individually evaluated for impairment, ALLL | 0 | 1 | |
Collectively evaluated for impairment, ALLL | 522 | 644 | |
Total, ALLL | 522 | 645 | 639 |
Individually evaluated for impairment, Loans | 35 | 64 | |
Collectively evaluated for impairment, Loans | 34,664 | 32,340 | |
Total | 34,699 | 32,404 | |
Unallocated [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Individually evaluated for impairment, ALLL | 0 | 0 | |
Collectively evaluated for impairment, ALLL | 1,048 | 1,183 | |
Total, ALLL | $ 1,048 | $ 1,183 | $ 534 |
Loans and ALLL (Credit quality
Loans and ALLL (Credit quality indicators for commercial and agricultural credit exposures) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total | $ 850,492 | $ 836,550 |
Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 448,381 | 433,270 |
Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 343,617 | 314,374 |
Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 104,764 | 118,896 |
Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 115,911 | 104,721 |
Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 76,542 | 71,197 |
Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 39,369 | 33,524 |
1 - Excellent [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 499 | 492 |
1 - Excellent [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
1 - Excellent [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 499 | 492 |
1 - Excellent [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
1 - Excellent [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
1 - Excellent [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
2 - High quality [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 18,660 | 28,043 |
2 - High quality [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 7,397 | 13,620 |
2 - High quality [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 11,263 | 14,423 |
2 - High quality [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 6,797 | 9,388 |
2 - High quality [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 4,647 | 5,806 |
2 - High quality [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 2,150 | 3,582 |
3 - High satisfactory [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 128,422 | 145,786 |
3 - High satisfactory [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 99,136 | 94,556 |
3 - High satisfactory [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 29,286 | 51,230 |
3 - High satisfactory [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 41,925 | 40,885 |
3 - High satisfactory [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 28,886 | 28,715 |
3 - High satisfactory [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 13,039 | 12,170 |
4 - Low satisfactory [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 285,418 | 235,178 |
4 - Low satisfactory [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 222,431 | 184,000 |
4 - Low satisfactory [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 62,987 | 51,178 |
4 - Low satisfactory [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 59,445 | 50,921 |
4 - Low satisfactory [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 37,279 | 33,361 |
4 - Low satisfactory [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 22,166 | 17,560 |
5 - Special mention [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 4,974 | 9,778 |
5 - Special mention [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 4,501 | 8,456 |
5 - Special mention [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 473 | 1,322 |
5 - Special mention [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 5,836 | 1,672 |
5 - Special mention [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 3,961 | 1,607 |
5 - Special mention [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 1,875 | 65 |
6 - Substandard [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 10,197 | 11,178 |
6 - Substandard [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 9,941 | 11,055 |
6 - Substandard [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 256 | 123 |
6 - Substandard [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 1,762 | 1,749 |
6 - Substandard [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 1,623 | 1,602 |
6 - Substandard [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 139 | 147 |
7 - Vulnerable [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 211 | 2,803 |
7 - Vulnerable [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 211 | 2,687 |
7 - Vulnerable [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 116 |
7 - Vulnerable [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 146 | 106 |
7 - Vulnerable [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 146 | 106 |
7 - Vulnerable [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
8 - Doubtful [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 12 |
8 - Doubtful [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
8 - Doubtful [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 12 |
8 - Doubtful [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
8 - Doubtful [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | 0 | 0 |
8 - Doubtful [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total | $ 0 | $ 0 |
Loans and ALLL (Past due and cu
Loans and ALLL (Past due and current loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | $ 0 | $ 148 |
Nonaccrual | 792 | 4,044 |
Total Past Due and Nonaccrual | 4,798 | 9,124 |
Current | 845,694 | 827,426 |
Total | 850,492 | 836,550 |
Total commercial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 2 |
Nonaccrual | 211 | 2,880 |
Total Past Due and Nonaccrual | 1,015 | 4,496 |
Current | 447,366 | 428,774 |
Total | 448,381 | 433,270 |
Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 211 | 2,764 |
Total Past Due and Nonaccrual | 997 | 4,201 |
Current | 342,620 | 310,173 |
Total | 343,617 | 314,374 |
Commercial other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 2 |
Nonaccrual | 0 | 116 |
Total Past Due and Nonaccrual | 18 | 295 |
Current | 104,746 | 118,601 |
Total | 104,764 | 118,896 |
Total agricultural [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 146 | 106 |
Total Past Due and Nonaccrual | 1,232 | 309 |
Current | 114,679 | 104,412 |
Total | 115,911 | 104,721 |
Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 146 | 106 |
Total Past Due and Nonaccrual | 1,232 | 207 |
Current | 75,310 | 70,990 |
Total | 76,542 | 71,197 |
Agricultural other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 0 | 0 |
Total Past Due and Nonaccrual | 0 | 102 |
Current | 39,369 | 33,422 |
Total | 39,369 | 33,524 |
Total residential real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 146 |
Nonaccrual | 435 | 1,048 |
Total Past Due and Nonaccrual | 2,520 | 4,181 |
Current | 248,981 | 261,974 |
Total | 251,501 | 266,155 |
Residential real estate senior liens [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 146 |
Nonaccrual | 429 | 668 |
Total Past Due and Nonaccrual | 2,241 | 3,060 |
Current | 199,622 | 211,698 |
Total | 201,863 | 214,758 |
Residential real estate junior liens [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 6 | 130 |
Total Past Due and Nonaccrual | 54 | 383 |
Current | 9,325 | 10,750 |
Total | 9,379 | 11,133 |
Residential real estate home equity lines of credit [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 0 | 250 |
Total Past Due and Nonaccrual | 225 | 738 |
Current | 40,034 | 39,526 |
Total | 40,259 | 40,264 |
Total consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 0 | 10 |
Total Past Due and Nonaccrual | 31 | 138 |
Current | 34,668 | 32,266 |
Total | 34,699 | 32,404 |
Consumer secured [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 0 | 10 |
Total Past Due and Nonaccrual | 27 | 119 |
Current | 30,839 | 28,328 |
Total | 30,866 | 28,447 |
Consumer unsecured [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | 0 |
Nonaccrual | 0 | 0 |
Total Past Due and Nonaccrual | 4 | 19 |
Current | 3,829 | 3,938 |
Total | 3,833 | 3,957 |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 2,566 | 4,161 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 523 | 1,308 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 505 | 1,155 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 18 | 153 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 196 | 203 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 196 | 101 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 102 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Total residential real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 1,816 | 2,524 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential real estate senior liens [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 1,551 | 1,821 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential real estate junior liens [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 40 | 235 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential real estate home equity lines of credit [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 225 | 468 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Total consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 31 | 126 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Consumer secured [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 27 | 107 |
