Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value of Financial Instruments [Abstract]

Schedule of fair value measurements for assets and liabilities on a recurring basis

The following table presents fair value measurements for assets that are measured at fair value on a recurring basis as of and for the three months ended March 31,  2020:

					Significant
					Other		Significant		Total Changes
			Quoted		Observable		Unobservable		In Fair Values
	Carrying		Prices		Inputs		Inputs		Included In
	Value		(Level 1)		(Level 2)		(Level 3)		Period Income
Assets:	(dollars in thousands)
AFS Securities - U.S. government agency notes	$	5,031	$	—	$	5,031	$	—	$	—
AFS Securities - corporate obligations		2,000		—		2,000		—		—
AFS Securities - mortgage-backed securities		11,811		—		11,811		—		—
Loans held for sale ("LHFS")		21,996		—		21,996		—		(200)
Mortgage servicing rights ("MSRs")		240		—		—		240		(83)
Interest-rate lock commitments ("IRLCs")		344		—		—		344		165
Best efforts forward contracts		835		—		835		—		812
Mandatory forward contracts		584		—		584		—		561
Liabilities:
IRLCs		405		—		—		405		(405)
Best efforts forward contracts		18		—		18		—		(18)

The following table presents fair value measurements for assets and liabilities that are measured at fair value on a recurring basis as of and for the year ended December 31, 2019:

					Significant
					Other		Significant		Total Changes
			Quoted		Observable		Unobservable		In Fair Values
	Carrying		Prices		Inputs		Inputs		Included In
	Value		(Level 1)		(Level 2)		(Level 3)		Period Income
Assets:	(dollars in thousands)
AFS Securities - U.S. government agency notes	$	5,019	$	—	$	5,019	$	—	$	—
AFS Securities - mortgage-backed securities		7,887		—		7,887		—		—
LHFS		10,910		—		10,910		—		(5)
MSRs		323		—		—		323		(114)
IRLCs		179		—		—		179		79
Mandatory forward contracts		23		—		23		—		39
Best efforts forward contracts		23		—		23		—		23

Schedule of additional quantitative information about assets measured at fair value on a recurring basis

The following table provides additional quantitative information about assets measured at fair value on a recurring basis and for which we have utilized Level 3 inputs to determine fair value:

	Fair Value		Valuation	Unobservable	Range
	Estimate		Technique	Input	(Weighted-Average)
March 31, 2020:	(dollars in thousands)
MSRs (1)	$	240	Market Approach	Weighted average prepayment speed	16.70	%
IRLCs - net liability		61	Market Approach	Range of pull through rate	70% - 95	%
				Average pull through rate	87	%
December 31, 2019:
MSRs (1)	$	323	Market Approach	Weighted average prepayment speed	11.10	%
IRLCs - asset		179	Market Approach	Range of pull through rate	70% - 95	%
				Average pull through rate	83	%

Schedule of activity of servicing assets at fair value

The following table shows the activity in the MSRs:

	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	323	$	437
Valuation adjustment		(83)		(37)
Ending balance	$	240	$	400

The following table shows the activity in the IRLCs:

	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	179	$	100
Valuation adjustment		(240)		235
Ending balance	$	(61)	$	335

Schedule of assets measured at fair value on a nonrecurring basis

For assets measured at fair value on a nonrecurring basis, the following tables provide the level of valuation assumptions used to determine each adjustment and the carrying value of assets:

	March 31, 2020
					Significant
					Other		Significant
			Quoted		Observable		Unobservable
	Carrying		Prices		Inputs		Inputs		Range of	Weighted
	Value		(Level 1)		(Level 2)		(Level 3)		Discount (1)	Average (2)
	(dollars in thousands)
Impaired loans	$	4,378	$	—	$	—	$	4,378	0% - 15%	7	%
Real estate acquired through foreclosure		471		—		—		471	0% - 17%	17	%

(1) Discount based on current market conditions and estimated selling costs

(2) Inputs are weighted based on the relative fair values of the instruments.

	December 31, 2019
					Significant
					Other		Significant
			Quoted		Observable		Unobservable
	Carrying		Prices		Inputs		Inputs		Range of	Weighted
	Value		(Level 1)		(Level 2)		(Level 3)		Discount (1)	Average (2)
	(dollars in thousands)
Impaired loans	$	4,437	$	—	$	—	$	4,437	0% - 160%	8	%
Real estate acquired through foreclosure		1,174		—		—		1,174	0% - 16%	10	%

(1) Discount based on current market conditions and estimated selling costs

(2) Inputs are weighted based on the relative fair values of the instruments

Estimated fair values of financial instruments

The carrying value and fair value of all financial instruments are summarized in the following tables:

	March 31, 2020
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:	(dollars in thousands)
Cash and cash equivalents	$	115,636	$	115,636	$	—	$	—	$	115,636
Certificates of deposit held for investment		7,540		7,540		—		—		7,540
AFS securities		18,842		—		18,842		—		18,842
HTM securities		22,737		1,015		22,442		—		23,457
LHFS		21,996		—		21,996		—		21,996
Loans receivable, net		628,032		—		—		616,259		616,259
Restricted stock investments		2,299		—		2,299		—		2,299
Accrued interest receivable		2,275		—		2,275		—		2,275
MSRs		240		—		—		240		240
IRLCs		344		—		—		344		344
Mandatory forward contracts		584		—		584		—		584
Best effort forward contracts		835		—		835		—		835
Liabilities:
Deposits		690,212		—		694,660		—		694,660
Accrued interest payable		308		—		308		—		308
Borrowings		35,000		—		35,495		—		35,495
Subordinated debentures		20,619		—		—		18,846		18,846
IRLCs		405		—		—		405		405
Best effort forward contracts		18		—		18		—		18

	December 31, 2019
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:	(dollars in thousands)
Cash and cash equivalents	$	88,193	$	88,193	$	—	$	—	$	88,193
Certificates of deposit held for investment		7,540		7,540		—		—		7,540
AFS securities		12,906		—		12,906		—		12,906
HTM securities		25,960		1,008		25,150		—		26,158
LHFS		10,910		—		10,910		—		10,910
Loans receivable, net		638,547		—		—		647,238		647,238
Restricted stock investments		2,431		—		2,431		—		2,431
Accrued interest receivable		2,458		—		2,458		—		2,458
MSRs		323		—		—		323		323
IRLCs		179		—		—		179		179
Mandatory forward contracts		23		—		23		—		23
Best effort forward contracts		23		—		23		—		23
Liabilities:
Deposits		661,049		—		662,418		—		662,418
Accrued interest payable		317		—		317		—		317
Borrowings		35,000		—		35,063		—		35,063
Subordinated debentures		20,619		—		—		16,754		16,754