v3.25.4
Fair Value (as Restated)
 3 Months Ended
Mar. 31, 2025
Fair Value (as Restated) [Abstract]  
Fair Value (as Restated)
NOTE 7 – Fair Value (as Restated)


Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:


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 company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

The fair value of loans that are collateral dependent is generally based upon the fair value of the collateral, which is obtained from 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. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Collateral dependent loans are evaluated on a quarterly basis for additional required calculation adjustments (taken as part of the ACL) and adjusted accordingly.



Appraisals for collateral-dependent loans and assets acquired through or by transfer of in lieu of foreclosure are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, an independent third-party licensed appraiser reviews the appraisals for accuracy and reasonableness, reviewing the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics.

Assets Measured on a Recurring Basis

Assets measured at fair value on a recurring basis are summarized below:
   
Fair Value Measurement
  
   
Quoted Prices
in Active
Markets for
Identical
Assets (Level 1)
    
Significant
Other
Observable
Inputs (Level 2)
    
Significant
Unobservable
Inputs (Level 3)
    
Total
  
   
(In thousands)
  
At March 31, 2025:
                        
Securities available-for-sale:
                        
Federal agency mortgage-backed securities
  
$
–
     $ 52,331    
$
–
     $ 52,331  
Federal agency CMOs
    
–
       19,255      
–
       19,255  
Federal agency debt
    
–
       40,527      
–
       40,527  
Municipal bonds
     –       4,418      
–
       4,418  
U.S. Treasuries
    
60,552
       –      
–
       60,552  
SBA pools
    
–
       8,855      
–
       8,855  
                                 
At December 31, 2024:
                                
Securities available-for-sale:
                                
Federal agency mortgage-backed securities
  
$
–
    
$
53,029
    
$
–
    
$
53,029
  
Federal agency CMOs
    
–
      
20,058
      
–
      
20,058
  
Federal agency debt
    
–
      
40,034
      
–
      
40,034
  
Municipal bonds
    
–
      
4,388
      
–
      
4,388
  
U.S. Treasuries
    
77,190
      
–
      
–
      
77,190
  
SBA pools
    
–
      
9,163
      
–
      
9,163
  


There were no transfers between Level 1, Level 2, or Level 3 during the three months ended March 31, 2025 and 2024.



Assets Measured on a Nonrecurring Basis



The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets.



Loans: The fair value of individually evaluated loans is estimated using one of several methods, including the collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those individually evaluated loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. As of March 31, 2025, substantially all of the Company’s individually evaluated loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, individually evaluated loans where an allowance is established based on the fair value of collateral, i.e., those that are collateral dependent, require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3.



The table below presents assets measured at fair value on a nonrecurring basis.  As of December 31, 2024, the Company did not have any assets or liabilities carried at fair value on a nonrecurring basis.

 
Fair Value Measurement
  
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
  
Significant Other Observable Inputs (Level 2)
  
Significant Unobservable Inputs (Level 3)
  
Total
  
 
(In thousands)
  
At March 31, 2025:
                
Individually evaluated loans:
Real estate:
                
Multi-family
  
$
–
    
$
–
    
$
4,110
    
$
4,110
  
Commercial real estate
    
–
      
–
      
1,768
      
1,768
  
SBA loans
    
–
      
–
      
35
      
35
  

Fair Values of Financial Instruments



The following tables present the carrying amount, fair value, and level within the fair value hierarchy of the Company’s financial instruments as of March 31, 2025 and December 31, 2024.

         
Fair Value Measurements at March 31, 2025
  
   
Carrying Value
    
Level 1
    
Level 2
    
Level 3
    
Total
  
   
(In thousands)
  
Financial Assets:
                              
Cash and cash equivalents   $ 15,794     $ 15,794     $ –     $ –     $ 15,794  
Securities available-for-sale
     185,938
       60,552
       125,386
       –
       185,938
  
Loans receivable held for investment
    
991,587
      
–
      
–
      
964,977
      
964,977
  
Accrued interest receivable
     5,624
       399
       453
       4,772
       5,624
  
                                         
Financial Liabilities:
                                        
Non interest bearing deposits
   $
94,588     $ –     $
94,588     $ –     $ 94,588  
Interest bearing deposits
     419,531       –       419,531       –       419,531  
Time deposits
     262,424       –       261,728       –       261,728  
FHLB borrowings
     78,000       –       78,000       –       78,000  
Secured borrowings
     31,256
      –       31,256       –       31,256  
Securities sold under agreements to repurchase
    
80,778
      
–
      
80,778
      
–
      
80,778
  
Accrued interest payable
     1,704
       –
       1,704
       –
       1,704
  

         
Fair Value Measurements at December 31, 2024
  
   
Carrying Value
    
Level 1
    
Level 2
    
Level 3
    
Total
  
   
(In thousands)
  
Financial Assets:
                              
Cash and cash equivalents
  
$
61,365
    
$
61,365
    
$
–
    
$
–
    
$
61,365
  
Securities available-for-sale
    
203,862
      
77,190
      
126,672
      
–
      
203,862
  
Loans receivable held for investment
    
999,956
      
–
      
–
      
973,183
      
973,183
  
Accrued interest receivable
    
5,001
      
5,001
      
–
      
–
      
5,001
  
Bank owned life insurance
     3,321       3,321       –       –       3,321  
                                         
Financial Liabilities:
                                        
Deposits
  
$
745,399
    
$
–
    
$
669,695
    
$
–
    
$
669,695
  
Borrowings
     226,888       –       227,150       –       227,150  
Securities sold under agreements to repurchase     66,610       –       66,070       –       66,070  
Accrued interest payable
     1,349       –       1,349       –       1,349  


In accordance with ASC 820, the fair value of financial assets and liabilities was measured using an exit price notion. Although the exit price notion represents the value that would be received to sell an asset or paid to transfer a liability, the actual price received for a sale of assets or paid to transfer liabilities could be different from exit price disclosed.