FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2022

FAIR VALUE MEASUREMENTS

Schedule of securities measured at fair value on a recurring basis

(Dollars in thousands)
September 30, 2022	Level 1		Level 2		Level 3		Total
Debt Securities Available-for-Sale:
U.S. Treasury securities	$	18,356	$	—	$	—	$	18,356
Obligations of U.S. Government Agencies and Sponsored Agencies:
Mortgaged-backed		—		95,674		—		95,674
Other		—		5,567		—		5,567
Other mortgage backed debt securities		—		36,340		—		36,340
Obligations of state and political subdivisions		—		155,322		—		155,322
Asset backed securities		—		29,867		—		29,867
Corporate debt securities		—		45,443		—		45,443
Total debt securities available-for-sale		18,356		368,213		—		386,569
Marketable equity securities		1,612		—		—		1,612
Total recurring fair value measurements	$	19,968	$	368,213	$	—	$	388,181

(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

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

(Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets at September 30, 2022
Impaired loans:
Commercial Real Estate	$	—	$	—	$	5,902	$	5,902
Residential Real Estate		—		—		30		30
Total impaired loans	$	—	$	—	$	5,932	$	5,932

(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

Schedule of fair value measurement inputs and valuation techniques

(Dollars in thousands)	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value					Weighted
September 30, 2022	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%) – (26%)	(15%)
Impaired loans - other	$	2,812	Discounted cash flow	Discount rate	(7%) – (7%)	(7%)
December 31, 2021
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%)

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 September 30, 2022
	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	8,677	$	8,677	$	—	$	—	$	8,677
Interest-bearing deposits in other banks		1,803		—		1,803		—		1,803
Time deposits with other banks		—		—		—		—		—
Restricted investment in bank stocks		4,408		—		4,408		—		4,408
Net loans		836,464		—		—		792,912		792,912
Mortgage servicing rights		327		—		—		327		327
Accrued interest receivable		4,479		—		4,479		—		4,479
FINANCIAL LIABILITIES:
Demand, savings and other deposits		899,267		—		899,267		—		899,267
Time deposits		159,042		—		153,246		—		153,246
Short-term borrowings		94,748		—		94,410		—		94,410
Long-term borrowings		25,000		—		24,058		—		24,058
Subordinated debentures		25,000		—		22,019		—		22,019
Accrued interest payable		573		—		573		—		573
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—

(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		—		—		—		—		—