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DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2023

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

14. 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, 2023 and 2022, for the remaining financial instruments not required to be reported at fair value were as follows:

AT DECEMBER 31, 2023

Carrying

Value

Fair Value

(Level 1)

(Level 2)

(Level 3)

(IN THOUSANDS)

FINANCIAL ASSETS:

Investment securities – HTM

$

63,979

$

58,621

$

—

$

56,769

$

1,852

Loans held for sale

130

132

132

—

—

Loans, net of allowance for credit losses and unearned income

1,023,218

950,402

—

—

950,402

FINANCIAL LIABILITIES:

Deposits with stated maturities

322,477

321,660

—

—

321,660

All other borrowings ⁽¹⁾

71,247

70,061

—

—

70,061


		AT DECEMBER 31, 2022
		Carrying
		Value				Fair Value			(Level 1)			(Level 2)			(Level 3)

			(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM		$	61,878		$	55,192		$	—		$	52,323		$	2,869
Loans held for sale			59			57			57			—			—
Loans, net of allowance for credit losses and unearned income			980,023			938,188			—			—			938,188
FINANCIAL LIABILITIES:
Deposits with stated maturities			286,004			281,297			—			—			281,297
All other borrowings ⁽¹⁾			46,409			44,759			—			—			44,759

(1)	All other borrowings include advances from Federal Home Loan Bank 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.