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

Note 7: Disclosures about Fair Value of Assets and Liabilities

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability 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 (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2

Significant other 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.

Level 3

Significant unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 

Recurring Measurements

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 March 31, 2026 and December 31, 2025.

 

 

 

Fair

 

 

Fair Value Measurements Using

 

 

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

  Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

Municipal bonds, taxable

 

$

6,608,961

 

 

$

—

 

 

$

6,608,961

 

 

$

—

 

Municipal bonds, non-taxable

 

 

1,420,304

 

 

 

—

 

 

 

1,420,304

 

 

 

—

 

U.S. Government agencies

 

 

977,126

 

 

 

977,126

 

 

 

—

 

 

 

—

 

Corporate bonds

 

 

493,750

 

 

 

—

 

 

 

493,750

 

 

 

—

 

Residential mortgage-backed securities

 

 

24,043,335

 

 

 

—

 

 

 

24,043,335

 

 

 

—

 

Collateralized mortgage obligations

 

 

41,964,653

 

 

 

—

 

 

 

41,964,653

 

 

 

—

 

  Derivative Instruments

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap

 

 

154,434

 

 

 

—

 

 

 

154,434

 

 

 

—

 

 

 

 

Fair

 

 

Fair Value Measurements Using

 

 

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

  Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

Municipal bonds, taxable

 

$

6,680,356

 

 

$

—

 

 

$

6,680,356

 

 

$

—

 

Municipal bonds, non-taxable

 

 

1,440,744

 

 

 

—

 

 

 

1,440,744

 

 

 

—

 

U.S. Government agencies

 

 

1,009,051

 

 

 

—

 

 

 

1,009,051

 

 

 

—

 

Residential mortgage-backed securities

 

 

24,938,680

 

 

 

—

 

 

 

24,938,680

 

 

 

—

 

Collateralized mortgage obligations

 

 

42,631,073

 

 

 

—

 

 

 

42,631,073

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

  Derivative Instruments

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap

 

 

102,029

 

 

 

—

 

 

 

102,029

 

 

 

—

 

 

Following is a description of the valuation methodologies 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 pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the three months ended March 31, 2026 and the year ended December 31, 2025.

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 are not available, securities are classified within Level 3 of the hierarchy. The Company had no Level 3 securities.

Interest Rate Swaps

The fair value of interest rate swaps is determined based upon pricing obtained from an independent pricing service and are classified as Level 2 measurements.

Nonrecurring Measurements

The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2026 and December 31, 2025:

 

 

 

Fair

 

 

Fair Value Measurements Using

 

 

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent loans

 

$

23,401

 

 

$

—

 

 

$

—

 

 

$

23,401

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent loans

 

$

23,733

 

 

$

—

 

 

$

—

 

 

$

23,733

 

 

The Company’s nonrecurring fair value adjustments to collateral dependent loans are recorded to reflect partial write-downs or specific reserves that are based on the observable market price or current estimated value of the collateral. These loans are reported at initial recognition of significant borrower distress and on an ongoing basis until recovery or charge-off.

The fair values of collateral dependent loans are generally determined using the sales comparison approach. Unobservable inputs consist primarily of adjustments for differences between sales of comparable properties.

The following table provides quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements at March 31, 2026 and December 31, 2025:

 

 

 

 

 

 

 

 

 

 

Range

 

 

Fair

 

 

Valuation

 

Unbservable

 

(Weighted-

 

 

Value

 

 

Technique

 

Inputs

 

Average)

March 31, 2026

 

 

 

 

 

 

Marketability

 

 

Collateral dependent loans

 

$

23,401

 

 

Appraisal

 

discount

 

10%

December 31, 2025

 

 

 

 

 

 

Marketability

 

 

Collateral dependent loans

 

$

23,733

 

 

Appraisal

 

discount

 

10%

 

 

The estimated fair values of the Company’s financial instruments not carried at fair value on the consolidated balance sheets are as follows:

 

 

 

Carrying

 

 

Fair

 

 

Fair Value Measurements Using

 

 

 

Value

 

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

35,909,448

 

 

$

35,909,448

 

 

$

35,909,448

 

 

$

—

 

 

$

—

 

Loans held for sale

 

 

160,000

 

 

 

162,362

 

 

 

—

 

 

 

—

 

 

 

162,362

 

Loans, net

 

 

128,013,854

 

 

 

126,769,000

 

 

 

—

 

 

 

—

 

 

 

126,769,000

 

FHLB stock

 

 

1,575,000

 

 

 

1,575,000

 

 

 

—

 

 

 

1,575,000

 

 

 

—

 

Mortgage servicing rights, net

 

 

324,044

 

 

 

582,000

 

 

 

—

 

 

 

—

 

 

 

582,000

 

Bank owned life insurance

 

 

2,326,500

 

 

 

2,326,500

 

 

 

—

 

 

 

2,326,500

 

 

 

—

 

Accrued interest receivable

 

 

793,171

 

 

 

793,171

 

 

 

793,171

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

192,096,792

 

 

 

192,075,434

 

 

 

148,135,554

 

 

 

43,939,880

 

 

 

—

 

Advances from the FHLB

 

 

35,000,000

 

 

 

35,011,000

 

 

 

—

 

 

 

35,011,000

 

 

 

—

 

Advances by borrowers for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

taxes and insurance

 

 

652,184

 

 

 

652,184

 

 

 

—

 

 

 

652,184

 

 

 

—

 

Accrued interest payable

 

 

154,527

 

 

 

154,527

 

 

 

154,527

 

 

 

—

 

 

 

—

 

 

 

 

Carrying

 

 

Fair

 

 

Fair Value Measurements Using

 

 

 

Value

 

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

50,378,538

 

 

$

50,378,538

 

 

$

50,378,538

 

 

$

—

 

 

$

—

 

Loans, net

 

 

117,816,517

 

 

 

108,908,000

 

 

 

—

 

 

 

—

 

 

 

108,908,000

 

FHLB stock

 

 

1,575,000

 

 

 

1,575,000

 

 

 

—

 

 

 

1,575,000

 

 

 

—

 

Mortgage servicing rights, net

 

 

326,764

 

 

 

582,000

 

 

 

—

 

 

 

—

 

 

 

582,000

 

Bank owned life insurance

 

 

2,308,325

 

 

 

2,308,325

 

 

 

—

 

 

 

2,308,325

 

 

 

—

 

Accrued interest receivable

 

 

751,961

 

 

 

751,961

 

 

 

751,961

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

196,505,483

 

 

 

196,538,974

 

 

 

152,221,974

 

 

 

44,317,000

 

 

 

—

 

Advances from the FHLB

 

 

35,000,000

 

 

 

35,008,000

 

 

 

—

 

 

 

35,008,000

 

 

 

—

 

Advances by borrowers for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

taxes and insurance

 

 

399,702

 

 

 

399,702

 

 

 

—

 

 

 

399,702

 

 

 

—

 

Accrued interest payable

 

 

153,018

 

 

 

153,018

 

 

 

153,018

 

 

 

—

 

 

 

—

 

 

Limitations: Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Fair value estimates may not be realizable in an immediate settlement of the instrument. In some instances, there are no quoted market prices for the Company’s various financial instruments, in which case fair values may be based on estimates using present value or other valuation techniques, or based on judgments regarding future expected loss experience, current economic conditions, risk characteristic of the financial instruments, or other factors. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. Subsequent changes in assumptions could significantly affect the estimates.