FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2013

Summary of assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

			Fair Value Measurement at March 31, 2013 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	142,497,742	$	27,545,000	$	114,952,742	$	-
Mortgage-backed securities, residential		27,156,327		-		27,156,327		-
Obligations of states and political subdivisions		40,029,366		-		40,029,366		-
Collateralized mortgage obligations		2,950,309		-		2,950,309		-
Corporate bonds and notes		11,611,516		-		11,611,516		-
SBA loan pools		1,640,459		-		1,640,459		-
Trust Preferred securities		2,519,637		-		2,022,812		496,825
Corporate stocks		6,901,278		6,245,611		655,667		-
Total available for sale securities	$	235,306,634	$	33,790,611	$	201,019,198	$	496,825

Trading assets	$	384,051	$	384,051	$	-	$	-

			Fair Value Measurement at December 31, 2012 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	141,591,214	$	37,698,000	$	103,893,214	$	-
Mortgage-backed securities, residential		31,515,249		-		31,515,249		-
Obligations of states and political subdivisions		40,814,722		-		40,814,722		-
Collateralized mortgage obligations		3,543,360		-		3,543,360		-
Corporate bonds and notes		11,651,635		-		11,651,635		-
SBA loan pools		1,724,140		-		1,724,140		-
Trust Preferred securities		2,470,913		-		2,025,313		445,600
Corporate stocks		6,374,530		5,720,533		653,997		-
Total available for sale securities	$	239,685,763	$	43,418,533	$	195,821,630	$	445,600

Trading assets	$	348,241	$	348,241	$	-	$	-

Changes in unrealized gains and losses recorded in earnings

The tables below present a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three-month periods ending March 31, 2013 and 2012:

	Fair Value Measurement for Three-Months Ended March 31, 2013 Using Significant Unobservable Inputs (Level 3)		Fair Value Measurement for Three-Months Ended March 31, 2012 Using Significant Unobservable Inputs (Level 3)
Trust Preferred Securities Available for Sale
Beginning balance	$	445,600	$	294,910
Total gains/losses (realized/unrealized):
Included in earnings:
Income on securities		-		-
Impairment charge on investment securities		-		-
Included in other comprehensive income		51,225		51,300
Transfers in and/or out of Level 3		-		-
Ending balance March 31	$	496,825	$	346,210

Summary of assets and liabilities measured at fair value on a non-recurring basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below:

			Fair Value Measurement at March 31, 2013 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired Loans:
Commercial and agricultural:
Commercial & industrial	$	237,444	$	-	$	-	$	237,444
Commercial mortgages:				-		-
Other		270,575		-		-		270,575
Consumer loans:
Home equity lines & loans		53,856		-		-		53,856
Total Impaired Loans	$	561,875	$	-	$	-	$	561,875

Other real estate owned:
Commercial and agricultural:
Commercial and industrial	$	101,200	$	-	$	-	$	101,200
Commercial mortgages:
Other		257,702		-		-		257,702
Residential mortgages		201,679		-		-		201,679
Consumer loans:
Home equity lines & loans		4,000		-		-		4,000
Total Other real estate owned, net	$	564,581	$	-	$	-	$	564,581

			Fair Value Measurement at December 31, 2012 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired Loans:
Commercial and agricultural:
Commercial & industrial	$	235,501	$	-	$	-	$	235,501
Commercial mortgages:				-		-
Other		305,222		-		-		305,222
Total Impaired Loans	$	540,723	$	-	$	-	$	540,723

Other real estate owned:
Commercial and agricultural:
Commercial and industrial	$	101,200	$	-	$	-	$	101,200
Commercial mortgages:
Other		257,702		-		-		257,702
Residential mortgages		201,679		-		-		201,679
Consumer loans:
Home equity lines & loans		4,000		-		-		4,000
Total Other real estate owned, net	$	564,581	$	-	$	-	$	564,581

Nonrecurring fair value measurement, valuation techniques

The following table presents information related to Level 3 non-recurring fair value measurement at March 31, 2013 and December 31, 2012:

Description	Fair Value at March 31, 2013		Technique	Unobservable Inputs
Impaired loans	$	561,875	Third party real estate and a 100% discount of personal property	1	Management discount based on underlying collateral characteristics and market conditions

Other real estate owned	$	564,581	Third party appraisals	1	Estimated holding period
				2	Estimated closing costs

Description	Fair Value at December 31, 2012		Technique	Unobservable Inputs
Impaired loans	$	540,723	Third party real estate and a 100% discount of personal property	1	Management discount based on underlying collateral characteristics and market conditions

Other real estate owned	$	564,581	Third party appraisals	1	Estimated holding period
				2	Estimated closing costs

Carrying value and estimated fair value of financial instruments

The carrying amounts and estimated fair values of other financial instruments, at March 31, 2013 and December 31, 2012, are as follows (dollars in thousands):

	Fair Value Measurements at March 31, 2013 Using
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial Institutions	$	27,757	$	27,757	$	-	$	-	$	27,757
Interest-bearing deposits in other financial institutions		18,380		18,380		-		-		18,380
Trading assets		384		384		-		-		384
Securities available for sale		235,307		33,791		201,019		497		235,307
Securities held to maturity		9,898		-		10,611		-		10,611
Federal Home Loan and Federal Reserve Bank stock		4,607		-		-		-		N/A
Net loans		910,608		-		-		942,247		942,247
Loans held for sale		786		-		786		-		786
Accrued interest receivable		4,530		328		1,724		2,478		4,530

Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts		845,008		845,008		-		-		845,008
Time deposits		232,091		-		233,391		-		233,391
Securities sold under agreements to repurchase		31,427		-		33,780		-		33,780
Federal Home Loan Bank advances		27,158		-		29,440		-		29,440
Accrued interest payable		389		16		206		167		389

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

	Fair Value Measurements at December 31, 2012
Financial Assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	29,239	$	29,239	$	-	$	-	$	29,239
Interest-bearing deposits in other financial institutions		11,002		8,645		2,357		-		11,002
Trading assets		348		348		-		-		348
Securities available for sale		239,686		43,419		195,822		445		239,686
Securities held to maturity		5,748		-		6,421		-		6,421
Federal Home Loan and Federal Reserve Bank stock		4,710		-		-		-		N/A
Net loans		883,084		-		-		916,289		916,289
Loans held for sale		1,057		-		1,057		-		1,057
Accrued interest receivable		3,788		175		1,257		2,356		3,788
Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	808,044	$	808,044	$	-	$	-	$	808,044
Time deposits		236,690		-		238,245		-		238,245
Securities sold under agreements to repurchase		32,711		-		35,260		-		35,260
Federal Home Loan Bank advances		27,225		-		29,688		-		29,688
Accrued interest payable		453		12		279		162		453

- Definition

Tabular disclosure of 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 nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may 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).

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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.

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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

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-Name Statement of Financial Accounting Standard (FAS)

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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-Subparagraph b-d

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-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

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