Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

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, 2013 and December 31, 2012 are as follows:

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Balances as of June 30, 2013	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Investment securities available-for-sale
U.S. government agencies	$	-	$	71,172	$	-	$	71,172
Mortgage-backed securities-residential		-		32,921		-		32,921
Collateralized mortgage obligations-residential		-		180,509		-		180,509
Corporate bonds		-		9,730		-		9,730
Municipal bonds		-		5,331		-		5,331
Other securities		-		-		4,407		4,407
Common stocks		46		-		-		46
Total investment securities available-for-sale	$	46	$	299,664	$	4,407	$	304,117

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Balances as of December 31, 2012	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Investment securities available-for-sale
U.S. government agencies	$	-	$	66,444	$	-	$	66,444
Mortgage-backed securities-residential		-		30,509		-		30,509
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
Common stocks		47		-		-		47
Total investment securities available-for-sale	$	47	$	344,992	$	4,164	$	349,203

Additional Information About Assets Measured at Fair Value on a 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, 2013 and 2012:

(In thousands)
Investment Securities Available for Sale	Other securities
Beginning balance January 1, 2013	$	4,164
Total gains/(losses) - (realized/unrealized):
Included in earnings		5
Included in other comprehensive income		319
Purchases		32
Sales and calls		(113	)
Transfers in and/or out of Level 3		-
Ending balance June 30, 2013	$	4,407

	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

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, 2013 and December 31, 2012 are as follows:

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Balances as of June 30, 2013	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Impaired loans and leases	$	-	$	-	$	7,601	$	7,601
Other real estate owned		-		-		4,585		4,585
Loans and leases held for sale		-		-		1,419		1,419

	Fair Value Measurements Using:
	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Balances 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

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, 2013			Valuation	Unobservable	Range (Weighted
(In thousands)	Fair Value		Techniques	Input	Average)
Impaired loans and leases	$	7,601	Appraisal of collateral (1)	Appraisal adjustments	0.0% to -15.8% (-11.9%)
				Liquidation expenses	0.0% to -16.4% (-8.1%)

			Salvageable value of			0.0	%
			collateral (2)

Other real estate owned		4,585	Appraisal of collateral (1)	Appraisal adjustments	0.0% to -81.1% (-5.4%)

Loans and leases held for sale		1,419	Sales prices	Liquidation expenses		-14.0	%

(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

The tables below state the fair value of the Company’s financial instruments at June 30, 2013 and December 31, 2012.

					Fair Value Measurements
					At June 30, 2013
					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	$	24,782	$	24,782	$	24,782	$	-	$	-
Investment securities available-for-sale		304,117		304,117		46		299,664		4,407
Other investment		2,250		2,250		-		-		2,250
Federal Home Loan Bank stock		4,594		4,594		-		-		4,594
Loans held for sale		1,419		1,419		-		-		1,419
Loans, net		352,688		351,840		-		-		351,840
Accrued interest receivable		8,733		8,733		-		8,733		-
Financial Liabilities:
Demand deposits		66,121		66,121		-		66,121		-
NOW and money markets		206,145		206,145		-		206,145		-
Savings		18,418		18,418		-		18,418		-
Time deposits		234,986		233,071		-		233,071		-
Short-term borrowings		10,000		10,000		10,000		-		-
Long-term borrowings		98,108		95,385		-		95,385		-
Subordinated debt		25,774		23,970		-		23,970		-
Accrued interest payable		4,917		4,917		-		4,917		-

					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		-
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		-

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

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

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

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

-Publisher FASB

-Name Accounting Standards Codification

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Reference 8: 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 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-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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Reference 12: 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.

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