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Fair Value (Tables)

12 Months Ended

Dec. 31, 2012

Estimated Fair Values of Financial Instruments

The estimated fair values of the financial instruments at December 31 are as follows:


	2012				2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	28,701	$	28,701	$	19,859	$	19,859
Securities available for sale		389,885		389,885		346,542		346,542
Loans held-for-sale		—		—		1,058		1,058
Loans		870,416		871,802		820,152		814,882
Interest receivable		4,520		4,520		4,725		4,725
Federal Home Loan Bank stock		10,462		10,462		10,652		10,652
Bank-owned life insurance		15,621		15,621		15,038		15,038
Financial liabilities:
Deposits	$	1,046,154	$	1,046,165	$	965,254	$	965,724
Federal funds and overnight funds purchased		11,570		11,570		12,300		12,300
Federal Home Loan Bank borrowings		118,000		119,517		101,500		103,884
Junior subordinated debentures		8,248		2,193		8,248		2,039
Accrued interest payable		218		218		264		264

Fair Value Hierarchy for Assets and Liabilities Not Measured at Fair Value

The following table presents information about the level in the fair value hierarchy for the Company’s assets and liabilities not measured at fair value as of December 31, 2012:


	Fair Value at December 31, 2012
	Total		Level 1		Level 2		Level 3

Financial assets:
Cash and cash equivalents	$	28,701	$	28,701	$	—	$	—
Loans		871,802		—		—		871,802
Interest receivable		4,520		4,520		—		—
Federal Home Loan Bank stock		10,462		10,462		—		—
Bank-owned life insurance		15,621		15,621		—		—

Financial liabilities:
Deposits	$	1,046,165	$	—	$	1,046,165	$	—
Federal funds and overnight funds purchased		11,570		11,570		—		—
Federal Home Loan Bank borrowings		119,517		—		119,517		—
Junior subordinated debentures		2,193		—		2,193		—
Accrued interest payable		218		218		—		—

Assets Measured at Fair Value on Recurring Basis

The tables below show assets measured at fair value on a recurring basis as of December 31, 2012, and December 31, 2011:


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

Available-for-sale securities
Obligations of U.S government agencies	$	17,844	$	—	$	17,844	$	—
Obligation of states and political subdivisions		81,501		—		81,501		—
Private-label mortgage-backed securities		8,600		—		6,918		1,682
Mortgage-backed securities		281,940		—		281,940		—

Total available-for-sale securities	$	389,885	$	—	$	388,203	$	1,682


			Fair Value Measurements Using
December 31, 2011	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Available-for-sale securities
Obligations of U.S government agencies	$	12,958	$	—	$	12,958	$	—
Obligation of states and political subdivisions		49,576		—		49,576		—
Private-label mortgage-backed securities		11,927		—		10,208		1,719
Mortgage-backed securities		272,081		—		272,081		—

Total available-for-sale securities	$	346,542	$	—	$	344,823	$	1,719

Reconciliation of Assets Measured at Fair Value on Recurring Basis

The following table provides a reconciliation of assets measured at fair value on a recurring basis using unobservable inputs (Level 3) from December 31, 2011, to December 31, 2012:


	Private-label Mortgage- backed Securities			Private-label Mortgage- backed Securities
Beginning balance	$	1,719		$	2,292
Transfers into Level 3		—			353
Transfers out of Level 3		—			—
Total gains or losses
Included in earnings		—			(113	)
Included in other comprehensive income		320			(86	)
Paydowns		(357	)		(346	)
Purchases, issuances, sales, and settlements
Purchases		—			—
Issuances		—			—
Sales		—			(381	)
Settlements		—			—

Ending Balance	$	1,682		$	1,719

Assets Measured at Fair Value on Nonrecurring Basis

The tables below show assets measured at fair value on a nonrecurring basis as of December 31, 2012, and December 31, 2011:


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

Loans measured for impairment (net of guarantees and specific reserve)	$	5,877	$	—	$	—	$	5,877	$	2
Other real estate owned		17,972		—		—		17,972		1,416

	$	23,849	$	—	$	—	$	23,849	$	1,418


			Fair Value Measurements Using
December 31, 2011	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Twelve Months Ended December 31, 2011 Total Loss

Loans measured for impairment (net of guarantees and specific reserve)	$	22,969	$	—	$	—	$	22,969	$	455
Other real estate owned		11,000		—		—		11,000		2,427

	$	33,969	$	—	$	—	$	33,969	$	2,882

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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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 (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef

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-Publisher FASB

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

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+ Details