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Fair Value Disclosures and Reporting, the Fair Value Option and Fair Value Measurements (Tables) | 6 Months Ended
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Jun. 30, 2012
Estimated Fair Values for Financial Instruments | Estimated fair values for the Company’s financial instruments at the periods noted are as follows:
Fair Value of Financial Instruments |  |  |
(dollars in thousands, unaudited) |  | June 30, 2012 |
|  |  |  |  | Estimated Fair Value |
|  | Carrying Amount |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Financial Assets: |  |  |  |  | (Dollars in thousands) |
Cash and cash equivalents |  | $ | 48,926 |  |  | $ | 48,926 |  |  | $ | - |  |  | $ | - |  |  | $ | 48,926 |
Investment securities available for sale |  |  | 422,196 |  |  |  | 1,809 |  |  |  | 420,387 |  |  |  | - |  |  |  | 422,196 |
Loans and leases, net |  |  | 784,644 |  |  |  | - |  |  |  | 829,825 |  |  |  | - |  |  |  | 829,825 |
Collateral dependent impaired loans |  |  | 19,980 |  |  |  | - |  |  |  | 15,212 |  |  |  | 307 |  |  |  | 15,519 |
Loans held-for-sale |  |  | 250 |  |  |  | 250 |  |  |  | - |  |  |  | - |  |  |  | 250 |
Cash surrender value of life insurance policies |  |  | 38,518 |  |  |  | - |  |  |  | 38,518 |  |  |  | - |  |  |  | 38,518 |
Other investments |  |  | 6,406 |  |  |  | - |  |  |  | 6,406 |  |  |  | - |  |  |  | 6,406 |
Investment in limited partnership |  |  | 10,622 |  |  |  | - |  |  |  | 10,622 |  |  |  | - |  |  |  | 10,622 |
Accrued interest receivable |  |  | 5,177 |  |  |  | - |  |  |  | 5,177 |  |  |  | - |  |  |  | 5,177 |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing |  | $ | 327,224 |  |  | $ | 327,224 |  |  | $ | - |  |  | $ | - |  |  | $ | 327,224 |
Interest-bearing |  |  | 822,311 |  |  |  | - |  |  |  | 822,756 |  |  |  | - |  |  |  | 822,756 |
Fed funds purchased and repurchase agreements |  |  | 2,890 |  |  |  | - |  |  |  | 2,890 |  |  |  | - |  |  |  | 2,890 |
Short-term borrowings |  |  | 24,640 |  |  |  | - |  |  |  | 24,640 |  |  |  | - |  |  |  | 24,640 |
Long-term borrowings |  |  | 5,000 |  |  |  | - |  |  |  | 5,000 |  |  |  | - |  |  |  | 5,000 |
Subordinated debentures |  |  | 30,928 |  |  |  | - |  |  |  | 12,229 |  |  |  | - |  |  |  | 12,229 |
Limited partnership capital commitment |  |  | 1,185 |  |  |  | - |  |  |  | 1,185 |  |  |  | - |  |  |  | 1,185 |
Accrued interest payable |  |  | 346 |  |  |  | - |  |  |  | 346 |  |  |  | - |  |  |  | 346 |
|  | December 31, 2011 |
|  |  |  |  | Estimated Fair Value |
|  | Carrying Amount |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Financial Assets: |  |  |  |  | (Dollars in thousands) |
Cash and cash equivalents |  | $ | 63,036 |  |  | $ | 63,036 |  |  | $ | - |  |  | $ | - |  |  | $ | 63,036 |
Investment securities available for sale |  |  | 406,471 |  |  |  | 1,347 |  |  |  | 405,124 |  |  |  | - |  |  |  | 406,471 |
Loans and leases, net |  |  | 726,302 |  |  |  | - |  |  |  | 771,192 |  |  |  | - |  |  |  | 771,192 |
Collateral dependent impaired loans |  |  | 14,627 |  |  |  | - |  |  |  | 11,016 |  |  |  | 285 |  |  |  | 11,301 |
Loans held-for-sale |  |  | 1,354 |  |  |  | 1,354 |  |  |  | - |  |  |  | - |  |  |  | 1,354 |
Cash surrender value of life insurance policies |  |  | 37,657 |  |  |  | - |  |  |  | 37,657 |  |  |  | - |  |  |  | 37,657 |
Other investments |  |  | 7,040 |  |  |  | - |  |  |  | 7,040 |  |  |  | - |  |  |  | 7,040 |
Investment in limited partnership |  |  | 9,927 |  |  |  | - |  |  |  | 9,927 |  |  |  | - |  |  |  | 9,927 |
Accrued interest receivable |  |  | 5,368 |  |  |  | - |  |  |  | 5,368 |  |  |  | - |  |  |  | 5,368 |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing |  | $ | 300,045 |  |  | $ | 300,045 |  |  | $ | - |  |  | $ | - |  |  | $ | 300,045 |
Interest-bearing |  |  | 786,223 |  |  |  | - |  |  |  | 702,270 |  |  |  | - |  |  |  | 702,270 |
Fed funds purchased and repurchase agreements |  |  | 3,037 |  |  |  | - |  |  |  | 3,037 |  |  |  | - |  |  |  | 3,037 |
Short-term borrowings |  |  | 17,120 |  |  |  | - |  |  |  | 17,120 |  |  |  | - |  |  |  | 17,120 |
Long-term borrowings |  |  | 15,000 |  |  |  | - |  |  |  | 15,000 |  |  |  | - |  |  |  | 15,000 |
Subordinated debentures |  |  | 30,928 |  |  |  | - |  |  |  | 12,262 |  |  |  | - |  |  |  | 12,262 |
Limited partnership capital commitment |  |  | 353 |  |  |  | - |  |  |  | 353 |  |  |  | - |  |  |  | 353 |
Accrued interest payable |  |  | 514 |  |  |  | - |  |  |  | 514 |  |  |  | - |  |  |  | 514 |
Off-Balance-Sheet Financial Instruments, Notional Amount |
Notional Amount |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Off-balance-sheet financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commitments to extend credit |  | $ | 194,916 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Standby letters of credit |  |  | 11,321 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial lines of credit |  |  | 8,982 |
Notional Amount |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Off-balance-sheet financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commitments to extend credit |  | $ | 154,323 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Standby letters of credit |  |  | 11,113 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial lines of credit |  |  | 8,991 |  |
Summary of Assets Reported at Fair Value on Recurring Basis | Assets reported at fair value on a recurring basis are summarized below:
Fair Value Measurements - Recurring |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands, unaudited) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Fair Value Measurements at June 30, 2012, Using |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |  |  | Realized Gain/(Loss) |
Investment Securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agencies |  | $ | - |  |  | $ | 1,288 |  |  | $ | - |  |  | $ | 1,288 |  |  | $ | - |
Obligations of states and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
political subdivisions |  |  | - |  |  |  | 80,769 |  |  |  | - |  |  |  | 80,769 |  |  |  | - |
U.S. Government agencies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
collateralized by mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
obligations |  |  | - |  |  |  | 338,330 |  |  |  | - |  |  |  | 338,330 |  |  |  | - |
Other Securities |  |  | 1,809 |  |  |  | - |  |  |  | - |  |  |  | 1,809 |  |  |  | - |
Total available-for-sale securities |  | $ | 1,809 |  |  | $ | 420,387 |  |  | $ | - |  |  | $ | 422,196 |  |  | $ | - |
|  | Fair Value Measurements at December 31, 2011, Using |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |  |  | Realized Gain/(Loss) |
Investment Securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government agencies |  | $ | - |  |  | $ | 2,026 |  |  | $ | - |  |  | $ | 2,026 |  |  | $ | - |
Obligations of states and |  |  |  |  |  |  |  |  |  |  |  |  |  |  | - |  |  |  |  |
political subdivisions |  |  | - |  |  |  | 71,340 |  |  |  | - |  |  |  | 71,340 |  |  |  | - |
U.S. Government agencies |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
collateralized by mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
obligations |  |  | - |  |  |  | 331,758 |  |  |  | - |  |  |  | 331,758 |  |  |  | - |
Other Securities |  |  | 1,347 |  |  |  | - |  |  |  | - |  |  |  | 1,347 |  |  |  | (1,370 | )
Total available-for-sale securities |  | $ | 1,347 |  |  | $ | 405,124 |  |  | $ | - |  |  | $ | 406,471 |  |  | $ | (1,370 | )
Summary of Assets for Which Nonrecurring Change in Fair Value Recorded | Assets reported at fair value on a nonrecurring basis are summarized below:
Fair Value Measurements - Nonrecurring |  |  |  |  |  |  |  |  |
(dollars in thousands, unaudited) |  |  |  |  |  |  |  |  |  |  |  |
|  | Fair Value Measurements at June 30, 2012, Using |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Collateral dependent impaired loans |  | $ | - |  |  | $ | 15,212 |  |  | $ | 307 |  |  | $ | 15,519 |
Foreclosed assets |  | $ | - |  |  | $ | 14,423 |  |  | $ | - |  |  | $ | 14,423 |
|  | Fair Value Measurements at December 31, 2011, Using |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Collateral dependent impaired loans |  | $ | - |  |  | $ | 11,016 |  |  | $ | 285 |  |  | $ | 11,301 |
Foreclosed assets |  | $ | - |  |  | $ | 14,777 |  |  | $ | 587 |  |  | $ | 15,364 |
Additional Valuation Information for Impaired Loan Balances Which are Measured Within Level 3 of Fair Value Hierarchy | The table below presents additional valuation information for impaired loan balances which are measured within Level 3 of the fair value hierarchy, as of June 30, 2012:
Quantitative Information about Level 3 Fair Value measurements
(dollars in thousands, unaudited)
Asset |  | Fair Value Amount |  | Valuation Technique |  | Unobservable Input |  | Range (Wtd Ave.)
Real Estate Secured loans |  | $ 307 |  | Adjusted Appraised Value |  | Selling Costs (1) |  | 15.00% - 25.00% (15.14%)
(1) Represents the range of estimated selling and closing costs that might be incurred through escrow at the time of sale.

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- 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). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 33 -Subparagraph a, b -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 Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19296-110258 + Details
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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). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 6 -Footnote 4 -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 157 -Paragraph 32 -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 Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19190-110258 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a),(b) -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258 + Details
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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. + References Reference 1: 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 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 Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611 Reference 4: 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 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611 Reference 6: 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. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -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 10: 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 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 + Details
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