FAIR VALUE MEASUREMENTS |
9 Months Ended |
---|---|
Sep. 30, 2024 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements |
NOTE 9 – FAIR VALUE
The fair value of an asset or liability is the price that would be received to sell that asset or paid
transaction occurring in the principal market (or most advantageous market in
liability.
approach and/or the cost approach.
assumptions that market participants would use in pricing an asset or liability.
establishes a fair value hierarchy for valuation inputs that gives the highest priority
assets or liabilities and the lowest priority to unobservable inputs.
●
Level 1 Inputs -
Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting
ability to access at the measurement date
.
●
Level 2 Inputs -
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
or indirectly. These might
or similar assets or liabilities in markets that are not active, inputs other
liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.)
corroborated, by market data by correlation or other means
.
●
Level 3 Inputs -
Unobservable inputs for determining the fair values of assets or liabilities that reflect
assumptions about the assumptions that market participants would
Assets and Liabilities Measured at Fair Value
Securities Available for Sale.
U.S. Treasury securities are reported at fair value
available for sale are reported at fair value utilizing Level 2 inputs.
from an independent pricing service.
spreads, cash flows, the U.S. Treasury yield curve,
and conditions, among other things.
In general, the Company does not purchase securities that have a complicated structure.
traditional investments, nearly all of which are U.S. Treasury
general obligation or revenue-based municipal bonds.
will validate prices supplied by the independent pricing service by compari
source.
Equity Securities.
through net income as an adjustment to the investment balance. These securities are not
as a Level 3 input within the fair value hierarchy.
Loans Held for Sale
.
using either quoted secondary-market prices or investor commitments.
using quoted prices for a similar asset or assets, adjusted for the specific attributes of
participants.
Mortgage Banking Derivative Instruments.
The fair values of interest rate lock commitments (“IRLCs”) are derived by valuation
models incorporating market pricing for instruments with similar characteristics,
investor commitment prices for best effort IRLCs which have
servicing rights expected to be recorded upon sale of the loans, net estimated costs to originate
and are therefore classified as Level 3 within the fair value hierarchy.
observable market pricing for similar instruments and are therefore
Interest Rate Swap.
The Company’s derivative positions
models generally accepted in the financial services industry and
external market data providers.
Fair Value
.
valuation represents the amount due and payable to the counterparty based upon
period. There was $
0.5
no
December 31, 2023.
A summary of fair values for assets and liabilities recorded at fair Level 1
Level 2
Level 3
Total
(Dollars in Thousands)
Inputs
Inputs
Inputs
Value
September 30, 2024
ASSETS:
Securities Available for
U.S. Government Treasury
$
50,646
$
-
$
-
$
50,646
U.S. Government Agency
-
125,330
-
125,330
States and Political Subdivisions
-
40,017
-
40,017
Mortgage-Backed Securities
-
59,781
-
59,781
Corporate Debt Securities
-
52,317
-
52,317
Equity Securities
-
-
6,976
6,976
Loans Held for Sale
-
31,251
-
31,251
Residential Mortgage Loan Commitments ("IRLCs")
-
-
556
556
Interest Rate Swap Derivative
-
4,444
-
4,444
Forward Sales Contracts
-
3
-
3
LIABILITIES:
Fair Value
-
-
548
548
December 31, 2023
ASSETS:
Securities Available for
U.S. Government Treasury
$
24,679
$
-
$
-
$
24,679
U.S. Government Agency
-
145,034
-
145,034
States and Political Subdivisions
-
39,083
-
39,083
Mortgage-Backed Securities
-
63,303
-
63,303
Corporate Debt Securities
-
57,552
-
57,552
Equity Securities
-
-
3,450
3,450
Loans Held for Sale
-
28,211
-
28,211
Residential Mortgage Loan Commitments ("IRLCs")
-
-
523
523
Interest Rate Swap Derivative
-
5,317
-
5,317
LIABILITIES:
Forward Sales Contracts
-
209
-
209
Mortgage Banking Activities
.
