10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

____________________________________________

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES             EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES         EXCHANGE ACT OF 1934

For the transition period from                       to      

 Commission File Number 001-34813

ONEIDA FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Maryland	80-0632920
(State or other jurisdiction of	(IRS Employer)
incorporation or organization)	Identification Number)

182 Main Street, Oneida, New York 13421

(Address of Principal Executive Offices)

(315) 363-2000

Registrant’s telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x  No o

Indicate by check mark whether the Registrant is a large accelerated file, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.).  Yes o No x

 APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: There were 7,041,747 shares of the Registrant’s common stock outstanding as of August 1, 2015.

ONEIDA FINANCIAL CORP.

INDEX

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Consolidated Statements of Condition (unaudited) At June 30, 2015 and December 31, 2014	2
	Consolidated Statements of Operations (unaudited) For the three and six months ended June 30, 2015 and 2014	3
	Consolidated Statements of Comprehensive Income (Loss) (unaudited) For the three and six months ended June 30, 2015 and 2014	4
	Consolidated Statement of Changes in Stockholders’ Equity (unaudited) For the six months ended June 30, 2015	5
	Consolidated Statements of Cash Flows (unaudited) For the six months ended June 30, 2015 and 2014	6
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition And Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43
PART II.	OTHER INFORMATION	44
Item 1.	Legal Proceedings	44
Item 1a.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	45
	Signatures	46

PART I. FINANCIAL INFORMATION

Item I. Financial Statements

1

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION

At June 30, 2015 (unaudited) and December 31, 2014

	June 30, 2015			December 31, 2014
	(In thousands, except share data)
ASSETS
Cash and due from banks	$	47,317		$	19,062
Federal funds sold	37,121			12,013
TOTAL CASH AND CASH EQUIVALENTS	84,438			31,075
Trading securities	3,922			3,900
Securities, available-for-sale	155,539			176,314
Securities, held-to-maturity (fair value $125,544 and $133,897 respectively)	122,384			129,415
Mortgage loans held for sale	75			839
Loans receivable	392,585			369,039
Deferred fees	1,818			1,483
Allowance for loan losses	(3,459		)	(3,502		)
LOANS RECEIVABLE, NET	390,944			367,020
Federal Home Loan Bank stock	1,440			1,391
Bank premises and equipment, net	22,178			20,382
Assets held for sale	63			63
Accrued interest receivable	2,206			2,342
Bank owned life insurance	18,073			17,842
Other assets	22,143			21,298
Goodwill	25,480			25,480
Other intangible assets	685			808
TOTAL ASSETS	$	849,570		$	798,169
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Interest bearing deposits	$	645,415		$	603,482
Non-interest bearing deposits	95,983			85,688
Other liabilities	11,763			13,226
TOTAL LIABILITIES	753,161			702,396
Oneida Financial Corp. Stockholders’ equity:
Preferred stock, 10,000,000 shares authorized; 0 issued and outstanding	—			—
Common stock ($0.01 par value; 30,000,000 shares authorized; 7,041,747 issued at June 30, 2015; 7,025,444 issued at December 31, 2014)	70			70
Additional paid-in capital	44,442			44,121
Retained earnings	54,940			54,185
Accumulated other comprehensive loss	(3,043		)	(2,603		)
TOTAL STOCKHOLDERS’ EQUITY	96,409			95,773
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	849,570		$	798,169

The accompanying notes are an integral part of the consolidated financial statements

2

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2015 (unaudited) and 2014 (unaudited)

	Three Months Ended					Six Months Ended
	June 30, 2015			June 30, 2014		June 30, 2015		June 30, 2014
	(In thousands, except per share data)
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$	3,967		$	3,693	$	7,798	$	7,350
Interest on investment securities	1,712			1,988		3,621		3,738
Dividends on equity securities	26			24		47		48
Interest on federal funds sold and interest-earning deposits	27			6		37		12
Total interest and dividend income	5,732			5,711		11,503		11,148
INTEREST EXPENSE:
Core deposits	274			323		537		607
Time deposits	321			349		656		700
Borrowings	—			13		1		26
Note payable	—			3		—		7
Total interest expense	595			688		1,194		1,340
NET INTEREST INCOME	5,137			5,023		10,309		9,808
Less: Provision for loan losses	—			100		—		200
Net interest income after provision for loan losses	5,137			4,923		10,309		9,608
INVESTMENT GAINS:
Net gains on sales of securities	76			27		222		73
Changes in fair value of trading securities	(220		)	13		22		823
Total investment (losses) gains	(144		)	40		244		896
NON-INTEREST INCOME:
Commissions and fees on sales of non-banking products	6,946			6,455		13,968		13,391
Other operating income	1,183			1,819		2,656		2,943
Total non-interest income	8,129			8,274		16,624		16,334
NON-INTEREST EXPENSES:
Compensation and employee benefits	7,117			7,322		14,584		14,500
Occupancy expenses, net	1,210			1,329		2,609		2,729
Merger related expenses	1,257			—		1,257		—
Other operating expense	2,767			2,649		5,322		5,008
Total non-interest expenses	12,351			11,300		23,772		22,237
INCOME BEFORE INCOME TAXES	771			1,937		3,405		4,601
Provision for income taxes	298			508		961		1,228
NET INCOME	$	473		$	1,429	$	2,444	$	3,373
EARNINGS PER SHARE — BASIC	$	0.07		$	0.20	$	0.35	$	0.48
EARNINGS PER SHARE — DILUTED	$	0.07		$	0.20	$	0.34	$	0.48

The accompanying notes are an integral part of the consolidated financial statements

3

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Three and Six Months Ended June 30, 2015 (unaudited) and 2014 (unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In thousands)
Net income	$	473		$	1,429		$	2,444		$	3,373
Other comprehensive income (loss), net of tax:
Net change in unrealized gains (losses):
Securities transferred from available-for-sale to held-to-maturity:
Amortization of unrealized gains on securities arising during period	181			132			320			274
Reclassification adjustment for gains realized included in income	—			—			—			—
Net unrealized gains	181			132			320			274
Income tax effect	(68		)	(53		)	(120		)	(110		)
Net change in securities transferred to held-to-maturity	113			79			200			164
Securities available-for-sale:
Unrealized holding (losses) gains on securities arising during period	(1,816		)	1,260			(806		)	2,999
Reclassification adjustment for gains realized in income	(76		)	(27		)	(222		)	(73		)
Net unrealized (losses) gains	(1,892		)	1,233			(1,028		)	2,926
Income tax effect	714			(493		)	388			(1,170		)
Net change in securities available-for-sale	(1,178		)	740			(640		)	1,756
Unrealized holding (losses) gains on securities, net of tax	(1,065		)	819			(440		)	1,920
Defined benefit pension plans:
Change in unrealized loss on pension benefits	—			—			—			24
Income tax effect	—			—			—			(10		)
Net change in pension benefits	—			—			—			14
Other comprehensive (loss) income, net of tax	(1,065		)	819			(440		)	1,934
Comprehensive (loss) income	$	(592	)	$	2,248		$	2,004		$	5,307

The accompanying notes are an integral part of the consolidated financial statements

4

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Six Months EndedJune 30, 2015 (unaudited)

	Common Stock			Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
	Shares	Amount
	(In thousands, except number of shares)
Balance as of January 1, 2015	7,025,444	$	70	$	44,121	$	54,185		$	(2,603	)	$	95,773
Net income	—	—		—		2,444			—			2,444
Other comprehensive loss, net of tax	—	—		—		—			(440		)	(440		)
Common stock dividends: $0.24 per share	—	—		—		(1,689		)	—			(1,689		)
Shares issued under stock plan	16,303	—		169		—			—			169
Shares earned under stock plan	—	—		152		—			—			152
Balance as of June 30, 2015	7,041,747	$	70	$	44,442	$	54,940		$	(3,043	)	$	96,409

The accompanying notes are an integral part of the consolidated financial statements

5

ONEIDA FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Six Months EndedJune 30, 2015 (unaudited) and 2014 (unaudited)

	Six Months Ended June 30,
	2015			2014
	(In thousands)
Operating Activities:
Net income	$	2,444		$	3,373
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	869			850
Amortization of premiums/discounts on securities, net	361			175
Net change in fair value of trading securities	(22		)	(823		)
Provision for loan losses	—			200
ESOP shares earned	—			116
Stock compensation earned	152			286
Loss on sale of foreclosed assets	6			10
Gain on securities, net	(222		)	(73		)
Gain on sale of loans, net	(119		)	(83		)
Income tax payable	109			1,284
Accrued interest receivable	136			27
Other assets	(904		)	3,756
Other liabilities	(1,466		)	(3,101		)
Earnings on bank owned life insurance	(231		)	(826		)
Origination of loans held for sale	(3,810		)	(3,310		)
Proceeds from sales of loans	4,693			3,454
Net cash provided by operating activities	1,996			5,315
Investing Activities:
Purchase of securities available-for-sale	(26,020		)	(47,674		)
Proceeds from sale of securities available-for-sale	23,368			2,649
Maturities and calls of securities available-for-sale	16,620			5,902
Principal collected on securities available-for-sale	5,741			5,647
Purchase of securities held-to-maturity	(426		)	(894		)
Maturities and call of securities held-to-maturity	2,456			1,386
Principal collected on securities held-to-maturity	5,221			4,522
Purchase of FHLB stock	(959		)	(93		)
Redemption of FHLB stock	910			79
Net increase in loans	(23,924		)	(8,592		)
Purchase of bank premises and equipment	(2,542		)	(1,065		)
Proceeds from the sale of foreclosed property	212			22
Settlement of bank owned life insurance	—			1,423
Net cash provided by (used in) investing activities	657			(36,688		)
Financing Activities:
Net increase in demand deposit, savings, money market, super now and escrow	59,493			32,247
Net (decrease) increase in time deposits	(7,265		)	1,709
Shares issued under stock plan	169			57
Cash dividends	(1,687		)	(1,677		)
Net cash provided by financing activities	50,710			32,336

6

Increase in cash and cash equivalents	53,363		963
Cash and cash equivalents at beginning of period	31,075		42,183
Cash and cash equivalents at end of period	$	84,438	$	43,146
Supplemental disclosures of cash flow information:
Cash paid for interest	$	1,196	$	1,340
Cash paid for income taxes	850		—
Supplemental noncash disclosures:
Transfer of loans to other real estate	—		81
Dividends declared and unpaid at period end	845		843

The accompanying notes are an integral part of the consolidated financial statements

7

ONEIDA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

June 30, 2015

Note A — Basis of Presentation

The accompanying unaudited consolidated financial statements include Oneida Financial Corp. (the “Company”), a Maryland corporation, and its wholly owned subsidiary, Oneida Savings Bank (the “Bank”), as of June 30, 2015 and December 31, 2014 and for the three month and six month periods ended June 30, 2015 and 2014.  All inter-company accounts and transactions have been eliminated in consolidation.  The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes.  These estimates, assumptions, and judgments are based on information available through the date of the filing of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments.  Certain policies inherently have a greater reliance on the use of estimates, assumptions, and judgments and as such have a greater possibility of producing results that could be materially different than originally reported.  Actual results could differ from those estimates.  In the opinion of management, the unaudited consolidated financial statements include all necessary adjustments, consisting of normal recurring accruals, necessary for a fair presentation for the periods presented.  The results of operations for the three months and six months ended June 30, 2015 are not necessarily indicative of the results to be achieved for the remainder of 2015. 

The data in the consolidated statements of condition for December 31, 2014 was derived from the audited financial statements included in the Company’s 2014 Annual Report on Form 10-K.  That data, along with the interim financial information presented in the consolidated statements of condition, statements of operations, comprehensive income, changes in stockholders’ equity and cash flows should be read in conjunction with the 2014 consolidated financial statements, including the notes thereto included in the Company’s Annual Report on Form 10-K.

Note B — Earnings per Share

Basic earnings per share is net income available to common shareholders divided by the weighted average number of common shares outstanding during the period excluding participating securities. ESOP shares are considered outstanding for the calculation unless unearned.  Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock plans. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Company has determined that 78,000 of its 153,000 outstanding non-vested stock awards are participating securities. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements.

Earnings per common share have been computed based on the following for the three months and six months ended June 30, 2015 and 2014:

	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In thousands, except per share data)
Net income	$	473		$	1,429		$	2,444		$	3,373
Net earnings allocated to participating securities	(6		)	(19		)	(25		)	(44		)
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329
Basic
Distributed earnings allocated to common stock	$	836		$	830		$	1,670		$	1,653
Undistributed earnings allocated to common stock	(369		)	580			749			1,676
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329

8

	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In thousands, except per share data)
Weighted average common shares outstanding including shares considered participating securities	7,012			6,986			7,006			6,982
Less: Average unallocated ESOP shares	—			(14		)	—			(16		)
Less: Average participating securities	(57		)	(78		)	(60		)	(83		)
Weighted average shares	6,955			6,894			6,946			6,883
Basic earnings per share	$	0.07		$	0.20		$	0.35		$	0.48
Diluted
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329
Weighted average common shares outstanding for basic earnings per common share	6,955			6,894			6,946			6,883
Add: Dilutive effects of assumed exercise of stock options and nonparticipating shares	105			65			99			62
Weighted average shares and dilutive potential common shares	7,060			6,959			7,045			6,945
Diluted earnings per common share	$	0.07		$	0.20		$	0.34		$	0.48

Stock options for 364 shares of common stock were not considered in computing diluted earnings per share for the three months and six months ended June 30, 2015 because they were anti-dilutive. Stock options for 8,215 shares of common stock were not considered in computing diluted earnings per share for the three months and six months ended June 30, 2014 because they were anti-dilutive.

Note C — Investment Securities and Mortgage-Backed Securities

Investment securities and mortgage-backed securities classified as available-for-sale and held-to-maturity consist of the following at June 30, 2015 and December 31, 2014:

Available-for-sale portfolio:	June 30, 2015
	Amortized  Cost		Unrealized					Fair  Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	28,453	$	36	$	(214	)	$	28,275
U.S. Treasury	1,999		—		(5		)	1,994
Corporate	28,810		89		(1,494		)	27,405
State and municipal	31,823		843		(35		)	32,631
Small Business Administration	3,653		88		—			3,741
	$	94,738	$	1,056	$	(1,748	)	$	94,046
Mortgage-Backed Securities
Fannie Mae	$	25,128	$	269	$	(79	)	$	25,318
Freddie Mac	25,708		160		(44		)	25,824
Government National Mortgage Assoc.	10,227		148		(24		)	10,351
	$	61,063	$	577	$	(147	)	$	61,493
Total available-for-sale	$	155,801	$	1,633	$	(1,895	)	$	155,539

9

Held-to-maturity portfolio:	June 30, 2015
	Amortized  Cost		Unrecognized					Fair  Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	40,008	$	1,818	$	(28	)	$	41,798
State and municipal	26,937		1,011		(84		)	27,864
Small Business Administration	8,743		210		—			8,953
	$	75,688	$	3,039	$	(112	)	$	78,615
Mortgage-Backed Securities
Fannie Mae	$	24,766	$	424	$	(334	)	$	24,856
Freddie Mac	13,771		169		(36		)	13,904
Government National Mortgage Assoc.	8,159		81		(71		)	8,169
	$	46,696	$	674	$	(441	)	$	46,929
Total held-to-maturity	$	122,384	$	3,713	$	(553	)	$	125,544

Available-for-sale portfolio:	December 31, 2014
	Amortized Cost		Unrealized					Fair Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	27,255	$	120	$	(143	)	$	27,232
Corporate	35,345		260		(1,508		)	34,097
Agency asset backed securities	8,734		91		(35		)	8,790
State and municipal	33,004		1,215		(1		)	34,218
Small Business Administration	6,835		135		—			6,970
	$	111,173	$	1,821	$	(1,687	)	$	111,307
Mortgage-Backed Securities
Fannie Mae	$	24,666	$	306	$	(39	)	$	24,933
Freddie Mac	25,659		207		(33		)	25,833
Government National Mortgage Assoc.	12,624		198		(58		)	12,764
Private placement mortgage obligation	1,426		51		—			1,477
	$	64,375	$	762	$	(130	)	$	65,007
Total available-for-sale	$	175,548	$	2,583	$	(1,817	)	$	176,314

10

Held-to-maturity portfolio:	December 31, 2014
	Amortized Cost		Unrecognized					Fair Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	41,703	$	2,274	$	—		$	43,977
State and municipal	27,506		1,504		(7		)	29,003
Small Business Administration	9,302		239		—			9,541
	$	78,511	$	4,017	$	(7	)	$	82,521
Mortgage-Backed Securities
Fannie Mae	$	26,602	$	533	$	(271	)	$	26,864
Freddie Mac	15,192		257		(53		)	15,396
Government National Mortgage Assoc.	9,110		101		(95		)	9,116
	$	50,904	$	891	$	(419	)	$	51,376
Total held-to-maturity	$	129,415	$	4,908	$	(426	)	$	133,897

The amortized cost and fair value of the investment securities portfolio at June 30, 2015 are shown by contractual maturities.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	3,946	$	3,953	$	473	$	475
After one year through five years	24,181		24,507		12,765		13,175
After five years through ten years	51,619		51,748		35,910		37,245
After ten years	14,992		13,838		26,540		27,720
Mortgage-backed securities	61,063		61,493		46,696		46,929
Total	$	155,801	$	155,539	$	122,384	$	125,544

Sales of available-for-sale securities were as follows: 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands)
Proceeds	$	18,312		$	902		$	23,368		$	2,649
Gross gains	$	198		$	64		$	344		$	126
Gross losses	$	(122	)	$	(37	)	$	(122	)	$	(53	)

Securities with unrealized losses at June 30, 2015 and December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

11

	Less than 12 Months					More than 12 Months					Total
June 30, 2015	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Description of Securities
Available-for-sale	(In thousands)
U.S. Agencies	$	16,063	$	(156	)	$	1,942	$	(58	)	$	18,005	$	(214	)
U.S. Treasury	1,994		(5		)	—		—			1,994		(5		)
Corporate	10,887		(236		)	10,907		(1,258		)	21,794		(1,494		)
State and municipal	1,807		(35		)	—		—			1,807		(35		)
Small Business Administration	—		—			4		—			4		—
Fannie Mae	6,017		(72		)	1,951		(7		)	7,968		(79		)
Freddie Mac	6,611		(23		)	1,703		(21		)	8,314		(44		)
Government National Mortgage Assoc.	—		—			3,608		(24		)	3,608		(24		)
Total securities available-for-sale in an unrealized loss position	$	43,379	$	(527	)	$	20,115	$	(1,368	)	$	63,494	$	(1,895	)
Held-to-maturity
U.S. Agencies	$	1,915	$	(28	)	$	—	$	—		$	1,915	$	(28	)
State and municipal	4,895		(84		)	—		—			4,895		(84		)
Fannie Mae	2,321		(11		)	8,689		(323		)	11,010		(334		)
Freddie Mac	—		—			2,030		(36		)	2,030		(36		)
Government National Mortgage Assoc.	—		—			3,407		(71		)	3,407		(71		)
Total securities held-to-maturity in an unrecognized loss position	$	9,131	$	(123	)	$	14,126	$	(430	)	$	23,257	$	(553	)

	Less than 12 Months					More than 12 Months					Total
December 31, 2014	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Description of Securities
Available-for-sale	(In thousands)
U.S. Agencies	$	999	$	(1	)	$	6,858	$	(142	)	$	7,857	$	(143	)
Corporate	9,237		(49		)	10,552		(1,459		)	19,789		(1,508		)
Agency asset backed securities	3,789		(35		)	—		—			3,789		(35		)
State and municipal	563		(1		)	—		—			563		(1		)
Small Business Administration	—		—			4		—			4		—
Fannie Mae	5,393		(16		)	2,002		(23		)	7,395		(39		)
Freddie Mac	5,567		(33		)	—		—			5,567		(33		)
Government National Mortgage Assoc.	2,084		(11		)	3,028		(47		)	5,112		(58		)
Total securities available-for-sale in an unrealized loss position	$	27,632	$	(146	)	$	22,444	$	(1,671	)	$	50,076	$	(1,817	)
Held-to-maturity
State and municipal	2,285		(4		)	822		(3		)	3,107		(7		)
Fannie Mae	2,361		(23		)	9,459		(248		)	11,820		(271		)
Freddie Mac	734		(3		)	2,238		(50		)	2,972		(53		)
Government National Mortgage Assoc.	3,631		(95		)	—		—			3,631		(95		)
Total securities held-to-maturity in an unrecognized loss position	$	9,011	$	(125	)	$	12,519	$	(301	)	$	21,530	$	(426	)

Declines in the fair value of securities below their cost that are other-than-temporary are reflected as realized losses.  The Company evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss

12

position before recovery of its amortized cost basis.  If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of the impairment is split into two components as follows:  1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

As of June 30, 2015, the Company’s security portfolio consisted of 357 securities, 83 of which were in an unrealized loss position. The majority of the unrealized losses are related to the Company’s agency, mortgage-backed securities, state and municipal, and corporate securities as discussed below.

U.S. Agency and Agency Mortgage-Backed Securities

Fannie Mae, Freddie Mac, Ginnie Mae and the Small Business Administration guarantee the contractual cash flows of our agency and mortgage-backed securities. Fannie Mae and Freddie Mac are institutions which the government has affirmed its commitment to support.  Our Ginnie Mae mortgage-backed securities are backed by the full faith and credit of the U.S. Government.  All of the agency mortgage-backed securities are residential mortgage-backed securities. At June 30, 2015, of the 43 U.S. Government sponsored enterprise agency and mortgage-backed securities in an unrealized loss position, eighteen were in a continuous unrealized loss position for 12 months or more.  The unrealized losses at June 30, 2015 were primarily attributable to changes in interest rates and illiquidity, and not credit quality.  The Company does not have the intent to sell these agency and mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The Company does not consider these securities to be other-than-temporarily impaired at June 30, 2015.

Corporate Debt and Municipal Securities

At June 30, 2015, of the 40 corporate debt and municipal securities in an unrealized loss position, eight were in a continuous unrealized loss position of 12 months or more.  We have assessed these securities and determined that the decline in fair value was temporary. In making this determination, we considered the period of time the securities were in a loss position, the percentage decline in comparison with the securities’ amortized cost, the financial condition of the issuer, and the delinquency or default rates based on the applicable bond ratings.  In addition, we do not have the intent to sell these securities and it is likely that we will not be required to sell these securities before the recovery of their amortized cost basis, which may be at maturity.  Included in the eight securities whose unrealized loss position exceeds 12 months was a $2.5 million Strats-Goldman Sachs Corporation obligation, maturing February 15, 2034 which is a variable rate note based on the 6 month libor. The current rate on the security is 1.44%.  The unrealized loss was $891,796 and $1,004,076 at June 30, 2015 and December 31, 2014, respectively.  In addition to the items noted above, we reviewed capital ratios, public filings of the issuer and related trust documents in the review of the unrealized loss.  The Strats-Goldman Sachs Corporation obligation is paying as agreed.  The other seven securities in a continuous unrealized loss position were finance sector corporate debt securities and municipal securities all rated above investment grade at June 30, 2015, that have maturities ranging from 2021 to 2033.  The Company does not consider these securities to be other-than-temporarily impaired at June 30, 2015.

Note D — Loans Receivable

The components of loans receivable at June 30, 2015 and December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014
	(In thousands)
Commercial loans	$	57,045		$	53,669
Commercial real estate	95,959			93,427
Consumer loans	59,471			46,883
Home equity	53,496			53,150
Residential mortgages	126,614			121,910
	392,585			369,039
Deferred fees	1,818			1,483
Allowance for loan losses	(3,459		)	(3,502		)
Net loans	$	390,944		$	367,020

13

The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocation of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. 

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired, when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or the fair value of collateral if repayment is expected solely from collateral.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

Troubled debt restructurings are individually evaluated for impairment and included in the separately identified impairment disclosures. Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan's effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of allowance on the loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The Company incorporates recent historical experience related to troubled debt restructurings that subsequently default into the calculation of the allowance by loan portfolio segment.

The general allowance covers non-impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent three years.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans (including troubled debt restructurings); levels of and trends in charge-offs and recoveries; migration of loans to the classification of special mention, substandard, or doubtful; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  commercial loans, commercial real estate loans, consumer loans, home equity loans and residential mortgages.

Commercial business lending generally involves greater risk than residential mortgage lending and involves risks that are different from those associated with residential and commercial real estate lending. Real estate lending is generally considered to be collateral based, with loan amounts based on predetermined loan to collateral values and liquidation of the underlying real estate collateral is viewed as the primary source of repayment in the event of borrower default. Although commercial business loans may be collateralized by equipment or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment because equipment and other business assets may be obsolete or of limited use, among other things. Accordingly, the repayment of a commercial business loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment.

Loans secured by commercial real estate and multi-family residential properties generally are larger than one-to-four family residential loans and involve a greater degree of risk. Commercial and multi-family residential mortgage loans often involve large loan balances to single borrowers or groups of related borrowers. Payments on these loans depend to a large degree on the results of operations and management of the properties or underlying businesses, and may be affected to a greater extent by adverse conditions in the real estate market or the economy in general. Accordingly, the nature of commercial real estate loans makes them more difficult for management to monitor and evaluate.

14

Consumer loans generally have shorter terms and higher interest rates than one-to-four family mortgage loans. In addition, consumer loans expand the products and services we offer to meet the financial services needs of our customers. Consumer loans generally involve greater credit risk than residential mortgage loans because of the difference in the underlying collateral.  Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because of the greater likelihood of damage to, loss of, or depreciation in the underlying collateral. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections depend on the borrower’s personal financial stability. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Home equity loans are secured by a borrower’s primary residence.  Home equity loans are underwritten under the same criteria that we use to underwrite one-to-four family fixed-rate loans. Home equity loans may be underwritten with a loan to value ratio of 90% when combined with the principal balance of an existing mortgage loan.  Home equity loans generally involve greater credit risk than the primary residential mortgage loans due to the potential of declines in collateral values, collectability as a result of foreclosure processes if the Bank is considered to be in a secondary position as well as the amount of expenses incurred during the process.

Residential real estate loans have as collateral a borrower’s primary residence.  The risk of loss on these loans would be due to collateral deficiencies due to market deterioration or location and condition of the property.  The foreclosure process of a primary residence is usually the final course of action on these types of loans. Given our underwriting criteria and the volume and balance of the loans as compared to collateral, the risk in this portfolio segment is lower than that of the other segments.

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net, due to immateriality. 

The following table sets forth the activity in the allowance for loan losses by portfolio segment:

For the Three Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages		Total
June 30, 2015
	(In thousands)
Allowance for loan losses:
Beginning balance	$	887	$	1,247		$	551		$	296		$	516	$	3,497
Charge-offs	—		—			(36		)	(19		)	—		(55		)
Recoveries	—		—			16			—			1		17
Provision for loan losses	65		(250		)	117			40			28		—
Ending balance	$	952	$	997		$	648		$	317		$	545	$	3,459

For the Six Months Ended	Commercial Loans			Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages		Total
June 30, 2015
	(In thousands)
Allowance for loan losses:
Beginning balance	$	1,175		$	1,085		$	445		$	295		$	502	$	3,502
Charge-offs	—			—			(57		)	(19		)	—		(76		)
Recoveries	—			—			32			—			1		33
Provision for loan losses	(223		)	(88		)	228			41			42		—
Ending balance	$	952		$	997		$	648		$	317		$	545	$	3,459

For the Three Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages			Total
June 30, 2014
	(In thousands)
Allowance for loan losses:
Beginning balance	$	954	$	993		$	264		$	302		$	678		$	3,191
Charge-offs	—		—			(16		)	—			(11		)	(27		)
Recoveries	—		1			7			—			1			9
Provision for loan losses	232		(1		)	49			(15		)	(165		)	100
Ending balance	$	1,186	$	993		$	304		$	287		$	503		$	3,273

15

For the Six Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages			Total
June 30, 2014
	(In thousands)
Allowance for loan losses:
Beginning balance	$	871	$	1,000		$	261		$	300		$	678		$	3,110
Charge-offs	—		—			(41		)	—			(11		)	(52		)
Recoveries	—		2			11			—			2			15
Provision for loan losses	315		(9		)	73			(13		)	(166		)	200
Ending balance	$	1,186	$	993		$	304		$	287		$	503		$	3,273

The following table presents the balances in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method:

June 30, 2015	Commercial Loans		Commercial Real Estate		Consumer Loans		Home Equity		Residential Mortgages		Total
	(In thousands)
Allowance for loan losses attributable to loans:	0
Individually evaluated for impairment	$	153	$	15	$	—	$	—	$	—	$	168
Collectively evaluated for impairment	799		982		648		317		545		3,291
Total	$	952	$	997	$	648	$	317	$	545	$	3,459
Loans:
Individually evaluated for impairment	$	1,376	$	448	$	—	$	—	$	—	$	1,824
Collectively evaluated for impairment	55,669		95,511		59,471		53,496		126,614		390,761
Total	$	57,045	$	95,959	$	59,471	$	53,496	$	126,614	$	392,585

December 31, 2014	Commercial Loans		Commercial Real Estate		Consumer Loans		Home Equity		Residential Mortgages		Total
	(In thousands)
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	$	115	$	21	$	—	$	—	$	—	$	136
Collectively evaluated for impairment	1,060		1,064		445		295		502		3,366
Total	$	1,175	$	1,085	$	445	$	295	$	502	$	3,502
Loans:
Individually evaluated for impairment	$	1,048	$	462	$	—	$	—	$	—	$	1,510
Collectively evaluated for impairment	52,621		92,965		46,883		53,150		121,910		367,529
Total	$	53,669	$	93,427	$	46,883	$	53,150	$	121,910	$	369,039

16

The following table presents information related to loans individually evaluated for impairment by segment of loans as of June 30, 2015 and December 31, 2014:

	June 30, 2015						December 31, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands)
With no related allowance recorded:
Commercial loans	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate	—		—		—		—		—		—
With an allowance recorded:
Commercial loans	1,376		1,376		153		1,048		1,048		115
Commercial real estate	448		448		15		462		462		21
Total	$	1,824	$	1,824	$	168	$	1,510	$	1,510	$	136

The following table presents the average recorded investment in impaired loans for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
	(In thousands)
With no related allowance recorded:	0		0		0		0
Commercial loans	$	—	$	—	$	—	$	—
Commercial real estate	—		—		—		—
With an allowance recorded:
Commercial loans	1,467		996		1,485		998
Commercial real estate	450		487		453		492
Total	$	1,917	$	1,483	$	1,938	$	1,490

At June 30, 2015, impaired commercial real estate loans are represented by three loans.  At June 30, 2015, impaired commercial loans are represented by eleven loans. Nine of the commercial loans were considered troubled debt restructurings and totaled $984,000 as of June 30, 2015. The remaining two commercial loans and the three commercial real estate loans were for customers who had commercial loans considered to be troubled debt restructurings. Cash basis interest income of $29,000 and $60,000 was recognized for the three months and six months ended June 30, 2015, respectively. Cash basis interest income of $23,000 and $44,000 was recognized for the three months and six months ended June 30, 2014, respectively. 

