2. 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 tables represent 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 (in thousands):


	September 30, 2017
		Cost		Unrealized Gains		Unrealized Losses		Accrued Interest		Estimated Fair Value		Cash & Cash Equivalents		Investment Securities

Cash	$	45,374	$	-	$	-	$	-	$	45,374	$	45,374	$	-

Level 1:
Certificate of deposit		25,000		-		-		-		25,000		25,000		-
Money market accounts		179		-		-		-		179		179		-
Government & agency securities		5,350		-		(36)		35		5,349		-		5,349
		30,529		-		(36)		35		30,528		25,179		5,349

Level 2:
Municipal bonds		19,619		-		(25)		238		19,832		-		19,832

Total	$	95,522	$	-	$	(61)	$	273	$	95,734	$	70,553	$	25,181


	December 31, 2016
		Cost		Unrealized Gains		Unrealized Losses		Accrued Interest		Estimated Fair Value		Cash & Cash Equivalents		Investment Securities

Cash	$	52,005	$	-	$	-	$	-	$	52,005	$	52,005	$	-

Level 1:
Money market accounts		431		-		-		-		431		431		-
Government & agency securities		2,655		-		(48)		9		2,616		-		2,616
		3,086		-		(48)		9		3,047		431		2,616

Level 2:
Municipal bonds		21,836		-		(348)		308		21,796		-		21,796

Total	$	76,927	$	-	$	(396)	$	317	$	76,848	$	52,436	$	24,412

The Company had a realized loss of $16 thousand and a realized gain of $84 thousand for the three months ended September 30, 2017 and 2016, respectively, and a realized loss of $73 thousand and a realized gain of $69 thousand for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017 and 2016, 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.