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Financial Instruments

3 Months Ended

Mar. 31, 2015

NOTE 5 – FINANCIAL INSTRUMENTS

Financial instruments as of the dates indicated were as follows:

					Quoted Prices
					in Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
(Dollars in thousands)	Carrying		Estimated		Assets		Inputs		Inputs
	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2015
Assets:
Cash and due from banks	$	9,748	$	9,748	$	9,748	$	—	$	—
Securities available for sale		150,607		150,607		808		137,121		12,678
Federal Home Loan Bank and Federal
Reserve Bank stock		3,185		3,185		—		3,185		—
Loans held for sale		2,061		2,114		—		—		2,114
Loans, net		333,973		338,568		—		—		338,568

Liabilities:
Noninterest-bearing deposits		110,025		110,025		—		110,025		—
Interest-bearing deposits		319,057		319,121		—		319,121		—
Repurchase agreements		21,153		21,153		—		21,153		—
Federal Home Loan Bank advances		20,880		20,921		—		20,921		—


December 31, 2014
Assets:
Cash and due from banks	$	16,650	$	16,650	$	16,650	$	—	$	—
Securities available for sale		142,521		142,521		775		130,104		11,642
Federal Home Loan Bank and Federal
Reserve Bank stock		3,185		3,185		—		3,185		—
Loans held for sale		2,170		2,237		—		—		2,237
Loans, net		341,940		345,656		—		—		345,656

Liabilities:
Noninterest-bearing deposits		113,006		113,006		—		113,006		—
Interest-bearing deposits		321,822		321,757		—		321,757		—
Repurchase agreements		26,743		26,743		—		26,743		—
Federal Home Loan Bank advances		18,363		18,402		—		18,402		—

The estimated fair values approximate the carrying amounts for all assets and liabilities except those described later in this paragraph. The methodology for determining the estimated fair value for securities available for sale is described in Note 6. The estimated fair value for loans is based on the rates charged at March 31, 2015 and December 31, 2014 for new loans with similar maturities, applied until the loan is assumed to reprice or be paid. The allowance for loan losses is considered to be a reasonable estimate of discount for credit quality concerns. The estimated fair values for time deposits and Federal Home Loan Bank (“FHLB”) advances are based on the rates paid at March 31, 2015 and December 31, 2014 for new deposits or FHLB advances, applied until maturity. The estimated fair values for other financial instruments and off-balance sheet loan commitments are considered nominal.