Financial Instruments |
Note 18 – Financial Instruments Financial instruments as of the dates indicated were as follows:
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Quoted Prices |
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In Active |
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Significant |
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Markets for |
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Other |
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Significant |
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Identical |
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Observable |
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Unobservable |
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(Dollars in thousands) |
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Carrying |
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Estimated |
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Assets |
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Inputs |
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Inputs |
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Amount |
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Fair Value |
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(Level 1) |
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(Level 2) |
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(Level 3) |
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December 31, 2023 |
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Assets |
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Cash and cash equivalents |
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$ |
55,433 |
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$ |
55,433 |
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$ |
55,433 |
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$ |
- |
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$ |
- |
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Equity securities at fair value |
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7,505 |
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7,505 |
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4,749 |
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- |
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2,756 |
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Securities available for sale |
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514,598 |
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514,598 |
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80,194 |
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434,404 |
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- |
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Securities held to maturity |
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407,959 |
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348,791 |
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- |
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335,493 |
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13,298 |
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Federal Home Loan Bank and Federal Reserve Bank stock |
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9,514 |
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9,514 |
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- |
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9,514 |
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- |
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Loans held for sale |
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4,710 |
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4,851 |
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- |
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4,851 |
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- |
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Loans, net |
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1,394,968 |
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1,362,920 |
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- |
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- |
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1,362,920 |
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Accrued interest receivable |
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10,066 |
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10,066 |
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- |
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10,066 |
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- |
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Interest rate lock commitments |
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64 |
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64 |
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- |
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64 |
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- |
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Interest rate derivative contracts |
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8,880 |
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8,880 |
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- |
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8,880 |
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- |
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Liabilities |
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Noninterest-bearing deposits |
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547,625 |
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547,625 |
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547,625 |
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- |
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- |
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Interest-bearing deposits |
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1,550,985 |
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1,549,386 |
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- |
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1,549,386 |
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- |
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Brokered deposits |
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23,445 |
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23,435 |
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- |
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23,435 |
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- |
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Borrowings |
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200,000 |
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199,743 |
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- |
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199,743 |
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- |
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Subordinated debentures |
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35,507 |
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31,748 |
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- |
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31,748 |
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- |
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Accrued interest payable |
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6,223 |
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6,223 |
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- |
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6,223 |
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- |
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Interest rate derivative contracts |
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- |
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- |
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- |
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- |
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- |
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December 31, 2022 |
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Assets |
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Cash and cash equivalents |
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$ |
43,943 |
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$ |
43,943 |
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$ |
43,943 |
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$ |
- |
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$ |
- |
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Equity securities at fair value |
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8,566 |
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8,566 |
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6,024 |
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- |
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2,542 |
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Securities available for sale |
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529,749 |
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529,749 |
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78,204 |
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451,545 |
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- |
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Securities held to maturity |
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425,906 |
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353,901 |
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- |
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338,583 |
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15,318 |
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Federal Home Loan Bank and Federal Reserve Bank stock |
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8,581 |
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8,581 |
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- |
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8,581 |
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- |
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Loans held for sale |
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4,834 |
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4,979 |
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- |
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4,979 |
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- |
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Loans, net |
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1,182,163 |
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1,123,198 |
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- |
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- |
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1,123,198 |
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Accrued interest receivable |
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8,949 |
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8,949 |
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- |
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8,949 |
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- |
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Interest rate lock commitments |
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28 |
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28 |
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- |
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28 |
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- |
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Interest rate derivative contracts |
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9,204 |
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9,204 |
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- |
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9,204 |
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- |
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Liabilities |
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Noninterest-bearing deposits |
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599,579 |
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599,579 |
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599,579 |
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- |
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- |
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Interest-bearing deposits |
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1,518,424 |
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1,514,294 |
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- |
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1,514,294 |
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- |
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Borrowings |
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50,000 |
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50,000 |
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- |
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50,000 |
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- |
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Subordinated debentures |
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35,262 |
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30,304 |
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- |
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30,304 |
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- |
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Accrued interest payable |
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610 |
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610 |
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- |
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610 |
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- |
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Interest rate derivative contracts |
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5,823 |
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5,823 |
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- |
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5,823 |
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- |
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The estimated fair values approximate the carrying amounts for all financial instruments except those described later in this paragraph. The methodology for determining the estimated fair value for securities available for sale is described in Note 18. The estimated fair value of loans involves discounting forecasted cash flows. The discounting is executed using the Treasury curve, incorporating a spread adjustment to account for factors such as liquidity, marketability, and related risks. The allowance for credit losses is considered to be a reasonable estimate of discount for credit quality concerns. The estimated fair value of loans also included the mark to market adjustments related to the Company’s mergers. The valuation of liabilities, encompassing deposits, borrowings, and others, is derived by aligning forecasted cash flows with relevant points on the SOFR Swap curve. The estimated fair values for time deposits and FHLB advances are based on the rates paid at December 31 for new deposits or FHLB advances, applied until maturity. The estimated fair values for other financial instruments and off-balance sheet loan commitments are considered nominal.
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