Fair Value (Tables)

3 Months Ended

Mar. 31, 2020

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 March 31, 2020, December 31, 2019 and March 31, 2019.



	At March 31, 2020
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	7,552,000	$	—	$	7,552,000
Mortgage-backed securities	—		285,152,000		—		285,152,000
State and political subdivisions	—		20,224,000		—		20,224,000
Total securities available for sale	—		312,928,000		—		312,928,000
Customer loan interest swap agreements	—		3,280,000		—		3,280,000
Total interest rate swap agreements	$	—	$	3,280,000	$	—	$	3,280,000
Total assets	$	—	$	316,208,000	$	—	$	316,208,000



	At March 31, 2020
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	9,322,000	$	—	$	9,322,000
Total liabilities	$	—	$	9,322,000	$	—	$	9,322,000



	At December 31, 2019
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	7,398,000	$	—	$	7,398,000
Mortgage-backed securities	—		326,617,000		—		326,617,000
State and political subdivisions	—		26,505,000		—		26,505,000
Total securities available for sale	—		360,520,000		—		360,520,000
Interest rate swap agreements	—		562,000		—		562,000
Customer loan interest swap agreements	—		1,205,000				1,205,000
Total interest rate swap agreements			1,767,000				1,767,000
Total assets	$	—	$	362,287,000	$	—	$	362,287,000



	At December 31, 2019
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	439,000	$	—	$	439,000
Customer loan interest swap agreements			$	1,205,000			$	1,205,000
Total liabilities	$	—	$	1,644,000	$	—	$	1,644,000



	At March 31, 2019
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Treasury and agency	$	—	$	5,016,000	$	—	$	5,016,000
Mortgage-backed securities	—		315,423,000		—		315,423,000
State and political subdivisions	—		4,837,000		—		4,837,000
Total securities available for sale	—		325,276,000		—		325,276,000
Interest rate swap agreements	—		1,433,000		—		1,433,000
Total assets	$	—	$	326,709,000	$	—	$	326,709,000



	At March 31, 2019
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	201,000	$	—	$	201,000
Total liabilities	$	—	$	201,000	$	—	$	201,000

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 March 31, 2020, 2019

and December 31, 2019. 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 $706,000, $1,916,000 and $1,822,000 at March 31, 2020, December 31, 2019, and March 31, 2019, respectively.



	At March 31, 2020
	Level 1		Level 2		Level 3		Total
Other real estate owned	$	—	$	316,000	$	—	$	316,000
Impaired loans	—		1,051,000		—		1,051,000
Total assets	$	—	$	1,367,000	$	—	$	1,367,000



	At December 31, 2019
	Level 1		Level 2		Level 3		Total
Other real estate owned	$	—	$	279,000	$	—	$	279,000
Impaired loans	—		6,579,000		—		6,579,000
Total assets	$	—	$	6,858,000	$	—	$	6,858,000



	At March 31, 2019
	Level 1		Level 2		Level 3		Total
Other real estate owned	$	—	$	584,000	$	—	$	584,000
Impaired loans	—		6,519,000		—		6,519,000
Total assets	$	—	$	7,103,000	$	—	$	7,103,000

Estimated Fair Value of Financial Instruments

The carrying amount and estimated fair values for financial instruments as of March 31, 2020 were as follows:



	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets
Securities to be held to maturity	$	341,592,000	$	349,248,000	$	—	$	349,248,000	$	—
Loans (net of allowance for loan losses)
Commercial
Real estate	378,049,000		371,916,000		—		7,000		371,909,000
Construction	43,397,000		42,693,000		—		—		42,693,000
Other	234,940,000		233,411,000		—		—		233,411,000
Municipal	43,502,000		41,909,000		—		—		41,909,000
Residential
Term	499,478,000		503,098,000		—		335,000		502,763,000
Construction	15,163,000		15,304,000		—		—		15,304,000
Home equity line of credit	89,442,000		89,407,000		—		700,000		88,707,000
Consumer	28,379,000		26,933,000		—		9,000		26,924,000
Total loans	1,332,350,000		1,324,671,000		—		1,051,000		1,323,620,000
Mortgage servicing rights	1,609,000		2,126,000		—		2,126,000		—
Financial liabilities
Local certificates of deposit	$	290,440,000	$	290,886,000	$	—	$	290,886,000	$	—
National certificates of deposit	420,498,000		429,110,000		—		429,110,000		—
Total certificates of deposits	710,938,000		719,996,000		—		719,996,000		—
Repurchase agreements	37,937,000		37,494,000		—		37,494,000		—
Federal Home Loan Bank advances	210,103,000		211,228,000		—		211,228,000		—
Total borrowed funds	248,040,000		248,722,000		—		248,722,000		—

The carrying amounts and estimated fair values for financial instruments as of December 31, 2019 were as follows:



	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets
Securities to be held to maturity	$	281,606,000	$	287,045,000	$	—	$	287,045,000	$	—
Loans (net of allowance for loan losses)
Commercial
Real estate	368,645,000		364,626,000		—		2,000		364,624,000
Construction	37,678,000		37,366,000		—		—		37,366,000
Other	215,068,000		212,548,000		—		5,046,000		207,502,000
Municipal	41,258,000		40,552,000		—		—		40,552,000
Residential
Term	491,315,000		491,359,000		—		577,000		490,782,000
Construction	14,785,000		14,786,000		—		—		14,786,000
Home equity line of credit	91,149,000		90,959,000		—		954,000		90,005,000
Consumer	25,538,000		23,489,000		—		—		23,489,000
Total loans	1,285,436,000		1,275,685,000		—		6,579,000		1,269,106,000
Mortgage servicing rights	1,546,000		2,089,000		—		2,089,000		—
Financial liabilities
Local certificates of deposit	$	285,602,000	$	281,480,000	$	—	$	281,480,000	$	—
National certificates of deposit	404,377,000		412,337,000		—		412,337,000		—
Total deposits	689,979,000		693,817,000		—		693,817,000		—
Repurchase agreements	37,450,000		37,450,000		—		37,450,000		—
Federal Home Loan Bank advances	147,505,000		140,063,000		—		140,063,000		—
Total borrowed funds	184,955,000		177,513,000		—		177,513,000		—

The carrying amount and estimated fair values for financial instruments as of March 31, 2019 were as follows:



	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets
Securities to be held to maturity	$	281,219,000	$	282,568,000	$	—	$	282,568,000	$	—
Loans (net of allowance for loan losses)
Commercial
Real estate	353,521,000		347,398,000		—		422,000		346,976,000
Construction	33,852,000		33,266,000		—		—		33,266,000
Other	201,459,000		199,700,000		—		5,458,000		194,242,000
Municipal	54,217,000		53,179,000		—		—		53,179,000
Residential
Term	472,941,000		463,150,000		—		625,000		462,525,000
Construction	18,415,000		18,034,000		—		—		18,034,000
Home equity line of credit	94,957,000		92,834,000		—		14,000		92,820,000
Consumer	23,787,000		22,124,000		—		—		22,124,000
Total loans	1,253,149,000		1,229,685,000		—		6,519,000		1,223,166,000
Mortgage servicing rights	1,356,000		2,410,000		—		2,410,000		—
Financial liabilities
Local certificates of deposit	293,980,000		293,325,000		—		293,325,000		—
National certificates of deposit	418,496,000		419,285,000		—		419,285,000		—
Total certificates of deposits	712,476,000		712,610,000		—		712,610,000		—
Repurchase agreements	30,309,000		30,276,000		—		30,276,000		—
Federal Home Loan Bank advances	140,110,000		139,565,000		—		139,565,000		—
Total borrowed funds	170,419,000		169,841,000		—		169,841,000		—