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FAIR VALUE MEASUREMENTS (Tables)
12 Months Ended
Dec. 31, 2016
Fair Value Disclosures [Abstract]  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
For assets measured at fair value, the fair value measurements by level within the fair value hierarchy, and the basis of measurement used at December 31, 2016 and 2015, are as follows:
 
 
 
Fair Value Measurements at December 31, 2016
In thousands
Basis
 
Total
 
Level 1
 
Level 2
 
Level 3
U.S. Government and agencies
 
 
$
79,579

 
$
—

 
$
79,579

 
$
—

Mortgage-backed securities, residential
 
 
31,973

 
—

 
31,973

 
—

State and municipal
 
 
24,660

 
—

 
24,660

 
—

Corporate bonds
 
 
5,062

 
—

 
5,062

 
—

CRA mutual fund
 
 
1,035

 
1,035

 
—

 
—

Stock in other banks
 
 
681

 
681

 
—

 
—

Total securities available for sale
Recurring
 
$
142,990

 
$
1,716

 
$
141,274

 
$
—

Impaired loans
Non-recurring
 
$
4,406

 
$
—

 
$
—

 
$
4,406

Foreclosed assets held for resale
Non-recurring
 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
Fair Value Measurements at December 31, 2015
In thousands
Basis
 
Total
 
Level 1
 
Level 2
 
Level 3
U.S. Government and agencies
 
 
$
46,029

 
$
—

 
$
46,029

 
$
—

Mortgage-backed securities, residential
 
 
42,839

 
—

 
42,839

 
—

State and municipal
 
 
28,078

 
—

 
28,078

 
—

Corporate bonds
 
 
6,955

 
—

 
6,955

 
—

CRA mutual fund
 
 
1,053

 
1,053

 
—

 
—

Stock in other banks
 
 
739

 
739

 
—

 
—

Total securities available for sale
Recurring
 
$
125,693

 
$
1,792

 
$
123,901

 
$
—

Impaired loans
Non-recurring
 
$
4,451

 
$
—

 
$
—

 
$
4,451

Foreclosed assets held for resale
Non-recurring
 
$
—

 
$
—

 
$
—

 
$
—

Fair Value Inputs, Assets, Quantitative Information
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:
 
 
Quantitative Information about Level 3 Fair Value Measurements
Dollars in thousands
 
Fair Value Estimate
 
Valuation Technique
 
Unobservable Input
 
 
Range
 
Weighted Average
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
  Impaired loans
 
$
4,406

 
Appraisal of collateral
(1)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
(39
)%
  Foreclosed assets held for resale
 
$
—

 
Appraisal of collateral
(1) (3)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
  Impaired loans
 
$
4,451

 
Appraisal of collateral
(1)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
(16
)%
  Foreclosed assets held for resale
 
$
—

 
Appraisal of collateral
(1) (3)
Appraisal adjustments
(2)
 
 (10) - (50)%
 
—
 %
(1)
Fair value is generally determined through management’s estimate or independent third-party appraisals of the underlying collateral, which generally includes various Level 3 inputs which are not observable.
(2)
Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal. Higher downward adjustments are caused by negative changes to the collateral or conditions in the real estate market, actual offers or sales contracts received, or age of the appraisal.
(3)
Includes qualitative adjustments by management and estimated liquidation expenses.
Fair Value, by Balance Sheet Grouping
The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Corporation’s financial instruments at December 31, 2016 and 2015:
 
December 31, 2016
In thousands
Carrying Amount
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
13,796

 
$
13,796

 
$
6,921

 
$
6,875

 
$
—

Interest-bearing deposits in banks
5,135

 
5,135

 
5,135

 
—

 
—

Investment securities available for sale
142,990

 
142,990

 
1,716

 
141,274

 
—

Investment securities held to maturity
55,568

 
55,425

 
—

 
55,425

 
—

Loans held for sale
1,770

 
1,770

 
—

 
1,770

 
—

Loans, less allowance for loan losses
893,176

 
888,169

 
—

 
—

 
888,169

Accrued interest receivable
3,158

 
3,158

 
—

 
3,158

 
—

Restricted investment in bank stocks
4,349

 
4,349

 
—

 
4,349

 
—

 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
967,621

 
967,236

 
—

 
967,236

 
—

Short-term borrowings
34,590

 
34,590

 
—

 
34,590

 
—

Long-term borrowings
74,250

 
75,029

 
—

 
75,029

 
—

Accrued interest payable
837

 
837

 
—

 
837

 
—

 
 
 
 
 
 
 
 
 
 
Off-balance sheet financial instruments
—

 
—

 
—

 
—

 
—

 
December 31, 2015
In thousands
Carrying Amount
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
13,468

 
$
13,468

 
$
6,746

 
$
6,722

 
$
—

Interest-bearing deposits in banks
5,289

 
5,289

 
5,289

 
—

 
—

Investment securities available for sale
125,693

 
125,693

 
1,792

 
123,901

 
—

Investment securities held to maturity
71,542

 
71,363

 
—

 
71,363

 
—

Loans held for sale
1,835

 
1,835

 
—

 
1,835

 
—

Loans, less allowance for loan losses
838,213

 
842,169

 
—

 
—

 
842,169

Accrued interest receivable
3,016

 
3,016

 
—

 
3,016

 
—

Restricted investment in bank stocks
4,414

 
4,414

 
—

 
4,414

 
—

 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
912,980

 
913,188

 
—

 
913,188

 
—

Short-term borrowings
35,202

 
35,202

 
—

 
35,202

 
—

Long-term borrowings
76,500

 
77,545

 
—

 
77,545

 
—

Accrued interest payable
815

 
815

 
—

 
815

 
—

 
 
 
 
 
 
 
 
 
 
Off-balance sheet financial instruments
—

 
—

 
—

 
—

 
—