FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2018

FAIR VALUE

Summary of assets measured at fair value on recurring basis

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

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
December 31, 2018	(Level 1)		(Level 2)		(Level 3)		Balance
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	—	$	250
GNMA mortgage-backed securities – residential		—		34,002		—		34,002
FNMA mortgage-backed securities – residential		—		3,870		—		3,870
Securities issued by U.S. government sponsored entities and agencies		—		4,302		—		4,302
Corporate CMO and MBS		—		1,271		—		1,271
SBIC		—		1,206		—		1,206
Total securities available-for-sale	$	250	$	44,651	$	—	$	44,901
Equity securities not available-for-sale	$	693	$	—	$	—	$	693
Interest rate lock and forward delivery commitments	$	—	$	890	$	—	$	890

	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 debt	$	249	$	—	$	—	$	249
GNMA mortgage-backed securities – residential		—		40,836		—		40,836
FNMA mortgage-backed securities – residential		—		4,399		—		4,399
Securities issued by U.S. government sponsored entities and agencies		—		5,054		—		5,054
Corporate CMO and MBS		—		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 December 31, 2018 and December 31, 2017 (in thousands):

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
December 31, 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 assets and liabilities measured at fair value on a recurring or nonrecurring, the significant unobservable inputs

	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2018
			Valuation		Significant		Range
	Fair Value		Technique		Unobservable Input		(Weighted Average)
Other real estate owned:
Commercial properties	$	658		Appraisal Value		Discount		50%  (50%)
						Commission and Cost to Sell		1% - 10% (7%)
Total impaired loans:
Commercial and industrial	$	795		Discounted Cash Flow		Discount Rate		9% (9%)

	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2017
			Valuation		Significant		Range
	Fair Value		Technique		Unobservable Input		(Weighted Average)
Other real estate owned:
Commercial properties	$	658		Appraisal Value		Discount		50%  (50%)
						Commission and Cost to Sell		1% - 10%  (7%)
Total impaired loans:
Commercial and industrial	$	1,113		Discounted Cash Flow		Discount Rate		9% (9%)

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 December 31, 2018 and December 31, 2017 (in thousands):

	Carrying		Fair Value Measurements Using:
December 31, 2018	Amount		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	73,357	$	73,357	$	—	$	—
Securities available-for-sale		44,901		250		44,651		—
Loans, net		886,515		—		—		868,828
Mortgage loans held for sale		14,832		—		14,832		—
Accrued interest receivable		2,844		—		2,844		—
Other assets		693		693		—		—
Liabilities:
Deposits	$	937,758	$	—	$	940,039	$	—
Borrowings:
FHLB Topeka Borrowings – fixed rate		15,000		—		14,833		—
2016 Subordinated notes –  fixed-to-floating rate		6,560		—		—		6,434
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		—