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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Financial Assets Measured at Fair Value on Recurring Basis

The following summarizes financial assets measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, segregated by level or the valuation inputs within the fair value hierarchy utilized to measure fair value:


Assets and Liabilities Measured at Fair Value on a Recurring Basis
		(In Thousands)
September 30, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets - (Securities Available-for-Sale)
U.S. Treasury		$	105,133			$	-			$	-
U.S. Government agencies			20,263				116,097				-
Mortgage-backed securities			-				96,693				-
State and local governments			-				65,049				1,646
Total Securities Available-for-Sale		$	125,396			$	277,839			$	1,646
Interest rate swap liabilities		$	-			$	(2,943	)		$	-


		(In Thousands)
December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets - (Securities Available-for-Sale)
U.S. Treasury		$	80,270			$	-			$	-
U.S. Government agencies			19,630				108,592				-
Mortgage-backed securities			-				82,132				-
State and local governments			-				65,394				2,460
Total Securities Available-for-Sale		$	99,900			$	256,118			$	2,460
Interest rate swaps liabilities		$	-			$	(2,679	)		$	-

Changes in the Level 3 Fair-Value Category of Unobservable Inputs

The following tables represent the changes in the Level 3 fair-value category of which unobservable inputs are relied upon as of the three and nine month periods ended September 30, 2024 and September 30, 2023.


		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at July 1, 2024		$	520			$	1,266			$	1,786

Change in Fair Value			4				26				30

Payments, Maturities & Calls			(170	)			-				(170	)

Balance at September 30, 2024		$	354			$	1,292			$	1,646


		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at January 1, 2024		$	1,188			$	1,272			$	2,460

Change in Fair Value			1				20				21

Payments, Maturities & Calls			(835	)			-				(835	)

Balance at September 30, 2024		$	354			$	1,292			$	1,646


		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at July 1, 2023		$	1,831			$	1,278			$	3,109

Change in Fair Value			-				(25	)			(25	)

Payments, Maturities & Calls			(657	)			-				(657	)

Balance at September 30, 2023		$	1,174			$	1,253			$	2,427


		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments
		Tax-Exempt				Taxable				Total
Balance at January 1, 2023		$	2,071			$	1,274			$	3,345

Change in Fair Value			5				(21	)			(16	)

Payments, Maturities & Calls			(902	)			-				(902	)

Balance at September 30, 2023		$	1,174			$	1,253			$	2,427

Assets Measured at Fair Value on Nonrecurring Basis

The following table presents assets measured at fair value on a nonrecurring basis at September 30, 2024 and December 31, 2023:


		(In Thousands)
		Assets Measured at Fair Value on a Nonrecurring Basis at September 30, 2024
		Balance at September 30, 2024				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Collateral dependent loans		$	2,766			$	-			$	-			$	2,766
Loan servicing rights			(2	)			-				-				(2	)


		(In Thousands)
		Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2023
		Balance at December 31, 2023				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Collateral dependent loans		$	22,676			$	-			$	-			$	22,676
Loan servicing rights			58				-				-				58

Quantitative Information about Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements:


		(In Thousands)								Range
		Fair Value at								(Weighted
		September 30, 2024				Valuation Technique		Unobservable Inputs		Average)
State and local government		$	1,646			Discounted Cash Flow		Credit strength of underlying project or entity / discount rate		3.14-3.95% (3.83%)

Collateral dependent loans			2,766			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability		0.00-22.46% (4.46%)

Loan servicing rights			(2	)		Discounted Cash Flow		Constant prepayment rate and probability of default / discount rate		9.75-425.44% (104.97%)


		(In Thousands)								Range
		Fair Value at								(Weighted
		December 31, 2023				Valuation Technique		Unobservable Inputs		Average)
State and local government		$	2,460			Discounted Cash Flow		Credit strength of underlying project or entity / discount rate		-0.17-4.92% (3.49%)

Collateral dependent loans			22,676			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability		0.00-50.00% (0.41%)

Loan servicing rights			58			Discounted Cash Flow		Constant prepayment rate and probability of default / discount rate		5.11-22.80% (10.87%)

Estimated Fair Values and Related Carrying or Notional Amounts

The estimated fair values, and related carrying or notional amounts, for on and off-balance sheet financial instruments as of September 30, 2024 and December 31, 2023 are reflected below.


		(In Thousands)
		September 30, 2024
		Carrying				Fair
		Amount				Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and cash equivalents		$	245,504			$	245,504			$	245,504			$	-			$	-
Interest-bearing time deposits			2,727				2,742				-				2,742				-
Securities - available-for-sale			404,881				404,881				125,396				277,839				1,646
Other securities			15,028				15,028				-				-				15,028
Loans held for sale			1,706				1,706				-				-				1,706
Loans, net			2,512,852				2,454,546				-				-				2,454,546
Interest receivable			14,316				14,316				-				-				14,316

Financial Liabilities:
Interest bearing deposits		$	1,527,182			$	1,526,588			$	-			$	-			$	1,526,588
Non-interest bearing deposits			481,444				481,444				481,444				-				-
Time deposits			676,187				676,172				-				-				676,172
Total Deposits			2,684,813				2,684,204				481,444				-				2,202,760

Federal funds purchased and securities sold under agreement to repurchase			27,292				27,292				-				-				27,292
Federal Home Loan Bank advances			263,081				249,109				-				-				249,109
Subordinated notes, net of unamortized issuance costs			34,789				30,642				-				30,642				-
Interest payable			6,527				6,527				-				-				6,527


		(In Thousands)
		December 31, 2023
		Carrying				Fair
		Amount				Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and cash equivalents		$	142,201			$	142,201			$	142,201			$	-			$	-
Interest-bearing time deposits			2,740				2,725				-				2,725				-
Securities - available-for-sale			358,478				358,478				99,900				256,118				2,460
Other securities			17,138				17,138				-				-				17,138
Loans held for sale			1,576				1,552				-				-				1,552
Loans, net			2,556,167				2,396,540				-				-				2,396,540
Interest receivable			11,774				11,774				-				-				11,774

Financial Liabilities:
Interest bearing deposits		$	1,415,981			$	1,416,007			$	-			$	-			$	1,416,007
Non-interest bearing deposits			528,465				528,465				528,465				-				-
Time deposits			663,017				656,141				-				-				656,141
Total Deposits			2,607,463				2,600,613				528,465				-				2,072,148

Federal funds purchased and securities sold under agreement to repurchase			28,218				28,218				-				-				28,218
Federal Home Loan Bank advances			265,750				260,400				-				-				260,400
Subordinated notes, net of unamortized issuance costs			34,702				30,676				-				30,676				-
Interest payable			5,441				5,441				-				-				5,441

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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