FAIR VALUE (Tables) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

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, 2018 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	$	15,451	$	—	$	15,451	$	—
Mortgage-backed securities, residential	207,819		—		207,819		—
Obligations of states and political subdivisions	51,617		—		51,617		—
Corporate bonds and notes	249		—		249		—
SBA loan pools	3,848		—		3,848		—
Total available for sale securities	$	278,984	$	—	$	278,984	$	—

Equity investments	$	1,225	$	1,225	$	—	$	—
Derivative assets	1,820		—		1,820		—

Financial Liabilities:
Derivative liabilities	$	1,870	$	—	$	1,820	$	50

There were no transfers between Level 1 and Level 2 during the three-month period ended March 31, 2018.



			Fair Value Measurement at December 31, 2017 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	$	15,491	$	—	$	15,491	$	—
Mortgage-backed securities, residential	219,909		—		219,909		—
Obligations of states and political subdivisions	53,132		—		53,132		—
Corporate bonds and notes	251		—		251		—
SBA loan pools	4,308		—		4,308		—
Total available for sale securities	$	293,091	$	—	$	293,091	$	—

Equity investments	$	1,192	$	1,192	$	—	$	—
Derivative assets	974		—		974		—

Financial Liabilities:
Derivative liabilities	$	1,049	$	—	$	974	$	75

Reconciliation of all assets measured at fair value

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, 2018 and March 31, 2017 (in thousands):



	Assets (Liabilities)
	Corporate Bonds and Notes				Derivative Liabilities
	March 31, 2018		March 31, 2017		March 31, 2018			March 31, 2017
Balance of recurring Level 3 assets at January 1	$	—	$	250	$	(75	)	$	(68	)
Total gains or losses for the period:
Included in earnings - other non-interest income	—		—		25			3
Included in other comprehensive income	—		1		—			—
Balance of recurring Level 3 assets at March 31,	$	—	$	251	$	(50	)	$	(65	)

Reconciliation of liabilities measured at fair value



	Assets (Liabilities)
	Corporate Bonds and Notes				Derivative Liabilities
	March 31, 2018		March 31, 2017		March 31, 2018			March 31, 2017
Balance of recurring Level 3 assets at January 1	$	—	$	250	$	(75	)	$	(68	)
Total gains or losses for the period:
Included in earnings - other non-interest income	—		—		25			3
Included in other comprehensive income	—		1		—			—
Balance of recurring Level 3 assets at March 31,	$	—	$	251	$	(50	)	$	(65	)

Distribution of shares of treasury stock for directors' compensation

$ 301

$ 269

Nonrecurring fair value measurement, valuation techniques

The following tables presents information related to Level 3 non-recurring fair value measurement at March 31, 2018 and December 31, 2017 (in thousands):



Description	Fair Value at March 31, 2018		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at March 31, 2018
Impaired loans:
Commercial and agricultural:
Commercial and industrial	$	12	Sales comparison	Discount to appraised value	0.00% - 0.00% [0.00%]
Commercial mortgages:
Commercial mortgages	338		Sales comparison	Discount to appraised value	21.98% - 69.81% [55.51%]
	$	350

OREO:
Commercial mortgages:
Commercial mortgages	$	1,474	Sales comparison	Discount to appraised value	10.00% - 22.95% [19.79%]
Residential mortgages	283		Sales comparison	Discount to appraised value	17.28% - 39.78% [20.39%]
Consumer loans:
Home equity lines and loans	75		Sales comparison	Discount to appraised value	20.80% - 20.80% [20.80%]
	$	1,832



Description	Fair Value at December 31, 2017		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2017
Impaired loans:
Commercial and agricultural:
Commercial and industrial	$	96	Sales comparison	Discount to appraised value	0.00% - 36.07% [33.02%]
Commercial mortgages:
Commercial mortgages	411		Sales comparison	Discount to appraised value	10.00% - 89.98% [51.35%]
	$	507

OREO:
Commercial mortgages:
Commercial mortgages	$	1,483	Sales comparison	Discount to appraised value	10.00% - 22.95% [19.75%]
Residential mortgages	382		Sales comparison	Discount to appraised value	17.28% - 27.97% [20.77%]
Consumer loans:
Home equity lines and loans	75		Sales comparison	Discount to appraised value	20.80% - 20.80% [20.80%]
	$	1,940