Financing Receivables, 30 to 59 Days Past Due [Member] | Consumer unsecured [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 4 | 19 |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 1,440 | 771 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Total commercial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 281 | 306 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 281 | 282 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 24 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Total agricultural [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 890 | 0 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Agricultural real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 890 | 0 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Agricultural other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Total residential real estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 269 | 463 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential real estate senior liens [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 261 | 425 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential real estate junior liens [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 8 | 18 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential real estate home equity lines of credit [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 20 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Total consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 2 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Consumer secured [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 2 |
Financing Receivables, 60 to 89 Days Past Due [Member] | Consumer unsecured [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Past Due | $ 0 | $ 0 |
Loans and ALLL (Summary of info
Loans and ALLL (Summary of information pertaining to impaired loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | $ 16,141 | $ 19,938 |
Impaired loans without a valuation allowance, Outstanding Balance | 6,197 | 5,910 |
Impaired loans, Outstanding Balance | 22,338 | 25,848 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 17,048 | 21,823 |
Impaired loans without a valuation allowance, Unpaid Principal Balance | 6,649 | 6,399 |
Impaired loans, Unpaid Principal Balance | 23,697 | 28,222 |
Impaired loans, Valuation Allowance | 2,820 | 3,427 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 18,594 | 20,890 |
Impaired loans without a valuation allowance, Average Outstanding Balance | 4,619 | 6,942 |
Impaired loans, Average Outstanding Balance | 23,213 | 27,832 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 848 | 977 |
Impaired loans without a valuation allowance, Interest Income Recognized | 341 | 445 |
Impaired loans, Interest Income Recognized | 1,189 | 1,422 |
Total commercial [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans, Outstanding Balance | 7,969 | 12,029 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans, Unpaid Principal Balance | 8,232 | 12,736 |
Impaired loans, Valuation Allowance | 829 | 1,283 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans, Average Outstanding Balance | 9,859 | 13,019 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans, Interest Income Recognized | 607 | 769 |
Commercial real estate [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 5,659 | 7,115 |
Impaired loans without a valuation allowance, Outstanding Balance | 2,122 | 4,116 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 5,777 | 7,234 |
Impaired loans without a valuation allowance, Unpaid Principal Balance | 2,256 | 4,462 |
Impaired loans, Valuation Allowance | 818 | 1,279 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 7,221 | 6,958 |
Impaired loans without a valuation allowance, Average Outstanding Balance | 2,170 | 4,997 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 376 | 392 |
Impaired loans without a valuation allowance, Interest Income Recognized | 201 | 309 |
Commercial other [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 8 | 609 |
Impaired loans without a valuation allowance, Outstanding Balance | 180 | 189 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 8 | 828 |
Impaired loans without a valuation allowance, Unpaid Principal Balance | 191 | 212 |
Impaired loans, Valuation Allowance | 11 | 4 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 362 | 704 |
Impaired loans without a valuation allowance, Average Outstanding Balance | 106 | 360 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 19 | 51 |
Impaired loans without a valuation allowance, Interest Income Recognized | 11 | 17 |
Total agricultural [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans, Outstanding Balance | 4,068 | 1,595 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans, Unpaid Principal Balance | 4,068 | 1,715 |
Impaired loans, Valuation Allowance | 2 | 0 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans, Average Outstanding Balance | 2,341 | 1,640 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans, Interest Income Recognized | 119 | 119 |
Agricultural real estate [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 0 | 0 |
Impaired loans without a valuation allowance, Outstanding Balance | 3,549 | 1,529 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 0 | 0 |
Impaired loans without a valuation allowance, Unpaid Principal Balance | 3,549 | 1,529 |
Impaired loans, Valuation Allowance | 0 | 0 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 22 | 85 |
Impaired loans without a valuation allowance, Average Outstanding Balance | 1,903 | 1,455 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 1 | 0 |
Impaired loans without a valuation allowance, Interest Income Recognized | 95 | 89 |
Agricultural other [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 335 | 0 |
Impaired loans without a valuation allowance, Outstanding Balance | 184 | 66 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 335 | 0 |
Impaired loans without a valuation allowance, Unpaid Principal Balance | 184 | 186 |
Impaired loans, Valuation Allowance | 2 | 0 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 126 | 0 |
Impaired loans without a valuation allowance, Average Outstanding Balance | 290 | 100 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 8 | 0 |
Impaired loans without a valuation allowance, Interest Income Recognized | 15 | 30 |
Total residential real estate [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans, Outstanding Balance | 10,266 | 12,160 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans, Unpaid Principal Balance | 11,362 | 13,707 |
Impaired loans, Valuation Allowance | 1,989 | 2,143 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans, Average Outstanding Balance | 10,968 | 13,099 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans, Interest Income Recognized | 459 | 530 |
Residential real estate senior liens [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 9,996 | 11,645 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 10,765 | 12,782 |
Impaired loans, Valuation Allowance | 1,959 | 2,015 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 10,610 | 12,713 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 425 | 509 |
Residential real estate junior liens [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 143 | 265 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 163 | 275 |
Impaired loans, Valuation Allowance | 30 | 53 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 183 | 133 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 16 | 0 |
Residential real estate home equity lines of credit [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 0 | 250 |
Impaired loans without a valuation allowance, Outstanding Balance | 127 | 0 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 0 | 650 |
Impaired loans without a valuation allowance, Unpaid Principal Balance | 434 | 0 |
Impaired loans, Valuation Allowance | 0 | 75 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 31 | 229 |
Impaired loans without a valuation allowance, Average Outstanding Balance | 144 | 24 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 0 | 21 |
Impaired loans without a valuation allowance, Interest Income Recognized | 18 | 0 |
Total consumer [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans, Outstanding Balance | 35 | 64 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans, Unpaid Principal Balance | 35 | 64 |
