Fair Value (Tables)

9 Months Ended

Sep. 30, 2017

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


	Fair Value Measurements at September 30, 2017 using Significant Other Observable Inputs
	(Level 2)
	(unaudited)
Financial Assets:
Securities available for sale:
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	11,480
Mortgage-backed securities - residential		268
Collateralized mortgage obligations		130
Total securities available for sale	$	11,878

Loans held for sale		3,509

Yield maintenance provisions (embedded derivatives)	$	82

Interest rate lock commitments	$	10

Financial Liabilities:
Interest-rate swaps	$	82


	Fair Value Measurements at December 31, 2016 using Significant Other Observable Inputs
	(Level 2)
Financial Assets:
Securities available for sale:
Issued by U.S. government-sponsored entities and agencies:
U.S. Treasury	$	13,505
Mortgage-backed securities - residential		357
Collateralized mortgage obligations		196
Total securities available for sale	$	14,058

Loans held for sale		2,812

Yield maintenance provisions (embedded derivatives)	$	122

Interest rate lock commitments	$	9

Financial Liabilities:
Interest-rate swaps	$	122

Assets measured at fair value on a non-recurring basis


Fair Value Measurements at September 30, 2017 Using
Significant Unobservable Inputs (Level 3)
(unaudited)
Impaired loans:
Commercial	$	119
Real Estate:
Single-family residential		117
Multi-family residential		31
Commercial:
Non-owner occupied		2,959
Owner occupied		771
Total impaired loans	$	3,997


Fair Value Measurements at December 31, 2016 Using
Significant Unobservable Inputs (Level 3)

Impaired loans:
Commercial	$	130
Real Estate:
Single-family residential		122
Multi-family residential		37
Commercial:
Non-owner occupied		2,161
Owner occupied		200
Total impaired loans	$	2,650

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, 2017 (unaudited):


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	119	Comparable sales approach	Adjustment for differences between the comparable market transactions	3.48%
Real estate:
Single-family residential		117	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.81% , 3.61%) 2.91%
Multi-family residential		31	Comparable sales approach	Adjustment for differences between the comparable market transactions	9.64%
Commercial:
Non-owner occupied		2,959	Comparable sales approach	Adjustment for differences between the comparable market transactions	(3.48%, 9.64%) 5.15%
Owner occupied		771	Comparable sales approach	Adjustment for differences between the comparable market transactions	(-4.46%, -5.26%) 5.09%

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 December 31, 2016:


		Fair Value	Valuation Technique(s)	Unobservable Inputs	(Range) Weighted Average
Impaired loans:
Commercial	$	130	Comparable sales approach	Adjustment for differences between the comparable market transactions	3.48%
Real estate:
Single -family residential		122	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.81% , 3.61%) 2.91%
Multi-family residential		37	Comparable sales approach	Adjustment for differences between the comparable market transactions	9.64%
Commercial:
Non-owner occupied		2,161	Comparable sales approach	Adjustment for differences between the comparable market transactions	(1.10%, 5.74%) 1.35%
Owner occupied		200	Comparable sales approach	Adjustment for differences between the comparable market transactions	-4.46%

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



	September 30, 2017		December 31, 2016
	(unaudited)
Aggregate fair value	$	3,509	$	2,812
Contractual balance		3,494		2,801
Gain (loss)	$	15	$	11

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


	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
	(unaudited)				(unaudited)
Interest income	$	10	$	25	$	39	$	40
Interest expense		-		-		-		-
Change in fair value		13		(2)		4		2
Total change in fair value	$	23	$	23	$	43	$	42

Carrying amounts and estimated fair values of financial instruments


	Fair Value Measurements at September 30, 2017 Using:
	Carrying
(unaudited)	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	27,956	$	27,956	$	-	$	-	$	27,956
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		11,878		-		11,878		-		11,878
Loans held for sale		3,509		-		3,509		-		3,509
Loans and leases, net		387,749		-		-		385,939		385,939
FHLB and FRB stock		3,227		n/a		n/a		n/a		n/a
Accrued interest receivable		1,285		6		57		1,222		1,285
Yield maintenance provisions (embedded derivatives)		82		-		82		-		82
Interest rate lock commitments		10		-		10		-		10

Financial liabilities
Deposits	$	(380,953)	$	(204,195)	$	(176,660)	$	-	$	(380,855)
FHLB advances and other borrowings		(19,000)		-		(19,073)		-		(19,073)
Advances by borrowers for taxes and insurance		(182)		-		-		(182)		(182)
Subordinated debentures		(5,155)		-		(3,730)		-		(3,730)
Accrued interest payable		(66)		(2)		(64)		-		(66)
Interest-rate swaps		(82)		-		(82)		-		(82)

The carrying amounts and estimated fair values of financial instruments at December 31, 2016 were as follows:



	Fair Value Measurements at December 31, 2016 Using:
	Carrying
	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	57,941	$	57,941	$	-	$	-	$	57,941
Interest-bearing deposits in other financial institutions		100		100		-		-		100
Securities available for sale		14,058		-		14,058		-		14,058
Loans held for sale		2,812		-		2,812		-		2,812
Loans and leases, net		346,125		-		-		343,523		343,523
FHLB stock		1,942		n/a		n/a		n/a		n/a
Accrued interest receivable		1,054		13		40		1,001		1,054
Yield maintenance provisions (embedded derivatives)		122		-		122		-		122
Interest rate lock commitments		9		-		9		-		9

Financial liabilities
Deposits	$	(375,364)	$	(202,158)	$	(171,967)	$	-	$	(374,125)
FHLB advances and other borrowings		(13,500)		-		(13,597)		-		(13,597)
Advances by borrowers for taxes and insurance		(408)		-		-		(408)		(408)
Subordinated debentures		(5,155)		-		(3,411)		-		(3,411)
Accrued interest payable		(78)		(2)		(76)		-		(78)
Interest-rate swaps		(122)		-		(122)		-		(122)

- 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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