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FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2018

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, 2018 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	$	10,453			$	—			$	10,453			$	—
Mortgage-backed securities, residential	186,777				—				186,777				—
Obligations of states and political subdivisions	45,545				—				45,545				—
Corporate bonds and notes	250				—				250				—
SBA loan pools	3,448				—				3,448				—
Total available for sale securities	$	246,473			$	—			$	246,473			$	—
Equity investments	$	1,153			$	1,153			$	—			$	—
Derivative assets	2,503				—				2,503				—
Financial Liabilities:
Derivative liabilities	$	2,516			$	—			$	2,503			$	13

There were no transfers between Level 1 and Level 2 during the three and nine month periods ended September 30, 2018.

					Fair Value Measurement at December 31, 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	$	15,491			$	—			$	15,491			$	—
Mortgage-backed securities, residential	219,909				—				219,909				—
Obligations of states and political subdivisions	53,132				—				53,132				—
Corporate bonds and notes	251				—				251				—
SBA loan pools	4,308				—				4,308				—
Total available for sale securities	$	293,091			$	—			$	293,091			$	—
Equity investments	$	1,192			$	1,192			$	—			$	—
Derivative assets	974				—				974				—
Financial Liabilities:
Derivative liabilities	$	1,049			$	—			$	974			$	75

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, 2018 and September 30, 2017 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		September 30, 2018				September 30, 2017				September 30, 2018				September 30, 2017
Balance of recurring Level 3 assets at July 1		$	—			$	252			$	(18	)		$	(71	)
Derivative instruments entered into		—				—				—				—
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				5				—
Included in other comprehensive income		—				(10		)		—				—
Transfers out of Level 3		—				(242		)		—				—
Balance of recurring Level 3 assets at September 30		$	—			$	—			$	(13	)		$	(71	)

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, 2018 and September 30, 2017 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		September 30, 2018				September 30, 2017				September 30, 2018				September 30, 2017
Balance of recurring Level 3 assets at January 1		$	—			$	250			$	(75	)		$	(68	)
Derivative instruments entered into		—				—				—				(1		)
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				62				(2		)
Included in other comprehensive income		—				(8		)		—				—
Transfers out of Level 3		—				(242		)		—				—
Balance of recurring Level 3 assets at September 30		$	—			$	—			$	(13	)		$	(71	)

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, 2018 and September 30, 2017 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		September 30, 2018				September 30, 2017				September 30, 2018				September 30, 2017
Balance of recurring Level 3 assets at July 1		$	—			$	252			$	(18	)		$	(71	)
Derivative instruments entered into		—				—				—				—
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				5				—
Included in other comprehensive income		—				(10		)		—				—
Transfers out of Level 3		—				(242		)		—				—
Balance of recurring Level 3 assets at September 30		$	—			$	—			$	(13	)		$	(71	)

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, 2018 and September 30, 2017 (in thousands):

		Assets (Liabilities)
		Corporate Bonds and Notes								Derivative Liabilities
		September 30, 2018				September 30, 2017				September 30, 2018				September 30, 2017
Balance of recurring Level 3 assets at January 1		$	—			$	250			$	(75	)		$	(68	)
Derivative instruments entered into		—				—				—				(1		)
Total gains or losses for the period:
Included in earnings - other non-interest income		—				—				62				(2		)
Included in other comprehensive income		—				(8		)		—				—
Transfers out of Level 3		—				(242		)		—				—
Balance of recurring Level 3 assets at September 30		$	—			$	—			$	(13	)		$	(71	)

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, 2018 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)				Total Gains (Losses)
Impaired Loans:
Commercial and agricultural:
Commercial and industrial	$	12			$	—			$	—			$	12			$	—
Total impaired loans	$	12			$	—			$	—			$	12			$	—
Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	375			$	—			$	—			$	375			$	—
Residential mortgages	204				—				—				204				—
Consumer loans:
Home equity lines and loans	148				—				—				148				—
Total other real estate owned, net	$	727			$	—			$	—			$	727			$	—

					Fair Value Measurement at December 31, 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)				Total Gains (Losses)
Impaired Loans:
Commercial and agricultural:
Commercial and industrial	$	96			$	—			$	—			$	96			$	(70	)
Commercial mortgages:
Commercial mortgages	411				—				—				411				(105		)
Total impaired loans	$	507			$	—			$	—			$	507			$	(175	)
Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	1,483			$	—			$	—			$	1,483			$	(43	)
Residential mortgages	382				—				—				382				—
Consumer loans:
Home equity lines and loans	75				—				—				75				—
Total other real estate owned, net	$	1,940			$	—			$	—			$	1,940			$	(43	)

