Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Information about level in fair value hierarchy for financial assets and liabilities

The following table presents information about the level in the fair value hierarchy for the Company's financial assets and liabilities that are measured at fair value as of March 31, 2013:

	Fair Value at March 31, 2013
Description	Total		Level 1		Level 2		Level 3
Financial assets:	(In thousands)
Cash and cash equivalents	$	8,795	$	8,795	$	-	$	-
Available for sale securities		19,713		-		17,016		2,697
FHLB Stock		2,379		-		-		2,379
Loans held for sale		2,083		-		2,083		-
Loans, net		341,695		-		-		341,695
Accrued interest receivable		1,303		1,303		-		-
Bank owned life insurance, net		10,798		-		10,798		-
Mortgage servicing rights		2,396		-		-		2,396

Financial liabilities:
Non-maturity deposits		171,851		-		171,851		-
Time deposits		146,266		-		146,266		-
Borrowings		25,567		-		25,567		-
Accrued interest payable		78		-		78		-
Advance payments from borrowers for taxes and insurance		585		-		585		-

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

	Fair Value at December 31, 2012
Description	Total		Level 1		Level 2		Level 3
Financial assets:	(In thousands)
Cash and cash equivalents	$	12,727	$	12,727	$	-	$	-
Available for sale securities		22,900		-		20,127		2,773
FHLB Stock		2,401		-		-		2,401
Loans held for sale		1,725		-		1,725		-
Loans, net		327,078		-		-		327,078
Accrued interest receivable		1,280		1,280		-		-
Bank owned life insurance, net		7,220				7,220		-
Mortgage servicing rights		2,306		-		-		2,306

Financial liabilities:
Non-maturity deposits		177,097		-		177,097		-
Time deposits		134,007		-		134,007		-
Borrowings		21,708		-		21,708		-
Accrued interest payable		83		-		83		-
Advance payments from borrowers for taxes and insurance		331		-		331		-

Fair value of assets measured on recurring basis

The following table presents the balance of assets measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012:

	Fair Value at March 31, 2013
Description	Total		Level 1		Level 2		Level 3
	(In thousands)
Agency mortgage-backed securities	$	17,016	$	-	$	17,016	$	-
Non-agency mortgage-backed securities		2,697		-		-		2,697
Mortgage servicing rights		2,396		-		-		2,396


	Fair Value at December 31, 2012
Description	Total		Level 1		Level 2		Level 3
	(In thousands)
Agency mortgage-backed securities	$	20,127	$	-	$	20,127	$	-
Non-agency mortgage-backed securities		2,773		-		-		2,773
Mortgage servicing rights		2,306		-		-		2,306

Fair value of assets, quantitative information

The following table provides a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a recurring basis at March 31, 2013:

Financial Instrument	Valuation Technique	Unobservable Input(s)	Range (Weighted Average)
Mortgage Servicing Rights	Discounted cash flow	Prepayment speed assumption	284-550% (310%)
		Discount rate	8-12% (10%)

Non-agency mortgage-backed securities	Discounted cash flow	Discount rate	(8%)

Reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3)

The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(In thousands)
Beginning balance, at fair value	$	2,773		$	2,933
OTTI impairment losses		(19	)		(91	)
Sales and principal payments		(133	)		(131	)
Change in unrealized loss		76			266
Ending balance, at fair value	$	2,697		$	2,977

Fair value of assets measured on nonrecurring basis

The following table presents the balance of assets measured at fair value on a nonrecurring basis at the dates indicated:

	Fair Value at March 31, 2013
Description	Total		Level 1		Level 2		Level 3
	(in thousands)
OREO and repossessed assets	$	2,453	$	-	$	-	$	2,453
Impaired loans		10,869		-		-		10,869

	Fair Value at December 31, 2012
Description	Total		Level 1		Level 2		Level 3
	(in thousands)
OREO and repossessed assets	$	2,503	$	-	$	-	$	2,503
Impaired loans		11,993		-		-		11,993

Losses relating to fair value adjustments

The following table presents the total losses during the three months ended March 31, 2013 and 2012 resulting from fair value adjustments:

	Three Months Ended March 31,
Description	2013		2012
	(in thousands)
OREO and repossessed assets	$	675	$	469
Impaired loans		494		1,615

Fair value of assets, quantitative information

The following table provides a description of the valuation technique, observable input, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a nonrecurring basis at March 31, 2013:

Financial Instrument	Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
OREO	Market approach	Adjusted for difference between comparable sales	0-44% (12%)

Impaired loans	Market approach	Adjusted for difference between comparable sales	0-100% (7%)

- 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 assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 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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