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Note 8 - Fair Value of Financial Instruments (Tables)
9 Months Ended
Sep. 30, 2020
Notes Tables  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

 

 

 

 

(dollars in thousands)

 

 

 

 

 

Total

  

(Level 1)

Quoted Prices

in Active

Markets for

Identical Assets

  

(Level 2)

Significant

Other

Observable

Inputs

  

 

(Level 3)

Significant

Unobservable

Inputs

 
                 

September 30, 2020

                

Assets:

                
                 

U.S. Government agencies

 $33,372  $-  $33,372  $- 

Collateralized mortgage obligations

  203,802   -   203,802   - 

Agency mortgage-backed securities

  131,203   -   131,203   - 

Municipal securities

  2,662   -   2,662   - 

Corporate bonds

  69,616   -   66,985   2,631 

Securities Available for Sale

 $440,655  $-  $438,024  $2,631 
                 

Mortgage Loans Held for Sale

 $41,683  $-  $41,683  $- 

SBA Servicing Assets

  4,634   -   -   4,634 

Interest Rate Lock Commitments

  1,451   -   1,451   - 

Best Efforts Forward Loan Sales Commitments

  -   -   -   - 

Mandatory Forward Loan Sales Commitments

  -   -   -   - 
                 

Liabilities:

                
                 

Interest Rate Lock Commitments

  1   -   1   - 

Best Efforts Forward Loan Sales Commitments

  554   -   554   - 

Mandatory Forward Loan Sales Commitments

  525   -   525   - 
                 

December 31, 2019

                

Assets:

                
                 

U.S. Government agencies

 $38,305  $-  $38,305  $- 

Collateralized mortgage obligations

  331,438   -   331,438   - 

Agency mortgage-backed securities

  98,937   -   98,937   - 

Municipal securities

  4,082   -   4,082   - 

Corporate bonds

  66,280   -   63,460   2,820 

Securities Available for Sale

 $539,042  $-  $536,222  $2,820 
                 

Mortgage Loans Held for Sale

 $10,345  $-  $10,345  $- 

SBA Servicing Assets

  4,447   -   -   4,447 

Interest Rate Lock Commitments

  362   -   362   - 

Best Efforts Forward Loan Sales Commitments

  4   -   4   - 

Mandatory Forward Loan Sales Commitments

  2   -   2   - 
                 

Liabilities:

                
                 

Interest Rate Lock Commitments

  -   -   -   - 

Best Efforts Forward Loan Sales Commitments

  133   -   133   - 

Mandatory Forward Loan Sales Commitments

  83   -   83   - 
Schedule of Servicing Assets at Fair Value [Table Text Block]
  

Three Months Ended

September 30,

 

(dollars in thousands)

 

2020

  

2019

 

Beginning balance, July 1st

 $4,604  $4,593 

Additions

  173   272 

Fair value adjustments

  (143)  (361)

Ending balance, September 30th

 $4,634  $4,504 
  

Nine Months Ended

September 30,

 

(dollars in thousands)

 

2020

  

2019

 

Beginning balance, January 1st

 $4,447  $4,785 

Additions

  488   825 

Fair value adjustments

  (301)  (1,106)

Ending balance, September 30th

 $4,634  $4,504 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
  

Three Months

Ended

September 30, 2020

  

Three Months

Ended

September 30, 2019

 

Level 3 Investments Only

(dollars in thousands)

 

Corporate Bonds

  

Corporate Bonds

 

Balance, July 1st

 $2,665  $2,999 

Unrealized gains (losses)

  (34)  (108)

Proceeds from sales

  -   - 

Realized losses

  -   - 

Balance, September 30th

 $2,631  $2,891 
  

Nine Months

Ended

September 30, 2020

  

Nine Months

Ended

September 30, 2019

 

Level 3 Investments Only

(dollars in thousands)

 

Corporate Bonds

  

Corporate Bonds

 

Balance, January 1st

 $2,819  $3,069 

Unrealized gains (losses)

  (188)  (178)

Proceeds from sales

  -   - 

Realized losses

  -   - 

Balance, September 30th

 $2,631  $2,891 
Fair Value Measurements, Nonrecurring [Table Text Block]

 

 

(dollars in thousands)

 

 

 

 

 

Total

  

(Level 1)

Quoted Prices

in Active

Markets for

Identical Assets

  

(Level 2)

Significant

Other

Observable

Inputs

  

 

(Level 3)

Significant

Unobservable

Inputs

 

September 30, 2020

                

Impaired loans

 $5,506  $-  $-  $5,506 

Other real estate owned

  130   -   -   130 
                 

December 31, 2019

                

Impaired loans

 $5,730  $-  $-  $5,730 

Other real estate owned

  899   -   -   899 
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
  

Quantitative Information about Level 3 Fair Value Measurements

Asset Description

 

Fair

Value

 

Valuation

Technique

 

Unobservable Input

 

Range (Weighted

Average)

September 30, 2020

             

Corporate bonds

 $2,631 

Discounted Cash Flows

 

Discount Rate

 (3.49%) 
              

SBA servicing assets

 $4,634 

Discounted Cash Flows

 

Conditional Prepayment Rate

 (13.60%) 
              
       Discount Rate (10.00%) 
              

Impaired loans

 $5,506 

Appraised Value of Collateral (1)

 

Liquidation expenses (2)

 0%-23%(15%)(3)
              

Other real estate owned

 $130 

Appraised Value of Collateral (1)

 

Liquidation expenses (2)

 (7%)(3)
              

December 31, 2019

             

Corporate bonds

 $2,820 

Discounted Cash Flows

 

