Fair Value Of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Summary of Financial Assets Measured on a Recurring Basis

The following table summarizes the fair value of our financial assets measured on a recurring basis by the above pricing observability levels as of March 31, 2017 and December 31, 2016:

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(Dollars in thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)
March 31, 2017
U.S. government agencies	$	22,244	$	—	$	22,244	$	—
State and political subdivisions	40,439		—		40,439		—
Mortgage-backed securities -
U.S. government-sponsored enterprises	35,081		—		35,081		—
Corporate debt	2,033		—		2,033		—
Derivative instruments
Interest rate swaps	1,687		—		1,687		—



December 31, 2016
U.S. government agencies	$	13,087	$	—	$	13,087	$	—
State and political subdivisions	40,688		—		40,688		—
Mortgage-backed securities -
U.S. government-sponsored enterprises	32,854		—		32,854		—
Corporate debt	1,982		—		1,982		—
Derivative instruments
Interest rate swaps	1,647		—		1,647		—

Summary of Financial Assets Measured on a Nonrecurring Basis

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2017 and December 31, 2016 are as follows:

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(Dollars in thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)
March 31, 2017
Impaired loans	$	861	$	—	$	—	$	861
Foreclosed real estate	3		—		—		3



December 31, 2016
Impaired loans	$	1,001	$	—	$	—	$	1,001
Foreclosed real estate	1,716		—		—		1,716

Qualitative Information About Level 3 Fair Value Measurements

The following table presents additional qualitative information about assets measured at fair value on a nonrecurring basis and for which Level III inputs were used to determine fair value:

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	Qualitative Information about Level III Fair Value Measurements
(Dollars in thousands)	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
March 31, 2017
Impaired loans	$	861	Appraisal of	Appraisal	0% to -11.3%
			collateral	adjustments (1)	(-0.4%)

Foreclosed real estate	3		Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)



December 31, 2016
Impaired loans	$	1,001	Appraisal of	Appraisal	0% to -27.3%
			collateral	adjustments (1)	(-2.5%)

Foreclosed real estate	1,716		Appraisal of	Selling
			collateral	expenses ₍₁₎	-7.0% (-7.0%)

(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling expenses. The range and weighted average of selling expenses and other appraisal adjustments are presented as a percentage of the appraisal.

Estimated Fair Values of Financial Instruments

The fair values of our financial instruments at March 31, 2017 and December 31, 2016, were as follows:



	March 31, 2017				Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)
(Dollars in thousands)	Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	7,688	$	7,688	$	7,688	$	—	$	—
Time deposits with other banks	100		100		—		100		—
Securities available for sale	99,797		99,797		—		99,797		—
Securities held to maturity	8,630		8,788		—		8,788		—
Federal Home Loan Bank stock	4,269		4,269		—		4,269		—
Loans receivable, net of allowance	712,003		695,158		—		—		695,158
Accrued interest receivable	2,006		2,006		—		2,006		—
Interest rate swaps	1,687		1,687		—		1,687		—

Financial liabilities:
Non-maturity deposits	550,289		550,289		—		550,289		—
Time deposits	146,287		145,823		—		145,823		—
Short-term borrowings	14,800		14,797		14,797		—		—
Long-term borrowings	66,000		64,520		—		64,520		—
Subordinated debentures	27,841		24,747		—		24,747		—
Accrued interest payable	352		352		—		352		—



	December 31, 2016				Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)
(Dollars in thousands)	Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	14,638	$	14,638	$	14,638	$	—	$	—
Time deposits with other banks	100		100		—		100		—
Securities available for sale	88,611		88,611		—		88,611		—
Securities held to maturity	11,618		11,739		—		11,739		—
Federal Home Loan Bank stock	5,106		5,106		—		5,106		—
Loans receivable, net of allowance	688,561		672,912		—		—		672,912
Accrued interest receivable	2,058		2,058		—		2,058		—
Interest rate swaps	1,647		1,647		—		1,647		—

Financial liabilities:
Non-maturity deposits	479,025		479,025		—		479,025		—
Time deposits	181,896		181,346		—		181,346		—
Short-term borrowings	29,805		29,805		29,805		—		—
Long-term borrowings	66,000		66,388		—		66,388		—
Subordinated debentures	27,840		24,519		—		24,519		—
Accrued interest payable	364		364		—		364		—