Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Assets Recorded at Fair Value on Recurring Basis

The following tables present the balances of assets recorded at fair value on a recurring basis by level within the hierarchy as of June 30, 2013 and December 31, 2012 (in thousands).

			Quoted Prices in		Significant Other		Significant
	Total		Active Markets for		Observable		Unobservable
	June 30,		Identical Assets		Inputs		Inputs
	2013		(Level 1)		(Level 2)		(Level 3)
Investment Securities:
Government Sponsored Enterprises	$	121,055	$	121,055	$	--	$	--
Trust Preferred Securities		4,247		--		2,554		1,693
Total Investment Securities		125,302		121,055		2,554		1,693
Mortgage-Backed and       Related Securities		55,106		--		55,106		--
Total	$	180,408	$	121,055	$	57,660	$	1,693

			Quoted Prices in		Significant Other		Significant
	Total		Active Markets for		Observable		Unobservable
	December 31,		Identical Assets		Inputs		Inputs
	2012		(Level 1)		(Level 2)		(Level 3)
Investment Securities:
Government Sponsored Enterprises	$	123,679	$	123,679		--		--
Trust Preferred Securities		4,335		--		2,788		1,547
Total Investment Securities		128,014		123,679		2,788		1,547
Mortgage-Backed and       Related Securities		41,200		--		41,200		--
Total	$	169,214	$	123,679	$	43,988	$	1,547

Reconciliation of Beginning and Ending Balances for Assets Measured at Fair Value on Recurring Basis

The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period ended June 30, 2013.

	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	(in thousands)
Investment Securities
	Available-for-Sale
Beginning balance at March 31, 2013	$	1,820
Transfers into Level 3		--
Total gains/ (losses) included in:
Net loss		--
Other comprehensive income		(123	)
Purchases, sales, issuances and settlements, net		(4	)
Ending balance at June 30, 2013	$	1,693
	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	(in thousands)
Investment Securities
	Available-for-Sale
Beginning balance at December 31, 2012	$	1,547
Transfers into Level 3		--
Total gains/ (losses) included in:
Net loss		--
Other comprehensive income		150
Purchases, sales, issuances and settlements, net		(4	)
Ending balance at June 30, 2013	$	1,693

Assets and Liabilities Measured at Fair Value on Recurring or Non-recurring Basis Using Significant Unobservable Inputs

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of June 30, 2013, the significant unobservable inputs used in the fair value measurements were as follows: (in thousands)

	Fair Value at June 30,  2013		Valuation Technique	Significant Unobservable Inputs	General Range Of Significant Unobservable Input Values
Impaired loans	$	18,564	Appraised Value/ Discounted Cash Flows Market Value of Note	Appraisals and/or sales of comparable properties/ Independent quotes		0-25	%
Other  real estate owned		5,182	Appraised Value/ Comparable Sales/ Other Estimates from Independent Sources	Appraisals and/or sales of comparable properties/ Independent quotes		0-40	%
Assets at fair value	$	23,746

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of December 31, 2012, the significant unobservable inputs used in the fair value measurements were as follows: (in thousands)

	Fair Value at December 31, 2012		Valuation Technique	Significant Unobservable Inputs	General Range Of Significant Unobservable Input Values
Impaired loans	$	23,462	Appraised Value/ Discounted Cash Flows Market Value of Note	Appraisals and/or sales of comparable properties/ Independent quotes		0-25	%
Other real estate owned		9,174	Appraised Value/ Comparable Sales/ Other Estimates from Independent Sources	Appraisals and/or sales of comparable properties/ Independent quotes		0-40	%
Asets at fair value	$	32,636

Fair Value Measurements

					Fair Value Measurements
					Quoted
					Prices in
					Active Markets		Significant
					for Identical		Other		Significant
					Assets or		Observable		Unobservable
	Carrying				Liabilities		Inputs		Inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
June 30, 2013
Financial Instruments - Assets
Loans	$	120,088	$	120,040		--		--	$	120,040
Financial Instruments – Liabilities
Time deposits	$	113,745	$	114,166	$	--	$	114,166	$	--
Securities sold under agreements
to repurchase		5,449		5,449		--		5,449		--
Subordinated debentures		12,372		12,372		--		12,372		--
December 31, 2012
Financial Instruments - Assets
Loans	$	123,414	$	123,553		--		--	$	123,553
Financial Instruments – Liabilities
Time deposits	$	117,167	$	117,723	$	--	$	117,723	$	--
Securities sold under agreements
to repurchase		6,280		6,280		--		6,280		--
Subordinated debentures		12,372		12,372		--		12,372		--