FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2019

FAIR VALUE

Summary of assets measured at fair value on recurring basis

The following presents assets measured on a recurring basis at December 31, 2019 and December 31, 2018 (in thousands):

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
December 31, 2019	(Level 1)		(Level 2)		(Level 3)		Balance
Investment securities available-for-sale:
U.S. Treasury debt	$	254	$	—	$	—	$	254
GNMA		—		45,312		—		45,312
FNMA		—		2,917		—		2,917
Corporate CMO and MBS		—		10,420		—		10,420
Total securities available-for-sale	$	254	$	58,649	$	—	$	58,903
Equity securities	$	713	$	—	$	—	$	713
Interest rate lock and forward delivery commitments	$	—	$	1,184	$	—	$	1,184

	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		—		34,002		—		34,002
FNMA		—		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
Total securities available-for-sale	$	250	$	43,445	$	—	$	43,695
Equity securities	$	693	$	—	$	—	$	693
Interest rate lock and forward delivery commitments	$	—	$	890	$	—	$	890

Summary of assets measured at fair value on nonrecurring basis

The following presents assets measured on a nonrecurring basis as of December 31, 2019 and December 31, 2018 (in thousands):

	Quoted
	Prices in		Significant
	Active Markets		Other		Significant
	for Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Reported
December 31, 2019	(Level 1)		(Level 2)		(Level 3)		Balance
Other real estate owned:
Commercial properties	$	—	$	—	$	658	$	658
Total impaired loans:
Commercial and industrial	$	—	$	—	$	3,579	$	3,579

	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 impaired loans:
Commercial and industrial	$	—	$	—	$	795	$	795

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, 2019
			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	$	3,579		Sales comparison, Market Approach - Guideline Transaction Method		Management discount for asset/property type		0% - 50% (23%)

	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%)

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, 2019 and December 31, 2018 (in thousands):

	Carrying		Fair Value Measurements Using:
December 31, 2019	Amount		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	78,638	$	78,638	$	—	$	—
Securities available-for-sale		58,903		254		58,649		—
Loans, net		990,132		—		—		974,142
Mortgage loans held for sale		48,312		—		48,312		—
Accrued interest receivable		3,048		—		3,048		—
Other assets		713		713		—		—
Liabilities:
Deposits	$	1,086,784	$	—	$	1,089,261	$	—
Borrowings:
FHLB Topeka Borrowings – fixed rate		10,000		—		10,003		—
2016 subordinated notes –  fixed-to-floating rate		6,560		—		—		6,004
Accrued interest payable		299		—		299		—

	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		43,695		250		43,445		—
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		—