Bogota Financial Corp. Fair Value Disclosure

NOTE 16 – FAIR VALUE

 

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

 

The Bank used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

 

The fair value for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

 

Assets measured at fair value on a recurring basis are summarized below:

 

		Carrying Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
December 31, 2025
Assets
Securities available for sale:
U.S. government and agency obligations		$	2,943,681			$	—			$	2,943,681			$	—
Corporate bonds			53,216,205				—				53,216,205				—
Municipal obligations			427,190				—				427,190				—
MBS – residential			89,983,662				—				89,983,662				—
MBS – commercial			12,809,611				—				12,809,611				—
Liabilities
Cash flow and fair value hedges			365,273								365,273
		$	159,745,622			$	—			$	159,745,622			$	—
December 31, 2024
Assets
Securities available for sale:
U.S. government and agency obligations		$	12,792,540			$	—			$	12,792,540			$	—
Corporate bonds			38,229,775				—				38,229,775				—
Municipal obligations			398,275				—				398,275				—
MBS – residential			74,552,809				—				74,552,809				—
MBS – commercial			14,334,049				—				14,334,049				—
Fair value hedge			109,594				—				109,594				—
Cash flow hedge			651,340								651,340				—
		$	141,068,382			$	—			$	141,068,382			$	—

 

No assets were measured at fair value on a non-recurring basis at December 31, 2025 and 2024.

 

 

The carrying amounts and estimated fair values of financial instruments, at December 31, 2025 and 2024 are as follows:

 

		Carrying				Fair				Fair Value Measurement Placement
		Amount				Value				(Level 1)				(Level 2)				(Level 3)
		(In thousands)
December 31, 2025
Financial instruments -assets
Loans, gross		$	650,176			$	626,438			$	—			$	—			$	626,438
Financial instruments - liabilities
Certificates of deposit			493,934				494,596				—				494,596				—
Borrowings			93,322				93,742				—				93,742				—
December 31, 2024
Financial instruments - assets
Loans			714,337				686,977				—				—				686,977
Financial instruments - liabilities
Certificates of deposit			482,878				493,769				—				493,769				—
Borrowings			172,173				172,575				—				172,575				—

 

Carrying amount is the estimated fair value for cash and cash equivalents. The fair value of loans is determined using an exit price methodology. Certificates of deposits fair value is estimated by using a discounted cash flow approach. Fair value of FHLB advances is based on current rates for similar financing. Other balance sheet instruments such as cash and cash equivalents, accrued interest receivable, accrued interest payable and Bank owned life insurance holding costs approximate fair value. The fair value of off-balance sheet items is not considered material.