XML 23 R13.htm IDEA: XBRL DOCUMENT
v3.24.1.1.u2

Fair Value Measurements | 3 Months Ended
--- | ---
Mar. 31, 2024
Fair Value Measurements [Abstract] |
Fair Value Measurements | Note 5 – Fair Value Measurements Determination of Fair Value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with the Fair Value Measurements and Disclosures topic of FASB ASC, 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 and 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 and 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 most representative of fair value under current market conditions. Fair Value Hierarchy In accordance with this guidance, the Company groups its financial assets and financial liabilities generally 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 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Fair Value on a Recurring Basis Securities Available-for-Sale Fair values of securities available-for sale are based on quoted prices available in an active market. If quoted prices are available, these securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. Currently, all of the Company’s securities are considered to be Level 2 securities. ‎ Note 5 – Fair Value Measurements (continued) Derivatives Assets/Liabilities – Interest Rate Lock Commitments (IRLCs) The Company recognizes IRLCs at fair value based on the price of the underlying loans obtained from an investor for loans that will be delivered on a best efforts basis while taking into consideration the probability that the rate lock commitments will close. All of the Company’s IRLCs are classified as Level 3. The below tables summarize the Company’s financial assets that were measured at fair value on a recurring basis during the period.
|  |  | Carrying Value at March 31, 2024 (in thousands)
|  |  | Quoted Prices |  | Significant |  |
|  |  | in Active |  | Other |  | Significant
| Balance as of |  | Markets for |  | Observable |  | Unobservable
| Mar 31, |  | Identical Assets |  | Inputs |  | Inputs
Description | 2024 |  | (Level 1) |  | (Level 2) |  | (Level 3)
US agency obligations | $ 64,776 |  | $ - |  | $ 64,776 |  | $ -
Mortgage-backed securities | 94,825 |  | - |  | 94,825 |  | -
Municipals | 40,455 |  | - |  | 40,455 |  | -
Corporates | 14,766 |  | - |  | 14,766 |  | -
Total available-for-sale securities | $ 214,822 |  | $ - |  | $ 214,822 |  | $ -
IRLCs - asset | 142 |  | - |  | - |  | 142
Total assets at fair value | $ 214,964 |  | $ - |  | $ 214,822 |  | $ 142
|  |  | Carrying Value at December 31, 2023 (in thousands)
|  |  | Quoted Prices |  | Significant |  |
|  |  | in Active |  | Other |  | Significant
| Balance as of |  | Markets for |  | Observable |  | Unobservable
| Dec 31, |  | Identical Assets |  | Inputs |  | Inputs
Description | 2023 |  | (Level 1) |  | (Level 2) |  | (Level 3)
US Treasuries | $ 4,947 |  | $ - |  | $ 4,947 |  | $ -
US agency obligations | 60,955 |  | - |  | 60,955 |  | -
Mortgage-backed securities | 95,079 |  | - |  | 95,079 |  | -
Municipals | 40,789 |  | - |  | 40,789 |  | -
Corporates | 14,740 |  | - |  | 14,740 |  | -
Total available-for-sale securities | $ 216,510 |  | $ - |  | $ 216,510 |  | $ -
IRLCs - asset | 129 |  | - |  | - |  | 129
Total assets at fair value | $ 216,639 |  | $ - |  | $ 216,510 |  | $ 129
‎ Note 5 – Fair Value Measurements (continued) The following table provides additional quantitative information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value:
| Quantitative information about Level 3 Fair Value Measurements for March 31, 2024
| (dollars in thousands)
| Fair Value |  | Valuation Technique(s) |  | Unobservable Input |  | Range (Weighted Average) (1)
Assets |  |  |  |  |  |  |  |
IRLCs – asset | $ | 142 |  | Market approach |  | Range of pull through rate |  | 70% - 100% (85%)
(1) Weighted based on the relative value of the instruments
| Quantitative information about Level 3 Fair Value Measurements for December 31, 2023
| (dollars in thousands)
| Fair Value |  | Valuation Technique(s) |  | Unobservable Input |  | Range (Weighted Average) (1)
Assets |  |  |  |  |  |  |  |
IRLCs - asset | $ | 129 |  | Market approach |  | Range of pull through rate |  | 70% - 100% (85%)
(1) Weighted based on the relative value of the instruments Fair Value on a Non-recurring Basis Collateral Dependent Loans with an ACLL In accordance with ASC 326, the Company may determine that an individual loan exhibits unique risk characteristics which differentiate it from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower’s industry, among other things. A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The Company reevaluates the fair value of collateral supporting collateral dependent loans on a quarterly basis. The fair value of real estate collateral supporting collateral dependent loans is evaluated by appraisal services using a methodology that is consistent with the Uniform Standards of Professional Appraisal Practice. Loans Held for Sale Loans held for sale are carried at cost which approximates estimated fair value. These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records fair value adjustments