Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2019

Summary of 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, 2019 and December 31, 2018 by levels within the valuation hierarchy:

	Fair Value Measurements
(In thousands)	Balance		Level 1		Level 2		Level 3
Assets at September 30, 2019:
Available for sale securities:
Obligations of U.S. Government corporations and agencies	$	58,247	$	-	$	58,247	$	-
Obligations of states and political subdivisions		14,310		-		14,310		-
Total available for sale securities		72,557		-		72,557		-
Mutual funds		403		403		-		-
Total assets at fair value	$	72,960	$	403	$	72,557	$	-
Liabilities at September 30, 2019:
Interest rate swaps	$	316	$	-	$	316	$	-
Total liabilities at fair value	$	316	$	-	$	316	$	-

Assets at December 31, 2018:
Available for sale securities:
Obligations of U.S. Government corporations and agencies	$	56,409	$	-	$	56,409	$	-
Obligations of states and political subdivisions		14,580		-		14,580		-
Corporate bonds		895		-		895		-
Total available for sale securities		71,884		-		71,884		-
Mutual funds		382		382		-		-
Interest rate swaps		367		-		367		-
Total assets at fair value	$	72,633	$	382	$	72,251	$	-
Liabilities at December 31, 2018:
Interest rate swaps	$	38	$	-	$	38	$	-
Total liabilities at fair value	$	38	$	-	$	38	$	-

Summary of 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, 2019 and December 31, 2018.

	September 30, 2019
(In thousands)	Balance		Level 1		Level 2		Level 3
Assets:
Mortgage loans held for sale	$	1,500	$	-	$	1,500	$	-
Impaired loans, net		2,231		-		-		2,231
Other real estate owned, net		1,356		-		-		1,356

	December 31, 2018
(In thousands)	Balance		Level 1		Level 2		Level 3
Assets:
Impaired loans, net	$	2,438	$	-	$	-	$	2,438
Other real estate owned, net		1,356		-		-		1,356

Summary of Quantitative Information About Level 3 Fair Value Measurements

The following table displays quantitative information about Level 3 fair value measurements at September 30, 2019 and December 31, 2018.

	September 30, 2019
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Weighted Average Discount
Impaired loans, net	$	2,231	Appraised values	Age of appraisal, current market conditions, experience within local market		83	%
Other real estate owned, net		1,356	Appraised values	Age of appraisal, current market conditions and selling costs		17	%
Total	$	3,587

	December 31, 2018
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Weighted Average Discount
Impaired loans, net	$	2,438	Appraised values	Age of appraisal, current market conditions, experience within local market		86	%
Other real estate owned, net		1,356	Appraised values	Age of appraisal, current market conditions and selling costs		18	%
Total	$	3,794

Schedule of 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, 2019
(In thousands)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
Assets
Cash and short-term investments	$	60,564	$	60,564	$	-	$	-	$	60,564
Securities available for sale		72,557		-		72,557		-		72,557
Restricted investments		2,571		-		2,571		-		2,571
Mortgage loans held for sale		1,500		-		1,500		-		1,500
Loans, net		539,832		-		-		537,655		537,655
Accrued interest receivable		1,929		-		1,929		-		1,929
Mutual funds		403		403		-		-		403
Bank-owned life insurance		13,870		-		13,870		-		13,870
Total financial assets	$	693,226	$	60,967	$	92,427	$	537,655	$	691,049

Liabilities
Deposits	$	614,000	$	-	$	614,170	$	-	$	614,170
FHLB advances		29,717		-		30,039		-		30,039
Junior subordinated debt		4,124		-		4,691		-		4,691
Accrued interest payable		554		-		554		-		554
Interest rate swaps		316		-		316		-		316
Total financial liabilities	$	648,711	$	-	$	649,770	$	-	$	649,770

	December 31, 2018
(In thousands)	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
Assets
Cash and short-term investments	$	67,110	$	67,110	$	-	$	-	$	67,110
Securities available for sale		71,884		-		71,884		-		71,884
Restricted investments		2,240		-		2,240		-		2,240
Loans, net		544,188		-		-		537,072		537,072
Accrued interest receivable		1,942		-		1,942		-		1,942
Mutual funds		382		382		-		-		382
Interest rate swaps		367		-		367		-		367
Bank-owned life insurance		13,595		-		13,595		-		13,595
Total financial assets	$	701,708	$	67,492	$	90,028	$	537,072	$	694,592

Liabilities
Deposits	$	635,638	$	-	$	634,917	$	-	$	634,917
FHLB advances		23,780		-		23,633		-		23,633
Junior subordinated debt		4,124		-		4,414		-		4,414
Accrued interest payable		300		-		300		-		300
Interest rate swaps		38		-		38		-		38
Total financial liabilities	$	663,880	$	-	$	663,302	$	-	$	663,302