At June 30, 2014, impaired commercial real estate loans are represented by three loans. At June 30, 2014, impaired commercial loans are represented by nine loans. Seven of the commercial loans were considered trouble debt restructurings and totaled $839,000 as of June 30, 2014. The remaining two commercial loans and three commercial real estate loans were for customers who had commercial loans considered to be troubled debt restructurings.

The following table presents the recorded investment in nonaccrual and past due loans over 90 days still on accrual by segment as of June 30, 2015 and December 31, 2014:

	June 30, 2015
	Nonaccrual		Loans Past Due Over 90 days still Accruing
	(In thousands)
Commercial loans	$	35	$	—
Commercial real estate	—		—
Consumer loans	—		—
Home equity	4		—
Residential mortgages	328		—
Total	$	367	$	—

17

	December 31, 2014
	Nonaccrual		Loans Past Due Over 90 days still Accruing
	(In thousands)
Commercial loans	$	39	$	—
Commercial real estate	—		—
Consumer loans	—		—
Home equity	—		—
Residential mortgages	267		—
Total	$	306	$	—

The following represents the aging of the recorded investment in past due loans as of June 30, 2015 and December 31, 2014 by class of loans.

	June 30, 2015
	Total		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due
	(In thousands)
Commercial loans	$	57,045	$	187	$	—	$	—	$	187	$	56,858
Commercial real estate	95,959		84		—		—		84		95,875
Consumer loans	59,471		82		2		—		84		59,387
Home equity	53,496		153		—		4		157		53,339
Residential mortgages	126,614		71		10		328		409		126,205
Total	$	392,585	$	577	$	12	$	332	$	921	$	391,664

	December 31, 2014
	Total		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due
	(In thousands)
Commercial loans	$	53,669	$	—	$	56	$	—	$	56	$	53,613
Commercial real estate	93,427		39		—		—		39		93,388
Consumer loans	46,883		70		11		—		81		46,802
Home equity	53,150		118		—		—		118		53,032
Residential mortgages	121,910		233		—		267		500		121,410
Total	$	369,039	$	460	$	67	$	267	$	794	$	368,245

The carrying value of foreclosed residential real estate property as of June 30, 2015 and December 31, 2014 was $28,000 and $245,692, respectively. There were six loans in process of foreclosure as of June 30, 2015 totaling $385,365. There were four loans in process of foreclosure as of December 31, 2014 totaling $334,266.

Troubled Debt Restructurings

The following table presents the summary of the investment in troubled debt restructurings and related allowance for loan losses as of June 30, 2015 and December 31, 2014 by class of loans:

18

	June 30, 2015					December 31, 2014
	Number of Loans	Recorded Investment		Allowance for Loan Losses Allocated		Number of Loans	Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands except number of loans)
Commercial loans	9	$	984	$	104	7	$	804	$	58
Commercial real estate	—	—		—		—	—		—
Consumer loans	—	—		—		—	—		—
Home equity	—	—		—		—	—		—
Residential mortgages	—	—		—		—	—		—
Total	9	$	984	$	104	7	$	804	$	58

There was one new troubled debt restructurings recorded during the three months ended June 30, 2015. There were no new troubled debt restructurings recorded during the three months ended June 30, 2014. During the six months ended June 30, 2015, there were three new troubled debt restructurings recorded compared to one new troubled debt restructuring recorded during the same period in 2014. The Company has not committed to lend additional amounts as of June 30, 2015 to customers with outstanding loans that are classified as troubled debt restructurings.

The modification of the terms of such loans included one or a combination of the following:  a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. Certain troubled debt restructurings are classified as nonperforming at the time of the restructuring and may only be returned to performing status after considering the borrower's sustained repayment performance for a reasonable period.

Each of the commercial loans represented a line of credit or fixed rate loan which was not paid in full at the time of maturity. Each loan maturity date was extended for terms ranging from ten years to twenty years and the reduction in interest rates were to below market rates. The nine loans considered troubled debt restructurings as of June 30, 2015 represented six commercial relationships. Two of the commercial loans representing one relationship with a principal balance of $35,000 and $39,000 as of June 30, 2015 and December 31, 2014, respectively, were considered nonaccrual.

For all such modifications, the pre and post outstanding recorded investment amount remained unchanged. There were no charge-offs or defaults during the three months and six months ended June 30, 2015 and 2014. All of the troubled debt restructurings were considered impaired as of June 30, 2015 and December 31, 2014. The allocated allowance for loan losses was based on the present value of estimated future cash flows. All of the loans are currently performing in accordance with their modified terms.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  The Company analyzes loans individually by classifying the loans as to credit risk.  This analysis includes non-homogeneous loans, such as commercial and commercial real estate with an outstanding relationship greater than $250,000.  Homogeneous loans are reviewed when appropriate given foreclosures, bankruptcies or relationships that include non-homogeneous loans. For homogeneous loan pools, such as residential mortgages, home equity and consumer loans, the Company uses the payment status to identify the credit risk in these loan portfolios.  Payment status is reviewed on at least a monthly basis by the Company’s personnel and on a quarterly basis with respect to determining the adequacy of the allowance for loan losses.  This analysis is performed on at least an annual basis.  The Company uses the following definitions for risk ratings:

Special Mention.  Loans classified as special mention have a potential weakness that deserves management’s close attention.  If left uncovered, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debts.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

19

Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.  Loans listed as not rated are either less than $250,000 or are included in groups of homogeneous loans.

Based on the most recent analysis performed (all loans graded within past 12 months), the risk category by class of loan is as follows:

	June 30, 2015
	Not Rated		Pass		Special Mention		Substandard		Doubtful
	(In thousands)
Commercial loans	$	14,054	$	40,731	$	492	$	1,768	$	—
Commercial real estate	16,898		73,682		1,523		3,856		—
Total	$	30,952	$	114,413	$	2,015	$	5,624	$	—

	December 31, 2014
	Not Rated		Pass		Special Mention		Substandard		Doubtful
	(In thousands)
Commercial loans	$	13,592	$	35,546	$	191	$	4,340	$	—
Commercial real estate	14,956		72,938		4,436		1,097		—
Total	$	28,548	$	108,484	$	4,627	$	5,437	$	—

Note E — Segment Information

The Bank has determined that it has three primary business segments; its banking franchise, its insurance, risk management and employee benefits activities and its financial and investment advisory activities. For the three months and six months ended June 30, 2015 and 2014, the Bank's insurance, risk management and employee benefit activities consisted of those conducted through its wholly owned subsidiary One Group NY, Inc. (formerly Bailey & Haskell Associates, Inc). The Bank's financial and investment advisory activities consisted of those conducted through its wholly owned subsidiary Oneida Wealth Management, Inc., which was approved as a broker-dealer by FINRA in April 2014.

Information about the Bank’s segments is presented in the following table for the periods indicated:

	Three Months Ended June 30, 2015
	Banking Activities			Insurance, Risk Management and Employee Benefits Activities		Financial/Investment Advisory Activities		Total
	(In thousands)
Net interest income	$	5,137		$	—	$	—	$	5,137
Provision for loan losses	—			—		—		—
Net interest income after provision for loan losses	5,137			—		—		5,137
Investment losses, net	(144		)	—		—		(144		)
Commissions and fees on sales of non-banking products	89			5,870		987		6,946
Non-interest income	1,183			—		—		1,183
Non-interest expenses	6,194			4,733		966		11,893
Depreciation and amortization	327			125		6		458
(Loss) income before income taxes	(256		)	1,012		15		771
Income tax (benefit) expense	(114		)	400		12		298
Net (loss) income	$	(142	)	$	612	$	3	$	473
Total Assets	$	822,361		$	30,897	$	4,276	$	857,534

20

	Three Months Ended June 30, 2014
	Banking Activities		Insurance, Risk Management and Employee Benefit Activities		Financial/Investment Advisory Activities			Total
	(In thousands)
Net interest income	$	5,023	$	—	$	—		$	5,023
Provision for loan losses	100		—		—			100
Net interest income after provision for loan losses	4,923		—		—			4,923
Investment gains, net	40		—		—			40
Commissions and fees on sales of non-banking products	511		5,215		729			6,455
Non-interest income	1,819		—		—			1,819
Non-interest expenses	5,607		4,406		880			10,893
Depreciation and amortization	324		76		7			407
Income (loss) before income taxes	1,362		733		(158		)	1,937
Income tax expense (benefit)	237		322		(51		)	508
Net income (loss)	$	1,125	$	411	$	(107	)	$	1,429
Total Assets	$	753,357	$	29,369	$	4,919		$	787,645

	Six Months Ended June 30, 2015
	Banking Activities		Insurance, Risk Management and Employee Benefit Activities		Financial/Investment Advisory Activities		Total
	(In thousands)
Net interest income	$	10,309	$	—	$	—	$	10,309
Provision for loan losses	—		—		—		—
Net interest income after provision for loan losses	10,309		—		—		10,309
Investment gains, net	244		—		—		244
Commissions and fees on sales of non banking products	452		11,590		1,926		13,968
Non-interest income	2,656		—		—		2,656
Non-interest expenses	11,407		9,700		1,796		22,903
Depreciation and amortization	661		195		13		869
Income before income taxes	1,593		1,695		117		3,405
Income tax expense	230		682		49		961
Net income	$	1,363	$	1,013	$	68	$	2,444
Total Assets	$	822,361	$	30,897	$	4,276	$	857,534

21

	Six Months Ended June 30, 2014
	Banking Activities		Insurance, Risk Management and Employee Benefit Activities		Financial/Investment Advisory Activities			Total
	(In thousands)
Net interest income	$	9,808	$	—	$	—		$	9,808
Provision for loan losses	200		—		—			200
Net interest income after provision for loan losses	9,608		—		—			9,608
Investment gains, net	896		—		—			896
Commissions and fees on sales of non banking products	1,025		10,884		1,482			13,391
Non-interest income	2,943		—		—			2,943
Non-interest expenses	10,725		8,870		1,792			21,387
Depreciation and amortization	687		149		14			850
Income (loss) before income taxes	3,060		1,865		(324		)	4,601
Income tax expense (benefit)	518		819		(109		)	1,228
Net income (loss)	$	2,542	$	1,046	$	(215	)	$	3,373
Total Assets	$	753,357	$	29,369	$	4,919		$	787,645

The following represents a reconciliation of the Company’s reported segment assets to consolidated assets as of June 30:

	2015			2014
	(In thousands)
Total assets for reportable segments	$	857,534		$	787,645
Elimination of intercompany cash balances	(7,964		)	(9,807		)
Consolidated Total	$	849,570		$	777,838

Note F — Fair Value

Fair Value Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Securities:  The fair values of trading securities and investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded, value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).  The fair value of level 3 investment securities are determined by the Company’s Finance Department, which reports to the Chief Financial Officer (CFO).  The CFO reviews the values and these are reported to the Investment Committee on a

22

quarterly basis.  Discounted cash flows are calculated using spread to swap and LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations. 

Assets and liabilities measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Trading securities
Common and preferred equities	$	3,922	$	1,041	$	2,881	$	—
Available-for-sale securities
U.S. Agencies	28,275		—		28,275		—
U.S. Treasury	1,994		—		1,994		—
Corporate	27,405		—		27,405		—
State and municipal	32,631		—		32,564		67
Small Business Administration	3,741		—		3,741		—
Residential mortgage-backed securities	61,493		—		61,493		—
Total	$	159,461	$	1,041	$	158,353	$	67

	Fair Value Measurement at December 31, 2014 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Trading securities
Common and preferred equities	$	3,900	$	1,083	$	2,817	$	—
Available-for-sale securities
U.S. Agencies	27,232		—		27,232		—
Corporate	34,097		—		34,097		—
Agency asset backed securities	8,790		—		8,790		—
State and municipal	34,218		—		34,150		68
Small Business Administration	6,970		—		6,970		—
Residential mortgage-backed securities	63,530		—		63,530		—
Private placement mortgage obligation	1,477		—		1,477		—
Total	$	180,214	$	1,083	$	179,063	$	68

There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2015 or 2014. 

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months endedJune 30:

23

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Municipal Securities			Total
	(In thousands)
Beginning balance January 1, 2015	$	68		$	68
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	—			—
Ending balance March 31, 2015	$	68		$	68
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	(1		)	(1		)
Ending balance June 30, 2015	$	67		$	67

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Municipal Securities			Total
	(In thousands)
Beginning balance January 1, 2014	$	101		$	101
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	—			—
Ending balance March 31, 2014	$	101		$	101
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	(1		)	(1		)
Ending balance June 30, 2014	$	100		$	100

24

The Company’s Level 3 state and local municipal securities valuations were supported by analysis prepared by an independent third party.  The third party’s approach to determining fair value involves using recently executed transactions for similar securities and market quotations for similar securities.  As these securities are not rated by the rating agencies and are localized to our market area, it was determined that these were valued using Level 3 inputs.  In addition, the Company reviews past history of the contractual payments and financial condition of the municipalities in determining an appropriate market value for this type of security.

There were no impaired loans, loans held for sale or other real estate owned, net that were measured at fair value as of June 30, 2015 or December 31, 2014.

Fair Value Option

The Company has elected the fair value option for certain preferred and common equity securities as they do not have stated maturity values and the fair value fluctuates with market changes.  The decision to elect the fair value option is made individually for each instrument and is irrevocable once made.  Changes in fair value for the selected instruments are recorded in earnings. Interest income is recorded based on the contractual amount of interest income earned on financial assets (except any that are in nonaccrual status). Dividend income is recorded based on cash dividends.  Cash flows from the purchase and sale of securities for which the fair value option has been elected are shown as operating activities in the consolidated statement of cash flows.

The following table presents the amount of gains and losses from changes in fair value included in income before taxes for financial assets carried at fair value is as follows:

	Three Months Ended					Six Months Ended
	June 30, 2015			June 30, 2014		June 30, 2015		June 30, 2014
	(In thousands)
Interest income	$	—		$	—	$	—	$	—
Change in fair value	(220		)	13		22		823
Total change in fair value	$	(220	)	$	13	$	22	$	823

Fair Value of Financial Instruments

Carrying amounts and estimated fair values of financial instruments at June 30, 2015 and December 31, 2014 were as follows: 

June 30, 2015	Carrying Value		Fair Value Measurements Using
			Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	84,438	$	84,438	$	—	$	—	$	84,438
Trading securities	3,922		1,041		2,881		—		3,922
Investment securities, available-for-sale	155,539		—		155,472		67		155,539
Investment securities, held-to-maturity	122,384		—		122,179		3,365		125,544
Loans held for sale	75		—		76		—		76
Loans receivable, net	390,944		—		—		403,311		403,311
Federal Home Loan Bank stock	1,440		N/A		N/A		N/A		N/A
Accrued interest receivable	2,206		—		1,148		1,058		2,206
Financial liabilities:	0
Deposits	$	741,398	$	602,753	$	140,524	$	—	$	743,277
Accrued interest payable	4		2		2		—		4

25

December 31, 2014	Carrying Value		Fair Value Measurement Using
			Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	31,075	$	31,075	$	—	$	—	$	31,075
Trading securities	3,900		1,083		2,817		—		3,900
Investment securities, available-for-sale	176,314		—		176,246		68		176,314
Investment securities, held-to-maturity	129,415		—		130,053		3,844		133,897
Loans held for sale	839		—		865		—		865
Loans receivable, net	367,020		—		—		381,084		381,084
Federal Home Loan Bank stock	1,391		N/A		N/A		N/A		N/A
Accrued interest receivable	2,342		—		1,339		1,003		2,342
Financial liabilities:
Deposits	$	689,170	$	543,262	$	148,115	$	—	$	691,377
Accrued interest payable	7		2		5		—		7

The methods and assumptions, not previously presented, used to estimate fair values are describes as follows:

(a)Cash and Cash Equivalents

The carrying value of our cash and cash equivalents approximates fair value and is classified as Level 1. 

(b)Loans Held for Sale

The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

(c) Loans

Fair value of loans, excluding loans held for sale, are estimated as follows:  for variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification.  Impaired loans are valued at the lower of cost or fair value.  The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

(d)  FHLB Stock

It is not practicable to estimate the fair value of FHLB stock due to restrictions placed on its transferability.

(e) Deposits

The fair value disclosed for demand deposits (e.g., interest and non-interest checking, savings and money market accounts)are, by definition, equal to the amount payable on demand at the reporting date (i.e. their carrying value) resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(f)  Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 1, Level 2 or Level 3 classification based on the level of the asset or the liability with which the accrual is associated.

26

(g)  Off-balance Sheet Instruments

Fair value for off-balance sheet, credit related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings.  The fair value of commitments is not material.

Note G — Stock-Based Compensation

The Company has one share based compensation plan as described below.  Total compensation cost that has been charged against income for the plan was $76,748 and $152,304 for the three months ended June 30, 2015 and 2014, respectively.  Total compensation cost that has been charged against income for the plan was $152,775 and $286,164 for the six months ended June 30, 2015 and 2014, respectively. The total income tax benefit was $28,972 and $57,673 for the three months and six months ended June 30, 2015, respectively. The total income tax benefit was $58,637 and $110,173 for the three months and six months ended June 30, 2014, respectively.

Stock Options

The Company’s 2012 Equity Incentive Plan, which is shareholder approved, permits the granting of share options to its directors, officers and key employees for up to 216,750 shares of common stock.  Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. All options granted expire by July 2022 and options vest and become exercisable ratably over a one to five year period. There were 25,750 shares available for future grants under the plan described above as of June 30, 2015. Compensation recorded in conjunction with the option awards was $8,984 and $17,874 for the three months and six months ended June 30, 2015, respectively. Compensation recorded in conjunction with the option awards was $14,695 and $23,832 for the three months and six months ended June 30, 2014, respectively.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company's common stock. The Company uses historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted was determined using the following weighted-average assumptions as of the grant date:

	2015		2014
Risk-free interest rate	0.00	%	1.50	%
Expected term	0.24 years		3.12 years
Expected stock price volatility	28.31	%	22.85	%
Dividend yield	4.66	%	4.66	%

A summary of activity in the stock option plan for 2015 was as follows:

27

	Shares		Average Exercise Price		Weighted Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2015	172,348		$	10.44	7.06	$	443,550
Granted	364		$	19.61	—	$	306
Exercised	(18,848	)	$	11.10	—	$	144,025
Forfeited or expired	—		$	—	—	$	—
Outstanding at June 30, 2015	153,864		$	10.38	6.89	$	1,548,746
Fully vested and expected to vest	108,000		$	10.39	7.32	$	1,086,615
Exercisable as of June 30, 2015	45,864		$	10.37	6.13	$	462,131

Information related to the stock option plan was as follows:

	2015			2014
Intrinsic value of options exercised	$	144,025		$	10,835
Cash received from option exercises	169,178			56,650
Tax benefit realized from option exercises	(185		)	—
Weighted average fair value of options granted	0.9728			1.3039

As of June 30, 2015, there was $74,496 of total unrecognized compensation cost related to nonvested stock options granted under the plan.  The cost is expected to be recognized over a weighted-average period of 2.1 years.

Stock Awards

The 2012 Equity Incentive Plan provides for the issuance of shares of restricted stock ("RRP") to directors, officers and key employees.  Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date.  The fair value of the stock was determined using the grant date fair value of $10.30 for shares awarded in July 2012 and $12.43 for shares awarded in June 2014.  RRP shares vest ratably over the five year vesting period on the anniversary date for shares awarded in July 2012 and over the four year vesting period on the anniversary date for those shares awarded in June 2014.  The shares have voting rights and are eligible to receive nonforfeitable dividends on the unvested shares.  These shares are considered to be participating securities in the earnings per share calculation.  Total shares issuable under the plan are 131,500 at June 30, 2015 and 130,000 shares have been issued.  A summary of changes in the Company’s nonvested shares for the years follows:

Nonvested Shares	Shares	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015	78,000	$	10.46
Granted	—	—
Vested	—	—
Forfeited	—	—
Nonvested at June 30, 2015	78,000	$	10.46

As of June 30, 2015, there was $562,055 of total unrecognized compensation cost related to nonvested shares granted under the Plan.  The cost is expected to be recognized over a weighted average period of 2.1 years. Compensation expense recorded in conjunction with the RRP awards was $67,764 and $134,901 for the three months and six months ended June 30, 2015, respectively. Compensation expense recorded in conjunction with the RRP awards was $73,183 and $134,180 for the three months and six months ended June 30, 2014, respectively.

Performance Awards

The 2012 Equity Incentive Plan provides for the issuance of shares of performance award restricted stock to directors, officers and key employees.  Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date. The fair value of the stock was determined using the grant date fair value of $10.30.  Performance shares cliff vest as of July 24, 2015 based on the performance results for the three year period ending December 31, 2014. There were two

28

sets of performance criteria based on the individual award: (1) based on a three year cumulative earnings per share, return on average assets and return on tangible equity metrics weighted at 33% and (2) average revenue and profit margin weighted at 50%. As of December 31, 2014, the compensation cost expensed ranged from 50% - 100% payout under the terms of the plan for the different performance sets. The shares have voting rights.  Upon vesting of the performance shares, any dividends declared during the vesting period will be paid based on the shares vested.  Total shares issuable under the plan are 75,000 at June 30, 2015 and all shares were issued in 2012.  A summary of changes in the Company’s nonvested shares for the years follows:

Nonvested Shares	Shares	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015	75,000	$	10.30
Granted	—	—
Vested	—	—
Forfeited	—	—
Nonvested at June 30, 2015	75,000	$	10.30

As of June 30, 2015, there was no unrecognized compensation cost related to nonvested shares granted under the Plan. There was no compensation expense recorded in conjunction with the performance shares during 2015. Compensation expense recorded in conjunction with the performance awards totaled $64,426 and $128,152 for the three months and six months ended June 30, 2014, respectively.

Note H - Comprehensive Income (Loss)

The following table represents the detail of comprehensive income (loss) for the three months and six months ended:

	For the Three Months Ended June 30, 2015
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding losses on available-for-sale securities during the period	$	(1,816	)	$	685		$	(1,131	)
Reclassification adjustment for gains included in net income (1)	(76		)	29			(47		)
Net unrealized losses on available-for-sale securities	(1,892		)	714			(1,178		)
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	181			(68		)	113
Net unrealized gains	181			(68		)	113
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive loss	$	(1,711	)	$	646		$	(1,065	)

	For the Six Months Ended June 30, 2015
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding losses on available-for-sale securities during the period	$	(806	)	$	304		$	(502	)
Reclassification adjustment for gains included in net income (1)	(222		)	84			(138		)
Net unrealized losses on available-for-sale securities	(1,028		)	388			(640		)
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	320			(120		)	200
Net unrealized gains	320			(120		)	200
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive loss	$	(708	)	$	268		$	(440	)

29

	For the Three Months Ended June 30, 2014
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding gains on available-for-sale securities during the period	$	1,260		$	(504	)	$	756
Reclassification adjustment for gains included in net income (1)	(27		)	11			(16		)
Net unrealized gains on available-for-sale securities	1,233			(493		)	740
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	132			(53		)	79
Net unrealized gains	132			(53		)	79
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive income	$	1,365		$	(546	)	$	819

	For the Six Months Ended June 30, 2014
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding gains on available-for-sale securities during the period	$	2,999		$	(1,200	)	$	1,799
Reclassification adjustment for gains included in net income (1)	(73		)	30			(43		)
Net unrealized gains on available-for-sale securities	2,926			(1,170		)	1,756
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	274			(110		)	164
Net unrealized gains	274			(110		)	164
Net pension gain arising during period (2)	24			(10		)	14
Net unrecognized postretirement benefit obligation	24			(10		)	14
Other comprehensive income	$	3,224		$	(1,290	)	$	1,934

___________________________________

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net gains (losses) on sales of securities on the consolidated statement of operations.

(2) Net gain (loss) arising during period which is comprised of net gain (loss) and amortization of prior gain (loss) is reported in compensation and benefits on the consolidated statements of operations.

(3) Amortization of unrealized gains on transfer of securities held-to-maturity are reported in the interest on investment securities on the consolidated statements of operations.

The following table represents a summary of the change in accumulated other comprehensive income (loss) by component, net of tax, for the six months ended June 30, 2015 and 2014:

	Net unrealized gains (losses) on available-for-sale securities			Net unrealized gains (losses) on transfer of securities to held-to-maturity			Unrecognized postretirement benefit obligation			Accumulated other comprehensive income (loss)
	(In thousands)
Balance at January 1, 2015	$	477		$	(2,328	)	$	(752	)	$	(2,603	)
Other comprehensive (loss) income, during the period, net of adjustments	(502		)	200			—			(302		)
Amounts reclassified from AOCI	(138		)	—			—			(138		)
Other comprehensive (loss) income	(640		)	200			—			(440		)
Balance at June 30, 2015	$	(163	)	$	(2,128	)	$	(752	)	$	(3,043	)

30

	Net unrealized gains (losses) on available-for-sale securities			Net unrealized gains (losses) on transfer of securities to held-to-maturity			Unrecognized postretirement benefit obligation			Accumulated other comprehensive income (loss)
	(In thousands)
Balance at January 1, 2014	$	(1,007	)	$	(2,579	)	$	(1,556	)	$	(5,142	)
Other comprehensive income, during the period, net of adjustments	1,799			164			14			1,977
Amounts reclassified from AOCI	(43		)	—			—			(43		)
Other comprehensive income	1,756			164			14			1,934
Balance at June 30, 2014	$	749		$	(2,415	)	$	(1,542	)	$	(3,208	)

Note I — Accounting Pronouncements

In June 2014, the FASB amended existing guidance and created a new Topic 606, Revenue from Contracts with Customers which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. This guidance provides a five-step analysis of transactions to determine when and how revenue is recognized that consists of: 1) identify the contract with the customer; 2) identify the performance obligation in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when or as each performance obligation is satisfied. The amendments in this guidance are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Companies can transition to the requirement of this guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption, which is January 1, 2018 for the Company. The impact of this guidance on the Company's operating results or financial condition is not known at this time.

In January 2014, the FASB amended existing guidance by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. The amendments clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. In addition, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this guidance are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in this guidance using either a modified retrospective transition method or a prospective transition method. The adoption of this guidance did not have a material effect on the Company's operating results or financial condition.

Note J - Merger

On February 24, 2015, the Company entered into a definitive merger agreement to be acquired by Community Bank System, Inc. for approximately $142 million in Community Bank System, Inc. stock and cash. The merger agreement has been unanimously approved by the board of directors of both companies and the stockholders of Oneida Financial Corp. The merger is expected to close in October 2015, subject to required regulatory approval.

Current Litigation Relating to the Merger

On March 3, 2015, Paul Parshall (the "Plaintiff") filed a stockholder class action lawsuit in the Supreme Court of the State of New York, County of Oneida, against the Company, the directors of the Company and Community Bank System, Inc. The lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by failing to take adequate steps to ensure that the Company’s stockholders receive adequate, fair and maximum consideration under the circumstances and by engineering the merger to the benefit of themselves and/or Community Bank System, Inc. without regard to the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary

31

duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On March 12, 2015, John Solak (the "Second Plaintiff") filed a stockholder class action lawsuit in the Supreme Court of the State of New York, County of Oneida, against the Company, the directors of the Company and Community Bank System, Inc. Similar to the Plaintiff’s lawsuit, the Second Plaintiff’s lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by failing to take adequate steps to ensure that the Company’s stockholders receive adequate, fair and maximum consideration under the circumstances and by engineering the merger to the benefit of themselves and/or Community Bank System, Inc. without regard to the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On March 13, 2015, the Company filed a complaint in the Supreme Court of the State of New York, County of Madison, against FinPro, Inc. (“FinPro”). The Company’s complaint alleges that FinPro has wrongfully demanded a $1.42 million services fee as a result of the Company's entering into the merger even though FinPro has provided no services in connection with the merger and has no right, contractual or otherwise, to such a fee. As a result, the Company is seeking declaratory judgment nullifying the improper demand made by FinPro, and any purported agreement on which the demand is allegedly based.

On April 24, 2015, Linda Colvin (the "Third Plaintiff") filed a stockholder class action lawsuit in the Circuit Court for Baltimore City, Maryland, against the Company, the directors of the Company and Community Bank System, Inc. Similar to the lawsuits by the Plaintiff and the Second Plaintiff, the Third Plaintiff’s lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by agreeing to a merger transaction that fails to maximize shareholder value and by putting their personal interests ahead of the interests of the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On June 9, 2015, the Company, Community Bank System, Inc., and the other defendants entered into a memorandum of understanding (the “MOU”) with the Plaintiff, Second Plaintiff and Third Plaintiff regarding the settlement of the lawsuits. Pursuant to the MOU, the Company agreed to provide additional information to Oneida Financial Corp. stockholders in the Proxy Statement/Prospectus of Oneida Financial Corp. and Community Bank System, Inc. dated May 6, 2015 (the “Proxy Statement/Prospectus”). The Company, Community Bank System, Inc. and the other defendants deny all of the allegations in the lawsuits. The Company, Community Bank System, Inc. and the individual director defendants believe the disclosures in the Proxy Statement/Prospectus were adequate under the law. Nevertheless, the Company, Community Bank System, Inc. and the other defendants have agreed to settle the lawsuits in order to avoid the costs, disruption, and distraction of further litigation. Any costs associated with settling the lawsuits was paid by the Company’s insurance carrier and the Company did not incur a loss on the settlement.

