Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of fair value assets and liabilities measured on recurring basis

The following table presents the balances of financial assets measured at fair value on a recurring basis at the dates indicated (dollars in thousands):



	Fair Value Measurements at March 31, 2018 Using
	Balance at March 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2018		Level 1		Level 2		Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs	$	108,627	$	—	$	108,627	$	—
Mortgage-backed and CMOs	108,421		—		108,421		—
State and municipal	85,322		—		85,322		—
Corporate	7,978		—		7,978		—
Total securities available for sale	$	310,348	$	—	$	310,348	$	—
Equity securities	$	2,320	$	—	$	2,320	$	—



	Fair Value Measurements at December 31, 2017 Using
	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2017		Level 1		Level 2		Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs	$	112,127	$	—	$	112,127	$	—
Mortgage-backed and CMOs	105,316		—		105,316		—
State and municipal	93,626		—		93,626		—
Corporate	8,062		—		8,062		—
Equity securities	2,206		—		2,206		—
Total securities available for sale	$	321,337	$	—	$	321,337	$	—

Schedule of assets that were measured at fair value on a nonrecurring basis

The following table summarizes the Company's assets that were measured at fair value on a nonrecurring basis at the dates indicated (dollars in thousands):



	Fair Value Measurements at March 31, 2018 Using
	Balance at March 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2018		Level 1		Level 2		Level 3
Assets:
Loans held for sale	$	1,792	$	—	$	1,792	$	—
Impaired loans, net of valuation allowance	420		—		—		420
Other real estate owned, net	1,716		—		—		1,716



	Fair Value Measurements at December 31, 2017 Using
	Balance at December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2017		Level 1		Level 2		Level 3
Assets:
Loans held for sale	$	1,639	$	—	$	1,639	$	—
Impaired loans, net of valuation allowance	1,391		—		—		1,391
Other real estate owned, net	1,225		—		—		1,225

Schedule of quantitative information of assets measured at Level 3

The following tables summarize the Company's quantitative information about Level 3 fair value measurements at the dates indicated:

Quantitative Information About Level 3 Fair Value Measurements at March 31, 2018



Assets	Valuation Technique	Unobservable Input	Rate

Impaired loans	Discounted appraised value	Selling cost	8.00%
	Discounted cash flow analysis	Market rate for borrower (discount rate)	3.25% - 9.80%

Other real estate owned, net	Discounted appraised value	Selling cost	8.00%

Quantitative Information About Level 3 Fair Value Measurements at December 31, 2017



Assets	Valuation Technique	Unobservable Input	Rate

Impaired loans	Discounted appraised value	Selling cost	8.00%
	Discounted cash flow analysis	Market rate for borrower (discount rate)	3.25% - 9.80%

Other real estate owned, net	Discounted appraised value	Selling cost	8.00%

Schedule of carrying values and estimated fair values of the entity's financial instruments

The carrying values and the exit pricing concept fair values of the Company's financial instruments at March 31, 2018 are as follows (dollars in thousands):



	Fair Value Measurements at March 31, 2018 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
Financial Assets:
Cash and cash equivalents	$	76,653	$	76,653	$	—	$	—	$	76,653
Equity securities	2,320				2,320				2,320
Securities available for sale	310,348		—		310,348		—		310,348
Restricted stock	5,221		—		5,221		—		5,221
Loans held for sale	1,792		—		1,792		—		1,792
Loans, net of allowance	1,307,646		—		—		1,305,037		1,305,037
Bank owned life insurance	18,566		—		18,566		—		18,566
Accrued interest receivable	4,945		—		4,945		—		4,945

Financial Liabilities:
Deposits	$	1,559,251	$	—	$	1,566,012	$	—	$	1,566,012
Repurchase agreements	10,466		—		10,466		—		10,466
Junior subordinated debt	27,851		—		—		21,801		21,801
Accrued interest payable	698		—		698		—		698

The carrying values and estimated fair values of the Company's financial instruments at December 31, 2017 are as follows (dollars in thousands):



	Fair Value Measurements at December 31, 2017 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
Financial Assets:
Cash and cash equivalents	$	52,477	$	52,477	$	—	$	—	$	52,477
Securities available for sale	321,337		—		321,337		—		321,337
Restricted stock	6,110		—		6,110		—		6,110
Loans held for sale	1,639		—		1,639		—		1,639
Loans, net of allowance	1,322,522		—		—		1,317,737		1,317,737
Bank owned life insurance	18,460		—		18,460		—		18,460
Accrued interest receivable	5,231		—		5,231		—		5,231

Financial Liabilities:
Deposits	$	1,534,726	$	—	$	1,527,956	$	—	$	1,527,956
Repurchase agreements	10,726		—		10,726		—		10,726
Other short-term borrowings	24,000		—		24,000		—		24,000
Junior subordinated debt	27,826		—		—		28,358		28,358
Accrued interest payable	674		—		674		—		674