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FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Assets Measured at Fair Value on a Recurring Basis

The following table summarizes assets measured at fair value on a recurring basis at December 31, 2019 or 2018.


	Level 1		Level 2		Level 3		Total Fair Value Measurements
December 31, 2019
AFS Securities:


States and political subdivisions	$	—	$	87,863	$	—	$	87,863


GSE residential CMOs	—		68,154		—		68,154
Non-agency CMOs	—		—		17,087		17,087


Private label commercial CMOs	—		79,437		7,192		86,629
Asset-backed and other	—		230,653		—		230,653
Loans held for sale	—		9,364		—		9,364
Interest rate lock commitments on residential mortgages	—		—		103		103
Totals	$	—	$	475,471	$	24,382	$	499,853
December 31, 2018
AFS Securities:



States and political subdivisions	$	—	$	145,004	$	—	$	145,004


GSE residential CMOs	—		108,064		—		108,064


Private label residential CMOs	—		143		—		143
Private label commercial CMOs	—		67,836		7,209		75,045
Asset-backed and other	—		137,588		—		137,588


Totals	$	—	$	458,635	$	7,209	$	465,844

Level 3 Fair Value, Assets Measurement Activity

The following provides details of the Level 3 fair value measurement activity for the years ended December 31, 2019 or 2018.


CMOs:
	2019		2018
Balance, beginning of year	$	7,209	$	—


Unrealized (loss) gain included in OCI	(17)		37
Purchases	17,619		7,213
Net discount accretion (premium amortization)	7		(41)
Principal payments	(539)		—


Balance, end of year	$	24,279	$	7,209


Interest rate lock commitments on residential mortgages:
	2019
Balance, beginning of year	$	—
Total gains (losses), realized/unrealized:
Included in earnings	103


Balance, end of year	$	103

Summary of Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes assets measured at fair value on a nonrecurring basis at December 31, 2019 and 2018.


	Level 1		Level 2		Level 3		Total Fair Value Measurements
December 31, 2019
Impaired loans
Commercial real estate:
Owner-occupied	$	—	$	—	$	938	$	938

Multi-family	—		—		96		96
Non-owner occupied residential	—		—		103		103



Commercial and industrial	—		—		11		11
Residential mortgage:
First lien	—		—		641		641

Home equity - lines of credit	—		—		400		400
Installment and other loans	—		—		7		7
Total impaired loans	$	—	$	—	$	2,196	$	2,196






Mortgage servicing rights	$	—	$	3,119	$	—	$	3,119

December 31, 2018
Impaired loans
Commercial real estate:
Owner-occupied	$	—	$	—	$	1,087	$	1,087

Multi-family	—		—		131		131
Non-owner occupied residential	—		—		278		278



Commercial and industrial	—		—		25		25
Residential mortgage:
First lien	—		—		1,121		1,121

Home equity - lines of credit	—		—		409		409

Total impaired loans	$	—	$	—	$	3,051	$	3,051

Schedule of Additional Qualitative Information

The following table presents additional qualitative information about assets measured on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value.

Fair Value

Estimate

Valuation Techniques

Unobservable Input

Range

December 31, 2019

Impaired loans

2,196

Appraisal of collateral

Management adjustments on appraisals for property type and recent activity

0% - 20% discount

- Management adjustments for liquidation expenses

6% - 33% discount

Mortgage servicing rights

3,119

Discounted cash flows

Weighted average CPR

11.63%

Discount rate

9.54%

December 31, 2018

Impaired loans

3,051

Appraisal of collateral

Management adjustments on appraisals for property type and recent activity

5% - 75% discount

- Management adjustments for liquidation expenses

6% - 20% discount

Schedule of Estimated Fair Values of Financial Instruments

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities at December 31, 2019, and 2018.


	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
December 31, 2019
Financial Assets
Cash and due from banks	$	25,969	$	25,969	$	25,969	$	—	$	—
Interest-bearing deposits with banks	30,493		30,493		30,493		—		—

Restricted investments in bank stock	16,184		n/a		n/a		n/a		n/a
AFS securities	490,386		490,386		—		466,107		24,279
Loans held for sale	9,364		9,364		—		9,364		—
Loans, net of allowance for loan losses	1,629,675		1,652,788		—		—		1,652,788
Interest rate lock commitments on residential mortgages	103		103		—		—		103
Accrued interest receivable	6,040		6,040		—		1,863		4,177

Financial Liabilities
Deposits	1,875,522		1,876,555		—		1,876,555		—
Short-term borrowings	154,869		154,869		—		154,869		—
Long-term debt	63,067		63,405		—		63,405		—
Subordinated notes	31,847		33,953		—		33,953		—
Accrued interest payable	879		879		—		879		—

December 31, 2018
Financial Assets
Cash and due from banks	$	26,156	$	26,156	$	26,156	$	—	$	—
Interest-bearing deposits with banks	45,664		45,664		45,664		—		—
Federal funds sold	16,995		16,995		16,995		—		—
Restricted investments in bank stock	10,842		n/a		n/a		n/a		n/a
AFS securities	465,844		465,844		—		458,635		7,209
Loans held for sale	3,340		3,413		—		3,413		—
Loans, net of allowance for loan losses	1,233,643		1,229,645		—		—		1,229,645

Accrued interest receivable	5,927		5,927		—		2,853		3,074

Financial Liabilities
Deposits	1,558,756		1,555,912		—		1,555,912		—
Short-term borrowings	64,069		64,069		—		64,069		—
Long-term debt	83,450		82,951		—		82,951		—
Subordinated notes	31,859		31,256		—		31,256		—
Accrued interest payable	1,301		1,301		—		1,301		—