Fair Value (Tables)

6 Months Ended

Jun. 30, 2018

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities


	Fair Value Measurements at June 30, 2018 using Significant Other Observable Inputs
	(Level 2)
	(unaudited)
Financial Assets:
Securities available for sale:
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	11,320
Mortgage-backed securities - residential		209
Collateralized mortgage obligations		85
Total securities available for sale	$	11,614

Loans held for sale		26,424

Yield maintenance provisions (embedded derivatives)	$	17

Interest rate lock commitments	$	468

Financial Liabilities:
Interest-rate swaps	$	17
TBA Mortgage-back securities	$	168


	Fair Value Measurements at December 31, 2017 using Significant Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	11,417
Mortgage-backed securities - residential		244
Collateralized mortgage obligations		112
Total securities available for sale	$	11,773

Loans held for sale		1,124

Yield maintenance provisions (embedded derivatives)	$	56

Interest rate lock commitments	$	11

Financial Liabilities:
Interest-rate swaps	$	56

Assets measured at fair value on a non-recurring basis


Fair Value Measurements at June 30, 2018 Using
Significant Unobservable Inputs (Level 3)
(unaudited)
Impaired loans:
Commercial	$	108
Real Estate:
Single-family residential		113
Commercial:
Non-owner occupied		2,818
Total impaired loans	$	3,039


Fair Value Measurements at December 31, 2017 Using
Significant Unobservable Inputs (Level 3)

Impaired loans:
Commercial	$	115
Real Estate:
Single-family residential		116
Commercial:
Non-owner occupied		2,832
Total impaired loans	$	3,063

Financial instruments measured at fair value on a non-recurring basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2018 (unaudited):


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	108	Comparable sales approach	Adjustment for differences between the comparable market transactions	3.48%
Real estate:
Single-family residential		113	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.81% , 3.61%) 2.91%
Commercial:
Non-owner occupied		2,818	Comparable sales approach	Adjustment for differences between the comparable market transactions	(3.48%, 9.64%) 5.15%

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2017:


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	115	Comparable sales approach	Adjustment for differences between the comparable market transactions	3.48%
Real estate:
Single -family residential		116	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.81% , 3.61%) 2.91%
Commercial:
Non-owner occupied		2,832	Comparable sales approach	Adjustment for differences between the comparable market transactions	(3.48%, 9.64%) 5.15%

Aggregate fair value, contractual balance (including accrued interest) and gain or loss



	June 30, 2018		December 31, 2017
	(unaudited)
Aggregate fair value	$	26,424	$	1,124
Contractual balance		26,146		1,120
Gain (loss)	$	278	$	4

Amount of gains and losses from changes in fair value included in earnings


	Three months ended June 30,				Six months ended June 30,
	2018		2017		2018		2017
	(unaudited)				(unaudited)
Interest income	$	142	$	8	$	166	$	29
Interest expense		-		-		-		-
Change in fair value		216		(1)		274		(9)
Total change in fair value	$	358	$	7	$	440	$	20

Carrying amounts and estimated fair values of financial instruments


	Fair Value Measurements at June 30, 2018 Using:
	Carrying
(unaudited)	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	32,739	$	32,739	$	-	$	-	$	32,739
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		11,614		-		11,614		-		11,614
Loans held for sale		26,424		-		26,424		-		26,424
Loans and leases, net		470,557		-		-		469,708		469,708
FHLB and FRB stock		3,251		n/a		n/a		n/a		n/a
Accrued interest receivable		1,614		11		42		1,561		1,614
Yield maintenance provisions (embedded derivatives)		17		-		17		-		17
Interest rate lock commitments		468		-		468		-		468

Financial liabilities
Deposits	$	(488,125)	$	(249,896)	$	(238,229)	$	-	$	(488,125)
FHLB advances and other borrowings		(19,500)		-		(19,568)		-		(19,568)
Advances by borrowers for taxes and insurance		(225)		-		-		(225)		(225)
Subordinated debentures		(5,155)		-		(4,994)		-		(4,994)
Accrued interest payable		(117)		(3)		(114)		-		(117)
Interest-rate swaps		(17)		-		(17)		-		(17)
TBA mortgage-back securities		(168)				(168)				(168)

The carrying amounts and estimated fair values of financial instruments at December 31, 2017 were as follows:



	Fair Value Measurements at December 31, 2017 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	45,498	$	45,498	$	-	$	-	$	45,498
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		11,773		-		11,773		-		11,773
Loans held for sale		1,124		-		1,124		-		1,124
Loans and leases, net		406,406		-		-		402,719		402,719
FHLB stock		3,227		n/a		n/a		n/a		n/a
Accrued interest receivable		1,326		27		38		1,261		1,326
Yield maintenance provisions (embedded derivatives)		56		-		56		-		56
Interest rate lock commitments		11		-		11		-		11

Financial liabilities
Deposits	$	(419,028)	$	(236,797)	$	(181,659)	$	-	$	(418,456)
FHLB advances and other borrowings		(13,500)		-		(13,466)		-		(13,466)
Advances by borrowers for taxes and insurance		(489)		-		-		(489)		(489)
Subordinated debentures		(5,155)		-		(4,094)		-		(4,094)
Accrued interest payable		(79)		(6)		(73)		-		(79)
Interest-rate swaps		(56)		-		(56)		-		(56)

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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