Impaired loans, Valuation Allowance | 0 | 1 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans, Average Outstanding Balance | 45 | 74 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans, Interest Income Recognized | 4 | 4 |
Consumer secured [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Outstanding Balance | 0 | 54 |
Impaired loans without a valuation allowance, Outstanding Balance | 35 | 10 |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | ||
Impaired loans with a valuation allowance, Unpaid Principal Balance | 0 | 54 |
Impaired loans without a valuation allowance, Unpaid Principal Balance | 35 | 10 |
Impaired loans, Valuation Allowance | 0 | 1 |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Impaired loans with a valuation allowance, Average Outstanding Balance | 39 | 68 |
Impaired loans without a valuation allowance, Average Outstanding Balance | 6 | 6 |
Impaired Financing Receivable, Interest Income, Accrual Method [Abstract] | ||
Impaired loans with a valuation allowance, Interest Income Recognized | 3 | 4 |
Impaired loans without a valuation allowance, Interest Income Recognized | $ 1 | $ 0 |
Loans and ALLL (Summary of in66
Loans and ALLL (Summary of information pertaining to TDRs) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)loan | Dec. 31, 2014USD ($)loan | |
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 32 | 34 |
Pre-Modification Recorded Investment | $ 6,981 | $ 3,004 |
Post-Modification Recorded Investment | $ 6,981 | $ 3,004 |
Commercial other [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 13 | 9 |
Pre-Modification Recorded Investment | $ 3,073 | $ 1,533 |
Post-Modification Recorded Investment | $ 3,073 | $ 1,533 |
Agricultural other [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 11 | 1 |
Pre-Modification Recorded Investment | $ 3,106 | $ 49 |
Post-Modification Recorded Investment | $ 3,106 | $ 49 |
Total residential real estate [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 8 | 20 |
Pre-Modification Recorded Investment | $ 802 | $ 1,404 |
Post-Modification Recorded Investment | $ 802 | $ 1,404 |
Residential real estate senior liens [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 6 | 15 |
Pre-Modification Recorded Investment | $ 678 | $ 1,011 |
Post-Modification Recorded Investment | $ 678 | $ 1,011 |
Residential real estate junior liens [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 4 |
Pre-Modification Recorded Investment | $ 30 | $ 233 |
Post-Modification Recorded Investment | $ 30 | $ 233 |
Residential real estate home equity lines of credit [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 1 |
Pre-Modification Recorded Investment | $ 94 | $ 160 |
Post-Modification Recorded Investment | $ 94 | $ 160 |
Consumer Unsecured Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 4 |
Pre-Modification Recorded Investment | $ 0 | $ 18 |
Post-Modification Recorded Investment | $ 0 | $ 18 |
Below Market Interest Rate and Extension of Amortization Period [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 9 | 17 |
Pre-Modification Recorded Investment | $ 2,599 | $ 1,055 |
Below Market Interest Rate and Extension of Amortization Period [Member] | Commercial other [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 2 | 1 |
Pre-Modification Recorded Investment | $ 331 | $ 8 |
Below Market Interest Rate and Extension of Amortization Period [Member] | Agricultural other [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 2 | 1 |
Pre-Modification Recorded Investment | $ 1,746 | $ 49 |
Below Market Interest Rate and Extension of Amortization Period [Member] | Total residential real estate [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 5 | 14 |
Pre-Modification Recorded Investment | $ 522 | $ 995 |
Below Market Interest Rate and Extension of Amortization Period [Member] | Residential real estate senior liens [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 3 | 12 |
Pre-Modification Recorded Investment | $ 398 | $ 914 |
Below Market Interest Rate and Extension of Amortization Period [Member] | Residential real estate junior liens [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 2 |
Pre-Modification Recorded Investment | $ 30 | $ 81 |
Below Market Interest Rate and Extension of Amortization Period [Member] | Residential real estate home equity lines of credit [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 0 |
Pre-Modification Recorded Investment | $ 94 | $ 0 |
Below Market Interest Rate and Extension of Amortization Period [Member] | Consumer Unsecured Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 1 |
Pre-Modification Recorded Investment | $ 0 | $ 3 |
Interest Rate Below Market Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 23 | 17 |
Pre-Modification Recorded Investment | $ 4,382 | $ 1,949 |
Interest Rate Below Market Reduction [Member] | Commercial other [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 11 | 8 |
Pre-Modification Recorded Investment | $ 2,742 | $ 1,525 |
Interest Rate Below Market Reduction [Member] | Agricultural other [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 9 | 0 |
Pre-Modification Recorded Investment | $ 1,360 | $ 0 |
Interest Rate Below Market Reduction [Member] | Total residential real estate [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 3 | 6 |
Pre-Modification Recorded Investment | $ 280 | $ 409 |
Interest Rate Below Market Reduction [Member] | Residential real estate senior liens [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 3 | 3 |
Pre-Modification Recorded Investment | $ 280 | $ 97 |
Interest Rate Below Market Reduction [Member] | Residential real estate junior liens [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 2 |
Pre-Modification Recorded Investment | $ 0 | $ 152 |
Interest Rate Below Market Reduction [Member] | Residential real estate home equity lines of credit [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 1 |
Pre-Modification Recorded Investment | $ 0 | $ 160 |
Interest Rate Below Market Reduction [Member] | Consumer Unsecured Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 3 |
Pre-Modification Recorded Investment | $ 0 | $ 15 |
Loans and ALLL (Summary of Defa
Loans and ALLL (Summary of Defaulted TDRs) (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)loan | Dec. 31, 2014USD ($)loan | |
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 2 | 2 |
Pre- Default Recorded Investment | $ 255,000 | $ 7,000 |
Charge-Off Recorded Upon Default | 64,000 | 7,000 |
Post- Default Recorded Investment | $ 191,000 | $ 0 |
Commercial Other Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 0 |
Pre- Default Recorded Investment | $ 216,000 | $ 0 |
Charge-Off Recorded Upon Default | 25,000 | 0 |
Post- Default Recorded Investment | $ 191,000 | $ 0 |
Residential, Junior Liens, Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 0 |
Pre- Default Recorded Investment | $ 39,000 | $ 0 |
Charge-Off Recorded Upon Default | 39,000 | 0 |
Post- Default Recorded Investment | $ 0 | $ 0 |
Consumer unsecured [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 2 |
Pre- Default Recorded Investment | $ 0 | $ 7,000 |
Charge-Off Recorded Upon Default | 0 | 7,000 |
Post- Default Recorded Investment | $ 0 | $ 0 |
Loans and ALLL (Summary of TDR
Loans and ALLL (Summary of TDR loan balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Troubled debt restructurings | $ 21,325 | $ 23,341 |
Loans and ALLL (Narrative) (Det
Loans and ALLL (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)NumberofLoan | Dec. 31, 2014USD ($)NumberofLoan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Restructure of Loans through Forbearance of Principal or Accrued Interest | NumberofLoan | 0 | 0 |
Migration analysis of loan portfolio period | 5 years | |
Threshold period of continuous performance to return loans to accrual status | 6 months | |
Advance in connection with impaired loans | $ 0 | $ 0 |
Minimum [Member] | 4 - Low satisfactory [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Delinquency period | 10 days | |
Minimum [Member] | 5 - Special mention [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Delinquency period | 30 days | |
Maximum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, amortization term | 30 years | |
Maximum [Member] | 4 - Low satisfactory [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Delinquency period | 30 days | |
Maximum [Member] | 5 - Special mention [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Delinquency period | 60 days | |
Commercial, Agricultural, and Residential Portfolio Segments [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of days past due (or more), accrual of interest discontinued | 90 days | |
Consumer [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Maximum days of consumer loan charged off | 180 days | |
Consumer [Member] | Maximum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, amortization term | 12 years | |
Commercial and Agricultural [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Maximum percentage of loan | 0.80 | |
