Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Schedule of fair value measurements by level within the fair value hierarchy and the basis of measurement used

For assets measured at fair value, the fair value measurements by level within the fair value hierarchy, and the basis of measurement used, at March 31, 2017, and December 31, 2016, are as follows:



		March 31, 2017
In thousands	Basis	Total		Level 1		Level 2		Level 3
U.S. Government and agencies		$	78,703			$	78,703	$	—
Mortgage-backed securities, residential		29,780		—		29,780		—
State and municipal		21,823		—		21,823		—
Corporate bonds		5,126		—		5,126		—
CRA mutual fund		1,035		1,035		—		—
Stock in other banks		632		632		—		—
Total securities available for sale	Recurring	$	137,099	$	1,667	$	135,432	$	—
Impaired loans	Nonrecurring	$	4,381	$	—	$	—	$	4,381



		December 31, 2016
In thousands	Basis	Total		Level 1		Level 2		Level 3
U.S. Government and agencies		$	79,579	$	—	$	79,579	$	—
Mortgage-backed securities, residential		31,973		—		31,973		—
State and municipal		24,660		—		24,660		—
Corporate bonds		5,062		—		5,062		—
CRA mutual fund		1,035		1,035		—		—
Stock in other banks		681		681		—		—
Total securities available for sale	Recurring	$	142,990	$	1,716	$	141,274	$	—
Impaired loans	Nonrecurring	$	4,406	$	—	$	—	$	4,406

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

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:

Quantitative Information about Level 3 Fair Value Measurements

Dollars in thousands

Fair Value Estimate

Valuation Technique

Unobservable Input

Range

Weighted Average

March 31, 2017

Impaired loans

4,381

Appraisal of collateral

(a)

Appraisal adjustments

(b)

(10) - (50)%

(39)%

December 31, 2016

Impaired loans

4,406

Appraisal of collateral

(a)

Appraisal adjustments

(b)

(10) - (50)%

(39)%

(a) Fair value is generally determined through management’s estimate or independent third-party appraisals of the underlying collateral, which generally includes various Level 3 inputs which are not observable.

(b) Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal. Higher downward adjustments are caused by negative changes to the collateral or conditions in the real estate market, actual offers or sales contracts received, and/or age of the appraisal.

Schedule of carrying amount, fair value and placement in the fair value hierarchy

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Corporation’s financial instruments as of March 31, 2017, and December 31, 2016:



	March 31, 2017
In thousands	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	14,406	$	14,406	$	6,407	$	7,999	$	—
Interest-bearing deposits in banks	2,110		2,110		2,110		—		—
Investment securities available for sale	137,099		137,099		1,667		135,432		—
Investment securities held to maturity	53,794		53,661		—		53,661		—
Loans held for sale	466		466		—		466		—
Loans, less allowance for loan losses	938,331		928,119		—		—		928,119
Accrued interest receivable	3,278		3,278		—		3,278		—
Restricted investment in bank stocks	5,089		5,089		—		5,089		—

Financial liabilities:
Deposits	990,494		989,986		—		989,986		—
Short-term borrowings	27,968		27,968		—		27,968		—
Long-term borrowings	90,250		91,074		—		91,074		—
Accrued interest payable	885		885		—		885		—

Off-balance sheet financial instruments	—		—		—		—		—



	December 31, 2016
In thousands	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	13,796	$	13,796	$	6,921	$	6,875	$	—
Interest-bearing deposits in banks	5,135		5,135		5,135		—		—
Investment securities available for sale	142,990		142,990		1,716		141,274		—
Investment securities held to maturity	55,568		55,425		—		55,425		—
Loans held for sale	1,770		1,770		—		1,770		—
Loans, less allowance for loan losses	893,176		888,169		—		—		888,169
Accrued interest receivable	3,158		3,158		—		3,158		—
Restricted investment in bank stocks	4,349		4,349		—		4,349		—

Financial liabilities:
Deposits	967,621		967,236		—		967,236		—
Short-term borrowings	34,590		34,590		—		34,590		—
Long-term borrowings	74,250		75,029		—		75,029		—
Accrued interest payable	837		837		—		837		—

Off-balance sheet financial instruments	—		—		—		—		—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details