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Fair Value Measurements | 3 Months Ended
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Mar. 31, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | NOTE 6 - FAIR VALUE MEASUREMENTS ASC 820-10, Fair Value Measurement – Overall, provides a framework for measuring fair value under U.S. GAAP. This guidance also allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis. In accordance with ASC 820-10, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 – Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 – Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities. Level 3 – Valuations for assets and liabilities that are derived from other methodologies, including option pricing models, discounted cash flow models and similar techniques, and are not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets and liabilities. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value for March 31, 2025 and December 31, 2024. Cash and Cash Equivalents For these financial instruments, which have original maturities of 90 days or less, their carrying amounts reported in the Consolidated Balance Sheets approximate fair value. Available-for-Sale and Held-to-Maturity Securities The Company’s investments in debt securities are generally classified within Level 2 of the fair value hierarchy. The Company obtains fair value measurements from independent pricing services which are not adjusted by management. The fair value measurements consider observable data that considers standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data. FHLB Stock The fair value of FHLB stock approximates the carrying amount based on the redemption provisions of the FHLB. These assets were classified as Level 2. Loans The fair value of loans is measured on an exit price basis incorporating discounts for credit, liquidity and marketability factors. Loans were classified as Level 3 since the valuation methodology utilizes significant unobservable inputs. Loans Held for Sale The fair value of loans held for sale, whose carrying amounts approximate fair value, was estimated using quoted market prices provided by investors. These assets were classified as Level 2 given the use of observable inputs. Bank-Owned Life Insurance The fair value of bank-owned life insurance was based upon quotations received from bank-owned life insurance dealers. These assets were classified as Level 2 given the use of observable inputs. Accrued Interest Receivable For these financial instruments, which have original maturities of 90 days or less, their carrying amounts reported in the Consolidated Balance Sheets approximate fair value. Deposits The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, interest-bearing demand deposits, savings and money market accounts, was equal to their carrying amount. The fair value of certificates of deposits is valued using a replacement cost of funds approach, and discounted to the market rates and based on weighted remaining maturity. Deposits were classified as Level 2 given the use of observable market inputs. Accrued Interest Payable For these financial instruments, which have original maturities of 90 days or less, their carrying amounts reported in the Consolidated Balance Sheets approximate fair value. Derivative Instruments The fair value of interest rate swaps was determined using discounted cash flow analysis on the expected cash flows of the interest rate swaps. This analysis reflects the contractual terms of the interest rate swaps, including the period of maturity, and uses observable market-based inputs including interest rate curves. The inputs used to value the Company’s interest rate swaps fall within Level 2 of the fair value hierarchy and as a result, the interest rate swaps were categorized as Level 2 within the fair value hierarchy. As of March 31, 2025 and December 31, 2024, the following summarizes assets and liabilities measured at fair value on a recurring basis:
|  | Fair Value Measurements at Reporting Date Using |
|  | Total |  |  | Quoted Prices |  |  | Significant |  |  | Significant |
|  |  |  |  | in Active |  |  | Other |  |  | Unobservable |
|  |  |  |  | Markets for |  |  | Observable |  |  | Inputs |
|  |  |  |  | Identical Assets |  |  | Inputs |  |  | Level 3 |
|  |  |  |  | Level 1 |  |  | Level 2 |  |  |  |
|  |  |  |  | (in thousands) |  |  |  |
March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 7,485 |  |  | $ | — |  |  | $ | 7,485 |  |  | $ | — |
Collateralized mortgage obligation |  |  | 1,428 |  |  |  | — |  |  |  | 1,428 |  |  |  | — |
Corporate bonds |  |  | 5,037 |  |  |  | — |  |  |  | 5,037 |  |  |  | — |
Derivative instruments |  |  | 39 |  |  |  | — |  |  |  | 39 |  |  |  | — |