32

ITEM 2.       Management’s Discussion and Analysis of Financial Condition and Results Of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section presents Management’s Discussion and Analysis of Oneida Financial Corp.'s (the "Company’s") consolidated financial results of operations and condition and should be read in conjunction with the Company’s financial statements and notes thereto included herein.

When used in this quarterly report the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including, among other things, changes in economic conditions in the Company’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Company’s market area and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected.  The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.  The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake, and specifically declines any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

GENERAL

Oneida Financial Corp. is the parent company of Oneida Savings Bank (the "Bank”). The Company is a Maryland corporation. The Company conducts no business other than holding the common stock of the Bank and general passive investment activities resulting from the capital it holds. Consequently, the net income of the Company is primarily derived from its investment in the Bank.  Our results of operations depend primarily on our net interest income.  Net interest income is the difference between interest income we earn on our interest-earning assets, consisting primarily of loans, investment securities, mortgage-backed securities and other interest-earning assets (primarily cash and cash equivalents), and the interest we pay on our interest-bearing liabilities, consisting primarily of deposits and Federal Home Loan Bank advances and other borrowings.  Net interest income is a function of our interest rate spread, which is the difference between the average yield earned on our interest-earning assets and the average rate paid on our interest-bearing liabilities, as well as a function of the average balance of interest-earning assets compared to interest-bearing liabilities.  Also contributing to our earnings is non-interest income, which consists primarily of service charges and fees on loan and deposit products and services, fees from our insurance, risk management and employee benefits and financial investment and advisory subsidiaries and fees from trust services, and net gains and losses on sale of investments.  Interest income and non-interest income are offset by provisions for loan losses, general administrative and other expenses, including employee compensation and benefits and occupancy and equipment costs, as well as by state and federal income tax expense.

Our results of operations are also significantly affected by general economic and competitive conditions, particularly with respect to changes in interest rates, government policies and actions of regulatory authorities.  Future changes in applicable law, regulation or government policies may materially affect our financial condition and results of operations.

RECENT DEVELOPMENTS

     On February 24, 2015, the Company entered into a definitive merger agreement to be acquired by Community Bank System, Inc. for approximately $142 million in Community Bank System, Inc. stock and cash. The merger agreement has been unanimously approved by the board of directors of both companies and by the stockholders of Oneida Financial Corp. The merger is expected to close in the fourth quarter of 2015, subject to required regulatory approvals.

The Company announced on June 24, 2015, a quarterly cash dividend of $0.12 per share, which was paid on July 21, 2015 to its shareholders of record on July 7, 2015.

FINANCIAL CONDITION

ASSETS.  Total assets at June 30, 2015 were $849.6 million, an increase of $51.4 million, or 6.4%, from $798.2 million at December 31, 2014. The increase in total assets was primarily attributable to increases in cash and cash equivalents and loans receivable.

33

Cash and cash equivalents increased $53.3 million, or 171.4%, to $84.4 million at June 30, 2015 as compared with $31.1 million at December 31, 2014. The increase in cash and cash equivalents was due to the increase in deposits and timing of investing the excess liquidity.

Trading securities increased $22,000, or 0.6%, to $3.9 million at June 30, 2015 as compared with $3.9 million at December 31, 2014. Trading securities represent common and preferred equity securities that we have elected to adjust to fair value.  The increase in trading securities was due to the increase in the fair value during the first six months of 2015 that was reflected through the income statement.

Mortgage-backed securities decreased $7.7 million, or 6.6%, to $108.2 million at June 30, 2015 as compared with $115.9 million at December 31, 2014.  Investment securities decreased $20.1 million, or 10.6%, to $169.7 million at June 30, 2015 as compared to $189.8 million at December 31, 2014. The decrease in mortgage-backed securities and investment securities was due to maintaining a higher liquidity position as well as investing excess funds in loans receivable.

Loans receivable, including loans held for sale, increased $23.1 million, or 6.3%, to $391.0 million at June 30, 2015 as compared with $367.9 million at December 31, 2014.  We continue to maintain a diversified loan portfolio. The increase in net loan balances reflect the Company's continued loan origination efforts partially offset by loan sales activity. Loan originations during the first six months of 2015 totaled $66.1 million as compared to total loan originations during the six months ended June 30, 2014 of $45.4 million. We sold $4.6 million in newly originated fixed rate residential loans with terms exceeding 15 years during the six months ended June 30, 2015 compared to $3.4 million during the same period in 2014.

LIABILITIES.  Total liabilities increased by $50.8 million, or 7.2%, to $753.2 million at June 30, 2015 from $702.4 million at December 31, 2014.  The increase was the result of an increase in deposits of $52.2 million partially offset by a decrease in other liabilities of $1.4 million.

Deposit accounts increased $52.2 million, or 7.6%, to $741.4 million at June 30, 2015 from $689.2 million at December 31, 2014.  Interest-bearing deposit accounts increased by $41.9 million, or 6.9%, to $645.4 million at June 30, 2015 from $603.5 million at December 31, 2014.  Non-interest bearing deposit accounts increased $10.3 million, or 12.0%, to $96.0 million at June 30, 2015 from $85.7 million at December 31, 2014.  The increase in deposit accounts was primarily a result of increases in both our retail deposits and municipal deposits offered through our limited purpose commercial banking subsidiary, State Bank of Chittenango.  Retail deposits increased $23.3 million, or 4.5%, to $542.0 million at June 30, 2015 from $518.7 million at December 31, 2014.  Municipal deposits increased $28.9 million, or 17.0%, to $199.4 million at June 30, 2015 from $170.5 million at December 31, 2014.  The Bank believes the increase in municipal deposits is related to a continuing trend of local towns, villages, cities and school districts seeking a locally-based financial institution partner.

We had no borrowings outstanding at June 30, 2015 or December 31, 2014. At June 30, 2015 we had no overnight line of credit borrowings. Our overnight line of credit is used from time to time for liquidity management.

Other liabilities decreased $1.4 million, or 10.6%, to $11.8 million at June 30, 2015 from $13.2 million at December 31, 2014. The decrease in other liabilities is primarily due to a decrease in premiums payable at our insurance subsidiary as a result of a decrease in future dated commissions at June 30, 2015 from December 31, 2014.

STOCKHOLDERS’ EQUITY.  Total stockholders’ equity at June 30, 2015 was $96.4 million, an increase of $636,000, or 0.7%, from $95.8 million at December 31, 2014.  The increase in stockholders’ equity was a result of net income of $2.4 million for the six months ended June 30, 2015. Offsetting this increase in stockholders' equity was a decrease resulting from the payment of a quarterly dividend during the first six months of 2015 totaling $0.24 per share as well as a decrease in accumulated other comprehensive income of $440,000 at June 30, 2015 as a result of a decrease in the fair value of mortgage-backed and investment securities reflecting the recent changes in interest rates.

ANALYSIS OF NET INTEREST INCOME

Oneida Savings Bank’s principal business has historically consisted of offering savings accounts and other deposits to the general public and using the funds from such deposits to make loans secured by residential and commercial real estate, as well as consumer and commercial business loans.  Oneida Savings Bank also invests a significant portion of its assets in investment securities and mortgage-backed securities both of which have classifications of available-for-sale and held-to-maturity.  Our results of operations depends primarily upon net interest income, which is the difference between income earned on interest-earning assets, such as loans and investments, and interest paid on interest-bearing liabilities, such as deposits and borrowings.  Net interest income is directly affected by changes in volume and mix of interest-earning assets and interest-bearing liabilities which support those assets, as well as the changing interest rates when differences exist in the repricing of assets or liabilities.

34

AVERAGE BALANCE SHEET.  The following table sets forth certain information relating to our average balance sheet, average yields and costs, and certain other information for the three months and six months ended June 30, 2015 and 2014 and for the year ended December 31, 2014.  For the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities is expressed in thousands of dollars and rates.  No tax equivalent adjustments were made.  The average balance is computed based upon an average daily balance.  Non-accrual loans and investments have been included in the average balances.

TABLE 1.  Average Balance Sheet.

	Three Months Ended June 30,														Twelve Months Ended Dec. 31,
	2015							2014							2014
	Average Outstanding Balance		Interest Earned/Paid			Yield/Rate		Average Outstanding Balance		Interest Earned/Paid			Yield/Rate		Average Outstanding Balance		Interest Earned/Paid			Yield/Rate
	(Dollars in thousands)
Assets
Interest-earning Assets:
Loans receivable	$	388,382	$	3,967		4.09	%	$	343,618	$	3,693		4.30	%	$	348,136	$	14,928		4.29	%
Investment and mortgage-backed securities	289,973		1,712			2.36	%	296,874		1,988			2.68	%	292,039		7,508			2.57	%
Federal funds	82,351		27			0.13	%	37,840		6			0.06	%	28,811		25			0.09	%
Equity securities	4,139		26			2.51	%	5,873		24			1.63	%	5,297		95			1.79	%
Total interest-earning assets	764,845		5,732			3.00	%	684,205		5,711			3.34	%	674,283		22,556			3.35	%
Non interest-earning Assets:
Cash and due from banks	13,612							15,435							14,905
Other assets	91,445							89,134							89,160
Total assets	$	869,902						$	788,774						$	778,348
Liabilities and Stockholders’ Equity
Interest-bearing Liabilities:
Money market deposits	$	291,037	$	167		0.23	%	$	233,467	$	216		0.37	%	$	222,110	$	783		0.35	%
Savings accounts	146,168		99			0.27	%	137,468		92			0.27	%	136,520		363			0.27	%
Interest-bearing checking	81,944		8			0.04	%	77,625		15			0.08	%	77,503		58			0.07	%
Time deposits	141,489		321			0.91	%	143,358		349			0.98	%	142,210		1,386			0.97	%
Borrowings	184		—			—		1,000		13			5.21	%	796		35			4.40	%
Notes payable	—		—			—		338		3			3.56	%	274		9			3.28	%
Total interest-bearing liabilities	660,822		595			0.36	%	593,256		688			0.47	%	579,413		2,634			0.45	%
Non-interest-bearing Liabilities:
Demand deposits	97,537							83,972							85,557
Other liabilities	12,546							17,764							19,064
Total liabilities	770,905							694,992							684,034
Stockholders’ equity	98,997							93,782							94,314
Total liabilities and stockholders’ equity	$	869,902						$	788,774						$	778,348
Net interest income			$	5,137						$	5,023						$	19,922
Net interest spread						2.64	%						2.87	%						2.90	%
Net earning assets	$	104,023						$	90,949						$	94,870
Net yield on average interest-earning assets			2.69		%					2.94		%					2.95		%
Average interest-earning assets to average interest-bearing liabilities			115.74		%					115.33		%					116.37		%

35

	Six Months Ended June 30,														Twelve Months Ended Dec. 31,
	2015							2014							2014
	Average Outstanding Balance		Interest Earned/Paid			Yield/Rate		Average Outstanding Balance		Interest Earned/Paid			Yield/Rate		Average Outstanding Balance		Interest Earned/Paid			Yield/Rate
	(Dollars inThousands)
Assets
Interest-earning Assets:
Loans receivable	$	381,565	$	7,798		4.09	%	$	340,367	$	7,350		4.32	%	$	348,136	$	14,928		4.29	%
Investment and mortgage-backed securities	295,367		3,621			2.45	%	286,941		3,738			2.61	%	292,039		7,508			2.57	%
Federal funds	60,618		37			0.12	%	37,063		12			0.06	%	28,811		25			0.09	%
Equity securities	4,021		47			2.34	%	5,473		48			1.75	%	5,297		95			1.79	%
Total interest-earning assets	741,571		11,503			3.10	%	669,844		11,148			3.33	%	674,283		22,556			3.35	%
Non interest-earning Assets:
Cash and due from banks	13,802							15,740							14,905
Other assets	91,508							88,420							89,160
Total assets	$	846,881						$	774,004						$	778,348
Liabilities and Stockholders’ Equity
Interest-bearing Liabilities:
Money market deposits	$	268,859	$	334		0.25	%	$	221,541	$	400		0.36	%	$	222,110	$	783		0.35	%
Savings accounts	142,529		187			0.26	%	136,565		176			0.26	%	136,520		363			0.27	%
Interest-bearing checking	82,212		16			0.04	%	78,296		31			0.08	%	77,503		58			0.07	%
Time deposits	143,294		656			0.92	%	142,417		700			0.99	%	142,210		1,386			0.97	%
Borrowings	625		1			0.32	%	1,000		26			5.24	%	796		35			4.40	%
Notes payable	—		—			—		401		7			3.52	%	274		9			3.28	%
Total interest-bearing liabilities	637,519		1,194			0.38	%	580,220		1,340			0.47	%	579,413		2,634			0.45	%
Non-interest-bearing Liabilities:
Demand deposits	96,860							82,219							85,557
Other liabilities	14,555							18,967							19,064
Total liabilities	748,934							681,406							684,034
Stockholders’ equity	97,947							92,598							94,314
Total liabilities and stockholders’ equity	$	846,881						$	774,004						$	778,348
Net interest income			$	10,309						$	9,808						$	19,922
Net interest spread						2.72	%						2.86	%						2.90	%
Net earning assets	$	104,052						$	89,624						$	94,870
Net yield on average interest-earning assets			2.78		%					2.93		%					2.95		%
Average interest-earning assets to average interest-bearing liabilities			116.32		%					115.45		%					116.37		%

RESULTS OF OPERATIONS

General.  Net income for the three months ended June 30, 2015 was $473,000 compared to $1.4 million for the three months ended June 30, 2014.  For the three months ended June 30, 2015, diluted net income per share was $0.07 as compared with diluted net income per share of $0.20 for the three months ended June 30, 2014. Net income for the six months ended June 30, 2015 was $2.4 million compared to $3.4 million for the six months ended June 30, 2014. The decrease in net income for the six month period is primarily the result of a decrease in the change in fair value of our equity investments and an increase in non-interest expenses; partially offset by an increase in net interest income, an increase in net gains on sales of securities, an increase in non-interest income and a decrease in income tax provision.

36

Interest and Dividend Income.  Interest and dividend income increased by $21,000, or 0.4%, to $5.7 million for the three months ended June 30, 2015 from $5.7 million for the three months ended June 30, 2014. Interest and fees on loans increased by $274,000 for the three months ended June 30, 2015 as compared with the same period in 2014.  Interest and dividend income on mortgage-backed and investment securities decreased $274,000 to $1.7 million for the three months ended June 30, 2015 from $2.0 million for the three months ended June 30, 2014. Interest income earned on federal funds sold increased to $27,000 for the three months ended June 30, 2015 as compared with $6,000 for the three months ended June 30, 2014.

For the six months ended June 30, 2015, interest and dividend income increased $355,000, or 3.2%, to $11.5 million from $11.1 million for the six months ended June 30, 2014. Interest and fees on loans increased by $448,000 for the six months ended June 30, 2015 compared with the same period in 2014. Interest and dividend income on mortgage-backed and investment securities decreased $118,000 for the six months ended June 30, 2015 as compared with the six months ended June 30, 2014.

For the three months ended June 30, 2015, the increase in income on loans resulted from an increase of $44.8 million in the average balance of loans to $388.4 million in the second quarter of 2015 from $343.6 million in the second quarter of 2014 partially offset by a decrease of 21 basis points in the average yield on loans to 4.09% from 4.30%. At June 30, 2015, net loans receivable, including loans held for sale, were $391.0 million as compared with $344.0 million at June 30, 2014; reflecting an increase of 13.7%. For the six months ended June 30, 2015, the increase in loan interest income resulted from an increase of $41.2 million in the average balance of loans to $381.6 million from $340.4 million for the six months ended June 30, 2014 partially offset by a decrease of 23 basis points in the average yield on loans to 4.09% from 4.32%. The decrease in the average yield on loans is a result of the continued low market interest rate environment resulting in lower yields earned on new loans and variable rate loans.

The decrease in interest income from investment and mortgage-backed securities was the result of a decrease of $6.9 million in the average balance of investment and mortgage-backed securities to $290.0 million in the second quarter of 2015 from $296.9 million in the second quarter of 2014 along with a decrease in the average yield earned to 2.36% from 2.68%.  For the six months ended June 30, 2015, interest on investment and mortgage-backed securities decreased $117,000 as compared with the same period in 2014 due to a decrease in average yield of 16 basis points partially offset by an increase in the average balance of $8.5 million. The increase in the average balance of investment and mortgage-backed securities is primarily the result of the increase in pledged collateral needed to support the increase in municipal deposit activity.

Interest income on federal funds sold increased $21,000 as a result of an increase in the average balance of federal funds sold to $82.4 million during the second quarter of 2015 as compared with $37.8 million during the second quarter of 2014 along with an increase in average yield of 7 basis points. For the six months ended June 30, 2015, interest income on federal funds sold increased $25,000 due to an increase in the average balance of $23.5 million and an increase in the average yield of 6 basis points.

Dividends from equity securities increased $2,000 to $26,000 due to an increase in the average yield of 88 basis points partially offset by a decrease in the average balance to $4.1 million for the three months ended June 30, 2015 from $5.9 million for the three months ended June 30, 2014. For the six months ended June 30, 2015, dividend income on equity securities decreased $1,000 as compared with the same period in 2014 due to a decrease in the average balance of $1.5 million partially offset by an increase in the average yield of 59 basis points.

Interest Expense.  Interest expense decreased $93,000, or 13.5%, to $595,000 for the three months ended June 30, 2015 from $688,000 for the three months ended June 30, 2014.  The decrease in interest expense was primarily due to a decrease in interest paid on deposit accounts during the second quarter of 2015 of $77,000, to $595,000 from $672,000 during the second quarter of 2014 and no borrowing expense for the three months ended June 30, 2015 compared with $13,000 for the three months ended June 30, 2014.  Interest expense decreased $146,000, or 10.9%, to $1.2 million for the six months ended June 30, 2015 from $1.3 million for the six months ended June 30, 2014.

The decrease in interest expense paid on deposits was primarily due to a decrease in the average rate paid on deposits. Core deposits, consisting of money market accounts, savings accounts and interest-bearing checking accounts, experienced an increase in the average balance of $70.5 million, or 15.7%, to $519.1 million at an average cost of 0.21% during the second quarter of 2015 from $448.6 million at an average cost of 0.29% during the second quarter of 2014.  During the same period, the average balance of time deposits decreased $1.9 million, or 1.3%, to $141.5 million in the second quarter of 2015 from $143.4 million during the second quarter of 2014 in addition to a decrease in the average rate paid on time deposits of 7 basis points. For the six months ended June 30, 2015, the average cost of deposits was 0.38% as compared with 0.46% for the six month period in 2014. The average balance of deposits increased $58.1 million for the six months ended June 30, 2015 as compared with the six months ended June 30, 2014. Total deposits increased $52.2 million from December 31, 2014, representing an increase in retail deposits of $23.3 million and an increase of $28.9 million in municipal deposits. The increase in municipal deposits is related to a continuing trend of local towns, villages, cities and school districts seeking a locally-based financial institution partner.

37

The decrease in borrowing expense for the second quarter of 2015 as compared to the second quarter of 2014 was due to a decrease of 521 basis points in the average rate paid on borrowed funds as well as a decrease in the average balance of borrowings outstanding in the June 30, 2015 period to $184,000 as compared with $1.0 million during the June 30, 2014 period. For the six months ended June 30, 2015, interest expense on borrowings decreased $25,000 due to a decrease in the average outstanding balance of borrowings to $625,000 as compared to $1.0 million for the six month period 2014. The change in the average balance and rate of borrowings reflects usage of our overnight line of credit during 2015 compared to a long term FHLB advance that matured during 2014.

Provision for Loan Losses.  During the three months and six months ending June 30, 2015, the Bank made no provision for loan loss. The total provision for loan losses was $100,000 and $200,000 for the three months and six months ended June 30, 2014, respectively. Oneida Savings Bank establishes provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level deemed appropriate to absorb probable incurred credit losses.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors.   Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. Management continues to monitor the adequacy of the allowance for loan losses given the risk assessment of the loan portfolio and current economic conditions making appropriate provisions for loan losses on a quarterly basis.

 Loans individually evaluated for impairment totaled $1.8 million at June 30, 2015 and had an allocated allowance for loan loss reserve of $168,000. Loans individually evaluated for impairment totaled $1.4 million at June 30, 2014 and had an allocated allowance for loan loss reserve of $86,000. The increase in loans individually evaluated for impairment during 2015 was due to a commercial relationship that was considered a troubled debt restructuring during the second quarter of 2015. Nonperforming loans totaled $367,000, or 0.09% of total loans at June 30, 2015, compared with $523,000, or 0.15% of total loans at June 30, 2014.  Net charge-off activity for the six months ended June 30, 2015 was $43,000 as compared with $37,000 in net charge-offs during the six months ended June 30, 2014. The balance of the allowance for loan losses was $3.5 million, or 0.88% of loans receivable at June 30, 2015, compared with $3.3 million, or 0.95% of loans receivable at June 30, 2014.

Investment Gains (Losses).  Investment gains (losses) consists of changes in fair value of trading securities and net gains on sales of securities.

We have identified the preferred and common equity securities we hold in the investment portfolio as trading securities and as such the change in fair value of these securities is reflected as a non-cash adjustment through the income statement.  For the three months ended June 30, 2015, the market value of our trading securities decreased $220,000 as compared with an increase of $13,000 in the 2014 period. For the six months ended June 30, 2015, the market value of our trading securities increased $22,000 as compared with an increase of $823,000 for the same period in 2014.

During the second quarter of 2015, the Company realized $76,000 of investment gains. This compares with realized gains of $27,000 during the three months ended June 30, 2014. For the six months ended June 30, 2015, realized investment gains totaled $222,000 as compared with realized gains of $73,000 for the same period in 2014.

Non-Interest Income.  Non-interest income decreased by $145,000, or 1.8%, to $8.1 million for the three months ended June 30, 2015 from $8.3 million for the three months ended June 30, 2014. For the six months ended June 30, 2015, non-interest income increased by $290,000, or 1.8%, to $16.6 million from $16.3 million for the six months ended June 30, 2014.  

Revenue derived from commissions and fees on sales of non-banking products increased $491,000, or 7.6%, to $6.9 million during the three months ended June 30, 2015 as compared with $6.5 million during the three months ended June 30, 2014. Revenue derived from non-banking subsidiaries increased $577,000, or 4.3%, to $14.0 million for the six months ended June 30, 2015 as compared with $13.4 million for the six months ended June 30, 2014. The increase was primarily due to the continued efforts to increase new business as well as maintaining existing account relationships.

Deposit account service fees decreased $14,000, or 2.0%, to $697,000 for the three months ended June 30, 2015 compared to $711,000 during the same three months ended in 2014. For the six months ended June 30, 2015, deposit account service fees decreased $10,000 as compared with the same period in 2014.

Excluding deposit account service fees, other operating income decreased $622,000, or 56.1%, to $486,000 for the three months ended June 30, 2015 as compared to $1.1 million during the three months ended June 30, 2014. For the six months ended June 30, 2015, other operating income, excluding deposit account service fees, decreased $277,000, or 17.9%, to $1.3 million as compared to $1.5 million for the same period in 2014. The decrease for both the three months and six months from the prior year was primarily the result of the receipt during the second quarter of 2014 of $614,000 from the proceeds of a bank-owned like

38

insurance policy. Offsetting the decrease for the six months as compared to the prior year was an increase in other operating income as a result of a partial recovery recorded on a previously charged off asset in the amount of $316,000.

Mortgage loan sale and servicing income decreased $17,000 to $231,000 for the six months ended June 30, 2015 as compared with $248,000 for the six months ended June 30, 2014. The Bank sells substantially all of its newly originated fixed-rate residential mortgage loans with maturities exceeding 15 years on a servicing retained basis in the secondary market. These loan sales help the bank provide its customers with a fixed rate loan product while controlling interest rate risk.

Non-Interest Expense.  Non-interest expense increased by $1.1 million, or 9.3%, to $12.4 million for the three months ended June 30, 2015 from $11.3 million for the three months ended June 30, 2014.  For the six months ended June 30, 2015, non-interest expense increased $1.6 million, or 7.2%, to $23.8 million as compared with $22.2 million for the same period in 2014. Excluding merger related expenses, non-interest expense increased $278,000, or 1.3%, to $22.5 million for the six months ended June 30, 2015 as compared with $22.2 million for the same period in 2014. The increase in non-interest expense excluding merger related expenses was primarily due to an increase in compensation and employee benefits combined with operating expenses associated with the increase in sales of insurance and other non-banking products through our subsidiaries.

 Merger related expenses of $1.3 million represent legal and other expenses incurred with the pending acquisition by Community Bank System, Inc. which is expected to close in the fourth quarter of 2015, subject to regulatory approval.

Salaries, wages and other compensation paid to the employees of Oneida Financial Corp. during the three months ended June 30, 2015 was $7.1 million; a decrease of $205,000, or 2.8%, from the second quarter of 2014. Compensation expense for the six months ended June 30, 2015 was $14.6 million; an increase of $84,000, or 0.6%, as compared with compensation expense of $14.5 million for the same period in 2014. The increase in compensation expense was primarily the result of the increase in sales of insurance and other non-banking products through our subsidiaries resulting in an increase in commissions paid and employee benefit expense.

Building and occupancy expense decreased $119,000, or 9.0%, to $1.2 million for the three months ended June 30, 2015 as compared to $1.3 million during the three months ended June 30, 2014. For the six months ended June 30, 2015, building and occupancy expense decreased $120,000, or 4.4%, to $2.6 million as compared with $2.7 million for the same period in 2014.

Other operating expenses increased $118,000, or 4.5%, to $2.8 million for the three months ended June 30, 2015 as compared to $2.6 million during the three months ended June 30, 2014. For the six months ended June 30, 2015, other operating expenses increased $314,000, or 6.3%, to $5.3 million as compared with $5.0 million for the same period in 2014. The increase in other operating expenses was primarily the result of an increase in consulting and related expenses associated with the sales of insurance and other non-banking products through our subsidiaries.

Provision for Income Taxes.  Provision for income taxes was $298,000 for the three months ended June 30, 2015, a decrease of $210,000 from the second quarter 2014 income tax provision of $508,000.  For the six months ended June 30, 2015, the provision for income taxes was $961,000, a decrease of $267,000 from $1.2 million for the same period in 2014. The effective tax rate was 28.2% during the first six months of 2015 as compared with an effective tax rate of 26.7% for the same time period in 2014. The increase in the effective tax rates for both the quarter and year-to date 2015 as compared to the same period in 2014 was due to changes in the Bank’s tax exempt and tax preferred investment income and the overall tax rate in effect for the year.

Liquidity and Capital Resources.   Our primary source of funds are deposits; FHLB borrowings; proceeds from the principal and interest payments on loans and mortgage-related debt and equity securities; and to a lesser extent, proceeds from the sale of fixed rate residential real estate loans and additional borrowings when and as needed.  While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit outflows, mortgage prepayments, mortgage loan sales and borrowings are greatly influenced by general interest rates, economic conditions and competition.

Our primary investing activities are the origination of residential mortgages, commercial loans and consumer loans, as well as the purchase of mortgage-backed and other debt securities. During the second quarter of 2015, loan originations totaled $33.7 million compared to $24.5 million during the second quarter of 2014. The purchases of securities available-for-sale totaled $7.0 million during the second quarter of 2015 as compared to $19.5 million during the second quarter of 2014. The purchases of investment securities were funded with cash and cash equivalents.

Cash flow from operations, deposit growth, as well as the sales, maturity and principal payments received on loans and investment securities were used to fund the investing activities described above. If Oneida Savings Bank requires funds beyond its ability to generate them internally, it has the ability to borrow funds from the FHLB.  Oneida Savings Bank may borrow from the FHLB under a blanket agreement which assigns all investments in FHLB stock as well as qualifying first mortgage loans equal

39

to 150% of the outstanding balance as collateral to secure the amounts borrowed.  Additionally, we also maintain lines of credit with various other commercial banks as an additional source of short-term borrowing that provides funding sources for lending, liquidity and asset and liability management as needed.

In the normal course of business, the Company extends commitments to originate residential and commercial loans and other consumer loans. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since the Company does not expect all of the commitments to be funded, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. Collateral may be obtained based upon management’s assessment of the customer’s creditworthiness. Commitments to extend credit may be written on a fixed rate basis exposing the Company to interest rate risk given the possibility that market rates may change between the commitment date and the actual extension of credit. As of June 30, 2015, the Company had outstanding commitments to originate loans of approximately $26.9 million, which generally have an expiration period of less than 120 days. Commitments to sell residential mortgages amounted to $75,000 at June 30, 2015 for loan closings pending and are to be delivered on a best effort basis.

The Company extends credit to consumer and commercial customers, up to a specified amount, through lines of credit. The borrower is able to draw on these lines as needed, thus the funding requirements are generally unpredictable. Unused lines of credit amounted to $58.1 million at June 30, 2015 and generally have an expiration period of less than one year. It is anticipated that there will be sufficient funds available to meet the current loan commitments and other obligations through the sources described above. The credit risk involved in issuing these commitments is essentially the same as that involved in extending loans to customers and is limited to the contractual notional amount of those instruments.

