Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

(5) Fair Value Measurements

ASC 820, Fair Value Measurements establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system consisting of three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets that the Company has the ability to access.

Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which significant assumptions are observable in the market.

Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market and are used only to the extent that observable inputs are not available. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

The following table summarizes the assets and liabilities of the Company for which fair values are determined on a recurring basis as of June 30, 2011 and December 31, 2010.

	Carrying value at June 30, 2011
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Securities available for sale	$	134,247		1,146		133,101		0
Mortgage loan commitments		10		0		10		0
Total	$	134,257		1,146		133,111		0

	Carrying value at December 31, 2010
(Dollars in thousands)	Total			Level 1		Level 2			Level 3
Securities available for sale	$	151,564			1,740		149,824			0
Mortgage loan commitments		(1	)		0		(1	)		0
Total	$	151,563			1,740		149,823			0

There were no transfers between Levels 1, 2, or 3 during the three or six month periods ended June 30, 2011.

The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from the application of the lower-of-cost-or-market accounting or write-downs of individual assets.

For assets measured at fair value on a nonrecurring basis in the second quarter of 2011 that were still held at June 30, 2011, the following table provides the level of valuation assumptions used to determine each adjustment and the carrying value of the related individual assets or portfolios at June 30, 2011 and December 31, 2010

	Carrying value at June 30, 2011
									Three months ended			Six months ended
									June 30, 2011			June 30, 2011
(Dollars in thousands)	Total		Level 1		Level 2		Level 3		Total gains (losses)			Total gains (losses)
Loans held for sale	$	1,075		0		1,075		0		3			53
Mortgage servicing rights		1,520		0		1,520		0		0			0
Loans (1)		56,697		0		56,697		0		(3,248	)		(5,330	)
Real estate, net (2)		21,868		0		21,868		0		(54	)		(134	)
Total	$	81,160		0		81,160		0		(3,299	)		(5,411	)

	Carrying value at December 31, 2010
									Year ended
									December 31, 2010
(Dollars in thousands)	Total		Level 1		Level 2		Level 3		Total Losses
Loans held for sale	$	2,728		0		2,728		0		(6	)
Mortgage servicing rights		1,586		0		1,586		0		0
Loans (1)		43,039		0		43,039		0		(18,855	)
Real estate, net (2)		16,382		0		16,382		0		(1,782	)
Total	$	63,735		0		63,735		0		(20,643	)

(1)	Represents the carrying value and related specific reserves on loans for which adjustments are based on the appraised value of the collateral. The carrying value of loans fully charged-off is zero.
(2)	Represents the fair value and related losses of foreclosed real estate and other collateral owned that were measured at fair value subsequent to their initial classification as foreclosed assets.