Total assets measured at fair value on a recurring basis |  | $ | 13,989 |  |  | $ | — |  |  | $ | 13,989 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative instruments |  | $ | 795 |  |  | $ | — |  |  | $ | 795 |  |  | $ | — |
Total liabilities measured at fair value on a recurring basis |  | $ | 795 |  |  | $ | — |  |  | $ | 795 |  |  | $ | — |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  | $ | 4,126 |  |  | $ | — |  |  | $ | 4,126 |  |  | $ | — |
Collateralized mortgage obligation |  |  | 1,438 |  |  |  | — |  |  |  | 1,438 |  |  |  | — |
Corporate bonds |  |  | 1,000 |  |  |  | — |  |  |  | 1,000 |  |  |  | — |
Derivative instruments |  |  | 557 |  |  |  | — |  |  |  | 557 |  |  |  | — |
Total assets measured at fair value on a recurring basis |  | $ | 7,121 |  |  | $ | — |  |  | $ | 7,121 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative instruments |  | $ | 173 |  |  | $ | — |  |  | $ | 173 |  |  | $ | — |
Total liabilities measured at fair value on a recurring basis |  | $ | 173 |  |  | $ | — |  |  | $ | 173 |  |  | $ | — |
Under certain circumstances, the Company makes fair value adjustments to its assets and liabilities although they are not measured at fair value on an ongoing basis. As of March 31, 2025 and December 31, 2024, the Bank had no assets or liabilities for which a nonrecurring change in fair value had been recorded. ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value are discussed above. The estimated fair values and related carrying amounts of assets and liabilities for which fair value is only disclosed are shown below at the dates indicated:
|  | March 31, 2025 |
|  | Carrying |  |  | Fair |  |  |  |  |  |  |  |  |  |
|  | Amount |  |  | Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
|  |  |  |  | (in thousands) |  |  |  |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 148,108 |  |  | $ | 148,108 |  |  | $ | 148,108 |  |  | $ | - |  |  | $ | - |
Interest-bearing time deposits |  |  | 100 |  |  |  | 100 |  |  |  | - |  |  |  | 100 |  |  |  | - |
Held-to-maturity securities |  |  | 68,081 |  |  |  | 63,355 |  |  |  | - |  |  |  | 63,355 |  |  |  | - |
Federal Home Loan Bank stock |  |  | 10,000 |  |  |  | 10,000 |  |  |  | - |  |  |  | 10,000 |  |  |  | - |
Loans, net |  |  | 1,177,543 |  |  |  | 1,127,467 |  |  |  | - |  |  |  | - |  |  |  | 1,127,467 |
Loans held for sale |  |  | 83 |  |  |  | 83 |  |  |  | - |  |  |  | 83 |  |  |  | - |
Accrued interest receivable |  |  | 4,343 |  |  |  | 4,343 |  |  |  | 4,343 |  |  |  | - |  |  |  | - |
Bank-owned life insurance |  |  | 15,061 |  |  |  | 15,061 |  |  |  | - |  |  |  | 15,061 |  |  |  | - |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits, other than certificates of deposit |  | $ | 399,697 |  |  | $ | 399,697 |  |  | $ | - |  |  | $ | 399,697 |  |  | $ | - |
Certificates of deposit |  |  | 636,923 |  |  |  | 637,601 |  |  |  | - |  |  |  | 637,601 |  |  |  | - |
Federal Home Loan Bank advances |  |  | 234,000 |  |  |  | 234,213 |  |  |  | - |  |  |  | 234,213 |  |  |  | - |
Accrued interest payable |  |  | 1,537 |  |  |  | 1,537 |  |  |  | 1,537 |  |  |  | - |  |  |  | - |
|  | December 31, 2024 |
|  | Carrying |  |  | Fair |  |  |  |  |  |  |  |  |  |
|  | Amount |  |  | Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
|  |  |  |  | (in thousands) |  |  |  |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 157,617 |  |  | $ | 157,617 |  |  | $ | 157,617 |  |  | $ | - |  |  | $ | - |
Interest-bearing time deposits |  |  | 100 |  |  |  | 100 |  |  |  | - |  |  |  | 100 |  |  |  | - |
Held-to-maturity securities |  |  | 73,215 |  |  |  | 67,505 |  |  |  | - |  |  |  | 67,505 |  |  |  | - |
Federal Home Loan Bank stock |  |  | 10,000 |  |  |  | 10,000 |  |  |  | - |  |  |  | 10,000 |  |  |  | - |
Loans, net |  |  | 1,136,449 |  |  |  | 1,079,916 |  |  |  | - |  |  |  | - |  |  |  | 1,079,916 |
Accrued interest receivable |  |  | 4,015 |  |  |  | 4,015 |  |  |  | 4,015 |  |  |  | - |  |  |  | - |
Bank-owned life insurance |  |  | 14,945 |  |  |  | 14,945 |  |  |  | - |  |  |  | 14,945 |  |  |  | - |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits, other than certificates of deposit |  | $ | 393,018 |  |  | $ | 393,018 |  |  | $ | - |  |  | $ | 393,018 |  |  | $ | - |
Certificates of deposit |  |  | 605,515 |  |  |  | 606,387 |  |  |  | - |  |  |  | 606,387 |  |  |  | - |
Federal Home Loan Bank advances |  |  | 234,000 |  |  |  | 232,027 |  |  |  | - |  |  |  | 232,027 |  |  |  | - |
Accrued interest payable |  |  | 2,207 |  |  |  | 2,207 |  |  |  | 2,207 |  |  |  | - |  |  |  | - |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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