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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value of Financial Instruments [Abstract]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques





For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of December 31, 2018 and 2017, the significant unobservable inputs used in the fair value measurements were as follows:




(in thousands)		Fair Value at December 31, 2018	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Recurring:

Investment Securities – available for sale - CDO	$	15,277	Discounted Cash Flow	Discount Rate	Libor+ 4.5%

Non-recurring:

Impaired Loans	$	1,316	Market Comparable Properties	Marketability Discount	10.0% to 15.0% (1)                                    (weighted avg 12.8%)

OREO	$	2,707	Market Comparable Properties	Marketability Discount	10.0% to 15.0% (1)                                    (weighted avg 13.5%)






(in thousands)		Fair Value at December 31, 2017	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Recurring:

Investment Securities – available for sale - CDO	$	14,920	Discounted Cash Flow	Discount Rate	Range of Libor+ 4.5% to 5.5%

Non-recurring:

Impaired Loans	$	2,507	Market Comparable Properties	Marketability Discount	10.0% to 15.0% (1)                                    (weighted avg 10.9%)

OREO	$	1,841	Market Comparable Properties	Marketability Discount	10.0% to 15.0% (1)                                    (weighted avg 13.3%)



(1) Range would include discounts taken since appraisal and estimated values

Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis

For assets measured at fair value on a recurring and non-recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2018 and 2017 are as follows:







				Fair Value Measurements at
				December 31, 2018 Using
				(In Thousands)
		Assets Measured at		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description		12/31/2018		(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
   U.S. government agencies		$	29,026			$	29,026
   Commercial mortgage-backed agencies		$	37,752			$	37,752
   Collateralized mortgage obligations		$	35,704			$	35,704
   Obligations of states and political subdivisions		$	19,882			$	19,882
   Collateralized debt obligations		$	15,277					$	15,277
Financial Derivative		$	1,043			$	1,043
Non-recurring:
Impaired loans		$	1,316					$	1,316
Other real estate owned		$	2,707					$	2,707


				Fair Value Measurements at
				December 31, 2017 Using
				(In Thousands)
		Assets Measured at		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description		12/31/2017		(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
   U.S. government agencies		$	29,256			$	29,256
   Commercial mortgage-backed agencies		$	40,891			$	40,891
   Collateralized mortgage obligations		$	40,384			$	40,384
   Obligations of states and political subdivisions		$	21,019			$	21,019
   Collateralized debt obligations		$	14,920					$	14,920
Financial Derivative		$	781			$	781
Non-recurring:
Impaired loans		$	2,507					$	2,507
Other real estate owned		$	1,841					$	1,841



Reconciliation of Fair Valued Assets Measured on a Recurring Basis

The following tables show a reconciliation of the beginning and ending balances for fair valued assets measured using Level 3 significant unobservable inputs for the years ended December 31, 2018 and 2017:





	Fair Value Measurements Using Significant
	Unobservable Inputs
	(Level 3)
	(In Thousands)
	Investment Securities Available for Sale
Beginning balance January 1, 2018	$	14,920
   Total gains/(losses) realized/unrealized:
       Calls/maturities of investments		(996)
       Included in other comprehensive income		1,353
Ending balance December 31, 2018	$	15,277



	Fair Value Measurements Using Significant
	Unobservable Inputs
	(Level 3)
	(In Thousands)
	Investment Securities Available for Sale
Beginning balance January 1, 2017	$	20,254
   Total gains/(losses) realized/unrealized:
       Calls/maturities of investments		(5,810)
       Included in other comprehensive income		476
Ending balance December 31, 2017	$	14,920




Fair Value by Balance Sheet Grouping

The following table presents fair value information about financial instruments, whether or not recognized in the statement of financial condition, for which it is practicable to estimate that value. The actual carrying amounts and estimated fair values of the Corporation’s financial instruments that are included in the statement of financial condition are as follows:





	December 31, 2018					Fair Value Measurements
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and due from banks	$	22,187	$	22,187	$	22,187
Interest bearing deposits in banks		1,354		1,354		1,354
Investment securities - AFS		137,641		137,641			$	122,364	$	15,277
Investment securities - HTM		94,010		93,760				80,780		12,980
Restricted Bank stock		5,394		5,394				5,394
Loans, net 1		996,667		967,198						967,198
Financial derivative		1,043		1,043				1,043
Accrued interest receivable		4,175		4,175				4,175

Financial Liabilities:
Deposits – non-maturity		815,858		815,858				815,858
Deposits – time deposits		251,669		252,146				252,146
Short-term borrowed funds		77,707		77,707				77,707
Long-term borrowed funds		100,929		102,590				102,590
Accrued interest payable		455		455				455
Off balance sheet financial instruments		0		0		0






	December 31, 2017					Fair Value Measurements
						Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands)	Carrying Amount		Fair Value			(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and due from banks	$	82,273	$	82,273	$	82,273
Interest bearing deposits in banks		1,479		1,479		1,479
Investment securities - AFS		146,470		146,470			$	131,550	$	14,920
Investment securities - HTM		93,632		95,346				86,836		8,510
Restricted Bank stock		5,204		5,204				5,204
Loans, net 1		882,546		883,936						883,936
Financial derivative		781		781				781
Accrued interest receivable		3,814		3,814				3,814

Financial Liabilities:
Deposits – non-maturity		805,263		805,263				805,263
Deposits – time deposits		234,127		235,489				235,489
Short-term borrowed funds		48,845		48,845				48,845
Long-term borrowed funds		120,929		123,906				123,906
Accrued interest payable		453		453				453
Off balance sheet financial instruments		0		0		0



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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 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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