FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Schedule of Financial Assets Measured at Fair Value on Recurring Basis

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2013 and 2012 are as follows:

As of December 31, 2013	Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Investment securities available-for-sale
U.S. government agencies	$	-	$	62,036	$	-	$	62,036
Mortgage-backed securities-residential		-		32,097		-		32,097
Collateralized mortgage obligations:
Issued or guaranteed by U.S. government agencies		-		189,103		-		189,103
Non-agency		-		4,479		-		4,479
Corporate bonds		-		9,438		-		9,438
Municipal bonds		-		6,900		-		6,900
Other securities		-		-		4,625		4,625
Common stocks		49		-		-		49
Total available for sale	$	49	$	304,053	$	4,625	$	308,727

As of December 31, 2012	Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Investment securities available-for-sale
U.S. government agencies	$	-	$	66,444	$	-	$	66,444
Mortgage-backed securities-residential		-		30,509		-		30,509
Collateralized mortgage obligations:
Issued or guaranteed by U.S. government agencies		-		233,976		-		233,976
Non-agency		-		1,011		-		1,011
Corporate bonds		-		7,437		-		7,437
Municipal bonds		-		5,615		-		5,615
Other securities		-		-		4,164		4,164
Common stocks		47		-		-		47
Total available for sale	$	47	$	344,992	$	4,164	$	349,203

Additional Information About Assets Measured at Fair Value on a Recurring Basis, Level 3 Inputs

The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value for the years ended December 31, 2013 and 2012:

(In thousands)	Other
Investment Securities Available for Sale	securities

Beginning balance January 1, 2013	$	4,164
Total gains/(losses) - (realized/unrealized):
Included in earnings		94
Included in other comprehensive income		850
Purchases		70
Sales and calls		(553	)
Transfers in and/or out of Level 3		-
Ending balance December 31, 2013	$	4,625

	Trust
(In thousands)	preferred			Other
Investment Securities Available for Sale	securities			securities			Total

Beginning balance January 1, 2012	$	12,603		$	6,918		$	19,521
Total gains/(losses) - (realized/unrealized):
Included in earnings		126			(1,817	)		(1,691	)
Included in other comprehensive income		(1,938	)		79			(1,859	)
Purchases		-			788			788
Sales and calls		(10,773	)		(1,804	)		(12,577	)
Amortization of premium		(18	)		-			(18	)
Transfers in and/or out of Level 3		-			-			-
Ending balance December 31, 2012	$	-		$	4,164		$	4,164

Financial Assets Measured at Fair Value on Nonrecurring Basis

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2013 and 2012 are as follows:

As of December 31, 2013	Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Impaired loans	$	-	$	-	$	4,073	$	4,073
Other real estate owned		-		-		9,182		9,182
Loans and leases held for sale		-		-		1,446		1,446

As of December 31, 2012	Fair Value Measurements Using
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets
Impaired loans	$	-	$	-	$	9,180	$	9,180
Other real estate owned		-		-		7,632		7,632
Loans and leases held for sale		-		-		1,572		1,572

Schedule of quantitative information about assets measured at fair value on nonrecurring basis

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Qualitative Information about Level 3 Fair Value Measurements
As of December 31, 2013			Valuation	Unobservable	Range (Weighted
(In thousands)	Fair Value		Techniques	Input	Average)
Impaired loans and leases	$	4,073	Appraisal of collateral (1)	Appraisal adjustments	0.0% to -25.0% (-2.0%)
				Liquidation expenses	0.0% to -23.2% (-6.7%)

			Salvageable value of			0.0	%
			collateral (2)

Other real estate owned		9,182	Appraisal of collateral (1)	Appraisal adjustments	0.0% to -62.5% (-11.2%)
			Sales prices	Liquidation expenses	-2.8% to -6.8% (-5.0%)

Loans and leases held for sale		1,446	Sales prices (3)

(1)

Appraisals or brokers opinions of collateral values may be adjusted for qualitative factors such as interior condition of the property and liquidation expenses. Fair value may also be based on negotiated settlements with the borrower.

(2)

Leases are measured using the salvageable value of the collateral.

(3)

Fair value was based on agreement with specific buyer.

Fair Value by Balance Sheet Grouping Instruments

Fair values for the Company’s off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. They are not shown in the table because the amounts are immaterial.

					Fair Value Measurements
					At December 31, 2013
					Quoted Prices
					in Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying		Estimated		Assets		Inputs		Inputs
(In thousands)	amount		fair value		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	16,844	$	16,844	$	16,844	$	-	$	-
AFS investment securities		308,727		308,727		49		304,053		4,625
Other investment		2,250		2,250		-		-		2,250
Federal Home Loan Bank stock		4,204		4,204		-		-		4,204
Loans held for sale		1,446		1,446		-		-		1,446
Loans, net		352,810		349,336		-		-		349,336
Accrued interest receivable		7,054		7,054		-		7,054		-

Financial Liabilities:
Demand deposits		60,473		60,473		-		60,473		-
NOW and money markets		210,053		210,053		-		210,053		-
Savings		17,593		17,593		-		17,593		-
Time deposits		240,845		239,102		-		239,102		-
Short-term borrowings		10,000		10,000		10,000		-		-
Long-term borrowings		97,881		94,896		-		94,896		-
Subordinated debt		25,774		26,000		-		26,000		-
Accrued interest payable		965		965		-		965		-

					Fair Value Measurements
					At December 31, 2012
					Quoted Prices
					in Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying		Estimated		Assets		Inputs		Inputs
(In thousands)	amount		fair value		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	28,802	$	28,802	$	28,802	$	-	$	-
AFS investment securities		349,203		349,203		47		344,992		4,164
Other investment		2,250		2,250		-		-		2,250
Federal Home Loan Bank stock		6,011		6,011		-		-		6,011
Loans held for sale		1,572		1,572		-		-		1,572
Loans, net		326,904		330,260		-		-		330,260
Accrued interest receivable		10,256		10,256		-		10,256		-

Financial Liabilities:
Demand deposits		58,531		58,531		-		58,531		-
NOW and money markets		223,279		223,279		-		223,279		-
Savings		17,472		17,472		-		17,472		-
Time deposits		255,635		251,532		-		251,532		-
Long-term borrowings		108,333		102,824		-		102,824		-
Subordinated debt		25,774		23,837		-		23,837		-
Accrued interest payable		3,760		3,760		-		3,760		-

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-Subparagraph a, c(1), c(2), c(3), d

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

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Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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