Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2018

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 by levels within the valuation hierarchy:

	Fair Value Measurements
(In thousands)	Balance		Level 1		Level 2		Level 3
Assets at September 30, 2018:
Available for sale securities:
Obligations of U.S. Government corporations and agencies	$	57,396	$	-	$	57,396	$	-
Obligations of states and political subdivisions		14,383		-		14,383		-
Corporate bonds		850		-		850		-
Total available for sale securities		72,629		-		72,629		-
Interest rate swaps		594		-		594		-
Total assets at fair value	$	73,223	$	-	$	73,223	$	-
Liabilities at September 30, 2018:
Interest rate swaps	$	22	$	-	$	22	$	-
Total liabilities at fair value	$	22	$	-	$	22	$	-

Assets at December 31, 2017:
Available for sale securities:
Obligations of U.S. Government corporations and agencies	$	52,377	$	-	$	52,377	$	-
Obligations of states and political subdivisions		15,255		-		15,255		-
Corporate bonds		4,139		-		4,139		-
Mutual funds		382		382		-		-
Total available for sale securities		72,153		382		71,771		-
Interest rate swaps		233		-		233		-
Total assets at fair value	$	72,386	$	382	$	72,004	$	-
Liabilities at December 31, 2017:
Interest rate swaps	$	119	$	-	$	119	$	-
Total liabilities at fair value	$	119	$	-	$	119	$	-

Financial Assets Measured at Fair Value on a Nonrecurring Basis

The following table summarizes the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017.

	September 30, 2018
(In thousands)	Balance		Level 1		Level 2		Level 3
Assets:
Impaired loans, net	$	2,689	$	-	$	2,568	$	121
Other real estate owned, net		1,356		-		-		1,356

	December 31, 2017
(In thousands)	Balance		Level 1		Level 2		Level 3
Assets:
Impaired loans, net	$	5,087	$	-	$	5,041	$	46
Other real estate owned, net		1,356		-		-		1,356

Quantitative Information About Level 3 Fair Value Measurements

The following table displays quantitative information about Level 3 Fair Value Measurements at September 30, 2018 and December 31, 2017.

	September 30, 2018
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Weighted Average Discount
Impaired loans, net	$	121	Appraised values	Age of appraisal, current market conditions, experience within local market, and U.S. Government guarantees		40	%
Other real estate owned, net		1,356	Appraised values	Age of appraisal, current market conditions and selling costs		18	%
Total	$	1,477

	December 31, 2017
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Weighted Average Discount
Impaired loans, net	$	46	Appraised values	Age of appraisal, current market conditions, experience within local market, and U.S. Government guarantees		90	%
Other real estate owned, net		1,356	Appraised values	Age of appraisal, current market conditions and selling costs		18	%
Total	$	1,402

Estimated Fair Values of Financial Instruments

The estimated fair values and related carrying amounts of the Company’s financial instruments are as follows:

	September 30, 2018
(In thousands)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
Assets
Cash and short-term investments	$	20,989	$	20,989	$	-	$	-	$	20,989
Securities available for sale		72,629		-		72,629		-		72,629
Restricted investments		2,495		-		2,495		-		2,495
Loans, net		527,802		-		-		509,568		509,568
Accrued interest receivable		1,944		-		1,944		-		1,944
Interest rate swaps		594		-		594		-		594
Bank-owned life insurance		13,505		-		13,505		-		13,505
Total financial assets	$	639,958	$	20,989	$	91,167	$	509,568	$	621,724

Liabilities
Deposits	$	566,231	$	-	$	565,159	$	-	$	565,159
Federal funds purchased		5,000		-		4,997		-		4,997
FHLB advances		29,800		-		29,603		-		29,603
Junior subordinated debt		4,124		-		4,795		-		4,795
Accrued interest payable		244		-		244		-		244
Interest rate swaps		22		-		22		-		22
Total financial liabilities	$	605,421	$	-	$	604,820	$	-	$	604,820

	December 31, 2017
(In thousands)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
Assets
Cash and short-term investments	$	29,300	$	29,091	$	-	$	-	$	29,091
Securities available for sale		72,153		382		71,771		-		72,153
Restricted investments		1,546		-		1,546		-		1,546
Loans, net		497,705		-		494,143		46		494,189
Accrued interest receivable		1,940		-		1,940		-		1,940
Interest rate swaps		233		-		233		-		233
Bank-owned life insurance		13,234		-		13,234		-		13,234
Total financial assets	$	616,111	$	29,473	$	582,867	$	46	$	612,386

Liabilities
Deposits	$	570,023	$	-	$	569,297	$	-	$	569,297
FHLB advances		7,860		-		7,766		-		7,766
Junior subordinated debt		4,124		-		4,116		-		4,116
Accrued interest payable		128		-		128		-		128
Interest rate swaps		119		-		119		-		119
Total financial liabilities	$	582,254	$	-	$	581,426	$	-	$	581,426