Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Financial assets and liabilities measured at fair value on a recurring basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis.

			Fair Value Measurements at March 31, 2013 Using
Description	Balance as of March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury	$	2,053	$	---	$	2,053	$	---
U.S. Government agencies and corporations		137,638		---		137,638		---
States and political subdivisions		33,583		---		33,583		---
Mortgage-backed securities		4,072		---		4,072		---
Corporate debt securities		11,935		---		11,935		---
Other securities		2,259		---		2,259		---
Total Securities Available for Sale	$	191,540	$	---	$	191,540	$	---

			Fair Value Measurements at December 31, 2012 Using
Description	Balance as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury	$	2,073	$	---	$	2,073	$	---
U.S. Government agencies and corporations		129,564		---		129,564		---
States and political subdivisions		36,779		---		36,779		---
Mortgage-backed securities		4,569		---		4,569		---
Corporate debt securities		14,575		---		14,575		---
Other securities		2,255		---		2,255		---
Total Securities Available for Sale	$	189,815	$	---	$	189,815	$	---

Impaired loans and other real estate owned (OREO) measured at fair value on nonrecurring basis

The following table summarizes the Company's impaired loans that were measured at fair value on a nonrecurring basis at March 31, 2013 and at December 31, 2012.

					Carrying Value
Date	Description	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	Assets:
March 31, 2013	Impaired loans net of valuation allowance		$	722		$	---		$	---		$	722
December 31, 2012	Impaired loans net of valuation allowance			928			---			---			928

The following table summarizes the Company's other real estate owned that was measured at fair value on a nonrecurring basis.

					Carrying Value
Date	Description	Balance			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	Assets:
March 31, 2013	Other real estate owned net of valuation allowance		$	1,094		$	---		$	---		$	1,094
December 31, 2012	Other real estate owned net of valuation allowance			1,435			---			---			1,435

Summary of information about level 3 fair value measurements

The following tables present information about Level 3 Fair Value Measurements for March 31, 2013 and December 31, 2012.

March 31, 2013	Valuation Technique	Unobservable Input	Range (Weighted Average)

Impaired loans	Discounted appraised value	Selling cost		10.00% (1)
Impaired loans	Present value of cash flows	Discount rate		6.25% - 7.75% (6.36%)

(1) Of the Company's impaired loans with specific allocations based on Level 3 inputs, only one loan was valued using fair value of collateral.

December 31, 2012	Valuation Technique	Unobservable Input	Range (Weighted Average)

Impaired loans	Discounted appraised value	Selling cost		0% - 10.00% (2.00%)
Impaired loans	Discounted appraised value	Discount for lack of marketability and age of appraisal		0% - 60.00% (52.00%)
Impaired loans	Present value of cash flows	Discount rate		6.00% - 7.50% (6.28%)

The following tables present information about Level 3 Fair Value Measurements for March 31, 2013 and December 31, 2012.

March 31, 2013	Valuation Technique	Unobservable Input	Range (Weighted Average)

Other real estate owned	Discounted appraised value	Selling cost		0.00% (1) – 9.95% (2.28%)
Other real estate owned	Discounted appraised value	Discount for lack of marketability and age of appraisal		0.00% - 30.90% (4.94%)

December 31, 2012	Valuation Technique	Unobservable Input	Range (Weighted Average)

Other real estate owned	Discounted appraised value	Selling cost		0.00% (1) – 6.00% (4.30%)
Other real estate owned	Discounted appraised value	Discount for lack of marketability and age of appraisal		0.00% - 30.90% (4.68%)

(1) The Company markets other real estate owned both independently and with local realtors. Properties marketed by realtors are discounted by selling costs. Properties that the Company markets independently are not discounted by selling costs.

Estimated fair values and related carrying amounts of financial instruments

The estimated fair values and related carrying amounts of the Company's financial instruments follow.

	March 31, 2013
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	10,674	$	10,674	$	---	$	---	$	10,674
Interest-bearing deposits		107,176		107,176		---		---		107,176
Securities		358,487		---		365,758		---		365,758
Mortgage loans held for sale		313		---		313		---		313
Loans, net		566,667		---		---		555,322		555,322
Accrued interest receivable		5,878		5,878		---		---		5,878
Bank-owned life insurance		20,690		20,690		---		---		20,690
Financial Liabilities:
Deposits	$	937,119	$	667,227	$	---	$	263,814	$	931,041
Accrued interest payable		146		146		---		---		146

	December 31, 2012
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	14,783	$	14,783	$	---	$	---	$	14,783
Interest-bearing deposits		96,597		96,597		---		---		96,597
Securities		352,043		---		362,350		---		362,350
Mortgage loans held for sale		2,796		---		2,796		---		2,796
Loans, net		583,813		---		---		570,471		570,471
Accrued interest receivable		6,247		6,247		---		---		6,247
Bank-owned life insurance		20,523		20,523		---		---		20,523
Financial Liabilities:
Deposits	$	946,766	$	669,028	$	---	$	272,820	$	941,848
Accrued interest payable		139		139		---		---		139

- 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 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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-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

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