| Disclosures about Fair Value of Assets |
Note 16: |
Disclosures about Fair Value of Assets | Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:
|
|
|
| Level 1 |
|
Quoted prices in active markets for identical assets |
|
|
| Level 2 |
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets |
|
|
| Level 3 |
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets | The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Fair Value Measurements Using |
|
| |
|
Fair Value |
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) |
|
|
Significant
Other
Observable
Inputs
(Level 2) |
|
|
Significant
Unobservable
Inputs
(Level 3) |
|
June 30, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Government and federal agency |
|
$ |
1,812 |
|
|
$ |
— |
|
|
$ |
1,812 |
|
|
$ |
— |
|
Mortgage-backed securities – GSE residential |
|
|
171,079 |
|
|
|
— |
|
|
|
171,079 |
|
|
|
— |
|
Small Business Administration |
|
|
13,114 |
|
|
|
— |
|
|
|
13,114 |
|
|
|
— |
|
State and political subdivisions |
|
|
1,748 |
|
|
|
— |
|
|
|
— |
|
|
|
1,748 |
|
Mortgage servicing rights |
|
|
1,429 |
|
|
|
— |
|
|
|
— |
|
|
|
1,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Fair Value Measurements Using |
|
| |
|
Fair Value |
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) |
|
|
Significant
Other
Observable
Inputs
(Level 2) |
|
|
Significant
Unobservable
Inputs
(Level 3) |
|
June 30, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Treasury |
|
$ |
444 |
|
|
$ |
444 |
|
|
$ |
— |
|
|
$ |
— |
|
US Government and federal agency |
|
|
6,609 |
|
|
|
— |
|
|
|
6,609 |
|
|
|
— |
|
Mortgage-backed securities – GSE residential |
|
|
166,236 |
|
|
|
— |
|
|
|
166,236 |
|
|
|
— |
|
Small Business Administration |
|
|
14,086 |
|
|
|
— |
|
|
|
14,086 |
|
|
|
— |
|
State and political subdivisions |
|
|
3,100 |
|
|
|
— |
|
|
|
1,043 |
|
|
|
2,057 |
|
Mortgage servicing rights |
|
|
1,491 |
|
|
|
— |
|
|
|
— |
|
|
|
1,491 |
| Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the year ended June 30, 2025. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. There were no Level 1 securities as of June 30, 2025. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. For these investments, the inputs used by the pricing service to determine fair value may include one, or a combination of, observable inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bid, offers and reference data market research publications and are classified within Level 2 of the valuation hierarchy. Level 2 securities include U.S. Government and federal agency, mortgage-backed securities (GSE - residential), Small Business Administration, and state and political subdivisions. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Mortgage Servicing Rights Mortgage servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy. Management measures mortgage servicing rights through the completion of a proprietary model. Inputs to the model are developed by the accounting staff and are reviewed by management. The model is tested annually using baseline data to check its accuracy. The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheet using significant unobservable (Level 3) inputs: June 30, 2025
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
State and
Political
Subdivisions |
|
|
Mortgage
Servicing
Rights |
|
|
Total |
|
Beginning balance |
|
$ |
2,057 |
|
|
$ |
1,491 |
|
|
$ |
3,548 |
|
Transfers into Level 3 |
|
|
— |
|
|
|
130 |
|
|
|
130 |
|
Transfers out of Level 3 |
|
|
— |
|
|
|
(122 |
) |
|
|
(122 |
) |
Total realized and unrealized gains and losses included in net income |
|
|
— |
|
|
|
(70 |
) |
|
|
(70 |
) |
Purchases |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Sales |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Settlements |
|
|
(309 |
) |
|
|
— |
|
|
|
(309 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
1,748 |
|
|
$ |
1,429 |
|
|
$ |
3,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date |
|
$ |
— |
|
|
$ |
(70 |
) |
|
$ |
(70 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
| June 30, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
State and
Political
Subdivisions |
|
|
Mortgage
Servicing
Rights |
|
|
Total |
|
Beginning balance |
|
$ |
2,361 |
|
|
$ |
1,482 |
|
|
$ |
3,843 |
|
Transfers into Level 3 |
|
|
— |
|
|
|
151 |
|
|
|
151 |
|
Transfers out of Level 3 |
|
|
— |
|
|
|
(143 |
) |
|
|
(143 |
) |
Total realized and unrealized gains and losses included in net income |
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Purchases |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Sales |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Settlements |
|
|
(304 |
) |
|
|
— |
|
|
|
(304 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
|
$ |
2,057 |
|
|
$ |
1,491 |
|
|
$ |
3,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date |
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized and unrealized gains and losses for items reflected in the table above are included in net income in the consolidated statements of income as noninterest income. Unobservable (Level 3) Inputs The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fair Value at
June 30, 2025 |
|
|
Valuation
Technique |
|
Unobservable
Inputs |
|
Range (Weighted Average) |
Mortgage servicing rights |
|
$ |
1,429 |
|
|
Discounted cash
flow |
|
Discount rate |
|
9.5% (9.5%) |
|
|
|
|
|
|
|
|
Constant
prepayment rate |
|
4.9% - 9.8% (9.2%) |
|
|
|
|
|
|
|
|
Probability of
default |
|
0.07% - 0.12% (0.12%) |
State and political subdivision |
|
$ |
1,748 |
|
|
Discounted cash
flow |
|
Maturity/Call
Date |
|
1 month – 6 years |
|
|
|
|
|
|
|
|
Weighted
average coupon |
|
2.97% - 3.08% (3.04%) |
|
|
|
|
|
|
|
|
Marketability
yield adjustment |
|
1.0% - 2.0% (1.6%) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fair Value at
June 30, 2024 |
|
|
Valuation
Technique |
|
Unobservable
Inputs |
|
Range (Weighted
Average) |
Mortgage servicing rights |
|
$ |
1,491 |
|
|
Discounted cash
flow |
|
Discount rate |
|
10.0% (10.0%) |
|
|
|
|
|
|
|
|
Constant
prepayment rate |
|
6.2% - 8.0% (7.7%) |
|
|
|
|
|
|
|
|
Probability of
default |
|
0.08% - 0.12% (0.11%) |
State and political subdivision |
|
$ |
2,057 |
|
|
Discounted cash
flow |
|
Maturity/Call
Date |
|
1 month – 7 years |
|
|
|
|
|
|
|
|
Weighted
average coupon |
|
2.97% - 3.08% (3.03%) |
|
|
|
|
|
|
|
|
Marketability
yield adjustment |
|
1.0% - 2.0% (1.6%) | There are no assets or liabilities measured using a non-recurring basis. Fair Value of Financial Instruments The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2025 and 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Carrying
Amount |
|
|
Fair Value
Measurements
Using
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |
|
|
Significant
Other
Observable
Inputs (Level 2) |
|
|
Significant
Unobservable
Inputs
(Level 3) |
|
June 30, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
20,092 |
|
|
$ |
20,092 |
|
|
$ |
— |
|
|
$ |
— |
|
Interest-bearing time deposits in banks |
|
|
250 |
|
|
|
250 |
|
|
|
— |
|
|
|
— |
|
Loans, net of allowance for credit losses |
|
|
633,603 |
|
|
|
— |
|
|
|
— |
|
|
|
610,986 |
|
Federal Home Loan Bank stock |
|
|
5,174 |
|
|
|
— |
|
|
|
5,174 |
|
|
|
— |
|
Accrued interest receivable |
|
|
3,545 |
|
|
|
— |
|
|
|
3,545 |
|
|
|
— |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
721,258 |
|
|
|
— |
|
|
|
408,173 |
|
|
|
312,719 |
|
Repurchase agreements |
|
|
18,795 |
|
|
|
— |
|
|
|
18,795 |
|
|
|
— |
|
Federal Home Loan Bank advances |
|
|
54,124 |
|
|
|
— |
|
|
|
52,892 |
|
|
|
— |
|
Advances from borrowers for taxes and insurance |
|
|
972 |
|
|
|
— |
|
|
|
972 |
|
|
|
— |
|
Accrued interest payable |
|
|
1,861 |
|
|
|
— |
|
|
|
1,861 |
|
|
|
— |
|
Unrecognized financial instruments (net of contract amount) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments to originate loans |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Carrying
Amount |
|
|
Fair Value
Measurements
Using
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |
|
|
Significant
Other
Observable
Inputs
(Level 2) |
|
|
Significant
Unobservable
Inputs
(Level 3) |
|
June 30, 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
9,571 |
|
|
$ |
9,571 |
|
|
$ |
— |
|
|
$ |
— |
|
Interest-bearing time deposits in banks |
|
|
250 |
|
|
|
250 |
|
|
|
— |
|
|
|
— |
|
Loans, net of allowance for credit losses |
|
|
639,297 |
|
|
|
— |
|
|
|
— |
|
|
|
607,076 |
|
Federal Home Loan Bank stock |
|
|
4,499 |
|
|
|
— |
|
|
|
4,499 |
|
|
|
— |
|
Accrued interest receivable |
|
|
3,457 |
|
|
|
— |
|
|
|
3,457 |
|
|
|
— |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
727,177 |
|
|
|
— |
|
|
|
407,544 |
|
|
|
318,612 |
|
Repurchase agreements |
|
|
17,772 |
|
|
|
— |
|
|
|
17,772 |
|
|
|
— |
|
Federal Home Loan Bank advances |
|
|
32,999 |
|
|
|
— |
|
|
|
32,560 |
|
|
|
— |
|
Other borrowings |
|
|
25,250 |
|
|
|
— |
|
|
|
25,199 |
|
|
|
— |
|
Advances from borrowers for taxes and insurance |
|
|
968 |
|
|
|
— |
|
|
|
968 |
|
|
|
— |
|
Accrued interest payable |
|
|
3,009 |
|
|
|
— |
|
|
|
3,009 |
|
|
|
— |
|
Unrecognized financial instruments (net of contract amount) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments to originate loans |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
| The methods utilized to measure the fair value of financial instruments at June 30, 2025 represent an approximation of exit price; however, an actual exit price may differ.
|