2.	RECENT ACCOUNTING PRONOUNCEMENTS

March 2016,

the

Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016

09,

Compensation – Stock Compensation

(Topic

718

). This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU requires all excess income tax benefits and tax deficiencies on share based payment awards to be recognized in the income statement when the awards vest or are settled and likewise changes the calculation of assumed proceeds in applying the treasury stock method for calculating diluted earnings per share. It also allows an employer to make a policy election to account for forfeitures as they occur. The ASU also eliminates the guidance in Topic

718

that was indefinitely deferred. The Company adopted the amendments beginning

January 1, 2017.

The Company’s adoption of the ASU primarily resulted in a change in presentation in the statement of cash flows of employee taxes withheld in shares of Company stock from operating activities to financing activities. The other provisions either were

not

applicable or did

not

have a material impact on the Company’s financial statements. The Company’s stock based compensation plan has

not

historically generated material amounts of excess tax benefits or deficiencies. However, the magnitude of any income tax benefits or deficiencies in the future will depend on the Company’s stock price at the dates awards vest or are settled.

August 2016,

the FASB issued ASU

2016

15,

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments.

This ASU adds or clarifies guidance on the classification of certain cash receipts and cash payments in the statement of cash flows in an attempt to reduce the diversity of financial reporting. For public entities, ASU

2016

is effective for interim and annual periods beginning after

December 15, 2017

with early adoption permitted. The Company adopted the guidance as of

January 1, 2017

and there was

impact on the Company’s financial statements at the date of adoption.

January 2017,

the FASB issued ASU

2017

04,

Intangibles - Goodwill and Other (Topic

350

), Simplifying the Test for Goodwill Impairment

. The objective of the ASU is to expand the simplification of the subsequent measurement of goodwill to include public business entities and

not

-for-profit entities. The simplification eliminates Step

from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. For public companies that are SEC filers, the ASU is effective for fiscal years beginning after

December 15, 2019,

including interim periods, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after

January 1, 2017.

The Company elected to adopt this ASU effective with its

September 30, 2017

annual impairment testing. The Company concluded that its goodwill is

not

impaired as of

September 30, 2017.

The adoption of this ASU did

not

have an impact on the Company’s financial position or results of operations.

March 2017,

the FASB issued ASU

2017

08,

Receivables – Nonrefundable Fees and Other Costs.

This amendment updates the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do

not

require an accounting change for securities held at a discount and can continue to be amortized to maturity. ASU

2017

will be effective for the Company in the fiscal year beginning after

December 15, 2019

and interim periods within fiscal years beginning after

December 15, 2020.

Early adoption is permitted, including interim periods within those years. The Company has elected to early adopt ASU

2017

and the effect was

not

material.

Accounting Standards

Not

Yet Effective

—

May 2014,

the FASB issued ASU

2014

09,

creating FASB Topic

606,

Revenue from Contracts with Customers

. The guidance in ASU

2014

affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The FASB also issued the following amendments to ASU

No.

2014

to provide clarification on the guidance: ASU

No.

2015

14,

Revenue from Contracts with Customers (Topic

606

) – Deferral of the Effective Date

, ASU

No.

2016

08,

Revenue from Contracts with Customers (Topic

606

) – Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)

, ASU

No.

2016

10,

Revenue from Contracts with Customers (Topic

606

) – Identifying Performance Obligations and Licensing

, and ASU

No.

2016

12,

Revenue from Contracts with Customers (Topic

606

) – Narrow-Scope Improvements and Practical Expedients

. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides steps to follow to achieve the core principle. An entity should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in this ASU become effective for annual periods and interim periods within those annual periods beginning after

December 15, 2017.

February 2017,

the FASB issued ASU

2017

to clarify the scope of Subtopic

610

20,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets

, and to add guidance for partial sales of nonfinancial assets. Subtopic

610

20,

which was issued in

May 2014

as a part of ASU

No.

2014

09,

Revenue from Contracts with Customers

(Topic

606

), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. Sales and partial sales of real estate assets will now be accounted for similar to all other sales of nonfinancial and in substance nonfinancial assets. The amendments in this ASU are effective at the same time as the amendments in ASU

2014

09.

This ASU is to be adopted concurrently with ASU

2014

09.

The Company is currently evaluating the impact, if any, of the new revenue recognition ASUs on its financial position, results of operations and financial statement disclosures.

January 2016,

the FASB issued

ASU

2016

01,

Recognition and Measurement of Financial Assets and Financial Liabilities

(Subtopic

825

)

This ASU requires certain equity investments to be measured at fair value with changes in fair value recognized in net income and simplifies the impairment assessment of such investments; eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost; requires public entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. For public entities, ASU

2016

is effective for fiscal years beginning after

December 15, 2017,

including interim periods within those fiscal years. The adoption of this ASU is

not

expected to have a material impact on the Company’s financial statements since it does

not

have any marketable equity securities and there are

indications that its nonmarketable equity securities are impaired.

February 2016,

the FASB issued ASU

2016

02,

Leases

(Topic

842

). This ASU applies to all leases and is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. The previous standards did

not

require lessees to recognize operating leases on the balance sheet. This ASU provides for accounting requirements so that lessees will be required to recognize the rights and obligations associated with operating leases. The guidance on lessor accounting was

not

fundamentally changed with this ASU. For public entities, ASU

2016

is effective for interim and annual periods beginning after

December 15, 2018,

however, early adoption is permitted. The Company has formed a committee and is in the process of collecting data and evaluating the impact this ASU will have on its financial statements and will subsequently implement new processes and update current accounting policies to comply with the amendments of this ASU.

June 2016,

the FASB issued ASU

2016

13,

Financial Instruments – Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments.

This ASU requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Current U.S. GAAP requires an incurred loss methodology for recognizing credit losses that delays loss recognition until it is probable that a loss has been incurred. The amendments in this ASU replace the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are

not

accounted for at fair value through net income. Existing purchased credit impaired assets will be grandfathered and classified as purchased credit deteriorated (“PCD”) assets at the date of adoption. The asset will be grossed up for the allowance for expected credit losses for all PCD assets at the date of adoption and will continue to recognize the noncredit discount in interest income based on the yield of such assets as of the adoption date. Subsequent changes in expected credit losses will be recorded through the allowance. ASU

2016

will be effective for the Company in the fiscal year beginning after

December 15, 2019,

including interim periods within that fiscal year. Early adoption is permitted for fiscal years beginning after

December 15, 2018,

including interim periods within those years. An entity will apply the amendments in this ASU through a cumulative effect adjustment to retained earnings as of the beginning of the

first

reporting period in which the guidance is effective. The Company has formed a committee to evaluate the impact this ASU will have on its financial statements and to begin developing and implementing processes and procedures during the next

two

years to ensure the Company is compliant with the amendments by the adoption date.

May 2017,

the FASB issued ASU

2017

09,

Compensation – Stock Compensation (Topic

718

)

: Scope of Modification Accounting

The ASU gives clarity and reduces diversity in practice by providing guidance about which changes to terms or conditions of a shared-based payment award require an entity to apply modification accounting in Topic

718.

For public entities, ASU

2017

is effective for interim and annual periods beginning after

December 15, 2017;

however, early adoption is permitted. The adoption of this ASU is

not

expected to have an impact on the Company’s financial statements as the Company has

not

historically changed the terms or conditions of share-based payment awards.

July 2017,

the FASB issue

d ASU

2017

11—

Earnings Per Share (Topic

260

)

Distinguishing Liabilities from Equity (Topic

480

); Derivatives and Hedging (Topic

815

): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

The amendments in the ASU change the classification of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. The amendments in Part II of this ASU recharacterize the indefinite deferral of certain provisions of Topic

480,

Distinguishing Liabilities from Equity

, that now are presented as pending content in the Codification, to a scope exception. Those amendments do

not

have an accounting effect. For public entities, ASU

2017

Part I is effective for interim and annual periods beginning after

December 15, 2018;

however, early adoption is permitted. The amendments in Part II of this ASU do

not

require any transition guidance because those amendments do

not

have an accounting effect. The adoption of this ASU is

not

expected to have an impact on the Company’s financial statements as the Company has

not

historically issued financial instruments that include down round features.

August 2017,

the FASB issued AS

2017

12—

Derivatives and Hedging (Topic

815

Targeted Improvements to Accounting for Hedging Activities

The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this ASU also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. For public entities, ASU

2017

is effective for interim and annual periods beginning after

December 15, 2018;

however, early adoption is permitted. The adoption of this ASU is

not

expected to have an impact on the Company’s financial statements as the Company does

not

currently have any hedging relationships.