Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments [Abstract]

Schedule of financial assets measured at fair value on recurring basis

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2012 and December 31, 2011 are as follows:

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Balances as of June 30, 2012	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Investment securities available-for-sale
Mortgage-backed securities-residential	$	-	$	36,865	$	-	$	36,865
U.S. government agencies		-		35,186		-		35,186
Common stocks		45		-		-		45
Collateralized mortgage obligations:
Issued or guaranteed by U.S. government agencies		-		252,159		-		252,159
Non-agency		-		998		-		998
Corporate bonds		-		7,014		-		7,014
Municipal bonds		-		3,593		-		3,593
Trust preferred securities		3,330		-		11,982		15,312
Other securities		-		-		5,918		5,918
Total investment securities available-for-sale	$	3,375	$	335,815	$	17,900	$	357,090

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Balances as of December 31, 2011	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Investment securities available-for-sale
Mortgage-backed securities-residential	$	-	$	17,005	$	-	$	17,005
U.S. government agencies		-		36,084		-		36,084
Common stocks		248		-		-		248
Collateralized mortgage obligations:
Issued or guaranteed by U.S. government agencies		-		234,034		-		234,034
Non-agency		-		4,832		-		4,832
Corporate bonds		-		12,975		-		12,975
Municipal bonds		-		965		-		965
Trust preferred securities		3,342		-		12,603		15,945
Other securities		-		-		6,918		6,918
Total investment securities available-for-sale	$	3,590	$	305,895	$	19,521	$	329,006

Schedule of assets measured at fair value on recurring basis Level 3 inputs

The following table presents additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value for the six months ended June 30, 2012 and 2011:

	Investment Securities Available for Sale
	Trust
	preferred			Other
(In thousands)	securities			securities			Total
Beginning balance January 1, 2012	$	12,603		$	6,918		$	19,521
Total gains/(losses) - (realized/unrealized):
Included in earnings		-			(818	)		(818	)
Included in other comprehensive income		(608	)		(151	)		(759	)
Purchases		-			499			499
Sales and calls		-			(530	)		(530	)
Amortization of premium		(13	)		-			(13	)
Transfers in and/or out of Level 3		-			-			-
Ending balance June 30, 2012	$	11,982		$	5,918		$	17,900

	Investment Securities Available for Sale
	Trust
	preferred			Other
(In thousands)	securities			securities			Total
Beginning balance January 1, 2011	$	15,020		$	8,405		$	23,425
Total gains/(losses) - (realized/unrealized):
Included in earnings		(326	)		446			120
Included in other comprehensive income		652			180			832
Purchases		-			238			238
Sales		(666	)		(1,148	)		(1,814	)
Amortization of premium		(26	)		-			(26	)
Transfers in and/or out of Level 3		-			-			-
Ending balance June 30, 2011	$	14,654		$	8,121		$	22,775

Schedule of financial assets measured at fair value on nonrecurring basis

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at June 30, 2012 and December 31, 2011 are as follows:

Fair Value Measurements Using:

Markets for

Other

Significant

Identical

Observable

Unobservable

Balances as of June 30, 2012

Assets

Inputs

(In thousands)

Level 1

Level 2

Level 3

Fair Value

Assets

Impaired loans and leases

4,894

Other real estate owned

12,293

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Balances as of December 31, 2011	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Impaired loans and leases	$	-	$	-	$	8,583	$	8,583
Other real estate owned		-		-		21,016		21,016
Loans and leases held for sale		-		-		3,830		3,830

Schedule of quantitative information about assets measured at fair value on nonrecurring basis

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Qualitative Information about Level 3 Fair Value Measurements
Balances as of June 30, 2012			Valuation	Unobservable	Range (Weighted
(In thousands)	Fair Value		Techniques	Input	Average)
Impaired loans and leases	$	4,894	Appraisal of collateral (1)	Appraisal adjustments		0.0% to -33.5% (-8.8%)
				Liquidation expenses	-0.5% to -7.0% (-1.9%)

			Discounted cash flow	Discount rate		12	%

			Salvageable value of			0.0	%
			collateral (2)

Other real estate owned		12,293	Appraisal of collateral (1)	Appraisal adjustments	0.0% to -61.0% (-2.5%)
			Sales prices	Liquidation expenses	-1.2% to -10.5% (-5.6%)

(1)

Appraisals may be adjusted for qualitative factors such as interior condition of the property and liquidation expenses. Fair value may also be based on negotiated settlements with the borrower.

(2)

Leases are measured using the salvageable value of the collateral.

Schedule of financial instruments balance sheet groupings

Fair values for the Company's off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties' credit standing. They are not shown in the table because the amounts are immaterial.

					Fair Value Measurements
					At June 30, 2012
					Quoted Prices
					in Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying		Estimated		Assets		Inputs		Inputs
(In thousands)	amount		fair value		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	32,418	$	32,418	$	32,418	$	-	$	-
Investment securities available-for-sale		357,090		357,090		3,375		335,815		17,900
Other investment		1,538		1,538		-		-		-
Federal Home Loan Bank stock		7,648		7,648		-		-		-
Loans held for sale		3,574		3,574		-		-		3,574
Loans, net		354,850		355,356		-		-		355,356
Accrued interest receivable		11,871		11,871		11,871		-		-
Financial Liabilities:
Demand deposits		53,004		53,004		53,004		-		-
NOW and money markets		234,598		234,598		234,598		-		-
Savings		17,294		17,294		17,294		-		-
Time deposits		277,396		272,901		-		272,901		-
Short-term borrowings		15,000		15,000		15,000		-		-
Long-term borrowings		108,558		102,967		-		102,967		-
Subordinated debt		25,774		21,643		-		21,643		-
Accrued interest payable		5,099		5,099		5,099		-		-

	At December 31, 2011
	Carrying		Estimated
(In thousands)	amount		fair value
Financial Assets:
Cash and cash equivalents	$	24,506	$	24,506
Investment securities available-for-sale		329,006		329,006
Other investment		1,538		1,538
Federal Home Loan Bank stock		8,474		8,474
Loans held for sale		12,569		12,569
Loans, net		397,863		395,616
Accrued interest receivable		15,463		15,463
Financial Liabilities:
Demand deposits		54,534		54,534
NOW and money markets		226,002		226,002
Savings		16,263		16,263
Time deposits		279,117		274,546
Short-term borrowings		54,218		53,936
Long-term borrowings		93,782		88,394
Subordinated debt		25,774		18,673
Accrued interest payable		3,450		3,450

- 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 assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 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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-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 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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Reference 3: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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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

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

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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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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

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-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

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

-Publisher FASB

-Name Accounting Standards Codification

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