Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2023

Investments All Other Investments [Abstract]

Fair Values of Financial Instruments

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair values of recognized financial instruments as of March 31, 2023 and December 31, 2022 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
March 31, 2023
Financial assets
Securities held-to-maturity	$	243,334	$	11,836	$	201,215	$	—	$	213,051
Loans held for sale		—		—		—		—		—
Net loans		641,466		—		—		622,852		622,852
Mortgage servicing rights		606		—		—		606		606
Financial liabilities
Deposits	$	1,007,507	$	879,886	$	—	$	128,398	$	1,008,284
Other borrowings		2,394		—		—		2,270		2,270
December 31, 2022
Financial assets
Securities held-to-maturity	$	247,401	$	11,617	$	200,337	$	—	$	211,954
Loans held for sale		52		55		—		—		55
Net loans		620,333		—		—		600,720		600,720
Mortgage servicing rights		621		—		—		621		621
Financial liabilities
Deposits	$	1,023,417	$	905,335	$	—	$	114,478	$	1,019,813
Other borrowings		2,461		—		—		2,321		2,321

Other financial instruments carried at amortized cost include cash and cash equivalents, restricted stock, bank-owned life insurance, accrued interest receivable, short-term borrowings, and accrued interest payable, all of which have a level 1 fair value that approximates their carrying value. The Company also has unrecognized financial instruments on March 31, 2023 and December 31, 2022. These financial instruments relate to commitments to extend credit and letters of credit. The aggregate contract amount of such financial instruments was approximately $265 million on March 31, 2023 and $268 million on December 31, 2022. 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.