11. Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Table Text Block Supplement [Abstract]

Schedule of Fair Value of Assets on a Recurring Basis

Assets on the consolidated balance sheets measured at fair value on a recurring basis are summarized below.

(in 000’s)		Fair Value Measurements at Reporting Date Using:
	Assets/Liabilities Measured at Fair Value at December 31, 2017	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs	Significant Unobservable Inputs
			(Level 2)	(Level 3)
Investment securities
available-for-sale:
U.S. Government agency securities	$ 2,273	$    -	$2,273	$    -
Government Sponsored Enterprises residential mortgage-backed securities	2,740	-	2,740
				-
Money Market Funds	132	132	-
Total	$5,145	$132	$5,013	-
Loans held for sale	$10,297	$    -	$10,297	$      -
Loans held at fair value	$ 4,451	$     -	$       -	$4,451
Servicing asset	$    319	$     -	$        -	$   319

(in 000’s)		Fair Value Measurements at Reporting Date Using:
	Assets/Liabilities Measured at Fair Value at December 31, 2016	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs  (Level 3)
Investment securities
available-for-sale:
U.S. Government agency securities	$2,268	$  -	$2,268	$    -
Government Sponsored Enterprises residential mortgage-backed securities	3,180		3,180	-
Money Market Funds	130	130	-	-
Total	$5,578	$130	$5,448	-
Loans held for sale	$7,794	$   -	$7,794	-
Loans held at fair value	$4,207	$     -	$       -	$4,207
Servicing asset	$313	$     -	$     -	$313

Schedule of Inputs in Estimation of Fair Value of Level 3 Financial Instruments

When estimating the fair value of our Level 3 financial instruments, management uses various observable and unobservable inputs. These inputs include estimated cash flows, prepayment speeds, average projected loss rate and discount rates as follows:

(in 000’s)

Assets measured at fair value	December 31, 2017 Fair value	December 31, 2016 Fair value	Principal valuation techniques	Significant observable inputs	December 31, 2017 Range of inputs	December 31, 2016 Range of inputs
Loans held at fair value:	$4,451	$4,207	Discounted cash flow	Constant prepayment rate	8.54% to 10.41 %	7.53% to 9.62 %
				Weighted average life	2.67 yrs. to 9.29 yrs.	3.05 yrs. to 9.95 yrs.
				Discount rate	9.00% to 11.62%	8.11% to 10.58
				Projected default rate	0.75% to 7.61 %	0.77% to 6.64%

(in 000’s)

Assets measured at fair value	December 31, 2017 Fair value	December 31, 2016 Fair Value	Principal valuation techniques	Significant observable inputs	December 31, 2017 Range of inputs	December 31, 2016 Range of inputs
Servicing asset	$319	$313	Discounted cash flow	Constant prepayment rate	5.58% to 10.67 %	4.89% to 9.96%
				Weighted average life	2.67 yrs. to 9.09 yrs.	3.05 yrs. to    9.70 yrs.

The following table summarizes additional information about assets measured at fair value on a recurring basis for which level 3 inputs were utilized to determine fair value:

Loans Held at Fair Value:

(in 000’s)	2017	2016
Balance at December 31,	$  4,207	$   2,459
Origination of loans	816	2,068
Principal repayments	(191)	(324)
Change in fair value	(381)	4
Balance at December 31,	$4,451	$4,207

Servicing Asset:

(in 000’s)	2017	2016
Balance at December 31,	$  313	$   200
Additions related to new loan originations	57	160
Change in fair value	(51)	(47)
Balance at December 31,	$319	$313

Schedule of Fair Value of Assets Measured on a Nonrecurring Basis

The following table presents the assets carried on the consolidated balance sheets by level within the fair value hierarchy as of December 31, 2017 for which a nonrecurring change in fair value has been recorded during the year ended December 31, 2017.

Carrying Value at December 31, 2017:

(in 000’s)	Total	Quoted Prices in Active markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total fair value loss during the year ended December 31, 2017
Impaired Loans	$134	-	-	$134	$(32)
Other real estate owned	$626	-	-	$ 626	$  -

The following table presents the assets and liabilities carried on the consolidated balance sheets by level within the fair value hierarchy as of December 31, 2016, for which a nonrecurring change in fair value has been recorded during the year ended December 31, 2016.

Carrying Value at December 31, 2016:

(in 000’s)	Total	Quoted Prices in Active markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total fair value loss during the year ended December 31, 2016
Impaired Loans	$418	-	--	$418	$  -
Other real estate owned	$ 447	-	-	$ 447	$ -

Schedule of Fair Value of Financial Instruments at Year-End

The fair value of financial instruments not previously disclosed are depicted below:

(in 000’s)

	Level in	2017		2016
	Value	Carrying	Fair	Carrying	Fair
Assets:	Hierarchy	Amount	Value	Amount	Value
Cash and cash equivalents	Level 1	$11,671	$11,671	$  7,803	$  7,803
Loans, net of allowance for loan losses	(1)	25,545	25,831	26,535	26,617
Servicing asset	Level 3	319	319	313	313
Accrued interest receivable	Level 2	153	153	141	141
Liabilities:
Demand deposits	Level 2	34,610	34,610	28,497	28,497
Savings deposits	Level 2	11,505	11,505	11,735	11,735
Time deposits	(2)	9,339	9,280	10,411	10,395
Accrued interest Payable	Level 2	14	14	11	11

(1) Level 2 for non-impaired loans; Level 3 for certain impaired loans.

(2) Level 1 for variable rate instruments, Level 3 for fixed rate instruments