FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2022

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

Schedule of assets measured at fair value and the valuation methods used

	September 30, 2022
	Quoted
	Prices		Other
	in Active		Observable		Unobservable		Total
	Markets		Inputs		Inputs		Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)		Value
Recurring fair value measurements, assets:
AVAILABLE-FOR-SALE DEBT SECURITIES:
Obligations of the U.S. Treasury	$	31,599	$	0	$	0	$	31,599
Obligations of U.S. Government agencies		0		21,389		0		21,389
Bank holding company debt securities		0		25,432		0		25,432
Obligations of states and political subdivisions:
Tax-exempt		0		126,710		0		126,710
Taxable		0		58,317		0		58,317
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities		0		102,739		0		102,739
Residential collateralized mortgage obligations		0		39,632		0		39,632
Commercial mortgage-backed securities		0		77,383		0		77,383
Private label commercial mortgage-backed securities		0		4,779		0		4,779
Total available-for-sale debt securities		31,599		456,381		0		487,980
Marketable equity security		857		0		0		857
Servicing rights		0		0		2,649		2,649
Interest rate swap agreements, assets		0		3,795		0		3,795
Total recurring fair value measurements, assets	$	32,456	$	460,176	$	2,649	$	495,281
Recurring fair value measurements, liabilities,
Interest rate swap agreements, liabilities	$	0	$	3,795	$	0	$	3,795
Nonrecurring fair value measurements, assets:
Impaired loans, net	$	0	$	0	$	2,969	$	2,969
Foreclosed assets held for sale		0		0		454		454
Total nonrecurring fair value measurements, assets	$	0	$	0	$	3,423	$	3,423

	December 31, 2021
	Quoted
	Prices		Other
	in Active		Observable		Unobservable		Total
	Markets		Inputs		Inputs		Fair
(In Thousands)	(Level 1)		(Level 2)		(Level 3)		Value
Recurring fair value measurements, assets:
AVAILABLE-FOR-SALE DEBT SECURITIES:
Obligations of the U.S. Treasury	$	24,912	$	0	$	0	$	24,912
Obligations of U.S. Government agencies		0		24,091		0		24,091
Bank holding company debt securities		0		17,987		0		17,987
Obligations of states and political subdivisions:
Tax-exempt		0		148,028		0		148,028
Taxable		0		72,765		0		72,765
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities		0		98,181		0		98,181
Residential collateralized mortgage obligations		0		44,247		0		44,247
Commercial mortgage-backed securities		0		87,468		0		87,468
Total available-for-sale debt securities		24,912		492,767		0		517,679
Marketable equity security		971		0		0		971
Servicing rights		0		0		2,329		2,329
Interest rate swap agreements, assets		0		3,104		0		3,104
Total recurring fair value measurements, assets	$	25,883	$	495,871	$	2,329	$	524,083
Recurring fair value measurements, liabilities,
Interest rate swap agreements, liabilities	$	0	$	3,104	$	0	$	3,104
Nonrecurring fair value measurements, assets:
Impaired loans, net	$	0	$	0	$	5,800	$	5,800
Foreclosed assets held for sale		0		0		684		684
Total nonrecurring fair value measurements, assets	$	0	$	0	$	6,484	$	6,484

Schedule of reconciliation of level 3 activity

(In Thousands)	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Servicing rights balance, beginning of period	$	2,640	$	2,116	$	2,329	$	1,689
Originations of servicing rights		33		176		192		567
Unrealized (loss) gain included in earnings		(24)		(45)		128		(9)
Servicing rights balance, end of period	$	2,649	$	2,247	$	2,649	$	2,247

Schedule of estimated fair values, and carrying amounts of financial instruments not recorded at fair value

(In Thousands)	Fair Value	September 30, 2022				December 31, 2021
	Hierarchy	Carrying		Fair		Carrying		Fair
	Level	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	55,444	$	55,444	$	95,848	$	95,848
Certificates of deposit	Level 2		8,600		8,184		9,100		9,142
Restricted equity securities (included in Other Assets)	Level 2		10,807		10,807		9,562		9,562
Loans, net	Level 3		1,674,076		1,643,468		1,551,312		1,573,955
Accrued interest receivable	Level 2		8,425		8,425		7,235		7,235
Financial liabilities:
Deposits with no stated maturity	Level 2		1,745,817		1,745,817		1,639,167		1,639,167
Time deposits	Level 2		293,778		292,703		285,893		286,962
Short-term borrowings	Level 2		2,457		1,849		1,803		1,603
Long-term borrowings	Level 2		55,463		54,129		28,042		28,347
Senior debt	Level 2		14,749		10,492		14,701		15,016
Subordinated debt	Level 2		24,580		17,567		33,009		33,171
Accrued interest payable	Level 2		635		635		205		205

Recurring fair value measurements

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

Schedule of inputs and valuation techniques

	Fair Value at
	9/30/2022		Valuation	Unobservable				Method or Value As of
Asset	(In Thousands)		Technique	Input(s)				9/30/2022
Servicing rights	$	2,649	Discounted cash flow	Discount rate		13.00	%	Rate used through modeling period
				Loan prepayment speeds		141.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

	Fair Value at
	12/31/2021		Valuation	Unobservable				Method or Value As of
Asset	(In Thousands)		Technique	Input(s)				12/31/2021
Servicing rights	$	2,329	Discounted cash flow	Discount rate		13.00	%	Rate used through modeling period
				Loan prepayment speeds		209.00	%	Weighted-average PSA
				Servicing fees		0.25	%	of loan balances
						4.00	%	of payments are late
						5.00	%	late fees assessed
					$	1.94		Miscellaneous fees per account per month
				Servicing costs	$	6.00		Monthly servicing cost per account
					$	24.00		Additional monthly servicing cost per loan on loans more than 30 days delinquent
						1.50	%	of loans more than 30 days delinquent
						3.00	%	annual increase in servicing costs

Nonrecurring fair value measurements

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

Schedule of inputs and valuation techniques

(Dollars In Thousands)									Weighted
			Valuation						Average
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	Discount at
Asset	9/30/2022		9/30/2022		9/30/2022		Technique	Inputs	9/30/2022
Impaired loans:
Commercial:
Commercial loans secured by real estate	$	3,396	$	427	$	2,969	Sales comparison	Discount to appraised value	25	%
Total impaired loans	$	3,396	$	427	$	2,969
Foreclosed assets held for sale - real estate:
Commercial real estate	$	275	$	0	$	275	Sales comparison	Discount to appraised value	50	%
Residential (1-4 family)		179		0		179	Sales comparison	Discount to appraised value	52	%
Total foreclosed assets held for sale	$	454	$	0	$	454

(Dollars In Thousands)									Weighted
			Valuation						Average
	Balance at		Allowance at		Fair Value at		Valuation	Unobservable	Discount at
Asset	12/31/2021		12/31/2021		12/31/2021		Technique	Inputs	12/31/2021
Impaired loans:
Commercial:
Commercial loans secured by real estate	$	6,468	$	668	$	5,800	Sales comparison	Discount to appraised value	27	%
Commercial and industrial		72		72		0	Liquidation of assets	Discount to appraised value	100	%
Total impaired loans	$	6,540	$	740	$	5,800
Foreclosed assets held for sale - real estate:
Commercial real estate	$	428	$	0	$	428	Sales comparison	Discount to appraised value	50	%
Residential (1-4 family)		256		0		256	Sales comparison	Discount to appraised value	53	%
Total foreclosed assets held for sale	$	684	$	0	$	684