8. Fair Value (Tables)

9 Months Ended

Sep. 30, 2015

Tables/Schedules

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 Measured at Fair Value at September 30, 2015	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	$3,090	$-	$3,090	$-
Government Sponsored Enterprises residential mortgage-backed securities	3,944	-	3,944	-
Money Market Funds	130	130	-	-
Total	$7,164	$130	$7,034	$-
Loans held for sale	$535	$-	$535	$-
Loans held at fair value	$2,473	$-	$-	$2,473

(in 000’s)		Fair Value Measurements at Reporting Date Using:
	Assets/Liabilities Measured at Fair Value at December 31, 2014	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	$4,036	$-	$4,036	$-
Government Sponsored Enterprises residential mortgage-backed securities	4,374	-	4,374	-
Money Market Funds	130	130	-	-
Total	$8,540	$130	$8,410	$-
Loans held for sale	$6,160	$-	$6,160	$-
Loans held at fair value	$629	$-	$-	$629

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

These inputs include estimated cashflows, prepayment speeds, average projected default rate and discount rates as follows:

(in 000’s)

Assets measured at fair value	September 30, 2015 Fair value	December 31, 2014 Fair Value	Principal valuation techniques	Significant observable inputs	September 30, 2015 Range of inputs	December 31, 2014 Range of inputs
Loans held at fair value:	$2,473	$629	Discounted cash flow	Constant prepayment rate	6.96% to 9.68%	7.58% to 8.52%
				Weighted average discount rate	7.45% to 9.58%	9.02% to 9.24%
				Weighted average life	3.42 yrs to 9.83 yrs	3.75 yrs to 4.25 yrs

Schedule of Fair Value of Assets Measured on a Nonrecurring Basis

The following table presents the assets carried on the consolidated balance sheet by level within the hierarchy as of September 30, 2015 and December 31, 2014, for which a nonrecurring change in fair value has been recorded during the nine months ended September 30, 2015 and year ended December 31, 2014.

Carrying Value at September 30, 2015:

(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 gain (loss) during 9 months ended
Impaired loans	$1,687	$-	$-	$1,687	$-
Other real estate owned (“OREO”)	$719	$ -	$ -	$719	$88

Carrying Value at December 31, 2014:

(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 gain (loss) during 12 months ended
Impaired Loans	$1,731	$-	$-	$1,731	$(142)
Other real estate owned (“OREO”)	$564	$-	$-	$564	$(13)

Schedule of Fair Value of Financial Instruments at Year-End

		September 30, 2015		December 31, 2014
(in 000’s)	Level in	Carrying	Fair	Carrying	Fair
	Value Hierarchy	Amount	Value	Amount	Value
(Dollars in thousands)
Assets:
Cash and cash equivalents	Level 1	$12,835	$12,835	$3,237	$3,237
Available for sale securities	(1)	7,164	7,164	8,540	8,540
Loans held for sale	Level 2	535	535	6,160	6,160
Loans held at fair value	Level 3	2,473	2,473	629	629
Loans, net of allowance for loan losses	(2)	34,085	34,524	40,127	40,069
Accrued interest receivable	Level 2	189	189	250	250
Liabilities:
Demand deposits	Level 2	29,691	29,691	28,723	28,723
Savings deposits	Level 2	11,597	11,597	12,091	12,091
Time deposits	Level 2	14,586	14,596	16,148	16,157
Accrued interest payable	Level 2			16	16