Nonrecurring fair value measurement, valuation techniques

The following tables present information related to Level 3 non-recurring fair value measurement at September 30, 2018 and December 31, 2017 (in thousands):

Description		Fair Value at September 30, 2018				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at September 30, 2018
Impaired loans:
Commercial and agricultural:
Commercial and industrial		$	12			Sales comparison		Discount to appraised value		0.00% - 0.00% [0.00%]
		$	12
OREO:
Commercial mortgages:
Commercial mortgages		$	375			Sales comparison		Discount to appraised value		10.00% - 22.00% [14.56%]
Residential mortgages		204				Sales comparison		Discount to appraised value		20.80% - 39.78% [22.94%]
Consumer loans:
Home equity lines and loans		148				Sales comparison		Discount to appraised value		20.80% - 20.80% [20.80%]
		$	727

Description		Fair Value at December 31, 2017				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at December 31, 2017
Impaired loans:
Commercial and agricultural:
Commercial and industrial		$	96			Sales comparison		Discount to appraised value		0.00% - 36.07% [33.02%]
Commercial mortgages:
Commercial mortgages		411				Sales comparison		Discount to appraised value		10.00% - 89.98% [51.35%]
		$	507
OREO:
Commercial mortgages:
Commercial mortgages		$	1,483			Sales comparison		Discount to appraised value		10.00% - 22.95% [19.75%]
Residential mortgages		382				Sales comparison		Discount to appraised value		17.28% - 27.97% [20.77%]
Consumer loans:
Home equity lines and loans		75				Sales comparison		Discount to appraised value		20.80% - 20.80% [20.80%]
		$	1,940

The following table presents information related to Level 3 recurring fair value measurements at September 30, 2018 and December 31, 2017 (in thousands):

Description		Fair Value at September 30, 2018				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at September 30, 2018
Derivative liabilities		$	13			Historical trend		Credit default rate		8.04% - 8.04% [8.04%]

Description		Fair Value at December 31, 2017				Valuation Technique		Unobservable Inputs		Range [Weighted Average] at December 31, 2017
Derivative liabilities		$	75			Historical trend		Credit default rate		5.67% - 5.67% [5.67%]

Carrying value and estimated fair value of financial instruments

The carrying amounts and estimated fair values of other financial instruments, at September 30, 2018 and December 31, 2017, are as follows (in thousands):

	September 30, 2018
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	$	31,831			$	31,831			$	—			$	—			$	31,831
Interest-earning deposits in other financial institutions	82,081				82,081				—				—				82,081
Equity investments	1,153				1,153				—				—				1,153
Securities available for sale	246,473				—				246,473				—				246,473
Securities held to maturity	4,203				—				2,067				2,123				4,190
FHLBNY and FRBNY stock	3,138				—				—				—				N/A
Loans, net and loans held for sale	1,302,718				—				—				1,283,057				1,283,057
Accrued interest receivable	4,768				17				867				3,884				4,768
Derivative assets	2,503				—				2,503				—				2,503
Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,431,096			$	1,431,096			$	—			$	—			$	1,431,096
Time deposits	144,901				—				145,401				—				145,401
Accrued interest payable	176				29				147				—				176
Derivative liabilities	2,516				—				2,503				13				2,516

(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, 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	$	27,966			$	27,966			$	—			$	—			$	27,966
Interest-earning deposits in other financial institutions	2,763				2,763				—				—				2,763
Equity investments	1,192				1,192				—				—				1,192
Securities available for sale	293,091				—				293,091				—				293,091
Securities held to maturity	3,781				—				1,830				1,946				3,776
FHLBNY and FRBNY stock	5,784				—				—				—				N/A
Loans, net	1,291,205				—				—				1,289,584				1,289,584
Loans held for sale	542				—				542				—				542
Accrued interest receivable	4,642				1				867				3,774				4,642
Derivative assets	974				—				974				—				974
Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,349,084			$	1,349,084			$	—			$	—			$	1,349,084
Time deposits	118,362				—				118,598				—				118,598
Securities sold under agreements to repurchase	10,000				—				10,058				—				10,058
FHLBNY overnight advances	57,700				—				57,700				—				57,700
FHLBNY term advances	2,000				—				2,001				—				2,001
Accrued interest payable	148				24				124				—				148
Derivative liabilities	1,049				—				974				75				1,049

(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).

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
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-Section 50
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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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