11. Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 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/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-16		(Level 2)	(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	$4,207
Loans held at fair value	$4,207	$     -	$       -	$313
Servicing asset	$313	$     -	$     -

(in 000’s)		Fair Value Measurements at Reporting Date Using:
	Assets/Liabilities 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	$2,459
Loans held at fair value	$2,459	$     -	$       -	$200
Servicing asset	$200	$     -	$     -

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 cashflows, prepayment speeds, average projected loss rate and discount rates as follows:

(in 000’s)

Assets measured at fair value	December 31, 2016 Fair value	December 31, 2015 Fair value	Principal valuation techniques	Significant observable inputs	December 31, 2016 Range of inputs	December 31, 2015 Range of inputs
Loans held at fair value:	$4,207	$2,459	Discounted cash flow	Constant prepayment rate	7.53% to 9.62 %	7.10% to 9.88%
				Weighted average life	3.05 yrs. to 9.95 yrs.	3.40 yrs. to 8.78 yrs.
				Discount rate	8.11% to 10.58 %	7.76% to 9.94%
				Projected default rate	0.77% to 6.64%	1.15% to 5.88%

(in 000’s)

Assets measured at fair value	December 31, 2016 Fair value	December 31, 2015 Fair Value	Principal valuation techniques	Significant observable inputs	December 31, 2016 Range of inputs	December 31, 2015 Range of inputs
Servicing asset	$313	$ 200	Discounted cash flow	Constant prepayment rate	4.89% to 9.96%	6.57% to 10.27%
				Weighted average life	3.05 yrs. to    9.70 yrs.	3.40 yrs. to  8.78 yrs.
				Weighted average discount rate	10.50% to 15.31%	11.94 % to 16.23%

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)	2016	2015
Balance at December 31,	$   2,459	$   629
Origination of loans	2,068	2,017
Principal repayments	(324)	(185)
Change in fair value	4	(2)
Balance at December 31,	$4,207	$ 2,459

Servicing Asset:

(in 000’s)	2016	2015
Balance at December 31,	$   200	$ 47
Additions related to new loan originations	160	160
Change in fair value	(47)	(7)
Balance at December 31,	$313	$ 200

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, 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	$  -

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, 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

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	2016		2015
	Value	Carrying	Fair	Carrying	Fair
Assets:	Hierarchy	Amount	Value	Amount	Value
Cash and cash equivalents	Level 1	$7,803	$7,803	$10,782	$10,782
Available for sale securities	(1)	5,578	5,578	7,572	7,572
Loans held for sale	Level 2	7,794	7,794	3,261	3,261
Loans held at fair value	Level 3	4,207	4,207	2,459	2,459
Loans, net of allowance for loan losses	(2)	26,296	26,617	33,101	33,082
Servicing asset	Level 3	313	313	200	200
Interest receivable	Level 1	141	141	175	175
Liabilities:
Demand deposits	Level 1	28,497	28,497	30,022	30,022
Savings deposits	Level 1	11,735	11,735	11,681	11,681
Time deposits	(3)	10,411	10,395	14,259	14,242
Interest Payable	Level 1	11	11	9	9

(1) Level 1 for money market funds; Level 2 for all other securities.

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

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