Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Assets Measured at Fair Value on a Recurring Basis

The following tables present the assets and liabilities reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of September 30, 2018 and December 31, 2017 by level within the fair value hierarchy (in thousands). 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, 2018	Level I		Level II		Level III		Total
Fair value measurements on a recurring basis:
Equity securities in financial institutions	$	291	$	-	$	-	$	291
Available for sale securities:
U.S. Agency securities		-		108,269		-		108,269
U.S. Treasury securities		32,837		-		-		32,837
Obligations of state and
political subdivisions		-		51,598		-		51,598
Corporate obligations		-		3,000		-		3,000
Mortgage-backed securities in
government sponsored entities		-		44,722		-		44,722

December 31, 2017	Level I		Level II		Level III		Total
Fair value measurements on a recurring basis:
Available for sale securities:
U.S. Agency securities	$	-	$	98,887	$	-	$	98,887
U.S. Treasuries securities		28,604		-		-		28,604
Obligations of state and
political subdivisions		-		79,090		-		79,090
Corporate obligations		-		3,083		-		3,083
Mortgage-backed securities in
government sponsored entities		-		45,027		-		45,027
Equity securities in financial institutions		91		-		-		91

Summary of Assets Measured at Fair Value on Non-recurring Basis

Assets measured at fair value on a nonrecurring basis as of September 30, 2018 and December 31, 2017 are included in the table below (in thousands):

September 30, 2018	Level I		Level II		Level III		Total
Impaired Loans	$	-	$	-	$	6,281	$	6,281
Other real estate owned		-		-		520		520

December 31, 2017
Impaired Loans	$	-	$	-	$	1,569	$	1,569
Other real estate owned		-		-		1,024		1,024

Significant Unobservable Inputs Used in Fair Value Measurement Process

The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing Level III techniques (dollars in thousands).

September 30, 2018	Fair Value		Valuation Technique(s)	Unobservable input	Range			Weighted average
Impaired Loans	$	6,281	Appraised Collateral Values	Discount for time since appraisal		0-100	%		20.06	%
				Selling costs		5%-11	%		8.73	%
				Holding period	0 - 12 months			11.71 months

Other real estate owned		520	Appraised Collateral Values	Discount for time since appraisal		25-35	%		26.34	%

December 31, 2017	Fair Value		Valuation Technique(s)	Unobservable input	Range				Weighted average
Impaired Loans		1,569	Appraised Collateral Values	Discount for time since appraisal		0-100	%		30.83	%
				Selling costs		5%-9	%		8.35	%
				Holding period	6 - 12 months			11.12 months

Other real estate owned		1,024	Appraised Collateral Values	Discount for time since appraisal		15-65	%		26.26	%

Fair Value of Financial Instruments

The carrying amount and fair value of the Company's financial instruments that are not required to be measured or reported at fair value on a recurring basis are as follows (in thousands):

	Carrying
September 30, 2018	Amount		Fair Value		Level I		Level II		Level III
Financial assets:
Cash and due from banks	$	16,500	$	16,500	$	16,500	$	-	$	-
Interest bearing time deposits with other banks		14,754		14,773		-		-		14,773
Equity securities		291		291		291		-		-
Available-for-sale securities		240,426		240,426		32,837		207,589		-
Loans held for sale		960		960		960		-		-

Net loans		1,047,948		1,037,065		-		-		1,037,065
Bank owned life insurance		27,350		27,350		27,350		-		-
Regulatory stock		5,661		5,661		5,661		-		-
Accrued interest receivable		4,480		4,480		4,480		-		-

Financial liabilities:
Deposits	$	1,174,843	$	1,168,834	$	882,539	$	-	$	286,295
Borrowed funds		86,097		84,686		49,631		-		35,055
Accrued interest payable		979		979		979		-		-

	Carrying
December 31, 2017	Amount		Fair Value		Level I		Level II		Level III
Financial assets:
Cash and due from banks	$	18,517	$	18,517	$	18,517	$	-	$	-
Interest bearing time deposits with other banks		10,283		10,287		-		-		10,287
Loans held for sale		1,439		1,439		1,439
Net loans		989,335		981,238		-		-		981,238
Bank owned life insurance		26,883		26,883		26,883		-		-
Regulatory stock		6,784		6,784		6,784		-		-
Accrued interest receivable		4,196		4,196		4,196		-		-

Financial liabilities:
Deposits	$	1,104,943	$	1,101,583	$	838,490	$	-	$	263,093
Borrowed funds		114,664		113,452		77,650		-		35,802
Accrued interest payable		897		897		897		-		-