Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

Schedule of financial asset amounts that are carried at fair value and measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the entity to determine the fair value

			Fair value measurements at March 31, 2013
						Significant		Significant
			Quoted prices			other		other
			in active markets			observable		unobservable
			for identical assets			inputs		inputs
(in thousands)	Fair value		(Level 1)			(Level 2)		(Level 3)
Available-for-sale securities:
Obligations of U.S. government agencies	$	1,870	$	—		$	1,870	$	—
Obligations of political and state subdivisions	102,709		—			101,105		1,604
Government sponsored agency CMOs	16,408		—			16,408		—
Residential mortgage-backed securities	94,453		—			94,453		—
Corporate debt securities	415		—			415		—
Equity securities	994		994		—	—		—
Total securities available-for-sale	$	216,849	$	994		$	214,251	$	1,604

			Fair value measurements at December 31, 2012
					Significant		Significant
			Quoted prices		other		other
			in active markets		observable		unobservable
			for identical assets		inputs		inputs
(in thousands)	Fair value		(Level 1)		(Level 2)		(Level 3)
Available-for-sale securities:
Obligations of U.S. government agencies	$	1,891	$	—	$	1,891	$	—
Obligations of state and political subdivisions	103,501		—		101,762		1,739
Government sponsored agency CMO	9,103		—		9,103		—
Residential mortgage-backed securities	69,456		—		69,456		—
Corporate debt securities	410		—		410		—
Equity securities	1,000		1,000		—		—
Total securities available-for-sale	$	185,361	$	1,000	$	182,622	$	1,739

Schedule of reconciliation and statement of operations classifications of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

Fair Value Measurements

Using Significant Unobservable Inputs (Level 3)

(in thousands)	State and Political Subdivisions
Balance at December 31, 2012	$	1,739
Amortization	—
Accretion	—
Payments received	(140		)
Purchases
Total gains or losses (realized/unrealized):
Included in earnings	—
Included in other comprehensive income	5
Balance at March 31, 2013	$	1,604

Fair Value Measurements

Using Significant Unobservable Inputs (Level 3)

(in thousands)	PreTSLs			State and Political Subdivisions			Private Label CMOs			Total
Balance at December 31, 2011	$	3,801		$	2,811		$	36,256		$	42,868
Amortization	—			—			(119		)	(119		)
Accretion	—			—			29			29
Payments received	(27		)	(135		)	(3,065		)	(3,227		)
Purchases							14,730			14,730
Total gains or losses (realized/unrealized):
Included in earnings	—			—			—			—
Included in other comprehensive income	201			47			79			327
Balance at March 31, 2012	$	3,975		$	2,723		$	47,910		$	54,608

Schedule of assets and liabilities measured at fair value on a non-recurring basis

	Fair Value Measurements at March 31, 2013
(in thousands)	Fair Value (1)		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Other Unobservable Inputs (Level 3)
Collateral-dependent impaired loans	$	7,039			$	7,039

	Fair Value Measurements at December 31, 2012
(in thousands)	Fair Value (1)		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Other Unobservable Inputs (Level 3)
Collateral-dependent impaired loans	$	7,816			$	7,816
Other real estate owned	$	2,455			$	2,455

(1) Represents carrying value and related write-downs for which adjustments are based on appraised value.  Management makes adjustments to the appraised values as necessary to consider declines in real estate values since the time of the appraisal.  Such adjustments are based on management’s knowledge of the local real estate markets.

Schedule of estimated fair values of the company's financial instruments

	Fair Value	March 31, 2013				December 31, 2012
(in thousands)	Measurement	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets
Cash and short term investments	Level 1	$	32,343	$	32,343	$	115,271	$	115,271
Securities	See previous table	219,074		219,350		187,559		187,844
FHLB and FRB Stock	Level 2	6,432		6,432		7,308		7,308
Loans, net	Level 3	597,682		604,311		579,396		592,504
Loans held for sale	Level 2	847		847		1,615		1,615
Accrued interest receivable	Level 2	2,618		2,618		2,199		2,199
Mortgage servicing rights	Level 3	637		915		675		884
Financial liabilities
Deposits	Level 2	823,746		827,780		854,613		858,970
Borrowed funds	Level 2	47,698		52,357		53,903		59,021
Accrued interest payable	Level 2	7,001		7,001		6,427		6,427