FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2016

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 (in thousands):



			Fair Value Measurement at March 31, 2016 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	$	85,357	$	—	$	85,357	$	—
Mortgage-backed securities, residential	193,028		—		193,028		—
Obligations of states and political subdivisions	44,246		—		44,246		—
Corporate bonds and notes	754		—		502		252
SBA loan pools	628		—		628		—
Corporate stocks	471		54		417		—
Total available for sale securities	$	324,484	$	54	$	324,178	$	252

Trading assets	$	734	$	734	$	—	$	—
Derivative assets	87		—		87		—

Financial Liabilities:
Derivative liabilities	$	171	$	—	$	87	$	84



			Fair Value Measurement at December 31, 2015 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	$	100,166	$	14,784	$	85,382	$	—
Mortgage-backed securities, residential	198,366		—		198,366		—
Obligations of states and political subdivisions	44,426		—		44,426		—
Corporate bonds and notes	752		—		504		248
SBA loan pools	647		—		647		—
Corporate stocks	463		56		407		—
Total available for sale securities	$	344,820	$	14,840	$	329,732	$	248

Trading assets	$	701	$	701	$	—	$	—
Derivative assets	15		—		15		—

Financial Liabilities:
Derivative liabilities	$	63	$	—	$	15	$	48

Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three month periods ended March 31, 2016 and March 31, 2015:



	Assets (Liabilities)
	Corporate Bonds and Notes				Derivative Liabilities
(in thousands)	March 31, 2016		March 31, 2015		March 31, 2016			March 31, 2015
Balance of recurring Level 3 assets at January 1	$	248	$	—	$	(48	)	$	(18	)
Derivative instruments entered into	—		—		(2		)	—
Total gains or losses for the period:
Included in earnings - other non-interest income	—		—		(34		)	(15		)
Included in other comprehensive income	4		—		—			—
Transfers into Level 3	—		—		—			—
Balance of recurring Level 3 assets at March 31	$	252	$	—	$	(84	)	$	(33	)

Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation



	Assets (Liabilities)
	Corporate Bonds and Notes				Derivative Liabilities
(in thousands)	March 31, 2016		March 31, 2015		March 31, 2016			March 31, 2015
Balance of recurring Level 3 assets at January 1	$	248	$	—	$	(48	)	$	(18	)
Derivative instruments entered into	—		—		(2		)	—
Total gains or losses for the period:
Included in earnings - other non-interest income	—		—		(34		)	(15		)
Included in other comprehensive income	4		—		—			—
Transfers into Level 3	—		—		—			—
Balance of recurring Level 3 assets at March 31	$	252	$	—	$	(84	)	$	(33	)

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 (in thousands):



			Fair Value Measurement at March 31, 2016 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 mortgages:
Commercial mortgages	$	612	$	—	$	—	$	612
Consumer loans:
Home equity lines and loans	200		—		—		200
Total impaired loans	$	812	$	—	$	—	$	812
Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	1,491	$	—	$	1,491	$	—
Residential mortgages	134		—		—		134
Consumer loans:
Home equity lines and loans	17		—		—		17
Total other real estate owned, net	$	1,642	$	—	$	1,491	$	151



			Fair Value Measurement at December 31, 2015 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 mortgages:
Commercial mortgages	$	2,629	$	—	$	—	$	2,629
Consumer loans:
Home equity lines and loans	287		—		—		287
Total impaired loans	$	2,916	$	—	$	—	$	2,916
Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	1,491	$	—	$	1,491	$	—
Residential mortgages	39		—		—		39
Total other real estate owned, net	$	1,530	$	—	$	1,491	$	39

Nonrecurring fair value measurement, valuation techniques

The following tables presents information related to Level 3 non-recurring fair value measurement at March 31, 2016 and December 31, 2015 (in thousands):



