v3.26.1
Disclosures About Fair Value of Assets and Liabilities
 3 Months Ended
Mar. 31, 2026
Disclosures About Fair Value of Assets and Liabilities [Abstract]  
Disclosures About Fair Value of Assets and Liabilities
Note 10. Disclosures About Fair Value of Assets and Liabilities

 

ASC 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

 

  Level 1: Quoted prices in active markets for identical assets or liabilities.

 

  Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, 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 or liabilities.

 

  Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

Following is a description of the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Available-for-sale securities:

 

Where quoted market prices are available in an active market, securities are classified within Level l of the valuation hierarchy. 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. Level 2 securities include all of the Company’s available-for-sale securities, consisting of U.S. Treasury, government agency, municipal and mortgage-backed securities. Inputs used to estimate the fair value of Level 2 securities when pricing models are used include the security’s call date, maturity date, and interest rate and current market interest rates. In certain cases where Level 1 and Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

 

Interest rate swap agreements:

 

The fair value of interest rate swap agreements is estimated using inputs including the remaining term of the agreement and current market interest rates, that are observable or that can be corroborated by observable marked data and, therefore, are classified within Level 2 of the valuation hierarchy.

 

The following tables present the fair value measurements of assets and liabilities 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 fell on March 31, 2026 and December 31, 2025:

 

   March 31, 2026 
       Quoted prices   Significant     
       in active   other   Significant 
       markets for   observable   unobservable 
   Fair   identical assets   inputs   inputs 
   value   (Level 1)   (Level 2)   (Level 3) 
Assets                
U.S. Government and federal agency  $14,948,700   $
        -
   $14,948,700   $
       -
 
U.S. Government sponsored enterprises (GSEs)        
 
         
 
 
Mortgage-backed:   3,619    
-
    3,619    
-
 
GSE residential   11,928,944    
-
    11,928,944    
-
 
State and political subdivisions   15,294,199    
-
    15,294,199    
-
 
Interest rate swaps   14,508,980    
-
    14,508,980    
-
 
Liabilities                    
Interest rate swaps   14,508,980    
-
    14,508,980    
-
 
   December 31, 2025 
       Quoted prices   Significant     
       in active   other   Significant 
       markets for   observable   unobservable 
   Fair   identical assets   inputs   inputs 
   value   (Level 1)   (Level 2)   (Level 3) 
Assets                
U.S. Government and federal agency  $14,830,375   $
        -
   $14,830,375   $
       -
 
U.S. Government-sponsored enterprises (GSEs)   5,395    
-
    5,395    
-
 
Mortgage-backed:                    
GSE residential   12,787,023    
-
    12,787,023    
-
 
State and political subdivisions   15,513,879    
-
    15,513,879    
-
 
Interest rate swaps   14,130,763    
-
    14,130,763    
-
 
Liabilities                    
Interest rate swaps   14,130,763    
-
    14,130,763    
-
 

 

The Company had no assets or liabilities whose fair values are measured using Level 3 inputs on a recurring basis as of March 31, 2026 and December 31, 2025.

 

Following is a description of the valuation methodologies and inputs used for assets and liabilities measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

 

Collateral-dependent and individually evaluated:

 

The fair value of collateral-dependent loans was primarily measured based on the value of the collateral securing these loans and classified within Level 3 of the fair value hierarchy. Collateral may be real estate and/or business assets, including equipment, inventory, and/or accounts receivable. The Company determines the value of the collateral based on independent appraisals performed by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Appraised values are discounted for costs to sell and may be discounted further based on management’s historical knowledge, changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts by management are subjective and are typically significant unobservable inputs for determining fair value. These loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors discussed above.

Foreclosed assets held for sale:

 

The fair value of foreclosed assets held for sale is estimated using the fair value method of measuring the amount of impairment. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. The fair value method is classified within Level 3 of the fair value hierarchy.

