FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2018

Summary of Assets Measured at Fair Value on Recurring Basis

The following table summarizes assets measured at fair value on a recurring basis at March 31, 2018 and December 31, 2017.



(Dollars in Thousands)	Level 1		Level 2		Level 3		Total Fair Value Measurements
March 31, 2018
AFS Securities:
States and political subdivisions	$	0	$	182,793	$	0	$	182,793
GSE residential CMOs	0		116,955		0		116,955
Private label residential CMOs	0		853		0		853
Private label commercial CMOs	0		12,689		0		12,689
Asset-backed and other	0		141,510		0		141,510
Totals	$	0	$	454,800	$	0	$	454,800

December 31, 2017
AFS Securities:
States and political subdivisions	$	0	$	159,458	$	0	$	159,458
GSE residential MBSs	0		49,530		0		49,530
GSE residential CMOs	0		111,119		0		111,119
Private label residential CMOs	0		1,003		0		1,003
Private label commercial CMOs	0		7,653		0		7,653
Asset-backed and other	0		86,545		0		86,545
Totals	$	0	$	415,308	$	0	$	415,308

Schedule of Changes in Fair Value of Impaired Loans

The following table presents changes in the fair value for impaired loans still held at March 31, considered in the determination of the provision for loan losses, for the three months ended March 31, 2018 and 2017.



	Three months ended March 31,
(Dollars in thousands)	2018		2017
Changes in fair value of impaired loans still held	$	8	$	89

Schedule of Changes in Fair Value of Foreclosed Real Estate Held

The following table summarizes changes in the fair value of OREO for properties still held at March 31, charged to real estate expenses, for the three months ended March 31, 2018 and 2017.



	Three months ended March 31,
(Dollars in thousands)	2018		2017
Changes in fair value of OREO still held	$	0	$	3

Summary of Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes assets measured at fair value on a nonrecurring basis at March 31, 2018 and December 31, 2017.



(Dollars in thousands)	Level 1		Level 2		Level 3		Total Fair Value Measurements
March 31, 2018
Impaired Loans
Commercial real estate:
Owner occupied	$	0	$	0	$	393	$	393
Non-owner occupied	0		0		3,976		3,976
Multi-family	0		0		156		156
Non-owner occupied residential	0		0		330		330
Commercial and industrial	0		0		49		49
Residential mortgage:
First lien	0		0		1,778		1,778
Home equity - lines of credit	0		0		222		222
Installment and other loans	0		0		2		2
Total impaired loans	$	0	$	0	$	6,906	$	6,906
December 31, 2017
Impaired Loans
Commercial real estate:
Owner occupied	$	0	$	0	$	430	$	430
Non-owner occupied	0		0		4,066		4,066
Multi-family	0		0		165		165
Non-owner occupied residential	0		0		344		344
Commercial and industrial	0		0		53		53
Residential mortgage:
First lien	0		0		1,951		1,951
Home equity - lines of credit	0		0		161		161
Installment and other loans	0		0		3		3
Total impaired loans	$	0	$	0	$	7,173	$	7,173

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, 2018
Impaired loans	$	6,906	Appraisal of collateral	Management adjustments on appraisals for property type and recent activity	7% - 75% discount
				- Management adjustments for liquidation expenses	0% - 20% discount
December 31, 2017
Impaired loans	$	7,173	Appraisal of collateral	Management adjustments on appraisals for property type and recent activity	7% - 75% discount
				- Management adjustments for liquidation expenses	0% - 20% discount

Financial Instruments at Estimated Fair Values

The following table presents carrying amounts and estimated fair values of the Company’s financial instruments at March 31, 2018 and December 31, 2017:



(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2018
Financial Assets
Cash and due from banks	$	14,848	$	14,848	$	14,848	$	0	$	0
Interest-bearing deposits with banks	15,324		15,324		15,324		0		0
Restricted investments in bank stocks	12,122		n/a		n/a		n/a		n/a
Securities available for sale	454,800		454,800		0		454,800		0
Loans held for sale	3,659		3,752		0		3,752		0
Loans, net of allowance for loan losses	1,031,114		1,028,897		0		0		1,028,897
Accrued interest receivable	4,902		4,902		0		2,320		2,582
Financial Liabilities
Deposits	1,299,514		1,298,061		0		1,298,061		0
Short-term borrowings	93,731		93,731		0		93,731		0
Long-term debt	83,725		83,049		0		83,049		0
Accrued interest payable	455		455		0		455		0
Off-balance sheet instruments	0		0		0		0		0
December 31, 2017
Financial Assets
Cash and due from banks	$	21,734	$	21,734	$	21,734	$	0	$	0
Interest-bearing deposits with banks	8,073		8,073		8,073		0		0
Restricted investments in bank stocks	9,997		n/a		n/a		n/a		n/a
Securities available for sale	415,308		415,308		0		415,308		0
Loans held for sale	6,089		6,272		0		6,272		0
Loans, net of allowance for loan losses	997,216		994,617		0		0		994,617
Accrued interest receivable	5,048		5,048		0		2,580		2,468
Financial Liabilities
Deposits	1,219,515		1,213,288		0		1,213,288		0
Short-term borrowings	93,576		93,576		0		93,576		0
Long-term debt	83,815		83,949		0		83,949		0
Accrued interest payable	495		495		0		495		0
Off-balance sheet instruments	0		0		0		0		0