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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value of Financial Instruments [Abstract]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of December 31, 2016 and 2015, the significant unobservable inputs used in the fair value measurements were as follows:




(in thousands)		Fair Value at December 31, 2016	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Recurring:

Investment Securities – available for sale - CDO	$	20,254	Discounted Cash Flow	Discount Rate	Range of Libor+ 4.5% to 5.5%

Non-recurring:

Impaired Loans	$	14,537	Market Comparable Properties	Marketability Discount	4.6% to 31.0% (1)                                    (weighted avg 6.5%)

OREO	$	1,201	Market Comparable Properties	Marketability Discount	15%






(in thousands)		Fair Value at December 31, 2015	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Recurring:

Investment Securities – available for sale - CDO	$	22,211	Discounted Cash Flow	Discount Rate	Range of Libor+ 4.5% to 5.5%

Cash Flow Hedge	$	(66)	Discounted Cash Flow	Reuters Third Party Market Quote	99.9% (weighted avg 99.9%)

Non-recurring:

Impaired Loans	$	6,247	Market Comparable Properties	Marketability Discount	3% to 15% (1)                                    (weighted avg 11.3%)

OREO	$	4,133	Market Comparable Properties	Marketability Discount	10% to 15% (1)                (weighted avg 12.5%)



(1) Range would include discounts taken since appraisal and estimated values

Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis

For assets measured at fair value on a recurring and non-recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2016 and 2015 are as follows:







				Fair Value Measurements at
				December 31, 2016 Using
				(In Thousands)
		Assets Measured at		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description		12/31/2016		(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
   U.S. government agencies		$	24,253			$	24,253
   Commercial mortgage-backed agencies		$	52,222			$	52,222
   Collateralized mortgage obligations		$	19,567			$	19,567
   Obligations of states and political subdivisions		$	23,704			$	23,704
   Collateralized debt obligations		$	20,254					$	20,254
Financial Derivative		$	700			$	700
Non-recurring:
Impaired loans		$	14,537					$	14,537
Other real estate owned		$	1,201					$	1,201


				Fair Value Measurements at
				December 31, 2015 Using
				(In Thousands)
		Assets Measured at		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description		12/31/2015		(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
   U.S. government agencies		$	33,964			$	33,964
   Residential mortgage-backed agencies		$	14,170			$	14,170
   Commercial mortgage-backed agencies		$	43,636			$	43,636
   Collateralized mortgage obligations		$	9,610			$	9,610
   Obligations of states and political subdivisions		$	46,641			$	46,641
   Collateralized debt obligations		$	22,211					$	22,211
Financial Derivative		$	(66)					$	(66)
Non-recurring:
Impaired loans		$	6,247					$	6,247
Other real estate owned		$	4,133					$	4,133



Reconciliation of Fair Valued Assets Measured on a Recurring Basis

The following tables show a reconciliation of the beginning and ending balances for fair valued assets measured using Level 3 significant unobservable inputs for the years ended December 31, 2016 and 2015:





		Fair Value Measurements Using Significant
		Unobservable Inputs
		(Level 3)
		(In Thousands)
	Investment Securities Available for Sale		Cash Flow Hedge
Beginning balance January 1, 2016	$	22,211	$	(66)
   Total gains/(losses) realized/unrealized:
       Included in earnings		0		0
       Included in other comprehensive loss		(1,957)		66
Ending balance December 31, 2016	$	20,254	$	0

The amount of total gains or losses for the period
   included in earnings attributable to the change in
   realized/unrealized gains or losses related to assets
   still held at the reporting date	$	0	$	0


		Fair Value Measurements Using Significant
		Unobservable Inputs
		(Level 3)
		(In Thousands)
	Investment Securities Available for Sale		Cash Flow Hedge
Beginning balance January 1, 2015	$	25,339	$	(199)
   Total gains/(losses) realized/unrealized:
       Included in earnings		818		0
       Included in other comprehensive income		(3,946)		133
Ending balance December 31, 2015	$	22,211	$	(66)

The amount of total gains or losses for the period
   included in earnings attributable to the change in
   realized/unrealized gains or losses related to assets
   still held at the reporting date	$	0	$	0



Fair Value by Balance Sheet Grouping

The following table presents fair value information about financial instruments, whether or not recognized in the statement of financial condition, for which it is practicable to estimate that value. The actual carrying amounts and estimated fair values of the Corporation’s financial instruments that are included in the statement of financial condition are as follows:





	December 31, 2016					Fair Value Measurements
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and due from banks	$	60,707	$	60,707	$	60,707
Interest bearing deposits in banks		2,603		2,603		2,603
Investment securities - AFS		140,000		140,000			$	119,746	$	20,254
Investment securities - HTM		97,169		97,981				89,031		8,950
Restricted Bank stock		5,209		5,209				5,209
Loans, net		882,008		886,712						886,712
Financial derivative		700		700				700
Accrued interest receivable		3,862		3,862				3,862

Financial Liabilities:
Deposits – non-maturity		773,120		773,120				773,120
Deposits – time deposits		241,110		245,762				245,762
Short-term borrowed funds		36,000		36,000				36,000
Long-term borrowed funds		131,737		133,397				133,397
Accrued interest payable		380		380				380
Off balance sheet financial instruments		0		0		0






	December 31, 2015					Fair Value Measurements
						Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands)	Carrying Amount		Fair Value			(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and due from banks	$	50,188	$	50,188	$	50,188
Interest bearing deposits in banks		1,953		1,953		1,953
Investment securities - AFS		170,232		170,232			$	148,021	$	22,211
Investment securities - HTM		105,560		106,742				103,779		2,963
Restricted Bank stock		5,904		5,904				5,904
Loans, net		867,101		872,991						872,991
Accrued interest receivable		4,218		4,218				4,218

Financial Liabilities:
Deposits – non-maturity		744,219		744,219				744,219
Deposits – time deposits		254,575		258,267				258,267
Short-term borrowed funds		35,828		35,828				35,828
Long-term borrowed funds		147,537		151,562				151,562
Accrued interest payable		478		478				478
Financial derivative		66		66						66
Off balance sheet financial instruments		0		0		0



X

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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-Publisher FASB
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Tabular disclosure of the inputs and valuation techniques used to measure fair value, and a discussion of changes in valuation techniques and related inputs, if any, applied during the period to each separate class of assets, liabilities, and financial instruments classified in shareholders' equity that are measured on a recurring and/or nonrecurring basis.

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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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