Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2017

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and Liabilities Measured on a Recurring Basis

The assets and liabilities measured at fair value on a recurring basis are summarized below:


	Total carrying value in the consolidated balance sheet at		Quoted Prices In Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	12/31/2017		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Securities available for sale
U.S. Agency securities	$	84,093		—		84,093		—
Taxable municipals		1,283		—		1,283		—
Tax-free municipals		26,966		—		26,966		—
Trust preferred securities		1,685		—		—		1,685
Mortgage backed securities		70,764		—		70,764		—

Total	$	184,791		—		183,106		1,685


	Total carrying value in the consolidated balance sheet at		Quoted Prices In Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	12/31/2016		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Securities available for sale
U.S. Treasury securities	$	2,001		2,001		—		—
U.S. Agency securities		84,012		—		84,012		—
Taxable municipals		2,727		—		2,727		—
Tax-free municipals		33,911		—		33,911		—
Trust preferred securities		1,817		—		—		1,817
Mortgage backed securities		85,012		—		85,012		—

Total	$	209,480		2,001		205,662		1,817

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The assets and liabilities measured at fair value on a non-recurring basis are summarized below:


December 31, 2017	Total carrying value in the		Quoted Prices In Active		Significant Other		Significant
Description	consolidated balance sheet At 12/31/2017		Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Foreclosed assets	$	3,369		—		—		3,369
Impaired loans, net of allowance of $289	$	473		—		—		473


December 31, 2016	Total carrying value in the		Quoted Prices In Active		Significant Other		Significant
Description	consolidated balance sheet At 12/31/2016		Markets for Identical Assets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets
Foreclosed assets	$	2,397		—		—		2,397
Impaired loans, net of allowance of $1,148	$	6,123		—		—		6,123

Quantitative Information about Level 3 Fair Value Measurements for Assets Measured at Fair Value on Recurring and Non-recurring Basis

The following table presents quantitative information about level 3 fair value measurements for assets measured at fair value on a recurring and non-recurring basis at December 31, 2017 and December 31, 2016:


Level 3 Significant Unobservable Input Assumptions
	Fair Value	Valuation Technique	Unobservable Input	Quantitative Range of Unobservable Inputs
December 31, 2017
Assets measured on a non-recurring basis
Foreclosed assets	3,369	Discount to either actual sales price or appraised value of collateral	Appraisal and sales comparability adjustments	30% to 55%

Impaired loans	760	Discount to appraised value of collateral	Appraisal comparability adjustments	10% to 25%
Asset measured on a recurring basis
Trust preferred securities	1,685	Discounted cash flow Spread to Libor swap curve	Compare to quotes for sale when available	One month libor plus 4% to 6%

December 31, 2016
Assets measured on a non-recurring basis
Foreclosed assets	2,397	Discount to either actual sales price or appraised value of collateral	Appraisal comparability adjustments	30% to 55%

Impaired loans	7,271	Discount to appraised value of collateral	Appraisal comparability adjustments	10% to 15%
Asset measured on a recurring basis
Trust preferred securities	1,817	Discounted cash flow Spread to Libor swap curve	Compare to quotes for sale when available	One month libor plus 4% to 6%

Roll-Forward of the Consolidated Condensed Statement of Financial Condition Items

The table below includes a roll-forward of the balance sheet items for the years ended December 31, 2017 and 2016, (including the change in fair value) for assets and liabilities classified by the Company within level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis. When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement. However, since Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components, observable components (that is components that are actively quoted and can be validated to external sources), the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.


	Year ended December 31,
	2017			2016
	Other Assets			Other Assets
Fair value, December 31,	$	1,817		$	1,865
Change in unrealized gains included in other comprehensive income for assets and liabilities still held at December 31,		(149	)		(65	)
Recovery of prior impairment charge		17			17

Fair value, December 31,	$	1,685		$	1,817

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows at December 31, 2017:


	Carrying Amount		Estimated Fair Value		Quoted Prices In Active Markets for Identical Assets Level 1		Using Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Financial Assets:
Cash and due from banks	$	37,965		37,965		37,965		—		—
Interest-bearing deposits in banks		7,111		7,111		7,111		—		—
Securities available for sale		184,791		184,791		—		183,106		1,685
Federal Home Loan Bank stock		4,428		4,428		—		—		4,428
Loans held for sale		1,539		1,539		—		1,539		—
Loans receivable		637,102		615,265		—		—		615,265
Accrued interest receivable		3,589		3,589		—		—		3,589
Financial Liabilities:
Deposits		754,009		754,510		—		754,510		—
Advances from borrowers for taxes and insurance		808		808		—		808		—
Advances from Federal Home Loan Bank		23,000		22,849		—		22,849		—
Repurchase agreements		38,353		38,353		—		38,353		—
Subordinated debentures		10,310		10,099		—		—		10,099

The estimated fair values of financial instruments were as follows at December 31, 2016:


	Carrying Amount		Estimated Fair Value		Quoted Prices In Active Markets for Identical Assets Level 1		Using Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Financial Assets:
Cash and due from banks	$	21,779		21,779		21,779		—		—
Interest-bearing deposits in banks		3,970		3,970		3,970		—		—
Securities available for sale		209,480		209,480		2,001		205,662		1,817
Federal Home Loan Bank stock		4,428		4,428		—		—		4,428
Loans held for sale		1,094		1,094		—		1,094		—
Loans receivable		604,286		593,257		—		—		593,257
Accrued interest receivable		3,799		3,799		—		—		3,799
Financial Liabilities:
Deposits		732,882		732,942		—		732,942		—
Advances from borrowers for taxes and insurance		766		766		—		766		—
Advances from Federal Home Loan Bank		11,000		10,979		—		10,979		—
Repurchase agreements		47,655		47,655		—		47,655		—
Subordinated debentures		10,310		10,099		—		—		10,099

Foreclosed Assets that were Re-measured and Reported at Fair Value

The following table presents foreclosed assets that were re-measured and reported at fair value:


	Years Ended December 31,
	2017			2016			2015
Beginning balance	$	2,397			1,736			1,927
Foreclosed assets measured at initial recognition:
Carrying value of foreclosed assets acquired		4,312			2,263			869
Proceeds from sale of foreclosed assets		(3,498	)		(1,623	)		(344	)
Gains (losses) included in non-interest expense		158			21			(716	)

Fair value	$	3,369		$	2,397			1,736