FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

Assets measured at fair value on a recurring basis are summarized below: There were no transfers between Level 1 and Level 2 during the periods presented.

			Quoted Prices in
			Active Markets for		Significant Other		Significant
	June 30,		Identical Assets		Observable Inputs		Unobservable Inputs
(Dollars in thousands)	2013		(Level 1)		(Level 2)		(Level 3)

Assets:
Government-sponsored mortgage-backed residential	$	129,346	$	-	$	129,346	$	-
Government-sponsored collateralized mortgage obligations		82,937		-		82,937		-
Asset backed-collateralized loan obligations		24,415		-		24,415		-
State and municipal		15,222		-		15,222		-
Corporate bonds		57,212		-		57,212		-

Total	$	309,132	$	-	$	309,132	$	-

			Quoted Prices in
			Active Markets for		Significant Other		Significant
	December 31,		Identical Assets		Observable Inputs		Unobservable Inputs
(Dollars in thousands)	2012		(Level 1)		(Level 2)		(Level 3)

Assets:
U.S. Treasury and agencies	$	8,278	$	-	$	8,278	$	-
Government-sponsored mortgage-backed residential		144,889		-		144,889		-
Government-sponsored collateralized mortgage obligations		150,147		-		150,147		-
Private asset backed		5,132		-		5,132		-
State and municipal		12,718		-		12,718		-
Corporate bonds		32,967		-		32,967		-

Total	$	354,131	$	-	$	354,131	$	-

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods ended June 30, 2012. The level 3 assets consist of trust preferred securities which were called or sold in the fourth quarter of 2012. We did not have any Level 3 assets measured at fair value on a recurring basis at June 30, 2013.

	Fair Value Measurements		Fair Value Measurements
	Using Significant		Using Significant
	Unobservable Inputs		Unobservable Inputs
	(Level 3)		(Level 3)
	Three Months Ended		Six Months Ended
	June 30,		June 30,
(Dollars in thousands)	2012		2012

Beginning balance	$	268	$	264
Total gains or losses:
Impairment charges on securities		-		-
Included in other comprehensive income		(2)		2
Purchases		-		-
Sales or calls		-		-
Settlements		-		-
Transfers in and/or out of Level 3		-		-
Ending balance	$	266	$	266

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Table Text Block]

Assets measured at fair value on a nonrecurring basis are summarized below:

			Quoted Prices in
			Active Markets for		Significant Other		Significant
	June 30,		Identical Assets		Observable Inputs		Unobservable Inputs
(Dollars in thousands)	2013		(Level 1)		(Level 2)		(Level 3)

Assets:
Impaired loans:
Commercial	$	1	$	-	$	-	$	1
Commercial Real Estate:
Land Development		1,969		-		-		1,969
Other		14,508		-		-		14,508
Residential Mortgage		446		-		-		446
Consumer and Home Equity		188		-		-		188
Real estate acquired through foreclosure:
Commercial Real Estate:
Land Development		980		-		-		980
Other		5,672		-		-		5,672

			Quoted Prices in
			Active Markets for		Significant Other		Significant
	December 31,		Identical Assets		Observable Inputs		Unobservable Inputs
(Dollars in thousands)	2012		(Level 1)		(Level 2)		(Level 3)

Assets:
Impaired loans:
Commercial	$	231	$	-	$	-	$	231
Commercial Real Estate:
Land Development		1,775		-		-		1,775
Other		12,560		-		-		12,560
Residential Mortgage		127		-		-		127
Consumer and Home Equity		137		-		-		137
Real estate acquired through foreclosure:
Commercial Real Estate:
Land Development		2,459		-		-		2,459
Building Lots		2,220		-		-		2,220
Other		8,350		-		-		8,350
Residential Mortgage		224		-		-		224

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2013.

	Fair		Valuation	Unobservable	Range (Weighted
(Dollars in thousands)	Value		Technique(s)	Input(s)	Average)

Impaired loans:
Commercial	$	1	Market value approach	Adjustment for receivables and inventory discounts	0.00% (1)
Commercial Real Estate:
Land Development		1,301	Income approach	Discount or capitalization rate	25.00% (1)
		668	Sales comparison approach	Adjustment for differences between comparable sales	3.39% (1)

Other		13,264	Income approach	Discount or capitalization rate	8.50%-11.00% (9.19%)
		1,244	Sales comparison approach	Adjustment for differences between comparable sales	10.00%-21.87% (19.69%)

Residential Mortgage		446	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-3.87% (1.06%)

Consumer and Home Equity		188	Sales comparison approach	Adjustment for differences between comparable sales	0.00%-2.25% (1.82%)

Real estate acquired through foreclosure:
Commercial Real Estate:
Land Development		312	Income approach	Discount or capitalization rate	8.50%-17.50% (11.24%)
		668	Sales comparison approach	Adjustment for differences between comparable sales	25.00% (1)

Other		5,006	Income approach	Discount or capitalization rate	8.50%-10.50% (8.91%)
		666	Sales comparison approach	Adjustment for differences between comparable sales	2.75%-9.00% (4.26%)

(1) Unobservable inputs with a single discount listed include only one property.

Fair Value, by Balance Sheet Grouping [Table Text Block]

The estimated fair value of financial instruments, not previously presented, is as follows:

					June 30, 2013
(Dollars in thousands)	Carrying				Fair Value Measurements
	Value		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	27,925	$	27,925	$	6,069	$	21,856	$	-
Mortgage loans held for sale		3,595		3,654		-		3,654		-
Loans, net		457,527		460,246		-		-		460,246
Accrued interest receivable		2,390		2,390		-		-		2,390
FHLB stock		4,430		N/A		N/A		N/A		N/A

Financial liabilities:
Deposits		798,377		760,870		-		760,870		-
Advances from Federal Home Loan Bank		22,526		23,249		-		23,249		-
Subordinated debentures		18,000		12,222		-		-		12,222
Accrued interest payable		3,798		3,798		-		3,798		-

					December 31, 2012
(Dollars in thousands)	Carrying				Fair Value Measurements
	Value		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	63,103	$	63,103	$	6,468	$	56,635	$	-
Mortgage loans held for sale		3,887		3,967		-		3,967		-
Loans, net		492,740		493,998		-		-		493,998
Accrued interest receivable		2,690		2,690		-		-		2,690
FHLB stock		4,805		N/A		N/A		N/A		N/A

Financial liabilities:
Deposits		922,620		934,637		-		934,637		-
Advances from Federal Home Loan Bank		12,596		13,944		-		13,944		-
Subordinated debentures		18,000		12,695		-		-		12,695
Accrued interest payable		3,121		3,121		-		3,121		-

- 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.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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