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Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Measurements  
Fair Value Measurements

Note 7.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for 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 on the measurement date. To measure fair value, accounting guidance has established a hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows:

Level 1    Quoted prices for identical assets or liabilities in instruments traded 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.

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.

Assets and Liabilities Measured on a Recurring Basis

The following describes the hierarchy designation, valuation methodology, and key inputs to measure fair value on a recurring basis for designated financial instruments:

Investment Securities Available-for-Sale

Where available, fair value estimates for available-for-sale securities are based on quoted market prices in an active market (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of securities with similar characteristics, quoted prices of identical securities in less active markets, discounted cash flow techniques or matrix pricing models (Level 2). In certain cases where Level 1 or Level 2 are not available, securities are classified as Level 3 of the hierarchy. The carrying amount of accrued interest on securities approximates its fair value.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 are summarized below:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

Total

​

​

Fair Value Measurements

​

Estimated

(in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Fair Value

Investment Securities Available-for-Sale

 

​

  

 

​

  

 

​

  

 

​

  

U.S. Government Agencies

​

$

—

​

$

989

​

$

—

​

$

989

Mortgage-Backed Securities

​

 

—

​

 

86,799

​

 

—

​

 

86,799

Collateralized Mortgage Obligations

​

 

—

​

 

2,127

​

 

—

​

 

2,127

Corporate Bonds

​

​

—

​

​

10,500

​

​

—

​

​

10,500

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

—

​

$

100,415

​

$

—

​

$

100,415

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

Total

​

​

Fair Value Measurements

​

Estimated

(in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Fair Value

Investment Securities Available-for-Sale

 

​

  

 

​

  

 

​

  

 

​

  

U.S. Government Agencies

​

$

—

​

$

996

​

$

—

​

$

996

Mortgage-Backed Securities

​

 

—

​

 

85,419

​

 

—

​

 

85,419

Collateralized Mortgage Obligations

​

​

​

​

​

2,322

​

​

—

​

​

2,322

Corporate Bonds

​

 

—

​

 

4,250

​

 

—

​

 

4,250

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

—

​

$

92,987

​

$

—

​

$

92,987

​

The Company did not record any liabilities at fair market value for which measurement of the fair value was made on a recurring basis at June 30, 2025 and December 31, 2024.

There were no transfers into, out of, purchases, or sales of Level 3 securities during the three and six months ended June 30, 2025 and 2024.

Assets and Liabilities Measured on a Non-Recurring Basis

The following describes the hierarchy designation, valuation methodologies, and key inputs for those assets that are measured at fair value on a non-recurring basis:

Collateral Dependent Loans

For collateral dependent loans, fair value is measured based on the value of the collateral securing these loans and is classified at a Level 3 in the fair value hierarchy. Collateral dependent loans consist of one-to-four family mortgages secured by residential properties. The value of residential property collateral is determined based on appraisal by qualified licensed appraisers hired by the Company. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.

Foreclosed Assets and Real Estate Owned

Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired and classified at a Level 3 in the fair value hierarchy. These assets are subsequently accounted for at the lower of cost or fair value less estimated cost to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.

The following tables present the Company’s assets and liabilities measured at fair value on a non-recurring basis at June 30, 2025 and December 31, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

Total

​

​

Fair Value Measurements

​

Estimated

(in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Fair Value

Assets

 

​

  

 

​

  

 

​

  

 

​

  

Collateral Dependent Loans

​

$

—

​

$

—

​

$

1,268

​

$

1,268

Real Estate Owned

​

 

—

​

 

—

​

 

42

​

 

42

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

—

​

$

—

​

$

1,310

​

$

1,310

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

Total

​

​

Fair Value Measurements

​

Estimated

(in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Fair Value

Assets

 

​

  

 

​

  

 

​

  

 

​

  

Collateral Dependent Loans

​

$

—

​

$

—

​

$

1,075

​

$

1,075

Real Estate Owned

​

 

—

​

 

—

​

 

42

​

 

