Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Assets and Liabilities Measured at Estimated Fair Value

Assets and liabilities measured at estimated fair value on a recurring basis for the periods indicated were,

As of September 30, 2012 (Unaudited, dollars in thousands)	Level 1		Level 2		Level 3
On a recurring basis:
Mortgage-backed securities	$	—	$	21,757	$	—
US Government Agency securities		—		23,859		—
Municipal securities		—		11,820		—
Asset-back debt securities		—		—		68
On a non-recurring basis:
Impaired Loans (1)		—		—		7,834
Other Real Estate Owned (2)		—		—		1,610
Total	$	—	$	57,436	$	9,512
As of December 31, 2011 (dollars in thousands)	Level 1		Level 2		Level 3
On a recurring basis:
Mortgage-backed securities	$	—	$	21,071	$	—
US Government Agency securities		—		24,606		—
Municipal securities		—		11,591		—
Asset-back debt securities		—		—		68
On a non-recurring basis:
Impaired Loans (1)		—		—		6,304
Other Real Estate Owned (2)		—		—		615
Total	$	—	$	57,268	$	6,987

(1) Includes loans that have been measured for impairment at the fair value of the loans’ collateral.

(2) Other real estate owned is transferred from loans to OREO at the lower of cost or market.

Reconciliation of Beginning and Ending Balance of Assets Measured on Recurring Basis

The following table presents a reconciliation of the beginning and ending balance for September 30, 2012 and December 31, 2011 of assets measured on a recurring basis,

	September 30, 2012		December 31, 2011
(Dollars in thousands)	(Unaudited)
Beginning Balance, January 1	$	68	$	17
Transfer into Level 3:		—		—
Purchases, settlements, paydowns, and maturities		—		—
Realized gains (losses) in earnings		—		—
Unrealized gains (losses) in other comprehensive income		—		51
Ending Balance	$	68	$	68

Fair values of Financial Instruments

Off-balance-sheet instruments. The fair value of off-balance-sheet lending commitments is equal to the amount of commitments outstanding. This is based on the fact that the Company generally does not offer lending commitments or standby letters of credit to its customers for long periods, and therefore, the underlying rates of the commitments approximate market rates.

	September 30, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Dollars in thousands)	(Unaudited)
Cash & Cash Equivalents	$	65,398	$	65,398	$	72,321	$	72,321
Investment Securities		57,504		57,504		57,336		57,336
Loans, net		455,844		462,429		415,005		420,122
Time Deposits		217,252		219,477		201,513		203,172
FHLB Advances		17,100		17,355		24,350		25,486
Off Balance Sheet Items		86,781		86,781		79,686		79,686