(20)	DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table summarizes the carrying value and estimated fair value of financial instruments at December 31, 2012 and 2011:


					Fair Value Measurements Using
(In thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3

December 31, 2012:
Financial assets:
Cash and cash equivalents	$	23,211	$	23,211	$	23,211	$	0	$	0
Securities available for sale		122,973		122,973		4,237		118,736		0
Securities held to maturity		12		12		0		12		0
Loans held for sale		3,609		3,705		0		3,705		0
Loans, net		280,407		287,609		0		0		287,609
FHLB stock		2,820		2,820		0		2,820		0
Accrued interest receivable		1,757		1,757		0		1,757		0
Financial liabilities:
Deposits		384,343		385,212		0		0		385,212
Retail repurchase agreements		14,092		14,092		0		14,092		0
Advances from FHLB		5,100		5,100		0		5,100		0
Accrued interest payable		290		290		0		290		0

December 31, 2011:
Financial assets:
Cash and cash equivalents	$	18,923	$	18,923	$	18,923	$	0	$	0
Securities available for sale		111,440		111,440		5,388		106,052		0
Securities held to maturity		16		16		0		16		0
Loans held for sale		2,909		2,966		0		2,966		0
Loans, net		276,047		287,624		0		0		287,624
FHLB stock		2,820		2,820		0		2,820		0
Accrued interest receivable		1,801		1,801		0		1,801		0
Financial liabilities:
Deposits		364,374		367,359		0		0		367,359
Retail repurchase agreements		9,125		9,125		0		9,125		0
Advances from FHLB		12,350		12,840		0		12,840		0
Accrued interest payable		413		413		0		413		0

The carrying amounts in the preceding table are included in the consolidated balance sheets under the applicable captions. The contractual or notional amounts of financial instruments with off-balance-sheet risk are disclosed in Note 16, and the fair value of these instruments is considered immaterial.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value:

Cash and Cash Equivalents

For cash and cash equivalents, including cash and due from banks, interest-bearing deposits with banks, and federal funds sold, the carrying amount is a reasonable estimate of fair value.

Debt and Equity Securities

For marketable equity securities, the fair values are based on quoted market prices. For debt securities, the Company obtains fair value measurements from an independent pricing service and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. For FHLB stock, a restricted equity security, the carrying amount is a reasonable estimate of fair value because it is not marketable.

Loans

The fair value of loans is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying amount of accrued interest receivable approximates its fair value. The fair value of loans held for sale is based on specific prices of underlying contracts for sale to investors.

Deposits

The fair value of demand deposits, savings accounts, money market deposit accounts and other transaction accounts is the amount payable on demand at the balance sheet date. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

Borrowed Funds

The carrying amount of retail repurchase agreements approximates its fair value. The fair value of advances from FHLB is estimated by discounting the future cash flows using the current rates at which similar loans with the same remaining maturities could be obtained.