FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2019

Schedule of Fair Value, Assets Measured on Recurring Basis

At June 30, 2019 and December 31, 2018, securities measured at fair value on a recurring basis and the valuation methods used are as follows:


(Dollars in thousands)	Level 1		Level 2		Level 3		Total
June 30, 2019
Debt Securities Available-for-Sale:
U.S. Treasury securities	$	—	$	5,339	$	—	$	5,339
Obligations of U.S. Government Corporations and Agencies:
Mortgage-backed		—		83,064		—		83,064
Other		—		20,052		—		20,052
Other mortgage backed debt securities		—		6,496		—		6,496
Obligations of state and political subdivisions		—		149,832		—		149,832
Asset backed securities		—		13,912		—		13,912
Corporate debt securities		—		26,883		—		26,883
Total debt securities available-for-sale		—		305,578		—		305,578
Marketable equity securities		1,671		—		—		1,671
Total recurring fair value measurements	$	1,671	$	305,578	$	—	$	307,249


(Dollars in thousands)	Level 1		Level 2		Level 3		Total
December 31, 2018
Available-for-Sale Debt Securities :
U.S. Treasury securities	$	—	$	5,295	$	—	$	5,295
Obligations of U.S. Government Corporations and Agencies:
Mortgaged-backed		—		64,876		—		64,876
Other		—		18,243		—		18,243
Other mortgage backed debt securities		—		4,749		—		4,749
Obligations of state and political subdivisions		—		182,278		—		182,278
Asset backed securities		—		14,370		—		14,370
Corporate debt securities		—		26,243		—		26,243
Total debt securities available-for-sale		—		316,054		—		316,054
Marketable equity securities		1,560		—		—		1,560
Total	$	1,560	$	316,054	$	—	$	317,614

Schedule of Fair Value Measurements, Nonrecurring

At June 30, 2019 and December 31, 2018, impaired loans measured at fair value on a nonrecurring basis and the valuation methods used are as follows:


(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at June 30, 2019
Impaired loans:
Commercial Real Estate	$	—	$	—	$	6,222	$	6,222
Residential Real Estate		—		—		189		189
Total impaired loans	$	—	$	—	$	6,411	$	6,411


(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2018
Impaired loans:
Commercial Real Estate	$	—	$	—	$	6,400	$	6,400
Residential Real Estate		—		—		81		81
Total impaired loans	$	—	$	—	$	6,481	$	6,481

Schedule of Fair Value Non Financial Assets Measured On Nonrecurring Basis

At June 30, 2019 and December 31, 2018, foreclosed assets held for resale measured at fair value on a nonrecurring basis and the valuation methods used are as follows:


(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at June 30, 2019
Foreclosed assets held for resale:
Commercial Real Estate	$	—	$	—	$	856	$	856
Residential Real Estate		—		—		—		—
Total foreclosed assets held for resale	$	—	$	—	$	856	$	856


(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2018
Foreclosed assets held for resale:
Commercial Real Estate	$	—	$	—	$	856	$	856
Residential Real Estate		—		—		—		—
Total foreclosed assets held for resale	$	—	$	—	$	856	$	856

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Bank has utilized Level 3 inputs to determine the fair value:


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value					Weighted
(Dollars in thousands)	Estimate		Valuation Technique	Unobservable Input	Range	Average
June 30, 2019
Impaired loans	$	3,388	Appraisal of collateral1,3	Appraisal adjustments2	(15%) – (73%)	(18%)
Impaired loans	$	3,023	Discounted cash flow	Discount rate	(7%) – (7%)	(7%)
Foreclosed assets held for resale	$	856	Appraisal of collateral1,3	Appraisal adjustments2	(16%) – (35%)	(18%)

December 31, 2018
Impaired loans	$	3,346	Appraisal of collateral1,3	Appraisal adjustments2	(15%) – (82%)	(18%)
Impaired loans	$	3,135	Discounted cash flow	Discount rate	(6%) – (7%)	(7%)
Foreclosed assets held for resale	$	856	Appraisal of collateral1,3	Appraisal adjustments2	(16%) – (35%)	(18%)

1Fair value is generally determined through independent appraisals of the underlying collateral, as defined by Bank regulators.

2Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value.

3Includes qualitative adjustments by management and estimated liquidation expenses.

Schedule of Fair Value, by Balance Sheet Grouping

Fair Value of Financial Instruments


	Carrying		Fair Value Measurements at June 30, 2019
(Dollars in thousands)	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	7,465	$	7,465	$	—	$	—	$	7,465
Interest-bearing deposits in other banks		2,182		—		2,182		—		2,182
Time deposits with other banks		1,482		—		1,482		—		1,482
Restricted investment in bank stocks		6,474		—		6,474		—		6,474
Net loans		605,309		—		—		615,054		615,054
Mortgage servicing rights		288		—		—		288		288
Accrued interest receivable		3,934		—		3,934		—		3,934

FINANCIAL LIABILITIES:
Demand, savings and other deposits		491,328		—		491,328		—		491,328
Time deposits		215,397		—		215,416		—		215,416
Short-term borrowings		120,151		—		120,187		—		120,187
Long-term borrowings		45,000		—		45,815		—		45,815
Accrued interest payable		739		—		739		—		739

OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—


	Carrying		Fair Value Measurements at December 31, 2018
(Dollars in thousands)	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	9,822	$	9,822	$	—	$	—	$	9,822
Interest-bearing deposits in other banks		1,128		—		1,128		—		1,128
Time deposits with other banks		1,482		—		1,469		—		1,469
Restricted investment in bank stocks		8,681		—		8,681		—		8,681
Net loans		599,647		—		—		597,548		597,548
Mortgage servicing rights		316		—		—		316		316
Accrued interest receivable		4,041		—		4,041		—		4,041

FINANCIAL LIABILITIES:
Demand, savings and other deposits		474,261		—		474,261		—		474,261
Time deposits		197,292		—		195,136		—		195,136
Short-term borrowings		174,445		—		174,491		—		174,491
Long-term borrowings		45,000		—		45,077		—		45,077
Accrued interest payable		785		—		785		—		785

OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—