Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2021

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 September 30, 2021 and December 31, 2020 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
September 30, 2021
Financial assets
Cash and cash equivalents	$	283,621	$	283,621	$	—	$	—	$	283,621
Securities held-to-maturity		51,317		—		51,013		—		51,013
Restricted stock		4,614	N/A		N/A		N/A		N/A
Loans held for sale		862		862		—		—		862
Net loans		538,450		—		—		543,274		543,274
Bank-owned life insurance		23,873		23,873		—		—		23,873
Accrued interest receivable		1,768		1,768		—		—		1,768
Mortgage servicing rights		584		—		—		584		584
Financial liabilities
Deposits	$	968,629	$	844,036	$	—	$	124,928	$	968,964
Short-term borrowings		38,130		38,130		—		—		38,130
Other borrowings		3,489		—		—		3,550		3,550
Accrued interest payable		59		59		—		—		59
December 31, 2020
Financial assets
Cash and cash equivalents	$	181,652	$	181,652	$	—	$	—	$	181,652
Securities held-to-maturity		9,045		—		9,225		—		9,225
Restricted stock		4,614	N/A		N/A		N/A		N/A
Loans held for sale		1,378		1,378		—		—		1,378
Net loans		600,885		—		—		598,583		598,583
Bank-owned life insurance		21,416		21,416		—		—		21,416
Accrued interest receivable		2,159		2,159		—		—		2,159
Mortgage servicing rights		488		—		—		488		488
Financial liabilities
Deposits	$	891,562	$	768,230	$	—	$	124,127	$	892,357
Short-term borrowings		37,215		37,215		—		—		37,215
Other borrowings		4,664		—		—		4,775		4,775
Accrued interest payable		90		90		—		—		90

The Company also has unrecognized financial instruments on September 30, 2021 and December 31, 2020.  These financial instruments relate to commitments to extend credit and letters of credit.  The aggregate contract amount of such financial instruments was approximately $246 million on September 30, 2021 and $228 million on December 31, 2020.  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.