FAIR VALUE (Tables)
 9 Months Ended
Sep. 30, 2012
Fair Value, Assets Measured on Recurring Basis [Table Text Block]

Assets measured at fair value on a recurring basis are summarized below: There were no transfers between Level 1 and Level 2 during the periods presented.

 

          Quoted Prices in              
          Active Markets for     Significant Other     Significant  
    September 30,     Identical Assets     Observable Inputs     Unobservable Inputs  
(Dollars in thousands)   2012     (Level 1)     (Level 2)     (Level 3)  
                         
Assets:                                
U.S. Treasury and agencies   $ 8,270     $ -     $ 8,270     $ -  
Government-sponsored mortgage-backed residential     279,714       -       279,714       -  
State and municipal     12,834       -       12,834       -  
Corporate bonds     20,608       -       20,608       -  
Trust preferred securities     281       -       -       281  
                                 
Total   $ 321,707     $ -     $ 321,426     $ 281  

 

          Quoted Prices in              
          Active Markets for     Significant Other     Significant  
    December 31,     Identical Assets     Observable Inputs     Unobservable Inputs  
(Dollars in thousands)   2011     (Level 1)     (Level 2)     (Level 3)  
                         
Assets:                                
U.S. Treasury and agencies   $ 25,028     $ -     $ 25,028     $ -  
Government-sponsored mortgage-backed residential     264,691       -       264,691       -  
State and municipal     23,794       -       23,794       -  
Trust preferred securities     264       -       -       264  
                                 
Total   $ 313,777     $ -     $ 313,513     $ 264  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The table below presents reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods ended September 30, 2012 and 2011:

 

    Fair Value Measurements     Fair Value Measurements  
    Using Significant     Using Significant  
    Unobservable Inputs     Unobservable Inputs  
    (Level 3)     (Level 3)  
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
(Dollars in thousands)   2012     2011     2012     2011  
                         
Beginning balance   $ 266     $ 668     $ 264     $ 346  
Total gains or losses:                                
Impairment charges on securities     -       (58 )     -       (83 )
Included in other comprehensive income     16       54       18       401  
Purchases     -       -       -       -  
Sales     (1 )     -       (1 )     -  
Settlements     -       -       -       -  
Transfers in and/or out of Level 3     -       -       -       -  
Ending balance   $ 281     $ 664     $ 281     $ 664  
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings [Table Text Block]

The table below summarizes changes in unrealized gains and losses recorded in earnings for the quarter and nine months ended September 30 for Level 3 assets and liabilities that are still held at September 30.

 

    Changes in Unrealized Gains/Losses     Changes in Unrealized Gains/Losses  
    Relating to Assets Still Held at Reporting     Relating to Assets Still Held at Reporting  
    Date for the Three Months Ended     Date for the Nine Months Ended  
    September 30,     September 30,  
(Dollars in thousands)   2012     2011     2012     2011  
                         
Interest income on securities   $ -     $ -     $ -     $ -  
Other changes in fair value     -       58       -       83  
Total   $ -     $ 58     $ -     $ 83  
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Table Text Block]

Assets measured at fair value on a nonrecurring basis are summarized below:

 

          Quoted Prices in              
          Active Markets for     Significant Other     Significant  
    September 30,     Identical Assets     Observable Inputs     Unobservable Inputs  
(Dollars in thousands)   2012     (Level 1)     (Level 2)     (Level 3)  
                         
Assets:                                
Impaired loans:                                
Commercial   $ 776     $ -     $ -     $ 776  
Commercial Real Estate:                                
Land Development     3,835       -       -       3,835  
Building Lots     313       -       -       313  
Other     19,826       -       -       19,826  
Residential Mortgage     4,413       -       -       4,413  
Consumer and Home Equity     795       -       -       795  
Indirect Consumer     118       -       -       118  
Real estate acquired through foreclosure:                                
Commercial Real Estate:                                
Land Development     1,746       -       -       1,746  
Building Lots     5,108       -       -       5,108  
Other     9,605       -       -       9,605  
Loans held for sale related to probable branch divestiture     46,384       -       46,384       -  

  

          Quoted Prices in              
          Active Markets for     Significant Other     Significant  
    December 31,     Identical Assets     Observable Inputs     Unobservable Inputs  
(Dollars in thousands)   2011     (Level 1)     (Level 2)     (Level 3)  
                         
