Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of fair value assets and liabilities measured on recurring basis

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



	Fair Value Measurements at September 30, 2019 Using
	Balance at September 30,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	2019		Level 1		Level 2		Level 3
Assets:
Securities available for sale:
Federal agencies and GSEs	$	121,256	$	—	$	121,256	$	—
Mortgage-backed and CMOs	135,201		—		135,201		—
State and municipal	43,855		—		43,855		—
Corporate	8,178		—		8,178		—
Total securities available for sale	$	308,490	$	—	$	308,490	$	—
Liabilities:
Derivative - cash flow hedges	$	3,477	$	—	$	3,477	$	—



	Fair Value Measurements at December 31, 2018 Using
	Balance at December 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	$	134,039	$	—	$	134,039	$	—
Mortgage-backed and CMOs	111,867		—		111,867		—
State and municipal	79,902		—		79,902		—
Corporate	6,845		—		6,845		—
Total securities available for sale	$	332,653	$	—	$	332,653	$	—
Equity securities	$	1,830	$	—	$	1,830	$	—
Liabilities:
Derivative - cash flow hedges	$	804	$	—	$	804	$	—

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 September 30, 2019 Using
	Balance at September 30,	Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
Description	2019	Level 1	Level 2	Level 3
Assets:
Impaired loans, net of valuation allowance	237	—	—	237
Other real estate owned, net	1,353	—	—	1,353



	Fair Value Measurements at December 31, 2018 Using
	Balance at December 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:
Impaired loans, net of valuation allowance	171	—	—	171
Other real estate owned, net	869	—	—	869

Schedule of quantitative information of assets measured at Level 3

Quantitative Information About Level 3 Fair Value Measurements as of September 30, 2019 and December 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%

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 September 30, 2019 are as follows (dollars in thousands):



	Fair Value Measurements at September 30, 2019 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Carrying Value		Level 1		Level 2		Level 3		Fair Value Balance
Financial Assets:
Cash and cash equivalents	$	142,617	$	142,617	$	—	$	—	$	142,617
Securities available for sale	308,490		—		308,490		—		308,490
Restricted stock	8,621		—		8,621		—		8,621
Loans held for sale	5,646		—		5,646		—		5,646
Loans, net of allowance	1,791,689		—		—		1,782,466		1,782,466
Bank owned life insurance	27,612		—		27,612		—		27,612
Accrued interest receivable	6,610		—		6,610		—		6,610

Financial Liabilities:
Deposits	$	2,041,862	$	—	$	2,043,915	$	—	$	2,043,915
Repurchase agreements	38,924		—		38,924		—		38,924
Subordinated debt	7,521		—		7,583		—		7,583
Junior subordinated debt	28,003		—		—		24,150		24,150
Accrued interest payable	1,398		—		1,398		—		1,398
Derivative - cash flow hedges	3,477		—		3,477		—		3,477

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



	Fair Value Measurements at December 31, 2018 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Carrying Value		Level 1		Level 2		Level 3		Fair Value Balance
Financial Assets:
Cash and cash equivalents	$	64,255	$	64,255	$	—	$	—	$	64,255
Equity securities	1,830				1,830				1,830
Securities available for sale	332,653		—		332,653		—		332,653
Restricted stock	5,247		—		5,247		—		5,247
Loans held for sale	640		—		640		—		640
Loans, net of allowance	1,344,671		—		—		1,334,236		1,334,236
Bank owned life insurance	18,941		—		18,941		—		18,941
Accrued interest receivable	5,449		—		5,449		—		5,449

Financial Liabilities:
Deposits	$	1,566,227	$	—	$	1,570,721	$	—	$	1,570,721
Repurchase agreements	35,243		—		35,243		—		35,243
Junior subordinated debt	27,927		—		—		22,577		22,577
Accrued interest payable	795		—		795		—		795
Derivative - cash flow hedges	804		—		804		—		804