Disclosure About Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

Disclosure About Fair Value of Financial Instruments

Note B Disclosure about Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the value:

Cash and Short-Term Investments

For cash, the carrying amount approximates fair value.  For short-term investments, fair values are calculated based upon general investment market interest rates for similar maturity investments.

Investment Securities

For securities and marketable equity securities held-for-investment purposes, fair values are based on quoted market prices.

Loan Receivables

For certain homogeneous categories of loans, such as residential mortgages, credit card receivables and other consumer loans, fair value is estimated using the current U.S. treasury interest rate curve, a factor for cost of processing and a factor for historical credit risk to determine the discount rate.

Deposit Liabilities

The fair value of demand deposits, savings deposits and certain money market deposits are calculated based upon general investment market interest rates for investments with similar maturities.  The value of fixed maturity certificates of deposit is estimated using the U.S. treasury interest rate curve currently offered for deposits of similar remaining maturities.

Commitments to Extend Credit

The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit-worthiness of the counterparties.

The estimated fair values of the Company’s financial instruments at June 30, 2011 and December 31, 2010, are as follows (amounts in thousands):

	June 30, 2011
`	Carrying			Fair
	Amount			Value
	(In Thousands)
Financial Assets:
Cash and Short-Term Investments	$	2,825		$	2,838
Certificates of Deposit		3,953			3,853
Investment Securities		878			878
Loans		58,941			58,698
Less:   Allowance for Loan Losses		(1,800	)		(1,800	)
	$	64,797		$	64,467
Financial Liabilities:
Deposits	$	78,563		$	79,043
Unrecognized Financial Instruments:
Commitments to Extend Credit	$	974		$	974
Credit Card Arrangements		13,109			13,109
	$	14,083		$	14,083

	December 31, 2010
	Carrying			Fair
	Amount			Value
	(In Thousands)
Financial Assets:
Cash and Short-Term Investments	$	3,834		$	3,834
Certificates of Deposit		4,203			4,203
Investment Securities		878			878
Loans		62,036			62,054
Less:   Allowance for Loan Losses		(1,800	)		(1,800	)
	$	69,151		$	69,169
Financial Liabilities:
Deposits	$	80,577		$	80,675
Unrecognized Financial Instruments:
Commitments to Extend Credit	$	1,763		$	1,763
Credit Card Arrangements		14,626			14,626
	$	16,389		$	16,389