Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2020

Investments All Other Investments [Abstract]

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair values of recognized financial instruments as of September 30, 2020 and December 31, 2019 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
September 30, 2020
Financial assets
Cash and cash equivalents	$	198,144	$	198,144	$	—	$	—	$	198,144
Securities available-for-sale		112,279		1,015		111,264		—		112,279
Securities held-to-maturity		9,901		—		10,120		—		10,120
Equity securities		82		36		—		46		82
Restricted stock		4,614	NA		N/A		N/A		N/A
Loans held for sale		1,488		1,488		—		—		1,488
Net loans		619,729		—		—		618,607		618,607
Bank-owned life insurance		19,284		19,284		—		—		19,284
Accrued interest receivable		2,022		2,022		—		—		2,022
Mortgage servicing rights		430		—		—		430		430
Financial liabilities
Deposits	$	840,656	$	714,920	$	—	$	127,123	$	842,043
Short-term borrowings		41,645		41,645		—		—		41,645
Other borrowings		9,765		—		—		9,896		9,896
Accrued interest payable		93		93		—		—		93

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 September 30, 2020 and December 31, 2019. These financial instruments relate to commitments to extend credit and letters of credit. The aggregate contract amount of such financial instruments was approximately $236 million at September 30, 2020 and $211 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.