Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Carrying Value and Estimated Fair Value of Financial Instruments

The following tables present the carrying values and fair value estimates of financial instruments as of December 31, 2013 and 2012:

		December 31, 2013
(Dollars in thousands)	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value
ASSETS
Continuing operations:
Cash and cash equivalents	Level 1	$	47,880	$	47,880
Restricted cash	Level 1		2,805		2,805
Loans receivable, net	Level 3		1,407		1,400
Preferred stock (other noncurrent assets)	Level 3		800		4,000
Discontinued operations:
Cash and cash equivalents	Level 1		139		139
LIABILITIES
Continuing operations:
Line of credit	Level 3	$	500	$	500
Long-term debt	Level 3		17,200		17,200
Common stock warrant liability	Level 3		9,300		9,300

		December 31, 2012
(Dollars in thousands)	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value
ASSETS
Continuing operations:
Cash and cash equivalents	Level 1	$	50,894	$	50,894
Restricted cash	Level 1		2,805		2,805
Investment securities, available for sale	Level 1		3,060		3,060
Loans receivable, net	Level 3		24,372		24,850
Preferred stock (other noncurrent assets)	Level 3		800		2,000
Common stock (other noncurrent assets)	Level 3		1,940		1,940
Discontinued operations:
Cash and cash equivalents	Level 1		162		162
FHLB stock	Level 1		2,051		2,051
Commercial real estate investments, net	Level 3		51		51
LIABILITIES
Continuing operations:
Line of credit	Level 3	$	1,000	$	1,000
Long-term debt:
Notes Payable	Level 1		37,246		34,732
Term loan	Level 3		6,900		6,900
Seller notes	Level 3		2,906		2,906
Common stock warrant liability	Level 3		2,350		2,350

Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis Based on Fair Value Hierarchy

The following table presents the Company’s assets and liabilities measured at estimated fair value as of December 31, 2013 and 2012 based on the fair value hierarchy on a recurring and nonrecurring basis:

(Dollars in thousands)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Recurring fair value measurements:
December 31, 2013
Liabilities:
Common stock warrant liability	$	-	$	-	$	9,300	$	9,300
December 31, 2012
Assets:
Investment securities, available for sale	$	3,060	$	-	$	-	$	3,060
Liabilities:
Common stock warrant liability	$	-	$	-	$	2,350	$	2,350
Nonrecurring fair value measurements:
December 31, 2013
Assets:
Real estate owned, net	$	-	$	-	$	75	$	75
December 31, 2012
Assets:
Real estate owned, net	$	-	$	-	$	830	$	830
Commercial real estate investments, net		-		-		51		51

Reconciliation for Liabilities Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Level Three)

The following table presents the reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2013 and 2012:

(Dollars in thousands)	Beginning Balance		Income (Expense) Realized in Earnings			Transfers In/Out of Level 3			Purchases		Issuances		Settlements		Ending Balance
Year Ended December 31, 2013
Common stock warrant liability	$	2,350	$	(6,950	)	$	-		$	-	$	-	$	-	$	9,300
Year Ended December 31, 2012
Contingent consideration	$	3,597	$	(403	)	$	(4,000	)	$	-	$	-	$	-	$	-
Common stock warrant liability		1,403		(947	)		-			-		-		-		2,350

Contingent consideration transferred out of Level 3 as of December 31, 2012, as a result of the final computation of the contingent consideration liability under the terms of the purchase agreement. Upon the resolution of the contingency, this liability was no longer measured at fair value.

Total Gains (Losses) on Assets and Liabilities Measured on Fair Values on Non-Recurring Basis

The following table summarizes gains (losses) on assets and liabilities recorded on a nonrecurring basis for the years ended December 31, 2013 and 2012:

	Year Ended December 31,
(Dollars in thousands)	2013			2012
Loans held for sale, net:
Continuing operations	$	-		$	2,776
Discontinued operations		-			(1,062	)
Common stock (other current assets)		(581	)		-
Real estate owned, net		(173	)		(725	)
Commercial real estate investments, net		-			(121	)
	$	(754	)	$	868

Valuation Techniques and Unobservable Inputs Applied to Level Three Fair Value Measurements

	Estimated Fair Value
(Dollars in thousands)	December 31, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average)
Assets:
Real estate owned, net	$	75	Market approach	Marketability discounts	20.0% (20.0%)
(discontinued operations)				Estimated selling costs	8.0% (8.0%)
Liabilities:
Common stock warrant liability	$	9,300	Lattice option pricing model	Exercise multiple	2.8x (2.8x)
				Volatility	55.0% (55.0%)
				Expected term	4.1 - 4.2 years (4.1 years)

	Estimated Fair Value
(Dollars in thousands)	December 31, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average)
Assets:
Real estate owned, net	$	830	Market approach	Marketability discounts	20.0% (20.0%)
(discontinued operations)				Estimated selling costs	8.0% (8.0%)
Commercial real estate investments		51	Market approach	Marketability discounts	60.0% - 90.0% (85.0%)
(discontinued operations)				Control Discount	25.0% (25.0%)
Liabilities:
Common stock warrant liability	$	2,350	Lattice option pricing model	Exercise multiple	2.8x (2.8x)
				Volatility	51.0% (51.0%)
				Expected term	7.1 - 7.2 years (7.1 years)