Fair Value (Tables)

6 Months Ended

Jun. 30, 2014

Assets Measured at Fair Value on Recurring Basis

Assets 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, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets        (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	28,093	$	0	$	28,093	$	0
State and political subdivisions		88,889		0		88,889		0
Corporate bonds		1,840		0		1,840		0
Mortgage-backed securities-residential		240,073		0		240,063		10
Collateralized mortgage obligations		27,074		0		27,074		0
Small business administration		23,112		0		23,112		0
Equity securities		204		204		0		0
Total investment securities	$	409,285	$	204	$	409,071	$	10
Yield maintenance provisions	$	365	$	0	$	365	$	0
Financial Liabilities
Interest rate swaps	$	365	$	0	$	365	$	0

	Fair Value Measurements at December 31, 2013 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for sale
U.S. Treasury and U.S. government    sponsored entities	$	51,310	$	0	$	51,310	$	0
State and political subdivisions		94,734		0		94,734		0
Corporate bonds		1,525		0		1,525		0
Mortgage-backed securities-residential		222,980		0		222,970		10
Collateralized mortgage obligations		28,676		0		28,676		0
Small business administration		23,573		0		23,573		0
Equity securities		187		187		0		0
Total investment securities	$	422,985	$	187	$	422,788	$	10
Yield maintenance provisions	$	275	$	0	$	275	$	0
Financial Liabilities
Interest rate swaps	$	275	$	0	$	275	$	0

Reconciliation for All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

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

	Investment Securities Available-for-sale (Level 3)
(In Thousands of Dollars)	Three Months ended June 30,				Six Months ended June 30,
	2014		2013		2014		2013
Beginning Balance	$	10	$	11	$	10	$	11
Total unrealized gains or losses:
Included in other comprehensive income		0		0		0		0
Repayments		0		0		0		0
Transfers in and/or out of Level 3		0		0		0		0
Ending Balance	$	10	$	11	$	10	$	11

Assets Measured at Fair Value on Non-Recurring Basis

Assets measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at June 30, 2014 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets    (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	531	$	0	$	0	$	531
1–4 family residential		250		0		0		250
Other real estate owned
1–4 family residential		33		0		0		33

	Fair Value Measurements at December 31, 2013 Using:
(In Thousands of Dollars)	Carrying Value		Quoted Prices  in Active Markets for Identical Assets    (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Impaired loans
Commercial real estate
Owner occupied	$	962	$	0	$	0	$	962
Non-owner occupied		391		0		0		391
Commercial		1,575		0		0		1,575
1–4 family residential		577		0		0		577
Home equity lines of credit		174		0		0		174
Consumer indirect		142		0		0		142
Consumer direct		22		0		0		22
Other real estate owned
1–4 family residential		33		0		0		33

Fair Value Measurements for Financial Instruments

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at period ended June 30, 2014 and December 31, 2013:

June 30, 2014	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	531	Sales comparison	Adjustment for differences between comparable sales	-34.18% - 27.28%              (-2.37%)
Residential		250	Sales comparison	Adjustment for differences between comparable sales	-30.22% - 34.86%                         (1.01%)
Other real estate owned		33	Sales comparison	Adjustment for differences between comparable sales	-30.69% - 26.07%                      (-14.29%)

December 31, 2013	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired loans
Commercial real estate	$	1,237	Sales comparison	Adjustment for differences between comparable sales	-41.59% - 77.25%              (-7.82%)
		116	Income approach	Adjustment for differences in net operating income	-13.64% - 12.93%              (-5.96%)
Commercial		1,575	Sales comparison	Adjustment for differences between comparable sales	25.56% - 33.03%              (17.42%)
Residential		751	Sales comparison	Adjustment for differences between comparable sales	-46.81% - 23.45%              (-7.00%)
Consumer		164	Sales comparison	Adjustment for differences between comparable sales	-29.00% - 29.00%              (0.00%)

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not previously disclosed at June 30, 2014 and December 31, 2013 are as follows:

			Fair Value Measurements at June 30, 2014 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	28,070	$	14,715	$	13,355	$	0	$	28,070
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		275		0		281		0		281
Loans, net		630,418		0		0		630,721		630,721
Accrued interest receivable		3,274		0		1,721		1,553		3,274
Financial liabilities
Deposits		907,443		690,390		218,104		0		908,494
Short-term borrowings		74,492		0		74,492		0		74,492
Long-term borrowings		19,315		0		19,990		0		19,990
Accrued interest payable		429		2		427		0		429

			Fair Value Measurements at December 31, 2013 Using:
(In Thousands of Dollars)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	27,513	$	12,957	$	14,556	$	0	$	27,513
Restricted stock		4,224	n/a		n/a		n/a		n/a
Loans held for sale		158		0		161		0		161
Loans, net		623,116		0		0		623,875		623,875
Accrued interest receivable		3,399		0		1,844		1,555		3,399
Financial liabilities
Deposits		915,216		688,470		228,116		0		916,586
Short-term borrowings		81,617		0		81,617		0		81,617
Long-term borrowings		19,822		0		20,526		0		20,526
Accrued interest payable		447		2		445		0		447