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FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

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, 2020 and December 31, 2019:

			Level 1						Level 2						Level 3						Total Fair Value Measurements
March 31, 2020
Investment securities:
States and political subdivisions			$	—					$	111,057					$	—					$	111,057
GSE residential MBSs			—						4,606						—						4,606
GSE residential CMOs			—						67,215						—						67,215
Nonagency CMOs			—						—						16,679						16,679
Private label commercial CMOs			—						59,563						6,571						66,134
Asset-backed			—						213,311						—						213,311
Other			597						—						—						597
Loans held for sale			—						7,900						—						7,900
Interest rate lock commitments on residential mortgages			—						—						435						435
Totals			$	597					$	463,652					$	23,685					$	487,934
December 31, 2019
Investment securities:
States and political subdivisions			$	—					$	87,863					$	—					$	87,863
GSE residential CMOs			—						68,154						—						68,154
Nonagency CMOs			—						—						17,087						17,087
Private label commercial CMOs			—						79,437						7,192						86,629
Asset-backed			—						230,515						—						230,515
Other			637						—						—						637
Loans held for sale			—						9,364						—						9,364
Interest rate lock commitments on residential mortgages			—						—						103						103
Totals			$	637					$	475,333					$	24,382					$	500,352

Level 3 Fair Value Measurement Activity

The following provides details of the Level 3 fair value measurement activity for the periods ended March 31, 2020 and 2019:

CMOs:

															March 31, 2020						March 31, 2019
Balance, beginning of year															$	24,279					$	—
Unrealized loss included in OCI															(961)						—
Principal payments															(68)						—
Balance, end of period															$	23,250					$	—

Interest rate lock commitments on residential mortgages:

															March 31, 2020						March 31, 2019
Balance, beginning of year															$	103					$	—
Total gains, realized/unrealized:
Included in earnings															332						—
Balance, end of period															$	435					$	—

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, 2020 and December 31, 2019:

			Level 1						Level 2						Level 3						Total Fair Value Measurements
March 31, 2020
Impaired Loans
Commercial real estate:
Owner occupied			$	—					$	—					$	909					$	909
Multi-family			—						—						88						88
Non-owner occupied residential			—						—						96						96
Commercial and industrial			—						—						11						11
Residential mortgage:
First lien			—						—						928						928
Home equity - lines of credit			—						—						302						302
Installment and other loans			—						—						7						7
Total impaired loans			$	—					$	—					$	2,341					$	2,341
Mortgage servicing rights			$	—					$	2,576					$	—					$	2,576
December 31, 2019
Impaired Loans
Commercial real estate:
Owner occupied			$	—					$	—					$	938					$	938
Multi-family			—						—						96						96
Non-owner occupied residential			—						—						103						103
Commercial and industrial			—						—						11						11
Residential mortgage:
First lien			—						—						641						641
Home equity - lines of credit			—						—						400						400
Installment and other loans			—						—						7						7
Total impaired loans			$	—					$	—					$	2,196					$	2,196
Mortgage servicing rights			$	—					$	3,119					$	—					$	3,119

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:

Fair Value Estimate

Valuation Techniques

Unobservable Input

Range

March 31, 2020

Impaired loans

$

2,341

Appraisal of collateral

Management adjustments on appraisals for property type and recent activity

0% - 20% discount

- Management adjustments for liquidation expenses

6%- 33% discount

Mortgage servicing rights

$

2,576

Discounted cash flows

Weighted average CPR

15.16%

- Weighted average discount rate

9.54%

December 31, 2019

Impaired loans

$

2,196

Appraisal of collateral

Management adjustments on appraisals for property type and recent activity

0% - 20% discount

- Management adjustments for liquidation expenses

6% - 33% discount

Mortgage servicing rights

$

3,119

Discounted cash flows

Weighted average CPR

11.63%

- Weighted average discount rate

9.54%

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, 2020 and December 31, 2019:

			Carrying Amount						Fair Value						Level 1						Level 2						Level 3
March 31, 2020
Financial Assets
Cash and due from banks			$	33,974					$	33,974					$	33,974					$	—					$	—
Interest-bearing deposits with banks			23,163						23,163						23,163						—						—
Restricted investments in bank stocks			15,823						n/a						n/a						n/a						n/a
Investment securities			479,599						479,599						—						456,349						23,250
Loans held for sale			7,900						7,900						—						7,900						—
Loans (carrying amount net of allowance for loan losses)			1,641,145						1,587,426						—						—						1,587,426
Interest rate lock commitments on residential mortgages			435						435						—						—						435
Interest rate swaps			104						104						—						104						—
Accrued interest receivable			6,697						6,697						—						2,237						4,460
Financial Liabilities
Deposits			1,897,296						1,901,268						—						1,901,268						—
Securities sold under agreements to repurchase			10,933						10,933						—						10,933						—
FHLB Advances			201,166						201,544						—						201,544						—
Subordinated notes			31,861						32,970						—						32,970						—
Interest rate swaps			1,359						1,359						—						1,359						—
Accrued interest payable			1,040						1,040						—						1,040						—
December 31, 2019
Financial Assets
Cash and due from banks			$	25,969					$	25,969					$	25,969					$	—					$	—
Interest-bearing deposits with banks			30,493						30,493						30,493						—						—
Restricted investments in bank stocks			16,184						n/a						n/a						n/a						n/a
Investment securities			490,386						490,386						—						466,107						24,279
Loans held for sale			9,364						9,364						—						9,364						—
Loans, net of allowance for loan losses			1,629,675						1,652,788						—						—						1,652,788
Interest rate lock commitments on residential mortgages			103						103						—						—						103
Accrued interest receivable			6,040						6,040						—						1,863						4,177
Financial Liabilities
Deposits			1,875,522						1,876,555						—						1,876,555						—
Securities sold under agreements to repurchase			8,269						8,269						—						8,269						—
FHLB Advances			209,667						210,005						—						210,005						—
Subordinated notes			31,847						33,953						—						33,953						—
Accrued interest payable			879						879						—						879						—

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- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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