Riverview Financial (RIVE) 8-K/A Completion of Acquisition or Disposition of Assets

EXHIBIT 99.4

CBT Financial Corp

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands, except share data)

	September 30, 2017			December 31, 2016
Assets:
Cash and due from banks	$	2,071		$	2,465
Interest-bearing deposits in other banks		29,951			3,350
Securitiesavailable-for-sale		43,869			56,003
Loans		394,817			386,280
Less: allowance for loan losses		2,779			3,617
Net loans		392,038			382,663
Premises and equipment, net		10,180			10,518
Accrued interest receivable		894			1,101
Goodwill		9,760			9,760
Other assets		14,480			14,838
Total assets	$	503,243		$	480,698
Liabilities:
Deposits:
Noninterest-bearing	$	70,636		$	66,894
Interest-bearing		367,181			332,844
Total deposits		437,817			399,738
Federal Home Loan Bank advances		—			16,500
Subordinated debentures		9,000			9,000
Accrued interest payable		256			207
Other liabilities		8,034			6,817
Total liabilities		455,107			432,262
Stockholders’ equity:
Common stock (No par value, authorized 10,000 shares; issued: 2017-2015 - 1,485,474; outstanding: 2017-2015 - 1,445,474)		15,081			15,081
Retained earnings		34,363			34,618
Accumulated other comprehensive income		259			304
Treasury stock, 40,000 shares		(1,567	)		(1,567	)
Total stockholders’ equity		48,136			48,436
Total liabilities and stockholders’ equity	$	503,243		$	480,698

See notes to consolidated financial statements.

CBT Financial Corp

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(Dollars in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	2017			2016			2017			2016
Interest income:
Loans:
Taxable	$	4,352		$	3,919		$	12,690		$	11,526
Tax-exempt		82			79			243			231
Investment securities:
Taxable		123			141			382			493
Tax-exempt		102			130			337			417
Dividends		10			6			39			40
Interest-bearing deposits in other banks		62			1			108			5
Total interest income		4,731			4,276			13,799			12,712
Interest expense:
Deposits		627			506			1,790			1,466
Federal Home Loan Bank advances		—			6			14			43
Subordinated debentures		83			90			237			270
Total interest expense		710			602			2,041			1,779
Net interest income		4,021			3,674			11,758			10,933
Provision for loan losses		100			95			940			303
Net interest income after provision for loan losses		3,921			3,579			10,818			10,630
Noninterest income:
Service charges, fees, commissions and other		791			831			2,390			2,350
Commission and fees on fiduciary activities		27			93			68			298
Wealth management income		193			171			609			562
Mortgage banking income		49			45			146			114
Bank owned life insurance		81			84			247			202
Net gain on sale of investment securitiesavailable-for-sale		—			—			—			—
Total noninterest income		1,141			1,224			3,460			3,526
Noninterest expense:
Salaries and employee benefits expense		2,872			2,161			7,243			6,473
Occupancy and equipment expense		656			511			1,598			1,418
Other expenses		2,019			944			4,576			2,889
Total noninterest expense		5,547			3,616			13,417			10,780
Income (loss) before income taxes		(485	)		1,187			861			3,376
Income tax expense (benefit)		(68	)		307			249			870
Net income (loss) available to common shareholders	$	(417	)	$	880		$	612		$	2,506
Other comprehensive income:
Unrealized gain (loss) on investment securitiesavailable-for-sale		(87	)		(1	)		(63	)		168
Unrealized gain (loss) on cash flow hedge		—			21			—			64
Change in pension liability		(4	)		159			(5	)		159
Income tax benefit related to other comprehensive loss		31			(61	)		23			(133	)
Other comprehensive income (loss), net of income taxes		(60	)		118			(45	)		258
Comprehensive income (loss)	$	(477	)	$	998		$	567		$	2,764
Per share data:
Net income (loss):
Basic and diluted	$	(0.29	)	$	0.61		$	0.42		$	1.73
Average common shares outstanding:
Basic and diluted		1,445,474			1,445,474			1,445,474			1,445,474
Dividends declared		—			0.30			0.60			0.90

See notes to consolidated financial statements    

CBT Financial Corp

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands, except per share data)

