BORROWED FUNDS AND REPURCHASE AGREEMENTS (Tables)

12 Months Ended

Dec. 31, 2016

BORROWED FUNDS AND REPURCHASE AGREEMENTS [Abstract]

Borrowed funds

The following table shows the breakdown of borrowed funds as of December 31, 2016 and 2015, (dollars in thousands):

	Securities
	Sold Under																		Total
	Agreements to			FHLB			Federal Funds			FRB			Notes			Term			Borrowed
	Repurchase(a)			Advances(b)			Line (c)			BIC Line (d)			Payable(e)			Loans(f)			Funds
2016
Balance at December 31	$	14,307		$	41,330		$	-		$	-		$	7,500		$	16,525		$	79,662
Highest balance at any month-end		16,132			45,125			-			-			7,500			16,525			85,282
Average balance		15,057			7,917			2			3			7,500			16,525			47,004
Weighted average interest rate:
Paid during the year		0.49	%		0.63	%		0.76	%		1.00	%		3.55	%		2.44	%		1.69	%
As of year-end		0.67	%		0.74	%		0.00	%		0.00	%		3.79	%		2.44	%		1.36	%
2015
Balance at December 31	$	16,008		$	1,598		$	-		$	-		$	7,500		$	16,525		$	41,631
Highest balance at any month-end		16,008			26,996			-			-			7,500			20,569			71,073
Average balance		5,998			5,218			-			-			7,500			17,984			36,700
Weighted average interest rate:
Paid during the year		0.82	%		0.35	%		0.00	%		0.77	%		3.14	%		2.25	%		1.93	%
As of year-end		0.45	%		0.43	%		0.00	%		0.00	%		3.33	%		2.40	%		1.74	%

(a)We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.

(b)FHLB Advances consist of an "Open RepoPlus" agreement with the FHLB of Pittsburgh. FHLB "Open RepoPlus" advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher.  The Company has a borrowing limit of $343,209,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company's FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans.

(c)The federal funds line consists of an unsecured line from a third party bank at market rates.  The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances.  No specific collateral is required to be pledged for these borrowings.

(d)The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession.  As of December 31, 2016 and 2015, the Company has a borrowing limit of $4,360,000 and $7,949,000, respectively, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $15,560,000 and $16,146,000 as of December 31, 2016 and 2015, respectively.

(e)In December 2003, the Company formed a special purpose entity ("Entity") to issue $7,500,000 of floating rate obligated mandatory redeemable trust preferred securities as part of a pooled offering.  The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80.   The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter.  The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable.  Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008.  Under current accounting rules, the Company's minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet.  The Entity is not consolidated as part of the Company's consolidated financial statements.

(f)Term Loans consist of separate loans with the FHLB of Pittsburgh as follows (in thousands):

Remaining contractual maturity of the repurchase agreements

The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015 is presented in the following tables.

	Remaining Contractual Maturity of the Agreements
	Overnight and		Up to				Greater than
2016	Continuous		30 Days		30 - 90 Days		90 days		Total
Repurchase Agreements:
U.S. agency securities	$	16,118	$	-	$	-	$	2,059	$	18,177
Total carrying value of collateral pledged	$	16,118	$	-	$	-	$	2,059	$	18,177
Total liability recognized for repurchase agreements									$	14,307
2015
Repurchase Agreements:
U.S. agency securities	$	18,144	$	-	$	-	$	2,049	$	20,193
Total carrying value of collateral pledged	$	18,144	$	-	$	-	$	2,049	$	20,193
Total liability recognized for repurchase agreements									$	16,008

Federal Home Loan Bank loans by branch

Term Loans consist of separate loans with the FHLB of Pittsburgh as follows (in thousands):

				December 31,		December 31,
Interest Rate			Maturity	2016		2015
Fixed:
	2.29	%	October 2, 2017		2,000		2,000
	2.72	%	July 12, 2018		1,000		1,000
	1.87	%	February 4, 2019		2,000		2,000
	2.61	%	February 3, 2021		2,000		2,000
	3.52	%	July 12, 2021		2,000		2,000
	2.37	%	August 20, 2021		2,800		2,800
	2.08	%	January 6, 2022		4,725		4,725
Total term loans				$	16,525	$	16,525

Maturities of borrowed funds

Following are maturities of borrowed funds as of December 31, 2016 (in thousands):

2017	$	64,033
2018		1,000
2019		2,000
2020		570
2021		7,334
Thereafter		4,725
Total borrowed funds	$	79,662