Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

Schedule of Assets Carried at Fair Value on Recurring and Nonrecurring Basis

The following table presents the assets reported on the balance sheet at their fair value as of September 30, 2012 and December 31, 2011, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

(dollars in thousands)	September 30, 2012
	Level I		Level II		Level III		Total
Assets measured on a recurring basis:
Securities available for sale:
U.S. Government corporations and agencies	$	—	$	42,347	$	—	$	42,347
Obligations of states and political subdivisions		—		49,261		—		49,261
Mortgage-backed securities
U.S. sponsored entities		—		74,643		—		74,643
Subtotal mortgage-backed securities		—		74,643		—		74,643
Equity securities		213		—		—		213
Total securities available for sale:	$	213	$	166,251	$	—	$	166,464
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	2,745	$	2,745
Other real estate	$	—	$	—	$	7	$	7
Mortgage servicing rights	$	—	$	—	$	45	$	45

(dollars in thousands)	December 31, 2011
	Level I		Level II		Level III		Total
Assets measured on a recurring basis:
Securities available for sale:
U.S. Government corporations and agencies	$	—	$	36,216	$	—	$	36,216
Obligations of states and political subdivisions		—		45,304		—		45,304
Mortgage-backed securities
U.S. sponsored entities		—		69,215		—		69,215
Subtotal mortgage-backed securities		—		69,215		—		69,215
Equity securities		226		—		—		226
Total securities available for sale:	$	226	$	150,735	$	—	$	150,961
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	3,055	$	3,055
Other real estate	$	—	$	—	$	138	$	138
Mortgage servicing rights	$	—	$	—	$	52	$	52

Additional quantitative information about assets measured at fair value on a nonrecurring basis

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Level 3 inputs were used in determining fair value.

(dollars in thousands)	Quantitative Information about Level 3 Fair Value  Measurements
September 30, 2012	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range (Weighted         Average)
Impaired Loans	$	2,745	Appraisal of collateral (1)	Appraisal adjustments (2) Liquidation expenses (2)	0% to -36.3% (16.2%) 3.5% to 22.9% (10.3%)
Other real estate owned and repossessed assets	$	7	Appraisal of collateral (1)(3)
Mortgage Servicing Rights	$	45	Discounted Cash Flow	Remaining term Discount rate	2.9 years to 7 years (3.49 years) 9.5% to 10.5% (10%)

(1) The fair value is determined through independent appraisals by certified appraisers of the underlying collateral.

(2) Appraisals may be adjusted by management for qualitative factors and estimated liquidation expenses. The range and weighted average of liquidation expenses are expressed as a percent of discounted collateral value and other appraisal adjustments are presented as a percentage of the appraised amounts.

(3) Valuation includes qualitative adjustments by management and estimated liquidation expenses.

Estimates of fair values of financial instruments

The estimates of fair values of financial instruments are summarized as follows at September 30, 2012 and December 31, 2011:

	September 30, 2012
(Amounts Expressed in Thousands)	Level I		Level II		Level III		Total Fair Value
Financial assets:
Cash and cash equivalents	$	21,033	$	—	$	—	$	21,033
Investment securities		213		166,221		—		166,464
Loans		—		—		99,360		99,360
Bank owned life insurance		3,598		—		—		3,598
Accrued interest receivable		1,186		—		—		1,186
Financial liabilities:
Deposits		158,335		70,878		—		229,213
Federal Funds Purchased and Repurchase Agreements		18,570		—		—		18,370
Federal Home Loan Bank borrowings		—		3,628		—		3,628
Accrued interest payable		171		—		—		171
	September 30, 2012				December 31, 2011
(Amounts Expressed in Thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	$	21,033	$	21,033	$	20,917	$	20,917
Investment securities		166,464		166,464		150,961		150,961
Loans		98,213		99,360		106,925		105,733
Bank owned life insurance		3,598		3,598		3,518		3,518
Accrued interest receivable		1,186		1,186		1,140		1,140
Financial liabilities:
Deposits		239,321		229,213		239,177		227,662
Federal funds purchased and repurchase agreements		18,570		18,570		14,014		14,014
Federal Home Loan Bank borrowings		3,628		3,628		3,693		3,693
Accrued interest payable		171		171		218		218