Fair Values of Financial Instruments and Interest Rate Risk (Tables)

12 Months Ended

Dec. 31, 2017

Comparison of Carrying Amounts and Estimated Fair Value of Financial Instruments

The following table reflects a comparison of carrying amounts and the estimated fair value of the financial instruments as of December 31, 2017 and December 31, 2016:

	Carrying		Estimated
December 31, 2017	Value		Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$	70,403	$	70,379	$	67,913	$	2,466	$	—
Securities available for sale		95,743		95,743		—		95,743		—
Securities held to maturity		11,458		11,461		—		11,461		—
Loans held for investment, net		356,871		359,325		—		—		359,325
Loans held for sale		4,414		4,414		—		4,414		—
Restricted stock		1,067		1,067		1,067		—		—
Mortgage servicing rights		2,125		3,310		—		3,310		—
Accrued interest receivable		1,709		1,709		—		—		1,629
FINANCIAL LIABILITIES
Deposits	$	512,628	$	481,300	$	—	$	481,300	$	—
Short-term borrowings		1,752		1,752		—		1,752		—
Long-term debt		9,534		9,658		—		—		9,658
Accrued interest payable		148		148		—		—		148

	Carrying		Estimated
December 31, 2016	Value		Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
FINANCIAL ASSETS
Cash and cash equivalents	$	45,968	$	45,995	$	43,478	$	2,517	$	—
Securities available for sale		105,899		105,899		4,014		101,885		—
Securities held to maturity		11,990		11,934		—		11,934		—
Loans held for investment, net		339,122		337,348		—		—		337,348
Loans held for sale		5,823		5,685		—		5,685		—
Restricted stock		1,052		1,052		1,052		—		—
Mortgage servicing rights		2,271		3,313		—		3,313		—
Accrued interest receivable		1,629		1,629		—		—		1,629
FINANCIAL LIABILITIES
Deposits	$	485,719	$	447,784	$	—	$	447,784	$	—
Short-term borrowings		2,674		2,674		—		2,674		—
Long-term debt		9,534		9,673		—		—		9,673
Accrued interest payable		151		151		—		—		151

Fair Value Information for Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table provides fair value information for assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016:

	December 31, 2017
	(dollars in thousands)
	Total		Level 1		Level 2		Level 3
Securities available for sale:
US Gov’t		55,615		—		55,615		—
Mortgage-backed securities and CMO’s		20,891		—		20,891		—
State and political subdivisions		14,199		—		14,199		—
Corporate bonds		5,038		—		5,038		—
Total assets at fair value	$	95,743	$	—	$	95,743	$	—
Total liabilities at fair value	$	—	$	—	$	—	$	—

	December 31, 2016
	(dollars in thousands)
	Total		Level 1		Level 2		Level 3
Securities available for sale:
US Treasury	$	4,014	$	4,014	$	—	$	—
US Gov’t		57,671		—		57,671		—
Mortgage-backed securities and CMO’s		25,648		—		25,648		—
State and political subdivisions		13,536		—		13,536		—
Corporate bonds		5,030		—		5,030		—
Total assets at fair value	$	105,899	$	4,014	$	101,885	$	—
Total liabilities at fair value	$	—	$	—	$	—	$	—

Assets Measured at Fair Value on Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis are included in the table below as of December 31, 2017 and December 31, 2016:

	December 31, 2017
	(dollars in thousands)
	Total		Level 1		Level 2		Level 3
Impaired loans	$	2,624	$	—	$	—	$	2,624
Other real estate owned		1,785		—		—		1,785
Total assets at fair value	$	4,409	$	—	$	—	$	4,409
Total liabilities at fair value	$	—	$	—	$	—	$	—

	December 31, 2016
	(dollars in thousands)
	Total		Level 1		Level 2		Level 3
Impaired loans	$	2,217	$	—	$	—	$	2,217
Other real estate owned		3,130		—		—		3,130
Total assets at fair value	$	5,347	$	—	$	—	$	5,347
Total liabilities at fair value	$	—	$	—	$	—	$	—

Quantitative Information about Level 3 Fair Value Measurements

			General
December 31, 2017	Valuation Technique	Unobservable Input	Range
Nonrecurring measurements:
Impaired loans	Discounted appraisals	Collateral discounts and Estimated costs to sell	0 – 25%
	Discounted cash flows	Discount rates	4%-8.75%
OREO	Discounted appraisals	Collateral discounts and Estimated costs to sell	0 – 10%

			General
December 31, 2016	Valuation Technique	Unobservable Input	Range
Nonrecurring measurements:
Impaired loans	Discounted appraisals	Collateral discounts and Estimated costs to sell	0 – 25%
	Discounted cash flows	Discount rates	4%-8.75%
OREO	Discounted appraisals	Collateral discounts and Estimated costs to sell	0 – 10%