Commercial and Agricultural [Member] | Customer Concentration Risk [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Maximum amount of loans | $ 15,000 | |
Residential Real Estate [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Maximum percentage of loan | 0.97 | |
Maximum percentage of principal, interest, taxes and hazard insurance on property over gross income | 0.28 | |
Maximum percentage of debt servicing over gross income | 0.36 | |
Maximum amount without corporation approval | $ 500 | |
Residential, Privately Insured, Financing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Maximum percentage of loan | 0.80 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 65,338 | $ 61,881 |
Less: accumulated depreciation | 37,007 | 36,000 |
Premises and equipment, net | 28,331 | 25,881 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 6,190 | 5,429 |
Buildings and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 27,580 | 25,441 |
Furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 31,568 | $ 31,011 |
Premises and Equipment (Narrati
Premises and Equipment (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 2,677 | $ 2,551 | $ 2,556 |
Foreclosed Assets (Summary of F
Foreclosed Assets (Summary of Foreclosed Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Banking and Thrift [Abstract] | ||||
Consumer mortgage loans collateralized by residential real estate foreclosed as a result of obtaining physical possession | [1] | $ 0 | ||
All other foreclosed assets | 421 | $ 885 | ||
Total | $ 421 | $ 885 | $ 1,412 | |
[1] | (1) Disclosure requirement from the adoption of ASU No. 2014-04 on January 1, 2015. As such, measurement was not applicable for December 31, 2014. |
Goodwill and Other Intangible73
Goodwill and Other Intangible Assets (Identifiable intangible assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Net Intangible Assets | $ 546 | |
Core deposit premium resulting from acquisitions [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible Assets | 5,579 | $ 5,373 |
Accumulated Amortization | 5,033 | 4,863 |
Net Intangible Assets | $ 546 | $ 510 |
Foreclosed Assets (Foreclosed A
Foreclosed Assets (Foreclosed Assets Rollforward) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Banking and Thrift [Abstract] | ||
Balance, January 1 | $ 885 | $ 1,412 |
Properties transferred | 1,158 | 1,371 |
Impairments | (99) | (123) |
Proceeds from sale | (1,523) | (1,775) |
Balance, December 31 | $ 421 | $ 885 |
Goodwill and Other Intangible75
Goodwill and Other Intangible Assets (Estimated amortization expense) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of estimated amortization expense associated with identifiable intangibles | |
2,016 | $ 163 |
2,017 | 119 |
2,018 | 96 |
2,018 | 71 |
2,019 | 48 |
Thereafter | 49 |
Net Intangible Assets | $ 546 |
Foreclosed Assets (Narrative) (
Foreclosed Assets (Narrative) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Consumer [Member] | |
Real Estate Properties [Line Items] | |
Mortgage Loans in Process of Foreclosure, Amount | $ 56 |
Goodwill and Other Intangible77
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Carrying amount of goodwill | $ 48,282 | $ 45,618 | |
Amortization expense of identifiable intangible assets | 169 | $ 183 | $ 221 |
Goodwill arising from branch acquisitions | 2,664 | ||
Core Deposits [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Core deposit premiums arising from branch acquisitions | $ 206 |
Deposits (Scheduled maturities
Deposits (Scheduled maturities of time deposits) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Scheduled maturities of time deposits | |
2,015 | $ 191,858 |
2,016 | 89,932 |
2,017 | 63,167 |
2,018 | 23,883 |
2,019 | 33,012 |
Thereafter | 21,028 |
Time Deposits, Total | $ 422,880 |
Deposits (Narrative) (Details)
Deposits (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Banking and Thrift [Abstract] | |||
Interest expense on time deposits greater than $100 | $ 2,806 | $ 2,920 | $ 3,203 |
Borrowed Funds (Borrowed funds
Borrowed Funds (Borrowed funds obligations) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Debt [Line Items] | ||
Borrowed funds | $ 309,732 | $ 289,709 |
Borrowed funds, Rate | 1.50% | 1.41% |
Securities Sold under Agreements to Repurchase [Member] | ||
Schedule of Debt [Line Items] | ||
Borrowed funds | $ 70,532 | $ 95,070 |
Borrowed funds, Rate | 0.12% | 0.14% |
Federal Funds Purchased [Member] | ||
Schedule of Debt [Line Items] | ||
Borrowed funds | $ 4,200 | $ 2,200 |
Borrowed funds, Rate | 0.75% | 0.50% |
Federal Home Loan Bank Advances [Member] | ||
Schedule of Debt [Line Items] | ||
Borrowed funds | $ 235,000 | $ 192,000 |
Borrowed funds, Rate | 1.93% | 2.05% |
Securities Sold under Agreements to Repurchase [Member] | ||
Schedule of Debt [Line Items] | ||
Borrowed funds | $ 0 | $ 439 |
Borrowed funds, Rate | 0.00% | 3.25% |
Borrowed Funds (Maturity and we
Borrowed Funds (Maturity and weighted average interest rates of FHLB advances) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB advances | $ 235,000 | $ 192,000 |
FHLB advances, rate | 1.93% | 2.05% |
Fixed Rate Advances Due 2015 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 0 | $ 42,000 |
FHLB advances, rate | 0.00% | 0.72% |
Fixed Rate Advances Due 2016 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 30,000 | $ 10,000 |
FHLB advances, rate | 1.25% | 2.15% |
Federal Home Loan Bank, Advances, Variable Rate Due 2016 [Member] [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
Federal Home Loan Bank, Advances, Floating Rate | $ 15,000 | $ 0 |
FHLB advances, rate | 0.62% | 0.00% |
Fixed Rate Advances Due 2017 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 50,000 | $ 30,000 |
FHLB advances, rate | 1.56% | 1.95% |
Fixed Rate Advances Due 2018 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 50,000 | $ 40,000 |
FHLB advances, rate | 2.16% | 2.35% |
Fixed Rate Advances Due 2019 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 40,000 | $ 20,000 |
FHLB advances, rate | 2.35% | 3.11% |
Fixed Rate Advances Due 2020 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 10,000 | $ 10,000 |
FHLB advances, rate | 1.98% | 1.98% |
Fixed Rate Advances Due 2021 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 30,000 | $ 30,000 |
FHLB advances, rate | 2.26% | 2.26% |
Fixed Rate Advances Due 2023 [Member] | ||
Federal Home Loan Bank, Advances [Line Items] | ||
FHLB fixed rate advances | $ 10,000 | $ 10,000 |
FHLB advances, rate | 3.90% | 3.90% |
Borrowed Funds (Maturity and 82
Borrowed Funds (Maturity and weighted average interest rates of Repurchase Agreements) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | $ 70,555 | $ 94,537 |
Securities Sold under Agreements to Repurchase [Member] | ||
Debt Instrument [Line Items] | ||
Repurchase agreements | $ 0 | $ 439 |
Repurchase agreements, rate | 0.00% | 3.25% |
Securities Sold under Agreements to Repurchase [Member] | Repurchase Agreements, Due 2015 [Member] | ||
Debt Instrument [Line Items] | ||
Repurchase agreements | $ 0 | $ 439 |
Repurchase agreements, rate | 0.00% | 3.25% |
State and Local Funds Purchased [Member] | ||
Debt Instrument [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | $ 3,639 | $ 6,643 |
Mortgage Backed Securities, Other [Member] | ||
Debt Instrument [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | 23,075 | 29,655 |
Collateralized Mortgage Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | $ 43,841 | $ 58,239 |
Borrowed Funds (Short-term borr
Borrowed Funds (Short-term borrowings) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Securities Sold under Agreements to Repurchase [Member] | ||
Short-term Debt [Line Items] | ||
Maximum Month End Balance | $ 84,859 | $ 95,070 |
Quarter to Date Average Balance | $ 70,368 | $ 91,422 |
Weighted Average Interest Rate During the Period | 0.13% | 0.13% |
Federal Funds Purchased [Member] | ||
Short-term Debt [Line Items] | ||
Maximum Month End Balance | $ 13,100 | $ 17,700 |
Quarter to Date Average Balance | $ 5,783 | $ 4,589 |
Weighted Average Interest Rate During the Period | 0.50% | 0.48% |
Borrowed Funds (Pledged financi
Borrowed Funds (Pledged financial instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Pledged to secure borrowed funds | $ 339,078 | $ 324,584 |
Pledged to secure repurchase agreements | 70,555 | 94,537 |
Pledged for public deposits and for other purposes necessary or required by law | 39,038 | 19,851 |
Total | 448,671 | 438,972 |
Short-term Debt [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | 70,555 | 94,537 |
State and Local Funds Purchased [Member] | ||
Short-term Debt [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | 3,639 | 6,643 |
Mortgage Backed Securities, Other [Member] | ||
Short-term Debt [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | 23,075 | 29,655 |
Collateralized Mortgage Obligations [Member] | ||
Short-term Debt [Line Items] | ||
