Fair Value (Tables)

9 Months Ended

Sep. 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 September 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	$	6,383	$	0	$	6,383	$	0
State and political subdivisions		201,275		0		201,275		0
Corporate bonds		1,183		0		1,183		0
Mortgage-backed securities-residential		147,427		0		147,421		6
Collateralized mortgage obligations		21,301		0		21,301		0
Small Business Administration		12,427		0		12,427		0
Equity securities		427		427		0		0
Other investments measured at net asset value		6,465	n/a		n/a		n/a
Total investment securities	$	396,888	$	427	$	389,990	$	6
Loan yield maintenance provisions	$	1,167	$	0	$	1,167	$	0
Financial Liabilities
Interest rate swaps	$	1,167	$	0	$	1,167	$	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 September 30,						Nine Months ended September 30,
(In Thousands of Dollars)	2018			2017			2018			2017
Beginning Balance	$	7		$	10		$	8		$	12
Transfers from level 2		0			0			0			0
Repayments, calls and maturities		(1	)		(1	)		(2	)		(3	)
Ending Balance	$	6		$	9		$	6		$	9

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 September 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		10		0		0		10
1–4 family residential		1,346		0		0		1,346
Consumer		15		0		0		15

	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 September 30, 2018 and December 31, 2017:

September 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		10	Sales Comparison	Adjustment for differences between comparable sales	(18.61%) - 28.25% (7.66%)
Residential		1,346	Sales comparison	Adjustment for differences between comparable sales	(15.76%) - 27.92% 3.03%
Consumer		15	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% 0.53%
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 September 30, 2018 and December 31, 2017 are as follows:

			Fair Value Measurements at September 30, 2018 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	75,635	$	19,652	$	55,983	$	0	$	75,635
Restricted stock		11,647	n/a		n/a		n/a		n/a
Loans held for sale		1,428		0		1,471		0		1,471
Loans, net		1,678,155		0		0		1,630,224		1,630,224
Accrued interest receivable		7,377		0		2,321		5,056		7,377
Financial liabilities
Deposits		1,758,711		1,451,980		299,623		0		1,751,603
Short-term borrowings		264,059		0		264,059		0		264,059
Long-term borrowings		6,214		0		5,968		0		5,968
Accrued interest payable		898		69		829		0		898

			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