	Nine Months Ended September 30, 2017 and 2016 (Unaudited)
(Unaudited)	Preferred Stock		Common Stock			Retained Earnings			Accumulated Other Comprehensive Income/(Loss)			Treasury Stock			Total
Balance, January 1, 2016	$	—	$	15,095		$	33,057		$	350		$	(1,567	)	$	46,935
Net income							2,506									2,506
Other comprehensive gain, net of income taxes										258						258
Cancellation of shareholder rights				(14	)											(14	)
Dividends declared: $0.90 per share							(1,302	)								(1,302	)
Balance, September 30, 2016	$	—	$	15,081		$	34,261		$	608		$	(1,567	)	$	48,383
(Unaudited)
Balance, January 1, 2017		—		15,081			34,618			304			(1,567	)		48,436
Net income							612									612
Other comprehensive gain, net of income taxes										(45	)					(45	)
Dividends declared: $0.60 per share							(867	)								(867	)
Balance, September 30, 2017	$	—	$	15,081		$	34,363		$	259		$	(1,567	)	$	48,136

See notes to consolidated financial statements.    

CBT Financial Corp

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands, except per share data)

For the Nine Months Ended September 30,	2017			2016
Cash flows from operating activities:
Net income	$	612		$	2,506
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of bank premises and equipment		571			568
Provision for loan losses		940			303
Net amortization of investment securitiesavailable-for-sale		250			331
Net loss on sale of other real estate owned		(7	)		—
Amortization of intangible assets		—			(37	)
Proceeds from sale of loans originated for sale		2,446			1,984
Net gain on sale of loans originated for sale		(83	)		(62	)
Loans originated for sale		(2,363	)		(1,922	)
Life insurance investment income		(247	)		(202	)
Net change in:
Accrued interest receivable		(207	)		(254	)
Other assets		(199	)		294
Accrued interest payable		49			(7	)
Other liabilities		1,125			897
Net cash provided by operating activities		2,887			4,399
Cash flows from investing activities:
Investment securitiesavailable-for-sale:
Purchases		—			(1,050	)
Proceeds from repayments		11,821			14,115
Proceeds from the sale of other real estate owned		586			223
Net increase in loans		(10,315	)		(20,515	)
Purchases of premises and equipment		(233	)		(369	)
Purchase of life insurance		—			(3,000	)
Net change in interest-bearing deposits in other financial institutions		(26,601	)		(3,899	)
Net change in Federal Home Loan Bank stock		749			1,376
Net cash used in investing activities		(23,993	)		(13,119	)
Cash flows from financing activities:
Net increase in deposits		38,079			38,178
Net decrease in short-term borrowings		(16,500	)		(28,700	)
Cash dividends paid		(867	)		(1,302	)
Cancelation of rights plan		—			(14	)
Net cash provided by (used in) financing activities		20,712			8,162
Net increase (decrease) in cash and cash equivalents		(394	)		(558	)
Cash and cash equivalents- beginning		2,465			2,532
Cash and cash equivalents- ending	$	2,071		$	1,974
Supplemental disclosures:
Cash paid during period for:
Interest	$	1,992		$	2,033
Income taxes	$	589		$	860
Noncash items from investing activities:
Other real estate acquired in settlement of loans	$	110		$	242

See notes to consolidated financial statements    

CBT Financial Corp

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

1. Summary of significant accounting policies:

Nature of Operations

CBT Financial Corp. (the “Company” or “CBT”), a bank holding company incorporated under the laws of Pennsylvania, provides a full range of financial services through its wholly-owned subsidiary, CBT Bank (the “Bank”). The Company services its retail and commercial customers through 13 community banking offices and three limited purpose offices located within Clearfield, Blair, Centre and Huntingdon Counties in Pennsylvania.

Basis of presentation:

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP’) for interim financial information. In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year’s presentation. These reclassifications did not have any effect on the operating results or financial position of the Company. The operating results and financial position of the Company for the three and nine months ended and as of September 30, 2017, are not necessarily indicative of the results of operations and financial position that may be expected in the future. The condensed consolidated balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by GAAP for complete financial statements. Accordingly, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2016 Annual Report.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

On October 2, 2017, Riverview Financial Corporation (“Riverview”) announced the completion of its merger of equals with CBT, effective October 1, 2017 at 12:01 a.m., Eastern Time, pursuant to the Agreement and Plan of Merger (the “Agreement”) between Riverview and CBT, dated April 19, 2017. At the effective time, CBT was merged with and into Riverview, with Riverview surviving. Additionally, CBT Bank, the wholly-owned subsidiary of CBT, merged with and into Riverview Bank, the wholly-owned subsidiary of Riverview, with Riverview Bank as the surviving institution.

