FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2012 and 2011 are as follows:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
As of December 31, 2012	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Investment securities available-for-sale
Mortgage-backed securities-residential	$	-	$	30,509	$	-	$	30,509
U.S. government agencies		-		66,444		-		66,444
Common stocks		47		-		-		47
Collateralized mortgage obligations:
Issued or guaranteed by U.S. government agencies		-		233,976		-		233,976
Non-agency		-		1,011		-		1,011
Corporate bonds		-		7,437		-		7,437
Municipal bonds		-		5,615		-		5,615
Other securities		-		-		4,164		4,164
Total investment securities available-for-sale	$	47	$	344,992	$	4,164	$	349,203

	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

Additional Information About Assets Measured at Fair Value on a Recurring Basis, Level 3 Inputs

The following tables present 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 years ended December 31, 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		126			(1,817	)		(1,691	)
Included in other comprehensive income		(1,938	)		79			(1,859	)
Purchases		-			788			788
Sales and calls		(10,773	)		(1,804	)		(12,577	)
Amortization of premium		(18	)		-			(18	)
Transfers in and/or out of Level 3		-			-			-
Ending balance December 31, 2012	$	-		$	4,164		$	4,164

	Investment Securities Available for Sale
	Trust
	preferred			Other
(In thousands)	securities			securities			Total
Beginning balance January 1, 2011	$	15,020		$	6,867		$	21,887
Total gains/(losses) - (realized/unrealized):
Included in earnings		(1,740	)		561			(1,179	)
Included in other comprehensive income		484			(99	)		385
Purchases		-			917			917
Sales		(1,122	)		(1,328	)		(2,450	)
Amortization of premium		(39	)		-			(39	)
Transfers in and/or out of Level 3		-			-			-
Ending balance December 31, 2011	$	12,603		$	6,918		$	19,521

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 December 31, 2012 and 2011 are as follows:

	Fair Value Measurements Using:
	Markets for		Other		Significant
	Identical		Observable		Unobservable
As of December 31, 2012	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Impaired loans and leases	$	-	$	-	$	9,180	$	9,180
Other real estate owned		-		-		7,632		7,632
Loans and leases held for sale		-		-		1,572		1,572

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
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		-		-		15,072		15,072
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 December 31, 2012			Valuation	Unobservable	Range (Weighted
(In thousands)	Fair Value		Techniques	Input	Average)
Impaired loans and leases	$	9,180	Appraisal of collateral (1)	Appraisal adjustments	0.0% to -69.9% (-16.4%)
				Liquidation expenses	0.0% to -15.2% (-7.3%)

			Salvageable value of			0.0	%
			collateral (2)

Other real estate owned		7,632	Appraisal of collateral (1)	Appraisal adjustments	0.0% to -61.7% (-11.1%)
			Sales prices	Liquidation expenses	-1.5% to -14.7% (-9.3%)

Loans and leases held for sale		1,572	Sales prices	Liquidation expenses		-12.7	%

(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.

Fair Value by Balance Sheet Grouping Instruments

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 December 31, 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	$	28,802	$	28,802	$	28,802	$	-	$	-
Investment securities available-for-sale		349,203		349,203		47		344,992		4,164
Other investment		2,250		2,250		-		-		2,250
Federal Home Loan Bank stock		6,011		6,011		-		-		6,011
Loans held for sale		1,572		1,572		-		-		1,572
Loans, net		326,904		330,260		-		-		330,260
Accrued interest receivable		10,256		10,256		-		10,256		-
Financial Liabilities:
Demand deposits		58,531		58,531		-		58,531		-
NOW and money markets		223,279		223,279		-		223,279		-
Savings		17,472		17,472		-		17,472		-
Time deposits		255,635		251,532		-		251,532		-
Short-term borrowings		-		-		-		-		-
Long-term borrowings		108,333		102,824		-		102,824		-
Subordinated debt		25,774		23,837		-		23,837		-
Accrued interest payable		3,760		3,760		-		3,760		-

	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 10: http://www.xbrl.org/2003/role/presentationRef

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