Fair Value (Tables)

6 Months Ended

Jun. 30, 2024

Schedule of 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 June 30, 2024, December 31, 2023 and June 30, 2023.


	At June 30, 2024
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	19,778,000	$	—	$	19,778,000
Mortgage-backed securities	—		217,823,000		—		217,823,000
State and political subdivisions	—		33,370,000		—		33,370,000
Asset-backed securities	—		2,530,000		—		2,530,000

Total securities available for sale	—		273,501,000		—		273,501,000
Interest rate swap agreements	—		1,063,000		—		1,063,000
Customer loan interest swap agreements	—		4,912,000		—		4,912,000
Total interest rate swap agreements	—		5,975,000		—		5,975,000
Total assets	$	—	$	279,476,000	$	—	$	279,476,000


	At June 30, 2024
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	67,000	$	—	$	67,000
Customer loan interest swap agreements	—		4,912,000		—		4,912,000
Total liabilities	$	—	$	4,979,000	$	—	$	4,979,000


	At December 31, 2023
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	19,830,000	$	—	$	19,830,000
Mortgage-backed securities	—		224,597,000		—		224,597,000
State and political subdivisions	—		34,645,000		—		34,645,000
Asset-backed securities	—		2,981,000		—		2,981,000

Total securities available for sale	—		282,053,000		—		282,053,000
Interest rate swap agreements	—		380,000		—		380,000
Customer loan interest swap agreements	—		4,348,000		—		4,348,000
Total interest rate swap agreements	—		4,728,000		—		4,728,000
Total assets	$	—	$	286,781,000	$	—	$	286,781,000


	At December 31, 2023
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	2,149,000	$	—	$	2,149,000
Customer loan interest swap agreements	—		4,348,000		—		4,348,000
Total liabilities	$	—	$	6,497,000	$	—	$	6,497,000


	At June 30, 2023
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	19,361,000	$	—	$	19,361,000
Mortgage-backed securities	—		222,192,000		—		222,192,000
State and political subdivisions	—		33,619,000		—		33,619,000
Asset-backed securities	—		3,183,000		—		3,183,000

Total securities available for sale	—		278,355,000		—		278,355,000
Interest rate swap agreements	—		1,620,000		—		1,620,000
Customer loan interest swap agreements	—		4,715,000		—		4,715,000
Total interest swap agreements	—		6,335,000		—		6,335,000
Total assets	$	—	$	284,690,000	$	—	$	284,690,000


	At June 30, 2023
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	759,000	$	—	$	759,000
Customer loan interest swap agreements	—		4,715,000		—		4,715,000
Total liabilities	$	—	$	5,474,000	$	—	$	5,474,000

Schedule of 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. Mortgage servicing rights are presented at fair value with no impairment reserve for each of the periods presented. OREO is presented net of no allowance at June 30, 2024 and 2023. There was no OREO or related allowance at

December 31, 2023. Only collateral-dependent IAL with a related specific ACL or a partial charge off are included in IAL for purposes of fair value disclosures. There were no collateral-dependent IAL with a related specific ACL or a partial charge off at June 30, 2024. IAL below are presented net of specific allowances of $19,000 and $157,000 at December 31, 2023, and June 30, 2023, respectively.


	At June 30, 2024
	Level 1		Level 2		Level 3		Total
Mortgage servicing rights	$	—	$	3,281,000	$	—	$	3,281,000

OREO	—		208,000		—		208,000

Total assets	$	—	$	3,489,000	$	—	$	3,489,000


	At December 31, 2023
	Level 1		Level 2		Level 3		Total
Mortgage servicing rights	$	—	$	3,583,000	$	—	$	3,583,000

Individually analyzed loans	—		285,000		—		285,000
Total assets	$	—	$	3,868,000	$	—	$	3,868,000


	At June 30, 2023
	Level 1		Level 2		Level 3		Total
Mortgage servicing rights	$	—	$	3,639,000	$	—	$	3,639,000

OREO	—		64,000		—		64,000
Individually analyzed loans	—		215,000		—		215,000
Total assets	$	—	$	3,918,000	$	—	$	3,918,000

Schedule of Estimated Fair Value of Financial Instruments

The carrying amount and estimated fair values for financial instruments as of June 30, 2024 were as follows:


	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets



Securities to be held to maturity (net of allowance for credit losses)	$	377,522,000	$	321,616,000	$	—	$	321,616,000	$	—


