Fair Value (Tables)

6 Months Ended

Jun. 30, 2018

Assets Measured at Fair Value on Recurring Basis

Assets measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements at June 30, 2018 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	6,657	$	0	$	6,657	$	0
State and political subdivisions		200,134		0		200,134		0
Corporate bonds		1,181		0		1,181		0
Mortgage-backed securities-residential		152,570		0		152,563		7
Collateralized mortgage obligations		15,381		0		15,381		0
Small Business Administration		12,967		0		12,967		0
Equity securities		434		434		0		0
Other investments measured at net asset value		5,910	n/a		n/a		n/a
Total investment securities	$	395,234	$	434	$	388,883	$	7
Loan yield maintenance provisions	$	1,021	$	0	$	1,021	$	0
Financial Liabilities
Interest rate swaps	$	1,021	$	0	$	1,021	$	0

	Fair Value Measurements at December 31, 2017 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government sponsored entities	$	8,917	$	0	$	8,917	$	0
State and political subdivisions		191,003		0		191,003		0
Corporate bonds		1,234		0		1,234		0
Mortgage-backed securities-residential		160,450		0		160,442		8
Collateralized mortgage obligations		17,121		0		17,121		0
Small Business Administration		14,212		0		14,212		0
Equity securities		394		394		0		0
Other investments measured at net asset value		5,185	n/a		n/a		n/a
Total investment securities	$	398,516	$	394	$	392,929	$	8
Loan yield maintenance provisions	$	653	$	0	$	653	$	0
Financial Liabilities
Interest rate swaps	$	653	$	0	$	653	$	0

Reconciliation of All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Investment Securities Available-for-sale (Level 3)
	Three Months ended June 30,					Six Months ended June 30,
(In Thousands of Dollars)	2018		2017			2018			2017
Beginning Balance	$	7	$	11		$	8		$	12
Transfers from level 2		0		0			0			0
Repayments, calls and maturities		0		(1	)		(1	)		(2	)
Ending Balance	$	7	$	10		$	7		$	10

Assets Measured at Fair Value on Non-Recurring Basis

Assets measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at June 30, 2018 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Farmland		251		0		0		251
Commercial
Commercial and industrial		8		0		0		8
1–4 family residential		1,604		0		0		1,604
Consumer		22		0		0		22

	Fair Value Measurements at December 31, 2017 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
1–4 family residential	$	740	$	0	$	0	$	740
Consumer		2		0		0		2

Fair Value Measurements for Financial Instruments

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods ended June 30, 2018 and December 31, 2017:

June 30, 2018	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	251	Sales Comparison	Adjustment for differences between comparable sales	(22.70%) - 16.16% 9.39%
Commercial		8	Sales Comparison	Adjustment for differences between comparable sales	(18.61%) - 28.25% (7.66%)
Residential		1,604	Sales comparison	Adjustment for differences between comparable sales	(15.76%) - 27.92% 3.03%
Consumer		22	Sales comparison	Adjustment for differences between comparable sales	(12.04%) - 12.04% 0.00%

December 31, 2017	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Residential	$	740	Sales comparison	Adjustment for differences between comparable sales	(15.67%) - 27.92% .53%
Consumer		2	Sales comparison	Adjustment for differences between comparable sales	(21.98%) - 21.98% (0.00%)

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously disclosed at June 30, 2018 and December 31, 2017 are as follows:

			Fair Value Measurements at June 30, 2018 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	76,623	$	18,021	$	58,602	$	0	$	76,623
Restricted stock		11,226	n/a		n/a		n/a		n/a
Loans held for sale		1,987		0		2,047		0		2,047
Loans, net		1,626,427		0		0		1,587,381		1,587,381
Accrued interest receivable		6,677		0		2,211		4,466		6,677
Financial liabilities
Deposits		1,650,337		1,363,262		280,397		0		1,643,659
Short-term borrowings		315,951		0		315,951		0		315,951
Long-term borrowings		6,614		0		6,401		0		6,401
Accrued interest payable		696		52		644		0		696

			Fair Value Measurements at December 31, 2017 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	57,614	$	17,785	$	39,829	$	0	$	57,614
Restricted stock		10,491	n/a		n/a		n/a		n/a
Loans held for sale		272		0		283		0		283
Loans, net		1,565,066		0		0		1,569,381		1,569,381
Accrued interest receivable		6,669		0		2,255		4,414		6,669
Financial liabilities
Deposits		1,604,719		1,340,814		259,346		0		1,600,160
Short-term borrowings		289,565		0		289,565		0		289,565
Long-term borrowings		6,994		0		6,690		0		6,690
Accrued interest payable		633		46		587		0		633