Cash, interest-earning demand accounts at correspondent banks, federal funds sold, and other short-term investments are the Company’s most liquid assets. The level of these assets are monitored daily and are dependent on operating, financing, lending and investing activities during any given period. Excess short-term liquidity is usually invested in overnight federal funds sold. In the event that funds beyond those generated internally are required due to higher expected loan commitment fundings, deposit outflows or the amount of debt being called, additional sources of funds are available through the use of repurchase agreements, the sale of loans or investments or the Company’s various lines of credit. As of June 30, 2015, the total of cash, interest-earning demand accounts and federal funds sold was $84.4 million.

On July 2, 2013, the Federal Reserve Board and FDIC approved final rules implementing changes to the regulatory capital framework for financial institutions. The final rules, which are subject to a multi-year phase-in period, began for the Bank on January 1, 2015. Under the final rules, minimum requirements increased for both the quantity and quality of capital held by the Bank. The final rules include a new minimum common equity Tier 1 capital to risk-weighted assets (CET) ratio of 4.5%, in addition to raising the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% and requiring a minimum leverage ratio of 4.0%. The final rules also established a new capital conservation buffer of 2.5% of risk-weighted assets, which is phased-in over a four-year period beginning January 1, 2016.

At June 30, 2015, the Bank exceeded all regulatory capital requirements. The current requirements and the actual levels for the Bank at June 30, 2015 and December 31, 2014 are as follows:

	Actual				For Capital Adequacy Purposes				Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
As of June 30, 2015:
Total Capital
(to Risk Weighted Assets)	$	76,582	15.87	%	$	38,606	8	%	$	48,258	10	%
Tier I Capital
(to Risk Weighted Assets)	$	73,123	15.15	%	$	28,955	6	%	$	38,606	8	%
CET Risk-based Capital
(to Risk Weighted Assets)	$	73,123	15.15	%	$	21,716	4.5	%	$	31,368	6.5	%
Tier I Capital
(to Average Assets)	$	73,123	8.66	%	$	33,774	4	%	$	42,218	5	%

40

	Actual				For Capital Adequacy Purposes				Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
As of December 31, 2014:
Total Capital
(to Risk Weighted Assets)	$	75,363	16.54	%	$	36,456	8	%	$	45,570	10	%
Tier I Capital
(to Risk Weighted Assets)	$	71,861	15.77	%	$	18,228	4	%	$	27,342	6	%
Tier I Capital
(to Average Assets)	$	71,861	9.36	%	$	30,720	4	%	$	38,400	5	%

41

ONEIDA FINANCIAL CORP. 

SELECTED FINANCIAL RATIOS

At and for the Three and Six Months Ended June 30, 2015 and 2014 (unaudited)

(Annualized where appropriate)

	Three Months Ending June 30,				Six Months Ending June 30,
	2015		2014		2015		2014
Performance Ratios:
Return on average assets	0.22	%	0.72	%	0.58	%	0.87	%
Return on average equity	1.91	%	6.09	%	4.99	%	7.29	%
Return on average tangible equity	2.60	%	8.49	%	6.82	%	10.21	%
Interest rate spread	2.64	%	2.87	%	2.72	%	2.86	%
Net interest margin	2.69	%	2.94	%	2.78	%	2.93	%
Efficiency ratio	92.67	%	84.44	%	87.81	%	84.49	%
Non-interest income to average total assets	3.74	%	4.20	%	3.93	%	4.22	%
Non-interest expense to average total assets	5.68	%	5.73	%	5.61	%	5.75	%
Average interest-earning assets as a ratio to average interest-bearing liabilities	115.74	%	115.33	%	116.32	%	115.45	%
Asset Quality Ratios:
Non-performing assets to total assets	0.05	%	0.08	%	0.05	%	0.08	%
Non-performing loans to total loans	0.09	%	0.15	%	0.09	%	0.15	%
Net charge-offs to average loans	0.01	%	0.01	%	0.01	%	0.01	%
Allowance for loan losses to non-performing loans	942.51	%	625.81	%	942.51	%	625.81	%
Allowance for loan losses to loans receivable	0.88	%	0.95	%	0.88	%	0.95	%
Capital Ratios:
Average equity to average total assets	11.38	%	11.89	%	11.57	%	11.96	%
Equity to total assets (end of period)	11.35	%	12.18	%	11.35	%	12.18	%
Tangible equity to tangible assets (end of period)	8.53	%	9.09	%	8.53	%	9.09	%

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Various forms of market risk are inherent in the business of the Bank including concentration risk, liquidity management, credit risk and collateral risk among others.  However, the Bank’s most significant form of market risk is interest rate risk, as the majority of the Bank’s assets and liabilities are sensitive to changes in interest rates.  Ongoing monitoring and management of this risk is an important component of the Company’s asset and liability management process. The Bank’s interest rate risk management program focuses primarily on evaluating and managing the composition of the Bank’s assets and liabilities in the context of various interest rate scenarios.  Factors beyond Management’s control, such as market interest rates and competition, also have an impact on interest income and expense.  Based on the asset-liability composition at June 30, 2015, in a rising interest rate environment, Management would expect that the Company’s cost of shorter-term deposits might rise faster than its earnings on longer-term loans and investments.  At June 30, 2015, the Bank had $96.8 million in time deposits scheduled to mature within one year. At that date, the average maturity of our investment portfolio was 4.7 years, and fixed rate residential mortgage loans totaled $72.3 million representing 19.1% of our loan portfolio. Conversely, as interest rates decrease, the prepayment of principal on loans and investments tends to increase, causing the Company to invest funds in a lower rate environment.  To mitigate the effect of interest rate changes, Management has taken steps to emphasize core deposits, monitor certificate of deposit rates to better match asset changes, and sell substantially all newly originated longer term fixed rate loans in the secondary market without recourse.  Management believes this approach will help reduce the exposure to interest rate fluctuations and enhance long-term profitability.

For a discussion of the Company’s asset and liability management policies as well as the potential impact of interest rate changes upon the earnings of the Company, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2014 Annual Report to Stockholders.  There has been no material change in the Company’s interest rate risk profile since December 31, 2014.

42

ITEM 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report.   Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the period covered by this quarterly report, the Company’s disclosure controls and procedures were effective to ensure that information to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.  There has been no change in the Company’s internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

43

ONEIDA FINANCIAL CORP.

AND SUBSIDIARIES

Part II — Other Information

Item 1.Legal Proceedings

On March 3, 2015, Paul Parshall (the "Plaintiff") filed a stockholder class action lawsuit in the Supreme Court of the State of New York, County of Oneida, against the Company, the directors of the Company and Community Bank System, Inc. The lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by failing to take adequate steps to ensure that the Company’s stockholders receive adequate, fair and maximum consideration under the circumstances and by engineering the merger to the benefit of themselves and/or Community Bank System, Inc. without regard to the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On March 12, 2015, John Solak (the "Second Plaintiff") filed a stockholder class action lawsuit in the Supreme Court of the State of New York, County of Oneida, against the Company, the directors of the Company and Community Bank System, Inc. Similar to the Plaintiff's lawsuit, the Second Plaintiff’s lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by failing to take adequate steps to ensure that the Company’s stockholders receive adequate, fair and maximum consideration under the circumstances and by engineering the merger to the benefit of themselves and/or Community Bank System, Inc. without regard to the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On March 13, 2015, the Company filed a complaint in the Supreme Court of the State of New York, County of Madison, against FinPro, Inc. (“FinPro”). The Company’s complaint alleges that FinPro has wrongfully demanded a $1.42 million services fee as a result of the Company's entering into the merger even though FinPro has provided no services in connection with the merger and has no right, contractual or otherwise, to such a fee. As a result, the Company is seeking declaratory judgment nullifying the improper demand made by FinPro, and any purported agreement on which the demand is allegedly based.

On April 24, 2015, Linda Colvin (the "Third Plaintiff") filed a stockholder class action lawsuit in the Circuit Court for Baltimore City, Maryland, against the Company, the directors of the Company and Community Bank System, Inc. Similar to the lawsuits by the Plaintiff and the Second Plaintiff, the Third Plaintiff’s lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by agreeing to a merger transaction that fails to maximize shareholder value and by putting their personal interests ahead of the interests of the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On June 9, 2015, the Company, Community Bank System, Inc, and the other defendants entered into a memorandum of understanding (the “MOU”) with the Plaintiff, Second Plaintiff and Third Plaintiff regarding the settlement of the lawsuits. Pursuant to the MOU, the Company agreed to provide additional information to Oneida Financial Corp. stockholders in the Proxy Statement/Prospectus of Oneida Financial Corp. and Community Bank System, Inc. dated May 6, 2015 (the “Proxy Statement/Prospectus”). The Company, Community Bank System, Inc. and the other defendants deny all of the allegations in the lawsuits. The Company, Community Bank System, Inc. and the individual director defendants believe the disclosures in the Proxy Statement/Prospectus were adequate under the law. Nevertheless, the Company, Community Bank System, Inc. and the other defendants have agreed to settle the lawsuits in order to avoid the costs, disruption, and distraction of further litigation. Any costs associated with settling the lawsuits was paid by the Company’s insurance carrier and the Company did not incur a loss on the settlement.

Item 1a. .                                                   Risk Factors

There has not been any material change in the risk factors disclosure from that contained in the Company’s Form 10-K for the fiscal year ended December 31, 2014.

44

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(a)  Not applicable

(b)  Not applicable

(c) There were no shares repurchased by the Company during the three months ended June 30, 2015.

Item 3.Defaults upon Senior Securities

Not applicable.

Item 4.Mine Safety Disclosures

Not applicable

Item 5.Other Information

None

Item 6.                                                          Exhibits

(a) All required exhibits are included in Part I under Consolidated Financial Statements, Notes to Unaudited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations, and are incorporated by reference, herein.

Exhibits

Exhibit 31.1 — Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 — Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1 — Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 101 - The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Condition, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statement of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements tagged as blocks of text and in detail.

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized.

		ONEIDA FINANCIAL CORP.
Date:	August 12, 2015	By:	/s/ Eric E. Stickels
		Eric E. Stickels
		President and Chief Operating Officer
Date:	August 12, 2015	By:	/s/ Deresa F. Durkee
		Deresa F. Durkee
		Senior Vice President and Chief Financial Officer

46

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Eric E. Stickels, President and Chief Operating Officer, certify that:

(1)I have reviewed this quarterly report on Form 10-Q of Oneida Financial Corp.;

(2)Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

(3)Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

(4)The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a)designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

(5)The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

8/12/2015	/s/ Eric E. Stickels
Date	President and Chief Operating Officer

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Deresa F. Durkee, Senior Vice President and Chief Financial Officer, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Oneida Financial Corp;

(2)Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

(3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

(4) The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a)designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

(5) The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial information and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

8/12/2015	/s/ Deresa F. Durkee
Date	Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification pursuant to

18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Eric E. Stickels, President and Chief Operating Officer, and Deresa F. Durkee, Senior Vice President and Chief Financial Officer of Oneida Financial Corp. (the “Company”), each certify in their capacity as an officer of the Company that he/she has reviewed the Quarterly Report of the Company on Form 10-Q for the quarter ended June 30, 2015 and that to the best of his/her knowledge:

(1) the report fully complies with the requirements of Sections 13(a) of the Securities Exchange Act of 1934; and

(2) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002.

8/12/2015	/s/ Eric E. Stickels
Date	President and Chief Operating Officer
8/12/2015	/s/ Deresa F. Durkee
Date	Senior Vice President and Chief Financial Officer

XML

Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets:
Trading securities	$ 3,922	$ 3,900
Available-for-sale securities	155,539	176,314
U.S. Agencies
Assets:
Available-for-sale securities	28,275	27,232
US Treasury Notes Securities
Assets:
Available-for-sale securities	1,994
Corporate
Assets:
Available-for-sale securities	27,405	34,097
Agency asset backed securities
Assets:
Available-for-sale securities		8,790
State and municipal
Assets:
Available-for-sale securities	32,631	34,218
Small Business Administration
Assets:
Available-for-sale securities	3,741	6,970
Private placement mortgage obligation
Assets:
Available-for-sale securities		1,477
Recurring basis | Total
Assets:
Total	159,461	180,214
Recurring basis | Total | Common and preferred equities
Assets:
Trading securities	3,922	3,900
Recurring basis | Total | U.S. Agencies
Assets:
Available-for-sale securities	28,275	27,232
Recurring basis | Total | US Treasury Notes Securities
Assets:
Available-for-sale securities	1,994
Recurring basis | Total | Corporate
Assets:
Available-for-sale securities	27,405	34,097
Recurring basis | Total | Agency asset backed securities
Assets:
Available-for-sale securities		8,790
Recurring basis | Total | State and municipal
Assets:
Available-for-sale securities	32,631	34,218
Recurring basis | Total | Small Business Administration
Assets:
Available-for-sale securities	3,741	6,970
Recurring basis | Total | Residential mortgage-backed securities
Assets:
Available-for-sale securities	61,493	63,530
Recurring basis | Total | Private placement mortgage obligation
Assets:
Available-for-sale securities		1,477
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Total	1,041	1,083
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Common and preferred equities
Assets:
Trading securities	1,041	1,083
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Agencies
Assets:
Available-for-sale securities	0	0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | US Treasury Notes Securities
Assets:
Available-for-sale securities	0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate
Assets:
Available-for-sale securities	0	0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Agency asset backed securities
Assets:
Available-for-sale securities		0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | State and municipal
Assets:
Available-for-sale securities	0	0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Small Business Administration
Assets:
Available-for-sale securities	0	0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential mortgage-backed securities
Assets:
Available-for-sale securities	0	0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Private placement mortgage obligation
Assets:
Available-for-sale securities		0
Recurring basis | Significant Other Observable Inputs (Level 2)
Assets:
Total	158,353	179,063
Recurring basis | Significant Other Observable Inputs (Level 2) | Common and preferred equities
Assets:
Trading securities	2,881	2,817
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. Agencies
Assets:
Available-for-sale securities	28,275	27,232
Recurring basis | Significant Other Observable Inputs (Level 2) | US Treasury Notes Securities
Assets:
Available-for-sale securities	1,994
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate
Assets:
Available-for-sale securities	27,405	34,097
Recurring basis | Significant Other Observable Inputs (Level 2) | Agency asset backed securities
Assets:
Available-for-sale securities		8,790
Recurring basis | Significant Other Observable Inputs (Level 2) | State and municipal
Assets:
Available-for-sale securities	32,564	34,150
Recurring basis | Significant Other Observable Inputs (Level 2) | Small Business Administration
Assets:
Available-for-sale securities	3,741	6,970
Recurring basis | Significant Other Observable Inputs (Level 2) | Residential mortgage-backed securities
Assets:
Available-for-sale securities	61,493	63,530
Recurring basis | Significant Other Observable Inputs (Level 2) | Private placement mortgage obligation
Assets:
Available-for-sale securities		1,477
Recurring basis | Significant Unobservable Inputs (Level 3)
Assets:
Total	67	68
Recurring basis | Significant Unobservable Inputs (Level 3) | Common and preferred equities
Assets:
Trading securities	0	0
Recurring basis | Significant Unobservable Inputs (Level 3) | U.S. Agencies
Assets:
Available-for-sale securities	0	0
Recurring basis | Significant Unobservable Inputs (Level 3) | US Treasury Notes Securities
Assets:
Available-for-sale securities	0
Recurring basis | Significant Unobservable Inputs (Level 3) | Corporate
Assets:
Available-for-sale securities		0
Recurring basis | Significant Unobservable Inputs (Level 3) | Agency asset backed securities
Assets:
Available-for-sale securities		0
Recurring basis | Significant Unobservable Inputs (Level 3) | State and municipal
Assets:
Available-for-sale securities	67	68
Recurring basis | Significant Unobservable Inputs (Level 3) | Small Business Administration
Assets:
Available-for-sale securities	0	0
Recurring basis | Significant Unobservable Inputs (Level 3) | Residential mortgage-backed securities
Assets:
Available-for-sale securities	$ 0	0
Recurring basis | Significant Unobservable Inputs (Level 3) | Private placement mortgage obligation
Assets:
Available-for-sale securities		$ 0

XML

Comprehensive Income (Changes in Accumulated Other Comprehensive Income Balances) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			$ (2,603)	$ (5,142)
Other comprehensive (loss) income, during the period, net of adjustments			(302)	1,977
Amounts reclassified from AOCI			(138)	(43)
Other comprehensive (loss) income, net of tax	$ (1,065)	$ 819	(440)	1,934
Ending balance	(3,043)	(3,208)	(3,043)	(3,208)
Net unrealized gains (losses) on available-for-sale securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			477	(1,007)
Other comprehensive (loss) income, during the period, net of adjustments			(502)	1,799
Amounts reclassified from AOCI			(138)	(43)
Other comprehensive (loss) income, net of tax			(640)	1,756
Ending balance	(163)	749	(163)	749
Net unrealized gains (losses) on transfer of securities to held-to-maturity
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(2,328)	(2,579)
Other comprehensive (loss) income, during the period, net of adjustments			200	164
Amounts reclassified from AOCI			0	0
Other comprehensive (loss) income, net of tax			200	164
Ending balance	(2,128)	(2,415)	(2,128)	(2,415)
Unrecognized postretirement benefit obligation
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance			(752)	(1,556)
Other comprehensive (loss) income, during the period, net of adjustments			0	14
Amounts reclassified from AOCI			0	0
Other comprehensive (loss) income, net of tax			0	14
Ending balance	$ (752)	$ (1,542)	$ (752)	$ (1,542)

XML

Loans Receivable (Details 4) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Loans Receivable
Nonaccrual	$ 367	$ 306
Loans Past Due Over 90 days still Accruing	0	0
Aging of the recorded investment in past due loans
Total Past Due	921	794
Loans Not Past Due	391,664	368,245
Total	392,585	369,039
Financing Receivables, 30 to 59 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	577	460
Financing Receivables, 60 to 89 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	12	67
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	332	267
Commercial loans
Loans Receivable
Nonaccrual	35	39
Loans Past Due Over 90 days still Accruing	0	0
Aging of the recorded investment in past due loans
Total Past Due	187	56
Loans Not Past Due	56,858	53,613
Total	57,045	53,669
Commercial loans | Financing Receivables, 30 to 59 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	187	0
Commercial loans | Financing Receivables, 60 to 89 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	0	56
Commercial loans | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	0	0
Commercial real estate
Loans Receivable
Nonaccrual	0	0
Loans Past Due Over 90 days still Accruing	0	0
Aging of the recorded investment in past due loans
Total Past Due	84	39
Loans Not Past Due	95,875	93,388
Total	95,959	93,427
Commercial real estate | Financing Receivables, 30 to 59 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	84
Commercial real estate | Financing Receivables, 60 to 89 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	0	0
Commercial real estate | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	0	0
Consumer loans
Loans Receivable
Nonaccrual	0	0
Loans Past Due Over 90 days still Accruing	0	0
Aging of the recorded investment in past due loans
Total Past Due	84	81
Loans Not Past Due	59,387	46,802
Total	59,471	46,883
Consumer loans | Financing Receivables, 30 to 59 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	82	70
Consumer loans | Financing Receivables, 60 to 89 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	2	11
Consumer loans | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	0	0
Home equity
Loans Receivable
Nonaccrual	4	0
Loans Past Due Over 90 days still Accruing	0	0
Aging of the recorded investment in past due loans
Total Past Due	157	118
Loans Not Past Due	53,339	53,032
Total	53,496	53,150
Home equity | Financing Receivables, 30 to 59 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	153	118
Home equity | Financing Receivables, 60 to 89 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	0	0
Home equity | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	4	0
Residential mortgages
Loans Receivable
Nonaccrual	328	267
Loans Past Due Over 90 days still Accruing	0	0
Aging of the recorded investment in past due loans
Total Past Due	409	500
Loans Not Past Due	126,205	121,410
Total	126,614	121,910
Residential mortgages | Financing Receivables, 30 to 59 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	71	233
Residential mortgages | Financing Receivables, 60 to 89 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	10	0
Residential mortgages | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Aging of the recorded investment in past due loans
Total Past Due	$ 328	$ 267

XML

Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2015

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of the detail of comprehensive income (loss)

The following table represents the detail of comprehensive income (loss) for the three months and six months ended:

	For the Three Months Ended June 30, 2015
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding losses on available-for-sale securities during the period	$	(1,816	)	$	685		$	(1,131	)
Reclassification adjustment for gains included in net income (1)	(76		)	29			(47		)
Net unrealized losses on available-for-sale securities	(1,892		)	714			(1,178		)
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	181			(68		)	113
Net unrealized gains	181			(68		)	113
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive loss	$	(1,711	)	$	646		$	(1,065	)

	For the Six Months Ended June 30, 2015
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding losses on available-for-sale securities during the period	$	(806	)	$	304		$	(502	)
Reclassification adjustment for gains included in net income (1)	(222		)	84			(138		)
Net unrealized losses on available-for-sale securities	(1,028		)	388			(640		)
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	320			(120		)	200
Net unrealized gains	320			(120		)	200
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive loss	$	(708	)	$	268		$	(440	)

	For the Three Months Ended June 30, 2014
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding gains on available-for-sale securities during the period	$	1,260		$	(504	)	$	756
Reclassification adjustment for gains included in net income (1)	(27		)	11			(16		)
Net unrealized gains on available-for-sale securities	1,233			(493		)	740
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	132			(53		)	79
Net unrealized gains	132			(53		)	79
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive income	$	1,365		$	(546	)	$	819

	For the Six Months Ended June 30, 2014
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding gains on available-for-sale securities during the period	$	2,999		$	(1,200	)	$	1,799
Reclassification adjustment for gains included in net income (1)	(73		)	30			(43		)
Net unrealized gains on available-for-sale securities	2,926			(1,170		)	1,756
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	274			(110		)	164
Net unrealized gains	274			(110		)	164
Net pension gain arising during period (2)	24			(10		)	14
Net unrecognized postretirement benefit obligation	24			(10		)	14
Other comprehensive income	$	3,224		$	(1,290	)	$	1,934

___________________________________

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net gains (losses) on sales of securities on the consolidated statement of operations.

(2) Net gain (loss) arising during period which is comprised of net gain (loss) and amortization of prior gain (loss) is reported in compensation and benefits on the consolidated statements of operations.

Schedule of the summary of the change in accumulated other comprehensive income balances, net of tax

The following table represents a summary of the change in accumulated other comprehensive income (loss) by component, net of tax, for the six months ended June 30, 2015 and 2014:

	Net unrealized gains (losses) on available-for-sale securities			Net unrealized gains (losses) on transfer of securities to held-to-maturity			Unrecognized postretirement benefit obligation			Accumulated other comprehensive income (loss)
	(In thousands)
Balance at January 1, 2015	$	477		$	(2,328	)	$	(752	)	$	(2,603	)
Other comprehensive (loss) income, during the period, net of adjustments	(502		)	200			—			(302		)
Amounts reclassified from AOCI	(138		)	—			—			(138		)
Other comprehensive (loss) income	(640		)	200			—			(440		)
Balance at June 30, 2015	$	(163	)	$	(2,128	)	$	(752	)	$	(3,043	)

	Net unrealized gains (losses) on available-for-sale securities			Net unrealized gains (losses) on transfer of securities to held-to-maturity			Unrecognized postretirement benefit obligation			Accumulated other comprehensive income (loss)
	(In thousands)
Balance at January 1, 2014	$	(1,007	)	$	(2,579	)	$	(1,556	)	$	(5,142	)
Other comprehensive income, during the period, net of adjustments	1,799			164			14			1,977
Amounts reclassified from AOCI	(43		)	—			—			(43		)
Other comprehensive income	1,756			164			14			1,934
Balance at June 30, 2014	$	749		$	(2,415	)	$	(1,542	)	$	(3,208	)

XML

Fair Value (Details 4) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financial assets:
Trading securities	$ 3,922	$ 3,900
Available-for-sale securities	155,539	176,314
Investment securities, held-to-maturity	125,544	133,897
Accrued interest receivable	2,206	2,342
Carrying Value
Financial assets:
Cash and cash equivalents	84,438	31,075
Trading securities	3,922	3,900
Available-for-sale securities	155,539	176,314
Investment securities, held-to-maturity	122,384	129,415
Loans held for sale	75	839
Loans receivable, net	390,944	367,020
Federal Home Loan Bank stock	1,440	1,391
Accrued interest receivable	2,206	2,342
Financial liabilities:
Deposits	741,398	689,170
Accrued interest payable	4	7
Estimated Fair Value
Financial assets:
Cash and cash equivalents	84,438	31,075
Trading securities	3,922	3,900
Available-for-sale securities	155,539	176,314
Investment securities, held-to-maturity	125,544	133,897
Loans held for sale	76	865
Loans receivable, net	403,311	381,084
Accrued interest receivable	2,206	2,342
Financial liabilities:
Deposits	743,277	691,377
Accrued interest payable	4	7
Estimated Fair Value | Level 1
Financial assets:
Cash and cash equivalents	84,438	31,075
Trading securities	1,041	1,083
Available-for-sale securities	0	0
Investment securities, held-to-maturity	0	0
Loans held for sale	0	0
Loans receivable, net	0	0
Accrued interest receivable	0	0
Financial liabilities:
Deposits	602,753	543,262
Accrued interest payable	2	2
Estimated Fair Value | Level 2
Financial assets:
Cash and cash equivalents	0	0
Trading securities	2,881	2,817
Available-for-sale securities	155,472	176,246
Investment securities, held-to-maturity	122,179	130,053
Loans held for sale	76	865
Loans receivable, net	0	0
Accrued interest receivable	1,148	1,339
Financial liabilities:
Deposits	140,524	148,115
Accrued interest payable	2	5
Estimated Fair Value | Level 3
Financial assets:
Cash and cash equivalents	0	0
Trading securities	0	0
Available-for-sale securities	67	68
Investment securities, held-to-maturity	3,365	3,844
Loans held for sale	0	0
Loans receivable, net	403,311	381,084
Accrued interest receivable	1,058	1,003
Financial liabilities:
Deposits	0	0
Accrued interest payable	$ 0	$ 0

XML

Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) segment	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Segment Information
Number of primary business segments | segment			3
Net interest income	$ 5,137	$ 5,023	$ 10,309	$ 9,808
Provision for loan losses	0	100	0	200
Net interest income after provision for loan losses	5,137	4,923	10,309	9,608
Investment gains (losses), net	(144)	40	244	896
Commissions and fees on sales of non-banking products	6,946	6,455	13,968	13,391
Non-interest income	1,183	1,819	2,656	2,943
Non-interest expenses	11,893	10,893	22,903	21,387
Depreciation and amortization	458	407	869	850
(Loss) income before income taxes	771	1,937	3,405	4,601
Income tax (benefit) expense	298	508	961	1,228
Net (loss) income	473	1,429	2,444	3,373
Total Assets	849,570	777,838	849,570	777,838	$ 798,169
Banking Activities
Segment Information
Net interest income	5,137	5,023	10,309	9,808
Provision for loan losses	0	100	0	200
Net interest income after provision for loan losses	5,137	4,923	10,309	9,608
Investment gains (losses), net	(144)	40	244	896
Commissions and fees on sales of non-banking products	89	511	452	1,025
Non-interest income	1,183	1,819	2,656	2,943
Non-interest expenses	6,194	5,607	11,407	10,725
Depreciation and amortization	327	324	661	687
(Loss) income before income taxes	(256)	1,362	1,593	3,060
Income tax (benefit) expense	(114)	237	230	518
Net (loss) income	(142)	1,125	1,363	2,542
Total Assets	822,361	753,357	822,361	753,357
Insurance, Risk Management and Employee Benefits Activities
Segment Information
Net interest income	0	0	0	0
Provision for loan losses	0	0	0	0
Net interest income after provision for loan losses	0	0	0	0
Investment gains (losses), net	0	0	0	0
Commissions and fees on sales of non-banking products	5,870	5,215	11,590	10,884
Non-interest income	0	0	0	0
Non-interest expenses	4,733	4,406	9,700	8,870
Depreciation and amortization	125	76	195	149
(Loss) income before income taxes	1,012	733	1,695	1,865
Income tax (benefit) expense	400	322	682	819
Net (loss) income	612	411	1,013	1,046
Total Assets	30,897	29,369	30,897	29,369
Financial/Investment Advisory Activities
Segment Information
Net interest income	0	0	0	0
Provision for loan losses	0	0	0	0
Net interest income after provision for loan losses	0	0	0	0
Investment gains (losses), net	0	0	0	0
Commissions and fees on sales of non-banking products	987	729	1,926	1,482
Non-interest income	0	0	0	0
Non-interest expenses	966	880	1,796	1,792
Depreciation and amortization	6	7	13	14
(Loss) income before income taxes	15	(158)	117	(324)
Income tax (benefit) expense	12	(51)	49	(109)
Net (loss) income	3	(107)	68	(215)
Total Assets	4,276	4,919	4,276	4,919
Operating Segments [Member]
Segment Information
Total Assets	$ 857,534	$ 787,645	$ 857,534	$ 787,645

XML

Merger (Details) - 2015 Merger Agreement [Member] - USD ($) $ in Millions	Jul. 11, 2015	Mar. 13, 2015
Subsequent Event [Line Items]
approximate payment amount upon completion of merger	$ 142
Loss Contingency, Damages Sought		1.42

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements include Oneida Financial Corp. (the “Company”), a Maryland corporation, and its wholly owned subsidiary, Oneida Savings Bank (the “Bank”), as of June 30, 2015 and December 31, 2014 and for the three month and six month periods ended June 30, 2015 and 2014.  All inter-company accounts and transactions have been eliminated in consolidation.  The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes.  These estimates, assumptions, and judgments are based on information available through the date of the filing of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments.  Certain policies inherently have a greater reliance on the use of estimates, assumptions, and judgments and as such have a greater possibility of producing results that could be materially different than originally reported.  Actual results could differ from those estimates.  In the opinion of management, the unaudited consolidated financial statements include all necessary adjustments, consisting of normal recurring accruals, necessary for a fair presentation for the periods presented.  The results of operations for the three months and six months ended June 30, 2015 are not necessarily indicative of the results to be achieved for the remainder of 2015. 

