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FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Summary of assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

					Fair Value Measurement at September 30, 2017 Using
Financial Assets:	Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	15,584			$	—			$	15,584			$	—
Mortgage-backed securities, residential	236,661				—				236,661				—
Obligations of states and political subdivisions	54,728				—				54,728				—
Corporate bonds and notes	242				—				242				—
SBA loan pools	4,485				—				4,485				—
Corporate stocks	526				194				332				—
Total available for sale securities	$	312,226			$	194			$	312,032			$	—
Trading assets	$	909			$	909			$	—			$	—
Derivative assets	670				—				670				—
Financial Liabilities:
Derivative liabilities	$	741			$	—			$	670			$	71

During the three months ended September 30, 2017, the Corporation transferred corporate bonds with a fair market value of $242 thousand from Level 3 to Level 2 due to the availability of pricing in secondary markets.

					Fair Value Measurement at December 31, 2016 Using
Financial Assets:	Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Obligations of U.S. Government and U.S. Government sponsored enterprises	$	17,455			$	—			$	17,455			$	—
Mortgage-backed securities, residential	245,866				—				245,866				—
Obligations of states and political subdivisions	38,740				—				38,740				—
Corporate bonds and notes	250				—				—				250
SBA loan pools	570				—				570				—
Corporate stocks	521				170				351				—
Total available for sale securities	$	303,402			$	170			$	302,982			$	250
Trading assets	$	774			$	774			$	—			$	—
Derivative assets	693				—				693				—
Financial Liabilities:
Derivative liabilities	$	761			$	—			$	693			$	68

Reconciliation of all assets measured at fair value

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three-month periods ended September 30, 2017 and September 30, 2016 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		2017				2016				2017				2016
Balance of recurring Level 3 assets at July 1		$	252			$	256			$	(71	)		$	(120	)
Derivative instruments entered into		—				—				—				—
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				—				26
Included in other comprehensive income		(10		)		(1		)		—				—
Transfers out of Level 3		(242		)		—				—				—
Balance of recurring Level 3 assets at September 30		$	—			$	255			$	(71	)		$	(94	)

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine month periods ended September 30, 2017 and September 30, 2016 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		2017				2016				2017				2016
Balance of recurring Level 3 assets at January 1		$	250			$	248			$	(68	)		$	(48	)
Derivative instruments entered into		—				—				(1		)		(25		)
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				(2		)		(21		)
Included in other comprehensive income		(8		)		7				—				—
Transfers out of Level 3		(242		)		—				—				—
Balance of recurring Level 3 assets at September 30		$	—			$	255			$	(71	)		$	(94	)

Reconciliation of liabilities measured at fair value

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three-month periods ended September 30, 2017 and September 30, 2016 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		2017				2016				2017				2016
Balance of recurring Level 3 assets at July 1		$	252			$	256			$	(71	)		$	(120	)
Derivative instruments entered into		—				—				—				—
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				—				26
Included in other comprehensive income		(10		)		(1		)		—				—
Transfers out of Level 3		(242		)		—				—				—
Balance of recurring Level 3 assets at September 30		$	—			$	255			$	(71	)		$	(94	)

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine month periods ended September 30, 2017 and September 30, 2016 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		2017				2016				2017				2016
Balance of recurring Level 3 assets at January 1		$	250			$	248			$	(68	)		$	(48	)
Derivative instruments entered into		—				—				(1		)		(25		)
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				(2		)		(21		)
Included in other comprehensive income		(8		)		7				—				—
Transfers out of Level 3		(242		)		—				—				—
Balance of recurring Level 3 assets at September 30		$	—			$	255			$	(71	)		$	(94	)

Summary of assets and liabilities measured at fair value on a non-recurring basis

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

					Fair Value Measurement at September 30, 2017 Using
Financial Assets:	Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Impaired Loans:
Commercial and agricultural:
Commercial and industrial	$	85			$	—			$	—			$	85
Commercial mortgages:
Commercial mortgages, other	3,157				—				—				3,157
Total impaired loans	$	3,242			$	—			$	—			$	3,242
Other real estate owned:
Residential mortgages	$	179			$	—			$	—			$	179
Total other real estate owned, net	$	179			$	—			$	—			$	179

					Fair Value Measurement at December 31, 2016 Using
Financial Assets:	Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Impaired Loans:
Commercial mortgages:
Commercial mortgages, other	$	2,631			$	—			$	—			$	2,631
Consumer loans:
Home equity lines and loans	219				—				—				219
Total impaired loans	$	2,850			$	—			$	—			$	2,850
Other real estate owned:
Residential mortgages	$	344			$	—			$	—			$	344
Total other real estate owned, net	$	344			$	—			$	—			$	344

