FAIR VALUE OF ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Assets Measured on Recurring Basis

The following table presents the Company’s assets that are measured at fair value on a recurring basis and the level within the hierarchy in which the fair value measurements fell as of September 30, 2013 and December 31, 2012 (in thousands):

September 30, 2013

(Dollars in thousands)			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	32,527	$	-	$	32,527	$	-
Municipal securities		110,367		-		110,367		-
Mortgage-backed securities		81,032		-		81,032		-
Corporate obligations		26,918		-		24,135		2,783
Other		969		969		-		-
Total	$	251,813	$	969	$	248,061	$	2,783

December 31, 2012

			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Obligations of U. S. Government Agencies	$	36,359	$	-	$	36,359	$	-
Municipal securities		98,910		-		98,910		-
Mortgage-backed securities		61,967		-		61,967		-
Corporate obligations		16,187		-		13,519		2,668
Other		970		970		-		-
Total	$	214,393	$	970	$	210,755	$	2,668

Reconciliation of Activity for Assets Measured at Fair Value based on Significant Unobservable (Non-market) Information

The following is a reconciliation of activity for assets measured at fair value based on significant unobservable (non-market) information.

(Dollars in thousands)

	Bank-Issued Trust Preferred Securities
	2013		2012
Balance, January 1	$	2,668	$	2,252
Transfers into Level 3		-		-
Transfers out of Level 3		-		-
Other-than-temporary impairment loss included in earnings		-		-
Unrealized gain included in comprehensive income		115		416
Balance at Sept. 30, 2013 and December 31, 2012	$	2,783	$	2,668

Fair Value Assets Measured on Nonrecurring Basis

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fell at September 30, 2013 and December 31, 2012.

($ in thousands)

September 30, 2013

			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	4,351	$	-	$	4,351	$	-
Other real estate owned		5,292		-		5,292		-

December 31, 2012

			Fair Value Measurements Using
			Quoted Prices in Active Markets For Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	3,589	$	-	$	3,589	$	-
Other real estate owned		6,782		-		6,782		-

Financial Instruments with No Distinguishable Fair Value

Management has determined that these instruments do not have a distinguishable fair value and no fair value has been assigned.

	As of September 30, 2013				As of December 31, 2012
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	(In thousands)
Financial Instruments:
Assets:
Cash and cash equivalents	$	51,764	$	51,764	$	30,877	$	30,877
Securities available-for-sale		251,813		251,813		214,393		214,393
Securities held-to-maturity		8,446		9,441		8,470		7,055
Other securities		4,624		4,624		3,438		3,438
Loans, net		566,841		580,204		408,971		422,029
Liabilities:
Noninterest-bearing Deposits	$	169,001	$	169,001	$	109,625	$	109,625
Interest-bearing deposits		644,964		644,511		487,002		487,599
Subordinated debentures		10,310		10,310		10,310		10,310
FHLB and other borrowings		30,000		30,000		36,771		36,771