Pledged Financial Instruments, Available for Sale Securities, without Single Maturity Date | $ 43,841 | $ 58,239 |
Borrowed Funds (Narrative) (Det
Borrowed Funds (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Short-term Debt [Line Items] | ||
Carrying value of securities sold under agreements to repurchase | $ 70,555 | $ 94,537 |
Fair value of securities sold under agreements to repurchase | 70,555 | $ 94,537 |
Additional borrowing capacity | $ 121,960 | |
Federal Funds Purchased [Member] | Minimum [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, term | 1 day | |
Federal Funds Purchased [Member] | Maximum [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, term | 4 days | |
Federal Reserve Bank Advances [Member] | Minimum [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, term | 1 day | |
Federal Reserve Bank Advances [Member] | Maximum [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument, term | 4 days |
Other Noninterest Expenses (Exp
Other Noninterest Expenses (Expenses included in other noninterest expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of expenses included in other noninterest expenses | |||
FDIC insurance premiums | $ 813 | $ 842 | $ 1,082 |
Audit and related fees | 821 | 809 | 738 |
Director fees | 827 | 775 | 819 |
Education and travel | 442 | 625 | 502 |
Postage and freight | 377 | 397 | 387 |
Printing and supplies | 405 | 367 | 396 |
Loan underwriting fees | 347 | 361 | 423 |
Consulting fees | 364 | 349 | 315 |
Legal Fees | 464 | 320 | 359 |
Other losses | 150 | 250 | 109 |
Amortization of deposit premium | 169 | 183 | 221 |
State taxes | 218 | 171 | 140 |
Foreclosed asset and collection | 53 | 122 | 211 |
All other | 1,661 | 1,628 | 1,517 |
Total other | 8,410 | 8,630 | 8,350 |
Donations and community relations | 808 | 1,004 | 715 |
Marketing Expense | $ 491 | $ 427 | $ 416 |
Federal Income Taxes (Component
Federal Income Taxes (Components of the consolidated provision for federal income taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Currently payable | $ 1,596 | $ 2,159 | $ 3,404 |
Deferred (benefit) expense | 1,692 | 185 | (1,208) |
Income tax expense | $ 3,288 | $ 2,344 | $ 2,196 |
Federal Income Taxes (Reconcili
Federal Income Taxes (Reconciliation of the provision for federal income taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 34.00% | 34.00% | 34.00% |
Income taxes at 34% statutory rate | $ 6,262 | $ 5,463 | $ 5,000 |
Interest income on tax exempt municipal securities | (2,026) | (1,999) | (1,746) |
Earnings on corporate owned life insurance policies | (262) | (255) | (249) |
Other | (88) | (263) | (154) |
Total effect of nontaxable income | (2,376) | (2,517) | (2,149) |
Effect of nondeductible expenses | 157 | 156 | 146 |
Effect of tax credits | (755) | (758) | (801) |
Federal income tax expense | $ 3,288 | $ 2,344 | $ 2,196 |
Federal Income Taxes (Significa
Federal Income Taxes (Significant components of our deferred tax assets and liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets | ||
Allowance for loan losses | $ 1,582 | $ 2,507 |
Deferred directors' fees | 2,549 | 2,414 |
Employee benefit plans | 229 | 255 |
Core deposit premium and acquisition expenses | 1,098 | 1,037 |
Net unrecognized actuarial loss on pension plan | 1,708 | 1,962 |
Life insurance death benefit payable | 804 | 804 |
Alternative minimum tax | 650 | 650 |
Other | 53 | 564 |
Total deferred tax assets | 8,673 | 10,193 |
Deferred tax liabilities | ||
Prepaid pension cost | 890 | 989 |
Premises and equipment | 166 | 247 |
Accretion on securities | 55 | 49 |
Core deposit premium and acquisition expenses | 1,289 | 1,229 |
Net unrealized gains on available-for-sale securities | 2,252 | 2,339 |
Other | 989 | 449 |
Total deferred tax liabilities | 5,641 | 5,302 |
Net deferred tax assets | $ 3,032 | $ 4,891 |
Off-Balance-Sheet Activities (C
Off-Balance-Sheet Activities (Contractual amount of credit related financial instruments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Maximum maturity period of commitments to extend credit | 1 year | |
Unfunded commitments under lines of credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract Amount | $ 116,935 | $ 134,412 |
Commercial and standby letters of credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract Amount | 4,985 | 915 |
Commitments to grant loans [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract Amount | $ 13,988 | $ 53,946 |
On-Balance Sheet Activities (Na
On-Balance Sheet Activities (Narrative) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Interest Rate Lock Commitments [Member] | ||
Derivative [Line Items] | ||
Notional Amount of undesignated commitments | $ 234 | $ 632 |
Forward Contracts [Member] | ||
Derivative [Line Items] | ||
Notional Amount of undesignated commitments | $ 1,421 | $ 1,533 |
Commitments and Other Matters (
Commitments and Other Matters (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Commitments and Contingencies Disclosure [Abstract] | ||
Cash reserve balances | $ 1,169 | $ 963 |
Amount available for dividends without regulatory approval | $ 24,700 |
Minimum Regulatory Capital Re93
Minimum Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Common Equity Tier 1 Capital [Abstract] | ||
CommonEquityTierOneCapital | $ 135,250 | |
CommonEquityTierOneRiskBasedCapitalToRiskWeightedAssets | 13.24% | |
CommonEquityTierOneRiskBasedCapitalRequiredForCapitalAdequacy | $ 40,886 | |
CommonEquityTierOneRiskBasedCapitalRequiredForCapitalAdequacyToRiskWeightedAssets | 4.50% | |
Total capital to risk weighted assets | ||
Actual Amount | $ 142,650 | $ 138,820 |
Actual Ratio | 13.96% | 15.19% |
Minimum Capital Requirement Amount | $ 81,772 | $ 73,108 |
Minimum Capital Requirement Ratio | 8.00% | 8.00% |
Tier 1 capital to risk weighted assets | ||
Actual Amount | $ 135,250 | $ 128,720 |
Actual Ratio | 13.24% | 14.08% |
Minimum Capital Requirement Amount | $ 40,886 | $ 36,554 |
Minimum Capital Requirement Ratio | 6.00% | 4.00% |
Tier 1 capital to average assets | ||
Actual Amount | $ 135,250 | $ 128,720 |
Actual Ratio | 8.52% | 8.59% |
Minimum Capital Requirement Amount | $ 63,524 | $ 59,908 |
Minimum Capital Requirement Ratio | 4.00% | 4.00% |
Isabella Bank [Member] | ||
Common Equity Tier 1 Capital [Abstract] | ||
CommonEquityTierOneCapital | $ 124,917 | |
CommonEquityTierOneRiskBasedCapitalToRiskWeightedAssets | 12.31% | |
CommonEquityTierOneRiskBasedCapitalRequiredForCapitalAdequacy | $ 40,589 | |
CommonEquityTierOneRiskBasedCapitalRequiredForCapitalAdequacyToRiskWeightedAssets | 4.50% | |
CommonEquityTierOneRiskBasedCapitalRequiredToBeWellCapitalized | $ 60,883 | |
CommonEquityTierOneRiskBasedCapitalRequiredToBeWellCapitalizedToRiskWeightedAssets | 6.50% | |
Total capital to risk weighted assets | ||
Actual Amount | $ 132,317 | $ 128,074 |
Actual Ratio | 13.04% | 14.18% |
Minimum Capital Requirement Amount | $ 81,178 | $ 72,278 |
Minimum Capital Requirement Ratio | 8.00% | 8.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 101,472 | $ 90,348 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio | 10.00% | 10.00% |
Tier 1 capital to risk weighted assets | ||
Actual Amount | $ 124,917 | $ 117,974 |
Actual Ratio | 12.31% | 13.06% |
Minimum Capital Requirement Amount | $ 40,589 | $ 36,139 |
Minimum Capital Requirement Ratio | 6.00% | 4.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 60,883 | $ 54,209 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio | 8.00% | 6.00% |
Tier 1 capital to average assets | ||
Actual Amount | $ 124,917 | $ 117,974 |
Actual Ratio | 7.93% | 7.96% |
Minimum Capital Requirement Amount | $ 63,032 | $ 59,297 |
Minimum Capital Requirement Ratio | 4.00% | 4.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $ 78,790 | $ 74,121 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio | 5.00% | 5.00% |
Benefit Plans (Changes in the d
Benefit Plans (Changes in the defined benefit pension plan) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Change in benefit obligation | |||
Benefit obligation, January 1 | $ 13,250 | $ 10,732 | |
Interest cost | 494 | 486 | $ 450 |
Actuarial (gain) loss | (744) | 3,049 | |
Benefits paid, including plan expenses | (1,023) | (1,017) | |
Benefit obligation, December 31 | 11,977 | 13,250 | 10,732 |
Change in plan assets | |||
Fair value of plan assets, January 1 | 10,390 | 10,508 | |
Investment return | 5 | 699 | |
Contributions | 200 | 200 | |
Benefits paid, including plan expenses | (1,023) | (1,017) | |
Fair value of plan assets, December 31 | 9,572 | 10,390 | 10,508 |
Deficiency in funded status at December31, included on the consolidated balance sheets in accrued interest payable and other liabilities | (2,405) | (2,860) | |
Accrued benefit cost at January 1 | (2,860) | (224) | |
Contributions | 200 | 200 | |
Net periodic cost for the year | (492) | (300) | (208) |
Net change in unrecognized actuarial loss and prior service cost | 747 | (2,536) | 2,328 |
Accrued benefit cost at December 31 | $ (2,405) | $ (2,860) | $ (224) |