Nonrecurring fair value measurement, valuation techniques

The following tables presents information related to Level 3 non-recurring fair value measurement at September 30, 2017 and December 31, 2016 (in thousands):

Description		Fair Value at September 30, 2017				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at September 30, 2017
Impaired loans:
Commercial and agricultural:
Commercial and industrial		$	85			Sales comparison		Discount to appraised value		36.07%-36.07% [36.07%]
Commercial mortgages:
Commercial mortgages, other		707				Sales comparison		Discount to appraised value		10.00% - 44.52% [20.34%]
		2,450				Income approach		Capitalization rate		9.00% - 10.00% [9.52%]
		$	3,242
OREO:
Residential mortgages		$	179			Sales comparison		Discount to appraised value		17.28% - 27.97% [20.73%]
		$	179

Description		Fair Value at December 31, 2016				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at December 31, 2016
Impaired loans:
Commercial mortgages:
Commercial mortgages, other		$	2,631			Income approach		Capitalization rate		9.00% - 10.00% [9.52%]
Consumer loans:
Home equity lines and loans		219				Sales comparison		Discount to appraised value		22.98% - 22.98% [22.98%]
		$	2,850
OREO:
Residential mortgages		$	344			Sales comparison		Discount to appraised value		20.80% - 48.17% [30.50%]
		$	344

The following table presents information related to Level 3 recurring fair value measurements at September 30, 2017 and December 31, 2016 (in thousands):

Description		Fair Value at September 30, 2017				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at September 30, 2017
Derivative liabilities		$	71			Historical trend		Credit default rate		5.15% - 5.15% [5.15%]

Description		Fair Value at December 31, 2016				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at December 31, 2016
Corporate bonds and notes		$	250			Discounted cash flow		Credit spread		1.73% - 1.73% [1.73%]
Derivative liabilities		$	68			Historical trend		Credit default rate		4.92% - 4.92% [4.92%]

Carrying value and estimated fair value of financial instruments

The carrying amounts and estimated fair values of other financial instruments, at September 30, 2017 and December 31, 2016, are as follows (in thousands):

	September 30, 2017
Financial assets:	Carrying Amount				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Estimated Fair Value (1)
Cash and due from financial institutions	$	34,572			$	34,572			$	—			$	—			$	34,572
Interest-bearing deposits in other financial institutions	21,806				21,806				—				—				21,806
Trading assets	909				909				—				—				909
Securities available for sale	312,226				194				312,032				—				312,226
Securities held to maturity	3,865				—				1,831				2,030				3,861
FHLBNY and FRBNY stock	3,497				—				—				—				N/A
Loans, net	1,273,119				—				—				1,277,896				1,277,896
Loans held for sale	1,246				—				1,246				—				1,246
Accrued interest receivable	4,516				2				1,050				3,464				4,516
Derivative assets	670				—				670				—				670
Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,410,836			$	1,410,836			$	—			$	—			$	1,410,836
Time deposits	126,182				—				126,445				—				126,445
Securities sold under agreements to repurchase	10,000				—				10,117				—				10,117
FHLBNY term advances	9,009				—				9,030				—				9,030
Accrued interest payable	184				21				163				—				184
Derivative liabilities	741				—				670				71				741

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.

	December 31, 2016
Financial assets:	Carrying Amount				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Estimated Fair Value (1)
Cash and due from financial institutions	$	28,205			$	28,205			$	—			$	—			$	28,205
Interest-bearing deposits in other financial institutions	45,957				45,957				—				—				45,957
Trading assets	774				774				—				—				774
Securities available for sale	303,402				170				302,982				250				303,402
Securities held to maturity	4,705				—				981				3,931				4,912
FHLBNY and FRBNY stock	4,041				—				—				—				N/A
Loans, net	1,186,037				—				—				1,205,814				1,205,814
Loans held for sale	412				—				412				—				412
Accrued interest receivable	4,000				9				784				3,207				4,000
Derivative assets	693				—				693				—				693
Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,312,237			$	1,312,237			$	—			$	—			$	1,312,237
Time deposits	144,106				—				144,460				—				144,460
Securities sold under agreements to repurchase	27,606				—				27,880				—				27,880
FHLBNY term advances	9,093				—				9,189				—				9,189
Accrued interest payable	210				25				185				—				210
Derivative liabilities	761				—				693				68				761

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.

X

- 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).

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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Tabular disclosure of quantitative information about the inputs used in the fair value measurement of assets. This disclosure may include, but is not limited to, the fair value of the asset, valuation technique used to measure fair value, the inputs used to measure fair value, the ranges of the inputs, and the weighted averages of the inputs.

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, 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).

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