Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis

The tables below present the recorded amount of assets measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017. No assets were transferred from one hierarchy level to another during the first nine months of 2018 or 2017.


					Significant
					Other		Significant
			Quoted		Observable		Unobservable
			Prices		Inputs		Inputs
(Dollars in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2018
Securities available for sale:
U.S. Government agencies	$	41,546	$	-	$	41,546	$	-
Mortgage-backed		126,129		-		126,129		-
		167,675		-		167,675		-
Equity		649		-		649		-
Total	$	168,324	$	-	$	168,324	$	-

					Significant
					Other		Significant
			Quoted		Observable		Unobservable
			Prices		Inputs		Inputs
(Dollars in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
December 31, 2017
Securities available for sale:
U.S. Government agencies	$	45,332	$	-	$	45,332	$	-
Mortgage-backed		150,965		-		150,965		-
Equity		658		-		658		-
Total	$	196,955	$	-	$	196,955	$	-

Fair Value of Assets Measured on Nonrecurring Basis

The tables below present the recorded amount of assets measured at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017.


	Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)	Fair Value		Valuation Technique			Unobservable Input			Range
September 30, 2018
Nonrecurring measurements:

Impaired loans	$	303		Appraisal of collateral	1		Liquidation expense	2		10%

Impaired loans	$	5,908		Discounted cash flow analysis	1		Discount rate			4% - 8.5%

Other real estate owned	$	1,518		Appraisal of collateral	1		Appraisal adjustments	2		20% - 30%
							Liquidation expense	2		5% - 10%


	Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)	Fair Value		Valuation Technique			Unobservable Input			Range
December 31, 2017
Nonrecurring measurements:

Impaired loans	$	510		Appraisal of collateral	1		Liquidation expense	2		10%

Impaired loans	$	6,005		Discounted cash flow analysis	1		Discount rate			4% - 8.5%

Other real estate owned	$	1,794		Appraisal of collateral	1		Appraisal adjustments	2		20% - 30%
							Liquidation expense	2		5% - 10%

Schedule of Estimated Fair Values of Financial Assets and Liabilities

The following table provides information on the estimated fair values of the Company’s financial assets and liabilities that are reported in the balance sheets not recorded at fair value on a recurring basis as of September 30, 2018 and December 31, 2017. The financial assets and liabilities have been segregated by their classification level in the fair value hierarchy.


	September 30, 2018				December 31, 2017
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Amount		Value		Amount		Value
Financial assets
Level 1 inputs
Cash and cash equivalents	$	48,777	$	48,777	$	31,820	$	31,820

Level 2 inputs
Investment securities held to maturity	$	6,037	$	5,983	$	6,247	$	6,391
Restricted securities		8,110		8,110		3,735		3,735
Cash surrender value on life insurance		3,676		3,676		3,637		3,637

Level 3 inputs
Loans, net (1)	$	1,170,229	$	1,139,344	$	1,083,733	$	1,072,951

Financial liabilities
Level 2 inputs
Deposits:
Noninterest-bearing demand	$	331,766	$	331,766	$	328,322	$	328,322
Checking plus interest		214,898		214,898		231,898		231,898
Money market		216,394		216,394		223,123		223,123
Savings		153,973		153,973		156,623		156,623
Club		1,535		1,535		398		398
Brokered Deposits		23,547		23,519		-		-
Certificates of deposit, $100,000 or more		96,498		94,212		107,343		105,691
Other time		143,225		138,187		155,074		151,339
Short-term borrowings		114,043		114,043		21,734		21,734

(1) Carrying amount is net of unearned income and the allowance for credit losses. In accordance with the prospective adoption
of ASU No. 2016-01, the fair value of loans as of September 30, 2018 was measured using an exit price notion. The fair value of
loans as of December 31, 2017 was measured using an entry price notion.