The following table presents information related to Level 3 recurring fair value measurements at March 31, 2018 and December 31, 2017 (in thousands):



Description	Fair Value at March 31, 2018		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at March 31, 2018
Derivative liabilities	$	50	Historical trend	Credit default rate	5.52% - 5.52% [5.52%]



Description	Fair Value at December 31, 2017		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2017
Derivative liabilities	$	75	Historical trend	Credit default rate	5.67% - 5.67% [5.67%]

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, 2018 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)		Total Gains (Losses)
Impaired Loans:
Commercial and agricultural:
Commercial and industrial	$	12	$	—	$	—	$	12	$	—
Commercial mortgages:
Commercial mortgages	338		—		—		338		(59		)
Total impaired loans	$	350	$	—	$	—	$	350	$	(59	)
Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	1,474	$	—	$	—	$	1,474	$	—
Residential mortgages	283		—		—		283		—
Consumer loans:
Home equity lines and loans	75		—		—		75		—
Total other real estate owned, net	$	1,832	$	—	$	—	$	1,832	$	—



			Fair Value Measurement at December 31, 2017 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)		Total Gains (Losses)
Impaired Loans:
Commercial and agricultural:
Commercial and industrial	$	96	$	—	$	—	$	96	$	(70	)
Commercial mortgages:
Commercial mortgages	411		—		—		411		(105		)
Total impaired loans	$	507	$	—	$	—	$	507	$	(175	)
Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	1,483	$	—	$	—	$	1,483	$	(43	)
Residential mortgages	382		—		—		382		—
Consumer loans:
Home equity lines and loans	75		—		—		75		—
Total other real estate owned, net	$	1,940	$	—	$	—	$	1,940	$	(43	)

Carrying value and estimated fair value of financial instruments

The carrying amounts and estimated fair values of other financial instruments, at March 31, 2018 and December 31, 2017, are as follows (in thousands):



	March 31, 2018
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	$	25,473	$	25,473	$	—	$	—	$	25,473
Interest-bearing deposits in other financial institutions	5,531		5,531		—		—		5,531
Equity investments	1,225		1,225		—		—		1,225
Securities available for sale	278,984		—		278,984		—		278,984
Securities held to maturity	3,640		—		1,822		1,085		2,907
FHLBNY and FRBNY stock	3,097		—		—		—		N/A
Loans, net and loans held for sale	1,298,711		—		—		1,272,169		1,272,169
Accrued interest receivable	4,624		—		1,006		3,618		4,624
Derivative assets	1,820		—		1,820		—		1,820

Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,401,753	$	1,401,753	$	—	$	—	$	1,401,753
Time deposits	116,447		—		116,677		—		116,677
Securities sold under agreements to repurchase	10,000		—		10,019		—		10,019
Accrued interest payable	119		24		95		—		119
Derivative liabilities	1,870		—		1,820		50		1,870

(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, 2017
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	$	27,966	$	27,966	$	—	$	—	$	27,966
Interest-bearing deposits in other financial institutions	2,763		2,763		—		—		2,763
Equity investments	1,192		1,192		—		—		1,192
Securities available for sale	293,091		—		293,091		—		293,091
Securities held to maturity	3,781		—		1,830		1,946		3,776
FHLBNY and FRBNY stock	5,784		—		—		—		N/A
Loans, net	1,291,205		—		—		1,289,584		1,289,584
Loans held for sale	542		—		542		—		542
Accrued interest receivable	4,642		1		867		3,774		4,642
Derivative assets	974		—		974		—		974

Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,349,084	$	1,349,084	$	—	$	—	$	1,349,084
Time deposits	118,362		—		118,598		—		118,598
Securities sold under agreements to repurchase	10,000		—		10,058		—		10,058
FHLBNY overnight advances	57,700		—		57,700		—		57,700
FHLBNY term advances	2,000		—		2,001		—		2,001
Accrued interest payable	148		24		124		—		148
Derivative liabilities	1,049		—		974		75		1,049