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Note 10 - Derivatives and Risk Management Activities
 6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
Note
10
: 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
six
months ended
June 30, 2018
and the
six
months ended
June 30, 2017.
The following table summarizes the amounts recorded in Republic’s statement of financial condition for derivatives
not
designated as hedging instruments as of
June 30, 2018
and
December 31, 2017 (
in thousands):
 
 
June
3
0
, 201
8
Balance Sheet
Presentation
  
Fair
Value
    
Notional
Amount
  
                   
Asset derivatives:
    
 
 
 
  
 
 
 
                   
IRLC’s
Other Assets
   $
714
     $
32,937
  
Best efforts forward loan sales commitments
Other Assets
    
1
      
363
  
Mandatory forward loan sales commitments
Other Assets
    
6
      
1,091
  
                   
Liability derivatives:
    
 
 
 
  
 
 
 
                   
IRLC’s
Other Liabilities
   $
3
     $
687
  
Best efforts forward loan sales commitments
Other Liabilities
    
210
      
33,261
  
Mandatory forward loan sales commitments
Other Liabilities
    
301
      
33,168
  
 
 
December 31, 2017
Balance Sheet
Presentation
  
Fair
Value
    
Notional
Amount
  
                   
Asset derivatives:
    
 
 
 
  
 
 
 
                   
IRLCs
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:
    
 
 
 
  
 
 
 
                   
IRLCs
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
  
 
The following tables summarize the amounts recorded in Republic’s statement of income for derivative instruments
not
designated as hedging instruments for the
three
and
six
months ended
June 30, 2018
and
2017
(in thousands):
 
     
Three Months
Ended
June
30, 201
8
    
Six
Months
Ended
June
30, 201
8
  
 
Income Statement
Presentation
  
Gain/(Loss)
    
Gain/(Loss)
  
                   
Asset derivatives:
    
 
 
 
  
 
 
 
                   
IRLC’s
Mortgage banking income
   $
80
     $
351
  
Best efforts forward loan sales commitments
Mortgage banking income
    
(5
 )    
(5
 )
Mandatory forward loan sales commitments
Mortgage banking income
    
3
      
(13
 )
                   
Liability derivatives:
    
 
 
 
  
 
 
 
                   
IRLC’s
Mortgage banking income
   $
(1
 )   $
(1
 )
Best efforts forward loan sales commitments
Mortgage banking income
    
17
      
(118
 )
Mandatory forward loan sales commitments
Mortgage banking income
    
(152
 )    
(105
 )
 
     
Three Months
Ended
June
30, 2017
    
Six
Months
Ended
June
30, 2017
  
 
Income Statement
Presentation
  
Gain/(Loss)
    
Gain/(Loss)
  
                   
Asset derivatives:
    
 
 
 
  
 
 
 
                   
IRLC’s
Mortgage banking income
   $
(71
 )   $
321
  
Best efforts forward loan sales commitments
Mortgage banking income
    
18
      
(82
 )
Mandatory forward loan sales commitments
Mortgage banking income
    
(4
 )    
(225
 )
                   
Liability derivatives:
    
 
 
 
  
 
 
 
                   
IRLC’s
Mortgage banking income
   $
6
     $
54
  
Best efforts forward loan sales commitments
Mortgage banking income
    
107
      
(38
 )
Mandatory forward loan sales commitments
Mortgage banking income
    
(23
 )    
(110
 )
 
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.