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Note 14 - Disclosure of Financial Instruments Not Reported at Fair Value

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(14)

Disclosure of Financial Instruments Not Reported at Fair Value

GAAP requires disclosure of the fair value of financial assets and liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis. The estimated fair values of Bancorp’s financial instruments not measured at fair value on a recurring or non-recurring basis follows:

		Carrying								Fair Value Measurements Using:
September 30, 2023 (in thousands)		amount				Fair value				Level 1				Level 2				Level 3

Assets
Cash and cash equivalents		$	193,037			$	193,037			$	193,037			$	—			$	—
HTM debt securities			445,205				397,418				—				397,418				—
Federal Home Loan Bank stock			26,241				26,241				—				26,241				—
Loans, net			5,539,009				5,263,127				—				—				5,263,127
Accrued interest receivable			23,777				23,777				23,777				—				—

Liabilities
Non-interest bearing deposits		$	1,714,918			$	1,714,918			$	1,714,918			$	—			$	—
Transaction deposits			3,824,732				3,824,732				—				3,824,732				—
Time deposits			863,157				852,693				—				852,693				—
Securities sold under agreement to repurchase			113,894				113,894				—				113,894				—
Federal funds purchased			11,518				11,518				—				11,518				—
Subordinated debentures			26,641				25,988				—				25,988				—
FHLB advances			350,000				345,101				—				345,101				—
Accrued interest payable			1,836				1,836				1,836				—				—

		Carrying								Fair Value Measurements Using:
December 31, 2022 (in thousands)		amount				Fair value				Level 1				Level 2				Level 3

Assets
Cash and cash equivalents		$	167,367			$	167,367			$	167,367			$	—			$	—
HTM debt securities			473,217				431,833				—				431,833				—
Federal Home Loan Bank stock			10,928				10,928				—				10,928				—
Loans, net			5,132,387				4,914,770				—				—				4,914,770
Accrued interest receivable			22,157				22,157				22,157				—				—

Liabilities
Non-interest bearing deposits		$	1,950,198			$	1,950,198			$	1,950,198			$	—			$	—
Transaction deposits			3,968,963				3,968,963				—				3,968,963				—
Time deposits			472,091				459,467				—				459,467				—
Securities sold under agreement to repurchase			133,342				133,342				—				133,342				—
Federal funds purchased			8,789				8,789				—				8,789				—
Subordinated debentures			26,343				26,460				—				26,460				—
FHLB advances			50,000				50,000				—				50,000				—
Accrued interest payable			660				660				660				—				—

Fair value estimates are made at a specific point in time based on relevant market information and information about financial instruments. Because no market exists for a significant portion of Bancorp’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Therefore, calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the instrument. Changes in assumptions could significantly impact estimates.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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