| Fair Value Disclosures [Text Block] |
In accordance with FASB Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosure”, the Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability (“an 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 is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
The fair value guidance provides a consistent definition of fair value, which focuses on exit price in the principal or most advantageous market for the asset or liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is the most representative of fair value under current market conditions.
In accordance with the guidance, a hierarchy of valuation techniques is based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC Topic 820 based on these two types of inputs, are as follows:
| |
●
|
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, and other inputs that are observable or can be corroborated by observable market data.
|
| |
●
|
Level 3: Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
|
The Company uses the following methods and significant assumptions to estimate the fair values of the following assets:
| |
●
|
Securities available for sale: The fair values of securities available for sale are determined by obtaining quoted prices from a nationally recognized securities pricing agent. If quoted market prices are not available, fair value is determined using quoted market prices for similar securities.
|
| |
●
|
Equity security at fair value: The Company’s investment in an equity mutual fund is valued based on the net asset value of the fund, which is classified as Level 1.
|
| |
●
|
Other real estate owned (“OREO”): Nonrecurring fair value adjustments to OREO reflect full or partial write-downs that are based on the OREO’s observable market price or current appraised value of the real estate. Since the market for OREO is not active, OREO subjected to nonrecurring fair value adjustments based on the current appraised value of the real estate are classified as Level 3. The appraised value is obtained annually from an independent third party appraiser and is reduced by expected sales costs, which has historically been 10% of the appraised value.
|
| |
●
|
Collateral-dependent loans: Nonrecurring fair value adjustments to collateral-dependent loans reflect full or partial write-downs and reserves that are based on the collateral-dependent loan’s observable market price or current appraised value of the collateral. Because the market for collateral-dependent loans is not active, such loans subjected to nonrecurring fair value adjustments based on the current appraised value of the collateral are classified as Level 3. The appraised value is obtained annually from an independent third party appraiser and is reduced by expected sales costs, which has historically been 10% of the appraised value.
|
| |
●
|
Fair value hedges: The market value based on independent third party valuation sources that uses observable and traded prices of interest rate swaps from leading banks and brokers.
|
| |
●
|
Loans held for sale: These loans are carried at the lower of cost or market. The market value is considered to approximate the price at which the loan is locked in with the investor.
|
The following tables summarize financial assets measured at fair value on a recurring and nonrecurring basis at June 30, 2026 and December 31, 2025, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
| |
|
Carrying Value:
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2026
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal
|
|
$ |
- |
|
|
$ |
156 |
|
|
$ |
- |
|
|
$ |
156 |
|
|
SBA pools
|
|
|
- |
|
|
|
445 |
|
|
|
- |
|
|
|
445 |
|
|
Corporate bonds
|
|
|
- |
|
|
|
6,463 |
|
|
|
- |
|
|
|
6,463 |
|
|
Mortgage-backed securities
|
|
|
- |
|
|
|
102,027 |
|
|
|
- |
|
|
|
102,027 |
|
| |
|
$ |
- |
|
|
$ |
109,091 |
|
|
$ |
- |
|
|
$ |
109,091 |
|
|
Fair value hedge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging asset
|
|
$ |
- |
|
|
$ |
98 |
|
|
$ |
- |
|
|
$ |
98 |
|
|
Hedging liability
|
|
|
- |
|
|
|
40 |
|
|
|
- |
|
|
|
40 |
|
|
Net fair value hedge
|
|
$ |
- |
|
|
$ |
58 |
|
|
$ |
- |
|
|
$ |
58 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity security at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund
|
|
$ |
553 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
553 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned, net
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,665 |
|
|
$ |
1,665 |
|
| |
|
Carrying Value:
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State and municipal
|
|
$ |
- |
|
|
$ |
202 |
|
|
$ |
- |
|
|
$ |
202 |
|
|
SBA pools
|
|
|
- |
|
|
|
512 |
|
|
|
- |
|
|
|
512 |
|
|
Corporate bonds
|
|
|
- |
|
|
|
6,464 |
|
|
|
- |
|
|
|
6,464 |
|
|
Mortgage-backed securities
|
|
|
- |
|
|
|
111,552 |
|
|
|
- |
|
|
|
111,552 |
|
| |
|
$ |
- |
|
|
$ |
118,730 |
|
|
$ |
- |
|
|
$ |
118,730 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging liability
|
|
$ |
- |
|
|
$ |
192 |
|
|
$ |
- |
|
|
$ |
192 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity security at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual fund
|
|
$ |
550 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
550 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonrecurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned, net
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
1,673 |
|
|
$ |
1,673 |
|
The following table provides information describing the unobservable inputs used in level 3 fair value measurements at June 30, 2026 and December 31, 2025:
|
June 30, 2026:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Range (Average)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned
|
|
$ |
1,665 |
|
Third party appraisals and in-house real estate valuations of fair value
|
|
Marketability/selling costs and current market conditions
|
|
|
0% |
to |
10% |
(5%) |
|
December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
Fair Value
|
|
Valuation Techniques
|
|
Unobservable Input
|
|
Range (Average)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other real estate owned
|
|
$ |
1,673 |
|
Third party appraisals and in-house real estate valuations of fair value
|
|
Marketability/selling costs and current market conditions
|
|
|
0% |
to |
10% |
(5%) |
The estimated fair value of financial instruments that are reported at amortized cost less allowance for credit losses in the Company’s consolidated balance sheets, segregated by the level of the valuation inputs were as follows:
| |
|
June 30, 2026
|
|
|
December 31, 2025
|
|
| |
|
Carrying
|
|
|
Estimated
|
|
|
Carrying
|
|
|
Estimated
|
|
| |
|
Amount
|
|
|
Fair Value
|
|
|
Amount
|
|
|
Fair Value
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
55,486 |
|
|
$ |
55,486 |
|
|
$ |
46,679 |
|
|
$ |
46,679 |
|
|
Equity security
|
|
|
553 |
|
|
|
553 |
|
|
|
550 |
|
|
|
550 |
|
|
Level 2 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit in other banks
|
|
|
100 |
|
|
|
100 |
|
|
|
100 |
|
|
|
100 |
|
|
Accrued interest receivable
|
|
|
2,402 |
|
|
|
2,402 |
|
|
|
2,535 |
|
|
|
2,535 |
|
|
Securities available for sale
|
|
|
109,091 |
|
|
|
109,091 |
|
|
|
118,730 |
|
|
|
118,730 |
|
|
Securities held to maturity
|
|
|
16,393 |
|
|
|
15,509 |
|
|
|
16,799 |
|
|
|
15,998 |
|
|
Mortgage loans held for sale
|
|
|
694 |
|
|
|
694 |
|
|
|
714 |
|
|
|
714 |
|
|
Restricted stock, at cost
|
|
|
3,475 |
|
|
|
3,475 |
|
|
|
3,693 |
|
|
|
3,693 |
|
|
Bank owned life insurance
|
|
|
15,555 |
|
|
|
15,555 |
|
|
|
15,353 |
|
|
|
15,353 |
|
|
Fair value hedge
|
|
|
98 |
|
|
|
98 |
|
|
|
- |
|
|
|
- |
|
|
Level 3 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities held to maturity
|
|
|
4,470 |
|
|
|
4,470 |
|
|
|
4,256 |
|
|
|
4,256 |
|
|
Loans, net
|
|
|
636,549 |
|
|
|
632,226 |
|
|
|
633,144 |
|
|
|
629,889 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
|
$ |
126,385 |
|
|
$ |
126,385 |
|
|
$ |
117,098 |
|
|
$ |
117,098 |
|
|
Securities sold under repurchase agreements
|
|
|
4,559 |
|
|
|
4,559 |
|
|
|
4,317 |
|
|
|
4,317 |
|
|
Level 2 inputs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
|
|
|
598,740 |
|
|
|
597,844 |
|
|
|
603,361 |
|
|
|
602,889 |
|
|
Federal Home Loan Bank advances
|
|
|
57,700 |
|
|
|
57,832 |
|
|
|
62,700 |
|
|
|
62,843 |
|
|
Long-term debt
|
|
|
12,060 |
|
|
|
12,388 |
|
|
|
12,036 |
|
|
|
12,840 |
|
|
Accrued interest payable
|
|
|
989 |
|
|
|
989 |
|
|
|
1,278 |
|
|
|
1,278 |
|
|
Fair value hedge
|
|
|
40 |
|
|
|
40 |
|
|
|
192 |
|
|
|
192 |
|
|