8. Financial Instruments

Certain financial assets and liabilities are accounted for at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs used to measure fair value:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant.

The following table represents cash and the available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or investment securities as of:


		September 30, 2016
		Cost		Unrealized Gains		Unrealized Losses		Accrued Interest		Estimated Fair Value		Cash & Cash Equivalents		Investment Securities

Cash	$	56,886	$	-	$	-	$	-	$	56,886	$	56,886	$	-

Level 1:
Money Market Accounts		234		-		-		-		234		234		-
Government & Agency Securities		2,661		2		(2)		4		2,665		-		2,665
		2,895		2		(2)		4		2,899		234		2,665

Level 2:
Municipal Bonds		22,025		17		(28)		257		22,271		-		22,271
		22,025		17		(28)		257		22,271		-		22,271

Total	$	81,806	$	19	$	(30)	$	261	$	82,056	$	57,120	$	24,936


		December 31, 2015
		Cost		Unrealized Gains		Unrealized Losses		Accrued Interest		Estimated Fair Value		Cash & Cash Equivalents		Investment Securities

Cash	$	38,276	$	-	$	-	$	-	$	38,276	$	38,276	$	-

Level 1:
Money Market Accounts		3,761		-		-		-		3,761		3,761		-
Mutual Funds		9,654		37		(444)		-		9,247		-		9,247
Corporate Equity Securities		1,332		246		(76)		-		1,502		-		1,502
Government & Agency Securities		5,425		25		(19)		17		5,448		-		5,448
		20,172		308		(539)		17		19,958		3,761		16,197

Level 2:
Municipal Bonds		2,735		42		(3)		20		2,794		-		2,794
Corporate Bonds		6,054		22		(41)		46		6,081		-		6,081
		8,789		64		(44)		66		8,875		-		8,875

Total	$	67,237	$	372	$	(583)	$	83	$	67,109	$	42,037	$	25,072

The Company had a realized loss of $97 thousand and $17 thousand for the three months ended September 30, 2016 and 2015, respectively, and a realized loss of $174 thousand and a realized gain of $117 thousand for the nine months ended September 30, 2016 and 2015, respectively. As of September 30, 2016 and 2015, gross unrealized losses related to individual securities that had been in a continuous loss position for 12 months or longer were not significant. The maturities of the Company’s investment securities generally range up to 5 years for municipal bonds and for government and agency securities.