FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2014

FAIR VALUE [Abstract]

Assets measured at fair value on a recurring basis

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

	Fair			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable		Significant Unobservable Inputs
	Value			(Level 1)		Inputs (Level 2)		(Level 3)
September 30, 2014
U.S. Treasury and federal agency securities	$	67,116		$	---	$	67,116	$	---
U.S. Agency MBS and CMOs		17,264			---		17,264		---
Tax-exempt state and municipal bonds		36,398			---		36,398		---
Taxable state and municipal bonds		26,479			---		26,479		---
Corporate bonds and other debt securities		13,354			---		13,354		---
Other equity securities		1,490			---		1,490		---
Loans held for sale		905			---		905		---
Interest rate swaps		89			---		---		89
Interest rate swaps		(89	)		---		---		(89	)
December 31, 2013
U.S. Treasury and federal agency securities	$	54,439		$	---	$	54,439	$	---
U.S. Agency MBS and CMOs		19,365			---		19,365		---
Tax-exempt state and municipal bonds		26,849			---		26,849		---
Taxable state and municipal bonds		26,328			---		26,328		---
Corporate bonds and other debt securities		11,212			---		11,212		---
Other equity securities		1,466			---		1,466		---
Loans held for sale		1,915			---		1,915		---
Interest rate swaps		94			---		---		94
Interest rate swaps		(94	)		---		---		(94	)

Assets measured at fair value on a non-recurring basis

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

	Fair		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable		Significant Unobservable Inputs
	Value		(Level 1)		Inputs (Level 2)		(Level 3)
September 30, 2014
Impaired loans	$	17,709	$	---	$	---	$	17,709
Other real estate owned		23,442		---		---		23,442
December 31, 2013
Impaired loans	$	22,403	$	---	$	---	$	22,403
Other real estate owned		29,711		---		---		29,711

Carrying amounts and estimated fair values of financial instruments, not previously presented

The carrying amounts and estimated fair values of financial instruments, not previously presented, were as follows at September 30, 2014 and December 31, 2013 (dollars in thousands).

	Level in	September 30, 2014						December 31, 2013
	Fair Value	Carrying			Fair			Carrying			Fair
	Hierarchy	Amount			Value			Amount			Value
Financial assets
Cash and due from banks	Level 1	$	24,731		$	24,731		$	38,714		$	38,714
Cash equivalents	Level 2		74,808			74,808			118,178			118,178
Interest-bearing time deposits in other financial institutions	Level 2		20,000			20,089			25,000			25,003
Securities held to maturity	Level 3		31,744			31,771			19,248			19,278
FHLB stock			11,236		NA				11,236		NA
Loans, net	Level 2		1,017,450			1,015,635			999,176			990,084
Bank owned life insurance	Level 3		28,021			28,021			27,517			27,517
Accrued interest receivable	Level 2		3,415			3,415			3,231			3,231
Financial liabilities
Deposits	Level 2		(1,216,089	)		(1,216,601	)		(1,249,734	)		(1,250,886	)
Other borrowed funds	Level 2		(88,107	)		(88,543	)		(89,991	)		(90,321	)
Long-term debt	Level 2		(41,238	)		(35,514	)		(41,238	)		(35,098	)
Subordinated debt	Level 2		---			---			---			---
Accrued interest payable	Level 2		(291	)		(291	)		(308	)		(308	)
Off-balance sheet credit-related items
Loan commitments			---			---			---			---