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

3 Months Ended

Mar. 31, 2013

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

Carrying amount and estimated fair values of financial instruments

The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company's financial instruments as of March 31, 2013 and December 31, 2012 are as follows:

	Fair Value Measurements at
	March 31, 2013
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	38,280	$	38,280	$	38,280	$	---	$	---
Investment Securities Available for Sale		288,249		288,249		---		287,108		1,141
Investment Securities Held to Maturity		43		43		---		43		---
Federal Home Loan Bank Stock		3,164		3,164		3,164		---		---
Loans, Net		723,651		723,995		---		706,500		17,495
Liabilities
Deposits		953,575		955,440		491,732		463,708		---
Subordinated Debentures		24,229		24,229		24,229		---		---
Other Borrowed Money		40,000		42,888		---		42,888		---

	Fair Value Measurements at
	December 31, 2012
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	71,041	$	71,041	$	71,041	$	---	$	---
Investment Securities Available for Sale		268,301		268,301		---		267,163		1,138
Investment Securities Held to Maturity		41		42		---		42		---
Federal Home Loan Bank Stock		3,364		3,364		3,364		---		---
Loans, Net		734,079		735,115		---		713,109		22,006
Liabilities
Deposits		979,685		982,215		486,775		495,440		---
Subordinated Debentures		24,229		24,229		24,229		---		---
Other Borrowed Money		35,000		38,424		---		38,424		---

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 March 31, 2013 and December 31, 2012, 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 March 31, 2013.  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
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
March 31, 2013	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	282,810	$	---	$	282,810	$	---
State, County and Municipal		4,209		---		3,200		1,009
Corporate Obligations		1,098		---		1,098		---
Asset-Backed Securities		132		---		---		132
	$	288,249	$	---	$	287,108	$	1,141
Nonrecurring
Impaired Loans	$	17,495	$	---	$	---	$	17,495
Other Real Estate	$	9,157	$	---	$	---	$	9,157

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
December 31, 2012	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	263,060	$	---	$	263,060	$	---
State, County and Municipal		4,004		---		2,998		1,006
Corporate Obligations		1,105		---		1,105		---
Asset-Backed Securities		132		---		---		132
	$	268,301	$	---	$	267,163	$	1,138
Nonrecurring
Impaired Loans	$	22,006	$	---	$	---	$	22,006
Other Real Estate	$	8,817	$	---	$	---	$	8,817

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 March 31, 2013.  This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

			Valuation	Unobservable	Range
	March 31, 2013		Techniques	Inputs	Weighted Avg
Impaired Loans
Commercial	$	1,009	Sales Comparison	Adjustment for Differences		0.00% - 0.00	%
				Between the Comparable Sales		0.00	%
				Management Adjustments for		0.00% - 80.00	%
				Age of Appraisals and/or Current		40.00	%
				Market Conditions
Real Estate
Commercial Construction		3,197	Sales Comparison	Adjustment for Differences		(16.00%) - 45.00	%
				Between the Comparable Sales		14.50	%
				Management Adjustments for		0.00% - 10.00	%
				Age of Appraisals and/or Current		5.00	%
				Market Conditions
			Income Approach	Capitalization Rate		8.50	%
				Discount Rate		3.00	%
Residential Real Estate		4,798	Sales Comparison	Adjustment for Differences		(0.40%) -168.20	%
				Between the Comparable Sales		83.90	%
				Management Adjustments for		0.00% - 50.00	%
				Age of Appraisals and/or Current		25.00	%
				Market Conditions
Commercial Real Estate		8,491	Sales Comparison	Adjustment for differences		(7.40%) - 52.00	%
				Between the comparable Sales		22.30	%
				Management Adjustments for		0.00% - 30.00	%
				Age of Appraisals and/or Current		15.00	%
				Market Conditions
			Income Approach	Capitalization Rate		10.50	%
				Discount Rate		5.13	%
Other Real Estate Owned		9,157	Sales Comparison	Adjustment for Differences		(35.00%) - 129.50	%
				Between the Comparable Sales		47.25	%
				Management Adjustment for		3.10% - 87.24	%
				Ageof Appraisals and/or Current		38.57	%
				Market Conditions
			Income Approach	Discount Rate		3.00	%

The following table presents quantitative information about recurring level 3 fair value measurements as of March 31, 2013.

			Valuation	Unobservable	Range
	Fair Value		Techniques	Inputs	Weighted Avg
Asset-Back Securities	$	132	Discounted Cash Flow	Discount Rate		2.95% - 3.42	%
						3.19	%
State, County and Municipal		1,009	Discounted Cash Flow	Discount Rate		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 table below 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 three months ended March 31, 2013 and the twelve months ended December 31, 2012.

	Available for Sale Securities
	March 31, 2013		December 31, 2012
Balance, Beginning	$	1,138	$	1,122
Total Realized/Unrealized Gains (Losses) Included In
Purchases, Sales, Issuances and Settlements
Transfers into Level 3		--		789
Securities Purchased During the Year		--		208
Securities Called During the Year		--		(1,000	)
Unrealized Gains Included in Other Comprehensive Income		3		78
Loss on OTTI Impairment Included in Noninterest Income		--		(59	)
Balance, Ending	$	1,141	$	1,138