Loans (net of allowance for credit losses)
Commercial
Real estate	738,022,000		700,230,000		—		—		700,230,000
Construction	97,804,000		92,796,000		—		—		92,796,000
Other	477,978,000		468,464,000		—		—		468,464,000
Municipal	61,925,000		59,216,000		—		—		59,216,000
Residential
Term	680,446,000		610,008,000		—		—		610,008,000
Construction	34,987,000		34,556,000		—		—		34,556,000
Home equity line of credit	111,484,000		111,424,000		—		—		111,424,000
Consumer	20,331,000		18,049,000		—		—		18,049,000
Total loans	2,222,977,000		2,094,743,000		—		—		2,094,743,000
Mortgage servicing rights	2,019,000		3,281,000		—		3,281,000		—


Financial liabilities




Local certificates of deposit	$	369,948,000	$	350,698,000	$	—	$	350,698,000	$	—
National certificates of deposit	741,791,000		750,751,000		—		750,751,000		—
Total certificates of deposit	1,111,739,000		1,101,449,000		—		1,101,449,000		—
Repurchase agreements	56,502,000		56,372,000		—		56,372,000		—
Federal Home Loan Bank advances	174,118,000		123,851,000		—		123,851,000		—
Total borrowed funds	230,620,000		180,223,000		—		180,223,000		—

The carrying amounts and estimated fair values for financial instruments as of December 31, 2023 were as follows:


	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets



Securities to be held to maturity (net of allowance for credit losses)	$	385,235,000	$	338,570,000	$	—	$	338,570,000	$	—


Loans (net of allowance for credit losses)
Commercial
Real estate	699,537,000		658,732,000		—		—		658,732,000
Construction	86,695,000		81,638,000		—		—		81,638,000
Other	443,944,000		431,067,000		—		—		431,067,000
Municipal	51,089,000		46,806,000		—		—		46,806,000
Residential
Term	669,864,000		595,033,000		—		285,000		594,748,000
Construction	31,740,000		31,131,000		—		—		31,131,000
Home equity line of credit	103,400,000		102,858,000		—		—		102,858,000
Consumer	19,155,000		16,963,000		—		—		16,963,000
Total loans	2,105,424,000		1,964,228,000		—		285,000		1,963,943,000
Mortgage servicing rights	2,177,000		3,583,000		—		3,583,000		—


Financial liabilities




Local certificates of deposit	$	293,466,000	$	362,555,000	$	—	$	362,555,000	$	—
National certificates of deposit	776,781,000		699,919,000		—		699,919,000		—
Total certificates of deposit	1,070,247,000		1,062,474,000		—		1,062,474,000		—
Repurchase agreements	49,576,000		49,462,000		—		49,462,000		—
Federal Home Loan Bank advances	20,076,000		20,074,000		—		20,074,000		—
Total borrowed funds	69,652,000		69,536,000		—		69,536,000		—

The carrying amount and estimated fair values for financial instruments as of June 30, 2023 were as follows:


	Carrying value		Estimated fair value		Level 1		Level 2		Level 3
Financial assets



Securities to be held to maturity (net of allowance for credit losses)	$	389,987,000	$	336,007,000	$	—	$	336,007,000	$	—


Loans (net of allowance for credit losses)
Commercial
Real estate	688,497,000		653,180,000		—		—		653,180,000
Construction	62,625,000		59,413,000		—		—		59,413,000
Other	438,945,000		427,185,000		—		215,000		426,970,000
Municipal	57,853,000		53,169,000		—		—		53,169,000
Residential
Term	640,296,000		572,873,000		—		—		572,873,000
Construction	30,203,000		30,089,000		—		—		30,089,000
Home equity line of credit	99,031,000		99,975,000		—		—		99,975,000
Consumer	20,038,000		17,984,000		—		—		17,984,000
Total loans	2,037,488,000		1,913,868,000		—		215,000		1,913,653,000
Mortgage servicing rights	2,313,000		3,639,000		—		3,639,000		—


Financial liabilities




Local certificates of deposit	$	332,390,000	$	311,328,000	$	—	$	311,328,000	$	—
National certificates of deposit	717,239,000		719,323,000		—		719,323,000		—
Total certificates of deposit	1,049,629,000		1,030,651,000		—		1,030,651,000		—
Repurchase agreements	48,401,000		48,293,000		—		48,293,000		—
Federal Home Loan Bank advances	66,080,000		66,050,000		—		66,050,000		—
Total borrowed funds	114,481,000		114,343,000		—		114,343,000		—