FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

At June 30, 2016 and December 31, 2015, investments measured at fair value on a recurring basis and the valuation methods used are as follows:

(Dollars in thousands)

June 30, 2016
	Level 1		Level 2		Level 3		Total
Available-for-Sale Securities:
U.S. Treasury securities	$	—	$	1,020	$	—	$	1,020
Obligations of U.S. Government Corporations and Agencies:
Mortgage-backed		—		114,204		—		114,204
Other		—		11,591		—		11,591
Obligations of state and political subdivisions		—		212,577		—		212,577
Corporate debt securities		—		43,669		—		43,669
Marketable equity securities		2,028		—		—		2,028
Total	$	2,028	$	383,061	$	—	$	385,089

(Dollars in thousands)

December 31, 2015

	Level 1		Level 2		Level 3		Total
Available-for-Sale Securities:
U.S. Treasury securities	$	—	$	1,021	$	—	$	1,021
Obligations of U.S. Government Corporations and Agencies:		—
Mortgaged-backed		—		112,474		—		112,474
Other		—		21,592		—		21,592
Obligations of state and political subdivisions		—		200,314		—		200,314
Corporate debt securities		—		47,833		—		47,833
Marketable equity securities		2,007		—		—		2,007
Total	$	2,007	$	383,234	$	—	$	385,241

Fair Value Measurements, Nonrecurring [Table Text Block]

At June 30, 2016 and December 31, 2015, impaired loans measured at fair value on a non-recurring basis that are collateral dependent and the valuation methods used are as follows:

(Dollars in thousands)

	Level 1		Level 2		Level 3		Total
Assets at June 30, 2016
Impaired loans:
Commercial Real Estate	$	—	$	—	$	5,289	$	5,289
Residential Real Estate		—		—		549		549
Total impaired loans	$	—	$	—	$	5,838	$	5,838

(Dollars in thousands)

	Level 1		Level 2		Level 3		Total
Assets at December 31, 2015
Impaired loans:
Commercial Real Estate	$	—	$	—	$	1,665	$	1,665
Residential Real Estate		—		—		631		631
Total impaired loans	$	—	$	—	$	2,296	$	2,296

Fair Value Non Financial Assets Measured On Nonrecurring Basis [Table Text Block]

At June 30, 2016, foreclosed assets held for resale measured at fair value on a non-recurring basis and the valuation methods used are as follows:

(Dollars in thousands)

	Level 1		Level 2		Level 3		Total
Assets at June 30, 2016
Foreclosed assets held for resale:
Commercial Real Estate	$	—	$	—	$	200	$	200
Total foreclosed assets held for resale	$	—	$	—	$	200	$	200

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis that are collateral dependent and for which the Bank has utilized Level 3 inputs to determine the fair value:

(Dollars in thousands)

Quantitative Information about Level 3 Fair Value Measurements

Fair Value

Weighted

Estimate

Valuation Technique

Unobservable Input

Range

Average

June 30, 2016

Impaired loans

5,838

Appraisal of collateral¹,³

Appraisal adjustments²

(10%) – (63%)

(19

Foreclosed assets held for resale

200

Appraisal of collateral¹,³

Appraisal adjustments²

(17%) – (17%)

(17

December 31, 2015

Impaired loans

2,296

Appraisal of collateral¹,³

Appraisal adjustments²

(10%) – (63%)

(29

Foreclosed assets held for resale

—

Appraisal of collateral¹,³

Appraisal adjustments²

(0%) – (0%)

______________________

¹Fair value is generally determined through independent appraisals of the underlying collateral, as defined by Bank regulators.

²Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value.

³Includes qualitative adjustments by management and estimated liquidation expenses.

Fair Value, by Balance Sheet Grouping [Table Text Block]

Fair Value of Financial Instruments

(Dollars in thousands)

	Carrying		Fair Value Measurements at June 30, 2016
	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	8,586	$	8,586	$	—	$	—	$	8,586
Interest-bearing deposits in other banks		672		—		672		—		672
Time deposits with other banks		1,482		—		1,482		—		1,482
Investment securities available-for-sale		385,089		2,028		383,061		—		385,089
Investment securities held-to-maturity		20		—		21		—		21
Restricted investment in bank stocks		6,622		—		6,622		—		6,622
Net loans		509,779		—		—		508,581		508,581
Mortgage servicing rights		461		—		—		461		461
Accrued interest receivable		3,932		—		3,932		—		3,932

FINANCIAL LIABILITIES:
Deposits		684,471		—		686,178		—		686,178
Short-term borrowings		99,638		—		99,638		—		99,638
Long-term borrowings		75,175		—		77,279		—		77,279
Accrued interest payable		441		—		441		—		441

OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—

(Dollars in thousands)	Carrying		Fair Value Measurements at December 31, 2015
	Amount		Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Cash and due from banks	$	7,474	$	7,474	$	—	$	—	$	7,474
Interest-bearing deposits in other banks		1,534		—		1,534		—		1,534
Time deposits with other banks		1,482		—		1,482		—		1,482
Investment securities available-for-sale		385,241		2,007		383,234		—		385,241
Investment securities held-to-maturity		26		—		27		—		27
Restricted investment in bank stocks		5,742		—		5,742		—		5,742
Net loans		509,871		—		—		498,671		498,671
Mortgage servicing rights		493		—		—		493		493
Accrued interest receivable		4,086		—		4,086		—		4,086

FINANCIAL LIABILITIES:
Deposits		720,598		—		720,341		—		720,341
Short-term borrowings		80,539		—		80,539		—		80,539
Long-term borrowings		70,232		—		71,302		—		71,302
Accrued interest payable		382		—		382		—		382

OFF-BALANCE SHEET FINANCIAL INSTRUMENTS		—		—		—		—		—