Note 20 - Disclosures About Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2014

Fair Value Measurements And Financial Instruments Disclosure [Abstract]

Fair Value Measurements And Financial Instruments Disclosure [Text Block]

(20) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table summarizes the carrying value and estimated fair value of financial instruments and the level within the fair value hierarchy (see Note 21) in which the fair value measurements fall at December 31, 2014 and 2013:

					Fair Value Measurements Using
(In thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3

December 31, 2014:

Financial assets:
Cash and cash equivalents	$	33,243	$	33,243	$	33,243	$	0	$	0
Interest-bearing time deposits		8,270		8,370		0		8,370		0
Securities available for sale		100,226		100,226		2,083		98,143		0
Securities held to maturity		6		6		0		6		0
Loans held for sale		1,608		1,641		0		1,641		0
Loans, net		300,603		301,864		0		0		301,864
FHLB stock		2,241		2,241		0		2,241		0
Accrued interest receivable		1,580		1,580		0		1,580		0
Cost method investment (included in other assets)		711		711		0		711		0

Financial liabilities:
Deposits		412,636		412,282		0		0		412,282
Accrued interest payable		127		127		0		127		0

December 31, 2013:

Financial assets:
Cash and cash equivalents	$	11,136	$	11,136	$	11,136	$	0	$	0
Interest-bearing time deposits		4,425		4,458		0		4,458		0
Securities available for sale		108,762		108,762		3,198		105,564		0
Securities held to maturity		9		9		0		9		0
Loans held for sale		1,611		1,644		0		1,644		0
Loans, net		288,506		287,753		0		0		287,753
FHLB stock		2,820		2,820		0		2,820		0
Accrued interest receivable		1,716		1,716		0		1,716		0
Cost method investment (included in other assets)		540		540		0		540		0

Financial liabilities:
Deposits		373,830		373,883		0		0		373,883
Retail repurchase agreements		9,310		9,310		0		9,310		0
Advances from FHLB		5,500		5,500		0		5,500		0
Accrued interest payable		192		192		0		192		0

The carrying amounts in the preceding table are included in the consolidated balance sheets under the applicable captions. The contractual or notional amounts of financial instruments with off-balance-sheet risk are disclosed in Note 16, and the fair value of these instruments is considered immaterial.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents and Interest-Bearing Time Deposits

For cash and short-term instruments, including cash and due from banks, interest-bearing deposits with banks, federal funds sold, and interest-bearing time deposits with other financial institutions, the carrying amount is a reasonable estimate of fair value.

Investment Securities

For marketable equity securities, the fair values are based on quoted market prices. For debt securities, the Company obtains fair value measurements from an independent pricing service and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. For FHLB stock, a restricted equity security, the carrying amount is a reasonable estimate of fair value because it is not marketable. For other cost method investments where a quoted market value is not available, the carrying amount is a reasonable estimate of fair value.

Loans

The fair value of loans is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amount of accrued interest receivable approximates its fair value. The fair value of loans held for sale is based on specific prices of underlying contracts for sales to investors.

Deposits

The fair value of demand deposits, savings accounts, money market deposit accounts and other transaction accounts is the amount payable on demand at the balance sheet date. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

Borrowed Funds

The carrying amount of retail repurchase agreements approximates its fair value. The fair value of advances from FHLB is estimated by discounting the future cash flows using the current rates at which similar loans with the same remaining maturities could be obtained.