Fair Value (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value for the dates indicated:



(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
December 31, 2019
Financial assets:
Loans held for sale	$	11,854	$	—	$	11,854	$	—
AFS investments:
Obligations of states and political subdivisions	118,083		—		118,083		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	463,386		—		463,386		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	325,905		—		325,905		—
Subordinated corporate bonds	10,744		—		10,744		—
Equity securities - bank stock	1,674		—		1,674		—
Customer loan swaps	17,756		—		17,756		—
Interest rate swap on loans	483		—		483		—
Fixed-rate mortgage interest rate lock commitments	480		—		480		—
Forward delivery commitments	312		—		312		—
Financial liabilities:
Junior subordinated debt interest rate swaps	$	8,187	$	—	$	8,187	$	—
Customer loan swaps	17,756		—		17,756		—
Fixed-rate mortgage interest rate lock commitments	18		—		18		—
Forward delivery commitments	15		—		15		—
December 31, 2018
Financial assets:
Loans held for sale	$	4,403	$	—	$	4,403	$	—
AFS investments:
Obligations of states and political subdivisions	93,752		—		93,752		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	453,672		—		453,672		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	342,894		—		342,894		—
Subordinated corporate bonds	20,374		—		20,374		—
Equity securities - bank stock	746		—		746		—
Customer loan swaps	7,841		—		7,841		—
Fixed-rate mortgage interest rate lock commitments	95		—		95		—
Forward delivery commitments	32		—		32		—
FHLBB advance interest rate swaps	30		—		30		—
Financial liabilities:
Junior subordinated debt interest rate swaps	$	5,682	$	—	$	5,682	$	—
Customer loan swaps	7,841		—		7,841		—
Fixed-rate mortgage interest rate lock commitments	28		—		28		—
Forward delivery commitments	17		—		17		—

Summary of Assets Measured at Fair Value on Non Recurring Basis

The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis for the dates indicated:



(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
December 31, 2019
Non-financial assets:
OREO	$	94	$	—	$	—	$	94
December 31, 2018
Financial assets:
Collateral-dependent impaired loans	$	522	$	—	$	—	$	522
Non-financial assets:
OREO	130		—		—		130

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis for the dates indicated:



(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable input	Discount Range (Weighted-Average)
December 31, 2019
OREO	$	94	Market approach appraisal of collateral	Management adjustment of appraisal	18%	(18%)
				Estimated selling costs	13%	(13%)
December 31, 2018
Collateral-dependent impaired loans:
Partially charged-off	$	50	Market approach appraisal of collateral	Management adjustment of appraisal	0%	(0%)
				Estimated selling costs	10%	(10%)
Specifically reserved	472		Market approach appraisal of collateral	Management adjustment of appraisal	0%	(0%)
				Estimated selling costs	10%	(10%)
OREO	130		Market approach appraisal of collateral	Management adjustment of appraisal	19%	(19%)
				Estimated selling costs	10%	(10%)

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:



(In thousands)	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
December 31, 2019
Financial assets:
HTM securities	$	1,302	$	1,359	$	—	$	1,359	$	—
Residential real estate loans⁽¹⁾	1,064,532		1,066,544		—		—		1,066,544
Commercial real estate loans⁽¹⁾	1,230,983		1,196,297		—		—		1,196,297
Commercial loans⁽¹⁾⁽²⁾	438,716		431,892		—		—		431,892
Home equity loans⁽¹⁾	310,356		293,565		—		—		293,565
Consumer loans⁽¹⁾	25,265		23,355		—		—		23,355
Servicing assets	877		1,496		—		—		1,496
Financial liabilities:
Time deposits	$	595,549	$	594,881	$	—	$	594,881	$	—
Short-term borrowings	268,809		268,631		—		268,631		—
Long-term borrowings	10,000		10,002		—		10,002		—
Subordinated debentures	59,080		50,171		—		50,171		—
December 31, 2018
Financial assets:
HTM securities	$	1,307	$	1,291	$	—	$	1,291	$	—
Residential real estate loans⁽¹⁾	986,795		957,957		—		—		957,957
Commercial real estate loans⁽¹⁾	1,257,879		1,218,436		—		—		1,218,436
Commercial loans⁽¹⁾⁽²⁾	411,479		404,805		—		—		404,805
Home equity loans⁽¹⁾	324,967		317,359		—		—		317,359
Consumer loans⁽¹⁾	20,390		18,969		—		—		18,969
Servicing assets	831		1,677		—		—		1,677
Financial liabilities:
Time deposits	$	661,281	$	654,954	$	—	$	654,954	$	—
Short-term borrowings	270,868		270,598		—		270,598		—
Long-term borrowings	11,580		11,573		—		11,573		—
Subordinated debentures	59,067		49,060		—		49,060		—


(1)	The presented carrying amount is net of the allocated ALL.


(2)	Includes the HPFC loan portfolio.

Excluded from the summary were financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.