FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2017

Schedule of Financial Assets (Liabilities) Measured at Fair Value

The following tables summarize quantitative disclosures about the fair value measurements for each category of financial assets (liabilities) carried at fair value:



As of June 30, 2017	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Other Unobservable Inputs (Level 3)
Assets (liabilities) at fair value on a recurring basis:
Available for sale securities
Mortgage-backed securities	$	94,465		$	—	$	94,465		$	—
Collateralized mortgage obligations	125,242			—		125,242			—
Municipal securities	7,493			—		7,493			—
Corporate bonds	19,033			—		19,033			—
Derivative instruments	(701		)	—		(701		)	—

Assets at fair value on a nonrecurring basis:
Impaired loans	8,310			—		—			8,310
Other real estate owned	1,733			—		—			1,733



As of December 31, 2016	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Other Unobservable Inputs (Level 3)
Assets (liabilities) at fair value on a recurring basis:
Available for sale securities
Mortgage-backed securities	$	59,690		$	—	$	59,690		$	—
Collateralized mortgage obligations	65,133			—		65,133			—
Municipal securities	7,219			—		7,219			—
Corporate bonds	24,883			—		24,883			—
U.S. treasury securities	—			—		—			—
Derivative instruments	(695		)	—		(695		)	—

Assets at fair value on a nonrecurring basis:
Impaired loans	6,065			—		—			6,065
Other real estate owned	1,692			—		—			1,692

Schedule of Foreclosed Assets Measured at Fair Value

The following table presents foreclosed assets that were remeasured and recorded at fair value as of:



	June 30, 2017			December 31, 2016			June 30, 2016
Foreclosed assets remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	$	351		$	78		$	43
Charge-offs recognized in the allowance for loan losses	(109		)	(11		)	(8		)
Fair value of foreclosed assets remeasured at initial recognition	$	242		$	67		$	35

Foreclosed assets remeasured subsequent to initial recognition:
Carrying value of foreclosed assets prior to remeasurement	$	—		$	170		$	135
Write-downs included in collection and other real estate owned expense	—			(69		)	(58		)
Fair value of foreclosed assets remeasured subsequent to initial recognition	$	—		$	101		$	77

Schedule of Quantitative Information About Nonrecurring Level 3 Fair Value Measurements

The following tables present quantitative information about nonrecurring Level 3 fair value measurements as of:



	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
June 30, 2017
Impaired loans	$	8,310	Fair value of collateral - sales comparison approach	Selling costs or other normal adjustments: Real estate Equipment	10%-20% (16%) 10%-20% (21%)
Other real estate owned	$	1,733	Appraisal value of collateral	Selling costs or other normal adjustments	10%-20% (16%)



	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
December 31, 2016
Impaired loans	$	6,065	Fair value of collateral - sales comparison approach	Selling costs or other normal adjustments: Real estate Equipment	10%-20% (16%) 40%-50% (42%)
Other real estate owned	$	1,692	Appraisal value of collateral	Selling costs or other normal adjustments	10%-20% (16%)

Schedule of Carrying Amounts And Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously discussed in this note, as of June 30, 2017 and December 31, 2016, are as follows:



	Fair value measurements as of June 30, 2017 using:
	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial assets:
Cash, due from banks, federal funds sold and interest-bearing deposits	$	83,306	$	54,089	$	29,217	$	—	$	83,306
Marketable securities held to maturity	182,248		—		184,527		—		184,527
Loans, net	1,284,318		—		—		1,283,241		1,283,241
Accrued interest receivable	7,631		—		7,631		—		7,631
Nonmarketable equity securities	7,679		—		7,679		—		7,679
Cash surrender value of life insurance	18,035		—		18,035		—		18,035
Financial liabilities:
Deposits	$	1,646,373	$	1,329,161	$	317,418	$	—	$	1,646,579
Securities sold under repurchase agreements	14,153		—		14,153		—		14,153
Accrued interest payable	805		—		805		—		805
Federal Home Loan Bank advances	25,161		—		25,156		—		25,156
Subordinated debentures	14,310		—		11,897		—		11,897



	Fair value measurements as of December 31, 2016 using:
	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Financial assets:
Cash, due from banks, federal funds sold and interest-bearing deposits	$	127,543	$	100,205	$	27,338	$	—	$	127,543
Marketable securities held to maturity	189,371		—		186,155		—		186,155
Loans, net	1,233,651		—		—		1,235,306		1,235,306
Accrued interest receivable	7,419		—		7,419		—		7,419
Nonmarketable equity securities	10,500		—		10,500		—		10,500
Cash surrender value of life insurance	17,804		—		17,804		—		17,804
Financial liabilities:
Deposits	$	1,576,791	$	1,234,875	$	342,615	$	—	$	1,577,490
Securities sold under repurchase agreements	10,859		—		10,859		—		10,859
Accrued interest payable	889		—		889		—		889
Other debt	18,286		—		18,286		—		18,286
Federal Home Loan Bank advances	55,170		—		55,160		—		55,160
Subordinated debentures	19,310		—		16,809		—		16,809

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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