Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2020

Investments All Other Investments [Abstract]

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair values of recognized financial instruments as of March 31, 2020 and December 31, 2019 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
March 31, 2020
Financial assets
Cash and cash equivalents	$	96,272	$	96,272	$	—	$	—	$	96,272
Securities available-for-sale		108,263		1,020		107,243		—		108,263
Securities held-to-maturity		11,242		—		11,542		—		11,542
Equity securities		79		33		—		46		79
Restricted stock		4,614	N/A		N/A		N/A		N/A
Loans held for sale		256		256		—		—		256
Net loans		548,200		—		—		549,544		549,544
Bank-owned life insurance		19,023		19,023		—		—		19,023
Accrued interest receivable		1,611		1,611		—		—		1,611
Mortgage servicing rights		330		—		—		330		330
Financial liabilities
Deposits	$	671,162	$	544,849	$	—	$	128,022	$	672,871
Short-term borrowings		40,605		40,605		—		—		40,605
Other borrowings		6,206		—		—		6,326		6,326
Accrued interest payable		119		119		—		—		119

December 31, 2019
Financial assets
Cash and cash equivalents	$	102,017	$	102,017	$	—	$	—	$	102,017
Securities available-for-sale		112,146		999		111,147		—		112,146
Securities held-to-maturity		13,869		—		13,950		—		13,950
Equity securities		92		46		—		46		92
Restricted stock		4,614	N/A		N/A		N/A		N/A
Loans held for sale		622		622		—		—		622
Net loans		544,616		—		—		542,981		542,981
Bank-owned life insurance		18,894		18,894		—		—		18,894
Accrued interest receivable		1,641		1,641		—		—		1,641
Mortgage servicing rights		328		—		—		328		328
Financial liabilities
Deposits	$	683,546	$	555,985	$	—	$	127,440	$	683,425
Short-term borrowings		38,889		38,889		—		—		38,889
Other borrowings		6,330		—		—		6,273		6,273
Accrued interest payable		127		127		—		—		127

The Company also has unrecognized financial instruments at March 31, 2020 and December 31, 2019. These financial instruments relate to commitments to extend credit and letters of credit. The aggregated contract amount of such financial instruments was approximately $207.1 million at March 31, 2020 and $211.3 million at December 31, 2019. Such amounts are also considered to be the fair values.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.