LOAN SERVICING ACTIVITIES

12 Months Ended

Dec. 31, 2018

LOAN SERVICING ACTIVITIES [Abstract]

LOAN SERVICING ACTIVITIES

10.  LOAN SERVICING ACTIVITIES

The Bank services real estate and C&I loans for others having principal balances outstanding of approximately $313,584, and $337,483 at December 31, 2018 and 2017, respectively. Loans serviced for others are not reported as assets. Servicing loans for others generally consists of collecting loan payments, maintaining escrow accounts, disbursing payments to investors, paying taxes and insurance and processing foreclosure. In connection with loans serviced for others, the Bank held borrowers' escrow balances of $3,022 and $3,107 at December 31, 2018 and 2017, respectively.

There are no restrictions on the Company's consolidated assets or liabilities related to loans sold with servicing rights retained. Upon sale of these loans, the Company recorded an SRA in other assets, and has elected to account for the SRA under the "amortization method" prescribed under GAAP. SRA activity prior to the year December 31, 2017 was not material. At December 31, 2018, there is no associated valuation allowance for SRAs. The activity for SRAs for the period indicated is as follows:

	Year Ended December 31,
	2018			2017
Beginning of the year	$	1,594		$	152
Additions		72			1,491
Amortized to expense		(351	)		(49	)
End of year	$	1,315		$	1,594

The fair-value of servicing rights approximates carrying value as of December 31, 2018. Fair value at December 31, 2018 was determined using a discount rate of 12.0%, prepayment speeds ranging from 16% to 20%, depending on the stratification of the specific servicing right, and a weighted average default rate of 1.30%.