Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value of Financial Instruments [Abstract]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

For Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis as of March 31, 2015, the significant unobservable inputs used in the fair value measurements were as follows:

(in thousands)		Fair Value at March 31, 2015	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Recurring:
Investment Securities – available for sale	$	28,391	Discounted Cash Flow	Discount Rate	Range of Libor+ 5.50% to 10.50%
Cash Flow Hedge	$	(164)	Discounted Cash Flow	Reuters Third Party Market Quote	99.9%                       (weighted avg 99.9%)
Non-recurring:
Impaired Loans	$	7,782	Market Comparable Properties	Marketability Discount	10%-15% (1)                (weighted avg 12.7%)
Other Real Estate Owned	$	1,586	Market Comparable Properties	Marketability Discount	10%-15% (1)                (weighted avg 14.2%)

NOTE:

(1) Range would include discounts taken since appraisal and estimated values

Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis

For assets measured at fair value on a recurring and non-recurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2015 and December 31, 2014 are as follows:

			Fair Value Measurements at March 31, 2015 Using
		Assets Measured at Fair Value	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)		3/31/2015	(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
U.S. treasuries	$	27,097		$	27,097
U.S. government agencies	$	44,218		$	44,218
Residential mortgage-backed agencies	$	29,008		$	29,008
Commercial mortgage-backed agencies	$	37,046		$	37,046
Collateralized mortgage obligations	$	14,189		$	14,189
Obligations of states and political subdivisions	$	47,846		$	47,846
Collateralized debt obligations	$	28,391				$	28,391
Financial Derivative	$	(164)				$	(164)
Non-recurring:
Impaired loans	$	7,782				$	7,782
Other real estate owned	$	1,586				$	1,586

			Fair Value Measurements at December 31, 2014 Using
		Assets Measured at Fair Value	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)		12/31/2014	(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
U.S. treasuries	$	29,596		$	29,596
U.S. government agencies	$	38,941		$	38,941
Residential mortgage-backed agencies	$	45,273		$	45,273
Commercial mortgage-backed agencies	$	25,957		$	25,957
Collateralized mortgage obligations	$	8,707		$	8,707
Obligations of states and political subdivisions	$	47,304		$	47,304
Collateralized debt obligations	$	25,339				$	25,339
Financial Derivative	$	(199)				$	(199)
Non-recurring:
Impaired loans	$	9,122				$	9,122
Other real estate owned	$	2,511				$	2,511

Reconciliation of Fair Valued Assets Measured on a Recurring Basis

The following tables show a reconciliation of the beginning and ending balances for fair valued assets measured on a recurring basis using Level 3 significant unobservable inputs for the three-month periods ended March 31, 2015 and 2014:

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(In thousands)		Investment Securities Available for Sale		Cash Flow Hedge
Beginning balance January 1, 2015	$	25,339	$	(199)
Total gains realized/unrealized:
Included in other comprehensive income		3,052		35
Ending balance March 31, 2015	$	28,391	$	(164)
The amount of total gains or losses for the period
included in earnings attributable to the change in
realized/unrealized gains or losses related to assets
still held at the reporting date	$	0	$	0

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(in thousands)		Investment Securities Available for Sale		Cash Flow Hedge
Beginning balance January 1, 2014	$	17,538	$	(457)
Total gains realized/unrealized:
Included in other comprehensive income		5,555		92
Ending balance March 31, 2014	$	23,093	$	(365)
The amount of total gains or losses for the period
included in earnings attributable to the change in
realized/unrealized gains or losses related to assets
still held at the reporting date	$	0	$	0

Fair Value by Balance Sheet Grouping

The following tables present fair value information about financial instruments, whether or not recognized in the Consolidated Statement of Financial Condition, for which it is practicable to estimate that value. The actual carrying amounts and estimated fair values of the Corporation’s financial instruments that are included in the Consolidated Statement of Financial Condition are as follows:

	March 31, 2015					Fair Value Measurements
	Carrying		Fair		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Amount		Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and due from banks	$	37,276	$	37,276	$	37,276
Interest bearing deposits in banks		7,949		7,949		7,949
Investment securities - AFS		227,795		227,795			$	199,404	$	28,391
Investment securities - HTM		109,040		111,320				108,792		2,528
Restricted bank stock		7,138		7,138				7,138
Loans, net		824,699		827,476						827,476
Accrued interest receivable		3,779		3,779				3,779
Financial Liabilities:
Deposits – non-maturity		716,477		716,477				716,477
Deposits – time deposits		282,669		287,323				287,323
Short-term borrowed funds		34,576		34,576				34,576
Long-term borrowed funds		177,589		181,705				181,705
Accrued interest payable		860		860				860
Financial derivative		164		164						164
Off balance sheet financial instruments		0		0		0

	December 31, 2014					Fair Value Measurements
	Carrying		Fair		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Amount		Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and due from banks	$	27,554	$	27,554	$	27,554
Interest bearing deposits in banks		7,897		7,897		7,897
Investment securities - AFS		221,117		221,117			$	195,778	$	25,339
Investment securities - HTM		109,449		110,771				108,163		2,608
Restricted bank stock		7,524		7,524				7,524
Loans, net		827,926		830,904						830,904
Accrued interest receivable		4,152		4,152				4,152
Financial Liabilities:
Deposits- non-maturity		689,581		689,581				689,581
Deposits- time deposits		291,742		296,713				296,713
Short-term borrowed funds		39,801		39,801				39,801
Long-term borrowed funds		182,606		187,143				187,143
Accrued interest payable		882		882				882
Financial derivative		199		199						199
Off balance sheet financial instruments		0		0		0