Fair Value (Tables)

9 Months Ended

Sep. 30, 2015

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities


	Fair Value Measurements at September 30, 2015 using Significant Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Corporate debt	$	1,000
State and municipal		-
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		9,628
Mortgage-backed securities - residential		524
Collateralized mortgage obligations		421
Total securities available for sale	$	11,573

Loans held for sale		673

Yield maintenance provisions (embedded derivatives)	$	265

Interest rate lock commitments	$	10

Financial Liabilities:
Interest-rate swaps	$	265


	Fair Value Measurements at December 31, 2014 using Significant Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Corporate debt	$	2,936
State and municipal		886
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury		5,011
Mortgage-backed securities - residential		727
Collateralized mortgage obligations		885
Total securities available for sale	$	10,445

Loans held for sale		1,672

Yield maintenance provisions (embedded derivatives)	$	318

Interest rate lock commitments	$	25

Financial Liabilities:
Interest-rate swaps	$	318

Assets measured at fair value on a non-recurring basis


Fair Value Measurements at September 30, 2015 Using
Significant Unobservable Inputs (Level 3)

Impaired loans:
Commercial	$	147
Real Estate:
Single-family residential		129
Multi-family residential		47
Commercial:
Non-owner occupied		2,225
Owner occupied		216
Land		260
Total impaired loans	$	3,024


Fair Value Measurements at December 31, 2014 Using
Significant Unobservable Inputs (Level 3)

Impaired loans:
Commercial	$	157
Real Estate:
Single-family residential		123
Multi-family residential		-
Commercial:
Non-owner occupied		-
Owner occupied		225
Land		289
Total impaired loans	$	794

Financial instruments measured at fair value on a non-recurring basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2015:


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	147	Comparable sales approach	Adjustment for differences between the comparable market transactions	1.10%
Commercial real estate:
Single-family residential		129	Comparable sales approach	Adjustment for differences between the comparable market transactions	(-1.23% , 4.63%) -.17%
Multi-family residential		47	Comparable sales approach	Adjustment for differences between the comparable market transactions	5.74%
Commercial:
Non-owner occupied		2,225	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.10%, 5.74%) 1.35%
Owner occupied		216	Comparable sales approach	Adjustment for differences between the comparable market transactions	-29.30%
Land		260	Comparable sales approach	Adjustment for differences between the comparable market transactions	(-1.89%, 2.54%) .08%

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measures at fair value on a non-recurring basis at December 31, 2014:


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	157	Income approach	Adjustment for differences in net operating income expectations	-16.00%
Commercial real estate:
Single -family residential		123	Comparable sales approach	Adjustment for differences between the comparable market transactions	2.35%
Commercial:
Owner occupied		225	Comparable sales approach	Adjustment for differences between the comparable market transactions	-12.21%
Land		289	Comparable sales approach	Adjustment for differences between the comparable market transactions	8.10%

Aggregate fair value, contractual balance (including accrued interest) and gain or loss



		September 30, 2015		December 31, 2014

Aggregate fair value	$	510	$	1,672
Contractual balance		506		1,657
Gain (loss)		4		15

Amount of gains and losses from changes in fair value included in earnings


	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Interest income	$	14	$	31	$	54	$	84
Interest expense		-		-		-		-
Change in fair value		(14)		(3)		(11)		13
Total change in fair value	$	-	$	28	$	43	$	97

Carrying amounts and estimated fair values of financial instruments


	Fair Value Measurements at September 30, 2015 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	20,101	$	20,101	$	-	$	-	$	20,101
Interest-bearing deposits in other financial institutions		494		494		-		-		494
Securities available for sale		11,573		-		11,573		-		11,573
Loans held for sale		673		-		673		-		673
Loans, net		283,434		-		-		286,028		286,028
FHLB stock		1,942		n/a		n/a		n/a		n/a
Accrued interest receivable		833		3		45		785		833
Yield maintenance provisions (embedded derivatives)		265		-		265		-		265
Interest rate lock commitments		10		-		10		-		10

Financial liabilities
Deposits	$	(273,814)	$	(133,082)		(141,605)	$	-	$	(274,687)
FHLB advances and other borrowings		(14,500)		-		(14,843)		-		(14,843)
Advances by borrowers for taxes and insurance		(311)		-		-		(311)		(311)
Subordinated debentures		(5,155)		-		(2,429)		-		(2,429)
Accrued interest payable		(46)		-		(46)		-		(46)
Interest-rate swaps		(265)		-		(265)		-		(265)

The carrying amounts and estimated fair values of financial instruments at December 31, 2014 were as follows:



	Fair Value Measurements at December 31, 2014 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	28,207	$	28,207	$	-	$	-	$	28,207
Interest-bearing deposits in other financial institutions		494		494		-		-		494
Securities available for sale		10,445		-		10,445		-		10,445
Loans held for sale		1,672		-		1,672		-		1,672
Loans, net		257,085		-		-		257,333		257,333
FHLB stock		1,942		n/a		n/a		n/a		n/a
Accrued interest receivable		780		2		32		746		780
Yield maintenance provisions (embedded derivatives)		318		-		318		-		318
Interest rate lock commitments		25		-		25		-		25

Financial liabilities
Deposits	$	(258,315)	$	(121,132)	$	(137,700)	$	-	$	(258,832)
FHLB advances and other borrowings		(14,500)		-		(14,663)		-		(14,663)
Advances by borrowers for taxes and insurance		(401)		-				(401)		(401)
Subordinated debentures		(5,155)		-		(2,536)		-		(2,536)
Accrued interest payable		(48)		-		(48)		-		(48)
Interest-rate swaps		(318)		-		(318)		-		(318)

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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