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Disclosures About Fair Value of Assets and Liabilities
 6 Months Ended
Jun. 30, 2021
Disclosures About Fair Value of Assets and Liabilities [Abstract]  
Disclosures About Fair Value of Assets and Liabilities
Note 8:
Disclosures About Fair Value of Assets and Liabilities
 
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs.  There is a hierarchy of three levels of inputs that may be used to measure fair value:
 

 		Level 1
Quoted prices in active markets for identical assets or liabilities
 

 		Level 2
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
 

 		Level 3
Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities
 
Recurring Measurements
 
There were no assets measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020.

Nonrecurring Measurements
 
The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2021 and December 31, 2020 (dollars in thousands):
 
   
Fair Value
    
(Level 1)
    
(Level 2)
    
(Level 3)
  
                         
June 30, 2021
                        
Impaired loans (collateral- dependent)
  
$
7,660
    
$
-
    
$
-
    
$
7,660
  
                                 
December 31, 2020
                                
Impaired loans (collateral- dependent)
  
$
11,358
    
$
-
    
$
-
    
$
11,358
  

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.  For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.
 
Collateral-Dependent Impaired Loans, Net of Allowance for Loan Losses
 
The estimated fair value of collateral-dependent impaired loans is based on fair value, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.
 
The Company considers evaluation analysis as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Values of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by executive management and loan administration. Values are reviewed for accuracy and consistency by executive management and loan administration. The ultimate collateral values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral.

Unobservable (Level 3) Inputs
 
The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.
 
   
Fair Value
  
Valuation
Technique
  
 Unobservable
Inputs
  
Weighted-
Average
  
June 30, 2021
                  
Collateral-dependent impaired loans
  
$
7,660
  
Appraisals from comparable properties
  
Estimated cost to sell
    
5-10
%
                       
December 31, 2020
                      
Collateral-dependent impaired loans
  
$
11,358
  
Appraisals from comparable properties
  
Estimated cost to sell
    
3-5
%

The following tables presents estimated fair values of the Company’s financial instruments not     recorded at fair value at June 30, 2021 and December 31, 2020 (dollars in thousands):

 
   
Fair Value Measurements
  
   
Carrying
Amount
    
Level 1
    
Level 2
    
Level 3
    
Total
  
June 30, 2021
                              
                               
Financial Assets
                              
Cash and due from banks
  
$
187,732
    
$
187,732
    
$
-
    
$
-
    
$
187,732
  
Interest-bearing time deposits in other banks
    
5,478
      
-
      
5,478
      
-
      
5,478
  
Loans, net of allowance
    
919,687
      
-
      
911,153
      
7,660
      
918,813
  
Mortgage loans held for sale
     1,334       -       1,334       -       1,334  
Nonmarketable equity securities
    
1,187
      
-
      
1,187
      
-
      
1,187
  
Interest receivable
    
3,609
      
-
      
3,609
      
-
      
3,609
  
                                         
Financial Liabilities
                                        
Deposits
  
$
1,008,549
    
$
-
    
$
1,007,905
    
$
-
    
$
1,007,905
  
Interest payable
    
188
      
-
      
188
      
-
      
188
  
                                         
December 31, 2020
                                        
                                         
Financial Assets
                                        
Cash and due from banks
  
$
153,901
    
$
153,901
    
$
-
    
$
-
    
$
153,901
  
Interest-bearing time deposits in other banks
    
16,412
      
-
      
16,412
      
-
      
16,412
  
Loans, net of allowance
    
826,974
      
-
      
815,223
      
11,358
      
826,581
  
Mortgage loans held for sale
    
324
      
-
      
324
      
-
      
324
  
Nonmarketable equity securities
    
1,172
      
-
      
1,172
      
-
      
1,172
  
Interest receivable
    
4,365
      
-
      
4,365
      
-
      
4,365
  
                                         
Financial Liabilities
                                        
Deposits
  
$
905,514
    
$
-
    
$
904,928
    
$
-
    
$
904,928
  
Interest payable
    
286
      
-
      
286
      
-
      
286
  

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value:
 
Cash and Due from Banks, Interest-Bearing Time Deposits in Other Banks, Nonmarketable Equity Securities, Interest Receivable and Interest Payable
 
The carrying amount approximates fair value.
Loans and Mortgage Loans Held for Sale
 
The Company determines fair value of loans by using exit market assumptions including factors such as liquidity, credit quality and risk of nonperformance. The fair value is estimated by discounting the future cash flows using the market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.
 
Deposits
 
Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.
 
Commitments to Extend Credit, Lines of Credit and Standby Letters of Credit
 
The fair values of unfunded commitments are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. The fair values of standby letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. The estimated fair values of the Company’s commitments to extend credit, lines of credit and standby letters of credit were not material at June 30, 2021 and December 31, 2020.