Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Assets Measured at Fair Value on Recurring Basis

The following table presents the balances of certain assets measured at fair value on a recurring basis as of the dates indicated:

				Fair Value Measurements at March 31, 2018 Using
	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in thousands)
Available-for-sale securities
Obligations of U.S. Government agencies		$	9,337		$	-		$	9,337		$	-
Obligations of state and political subdivisions			59,269			-			59,269			-
Mortgage-backed securities			70,941			-			70,941			-
Money market investments			1,612			-			1,612			-
Corporate bonds			4,698			-			4,698			-
Total available-for-sale securities		$	145,857		$	-		$	145,857		$	-

				Fair Value Measurements at December 31, 2017 Using
	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in thousands)
Available-for-sale securities
Obligations of U.S. Government agencies		$	9,435		$	-		$	9,435		$	-
Obligations of state and political subdivisions			64,765			-			64,765			-
Mortgage-backed securities			74,296			-			74,296			-
Money market investments			1,194			-			1,194			-
Corporate bonds			7,234			-			7,234			-
Other marketable equity securities			197			-			197			-
Total available-for-sale securities		$	157,121		$	-		$	157,121		$	-

Assets Measured at Fair Value on Nonrecurring Basis

The following table presents the assets carried on the consolidated balance sheets for which a nonrecurring change in fair value has been recorded. Assets are shown by class of loan and by level in the fair value hierarchy, as of the dates indicated. Certain impaired loans are valued by the present value of the loan's expected future cash flows, discounted at the loan's effective interest rate rather than at a market rate. These loans are not carried on the consolidated balance sheets at fair value and, as such, are not included in the table below.

			Carrying Value at March 31, 2018 Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Impaired loans
Mortgage loans on real estate:
Residential 1-4 family	$	45	$	-	$	-	$	45
Commercial		272		-		-		272
Construction		74		-		-		74
Equity lines of credit		229		-		-		229
Total mortgage loans on real estate	$	620	$	-	$	-	$	620
Consumer loans		100		-		-		100
Total	$	720	$	-	$	-	$	720

Loans
Loans held for sale	$	715	$	-	$	715	$	-

Other real estate owned
Commercial real estate	$	203	$	-	$	-	$	203

			Carrying Value at December 31, 2017 Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Impaired loans
Mortgage loans on real estate:
Residential 1-4 family	$	264	$	-	$	-	$	264
Construction		74		-		-		74
Equity lines of credit		229		-		-		229
Total	$	567	$	-	$	-	$	567

Loans
Loans held for sale	$	779	$	-	$	779	$	-

Fair Value Inputs, Assets, Quantitative Information

The following table displays quantitative information about Level 3 Fair Value Measurements as of the dates indicated:

Quantitative Information About Level 3 Fair Value Measurements
	Fair Value at March 31, 2018 (dollars in thousands)		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Impaired loans
Residential 1-4 family real estate	$	45	Market comparables	Selling costs		7.25	%
				Liquidation discount		4.00	%
Commercial real estate	$	272	Market comparables	Selling costs		7.78	%
				Liquidation discount		4.70	%
Construction	$	74	Market comparables	Selling costs		7.25	%
				Liquidation discount		4.00	%
Equity lines of credit	$	229	Market comparables	Selling costs		6.70	%
				Liquidation discount		3.70	%
Consumer	$	100	Market comparables	Selling costs		0.00	%
				Liquidation discount		0.00	%

Other real estate owned
Commercial real estate	$	203	Market comparables	Selling costs		7.25	%
				Liquidation discount		10.00	%

Quantitative Information About Level 3 Fair Value Measurements
	Fair Value at December 31, 2017 (dollars in thousands)		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Impaired loans
Residential 1-4 family real estate	$	264	Market comparables	Selling costs		7.25	%
				Liquidation discount		0.00% - 4.00% (2.91	%)
Construction	$	74	Market comparables	Selling costs		7.25	%
				Liquidation discount		4.00	%
Equity lines of credit	$	229	Market comparables	Selling costs		7.25	%
				Liquidation discount		4.00	%

Estimated Fair Values and Related Carrying or Notional Amounts of Financial Instruments

The estimated fair values, and related carrying or notional amounts, of the Company's financial instruments as of the dates indicated are as follows:

			Fair Value Measurements at March 31, 2018 Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets
Cash and cash equivalents	$	43,437	$	43,437	$	-	$	-
Securities available-for-sale		145,857		-		145,857		-
Restricted securities		4,023		-		4,023		-
Loans held for sale		715		-		715		-
Loans, net of allowances for loan losses *		723,144		-		-		705,413
Bank-owned life insurance		26,190		-		26,190		-
Accrued interest receivable		2,787		-		2,787		-

Liabilities
Deposits	$	789,027	$	-	$	790,246	$	-
Overnight repurchase agreements		36,141		-		36,141		-
Federal Home Loan Bank advances		70,000		-		69,716		-
Accrued interest payable		364		-		364		-

			Fair Value Measurements at December 31, 2017 Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets
Cash and cash equivalents	$	14,412	$	14,412	$	-	$	-
Securities available-for-sale		157,121		-		157,121		-
Restricted securities		3,846		-		3,846		-
Loans held for sale		779		-		779		-
Loans, net of allowances for loan losses *		729,092		-		-		722,464
Bank-owned life insurance		25,981		-		25,981		-
Accrued interest receivable		3,254		-		3,254		-

Liabilities
Deposits	$	783,594	$	-	$	782,539	$	-
Federal funds purchased		10,000		-		10,000		-
Overnight repurchase agreements		20,693		-		20,693		-
Federal Home Loan Bank advances		67,500		-		67,329		-
Accrued interest payable		360		-		360		-

* In accordance with the adoption of ASU 2016-01, the fair values of loans held for investment and time deposits as of March 31, 2018 were measured using an exit price notion. The fair values of loans held for investment and time deposits as of December 31, 2017 were measured using an entry price notion.