The data in the consolidated statements of condition for December 31, 2014 was derived from the audited financial statements included in the Company’s 2014 Annual Report on Form 10-K.  That data, along with the interim financial information presented in the consolidated statements of condition, statements of operations, comprehensive income, changes in stockholders’ equity and cash flows should be read in conjunction with the 2014 consolidated financial statements, including the notes thereto included in the Company’s Annual Report on Form 10-K.

XML

Stock-Based Compensation (Details)	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jul. 31, 2012 $ / shares	Jun. 30, 2015 USD ($) $ / shares shares	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) plan $ / shares shares	Jun. 30, 2014 USD ($) $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Jun. 01, 2014 $ / shares
Stock-Based Compensation
Number of share-based compensation plans | plan					1
Total income tax benefit			$ 28,972	$ 58,637	$ 57,673	$ 110,173
Share based compensation cost			$ 76,748	152,304	$ 152,775	$ 286,164
Options
Shares
Granted (in shares) | shares					364	8,215
Stock Option Plan | Options
Stock-Based Compensation
Risk Free Interest Rate					0.00%	1.50%
Expected Term					2 months 27 days	3 years 1 month 13 days
Expected Stock Price Volatility Rate					28.31%	22.85%
Expected Dividend Rate					4.66%	4.66%
Number of shares authorized under the plan | shares			216,750		216,750
Vesting Period					1 year
Weighted Average Remaining Contractual Term					5 years
Number of shares available for future grants | shares			25,750		25,750
Share based compensation cost			$ 8,984	14,695	$ 17,874	$ 23,832
Shares
Outstanding at January 1, 2015 | shares					172,348
Granted (in shares) | shares					364
Exercised (in shares) | shares					(18,848)
Forfeited or expired (in shares) | shares					0
Outstanding at June 30, 2015 | shares			153,864		153,864		172,348
Fully Vested and expected to vest (in shares) | shares			108,000		108,000
Exercisable as of June 30, 2015 | shares			45,864		45,864
Average Exercise Price
Outstanding at January 1, 2015 (in dollars per share) | $ / shares					$ 10.44
Granted (in dollars per share) | $ / shares					19.61
Exercised (in dollars per share) | $ / shares					11.10
Forfeited or expired (in dollars per share) | $ / shares					0.00
Outstanding at June 30, 2015 (in dollars per share) | $ / shares			$ 10.38		10.38		$ 10.44
Vested and Expected to Vest, Exercisable, Weighted Average Exercise Price | $ / shares			10.39		10.39
Exercisable as of June 30, 2015 (in dollars per share) | $ / shares			$ 10.37		$ 10.37
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2					6 years 10 months 21 days		7 years 22 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term					6 years 1 month 17 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term					7 years 3 months 26 days
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2					6 years 10 months 21 days		7 years 22 days
Aggregate Intrinsic Value
Outstanding at January 1, 2015					$ 443,550
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value | $ / shares					$ 306
Exercised					$ 144,025	10,835
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Intrinsic Value | $ / shares					$ 0
Outstanding at June 30, 2015			$ 1,548,746		$ 1,548,746		$ 443,550
Fully vested and expected to vest			1,086,615		1,086,615
Exercisable as of June 30, 2015			462,131		462,131
Information related to the stock option plan
Intrinsic value of options exercised					144,025	10,835
Employee Service Share-based Compensation, Cash Received from Exercise of Stock Options					169,178	56,650
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net					$ (185)	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares					$ 0.9728	$ 1.3039
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options			$ 74,496		$ 74,496
Weighted-average period over which cost is expected to be recognized					2 years 1 month 6 days
Recognition and Retention Plan [Member] | Nonvested Stock
Stock-Based Compensation
Vesting Period	4 years	5 years
Number of shares available for future grants | shares			131,500		131,500
Share based compensation cost			$ 67,764	73,183	$ 134,901	$ 134,180
Information related to the stock option plan
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares					$ 0.00
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options			$ 562,055		$ 562,055
Weighted-average period over which cost is expected to be recognized					2 years 1 month 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares		$ 10.30	$ 10.46		$ 10.46		$ 10.46	$ 12.43
Performance Award Plan | Nonvested Stock
Stock-Based Compensation
Number of shares available for future grants | shares			75,000		75,000
Share based compensation cost				$ 64,426		$ 128,152
Information related to the stock option plan
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares					$ 0.00
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options			$ 0		$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares		$ 10.30	$ 10.30		$ 10.30		$ 10.30

XML

Investment Securities and Mortgage-Backed Securities (Details 3) $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($) security	Dec. 31, 2014 USD ($)
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	$ 43,379	$ 27,632
Continuous Unrealized Loss Position, Less than 12 Months,	(527)	(146)
More than 12 Months, Fair Value	20,115	22,444
Continuous Unrealized Loss Position, 12 Months or Longer	(1,368)	(1,671)
Total Fair Value	63,494	50,076
Continuous Unrealized Loss Position	(1,895)	(1,817)
Held-to-maturity securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	9,131	9,011
Continuous Unrealized Loss Position, Less than 12 Months	(123)	(125)
More than 12 Months, Fair Value	14,126	12,519
Unrealized Loss Position, 12 Months or Longer,	(430)	(301)
Total Fair Value	23,257	21,530
Continuous Unrealized Loss Position	$ (553)	(426)
Other-Than-Temporary-Impairment
Number of securities in the portfolio | security	357
Number of securities in unrealized loss position | security	83
U.S. Agencies
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	$ 16,063	999
Continuous Unrealized Loss Position, Less than 12 Months,	(156)	(1)
More than 12 Months, Fair Value	1,942	6,858
Continuous Unrealized Loss Position, 12 Months or Longer	(58)	(142)
Total Fair Value	18,005	7,857
Continuous Unrealized Loss Position	(214)	(143)
Held-to-maturity securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	1,915
Continuous Unrealized Loss Position, Less than 12 Months	(28)
More than 12 Months, Fair Value	0
Unrealized Loss Position, 12 Months or Longer,	0
Total Fair Value	1,915
Continuous Unrealized Loss Position	(28)
US Treasury Notes Securities
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	1,994
Continuous Unrealized Loss Position, Less than 12 Months,	(5)
More than 12 Months, Fair Value	0
Continuous Unrealized Loss Position, 12 Months or Longer	0
Total Fair Value	1,994
Continuous Unrealized Loss Position	(5)
Corporate
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	10,887	9,237
Continuous Unrealized Loss Position, Less than 12 Months,	(236)	(49)
More than 12 Months, Fair Value	10,907	10,552
Continuous Unrealized Loss Position, 12 Months or Longer	(1,258)	(1,459)
Total Fair Value	21,794	19,789
Continuous Unrealized Loss Position	(1,494)	(1,508)
Asset-backed Securities
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value		3,789
Continuous Unrealized Loss Position, Less than 12 Months,		(35)
More than 12 Months, Fair Value		0
Total Fair Value		3,789
Continuous Unrealized Loss Position		(35)
State and municipal
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	1,807	563
Continuous Unrealized Loss Position, Less than 12 Months,	(35)	(1)
More than 12 Months, Fair Value	0	0
Continuous Unrealized Loss Position, 12 Months or Longer	0
Total Fair Value	1,807	563
Continuous Unrealized Loss Position	(35)	(1)
Held-to-maturity securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	4,895	2,285
Continuous Unrealized Loss Position, Less than 12 Months	(84)	(4)
More than 12 Months, Fair Value	0	822
Unrealized Loss Position, 12 Months or Longer,	0	(3)
Total Fair Value	4,895	3,107
Continuous Unrealized Loss Position	(84)	(7)
Small Business Administration
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	0	0
Continuous Unrealized Loss Position, Less than 12 Months,	0	0
More than 12 Months, Fair Value	4	4
Continuous Unrealized Loss Position, 12 Months or Longer	0
Total Fair Value	4	4
Continuous Unrealized Loss Position	0	0
Fannie Mae
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	6,017	5,393
Continuous Unrealized Loss Position, Less than 12 Months,	(72)	(16)
More than 12 Months, Fair Value	1,951	2,002
Continuous Unrealized Loss Position, 12 Months or Longer	(7)	(23)
Total Fair Value	7,968	7,395
Continuous Unrealized Loss Position	(79)	(39)
Held-to-maturity securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	2,321	2,361
Continuous Unrealized Loss Position, Less than 12 Months	(11)	(23)
More than 12 Months, Fair Value	8,689	9,459
Unrealized Loss Position, 12 Months or Longer,	(323)	(248)
Total Fair Value	11,010	11,820
Continuous Unrealized Loss Position	(334)	(271)
Freddie Mac
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	6,611	5,567
Continuous Unrealized Loss Position, Less than 12 Months,	(23)	(33)
More than 12 Months, Fair Value	1,703	0
Continuous Unrealized Loss Position, 12 Months or Longer	(21)
Total Fair Value	8,314	5,567
Continuous Unrealized Loss Position	(44)	(33)
Held-to-maturity securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	0	734
Continuous Unrealized Loss Position, Less than 12 Months	0	(3)
More than 12 Months, Fair Value	2,030	2,238
Unrealized Loss Position, 12 Months or Longer,	(36)	(50)
Total Fair Value	2,030	2,972
Continuous Unrealized Loss Position	(36)	(53)
Government National Mortgage Assoc.
Available-for-sale securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	0	2,084
Continuous Unrealized Loss Position, Less than 12 Months,	0	(11)
More than 12 Months, Fair Value	3,608	3,028
Continuous Unrealized Loss Position, 12 Months or Longer	(24)	(47)
Total Fair Value	3,608	5,112
Continuous Unrealized Loss Position	(24)	(58)
Held-to-maturity securities in a continuous unrealized loss position
Less than 12 Months, Fair Value	0	3,631
Continuous Unrealized Loss Position, Less than 12 Months	0	(95)
More than 12 Months, Fair Value	3,407	0
Unrealized Loss Position, 12 Months or Longer,	(71)
Total Fair Value	3,407	3,631
Continuous Unrealized Loss Position	$ (71)	(95)
U.S. Agency and Agency Mortgage-Backed Securities
Other-Than-Temporary-Impairment
Number of securities in unrealized loss position | security	43
Number of individual securities in continuous unrealized loss position for 12 months or more | security	18
Corporate Debt and Municipal Securities
Other-Than-Temporary-Impairment
Number of securities in unrealized loss position | security	40
Number of individual securities in continuous unrealized loss position for 12 months or more | security	8
Strats-Goldman Sachs corporation obligation
Available-for-sale securities in a continuous unrealized loss position
More than 12 Months, Fair Value	$ 2,500
Continuous Unrealized Loss Position	$ 892	$ 1,004
Other-Than-Temporary-Impairment
Variable rate basis	6 month libor
Current interest rate (as a percent)	1.44%
Finance sector corporate debt securities
Other-Than-Temporary-Impairment
Number of securities in unrealized loss position | security	7

XML

Investment Securities and Mortgage-Backed Securities (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Amortized cost of Available For Sale securities
Total	$ 155,801		$ 155,801
Fair Value of Available For Sale securities
Fair Value	155,539		155,539		$ 176,314
Amortized cost of Held to Maturity securities
Total	122,384		122,384		129,415
Fair Value of Held to Maturity securities
Total	125,544		125,544		133,897
Sales of securities
Proceeds	18,312	$ 902	23,368	$ 2,649
Gross gains	198	64	344	126
Gross losses	(122)	$ (37)	(122)	$ (53)
Investment Securities
Amortized cost of Available For Sale securities
Within one year	3,946		3,946
After one year through five years	24,181		24,181
After five years through ten years	51,619		51,619
After ten years	14,992		14,992
Fair Value of Available For Sale securities
Within one year	3,953		3,953
After one year through five years	24,507		24,507
After five years through ten years	51,748		51,748
After ten years	13,838		13,838
Fair Value	94,046		94,046		111,307
Amortized cost of Held to Maturity securities
Within one year	473		473
After one year through five years	12,765		12,765
After five years through ten years	35,910		35,910
After ten years	26,540		26,540
Total	75,688		75,688		78,511
Fair Value of Held to Maturity securities
Within one year	475		475
After one year through five years	13,175		13,175
After five years through ten years	37,245		37,245
After ten years	27,720		27,720
Total	78,615		78,615		82,521
Mortgage-Backed Securities
Amortized cost of Available For Sale securities
Securities without single maturity date	61,063		61,063
Fair Value of Available For Sale securities
Securities without single maturity date	61,493		61,493
Fair Value	61,493		61,493		65,007
Amortized cost of Held to Maturity securities
Securities without single maturity date	46,696		46,696
Total	46,696		46,696		50,904
Fair Value of Held to Maturity securities
Securities without single maturity date	46,929		46,929
Total	$ 46,929		$ 46,929		$ 51,376

XML

Stock-Based Compensation (Details 2) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jul. 31, 2012	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Shares
Nonvested at June 30, 2015			153,000		153,000
Weighted Average Grant Date Fair Value
Share based compensation cost			$ 76,748	$ 152,304	$ 152,775	$ 286,164
Stock Option Plan 2012 [Member] | Stock Options [Member]
Stock-Based Compensation
Vesting period					1 year
Weighted-average period over which cost is expected to be recognized					2 years 1 month 6 days
Weighted Average Grant Date Fair Value
Forfeited (in dollars per share)					$ 0.9728	$ 1.3039
Total unrecognized compensation cost			74,496		$ 74,496
Share based compensation cost			$ 8,984	14,695	$ 17,874	$ 23,832
Number of shares available for future grants			25,750		25,750
Recognition and Retention Plan [Member] | Nonvested Stock
Stock-Based Compensation
Vesting period	4 years	5 years
Nonvested at June 30, 2015		$ 10.30	$ 10.46		$ 10.46
Number of shares issued					130,000
Weighted-average period over which cost is expected to be recognized					2 years 1 month 6 days
Shares
Nonvested at January 1, 2015					78,000
Granted (in shares)					0
Vested (in shares)					0
Forfeited (in shares)					0
Nonvested at June 30, 2015			78,000		78,000
Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015 (in dollars per share)					$ 10.46
Granted (in dollars per share)					0.00
Vested (in dollars per share)					0.00
Forfeited (in dollars per share)					0.00
Nonvested at June 30, 2015		10.30	$ 10.46		$ 10.46
Total unrecognized compensation cost			$ 562,055		$ 562,055
Share based compensation cost			$ 67,764	73,183	$ 134,901	134,180
Number of shares available for future grants			131,500		131,500
Performance Award Plan | Nonvested Stock
Stock-Based Compensation
Nonvested at June 30, 2015		10.30	$ 10.30		$ 10.30
Period of performance results on which vesting period is based					3 years
Period of cumulative earnings per share on which performance criteria is based					3 years
Return on average tangible equity metrics (as a percent)					33.00%
Profit margin (as a percent)					50.00%
Shares
Nonvested at January 1, 2015					75,000
Granted (in shares)					0
Vested (in shares)					0
Forfeited (in shares)					0
Nonvested at June 30, 2015			75,000		75,000
Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015 (in dollars per share)					$ 10.30
Granted (in dollars per share)					0.00
Vested (in dollars per share)					0
Forfeited (in dollars per share)					0.00
Nonvested at June 30, 2015		$ 10.30	$ 10.30		$ 10.30
Total unrecognized compensation cost			$ 0		$ 0
Share based compensation cost				$ 64,426		$ 128,152
Number of shares available for future grants			75,000		75,000
Minimum | Recognition and Retention Plan [Member] | Nonvested Stock
Stock-Based Compensation
Percentage of compensation cost payout					50.00%
Maximum | Recognition and Retention Plan [Member] | Nonvested Stock
Stock-Based Compensation
Percentage of compensation cost payout					100.00%

XML

Loans Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Components of loans receivable
Total loans	$ 392,585		$ 369,039
Deferred Fees	1,818		1,483
Allowance for loan losses	(3,459)	$ (3,497)	(3,502)	$ (3,273)	$ (3,191)	$ (3,110)
LOANS RECEIVABLE, NET	390,944		367,020
Commercial loans
Components of loans receivable
Total loans	57,045		53,669
Allowance for loan losses	(952)	(887)	(1,175)	(1,186)	(954)	(871)
Commercial real estate
Components of loans receivable
Total loans	95,959		93,427
Allowance for loan losses	(997)	(1,247)	(1,085)	(993)	(993)	(1,000)
Consumer loans
Components of loans receivable
Total loans	59,471		46,883
Allowance for loan losses	(648)	(551)	(445)	(304)	(264)	(261)
Home equity
Components of loans receivable
Total loans	53,496		53,150
Allowance for loan losses	(317)	(296)	(295)	(287)	(302)	(300)
Residential mortgages
Components of loans receivable
Total loans	126,614		121,910
Allowance for loan losses	$ (545)	$ (516)	$ (502)	$ (503)	$ (678)	$ (678)

XML

Loans Receivable Loans Receivable (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Allowance for Loan Losses
Beginning Balance	$ 3,497	$ 3,191	$ 3,502	$ 3,110
Charge Offs	(55)	(27)	(76)	(52)
Recoveries	17	9	33	15
Provision for loan losses	0	100	0	200
Ending Balance	3,459	3,273	3,459	3,273
Commercial Portfolio Segment [Member]
Allowance for Loan Losses
Beginning Balance	887	954	1,175	871
Charge Offs	0	0	0	0
Recoveries	0	0	0	0
Provision for loan losses	65	232	(223)	315
Ending Balance	952	1,186	952	1,186
Commercial Real Estate Portfolio Segment [Member]
Allowance for Loan Losses
Beginning Balance	1,247	993	1,085	1,000
Charge Offs	0	0	0	0
Recoveries	0	1	0	2
Provision for loan losses	(250)	(1)	(88)	(9)
Ending Balance	997	993	997	993
Consumer Portfolio Segment [Member]
Allowance for Loan Losses
Beginning Balance	551	264	445	261
Charge Offs	(36)	(16)	(57)	(41)
Recoveries	16	7	32	11
Provision for loan losses	117	49	228	73
Ending Balance	648	304	648	304
Home Equity Line of Credit [Member]
Allowance for Loan Losses
Beginning Balance	296	302	295	300
Charge Offs	(19)	0	(19)	0
Recoveries	0	0	0	0
Provision for loan losses	40	(15)	41	(13)
Ending Balance	317	287	317	287
Residential Portfolio Segment [Member]
Allowance for Loan Losses
Beginning Balance	516	678	502	678
Charge Offs	0	(11)	0	(11)
Recoveries	1	1	1	2
Provision for loan losses	28	(165)	42	(166)
Ending Balance	$ 545	$ 503	$ 545	$ 503

XML

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating Activities:
Net income	$ 2,444	$ 3,373
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	869	850
Amortization of premiums/discounts on securities, net	361	175
Net change in fair value of trading securities	(22)	(823)
Provision for loan losses	0	200
ESOP shares earned	0	116
Stock compensation earned	152	286
Loss on write down of foreclosed assets	6	10
Gain on securities, net	(222)	(73)
Gain on sale of loans, net	(119)	(83)
Income tax payable	109	1,284
Accrued interest receivable	136	27
Other assets	(904)	3,756
Other liabilities	(1,466)	(3,101)
Earnings on bank owned life insurance	(231)	(826)
Origination of loans held for sale	(3,810)	(3,310)
Proceeds from sales of loans	4,693	3,454
Net cash provided by operating activities	1,996	5,315
Investing Activities:
Purchase of securities available-for-sale	(26,020)	(47,674)
Proceeds from sale of securities available-for-sale	23,368	2,649
Maturities and calls of securities available-for-sale	16,620	5,902
Principal collected on securities available-for-sale	5,741	5,647
Purchase of securities held-to-maturity	(426)	(894)
Maturities and call of securities held-to-maturity	2,456	1,386
Principal collected on securities held-to-maturity	5,221	4,522
Purchase of FHLB stock	(959)	(93)
Redemption of FHLB stock	910	79
Net increase in loans	(23,924)	(8,592)
Purchase of bank premises and equipment	(2,542)	(1,065)
Proceeds from Sale of Foreclosed Assets	212	22
Settlement of bank owed life insurance	0	1,423
Net cash provided by (used in) investing activities	657	(36,688)
Financing Activities:
Net increase in demand deposit, savings, money market, super now and escrow	59,493	32,247
Net (decrease) increase in time deposits	(7,265)	1,709
Shares issued under stock plans	169	57
Cash dividends	(1,687)	(1,677)
Net cash provided by financing activities	50,710	32,336
Increase in cash and cash equivalents	53,363	963
Cash and cash equivalents at beginning of period	31,075	42,183
Cash and cash equivalents at end of period	84,438	43,146
Supplemental disclosures of cash flow information:
Cash paid for interest	1,196	1,340
Cash paid for income taxes	850	0
Supplemental noncash disclosures:
Transfer of loans to other real estate	0	81
Dividends declared and unpaid at period end	$ 845	$ 843

XML

Loans Receivable (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	$ 168		$ 168			$ 136
Collectively evaluated for impairment	3,291		3,291			3,366
Total	3,459	$ 3,273	3,459	$ 3,273	$ 3,497	3,502	$ 3,191	$ 3,110
Financing Receivable, Individually Evaluated for Impairment	1,824		1,824			1,510
Loans:
Collectively evaluated for impairment	390,761		390,761			367,529
Total	392,585		392,585			369,039
Unpaid Principal Balance
Total	1,824		1,824			1,510
Recorded Investment
Total	1,824		1,824			1,510
Allowance for Loan Losses Allocated
With an allowance recorded	168		168			136
Average recorded investment
With an allowance recorded	1,917	1,483	1,938	1,490
Commercial loans
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	153		153			115
Collectively evaluated for impairment	799		799			1,060
Total	952	1,186	952	1,186	887	1,175	954	871
Financing Receivable, Individually Evaluated for Impairment	1,376		1,376			1,048
Loans:
Collectively evaluated for impairment	55,669		55,669			52,621
Total	57,045		57,045			53,669
Unpaid Principal Balance
With no related allowance recorded	0		0			0
With an allowance recorded	1,376		1,376			1,048
Recorded Investment
With no related allowance recorded	0		0			0
With an allowance recorded	1,376		1,376			1,048
Allowance for Loan Losses Allocated
With an allowance recorded	153		153			115
Average recorded investment
With no related allowance recorded	0	0
With an allowance recorded	1,467	996	1,485	998
Commercial real estate
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	15		15			21
Collectively evaluated for impairment	982		982			1,064
Total	997	993	997	993	1,247	1,085	993	1,000
Financing Receivable, Individually Evaluated for Impairment	448		448			462
Loans:
Collectively evaluated for impairment	95,511		95,511			92,965
Total	95,959		95,959			93,427
Unpaid Principal Balance
With no related allowance recorded	0		0			0
With an allowance recorded	448		448			462
Recorded Investment
With no related allowance recorded	0		0			0
With an allowance recorded	448		448			462
Allowance for Loan Losses Allocated
With an allowance recorded	15		15			21
Average recorded investment
With no related allowance recorded	0	0	0	0
With an allowance recorded	450	487	453	492
Consumer loans
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	0		0			0
Collectively evaluated for impairment	648		648			445
Total	648	304	648	304	551	445	264	261
Financing Receivable, Individually Evaluated for Impairment	0		0			0
Loans:
Collectively evaluated for impairment	59,471		59,471			46,883
Total	59,471		59,471			46,883
Home equity
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	0		0			0
Collectively evaluated for impairment	317		317			295
Total	317	287	317	287	296	295	302	300
Financing Receivable, Individually Evaluated for Impairment	0		0			0
Loans:
Collectively evaluated for impairment	53,496		53,496			53,150
Total	53,496		53,496			53,150
Residential mortgages
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	0		0			0
Collectively evaluated for impairment	545		545			502
Total	545	$ 503	545	$ 503	$ 516	502	$ 678	$ 678
Financing Receivable, Individually Evaluated for Impairment	0		0			0
Loans:
Collectively evaluated for impairment	126,614		126,614			121,910
Total	$ 126,614		$ 126,614			$ 121,910

XML

Fair Value (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2014	Mar. 31, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance January 1, 2015	$ 68	$ 68	$ 101	$ 101
Interest payments applied to principal	0	0	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements)	0	0
FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisPayDownsOnSecurites				0
Included in other comprehensive income	(1)	0	(1)	0
Ending balance	67	68	100	101
Interest income on securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total gains or losses (realized/unrealized) Included in earnings	0	0	0	0
Other changes in fair value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total gains or losses (realized/unrealized) Included in earnings	0	0		0
Net impairment losses recognized in earnings
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total gains or losses (realized/unrealized) Included in earnings	0	0	0	0
Municipal Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance January 1, 2015	68	68	101	101
Interest payments applied to principal	0	0	0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements)	0	0
FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisPayDownsOnSecurites			0	0
Included in other comprehensive income	(1)	0	(1)	0
Ending balance	67	68	100	101
Municipal Securities | Interest income on securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total gains or losses (realized/unrealized) Included in earnings	0	0	0	0
Municipal Securities | Other changes in fair value
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total gains or losses (realized/unrealized) Included in earnings	0	0	0	0
Municipal Securities | Net impairment losses recognized in earnings
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total gains or losses (realized/unrealized) Included in earnings	$ 0	$ 0	$ 0	$ 0

XML

CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 47,317	$ 19,062
Federal funds sold	37,121	12,013
TOTAL CASH AND CASH EQUIVALENTS	84,438	31,075
Trading securities	3,922	3,900
Securities, available-for-sale	155,539	176,314
Securities, held-to-maturity (fair value $125,544 and $133,897 respectively)	122,384	129,415
Mortgage loans held for sale	75	839
Loans receivable	392,585	369,039
Deferred Fees	1,818	1,483
Allowance for loan losses	(3,459)	(3,502)
LOANS RECEIVABLE, NET	390,944	367,020
Federal Home Loan Bank stock	1,440	1,391
Bank premises and equipment, net	22,178	20,382
Assets Held-for-sale	63	63
Accrued interest receivable	2,206	2,342
Bank owned life insurance	18,073	17,842
Other assets	22,143	21,298
Goodwill	25,480	25,480
Other intangible assets	685	808
TOTAL ASSETS	849,570	798,169
Liabilities:
Interest bearing deposits	645,415	603,482
Non-interest bearing deposits	95,983	85,688
Other liabilities	11,763	13,226
TOTAL LIABILITIES	753,161	702,396
Oneida Financial Corp. Stockholders' equity:
Preferred stock, 10,000,000 shares authorized; 0 issued and outstanding	0	0
Common stock ($0.01 par value; 30,000,000 shares authorized; 7,041,747 issued at June 30, 2015; 7,025,444 issued at December 31, 2014)	70	70
Additional paid-in capital	44,442	44,121
Retained earnings	54,940	54,185
Accumulated other comprehensive loss	(3,043)	(2,603)
TOTAL STOCKHOLDERS’ EQUITY	96,409	95,773
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 849,570	$ 798,169

XML

Comprehensive Income (Other Comprehensive Income (Loss)) (Details) - Equity Component [Domain] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Available-for-sale Securities, Pre-tax
Unrealized holding (losses) gains on securities arising during period	$ (1,816)	$ 1,260	$ (806)	$ 2,999
Reclassification adjustment for gains realized in income	(76)	(27)	(222)	(73)
Net unrealized (losses) gains	(1,892)	1,233	(1,028)	2,926
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	(181)	(132)	(320)	(274)
Net unrealized gains	181	132	320	274
Available-for-sale Securities, Tax
Unrealized holding losses on available-for-sale securities during the period	685	(504)	304	(1,200)
Reclassification adjustment for gains included in net income (1)	29	11	84	30
Net unrealized loss on available-for-sale securities	714	(493)	388	(1,170)
Other Comprehensive Income (Loss), Transfers from Held-to-maturity to Available-for-Sale Securities, Tax	(68)	(53)	(120)	(110)
Net unrealized gains	(68)	(53)	(120)	(110)
Available-for-sale Securities, After-tax
Unrealized holding losses on available-for-sale securities during the period	(1,131)	756	(502)	1,799
Reclassification adjustment for gains included in net income (1)	(47)	(16)	(138)	(43)
Net change in securities available-for-sale	(1,178)	740	(640)	1,756
Other Comprehensive Income (Loss), Amortization, Transfers from Available-for-Sale Securities to Held-to-maturity Securities, Net of Tax	113	79	200	164
Net unrealized gains	113	79	200	164
Postretirement Benefit Obligation, Before-tax
Net pension gain (loss) arising during period (2)	0	0	0	24
Net unrecognized postretirement benefit obligation	0	0	0	24
Postretirement Benefit Obligation, Tax
Net pension gain (loss) arising during period (2)	0	0	0	(10)
Net unrecognized postretirement benefit obligation	0	0	0	(10)
Postretirement Benefit Obligation, After-tax
Net pension gain (loss) arising during period (2)	0	0	0	14
Net unrecognized postretirement benefit obligation	0	0	0	14
Other comprehensive Income, Pre-tax
Other comprehensive loss	(1,711)	1,365	(708)	3,224
Other comprehensive Income, Tax
Other comprehensive loss	646	(546)	268	(1,290)
Other comprehensive income (loss), After-tax
Other comprehensive (loss) income, net of tax	$ (1,065)	$ 819	$ (440)	$ 1,934

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2014	$ 95,773	$ 70	$ 44,121	$ 54,185	$ (2,603)
Balance (in shares) at Dec. 31, 2014		7,025,444
Increase (Decrease) in Stockholders' Equity
Net income	2,444			2,444
Other comprehensive loss, net of tax	(440)				(440)
Common stock dividends: $0.24 per share	(1,689)			(1,689)
Stock issued under stock plan shares		16,303
Stock issued under stock plans	169	$ 0	169
Shares earned under stock plan	152		152
Balance at Jun. 30, 2015	$ 96,409	$ 70	$ 44,442	$ 54,940	$ (3,043)
Balance (in shares) at Jun. 30, 2015		7,041,747