Benefit Plans (Components of ne
Benefit Plans (Components of net periodic benefit cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost on benefit obligation | $ 494 | $ 486 | $ 450 | |
Expected return on plan assets | (607) | (615) | (572) | |
Amortization of unrecognized actuarial net loss | 355 | 169 | 330 | |
Settlement loss | 250 | 260 | 0 | |
Net periodic benefit cost | $ 492 | $ 300 | $ 208 | |
Scenario, Forecast [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost on benefit obligation | $ 484 | |||
Expected return on plan assets | (559) | |||
Amortization of unrecognized actuarial net loss | 313 | |||
Net periodic benefit cost | $ 238 |
Benefit Plans (Actuarial assump
Benefit Plans (Actuarial assumptions used) (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Actuarial assumptions used in determining the projected benefit obligation | |||
Discount rate | 4.13% | 3.80% | 4.64% |
Actuarial weighted average assumptions used in determining the net periodic pension costs | |||
Discount rate | 3.80% | 4.64% | 3.75% |
Expected long-term return on plan assets | 6.00% | 6.00% | 6.00% |
Benefit Plans (Fair values of o
Benefit Plans (Fair values of our pension plan assets by asset category) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | $ 9,572 | $ 10,390 | $ 10,508 |
Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | 9,572 | 10,390 | |
Short-term investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | 157 | 804 | |
Short-term investments [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | 157 | 804 | |
Fixed income [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | 4,662 | 4,738 | |
Fixed income [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | 4,662 | 4,738 | |
Equity investments [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | 4,753 | 4,848 | |
Equity investments [Member] | Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair values of the Corporation's pension plan assets | $ 4,753 | $ 4,848 |
Benefit Plans (Estimated future
Benefit Plans (Estimated future benefit payments) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Compensation and Retirement Disclosure [Abstract] | |
2,015 | $ 500 |
2,016 | 527 |
2,017 | 529 |
2,018 | 570 |
2,019 | 614 |
Years 2020 - 2024 | $ 3,290 |
Benefit Plans (Components of sh
Benefit Plans (Components of shares eligible to be issued under the Directors Plan) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Eligible shares, unissued | 19,401 | 13,934 |
Director [Member] | ||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||
Eligible shares, unissued | 180,616 | 173,435 |
Eligible shares, shares held in Rabbi Trust | 19,401 | 13,934 |
Eligible shares, total | 200,017 | 187,369 |
Market value, unissued | $ 5,400 | $ 3,902 |
Market value, shares held in Rabbi Trust | 580 | 314 |
Market value, total | $ 5,980 | $ 4,216 |
Benefit Plans (Narrative) (Deta
Benefit Plans (Narrative) (Details) | Mar. 01, 2007 | Dec. 31, 2015USD ($)NumberofPlanshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares |
Compensation and Retirement Disclosure [Abstract] | ||||
Employees contribution | 100.00% | |||
Corporation matching contribution, percent | 100.00% | 50.00% | ||
Employee contribution, percent | 5.00% | 4.00% | ||
Defined Contribution Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements | $ (250,000) | $ (260,000) | $ 0 | |
Plan expenses | 664,000 | $ 655,000 | 608,000 | |
Highest consecutive years of compensation | 5 years | |||
Years of service | 10 years | |||
Accumulated other comprehensive income includes net unrecognized pension cost before income taxes | 5,022,000 | |||
Accumulated other comprehensive income expected to be amortized into benefit cost | 238,000 | |||
Defer earned board fees into the Directors Plan | 25.00% | |||
Contribution approved by Board of Directors to the ESOP (Discretionary) | 0 | $ 0 | 0 | |
Compensation cost related to plan | $ 32,000 | $ 23,000 | $ 29,000 | |
Allocated shares outstanding related to the ESOP | shares | 217,064,000 | 241,958,000 | 241,958,000 | |
Corporation self-funded medical plan | $ 75,000 | |||
Medical expenses | $ 1,695,000 | 1,786,000 | $ 2,698,000 | |
First Two Years of Employment [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Vesting percentage | 0.00% | |||
Vested years of employment | 2 years | |||
After Six Years of Employment [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Vesting percentage | 100.00% | |||
Vested years of employment | 6 years | |||
Other Postretirement Benefit Plan [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Plan expenses | $ 379,000 | $ 372,000 | $ 375,000 | |
Number of nonqualified supplementary employee retirement plans | NumberofPlan | 2 | |||
Safe Harbor 401(k) [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Vesting percentage | 100.00% | 100.00% | ||
Safe harbor contribution | 3.00% | |||
Equity Collective Trust [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Investment allocation in securities | 50.00% | |||
Fixed Income Funds [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Investment allocation in securities | 50.00% |
Accumulated Other Comprehens101
Accumulated Other Comprehensive Income (Loss) (Changes in AOCI by component) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | $ (506) | $ (6,341) | $ 5,007 |
OCI before reclassifications | 565 | 8,454 | (16,851) |
Amounts reclassified from AOCI | 329 | 203 | 37 |
Net unrealized gains (losses) | 894 | 8,657 | (16,814) |
Tax effect | (167) | (2,822) | 5,466 |
Unrealized gains (losses), net of tax | 727 | 5,835 | (11,348) |
Ending Balance | 221 | (506) | (6,341) |
Unrealized Holding Gains (Losses) on AFS Securities [Member] | |||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | 3,302 | (4,207) | 8,678 |
OCI before reclassifications | 310 | 11,290 | (18,971) |
Amounts reclassified from AOCI | (163) | (97) | (171) |
Net unrealized gains (losses) | 147 | 11,193 | (19,142) |
Tax effect | 87 | (3,684) | 6,257 |
Unrealized gains (losses), net of tax | 234 | 7,509 | (12,885) |
Ending Balance | 3,536 | 3,302 | (4,207) |
Defined Benefit Pension Plan [Member] | |||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||
Beginning Balance | (3,808) | (2,134) | (3,671) |
OCI before reclassifications | 255 | (2,836) | 2,120 |
Amounts reclassified from AOCI | 492 | 300 | 208 |
Net unrealized gains (losses) | 747 | (2,536) | 2,328 |
Tax effect | (254) | 862 | (791) |
Unrealized gains (losses), net of tax | 493 | (1,674) | 1,537 |
Ending Balance | $ (3,315) | $ (3,808) | $ (2,134) |
Accumulated Other Comprehens102
Accumulated Other Comprehensive Income (Loss) (Components of unrealized holding gains on AFS securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gains (losses) arising during the period | $ 310 | $ 11,290 | $ (18,971) | ||
Reclassification adjustment for net realized (gains) losses included in net income | (163) | (97) | (171) | ||
Net unrealized gains (losses) | 147 | 11,193 | (19,142) | ||
Tax effect | [1] | 87 | (3,684) | 6,257 | |
Unrealized gains (losses), net of tax | 234 | 7,509 | (12,885) | ||
Unrealized Holding Gains (Losses) on AFS Securities [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gains (losses) arising during the period | 310 | 11,290 | (18,971) | ||
Reclassification adjustment for net realized (gains) losses included in net income | (163) | (97) | (171) | ||
Net unrealized gains (losses) | 147 | 11,193 | (19,142) | ||
Tax effect | [1] | 87 | (3,684) | 6,257 | |
Unrealized gains (losses), net of tax | 234 | 7,509 | (12,885) | ||
Unrealized Holding Gains (Losses) on AFS Securities [Member] | Auction Rate Money Market Preferred and Preferred Stocks [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gains (losses) arising during the period | 406 | 355 | (737) | ||
Reclassification adjustment for net realized (gains) losses included in net income | 0 | 0 | 0 | ||
Net unrealized gains (losses) | 406 | 355 | (737) | ||
Tax effect | 0 | 0 | 0 | [1] | |
Unrealized gains (losses), net of tax | 406 | 355 | (737) | ||
Unrealized Holding Gains (Losses) on AFS Securities [Member] | All Other AFS Securities [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Unrealized gains (losses) arising during the period | (96) | 10,935 | (18,234) | ||
Reclassification adjustment for net realized (gains) losses included in net income | (163) | (97) | (171) | ||
Net unrealized gains (losses) | (259) | 10,838 | (18,405) | ||
Tax effect | 87 | (3,684) | 6,257 | [1] | |
Unrealized gains (losses), net of tax | $ (172) | $ 7,154 | $ (12,148) | ||
[1] | See “Note 18 – Accumulated Other Comprehensive Income (Loss)” in the accompanying notes to consolidated financial statements for tax effect reconciliation. |
Accumulated Other Comprehens103
Accumulated Other Comprehensive Income (Loss) (Reclassification adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net gains (losses) on sale of AFS securities | $ 163 | $ 97 | $ 171 | |
Net AFS Impairment Loss | $ (282) | |||
