FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Assets Measured at Fair Value on a Recurring Basis

The following tables present the assets reported on the consolidated balance sheet at their fair value on a recurring basis as of December 31, 2023 and 2022 (in thousands) by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

2023	Level I		Level II			Level III		Total
Fair value measurements on a recurring basis:
Assets
Equity securities	$	1,938	$	-		$	-	$	1,938
Available for sale securities:
U.S. Agency securities		-		60,771			-		60,771
U.S. Treasuries securities		143,288		-			-		143,288
Obligations of state and political subdivisions		-		101,787			-		101,787
Corporate obligations		-		12,403			-		12,403
Mortgage-backed securities in government sponsored entities		-		99,352			-		99,352
Other Assets
Derivative instruments		-		13,363			324		13,687
Liabilities
Derivative instruments		-		(7,922	)		-		(7,922	)

2022	Level I		Level II			Level III		Total
Fair value measurements on a recurring basis:
Assets
Equity securities	$	2,208	$	-		$	-	$	2,208
Available for sale securities:
U.S. Agency securities		-		70,677			-		70,677
U.S. Treasuries securities		148,570		-			-		148,570
Obligations of state and political subdivisions		-		110,300			-		110,300
Corporate obligations		-		9,383			-		9,383
Mortgage-backed securities in government sponsored entities		-		100,576			-		100,576
Other Assets
Derivative instruments		-		16,599			-		16,599
Liabilities
Derivative instruments		-		(9,726	)		-		(9,726	)

Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following tables represent assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2023:

	Level 3
	IRLC - Asset			IRLC - Liability
Beginning Balance: June 16, 2023	$	657		$	-
Total gains (losses) (unrealized):
Included in other comprehensive loss		-			-
Total (loss) gains included in earnings and held at reporting date		(333	)		-
Purchases, sales and settlements		-			-
Transfers out of Level 3		-			-
Ending Balance December 31, 2023	$	324		$	-
Change in unrealized (losses) gains for the period included in earnings (or changes in net assets) for assets held as of December 31, 2023	$	(333	)		-
Change in unrealized losses for the period included other comprehensive loss for assets held as of December 31, 2023	$	-			-

Assets Measured at Fair Value on Non-recurring Basis

Assets measured at fair value on a nonrecurring basis as of December 31, 2023 and 2022 (in thousands) are included in the table below:

2023	Level I		Level II		Level III		Total
Collateral-dependent loans	$	-	$	-	$	3,885	$	3,885
Other real estate owned		-		-		97		97

2022	Level I		Level II		Level III		Total
Impaired loans	$	-	$	-	$	496	$	496
Other real estate owned		-		-		297		297

Significant Unobservable Inputs Used in Fair Value Measurement Process

Significant unobservable inputs for assets and liabilities measured at fair value on a recurring basis at December 31, 2023:

Quantitative Information about Level 3 Fair Value Measurements
2023	Fair Value	Valuation Technique(s)	Unobservable input	Range		Weighted average
Measured at Fair Value on a Recurring Basis:
Net derivative asset and liability:
IRLC	324	Discounted cashflows	Pull-though rates	63.63%-94.24	%	85.43	%

The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques (dollars in thousands).

2023	Fair Value	Valuation Technique(s)	Unobservable input	Range	Weighted average
Collateral-dependent  loans	3,885	Appraised Collateral Values	Discount for time since appraisal	0-100%	29.32%
			Selling costs	8%-12%	10.20%
			Holding period	3 - 12 months	6.65 months
Other real estate owned	97	Appraised Collateral Values	Discount for time since appraisal	32%	32.00%

2022	Fair Value	Valuation Technique(s)	Unobservable input	Range	Weighted average
Impaired loans	496	Appraised Collateral Values	Discount for time since appraisal	0-100%	25.16%
			Selling costs	8%-10%	8.41%
			Holding period	6 - 12 months	11.51 months
Other real estate owned	297	Appraised Collateral Values	Discount for time since appraisal	20-84%	39.84%

Carrying Amount and Fair Value of Financial Instruments

The carrying amount and fair value of the Company’s financial instruments that are not required to be measured or reported at fair value on a recurring basis are as follows (in thousands):

December 31, 2023	Carrying Amount		Fair Value		Level I		Level II		Level III
Financial assets:
Interest bearing time deposits with other banks	$	4,070	$	4,070	$	-	$	-	$	4,070
Loans held for sale		9,379		9,379		-		-		9,379
Net loans		2,227,683		2,126,237		-		-		2,126,237
Financial liabilities:
Deposits		2,321,481		2,315,374		1,902,007		-		413,367
Borrowed funds		322,036		313,217		-		-		313,217

December 31, 2022	Carrying Amount		Fair Value		Level I		Level II		Level III
Financial assets:
Interest bearing time deposits with other banks	$	6,055	$	6,055	$	-	$	-	$	6,055
Loans held for sale		725		725		-		-		725
Net loans		1,706,447		1,662,514		-		-		1,662,514
Financial liabilities:
Deposits		1,844,208		1,832,037		1,566,517		-		265,520
Borrowed funds		257,278		246,288		-		-		246,288