Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value of Assets on Recurring Basis Segregated by Level of Valuation Inputs

The following tables summarize assets measured at fair value on a recurring basis as of the indicated dates, segregated by the level of valuation inputs within the hierarchy utilized to measure fair value:

	March 31, 2013
								Total Fair
(In thousands)	Level 1		Level 2			Level 3		Value
Debt investment securities:
US Treasury, agencies and GSEs	$	-	$	19,934		$	-	$	19,934
State and political subdivisions		-		26,311			-		26,311
Corporate		-		21,853			-		21,853
Residential mortgage-backed - US agency		-		54,347			-		54,347
Residential mortgage-backed - private label		-		269			-		269
Equity investment securities:
Mutual funds:
Ultra short mortgage fund		1,286		-			-		1,286
Large cap equity fund		1,208		-			-		1,208
Other mutual funds		-		311			-		311
Common stock - financial services industry		36		400			-		436
Total investment securities	$	2,530	$	123,425		$	-	$	125,955

Interest rate swap derivative	$	-	$	(180	)	$	-	$	(180	)

	December 31, 2012
								Total Fair
(In thousands)	Level 1		Level 2			Level 3		Value
Debt investment securities:
US Treasury, agencies and GSEs	$	-	$	6,183		$	-	$	6,183
State and political subdivisions		-		27,471			-		27,471
Corporate		-		23,006			-		23,006
Residential mortgage-backed - US agency		-		48,251			-		48,251
Residential mortgage-backed - private label		-		305			-		305
Equity investment securities:
Mutual funds:
Ultra short mortgage fund		1,291		-			-		1,291
Large cap equity fund		1,081		-			-		1,081
Other mutual funds		-		319			-		319
Common stock - financial services industry		33		399			-		432
Total investment securities	$	2,405	$	105,934		$	-	$	108,339

Interest rate swap derivative	$	-	$	(195	)	$	-	$	(195	)

Summary of Assets Measured at Fair Value on a Nonrecurring Basis Segregated by Level of Valuation Inputs

The Bank had the following assets measured at fair value on a nonrecurring basis as of March 31, 2013 and December 31, 2012:

	March 31, 2013
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Impaired loans	$	-	$	-	$	904	$	904
Foreclosed real estate	$	-	$	-	$	-	$	-

	December 31, 2012
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Impaired loans	$	-	$	-	$	1,951	$	1,951
Foreclosed real estate	$	-	$	-	$	301	$	301

Fair Value Inputs, Quantitative Information

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

		Quantitative Information about Level 3 Fair Value Measurements
	Valuation	Unobservable	Range
	Techniques	Input	(Weighted Avg.)
March 31, 2013
Impaired loans	Appraisal of collateral	Appraisal Adjustments		5% - 30% (21%)
		Costs to Sell		6% - 50% (12%)

Foreclosed real estate	Appraisal of collateral	Appraisal Adjustments		15% - 15% (15%)
		Costs to Sell		6% - 7% (6%)

		Quantitative Information about Level 3 Fair Value Measurements
	Valuation	Unobservable	Range
	Techniques	Input	(Weighted Avg.)
December 31, 2012
Impaired loans	Appraisal of collateral	Appraisal Adjustments		5% - 30% (21%)
		Costs to Sell		6% - 15% (12%)

Foreclosed real estate	Appraisal of collateral	Appraisal Adjustments		15% - 15% (15%)
		Costs to Sell		6% - 7% (6%)

Carrying Amounts and Fair Value of Financial Instruments

The carrying amounts and fair values of the Company's financial instruments as of the indicated dates are presented in the following table:

			March 31, 2013				December 31, 2012
	Fair Value		Carrying		Estimated		Carrying		Estimated
(Dollars In thousands)	Hierarchy		Amounts		Fair Values		Amounts		Fair Values
Financial assets:
Cash and cash equivalents		1	$	13,218	$	13,218	$	8,665	$	8,665
Interest earning time deposits		1		2,000		2,000		2,000		2,000
Investment securities		1		2,530		2,530		2,405		2,405
Investment securities		2		123,425		123,425		105,934		105,934
Federal Home Loan Bank stock		2		1,505		1,505		1,929		1,929
Net loans		3		334,258		344,647		329,247		341,389
Accrued interest receivable		1		1,912		1,912		1,717		1,717

Financial liabilities:
Demand Deposits, Savings, NOW and MMDA		1	$	259,458	$	259,458	$	228,484	$	228,484
Time Deposits		2		168,927		170,776		163,321		165,491
Borrowings		2		25,936		26,846		34,964		36,054
Junior subordinated debentures		2		5,155		4,429		-		-
Junior subordinated debentures		3		-		-		5,155		5,155
Accrued interest payable		1		142		142		140		140
Interest rate swap derivative		2		180		180		195		195

- 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.

+ References

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-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 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-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 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

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-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-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 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-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 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-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

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-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 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

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