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%)