Note 9 - Fair Value Measurements and Disclosures (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2025 and December 31, 2024:


June 30, 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		$	—			$	19,468			$	—			$	19,468
U.S. Government agency securities			—				69,407				—				69,407
State and municipal securities (1)			—				83,927				—				83,927
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed securities (1)			—				190,057				—				190,057
Collateralized mortgage obligations (CMOs)			—				158,631				—				158,631
Corporate debt securities and money market funds			—				22,721				51				22,772
Total securities available-for-sale			—				544,211				51				544,262
Total recurring fair value measurements		$	—			$	544,211			$	51			$	544,262

Nonrecurring fair value measurements
Collateral dependent loans		$	—			$	—			$	6,238			$	6,238
Mortgage servicing rights			—				—				1				1
Total nonrecurring fair value measurements		$	—			$	—			$	6,239			$	6,239


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

         June 30, 2025

         Fair value

         Valuation
techniques

         Unobservable
inputs

         Value or range
of values

Collateral dependent loans

$

6,238

Appraisal of collateral

(1)

Appraisal adjustments

(2)

-10% to -100%

Liquidation expenses

(3)

-10

%

Mortgage servicing rights

1

Discounted cash flow

Remaining term

3.4 to 29.1 years

          
         Prepayment speeds

         86% to 178%

          
         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 percentage 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 percentage 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 six months ended June 30, 2025 and 2024:


		Fair value measurements using significant unobservable inputs (Level 3)
		2025				2024
Balance, January 1,		$	52			$	52
Payments received			(1	)			(1	)
Total gains or losses (realized/unrealized)
Included in earnings			—				—
Included in other comprehensive (loss) income			—				1
Transfers in and/or out of Level 3			—				—
Balance, June 30,		$	51			$	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
June 30, 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		$	66,471			$	66,471			$	66,471			$	—			$	—
Investment securities:
Available-for-sale (1)			544,262				544,262				—				544,211				51
Restricted investment in bank stocks			5,772				5,772				—				5,772				—
Loans held for sale			1,166				1,182				—				1,182				—
Net loans			1,209,370				1,220,077				—				—				1,220,077
Mortgage servicing rights			362				557				—				—				557
Accrued interest receivable			5,002				5,002				—				5,002				—

Financial liabilities
Deposits with no stated maturities		$	1,262,148			$	1,262,148			$	1,262,148			$	—			$	—
Deposits with stated maturities			389,519				388,136				—				388,136				—
Short-term borrowings			67,464				67,464				67,464				—				—
Long-term debt			—				—				—				—				—
Subordinated debt			39,168				40,250				—				40,250				—
Accrued interest payable			6,251				6,251				—				6,251				—

Off-balance sheet instruments
Commitments to extend credit		$	—			$	—			$	—			$	—			$	—
Standby letters of credit			—				75				—				75				—


										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.