on a nonrecurring basis. No nonrecurring fair value adjustments were recorded on loans held for sale during the period ended March 31, 2024. Gains and losses on the sale of loans are recorded within gains on sales of loans held for sale on the Consolidated Statements of Income. Other Real Estate Owned Certain assets such as other real estate owned (OREO) are measured at fair value less cost to sell. The Company believes that the fair value component in its valuation follows the provisions of ASC 820. Real estate acquired through foreclosure is transferred to OREO. The measurement of loss associated with OREO is based on the fair value of the collateral compared to the unpaid loan balance and anticipated costs to sell the property. The value of OREO property is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of Bank of the James (the “Bank”) using observable market data (Level 2). Note 5 – Fair Value Measurements (continued) Any fair value adjustments are recorded in the period incurred and expensed against current earnings. However, in situations where the collateral is a house or building in the process of construction, the appraisal is more than 12 months old, management has determined the fair value of the collateral is further impaired below the appraised value, or the appraisal is not based solely on market comparables adjusted for observable inputs, the value is considered Level 3. There was no OREO as of both March 31, 2024 and December 31, 2023. Financial Instruments FASB ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments, including those financial assets and financial liabilities that are not required to be measured and reported at fair value on a recurring or nonrecurring basis. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The carrying amounts and estimated fair values of the Company’s financial instruments are presented in the following tables whether or not recognized on the Consolidated Balance Sheets at fair value. ‎ Note 5 – Fair Value Measurements (continued) The estimated fair values, and related carrying or notional amounts, of Financial’s financial instruments and their placement in the fair value hierarchy at March 31, 2024 and December 31, 2023 was as follows (in thousands):
|  |  | Fair Value Measurements at March 31, 2024 using
|  |  | Quoted Prices |  | Significant |  |  |  |
|  |  | in Active |  | Other |  | Significant |  |
|  |  | Markets for |  | Observable |  | Unobservable |  |
| Carrying |  | Identical Assets |  | Inputs |  | Inputs |  |
Assets | Amounts |  | (Level 1) |  | (Level 2) |  | (Level 3) |  | Balance
Cash and due from banks | $ 25,428 |  | $ 25,428 |  | $ - |  | $ - |  | $ 25,428
Federal funds sold | 62,644 |  | 62,644 |  | - |  | - |  | 62,644
Securities |  |  |  |  |  |  |  |  |
Available-for-sale | 214,822 |  | - |  | 214,822 |  | - |  | 214,822
Held-to-maturity, net | 3,618 |  | - |  | 3,194 |  | - |  | 3,194
Restricted stock | 1,541 |  | - |  | 1,541 |  | - |  | 1,541
Loans, net (1) | 601,115 |  | - |  | - |  | 572,478 |  | 572,478
Loans held for sale | 4,640 |  | - |  | 4,640 |  | - |  | 4,640
Interest receivable | 2,936 |  | - |  | 2,936 |  | - |  | 2,936
BOLI | 22,344 |  | - |  | 22,344 |  | - |  | 22,344
Derivatives - IRLCs | 142 |  | - |  | - |  | 142 |  | 142
Liabilities |  |  |  |  |  |  |  |  |
Deposits | $ 893,494 |  | $ - |  | $ 803,646 |  | $ - |  | $ 803,646
Capital notes | 10,044 |  | - |  | 9,846 |  | - |  | 9,846
Other borrowings | 9,741 |  | - |  | 9,667 |  | - |  | 9,667
Interest payable | 522 |  | - |  | 522 |  | - |  | 522
|  |  | Fair Value Measurements at December 31, 2023 using
|  |  | Quoted Prices |  | Significant |  |  |  |
|  |  | in Active |  | Other |  | Significant |  |
|  |  | Markets for |  | Observable |  | Unobservable |  |
| Carrying |  | Identical Assets |  | Inputs |  | Inputs |  |
Assets | Amounts |  | (Level 1) |  | (Level 2) |  | (Level 3) |  | Balance
Cash and due from banks | $ 25,613 |  | $ 25,613 |  | $ - |  | $ - |  | $ 25,613
Federal funds sold | 49,225 |  | 49,225 |  | - |  | - |  | 49,225
Securities |  |  |  |  |  |  |  |  |
Available-for-sale | 216,510 |  | - |  | 216,510 |  | - |  | 216,510
Held-to-maturity | 3,622 |  | - |  | 3,231 |  | - |  | 3,231
Restricted stock | 1,541 |  | - |  | 1,541 |  | - |  | 1,541
Loans, net (1) | 601,921 |  | - |  | - |  | 566,655 |  | 566,655
Loans held for sale | 1,258 |  | - |  | 1,258 |  | - |  | 1,258
Interest receivable | 2,835 |  | - |  | 2,835 |  | - |  | 2,835
BOLI | 21,586 |  | - |  | 21,586 |  | - |  | 21,586
Derivatives - IRLCs | 129 |  | - |  | - |  | 129 |  | 129
Liabilities |  |  |  |  |  |  |  |  |
Deposits | $ 878,459 |  | $ - |  | $ 876,846 |  | $ - |  | $ 876,846
Capital notes | 10,042 |  | - |  | 9,854 |  | - |  | 9,854
Other borrowings | 9,890 |  | - |  | 9,861 |  | - |  | 9,861
Interest payable | 480 |  | - |  | 480 |  | - |  | 480
(1) Carrying amount is net of unearned income and the ACLL.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//820/tableOfContent + Details
Name: | us-gaap_FairValueMeasurementInputsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration