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Fair Values of Financial Instruments

6 Months Ended

Jun. 30, 2011

Fair Values of Financial Instruments [Abstract]

Fair Value of Financial Instruments

10.		FAIR VALUES OF FINANCIAL INSTRUMENTS

		Carrying amounts and estimated fair values of financial instruments were as follows as of June 30, 2011 and December 31, 2010:


		June 30, 2011								December 31, 2010
		Carrying				Fair				Carrying				Fair
		Values				Values				Values				Values
Financial assets
Cash and cash equivalents		$	126,999,000			$	126,999,000			$	64,198,000			$	64,198,000
Securities available for sale			199,785,000				199,785,000				220,830,000				220,830,000
Federal Home Loan Bank stock			11,961,000				11,961,000				14,345,000				14,345,000
Loans, net			1,084,279,000				1,090,796,000				1,217,262,000				1,223,911,000
Bank owned life insurance			47,631,000				47,631,000				46,743,000				46,743,000
Accrued interest receivable			5,010,000				5,010,000				5,942,000				5,942,000
Purchased interest rate cap			816,000				816,000				0				0

Financial liabilities
Deposits			1,247,932,000				1,257,722,000				1,273,832,000				1,284,767,000
Securities sold under agreements to repurchase			71,207,000				71,207,000				116,979,000				116,979,000
Federal Home Loan Bank advances			45,000,000				46,640,000				65,000,000				67,668,000
Subordinated debentures			32,990,000				32,937,000				32,990,000				33,006,000
Accrued interest payable			5,007,000				5,007,000				4,749,000				4,749,000
Sold interest rate cap			248,000				248,000				0				0


		Carrying amount is the estimated fair value for cash and cash equivalents, Federal Home Loan Bank stock, accrued interest receivable and payable, bank owned life insurance, demand deposits, securities sold under agreements to repurchase, and variable rate loans and deposits that reprice frequently and fully. Security fair values are based on market prices or dealer quotes, and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans and deposits and for variable rate loans and deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of subordinated debentures and Federal Home Loan Bank advances is based on current rates for similar financing. Fair value of off-balance sheet items is estimated to be nominal.

		Current accounting pronouncements require disclosure of the estimated fair value of financial instruments as disclosed in Note 11. Given current market conditions, a portion of our loan portfolio is not readily marketable and market prices do not exist. We have not attempted to market our loans to potential buyers, if any exist, to determine the fair value of those instruments. Since negotiated prices in illiquid markets depend upon the then present motivations of the buyer and seller, it is reasonable to assume that actual sales prices could vary widely from any estimate of fair value made without the benefit of negotiations. Additionally, changes in market interest rates can dramatically impact the value of financial instruments in a short period of time. Accordingly, the fair value measurements for loans included in the table above are unlikely to represent the instruments’ liquidation values.