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FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2020

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

Schedule of fair Value, by Balance Sheet Grouping


	September 30, 2020
	Quoted
	Prices		Other
	in Active		Observable		Unobservable		Total
	Markets		Inputs		Inputs		Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)		Value
Recurring fair value measurements, assets:
AVAILABLE-FOR-SALE DEBT SECURITIES:
Obligations of the U.S. Treasury	$	0	$	12,226	$	0	$	12,226
Obligations of U.S. Government agencies		0		16,355		0		16,355
Obligations of states and political subdivisions:
Tax-exempt		0		109,668		0		109,668
Taxable		0		44,195		0		44,195
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities		0		46,211		0		46,211
Residential collateralized mortgage obligations		0		69,337		0		69,337
Commercial mortgage-backed securities		0		42,553		0		42,553
Total available for sale debt Securities		0		340,545		0		340,545
Marketable equity security		1,003		0		0		1,003
Servicing rights		0		0		1,437		1,437
Interest rate swap agreements, assets		0		7,478		0		7,478
Total recurring fair value measurements, assets	$	1,003	$	348,023	$	1,437	$	350,463

Recurring fair value measurements, liabilities,
Interest rate swap agreements, liabilities	$	0	$	7,478	$	0	$	7,478

Nonrecurring fair value measurements, assets:
Impaired loans with a valuation allowance		0		0		8,085		8,085
Valuation allowance		0		0		(651)		(651)
Impaired loans, net		0		0		7,434		7,434
Foreclosed assets held for sale		0		0		2,369		2,369
Total nonrecurring fair value measurements, assets	$	0	$	0	$	9,803	$	9,803


	December 31, 2019
	Quoted
	Prices		Other
	in Active		Observable		Unobservable		Total
	Markets		Inputs		Inputs		Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)		Value
Recurring fair value measurements, assets:
AVAILABLE-FOR-SALE DEBT SECURITIES:
Obligations of U.S. Government agencies	$	0	$	17,000	$	0	$	17,000
Obligations of states and political subdivisions:
Tax-exempt		0		70,760		0		70,760
Taxable		0		36,303		0		36,303
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities		0		59,210		0		59,210
Residential collateralized mortgage obligations		0		114,723		0		114,723
Commercial mortgage-backed securities		0		48,727		0		48,727
Total available-for-sale debt securities		0		346,723		0		346,723
Marketable equity security		979		0		0		979
Servicing rights		0		0		1,277		1,277
Total recurring fair value measurements	$	979	$	346,723	$	1,277	$	348,979

Nonrecurring fair value measurements, assets
Impaired loans with a valuation allowance	$	0	$	0	$	3,375	$	3,375
Valuation allowance		0		0		(1,051)		(1,051)
Impaired loans, net		0		0		2,324		2,324
Foreclosed assets held for sale		0		0		2,886		2,886
Total nonrecurring fair value measurements, assets	$	0	$	0	$	5,210	$	5,210

Schedule of fair Value Measurement Inputs and Valuation Techniques


	Fair Value at
	9/30/2020		Valuation	Unobservable				Method or Value As of
Asset	(In Thousands)		Technique	Input(s)				9/30/2020
Servicing rights	$	1,437	Discounted cash flow	Discount rate		12.50	%	Rate used through modeling period
				Loan prepayment speeds		354.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs


	Fair Value at
	12/31/2019		Valuation	Unobservable				Method or Value As of
Asset	(In Thousands)		Technique	Input(s)				12/31/2019
Servicing rights	$	1,277	Discounted cash flow	Discount rate		12.50	%	Rate used through modeling period
				Loan prepayment speeds		183.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

Schedule of fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation


(In Thousands)	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Servicing rights balance, beginning of period	$	1,284	$	1,322	$	1,277	$	1,404
Originations of servicing rights		374		70		777		136
Unrealized losses included in earnings		(221)		(164)		(617)		(312)
Servicing rights balance, end of period	$	1,437	$	1,228	$	1,437	$	1,228

Schedule of fair Value Measurements, Recurring and Nonrecurring


(In Thousands)	Fair Value	September 30, 2020				December 31, 2019
	Hierarchy	Carrying		Fair		Carrying		Fair
	Level	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	168,148	$	168,148	$	31,122	$	31,122
Certificates of deposit	Level 2		6,330		6,567		4,080		4,227
Restricted equity securities (included in Other Assets)	Level 2		12,179		12,179		10,321		10,321
Loans, net	Level 3		1,680,617		1,686,087		1,172,386		1,181,000
Accrued interest receivable	Level 2		8,296		8,296		5,001		5,001

Financial liabilities:
Deposits with no stated maturity	Level 2		1,440,602		1,440,602		877,965		877,965
Time deposits	Level 2		430,912		434,978		374,695		376,738
Short-term borrowings	Level 2		40,870		40,902		86,220		86,166
Long-term borrowings	Level 2		102,787		105,336		52,127		52,040
Subordinated debt	Level 2		16,572		16,680		6,500		6,499
Accrued interest payable	Level 2		563		563		311		311

Recurring fair value measurements

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

Schedule of fair Value Measurement Inputs and Valuation Techniques


(In Thousands, Except									Weighted
Percentages)			Valuation						Average
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	Discount at
Asset	9/30/2020		9/30/2020		9/30/2020		Technique	Inputs	9/30/2020

Impaired loans:
Residential mortgage loans - first and junior liens	$	1,516	$	170	$	1,346	Sales comparison	Discount to appraised value	31	%
Commercial:
Commercial loans secured by real estate		6,497		409		6,088	Sales comparison	Discount to appraised value	38	%
Commercial and industrial		72		72		0	Liquidation of assets	Discount to appraised value	100	%
Total impaired loans	$	8,085	$	651	$	7,434
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	104	$	0	$	104	Sales comparison	Discount to appraised value	47	%
Commercial real estate		2,265		0		2,265	Sales comparison	Discount to appraised value	34	%
Total foreclosed assets held for sale	$	2,369	$	0	$	2,369


(In Thousands, Except									Weighted
Percentages)			Valuation						Average
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	Discount at
Asset	12/31/2019		12/31/2019		12/31/2019		Technique	Inputs	12/31/2019

Impaired loans:
Residential mortgage loans - first and junior liens	$	732	$	176	$	556	Sales comparison	Discount to appraised value	30	%
Commercial:
Commercial and industrial		106		89		17	Sales comparison	Discount to appraised value	69	%
Commercial and industrial		798		60		738	Liquidation of accounts receivable	Discount to borrower's financial statement value	15	%
Commercial construction and land		1,261		678		583	Sales comparison	Discount to appraised value	47	%
Loans secured by farmland		478		48		430	Sales comparison	Discount to appraised value	46	%
Total impaired loans	$	3,375	$	1,051	$	2,324
Foreclosed assets held for sale - real estate:
Residential (1-4 family)	$	292	$	0	$	292	Sales comparison	Discount to appraised value	46	%
Land		70		0		70	Sales comparison	Discount to appraised value	53	%
Commercial real estate		2,524		0		2,524	Sales comparison	Discount to appraised value	39	%
Total foreclosed assets held for sale	$	2,886	$	0	$	2,886

- 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.

+ References + Details