11. Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 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/Liabilities Measured at Fair Value at	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs	Significant Unobservable Inputs
	31-Dec-15		(Level 2)	(Level 3)
Investment securities available-for-sale:
U.S. Government agency securities	$3,662	$  -	$3,662	$    -
Government Sponsored Enterprises residential mortgage-backed securities	3,780	-	3,780	-
Money Market Funds	130	130	-	-
Total	$7,572	$130	$7,572	-
Loans held for sale	$3,261	$   -	$3,261	-
Loans held at fair value	$2,459	$     -	$       -	$2,459

United Bancshares, Inc. and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

December 31, 2015 and 2014

(in 000’s)	Fair Value Measurements at Reporting Date Using:
	Assets/Liabilities Measured at Fair Value at	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs	Significant Unobservable Inputs
	31-Dec-14		(Level 2)	(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	December 31,  2015 Fair value	December 31,  2014 Fair value	Principal valuation techniques	Significant observable inputs	December 31, 2015 Range of inputs	December 31, 2014 Range of inputs
Loans held at fair value:	$2,459	$629	Discounted cash flow	Constant prepayment rate	7.10% to 9.88%	7.58% to 8.52%
				Weighted average life	3.40 yrs to 8.78 yrs	3.75 yrs to 4.25 yrs
				Discount rate	7.76% to 9.94%	9.02% to 9.24%

Due to the inherent uncertainty of determining the fair value of assets that do not have a readily available market value, fair value as determined by management may fluctuate from period to period.

United Bancshares, Inc. and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

December 31, 2015 and 2014

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:

(in 000’s)	2015	2014
Balance at December 31,	$   629	$  447
Origination of loans	2,017	209
Principal repayments	(185)	(20)
Change in fair value of financial instruments	(2)	(7)
Balance at December 31,	$ 2,459	$  629

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, 2015, for which a nonrecurring change in fair value has been recorded during the year ended December 31, 2015.

Carrying Value at December 31, 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 loss during the year ended December 31, 2015
Impaired Loans	$2,424	-	-	$2,424	$     -
Other real estate owned	$ 480	-	-	$  480	$  39

United Bancshares, Inc. and Subsidiary

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

December 31, 2015 and 2014

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, 2014, for which a nonrecurring change in fair value has been recorded during the year ended December 31, 2014.

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  loss during the year ended December 31, 2014
Impaired Loans	$1,731	-	-	$1,731	$(142)
Other real estate owned	564	-	-	564	(13)

Schedule of Fair Value of Financial Instruments at Year-End

The fair value of financial instruments at year-end are presented below:

  (in 000’s)

	Level in	2015		2014
	Value	Carrying	Fair	Carrying	Fair
Assets:	Hierarchy	Amount	Value	Amount	Value
Cash and cash equivalents	Level 1	$10,782	$10,782	$3,237	$3,237
Available for sale securities	(1)	7,572	7,572	8,540	8,540
Loans held for sale	Level 2	3,261	3,261	6,160	6,160
Loans held at fair value	Level 3	2,459	2,459	629	629
Loans, net of allowance for loan losses	(2)	33,101	33,082	40,127	40,069
Interest receivable	Level 2	175	175	250	250
Liabilities:
Demand deposits	Level 2	30,022	30,022	28,723	28,723
Savings deposits	Level 2	11,681	11,681	12,091	12,091
Time deposits	Level 2	14,259	14,242	16,148	16,157
Interest Payable	Level 2	9	9	16	16