BRANCH ACQUISITION

12 Months Ended

Dec. 31, 2013

BRANCH ACQUISITION [Abstract]

BRANCH ACQUISITION

(20)BRANCH ACQUISITION

On July 10, 2013, the Bank entered into an agreement with Bank of America to acquire six branch offices in Auburn, Cortland, Ithaca and Seneca Falls, New York.  Under the terms of the agreement, the Bank purchased the related branch premises and certain performing loans, and assumed the related deposits.  The transaction was completed on November 23, 2013.  The assets acquired and deposits assumed in the transaction were recorded at their estimated fair values as follows:

Cash, net	$	170,904,285
Loans		1,240,224
Bank premises and equipment		4,081,292
Core deposit intangible asset		2,154,670
Other assets		349,091
Total assets acquired	$	178,729,562
Deposits assumed	$	177,749,174
Time deposit premium		263,387
Other liabilities		717,001
Total liabilities assumed	$	178,729,562

The transaction was accounted for using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at their estimated fair values on the acquisition date.  Fair values are preliminary and in certain cases are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to fair values becomes available.

The operating results of the acquired branch offices included in the Corporation’s consolidated statement of income for the year ended December 31, 2013 reflect only the amounts from the acquisition date through December 31, 2013.

The core deposit intangible asset of $2,154,670 will be amortized on an accelerated basis over a period of approximately seven years.  The time deposit premium of $263,387 will be accreted over the estimated remaining life of the related deposits as a reduction to interest expense.

Preliminary negative goodwill of $469,929 was recorded as a gain from bargain purchase, was calculated as the purchase discount after adjusting for the fair value of net assets acquired.