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Financial Instruments

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Financial Instruments

(8) Financial Instruments

The estimated fair values of the Company’s financial instruments were as follows (in thousands):

		At December 31, 2015						At December 31, 2014
		Carrying Amount			Fair Value			Carrying Amount			Fair Value
Financial assets:
Cash and cash equivalents		$	10,365		$	10,365		$	12,074		$	12,074
Securities available for sale			25,749			25,749			26,748			26,748
Loans			82,573			82,429			75,829			75,621
Federal Home Loan Bank stock			966			966			1,229			1,229
Accrued interest receivable			462			462			426			426

Financial liabilities:
Deposit liabilities			97,571			97,837			91,603			91,849
Federal Home Loan Bank advances			20,000			20,000			22,740			22,744
Junior subordinated debenture			5,155			N/A	(1)		5,155			N/A	⁽¹⁾
Off-balance sheet financial instruments			—			—			—			—

(1)

The Company is unable to determine value based on significant unobservable inputs required in the calculation. Refer to Note 7 for further information.

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit and may involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the consolidated balance sheet. The contract amounts of these instruments reflect the extent of involvement the Company has in these financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, upon extension of credit, is based on management’s credit evaluation of the counterparty.

As of December 31, 2015, commitments to extend credit totaled $4.3 million.