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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

) in which the fair value measurements fall at

December 31, 2017

and

2016:

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

December 31, 2017:

Financial assets:
Cash and cash equivalents	$	25,915	$	25,915	$	25,915	$	-	$	-
Interest-bearing time deposits		9,258		9,220		-		9,220		-
Securities available for sale		271,172		271,172-		271,172		-
Securities held to maturity		1		1		-		1		-
Loans held for sale		2,630		2,678		-		2,678		-
Loans, net		409,618		404,931		-		-		404,931
FHLB and other stock		1,979		N/A		N/A		N/A		N/A
Accrued interest receivable		2,694		2,694		-		2,694		-

Financial liabilities:
Deposits		664,562		663,006		-		-		663,006
FHLB advances		10,000		10,000		-		10,000		-
Accrued interest payable		107		107		-		107		-

December 31, 2016:

Financial assets:
Cash and cash equivalents	$	45,909	$	45,909	$	45,909	$	-	$	-
Interest-bearing time deposits		14,735		14,786		-		14,786		-
Securities available for sale		255,770		255,770		-		255,770		-
Securities held to maturity		2		2		-		2		-
Loans held for sale		4,507		4,598		-		4,598		-
Loans, net		381,154		381,459		-		-		381,459
FHLB and other stock		1,650		N/A		N/A		N/A		N/A
Accrued interest receivable		2,363		2,363		-		2,363		-

Financial liabilities:
Deposits		664,650		663,806		-		-		663,806
Accrued interest payable		133		133		-		133		-

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

17,

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

For cash and short-term instruments, including cash and due from banks, interest-bearing deposits with banks with original maturities of

days or less, money market funds, and federal funds sold, the carrying amount is a reasonable estimate of fair value.

Investment Securities and Interest-Bearing Time Deposits

For debt securities and interest-bearing time deposits, 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.

Loans

The fair value of loans, excluding loans held for sale, is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and terms. Impaired loans are valued at the lower of their carrying value or fair value, as previously described. The carrying amount of accrued interest receivable approximates its fair value.

The fair value of loans held for sale is estimated based on specific prices of underlying contracts for sales to investors, as previously described.

FHLB Stock

It is

not

practical to determine the fair value of FHLB and other restricted stock due to restrictions placed on transferability.

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.

FHLB Advances

The fair value of FHLB advances is estimated by discounting the future cash flows at current interest rates for FHLB advances of similar maturities.