Note 9 - Fair Value Measurements and Disclosures (Tables)

3 Months Ended

Mar. 31, 2026

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, 2026 and December 31, 2025:


March 31, 2026		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		$	—			$	19,435			$	—			$	19,435
U.S. Government agency securities			—				70,786				—				70,786
State and municipal securities (1)			—				87,249				—				87,249
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed securities (1)			—				177,676				—				177,676
Collateralized mortgage obligations (CMOs)			—				145,102				—				145,102
Corporate debt securities and money market funds			—				27,710				49				27,759
Total securities available-for-sale			—				527,958				49				528,007
Total recurring fair value measurements		$	—			$	527,958			$	49			$	528,007

Nonrecurring fair value measurements
Collateral dependent loans		$	—			$	—			$	6,183			$	6,183
Mortgage servicing rights			—				—				1				1
Total nonrecurring fair value measurements		$	—			$	—			$	6,184			$	6,184


December 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		$	—			$	21,583			$	—			$	21,583
U.S. Government agency securities			—				70,850				—				70,850
State and municipal securities (1)			—				88,787				—				88,787
U.S. Government agencies and sponsored enterprises (GSEs):
Mortgage-backed securities (1)			—				182,208				—				182,208
Collateralized mortgage obligations (CMOs)			—				149,203				—				149,203
Corporate debt securities and money market funds			—				30,149				50				30,199
Total securities available-for-sale			—				542,780				50				542,830
Total recurring fair value measurements		$	—			$	542,780			$	50			$	542,830

Nonrecurring fair value measurements
Collateral dependent loans		$	—			$	—			$	5,440			$	5,440
Mortgage servicing rights			—				—				1				1
Total nonrecurring fair value measurements		$	—			$	—			$	5,441			$	5,441

(1) Includes derivatives designated as fair value hedges.

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, 2026

         Fair value

         Valuation
techniques

         Unobservable
inputs

         Value or range
of values

Collateral dependent loans

$

6,183

Appraisal of collateral

(1)

Appraisal adjustments

(2)

-10% to -100%

Liquidation expenses

(3)

-10

%

Mortgage servicing rights

1

Discounted cash flow

Remaining term

2.6 to 28.8 years

          
         Prepayment speeds

         98% to 208%

          
         Discount rate

         12.0% to 12.5%

          
         Quantitative information about Level 3 fair value measurements

         December 31, 2025

         Fair value

         Valuation
techniques

         Unobservable
inputs

         Value or range
of values

Collateral dependent loans

$

5,440

Appraisal of collateral

(1)

Appraisal adjustments

(2)

-10 to -100%

Liquidation expenses

(3)

10

%

Mortgage servicing rights

1

Discounted cash flow

Remaining term

2.8 to 29.1 yrs

          
         Prepayment speeds

         92% to 199%

          
         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 three months ended March 31, 2026 and 2025:


		Fair value measurements using significant unobservable inputs (Level 3)
		2026				2025
Balance, January 1,		$	50			$	52
Payments received			(1	)			(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,		$	49			$	50

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, 2026		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		$	56,603			$	56,603			$	56,603			$	—			$	—
Investment securities:
Available-for-sale (1)			528,007				528,007				—				527,958				49
Restricted investment in bank stocks			7,427				7,427				—				7,427				—
Loans held for sale			1,199				1,199				—				1,199				—
Net loans			1,273,242				1,278,383				—				—				1,278,383
Mortgage servicing rights			342				522				—				—				522
Accrued interest receivable			4,850				4,850				—				4,850				—

Financial liabilities
Deposits with no stated maturities		$	1,287,060			$	1,287,060			$	1,287,060			$	—			$	—
Deposits with stated maturities			366,371				365,247				—				365,247				—
Short-term borrowings			86,806				86,806				86,806				—				—
Subordinated debt			39,318				40,813				—				40,813				—
Accrued interest payable			3,593				3,593				—				3,593				—

Off-balance sheet instruments
Commitments to extend credit		$	—			$	—			$	—			$	—			$	—
Standby letters of credit			—				42				—				42				—


										Fair value measurements
December 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		$	50,297			$	50,297			$	50,297			$	—			$	—
Investment securities:
Available-for-sale (1)			542,830				542,830				—				542,780				50
Restricted investment in bank stocks			6,663				6,663				—				6,663				—
Loans held for sale			246				249				—				249				—
Net loans			1,252,859				1,265,478				—				—				1,265,478
Mortgage servicing rights			346				530				—				—				530
Accrued interest receivable			4,839				4,839				—				4,839				—

Financial liabilities
Deposits with no stated maturities		$	1,266,714			$	1,266,714			$	1,266,714			$	—			$	—
Deposits with stated maturities			316,760				374,988				—				374,988				—
Short-term borrowings			80,601				80,601				80,601				—				—
Subordinated debt			39,268				40,541				—				40,541				—
Accrued interest payable			5,050				5,050				—				5,050				—

Off-balance sheet instruments
Commitments to extend credit		$	—			$	—			$	—			$	—			$	—
Standby letters of credit			—				74				—				74				—

(1) Includes derivatives designated as fair value hedges.