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FAIR VALUE OF INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2014 and December 31, 2013 are reflected below.

		(In Thousands)
		June 2014
		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
Financial Assets:
Cash and Cash Equivalents		$	19,098			$	19,098			$	19,098			$	—			$	—
Securities - available for sale			284,628				284,628				25,331				251,222				8,074
Other Securities			3,717				3,717				—				—				3,717
Loans, net			592,176				602,149				—				—				602,149
Interest receivable			3,659				3,659				—				—				359
Total Assets		$	903,278			$	913,251			$	44,429			$	251,222			$	614,299
Financial Liabilities:
Interest bearing Deposits		$	427,881			$	429,276			$	—			$	—			$	429,276
Non-interest bearing Deposits			115,371				115,371				—				115,371				—
Time Deposits			217,820				217,498				—				—				217,498
Total Deposits		$	761,072			$	762,145			$	—			$	115,371			$	646,774
Short-term debt			70,066				70,066				—				—				70,066
Interest payable			205				205				—				—				205
Dividends payable			963				963				—				963				—
Total Liabilities		$	832,306			$	833,379			$	—			$	116,334			$	717,045

		(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				110,452				—				110,452				—
Time Deposits			236,360				236,027				—				—				236,027
Total Deposits		$	776,464			$	776,229			$	—			$	110,452			$	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			$	851,745			$	—			$	111,419			$	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 June 30, 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)
June 30, 2014		Quoted Prices in Active Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Observable Inputs (Level 3)
Assets-(Securities Available for Sale)
U.S. Treasury		$	25,331			$	—			$	—
U.S. Government agency							147,146				—
Mortgage-backed securities							33,182				—
State and local governments			—				70,895				8,074
Total Securities Available for Sale		$	25,331			$	251,223			$	8,074
December 31, 2013		Quoted Prices in Active Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Observable Inputs (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 June 30, 2014 and June 30, 2013.

		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments Tax-Exempt				State and Local Governments Taxable				State and Local Governments Total
Balance at January 1, 2014		$	8,802			$	1,544			$	10,346
Change in Market Value			(1,093	)			(359	)			(1,452	)
Payments & Maturities			(820	)			—				(820	)
Balance at June 30, 2014		$	6,889			$	1,185			$	8,074
		(In Thousands)
		Fair Value Measurements Using Significant
		Unobservable Inputs (Level 3)
		State and Local Governments Tax-Exempt				State and Local Governments Taxable				State and Local Governments Total
Balance at January 1, 2013		$	14,863			$	1,545			$	16,408
Change in Market Value			(116	)			1				(115	)
Purchases			519				—				519
Payments & Maturities			(4,388	)			—				(4,388	)
Balance at June 30, 2013		$	10,878			$	1,546			$	12,424

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 June 30, 2014				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
State and political subdivision securities		$	8,074			Discounted cash flow		Credit strength of underlying project or entity / Discount rate			0-5	%
Impaired Loans		$	1,587			Collateral based measurements		Discount to reflect current market conditions and ultimate collectability			0-50	%
Other real estate owned - residential		$	734			Appraisals		Discount to reflect current market			0-20	%
Other real estate owned - commercial		$	807			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 June 30, 2014 and December 31, 2013:

		Assets Measured at Fair Value on a Nonrecurring Basis at June 30, 2014
(In Thousands)		Balance at June 30, 2014				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Impaired loans		$	1,587			$	—			$	—			$	1,587
Other real estate owned residential mortgages		$	734			$	—			$	—			$	734
Other real estate owned commercial		$	807			$	—			$	—			$	807
		Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2013
(In Thousands)		Balance at December 31, 2013				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (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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