FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2018

FAIR VALUE

Summary of assets measured at fair value on recurring basis

The following presents assets measured on a recurring basis at June 30, 2018 and December 31, 2017 (in thousands):

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
June 30, 2018	(Level 1)		(Level 2)		(Level 3)		Balance
Investment securities available-for-sale:
U.S. treasury and federal agency	$	249	$	—	$	—	$	249
GNMA mortgage-backed securities – residential		—		36,453		—		36,453
Collateralized mortgage obligations issued by U.S. government sponsored entities and agencies		—		8,707		—		8,707
Corporate collateralized mortgage obligations and mortgage-backed securities		—		1,464		—		1,464
SBIC		—		1,017		—		1,017
Total securities available-for-sale	$	249	$	47,641	$	—	$	47,890
Equity securities not available-for-sale	$	692	$	—	$	—	$	692
Interest rate lock and forward delivery commitments	$	—	$	1,408	$	—	$	1,408

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
December 31, 2017	(Level 1)		(Level 2)		(Level 3)		Balance
Investment securities available-for-sale:
U.S. treasury and federal agency	$	249	$	—	$	—	$	249
GNMA mortgage-backed securities – residential		—		40,836		—		40,836
Collateralized mortgage obligations issued by U.S. government sponsored entities and agencies		—		9,453		—		9,453
Corporate collateralized mortgage obligations and mortgage-backed securities		—		1,479		—		1,479
SBIC		—		930		—		930
Equity mutual fund		703		—		—		703
Total securities available-for-sale	$	952	$	52,698	$	—	$	53,650
Interest rate lock and forward delivery commitments	$	—	$	665	$	—	$	665

Summary of assets measured at fair value on nonrecurring basis

The following presents assets measured on a nonrecurring basis as of June 30, 2018 and December 31, 2017 (in thousands):

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
June 30, 2018	(Level 1)		(Level 2)		(Level 3)		Balance
Other real estate owned:
Commercial properties	$	—	$	—	$	658	$	658
Total other real estate owned	$	—	$	—	$	658	$	658
Total impaired loans:
Commercial and industrial	$	—	$	—	$	795	$	795
Total impaired loans	$	—	$	—	$	795	$	795

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
December 31, 2017	(Level 1)		(Level 2)		(Level 3)		Balance
Other real estate owned:
Commercial properties	$	—	$	—	$	658	$	658
Total other real estate owned	$	—	$	—	$	658	$	658
Total impaired loans:
Commercial and industrial	$	—	$	—	$	1,113	$	1,113
Total impaired loans	$	—	$	—	$	1,113	$	1,113

Summary of carrying amounts and estimated fair values of financial instruments

The following presents carrying amounts and estimated fair values for financial instruments as of June 30, 2018 and December 31, 2017 (in thousands):

	Carrying		Fair Value Measurements Using:
June 30, 2018	Amount		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	58,464	$	58,464	$	—	$	—
Securities available-for-sale		47,890		249		47,641		—
Loans, net		835,544		—		—		810,863
Mortgage loans held for sale		35,064		—		35,064		—
Correspondent bank stock		3,477		N/A		N/A		N/A
Accrued interest receivable		2,565		—		2,565		—
Promissory notes, net		2,125		—		—		2,125
Other assets		692		692		—		—
Liabilities:
Deposits	$	843,742	$	—	$	844,474	$	—
Borrowings:
FHLB Topeka Borrowings – fixed rate		75,598		—		76,077		—
2016 Subordinated notes –  fixed-to-floating rate		6,560		—		—		6,662
2012 Subordinated notes – fixed rate		6,875		—		—		6,857
Accrued interest payable		231		—		231		—

	Carrying		Fair Value Measurements Using:
December 31, 2017	Amount		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	9,502	$	9,502	$	—	$	—
Securities available-for-sale		53,650		952		52,698		—
Loans, net		806,402		—		—		822,392
Mortgage loans held for sale		22,940		—		22,940		—
Correspondent bank stock		1,555		N/A		N/A		N/A
Accrued interest receivable		2,421		—		2,421		—
Promissory notes, net		5,792		—		—		5,792
Liabilities:
Deposits	$	816,117	$	—	$	821,059	$	—
Borrowings:
FHLB Topeka Borrowings – fixed rate		28,563		—		29,108		—
2016 Subordinated notes –  fixed-to-floating rate		6,560		—		—		6,893
2012 Subordinated notes – fixed rate		6,875		—		—		7,129
Accrued interest payable		197		—		197		—