FAIR VALUE MEASUREMENT AND DISCLOSURE (Tables)

3 Months Ended

Mar. 31, 2020

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:



(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
March 31, 2020
Financial assets:
Loans held for sale	$	27,730	$	—	$	27,730	$	—
AFS investments:
Obligations of states and political subdivisions	126,880		—		126,880		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	488,049		—		488,049		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	334,615		—		334,615		—
Subordinated corporate bonds	10,587		—		10,587		—
Equity securities - bank stock	1,674		—		1,674		—
Customer loan swaps	45,220		—		45,220		—
Interest rate swap on loans	5,591		—		5,591		—
Fixed-rate mortgage interest rate lock commitments	2,241		—		2,241		—
Forward delivery commitments	1,185		—		1,185		—
Financial liabilities:
Junior subordinated debt interest rate swaps	12,642		—		12,642		—
Customer loan swaps	45,220		—		45,220		—
Interest rate swap on borrowings	1,615		—		1,615		—
Fixed-rate mortgage interest rate lock commitments	264		—		264		—
Forward delivery commitments	30		—		30		—
December 31, 2019
Financial assets:
Loans held for sale	$	11,854	$	—	$	11,854	$	—
AFS investments:
Obligations of states and political subdivisions	118,083		—		118,083		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	463,386		—		463,386		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	325,905		—		325,905		—
Subordinated corporate bonds	10,744		—		10,744		—
Equity securities - bank stock	1,674		—		1,674		—
Customer loan swaps	17,756		—		17,756		—
Interest rate swap on loans	483		—		483		—
Fixed-rate mortgage interest rate lock commitments	480		—		480		—
Forward delivery commitments	312		—		312		—
Financial liabilities:
Junior subordinated debt interest rate swaps	8,187		—		8,187		—
Customer loan swaps	17,756		—		17,756		—
Fixed-rate mortgage interest rate lock commitments	18		—		18		—
Forward delivery commitments	15		—		15		—

Summary of Assets Measured at Fair Value on Non Recurring Basis

The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis for the dates indicated:



(In thousands)	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
March 31, 2020
Financial assets:
Collateral-dependent impaired loans	$	110	$	—	$	—	$	110
Non-financial assets:
OREO	94		—		—		94
December 31, 2019
Non-financial assets:
OREO	$	94	$	—	$	—	$	94

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis for the dates indicated:



(Dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Input	Discount
March 31, 2020
Collateral-dependent impaired loans:
Partially charged-off	$	110	Market approach appraisal of collateral	Management adjustment of appraisal	0%	(0%)
				Estimated selling costs	10%	(10%)
OREO	$	94	Market approach appraisal of collateral	Management adjustment of appraisal	18%	(18%)
				Estimated selling cost	13%	(13%)
December 31, 2019
OREO	$	94	Market approach appraisal of collateral	Management adjustment of appraisal	18%	(18%)
				Estimated selling cost	13%	(13%)

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:



(In thousands)	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
March 31, 2020
Financial assets:
HTM securities	$	1,300	$	1,358	$	—	$	1,358	$	—
Residential real estate loans⁽¹⁾	1,058,315		1,070,839		—		—		1,070,839
Commercial real estate loans⁽¹⁾	1,286,486		1,246,184		—		—		1,246,184
Commercial loans⁽¹⁾⁽²⁾	458,790		455,364		—		—		455,364
Home equity loans⁽¹⁾	303,746		292,371		—		—		292,371
Consumer loans⁽¹⁾	23,904		22,034		—		—		22,034
Servicing assets	903		1,418		—		—		1,418
Financial liabilities:
Time deposits	$	595,061	$	598,911	$	—	$	598,911	$	—
Short-term borrowings	326,722		326,678		—		326,678		—
Long-term borrowings	35,000		34,923		—		34,923		—
Subordinated debentures	59,155		44,327		—		44,327		—
December 31, 2019
Financial assets:
HTM securities	$	1,302	$	1,359	$	—	$	1,359	$	—
Residential real estate loans⁽¹⁾	1,064,532		1,066,544		—		—		1,066,544
Commercial real estate loans⁽¹⁾	1,230,983		1,196,297		—		—		1,196,297
Commercial loans⁽¹⁾⁽²⁾	438,716		431,892		—		—		431,892
Home equity loans⁽¹⁾	310,356		293,565		—		—		293,565
Consumer loans⁽¹⁾	25,265		23,355		—		—		23,355
Servicing assets	877		1,496		—		—		1,496
Financial liabilities:
Time deposits	$	595,549	$	594,881	$	—	$	594,881	$	—
Short-term borrowings	268,809		268,631		—		268,631		—
Long-term borrowings	10,000		10,002		—		10,002		—
Subordinated debentures	59,080		50,171		—		50,171		—


(1)	The presented carrying amount is net of the allocated ALL.


(2)	Includes the HPFC loan portfolio.