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DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2021

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

15. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

For the Company, as for most financial institutions, approximately 90% of its assets and liabilities are considered financial instruments. Many of the Company’s financial instruments, however, lack an available trading market characterized by a willing buyer and willing seller engaging in an exchange transaction. Therefore, significant estimates and present value calculations were used by the Company for the purpose of this disclosure.

Fair values have been determined by the Company using independent third party valuations that use the best available data (Level 2) and an estimation methodology (Level 3) the Company believes is suitable for each category of financial instruments. Management believes that cash and cash equivalents, bank owned life insurance, regulatory stock, accrued interest receivable and payable, deposits with no stated maturities, and short term borrowings have fair values which approximate the recorded carrying values. The fair value measurements for all of these financial instruments are Level 1 measurements.

The estimated fair values based on US GAAP measurements and recorded carrying values at December 31, 2021 and 2020, for the remaining financial instruments not required to be measured or reported at fair value were as follows:

AT DECEMBER 31, 2021

Carrying

Value

Fair Value

(Level 1)

(Level 2)

(Level 3)

(IN THOUSANDS)

FINANCIAL ASSETS:

Investment securities – HTM

53,751

55,516

—

52,523

2,993

Loans held for sale

983

1,022

—

Loans, net of allowance for loan loss and unearned income

972,656

969,681

—

969,681

FINANCIAL LIABILITIES:

Deposits with stated maturities

292,325

294,280

—

294,280

All other borrowings ⁽¹⁾

69,256

69,506

—

69,506


	AT DECEMBER 31, 2020
	Carrying
	Value			Fair Value		(Level 1)		(Level 2)		(Level 3)

		(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM	$	44,222	$	47,106	$	—	$	44,108	$	2,998
Loans held for sale		6,250		6,428		6,428		—		—
Loans, net of allowance for loan loss and unearned income		960,750		969,433		—		—		969,433
FINANCIAL LIABILITIES:
Deposits with stated maturities		344,146		347,927		—		—		347,927
All other borrowings⁽¹⁾		85,493		90,907		—		—		90,907

(1)	All other borrowings include advances from Federal Home Loan Bank, guaranteed junior subordinated deferrable interest debentures, and subordinated debt.

Changes in assumptions or estimation methodologies may have a material effect on these estimated fair values. The Company’s remaining assets and liabilities which are not considered financial instruments have not been valued differently than has been customary under historical cost accounting.