Fair Value (Tables)

9 Months Ended

Sep. 30, 2016

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities


	Fair Value Measurements at September 30, 2016 using Significant Other Observable Inputs
	(Level 2)
	(unaudited)
Financial Assets:
Securities available for sale:
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	8,609
Mortgage-backed securities - residential		392
Collateralized mortgage obligations		225
Total securities available for sale	$	9,226

Loans held for sale		2,466

Yield maintenance provisions (embedded derivatives)	$	214

Interest rate lock commitments	$	19

Financial Liabilities:
Interest-rate swaps	$	214


	Fair Value Measurements at December 31, 2015 using Significant Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	8,536
Mortgage-backed securities - residential		481
Collateralized mortgage obligations		351
Total securities available for sale	$	9,368

Loans held for sale		889

Yield maintenance provisions (embedded derivatives)	$	213

Interest rate lock commitments	$	8

Financial Liabilities:
Interest-rate swaps	$	213

Assets measured at fair value on a non-recurring basis


Fair Value Measurements at September 30, 2016 Using
Significant Unobservable Inputs (Level 3)
(unaudited)
Impaired loans:
Commercial	$	134
Real Estate:
Single-family residential		123
Multi-family residential		39
Commercial:
Non-owner occupied		2,172
Owner occupied		203
Land		215
Total impaired loans	$	2,886


Fair Value Measurements at December 31, 2015 Using
Significant Unobservable Inputs (Level 3)

Impaired loans:
Commercial	$	143
Real Estate:
Single-family residential		128
Multi-family residential		45
Commercial:
Non-owner occupied		2,215
Owner occupied		213
Land		245
Total impaired loans	$	2,989

Financial instruments measured at fair value on a non-recurring basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2016 (unaudited):


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	134	Comparable sales approach	Adjustment for differences between the comparable market transactions	3.48%
Real estate:
Single-family residential		123	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.81% , 3.61%) 2.91%
Multi-family residential		39	Comparable sales approach	Adjustment for differences between the comparable market transactions	9.64%
Commercial:
Non-owner occupied		2,172	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.10%, 5.74%) 1.35%
Owner occupied		203	Comparable sales approach	Adjustment for differences between the comparable market transactions	-4.46%
Land		215	Comparable sales approach	Adjustment for differences between the comparable market transactions	(-2.73%, 1.50%) -.43%

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2015:


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	143	Comparable sales approach	Adjustment for differences between the comparable market transactions	1.10%
Real estate:
Single -family residential		128	Comparable sales approach	Adjustment for differences between the comparable market transactions	(-1.23% , 4.63%) -.17%
Multi-family residential		45	Comparable sales approach	Adjustment for differences between the comparable market transactions	5.74%
Commercial:
Non-owner occupied		2,215	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.10%, 5.74%) 1.35%
Owner occupied		213	Comparable sales approach	Adjustment for differences between the comparable market transactions	-29.30%
Land		245	Comparable sales approach	Adjustment for differences between the comparable market transactions	(-1.89%, 2.54%) .08%

Aggregate fair value, contractual balance (including accrued interest) and gain or loss



	September 30, 2016		December 31, 2015
	(unaudited)
Aggregate fair value	$	2,466	$	889
Contractual balance		2,459		884
Gain (loss)		7		5

Amount of gains and losses from changes in fair value included in earnings


	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
	(unaudited)				(unaudited)
Interest income	$	25	$	14	$	40	$	54
Interest expense		-		-		-		-
Change in fair value		(2)		(14)		2		(11)
Total change in fair value	$	23	$	-	$	42	$	43

Carrying amounts and estimated fair values of financial instruments


	Fair Value Measurements at September 30, 2016 Using (unaudited):
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	52,302	$	52,302	$	-	$	-	$	52,302
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		9,226		-		9,226		-		9,226
Loans held for sale		2,466		-		2,466		-		2,466
Loans, net		329,376		-		-		328,979		328,979
FHLB stock		1,942		n/a		n/a		n/a		n/a
Accrued interest receivable		925		2		17		906		925
Yield maintenance provisions (embedded derivatives)		214		-		214		-		214
Interest rate lock commitments		19		-		19		-		19

Financial liabilities
Deposits	$	(345,854)	$	(172,648)		(173,764)	$	-	$	(346,412)
FHLB advances and other borrowings		(15,500)		-		(15,880)		-		(15,880)
Advances by borrowers for taxes and insurance		(349)		-		-		(349)		(349)
Subordinated debentures		(5,155)		-		(3,492)		-		(3,492)
Accrued interest payable		(64)		-		(64)		-		(64)
Interest-rate swaps		(214)		-		(214)		-		(214)

The carrying amounts and estimated fair values of financial instruments at December 31, 2015 were as follows:



	Fair Value Measurements at December 31, 2015 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	25,895	$	25,895	$	-	$	-	$	25,895
Securities available for sale		9,368		-		9,368		-		9,368
Loans held for sale		889		-		889		-		889
Loans, net		297,064		-		-		295,498		295,498
FHLB stock		1,942		n/a		n/a		n/a		n/a
Accrued interest receivable		831		1		21		809		831
Yield maintenance provisions (embedded derivatives)		213		-		213		-		213
Interest rate lock commitments		8		-		8		-		8

Financial liabilities
Deposits	$	(290,467)	$	(147,523)	$	(143,236)	$	-	$	(290,759)
FHLB advances and other borrowings		(14,500)		-		(14,693)		-		(14,693)
Advances by borrowers for taxes and insurance		(656)		-		-		(656)		(656)
Subordinated debentures		(5,155)		-		(2,269)		-		(2,269)
Accrued interest payable		(44)		-		(44)		-		(44)
Interest-rate swaps		(213)		-		(213)		-		(213)

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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