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FAIR VALUE MEASUREMENTS (Tables)
 12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
For assets measured at fair value, the fair value measurements by level within the fair value hierarchy, and the basis of measurement used at December 31, 2017 and 2016, are as follows:
 
 
 
Fair Value Measurements at December 31, 2017
In thousands
Basis
 
Total
 
Level 1
 
Level 2
 
Level 3
U.S. Government and agencies
 
 
$
104,083

 
$
—

 
$
104,083

 
$
—

Mortgage-backed securities, residential
 
 
34,833

 
—

 
34,833

 
—

State and municipal
 
 
13,294

 
—

 
13,294

 
—

Corporate bonds
 
 
5,057

 
—

 
5,057

 
—

CRA mutual fund
 
 
1,035

 
1,035

 
—

 
—

Stock in other banks
 
 
749

 
749

 
—

 
—

Total securities available for sale
Recurring
 
$
159,051

 
$
1,784

 
$
157,267

 
$
—

Impaired loans
Non-recurring
 
$
5,426

 
$
—

 
$
—

 
$
5,426

Foreclosed assets held for resale
Non-recurring
 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
Fair Value Measurements at 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
Non-recurring
 
$
4,406

 
$
—

 
$
—

 
$
4,406

Foreclosed assets held for resale
Non-recurring
 
$
—

 
$
—

 
$
—

 
$
—
Fair Value Inputs, Assets, Quantitative Information
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
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
  Impaired loans
 
$
5,426

 
Appraisal of collateral
(1)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
(36
)%
  Foreclosed assets held for resale
 
$
—

 
Appraisal of collateral
(1) (3)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
  Impaired loans
 
$
4,406

 
Appraisal of collateral
(1)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
(39
)%
  Foreclosed assets held for resale
 
$
—

 
Appraisal of collateral
(1) (3)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
—
 %
(1)
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.
(2)
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.
(3)
Includes qualitative adjustments by management and estimated liquidation expenses.
Fair Value, by Balance Sheet Grouping
The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Corporation’s financial instruments at December 31, 2017 and 2016:
 
December 31, 2017
In thousands
Carrying Amount
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
19,304

 
$
19,304

 
$
8,313

 
$
10,991

 
$
—

Interest-bearing deposits in banks
15,137

 
15,137

 
15,137

 
—

 
—

Investment securities available for sale
159,051

 
159,051

 
1,784

 
157,267

 
—

Investment securities held to maturity
44,829

 
44,549

 
—

 
44,549

 
—

Loans held for sale
1,736

 
1,736

 
—

 
1,736

 
—

Loans, less allowance for loan losses
1,230,194

 
1,213,932

 
—

 
—

 
1,213,932

Accrued interest receivable
3,670

 
3,670

 
—

 
3,670

 
—

Restricted investment in bank stocks
4,773

 
4,773

 
—

 
4,773

 
—

 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
1,298,492

 
1,295,456

 
—

 
1,295,456

 
—

Short-term borrowings
36,908

 
36,908

 
—

 
36,908

 
—

Long-term borrowings
89,600

 
89,571

 
—

 
89,571

 
—

Trust preferred subordinated debt
5,000

 
4,692

 
—

 
4,692

 
—

Accrued interest payable
1,163

 
1,163

 
—

 
1,163

 
—

 
 
 
 
 
 
 
 
 
 
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
—

 
—

 
—

 
—

 
—