FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2020

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments at September 30, 2020 were as follows:

	Carrying		Fair Value Measurements at September 30, 2020 Using
	Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from banks	$	75,559	$	75,559	$	-	$	-	$	75,559
Time deposits with other banks		598		–		599		–		599
Federal funds sold		5,859		5,859		–		–		5,859
Securities available for sale		436,580		-		436,580		-		436,580
Loans, net		1,255,708		-		-		1,260,773		1,260,773
Interest receivable		6,662		-		1,620		5,042		6,662

Financial liabilities
Deposits	$	1,585,389	$	1,240,462	$	347,536	$	-	$	1,587,998
Securities sold under agreements to repurchase		28,214		-		28,214		-		28,214
Subordinated debt		5,465		-		5,364		-		5,364
Interest payable		510		8		502		-		510

The carrying amounts and estimated fair values of financial instruments at December 31, 2019 were as follows:

	Carrying		Fair Value Measurements at December 31, 2019 Using
	Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from banks	$	88,556	$	88,556	$	–	$	–	$	88,556
Time deposits with other banks		598		–		599		–		599
Federal funds sold		5,902		5,902		–		–		5,902
Securities available for sale		390,754		–		390,754		–		390,754
Loans, net		1,181,753		–		–		1,172,575		1,172,575
Interest receivable		4,699		4		1,110		3,585		4,699

Financial liabilities
Deposits	$	1,495,753	$	1,070,610	$	424,886	$	–	$	1,495,496
Securities sold under agreements to repurchase		20,428		–		20,428		–		20,428
FHLB advance		6,375		–		6,406		–		6,406
Subordinated debt		5,436		–		5,527		–		5,527
Interest payable		912		15		897		–		912

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

			Fair Value Measurements at September 30, 2020 Using:
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale
Mortgage-backed securities
U. S. agency MBS - residential	$	340,787	$	-	$	340,787	$	-
U. S. agency CMO’s - residential		38,937		-		38,937		-
Total mortgage-backed securities of government sponsored agencies		379,724		-		379,724		-
U. S. government sponsored agency securities		6,153		-		6,153		-
Obligations of states and political subdivisions		44,871		-		44,871		-
Other securities		5,832		-		5,832		-
Total securities available for sale	$	436,580	$	-	$	436,580	$	-

			Fair Value Measurements at December 31, 2019 Using:
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale
Mortgage-backed securities
U. S. agency MBS - residential	$	279,309	$	-	$	279,309	$	-
U. S. agency CMO’s		62,644		-		62,644		-
Total mortgage-backed securities of government sponsored agencies		341,953		-		341,953		-
U. S. government sponsored agency securities		30,730		-		30,730		-
Obligations of states and political subdivisions		16,017		-		16,017		-
Other securities		2,054		-		2,054		-
Total securities available for sale	$	390,754	$	-	$	390,754	$	-

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis at September 30, 2020 are summarized below:

			Fair Value Measurements at September 30, 2020 Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Commercial real estate
Non-owner occupied	$	1,209	$	-	$	-	$	1,209
Commercial and industrial		295		-		-		295
Total impaired loans	$	1,504	$	-	$	-	$	1,504

Other real estate owned:
Residential real estate	$	206	$	-	$	-	$	206
Multifamily real estate		9,503		-		-		9,503
Commercial real estate
Owner occupied		829		–		–		829
Construction and land		551		-		-		551
Total OREO	$	11,089	$	-	$	-	$	11,089

Assets and liabilities measured at fair value on a non-recurring basis at December 31, 2019 are summarized below:

			Fair Value Measurements at December 31, 2019 Using
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans:
Multifamily real estate	$	1,900	$	-	$	-	$	1,900
Commercial real estate
Owner occupied		509		-		-		509
Non-owner occupied		2,266		-		-		2,266
Commercial and industrial		288		-		-		288
Construction and land		380		-		-		380
Total impaired loans	$	5,343	$	-	$	-	$	5,343

Other real estate owned:
Residential real estate	$	249	$	-	$	-	$	249
Multifamily real estate		9,588		-		-		9,588
Commercial real estate
Owner occupied		288		-		-		288
Construction and land		750		-		-		750
Total OREO	$	10,875	$	-	$	-	$	10,875

Fair Value Inputs, Assets, Quantitative Information

The significant unobservable inputs related to assets and liabilities measured at fair value on a non-recurring basis at September 30, 2020 are summarized below:

	September 30, 2020		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired loans:
Commercial real estate
Non-owner occupied	$	1,209	income approach	adjustment for differences in net operating income expectations	0.0%-33.3% (14.6%)
Commercial and industrial		295	sales comparison	adjustment for estimated realizable value	25.0%-97.5% (43.9%)
Total impaired loans	$	1,504

Other real estate owned:
Residential real estate	$	206	sales comparison	adjustment for estimated realizable value	0.2%-59.8% (18.1%)
Multifamily real estate		9,503	income approach	adjustment for differences in net operating income expectations	26.2%-26.2% (26.2%)
Commercial real estate
Owner occupied		829	sales comparison	adjustment for estimated realizable value	16.1%-29.5% (24.6%)
Construction and land		551	sales comparison	adjustment for estimated realizable value	50.3%-86.3% (76.5%)
Total OREO	$	11,089

The significant unobservable inputs related to assets and liabilities measured at fair value on a non-recurring basis at December 31, 2019 are summarized below:

	December 31, 2019		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired loans:
Multifamily real estate	$	1,900	sales comparison	adjustment for estimated realizable value	58.9%-58.9% (58.9%)
Commercial real estate
Owner occupied		509	sales comparison	adjustment for estimated realizable value	76.1%-76.1% (76.1%)
Non-owner occupied		2,266	income approach	adjustment for differences in net operating income expectations	36.6%-67.4% (60.6%)
Commercial and industrial		288	sales comparison	adjustment for estimated realizable value	25.0%-87.0% (43.6%)
Construction and land		380	sales comparison	adjustment for estimated realizable value	56.5%-56.5% (56.5%)
Total impaired loans	$	5,343

Other real estate owned:
Residential real estate	$	249	sales comparison	adjustment for estimated realizable value	0.2%-59.8% (17.5%)
Multifamily real estate		9,588	income approach	adjustment for differences in net operating income expectations	25.6%-25.6% (25.6%)
Commercial real estate
Owner occupied		288	sales comparison	adjustment for estimated realizable value	14.6%-70.4% (34.0%)
Construction and land		750	sales comparison	adjustment for estimated realizable value	50.3%-69.9% (66.0%)
Total OREO	$	10,875