Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value of Assets on Recurring Basis Segregated by Level of Valuation Inputs

The following tables summarize assets measured at fair value on a recurring basis as of the indicated dates, segregated by the level of valuation inputs within the hierarchy utilized to measure fair value:

	March 31, 2014
								Total Fair
(In thousands)	Level 1		Level 2			Level 3		Value
Available-for-sale portfolio
Debt investment securities:
US Treasury, agencies and GSEs	$	-	$	19,598		$	-	$	19,598
State and political subdivisions		-		6,450			-		6,450
Corporate		-		12,060			-		12,060
Residential mortgage-backed - US agency		-		43,600			-		43,600
Equity investment securities:
Mutual funds:
Ultra short mortgage fund		647		-			-		647
Large cap equity fund		655		-			-		655
Other mutual funds		-		364			-		364
Common stock - financial services industry		40		249			-		289
Total available-for-sale securities	$	1,342	$	82,321		$	-	$	83,663

Interest rate swap derivative	$	-	$	(123	)	$	-	$	(123	)

	December 31, 2013
								Total Fair
(In thousands)	Level 1		Level 2			Level 3		Value
Available-for-sale portfolio
Debt investment securities:
US Treasury, agencies and GSEs	$	-	$	16,597		$	-	$	16,597
State and political subdivisions		-		6,587			-		6,587
Corporate		-		13,696			-		13,696
Residential mortgage-backed - US agency		-		42,142			-		42,142
Equity investment securities:
Mutual funds:
Ultra short mortgage fund		648		-			-		648
Large cap equity fund		651		-			-		651
Other mutual funds		-		345			-		345
Common stock - financial services industry		42		251			-		293
Total available-for-sale securities	$	1,341	$	79,618		$	-	$	80,959

Interest rate swap derivative	$	-	$	(135	)	$	-	$	(135	)

Summary of Assets Measured at Fair Value on a Nonrecurring Basis Segregated by Level of Valuation Inputs

Pathfinder Bank had the following assets measured at fair value on a nonrecurring basis as of March 31, 2014 and December 31, 2013:

	March 31, 2014
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Impaired loans	$	-	$	-	$	1,254	$	1,254
Foreclosed real estate	$	-	$	-	$	130	$	130

	December 31, 2013
							Total Fair
(In thousands)	Level 1		Level 2		Level 3		Value
Impaired loans	$	-	$	-	$	258	$	258
Foreclosed real estate	$	-	$	-	$	69	$	69

Fair Value Inputs, Quantitative Information

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Level 3 inputs were used to determine fair value at the indicated dates.

		Quantitative Information about Level 3 Fair Value Measurements

	Valuation	Unobservable	Range
	Techniques	Input	(Weighted Avg.)
At March 31, 2014
Impaired loans	Appraisal of collateral	Appraisal Adjustments		5% - 30%	(15%)
	(Sales Approach)	Costs to Sell		4% - 50%	(12%)

Foreclosed real estate	Appraisal of collateral	Appraisal Adjustments		15% - 15%	(15%)
	(Sales Approach)	Costs to Sell		6% - 8%	(7%)

		Quantitative Information about Level 3 Fair Value Measurements

	Valuation	Unobservable	Range
	Techniques	Input	(Weighted Avg.)
At December 31, 2013
Impaired loans	Appraisal of collateral	Appraisal Adjustments		5% - 30%	(14%)
	(Sales Approach)	Costs to Sell		6% - 50%	(12%)

Foreclosed real estate	Appraisal of collateral	Appraisal Adjustments		15% - 15%	(15%)
	(Sales Approach)	Costs to Sell		6% - 7%	(6%)

Carrying Amounts and Fair Value of Financial Instruments

The carrying amounts and fair values of the Company’s financial instruments as of the indicated dates are presented in the following table:

			March 31, 2014				December 31, 2013
	Fair Value		Carrying		Estimated		Carrying		Estimated
(Dollars In thousands)	Hierarchy		Amounts		Fair Values		Amounts		Fair Values
Financial assets:
Cash and cash equivalents		1	$	18,933	$	18,933	$	16,575	$	16,575
Interest earning time deposits		1		500		500		500		500
Investment securities - available-for-sale		1		1,342		1,342		1,341		1,341
Investment securities - available-for-sale		2		82,321		82,321		79,618		79,618
Investment securities - held-to-maturity		2		42,990		43,359		34,412		34,222
Federal Home Loan Bank stock		2		2,035		2,035		2,440		2,440
Net loans		3		343,143		349,472		336,592		343,660
Accrued interest receivable		1		1,813		1,813		1,715		1,715

Financial liabilities:
Demand Deposits, Savings, NOW and MMDA		1	$	282,620	$	282,620	$	250,248	$	250,248
Time Deposits		2		155,732		155,914		159,892		160,201
Borrowings		2		33,826		34,205		40,853		41,255
Junior subordinated debentures		2		5,155		5,152		5,155		4,825
Accrued interest payable		1		98		98		86		86
Interest rate swap derivative		2		123		123		135		135

- 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 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.

+ References

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 10

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-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 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

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

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-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 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

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

-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.

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