Income before federal income tax expense | 18,418 | 16,068 | 14,706 | |
Compensation and benefits | 19,068 | 18,502 | 17,807 | |
Federal income tax expense | 3,288 | 2,344 | 2,196 | |
NET INCOME | 15,130 | 13,724 | 12,510 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Holding Gains (Losses) on AFS Securities [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net gains (losses) on sale of AFS securities | 163 | 97 | 171 | |
Federal income tax expense | 55 | 33 | 58 | |
NET INCOME | 108 | 64 | 113 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined Benefit Pension Plan [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Compensation and benefits | 492 | 300 | 208 | |
Federal income tax expense | 167 | 102 | 71 | |
NET INCOME | $ 325 | $ 198 | $ 137 |
Related Party Transactions (Ann
Related Party Transactions (Annual activity) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Annual activity | ||
Balance, January 1 | $ 3,822 | $ 4,178 |
New loans | 2,779 | 1,475 |
Repayments | (2,580) | (1,831) |
Balance, December 31 | $ 4,021 | $ 3,822 |
Related Party Transactions (End
Related Party Transactions (Ending balances of, and contributions to the Isabella Bank Foundation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
Ending assets | $ 1,668,112 | $ 1,549,543 | |
Affiliated Entity [Member] | Isabella Bank Foundation [Member] | Charitable Donation [Member] | |||
Related Party Transaction [Line Items] | |||
Donations | 258 | 500 | $ 200 |
Affiliated Entity [Member] | Isabella Bank Foundation [Member] | |||
Related Party Transaction [Line Items] | |||
Ending assets | $ 2,435 | $ 2,090 | $ 1,815 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Employee Stock Ownership Plan (ESOP) Deposit [Member] | Subsidiaries [Member] | ||
Related Party Transaction [Line Items] | ||
Total deposits | $ 143 | $ 392 |
Principal Officers and Directors and Their Affiliates [Member] | ||
Related Party Transaction [Line Items] | ||
Total deposits | $ 5,625 | $ 5,861 |
Affiliated Entity [Member] | Isabella Bank Foundation [Member] | ||
Related Party Transaction [Line Items] | ||
Shares held by related party | 44,350 | 34,350 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Federal Funds Purchased, Securities Sold Under Agreements To Repurchase, And Other Borrowings [Member] | Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, term | 90 days | |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairments recorded on equity securities without readily determinable fair values | $ 0 | $ 0 |
Impairments recorded on goodwill and other acquisition intangibles | $ 0 | $ 0 |
Fair Value (Quantitative inform
Fair Value (Quantitative information about impaired loans) (Details) - Discounted appraisal value [Member] - Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discounted appraisal value at fair value | $ 9,301 | $ 8,720 |
Real Estate [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 20.00% | 20.00% |
Real Estate [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 30.00% | 25.00% |
Equipment [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 20.00% | 30.00% |
Equipment [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 35.00% | 40.00% |
Cash crop inventory [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 40.00% | 40.00% |
Other inventory [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 50.00% | 75.00% |
Other inventory [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 50.00% | |
Other inventory [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 50.00% | |
Accounts receivable [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 50.00% | 50.00% |
Liquor License [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 75.00% | 75.00% |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 35.00% | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 45.00% |
Fair Value (Quantitative inf109
Fair Value (Quantitative information related to foreclosed assets) (Details) - Discounted appraisal value [Member] - Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discounted appraisal value at fair value | $ 421 | $ 885 |
Real Estate [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 20.00% | 20.00% |
Real Estate [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value Inputs, Discount Rate | 30.00% | 25.00% |
Fair Value (Carrying amount and
Fair Value (Carrying amount and estimated fair value of financial instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Level 1 [Member] | ||
ASSETS | ||
Cash and cash equivalents | $ 21,569 | $ 19,906 |
Mortgage loans AFS | 0 | 0 |
Total loans | 0 | 0 |
Less allowance for loan losses | 0 | 0 |
Net loans | 0 | 0 |
Accrued interest receivable | 6,269 | 5,851 |
Equity securities without readily determinable fair values | 0 | 0 |
OMSR | 0 | 0 |
LIABILITIES | ||
Deposits without stated maturities | 741,683 | 634,222 |
Deposits with stated maturities | 0 | 0 |
Borrowed funds | 0 | 0 |
Accrued interest payable | 545 | 558 |
Level 2 [Member] | ||
ASSETS | ||
Cash and cash equivalents | 0 | 0 |
Mortgage loans AFS | 1,210 | 911 |
Total loans | 0 | 0 |
Less allowance for loan losses | 0 | 0 |
Net loans | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Equity securities without readily determinable fair values | 0 | 0 |
OMSR | 2,518 | 2,554 |
LIABILITIES | ||
Deposits without stated maturities | 0 | 0 |
Deposits with stated maturities | 421,429 | 440,964 |
Borrowed funds | 297,495 | 293,401 |
Accrued interest payable | 0 | 0 |
Level 3 [Member] | ||
ASSETS | ||
Cash and cash equivalents | 0 | 0 |
Mortgage loans AFS | 0 | 0 |
Total loans | 839,398 | 830,417 |
Less allowance for loan losses | 7,400 | 10,100 |
Net loans | 831,998 | 820,317 |
Accrued interest receivable | 0 | 0 |
Equity securities without readily determinable fair values | 0 | 0 |
OMSR | 0 | 0 |
LIABILITIES | ||
Deposits without stated maturities | 0 | 0 |
Deposits with stated maturities | 0 | 0 |
Borrowed funds | 0 | 0 |
Accrued interest payable | 0 | 0 |
Carrying Value [Member] | ||
ASSETS | ||
Cash and cash equivalents | 21,569 | 19,906 |
Mortgage loans AFS | 1,187 | 901 |
Total loans | 850,492 | 836,550 |
Less allowance for loan losses | 7,400 | 10,100 |
Net loans | 843,092 | 826,450 |
Accrued interest receivable | 6,269 | 5,851 |
Equity securities without readily determinable fair values | 22,286 | 20,076 |
OMSR | 2,505 | 2,519 |
LIABILITIES | ||
Deposits without stated maturities | 741,683 | 634,222 |
Deposits with stated maturities | 422,880 | 440,262 |
Borrowed funds | 309,732 | 289,709 |
Accrued interest payable | 545 | 558 |
Estimated Fair Value [Member] | ||
ASSETS | ||
Cash and cash equivalents | 21,569 | 19,906 |
Mortgage loans AFS | 1,210 | 911 |
Total loans | 839,398 | 830,417 |
Less allowance for loan losses | 7,400 | 10,100 |
Net loans | 831,998 | 820,317 |
Accrued interest receivable | 6,269 | 5,851 |
OMSR | 2,518 | 2,554 |
LIABILITIES | ||
Deposits without stated maturities | 741,683 | 634,222 |
Deposits with stated maturities | 421,429 | 440,964 |
Borrowed funds | 297,495 | 293,401 |
Accrued interest payable | $ 545 | $ 558 |
Fair Value (Recorded amount of
Fair Value (Recorded amount of assets and liabilities measured at fair value) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
AFS Securities | ||
AFS securities | $ 660,136 | $ 567,534 |
Fair value, total | 669,858 | 577,139 |
Level 1 [Member] | ||
AFS Securities | ||
Fair value, total | $ 3,299 | $ 6,140 |
Percent of assets and liabilities measured at fair value | 0.49% | 1.06% |
Level 2 [Member] | ||
AFS Securities | ||
Fair value, total | $ 656,837 | $ 561,394 |
Percent of assets and liabilities measured at fair value | 98.06% | 97.27% |
Level 3 [Member] | ||
AFS Securities | ||
Fair value, total | $ 9,722 | $ 9,605 |
Percent of assets and liabilities measured at fair value | 1.45% | 1.67% |
Recurring items [Member] | ||
AFS Securities | ||
AFS securities | $ 660,136 | $ 567,534 |
Recurring items [Member] | Government sponsored enterprises [Member] | ||
AFS Securities | ||
AFS securities | 24,345 | 24,136 |
Recurring items [Member] | States and political subdivisions [Member] | ||
AFS Securities | ||
AFS securities | 232,217 | 215,345 |
Recurring items [Member] | Auction rate money market preferred [Member] | ||
AFS Securities | ||
AFS securities | 2,866 | 2,619 |
Recurring items [Member] | Preferred stock [Member] | ||
AFS Securities | ||
AFS securities | 3,299 | 6,140 |
Recurring items [Member] | Mortgage-backed securities [Member] | ||
AFS Securities | ||
AFS securities | 263,384 | 166,926 |
Recurring items [Member] | Collateralized mortgage obligations [Member] | ||
AFS Securities | ||
AFS securities | 134,025 | 152,368 |
Recurring items [Member] | Level 1 [Member] | ||
AFS Securities | ||
AFS securities | 3,299 | 6,140 |
