Fair Value (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured on Recurring Basis Measured at Fair Value

The following tables present the balances of assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2019, December 31, 2018 and September 30, 2018.

	At September 30, 2019
	Level 1		Level 2		Level 3		Total
Securities available for sale
Mortgage-backed securities	$	—	$	322,190,000	$	—	$	322,190,000
State and political subdivisions	—		4,608,000		—		4,608,000
Total securities available for sale	—		326,798,000		—		326,798,000
Interest rate swap agreements	—		510,000		—		510,000
Customer loan interest swap agreements	—		1,643,000		—		1,643,000
Total interest rate swap agreements	$	—	$	2,153,000	$	—	$	2,153,000
Total assets	$	—	$	328,951,000	$	—	$	328,951,000

	At September 30, 2019
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	845,000	$	—	$	845,000
Customer loan interest swap agreements	—		1,643,000		—		1,643,000
Total liabilities	$	—	$	2,488,000	$	—	$	2,488,000

	At December 31, 2018
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	5,007,000	$	—	$	5,007,000
Mortgage-backed securities	—		307,693,000		—		307,693,000
State and political subdivisions	—		4,716,000		—		4,716,000
Total securities available for sale	—		317,416,000		—		317,416,000
Interest rate swap agreements	—		1,889,000		—		1,889,000
Total assets	$	—	$	319,305,000	$	—	$	319,305,000

	At December 31, 2018
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	69,000	$	—	$	69,000
Total liabilities	$	—	$	69,000	$	—	$	69,000

	At September 30, 2018
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Treasury and agency	$	—	$	4,979,000	$	—	$	4,979,000
Mortgage-backed securities	$	—	$	292,570,000	$	—	$	292,570,000
State and political subdivisions	—		4,638,000		—		4,638,000
Total securities available for sale	—		302,187,000		—		302,187,000
Interest rate swap agreements	—		2,888,000		—		2,888,000
Total assets	$	—	$	305,075,000	$	—	$	305,075,000

Assets Measured on Nonrecurring Basis Measured at Fair Value

The following tables include assets measured at fair value on a nonrecurring basis that have had a fair value adjustment since their initial recognition. Other real estate owned is presented net of an allowance of $0 at September 30, 2019, 2018 and December 31, 2018. Only collateral-dependent impaired loans with a related specific allowance for loan losses or a partial

charge off are included in impaired loans for purposes of fair value disclosures. Impaired loans below are presented net of specific allowances of $1,763,000, $2,096,000 and $2,109,000 at September 30, 2019, December 31, 2018, and September 30, 2018, respectively.

	At September 30, 2019
	Level 1		Level 2		Level 3		Total
Other real estate owned	$	—	$	279,000	$	—	$	279,000
Impaired loans	—		7,143,000		—		7,143,000
Total assets	$	—	$	7,422,000	$	—	$	7,422,000

	At December 31, 2018
	Level 1		Level 2		Level 3		Total
Other real estate owned	$	—	$	584,000	$	—	$	584,000
Impaired loans	—		7,415,000		—		7,415,000
Total assets	$	—	$	7,999,000	$	—	$	7,999,000

	At September 30, 2018
	Level 1		Level 2		Level 3		Total
Other real estate owned	$	—	$	584,000	$	—	$	584,000
Impaired loans	—		7,024,000		—		7,024,000
Total assets	$	—	$	7,608,000	$	—	$	7,608,000

Estimated Fair Value of Financial Instruments

The carrying amount and estimated fair values for financial instruments as of September 30, 2019 were as follows:

	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets
Securities to be held to maturity	$	298,786,000	$	306,647,000	$	—	$	306,647,000	$	—
Loans (net of allowance for loan losses)
Commercial
Real estate	363,725,000		360,061,000		—		622,000		359,439,000
Construction	36,829,000		36,458,000		—		—		36,458,000
Other	198,093,000		196,674,000		—		5,142,000		191,532,000
Municipal	36,492,000		36,192,000		—		—		36,192,000
Residential
Term	484,160,000		482,121,000		—		992,000		481,129,000
Construction	14,091,000		14,032,000		—		—		14,032,000
Home equity line of credit	93,180,000		90,289,000		—		387,000		89,902,000
Consumer	25,124,000		23,318,000		—		—		23,318,000
Total loans	1,251,694,000		1,239,145,000		—		7,143,000		1,232,002,000
Mortgage servicing rights	1,451,000		2,083,000		—		2,083,000		—
Financial liabilities
Local certificates of deposit	$	283,119,000	$	285,598,000	$	—	$	285,598,000	$	—
National certificates of deposit	378,654,000		379,995,000		—		379,995,000		—
Total certificates of deposits	661,773,000		665,593,000		—		665,593,000		—
Repurchase agreements	41,310,000		40,004,000		—		40,004,000		—
Federal Home Loan Bank advances	140,107,000		140,008,000		—		140,008,000		—
Total borrowed funds	181,417,000		180,012,000		—		180,012,000		—

The carrying amounts and estimated fair values for financial instruments as of December 31, 2018 were as follows:

	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets
Securities to be held to maturity	$	255,663,000	$	250,900,000	$	—	$	250,900,000	$	—
Loans (net of allowance for loan losses)
Commercial
Real estate	349,243,000		340,526,000		—		423,000		340,103,000
Construction	27,018,000		26,344,000		—		—		26,344,000
Other	192,420,000		189,842,000		—		6,096,000		183,746,000
Municipal	51,101,000		50,965,000		—		—		50,965,000
Residential
Term	467,760,000		451,323,000		—		793,000		450,530,000
Construction	17,705,000		17,083,000		—		—		17,083,000
Home equity line of credit	97,650,000		95,175,000		—		103,000		95,072,000
Consumer	24,154,000		22,530,000		—		—		22,530,000
Total loans	1,227,051,000		1,193,788,000		—		7,415,000		1,186,373,000
Mortgage servicing rights	1,354,000		2,586,000		—		2,586,000		—
Financial liabilities
Local certificates of deposit	$	284,482,000	$	281,282,000	$	—	$	281,282,000	$	—
National certificates of deposit	306,927,000		307,508,000		—		307,508,000		—
Total deposits	591,409,000		588,790,000		—		588,790,000		—
Repurchase agreements	40,205,000		40,161,000		—		40,161,000		—
Federal Home Loan Bank advances	170,112,000		169,240,000		—		169,240,000		—
Total borrowed funds	210,317,000		209,401,000		—		209,401,000		—

The carrying amount and estimated fair values for financial instruments as of September 30, 2018 were as follows:

	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets
Securities to be held to maturity	$	257,395,000	$	249,890,000	$	—	$	249,890,000	$	—
Loans (net of allowance for loan losses)
Commercial
Real estate	362,199,000		359,421,000		—		423,000		358,998,000
Construction	23,639,000		23,458,000		—		—		23,458,000
Other	183,935,000		184,116,000		—		6,033,000		178,083,000
Municipal	56,677,000		56,981,000		—		—		56,981,000
Residential
Term	458,174,000		459,561,000		—		475,000		459,086,000
Construction	18,124,000		18,095,000		—		—		18,095,000
Home equity line of credit	104,373,000		103,209,000		—		93,000		103,116,000
Consumer	24,755,000		24,126,000		—		—		24,126,000
Total loans	1,231,876,000		1,228,967,000		—		7,024,000		1,221,943,000
Mortgage servicing rights	1,299,000		2,572,000		—		2,572,000		—
Financial liabilities
Local certificates of deposit	252,440,000		253,014,000		—		253,014,000		—
National certificates of deposit	366,969,000		368,127,000		—		368,127,000		—
Total certificates of deposits	619,409,000		621,141,000		—		621,141,000		—
Repurchase agreements	95,160,000		90,311,000		—		90,311,000		—
Federal Home Loan Bank advances	170,114,000		170,058,000		—		170,058,000		—
Total borrowed funds	265,274,000		260,369,000		—		260,369,000		—