5.9
and $
11.0
11.1
16.3
the nine months ended September 30, 2023.
from inception of the IRLC to the Consolidated Statement of Financial Condition
originate.
value.
Assets Measured at Fair Value
Certain assets are measured at fair value on a non-recurring basis (i.e., the
but are subject to fair value adjustments in certain circumstances).
The following is a description of valuation methodologies used for assets measured
Collateral Dependent Loans
.
costs.
regulations.
estimation involved in the real estate appraisal process.
basis for additional impairment and adjusted accordingly.
periods.
3.6
0.1
2024 and a carrying value of $
3.3
0.1
Other Real Estate Owned
.
reported at fair value through a charge-off
estimated cost to sell.
conformance with banking regulations.
adjustments as necessary.
involved in the real estate valuation process.
Mortgage Servicing Rights
.
upon the fair value of the rights as compared to the carrying amount.
estimated prepayment speeds of the underlying mortgage loans serviced and
underlying loans (predominantly loan type and note interest rate).
discount rate, weighted average prepayment speed, and the cost of loan
provided in Note 4 – Mortgage Banking Activities.
no
allowance for loan servicing rights.
Assets and Liabilities Disclosed at Fair Value
The Company is required to disclose the estimated fair value of financial instruments,
practical to estimate fair value and the following is a description of valuation
Cash and Short-Term
The carrying amount of cash and short-term investments is used to approximate
the short time frame to maturity and as such assets do not present unanticipated
Securities Held to Maturity
.
caption “Assets and Liabilities Measured at Fair Value
Other Equity Securities.
securities are not readily marketable securities and are reflected in Other
Loans.
techniques based upon projected cash flows and estimated discount
discount to meet the objective of “exit price” valuation.
Deposits.
amounts payable on demand at the reporting date. The fair value of fixed maturity
value techniques and rates currently offered for deposits of
Subordinated Notes Payable.
flows and estimated discount rates as well as rates being offered
Short-Term
projected cash flows and estimated discount rates as well as rates being offered
A summary of estimated fair values of significant financial instruments not September 30, 2024
Carrying
Level 1
Level 2
Level 3
(Dollars in Thousands)
Value
Inputs
Inputs
Inputs
ASSETS:
Cash
$
83,431
$
83,431
$
-
$
-
Fed Funds Sold and Interest Bearing Deposits
261,779
261,779
-
-
Investment Securities, Held to Maturity
561,480
390,553
151,775
-
Other Equity Securities
2,848
-
2,848
-
Mortgage Servicing Rights
969
-
-
1,484
Loans, Net of Allowance for Credit Losses
2,653,260
-
-
2,529,755
LIABILITIES:
Deposits
$
3,579,077
$
-
$
3,140,058
$
-
Short-Term
37,268
-
37,268
-
Subordinated Notes Payable
52,887
-
42,259
-
Long-Term Borrowings
794
-
794
-
December 31, 2023
Carrying
Level 1
Level 2
Level 3
(Dollars in Thousands)
Value
Inputs
Inputs
Inputs
ASSETS:
Cash
$
83,118
$
83,118
$
-
$
-
Fed Funds Sold and Interest Bearing Deposits
228,949
228,949
-
-
Investment Securities, Held to Maturity
625,022
441,189
150,562
-
Other Equity Securities
2,848
-
2,848
-
Mortgage Servicing Rights
831
-
-
1,280
Loans, Net of Allowance for Credit Losses
2,703,977
-
-
2,510,529
LIABILITIES:
Deposits
$
3,701,822
$
-
$
3,243,896
$
-
Short-Term
35,341
-
35,341
-
Subordinated Notes Payable
52,887
-
44,323
-
Long-Term Borrowings
315
-
315
-
All non-financial instruments are excluded from the above table.
aggregate fair value amounts presented do not represent the underlying
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