 

The following tables present the fair value measurement of assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fell on March 31, 2026 and December 31, 2025:

 

   March 31, 2026 
   Fair Value Measurements Using 
   Fair value   (Level 1)   (Level 2)   (Level 3) 
                 
Foreclosed assets held for sale  $
-
   $
      -
   $
        -
   $
-
 
Collateral-dependent loans  $230,000   $
-
   $
-
   $230,000 

 

   December 31, 2025 
   Fair Value Measurements Using 
   Fair value   (Level 1)   (Level 2)   (Level 3) 
                 
Foreclosed assets held for sale  $
-
   $
        -
   $
       -
   $
-
 
Collateral-dependent loans  $230,000   $
-
   $
-
   $230,000 

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value on March 31, 2026 and December 31, 2025:

 

   March 31, 2026 
   Fair   Valuation  Significant  Weighted 
   value   techniques(1)  unobservable inputs  average 
               
Foreclosed assets held for sale  $
-
   Appraisal  Estimated costs to sell   
-
 
Collateral-dependent loans  $230,000   Appraisal  Estimated costs to sell   8%

 

   December 31, 2025 
   Fair   Valuation  Significant  Weighted 
   value   techniques(1)  unobservable inputs  average 
               
Foreclosed assets held for sale  $
-
   Appraisal  Estimated costs to sell   
-
 
Collateral-dependent loans  $230,000   Appraisal  Estimated costs to sell   8%

 

(1)The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral-dependent.

Fair values of financial instruments:

 

The carrying amounts and estimated fair values of financial instruments not carried at fair value, on March 31, 2026 and December 31, 2025, are as follows:

 

   March 31, 2026 
   Carrying   Fair value measurements 
   amount   Level 1   Level 2   Level 3   Total 
Financial assets                    
Cash and cash equivalents  $168,394,594   $168,394,594   $
-
   $
-
   $168,394,594 
Held-to-maturity securities                         
U.S. Government and federal agency   42,598,382    
-
    41,893,800    
-
    41,893,800 
U.S. Government-sponsored enterprises (GSEs)   13,663,836    
-
    13,361,203    
-
    13,361,203 
Mortgage-backed: GSE residential   36,216,636    
-
    33,939,183    
-
    33,939,183 
State and political subdivisions   3,908,088    
-
    3,695,841    
-
    3,695,841 
    96,386,942    
-
    92,890,027    
-
    92,890,027 
                          
Loans receivable   1,873,845,370    
-
    
-
    1,851,592,022    1,851,592,022 
    Interest rate swaps   14,508,980    
-
    14,508,980    
-
    14,508,980 
                          
Financial Liabilities                         
Time Deposits   503,407,575    
-
    500,781,000    
-
    500,781,000 
Long-Term borrowings   73,180,526    
-
    70,819,112    
-
    70,819,112 
Short-Term borrowings   45,067,842    45,067,842    
-
    
-
    45,067,842 
Interest rate swaps   14,508,980    
-
    14,508,980    
-
    14,508,980 
   December 31, 2025 
   Carrying   Fair value measurements 
   amount   Level 1   Level 2   Level 3   Total 
Financial assets                    
Cash and cash equivalents  $144,318,929   $144,318,929   $
-
   $
-
   $144,318,929 
Held-to-maturity securities                         
U.S. Government and federal agency   42,681,410    
-
    41,878,600    
-
    41,878,600 
U.S. Government-sponsored enterprises (GSEs)   13,599,444    
-
    13,308,535    
-
    13,308,535 
Mortgage-backed: GSE residential   37,534,375    
-
    35,524,297    
-
    35,524,297 
State and political subdivisions   3,912,892    
-
    3,744,446    
-
    3,744,446 
    97,728,121    
-
    94,455,878    
-
    94,455,878 
                          
Loans Receivable   1,855,434,066    
-
    
-
    1,820,894,000    1,820,894,000 
Interest rate swaps   14,130,763    
-
    14,130,763    
-
    14,130,763 
                          
Financial Liabilities                         
Time Deposits   487,032,489    
-
    485,172,000    
-
    485,172,000 
Long-Term borrowings   78,587,361    
-
    77,385,800    
-
    77,385,800 
Short-Term borrowings   88,251,290    88,251,290    
-
    
-
    88,251,290 
Interest rate swaps   14,130,763    
-
    14,130,763    
-
    14,130,763