Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Balances of Assets Measured at Fair Value on a Recurring Basis

The following tables present the balances of assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands).



			Fair Value Measurements at September 30, 2018
Description	Balance as of September 30, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale
U.S. agency and mortgage-backed securities	$	88,043	$	—	$	88,043	$	—
Obligations of states and political subdivisions	14,705		—		14,705		—
	$	102,748	$	—	$	102,748	$	—

			Fair Value Measurements at December 31, 2017
Description	Balance as of December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Securities available for sale
U.S. agency and mortgage-backed securities	$	74,804	$	—	$	74,804	$	—
Obligations of states and political subdivisions	14,451		—		14,451		—
	$	89,255	$	—	$	89,255	$	—

Summary of Assets Measured at Fair Value on a Nonrecurring Basis

The following tables summarize the Company’s assets that were measured at fair value on a nonrecurring basis during the periods (dollars in thousands):



			Fair Value Measurements at September 30, 2018
Description	Balance as of September 30, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans, net	$	387	$	—	$	—	$	387



			Fair Value Measurements at December 31, 2017
Description	Balance as of December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other real estate owned	$	326	$	—	$	—	$	326

Quantitative Information about Level 3 Fair Value Measurements



	Quantitative information about Level 3 Fair Value Measurements for September 30, 2018
	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
Impaired loans, net	$	387	Property appraisals	Selling cost	10	%

	Quantitative information about Level 3 Fair Value Measurements for December 31, 2017
	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
Other real estate owned	$	326	Contract price	Selling cost	7	%

Carrying Values and Estimated Fair Values of Company's Financial Instruments

The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2018 and December 31, 2017 are as follows (in thousands):



			Fair Value Measurements at September 30, 2018 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value
Financial Assets
Cash and short-term investments	$	21,438	$	21,438	$	—	$	—	$	21,438
Securities available for sale	102,748		—		102,748		—		102,748
Securities held to maturity	44,239		—		41,218		1,489		42,707
Restricted securities	1,590		—		1,590		—		1,590
Loans held for sale	516		—		516		—		516
Loans, net ⁽¹⁾	535,020		—		—		529,759		529,759
Bank owned life insurance	13,894		—		13,894		—		13,894
Accrued interest receivable	2,138		—		2,138		—		2,138
Financial Liabilities
Deposits	$	667,104	$	—	$	547,281	$	117,005	$	664,286
Subordinated debt	4,961		—		—		4,802		4,802
Junior subordinated debt	9,279		—		—		9,603		9,603
Accrued interest payable	123		—		123		—		123



			Fair Value Measurements at December 31, 2017 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value
Financial Assets
Cash and short-term investments	$	39,986	$	39,986	$	—	$	—	$	39,986
Securities available for sale	89,255		—		89,255		—		89,255
Securities held to maturity	48,208		—		46,186		1,516		47,702
Restricted securities	1,570		—		1,570		—		1,570
Loans held for sale	438		—		438		—		438
Loans, net ⁽¹⁾	516,875		—		—		514,013		514,013
Bank owned life insurance	13,967		—		13,967		—		13,967
Accrued interest receivable	1,916		—		1,916		—		1,916
Financial Liabilities
Deposits	$	664,980	$	—	$	542,329	$	120,834	$	663,163
Subordinated debt	4,948		—		—		5,004		5,004
Junior subordinated debt	9,279		—		—		9,653		9,653
Accrued interest payable	98		—		98		—		98


(1)	In accordance with the prospective adoption of ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," the fair value of loans as of September 30, 2018 was measured using an exit price notion. The fair value of loans as of December 31, 2017 was measured using an entry price notion.