FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2014

FAIR VALUE [Abstract]

Summary of assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands):

			Fair Value Measurement at June 30, 2014 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Obligations of U.S. Government and U.S.   Government sponsored enterprises	$	167,946	$	31,303	$	136,643	$	-
Mortgage-backed securities, residential		67,924		-		67,924		-
Collateralized mortgage obligations		614		-		614		-
Obligations of states and political subdivisions		35,947		-		35,947		-
Corporate bonds and notes		2,655		-		2,655		-
SBA loan pools		1,398		-		1,398		-
Trust Preferred securities		2,034		-		2,034		-
Corporate stocks		7,880		7,462		418		-
Total available for sale securities	$	286,398	$	38,765	$	247,633	$	-
Trading assets	$	450	$	450	$	-	$	-

			Fair Value Measurement at December 31, 2013 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Obligations of U.S. Government and U.S.   Government sponsored enterprises	$	188,106	$	31,262	$	156,844	$	-
Mortgage-backed securities, residential		104,356		-		104,356		-
Collateralized mortgage obligations		1,015		-		1,015		-
Obligations of states and political subdivisions		38,376		-		38,376		-
Corporate bonds and notes		2,946		-		2,946		-
SBA loan pools		1,488		-		1,488		-
Trust Preferred securities		2,034		-		2,034		-
Corporate stocks		7,695		7,279		416		-
Total available for sale securities	$	346,016	$	38,541	$	307,475	$	-
Trading assets	$	366	$	366	$	-	$	-

Summary of assets and liabilities measured at fair value on a non-recurring basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below (dollars in thousands):

			Fair Value Measurement at June 30, 2014 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired Loans:
Commercial and agricultural:
Commercial and industrial	$	87	$	-	$	-	$	87
Commercial mortgages:
Commercial mortgages		1,044		-		-		1,044
Consumer loans:
Home equity lines and loans		54		-		-		54
Total Impaired Loans	$	1,185	$	-	$	-	$	1,185
Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	631	$	-	$	-	$	631
Consumer loans:
Home equity lines and loans		2		-		-		2
Total Other Real Estate Owned, net	$	633	$	-	$	-	$	633

			Fair Value Measurement at December 31, 2013 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired Loans:
Commercial and agricultural:
Commercial and industrial	$	460	$	-	$	-	$	460
Commercial mortgages:
Commercial mortgages		485		-		-		485
Consumer loans:
Home equity lines and loans		54		-		-		54
Total Impaired Loans	$	999	$	-	$	-	$	999
Other real estate owned:
Commercial and agricultural:
Commercial and industrial	$	101	$	-	$	-	$	101
Commercial mortgages:
Commercial mortgages		266		-		-		266
Residential mortgages		106		-		-		106
Consumer loans:
Home equity lines and loans		65		-		-		65
Total Other Real Estate Owned, net	$	538	$	-	$	-	$	538

Nonrecurring fair value measurement, valuation techniques

The following table presents information related to Level 3 non-recurring fair value measurement at June 30, 2014 and December 31, 2013 (dollars in thousands):

Description	Fair Value at June 30, 2014		Technique	Unobservable Inputs
Impaired loans	$	1,185	Third party appraisals		1	Management discount based on underlying collateral characteristics and market conditions
Other real estate owned	$	633	Third party appraisals		1	Estimated holding  period
					2	Estimated closing costs

Description	Fair Value at December 31, 2013		Technique	Unobservable Inputs
Impaired loans	$	999	Third party appraisals		1	Management discount based on underlying collateral characteristics and market conditions
Other real estate owned	$	538	Third party appraisals		1	Estimated holding  period
					2	Estimated closing costs

Carrying value and estimated fair value of financial instruments

The carrying amounts and estimated fair values of other financial instruments, at June 30, 2014 and December 31, 2013, are as follows (dollars in thousands):

	Fair Value Measurements at June 30, 2014 Using
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial   Institutions	$	35,981	$	35,981	$	-	$	-	$	35,981
Interest-bearing deposits in other   financial institutions		30,301		30,301		-		-		30,301
Trading assets		450		450		-		-		450
Securities available for sale		286,398		38,765		247,633		-		286,398
Securities held to maturity		5,274		-		5,632		-		5,632
FHLBNY and FRBNY stock		4,730		-		-		-		N/	A
Loans, net		1,070,721		-		-		1,097,547		1,097,547
Loans held for sale		914		-		914		-		914
Accrued interest receivable		3,797		143		1,291		2,363		3,797
Financial liabilities:
Deposits:
Demand, savings, and insured   money market accounts	$	1,082,913	$	1,082,913	$	-	$	-	$	1,082,913
Time deposits		225,515		-		226,199		-		226,199
Securities sold under agreements   to repurchase		30,746		-		31,986		-		31,986
FHLBNY term advances		24,136		-		25,148		-		25,148
Accrued interest payable		290		13		277		-		290
(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

	Fair Value Measurements at December 31, 2013 Using
Financial Assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	31,600	$	31,600	$	-	$	-	$	31,600
Interest-bearing deposits in other   financial institutions		20,009		20,009		-		-		20,009
Trading assets		366		366		-		-		366
Securities available for sale		346,016		38,541		307,475		-		346,016
Securities held to maturity		6,495		-		6,930		-		6,930
FHLBNY and FRBNY stock		4,482		-		-		-		N/	A
Loans, net		983,090		-		-		1,008,826		1,008,826
Loans held for sale		695		-		695		-		695
Accrued interest receivable		4,166		145		1,468		2,553		4,166
Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,021,764	$	1,021,764	$	-	$	-	$	1,021,764
Time deposits		244,492		-		245,482		-		245,482
Securities sold under agreements   to repurchase		32,701		-		33,636		-		33,636
FHLBNY Advances		25,243		-		26,064		-		26,064
Accrued interest payable		336		15		321		-		336
(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.