Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

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

March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Fair Value Measurements at March 31, 2017 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
Corporate bonds	$	6,715	$	—	$	—	$	6,715
U. S. Government agencies		24,235		—		24,235		—
State and municipal obligations		18,876		—		18,876		—
Total securities available-for-sale:	$	49,826	$	—	$	43,111	$	6,715
Mortgage servicing rights	$	692	$	—	$	—	$	692
Defined benefit plan assets:
Cash and cash equivalents	$	3	$	3	$	—	$	—
Mutual funds - fixed income		1,043		1,043	$	—	$	—
Mutual funds - equity		1,577		1,577		—		—
Total defined benefit plan assets	$	2,623	$	2,623	$	—	$	—
	Fair Value Measurements at December 31, 2016 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
Corporate bonds	$	7,704	$	—	$	—	$	7,704
U. S. Government agencies		25,313		—		25,313		—
State and municipal obligations		18,156		—		18,156		—
Total securities available-for-sale:	$	51,173	$	—	$	43,469	$	7,704
Mortgage servicing rights	$	671	$	—	$	—	$	671
Defined benefit plan assets:
Mutual funds - fixed income	$	1,041	$	1,041	$	—	$	—
Mutual funds - equity		1,649		1,649		—		—
Total defined benefit plan assets	$	2,690	$	2,690	$	—	$	—

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, 2017	$	671	$	7,704
Purchases		—		—
Impairments		—		—
Fair value adjustments		21		11
Sales		—		(1,000	)
Balance, March 31, 2017	$	692	$	6,715

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 March 31, 2017 Using
(Dollars in thousands) Description	Balance as of March 31, 2017		Level 1		Level 2		Level 3
Impaired Loans, net	$	2,414	$	—	$	—	$	2,414
Other real estate owned, net		2,436		—		—		2,436
			Fair Value Measurements at December 31, 2016 Using
Description	Balance as of December 31, 2016		Level 1		Level 2		Level 3
Impaired loans, net		2,774		—		—		2,774
Other real estate owned, net	$	2,494	$	—	$	—	$	2,494

Summary of Quantitative Fair Value Measurements for Level 3

The following table displays quantitative information about Level 3 Fair Value Measurements as of March 31, 2017:

							Range
	Balance as of		Valuation		Unobservable		(Weighted
(Dollars in thousands)	March 31, 2017		Technique		Input		Average)
Impaired Loans, net	$	2,414		Discounted appraised value		Selling Cost		0% - 20% (15%	)
						Lack of Marketability		50% - 100% (96%	)
Other real estate owned, net		2,436		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, 2016:

							Range
	Balance as of		Valuation		Unobservable		(Weighted
(Dollars in thousands)	December 31, 2016		Technique		Input		Average)
Impaired Loans, net	$	2,774		Discounted appraised value		Selling Cost		10% - 20% (16%	)
						Lack of Marketability		50% (50%	)
Other real estate owned, net	$	2,494		Discounted appraised value		Selling Cost		3% - 13% (5%	)
						Lack of Marketability		10% - 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 March 31, 2017 Using
(Dollars in thousands) Description	Balance as of March 31, 2017		Fair Value as of March 31, 2017		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	5,087	$	5,087	$	5,087	$	—	$	—
Interest-bearing deposits		6,826		6,826		6,826		—		—
Certificates of deposit		3,472		3,472		—		3,472		—
Federal funds sold		336		336		336		—		—
Securities available-for-sale		49,826		49,826		—		43,111		6,715
Restricted securities		3,756		3,756		—		—		3,756
Loans, net		401,268		400,988		—		—		400,988
Accrued interest receivable		1,321		1,321		—		1,321		—
Bank owned life insurance		9,944		9,944		9,944		—		—
Mortgage servicing rights		692		692		—		—		692
Financial Liabilities:
Non-interest-bearing liabilities	$	77,369	$	77,369	$	77,369	$	—	$	—
Savings and other interest-bearing deposits		169,027		167,027		—		167,027		—
Time deposits		136,104		135,662		—		—		135,662
Securities sold under repurchase agreements		8,489		8,489		—		8,489		—
FHLB advances		60,000		59,352		—		59,352		—
Subordinated debt		6,864		7,000		—		—		7,000
Accrued interest payable		225		225		—		225		—
					Fair Value Measurements at December 31, 2016 Using
(Dollars in thousands) Description	Balance as of December 31, 2016		Fair Value as of December 31, 2016		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	4,851	$	4,851	$	4,851	$	—	$	—
Interest-bearing deposits		7,501		7,501		7,501		—		—
Certificates of deposit		4,216		4,216		—		4,216		—
Federal funds sold		2,350		2,350		2,350		—		—
Securities available-for-sale		51,173		51,173		—		43,469		7,704
Restricted securities		2,649		2,649		—		—		2,649
Loans, net		381,537		384,468		—		—		384,468
Loans held for sale		276		276		—		—		276
Accrued interest receivable		1,372		1,372		—		1,372		—
Bank owned life insurance		9,869		9,869		9,869		—		—
Mortgage servicing rights		671		671		—		—		671
Financial Liabilities:
Non-interest-bearing liabilities	$	74,799	$	74,799	$	74,799	$	—	$	—
Savings and other interest-bearing deposits		178,869		178,869		—		178,869		—
Time deposits		128,050		127,497		—		—		127,497
Securities sold under repurchase agreements		18,310		18,310		—		18,310		—
FHLB advances		35,000		35,668		—		35,668		—
Subordinated debt		6,860		7,000		—		—		7,000
Accrued interest payable		331		331		—		331		—