Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The assets and liabilities measured at fair value on a recurring basis at September 30, 2018 are summarized below:

Description	Total carrying value in the consolidated balance sheet at 9/30/2018		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in Thousands)
Securities available for sale
U.S. Agency securities	$	71,750		—		71,750		—
Taxable municipals		955		—		955		—
Tax-free municipals		23,959		—		23,959		—
Mortgage backed securities		62,618		—		62,618		—
Total	$	159,282		—		159,282		—

The assets and liabilities measured at fair value on a recurring basis at December 31, 2017 are summarized below:

Description	Total carrying value in the consolidated balance sheet at 12/31/2017		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (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

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 for September 30, 2018:

Description	Total carrying value in the consolidated balance sheet at September 30, 2018		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in Thousands)
Assets
Foreclosed assets	$	3,533		—		—		3,533
Impaired loans, net of allowance of $204	$	182		—		—		182

The assets and liabilities measured at fair value on a non-recurring basis are summarized below for December 31, 2017:

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

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 September 30, 2018 and December 31, 2017:

	Level 3 Significant Unobservable Input Assumptions
	Fair Value	Valuation Technique	Unobservable Input	Quantitative Range of Unobservable Inputs
		(Dollars in Thousands)
September 30, 2018
Assets measured on a non-recurring basis
Foreclosed assets	$ 3,533	Discount to appraised value of collateral. Auction results	Appraisal comparability adjustments	10% to 25%
Impaired loans	386	Discount to appraised value of collateral	Appraisal comparability adjustments	10% to 25%
Asset measured on a recurring basis
December 31, 2017
Assets measured on a non-recurring basis
Foreclosed assets	$ 3,369	Discount to appraised value of collateral	Appraisal comparability adjustments	30% to 55%
Impaired loans	760	Discount to appraised value of collateral	Appraisal comparability adjustments	10% to 15%
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 4% to 6%

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows at September 30, 2018:

					In Active Markets		Other		Significant
			Estimated		for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
	Amount		Value		Level 1		Level 2		Level 3
	(Dollars in Thousands)
Financial Assets:
Cash and due from banks	$	21,987		21,987		21,987		—		—
Interest-bearing deposits		8,687		8,627		8,627		—		—
Securities available for sale		159,282		159,282		—		159,282		—
Federal Home Loan Bank stock		4,428		4,428		—		—		4,428
Loans held for sale		1,873		1,873		—		1,873		—
Loans receivable		663,821		633,187		—		—		633,187
Accrued interest receivable		3,390		3,390		—		—		3,390
Financial liabilities:
Deposits		726,914		725,466		—		725,466		—
Advances from borrowers for taxes and insurance		1,433		1,433		—		1,433		—
Advances from Federal Home Loan Bank		33,000		32,772		—		32,772		—
Repurchase agreements		42,043		42,043		—		42,043		—
Subordinated debentures		10,310		10,310		—		—		10,310

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

							Using
					Quoted Prices		Significant
					In Active Markets		Other		Significant
			Estimated		for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
	Amount		Value		Level 1		Level 2		Level 3
	(Dollars in Thousands)
Financial Assets:
Cash and due from banks	$	21,779		21,779		21,779		—		—
Interest-bearing deposits		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

Trust Preferred Securities [Member]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table provides a reconciliation for trust preferred securities owned by the Company and measured at fair value on a recurring basis using Level 3 inputs, during the three and nine month periods ended September 30, 2018 and September 30, 2017:

	For the three month periods					For the nine month periods
	Ended September 30					Ended September 30,
	(Dollars in Thousands)
	2018		2017			2018			2017
Balance at beginning of period	$	—		1,865			1,685			1,817
Accretion included in net income		—		4			4			13
Unrealized gains (loss) included in comprehensive income		—		(152	)		294			(113	)
Call of security - book value		—		—			(1,658	)		—
Realized gain on call of security		—		—			(325	)		—
Balance at end of period	$	—		1,717			—			1,717