FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2017

FAIR VALUE.

Schedule of changes in asset subject to fair value measurement by Level

							Fair
(dollars in thousands)	Level 1		Level 2		Level 3		Value
September 30, 2017
Recurring:
Securities available for sale
U.S. Treasury	$	—	$	1,504	$	—	$	1,504
Agency		—		1,992		—		1,992
State and Municipal		—		36,835		—		36,835
Mortgaged-backed		—		49,572		—		49,572
Non-recurring:
Maryland Financial Bank stock		—		—		30		30
Impaired loans		—		—		4,227		4,227
OREO		—		114		—		114
	$	—	$	90,017	$	4,257	$	94,274
December 31, 2016
Recurring:
Securities available for sale
U.S. Treasury	$	—	$	1,507	$	—	$	1,507
Agency		—		—		—		—
State and Municipal		—		33,845		—		33,845
Mortgaged-backed		—		59,255		—		59,255
Non-recurring:
Maryland Financial Bank stock		—		—		30		30
Impaired loans		—		—		2,891		2,891
OREO		—		114		—		114
	$	—	$	94,721	$	2,921	$	97,642

Schedule of estimated fair values of financial instruments

	September 30, 2017				December 31, 2016
(dollars in thousands)	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Cash and due from banks	$	4,371	$	4,371	$	3,195	$	3,195
Interest-bearing deposits in other financial institutions		7,117		7,117		4,230		4,230
Federal funds sold		9		9		3,197		3,197
Investment securities available for sale		89,903		89,903		94,607		94,607
Investments in restricted stock		30		30		1,230		1,230
Ground rents		156		156		164		164
Loans, less allowance for credit losses		268,840		266,254		262,574		259,017
Accrued interest receivable		1,140		1,140		1,134		1,134
Cash value of life insurance		9,479		9,479		9,328		9,328
Financial liabilities:
Deposits		334,105		316,619		333,246		315,418
Long-term borrowings		—		—		10,000		10,257
Short-term borrowings		20,000		20,917		10,000		10,188
Dividends payable		—		—		—		—

Schedule of fair value hierarchy of financial instruments

(dollars in thousands)
	Carrying		Fair
September 30, 2017	Amount		Value		Level 1		Level 2	Level 3
Financial instruments - Assets
Cash and cash equivalents	$	11,497	$	11,497	$	11,497	—	$	—
Loans receivable, net		268,840		266,254		—	—		266,254
Cash value of life insurance		9,479		9,479		—	9,479		—
Financial instruments - Liabilities
Deposits		334,105		316,619		219,478	97,141		—
Long-term debt		—		—		—	—		—
Short-term debt		20,000		20,917		—	20,917		—

Schedule of gross unrealized losses and fair value, aggregated by investment category and length of time in continuous unrealized loss position

The gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2017 and December 31, 2016 are as follows:

September 30, 2017	Less than 12 months				12 months or more				Total
Securities available for sale:	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(dollars in thousands)
U.S. Treasury	$	499	$	1	$	—	$	—	$	499	$	1
Agency		1,992		7		848		12		2,840		19
State and Municipal		5,133		62		4,862		167		9,995		229
Mortgage Backed		33,466		422		9,446		232		42,912		654
	$	41,090	$	492	$	15,156	$	411	$	56,246	$	903

December 31, 2016	Less than 12 months				12 months or more				Total
Securities available for sale:	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(dollars in thousands)
U.S. Treasury	$	—	$	—	$	—	$	—	$	—	$	—
Agency		—		—		986		16		986		16
State and Municipal		19,200		580		—		—		19,200		580
Mortgage Backed		43,094		575		9,603		277		52,697		852
	$	62,294	$	1,155	$	10,589	$	293	$	72,883	$	1,448