Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2022

Investments All Other Investments [Abstract]

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair values of recognized financial instruments as of March 31, 2022 and December 31, 2021 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
March 31, 2022
Financial assets
Securities held-to-maturity	$	246,301	$	12,116	$	220,559	$	—	$	232,675
Loans held for sale		431		444		—		—		444
Net loans		560,070		—		—		564,887		564,887
Mortgage servicing rights		618		—		—		618		618
Financial liabilities
Deposits	$	994,939	$	876,951	$	—	$	117,419	$	994,370
Other borrowings		3,325		—		—		3,265		3,265

December 31, 2021
Financial assets
Securities held-to-maturity		174,808		12,693		161,835		—		174,528
Loans held for sale		231		238		—		—		238
Net loans		541,536		—		—		548,317		548,317
Mortgage servicing rights		604		—		—		604		604
Financial liabilities
Deposits	$	1,002,747	$	881,372	$	—	$	121,005	$	1,002,377
Other borrowings		3,407		—		—		3,431		3,431

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, 2022 and December 31, 2021. These financial instruments relate to commitments to extend credit and letters of credit. The aggregate contract amount of such financial instruments was approximately $250 million on March 31, 2022 and $248 million on December 31, 2021. 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.