Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

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, 2016 and December 31, 2015:

(Dollars in thousands)			Fair Value Measurements at September 30, 2016 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
Corporate bonds	$	7,003	$	—	$	1,500	$	5,503
U. S. Government agencies		25,677		1,597		24,080		—
State and municipal obligations		19,883		—		19,883		—
Total securities available-for-sale:	$	52,563	$	1,597	$	45,463	$	5,503
Mortgage servicing rights	$	590	$	—	$	—	$	590
Defined benefit plan assets:
Cash and cash equivalents	$	3	$	3	$	—	$	—
Mutual funds - fixed income		1,071		1,071		—		—
Mutual funds - equity		1,615		1,615		—		—
Total defined benefit plan assets	$	2,689	$	2,689	$	—	$	—
			Fair Value Measurements at December 31, 2015 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
Corporate bonds	$	3,945	$	—	$	—	$	3,945
U. S. Government agencies		21,288		1,216		20,072		—
State and municipal obligations		28,857		—		28,857		—
Total securities available-for-sale:	$	54,090	$	1,216	$	48,929	$	3,945
Mortgage servicing rights	$	658	$	—	$	—	$	658
Defined benefit plan assets:
Cash and cash equivalents	$	3	$	3	$	—	$	—
Mutual funds - fixed income		1,119		1,119		—		—
Mutual funds - equity		1,684		1,684		—		—
Total defined benefit plan assets	$	2,806	$	2,806	$	—	$	—

Reconciliation of Items Using Level Three Inputs

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

				Corporate
(Dollars in thousands)	MSRs			Bonds
Balance, January 1, 2016	$	658		$	3,945
Purchases		—			3,000
Impairments		—			—
Fair value adjustments		(68	)		58
Sales		—			—
Balance, September 30, 2016	$	590		$	7,003

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, 2016 Using
(Dollars in thousands)	Balance as of
Description	September 30, 2016		Level 1		Level 2		Level 3
Impaired Loans, net	$	2,375	$	—	$	—	$	2,375
Other real estate owned, net		2,764		—		—		2,764
			Fair Value Measurements at December 31, 2015 Using
	Balance as of
Description	December 31, 2015		Level 1		Level 2		Level 3
Impaired Loans, net	$	3,868	$	—	$	—	$	3,868
Other real estate owned, net		1,870		—		—		1,870

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, 2016:

(Dollars in thousands)	Balance as of September 30, 2016		Valuation Technique	Unobservable Input		Range (Weighted Average)
Impaired Loans, net	$	2,375	Discounted appraised value		Selling Cost		10% - 20% (14%)
					Lack of Marketability		50% (50%)
Other real estate owned, net		2,764	Discounted appraised value		Selling Cost		3% - 13% (5%)
					Lack of Marketability		10% - 20% (11%)

The following table displays quantitative information about Level 3 Fair Value Measurements as of December 31, 2015:

(Dollars in thousands)	Balance as of December 31, 2015		Valuation Technique	Unobservable Input	Range (Weighted Average)
Impaired Loans, net	$	3,868	Discounted appraised value	Selling Cost		10% - 25% (13%)
				Lack of Marketability		50% - 60% (51%)
Other real estate owned, net		1,870	Discounted appraised value	Selling Cost		3% - 13% (4%)
				Lack of Marketability		10% - 20% (12%)

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, 2016 Using
(Dollars in thousands)	Balance as of		Fair Value as of
Description	September 30, 2016		September 30, 2016		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	5,280	$	5,280	$	5,280	$	—	$	—
Interest-bearing deposits		6,343		6,343		6,343		—		—
Certificates of deposit		4,464		4,464		—		4,464		—
Federal funds sold		460		460		460		—		—
Securities available-for-sale		52,563		52,563		1,597		45,463		5,503
Restricted securities		2,209		2,209		—		—		2,209
Loans, net		364,822		371,247		—		—		371,247
Loans held for sale		481		481		—		—		481
Accrued interest receivable		1,241		1,241		—		1,241		—
Mortgage servicing rights		590		590		—		—		590
Financial Liabilities:
Non-interest-bearing liabilities	$	74,615	$	74,615	$	74,615	$	—	$	—
Savings and other interest-bearing deposits		175,448		175,448		—		175,448		—
Time deposits		127,912		129,175		—		—		129,175
Securities sold under repurchase agreements		12,984		12,984		—		12,984		—
FHLB advances		25,000		25,755		—		25,755		—
Subordinated debt		6,856		7,000		—		—		7,000
Accrued interest payable		207		207		—		207		—
					Fair Value Measurements at December 31, 2015 Using
(Dollars in thousands)	Balance as of		Fair Value as of
Description	December 31, 2015		December 31, 2015		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	4,969	$	4,969	$	4,969	$	—	$	—
Interest-bearing deposits		15,330		15,330		15,330		—		—
Certificates of deposit		5,735		5,735		—		5,487		248
Federal funds sold		271		271		271		—		—
Securities available-for-sale		54,090		54,090		1,216		48,929		3,945
Restricted securities		2,731		2,731		—		—		2,731
Loans, net		343,323		347,500		—		—		347,500
Loans held for sale		270		270		—		—		270
Accrued interest receivable		1,318		1,318		—		1,318		—
Mortgage servicing rights		658		658		—		—		658
Financial Liabilities:
Non-interest-bearing liabilities	$	65,842	$	65,842	$	65,842	$	—	$	—
Savings and other interest-bearing deposits		166,628		166,628		—		166,628		—
Time deposits		127,388		127,433		—		—		127,433
Securities sold under repurchase agreements		7,161		7,161		—		7,161		—
FHLB advances		40,000		40,855		—		40,855		—
Subordinated debt		6,844		7,000		—		—		7,000
Accrued interest payable		318		318		—		318		—