42

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

$

—

​

$

—

​

$

1,117

​

$

1,117

​

The following tables show significant unobservable inputs used in the fair value measurement of Level 3 assets:

​

​

​

​

​

​

​

​

​

​

​

​

Valuation

​

Unobservable

​

Range of

​

Weighted Average

June 30, 2025

    

Technique

    

Inputs

    

Discount

    

Discount

Collateral Dependent Loans

 

Third-party appraisals and discounted cash flows

 

Collateral discounts and estimated costs to sell

 

6% - 10%

​

6%

Real Estate Owned

 

Third-party appraisals, sales contracts or brokered price options

 

Collateral discounts and estimated costs to sell

 

6% - 10%

​

6%

​

​

​

​

​

​

​

​

​

​

​

​

Valuation

​

Unobservable

​

Range of

​

Weighted Average

December 31, 2024

    

Technique

    

Inputs

    

Discount

    

Discount

Collateral Dependent Loans

 

Third-party appraisals and discounted cash flows

 

Collateral discounts and estimated costs to sell

 

6% - 10%

​

6%

Real Estate Owned

 

Third-party appraisals, sales contracts or brokered price options

 

Collateral discounts and estimated costs to sell

 

6% - 10%

​

6%

​

The following methods and assumptions were used by the Company to estimate fair value of financial instruments.

Cash and Cash Equivalents - Fair value approximates carrying value.

Investment Securities Available-for-Sale - Fair value is obtained from an independent pricing service based on quoted market prices or quoted market prices of securities with similar characteristics, quoted prices of identical securities in less active markets, discounted cash flow techniques, or matrix pricing models.

Restricted Stock - Consists of stock held as required by the respective institutions for membership and are carried at cost. While a fixed stock amount is required, the Federal Home Loan Bank stock requirement increases or decreases with the level of borrowing activity.

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. The fair value of loans is measured using an exit price notion.

Bank Owned Life Insurance - Fair value approximates carrying value.

Deposits - For NOW, savings and certain money market fund accounts, fair value is equal to the amount payable on demand or carrying value. For time deposits, fair value is estimated using a discounted cash flow method.

The carrying amount and estimated fair value of the Company’s financial instruments are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2025

​

​

Carrying

​

Fair Value Measurements

(in thousands)

    

Value

    

Level 1

    

Level 2

    

Level 3

Financial Assets

​

​

​

​

​

​

​

​

​

​

​

​

Cash and Cash Equivalents

​

$

27,694

​

$

27,694

​

$

—

​

$

—

Investment Securities Available-for-Sale

​

 

100,415

​

 

—

​

 

100,415

​

 

—

Restricted Stock

​

 

922

​

 

—

​

 

—

​

 

922

Loans Receivable, Net

​

 

379,607

​

 

—

​

 

—

​

 

323,635

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities

​

 

​

​

 

​

​

 

​

​

 

​

Deposits

​

 

398,243

​

 

—

​

 

—

​

 

357,374

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

Carrying

​

Fair Value Measurements

(in thousands)

    

Value

    

Level 1

    

Level 2

    

Level 3

Financial Assets

 

​

  

 

​

  

 

​

  

 

​

  

Cash and Cash Equivalents

​

$

37,916

​

$

37,916

​

$

—

​

$

—

Investment Securities Available-for-Sale

​

 

92,987

​

 

—

​

 

92,987

​

 

—

Restricted Stock

​

 

910

​

 

—

​

 

—

​

 

910

Loans Receivable, Net

​

 

367,333

​

 

—

​

 

—

​

 

308,645

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities

​

 

  

​

 

  

​

 

  

​

 

  

Deposits

​

 

391,476

​

 

—

​

 

—

​

 

351,041

​

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 the present value or other valuation techniques, or based on judgements regarding future expected loss experience, current economic conditions, risk characteristics of financial instruments, or other factors. Those

techniques are significantly affected by assumptions used, including the discount rate and estimate of future cash flows. Subsequent changes in assumptions could significantly affect the estimates.