XML

Loans Receivable (Details 6) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Credit Quality Indicators
Loans	$ 392,585	$ 369,039
Minimum
Credit Quality Indicators
Amount considered as basis for analysis of credit quality	$ 250
Maximum
Credit Quality Indicators
Period considered for analysis of credit quality	12 months
Not Rated
Credit Quality Indicators
Loans	$ 30,952	28,548
Not Rated | Maximum
Credit Quality Indicators
Amount considered as basis for analysis of credit quality	250
Pass
Credit Quality Indicators
Loans	114,413	108,484
Special Mention
Credit Quality Indicators
Loans	2,015	4,627
Substandard
Credit Quality Indicators
Loans	5,624	5,437
Doubtful
Credit Quality Indicators
Loans	0	0
Commercial real estate
Credit Quality Indicators
Loans	95,959	93,427
Commercial real estate | Not Rated
Credit Quality Indicators
Loans	14,054	13,592
Commercial real estate | Pass
Credit Quality Indicators
Loans	40,731	35,546
Commercial real estate | Special Mention
Credit Quality Indicators
Loans	492	191
Commercial real estate | Substandard
Credit Quality Indicators
Loans	1,768	4,340
Commercial real estate | Doubtful
Credit Quality Indicators
Loans	0	0
Commercial loans
Credit Quality Indicators
Loans	57,045	53,669
Commercial loans | Not Rated
Credit Quality Indicators
Loans	16,898	14,956
Commercial loans | Pass
Credit Quality Indicators
Loans	73,682	72,938
Commercial loans | Special Mention
Credit Quality Indicators
Loans	1,523	4,436
Commercial loans | Substandard
Credit Quality Indicators
Loans	3,856	1,097
Commercial loans | Doubtful
Credit Quality Indicators
Loans	$ 0	$ 0

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Schedule of information about the entity's segments

Information about the Bank’s segments is presented in the following table for the periods indicated:

	Three Months Ended June 30, 2015
	Banking Activities			Insurance, Risk Management and Employee Benefits Activities		Financial/Investment Advisory Activities		Total
	(In thousands)
Net interest income	$	5,137		$	—	$	—	$	5,137
Provision for loan losses	—			—		—		—
Net interest income after provision for loan losses	5,137			—		—		5,137
Investment losses, net	(144		)	—		—		(144		)
Commissions and fees on sales of non-banking products	89			5,870		987		6,946
Non-interest income	1,183			—		—		1,183
Non-interest expenses	6,194			4,733		966		11,893
Depreciation and amortization	327			125		6		458
(Loss) income before income taxes	(256		)	1,012		15		771
Income tax (benefit) expense	(114		)	400		12		298
Net (loss) income	$	(142	)	$	612	$	3	$	473
Total Assets	$	822,361		$	30,897	$	4,276	$	857,534

	Three Months Ended June 30, 2014
	Banking Activities		Insurance, Risk Management and Employee Benefit Activities		Financial/Investment Advisory Activities			Total
	(In thousands)
Net interest income	$	5,023	$	—	$	—		$	5,023
Provision for loan losses	100		—		—			100
Net interest income after provision for loan losses	4,923		—		—			4,923
Investment gains, net	40		—		—			40
Commissions and fees on sales of non-banking products	511		5,215		729			6,455
Non-interest income	1,819		—		—			1,819
Non-interest expenses	5,607		4,406		880			10,893
Depreciation and amortization	324		76		7			407
Income (loss) before income taxes	1,362		733		(158		)	1,937
Income tax expense (benefit)	237		322		(51		)	508
Net income (loss)	$	1,125	$	411	$	(107	)	$	1,429
Total Assets	$	753,357	$	29,369	$	4,919		$	787,645

Schedule of reconciliation of the Company's reported segment assets to consolidated assets

The following represents a reconciliation of the Company’s reported segment assets to consolidated assets as of June 30:

	2015			2014
	(In thousands)
Total assets for reportable segments	$	857,534		$	787,645
Elimination of intercompany cash balances	(7,964		)	(9,807		)
Consolidated Total	$	849,570		$	777,838

XML

Loans Receivable Loans Receivable (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan	Jun. 30, 2015 USD ($) component loan	Jun. 30, 2014 USD ($) loan	Dec. 31, 2014 USD ($) loan
Financing Receivable, Modifications [Line Items]
Allowance for Loan Losses Determination of Historical Loss Component Period			3 years
Financing Receivable, Modifications, Number of Contracts			9		7
Financing Receivable, Modifications, Recorded Investment | $	$ 984		$ 984		$ 804
Impaired Financing Receivable, Interest Income, Cash Basis Method | $	$ 29	$ 23	$ 60	$ 44
Financing Receivable, Modifications, Number of Contracts Modified During Period	1	0	3	1
Financing Receivable Modifications Number of Commercial Relationship of Loans Considered Nonaccrual			6
Impaired Financing Receivable, Unpaid Principal Balance | $	$ 1,824		$ 1,824		$ 1,510
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			0		0
Financing Receivable, Modifications, Recorded Investment | $	0		$ 0		$ 0
Commercial Loans Non Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts			9	7	7
Financing Receivable, Modifications, Recorded Investment | $	$ 984	$ 839	$ 984	$ 839	$ 804
ImpairedFinanceRecNumberLoansNotTDRForCustomersWhoAlsoHaveTDR	2	2	2	2
Minimum
Financing Receivable, Modifications [Line Items]
Financing Receivable Modifications Maturity Period Extended			10 years
Financing Receivable Basis for Analysis of Credit Quality Outstanding Amount | $			$ 250
Maximum
Financing Receivable, Modifications [Line Items]
Financing Receivable Modifications Maturity Period Extended			20 years
Financing Receivable Period for Analysis of Credit Quality			12 months
Maximum | Not Rated
Financing Receivable, Modifications [Line Items]
Financing Receivable Basis for Analysis of Credit Quality Outstanding Amount | $			$ 250
Home equity
Financing Receivable, Modifications [Line Items]
Loans and Leases Receivable Secured by Primary Residence Loan to Value Ratio for Underwriting			90.00%
Commercial real estate
Financing Receivable, Modifications [Line Items]
Financing Receivable Modifications Number of Loans Considered to be Impaired			3	3
ImpairedFinanceRecNumberLoansNotTDRForCustomersWhoAlsoHaveTDR	3	3	3	3
Commercial loans
Financing Receivable, Modifications [Line Items]
Financing Receivable Modifications Number of Loans Considered to be Impaired			11	9
Commercial loans | Non accrual
Financing Receivable, Modifications [Line Items]
Financing Receivable Modifications Number of Loans Considered to be Impaired			2
Real Estate Acquired in Satisfaction of Debt [Member]
Financing Receivable, Modifications [Line Items]
Mortgage Loans on Real Estate, Foreclosures | $			$ 28		246
Residential Real Estate in the process of foreclosure [Domain]
Financing Receivable, Modifications [Line Items]
Mortgage Loans on Real Estate, Foreclosures | $			$ 385		$ 334
Mortgage Loans on Real Estate, Number of Loans			6		4
Loan three | Non accrual
Financing Receivable, Modifications [Line Items]
Financing Receivable Modifications Number of Commercial Relationship of Loans Considered Nonaccrual			1
Impaired Financing Receivable, Unpaid Principal Balance | $	$ 35		$ 35		$ 39
Mortgage-Backed Securities
Financing Receivable, Modifications [Line Items]
Other Than Temporary Impairment Losses Number of Components | component			2

XML

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of activity in the stock option plan

A summary of activity in the stock option plan for 2015 was as follows:

	Shares		Average Exercise Price		Weighted Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2015	172,348		$	10.44	7.06	$	443,550
Granted	364		$	19.61	—	$	306
Exercised	(18,848	)	$	11.10	—	$	144,025
Forfeited or expired	—		$	—	—	$	—
Outstanding at June 30, 2015	153,864		$	10.38	6.89	$	1,548,746
Fully vested and expected to vest	108,000		$	10.39	7.32	$	1,086,615
Exercisable as of June 30, 2015	45,864		$	10.37	6.13	$	462,131

Schedule of information related to the stock option plan

Information related to the stock option plan was as follows:

	2015			2014
Intrinsic value of options exercised	$	144,025		$	10,835
Cash received from option exercises	169,178			56,650
Tax benefit realized from option exercises	(185		)	—
Weighted average fair value of options granted	0.9728			1.3039

Recognition and Retention Plan [Member]

Stock-Based Compensation

Summary of changes in nonvested shares

Nonvested Shares	Shares	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015	78,000	$	10.46
Granted	—	—
Vested	—	—
Forfeited	—	—
Nonvested at June 30, 2015	78,000	$	10.46

Performance Award Plan

Stock-Based Compensation

Summary of changes in nonvested shares

Nonvested Shares	Shares	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015	75,000	$	10.30
Granted	—	—
Vested	—	—
Forfeited	—	—
Nonvested at June 30, 2015	75,000	$	10.30

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical)	6 Months Ended
	Jun. 30, 2015 $ / shares
Common stock dividends, per share (in dollars per share)	$ 0.24

XML

CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Investment securities, held-to-maturity	$ 125,544	$ 133,897
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	7,041,747	7,025,444

XML

Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Accounting Pronouncements

Accounting Pronouncements

In June 2014, the FASB amended existing guidance and created a new Topic 606, Revenue from Contracts with Customers which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. This guidance provides a five-step analysis of transactions to determine when and how revenue is recognized that consists of: 1) identify the contract with the customer; 2) identify the performance obligation in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when or as each performance obligation is satisfied. The amendments in this guidance are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Companies can transition to the requirement of this guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption, which is January 1, 2018 for the Company. The impact of this guidance on the Company's operating results or financial condition is not known at this time.

In January 2014, the FASB amended existing guidance by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. The amendments clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. In addition, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this guidance are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in this guidance using either a modified retrospective transition method or a prospective transition method. The adoption of this guidance did not have a material effect on the Company's operating results or financial condition.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 01, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Oneida Financial Corp.
Entity Central Index Key	0001485001
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,041,747
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

XML

Merger (Notes)

6 Months Ended

Jun. 30, 2015

Merger [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Merger

On February 24, 2015, the Company entered into a definitive merger agreement to be acquired by Community Bank System, Inc. for approximately $142 million in Community Bank System, Inc. stock and cash. The merger agreement has been unanimously approved by the board of directors of both companies and the stockholders of Oneida Financial Corp. The merger is expected to close in October 2015, subject to required regulatory approval.

Current Litigation Relating to the Merger

On March 3, 2015, Paul Parshall (the "Plaintiff") filed a stockholder class action lawsuit in the Supreme Court of the State of New York, County of Oneida, against the Company, the directors of the Company and Community Bank System, Inc. The lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by failing to take adequate steps to ensure that the Company’s stockholders receive adequate, fair and maximum consideration under the circumstances and by engineering the merger to the benefit of themselves and/or Community Bank System, Inc. without regard to the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On March 12, 2015, John Solak (the "Second Plaintiff") filed a stockholder class action lawsuit in the Supreme Court of the State of New York, County of Oneida, against the Company, the directors of the Company and Community Bank System, Inc. Similar to the Plaintiff’s lawsuit, the Second Plaintiff’s lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by failing to take adequate steps to ensure that the Company’s stockholders receive adequate, fair and maximum consideration under the circumstances and by engineering the merger to the benefit of themselves and/or Community Bank System, Inc. without regard to the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On March 13, 2015, the Company filed a complaint in the Supreme Court of the State of New York, County of Madison, against FinPro, Inc. (“FinPro”). The Company’s complaint alleges that FinPro has wrongfully demanded a $1.42 million services fee as a result of the Company's entering into the merger even though FinPro has provided no services in connection with the merger and has no right, contractual or otherwise, to such a fee. As a result, the Company is seeking declaratory judgment nullifying the improper demand made by FinPro, and any purported agreement on which the demand is allegedly based.

On April 24, 2015, Linda Colvin (the "Third Plaintiff") filed a stockholder class action lawsuit in the Circuit Court for Baltimore City, Maryland, against the Company, the directors of the Company and Community Bank System, Inc. Similar to the lawsuits by the Plaintiff and the Second Plaintiff, the Third Plaintiff’s lawsuit purports to be brought on behalf of all of the Company’s public stockholders, excluding the directors of the Company. The complaint alleges that the directors of the Company breached their fiduciary duties to the stockholders by agreeing to a merger transaction that fails to maximize shareholder value and by putting their personal interests ahead of the interests of the Company’s stockholders. The complaint further alleges that Community Bank System, Inc. aided and abetted the alleged breaches of fiduciary duty by the Company’s directors. The lawsuit seeks to enjoin the proposed merger from proceeding and seeks unspecified compensatory damages on behalf of the Company’s stockholders and/or rescission of the proposed merger transaction.

On June 9, 2015, the Company, Community Bank System, Inc., and the other defendants entered into a memorandum of understanding (the “MOU”) with the Plaintiff, Second Plaintiff and Third Plaintiff regarding the settlement of the lawsuits. Pursuant to the MOU, the Company agreed to provide additional information to Oneida Financial Corp. stockholders in the Proxy Statement/Prospectus of Oneida Financial Corp. and Community Bank System, Inc. dated May 6, 2015 (the “Proxy Statement/Prospectus”). The Company, Community Bank System, Inc. and the other defendants deny all of the allegations in the lawsuits. The Company, Community Bank System, Inc. and the individual director defendants believe the disclosures in the Proxy Statement/Prospectus were adequate under the law. Nevertheless, the Company, Community Bank System, Inc. and the other defendants have agreed to settle the lawsuits in order to avoid the costs, disruption, and distraction of further litigation. Any costs associated with settling the lawsuits was paid by the Company’s insurance carrier and the Company did not incur a loss on the settlement.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$ 3,967	$ 3,693	$ 7,798	$ 7,350
Interest on investment securities	1,712	1,988	3,621	3,738
Dividends on equity securities	26	24	47	48
Interest on federal funds sold and interest-earning deposits	27	6	37	12
Total interest and dividend income	5,732	5,711	11,503	11,148
INTEREST EXPENSE:
Core deposits	274	323	537	607
Time deposits	321	349	656	700
Borrowings	0	13	1	26
Note payable	0	3	0	7
Total interest expense	595	688	1,194	1,340
NET INTEREST INCOME	5,137	5,023	10,309	9,808
Less: Provision for loan losses	0	100	0	200
Net interest income after provision for loan losses	5,137	4,923	10,309	9,608
INVESTMENT GAINS:
Net gains on sales of securities	76	27	222	73
Changes in fair value of trading securities	(220)	13	22	823
Total investment (losses) gains	(144)	40	244	896
NON-INTEREST INCOME:
Commissions and fees on sales of non-banking products	6,946	6,455	13,968	13,391
Other operating income	1,183	1,819	2,656	2,943
Total non-interest income	8,129	8,274	16,624	16,334
NON-INTEREST EXPENSES:
Compensation and employee benefits	7,117	7,322	14,584	14,500
Occupancy expenses, net	1,210	1,329	2,609	2,729
Merger related expenses	1,257	0	1,257	0
Other operating expense	2,767	2,649	5,322	5,008
Total non-interest expenses	12,351	11,300	23,772	22,237
Income (loss) before income taxes	771	1,937	3,405	4,601
Provision for income taxes	298	508	961	1,228
Net income (loss)	$ 473	$ 1,429	$ 2,444	$ 3,373
EARNINGS PER SHARE — BASIC (in dollars per share)	$ 0.07	$ 0.20	$ 0.35	$ 0.48
EARNINGS PER SHARE — DILUTED (in dollars per share)	$ 0.07	$ 0.20	$ 0.34	$ 0.48

XML

Loans Receivable

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Loans Receivable

Loans Receivable

The components of loans receivable at June 30, 2015 and December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014
	(In thousands)
Commercial loans	$	57,045		$	53,669
Commercial real estate	95,959			93,427
Consumer loans	59,471			46,883
Home equity	53,496			53,150
Residential mortgages	126,614			121,910
	392,585			369,039
Deferred fees	1,818			1,483
Allowance for loan losses	(3,459		)	(3,502		)
Net loans	$	390,944		$	367,020

The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocation of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. 

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired, when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or the fair value of collateral if repayment is expected solely from collateral.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

Troubled debt restructurings are individually evaluated for impairment and included in the separately identified impairment disclosures. Troubled debt restructurings are measured at the present value of estimated future cash flows using the loan's effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of allowance on the loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired. The Company incorporates recent historical experience related to troubled debt restructurings that subsequently default into the calculation of the allowance by loan portfolio segment.

The general allowance covers non-impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent three years.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans (including troubled debt restructurings); levels of and trends in charge-offs and recoveries; migration of loans to the classification of special mention, substandard, or doubtful; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:  commercial loans, commercial real estate loans, consumer loans, home equity loans and residential mortgages.

Commercial business lending generally involves greater risk than residential mortgage lending and involves risks that are different from those associated with residential and commercial real estate lending. Real estate lending is generally considered to be collateral based, with loan amounts based on predetermined loan to collateral values and liquidation of the underlying real estate collateral is viewed as the primary source of repayment in the event of borrower default. Although commercial business loans may be collateralized by equipment or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment because equipment and other business assets may be obsolete or of limited use, among other things. Accordingly, the repayment of a commercial business loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment.

Loans secured by commercial real estate and multi-family residential properties generally are larger than one-to-four family residential loans and involve a greater degree of risk. Commercial and multi-family residential mortgage loans often involve large loan balances to single borrowers or groups of related borrowers. Payments on these loans depend to a large degree on the results of operations and management of the properties or underlying businesses, and may be affected to a greater extent by adverse conditions in the real estate market or the economy in general. Accordingly, the nature of commercial real estate loans makes them more difficult for management to monitor and evaluate.

Consumer loans generally have shorter terms and higher interest rates than one-to-four family mortgage loans. In addition, consumer loans expand the products and services we offer to meet the financial services needs of our customers. Consumer loans generally involve greater credit risk than residential mortgage loans because of the difference in the underlying collateral.  Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because of the greater likelihood of damage to, loss of, or depreciation in the underlying collateral. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections depend on the borrower’s personal financial stability. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Home equity loans are secured by a borrower’s primary residence.  Home equity loans are underwritten under the same criteria that we use to underwrite one-to-four family fixed-rate loans. Home equity loans may be underwritten with a loan to value ratio of 90% when combined with the principal balance of an existing mortgage loan.  Home equity loans generally involve greater credit risk than the primary residential mortgage loans due to the potential of declines in collateral values, collectability as a result of foreclosure processes if the Bank is considered to be in a secondary position as well as the amount of expenses incurred during the process.

Residential real estate loans have as collateral a borrower’s primary residence.  The risk of loss on these loans would be due to collateral deficiencies due to market deterioration or location and condition of the property.  The foreclosure process of a primary residence is usually the final course of action on these types of loans. Given our underwriting criteria and the volume and balance of the loans as compared to collateral, the risk in this portfolio segment is lower than that of the other segments.

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net, due to immateriality. 

The following table sets forth the activity in the allowance for loan losses by portfolio segment:

For the Three Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages		Total
June 30, 2015
	(In thousands)
Allowance for loan losses:
Beginning balance	$	887	$	1,247		$	551		$	296		$	516	$	3,497
Charge-offs	—		—			(36		)	(19		)	—		(55		)
Recoveries	—		—			16			—			1		17
Provision for loan losses	65		(250		)	117			40			28		—
Ending balance	$	952	$	997		$	648		$	317		$	545	$	3,459

For the Six Months Ended	Commercial Loans			Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages		Total
June 30, 2015
	(In thousands)
Allowance for loan losses:
Beginning balance	$	1,175		$	1,085		$	445		$	295		$	502	$	3,502
Charge-offs	—			—			(57		)	(19		)	—		(76		)
Recoveries	—			—			32			—			1		33
Provision for loan losses	(223		)	(88		)	228			41			42		—
Ending balance	$	952		$	997		$	648		$	317		$	545	$	3,459

For the Three Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages			Total
June 30, 2014
	(In thousands)
Allowance for loan losses:
Beginning balance	$	954	$	993		$	264		$	302		$	678		$	3,191
Charge-offs	—		—			(16		)	—			(11		)	(27		)
Recoveries	—		1			7			—			1			9
Provision for loan losses	232		(1		)	49			(15		)	(165		)	100
Ending balance	$	1,186	$	993		$	304		$	287		$	503		$	3,273

For the Six Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages			Total
June 30, 2014
	(In thousands)
Allowance for loan losses:
Beginning balance	$	871	$	1,000		$	261		$	300		$	678		$	3,110
Charge-offs	—		—			(41		)	—			(11		)	(52		)
Recoveries	—		2			11			—			2			15
Provision for loan losses	315		(9		)	73			(13		)	(166		)	200
Ending balance	$	1,186	$	993		$	304		$	287		$	503		$	3,273

The following table presents the balances in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method:

June 30, 2015	Commercial Loans		Commercial Real Estate		Consumer Loans		Home Equity		Residential Mortgages		Total
	(In thousands)
Allowance for loan losses attributable to loans:	0
Individually evaluated for impairment	$	153	$	15	$	—	$	—	$	—	$	168
Collectively evaluated for impairment	799		982		648		317		545		3,291
Total	$	952	$	997	$	648	$	317	$	545	$	3,459
Loans:
Individually evaluated for impairment	$	1,376	$	448	$	—	$	—	$	—	$	1,824
Collectively evaluated for impairment	55,669		95,511		59,471		53,496		126,614		390,761
Total	$	57,045	$	95,959	$	59,471	$	53,496	$	126,614	$	392,585

December 31, 2014	Commercial Loans		Commercial Real Estate		Consumer Loans		Home Equity		Residential Mortgages		Total
	(In thousands)
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	$	115	$	21	$	—	$	—	$	—	$	136
Collectively evaluated for impairment	1,060		1,064		445		295		502		3,366
Total	$	1,175	$	1,085	$	445	$	295	$	502	$	3,502
Loans:
Individually evaluated for impairment	$	1,048	$	462	$	—	$	—	$	—	$	1,510
Collectively evaluated for impairment	52,621		92,965		46,883		53,150		121,910		367,529
Total	$	53,669	$	93,427	$	46,883	$	53,150	$	121,910	$	369,039

The following table presents information related to loans individually evaluated for impairment by segment of loans as of June 30, 2015 and December 31, 2014:

	June 30, 2015						December 31, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands)
With no related allowance recorded:
Commercial loans	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate	—		—		—		—		—		—
With an allowance recorded:
Commercial loans	1,376		1,376		153		1,048		1,048		115
Commercial real estate	448		448		15		462		462		21
Total	$	1,824	$	1,824	$	168	$	1,510	$	1,510	$	136

The following table presents the average recorded investment in impaired loans for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
	(In thousands)
With no related allowance recorded:	0		0		0		0
Commercial loans	$	—	$	—	$	—	$	—
Commercial real estate	—		—		—		—
With an allowance recorded:
Commercial loans	1,467		996		1,485		998
Commercial real estate	450		487		453		492
Total	$	1,917	$	1,483	$	1,938	$	1,490

At June 30, 2015, impaired commercial real estate loans are represented by three loans.  At June 30, 2015, impaired commercial loans are represented by eleven loans. Nine of the commercial loans were considered troubled debt restructurings and totaled $984,000 as of June 30, 2015. The remaining two commercial loans and the three commercial real estate loans were for customers who had commercial loans considered to be troubled debt restructurings. Cash basis interest income of $29,000 and $60,000 was recognized for the three months and six months ended June 30, 2015, respectively. Cash basis interest income of $23,000 and $44,000 was recognized for the three months and six months ended June 30, 2014, respectively. 

At June 30, 2014, impaired commercial real estate loans are represented by three loans. At June 30, 2014, impaired commercial loans are represented by nine loans. Seven of the commercial loans were considered trouble debt restructurings and totaled $839,000 as of June 30, 2014. The remaining two commercial loans and three commercial real estate loans were for customers who had commercial loans considered to be troubled debt restructurings.

The following table presents the recorded investment in nonaccrual and past due loans over 90 days still on accrual by segment as of June 30, 2015 and December 31, 2014:

	June 30, 2015
	Nonaccrual		Loans Past Due Over 90 days still Accruing
	(In thousands)
Commercial loans	$	35	$	—
Commercial real estate	—		—
Consumer loans	—		—
Home equity	4		—
Residential mortgages	328		—
Total	$	367	$	—

	December 31, 2014
	Nonaccrual		Loans Past Due Over 90 days still Accruing
	(In thousands)
Commercial loans	$	39	$	—
Commercial real estate	—		—
Consumer loans	—		—
Home equity	—		—
Residential mortgages	267		—
Total	$	306	$	—

The following represents the aging of the recorded investment in past due loans as of June 30, 2015 and December 31, 2014 by class of loans.

	June 30, 2015
	Total		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due
	(In thousands)
Commercial loans	$	57,045	$	187	$	—	$	—	$	187	$	56,858
Commercial real estate	95,959		84		—		—		84		95,875
Consumer loans	59,471		82		2		—		84		59,387
Home equity	53,496		153		—		4		157		53,339
Residential mortgages	126,614		71		10		328		409		126,205
Total	$	392,585	$	577	$	12	$	332	$	921	$	391,664

	December 31, 2014
	Total		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due
	(In thousands)
Commercial loans	$	53,669	$	—	$	56	$	—	$	56	$	53,613
Commercial real estate	93,427		39		—		—		39		93,388
Consumer loans	46,883		70		11		—		81		46,802
Home equity	53,150		118		—		—		118		53,032
Residential mortgages	121,910		233		—		267		500		121,410
Total	$	369,039	$	460	$	67	$	267	$	794	$	368,245

The carrying value of foreclosed residential real estate property as of June 30, 2015 and December 31, 2014 was $28,000 and $245,692, respectively. There were six loans in process of foreclosure as of June 30, 2015 totaling $385,365. There were four loans in process of foreclosure as of December 31, 2014 totaling $334,266.

Troubled Debt Restructurings

The following table presents the summary of the investment in troubled debt restructurings and related allowance for loan losses as of June 30, 2015 and December 31, 2014 by class of loans:

	June 30, 2015					December 31, 2014
	Number of Loans	Recorded Investment		Allowance for Loan Losses Allocated		Number of Loans	Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands except number of loans)
Commercial loans	9	$	984	$	104	7	$	804	$	58
Commercial real estate	—	—		—		—	—		—
Consumer loans	—	—		—		—	—		—
Home equity	—	—		—		—	—		—
Residential mortgages	—	—		—		—	—		—
Total	9	$	984	$	104	7	$	804	$	58

There was one new troubled debt restructurings recorded during the three months ended June 30, 2015. There were no new troubled debt restructurings recorded during the three months ended June 30, 2014. During the six months ended June 30, 2015, there were three new troubled debt restructurings recorded compared to one new troubled debt restructuring recorded during the same period in 2014. The Company has not committed to lend additional amounts as of June 30, 2015 to customers with outstanding loans that are classified as troubled debt restructurings.

The modification of the terms of such loans included one or a combination of the following:  a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. Certain troubled debt restructurings are classified as nonperforming at the time of the restructuring and may only be returned to performing status after considering the borrower's sustained repayment performance for a reasonable period.

Each of the commercial loans represented a line of credit or fixed rate loan which was not paid in full at the time of maturity. Each loan maturity date was extended for terms ranging from ten years to twenty years and the reduction in interest rates were to below market rates. The nine loans considered troubled debt restructurings as of June 30, 2015 represented six commercial relationships. Two of the commercial loans representing one relationship with a principal balance of $35,000 and $39,000 as of June 30, 2015 and December 31, 2014, respectively, were considered nonaccrual.

For all such modifications, the pre and post outstanding recorded investment amount remained unchanged. There were no charge-offs or defaults during the three months and six months ended June 30, 2015 and 2014. All of the troubled debt restructurings were considered impaired as of June 30, 2015 and December 31, 2014. The allocated allowance for loan losses was based on the present value of estimated future cash flows. All of the loans are currently performing in accordance with their modified terms.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  The Company analyzes loans individually by classifying the loans as to credit risk.  This analysis includes non-homogeneous loans, such as commercial and commercial real estate with an outstanding relationship greater than $250,000.  Homogeneous loans are reviewed when appropriate given foreclosures, bankruptcies or relationships that include non-homogeneous loans. For homogeneous loan pools, such as residential mortgages, home equity and consumer loans, the Company uses the payment status to identify the credit risk in these loan portfolios.  Payment status is reviewed on at least a monthly basis by the Company’s personnel and on a quarterly basis with respect to determining the adequacy of the allowance for loan losses.  This analysis is performed on at least an annual basis.  The Company uses the following definitions for risk ratings:

Special Mention.  Loans classified as special mention have a potential weakness that deserves management’s close attention.  If left uncovered, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debts.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.  Loans listed as not rated are either less than $250,000 or are included in groups of homogeneous loans.

