v3.26.1
Note 8 - Fair Value Measures
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

Note 8. Fair Value Measures

 

Accounting guidance establishes a fair value hierarchy 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 (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 a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 

 

Accounting guidance from the FASB requires the disclosure of estimated fair value information about certain on- and off-balance sheet financial instruments, including those financial instruments that are not measured and reported at fair value on a recurring basis.

 

Loans individually evaluated for credit loss are Level 2 assets measured at the fair value of the underlying collateral based on independent third-party appraisals on a nonrecurring basis.

 

The following presents the financial assets that are measured at fair value on a non-recurring basis for each of the fair value hierarchy levels:

 

June 30, 2026

 

Level 1

  

Level 2

  

Level 3

 
  

(dollars in thousands)

 

Loans individually evaluated

 $-  $67  $- 

 

December 31, 2025

 

Level 1

  

Level 2

  

Level 3

 
  

(dollars in thousands)

 

Loans individually evaluated

 $-  $136  $- 

 

The significant methods and assumptions used by the Company to estimate the fair value of financial instruments are discussed below.

 

Cash and cash equivalents – The carrying value approximates fair value.

 

FHLB stock – The carrying value approximates fair value based on the redemption provisions of the Federal Home Loan Bank.

 

Loans receivable, net – Fair value is estimated by discounting the future cash flows using the current rate at which similar loans would be made to borrowers with similar credit rating and for the same remaining maturity.

 

Deposits - For checking and savings accounts, fair value is equal to the amount payable on demand or carrying value. For certificates of deposit, fair value is estimated using a discounted cash flow method.

 

The carrying value and estimated fair value of financial instruments are as follows.

 

June 30, 2026

     

Fair Value Measures

 

(dollars in thousands)

 

Carrying Value

  

Level 1

  

Level 2

  

Level 3

 

Financial assets:

                

Cash and cash equivalents

 $3,887  $3,887  $-  $- 

Loans receivable, net

  30,072   -   -   28,376 

FHLB stock

  374   -   374   - 

Financial liabilities:

                

Deposits

 $15,324  $-  $-  $17,175 

 

December 31, 2025

     

Fair Value Measures

 

(dollars in thousands)

 

Carrying Value

  

Level 1

  

Level 2

  

Level 3

 

Financial assets:

                

Cash and cash equivalents

 $4,513  $4,513  $-  $- 

Loans receivable, net

  30,719   -   -   29,106 

FHLB stock

  367   -   367   - 

Financial liabilities:

                

Deposits

 $16,852  $-  $-  $17,445