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Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Balances of Assets Measured at Fair Value on a Recurring Basis
The following tables present the balances of assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands).
 
 
 
Fair Value Measurements at September 30, 2018
Description
Balance as of September 30,
2018
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Securities available for sale
 
 
 
 
 
 
 
U.S. agency and mortgage-backed securities
$
88,043

 
$
—

 
$
88,043

 
$
—

Obligations of states and political subdivisions
14,705

 
—

 
14,705

 
—

 
$
102,748

 
$
—

 
$
102,748

 
$
—

 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements at December 31, 2017
Description
Balance as of December 31,
2017
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Securities available for sale
 
 
 
 
 
 
 
U.S. agency and mortgage-backed securities
$
74,804

 
$
—

 
$
74,804

 
$
—

Obligations of states and political subdivisions
14,451

 
—

 
14,451

 
—

 
$
89,255

 
$
—

 
$
89,255

 
$
—

Summary of Assets Measured at Fair Value on a Nonrecurring Basis
The following tables summarize the Company’s assets that were measured at fair value on a nonrecurring basis during the periods (dollars in thousands):
 
 
 
Fair Value Measurements at September 30, 2018
Description
Balance as of September 30,
2018
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Impaired loans, net
$
387

 
$
—

 
$
—

 
$
387

 
 
 
Fair Value Measurements at December 31, 2017
Description
Balance as of December 31,
2017
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Other real estate owned
$
326

 
$
—

 
$
—

 
$
326

Quantitative Information about Level 3 Fair Value Measurements
 
Quantitative information about Level 3 Fair Value Measurements for September 30, 2018
 
Fair Value
 
Valuation Technique
 
Unobservable Input
 
Range
(Weighted-Average)
Impaired loans, net
$
387

 
Property appraisals
 
Selling cost
 
10
%
 
 
 
 
 
 
 
 
 
Quantitative information about Level 3 Fair Value Measurements for December 31, 2017
 
Fair Value
 
Valuation Technique
 
Unobservable Input
 
Range
(Weighted-Average)
Other real estate owned
$
326

 
Contract price
 
Selling cost
 
7
%
Carrying Values and Estimated Fair Values of Company's Financial Instruments
The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2018 and December 31, 2017 are as follows (in thousands):
 
 
 
Fair Value Measurements at September 30, 2018 Using
 
Carrying
Amount
 
Quoted
Prices in
Active
Markets for
Identical
Assets
Level 1
 
Significant
Other
Observable
Inputs
Level 2
 
Significant
Unobservable
Inputs
Level 3
 
Fair Value
Financial Assets
 
 
 
 
 
 
 
 
 
Cash and short-term investments
$
21,438

 
$
21,438

 
$
—

 
$
—

 
$
21,438

Securities available for sale
102,748

 
—

 
102,748

 
—

 
102,748

Securities held to maturity
44,239

 
—

 
41,218

 
1,489

 
42,707

Restricted securities
1,590

 
—

 
1,590

 
—

 
1,590

Loans held for sale
516

 
—

 
516

 
—

 
516

Loans, net (1)
535,020

 
—

 
—

 
529,759

 
529,759

Bank owned life insurance
13,894

 
—

 
13,894

 
—

 
13,894

Accrued interest receivable
2,138

 
—

 
2,138

 
—

 
2,138

Financial Liabilities
 
 
 
 
 
 
 
 
 
Deposits
$
667,104

 
$
—

 
$
547,281

 
$
117,005

 
$
664,286

Subordinated debt
4,961

 
—

 
—

 
4,802

 
4,802

Junior subordinated debt
9,279

 
—

 
—

 
9,603

 
9,603

Accrued interest payable
123

 
—

 
123

 
—

 
123

 
 
 
Fair Value Measurements at December 31, 2017 Using
 
Carrying
Amount
 
Quoted
Prices in
Active
Markets for
Identical
Assets
Level 1
 
Significant
Other
Observable
Inputs
Level 2
 
Significant
Unobservable
Inputs
Level 3
 
Fair Value
Financial Assets
 
 
 
 
 
 
 
 
 
Cash and short-term investments
$
39,986

 
$
39,986

 
$
—

 
$
—

 
$
39,986

Securities available for sale
89,255

 
—

 
89,255

 
—

 
89,255

Securities held to maturity
48,208

 
—

 
46,186

 
1,516

 
47,702

Restricted securities
1,570

 
—

 
1,570

 
—

 
1,570

Loans held for sale
438

 
—

 
438

 
—

 
438

Loans, net (1)
516,875

 
—

 
—

 
514,013

 
514,013

Bank owned life insurance
13,967

 
—

 
13,967

 
—

 
13,967

Accrued interest receivable
1,916

 
—

 
1,916

 
—

 
1,916

Financial Liabilities
 
 
 
 
 
 
 
 
 
Deposits
$
664,980

 
$
—

 
$
542,329

 
$
120,834

 
$
663,163

Subordinated debt
4,948

 
—

 
—

 
5,004

 
5,004

Junior subordinated debt
9,279

 
—

 
—

 
9,653

 
9,653

Accrued interest payable
98

 
—

 
98

 
—

 
98


(1)
In accordance with the prospective adoption of ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," the fair value of loans as of September 30, 2018 was measured using an exit price notion. The fair value of loans as of December 31, 2017 was measured using an entry price notion.