Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value, Assets Measured on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:



(Dollars in thousands)	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
June 30, 2016:
Securities available for sale:
U. S. Treasury securities and obligations of U.S. Government sponsored corporations (“GSE”) and agencies	$	—	$	5,558	$	—	$	5,558
Residential collateralized mortgage obligations- GSE	—		17,832		—		17,832
Residential mortgage backed securities – GSE	—		35,779		—		35,779
Obligations of state and political subdivisions	—		21,672		—		21,672
Trust preferred debt securities – single issuer	—		2,088		—		2,088
Corporate debt securities	10,800		16,643		—		27,443
Other debt securities	—		955		—		955
Total	$	10,800	$	100,527	$	—	$	111,327



(Dollars in thousands)	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
December 31, 2015:
Securities available for sale:
U. S. Treasury securities and obligations of U.S. Government sponsored corporations (“GSE”) and agencies	$	—	$	5,481	$	—	$	5,481
Residential collateralized mortgage obligations- GSE	—		8,287		—		8,287
Residential mortgage backed securities – GSE	—		32,635		—		32,635
Obligations of state and political subdivisions	—		21,436		—		21,436
Trust preferred debt securities – single issuer	—		2,136		—		2,136
Corporate debt securities	14,043		6,379		—		20,422
Other debt securities	—		971		54		1,025
Total	$	14,043	$	77,325	$	54	$	91,422

Fair Value Measurements, Nonrecurring

Assets and financial liabilities measured at fair value on a nonrecurring basis, where there was evidence of impairment, at June 30, 2016 and December 31, 2015 were as follows:



(Dollars in thousands)	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
June 30, 2016:
Impaired loans	$	—	$	—	$	3,655	$	3,655
Other real estate owned	—		—		166		166

December 31, 2015:
Impaired loans	$	—	$	—	$	3,960	$	3,960
Other real estate owned	—		—		966		966

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques

The following table presents additional qualitative information about assets measured at fair value on a nonrecurring basis, where there was evidence of impairment, and for which the Company has utilized Level 3 inputs to determine fair value:



Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
June 30, 2016
Impaired loans	$	3,655	Appraisal of collateral (1)	Appraisal adjustments (2)	3% - 100% (41.6%)
Other real estate owned	$	166	Appraisal of collateral (1)	Appraisal adjustments (2)	3.1%
December 31, 2015
Impaired loans	$	3,960	Appraisal of collateral (1)	Appraisal adjustments (2)	11%-44% (29.6%)
Other real estate owned	$	966	Appraisal of collateral (1)	Appraisal adjustments (2)	11%


(1)	Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.


(2)	Includes qualitative adjustments by management and estimated liquidation expenses.

Fair Value, by Balance Sheet Grouping

The estimated fair values and carrying amounts of financial assets and liabilities as of June 30, 2016 and December 31, 2015 were as follows:



June 30, 2016
(Dollars in thousands)	Carrying			Level 1		Level 2			Level 3		Fair
	Value			Inputs		Inputs			Inputs		Value
Cash and cash equivalents	$	13,650		$	13,650	$	—		$	—	$	13,650
Securities available for sale	111,327			10,800		100,527			—		111,327
Securities held to maturity	122,635			—		127,899			—		127,899
Loans held for sale	3,228			—		3,277			—		3,277
Net loans	754,090			—		—			758,697		758,697
Accrued interest receivable	3,051			—		3,051			—		3,051
Deposits	(791,486		)	—		(792,085		)	—		(792,085		)
Borrowings	(149,865		)	—		(150,232		)	—		(150,232		)
Redeemable subordinated debt	(18,557		)	—		(11,641		)	—		(11,641		)
Accrued interest payable	(846		)	—		(846		)	—		(846		)



December 31, 2015
(Dollars in thousands)	Carrying			Level 1		Level 2			Level 3		Fair
	Value			Inputs		Inputs			Inputs		Value
Cash and cash equivalents	$	11,368		$	11,368	$	—		$	—	$	11,368
Securities available for sale	91,422			14,043		77,325			54		91,422
Securities held to maturity	123,261			—		127,157			—		127,157
Loans held for sale	5,997			—		6,115			—		6,115
Net loans	674,561			—		—			680,719		680,719
Accrued interest receivable	2,853			—		2,853			—		2,853
Deposits	(786,757		)	—		(786,594		)	—		(786,594		)
Borrowings	(58,896		)	—		(59,347		)	—		(59,347		)
Redeemable subordinated debt	(18,557		)	—		(11,641		)	—		(11,641		)
Accrued interest payable	(846		)	—		(846		)	—		(846		)