Based on the most recent analysis performed (all loans graded within past 12 months), the risk category by class of loan is as follows:

	June 30, 2015
	Not Rated		Pass		Special Mention		Substandard		Doubtful
	(In thousands)
Commercial loans	$	14,054	$	40,731	$	492	$	1,768	$	—
Commercial real estate	16,898		73,682		1,523		3,856		—
Total	$	30,952	$	114,413	$	2,015	$	5,624	$	—

	December 31, 2014
	Not Rated		Pass		Special Mention		Substandard		Doubtful
	(In thousands)
Commercial loans	$	13,592	$	35,546	$	191	$	4,340	$	—
Commercial real estate	14,956		72,938		4,436		1,097		—
Total	$	28,548	$	108,484	$	4,627	$	5,437	$	—

XML

Investment Securities and Mortgage-Backed Securities

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investment Securities and Mortgage-Backed Securities

Investment Securities and Mortgage-Backed Securities

Investment securities and mortgage-backed securities classified as available-for-sale and held-to-maturity consist of the following at June 30, 2015 and December 31, 2014:

Available-for-sale portfolio:	June 30, 2015
	Amortized  Cost		Unrealized					Fair  Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	28,453	$	36	$	(214	)	$	28,275
U.S. Treasury	1,999		—		(5		)	1,994
Corporate	28,810		89		(1,494		)	27,405
State and municipal	31,823		843		(35		)	32,631
Small Business Administration	3,653		88		—			3,741
	$	94,738	$	1,056	$	(1,748	)	$	94,046
Mortgage-Backed Securities
Fannie Mae	$	25,128	$	269	$	(79	)	$	25,318
Freddie Mac	25,708		160		(44		)	25,824
Government National Mortgage Assoc.	10,227		148		(24		)	10,351
	$	61,063	$	577	$	(147	)	$	61,493
Total available-for-sale	$	155,801	$	1,633	$	(1,895	)	$	155,539

Held-to-maturity portfolio:	June 30, 2015
	Amortized  Cost		Unrecognized					Fair  Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	40,008	$	1,818	$	(28	)	$	41,798
State and municipal	26,937		1,011		(84		)	27,864
Small Business Administration	8,743		210		—			8,953
	$	75,688	$	3,039	$	(112	)	$	78,615
Mortgage-Backed Securities
Fannie Mae	$	24,766	$	424	$	(334	)	$	24,856
Freddie Mac	13,771		169		(36		)	13,904
Government National Mortgage Assoc.	8,159		81		(71		)	8,169
	$	46,696	$	674	$	(441	)	$	46,929
Total held-to-maturity	$	122,384	$	3,713	$	(553	)	$	125,544

Available-for-sale portfolio:	December 31, 2014
	Amortized Cost		Unrealized					Fair Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	27,255	$	120	$	(143	)	$	27,232
Corporate	35,345		260		(1,508		)	34,097
Agency asset backed securities	8,734		91		(35		)	8,790
State and municipal	33,004		1,215		(1		)	34,218
Small Business Administration	6,835		135		—			6,970
	$	111,173	$	1,821	$	(1,687	)	$	111,307
Mortgage-Backed Securities
Fannie Mae	$	24,666	$	306	$	(39	)	$	24,933
Freddie Mac	25,659		207		(33		)	25,833
Government National Mortgage Assoc.	12,624		198		(58		)	12,764
Private placement mortgage obligation	1,426		51		—			1,477
	$	64,375	$	762	$	(130	)	$	65,007
Total available-for-sale	$	175,548	$	2,583	$	(1,817	)	$	176,314

Held-to-maturity portfolio:	December 31, 2014
	Amortized Cost		Unrecognized					Fair Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	41,703	$	2,274	$	—		$	43,977
State and municipal	27,506		1,504		(7		)	29,003
Small Business Administration	9,302		239		—			9,541
	$	78,511	$	4,017	$	(7	)	$	82,521
Mortgage-Backed Securities
Fannie Mae	$	26,602	$	533	$	(271	)	$	26,864
Freddie Mac	15,192		257		(53		)	15,396
Government National Mortgage Assoc.	9,110		101		(95		)	9,116
	$	50,904	$	891	$	(419	)	$	51,376
Total held-to-maturity	$	129,415	$	4,908	$	(426	)	$	133,897

The amortized cost and fair value of the investment securities portfolio at June 30, 2015 are shown by contractual maturities.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	3,946	$	3,953	$	473	$	475
After one year through five years	24,181		24,507		12,765		13,175
After five years through ten years	51,619		51,748		35,910		37,245
After ten years	14,992		13,838		26,540		27,720
Mortgage-backed securities	61,063		61,493		46,696		46,929
Total	$	155,801	$	155,539	$	122,384	$	125,544

Sales of available-for-sale securities were as follows: 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands)
Proceeds	$	18,312		$	902		$	23,368		$	2,649
Gross gains	$	198		$	64		$	344		$	126
Gross losses	$	(122	)	$	(37	)	$	(122	)	$	(53	)

Securities with unrealized losses at June 30, 2015 and December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

	Less than 12 Months					More than 12 Months					Total
June 30, 2015	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Description of Securities
Available-for-sale	(In thousands)
U.S. Agencies	$	16,063	$	(156	)	$	1,942	$	(58	)	$	18,005	$	(214	)
U.S. Treasury	1,994		(5		)	—		—			1,994		(5		)
Corporate	10,887		(236		)	10,907		(1,258		)	21,794		(1,494		)
State and municipal	1,807		(35		)	—		—			1,807		(35		)
Small Business Administration	—		—			4		—			4		—
Fannie Mae	6,017		(72		)	1,951		(7		)	7,968		(79		)
Freddie Mac	6,611		(23		)	1,703		(21		)	8,314		(44		)
Government National Mortgage Assoc.	—		—			3,608		(24		)	3,608		(24		)
Total securities available-for-sale in an unrealized loss position	$	43,379	$	(527	)	$	20,115	$	(1,368	)	$	63,494	$	(1,895	)
Held-to-maturity
U.S. Agencies	$	1,915	$	(28	)	$	—	$	—		$	1,915	$	(28	)
State and municipal	4,895		(84		)	—		—			4,895		(84		)
Fannie Mae	2,321		(11		)	8,689		(323		)	11,010		(334		)
Freddie Mac	—		—			2,030		(36		)	2,030		(36		)
Government National Mortgage Assoc.	—		—			3,407		(71		)	3,407		(71		)
Total securities held-to-maturity in an unrecognized loss position	$	9,131	$	(123	)	$	14,126	$	(430	)	$	23,257	$	(553	)

	Less than 12 Months					More than 12 Months					Total
December 31, 2014	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Description of Securities
Available-for-sale	(In thousands)
U.S. Agencies	$	999	$	(1	)	$	6,858	$	(142	)	$	7,857	$	(143	)
Corporate	9,237		(49		)	10,552		(1,459		)	19,789		(1,508		)
Agency asset backed securities	3,789		(35		)	—		—			3,789		(35		)
State and municipal	563		(1		)	—		—			563		(1		)
Small Business Administration	—		—			4		—			4		—
Fannie Mae	5,393		(16		)	2,002		(23		)	7,395		(39		)
Freddie Mac	5,567		(33		)	—		—			5,567		(33		)
Government National Mortgage Assoc.	2,084		(11		)	3,028		(47		)	5,112		(58		)
Total securities available-for-sale in an unrealized loss position	$	27,632	$	(146	)	$	22,444	$	(1,671	)	$	50,076	$	(1,817	)
Held-to-maturity
State and municipal	2,285		(4		)	822		(3		)	3,107		(7		)
Fannie Mae	2,361		(23		)	9,459		(248		)	11,820		(271		)
Freddie Mac	734		(3		)	2,238		(50		)	2,972		(53		)
Government National Mortgage Assoc.	3,631		(95		)	—		—			3,631		(95		)
Total securities held-to-maturity in an unrecognized loss position	$	9,011	$	(125	)	$	12,519	$	(301	)	$	21,530	$	(426	)

Declines in the fair value of securities below their cost that are other-than-temporary are reflected as realized losses.  The Company evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis.  If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of the impairment is split into two components as follows:  1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

As of June 30, 2015, the Company’s security portfolio consisted of 357 securities, 83 of which were in an unrealized loss position. The majority of the unrealized losses are related to the Company’s agency, mortgage-backed securities, state and municipal, and corporate securities as discussed below.

U.S. Agency and Agency Mortgage-Backed Securities

Fannie Mae, Freddie Mac, Ginnie Mae and the Small Business Administration guarantee the contractual cash flows of our agency and mortgage-backed securities. Fannie Mae and Freddie Mac are institutions which the government has affirmed its commitment to support.  Our Ginnie Mae mortgage-backed securities are backed by the full faith and credit of the U.S. Government.  All of the agency mortgage-backed securities are residential mortgage-backed securities. At June 30, 2015, of the 43 U.S. Government sponsored enterprise agency and mortgage-backed securities in an unrealized loss position, eighteen were in a continuous unrealized loss position for 12 months or more.  The unrealized losses at June 30, 2015 were primarily attributable to changes in interest rates and illiquidity, and not credit quality.  The Company does not have the intent to sell these agency and mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The Company does not consider these securities to be other-than-temporarily impaired at June 30, 2015.

Corporate Debt and Municipal Securities

At June 30, 2015, of the 40 corporate debt and municipal securities in an unrealized loss position, eight were in a continuous unrealized loss position of 12 months or more.  We have assessed these securities and determined that the decline in fair value was temporary. In making this determination, we considered the period of time the securities were in a loss position, the percentage decline in comparison with the securities’ amortized cost, the financial condition of the issuer, and the delinquency or default rates based on the applicable bond ratings.  In addition, we do not have the intent to sell these securities and it is likely that we will not be required to sell these securities before the recovery of their amortized cost basis, which may be at maturity.  Included in the eight securities whose unrealized loss position exceeds 12 months was a $2.5 million Strats-Goldman Sachs Corporation obligation, maturing February 15, 2034 which is a variable rate note based on the 6 month libor. The current rate on the security is 1.44%.  The unrealized loss was $891,796 and $1,004,076 at June 30, 2015 and December 31, 2014, respectively.  In addition to the items noted above, we reviewed capital ratios, public filings of the issuer and related trust documents in the review of the unrealized loss.  The Strats-Goldman Sachs Corporation obligation is paying as agreed.  The other seven securities in a continuous unrealized loss position were finance sector corporate debt securities and municipal securities all rated above investment grade at June 30, 2015, that have maturities ranging from 2021 to 2033.  The Company does not consider these securities to be other-than-temporarily impaired at June 30, 2015.

XML

Fair Value (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

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

Assets and liabilities measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Trading securities
Common and preferred equities	$	3,922	$	1,041	$	2,881	$	—
Available-for-sale securities
U.S. Agencies	28,275		—		28,275		—
U.S. Treasury	1,994		—		1,994		—
Corporate	27,405		—		27,405		—
State and municipal	32,631		—		32,564		67
Small Business Administration	3,741		—		3,741		—
Residential mortgage-backed securities	61,493		—		61,493		—
Total	$	159,461	$	1,041	$	158,353	$	67

	Fair Value Measurement at December 31, 2014 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Trading securities
Common and preferred equities	$	3,900	$	1,083	$	2,817	$	—
Available-for-sale securities
U.S. Agencies	27,232		—		27,232		—
Corporate	34,097		—		34,097		—
Agency asset backed securities	8,790		—		8,790		—
State and municipal	34,218		—		34,150		68
Small Business Administration	6,970		—		6,970		—
Residential mortgage-backed securities	63,530		—		63,530		—
Private placement mortgage obligation	1,477		—		1,477		—
Total	$	180,214	$	1,083	$	179,063	$	68

Schedule of a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months endedJune 30:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Municipal Securities			Total
	(In thousands)
Beginning balance January 1, 2015	$	68		$	68
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	—			—
Ending balance March 31, 2015	$	68		$	68
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	(1		)	(1		)
Ending balance June 30, 2015	$	67		$	67

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Municipal Securities			Total
	(In thousands)
Beginning balance January 1, 2014	$	101		$	101
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	—			—
Ending balance March 31, 2014	$	101		$	101
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	(1		)	(1		)
Ending balance June 30, 2014	$	100		$	100

Schedule of the total amount of gains and losses from changes in fair value

The following table presents the amount of gains and losses from changes in fair value included in income before taxes for financial assets carried at fair value is as follows:

	Three Months Ended					Six Months Ended
	June 30, 2015			June 30, 2014		June 30, 2015		June 30, 2014
	(In thousands)
Interest income	$	—		$	—	$	—	$	—
Change in fair value	(220		)	13		22		823
Total change in fair value	$	(220	)	$	13	$	22	$	823

Schedule of carrying amounts and estimated fair values of financial instruments

Carrying amounts and estimated fair values of financial instruments at June 30, 2015 and December 31, 2014 were as follows: 

June 30, 2015	Carrying Value		Fair Value Measurements Using
			Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	84,438	$	84,438	$	—	$	—	$	84,438
Trading securities	3,922		1,041		2,881		—		3,922
Investment securities, available-for-sale	155,539		—		155,472		67		155,539
Investment securities, held-to-maturity	122,384		—		122,179		3,365		125,544
Loans held for sale	75		—		76		—		76
Loans receivable, net	390,944		—		—		403,311		403,311
Federal Home Loan Bank stock	1,440		N/A		N/A		N/A		N/A
Accrued interest receivable	2,206		—		1,148		1,058		2,206
Financial liabilities:	0
Deposits	$	741,398	$	602,753	$	140,524	$	—	$	743,277
Accrued interest payable	4		2		2		—		4

December 31, 2014	Carrying Value		Fair Value Measurement Using
			Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	31,075	$	31,075	$	—	$	—	$	31,075
Trading securities	3,900		1,083		2,817		—		3,900
Investment securities, available-for-sale	176,314		—		176,246		68		176,314
Investment securities, held-to-maturity	129,415		—		130,053		3,844		133,897
Loans held for sale	839		—		865		—		865
Loans receivable, net	367,020		—		—		381,084		381,084
Federal Home Loan Bank stock	1,391		N/A		N/A		N/A		N/A
Accrued interest receivable	2,342		—		1,339		1,003		2,342
Financial liabilities:
Deposits	$	689,170	$	543,262	$	148,115	$	—	$	691,377
Accrued interest payable	7		2		5		—		7

XML

Earnings per share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Schedule of earnings per common share

Earnings per common share have been computed based on the following for the three months and six months ended June 30, 2015 and 2014:

	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In thousands, except per share data)
Net income	$	473		$	1,429		$	2,444		$	3,373
Net earnings allocated to participating securities	(6		)	(19		)	(25		)	(44		)
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329
Basic
Distributed earnings allocated to common stock	$	836		$	830		$	1,670		$	1,653
Undistributed earnings allocated to common stock	(369		)	580			749			1,676
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329

	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In thousands, except per share data)
Weighted average common shares outstanding including shares considered participating securities	7,012			6,986			7,006			6,982
Less: Average unallocated ESOP shares	—			(14		)	—			(16		)
Less: Average participating securities	(57		)	(78		)	(60		)	(83		)
Weighted average shares	6,955			6,894			6,946			6,883
Basic earnings per share	$	0.07		$	0.20		$	0.35		$	0.48
Diluted
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329
Weighted average common shares outstanding for basic earnings per common share	6,955			6,894			6,946			6,883
Add: Dilutive effects of assumed exercise of stock options and nonparticipating shares	105			65			99			62
Weighted average shares and dilutive potential common shares	7,060			6,959			7,045			6,945
Diluted earnings per common share	$	0.07		$	0.20		$	0.34		$	0.48

XML

Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company has one share based compensation plan as described below.  Total compensation cost that has been charged against income for the plan was $76,748 and $152,304 for the three months ended June 30, 2015 and 2014, respectively.  Total compensation cost that has been charged against income for the plan was $152,775 and $286,164 for the six months ended June 30, 2015 and 2014, respectively. The total income tax benefit was $28,972 and $57,673 for the three months and six months ended June 30, 2015, respectively. The total income tax benefit was $58,637 and $110,173 for the three months and six months ended June 30, 2014, respectively.

Stock Options

The Company’s 2012 Equity Incentive Plan, which is shareholder approved, permits the granting of share options to its directors, officers and key employees for up to 216,750 shares of common stock.  Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. All options granted expire by July 2022 and options vest and become exercisable ratably over a one to five year period. There were 25,750 shares available for future grants under the plan described above as of June 30, 2015. Compensation recorded in conjunction with the option awards was $8,984 and $17,874 for the three months and six months ended June 30, 2015, respectively. Compensation recorded in conjunction with the option awards was $14,695 and $23,832 for the three months and six months ended June 30, 2014, respectively.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company's common stock. The Company uses historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted was determined using the following weighted-average assumptions as of the grant date:

	2015		2014
Risk-free interest rate	0.00	%	1.50	%
Expected term	0.24 years		3.12 years
Expected stock price volatility	28.31	%	22.85	%
Dividend yield	4.66	%	4.66	%

A summary of activity in the stock option plan for 2015 was as follows:

	Shares		Average Exercise Price		Weighted Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2015	172,348		$	10.44	7.06	$	443,550
Granted	364		$	19.61	—	$	306
Exercised	(18,848	)	$	11.10	—	$	144,025
Forfeited or expired	—		$	—	—	$	—
Outstanding at June 30, 2015	153,864		$	10.38	6.89	$	1,548,746
Fully vested and expected to vest	108,000		$	10.39	7.32	$	1,086,615
Exercisable as of June 30, 2015	45,864		$	10.37	6.13	$	462,131

Information related to the stock option plan was as follows:

	2015			2014
Intrinsic value of options exercised	$	144,025		$	10,835
Cash received from option exercises	169,178			56,650
Tax benefit realized from option exercises	(185		)	—
Weighted average fair value of options granted	0.9728			1.3039

As of June 30, 2015, there was $74,496 of total unrecognized compensation cost related to nonvested stock options granted under the plan.  The cost is expected to be recognized over a weighted-average period of 2.1 years.

Stock Awards

The 2012 Equity Incentive Plan provides for the issuance of shares of restricted stock ("RRP") to directors, officers and key employees.  Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date.  The fair value of the stock was determined using the grant date fair value of $10.30 for shares awarded in July 2012 and $12.43 for shares awarded in June 2014.  RRP shares vest ratably over the five year vesting period on the anniversary date for shares awarded in July 2012 and over the four year vesting period on the anniversary date for those shares awarded in June 2014.  The shares have voting rights and are eligible to receive nonforfeitable dividends on the unvested shares.  These shares are considered to be participating securities in the earnings per share calculation.  Total shares issuable under the plan are 131,500 at June 30, 2015 and 130,000 shares have been issued.  A summary of changes in the Company’s nonvested shares for the years follows:

Nonvested Shares	Shares	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015	78,000	$	10.46
Granted	—	—
Vested	—	—
Forfeited	—	—
Nonvested at June 30, 2015	78,000	$	10.46

As of June 30, 2015, there was $562,055 of total unrecognized compensation cost related to nonvested shares granted under the Plan.  The cost is expected to be recognized over a weighted average period of 2.1 years. Compensation expense recorded in conjunction with the RRP awards was $67,764 and $134,901 for the three months and six months ended June 30, 2015, respectively. Compensation expense recorded in conjunction with the RRP awards was $73,183 and $134,180 for the three months and six months ended June 30, 2014, respectively.

Performance Awards

The 2012 Equity Incentive Plan provides for the issuance of shares of performance award restricted stock to directors, officers and key employees.  Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date. The fair value of the stock was determined using the grant date fair value of $10.30.  Performance shares cliff vest as of July 24, 2015 based on the performance results for the three year period ending December 31, 2014. There were two sets of performance criteria based on the individual award: (1) based on a three year cumulative earnings per share, return on average assets and return on tangible equity metrics weighted at 33% and (2) average revenue and profit margin weighted at 50%. As of December 31, 2014, the compensation cost expensed ranged from 50% - 100% payout under the terms of the plan for the different performance sets. The shares have voting rights.  Upon vesting of the performance shares, any dividends declared during the vesting period will be paid based on the shares vested.  Total shares issuable under the plan are 75,000 at June 30, 2015 and all shares were issued in 2012.  A summary of changes in the Company’s nonvested shares for the years follows:

Nonvested Shares	Shares	Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015	75,000	$	10.30
Granted	—	—
Vested	—	—
Forfeited	—	—
Nonvested at June 30, 2015	75,000	$	10.30

As of June 30, 2015, there was no unrecognized compensation cost related to nonvested shares granted under the Plan. There was no compensation expense recorded in conjunction with the performance shares during 2015. Compensation expense recorded in conjunction with the performance awards totaled $64,426 and $128,152 for the three months and six months ended June 30, 2014, respectively.

XML

Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

The Bank has determined that it has three primary business segments; its banking franchise, its insurance, risk management and employee benefits activities and its financial and investment advisory activities. For the three months and six months ended June 30, 2015 and 2014, the Bank's insurance, risk management and employee benefit activities consisted of those conducted through its wholly owned subsidiary One Group NY, Inc. (formerly Bailey & Haskell Associates, Inc). The Bank's financial and investment advisory activities consisted of those conducted through its wholly owned subsidiary Oneida Wealth Management, Inc., which was approved as a broker-dealer by FINRA in April 2014.

Information about the Bank’s segments is presented in the following table for the periods indicated:

	Three Months Ended June 30, 2015
	Banking Activities			Insurance, Risk Management and Employee Benefits Activities		Financial/Investment Advisory Activities		Total
	(In thousands)
Net interest income	$	5,137		$	—	$	—	$	5,137
Provision for loan losses	—			—		—		—
Net interest income after provision for loan losses	5,137			—		—		5,137
Investment losses, net	(144		)	—		—		(144		)
Commissions and fees on sales of non-banking products	89			5,870		987		6,946
Non-interest income	1,183			—		—		1,183
Non-interest expenses	6,194			4,733		966		11,893
Depreciation and amortization	327			125		6		458
(Loss) income before income taxes	(256		)	1,012		15		771
Income tax (benefit) expense	(114		)	400		12		298
Net (loss) income	$	(142	)	$	612	$	3	$	473
Total Assets	$	822,361		$	30,897	$	4,276	$	857,534

	Three Months Ended June 30, 2014
	Banking Activities		Insurance, Risk Management and Employee Benefit Activities		Financial/Investment Advisory Activities			Total
	(In thousands)
Net interest income	$	5,023	$	—	$	—		$	5,023
Provision for loan losses	100		—		—			100
Net interest income after provision for loan losses	4,923		—		—			4,923
Investment gains, net	40		—		—			40
Commissions and fees on sales of non-banking products	511		5,215		729			6,455
Non-interest income	1,819		—		—			1,819
Non-interest expenses	5,607		4,406		880			10,893
Depreciation and amortization	324		76		7			407
Income (loss) before income taxes	1,362		733		(158		)	1,937
Income tax expense (benefit)	237		322		(51		)	508
Net income (loss)	$	1,125	$	411	$	(107	)	$	1,429
Total Assets	$	753,357	$	29,369	$	4,919		$	787,645

	Six Months Ended June 30, 2015
	Banking Activities		Insurance, Risk Management and Employee Benefit Activities		Financial/Investment Advisory Activities		Total
	(In thousands)
Net interest income	$	10,309	$	—	$	—	$	10,309
Provision for loan losses	—		—		—		—
Net interest income after provision for loan losses	10,309		—		—		10,309
Investment gains, net	244		—		—		244
Commissions and fees on sales of non banking products	452		11,590		1,926		13,968
Non-interest income	2,656		—		—		2,656
Non-interest expenses	11,407		9,700		1,796		22,903
Depreciation and amortization	661		195		13		869
Income before income taxes	1,593		1,695		117		3,405
Income tax expense	230		682		49		961
Net income	$	1,363	$	1,013	$	68	$	2,444
Total Assets	$	822,361	$	30,897	$	4,276	$	857,534

	Six Months Ended June 30, 2014
	Banking Activities		Insurance, Risk Management and Employee Benefit Activities		Financial/Investment Advisory Activities			Total
	(In thousands)
Net interest income	$	9,808	$	—	$	—		$	9,808
Provision for loan losses	200		—		—			200
Net interest income after provision for loan losses	9,608		—		—			9,608
Investment gains, net	896		—		—			896
Commissions and fees on sales of non banking products	1,025		10,884		1,482			13,391
Non-interest income	2,943		—		—			2,943
Non-interest expenses	10,725		8,870		1,792			21,387
Depreciation and amortization	687		149		14			850
Income (loss) before income taxes	3,060		1,865		(324		)	4,601
Income tax expense (benefit)	518		819		(109		)	1,228
Net income (loss)	$	2,542	$	1,046	$	(215	)	$	3,373
Total Assets	$	753,357	$	29,369	$	4,919		$	787,645

The following represents a reconciliation of the Company’s reported segment assets to consolidated assets as of June 30:

	2015			2014
	(In thousands)
Total assets for reportable segments	$	857,534		$	787,645
Elimination of intercompany cash balances	(7,964		)	(9,807		)
Consolidated Total	$	849,570		$	777,838

XML

Fair Value

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair Value Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Securities:  The fair values of trading securities and investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded, value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).  The fair value of level 3 investment securities are determined by the Company’s Finance Department, which reports to the Chief Financial Officer (CFO).  The CFO reviews the values and these are reported to the Investment Committee on a quarterly basis.  Discounted cash flows are calculated using spread to swap and LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations. 

Assets and liabilities measured at fair value on a recurring basis, including financial assets for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Trading securities
Common and preferred equities	$	3,922	$	1,041	$	2,881	$	—
Available-for-sale securities
U.S. Agencies	28,275		—		28,275		—
U.S. Treasury	1,994		—		1,994		—
Corporate	27,405		—		27,405		—
State and municipal	32,631		—		32,564		67
Small Business Administration	3,741		—		3,741		—
Residential mortgage-backed securities	61,493		—		61,493		—
Total	$	159,461	$	1,041	$	158,353	$	67

	Fair Value Measurement at December 31, 2014 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Trading securities
Common and preferred equities	$	3,900	$	1,083	$	2,817	$	—
Available-for-sale securities
U.S. Agencies	27,232		—		27,232		—
Corporate	34,097		—		34,097		—
Agency asset backed securities	8,790		—		8,790		—
State and municipal	34,218		—		34,150		68
Small Business Administration	6,970		—		6,970		—
Residential mortgage-backed securities	63,530		—		63,530		—
Private placement mortgage obligation	1,477		—		1,477		—
Total	$	180,214	$	1,083	$	179,063	$	68

There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2015 or 2014. 

The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months endedJune 30:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Municipal Securities			Total
	(In thousands)
Beginning balance January 1, 2015	$	68		$	68
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	—			—
Ending balance March 31, 2015	$	68		$	68
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	(1		)	(1		)
Ending balance June 30, 2015	$	67		$	67

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Municipal Securities			Total
	(In thousands)
Beginning balance January 1, 2014	$	101		$	101
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	—			—
Ending balance March 31, 2014	$	101		$	101
Total gains or losses (realized/unrealized)
Included in earnings
Interest income on securities	—			—
Other changes in fair value	—			—
Net impairment losses recognized in earnings	—			—
Interest payments applied to principal	—			—
Pay downs on securities	—			—
Included in other comprehensive income	(1		)	(1		)
Ending balance June 30, 2014	$	100		$	100

The Company’s Level 3 state and local municipal securities valuations were supported by analysis prepared by an independent third party.  The third party’s approach to determining fair value involves using recently executed transactions for similar securities and market quotations for similar securities.  As these securities are not rated by the rating agencies and are localized to our market area, it was determined that these were valued using Level 3 inputs.  In addition, the Company reviews past history of the contractual payments and financial condition of the municipalities in determining an appropriate market value for this type of security.

There were no impaired loans, loans held for sale or other real estate owned, net that were measured at fair value as of June 30, 2015 or December 31, 2014.

Fair Value Option

The Company has elected the fair value option for certain preferred and common equity securities as they do not have stated maturity values and the fair value fluctuates with market changes.  The decision to elect the fair value option is made individually for each instrument and is irrevocable once made.  Changes in fair value for the selected instruments are recorded in earnings. Interest income is recorded based on the contractual amount of interest income earned on financial assets (except any that are in nonaccrual status). Dividend income is recorded based on cash dividends.  Cash flows from the purchase and sale of securities for which the fair value option has been elected are shown as operating activities in the consolidated statement of cash flows.

The following table presents the amount of gains and losses from changes in fair value included in income before taxes for financial assets carried at fair value is as follows:

	Three Months Ended					Six Months Ended
	June 30, 2015			June 30, 2014		June 30, 2015		June 30, 2014
	(In thousands)
Interest income	$	—		$	—	$	—	$	—
Change in fair value	(220		)	13		22		823
Total change in fair value	$	(220	)	$	13	$	22	$	823

Fair Value of Financial Instruments

Carrying amounts and estimated fair values of financial instruments at June 30, 2015 and December 31, 2014 were as follows: 

June 30, 2015	Carrying Value		Fair Value Measurements Using
			Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	84,438	$	84,438	$	—	$	—	$	84,438
Trading securities	3,922		1,041		2,881		—		3,922
Investment securities, available-for-sale	155,539		—		155,472		67		155,539
Investment securities, held-to-maturity	122,384		—		122,179		3,365		125,544
Loans held for sale	75		—		76		—		76
Loans receivable, net	390,944		—		—		403,311		403,311
Federal Home Loan Bank stock	1,440		N/A		N/A		N/A		N/A
Accrued interest receivable	2,206		—		1,148		1,058		2,206
Financial liabilities:	0
Deposits	$	741,398	$	602,753	$	140,524	$	—	$	743,277
Accrued interest payable	4		2		2		—		4

December 31, 2014	Carrying Value		Fair Value Measurement Using
			Level 1		Level 2		Level 3		Total
	(In thousands)
Financial assets:
Cash and cash equivalents	$	31,075	$	31,075	$	—	$	—	$	31,075
Trading securities	3,900		1,083		2,817		—		3,900
Investment securities, available-for-sale	176,314		—		176,246		68		176,314
Investment securities, held-to-maturity	129,415		—		130,053		3,844		133,897
Loans held for sale	839		—		865		—		865
Loans receivable, net	367,020		—		—		381,084		381,084
Federal Home Loan Bank stock	1,391		N/A		N/A		N/A		N/A
Accrued interest receivable	2,342		—		1,339		1,003		2,342
Financial liabilities:
Deposits	$	689,170	$	543,262	$	148,115	$	—	$	691,377
Accrued interest payable	7		2		5		—		7

The methods and assumptions, not previously presented, used to estimate fair values are describes as follows:

(a)Cash and Cash Equivalents

The carrying value of our cash and cash equivalents approximates fair value and is classified as Level 1. 

(b)Loans Held for Sale

The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification.

(c) Loans

Fair value of loans, excluding loans held for sale, are estimated as follows:  for variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification.  Impaired loans are valued at the lower of cost or fair value.  The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

(d)  FHLB Stock

It is not practicable to estimate the fair value of FHLB stock due to restrictions placed on its transferability.

(e) Deposits

The fair value disclosed for demand deposits (e.g., interest and non-interest checking, savings and money market accounts)are, by definition, equal to the amount payable on demand at the reporting date (i.e. their carrying value) resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(f)  Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 1, Level 2 or Level 3 classification based on the level of the asset or the liability with which the accrual is associated.

