Fair Value (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

	Fair value measurements at March 31, 2019
				Quoted prices
				in active		Significant
				markets for		other			Significant
				identical		observable			unobservable
	Carrying			assets		inputs			inputs
	Value			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities available-for-sale:
U.S. government-sponsored agencies	$	10,601		$	—	$	10,601		$	—
Obligations of states and political subdivisions		63,400			—		63,400			—
Mortgage-backed securities-residential		138,133			—		138,133			—
Asset-backed securities		9,748			—		9,748			—
Other debt securities		11,809			—		11,809			—
Total securities available-for-sale	$	233,691		$	—	$	233,691		$	—
Derivatives:
Interest rate swaps - customer related	$	464		$	—	$	464		$	—
Liabilities:
Derivatives:
Interest rate swaps - customer related	$	(464	)	$	—	$	(464	)	$	—
Interest rate swaps - cash flow hedges		(1,042	)		—		(1,042	)		—
Total derivatives	$	(1,506	)	$	—	$	(1,506	)	$	—

	Fair value measurements at December 31, 2018
				Quoted prices
				in active		Significant
				markets for		other			Significant
				identical		observable			unobservable
	Carrying			assets		inputs			inputs
	Value			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities available-for-sale:
U.S. government-sponsored agencies	$	10,706		$	—	$	10,706		$	—
Obligations of states and political subdivisions		61,926			—		61,926			—
Mortgage-backed securities-residential		144,158			—		144,158			—
Asset-backed securities		15,284			—		15,284			—
Other debt securities		11,734					11,734
Total securities available-for-sale	$	243,808		$	—	$	243,808		$	—
Derivatives:
Interest rate swaps - customer related	$	494		$	—	$	494		$	—
Liabilities:
Derivatives:
Interest rate swaps - customer related	$	(494	)	$	—	$	(494	)	$	—
Interest rate swaps - cash flow hedges		(836	)		—		(836	)		—
Total derivatives	$	(1,330	)	$	—	$	(1,330	)	$	—

Summary of Assets Measured at Fair Value on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis are summarized below (in thousands): There were no assets measured at fair value on a nonrecurring basis at December 31, 2018.

Fair value measurements at March 31, 2019

Quoted prices

in active

Significant

markets for

other

Significant

identical

observable

unobservable

Carrying

assets

inputs

Value

(level 1)

(level 2)

(level 3)

Assets:

Impaired loans:

Commercial and industrial

551

—

551

Summary of Quantitative Information About Level 3 Fair Value Measurements for Assets Measured at Fair Value on a Non-recurring Basis

The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis at March 31, 2019 (dollars in thousands):

Range

Fair

Valuation

(Weighted-

March 31, 2019

Value

Technique(s)

Unobservable Input(s)

Average)

Impaired loans:

Commercial and industrial

551

Sales comparison approach

Appraisal discounts

Summary of Carrying Value and Fair Values of the Bank's Financial Instruments

The carrying value and estimated fair values of the Bank’s financial instruments at March 31, 2019 and December 31, 2018 were as follows (in thousands):

	March 31, 2019				December 31, 2018
	Carrying				Carrying				Fair value
	amount		Fair value		amount		Fair value		level of input
Financial assets:
Cash and due from banks, interest-bearing deposits in financial institutions	$	112,196	$	112,196	$	94,681	$	94,681	Level 1
Federal funds sold		8,125		8,125		10,762		10,762	Level 1
Securities available-for-sale		233,691		233,691		243,808		243,808	Level 2
Securities held-to-maturity		3,727		3,806		3,734		3,785	Level 2
Loans held for sale		72,870		74,193		57,618		58,596	Level 2
Restricted equity securities		14,145	N/A			12,038	N/A		N/A
Loans		1,467,786		1,466,147		1,429,794		1,442,082	Level 3
Accrued interest receivable		6,446		6,446		5,964		5,964	Level 2
Other assets		34,664		34,664		34,489		34,489	Level 2
Financial liabilities:
Deposits		1,678,802		1,612,455		1,570,008		1,504,101	Level 3
Federal Home Loan Bank advances		75,000		75,663		125,000		126,548	Level 2
Other liabilities		1,506		1,506		2,753		2,753	Level 3