FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2020

FAIR VALUE MEASUREMENTS

Schedule of securities measured at fair value on a recurring basis

(Dollars in thousands)
June 30, 2020	Level 1		Level 2		Level 3		Total
Debt Securities Available-for-Sale:
U.S. Treasury securities	$	—	$	—	$	—	$	—
Obligations of U.S. Government Agencies and Sponsored Agencies:
Mortgaged-backed		—		63,967		—		63,967
Other		—		11,616		—		11,616
Other mortgage backed debt securities		—		28,636		—		28,636
Obligations of state and political subdivisions		—		150,865		—		150,865
Asset backed securities		—		38,845		—		38,845
Corporate debt securities		—		18,760		—		18,760
Total debt securities available-for-sale		—		312,689		—		312,689
Marketable equity securities		1,463		—		—		1,463
Total recurring fair value measurements	$	1,463	$	312,689	$	—	$	314,152

(Dollars in thousands)
December 31, 2019	Level 1		Level 2		Level 3		Total
Debt Securities Available-for-Sale:
U.S. Treasury securities	$	—	$	2,855	$	—	$	2,855
Obligations of U.S. Government Agencies and Sponsored Agencies:
Mortgaged-backed		—		77,283		—		77,283
Other		—		10,297		—		10,297
Other mortgage backed debt securities		—		11,138		—		11,138
Obligations of state and political subdivisions		—		120,376		—		120,376
Asset backed securities		—		37,536		—		37,536
Corporate debt securities		—		18,443		—		18,443
Total debt securities available-for-sale		—		277,928		—		277,928
Marketable equity securities		1,933		—		—		1,933
Total recurring fair value measurements	$	1,933	$	277,928	$	—	$	279,861

Schedule of impaired loans measured at fair value on a nonrecurring basis

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at June 30, 2020
Impaired loans:
Commercial Real Estate	$	—	$	—	$	6,385	$	6,385
Residential Real Estate		—		—		188		188
Total impaired loans	$	—	$	—	$	6,573	$	6,573

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2019
Impaired loans:
Commercial Real Estate	$	—	$	—	$	6,218	$	6,218
Residential Real Estate		—		—		221		221
Total impaired loans	$	—	$	—	$	6,439	$	6,439

Schedule of foreclosed assets held for resale measured at fair value on a nonrecurring basis

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at June 30, 2020
Foreclosed assets held for resale:
Commercial Real Estate	$	—	$	—	$	81	$	81
Total foreclosed assets held for resale	$	—	$	—	$	81	$	81

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2019
Foreclosed assets held for resale:
Commercial Real Estate	$	—	$	—	$	81	$	81
Total foreclosed assets held for resale	$	—	$	—	$	81	$	81

Schedule of fair value measurement inputs and valuation techniques

(Dollars in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value					Weighted
June 30, 2020	Estimate		Valuation Technique	Unobservable Input	Range	Average
Impaired loans - collateral dependent	$	3,381	Appraisal of collateral1,3	Appraisal adjustments2	(13%) – (77%)	(18%)
Impaired loans - other	$	3,192	Discounted cash flow	Discount rate	(5%) – (9%)	(6%)
Foreclosed assets held for resale	$	81	Appraisal of collateral1,3	Appraisal adjustments2	(35%) –(35%)	(35%)
December 31, 2019
Impaired loans - collater dependent	$	3,419	Appraisal of collateral1,3	Appraisal adjustments2	(10%) – (77%)	(17%)
Impaired loans - other	$	3,020	Discounted cash flow	Discount rate	(7%) – (8%)	(7%)
Foreclosed assets held for resale	$	81	Appraisal of collateral1,3	Appraisal adjustments2	(35%) – (35%)	(35%)

¹ Fair value is generally determined through independent appraisals of the underlying collateral, as defined by Bank regulators.

² Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value.

³ Includes qualitative adjustments by management and estimated liquidation expenses.

Schedule of fair value of financial instruments, including financial assets and financial liabilities

(Dollars in thousands)	Carrying		Fair Value Measurements at June 30, 2020
	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	9,162	$	9,162	$	—	$	—	$	9,162
Interest-bearing deposits in other banks		588		—		588		—		588
Time deposits with other banks		247		—		255		—		255
Restricted investment in bank stocks		3,416		—		3,416		—		3,416
Net loans		669,580		—		—		699,432		699,432
Mortgage servicing rights		282		—		—		282		282
Accrued interest receivable		4,580		—		4,580		—		4,580
FINANCIAL LIABILITIES:
Demand, savings and other deposits		636,924		—		636,924		—		636,924
Time deposits		207,802		—		210,900		—		210,900
Short-term borrowings		33,315		—		33,350		—		33,350
Long-term borrowings		45,000		—		47,660		—		47,660
Accrued interest payable		453		—		453		—		453
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—

(Dollars in thousands)	Carrying		Fair Value Measurements at December 31, 2019
	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	10,251	$	10,251	$	—	$	—	$	10,251
Interest-bearing deposits in other banks		473		—		473		—		473
Time deposits with other banks		247		—		250		—		250
Restricted investment in bank stocks		4,224		—		4,224		—		4,224
Net loans		640,727		—		—		655,301		655,301
Mortgage servicing rights		283		—		—		283		283
Accrued interest receivable		3,405		—		3,405		—		3,405
FINANCIAL LIABILITIES:
Demand, savings and other deposits		526,564		—		526,564		—		526,564
Time deposits		235,064		—		235,134		—		235,134
Short-term borrowings		54,663		—		54,655		—		54,655
Long-term borrowings		55,000		—		55,809		—		55,809
Accrued interest payable		606		—		606		—		606
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—