Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Assets measured at fair value on a recurring basis

The following table presents the balances of certain assets measured at fair value on a recurring basis as of the dates indicated:

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

Description	Balance
Available-for-sale securities
Obligations of U.S. Government agencies	$	37,088	$	0	$	37,088	$	0
Obligations of state and political subdivisions		43,774		0		43,774		0
Mortgage-backed securities		247,355		0		247,355		0
Money market investments		541		0		541		0
Corporate Bonds		698		0		698		0
Total available-for-sale securities	$	329,456	$	0	$	329,456	$	0

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

Description	Balance
Available-for-sale securities
U.S. Treasury securities	$	250	$	0	$	250	$	0
Obligations of U.S. Government agencies		119,554		0		119,554		0
Obligations of state and political subdivisions		12,261		0		12,261		0
Mortgage-backed securities		103,228		0		103,228		0
Money market investments		1,306		0		1,306		0
Total available-for-sale securities	$	236,599	$	0	$	236,599	$	0

Assets measured at fair value on a nonrecurring basis

The following table presents the assets carried on the consolidated balance sheets for which a nonrecurring change in fair value has been recorded. Assets are shown by class of loan and by level in the fair value hierarchy, as of the dates indicated. Certain impaired loans are valued by the present value of the loan's expected future cash flows, discounted at the interest rate of the loan rather than at a market rate. These loans are not carried on the consolidated balance sheet at fair value and as such, are not included in the table below.

			Carrying Value at December 31, 2012 Using
			(in thousands)
Description	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans
Mortgage loans on real estate:
Residential 1-4 family	$	3,009	$	0	$	0	$	3,009
Commercial		2,271		0		0		2,271
Second mortgages		42		0		0		42
Total mortgage loans on real estate	$	5,322	$	0	$	0	$	5,322
Commercial loans		64		0		0		64
Total	$	5,386	$	0	$	0	$	5,386

Foreclosed assets
Residential 1-4 family	$	676	$	0	$	0	$	676
Commercial		2,094		0		0		2,094
Construction		3,804		0		0		3,804
Total	$	6,574	$	0	$	0	$	6,574

			Carrying Value at December 31, 2011 Using
			(in thousands)
Description	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans
Mortgage loans on real estate:
Residential 1-4 family	$	85	$	0	$	0	$	85
Commercial		2,403		0		0		2,403
Second mortgages		227		0		0		227
Total mortgage loans on real estate	$	2,715	$	0	$	0	$	2,715
Commercial loans		87		0		0		87
Total	$	2,802	$	0	$	0	$	2,802

Foreclosed assets
Residential 1-4 family	$	3,650	$	0	$	0	$	3,650
Commercial		1,771		0		0		1,771
Construction		3,969		0		0		3,969
Total	$	9,390	$	0	$	0	$	9,390

Fair Value Inputs, Assets, Quantitative Information

The following table displays quantitative information about Level 3 Fair Value Measurements as of the date indicated (dollars in thousands):

Quantitative Information About Level 3 Fair Value Measurements

Description

Fair Value at December 31, 2012 (in thousands)

Valuation Techniques

Unobservable Input

Range (Average)

Impaired loans

Residential 1-4 family real estate

3,009

Market comparables

Differences in comparables

0% - 5% (5%)

Selling costs

4.75% - 6% (6%)

Commercial real estate

2,271

Market comparables

Selling costs

0% - 6% (4%)

Second mortgages

Market comparables

Selling costs

Commercial loans

Market comparables

Differences in comparables

25%

Foreclosed assets

Residential 1-4 family

676

Market comparables

Selling costs

6% - 10% (6%)

Commercial

2,094

Market comparables

Selling costs

6% - 10% (6%)

Construction

3,804

Market comparables

Selling costs

6% - 10% (6%)

Estimated fair values and related carrying or notional amounts of financial instruments

The estimated fair values, and related carrying or notional amounts, of the Company's financial instruments as of the dates indicated are as follows:

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

	Carrying Value
Assets
Cash and cash equivalents	$	42,317	$	42,317	$	0	$	0
Securities available-for-sale		329,456		0		329,456		0
Securities held-to-maturity		570		0		574		0
Restricted securities		2,562		0		2,562		0
Loans, net of allowances for loan losses		463,809		0		0		466,492
Bank owned life insurance		21,824		0		21,824		0
Accrued interest receivable		2,420		0		2,420		0

Liabilities
Deposits	$	753,816	$	0	$	757,923	$	0
Overnight repurchase agreements		35,946		0		35,946		0
Term repurchase agreements		1,280		0		1,282		0
Federal Home Loan Bank advances		25,000		0		28,681		0
Accrued interest payable		439		0		439		0

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

	Carrying Value
Assets
Cash and cash equivalents	$	24,855	$	24,855	$	0	$	0
Securities available-for-sale		236,599		0		236,599		0
Securities held-to-maturity		1,515		0		1,526		0
Restricted securities		3,451		0		3,451		0
Loans, net of allowances for loan losses		511,829		0		0		515,105
Bank owned life insurance		21,593		0		21,593		0
Accrued interest receivable		2,528		0		2,528		0

Liabilities
Deposits	$	690,879	$	0	$	692,539	$	0
Overnight repurchase agreements		35,001		0		35,001		0
Term repurchase agreements		1,480		0		1,481		0
Federal Home Loan Bank advances		35,000		0		39,341		0
Accrued interest payable		577		0		577		0

- 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 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.

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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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

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-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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