Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Financial assets and liabilities measured at fair value on a recurring basis

The following tables present the balances of financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011.

	June 30, 2012
	(In thousands)
	Total		Level I		Level II		Level III
Assets:
U.S. government agencies	$	9,138	$	-	$	9,138	$	-
Obligations of states and political subdivisions	72,603		-		72,603		-
Mortgage-backed securities:
Agency	173,810		-		173,810		-
Non-agency	49,095		-		49,095		-
Corporate preferred stock	54		-		54		-
Corporate securities	9,719		-		9,719		-
Trust preferred securities	111		-		111		-
Mortgage interest rate locks	41		-		41		-
Liabilities:
Interest rate swap	$	446	$	-	$	446	$	-
Mortgage banking hedge instruments	50		-		50		-

	December 31, 2011
	(In thousands)
	Total		Level I		Level II		Level III
Assets:
U.S. government agencies	$	9,343	$	-	$	9,343	$	-
Obligations of states and political subdivisions	67,542		-		67,542		-
Mortgage-backed securities:
Agency	187,070		-		187,070		-
Non-agency	34,002		-		34,002		-
Corporate preferred stock	40		-		40		-
Corporate securities	9,976		-		9,976		-
Trust preferred securities	269		-		269		-
Liabilities:
Interest rate swap	314		-		314		-

Financial and non financial assets measured at fair value on a nonrecurring basis

The following table summarizes the Company's financial assets that were measured at fair value on a nonrecurring basis as of June 30, 2012 and December 31, 2011:

	June 30, 2012
	(In thousands)
Description	Total		Level I		Level II		Level III
Assets:
Loans held for sale	$	67,965	$	-	$	67,965	$	-
Impaired loans	8,880		-		5,841		3,039

	December 31, 2011
	(In thousands)
Description	Total		Level I		Level II		Level III
Assets:
Loans held for sale	$	92,514	$	-	$	92,514	$	-
Impaired loans	10,648		-		6,767		3,881

The following table summarizes the Company's non-financial assets that were measured at fair value on a nonrecurring basis during the period.

	June 30, 2012
	(In thousands)
Description	Total		Level I		Level II		Level III
Assets:
Other real estate owned	$	13,335	$	-	$	13,335	$	-

	December 31, 2011
	(In thousands)
Description	Total		Level I		Level II		Level III
Assets:
Other real estate owned	$	8,535	$	-	$	8,535	$	-

Roll-forward of the transfers in and out of the Level III valuation method

The following table presents a roll-forward of the transfers in and out of the Level III valuation method for financial assets that are measured at fair value on a nonrecurring basis as of June 30, 2012:

	Impaired Loans
Balance at December 31, 2011	$	3,881

Transfers in	1,381

Transfers out (1)	(1,988		)

Other (2)	(235		)

Balance at June 30, 2012	$	3,039

(1) Impaired loans are considered to have a Level III valuation methodology if the appraisal on the loan is older than two years. Transfers out of level three status represent loans for which current appraisals have been obtained or loans which have been transferred to other real estate owned and the collateral re-appraised at the time of the transfer.

(2) Other changes in the Level III balances during the period represent principal changes on level three impaired loans and minor valuation adjustments.

Estimated fair values and related carrying amounts of financial instruments

The estimated fair values, and related carrying amounts, of the Company's financial instruments as of June 30, 2012 are as follows:

					June 30, 2012
					Fair value measurements using:
	Carrying Amount		Total Fair Value		Level I		Level II		Level III
	(In thousands)
Financial assets:
Cash and cash equivalents	$	78,811	$	78,811	$	78,811	$	-	-
Securities	314,530		314,530		-		314,530		-
Loans held for sale	67,965		67,965		-		67,965		-
Net portfolio loans	670,941		696,309		-		693,270		3,039
Accrued interest receivable	4,247		4,247		-		4,247		-
Mortgage interest rate locks	41		41		-		41		-

Financial liabilities:
Deposits	$	975,285	$	979,396	$	-	$	979,396	-
Securities sold under agreements
to repurchase	33,034		33,034		-		33,034		-
Short-term debt	8,393		8,393		-		8,393		-
FHLB borrowings	77,912		78,898		-		78,898		-
Trust preferred capital notes	5,155		5,220		-		5,220		-
Accrued interest payable	678		678		-		678		-
Interest rate swap	446		446		-		446		-
Mortgage banking hedge instruments	50		50		-		50		-

The estimated fair values, and related carrying amounts, of the Company's financial instruments as of December 31, 2011 are as follows:

		December 31, 2011
		Carrying Amount		Fair Value
	(In thousands)
Financial assets:
Cash and cash equivalents		$	51,270	$	51,270
Securities		308,242		308,242
Loans		749,284		770,759
Accrued interest receivable		4,221		4,221
Financial liabilities:
Deposits		$	929,869	$	934,322
Securities sold under agreements
to repurchase		31,686		31,686
Short-term debt		28,331		28,331
FHLB borrowings		82,912		83,899
Trust preferred capital notes		5,155		5,216
Accrued interest payable		844		844
Derivative financial instruments		314		314

- 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 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 (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)

-Number 107

-Paragraph 14

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

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-Name Statement of Financial Accounting Standard (FAS)

-Number 159

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-Subparagraph c(2), d, e, f

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-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

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-Section 50

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

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-Section 50

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-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 7: http://www.xbrl.org/2003/role/presentationRef

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Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-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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Reference 11: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

-Topic 825

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-Name Accounting Standards Codification

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