Description	Fair Value at March 31, 2016		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at March 31, 2016
Impaired loans:
Commercial mortgages:
Commercial mortgages	$	612	Sales comparison	Discount to appraised value	11.75% - 18.55% [16.65%]
Consumer loans:
Home equity lines and loans	200		Sales comparison	Discount to appraised value	24.92% - 24.92% [24.92%]
	$	812

OREO
Residential mortgages	$	134	Sales comparison	Discount to appraised value	20.80% - 27.97% [23.07%]
Consumer loans:
Home equity lines and loans	17		Sales comparison	Discount to appraised value	20.80% - 20.80% [20.80%]
	$	151



Description	Fair Value at December 31, 2015		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2015
Impaired loans:
Commercial mortgages:
Commercial mortgages	$	2,629	Sales comparison	Discount to appraised value	10.00% - 17.19% [16.06%]
Consumer loans:
Home equity lines and loans	287		Sales comparison	Discount to appraised value	18.04% - 18.04% [18.04%]
	$	2,916

OREO:
Residential mortgages	$	39	Sales comparison	Discount to appraised value	22.30% - 22.30% [22.30%]
	$	39

The following table presents information related to Level 3 recurring fair value measurements at March 31, 2016 and December 31, 2015 (in thousands):



Description	Fair Value at March 31, 2016		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at March 31, 2016
Corporate bonds and notes	$	252	Discounted cash flow	Credit spread	1.73% - 1.73% [1.73%]

Derivative liabilities	$	84	Historical trend	Credit default rate	5.83% - 5.83% [5.83%]



Description	Fair Value at December 31, 2015		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2015
Corporate bonds and notes	$	248	Discounted cash flow	Credit spread	1.73% - 1.73% [1.73%]

Derivative liabilities	$	48	Historical trend	Credit default rate	5.83% - 5.83% [5.83%]

Carrying value and estimated fair value of financial instruments

The carrying amounts and estimated fair values of other financial instruments, at March 31, 2016 and December 31, 2015, are as follows (in thousands):



	March 31, 2016
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	$	26,471	$	26,471	$	—	$	—	$	26,471
Interest-bearing deposits in other financial institutions	29,388		29,388		—		—		29,388
Trading assets	734		734		—		—		734
Securities available for sale	324,484		54		324,178		252		324,484
Securities held to maturity	4,577		—		—		4,863		4,863
FHLBNY and FRBNY stock	4,179		—		—		—		N/A
Loans, net	1,172,366		—		—		1,196,894		1,196,894
Loans held for sale	593		—		593		—		593
Accrued interest receivable	4,386		—		1,488		2,898		4,386
Derivative assets	87		—		87		—		87

Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,270,711	$	1,270,711	$	—	$	—	$	1,270,711
Time deposits	163,541		—		164,001		—		164,001
Securities sold under agreements to repurchase	28,825		—		29,533		—		29,533
FHLBNY term advances	19,175		—		19,637		—		19,637
Accrued interest payable	207		17		190		—		207
Derivative liabilities	171		—		87		84		171

(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.



	December 31, 2015
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	$	24,886	$	24,886	$	—	$	—	$	24,886
Interest-bearing deposits in other financial institutions	1,299		1,299		—		—		1,299
Trading assets	701		701		—		—		701
Securities available for sale	344,820		14,840		329,732		248		344,820
Securities held to maturity	4,566		—		—		4,822		4,822
FHLBNY and FRBNY stock	4,797		—		—		—		N/A
Loans, net	1,154,373		—		—		1,178,081		1,178,081
Loans held for sale	1,076		—		1,076		—		1,076
Accrued interest receivable	4,015		39		1,141		2,835		4,015
Derivative assets	15		—		15		—		15

Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,234,216	$	1,234,216	$	—	$	—	$	1,234,216
Time deposits	166,079		—		166,551		—		166,551
Securities sold under agreements to repurchase	28,453		—		29,128		—		29,128
FHLBNY overnight advances	13,900		—		13,901		—		13,901
FHLBNY term advances	19,203		—		19,658		—		19,658
Accrued interest payable	209		17		192		—		209
Derivative liabilities	63		—		15		48		63