Discount Rate

 (6.66%) 
              

SBA servicing assets

 $4,447 

Discounted Cash Flows

 

Conditional Prepayment Rate

 (13.53%) 
              
       Discount Rate (10.75%) 
              

Impaired loans

 $5,730 

Appraised Value of Collateral (1)

 

Liquidation expenses (2)

 9%-20%(12%)(3)
              

Other real estate owned

 $899 

Appraised Value of Collateral (1)

 

Liquidation expenses (2)

 6%-16%(8%)(3)
Fair Value Option, Disclosures [Table Text Block]
  

Carrying

Amount

  

Aggregate Unpaid

Principal Balance

  

Excess Carrying

Amount Over

Aggregate Unpaid

Principal Balance

 

September 30, 2020

 $41,683  $39,983  $1,700 
             

December 31, 2019

 $10,345  $9,983  $362 
Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block]

(dollars in thousands)

 

September 30, 2020

  

December 31, 2019

 
         

SBA Servicing Asset

        
         

Fair Value of SBA Servicing Asset

 $4,634  $4,447 
         

Composition of SBA Loans Serviced for Others

        

Fixed-rate SBA loans

  2%  2%

Adjustable-rate SBA loans

  98%  98%

Total

  100%  100%
         

Weighted Average Remaining Term (in years)

 

20.3

  

20.7

 
         

Prepayment Speed

  13.60%  13.53%

Effect on fair value of a 10% increase

 $(167) $(175)

Effect on fair value of a 20% increase

  (323)  (338)
         

Weighted Average Discount Rate

  10.00%  10.75%

Effect on fair value of a 10% increase

 $(151) $(154)

Effect on fair value of a 20% increase

  (293)  (298)
Fair Value, by Balance Sheet Grouping [Table Text Block]
  

Fair Value Measurements at September 30, 2020

 

 

(dollars in thousands)

 

Carrying

Amount

  

Fair

Value

  

Quoted Prices

in Active

Markets for

Identical

Assets

(Level 1)

  

Significant

Other

Observable

Inputs

(Level 2)

  

Significant

Unobservable Inputs

(Level 3)

 

Balance Sheet Data

                    

Financial assets:

                    

Cash and cash equivalents

 $918,161  $918,161  $918,161  $-  $- 

Investment securities available for sale

  440,655   440,655   -   438,024   2,631 

Investment securities held to maturity

  688,939   712,369   -   712,369   - 

Restricted stock

  3,789   3,789   -   3,789   - 

Loans held for sale

  42,549   42,588   -   41,683   905 

Loans receivable, net

  2,617,547   2,606,683   -   -   2,606,683 

SBA servicing assets

  4,634   4,634   -   -   4,634 

Accrued interest receivable

  15,021   15,021   -   15,021   - 

Interest rate lock commitments

  1,451   1,451   -   1,451   - 

Best efforts forward loan sales commitments

  -   -   -   -   - 

Mandatory forward loan sales commitments

  -   -   -   -   - 
                     

Financial liabilities:

                    

Deposits

                    

Demand, savings and money market

 $3,702,310  $3,702,310  $-  $3,702,310  $- 

Time

  203,296   204,384   -   204,384   - 

Short-term borrowings

  646,267   646,267   -   646,267   - 

Subordinated debt

  11,270   8,008   -   -   8,008 

Accrued interest payable

  1,277   1,277   -   1,277   - 

Interest rate lock commitments

  1   1   -   1   - 

Best efforts forward loan sales commitments

  554   554   -   554   - 

Mandatory forward loan sales commitments

  525   525   -   525   - 
                     

Off-Balance Sheet Data

                    

Commitments to extend credit

  -   -   -   -   - 

Standby letters-of-credit

  -   -   -   -   - 
  

Fair Value Measurements at December 31, 2019

 

 

(dollars in thousands)

 

Carrying Amount

  

Fair

Value

  

Quoted Prices in Active Markets for Identical Assets

(Level 1)

  

Significant Other Observable Inputs

(Level 2)

  

Significant Unobservable Inputs

(Level 3)

 

Balance Sheet Data

                    

Financial assets:

                    

Cash and cash equivalents

 $168,319  $168,319  $168,319  $-  $- 

Investment securities available for sale

  539,042   539,042   -   536,222   2,820 

Investment securities held to maturity

  644,842   653,109   -   653,109   - 

Restricted stock

  2,746   2,746   -   2,746   - 

Loans held for sale

  13,349   13,349   -   10,345   3,004 

Loans receivable, net

  1,738,929   1,731,876   -   -   1,731,876 

SBA servicing assets

  4,447   4,447   -   -   4,447 

Accrued interest receivable

  9,934   9,934   -   9,934   - 

Interest rate lock commitments

  362   362   -   362   - 

Best efforts forward loan sales commitments

  4   4   -   4   - 

Mandatory forward loan sales commitments

  2   2   -   2   - 
                     

Financial liabilities:

                    

Deposits

                    

Demand, savings and money market

 $2,775,584  $2,775,584  $-  $2,775,584  $- 

Time

  223,579   224,095   -   224,095   - 

Subordinated debt

  11,265   8,540   -   -   8,540 

Accrued interest payable

  1,630   1,630   -   1,630   - 

Interest rate lock commitments

  -   -   -   -   - 

Best efforts forward loan sales commitments

  133   133   -   133   - 

Mandatory forward loan sales commitments

  83   83   -   83   - 
                     

Off-Balance Sheet Data

                    

Commitments to extend credit

  -   -   -   -   - 

Standby letters-of-credit

  -   -   -   -   -