8. Fair Value (Tables)

6 Months Ended

Jun. 30, 2016

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 Measured at Fair Value at June 30, 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	$ 2,953	$ -	$ 2,953	$ -
Government Sponsored Enterprises residential mortgage-backed securities	3,620	-	3,620	-
Money Market Funds	130	130	-	-
Total	$ 6,703	$ 130	$ 6,573	$ -
Loans held for sale	$ 7,137	$ -	$ 7,137	$ -
Loans held at fair value	$ 3,238	$ -	$ -	$ 3,238

(in 000’s)		Fair Value Measurements at Reporting Date Using:
	Assets Measured at Fair Value at December 31, 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	$ 3,662	$ -	$ 3,662	$ -
Government Sponsored Enterprises residential mortgage-backed securities	3,780	-	3,780	-
Money Market Funds	130	130	-	-
Total	$ 7,572	$ 130	$ 7,442	$ -
Loans held for sale	$ 3,261	$ -	$ 3,261	$ -
Loans held at fair value	$ 2,459	$ -	$ -	$ 2,459

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	June 30, 2016 Fair value	December 31, 2015 Fair Value	Principal valuation techniques	Significant observable inputs	June 30, 2016 Range of inputs	December 31, 2015 Range of inputs
Loans held at fair value:	$ 3,238	$ 2,459	Discounted cash flow	Constant prepayment rate	7.33% to   10.189 %	7.10% to 9.88%
				Weighted average discount rate	7.22% to   10.12%	7.76% to 9.94%
				Weighted average life	3.20yrs to    9.86 yrs	3.40 yrs to  8.78 yrs

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.

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)	Loans held at fair value
Balance at December 31, 2015	$   2,459
Origination of loans	-
Principal repayments	-
Change in fair value of financial instruments	-
Balance at June 30, 2016	$   3,238

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 June 30, 2016 and December 31, 2015, for which a nonrecurring change in fair value has been recorded during the six months ended June 30, 2016 and year ended December 31, 2015.

Carrying Value at June 30, 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 gain (loss) during 3 months ended
Impaired loans	$ 2,184	$   -	$   -	$ 2,184	$   -
Other real estate owned (“OREO”)	$     447	$   -	$    -	$     447	-

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 gain (loss) during 12 months ended
Impaired Loans	$ 2,424	$       -	$      -	$  2,424	$   -
Other real estate owned (“OREO”)	$    480	$        -	$        -	$    480	$   39

Schedule of Fair Value of Financial Instruments at Year-End

		June 30, 2016		December 31, 2015
(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	$ 5,223	$ 5,223	$ 10,782	$  10,782
Available for sale securities	(1)	6,703	6,703	7,572	7,572
Loans held for sale	Level 2	7,137	7,137	3,261	3,261
Loans held at fair value	Level 3	3,238	3,238	2,459	2,459
Loans, net of allowance for loan losses	(2)	30,359	30,359	33,101	33,082
Accrued interest receivable	Level 2	203	203	175	175
Liabilities:
Demand deposits	Level 2	28,418	28,418	30,022	30,022
Savings deposits	Level 2	11,323	11,323	11,681	11,681
Time deposits	Level 2	11,566	11,566	14,259	14,242
Accrued interest payable	Level 2	13	13	9	9