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FAIR VALUE OF INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Estimated Fair Values and Related Carrying or Notional Amounts

The estimated fair values, and related carrying or notional amounts, for on and off-balance sheet financial instruments as of March 31, 2014 and December 31, 2013 are reflected below.

		(In Thousands)
		March 2014
		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and Cash Equivalents		$	27,584			$	27,584			$	27,584			$	—			$	—
Securities - available for sale			307,725				307,725				25,229				273,840				8,656
Other Securities			3,717				3,717				—				—				3,717
Loans, net			577,547				587,274				—				—				587,274
Interest receivable			4,117				4,117				—				—				4,117
Total Assets		$	920,690			$	930,417			$	52,813			$	273,840			$	603,764
Financial Liabilities:
Interest bearing Deposits		$	447,754			$	448,888			$	—			$	—			$	448,888
Non-interest bearing Deposits			115,404				114,877				—				114,877				—
Time Deposits			227,106				241,322				—				—				241,322
Total Deposits		$	790,264			$	805,087			$	—			$	114,877			$	690,210
Short-term debt			58,775				58,775				—				—				58,775
Interest payable			216				216				—				—				216
Dividends payable			967				967				—				967				—
Total Liabilities		$	850,222			$	865,045			$	—			$	115,844			$	749,201

		(In Thousands)
		December 2013
		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and Cash Equivalents		$	19,263			$	19,263			$	19,263			$	—			$	—
Securities - available for sale			324,509				324,509				25,272				288,891				10,346
Other Securities			4,216				4,216				—				—				4,216
Loans, net			570,919				579,992				—				—				579,992
Interest receivable			3,694				3,694				—				—				3,694
Total Assets		$	922,601			$	931,674			$	44,535			$	288,891			$	598,248
Financial Liabilities:
Interest bearing Deposits		$	429,652			$	429,750			$	—			$	—			$	429,750
Non-interest bearing Deposits			110,452				111,239				—				111,239				—
Time Deposits			236,360				236,027				—				—				236,027
Total Deposits		$	776,464			$	777,016			$	—			$	111,239			$	665,777
Short-term debt			69,756				69,756				—				—				69,756
Federal Home Loan Bank advances			4,500				4,570				—				—				4,570
Interest payable			223				223				—				—				223
Dividends payable			967				967				—				967				—
Total Liabilities		$	851,910			$	852,532			$	—			$	112,206			$	740,326

Financial Assets Measured at Fair Value on Recurring Basis

The following summarizes financial assets measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013, segregated by level or the valuation inputs within the fair value hierarchy utilized to measure fair value:

Assets and Liabilities Measured at Fair Value on a Recurring Basis (In Thousands)
		Quoted Prices in Active Active Markets for Identical				Significant Observable Inputs				Significant Observable Inputs
March 31, 2014		Assets (Level 1)				(Level 2)				(Level 3)
Assets-(Securities Available for Sale)
U.S. Treasury		$	25,229			$	—			$	—
U.S. Government agency							159,866				—
Mortgage-backed securities							42,815				—
State and local governments			—				71,159				8,656
Total Securities Available for Sale		$	25,229			$	273,840			$	8,656
		Quoted Prices in Active Active Markets for Identical				Significant Observable Inputs				Significant Observable Inputs
December 31, 2013		Assets (Level 1)				(Level 2)				(Level 3)
Assets-(Securities Available for Sale)
U.S. Treasury		$	25,272			$	—			$	—
U.S. Government agency			—				172,972
Mortgage-backed securities			—				44,792				—
State and local governments			—				71,127				10,346
Total Securities Available for Sale		$	25,272			$	288,891			$	10,346

Changes in the Level 3 Fair-Value Category of Which Unobservable Inputs

The following table represents the changes in the Level 3 fair-value category of which unobservable inputs are relied upon as of March 31, 2014 and March 31, 2013.

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local				State and Local				State and Local
		Governments				Governments				Governments
		Tax-Exempt				Taxable				Total
Balance at January 1, 2014		$	8,802			$	1,544			$	10,346
Change in Market Value			(1,121	)			(369	)			(1,490	)
Payments & Maturities			(200	)			—				(200	)
Balance at March 31, 2014		$	7,481			$	1,175			$	8,656
		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local				State and Local				State and Local
		Governments				Governments				Governments
		Tax-Exempt				Taxable				Total
Balance at January 1, 2013		$	14,863			$	1,545			$	16,408
Change in Market Value			(504	)			(26	)			(530	)
Purchases			519				—				519
Payments & Maturities			(4,388	)			—				(4,388	)
Balance at March 31, 2013		$	10,490			$	1,519			$	12,009

Quantitative Information about Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements:

		Fair Value at March 31, 2014				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
State and political subdivision securities		$	8,656			Discounted Cash Flow		Credit strength of underlying project or entity / Discount rate			0-5	%
Impaired Loans			1,798			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability			0-50	%
Other real estate owned - residential			933			Appraisals		Discount to reflect current market			0-20	%
Other real estate owned - commercial			911			Appraisals		Discount to reflect current market			0-20	%
		Fair Value at December 31, 2013				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
State and political subdivision securities		$	10,346			Discounted Cash Flow		Credit strength of underlying project or entity / Discount rate			0-5	%
Impaired Loans			1,924			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability			0-50	%
Other real estate owned - residential			964			Appraisals		Discount to reflect current market			0-20	%
Other real estate owned - commercial			1,127			Appraisals		Discount to reflect current market			0-20	%

Impaired Loans and Other Real Estate

The following table presents impaired loans and other real estate owned as recorded at fair value on March 31, 2014 and December 31, 2013:

		Assets Measured at Fair Value on a Nonrecurring Basis at March 31, 2014
		Balance at				Quoted Prices in Active Markets for Identical				Significant Observable Inputs				Significant Unobservable Inputs
(In Thousands)		March 31, 2014				Assets (Level 1)				(Level 2)				(Level 3)
Impaired loans		$	1,798			$	—			$	—			$	1,798
Other real estate owned residential mortgages		$	933			$	—			$	—			$	933
Other real estate owned commercial		$	911			$	—			$	—			$	911
		Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2013
		Balance at				Quoted Prices in Active Markets for Identical				Significant Observable Inputs				Significant Unobservable Inputs
(In Thousands)		December 31, 2013				Assets (Level 1)				(Level 2)				(Level 3)
Impaired loans		$	1,924			$	—			$	—			$	1,924
Other real estate owned residential mortgages		$	964			$	—			$	—			$	964
Other real estate owned commercial		$	1,127			$	—			$	—			$	1,127

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Tabular disclosure of financial instrument classified as a derivative asset (liability) after deduction of derivative liability (asset) using recurring unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing.

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