Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Schedule of Balances of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014:

(Dollars in thousands)			Fair Value Measurements at September 30, 2015 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
Corporate bonds	$	700	$	—	$	—	$	700
U. S. Government agencies		23,136		1,428		21,708		—
State and municipal obligations		24,562		—		24,562		—
Certificates of deposit		5,497		—		5,249		248
Total securities available-for-sale:	$	53,895	$	1,428	$	51,519	$	948
Mortgage servicing rights	$	642	$	—	$	—	$	642
Defined benefit plan assets:
Cash and cash equivalents	$	3	$	3	$	—	$	—
Mutual funds - fixed income		1,613		1,613		—		—
Mutual funds - equity		1,125		1,125		—		—
Total defined benefit plan assets	$	2,741	$	2,741	$	—	$	—
			Fair Value Measurements at December 31, 2014 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
U. S. Government agencies	$	16,965	$	845	$	16,120	$	—
State and municipal obligations		23,401		—		23,401		—
Certificates of deposit		2,238		—		2,238		—
Total securities available-for-sale:	$	42,604	$	845	$	41,759	$	—
Mortgage servicing rights	$	596	$	—	$	—	$	596
Defined benefit plan assets:
Cash and cash equivalents	$	4	$	4	$	—	$	—
Mutual funds - fixed income		1,139		1,139		—		—
Mutual funds - equity		1,754		1,754		—		—
Total defined benefit plan assets	$	2,897	$	2,897	$	—	$	—

Reconciliation of Items Using Level Three Inputs

The reconciliation of items using Level 3 inputs is as follows:

			Corporate		Certificates of
(Dollars in thousands)	MSRs		Bonds		Deposit
Balance, January 1, 2015	$	596	$	—	$	—
Purchases		—		700		248
Impairments		—		—		—
Fair value adjustments		46		—		—
Sales		—		—		—
Balance, September 30, 2015	$	642	$	700	$	248

Summary of Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes the Company’s assets that were measured at fair value on a nonrecurring basis at the end of the respective period.

			Fair Value Measurements at September 30, 2015 Using
(Dollars in thousands)	Balance as of
Description	September 30, 2015		Level 1		Level 2		Level 3
Impaired Loans, net	$	2,690	$	—	$	—	$	2,690
Other real estate owned, net		2,343		—		—		2,343
			Fair Value Measurements at December 31, 2014 Using
	Balance as of
Description	December 31, 2014		Level 1		Level 2		Level 3
Impaired Loans, net	$	1,958	$	—	$	—	$	1,958
Other real estate owned, net		2,791		—		—		2,791

Summary of Quantitative Fair Value Measurements for Level 3

The following table displays quantitative information about Level 3 Fair Value Measurements as of September 30, 2015:

							Range
	Balance as of		Valuation		Unobservable		(Weighted
(Dollars in thousands)	September 30, 2015		Technique		Input		Average)
Impaired Loans, net	$	2,690		Discounted appraised value		Selling Cost		10% - 25% (13%	)
						Lack of Marketability		25% - 75% (52%	)
Other real estate owned, net		2,343		Discounted appraised value		Selling Cost		3% - 13% (5%	)
						Lack of Marketability		7% - 20% (10%	)

The following table displays quantitative information about Level 3 Fair Value Measurements as of December 31, 2014:

							Range
	Balance as of		Valuation		Unobservable		(Weighted
(Dollars in thousands)	December 31, 2014		Technique		Input		Average)
Impaired Loans, net	$	1,958		Discounted appraised value		Selling Cost		10% - 20% (10%	)
						Lack of Marketability		25% - 75% (53%	)
Other real estate owned, net		2,791		Discounted appraised value		Selling Cost		3% - 13% (5%	)
						Lack of Marketability		7% - 20% (11%	)

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments are shown in the following table. The carrying amounts in the table are included in the balance sheet under the applicable captions.

					Fair Value Measurements at September 30, 2015 Using
(Dollars in thousands)	Balance as of		Fair Value as of
Description	September 30, 2015		September 30, 2015		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	5,424	$	5,424	$	5,424	$	—	$	—
Interest-bearing deposits		7,578		7,578		7,578		—		—
Federal funds sold		466		466		466		—		—
Securities available-for-sale		53,895		53,895		1,428		51,519		948
Restricted securities		2,261		2,261		—		—		2,261
Loans, net		329,231		336,077		—		—		336,077
Loans held for sale		1,182		1,182		—		—		1,182
Accrued interest receivable		1,207		1,207		—		1,207		—
Mortgage servicing rights		642		642		—		—		642
Financial Liabilities:
Non-interest-bearing liabilities	$	61,609	$	61,609	$	61,609	$	—	$	—
Savings and other interest-bearing deposits		159,274		159,274		—		159,274		—
Time deposits		118,501		119,471		—		—		119,471
Securities sold under repurchase agreements		10,491		10,491		—		10,491		—
FHLB advances		30,000		30,910		—		30,910		—
Subordinated debt		6,839		6,839		—		—		6,839
Accrued interest payable		204		204		—		204		—

					Fair Value Measurements at December 31, 2014 Using
(Dollars in thousands)	Balance as of		Fair Value as of
Description	December 31, 2014		December 31, 2014		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	6,181	$	6,181	$	6,181	$	—	$	—
Interest-bearing deposits		14,784		14,784		14,784		—		—
Federal funds sold		119		119		119		—		—
Securities available-for-sale		42,604		42,604		845		41,759		—
Restricted securities		2,430		2,430		—		—		2,430
Loans, net		295,242		300,481		—		—		300,481
Accrued interest receivable		1,197		1,197		—		1,197		—
Mortgage servicing rights		596		596		—		—		596
Financial Liabilities:
Non-interest-bearing liabilities	$	63,308	$	63,308	$	63,308	$	—	$	—
Savings and other interest-bearing deposits		122,502		122,502		—		122,502		—
Time deposits		121,775		122,662		—		—		122,662
Securities sold under repurchase agreements		6,012		6,012		—		6,012		—
FHLB advances		35,000		35,951		—		35,951		—
Accrued interest payable		149		149		—		149		—