Fair Value (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value

Reconciliation of Level 3 Available for Sale Debt Securities Measured at Fair Value on Recurring Basis

The following table presents a reconciliation of the Level 3 available for sale debt securities measured at fair value on a recurring basis for the three months ended March 31, 2021 and 2020:

	For the three months ended March 31,
(In thousands)	2021		2020
Balance at beginning of period (1)	$	4,400	$	—
Purchases/additions		—		—
Sales/reductions		—		—
Realized gains (losses)		—		—
Unrealized gains		138		—
Balance at end of period	$	4,538	$	—

(1) Includes AFS debt securities classified as Level 2 at December 31, 2019, which were transferred to Level 3 during the year ended 2020.

Balances of Assets And Liabilities Measured at Fair Value on Recurring Basis

The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020:

	Fair Value Measurements at March 31, 2021 Using
			Quoted Prices in
	Assets/Liabilities		Active Markets		Significant Other		Significant
	Measured at Fair		for Identical		Observable		Unobservable
(In thousands)	Value		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)
Measured on a recurring basis:
Assets:
Debt securities available for sale:
State and political subdivisions	$	2,375	$	—	$	2,375	$	—
Residential mortgage-backed securities		15,013		—		15,013		—
Corporate and other securities		14,942		—		10,404		4,538
Total debt securities available for sale	$	32,330	$	—	$	27,792	$	4,538
Equity securities with readily determinable fair values		2,221		—		2,221		—
Total equity securities	$	2,221	$	—	$	2,221	$	—
Loans held for sale		10,392		—		10,392		—
Total loans held for sale	$	10,392	$	—	$	10,392	$	—
Interest rate swap agreements		(219)		—		(219)		—
Total swap agreements	$	(219)	$	—	$	(219)	$	—

	Fair value Measurements at December 31, 2020 Using
			Quoted Prices in
	Assets/Liabilities		Active Markets		Significant Other		Significant
	Measured at Fair		for Identical		Observable		Unobservable
(In thousands)	Value		Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)
Measured on a recurring basis:
Assets:
Debt securities available for sale:
U.S. Government sponsored entities	$	2,003	$	—	$	2,003	$	—
State and political subdivisions		2,969		—		2,969		—
Residential mortgage-backed securities		17,410		—		17,410		—
Corporate and other securities		23,235		—		18,835		4,400
Total debt securities available for sale	$	45,617	$	—	$	41,217	$	4,400
Equity securities with readily determinable fair values		1,954		—		1,954		—
Total equity securities	$	1,954	$	—	$	1,954	$	—
Loans held for sale		10,712		—		10,712		—
Total loans held for sale	$	10,712	$	—	$	10,712	$	—
Interest rate swap agreements		(1,026)		—		(1,026)		—
Total swap agreements	$	(1,026)	$	—	$	(1,026)	$	—

Assets and Liabilities Carried on the Balance Sheet by Caption And By Level Within The Hierarchy

The following tables present the assets and liabilities subject to fair value adjustments (impairment) on a non-recurring basis carried on the balance sheet by caption and by level within the hierarchy (as described above):

	Fair Value Measurements at March 31, 2021 Using
			Quoted Prices		Significant
			in Active		Other		Significant
	Assets/Liabilities		Markets for		Observable		Unobservable		Net Credit
	Measured at Fair		Identical Assets		Inputs		Inputs		During
(In thousands)	Value		(Level 1)		(Level 2)		(Level 3)		Period
Measured on a non-recurring basis:
Financial assets:
Impaired collateral-dependent loans	$	12,591	$	—	$	—	$	12,591	$	(556)

	Fair Value Measurements at December 31, 2020 Using
			Quoted Prices		Significant
			in Active		Other		Significant		Net (Credit)
	Assets/Liabilities		Markets for		Observable		Unobservable		Provision
	Measured at Fair		Identical Assets		Inputs		Inputs		During
(In thousands)	Value		(Level 1)		(Level 2)		(Level 3)		Period
Financial assets:
OREO	$	—	$	—	$	—	$	—	$	(225)
Impaired collateral-dependent loans		11,959		—		—		11,959		3,693

Carrying Amount and Estimated Fair Values of Financial Instruments

The table below presents the carrying amount and estimated fair values of the Company’s financial instruments presented as of March 31, 2021 and December 31, 2020:

		March 31, 2021				December 31, 2020
	Fair value	Carrying		Estimated		Carrying		Estimated
(In thousands)	level	amount		fair value		amount		fair value
Financial assets:
Cash and cash equivalents	Level 1	$	239,577	$	239,577	$	219,311	$	219,311
Securities (1)	Level 2		34,551		34,551		47,571		47,571
SBA loans held for sale	Level 2		8,809		10,392		9,335		10,712
Loans, net of allowance for loan losses (2)	Level 2		1,636,674		1,650,152		1,595,377		1,613,593
FHLB stock	Level 2		9,269		9,269		10,594		10,594
Servicing assets	Level 3		1,738		1,738		1,857		1,857
Accrued interest receivable	Level 2		9,831		9,831		10,429		10,429
Financial liabilities:
Deposits	Level 2		1,628,393		1,628,042		1,557,959		1,561,502
Borrowed funds and subordinated debentures	Level 2		180,310		181,727		210		212,358
Accrued interest payable	Level 2		255		255		248		248

(1) Includes corporate securities that are considered Level 3 and reported separately in the table under the “Fair Value on a Recurring Basis” heading. These securities had book values of $5.3 million and market values of $4.5 million.

(2) Includes collateral-dependent impaired loans that are considered Level 3 and reported separately in the tables under the “Fair Value on a Nonrecurring Basis” heading. Collateral-dependent impaired loans, net of specific reserves totaled $12.6 million and $12.0 million at March 31, 2021 and December 31, 2020, respectively.