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

6 Months Ended

Jun. 30, 2024

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

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


		June 30, 2024
		Quoted Prices			Other Observable			Unobservable
		in Active Markets			Inputs			Inputs			Total
(In Thousands)		(Level 1)			(Level 2)			(Level 3)			Fair Value
Recurring fair value measurements, assets:
AVAILABLE-FOR-SALE DEBT SECURITIES:
Obligations of the U.S. Treasury		$	9,257		$	0		$	0		$	9,257
Obligations of U.S. Government agencies			0			9,350			0			9,350
Bank holding company debt securities			0			23,657			0			23,657
Obligations of states and political subdivisions:
Tax-exempt			0			102,020			0			102,020
Taxable			0			47,481			0			47,481
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities			0			93,874			0			93,874
Residential collateralized mortgage obligations			0			42,565			0			42,565
Commercial mortgage-backed securities			0			64,718			0			64,718
Private label commercial mortgage-backed securities			0			8,223			0			8,223
Total available-for-sale debt securities			9,257			391,888			0			401,145
Marketable equity security			858			0			0			858
Servicing rights			0			0			2,720			2,720
RPA Out			0			4			0			4
Interest rate swap agreements, assets			0			3,202			0			3,202
Total recurring fair value measurements, assets		$	10,115		$	395,094		$	2,720		$	407,929

Recurring fair value measurements, liabilities:
RPA In		$	0		$	4		$	0		$	4
Interest rate swap agreements, liabilities			0			3,202			0			3,202
Total recurring fair value measurements, liabilities		$	0		$	3,206		$	0		$	3,206

Nonrecurring fair value measurements, assets:
Loans individually evaluated for credit loss, net		$	0		$	0		$	5,383		$	5,383
Foreclosed assets held for sale			0			0			181			181
Total nonrecurring fair value measurements, assets		$	0		$	0		$	5,564		$	5,564


		December 31, 2023
		Quoted Prices			Other Observable			Unobservable
		in Active Markets			Inputs			Inputs			Total
(In Thousands)		(Level 1)			(Level 2)			(Level 3)			Fair Value
Recurring fair value measurements, assets:
AVAILABLE-FOR-SALE DEBT SECURITIES:
Obligations of the U.S. Treasury		$	11,290		$	0		$	0		$	11,290
Obligations of U.S. Government agencies			0			9,946			0			9,946
Bank holding company debt securities			0			23,500			0			23,500
Obligations of states and political subdivisions:
Tax-exempt			0			104,199			0			104,199
Taxable			0			50,111			0			50,111
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities			0			95,405			0			95,405
Residential collateralized mortgage obligations			0			46,462			0			46,462
Commercial mortgage-backed securities			0			66,682			0			66,682
Private label commercial mortgage-backed securities			0			8,160			0			8,160
Total available-for-sale debt securities			11,290			404,465			0			415,755
Marketable equity security			871			0			0			871
Servicing rights			0			0			2,659			2,659
RPA Out			0			11			0			11
Interest rate swap agreements, assets			0			2,783			0			2,783
Total recurring fair value measurements, assets		$	12,161		$	407,259		$	2,659		$	422,079

Recurring fair value measurements, liabilities,
RPA In		$	0		$	13		$	0		$	13
Interest rate swap agreements, liabilities			0			2,783			0			2,783
Total recurring fair value measurements, liabilities		$	0		$	2,796		$	0		$	2,796

Nonrecurring fair value measurements, assets:
Impaired loans, net		$	0		$	0		$	7,043		$	7,043
Foreclosed assets held for sale			0			0			478			478
Total nonrecurring fair value measurements, assets		$	0		$	0		$	7,521		$	7,521

Schedule of reconciliation of level 3 activity


(In Thousands)		Three Months Ended						Six Months Ended
		June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Servicing rights balance, beginning of period		$	2,731		$	2,585		$	2,659		$	2,653
Originations of servicing rights			57			34			104			49
Unrealized loss included in earnings			(68)			(12)			(43)			(95)
Servicing rights balance, end of period		$	2,720		$	2,607		$	2,720		$	2,607