Under the terms of the Agreement, each outstanding share of CBT common stock was converted into the right to receive 2.86 shares of Riverview common stock and cash in lieu of fractional shares. As of the closing date, there were 1,445,474 outstanding shares of CBT common stock. Cash for any fractional shares of Riverview common stock was based on $12.87 for each whole share, based on the average market price of Riverview common stock for the ten trading days ending September 27, 2017.

2. Other comprehensive income (loss):

The components of other comprehensive income (loss) and their related tax effects are reported in the Consolidated Statements of Income and Comprehensive Income (Loss). The accumulated other comprehensive income (loss) included in the Consolidated Balance Sheets relates to net unrealized gains and losses on investment securitiesavailable-for-sale and benefit plan adjustments.

The components of accumulated other comprehensive income (loss) included in stockholders’ equity at September 30, 2017 and December 31, 2016 is as follows:

	September 30, 2017		December 31, 2016
Net unrealized gain on investment securitiesavailable-for-sale	$	366	$	429
Income tax expense		124		146
Net of income taxes		242		283
Benefit plan adjustments		27		31
Income tax expense		9		11
Net of income taxes		18		20
Accumulated other comprehensive income (loss)	$	259	$	304

Other comprehensive income (loss) and related tax effects for the three and nine months ended September 30, 2017 and 2016 is as follows:

Three months ended September 30,	2017			2016
Unrealized gain (loss) on investment securitiesavailable-for-sale	$	(58	)	$	(1	)
Benefit plans:
Amortization of actuarial loss (gain)		—			—
Actuarial (loss) gain		(2	)		105
Net change in benefit plan liabilities		(2	)		105
Unrealized gain (loss) on cash flow hedge		—			14
Other comprehensive income (loss) gain before taxes		(60	)		118
Income tax expense (benefit)		(20	)		40
Other comprehensive income (loss)	$	(40	)	$	78
Nine months ended September 30,	2017			2016
Unrealized gain (loss) on investment securitiesavailable-for-sale	$	(63	)	$	168
Benefit plans:
Amortization of actuarial loss (gain)		—			—
Actuarial (loss) gain		(5	)		159
Net change in benefit plan liabilities		(5	)		159
Unrealized gain (loss) on cash flow hedge		—			64
Other comprehensive income (loss) gain before taxes		(68	)		391
Income tax expense (benefit)		(23	)		133
Other comprehensive income (loss)	$	(45	)	$	258

3. Earnings (loss) per share:

The following table provides a reconciliation between the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2017 and 2016:

Three months ended September 30,	2017			2016
Numerator:
Net income (loss) available to common stockholders	$	(417	)	$	880
Denominator:
Basic and diluted		1,445,474			1,445,474
Earnings (loss) per share:
Basic and diluted	$	(0.29	)	$	0.61
Nine months ended September 30,	2017			2016
Numerator:
Net income (loss) available to common stockholders	$	612		$	2,506
Denominator:
Basic and diluted		1,445,474			1,445,474
Earnings per share:
Basic and diluted	$	0.42		$	1.73

4. Investment securities:

The amortized cost and fair value of investment securitiesavailable-for-sale aggregated by investment category at September 30, 2017 and December 31, 2016 are summarized as follows:

September 30, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and municipals:
Tax-exempt	$	11,742	$	297			$	12,039
Mortgage-backed securities:
U.S. Government-sponsored enterprises		28,507		291	$	209		28,589
Equity securities, mutual funds		3,254				13		3,241
Total	$	43,503	$	588	$	222	$	43,869
December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and municipals:
Tax-exempt	$	16,052	$	316	$	7	$	16,361
Mortgage-backed securities:
U.S. Government-sponsored enterprises		36,316		377		221		36,472
Equity securities, mutual funds		3,206				36		3,170
Total	$	55,574	$	693	$	264	$	56,003

The maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified asavailable-for-sale at September 30, 2017, is summarized as follows:

September 30, 2017	Fair Value
Within one year	$	2,628
After one but within five years		4,690
After five but within ten years		3,158
After ten years		1,563
	12,039
Mortgage-backed securities		28,589
Total	$	40,628

Securities with a carrying value of $40,249 and $22,746 at September 30, 2017 and December 31, 2016, respectively, were pledged to secure public deposits and repurchase agreements as required or permitted by law.

