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Note 6 - Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

 

 

 

 

Fair Value Measurement Using

 

September 30, 2024

 

Balance

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

U.S. government agencies and corporations

 

$

320,432

 

 

$

-

 

 

$

320,432

 

 

$

-

 

States and political subdivisions

 

 

152,728

 

 

 

-

 

 

 

152,728

 

 

 

-

 

Mortgage-backed securities

 

 

142,245

 

 

 

-

 

 

 

142,245

 

 

 

-

 

Corporate debt securities

 

 

5,876

 

 

 

-

 

 

 

5,876

 

 

 

-

 

U.S. treasury

 

 

990

 

 

 

-

 

 

 

990

 

 

 

-

 

Total securities available for sale

 

$

622,271

 

 

$

-

 

 

$

622,271

 

 

$

-

 

 

 

 

 

 

Fair Value Measurement Using

 

December 31, 2023

 

Balance

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

U.S. government agencies and corporations

 

$

311,844

 

 

$

-

 

 

$

311,844

 

 

$

-

 

States and political subdivisions

 

 

149,893

 

 

 

-

 

 

 

149,893

 

 

 

-

 

Mortgage-backed securities

 

 

150,151

 

 

 

-

 

 

 

150,151

 

 

 

-

 

Corporate debt securities

 

 

5,750

 

 

 

-

 

 

 

5,750

 

 

 

-

 

U.S. treasury

 

 

963

 

 

 

-

 

 

 

963

 

 

 

-

 

Total securities available for sale

 

$

618,601

 

 

$

-

 

 

$

618,601

 

 

$

-

 

 

 

 

 

Fair Value Measurement Using

 

September 30, 2024

 

Balance

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Forward sale commitment

 

$

(3

)

 

$

-

 

 

$

-

 

 

$

(3

)

 

September 30, 2024

 

Valuation Technique

 

Unobservable Input

 

Range (Weighted Average)

Forward sale commitment

 

Market approach

 

Pull-through rate

 

100%(1)

Forward sale commitment

 

Market approach

 

Current reference price

 

101.99% - 102.63% (102.14) (2)

 

 

 

 

 

Fair Value Measurement Using

 

December 31, 2023

 

Balance

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Interest rate loan contract

 

$

3

 

 

$

-

 

 

$

-

 

 

$

3

 

Forward sale commitment

 

$

(4

)

 

$

-

 

 

$

-

 

 

$

(4

)

 

December 31, 2023

 

Valuation Technique

 

Unobservable Input

 

Range (Weighted Average)

Interest rate loan contract

 

Market approach

 

Pull-through rate

 

100%(1)

Forward sale commitment

 

Market approach

 

Pull-through rate

 

100%(1)

 

 

 

 

 

 

 

Interest rate loan contract

 

Market approach

 

Current reference price

 

102.64%(3)

Forward sale commitment

 

Market approach

 

Current reference price

 

101.60% - 102.64% (101.98%)(2)

 

(1)
All contracts are valued using the same pull-through rate
(2)
Current reference prices were weighted by the relative amount of the loan
(3)
Comprised of only one loan.

Financial Instruments Measured at Fair Value on a Non-Recurring Basis

Certain financial instruments are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the consolidated financial statements.

Loans Held for Sale

Loans held for sale are carried at the lower of cost or fair value. These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records any fair value adjustments on a nonrecurring basis. A liability of $3 for the fair value of loans held for sale was recorded as of September 30, 2024. No nonrecurring fair value adjustments were recorded on loans held for sale at December 31, 2023.

Collateral Dependent Loans

Collateral dependent loans are measured on a non-recurring basis for the ACLL. If the fair value of the collateral is lower than the loan’s amortized cost basis, the shortfall is recognized in the ACLL. When repayment is expected from the operation of the collateral, fair value is estimated as the present value of expected cash flows from the operation of the collateral. When repayment is expected from the sale of the collateral, fair value is estimated using measurement techniques discussed below and discounted by the estimated cost to sell. The ACLL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.

For loans secured by real estate, fair value of collateral is determined by the “as-is” value of appraisals or third party evaluations that are less than 24 months of age. Appraisals are prepared by independent, licensed appraisers. Appraisals are based upon observable market data analyzed through an income or sales valuation approach. Valuation falls within Level 2 categorization. The Company may further discount appraisals for marketing strategies, which results in Level 3 categorization.

The value of business equipment is based upon an outside appraisal (Level 2) if deemed significant, or the net book value on the applicable business’ financial statements (Level 3) if not considered significant. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3).

As of September 30, 2024, one consumer real estate loan totaling $84 and three commercial real estate loans totaling $9,344 were collateral dependent. Valuation of the consumer real estate loan and two of the commercial real estate loans were based upon third party evaluations (Level 2). Valuation for one commercial real estate loan was based upon an internal evaluation (Level 3). None of the measurements resulted in a specific allocation.
Fair Value, by Balance Sheet Grouping [Table Text Block]

 

 

 

 

Estimated Fair Value

 

September 30, 2024

 

Carrying Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

15,990

 

 

$

15,990

 

 

$

-

 

 

$

-

 

Interest-bearing deposits

 

 

33,707

 

 

 

33,707

 

 

 

 

 

 

 

Federal funds sold

 

 

73

 

 

 

73

 

 

 

-

 

 

 

-

 

Securities available for sale

 

 

622,271

 

 

 

-

 

 

 

622,271

 

 

 

-

 

Restricted stock, at cost

 

 

1,849

 

 

 

-

 

 

 

1,849

 

 

 

-

 

Mortgage loans held for sale

 

 

457

 

 

 

-

 

 

 

457

 

 

 

-

 

Loans, net

 

 

991,331

 

 

 

-

 

 

 

-

 

 

 

934,186

 

Accrued interest receivable

 

 

6,648

 

 

 

-

 

 

 

6,648

 

 

 

-

 

Bank-owned life insurance

 

 

47,071

 

 

 

-

 

 

 

47,071

 

 

 

-

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

1,602,953

 

 

$

-

 

 

$

1,292,876

 

 

$

310,116

 

Accrued interest payable

 

 

2,074

 

 

 

-

 

 

 

2,074

 

 

 

-

 

Forward sale commitment

 

 

3

 

 

 

-

 

 

 

-

 

 

 

3

 

 

 

 

 

 

Estimated Fair Value

 

December 31, 2023

 

Carrying Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

12,967

 

 

$

12,967

 

 

$

-

 

 

$

-

 

Interest-bearing deposits

 

 

73,636

 

 

 

73,636

 

 

 

-

 

 

 

-

 

Securities available for sale

 

 

618,601

 

 

 

-

 

 

 

618,601

 

 

 

-

 

Restricted stock, at cost

 

 

1,264

 

 

 

-

 

 

 

1,264

 

 

 

-

 

Mortgage loans held for sale

 

 

406

 

 

 

-

 

 

 

406

 

 

 

-

 

Loans, net

 

 

847,552

 

 

 

-

 

 

 

-

 

 

 

793,800

 

Accrued interest receivable

 

 

6,313

 

 

 

-

 

 

 

6,313

 

 

 

-

 

Bank-owned life insurance

 

 

43,583

 

 

 

-

 

 

 

43,583

 

 

 

-

 

Interest rate loan contract

 

 

3

 

 

 

-

 

 

 

-

 

 

 

3

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

1,503,972

 

 

$

-

 

 

$

1,280,732

 

 

$

222,374

 

Accrued interest payable

 

 

1,416

 

 

 

-

 

 

 

1,416

 

 

 

-

 

Forward sale commitment

 

 

4

 

 

 

-

 

 

 

-

 

 

 

4