Fair Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Summary of Financial Assets Measured on a Recurring Basis

The following table summarizes the fair value of our financial assets measured on a recurring basis by the above pricing observability levels as of September 30, 2016 and December 31, 2015:

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(Dollars in thousands)	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)			Significant Unobservable Inputs (Level III)
September 30, 2016
U.S. government agencies	$	13,653		$	—	$	13,653		$	—
State and political subdivisions	34,031			—		34,031			—
Mortgage-backed securities -
U.S. government-sponsored enterprises	41,946			—		41,946			—
Corporate debt	2,000			—		2,000			—
Derivative instruments
Interest rate swaps	(1,359		)	—		(1,359		)	—



December 31, 2015
U.S. government agencies	$	12,788	$	—	$	12,788	$	—
State and political subdivisions	38,149		—		38,149		—
Mortgage-backed securities -
U.S. government-sponsored enterprises	42,839		—		42,839		—

Summary of Financial Assets Measured on a Nonrecurring Basis

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2016 and December 31, 2015 are as follows:

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(Dollars in thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)
September 30, 2016
Impaired loans	$	602	$	—	$	—	$	602
Foreclosed real estate	1,703		—		—		1,703



December 31, 2015
Impaired loans	$	801	$	—	$	—	$	801
Foreclosed real estate	756		—		—		756

Qualitative Information About Level 3 Fair Value Measurements

The following table presents additional qualitative information about assets measured at fair value on a nonrecurring basis and for which Level III inputs were used to determine fair value:

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	Qualitative Information about Level III Fair Value Measurements
(Dollars in thousands)	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
September 30, 2016
Impaired loans	$	602	Appraisal of	Appraisal	0% to -27.3%
			collateral	adjustments (1)	(-3.5%)

Foreclosed real estate	1,703		Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)



December 31, 2015
Impaired loans	$	801	Appraisal of	Appraisal	0% to -61.8%
			collateral	adjustments (1)	(-5.8%)

Foreclosed real estate	756		Appraisal of	Selling
			collateral	expenses ₍₁₎	-7.0% (-7.0%)

(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling expenses. The range and weighted average of selling expenses and other appraisal adjustments are presented as a percentage of the appraisal.

Estimated Fair Values of Financial Instruments

The fair values of our financial instruments at September 30, 2016 and December 31, 2015, were as follows:



	September 30, 2016						Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)			Significant Unobservable Inputs (Level III)
(Dollars in thousands)	Carrying Amount			Fair Value
Financial assets:
Cash and cash equivalents	$	12,410		$	12,410		$	12,410	$	—		$	—
Time deposits with other banks	100			100			—		100			—
Securities available for sale	91,630			91,630			—		91,630			—
Securities held to maturity	6,628			6,863			—		6,863			—
Federal Home Loan Bank stock	5,633			5,633			—		5,633			—
Loans receivable, net of allowance	656,927			655,302			—		—			655,302
Accrued interest receivable	1,797			1,797			—		1,797			—

Financial liabilities:
Non-maturity deposits	446,559			446,559			—		446,559			—
Time deposits	178,362			178,558			—		178,558			—
Short-term borrowings	36,500			36,500			36,500		—			—
Long-term borrowings	71,000			72,063			—		72,063			—
Junior subordinated debentures	12,887			11,580			—		11,580			—
Accrued interest payable	330			330			—		330			—

Derivative instruments:
Interest rate swaps	(1,359		)	(1,359		)	—		(1,359		)	—



	December 31, 2015				Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)
(Dollars in thousands)	Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	6,120	$	6,120	$	6,120	$	—	$	—
Time deposits with other banks	100		100		—		100		—
Securities available for sale	93,776		93,776		—		93,776		—
Securities held to maturity	6,834		7,008		—		7,008		—
Federal Home Loan Bank stock	5,165		5,165		—		5,165		—
Loans receivable, net of allowance	537,833		528,065		—		—		528,065
Accrued interest receivable	1,764		1,764		—		1,764		—

Financial liabilities:
Non-maturity deposits	380,983		380,983		—		380,983		—
Time deposits	136,873		136,619		—		136,619		—
Short-term borrowings	34,650		34,650		34,650		—		—
Long-term borrowings	61,000		58,685		—		58,685		—
Junior subordinated debentures	12,887		9,344		—		9,344		—
Accrued interest payable	281		281		—		281		—