Securities and short-term investment activities are conducted with a diverse group of government entities, corporations and state and local municipalities. The counterparty’s creditworthiness and type of collateral is evaluated on acase-by-case basis. At September 30, 2017 and December 31, 2016, there were no significant concentrations of credit risk from any one issuer, with the exception of U.S. Government agencies and sponsored enterprises that exceeded 10.0 percent of stockholders’ equity.

The fair value and gross unrealized losses of investment securities with unrealized losses for which an other-than-temporary impairment (“OTTI”) has not been recognized at September 30, 2017 and December 31, 2016, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized as follows:

	Less than 12 Months				12 Months or More				Total
September 30, 2017	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Mortgage-backed securities:
U.S. Government-sponsored enterprises	$	13,839	$	209					$	13,839	$	209
Equity securities, mutual funds		3,254		13						3,254		13
Total	$	17,093	$	222	$	—	$	—	$	17,093	$	222
	Less than 12 Months				12 Months or More				Total
December 31, 2016	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
State and municipals:
Tax-exempt	$	601	$	7					$	601	$	7
Mortgage-backed securities:
U.S. Government-sponsored enterprises		8,065		49	$	10,132	$	172		18,197		221
Equity securities, mutual funds		3,170		36						3,170		36
Total	$	11,836	$	92	$	10,132	$	172	$	21,968	$	264

As of September 30, 2017, the Company’s security portfolio consisted of 57 securities, 17 of which were in an unrealized loss position. As of December 31, 2016, the Company’s security portfolio consisted of 64 securities, 20 of which were in an unrealized loss position.

At September 30, 2017 and December 31, 2016, 100% of the mortgage-backed securities held by the Company were issued by U.S. government-sponsored entities and agencies. In addition, the municipal securities are general obligations of states and municipalities. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is unlikely that it will not be required to sell the securities before the anticipated recovery, the Company does not consider these securities to be other-than-temporarily-impaired.

5. Loans, net and allowance for loan losses:

The major classifications of loans outstanding, net of deferred loan origination fees and costs at September 30, 2017 and December 31, 2016 are summarized as follows. Net deferred loan costs were $996 and $1,035 at September 30, 2017 and December 31, 2016.

	September 30, 2017		December 31, 2016
Commercial	$	70,356	$	74,668
Real estate:
Construction		11,050		4,786
Commercial		198,641		185,875
Residential		103,796		107,427
Consumer		10,974		13,524
Total	$	394,817	$	386,280

The changes in the allowance for loan losses account by major classification of loan for the three and nine months ended September 30, 2017 and 2016 are summarized as follows:

				Real Estate
September 30, 2017	Commercial			Construction			Commercial			Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning Balance, July 1, 2017	$	770		$	41		$	2,144		$	773		$	298		$	—		$	4,026
Charge-offs		(198	)					(389	)		(495	)		(294	)					(1,376	)
Recoveries		4						1			2			22						29
Provisions		(43	)		(13	)		(270	)		245			181						100
Ending Balance	$	533		$	28		$	1,486		$	525		$	207		$	—		$	2,779
				Real Estate
September 30, 2017	Commercial			Construction			Commercial			Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning Balance, January 1, 2017	$	676		$	41		$	1,869		$	711		$	320					$	3,617
Charge-offs		(468	)					(389	)		(564	)		(506	)					(1,927	)
Recoveries		32						14			36			67						149
Provisions		293			( 13	)		(8	)		342			326			—			940
Ending Balance	$	533		$	28		$	1,486		$	525		$	207		$	—		$	2,779
				Real Estate
September 30, 2016	Commercial			Construction			Commercial			Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning Balance, July 1, 2016	$	709		$	25		$	1,475		$	742		$	356					$	3,307
Charge-offs		(8	)								(33	)		(82	)					(123	)
Recoveries		5						2						30						37
Provisions		(80	)		3			101			36			35			—			95
Ending Balance	$	626		$	28		$	1,578		$	745		$	339		$	—		$	3,316
				Real Estate
September 30, 2016	Commercial			Construction			Commercial			Residential			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning Balance, January 1, 2016	$	800		$	21		$	1,362		$	626		$	325		$	85		$	3,219
Charge-offs		(61	)		—						(48	)		(262	)					(371	)
Recoveries		17			—			14			29			105						165
Provisions		(130	)		7			202			138			171			(85	)		303
Ending Balance	$	626		$	28		$	1,578		$	745		$	339		$	—		$	3,316

