Disclosures about Fair Value of Assets and Liabilities

3 Months Ended

Sep. 30, 2023

Disclosures about Fair Value of Assets and Liabilities

Disclosures about Fair Value of Assets and Liabilities

Note 6: Disclosures about Fair Value of Assets and Liabilities

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

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

Recurring Measurements

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2023 and June 30, 2023:

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Fair		Identical Assets		Observable Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2023 (Unaudited)
U.S. Treasury bills	$	15,981,280	$	—	$	15,981,280	$	—
U.S. Government agencies		6,519,960		—		6,519,960		—
Mortgage-backed GSEs		31,360,458		—		31,360,458		—
Collateralized mortgage obligations		43,147,852		—		43,147,852		—
Subordinated debt		835,755		—		835,755		—
State and political subdivisions		3,682,173		—		3,682,173		—
June 30, 2023
U.S. Government agencies	$	6,529,510	$	—	$	6,529,510	$	—
Mortgage-backed GSEs		28,929,259		—		28,929,259		—
Collateralized mortgage obligations		30,384,590		—		30,384,590		—
Subordinated debt		860,470		—		860,470		—
State and political subdivisions		3,881,365		—		3,881,365		—

Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There are no liabilities measured at fair value on a recurring basis. There have been no significant changes in the valuation techniques during the three months ended September 30, 2023 and for the year ended June 30, 2023.

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 are not available, securities are classified within Level 3 of the hierarchy. The Company had no Level 3 securities.

The Company had no assets or liabilities measured at fair value on a nonrecurring basis at September 30, 2023. At June 30, 2023, the Company had one loan measured at fair value with a carrying value of $60,000, which is classified within Level 3 of the fair value hierarchy. The fair value of the loan is estimated using third-party appraisals of the collateral, less estimated costs to sell.

The estimated fair values of the Company’s financial instruments not carried at fair value on the consolidated balance sheets at September 30, 2023 and June 30, 2023 are as follows:

	Carrying		Fair		Fair Value Measurements Using
	Value		Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2023 (Unaudited)
Financial assets:
Cash and due from banks	$	11,026,868	$	11,026,868	$	11,026,868	$	—	$	—
Loans, net		92,264,825		82,964,010		—		—		82,964,010
FHLB Stock		702,800		702,800		—		702,800		—
FRB Stock		536,000		536,000		—		536,000		—
Accrued interest receivable		604,034		604,034		604,034		—		—
Financial liabilities:
Deposits		139,510,377		140,049,925		64,623,925		—		75,426,000
Borrowings		36,000,000		35,948,000		—		—		35,948,000
Accrued interest payable		336,703		336,703		336,703		—		—
June 30, 2023
Financial assets:
Cash and due from banks	$	5,515,728	$	5,515,728	$	5,515,728	$	—	$	—
Loans, net		81,208,395		73,268,657		—		—		73,268,657
FHLB Stock		396,800		396,800		—		396,800		—
Accrued interest receivable		498,807		498,807		498,807		—		—
Financial liabilities:
Deposits		119,991,581		120,415,085		68,571,085		—		51,844,000
Borrowings		6,200,000		6,191,000		—		—		6,191,000
Accrued interest payable		55,667		55,667		55,667		—		—

Limitations: 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 present value or other valuation techniques, or based on judgments regarding future expected loss experience, current economic conditions, risk characteristic of the financial instruments, or other factors. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. Subsequent changes in assumptions could significantly affect the estimates.