Indiana Code 5-13-8-1 allows a political subdivision of the State of Indiana to deposit public funds in a financial institution only if the financial institution is a depository eligible to receive state funds and has a principal office or branch that qualifies to receive public funds of the political subdivision. The County's deposit policy for custodial credit risk is to comply with Indiana Code 5-13-8-1. All bank balances were insured by the Federal Deposit Insurance Fund or the Public Deposit Insurance Fund, which covers all public funds held in approved depositories.
The County categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
The valuation methods for recurring fair value measurements are as follows:
Level 1 - Mutual funds, other than bonds, money markets and equity securities are valued using unadjusted quoted prices in active markets for those securities.
Level 2 - Mutual funds, other than bonds are valued using a proprietary matrix technique. This pricing technique defines the primary source and secondary sources to be used if the primary source does not provide a value. The valuation techniques may include market participant's assumptions, quoted prices for similar securities, benchmark yield curves, including but not limited to treasury benchmarks, LIBOR and swap curves, market corroborated inputs and other data inputs. Equity securities are valued using bid evaluations.
Level 3 - Mutual funds, other than bonds are valued using proprietary information. Equity securities are valued using proprietary information and independent appraisals. This results in using one or more valuation techniques, such as the market approach and or the income approach, for those securities for which sufficient and reliable data is available. Within this level, the use of the market approach generally consists of using comparable market transactions or other data, while the use of the income approach generally consists of the net present value of estimated future cash flows.
| December 31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Investment Type | Level 1 | Level 2 | Level 3 | Total | ||||
| Mutual funds - bond funds | $ | 8,640,958 | $ | - | $ | - | $ | 8,640,958 |
| Equity securities | 16,727,284 | - | - | 16,727,284 | ||||
| Total | $ | 25,368,242 | $ | - | $ | - | $ | 25,368,242 |
Custodial credit risk is the risk that in the event of a financial institution failure, the County's deposits may not be returned to the County.
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party.
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations.