Note 24.

Derivatives

During the fourth quarter of 2010, the Company entered into an interest rate swap agreement as part of the interest rate risk management process. The Company designated the swap as a cash flow hedge intended to hedge the variability of cash flows associated with the Company's trust preferred capital securities described in Note 19. “Trust-Preferred Capital Notes”. The swap hedges the interest rate risk associated with the trust preferred capital notes wherein the Company receives LIBOR from a counterparty and pays a fixed rate of 2.59% to the same counterparty. The swap is calculated on a notional amount of $5,155,000. The term of the swap is ten years and commenced on October 23, 2010. The swap was entered into with a counterparty that met the Company's credit standards and the agreement contains collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in the contract is not significant.

Amounts receivable or payable are recognized as accrued under the terms of the agreements. In accordance with ASC 815, Derivatives and Hedging, the interest rate swap is designated as a cash flow hedge, with the effective portion of the derivative's unrealized gain or loss recorded as a component of other comprehensive income. The ineffective portion of the unrealized gain or loss, if any, would be recorded in other expense. The Company has assessed the effectiveness of the hedging relationship by comparing the changes in cash flows on the designated hedged item. There was no hedge ineffectiveness for this swap. At December 31, 2011, the fair value of the swap agreement was an unrealized loss of $314,000, the amount the Company would have expected to pay if the contract was terminated.

Information concerning the derivative designated as an accounting hedge at December 31, 2011 and 2010 is presented in the following tables:

	December 31, 2011
	Positions (#)	Notional Amount		Asset		Liability		Receive Rate		Pay Rate		Life (Years)
Pay fixed - receive floating interest rate swap	1	$	5,155,000	$	-	$	314,000	0.29	%	2.59	%	8.8
Total derivatives used in hedging relationships		$	5,155,000	$	-	$	314,000	0.29	%	2.59	%	8.8

	December 31, 2010
	Positions (#)	Notional Amount		Asset		Liability		Receive Rate		Pay Rate		Life (Years)
Pay fixed - receive floating interest rate swap	1	$	5,155,000	$	312,000	$	-	0.29	%	2.59	%	9.8
Total derivatives used in hedging relationships		$	5,155,000	$	312,000	$	-	0.29	%	2.59	%	9.8