The allocation of the allowance for loan losses and the related loans by major classifications of loans at September 30, 2017 and December 31, 2016 is summarized as follows:

			Real Estate
September 30, 2017	Commercial		Construction		Commercial		Residential		Consumer		Unallocated		Total
Allowance for loan losses:
Ending Balance	$	533	$	28	$	1,486	$	525	$	207	$	—	$	2,779
Ending balance: individually evaluated for impairment		227				33								260
Ending balance: collectively evaluated for impairment	$	306	$	28	$	1,453	$	525	$	207			$	2,519
Loans receivable:
Ending balance	$	70,356	$	11,050	$	198,641	$	103,796	$	10,974			$	394,817
Ending balance: individually evaluated for impairment		1,027				1,522								2,549
Ending balance: collectively evaluated for impairment	$	69,329	$	11,050	$	197,119	$	103,796	$	10,974			$	392,268
			Real Estate
December 31, 2016	Commercial		Construction		Commercial		Residential		Consumer		Unallocated		Total
Allowance for loan losses:
Ending Balance	$	676	$	41	$	1,869	$	711	$	320			$	3,617
Ending balance: individually evaluated for impairment		375				229								604
Ending balance: collectively evaluated for impairment	$	301	$	41	$	1,640	$	711	$	320			$	3,013
Loans receivable:
Ending balance	$	74,668	$	4,786	$	185,875	$	107,427	$	13,524			$	386,280
Ending balance: individually evaluated for impairment		1,222				4,322		315		104				5,963
Ending balance: collectively evaluated for impairment	$	73,446	$	4,786	$	181,553	$	107,112	$	13,420			$	380,317

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes loan relationships with outstanding balances greater than $500 thousand. Other loan relationships are analyzed based on historic payment experience and collateral. Loans over 90 days past due are classified as substandard and loans over 120 days past due are classified as loss, unless collateral is sufficient to cover the loan balance.

Loans listed as not rated are included in groups of homogeneous loans. As of September 30, 2017 and December 31, 2016, and based on the most recent analysis performed, the risk category of loans by class is as follows:

• Pass- A loan to borrowers with acceptable credit quality and risk that is not adversely classified as Substandard, Doubtful, Loss or designated as Special Mention.

• Special Mention- Loans classified as special mention have a potential weakness that deserves Management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

• Substandard- Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

• Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

• Loss – Loans classified as loss have all the weaknesses inherent in those classified as doubtful, with the added characteristic that the loan is unsecured and over 120 day past due.

The following tables present the major classification of loans summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system at September 30, 2017 and December 31, 2016:

September 30, 2017	Not Rated		Pass		Special Mention		Substandard		Total
Commercial		18,155	$	49,362	$	2,549	$	290	$	70,356
Real estate:
Construction		2,650		6,770		1,630				11,050
Commercial		22,749		164,677		6,440		4,775		198,641
Residential		81,333		21,239		810		414		103,796
Consumer		10,828		17		129				10,974
Total	$	135,715	$	242,065	$	11,558	$	5,479	$	394,817
December 31, 2016	Not Rated		Pass		Special Mention		Substandard		Total
Commercial	$	17,623	$	55,189	$	1,284	$	572	$	74,668
Real estate:
Construction		1,835		2,951						4,786
Commercial		23,759		157,495		2,246		2,375		185,875
Residential		83,480		23,415		87		445		107,427
Consumer		13,468		23				33		13,524
Total	$	140,165	$	239,073	$	3,617	$	3,425	$	386,280

Information concerning nonaccrual loans by major loan classification at September 30, 2017 and December 31, 2016 is summarized as follows:

	September 30, 2017		December 31, 2016
Commercial	$	1,027	$	321
Real estate:
Construction
Commercial		779		1,150
Residential		262		300
Consumer				29
Total	$	2,068	$	1,800

The major classifications of loans by past due status at September 30, 2017 and December 31, 2016 are summarized as follows:

September 30, 2017	30-59 Days Past Due		60-89 Days Past Due		Still Accruing Greater than 89 Days Past Due		Total Past Due Still Accruing		Total Loans Not Past Due		Total Nonaccrual		Total Loans
Commercial	$	155					$	155	$	69,174	$	1,027	$	70,356
Real estate:
Construction										11,050				11,050
Commercial		18						18		197,844		779		198,641
Residential		596						596		102,938		262		103,796
Consumer		107						107		10,867				10,974
Total	$	876	$	—	$	—	$	876	$	391,873	$	2,068	$	394,817
December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		Still Accruing Greater than 89 Days Past Due		Total Past Due Still Accruing		Total Loans Not Past Due		Total Nonaccrual		Total Loans
Commercial	$	46					$	46	$	74,301	$	321	$	74,668
Real estate:
Construction										4,786				4,786
Commercial		208						208		184,517		1,150		185,875
Residential		462	$	153				615		106,512		300		107,427
Consumer		168		51				219		13,276		29		13,524
Total	$	884	$	204	$	—	$	1,088	$	383,392	$	1,800	$	386,280

The following tables summarize information concerning impaired loans as of and for the three and nine months ended September 30, 2017 and September 30, 2016, and as of and for the year ended, December 31, 2016 by major loan classification:

							Quarter				Year-to-Date
September 30, 2017	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial	$	1,738	$	1,779			$	1,800	$	22	$	1,674	$	31
Real estate:
Construction
Commercial		4,684		4,684				1,834		20		1,746		34
Residential		403		470				199		4		460		24
Consumer		111		110				11		1		133		7
Total		6,936		7,043		—		3,844		47		4,013		96
With an allowance recorded:
Commercial		14		13	$	226		63		4		131		1
Real estate:
Construction
Commercial		1,735		1,739		34		1,961		24		2,127		47
Residential								299		8
Consumer								124		1
Total		1,749		1,752		260		2,447		37		2,258		48
Commercial		1,752		1,792		226		1,863		26		1,805		32
Real estate:
Construction
Commercial		6,419		6,423		34		3,795		44		3,873		81
Residential		403		470		—		498		12		460		24
Consumer		111		110				135		2		133		7
Total	$	8,685	$	8,795	$	260	$	6,291	$	84	$	6,271	$	144

							For the Year Ended
December 31, 2016	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial	$	783	$	835			$	897	$	46
Real estate:
Construction
Commercial		1,200		1,199				1,172		50
Residential		315		313				301		21
Consumer		104		102				85		5
Total		2,402		2,449		—		2,455		122
With an allowance recorded:
Commercial		439		439	$	375		123		5
Real estate:
Construction
Commercial		3,122		3,126		229		2,577		99
Residential								25
Consumer
Total		3,561		3,565		604		2,725		104
Commercial		1,222		1,274		375		1,020		51
Real estate:
Construction
Commercial		4,322		4,325		229		3,749		149
Residential		315		313		—		326		21
Consumer		104		102				85		5
Total	$	5,963	$	6,014	$	604	$	5,180	$	226

							Quarter				Year-to-Date
September 30, 2016	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial	$	814	$	866			$	882	$	15	$	900	$	35
Real estate:
Construction
Commercial		1,790		1,789				1,286		17		1,296		36
Residential		307		419				308		7		299		15
Consumer		116		115				111		3		85		5
Total		3,027		3,189		—		2,587		42		2,580		91
With an allowance recorded:
Commercial		110		110	$	1		117		1		124		4
Real estate:
Construction
Commercial		2,558		2,559		489		2,568		39		2,579		82
Residential				75								24
Consumer
Total		2,668		2,744		490		2,685		40		2,727		86
Commercial		924		976		1		999		16		1,024		39
Real estate:
Construction
Commercial		4,348		4,348		489		3,854		56		3,875		118
Residential		307		494		—		308		7		323		15
Consumer		116		115				111		3		85		5
Total	$	5,695	$	5,933	$	490	$	5,272	$	82	$	5,307	$	177

6. Other assets:

The components of other assets at September 30, 2017 and December 31, 2016 are summarized as follows:

	September 30, 2017		December 31, 2016
Other real estate owned	$	230	$	699
Bank owned life insurance		11,736		11,489
Restricted equity securities		291		1,039
Other assets		2,223		1,611
Total	$	14,480	$	14,838

7. Fair value estimates:

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels or inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Investment Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2) using matrix pricing. For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals or other valuations of the underlying collateral. Real estate appraisals may use a single valuation approach or a combination of approaches including use of comparable sales and the capitalization of income. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available.Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and Management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a monthly basis for additional impairment and adjusted accordingly.

Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Appraisals for both collateral-dependent impaired loans and real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Loan Review Department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On an annual basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. The most recent analysis performed indicated that a discount of 10% should be applied to properties with appraisals performed within 12 months.

Assets and liabilities measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016 are summarized as follows:

	Fair Value Measurement Using
September 30, 2017	Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
State and municipals:
Tax-exempt	$	12,039			$	12,039
Mortgage-backed securities:
U.S. Government-sponsored enterprises		28,589			$	28,589
Equity securities, mutual funds		3,241	$	3,241
Total	$	43,869	$	3,241	$	40,628	$	—
	Fair Value Measurement Using
December 31, 2016	Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
State and municipals:
Tax-exempt	$	16,361			$	16,361
Mortgage-backed securities:
U.S. Government-sponsored enterprises		36,472				36,472
Equity securities, mutual funds		3,170	$	3,170
Total	$	56,003	$	3,170	$	52,833	$	—

Assets and liabilities measured at fair value on a nonrecurring basis at September 30, 2017 and December 31, 2016 are summarized as follows:

	Fair Value Measurement Using
September 30, 2017	Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans
Commercial owner-occupied real estate	$	1,749					$	1,749
Other real estate owned
Residential		13						13
Commercial owner-occupied		217						217
Total	$	1,979	$	—	$	—	$	1,979
	Fair Value Measurement Using
December 31, 2016	Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans
Commercial owner-occupied real estate	$	1,542					$	1,542
Other real estate, net
Residential		159						159
Commercial owner-occupied		540						540
Total	$	2,241	$	—	$	—	$	2,241

Fair values of impaired loans are based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

Fair value of other real estate owned is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company utilized Level 3 inputs to determine fair value at September 30, 2017:

	Quantitative Information about Level 3 Fair Value Measurements
September 30, 2017	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Impaired loans
Commercial real estate
Owner occupied	$	276	Sales comparison	Comparable sales adjustment		-22% to -4%	(12)%
Non-owner occupied		1,473	Income comparison	Capitalization rate		10%	(10)%
Other real estate, net
Residential real estate		13	Sales comparison	Comparable sales adjustment		-9% to -28%	(16)%
Commercial real estate owner occupied		217	Sales comparison	Comparable sales adjustment		-3% to -6%	(5)%

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company utilized Level 3 inputs to determine fair value at December 31, 2016:

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2016	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted Average)
Impaired loans
Commercial real estate
Owner occupied	$	972	Sales comparison	Comparable sales adjustment		-48% to -5%	(9)%
Owner occupied		570	Cost approach	Accumulated depreciation		23% to 29%	(26)%
Other real estate, net
Residential real estate		159	Sales comparison	Comparable sales adjustment		0% to 18%	(8)%
Commercial real estate owner occupied		540	Income comparison	Capitalization rate		9%	(9)%

Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 Inputs which are not identifiable.

Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

The carrying and fair values of the Company’s financial instruments at September 30, 2017 and December 31, 2016 and their placement within the fair value hierarchy are as follows:

			Fair Value Hierarchy
September 30, 2017	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	2,071	$	2,071	$	2,071
Interest-bearing deposits		29,951		29,951		29,951
Securities available for sale		43,869		43,869		3,241	$	40,628
Loans, net		392,038		389,524					$	389,524
Federal Home Loan Bank stock		227		N/A
Accrued interest receivable		894		894		149				745
Financial assets:
Deposits	$	437,817	$	438,845			$	438,845
Federal Home Loan Bank advances		—
Subordinated debentures		9,000		6,801				6,801
Accrued interest payable		256		256				256
			Fair Value Hierarchy
December 31, 2016	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	2,465	$	2,465	$	2,465
Interest-bearing deposits		3,350		3,350		3,350
Securities available for sale		56,003		56,003		3,170	$	52,833
Loans, net		382,663		375,527					$	375,527
Federal Home Loan Bank stock		976		N/A
Accrued interest receivable		1,101		1,101		222				879
Financial assets:
Deposits	$	399,738	$	398,505			$	398,505
Federal Home Loan Bank advances		16,500		16,500				16,500
Subordinated debentures		9,000		8,255				8,255
Accrued interest payable		207		207				207