Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value of Financial Instruments [Abstract]

Schedule of fair value measurements for assets on a recurring basis

The following tables present fair value measurements for assets that are measured at fair value on a recurring basis as of and for the nine months ended September 30, 2018:

					Significant
					Other		Significant		Total Changes
			Quoted		Observable		Unobservable		In Fair Values
	Carrying		Prices		Inputs		Inputs		Included In
	Value		(Level 1)		(Level 2)		(Level 3)		Period Income
Assets:	(dollars in thousands)
AFS Securities - U.S. Treasury and government agency notes	$	11,950	$	1,975	$	9,975	$	—	$	—
Loans held for sale ("LHFS")		9,023		—		9,023		—		126
Mortgage servicing rights ("MSRs")		482		—		—		482		5
Interest-rate lock commitments ("IRLCs")		187		—		—		187		165
Mandatory forward contracts		71		—		71		—		58
Best efforts forward contracts		51		—		51		—		48

The following tables present fair value measurements for assets and liabilities that are measured at fair value on a recurring basis as of and for the year ended December 31, 2017:

					Significant
					Other		Significant		Total Changes
			Quoted		Observable		Unobservable		In Fair Values
	Carrying		Prices		Inputs		Inputs		Included In
	Value		(Level 1)		(Level 2)		(Level 3)		Period Income
Assets:	(dollars in thousands)
AFS Securities - U.S. government agency notes	$	10,119	$	—	$	10,119	$	—	$	—
LHFS		4,530		—		4,530		—		131
MSRs		477		—		—		477		(80)
IRLCs		22		—		—		22		(140)
Mandatory forward contracts		13		—		13		—		(140)
Best efforts forward contracts		3		—		3		—		3

Schedule of additional quantitative information about assets measured at fair value on a recurring basis

The following table provides additional quantitative information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value:

	Fair Value		Valuation	Unobservable	Range
	Estimate		Technique	Input	(Weighted-Average)
September 30, 2018:	(dollars in thousands)
MSRs	$	482	Market Approach	Weighted average prepayment speed	8.50	%
IRLCs		187	Market Approach	Range of pull through rate	70% - 95	%
				Average pull through rate	85	%
December 31, 2017:
MSRs	$	477	Market Approach	Weighted average prepayment speed	3.94	%
IRLCs		22	Market Approach	Range of pull through rate	80% - 95	%
				Average pull through rate	90	%

Schedule of activity of servicing assets at fair value

The following table shows the activity in the MSRs:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(dollars in thousands)
Beginning balance	$	501	$	511	$	477	$	557
Valuation adjustment		(19)		(38)		5		(84)
Ending balance	$	482	$	473	$	482	$	473

The following table shows the activity in the IRLCs:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(dollars in thousands)
Beginning balance	$	168	$	23	$	22	$	162
Valuation adjustment		19		19		165		(120)
Ending balance	$	187	$	42	$	187	$	42

Schedule of assets measured at fair value on a nonrecurring basis

For assets measured at fair value on a nonrecurring basis, the following tables provide the level of valuation assumptions used to determine each adjustment and the carrying value of assets:

	September 30, 2018
					Significant
					Other		Significant
			Quoted		Observable		Unobservable
	Carrying		Prices		Inputs		Inputs		Range of	Weighted
	Value		(Level 1)		(Level 2)		(Level 3)		Discount (1)	Average
	(dollars in thousands)
Impaired loans	$	5,690	$	—	$	—	$	5,690	0% - 27%	11.0	%
Real estate acquired through foreclosure		114		—		—		114	0% - 8%	8.0	%

(1) Discount based on current market conditions and estimated selling costs

	December 31, 2017
					Significant
					Other		Significant
			Quoted		Observable		Unobservable
	Carrying		Prices		Inputs		Inputs		Range of	Weighted
	Value		(Level 1)		(Level 2)		(Level 3)		Discount (1)	Average
	(dollars in thousands)
Impaired loans	$	2,793	$	—	$	—	$	2,793	0% - 33%	14.5	%
Real estate acquired through foreclosure		178		—		—		178	0% - 22%	11.5	%

(1) Discount based on current market conditions and estimated selling costs

Estimated fair values of financial instruments

The carrying value and fair value of all financial instruments are summarized in the following tables. The descriptions of the fair value calculations for AFS securities, LHFS, MSRs, IRLCs, best efforts forward contracts, mandatory forward contracts, impaired loans, and impaired real estate are included in the discussions above.

	September 30, 2018
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:	(dollars in thousands)
Cash and cash equivalents	$	91,316	$	91,316	$	—	$	—	$	91,316
Certificates of deposit held for investment		8,780		8,780		—		—		8,780
AFS securities		11,950		1,975		9,975		—		11,950
HTM securities		43,108		4,003		37,863		—		41,866
LHFS		9,023		—		9,023		—		9,023
Loans receivable, net		681,656		—		—		677,510		677,510
Restricted stock investments		3,866		—		3,866		—		3,866
Accrued interest receivable		2,689		—		2,689		—		2,689
MSRs		482		—		—		482		482
IRLCs		187		—		—		187		187
Mandatory forward contracts		71		—		71		—		71
Best effort forward contracts		51		—		51		—		51
Liabilities:
Deposits		694,177		—		687,034		—		687,034
Accrued interest payable		433		—		433		—		433
Borrowings		73,500		—		66,745		—		66,745
Subordinated debentures		20,619		—		—		20,619		20,619

	December 31, 2017
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:	(dollars in thousands)
Cash and cash equivalents	$	21,853	$	21,853	$	—	$	—	$	21,853
Certificates of deposit held for investment		8,780		8,780		—		—		8,780
AFS securities		10,119		—		10,119		—		10,119
HTM securities		54,303		5,056		48,948		—		54,004
LHFS		4,530		—		4,530		—		4,530
Loans receivable, net		660,096		—		—		672,349		672,349
Restricted stock investments		4,489		—		4,489		—		4,489
Accrued interest receivable		2,640		—		2,640		—		2,640
MSRs		477		—		—		477		477
IRLCs		22		—		—		22		22
Mandatory forward contracts		13		—		13		—		13
Best effort forward contracts		3		—		3		—		3
Liabilities:
Deposits		602,228		—		594,659		—		594,659
Accrued interest payable		395		—		395		—		395
Borrowings		88,500		—		81,303		—		81,303
Subordinated debentures		20,619		—		—		20,619		20,619