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Reconciliation of available for sale securities, which require significant adjustment based on unobservable data, are presented below: 

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## Assets and Liabilities Measured on a Non-Recurring Basis 

Assets and liabilities measured at fair value on a non- recurring basis are summarized below: 

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The fair value of impaired loans with specific allocations of the allowance for loan losses or loans on which charge-offs have been taken is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including compa- rable sales and the income approach. Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a fair value of $19,100,000, with a valuation allowance of $2,794,000, resulting in additional provision for the year of $2,400,000. Fair value is determined, where possible, using market prices derived from an appraisal or evaluation, which are considered to be Level 2. However, certain assumptions and unobservable inputs are used many times by the appraiser, therefore, qualifying the assets as Level 3 in the fair value hierarchy. The fair value of foreclosed real estate is similarly determined by using the results of recent real estate appraisals. 

The following table shows fair values and the related carrying values of financial instruments as of the dates indi- cated. Items that are not financial instruments are not included. 

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For purposes of the above disclosures of estimated fair value, the following assumptions were used as of December 31, 2010 and December 31, 2009. The estimated fair value for cash and cash equivalents, Federal Home Loan Bank stock, demand and savings deposits, and accrued interest receivable and payable are considered to approximate carrying book value. The estimated fair value for loans is based on estimates of the rate the Bancorp would charge for similar such loans at December 31, 2010 and 2009, applied for the time period until estimated repayment. For commer- cial loans, the fair value includes a liquidity adjustment to reflect current market conditions. The estimated fair value for certificates of deposits are based on estimates of the rate the Bancorp would pay on such deposits at December 31, 2010 and 2009, applied for the time period until maturity. The estimated fair value for borrowed funds is based on current rates for similar financings. The estimated fair value of other financial instruments, and off-balance sheet loan commitments approximate cost and are not considered significant to this presentation. 