Recurring items [Member] | Level 1 [Member] | Government sponsored enterprises [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 1 [Member] | States and political subdivisions [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 1 [Member] | Auction rate money market preferred [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 1 [Member] | Preferred stock [Member] | ||
AFS Securities | ||
AFS securities | 3,299 | 6,140 |
Recurring items [Member] | Level 1 [Member] | Mortgage-backed securities [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 1 [Member] | Collateralized mortgage obligations [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 2 [Member] | ||
AFS Securities | ||
AFS securities | 656,837 | 561,394 |
Recurring items [Member] | Level 2 [Member] | Government sponsored enterprises [Member] | ||
AFS Securities | ||
AFS securities | 24,345 | 24,136 |
Recurring items [Member] | Level 2 [Member] | States and political subdivisions [Member] | ||
AFS Securities | ||
AFS securities | 232,217 | 215,345 |
Recurring items [Member] | Level 2 [Member] | Auction rate money market preferred [Member] | ||
AFS Securities | ||
AFS securities | 2,866 | 2,619 |
Recurring items [Member] | Level 2 [Member] | Preferred stock [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 2 [Member] | Mortgage-backed securities [Member] | ||
AFS Securities | ||
AFS securities | 263,384 | 166,926 |
Recurring items [Member] | Level 2 [Member] | Collateralized mortgage obligations [Member] | ||
AFS Securities | ||
AFS securities | 134,025 | 152,368 |
Recurring items [Member] | Level 3 [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 3 [Member] | Government sponsored enterprises [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 3 [Member] | States and political subdivisions [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 3 [Member] | Auction rate money market preferred [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 3 [Member] | Preferred stock [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 3 [Member] | Mortgage-backed securities [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Recurring items [Member] | Level 3 [Member] | Collateralized mortgage obligations [Member] | ||
AFS Securities | ||
AFS securities | 0 | 0 |
Nonrecurring items [Member] | ||
AFS Securities | ||
Impaired loans (net of the allowance for loan losses) | 9,301 | 8,720 |
Foreclosed assets | 421 | 885 |
Nonrecurring items [Member] | Level 1 [Member] | ||
AFS Securities | ||
Impaired loans (net of the allowance for loan losses) | 0 | 0 |
Foreclosed assets | 0 | 0 |
Nonrecurring items [Member] | Level 2 [Member] | ||
AFS Securities | ||
Impaired loans (net of the allowance for loan losses) | 0 | 0 |
Foreclosed assets | 0 | 0 |
Nonrecurring items [Member] | Level 3 [Member] | ||
AFS Securities | ||
Impaired loans (net of the allowance for loan losses) | 9,301 | 8,720 |
Foreclosed assets | $ 421 | $ 885 |
Fair Value (Changes in fair val
Fair Value (Changes in fair value of assets and liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Changes in fair value, gain (loss), Foreclosed assets | $ (99) | $ (123) |
Parent Company Only Financia113
Parent Company Only Financial Information (Interim Condensed Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
ASSETS | ||||
AFS securities | $ 660,136 | $ 567,534 | ||
Premises and equipment | 28,331 | 25,881 | ||
Other assets | 9,991 | 11,664 | ||
TOTAL ASSETS | 1,668,112 | 1,549,543 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Shareholders' equity | 183,971 | 174,594 | $ 160,609 | $ 164,489 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,668,112 | 1,549,543 | ||
Parent Company [Member] | ||||
ASSETS | ||||
Cash on deposit at subsidiary Bank | 4,125 | 1,035 | ||
AFS securities | 257 | 3,294 | ||
Investments in subsidiaries | 133,883 | 124,827 | ||
Premises and equipment | 2,014 | 1,982 | ||
Other assets | 53,396 | 53,228 | ||
TOTAL ASSETS | 193,675 | 184,366 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Other liabilities | 9,704 | 9,772 | ||
Shareholders' equity | 183,971 | 174,594 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 193,675 | $ 184,366 |
Parent Company Only Financia114
Parent Company Only Financial Information (Interim Condensed Statements of Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Expenses | |||
Compensation and benefits | $ 19,068 | $ 18,502 | $ 17,807 |
Occupancy and equipment | 2,834 | 2,798 | 2,653 |
Audit and related fees | 821 | 809 | 738 |
Other | 8,410 | 8,630 | 8,350 |
Federal income tax benefit | (3,288) | (2,344) | (2,196) |
NET INCOME | 15,130 | 13,724 | 12,510 |
Parent Company [Member] | |||
Income | |||
Dividends from subsidiaries | 8,000 | 7,000 | 7,000 |
Interest income | 78 | 150 | 161 |
Management fee and other | 6,331 | 3,665 | 2,146 |
Total income | 14,409 | 10,815 | 9,307 |
Expenses | |||
Compensation and benefits | 5,110 | 3,688 | 2,811 |
Occupancy and equipment | 1,634 | 1,082 | 476 |
Audit and related fees | 452 | 404 | 345 |
Other | 2,160 | 1,395 | 958 |
Total expenses | 9,356 | 6,569 | 4,590 |
Income before income tax benefit and equity in undistributed earnings of subsidiaries | 5,053 | 4,246 | 4,717 |
Federal income tax benefit | 991 | 940 | 790 |
Income before equity in undistributed earnings of subsidiaries | 6,044 | 5,186 | 5,507 |
Undistributed earnings of subsidiaries | 9,086 | 8,538 | 7,003 |
NET INCOME | $ 15,130 | $ 13,724 | $ 12,510 |
Parent Company Only Financia115
Parent Company Only Financial Information (Interim Condensed Statements of Cash Flows) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||
Net income | $ 15,130 | $ 13,724 | $ 12,510 |
Adjustments to reconcile net income to cash provided by operations | |||
Share-based payment awards | 550 | 495 | 554 |
Depreciation | 2,677 | 2,551 | 2,556 |
Net amortization of AFS securities | 2,074 | 1,830 | 2,028 |
Deferred Income Tax Expense (Benefit) | 1,692 | 207 | (1,208) |
Changes in operating assets and liabilities which used cash | |||
Other assets | (5,322) | (1,392) | 1,792 |
Accrued interest and other liabilities | (910) | 1,298 | 1,954 |
Net cash provided by (used in) operating activities | 12,090 | 17,562 | 23,607 |
Investing activities | |||
Purchases of equipment and premises | (5,127) | (2,713) | (2,488) |
Net cash provided by (used in) investing activities | (113,499) | (74,826) | (69,682) |
Financing activities | |||
Net increase (decrease) in other borrowed funds | 20,023 | 10,383 | 38,325 |
Cash dividends paid on common stock | (7,273) | (6,843) | (6,456) |
Proceeds from the issuance of common stock | 5,201 | 4,227 | 3,618 |
Common stock repurchased | (4,590) | (3,122) | (2,375) |
Common stock purchased for deferred compensation obligations | (368) | (331) | (383) |
Net cash provided by (used in) financing activities | 103,072 | 35,032 | 58,828 |
Increase (decrease) in cash and cash equivalents | 1,663 | (22,232) | 12,753 |
Cash and cash equivalents at beginning of period | 19,906 | 42,138 | 29,385 |
Cash and cash equivalents at end of period | 21,569 | 19,906 | 42,138 |
Parent Company [Member] | |||
Operating activities | |||
Net income | 15,130 | 13,724 | 12,510 |
Adjustments to reconcile net income to cash provided by operations | |||
Undistributed earnings of subsidiaries | (9,086) | (8,538) | (7,003) |
Undistributed earnings of equity securities without readily determinable fair values | (310) | 37 | 74 |
Share-based payment awards | 550 | 495 | 554 |
Depreciation | 154 | 144 | 174 |
Net amortization of AFS securities | 0 | 1 | 2 |
Deferred Income Tax Expense (Benefit) | 131 | (159) | (305) |
Changes in operating assets and liabilities which used cash | |||
Other assets | 506 | 145 | (51) |
Accrued interest and other liabilities | 142 | 1,516 | 1,238 |
Net cash provided by (used in) operating activities | 7,217 | 7,365 | 7,193 |
Investing activities | |||
Maturities, calls, principal repayments, and sales of AFS securities | 3,000 | 250 | 395 |
Purchases of equipment and premises | (186) | (81) | (146) |
Advances to subsidiaries, net of repayments | 300 | 641 | (299) |
Net cash provided by (used in) investing activities | 3,114 | 810 | (50) |
Financing activities | |||
Net increase (decrease) in other borrowed funds | (211) | (1,600) | (1,350) |
Cash dividends paid on common stock | (7,273) | (6,843) | (6,456) |
Proceeds from the issuance of common stock | 5,201 | 4,227 | 3,618 |
Common stock repurchased | (4,590) | (3,122) | (2,375) |
Common stock purchased for deferred compensation obligations | (368) | (331) | (383) |
Net cash provided by (used in) financing activities | (7,241) | (7,669) | (6,946) |
Increase (decrease) in cash and cash equivalents | 3,090 | 506 | 197 |
Cash and cash equivalents at beginning of period | 1,035 | 529 | 332 |
Cash and cash equivalents at end of period | $ 4,125 | $ 1,035 | $ 529 |
Operating Segments (Narrative)
Operating Segments (Narrative) (Details) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Segment Reporting [Abstract] | |||
Percentage of reportable segments total assets and operating results, or more | 90.00% | 90.00% | 90.00% |