Note 9 - Fair Value Measurements and Disclosures (Tables)

3 Months Ended

Mar. 31, 2025

Fair Value Disclosures [Abstract]

Financial Assets Measured at Fair Value on a Recurring and Nonrecurring Basis

The following tables sets forth QNB’s financial assets measured at fair value on a recurring and nonrecurring basis and the fair value measurements by level within the fair value hierarchy as of March 31, 2025 and December 31, 2024:

March 31, 2025	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance at end of period
Recurring fair value measurements
Securities available-for-sale
U.S. Treasury securities	$	—	$	20,441	$	—	$	20,441
U.S. Government agency securities		—		68,431		—		68,431
State and municipal securities (1)		—		84,430		—		84,430
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed securities (1)		—		195,291		—		195,291
Collateralized mortgage obligations (CMOs)		—		161,863		—		161,863
Corporate debt securities and money market funds		—		16,632		50		16,682
Total securities available-for-sale		—		547,088		50		547,138
Total recurring fair value measurements	$	—	$	547,088	$	50	$	547,138
Nonrecurring fair value measurements
Collateral dependent loans	$	—	$	—	$	5,983	$	5,983
Mortgage servicing rights		—		—		1		1
Total nonrecurring fair value measurements	$	—	$	—	$	5,984	$	5,984

December 31, 2024	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance at end of period
Recurring fair value measurements
Securities available-for-sale
U.S. Treasury securities	$	—	$	18,010	$	—	$	18,010
U.S. Government agency securities		—		66,908		—		66,908
State and municipal securities (1)		—		86,352		—		86,352
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed securities (1)		—		198,510		—		198,510
Collateralized mortgage obligations (CMOs)		—		161,646		—		161,646
Corporate debt securities and money market funds		—		15,082		51		15,133
Total securities available-for-sale		—		546,508		51		546,559
Total recurring fair value measurements	$	—	$	546,508	$	51	$	546,559
Nonrecurring fair value measurements
Collateral dependent loans	$	—	$	—	$	—	$	—
Mortgage servicing rights		—		—		1		1
Total nonrecurring fair value measurements	$	—	$	—	$	1	$	1

Quantitative Information about Assets Measured at Fair Value

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which QNB has utilized Level 3 inputs to determine fair value:

	Quantitative information about Level 3 fair value measurements
March 31, 2025	Fair value		Valuation techniques		Unobservable inputs		Value or range of values
Collateral dependent loans	$	5,983	Appraisal of collateral	(1)	Appraisal adjustments	(2)	-15% to -100%
					Liquidation expenses	(3)		-10	%
Mortgage servicing rights		1	Discounted cash flow		Remaining term		1 to 29 years
					Prepayment speeds		88% to 177%
					Discount rate		12.0% to 12.5%

	Quantitative information about Level 3 fair value measurements
December 31, 2024	Fair value		Valuation techniques		Unobservable inputs		Value or range of values
Collateral dependent loans	$	-	Appraisal of collateral	(1)	Appraisal adjustments	(2)	-100%
					Liquidation expenses	(3)		0	%
Mortgage servicing rights		1	Discounted cash flow		Remaining term		0.4 to 29.2 yrs
					Prepayment speeds		90% to 350%
					Discount rate		12.0% to 12.5%

(1)Fair value is primarily determined through appraisals of the underlying collateral by independent parties, which generally includes various Level 3 inputs which are not always identifiable.

(2)Appraisals may be adjusted by management for qualitative factors such as economic conditions and the age of the appraisal. The range is presented as a percent of the initial appraised value.

(3)Appraisals and pending agreements of sale are adjusted by management for estimated liquidation expenses. The range is presented as a percent of the initial appraised value.

Available-for-sale Securities Measured at Fair Value Using Significant Unobservable Inputs

The following table presents additional information about the available-for-sale securities measured at fair value on a recurring basis and for which QNB utilized significant unobservable inputs (Level 3 inputs) to determine fair value for the three months ended March 31, 2025 and 2024:

	Fair value measurements using significant unobservable inputs (Level 3)
	2025			2024
Balance, January 1,	$	52		$	52
Payments received		(2	)		—
Total gains or losses (realized/unrealized)
Included in earnings		—			—
Included in other comprehensive (loss) income		—			—
Transfers in and/or out of Level 3		—			—
Balance, March 31,	$	50		$	52

Financial and Off-balance Sheet Instruments

The estimated fair values and carrying amounts of the Company’s financial and off-balance sheet instruments are summarized as follows:

					Fair value measurements
March 31, 2025	Carrying amount		Fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial assets
Cash and cash equivalents	$	81,557	$	81,557	$	81,557	$	—	$	—
Investment securities:
Available-for-sale (1)		547,138		547,138		—		547,088		50
Restricted investment in bank stocks		5,491		5,491		—		5,491		—
Loans held for sale		248		248		—		248		—
Net loans		1,202,864		1,208,234		—		—		1,208,234
Mortgage servicing rights		370		535		—		—		535
Accrued interest receivable		4,801		4,801		—		4,801		—
Financial liabilities
Deposits with no stated maturities	$	1,286,677	$	1,286,677	$	1,286,677	$	—	$	—
Deposits with stated maturities		377,878		376,435		—		376,435		—
Short-term borrowings		43,299		43,299		43,299		—		—
Long-term debt		30,000		30,012		—		30,012		—
Subordinated debt		39,118		40,650		—		40,650		—
Accrued interest payable		4,465		4,465		—		4,465		—
Off-balance sheet instruments
Commitments to extend credit	$	—	$	—	$	—	$	—	$	—
Standby letters of credit		—		67		—		67		—

					Fair value measurements
December 31, 2024	Carrying amount		Fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial assets
Cash and cash equivalents	$	50,713	$	50,713	$	50,713	$	—	$	—
Investment securities:
Available-for-sale (1)		546,559		546,559		—		546,508		51
Restricted investment in bank stocks		5,436		5,436		—		5,436		—
Loans held for sale		664		664		—		664		—
Net loans		1,207,304		1,212,780		—		—		1,212,780
Mortgage servicing rights		378		556		—		—		556
Accrued interest receivable		4,965		4,965		—		4,965		—
Financial liabilities
Deposits with no stated maturities	$	1,247,083	$	1,247,083	$	1,247,083	$	—	$	—
Deposits with stated maturities		381,458		379,960		—		379,960		—
Short-term borrowings		53,844		53,844		53,844		—		—
Long-term debt		30,000		30,033		—		30,033		—
Subordinated debt		39,068		40,600		—		40,600		—
Accrued interest payable		7,580		7,580		—		7,580		—
Off-balance sheet instruments
Commitments to extend credit	$	—	$	—	$	—	$	—	$	—
Standby letters of credit		—		59		—		59		—

(1) Includes derivatives designated as fair value hedges.