Assets:                                
Impaired loans:                                
Commercial   $ 2,643     $ -     $ -     $ 2,643  
Commercial Real Estate:                                
Land Development     7,929       -       -       7,929  
Building Lots     1,517       -       -       1,517  
Other     27,668       -       -       27,668  
Residential Mortgage     4,384       -       -       4,384  
Consumer and Home Equity     937       -       -       937  
Indirect Consumer     194       -       -       194  
Real estate acquired through foreclosure:                                
Commercial     728       -       -       728  
Commercial Real Estate:                                
Land Development     4,285       -       -       4,285  
Building Lots     5,369       -       -       5,369  
Other     6,300       -       -       6,300  
Residential Mortgage     172       -       -       172  
Trust preferred security held-to-maturity     24       -       -       24  
Loans held for sale     45,829       -       45,829       -  
Fair Value, by Balance Sheet Grouping [Table Text Block]

The estimated fair value of financial instruments, not previously presented, is as follows:

 

          September 30, 2012  
(Dollars in thousands)   Carrying     Fair Value Measurements  
    Value     Total     Level 1     Level 2     Level 3  
Financial assets:                                        
Cash and due from banks   $ 55,337       55,337       6,269       49,068       -  
Mortgage loans held for sale     2,762       2,820       -       2,820       -  
Loans, net     478,523       514,863       -       -       514,863  
FHLB stock     4,805       N/A       N/A       N/A       N/A  
                                         
Financial liabilities:                                        
Deposits     931,217       948,336       -       948,336       -  
Advances from Federal Home Loan Bank     12,631       14,089       -       14,089       -  
Subordinated debentures     18,000       11,860       -       -       11,860  

 

 

(Dollars in thousands)   December 31, 2011  
    Carrying     Fair  
    Value     Value  
Financial assets:                
Cash and due from banks   $ 92,236     $ 92,236  
Mortgage loans held for sale     10,187       10,326  
Loans, net     628,800       643,797  
FHLB stock     4,805       N/A  
                 
Financial liabilities:                
Deposits     1,122,794       1,134,843  
Advances from Federal Home Loan Bank     27,736       30,888  
Subordinated debentures     18,000       12,448  
Fair Value, Measurements, Recurring [Member]
  
Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents quantitative information about recurring Level 3 fair value measurements at September 30, 2012.

 

                  Range  
    Fair     Valuation   Unobservable   (Weighted  
(Dollars in thousands)   Value     Technique   Inputs   Average)  
                         
Trust preferred securities   $ 281     Discounted cash flow   Discount rate     3.62% - 4.38% (4.05%)  
                Prepayment rate     1.00%  
                Default rate     3.75% - 10.00% (7.39%)  
                Recovery probability     15.00% - 40.00% (25.43%)
Fair Value, Measurements, Nonrecurring [Member]
  
Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2012.

 

    Fair     Valuation   Unobservable   Range (Weighted  
(Dollars in thousands)   Value     Technique(s)   Input(s)   Average)  
                     
Impaired loans:                        
  Commercial   $ 776     Sales comparison approach   Adjustment for differences     6.43%-10.87% (8.48%)  
                   between comparable sales        
  Commercial Real Estate:                        
      Land Development     2,680     Income approach   Discount rate      20.00%-24.50% (23.03%)  
      1,155     Sales comparison approach   Adjustment for differences     2.63% (1)  
                   between comparable sales        
                         
      Building Lots     313     Sales comparison approach   Adjustment for differences     2.49%-13.33% (6.01%)  
                   between comparable sales        
                         
      Other     11,194     Income approach   Capitalization rate     7.70%-16.00% (10.40%)  
      8,632     Sales comparison approach   Adjustment for differences     0.00%-21.87% (11.81%)  
                   between comparable sales        
                         
  Residential Mortgage     4,413     Sales comparison approach   Adjustment for differences     0.00%-19.00% (11.83%)  
                   between comparable sales        
                         
  Consumer and Home Equity     795     Sales comparison approach   Adjustment for differences     0.00%-8.29% (2.10%)  
                   between comparable sales        
                         
  Indirect Consumer     118     NADA value            
                         
                         
Real estate acquired through                
 foreclosure:                        
  Commercial Real Estate:                        
      Land Development     252     Income approach   Capitalization rate     8.50% (1)  
      1,494     Sales comparison approach   Adjustment for differences        
                   between comparable sales     25.00% (1)  
                         
      Building Lots     5,108     Income approach   Discount rate     24.00%-26.00% (25.99%)  
                         
      Other     7,311     Income approach   Capitalization rate     9.00%-11.50% (10.51%)  
      2,294     Sales comparison approach   Adjustment for differences        
                   between comparable sales     2.75%-5.19% (3.29%)  

 

 

(1) Unobservable inputs with a single discount listed include only one property.