XML 60 R45.htm IDEA: XBRL DOCUMENT

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Estimated Fair Values and Related Carrying or Notional Amounts

The estimated fair values, and related carrying or notional amounts, for on and off-balance sheet financial instruments as of December 31, 2022 and 2021, are reflected below. The aggregate fair values in the table below do not represent the total market value of the Bank’s assets and liabilities. The table excludes the following: Bank Premises and Equipment, Goodwill, Mortgage Servicing Rights, Other Real Estate Owned, Other Assets, Other Liabilities and Accrued Expenses.


	(In Thousands)
	December 31, 2022										December 31, 2021
	Carrying		Fair								Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3		Amount		Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	84,409	$	84,409	$	84,409	$	-	$	-	$	180,823	$	180,823	$	180,823	$	-	$	-
Interest-bearing time deposits		4,442		4,440		-		4,440		-		10,913		10,933		-		10,933		-
Securities - available-for-sale		390,789		390,789		94,678		292,766		3,345		429,931		429,931		89,177		335,981		4,773
Other securities		9,799		9,799		-		-		9,799		8,162		8,162		-		-		8,162
Loans held for sale		827		815		-		-		815		7,714		7,844		-		-		7,844
Loans, net		2,336,074		2,171,152		-		-		2,171,152		1,841,177		1,864,386		-		-		1,864,386
Interest receivable		10,440		10,440		-		-		10,440		7,209		7,209		-		-		7,209

Financial Liabilities:
Interest bearing deposits	$	1,378,090	$	1,377,944	$	-	$	-	$	1,377,944	$	1,248,294	$	1,248,044	$	-	$	-	$	1,248,044
Noninterest bearing deposits		532,794		532,794		532,794		-		-		473,689		473,689		-		473,689		-
Time deposits		557,980		543,737		-		-		543,737		471,479		475,810		-		-		475,810
Total Deposits		2,468,864		2,454,475		532,794		-		1,921,681		2,193,462		2,197,543		-		473,689		1,723,854
Fed funds purchased and securities sold under agreement to repurchase		54,206		54,206		-		-		54,206		29,268		29,268		-		-		29,268
Federal Home Loan Bank advances		127,485		125,761		-		-		125,761		24,065		24,305		-		-		24,305
Other borrowings		10,000		10,000		-		10,000		-		40,000		40,000		-		40,000		-
Subordinated notes		34,586		30,993		-		30,993		-		34,471		35,000		-		35,000		-
Interest payable		1,739		1,739		-		-		1,739		1,125		1,125		-		-		1,125

Financial Assets Measured at Fair Value on Recurring Basis

The following table summarizes financial assets measured at fair value on a recurring basis as of December 31, 2022 and December 31, 2021 segregated by level or the valuation inputs within the fair value hierarchy utilized to measure fair value.


Assets and Liabilities Measured at Fair Value on a Recurring Basis (in Thousands)

	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Observable
	for Identical		Inputs		Inputs
December 31, 2022	Assets (Level 1)		(Level 2)		(Level 3)
Assets-(Securities Available-for-Sale)
U.S. Treasury	$	94,678	$	-	$	-
U.S. Government agencies		-		139,767		-
Mortgage-backed securities		-		86,927		-
State and local governments		-		66,072		3,345
Total Securities Available-for-Sale	$	94,678	$	292,766	$	3,345


	Quoted Prices in		Significant		Significant
	Active Markets		Observable		Observable
	for Identical		Inputs		Inputs
December 31, 2021	Assets (Level 1)		(Level 2)		(Level 3)
Assets-(Securities Available-for-Sale)
U.S. Treasury	$	89,177	$	-	$	-
U.S. Government agencies		-		156,886		-
Mortgage-backed securities		-		117,927		-
State and local governments		-		61,168		4,773
Total Securities Available-for-Sale	$	89,177	$	335,981	$	4,773

Changes in the Level 3 Fair-Value Category of Unobservable Inputs


	(In Thousands)
	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	State and Local			State and Local			State and Local
	Governments			Governments			Governments
	Tax-Exempt			Taxable			Total
Balance at January 1, 2022	$	2,307		$	2,466		$	4,773
Change in Market Value		(76	)		(203	)		(279	)
Purchases		-			-			-
Sales		-			-			-
Payments & Maturities		(160	)		-			(160	)
Reclassification and Adjustments		-			(989	)		(989	)
Balance at December 31, 2022	$	2,071		$	1,274		$	3,345


	(In Thousands)
	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	State and Local			State and Local			State and Local
	Governments			Governments			Governments
	Tax-Exempt			Taxable			Total
Balance at January 1, 2021	$	-		$	1,562		$	1,562
Change in Market Value		44			(96	)		(52	)
Purchases		2,418			1,000			3,418
Sales		-			-			-
Payments & Maturities		-			-			-
Reclassification and Adjustments		(155	)		-			(155	)
Balance at December 31, 2021	$	2,307		$	2,466		$	4,773

Collateral Dependent Impaired Loans and Other Real Estate

The following table presents collateral dependent impaired loans and other real estate owned as recorded at fair value:


	($ in Thousands)
	Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2022
			Quoted Prices in
			Markets for		Significant		Significant
	Balance at		Identical		Observable Inputs		Unobservable Inputs
	December 31, 2022		Assets (Level 1)		(Level 2)		(Level 3)
Collateral dependent impaired loans	$	2,667	$	-	$	-	$	2,667
Mortgage servicing rights		-		-		-		-
Other real estate owned - residential		-		-		-		-


	($ in Thousands)
	Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2021
			Quoted Prices in
			Markets for		Significant		Significant
	Balance at		Identical		Observable Inputs		Unobservable Inputs
	December 31, 2021		Assets (Level 1)		(Level 2)		(Level 3)
Collateral dependent impaired loans	$	8,527	$	-	$	-	$	8,527
Mortgage servicing rights		3,157		-		-		3,157
Other real estate owned - residential		99		-		-		99

Quantitative Information about Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements:


	(In Thousands)
	Fair Value at December 31, 2022		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
State and local government	$	3,345	Discounted Cash Flow	Credit strength of underlying project or entity / Discount rate	2.08-5.01% (4.38%)
Collateral dependent impaired loans		2,667	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	20.00-29.01% (24.13%)
Mortgage servicing rights		-	Discounted Cash Flow	Constant prepayment rate and probability of default / Discount rate	— % ( — )
		-	Appraisals	Discount to reflect current market	— % ( — )


Other real estate owned - residential


	(In Thousands)
	Fair Value at December 31, 2021		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
State and local government	$	4,773	Discounted Cash Flow	Credit strength of underlying project or entity / Discount rate	0.21-1.77% (1.33%)
Collateral dependent impaired loans		8,527	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	20.00-53.95% (34.78%)
Mortgage servicing rights		3,157	Discounted Cash Flow	Constant prepayment rate and probability of default / Discount rate	1.94-27.70% (18.44%)
Other real estate owned - residential		99	Appraisals	Discount to reflect current market	32.72% (32.72%)

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details