FAIR VALUE DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2017

Summary of Assets Measured at Estimated Fair Value on Recurring Basis

The following table summarizes assets at March 31, 2017 and December 31, 2016, measured at fair value on a recurring basis.



(Dollars in Thousands)	Level 1		Level 2		Level 3		Total Fair Value Measurements
March 31, 2017
AFS Securities:
U.S. Government Agencies	$	0	$	8,491	$	0	$	8,491
States and political subdivisions	0		183,876		0		183,876
GSE residential MBSs	0		108,911		0		108,911
GSE residential CMOs	0		113,084		0		113,084
GSE commercial CMOs	0		4,939		0		4,939
Private label CMOs	0		4,198		0		4,198
Total debt securities	0		423,499		0		423,499
Equity securities	0		102		0		102
Total securities	$	0	$	423,601	$	0	$	423,601

December 31, 2016
AFS Securities:
U.S. Government Agencies	$	0	$	39,592	$	0	$	39,592
States and political subdivisions	0		164,282		0		164,282
GSE residential MBSs	0		116,944		0		116,944
GSE residential CMOs	0		69,383		0		69,383
GSE commercial CMOs	0		4,856		0		4,856
Private label CMOs	0		5,006		0		5,006
Total debt securities	0		400,063		0		400,063
Equity securities	0		91		0		91
Total securities	$	0	$	400,154	$	0	$	400,154

Summary of Additional Qualitative Information

The following table presents additional qualitative information about assets measured on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value.



(Dollars in thousands)	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range
March 31, 2017
Impaired loans	$	3,492	Appraisal of collateral	Management adjustments on appraisals for property type and recent activity	10% - 100% discount
				- Management adjustments for liquidation expenses	0% - 40% discount
Foreclosed real estate	49		Appraisal of collateral	Management adjustments on appraisals for property type and recent activity	17% - 41% discount
				- Management adjustments for liquidation expenses	8% - 14% discount
December 31, 2016
Impaired loans	$	4,350	Appraisal of collateral	Management adjustments on appraisals for property type and recent activity	10% - 75% discount
				- Management adjustments for liquidation expenses	0% - 41% discount
Foreclosed real estate	88		Appraisal of collateral	Management adjustments on appraisals for property type and recent activity	13% - 17% discount
				- Management adjustments for liquidation expenses	10% - 18% discount

Summary of Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes assets at March 31, 2017 and December 31, 2016, measured at fair value on a nonrecurring basis:



(Dollars in thousands)	Level 1		Level 2		Level 3		Total Fair Value Measurements
March 31, 2017
Impaired Loans
Commercial real estate:
Owner-occupied	$	0	$	0	$	735	$	735
Multi-family	0		0		190		190
Non-owner occupied residential	0		0		395		395
Commercial and industrial	0		0		64		64
Residential mortgage:
First lien	0		0		1,944		1,944
Home equity - lines of credit	0		0		159		159
Installment and other loans	0		0		5		5
Total impaired loans	$	0	$	0	$	3,492	$	3,492

Foreclosed real estate
Residential	$	0	$	0	$	49	$	49

December 31, 2016
Impaired Loans
Commercial real estate:
Owner-occupied	$	0	$	0	$	777	$	777
Non-owner occupied	0		0		736		736
Multi-family	0		0		199		199
Non-owner occupied residential	0		0		409		409
Acquisition and development:
Commercial and land development	0		0		1		1
Commercial and industrial	0		0		66		66
Residential mortgage:
First lien	0		0		1,994		1,994
Home equity - lines of credit	0		0		162		162
Installment and other loans	0		0		6		6
Total impaired loans	$	0	$	0	$	4,350	$	4,350

Foreclosed real estate
Residential	$	0	$	0	$	88	$	88

Financial Instruments at Estimated Fair Values

The following table presents estimated fair values of the Company’s financial instruments at March 31, 2017 and December 31, 2016:



(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2017
Financial Assets
Cash and due from banks	$	17,799	$	17,799	$	17,799	$	0	$	0
Interest-bearing deposits with banks	10,752		10,752		10,752		0		0
Restricted investments in bank stocks	7,424		n/a		n/a		n/a		n/a
AFS securities	423,601		423,601		0		423,601		0
Loans held for sale	3,349		3,452		0		3,452		0
Loans, net of allowance for loan losses	888,663		886,959		0		0		886,959
Accrued interest receivable	4,104		4,054		0		2,123		1,931
Financial Liabilities
Deposits	1,183,876		1,180,113		0		1,180,113		0
Short-term borrowings	113,414		113,414		0		113,414		0
Long-term debt	4,077		4,578		0		4,578		0
Accrued interest payable	507		507		0		507		0
Off-balance sheet instruments	0		0		0		0		0
December 31, 2016
Financial Assets
Cash and due from banks	$	16,072	$	16,072	$	16,072	$	0	$	0
Interest-bearing deposits with banks	14,201		14,201		14,201		0		0
Restricted investments in bank stocks	7,970		n/a		n/a		n/a		n/a
AFS securities	400,154		400,154		0		400,154		0
Loans held for sale	2,768		2,843		0		2,843		0
Loans, net of allowance for loan losses	870,616		870,470		0		0		870,470
Accrued interest receivable	4,672		4,672		0		2,643		2,029
Financial Liabilities
Deposits	1,152,452		1,149,727		0		1,149,727		0
Short-term borrowings	87,864		87,864		0		87,864		0
Long-term debt	24,163		24,966		0		24,966		0
Accrued interest payable	437		437		0		437		0
Off-balance sheet instruments	0		0		0		0		0