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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Estimated Fair Values and Related Carrying or Notional Amounts

The estimated fair values, and related carrying or notional amounts, for on and off-balance sheet financial instruments as of June 30, 2022 and December 31, 2021 are reflected below.

		(In Thousands)
		June 30, 2022
		Carrying				Fair
		Amount				Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and cash equivalents		$	71,439			$	71,439			$	71,439			$	-			$	-
Interest-bearing time deposits			6,684				6,687				-				6,687				-
Securities - available-for-sale			399,687				399,687				97,100				299,173				3,414
Other securities			8,735				8,735				-				-				8,735
Loans held for sale			4,230				4,301				-				-				4,301
Loans, net			2,016,394				2,042,904				-				-				2,042,904
Interest receivable			8,008				8,008				-				-				8,008
Financial Liabilities:
Interest bearing deposits		$	1,296,402			$	1,288,006			$	-			$	-			$	1,288,006
Non-interest bearing deposits			503,395				503,395				-				503,395				-
Time deposits			424,249				416,076				-				-				416,076
Total Deposits			2,224,046				2,207,477				-				503,395				1,704,082
Federal funds purchased and securities sold under    agreement to repurchase			71,944				71,944				-				-				71,944
Federal Home Loan Bank advances			42,635				42,930				-				-				42,930
Other borrowings			-				-				-				-				-
Subordinated notes, net of unamortized issuance costs			34,528				35,000				-				35,000				-
Interest payable			923				923				-				-				923

		(In Thousands)
		December 31, 2021
		Carrying				Fair
		Amount				Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and cash equivalents		$	180,823			$	180,832			$	180,823			$	-			$	-
Interest-bearing time deposits			10,913				10,933				-				10,933				-
Securities - available-for-sale			429,931				429,931				89,177				335,981				4,773
Other securities			8,162				8,162				-				-				8,162
Loans held for sale			7,714				7,844				-				-				7,844
Loans, net			1,841,177				1,864,386				-				-				1,864,386
Interest receivable			7,209				7,209				-				-				7,209
Financial Liabilities:
Interest bearing deposits		$	1,248,294			$	1,248,044			$	-			$	-			$	1,248,044
Non-interest bearing deposits			473,689				473,689				-				473,689				-
Time deposits			471,479				475,810				-				-				475,810
Total Deposits			2,193,462				2,197,543				-				473,689				1,723,854
Federal funds purchased and securities sold under    agreement to repurchase			29,268				29,268				-				-				29,268
Federal Home Loan Bank advances			24,065				24,305				-				-				24,305
Other borrowings			40,000				40,000				-				40,000				-
Subordinated notes, net of unamortized issuance costs			34,471				35,000				-				35,000				-
Interest payable			1,125				1,125				-				-				1,125

Financial Assets Measured at Fair Value on Recurring Basis

The following summarizes financial assets measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, segregated by level or the valuation inputs within the fair value hierarchy utilized to measure fair value:

Assets and Liabilities Measured at Fair Value on a Recurring Basis (In Thousands)
June 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets - (Securities Available-for-Sale)
U.S. Treasury		$	97,100			$	-			$	-
U.S. Government agencies			-				141,512				-
Mortgage-backed securities			-				93,981				-
State and local governments			-				63,680				3,414
Total Securities Available-for-Sale		$	97,100			$	299,173			$	3,414

December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets - (Securities Available-for-Sale)
U.S. Treasury		$	89,177			$	-			$	-
U.S. Government agencies			-				156,886				-
Mortgage-backed securities			-				117,927				-
State and local governments			-				61,168				4,773
Total Securities Available-for-Sale		$	89,177			$	335,981			$	4,773

Changes in the Level 3 Fair-Value Category of Unobservable Inputs

The following tables represent the changes in the Level 3 fair-value category of which unobservable inputs are relied upon as of the three and six month periods ended June 30, 2022 and June 30, 2021.  For the three month period ended March 31, 2022, there was one security transfer from Level 3 to Level 2.

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments Tax-Exempt				State and Local Governments Taxable				State and Local Governments Total
Balance at April 1, 2022		$	2,108			$	1,394			$	3,502
Change in Market Value			(19	)			(69	)			(88	)
Purchases											-
Payments & Maturities											-
Reclassification & Adjustments											-
Balance at June 30, 2022		$	2,089			$	1,325			$	3,414

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments Tax-Exempt				State and Local Governments Taxable				State and Local Governments Total
Balance at April 1, 2021		$	-			$	1,539			$	1,539
Change in Market Value			(8	)			(1	)			(9	)
Purchases			2,418				-				2,418
Payments & Maturities			-				-				-
Reclassification & Adjustments			-				-				-
Balance at June 30, 2021		$	2,410			$	1,538			$	3,948

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments Tax-Exempt				State and Local Governments Taxable				State and Local Governments Total
Balance at January 1, 2022		$	2,307			$	2,466			$	4,773
Change in Market Value			(58	)			(152	)			(210	)
Purchases			-				-				-
Payments & Maturities			(160	)			-				(160	)
Reclassification & Adjustments			-				(989	)			(989	)
Balance at June 30, 2022		$	2,089			$	1,325			$	3,414

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments Tax-Exempt				State and Local Governments Taxable				State and Local Governments Total
Balance at January 1, 2021		$	-			$	1,562			$	1,562
Change in Market Value			(8	)			(24	)			(32	)
Purchases			2,418				-				2,418
Payments & Maturities			-				-				-
Reclassification & Adjustments			-				-				-
Balance at June 30, 2021		$	2,410			$	1,538			$	3,948

Quantitative Information about Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements:

		(In Thousands)								Range
		Fair Value at								(Weighted
		June 30, 2022				Valuation Technique		Unobservable Inputs		Average)
State and local government		$	3,414			Discounted Cash Flow		Credit strength of underlying project or entity / Discount rate		1.84-4.08% (3.35%)
Collateral dependent    impaired loans			2,570			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability		20.00-22.18% (22.05%)
Mortgage servicing rights			3,426			Discounted Cash Flow		Constant prepayment rate and probability of default / Discount rate		15.24-55.96% (17.30%)

		(In Thousands)								Range
		Fair Value at								(Weighted
		December 31, 2021				Valuation Technique		Unobservable Inputs		Average)
State and local government		$	4,773			Discounted Cash Flow		Credit strength of underlying project or entity / Discount rate		0.21-1.77% (1.33%)
Collateral dependent    impaired loans			8,527			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability		20.00-53.95% (34.78%)
Mortgage servicing rights			3,157			Discounted Cash Flow		Constant prepayment rate and probability of default / Discount rate		1.94-27.70% (18.44%)
Other real estate owned -    residential			99			Appraisals		Discount to reflect current market		32.72% (32.72%)

Assets Measured at Fair Value on Nonrecurring Basis

The following table presents assets measured at fair value on a nonrecurring basis at June 30, 2022 and December 31, 2021:

		Assets Measured at Fair Value on a Nonrecurring Basis at June 30, 2022
		(In Thousands)
		Balance at June 30, 2022				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Collateral dependent    impaired loans		$	2,570			$	-			$	-			$	2,570
Mortgage servicing rights			3,426				-				-				3,426
Other real estate    owned - residential			-				-				-				-

		Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2021
		(In Thousands)
		Balance at December 31, 2021				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Collateral dependent    impaired loans		$	8,527			$	-			$	-			$	8,527
Mortgage servicing rights			3,157				-				-				3,157
Other real estate    owned - residential			99				-				-				99

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- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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