Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2017

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 June 30, 2017 and December 31, 2016, the significant unobservable inputs used in the fair value measurements were as follows:

(in thousands)		Fair Value at June 30, 2017	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Recurring:
Investment Securities – available for sale	$	14,347	Discounted Cash Flow	Discount Rate	LIBOR+ 5.50%
Non-recurring:
Impaired Loans	$	4,691	Market Comparable Properties	Marketability Discount	10.0% - 34.2%(1)               (weighted avg 11.0%)
Other Real Estate Owned	$	1,009	Market Comparable Properties	Marketability Discount	15%
(in thousands)		Fair Value at December 31, 2016	Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Value
Recurring:
Investment Securities – available for sale	$	20,254	Discounted Cash Flow	Discount Rate	Range of LIBOR+ 4.5% to 5.5%
Non-recurring:
Impaired Loans	$	14,537	Market Comparable Properties	Marketability Discount	4.6% - 31.0% (1)               (weighted avg 6.5%)
Other Real Estate Owned	$	1,201	Market Comparable Properties	Marketability Discount	15%

NOTE:

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 June 30, 2017 and December 31, 2016 are as follows:

			Fair Value Measurements at June 30, 2017 Using
		Assets Measured at Fair Value	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)		06/30/2017	(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
U.S. government agencies	$	24,424		$	24,424
Commercial mortgage-backed agencies	$	42,343		$	42,343
Collateralized mortgage obligations	$	29,021		$	29,021
Obligations of states and political subdivisions	$	19,063		$	19,063
Collateralized debt obligations	$	14,347				$	14,347
Financial Derivatives	$	537		$	537	$
Non-recurring:
Impaired loans	$	4,691				$	4,691
Other real estate owned	$	1,009				$	1,009

			Fair Value Measurements at December 31, 2016 Using
		Assets Measured at Fair Value	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)		12/31/2016	(Level 1)		(Level 2)		(Level 3)
Recurring:
Investment securities available-for-sale:
U.S. government agencies	$	24,253		$	24,253
Commercial mortgage-backed agencies	$	52,222		$	52,222
Collateralized mortgage obligations	$	19,567		$	19,567
Obligations of states and political subdivisions	$	23,704		$	23,704
Collateralized debt obligations	$	20,254				$	20,254
Financial Derivative	$	700			700	$
Non-recurring:
Impaired loans	$	14,537				$	14,537
Other real estate owned	$	1,201				$	1,201

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 six- and three-month periods ended June 30, 2017 and 2016:

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(In thousands)		Investment Securities Available for Sale
Beginning balance January 1, 2017	$	20,254
Total losses realized/unrealized:
Included in other comprehensive income		(5,907)
Ending balance June 30, 2017	$	14,347

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(in thousands)		Investment Securities Available for Sale		Cash Flow Hedge
Beginning balance January 1, 2016	$	22,211	$	(66)
Total (losses)/gains realized/unrealized:
Included in other comprehensive loss		(1,981)		66
Ending balance June 30, 2016	$	20,230	$	0

		Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
(in thousands)		Investment Securities Available for Sale		Cash Flow Hedge
Beginning balance April 1, 2017	$	20,357	$
Total losses realized/unrealized:
Included in other comprehensive income		(6,010)
Ending balance June 30, 2017	$	14,347	$

		Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
(in thousands)		Investment Securities Available for Sale		Cash Flow Hedge
Beginning balance April 1, 2016	$	19,532	$	(33)
Total gains realized/unrealized:
Included in other comprehensive income		698		33
Ending balance June 30, 2016	$	20,230	$	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:

	June 30, 2017					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	$	71,405	$	71,405	$	71,405
Interest bearing deposits in banks		1,557		1,557		1,557
Investment securities - AFS		129,198		129,198			$	114,851	$	14,347
Investment securities - HTM		98,354		100,365				90,563		9,802
Restricted bank stock		5,204		5,204				5,204
Loans, net		886,033		891,251						891,251
Financial derivatives		537		537				537
Accrued interest receivable		3,495		3,495				3,495
Financial Liabilities:
Deposits – non-maturity		803,745		803,745				803,745
Deposits – time deposits		233,967		239,043				239,043
Short-term borrowed funds		25,224		25,224				25,224
Long-term borrowed funds		120,929		122,046				122,046
Accrued interest payable		428		428				428
Off balance sheet financial instruments		0		0		0

	December 31, 2016					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	$	60,707	$	60,707	$	60,707
Interest bearing deposits in banks		2,603		2,603		2,603
Investment securities - AFS		140,000		140,000			$	119,746	$	20,254
Investment securities - HTM		97,169		97,981				89,031		8,950
Restricted bank stock		5,209		5,209				5,209
Loans, net		882,008		886,712						886,712
Financial derivative		700		700				700
Accrued interest receivable		3,862		3,862				3,862
Financial Liabilities:
Deposits- non-maturity		773,119		773,119				773,119
Deposits- time deposits		241,110		245,762				245,762
Short-term borrowed funds		36,000		36,000				36,000
Long-term borrowed funds		131,737		133,397				133,397
Accrued interest payable		380		380				380
Off balance sheet financial instruments		0		0		0