Note 24 - Derivatives and Risk Management Activities

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

24

: Derivatives and Risk Management Activities

Republic did

not

have any derivative instruments designated as hedging instruments, or subject to master netting and collateral agreements for

the

twelve

months ended

December 31, 2017.

The following table summarizes the amounts recorded in Republic’s statement of financial condition for derivatives

not

designated as hedging instruments as of

December 31, 2017

and

December 31, 2016 (

in thousands):

December 31, 201 7	Balance Sheet Presentation	Fair Value		Notional Amount
Asset derivatives:
IRLC ’s	Other Assets	$	363	$	16,366
Best efforts forward loan sales commitments	Other Assets		5		1,807
Mandatory forward loan sales commitments	Other Assets		19		4,566
Liability derivatives:
IRLC ’s	Other Liabilities	$	1	$	424
Best efforts forward loan sales commitments	Other Liabilities		93		14,983
Mandatory forward loan sales commitments	Other Liabilities		195		36,223

December 31, 2016	Balance Sheet Presentation	Fair Value		Notional Amount
Asset derivatives:
IRLC ’s	Other Assets	$	439	$	20,792
Best efforts forward loan sales commitments	Other Assets		103		8,586
Mandatory forward loan sales commitments	Other Assets		229		18,373
Liability derivatives:
IRLC ’s	Other Liabilities	$	55	$	6,757
Best efforts forward loan sales commitments	Other Liabilities		125		18,963
Mandatory forward loan sales commitments	Other Liabilities		38		5,024

The following table summarizes the amounts recorded in Republic

’s statement of income for derivative instruments

not

designated as hedging instruments for the

twelve

months ended

December 31, 2017

and

December 31, 2016 (

in thousands):

Twelve Months Ended December 31, 201 7	Income Statement Presentation	Gain/(Loss)
Asset derivatives:
IRLC ’s	Mortgage banking income	$	(76	)
Best efforts forward loan sales commitments	Mortgage banking income		(98	)
Mandatory forward loan sales commitments	Mortgage banking income		(210	)
Liability derivatives:
IRLC ’s	Mortgage banking income	$	54
Best efforts forward loan sales commitments	Mortgage banking income		32
Mandatory forward loan sales commitments	Mortgage banking income		(157	)

Twelve Months Ended December 3 1 , 2016	Income Statement Presentation	Gain/(Loss)
Asset derivatives:
IRLC ’s	Mortgage banking income	$	(1,042	)
Best efforts forward loan sales commitments	Mortgage banking income		77
Mandatory forward loan sales commitments	Mortgage banking income		229
Liability derivatives:
IRLC ’s	Mortgage banking income	$	(32	)
Best efforts forward loan sales commitments	Mortgage banking income		264
Mandatory forward loan sales commitments	Mortgage banking income		(38	)

The fair value of Republic

’s IRLCs, best efforts forward loan sales commitments, and mandatory forward loan sales commitments are based upon the estimated value of the underlying mortgage loan (determined consistent with “Loans Held for Sale”), adjusted for (

1

) estimated costs to complete and originate the loan, and (

2

) the estimated percentage of IRLCs that will result in a closed mortgage loan. The valuation of the IRLCs issued by Republic includes the value of the servicing released premium. Republic sells loans servicing released, and the servicing released premium is included in the market price.