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


(In Thousands)		Fair Value		June 30, 2024						December 31, 2023
		Hierarchy		Carrying			Fair			Carrying			Fair
		Level		Amount			Value			Amount			Value
Financial assets:
Cash and cash equivalents		Level 1		$	96,562		$	96,562		$	52,778		$	52,778
Certificates of deposit		Level 2			3,850			3,676			4,100			3,859
Restricted equity securities (included in other assets)		Level 2			22,990			N/A			21,716			N/A
Loans, net		Level 3			1,872,825			1,784,727			1,828,931			1,750,336
Accrued interest receivable		Level 2			9,165			9,165			9,140			9,140

Financial liabilities:
Deposits with no stated maturity		Level 2			1,587,482			1,587,482			1,590,357			1,590,357
Time deposits		Level 2			471,827			470,630			424,449			423,643
Short-term borrowings		Level 2			16,874			16,874			33,874			33,874
Long-term borrowings		Level 2			185,649			184,756			138,337			137,775
Senior debt		Level 2			14,865			13,163			14,831			12,706
Subordinated debt		Level 2			24,773			22,499			24,717			22,750
Accrued interest payable		Level 2			2,235			2,235			1,525			1,525

Recurring fair value measurements

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

Schedule of inputs and valuation techniques

Fair Value at

6/30/2024

Valuation

Unobservable

Method or Value As of

Asset

(In Thousands)

Technique

Input(s)

6/30/2024

Servicing rights

$

2,720

Discounted cash flow

Discount rate

13.00

%

Rate used through modeling period

Loan prepayment speeds

112.00

%

Weighted-average PSA

Fair Value at

12/31/2023

Valuation

Unobservable

Method or Value As of

Asset

(In Thousands)

Technique

Input(s)

12/31/2023

Servicing rights

$

2,659

Discounted cash flow

Discount rate

13.00

%

Rate used through modeling period

Loan prepayment speeds

131.00

%

Weighted-average PSA

Nonrecurring fair value measurements

FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

Schedule of inputs and valuation techniques


(Dollars In Thousands)															Range (Weighted
					Valuation										Average)
		Balance at			Allowance at			Fair Value at			Valuation		Unobservable		Discount at
Asset		6/30/2024			6/30/2024			6/30/2024			Technique		Inputs		6/30/2024

Loans individually evaluated for credit loss:
Commercial real estate - nonowner occupied		$	3,885		$	493		$	3,392		Sales comparison		Discount to appraised value		25%-30% (27)	%
Commercial real estate - owner occupied			278			234			44		Sales comparison & SBA guaranty		Discount to appraised value		99% (99)	%
All other commercial loans			2,450			503			1,947		Sales comparison		Discount to appraised value		0%- 85% (16)	%
Total loans individually evaluated for credit loss		$	6,613		$	1,230		$	5,383
Foreclosed assets held for sale - real estate:
Residential (1-4 family)		$	25		$	0		$	25		Sales comparison		Discount to appraised value		62% (62)	%
Commercial real estate			156			0			156		Sales comparison		Discount to appraised value		18%-77% (34)	%
Total foreclosed assets held for sale		$	181		$	0		$	181


(Dollars In Thousands)															Range (Weighted
					Valuation										Average)
		Balance at			Allowance at			Fair Value at			Valuation		Unobservable		Discount at
Asset		12/31/2023			12/31/2023			12/31/2023			Technique		Inputs		12/31/2023

Loans individually evaluated for credit loss:
Commercial real estate - nonowner occupied		$	7,301		$	648		$	6,653		Sales comparison		Discount to appraised value		22%-30% (25)	%
Commercial real estate - owner occupied			294			5			289		Sales comparison & SBA guaranty		Discount to appraised value		93% (93)	%
All other commercial loans			191			90			101		Liquidation & SBA guaranty		Discount to appraised value		0%-76% (17)	%
Total loans individually evaluated for credit loss		$	7,786		$	743		$	7,043
Foreclosed assets held for sale - real estate:
Residential (1-4 family)		$	47		$	0		$	47		Sales comparison		Discount to appraised value		20%-62% (50)	%
Commercial real estate			431			0			431		Sales comparison		Discount to appraised value		18%-50% (45)	%
Total foreclosed assets held for sale		$	478		$	0		$	478

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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