Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Measurements

Fair Value Measurements

NOTE 8 — Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values.

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

For available-for-sale securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

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

	Fair Value Measurements Using
	Quoted Prices In Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
	(In thousands)
March 31, 2020
Assets
Available-for-sale securities
Mortgage-backed securities – agency	$	—	$	24,694	$	—
CMO’s – agency		—		113,431		—
Total	$	—	$	138,125	$	—
December 31, 2019
Assets
Available-for-sale securities
Mortgage-backed securities – agency	$	—	$	25,037	$	—
CMO’s – agency		—		121,382		—
Total	$	—	$	146,419	$	—

There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2020 and 2019. There were no assets measured on a nonrecurring basis as of March 31, 2020 and December 31, 2019.

The following tables present the carrying amounts and fair values (represents exit price) of financial instruments at March 31, 2020 and December 31, 2019:

	Fair Value Measurement at March 31, 2020, Using:
	Carrying
	Value		(Level 1)		(Level 2)		(Level 3)		Total
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	70,379	$	1,605	$	68,774	$	—	$	70,379
Securities available-for-sale		138,125		—		138,125		—		138,125
Securities, restricted, at cost		2,665		N/A		N/A		N/A		N/A
Loans, net		581,519		—		—		582,948		582,948
Accrued interest receivable		3,309		—		369		2,940		3,309
Financial Liabilities:
Time deposits		19,692		—		19,833		—		19,833
Demand and other deposits		678,138		678,138		—		—		678,138
Secured borrowings		85		—		85		—		85
Accrued interest payable		12		—		12		—		12

	Fair Value Measurement at December 31, 2019, Using:
	Carrying
	Value		(Level 1)		(Level 2)		(Level 3)		Total
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	61,806	$	669	$	61,007	$	—	$	61,676
Securities available-for-sale		146,419		—		146,419		—		146,419
Securities, restricted, at cost		2,665		N/A		N/A		N/A		N/A
Loans, net		558,380		—		—		560,859		560,859
Accrued interest receivable		3,242		—		386		2,856		3,242
Financial Liabilities:
Time deposits		19,746		—		19,763		—		19,763
Demand and other deposits		660,874		660,874		—		—		660,874
Secured borrowings		86		—		86		—		86
Accrued interest payable		12		—		12		—		12