FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2021

FAIR VALUE MEASUREMENTS

Schedule of securities measured at fair value on a recurring basis

At December 31, 2021 and 2020, securities measured at fair value on a recurring basis and the valuation methods used are as follows:

(Dollars in thousands)
December 31, 2021	Level 1		Level 2		Level 3		Total
Debt Securities Available-for-Sale:
U.S. Treasury securities	$	7,729	$	—	$	—	$	7,729
Obligations of U.S. Government Agencies and Sponsored Agencies:
Mortgaged-backed		—		114,911		—		114,911
Other		—		7,576		—		7,576
Other mortgage backed debt securities		—		39,550		—		39,550
Obligations of state and political subdivisions		—		186,176		—		186,176
Asset backed securities		—		36,542		—		36,542
Corporate debt securities		—		45,432		—		45,432
Total debt securities available-for-sale		7,729		430,187		—		437,916
Marketable equity securities		1,962		—		—		1,962
Total recurring fair value measurements	$	9,691	$	430,187	$	—	$	439,878

(Dollars in thousands)
December 31, 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		—		77,573		—		77,573
Other		—		10,430		—		10,430
Other mortgage backed debt securities		—		39,844		—		39,844
Obligations of state and political subdivisions		—		165,101		—		165,101
Asset backed securities		—		44,821		—		44,821
Corporate debt securities		—		28,942		—		28,942
Total debt securities available-for-sale		—		366,711		—		366,711
Marketable equity securities		1,646		—		—		1,646
Total recurring fair value measurements	$	1,646	$	366,711	$	—	$	368,357

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

At December 31, 2021 and 2020, impaired loans measured at fair value on a nonrecurring basis and the valuation methods used are as follows:

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2021
Impaired loans:
Commercial Real Estate	$	—	$	—	$	5,954	$	5,954
Residential Real Estate		—		—		30		30
Total impaired loans	$	—	$	—	$	5,984	$	5,984

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2020
Impaired loans:
Commercial Real Estate	$	—	$	—	$	6,497	$	6,497
Residential Real Estate		—		—		111		111
Total impaired loans	$	—	$	—	$	6,608	$	6,608

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

At December 31, 2021 and 2020, foreclosed assets held for resale measured at fair value on a nonrecurring basis and the valuation methods used are as follows:

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2021
Foreclosed assets held for resale:
Commercial Real Estate	$	—	$	—	$	—	$	—
Total foreclosed assets held for resale	$	—	$	—	$	—	$	—

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at December 31, 2020
Foreclosed assets held for resale:
Commercial Real Estate	$	—	$	—	$	28	$	28
Total foreclosed assets held for resale	$	—	$	—	$	28	$	28

Schedule of fair value measurement inputs and valuation techniques

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Corporation has utilized Level 3 inputs to determine the fair value:

(Dollars in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value					Weighted
December 31, 2021	Estimate		Valuation Technique	Unobservable Input	Range	Average
Impaired loans - collateral dependent	$	3,120	Appraisal of collateral1,3 Certificate of Inspection1,3	Appraisal adjustments2 Qualitative Adjustments4	(15%) – (44%)	(15%)
Impaired loans - other	$	2,864	Discounted cash flow	Discount rate	(7%) – (7%)	(7%)
Foreclosed assets held for resale	$	—	Appraisal of collateral1,3 Certificate of Inspection1,3	Appraisal adjustments2 Qualitative Adjustments4	(0%) –(0%)	(0%)
December 31, 2020
Impaired loans - collateral dependent	$	3,679	Appraisal of collateral1,3 Certificate of Inspection1,3	Appraisal adjustments2 Qualitative Adjustments4	(15%) – (73%)	(17%)
Impaired loans - other	$	2,929	Discounted cash flow	Discount rate	(7%) – (7%)	(7%)
Foreclosed assets held for resale	$	28	Appraisal of collateral1,3 Certificate of Inspection1,3	Appraisal adjustments2 Qualitative Adjustments4	(28%) – (28%)	(28%)

1. Fair value is generally determined through independent appraisals or Certificates of Inspection 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.

4. Collateral values may be adjusted downward by management for qualitative factors such as economic conditions 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 December 31, 2021
	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	9,600	$	9,600	$	—	$	—	$	9,600
Interest-bearing deposits in other banks		51,738		—		51,738		—		51,738
Time deposits with other banks		247		—		247		—		247
Restricted investment in bank stocks		1,919		—		1,919		—		1,919
Net loans		744,161		—		—		762,914		762,914
Mortgage servicing rights		367		—		—		367		367
Accrued interest receivable		4,361		—		4,361		—		4,361
FINANCIAL LIABILITIES:
Demand, savings and other deposits		904,877		—		904,877		—		904,877
Time deposits		173,092		—		172,897		—		172,897
Short-term borrowings		27,377		—		27,380		—		27,380
Long-term borrowings		35,000		—		35,987		—		35,987
Subordinated debentures		25,000		—		24,384		—		24,384
Accrued interest payable		251		—		251		—		251
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—

(Dollars in thousands)	Carrying		Fair Value Measurements at December 31, 2020
	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	8,833	$	8,833	$	—	$	—	$	8,833
Interest-bearing deposits in other banks		15,347		—		15,347		—		15,347
Time deposits with other banks		247		—		253		—		253
Restricted investment in bank stocks		2,247		—		2,247		—		2,247
Net loans		712,677		—		—		741,934		741,934
Mortgage servicing rights		262		—		—		262		262
Accrued interest receivable		4,544		—		4,544		—		4,544
FINANCIAL LIABILITIES:
Demand, savings and other deposits		743,660		—		743,660		—		743,660
Time deposits		193,828		—		196,200		—		196,200
Short-term borrowings		19,494		—		19,498		—		19,498
Long-term borrowings		45,000		—		47,237		—		47,237
Subordinated debentures		25,000		—		25,378		—		25,378
Accrued interest payable		405		—		405		—		405
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—