Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Carrying amount and estimated fair values of financial instruments

Based on the foregoing methods and assumptions, the carrying value and fair value of the Corporation’s financial instruments are as follows:

At June 30, 2013:

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	38,300	$	38,300	$	38,300	$	-	$	-
Securities available-for-sale		87,499		87,499		-		86,495		1,004
Securities held-to-maturity		-		-		-		-		-
Loans (net of allowance)		339,134		331,564						331,564
FHLB stock		3,799		3,799				3,799
Accrued interest receivable		1,529		1,529						1,529

Financial liabilities
Noninterest-bearing deposits	$	96,875	$	96,875			$	96,875
Interest-bearing deposits		349,313		349,871				349,871
FHLB advances		5,760		5,760				5,760
Accrued interest payable		189		189						189

At December 31, 2012:

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	63,307	$	63,307	$	63,307
Securities available-for-sale		87,197		87,197				87,197
Securities held-to-maturity		1,149		2,090						2,090
Loans (net of allowance)		310,623		307,729						307,729
FHLB stock		3,799		3,799				3,799
Accrued interest receivable		1,287		1,287						1,287

Financial liabilities
Noninterest-bearing deposits	$	95,847	$	95,847			$	95,847
Interest-bearing deposits		352,443		352,759				352,759
FHLB advances		7,498		7,498				7,498
Accrued interest payable		208		208						208

Fair value measurements of assets recurring basis

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2013 and December 31, 2012:

June 30, 2013			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

U.S. Government and agency obligations	$	17,728	$	-	$	17,728	$	-
State and municipal obligations		21,077		-		21,077		-
Collateralized debt obligations		1,004		-		-		1,004
Corporate bonds		6,715		-		6,715		-
Mortgage-backed securities and other		40,975		-		40,975		-
Total	$	87,499	$	-	$	86,495	$	1,004

December 31, 2012			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

U.S. Government and agency obligations	$	16,937	$	-	$	16,937	$	-
State and municipal obligations		20,761		-		20,761		-
Corporate bonds		5,165		-		5,165		-
Mortgage-backed securities and other		44,334		-		44,334		-
Total	$	87,197	$	-	$	87,197	$	-

Fair value measurements of assets nonrecurring basis

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2013 and December 31, 2012.

June 30, 2013			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans		26,566						26,566
Real estate owned		2,100		-		-		2,100

December 31, 2012			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Collateralized debt obligations	$	2,090	$	-	$	-	$	2,090
Impaired loans		23,370		-		-		23,370
Real estate owned		3,671		-		-		3,671

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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