Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Fair value of assets and liabilities

The following table represents recurring level III assets:



Interest Rate Lock Commitments	Three Months Ended September 30, 2016			Three Months Ended September 30, 2015		Nine Months Ended September 30, 2016		Nine Months Ended September 30, 2015
(Dollars in thousands)
Balance, beginning of period	$	3,625		$	1,653	$	1,583	$	1,020

Realized and unrealized gains (loss) included in earnings	(474		)	105		1,568		738

Balance, end of period	$	3,151		$	1,758	$	3,151	$	1,758

Schedule of Quantitative Information About Level 3 Significant Unobservable Inputs for Assets Measured at Fair Value

The following tables present quantitative information about the Level 3 significant unobservable inputs for assets measured at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015.



September 30, 2016	Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range

Impaired loans	$	10,441	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 62%
				Liquidation expense (2)	5% - 10%
Other real estate owned	$	240	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 10%



December 31, 2015	Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range

Impaired loans	$	14,362	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 62%
				Liquidation expense (2)	5% - 10%
Other real estate owned	$	239	Appraisal of collateral (1)	Appraisal adjustments (2)	20% - 30%
				Liquidation expense (2)	5% - 10%

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

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

Schedule of Carrying Values and Estimated Fair Values of Financial Instruments

The carrying values and estimated fair values of the Company’s financial instruments are summarized as follows (Dollars in thousands):

Fair Value Measurements at:



	Carrying Value		Estimated Fair Value		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2016
Financial assets:
Cash and cash equivalents	$	28,804	$	28,804	$	28,804	$	—	$	—
Certificates of deposits with other banks	7,174		7,316		—		7,316		—
Securities available-for-sale	152,171		152,171		—		152,171		—
Loans held for sale	123,109		123,109		—		123,109		—
Loans, net	1,066,923		1,060,457		—		—		1,060,457
Mortgage servicing rights	433		433		—		—		433
Interest rate lock commitment	3,151		3,151		—		—		3,151
Interest rate swap	1,320		1,320		—		1,320		—
Interest rate cap	100		100		—		100		—
Accrued interest receivable	4,061		4,061		—		979		3,082

Financial liabilities:
Deposits	$	1,126,790	$	1,148,187	$	—	$	1,148,187	$	—
Repurchase agreements	27,192		27,192		—		27,192		—
FHLB and other borrowings	136,112		136,111		—		136,111		—
Interest rate swap	1,320		1,320		—		1,320		—
Forward sales commitments	829		829		—		829		—
Accrued interest payable	735		735		—		735		—
Subordinated debt	33,524		32,172		—		32,172		—

December 31, 2015
Financial assets:
Cash and cash equivalents	$	29,133	$	29,133	$	29,133	$	—	$	—
Certificates of deposits with other banks	13,150		13,270		—		13,270		—
Securities available-for-sale	70,256		70,256		—		70,256		—
Securities held-to-maturity	52,859		54,470		—		54,470		—
Loans held for sale	102,623		102,623		—		102,623		—
Loans, net	1,024,164		1,034,832		—		—		1,034,832
Mortgage servicing rights	956		956		—		—		956
Interest rate lock commitment	1,583		1,583		—		—		1,583
Interest rate swap	405		405		—		405		—
Interest rate cap	437		437		—		437		—
Accrued interest receivable	3,356		3,356		—		723		2,633

Financial liabilities:
Deposits	$	1,012,314	$	1,015,521	$	—	$	1,015,521	$	—
Repurchase agreements	27,437		27,437		—		27,437		—
FHLB and other borrowings	183,198		183,211		—		183,211		—
Interest rate swap	405		405		—		405		—
Accrued interest payable	474		474		—		474		—
Subordinated debt	33,524		32,172		—		32,172		—

Recurring

Fair value of assets and liabilities

Schedule of Assets and Liabilities at Fair Value

The following tables present the assets and liabilities reported on the consolidated statements of financial condition at their fair value on a recurring basis as of September 30, 2016 and December 31, 2015 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.



	September 30, 2016
(Dollars in thousands)	Level I		Level II		Level III		Total
Assets:
U.S. Government Agency securities	$	—	$	19,844	$	—	$	19,844
U.S. Sponsored Mortgage backed securities	—		55,664		—		55,664
Municipal securities	—		69,550		—		69,550
Equity and Other securities	1,096		6,017		—		7,113
Loans held for sale	—		123,109		—		123,109
Interest rate lock commitment	—		—		3,151		3,151
Interest rate swap	—		1,320		—		1,320
Interest rate cap	—		100		—		100
Liabilities:
Interest rate swap	—		1,320		—		1,320
Forward sales commitments	—		829		—		829



	December 31, 2015
(Dollars in thousands)	Level I		Level II		Level III		Total
Assets:
U.S. Government Agency securities	$	—	$	29,351	$	—	$	29,351
U.S. Sponsored Mortgage backed securities	—		33,714		—		33,714
Municipal securities	—		1,798		—		1,798
Equity and Other securities	—		5,393		—		5,393
Loans held for sale	—		102,623		—		102,623
Interest rate lock commitment	—		—		1,583		1,583
Interest rate swap	—		405		—		405
Interest rate cap	—		437		—		437
Liabilities:
Interest rate swap	—		405		—		405

Non-recurring

Fair value of assets and liabilities

Schedule of Assets and Liabilities at Fair Value

Assets measured at fair value on a nonrecurring basis as of September 30, 2016 and December 31, 2015 are included in the tables below:



	September 30, 2016
(Dollars in thousands)	Level I		Level II		Level III		Total
Assets:
Impaired loans	$	—	$	—	$	10,441	$	10,441
Other real estate owned	—		—		240		$	240



	December 31, 2015
(Dollars in thousands)	Level I		Level II		Level III		Total
Assets:
Impaired loans	$	—	$	—	$	14,362	$	14,362
Other real estate owned	—		—		239		$	239