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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Financial Assets Measured at Fair Value on Recurring Basis

The following summarizes financial assets measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022, 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)
September 30, 2023		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		$	81,978			$	-			$	-
U.S. Government agencies			-				123,762				-
Mortgage-backed securities			-				76,480				-
State and local governments			-				63,608				2,427
Total Securities Available-for-Sale		$	81,978			$	263,850			$	2,427

		(In Thousands)
December 31, 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		$	94,678			$	-			$	-
U.S. Government agencies			-				139,767				-
Mortgage-backed securities			-				86,927				-
State and local governments			-				66,072				3,345
Total Securities Available-for-Sale		$	94,678			$	292,766			$	3,345

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 nine month periods ended September 30, 2023 and September 30, 2022. During the three month period ended March 31, 2022, there was one security transferred from Level 3 to Level 2.

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at July 1, 2023		$	1,831			$	1,278			$	3,109
Change in Fair Value			-				(25	)			(25	)
Payments, Maturities & Calls			(657	)			-				(657	)
Reclassification & Adjustments			-				-				-
Balance at September 30, 2023		$	1,174			$	1,253			$	2,427

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at July 1, 2022		$	2,089			$	1,325			$	3,414
Change in Fair Value			(19	)			(29	)			(48	)
Payments, Maturities & Calls			-				-				-
Reclassification & Adjustments			-				-				-
Balance at September 30, 2022		$	2,070			$	1,296			$	3,366

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at January 1, 2023		$	2,071			$	1,274			$	3,345
Change in Fair Value			5				(21	)			(16	)
Payments, Maturities & Calls			(902	)			-				(902	)
Reclassification & Adjustments			-				-				-
Balance at September 30, 2023		$	1,174			$	1,253			$	2,427

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at January 1, 2022		$	2,307			$	2,466			$	4,773
Change in Fair Value			(77	)			(181	)			(258	)
Payments, Maturities & Calls			(160	)			-				(160	)
Reclassification & Adjustments			-				(989	)			(989	)
Balance at September 30, 2022		$	2,070			$	1,296			$	3,366

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
		September 30, 2023				Valuation Technique		Unobservable Inputs		Average)
State and local government		$	2,427			Discounted Cash Flow		Credit strength of underlying project or entity / Discount rate		3.96- 5.78% (5.18%)
Collateral dependent    loans			312			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability		25.00-50.00% (26.37%)
Real estate servicing rights			35			Discounted Cash Flow		Constant prepayment rate and probability of default / Discount rate		5.71- 7.33% (7.29%)

		(In Thousands)								Range
		Fair Value at								(Weighted
		December 31, 2022				Valuation Technique		Unobservable Inputs		Average)
State and local government		$	3,345			Discounted Cash Flow		Credit strength of underlying project or entity / Discount rate		2.08-5.01% (4.38%)
Collateral dependent    impaired loans			2,667			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability		20.00-29.01% (24.13%)
Real estate servicing rights			-			Discounted Cash Flow		Constant prepayment rate and probability of default / Discount rate		— % ( — )

Assets Measured at Fair Value on Nonrecurring Basis

The following table presents assets measured at fair value on a nonrecurring basis at September 30, 2023 and December 31, 2022:

		(In Thousands)
		Assets Measured at Fair Value on a Nonrecurring Basis at September 30, 2023
		Balance at September 30, 2023				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Collateral dependent    loans		$	312			$	-			$	-			$	312
Real estate servicing rights			35				-				-				35

		(In Thousands)
		Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2022
		Balance at December 31, 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		$	2,667			$	-			$	-			$	2,667
Real estate servicing rights			-				-				-				-

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 September 30, 2023 and December 31, 2022 are reflected below.

		(In Thousands)
		September 30, 2023
		Carrying				Fair
		Amount				Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and cash equivalents		$	153,182			$	153,182			$	153,182			$	-			$	-
Interest-bearing time deposits			2,989				2,977				-				2,977				-
Securities - available-for-sale			348,255				348,255				81,978				263,850				2,427
Other securities			16,995				16,995				-				-				16,995
Loans held for sale			1,039				1,023				-				-				1,023
Loans, net			2,504,329				2,336,246				-				-				2,336,246
Interest receivable			12,902				12,902				-				-				12,902
Financial Liabilities:
Interest bearing deposits		$	1,369,477			$	1,369,406			$	-			$	-			$	1,369,406
Non-interest bearing deposits			505,358				505,358				505,358				-				-
Time deposits			700,445				691,341				-				-				691,341
Total Deposits			2,575,280				2,566,105				505,358				-				2,060,747
Federal funds purchased and securities sold under    agreement to repurchase			30,527				30,527				-				-				30,527
Federal Home Loan Bank advances			266,286				260,871				-				-				260,871
Other borrowings			-				-				-				-				-
Subordinated notes, net of unamortized issuance costs			34,673				30,642				-				30,642				-
Interest payable			4,760				4,760				-				-				4,760

		(In Thousands)
		December 31, 2022
		Carrying				Fair
		Amount				Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and cash equivalents		$	84,409			$	84,409			$	84,409			$	-			$	-
Interest-bearing time deposits			4,442				4,440				-				4,440				-
Securities - available-for-sale			390,789				390,789				94,678				292,766				3,345
Other securities			9,799				9,799				-				-				9,799
Loans held for sale			827				815				-				-				815
Loans, net			2,336,074				2,171,152				-				-				2,171,152
Interest receivable			10,440				10,440				-				-				10,440
Financial Liabilities:
Interest bearing deposits		$	1,378,090			$	1,377,944			$	-			$	-			$	1,377,944
Non-interest bearing deposits			532,794				532,794				532,794				-				-
Time deposits			557,980				543,737				-				-				543,737
Total Deposits			2,468,864				2,454,475				532,794				-				1,921,681
Federal funds purchased and securities sold under    agreement to repurchase			54,206				54,206				-				-				54,206
Federal Home Loan Bank advances			127,485				125,761				-				-				125,761
Other borrowings			10,000				10,000				-				10,000				-
Subordinated notes, net of unamortized issuance costs			34,586				30,993				-				30,993				-
Interest payable			1,739				1,739				-				-				1,739

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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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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 assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 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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