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FAIR VALUE (Tables)
12 Months Ended
Dec. 31, 2020
Schedule of fair value assets and liabilities measured on recurring basis

The following presents assets and liabilities measured on a recurring basis as of December 31, 2020 and December 31, 2019 (in thousands):

    

Quoted

Prices in

Significant

Active Markets

Other

Significant

for Identical

Observable

Unobservable

Assets

Inputs

Inputs

Reported

December 31, 2020

(Level 1)

(Level 2)

(Level 3)

Balance

Investment securities available-for-sale:

 

  

 

  

 

  

 

  

U.S. Treasury debt

$

254

$

$

$

254

Corporate bonds

6,044

6,044

GNMA mortgage-backed securities - residential

24,604

24,604

FNMA mortgage-backed securities - residential

1,677

1,677

Corporate CMO and MBS

4,087

4,087

Total securities available-for-sale

$

254

$

36,412

$

$

36,666

Equity securities

$

730

$

$

$

730

Guarantee asset

$

$

$

232

$

232

IRLC and FSC, net

$

$

$

9,752

$

9,752

Guarantee liability

$

$

$

(125)

$

(125)

    

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 mortgage-backed securities - residential

45,312

45,312

FNMA mortgage-backed securities - residential

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

IRLC and FSC, net

$

$

$

1,184

$

1,184

Summary of assets and liability for level 3 instruments measured at fair value on recurring basis

The following presents a reconciliation for Level 3 instruments measured at fair value on a recurring basis (in thousands):

Year Ended December 31, 2020

    

Guarantee Asset

IRLC and FSC, Net

Guarantee Liability

Beginning balance

$

$

1,184

$

Acquisitions

44,763

Originations

(39,985)

Sales

245

244

Gains (losses) in net income, net

55

3,790

(119)

Other settlements

(68)

Ending balance

$

232

$

9,752

$

125

Year Ended December 31, 2019

    

Guarantee Asset

    

IRLC and FSC, Net

    

Guarantee Liability

Beginning balance

$

$

421

$

Acquisitions

 

13,094

Originations

 

(10,009)

Losses in net income, net

(2,322)

Ending balance

$

$

1,184

$

Summary of assets measured at fair value on nonrecurring basis

The following presents assets measured on a nonrecurring basis as of December 31, 2020 and December 31, 2019 (in thousands):

    

Quoted

Prices in

Significant

Active Markets

Other

Significant

for Identical

Observable

Unobservable

Assets

Inputs

Inputs

Reported

December 31, 2020

(Level 1)

(Level 2)

(Level 3)

Balance

Other real estate owned:

 

  

 

  

 

  

 

  

Commercial properties

$

$

$

194

$

194

Total impaired loans(1):

Commercial and Industrial

$

$

$

1,800

$

1,800

______________________________________

(1) An immaterial Cash, Securities and Other loan was fully reserved for using a specific allowance as of December 31, 2020.

    

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

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 as of December 31, 2020

Valuation

Significant

Range

Fair Value

Technique

Unobservable Input

(Weighted Average)

Other real estate owned:

 

  

 

  

 

  

 

  

Commercial properties

$

194

Sales contract

Commission, cost to sell, closing costs

5% (5%)

Total impaired loans(1):

Commercial and Industrial

$

1,800

Sales comparison, Market approach - guideline transaction method

Management discount for asset/property type

17% - 35% (26%)

______________________________________

(1) An immaterial Cash, Securities and Other loan was fully reserved for using a specific allowance as of December 31, 2020.

Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2019

Valuation

Significant

Range

Fair Value

Technique

Unobservable Input

(Weighted Average)

Other real estate owned:

 

  

 

  

 

  

 

  

Commercial properties

$

658

Appraisal value

Discount rate

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%)

Summary of carrying amounts and estimated fair values of financial instruments

Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2019

Valuation

Significant

Range

Fair Value

Technique

Unobservable Input

(Weighted Average)

Other real estate owned:

 

  

 

  

 

  

 

  

Commercial properties

$

658

Appraisal value

Discount rate

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%)

Recurring  
Summary of assets and liabilities measured at fair value on a recurring or nonrecurring, the significant unobservable inputs

The following presents quantitative information about Level 3 assets measured on a recurring basis as of December 31, 2020 and 2019 (in thousands):

Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2020

Valuation

Significant

Range

Fair Value

Technique

Unobservable Input

(Weighted Average)

Guarantee asset

$

232

Discounted cash flow

Discount rate
Prepayment rate

3% (3%)
25% (25%)

IRLC and FSC, net

9,752

Best execution model

Pull through

55% - 100% (86%)

Guarantee liability

$

(125)

Discounted cash flow

Discount rate
Prepayment rate

3% (3%)
25% (25%)

Quantitative Information about Level 3 Fair Value Measurements as of December 31, 2019

Valuation

Significant

Range

Fair Value

Technique

Unobservable Input

(Weighted Average)

IRLC and FSC, net

$

1,184

Best execution model

Pull through

75% - 100% (88%)