FAIR VALUE MEASUREMENT (Tables)

6 Months Ended

Jun. 30, 2016

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2016:

	(in thousands)
June 30, 2016	Total		Level 1		Level 2		Level 3
U.S. Treasury securities	$	26,468	$	26,468	$	—	$	—
Securities of U.S. government agencies and corporations		30,733		—		30,733		—
Obligations of states and political subdivisions		24,181		—		24,181		—
Collateralized mortgage obligations		18,949		—		18,949		—
Mortgage-backed securities		134,902		—		134,902		—

Total investments at fair value	$	235,233	$	26,468	$	208,765	$	—

There were no transfers of assets measured at fair value on a recurring basis between level 1 and level 2 of the fair value hierarchy.

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2015:

	(in thousands)
December 31, 2015	Total		Level 1		Level 2		Level 3
U.S. Treasury securities	$	20,186	$	20,186	$	—	$	—
Securities of U.S. government agencies and corporations		33,997		—		33,997		—
Obligations of states and political subdivisions		25,709		—		25,709		—
Collateralized mortgage obligations		10,932		—		10,932		—
Mortgage-backed securities		92,527		—		92,527		—

Total investments at fair value	$	183,351	$	20,186	$	163,165	$	—

Assets Measured at Fair Value on a Non-recurring Basis

Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of June 30, 2016:

	(in thousands)
June 30, 2016	Total		Level 1		Level 2		Level 3
Impaired loans	$	46	$	—	$	—	$	46
Loan servicing rights		1,785		—		—		1,785

Total assets at fair value	$	1,831	$	—	$	—	$	1,831

Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of December 31, 2015:

	(in thousands)
December 31, 2015	Total			Level 1			Level 2			Level 3
Impaired loans		$	841		$	—		$	—		$	841

Total assets at fair value		$	841		$	—		$	—		$	841

Methods and Assumptions Used in Measuring Fair Value of Assets and Liabilities

Key methods and assumptions used in measuring the fair value of impaired loans and other real estate owned as of December 31, 2015 were as follows:

	Method	Assumption Inputs

Impaired loans	Collateral, market, income, enterprise, liquidation and discounted Cash Flows	External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 7%.
Loan servicing rights	Discounted Cash Flows	Present value of expected future cash flows was estimated using a discount rate factor of 10.00% and 10.03% as of June 30, 2016 and December 31, 2015, respectively. A constant prepayment rate of 12.98% and 10.94% as of June 30, 2016 and December 31, 2015, respectively, was utilized.