Fair Value of Financial Instruments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

Carrying amount and estimated fair values of financial instruments

The carrying amount and estimated fair values of the Company's financial instruments as of December 31 are as follows:

	2012										2011
	Carrying		Estimated		Level						Carrying		Estimated
	Amount		Fair Value			1		2		3	Amount		Fair Value
	(in Thousands)
Assets
Cash and Short-Term Investments	$	71,041	$	71,041	$	71,041	$	-	$	-	$	112,329	$	112,329
Investment Securities Available for Sale		268,300		268,300		-		267,162		1,138		303,891		303,891
Investment Securities Held to Maturity		41		42		-		42		-		46		46
Federal Home Loan Bank Stock		3,364		3,364		3,364		-		-		5,398		5,398
Loans, Net		734,079		735,115		-		713,109		22,006		700,614		702,438

Liabilities
Deposits		979,685		982,215		486,775		495,440		-		999,985		1,003,648
Subordinated Debentures		24,229		24,229		24,229		-		-		24,229		24,229
Other Borrowed Money		35,000		38,424		-		38,424		-		71,000		74,720

Assets and liabilities measured at fair value on a recurring basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis - The following table presents the recorded amount of the Company's assets measured at fair value on a recurring and nonrecurring basis as of December 31, 2012 and 2011, aggregated by the level in the fair value hierarchy within which those measurements fall. The table below includes only impaired loans with a specific reserve and only other real estate properties with a valuation allowance at December 31, 2012. Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
2012	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	263,059,074	$	-	$	263,059,074	$	-
State, County and Municipal		4,004,010		-		2,998,199		1,005,811
Corporate Obligations		1,104,900		-		1,104,900		-
Asset-Backed Securities		132,427		-		-		132,427

	$	268,300,411	$	-	$	267,162,173	$	1,138,238
Nonrecurring
Impaired Loans	$	22,006,150	$	-	$	-	$	22,006,150

Other Real Estate	$	8,817,204	$	-	$	-	$	8,817,204

2011

Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	294,060,799	$	-	$	294,060,799	$	-
State, County and Municipal		7,583,691		-		7,583,691		-
Corporate Obligations		2,113,930		-		1,123,930		990,000
Asset-Backed Securities		132,427		-		-		132,427

	$	303,890,847	$	-	$	302,768,420	$	1,122,427
Nonrecurring
Impaired Loans	$	17,250,312	$	-	$	-	$	17,250,312

Other Real Estate	$	5,094,081	$	-	$	-	$	5,094,081

Quantitative information for financial instruments measured at fair value

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at December 31, 2012. This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2012	Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)

Impaired Loans
Commercial	$ 1,030,877	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(45.00%)-80.00% (17.50%)

			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-80.00% (40.00%)

		Income Approach	Capitalization Rate	8.50%

Real Estate
Commercial Construction	5,885,060	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-45.00% (22.50%)

			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)

		Income Approach	Discount Rate	7.94%

Residential Real Estate	3,581,317	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-24.00% (12.00%)

			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)

		Income Approach	Capitalization Rate	8.90%

Commercial Real Estate	11,508,896	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(7.40%)-73.70% (32.95%)

			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)

		Income Approach	Capitalization Rate	9.50%

			Discount Rate	5.13%

Other Real Estate Owned	8,817,204	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(35.00%)-129.50% (47.25%)

			Management Adjustments for Age of Appraisals and/or Current Market Conditions	3.10%-61.32% (32.33%)

		Income Approach	Discount Rate	3.00%

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2012.

	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)

Asset-Back Securities	$	132,427	Discounted Cash Flow	Discount Rate	2.95%-3.42% (3.19%)

State, County and Municipal		1,005,811	Discounted Cash Flow	Discount Rate or Yield	N/A*

* The Company relies on a third-party pricing service to value its municipal securities. The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.

Fair value measurement using significant unobservable inputs (Level 3)

The following table presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the years ended December 31, 2012, 2011 and 2010.

	Available for Sale Securities
	2012			2011			2010

Balance, Beginning	$	1,122,427		$	1,016,997		$	982,427
Total Realized/Unrealized Gains (Losses) Included In Purchases, Sales, Issuances and Settlements
Transfers into Level 3		788,933			-			-
Securities Purchased During the Year		208,245			-			-
Securities Called During the Year		(1,000,000	)		-			-
Unrealized Gains Included in Other Comprehensive Income		78,201			158,488			34,570
Loss on OTTI Impairment Included in Noninterest Income		(59,568	)		(53,058	)		-

Balance, Ending	$	1,138,238		$	1,122,427		$	1,016,997

- Definition

Tabular disclosure related to 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 recurring and/or nonrecurring basis in periods after initial recognition. Disclosures 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) as well as transfers between levels 1 and 2.

+ References

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

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+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- 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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-Publisher FASB

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