(g)  Off-balance Sheet Instruments

Fair value for off-balance sheet, credit related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standings.  The fair value of commitments is not material.

XML

Comprehensive Income

6 Months Ended

Jun. 30, 2015

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Comprehensive Income

Comprehensive Income (Loss)

The following table represents the detail of comprehensive income (loss) for the three months and six months ended:

	For the Three Months Ended June 30, 2015
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding losses on available-for-sale securities during the period	$	(1,816	)	$	685		$	(1,131	)
Reclassification adjustment for gains included in net income (1)	(76		)	29			(47		)
Net unrealized losses on available-for-sale securities	(1,892		)	714			(1,178		)
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	181			(68		)	113
Net unrealized gains	181			(68		)	113
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive loss	$	(1,711	)	$	646		$	(1,065	)

	For the Six Months Ended June 30, 2015
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding losses on available-for-sale securities during the period	$	(806	)	$	304		$	(502	)
Reclassification adjustment for gains included in net income (1)	(222		)	84			(138		)
Net unrealized losses on available-for-sale securities	(1,028		)	388			(640		)
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	320			(120		)	200
Net unrealized gains	320			(120		)	200
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive loss	$	(708	)	$	268		$	(440	)

	For the Three Months Ended June 30, 2014
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding gains on available-for-sale securities during the period	$	1,260		$	(504	)	$	756
Reclassification adjustment for gains included in net income (1)	(27		)	11			(16		)
Net unrealized gains on available-for-sale securities	1,233			(493		)	740
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	132			(53		)	79
Net unrealized gains	132			(53		)	79
Net pension gain arising during period (2)	—			—			—
Net unrecognized postretirement benefit obligation	—			—			—
Other comprehensive income	$	1,365		$	(546	)	$	819

	For the Six Months Ended June 30, 2014
	Pre-tax			Tax			After-tax
	(In thousands)
Unrealized holding gains on available-for-sale securities during the period	$	2,999		$	(1,200	)	$	1,799
Reclassification adjustment for gains included in net income (1)	(73		)	30			(43		)
Net unrealized gains on available-for-sale securities	2,926			(1,170		)	1,756
Amortization of unrealized gains on transfer of securities to held-to-maturity (3)	274			(110		)	164
Net unrealized gains	274			(110		)	164
Net pension gain arising during period (2)	24			(10		)	14
Net unrecognized postretirement benefit obligation	24			(10		)	14
Other comprehensive income	$	3,224		$	(1,290	)	$	1,934

___________________________________

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net gains (losses) on sales of securities on the consolidated statement of operations.

(2) Net gain (loss) arising during period which is comprised of net gain (loss) and amortization of prior gain (loss) is reported in compensation and benefits on the consolidated statements of operations.

(3) Amortization of unrealized gains on transfer of securities held-to-maturity are reported in the interest on investment securities on the consolidated statements of operations.

The following table represents a summary of the change in accumulated other comprehensive income (loss) by component, net of tax, for the six months ended June 30, 2015 and 2014:

	Net unrealized gains (losses) on available-for-sale securities			Net unrealized gains (losses) on transfer of securities to held-to-maturity			Unrecognized postretirement benefit obligation			Accumulated other comprehensive income (loss)
	(In thousands)
Balance at January 1, 2015	$	477		$	(2,328	)	$	(752	)	$	(2,603	)
Other comprehensive (loss) income, during the period, net of adjustments	(502		)	200			—			(302		)
Amounts reclassified from AOCI	(138		)	—			—			(138		)
Other comprehensive (loss) income	(640		)	200			—			(440		)
Balance at June 30, 2015	$	(163	)	$	(2,128	)	$	(752	)	$	(3,043	)

	Net unrealized gains (losses) on available-for-sale securities			Net unrealized gains (losses) on transfer of securities to held-to-maturity			Unrecognized postretirement benefit obligation			Accumulated other comprehensive income (loss)
	(In thousands)
Balance at January 1, 2014	$	(1,007	)	$	(2,579	)	$	(1,556	)	$	(5,142	)
Other comprehensive income, during the period, net of adjustments	1,799			164			14			1,977
Amounts reclassified from AOCI	(43		)	—			—			(43		)
Other comprehensive income	1,756			164			14			1,934
Balance at June 30, 2014	$	749		$	(2,415	)	$	(1,542	)	$	(3,208	)

XML

Loans Receivable (Details 5) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan	Dec. 31, 2014 USD ($) loan
Financing Receivable, Modifications [Line Items]
Number of loans considered to be troubled debt restructurings | loan	9		7
Financing Receivable, Modifications, Recorded Investment	$ 984		$ 804
Amount of specific reserves allocated	$ 104		$ 58
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of loans considered to be troubled debt restructurings | loan	0		0
Financing Receivable, Modifications, Recorded Investment	$ 0		$ 0
Amount of specific reserves allocated	$ 0		$ 0
Commercial Loans Non Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of loans considered to be troubled debt restructurings | loan	9	7	7
Financing Receivable, Modifications, Recorded Investment	$ 984	$ 839	$ 804
Amount of specific reserves allocated	$ 104		$ 58
Consumer Loan [Member]
Financing Receivable, Modifications [Line Items]
Number of loans considered to be troubled debt restructurings | loan	0		0
Financing Receivable, Modifications, Recorded Investment	$ 0		$ 0
Amount of specific reserves allocated	$ 0		$ 0
Home equity
Financing Receivable, Modifications [Line Items]
Number of loans considered to be troubled debt restructurings | loan	0		0
Financing Receivable, Modifications, Recorded Investment	$ 0		$ 0
Amount of specific reserves allocated	$ 0		$ 0
Residential Mortgage [Member]
Financing Receivable, Modifications [Line Items]
Number of loans considered to be troubled debt restructurings | loan	0		0
Financing Receivable, Modifications, Recorded Investment	$ 0		$ 0
Amount of specific reserves allocated	$ 0		$ 0

XML

Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Schedule of components of loans receivable

The components of loans receivable at June 30, 2015 and December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014
	(In thousands)
Commercial loans	$	57,045		$	53,669
Commercial real estate	95,959			93,427
Consumer loans	59,471			46,883
Home equity	53,496			53,150
Residential mortgages	126,614			121,910
	392,585			369,039
Deferred fees	1,818			1,483
Allowance for loan losses	(3,459		)	(3,502		)
Net loans	$	390,944		$	367,020

Schedule of activity in the allowance for loan losses by portfolio segment

The following table sets forth the activity in the allowance for loan losses by portfolio segment:

For the Three Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages		Total
June 30, 2015
	(In thousands)
Allowance for loan losses:
Beginning balance	$	887	$	1,247		$	551		$	296		$	516	$	3,497
Charge-offs	—		—			(36		)	(19		)	—		(55		)
Recoveries	—		—			16			—			1		17
Provision for loan losses	65		(250		)	117			40			28		—
Ending balance	$	952	$	997		$	648		$	317		$	545	$	3,459

For the Six Months Ended	Commercial Loans			Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages		Total
June 30, 2015
	(In thousands)
Allowance for loan losses:
Beginning balance	$	1,175		$	1,085		$	445		$	295		$	502	$	3,502
Charge-offs	—			—			(57		)	(19		)	—		(76		)
Recoveries	—			—			32			—			1		33
Provision for loan losses	(223		)	(88		)	228			41			42		—
Ending balance	$	952		$	997		$	648		$	317		$	545	$	3,459

For the Three Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages			Total
June 30, 2014
	(In thousands)
Allowance for loan losses:
Beginning balance	$	954	$	993		$	264		$	302		$	678		$	3,191
Charge-offs	—		—			(16		)	—			(11		)	(27		)
Recoveries	—		1			7			—			1			9
Provision for loan losses	232		(1		)	49			(15		)	(165		)	100
Ending balance	$	1,186	$	993		$	304		$	287		$	503		$	3,273

For the Six Months Ended	Commercial Loans		Commercial Real Estate			Consumer Loans			Home Equity			Residential Mortgages			Total
June 30, 2014
	(In thousands)
Allowance for loan losses:
Beginning balance	$	871	$	1,000		$	261		$	300		$	678		$	3,110
Charge-offs	—		—			(41		)	—			(11		)	(52		)
Recoveries	—		2			11			—			2			15
Provision for loan losses	315		(9		)	73			(13		)	(166		)	200
Ending balance	$	1,186	$	993		$	304		$	287		$	503		$	3,273

Schedule of the balances in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method

The following table presents the balances in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method:

June 30, 2015	Commercial Loans		Commercial Real Estate		Consumer Loans		Home Equity		Residential Mortgages		Total
	(In thousands)
Allowance for loan losses attributable to loans:	0
Individually evaluated for impairment	$	153	$	15	$	—	$	—	$	—	$	168
Collectively evaluated for impairment	799		982		648		317		545		3,291
Total	$	952	$	997	$	648	$	317	$	545	$	3,459
Loans:
Individually evaluated for impairment	$	1,376	$	448	$	—	$	—	$	—	$	1,824
Collectively evaluated for impairment	55,669		95,511		59,471		53,496		126,614		390,761
Total	$	57,045	$	95,959	$	59,471	$	53,496	$	126,614	$	392,585

December 31, 2014	Commercial Loans		Commercial Real Estate		Consumer Loans		Home Equity		Residential Mortgages		Total
	(In thousands)
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	$	115	$	21	$	—	$	—	$	—	$	136
Collectively evaluated for impairment	1,060		1,064		445		295		502		3,366
Total	$	1,175	$	1,085	$	445	$	295	$	502	$	3,502
Loans:
Individually evaluated for impairment	$	1,048	$	462	$	—	$	—	$	—	$	1,510
Collectively evaluated for impairment	52,621		92,965		46,883		53,150		121,910		367,529
Total	$	53,669	$	93,427	$	46,883	$	53,150	$	121,910	$	369,039

Schedule of information related to loans individually evaluated for impairment by segment of loans

The following table presents information related to loans individually evaluated for impairment by segment of loans as of June 30, 2015 and December 31, 2014:

	June 30, 2015						December 31, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands)
With no related allowance recorded:
Commercial loans	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate	—		—		—		—		—		—
With an allowance recorded:
Commercial loans	1,376		1,376		153		1,048		1,048		115
Commercial real estate	448		448		15		462		462		21
Total	$	1,824	$	1,824	$	168	$	1,510	$	1,510	$	136

Schedule of average recorded investment in impaired loans

The following table presents the average recorded investment in impaired loans for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
	(In thousands)
With no related allowance recorded:	0		0		0		0
Commercial loans	$	—	$	—	$	—	$	—
Commercial real estate	—		—		—		—
With an allowance recorded:
Commercial loans	1,467		996		1,485		998
Commercial real estate	450		487		453		492
Total	$	1,917	$	1,483	$	1,938	$	1,490

Schedule of recorded investment in nonaccrual and past due loans over 90 days still on accrual by segment

The following table presents the recorded investment in nonaccrual and past due loans over 90 days still on accrual by segment as of June 30, 2015 and December 31, 2014:

	June 30, 2015
	Nonaccrual		Loans Past Due Over 90 days still Accruing
	(In thousands)
Commercial loans	$	35	$	—
Commercial real estate	—		—
Consumer loans	—		—
Home equity	4		—
Residential mortgages	328		—
Total	$	367	$	—

	December 31, 2014
	Nonaccrual		Loans Past Due Over 90 days still Accruing
	(In thousands)
Commercial loans	$	39	$	—
Commercial real estate	—		—
Consumer loans	—		—
Home equity	—		—
Residential mortgages	267		—
Total	$	306	$	—

Schedule of aging of the recorded investment in past due loans by class of loans

The following represents the aging of the recorded investment in past due loans as of June 30, 2015 and December 31, 2014 by class of loans.

	June 30, 2015
	Total		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due
	(In thousands)
Commercial loans	$	57,045	$	187	$	—	$	—	$	187	$	56,858
Commercial real estate	95,959		84		—		—		84		95,875
Consumer loans	59,471		82		2		—		84		59,387
Home equity	53,496		153		—		4		157		53,339
Residential mortgages	126,614		71		10		328		409		126,205
Total	$	392,585	$	577	$	12	$	332	$	921	$	391,664

	December 31, 2014
	Total		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due
	(In thousands)
Commercial loans	$	53,669	$	—	$	56	$	—	$	56	$	53,613
Commercial real estate	93,427		39		—		—		39		93,388
Consumer loans	46,883		70		11		—		81		46,802
Home equity	53,150		118		—		—		118		53,032
Residential mortgages	121,910		233		—		267		500		121,410
Total	$	369,039	$	460	$	67	$	267	$	794	$	368,245

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

The following table presents the summary of the investment in troubled debt restructurings and related allowance for loan losses as of June 30, 2015 and December 31, 2014 by class of loans:

	June 30, 2015					December 31, 2014
	Number of Loans	Recorded Investment		Allowance for Loan Losses Allocated		Number of Loans	Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands except number of loans)
Commercial loans	9	$	984	$	104	7	$	804	$	58
Commercial real estate	—	—		—		—	—		—
Consumer loans	—	—		—		—	—		—
Home equity	—	—		—		—	—		—
Residential mortgages	—	—		—		—	—		—
Total	9	$	984	$	104	7	$	804	$	58

XML

Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments other than Options, Nonvested Participating Securities, Number	78,000		78,000
Number of non-vested stock awards outstanding (in shares)	153,000		153,000
Net income	$ 473	$ 1,429	$ 2,444	$ 3,373
Net earnings allocated to participating securities	(6)	(19)	(25)	(44)
Net earnings allocated to common stock (in dollars)	467	1,410	2,419	3,329
Basic
Distributed earnings allocated to common stock	836	830	1,670	1,653
(Over distributed) undistributed earnings allocated to common stock	(369)	580	749	1,676
Net earnings allocated to common stock (in dollars)	$ 467	$ 1,410	$ 2,419	$ 3,329
Weighted average common shares outstanding including shares considered participating securities	7,012,000	6,986,000	7,006,000	6,982,000
Less: Average unallocated ESOP shares	0	(14,000)	0	(16,000)
Less: Average participating securities (in shares)	(57,000)	(78,000)	(60,000)	(83,000)
Weighted average shares	6,955,000	6,894,000	6,946,000	6,883,000
Basic earnings per share (in dollars per share)	$ 0.07	$ 0.20	$ 0.35	$ 0.48
Diluted
Net earnings allocated to common stock (in dollars)	$ 467	$ 1,410	$ 2,419	$ 3,329
Weighted average common shares outstanding for basic earnings per common share	6,955,000	6,894,000	6,946,000	6,883,000
Add: Dilutive effects of assumed exercise of stock options and nonparticipaing shares	105,000	65,000	99,000	62,000
Weighted average shares and dilutive potential common shares	7,060,000	6,959,000	7,045,000	6,945,000
Diluted earnings per common share (in dollars per share)	$ 0.07	$ 0.20	$ 0.34	$ 0.48
Stock Options [Member]
Diluted
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			364	8,215

XML

Fair Value (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Fair Value Option
Total change in fair value	$ (220)	$ 13	$ 22	$ 823
Interest income
Fair Value Option
Total change in fair value	0	0	0	0
Change in fair value
Fair Value Option
Total change in fair value	$ (220)	$ 13	$ 22	$ 823

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 473	$ 1,429	$ 2,444	$ 3,373
Net change in unrealized gains (losses):
Other Comprehensive Income (Loss), Amortization of unrealized gains and losses, Transfers from Available-for-Sale Securities to Held-to-maturity Securities, Before Tax	181	132	320	274
Reclassification adjustment for gains realized included in income	0	0	0	0
Net unrealized gains	181	132	320	274
Income tax effect	(68)	(53)	(120)	(110)
Net unrealized gains	113	79	200	164
Securities available-for-sale:
Unrealized holding (losses) gains on securities arising during period	(1,816)	1,260	(806)	2,999
Reclassification adjustment for gains realized in income	(76)	(27)	(222)	(73)
Net unrealized (losses) gains	(1,892)	1,233	(1,028)	2,926
Income tax effect	714	(493)	388	(1,170)
Net change in securities available-for-sale	(1,178)	740	(640)	1,756
Unrealized holding (losses) gains on securities, net of tax	(1,065)	819	(440)	1,920
Defined benefit pension plans:
Change in unrealized loss on pension benefits	0	0	0	24
Income tax effect	0	0	0	(10)
Net change in pension benefits	0	0	0	14
Other comprehensive (loss) income, net of tax	(1,065)	819	(440)	1,934
Comprehensive (loss) income	$ (592)	$ 2,248	$ 2,004	$ 5,307

XML

Earnings per share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings per share

Earnings per Share

Basic earnings per share is net income available to common shareholders divided by the weighted average number of common shares outstanding during the period excluding participating securities. ESOP shares are considered outstanding for the calculation unless unearned.  Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock plans. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Company has determined that 78,000 of its 153,000 outstanding non-vested stock awards are participating securities. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements.

Earnings per common share have been computed based on the following for the three months and six months ended June 30, 2015 and 2014:

	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In thousands, except per share data)
Net income	$	473		$	1,429		$	2,444		$	3,373
Net earnings allocated to participating securities	(6		)	(19		)	(25		)	(44		)
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329
Basic
Distributed earnings allocated to common stock	$	836		$	830		$	1,670		$	1,653
Undistributed earnings allocated to common stock	(369		)	580			749			1,676
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329

	Three Months Ended						Six Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
	(In thousands, except per share data)
Weighted average common shares outstanding including shares considered participating securities	7,012			6,986			7,006			6,982
Less: Average unallocated ESOP shares	—			(14		)	—			(16		)
Less: Average participating securities	(57		)	(78		)	(60		)	(83		)
Weighted average shares	6,955			6,894			6,946			6,883
Basic earnings per share	$	0.07		$	0.20		$	0.35		$	0.48
Diluted
Net earnings allocated to common stock	$	467		$	1,410		$	2,419		$	3,329
Weighted average common shares outstanding for basic earnings per common share	6,955			6,894			6,946			6,883
Add: Dilutive effects of assumed exercise of stock options and nonparticipating shares	105			65			99			62
Weighted average shares and dilutive potential common shares	7,060			6,959			7,045			6,945
Diluted earnings per common share	$	0.07		$	0.20		$	0.34		$	0.48

Stock options for 364 shares of common stock were not considered in computing diluted earnings per share for the three months and six months ended June 30, 2015 because they were anti-dilutive. Stock options for 8,215 shares of common stock were not considered in computing diluted earnings per share for the three months and six months ended June 30, 2014 because they were anti-dilutive.

XML

Investment Securities and Mortgage-Backed Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Available-for-sale portfolio:
Amortized Cost	$ 155,801	$ 175,548
Gains	1,633	2,583
Losses	(1,895)	(1,817)
Fair Value	155,539	176,314
Held-to-maturity portfolio:
Amortized Cost	122,384	129,415
Gains	3,713	4,908
Losses	(553)	(426)
Total	125,544	133,897
Investment Securities
Available-for-sale portfolio:
Amortized Cost	94,738	111,173
Gains	1,056	1,821
Losses	(1,748)	(1,687)
Fair Value	94,046	111,307
Held-to-maturity portfolio:
Amortized Cost	75,688	78,511
Gains	3,039	4,017
Losses	(112)	(7)
Total	78,615	82,521
U.S. Agencies
Available-for-sale portfolio:
Amortized Cost	28,453	27,255
Gains	36	120
Losses	(214)	(143)
Fair Value	28,275	27,232
Held-to-maturity portfolio:
Amortized Cost	40,008	41,703
Gains	1,818	2,274
Losses	(28)	0
Total	41,798	43,977
US Treasury Notes Securities
Available-for-sale portfolio:
Amortized Cost	1,999
Gains	0
Losses	(5)
Fair Value	1,994
Corporate
Available-for-sale portfolio:
Amortized Cost	28,810	35,345
Gains	89	260
Losses	(1,494)	(1,508)
Fair Value	27,405	34,097
Agency asset backed securities
Available-for-sale portfolio:
Amortized Cost		8,734
Gains		91
Losses		(35)
Fair Value		8,790
State and municipal
Available-for-sale portfolio:
Amortized Cost	31,823	33,004
Gains	843	1,215
Losses	(35)	(1)
Fair Value	32,631	34,218
Held-to-maturity portfolio:
Amortized Cost	26,937	27,506
Gains	1,011	1,504
Losses	(84)	(7)
Total	27,864	29,003
Small Business Administration
Available-for-sale portfolio:
Amortized Cost	3,653	6,835
Gains	88	135
Losses	0	0
Fair Value	3,741	6,970
Held-to-maturity portfolio:
Amortized Cost	8,743	9,302
Gains	210	239
Losses	0	0
Total	8,953	9,541
Mortgage-Backed Securities
Available-for-sale portfolio:
Amortized Cost	61,063	64,375
Gains	577	762
Losses	(147)	(130)
Fair Value	61,493	65,007
Held-to-maturity portfolio:
Amortized Cost	46,696	50,904
Gains	674	891
Losses	(441)	(419)
Total	46,929	51,376
Fannie Mae
Available-for-sale portfolio:
Amortized Cost	25,128	24,666
Gains	269	306
Losses	(79)	(39)
Fair Value	25,318	24,933
Held-to-maturity portfolio:
Amortized Cost	24,766	26,602
Gains	424	533
Losses	(334)	(271)
Total	24,856	26,864
Freddie Mac
Available-for-sale portfolio:
Amortized Cost	25,708	25,659
Gains	160	207
Losses	(44)	(33)
Fair Value	25,824	25,833
Held-to-maturity portfolio:
Amortized Cost	13,771	15,192
Gains	169	257
Losses	(36)	(53)
Total	13,904	15,396
Government National Mortgage Assoc.
Available-for-sale portfolio:
Amortized Cost	10,227	12,624
Gains	148	198
Losses	(24)	(58)
Fair Value	10,351	12,764
Held-to-maturity portfolio:
Amortized Cost	8,159	9,110
Gains	81	101
Losses	(71)	(95)
Total	$ 8,169	9,116
Private placement mortgage obligation
Available-for-sale portfolio:
Amortized Cost		1,426
Gains		51
Losses		0
Fair Value		$ 1,477

XML

Segment Information (Details 2) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Reconciliation of the Company's reported segment assets to consolidated assets
Consolidated assets	$ 849,570	$ 798,169	$ 777,838
Reportable segments
Reconciliation of the Company's reported segment assets to consolidated assets
Consolidated assets	857,534		787,645
Elimination of intercompany cash balances
Reconciliation of the Company's reported segment assets to consolidated assets
Consolidated assets	$ (7,964)		$ (9,807)

XML

Investment Securities and Mortgage-Backed Securities (Tables)

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Schedule of the amortized cost and estimated fair values of Investment and Mortgage-Backed Securities

Investment securities and mortgage-backed securities classified as available-for-sale and held-to-maturity consist of the following at June 30, 2015 and December 31, 2014:

Available-for-sale portfolio:	June 30, 2015
	Amortized  Cost		Unrealized					Fair  Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	28,453	$	36	$	(214	)	$	28,275
U.S. Treasury	1,999		—		(5		)	1,994
Corporate	28,810		89		(1,494		)	27,405
State and municipal	31,823		843		(35		)	32,631
Small Business Administration	3,653		88		—			3,741
	$	94,738	$	1,056	$	(1,748	)	$	94,046
Mortgage-Backed Securities
Fannie Mae	$	25,128	$	269	$	(79	)	$	25,318
Freddie Mac	25,708		160		(44		)	25,824
Government National Mortgage Assoc.	10,227		148		(24		)	10,351
	$	61,063	$	577	$	(147	)	$	61,493
Total available-for-sale	$	155,801	$	1,633	$	(1,895	)	$	155,539

Held-to-maturity portfolio:	June 30, 2015
	Amortized  Cost		Unrecognized					Fair  Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	40,008	$	1,818	$	(28	)	$	41,798
State and municipal	26,937		1,011		(84		)	27,864
Small Business Administration	8,743		210		—			8,953
	$	75,688	$	3,039	$	(112	)	$	78,615
Mortgage-Backed Securities
Fannie Mae	$	24,766	$	424	$	(334	)	$	24,856
Freddie Mac	13,771		169		(36		)	13,904
Government National Mortgage Assoc.	8,159		81		(71		)	8,169
	$	46,696	$	674	$	(441	)	$	46,929
Total held-to-maturity	$	122,384	$	3,713	$	(553	)	$	125,544

Available-for-sale portfolio:	December 31, 2014
	Amortized Cost		Unrealized					Fair Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	27,255	$	120	$	(143	)	$	27,232
Corporate	35,345		260		(1,508		)	34,097
Agency asset backed securities	8,734		91		(35		)	8,790
State and municipal	33,004		1,215		(1		)	34,218
Small Business Administration	6,835		135		—			6,970
	$	111,173	$	1,821	$	(1,687	)	$	111,307
Mortgage-Backed Securities
Fannie Mae	$	24,666	$	306	$	(39	)	$	24,933
Freddie Mac	25,659		207		(33		)	25,833
Government National Mortgage Assoc.	12,624		198		(58		)	12,764
Private placement mortgage obligation	1,426		51		—			1,477
	$	64,375	$	762	$	(130	)	$	65,007
Total available-for-sale	$	175,548	$	2,583	$	(1,817	)	$	176,314

Held-to-maturity portfolio:	December 31, 2014
	Amortized Cost		Unrecognized					Fair Value
			Gains		Losses
	(In thousands)
Investment Securities
Debt securities:
U.S. Agencies	$	41,703	$	2,274	$	—		$	43,977
State and municipal	27,506		1,504		(7		)	29,003
Small Business Administration	9,302		239		—			9,541
	$	78,511	$	4,017	$	(7	)	$	82,521
Mortgage-Backed Securities
Fannie Mae	$	26,602	$	533	$	(271	)	$	26,864
Freddie Mac	15,192		257		(53		)	15,396
Government National Mortgage Assoc.	9,110		101		(95		)	9,116
	$	50,904	$	891	$	(419	)	$	51,376
Total held-to-maturity	$	129,415	$	4,908	$	(426	)	$	133,897

Investments Classified by Contractual Maturity Date [Table Text Block]

The amortized cost and fair value of the investment securities portfolio at June 30, 2015 are shown by contractual maturities.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	3,946	$	3,953	$	473	$	475
After one year through five years	24,181		24,507		12,765		13,175
After five years through ten years	51,619		51,748		35,910		37,245
After ten years	14,992		13,838		26,540		27,720
Mortgage-backed securities	61,063		61,493		46,696		46,929
Total	$	155,801	$	155,539	$	122,384	$	125,544

Schedule of Gains (losses) on securities

Sales of available-for-sale securities were as follows: 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(In thousands)
Proceeds	$	18,312		$	902		$	23,368		$	2,649
Gross gains	$	198		$	64		$	344		$	126
Gross losses	$	(122	)	$	(37	)	$	(122	)	$	(53	)

Schedule of securities with unrealized losses

Securities with unrealized losses at June 30, 2015 and December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

	Less than 12 Months					More than 12 Months					Total
June 30, 2015	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Description of Securities
Available-for-sale	(In thousands)
U.S. Agencies	$	16,063	$	(156	)	$	1,942	$	(58	)	$	18,005	$	(214	)
U.S. Treasury	1,994		(5		)	—		—			1,994		(5		)
Corporate	10,887		(236		)	10,907		(1,258		)	21,794		(1,494		)
State and municipal	1,807		(35		)	—		—			1,807		(35		)
Small Business Administration	—		—			4		—			4		—
Fannie Mae	6,017		(72		)	1,951		(7		)	7,968		(79		)
Freddie Mac	6,611		(23		)	1,703		(21		)	8,314		(44		)
Government National Mortgage Assoc.	—		—			3,608		(24		)	3,608		(24		)
Total securities available-for-sale in an unrealized loss position	$	43,379	$	(527	)	$	20,115	$	(1,368	)	$	63,494	$	(1,895	)
Held-to-maturity
U.S. Agencies	$	1,915	$	(28	)	$	—	$	—		$	1,915	$	(28	)
State and municipal	4,895		(84		)	—		—			4,895		(84		)
Fannie Mae	2,321		(11		)	8,689		(323		)	11,010		(334		)
Freddie Mac	—		—			2,030		(36		)	2,030		(36		)
Government National Mortgage Assoc.	—		—			3,407		(71		)	3,407		(71		)
Total securities held-to-maturity in an unrecognized loss position	$	9,131	$	(123	)	$	14,126	$	(430	)	$	23,257	$	(553	)

	Less than 12 Months					More than 12 Months					Total
December 31, 2014	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Description of Securities
Available-for-sale	(In thousands)
U.S. Agencies	$	999	$	(1	)	$	6,858	$	(142	)	$	7,857	$	(143	)
Corporate	9,237		(49		)	10,552		(1,459		)	19,789		(1,508		)
Agency asset backed securities	3,789		(35		)	—		—			3,789		(35		)
State and municipal	563		(1		)	—		—			563		(1		)
Small Business Administration	—		—			4		—			4		—
Fannie Mae	5,393		(16		)	2,002		(23		)	7,395		(39		)
Freddie Mac	5,567		(33		)	—		—			5,567		(33		)
Government National Mortgage Assoc.	2,084		(11		)	3,028		(47		)	5,112		(58		)
Total securities available-for-sale in an unrealized loss position	$	27,632	$	(146	)	$	22,444	$	(1,671	)	$	50,076	$	(1,817	)
Held-to-maturity
State and municipal	2,285		(4		)	822		(3		)	3,107		(7		)
Fannie Mae	2,361		(23		)	9,459		(248		)	11,820		(271		)
Freddie Mac	734		(3		)	2,238		(50		)	2,972		(53		)
Government National Mortgage Assoc.	3,631		(95		)	—		—			3,631		(95		)
Total securities held-to-maturity in an unrecognized loss position	$	9,011	$	(125	)	$	12,519	$	(301	)	$	21,530	$	(426	)