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Fair Value Measurements
 9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
 
Management uses its best judgment in estimating the fair value of the Corporation’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Corporation could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective reporting dates and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period end.
 
Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions.
 
Fair value measurement and disclosure guidance provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in accordance with fair value measurement and disclosure guidance.
 
This guidance further clarifies that when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The guidance provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value.
 
Fair value measurement and disclosure guidance establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
 
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
 
Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
 
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
 
An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For assets measured at fair value, the fair value measurements by level within the fair value hierarchy, and the basis of measurement used at September 30, 2020, and December 31, 2019, are as follows:
September 30, 2020
In thousandsBasisTotalLevel 1Level 2Level 3
U.S. Government and agencies $173,587 $— $173,587 $— 
Mortgage-backed securities, residential 101,855 — 101,855 — 
State and municipal 31,958 — 31,958 — 
Corporate bonds 6,271 — 6,271 — 
Total securities available for saleRecurring$313,671 $— $313,671 $— 
Equity securities with readily determinable fair valuesRecurring$1,880 $1,880 $— $— 
Collateral dependent impaired loansNonrecurring$12,170 $— $— $12,170 
 
December 31, 2019
In thousandsBasisTotalLevel 1Level 2Level 3
U.S. Government and agencies $114,249 $— $114,249 $— 
Mortgage-backed securities, residential 65,592 — 65,592 — 
State and municipal 10,996 — 10,996 — 
Total securities available for saleRecurring$190,837 $— $190,837 $— 
Equity securities with readily determinable fair valuesRecurring$2,106 $2,106 $— $— 
Collateral dependent impaired loansNonrecurring$3,806 $— $— $3,806 
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 thousandsFair Value EstimateValuation TechniqueUnobservable InputRangeWeighted Average
September 30, 2020
  Impaired loans$12,170 Appraisal of collateral(a)Appraisal adjustments(b)
 (10) – (50)%
(19)%
December 31, 2019
  Impaired loans$3,806 Appraisal of collateral(a)Appraisal adjustments(b)
(10) – (50)%
(15)%
(a) 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.

(b) 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.

The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a fair value calculation is only provided for a limited portion of the Corporation’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful. 

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Corporation’s financial instruments as of September 30, 2020:
September 30, 2020
In thousandsCarrying AmountFair ValueLevel 1Level 2Level 3
Financial assets:
Cash and due from banks
$21,163 $21,163 $11,080 $10,083 $— 
Interest-bearing deposits in banks278,490 278,490 278,490 — — 
Equity securities available for sale1,880 1,880 1,880 — — 
Investment securities available for sale313,671 313,671 — 313,671 — 
Investment securities held to maturity13,606 14,110 — 14,110 — 
Loans held for sale
10,043 10,043 — 10,043 — 
Loans, less allowance for loan losses1,681,683 1,732,710 — — 1,732,710 
Accrued interest receivable7,317 7,317 — 7,317 — 
Restricted investment in bank stocks3,022 3,022 — 3,022 — 
Financial liabilities:
Demand deposits and savings1,634,803 1,634,803 — 1,634,803 — 
Time deposits480,773 486,460 — 486,460 — 
Short-term borrowings52,721 52,721 — 52,721 — 
Long-term borrowings46,113 47,263 — 47,263 — 
Trust preferred subordinated debt11,000 9,890 — 9,890 — 
Accrued interest payable1,919 1,919 — 1,919 — 
Off-balance sheet financial instruments— — — — — 
The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Corporation’s financial instruments as of December 31, 2019:
December 31, 2019
In thousandsCarrying AmountFair ValueLevel 1Level 2Level 3
Financial assets:
Cash and due from banks$16,878 $16,878 $9,542 $7,336 $— 
Interest-bearing deposits in banks97,478 97,478 97,478 — — 
Equity securities available for sale2,106 2,106 2,106 — — 
Investment securities available for sale190,837 190,837 — 190,837 — 
Investment securities held to maturity19,234 19,281 — 19,281 — 
Loans held for sale2,406 2,406 — 2,406 — 
Loans, less allowance for loan losses1,258,766 1,263,014 — — 1,263,014 
Accrued interest receivable4,368 4,368 — 4,368 — 
Restricted investment in bank stocks3,644 3,644 — 3,644 — 
Financial liabilities:
Demand deposits and savings1,004,407 1,004,407 — 1,004,407 — 
Time deposits407,853 409,426 — 409,426 — 
Short-term borrowings33,435 33,435 — 33,435 — 
Long-term borrowings61,296 61,965 — 61,965 — 
Trust preferred subordinated debt5,000 4,711 — 4,711 — 
Accrued interest payable2,676 2,676 — 2,676 — 
Off-balance sheet financial instruments— — — — —