Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 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

June 30, 2017 and December 31, 2016:

(Dollars in thousands)			Fair Value Measurements at June 30, 2017 Using
Description	Balance		Level 1		Level 2		Level 3
Securities available-for-sale:
Corporate bonds	$	6,715	$	—	$	—	$	6,715
U. S. Government agencies		27,056		—		27,056		—
State and municipal obligations		20,677		—		20,677		—
Total securities available-for-sale:	$	54,448	$	—	$	47,733	$	6,715
Mortgage servicing rights	$	989	$	—	$	—	$	989
Defined benefit plan assets:
Cash and cash equivalents	$	21	$	21	$	—	$	—
Mutual funds - fixed income		1,016		1,016		—		—
Mutual funds - equity		1,524		1,524		—		—
Total defined benefit plan assets	$	2,561	$	2,561	$	—	$	—
			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		—			—
Acquired in merger		324			—
Impairments		—			—
Fair value adjustments		(6	)		11
Sales		—			(1,000	)
Balance, June 30, 2017	$	989		$	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 June 30, 2017 Using
(Dollars in thousands) Description	Balance as of June 30, 2017		Level 1		Level 2		Level 3
Impaired Loans, net	$	3,354	$	—	$	—	$	3,354
Other real estate owned, net		5,360		—		—		5,360
			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 June 30, 2017:

(Dollars in thousands)	Balance as of June 30, 2017		Valuation Technique		Unobservable Input		Range (Weighted Average)
Impaired Loans, net	$	3,354		Discounted appraised value		Selling Cost		15% (15%)
Other real estate owned, net		5,360		Discounted appraised value		Selling Cost		0% - 100% (5%)
						Lack of Marketability		10% -20% (11%)

The following table displays quantitative information about Level 3 Fair Value Measurements as of December 31, 2016:

(Dollars in thousands)	Balance as of December 31, 2016		Valuation Technique	Unobservable Input		Range (Weighted 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 June 30, 2017 Using
(Dollars in thousands)	Balance as of		Fair Value as of
Description	June 30, 2017		June 30, 2017		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	7,454	$	7,454	$	7,454	$	—	$	—
Interest-bearing deposits		26,998		26,998		26,998		—		—
Certificates of deposit		3,224		3,224		—		3,224		—
Federal funds sold		6,559		6,559		6,559		—		—
Securities available-for-sale		54,448		54,448		—		47,733		6,715
Restricted securities		4,662		4,662		—		—		4,662
Loans, net		645,701		654,263		—		—		654,263
Loans held for sale		55,620		55,620		—		—		55,620
Accrued interest receivable		2,624		2,624		—		2,624		—
Bank owned life insurance		18,508		18,508		18,508		—		—
Mortgage servicing rights		989		989		—		—		989
Financial Liabilities:
Non-interest-bearing liabilities	$	97,299	$	97,299	$	97,299	$	—	$	—
Savings and other interest-bearing deposits		282,056		282,056		—		282,056		—
Time deposits		309,619		308,952		—		—		308,952
Securities sold under repurchase agreements		10,786		10,786		—		10,786		—
FHLB advances		70,000		70,591		—		70,591		—
Subordinated debt		6,868		7,000		—		—		7,000
Accrued interest payable		395		395		—		395		—
					Fair Value Measurements at December 31, 2016 Using
(Dollars in thousands)	Balance as of		Fair Value as of
Description	December 31, 2016		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		7,945		7,945		7,945		—		—
Certificates of deposit		4,216		4,216		—		4,216		—
Federal funds sold		1,906		1,906		1,906		—		—
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		—