Fair Value (Tables)

9 Months Ended

Sep. 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 September 30, 2024, December 31, 2023 and September 30, 2023.


	At September 30, 2024
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	20,735,000	$	—	$	20,735,000
Mortgage-backed securities	—		227,374,000		—		227,374,000
State and political subdivisions	—		34,608,000		—		34,608,000
Asset-backed securities	—		2,304,000		—		2,304,000

Total securities available for sale	—		285,021,000		—		285,021,000

Customer loan interest swap agreements	—		3,752,000		—		3,752,000
Total interest rate swap agreements	—		3,752,000		—		3,752,000
Total assets	$	—	$	288,773,000	$	—	$	288,773,000


	At September 30, 2024
	Level 1		Level 2		Level 3		Total
Interest rate swap agreements	$	—	$	2,634,000	$	—	$	2,634,000
Customer loan interest swap agreements	—		3,752,000		—		3,752,000
Total liabilities	$	—	$	6,386,000	$	—	$	6,386,000


	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 September 30, 2023
	Level 1		Level 2		Level 3		Total
Securities available for sale
U.S. Government-sponsored agencies	$	—	$	38,252,000	$	—	$	38,252,000
Mortgage-backed securities	—		212,846,000		—		212,846,000
State and political subdivisions	—		30,780,000		—		30,780,000
Asset-backed securities	—		3,094,000		—		3,094,000

Total securities available for sale	—		284,972,000		—		284,972,000
Interest rate swap agreements	—		2,489,000		—		2,489,000
Customer loan interest swap agreements	—		6,031,000		—		6,031,000
Total interest swap agreements	—		8,520,000		—		8,520,000
Total assets	$	—	$	293,492,000	$	—	$	293,492,000


	At September 30, 2023
	Level 1		Level 2		Level 3		Total

Customer loan interest swap agreements	$	—	$	6,031,000	$	—	$	6,031,000
Total liabilities	$	—	$	6,031,000	$	—	$	6,031,000

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 a $5,000 impairment reserve at September 30, 2024. There was no impairment reserve at December 31, 2023 and September 30, 2023. OREO is presented net of an allowance of $35,000 at September 30, 2024. There was no OREO or related allowance at December 31, 2023 and September 30, 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 September 30, 2024. IAL below are presented net of specific allowances of $19,000 at December 31, 2023, and September 30, 2023.


	At September 30, 2024
	Level 1		Level 2		Level 3		Total
Mortgage servicing rights	$	—	$	3,074,000	$	—	$	3,074,000

OREO	—		173,000		—		173,000

Total assets	$	—	$	3,247,000	$	—	$	3,247,000


	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 September 30, 2023
	Level 1		Level 2		Level 3		Total
Mortgage servicing rights	$	—	$	3,673,000	$	—	$	3,673,000


Individually analyzed loans	—		285,000		—		285,000
Total assets	$	—	$	3,958,000	$	—	$	3,958,000

Schedule of Estimated Fair Value of Financial Instruments

The carrying amount and estimated fair values for financial instruments as of September 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)	$	377,635,000	$	333,575,000	$	—	$	333,575,000	$	—


Loans (net of allowance for credit losses)
Commercial
Real estate	746,558,000		714,398,000		—		—		714,398,000
Construction	87,185,000		83,429,000		—		—		83,429,000
Other	523,624,000		516,977,000		—		—		516,977,000
Municipal	62,678,000		57,578,000		—		—		57,578,000
Residential
Term	693,017,000		633,247,000		—		—		633,247,000
Construction	34,203,000		33,869,000		—		—		33,869,000
Home equity line of credit	116,365,000		116,058,000		—		—		116,058,000
Consumer	19,624,000		17,375,000		—		—		17,375,000
Total loans	2,283,254,000		2,172,931,000		—		—		2,172,931,000
Mortgage servicing rights	1,940,000		3,074,000		—		3,074,000		—


Financial liabilities




Local certificates of deposit	$	377,750,000	$	360,988,000	$	—	$	360,988,000	$	—
National certificates of deposit	747,576,000		768,270,000		—		768,270,000		—
Total certificates of deposit	1,125,326,000		1,129,258,000		—		1,129,258,000		—
Repurchase agreements	56,027,000		55,910,000		—		55,910,000		—
Federal Home Loan Bank advances	95,000,000		94,914,000		—		94,914,000		—
Total borrowed funds	151,027,000		150,824,000		—		150,824,000		—

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 September 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)	$	387,374,000	$	311,864,000	$	—	$	311,864,000	$	—


Loans (net of allowance for credit losses)
Commercial
Real estate	688,027,000		652,297,000		—		—		652,297,000
Construction	70,822,000		67,144,000		—		—		67,144,000
Other	435,563,000		423,464,000		—		—		423,464,000
Municipal	58,071,000		52,196,000		—		—		52,196,000
Residential
Term	655,431,000		577,982,000		—		285,000		577,697,000
Construction	28,410,000		27,972,000		—		—		27,972,000
Home equity line of credit	101,363,000		102,124,000		—		—		102,124,000
Consumer	19,119,000		16,978,000		—		—		16,978,000
Total loans	2,056,806,000		1,920,157,000		—		285,000		1,919,872,000
Mortgage servicing rights	2,246,000		3,673,000		—		3,673,000		—


Financial liabilities




Local certificates of deposit	$	338,280,000	$	319,218,000	$	—	$	319,218,000	$	—
National certificates of deposit	670,886,000		672,654,000		—		672,654,000		—
Total certificates of deposit	1,009,166,000		991,872,000		—		991,872,000		—
Repurchase agreements	52,915,000		52,793,000		—		52,793,000		—
Federal Home Loan Bank advances	30,078,000		30,074,000		—		30,074,000		—
Total borrowed funds	82,993,000		82,867,000		—		82,867,000		—