FAIR VALUES (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

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



			Fair Value Measurement at December 31, 2019 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	$	—	$	—	$	—	$	—
Mortgage-backed securities, residential	225,234		—		225,234		—
Obligations of states and political subdivisions	42,845		—		42,845		—
Corporate bonds and notes	250		—		250		—
SBA loan pools	15,761		—		15,761		—
Total available for sale securities	$	284,090	$	—	$	284,090	$	—

Equity Investments	$	1,442	$	1,442	$	—	$	—
Derivative assets	6,466		—		6,466		—

Financial Liabilities:
Derivative liabilities	$	6,831	$	—	$	6,466	$	365



			Fair Value Measurement at December 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	$	5,472	$	—	$	5,472	$	—
Mortgage-backed securities, residential	183,192		—		183,192		—
Obligations of states and political subdivisions	44,152		—		44,152		—
Corporate bonds and notes	247		—		247		—
SBA loan pools	9,195		—		9,195		—
Total available for sale securities	$	242,258	$	—	$	242,258	$	—

Equity investments	$	1,075	$	1,075	$	—	$	—
Derivative assets	3,142		—		3,142		—

Financial Liabilities:
Derivative liabilities	$	3,282	$	—	$	3,142	$	140

Fair Value, Liabilities 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 year ended December 31:



	Assets (Liabilities)
	Corporate Bonds and Notes				Derivative Liabilities
(in thousands)	2019		2018		2019			2018
Balance of recurring Level 3 assets at January 1	$	—	$	—	$	(140	)	$	(75	)
Derivative instruments entered into	—		—		(43		)	(1		)
Total gains or losses for the period:
Included in earnings - other non-interest income	—		—		(182		)	(64		)
Balance of recurring Level 3 assets at December 31	$	—	$	—	$	(365	)	$	(140	)

Fair Value, 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 year ended December 31:



	Assets (Liabilities)
	Corporate Bonds and Notes				Derivative Liabilities
(in thousands)	2019		2018		2019			2018
Balance of recurring Level 3 assets at January 1	$	—	$	—	$	(140	)	$	(75	)
Derivative instruments entered into	—		—		(43		)	(1		)
Total gains or losses for the period:
Included in earnings - other non-interest income	—		—		(182		)	(64		)
Balance of recurring Level 3 assets at December 31	$	—	$	—	$	(365	)	$	(140	)

The following table presents information related to Level 3 recurring fair value measurement at December 31, 2019 and December 31, 2018 (in thousands):



Description	Fair Value at December 31, 2019		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2019
Derivative liabilities	$	365	Historical trend	Credit default rate	7.30% - 7.30% [7.30%]



Description	Fair Value at December 31, 2018		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2018
Derivative liabilities	$	140	Historical trend	Credit default rate	7.46% - 7.46% [7.46%]

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



			Fair Value Measurement at December 31, 2019 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 mortgages:
Commercial mortgages	$	1,554	$	—	$	—	$	1,554	$	(1,597	)
Total impaired loans	$	1,554	$	—	$	—	$	1,554	$	(1,597	)

Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	111	$	—	$	—	$	111	$	—
Residential mortgages	284		—		—		284		(12		)
Consumer loans:
Home equity lines and loans	122		—		—		122		—
Total other real estate owned, net	$	517	$	—	$	—	$	517	$	(12	)



			Fair Value Measurement at December 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 mortgages:
Commercial mortgages	$	1,456	—		—		$	1,456	$	240
Total impaired loans	$	1,456	$	—	$	—	$	1,456	$	240

Other real estate owned:
Commercial mortgages:
Commercial mortgages	$	213	$	—	$	—	$	213	$	—
Residential mortgages	204		—		—		204		—
Consumer loans:
Home equity lines and loans	157		—		—		157		(14		)
Total other real estate owned, net	$	574	$	—	$	—	$	574	$	(14	)

The following table presents information related to Level 3 non-recurring fair value measurement at December 31, 2019 and 2018 (in thousands):



Asset	Fair Value at December 31, 2019		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2019
Impaired loans:
Commercial mortgages:
Commercial mortgages	$	1,554	Sales comparison	Discount to appraised value	10.00% - 10.00% [10.00%]
	$	1,554

OREO:
Commercial mortgages:
Commercial mortgages	$	111	Sales comparison	Discount to appraised value	20.80% - 20.80% [20.80%]
Residential mortgages	284		Sales comparison	Discount to appraised value	20.80% - 35.29% [24.09%]
Consumer loans:
Home equity lines and loans	122		Sales comparison	Discount to appraised value	20.80% - 20.80% [20.80%]
	$	517



Asset	Fair Value at December 31, 2018		Valuation Technique	Unobservable Inputs	Range [Weighted Average] at December 31, 2018.
Impaired loans:
Commercial mortgages:
Commercial mortgages	$	1,456	Sales comparison	Discount to appraised value	11.76% - 11.76% [11.76%]
	$	1,456

OREO:
Commercial mortgages:
Commercial mortgages	$	213	Sales comparison	Discount to appraised value	10.00% - 24.80% [17.72%]
Residential mortgages	204		Sales comparison	Discount to appraised value	20.80% - 39.78% [22.94%]
Consumer loans:
Home equity lines and loans	157		Sales comparison	Discount to appraised value	20.80% - 20.80% [20.80%]
	$	574

Carrying Value and Estimated Fair Value of Other Financial Instruments

The carrying amounts and estimated fair values of other financial instruments, at December 31, 2019 and December 31, 2018, are as follows (in thousands):



			Fair Value Measurements at December 31, 2019 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	$	25,203	$	25,203	$	—	$	—	$	25,203
Interest-bearing deposits in other financial institutions	96,701		96,701		—		—		96,701
Equity investments	2,174		2,174		—		—		2,174
Securities available for sale	284,090		—		284,090		—		284,090
Securities held to maturity	3,115		—		2,094		1,045		3,139
FHLBNY and FRBNY stock	3,099		—		—		—		N/A
Loans, net and loans held for sale	1,286,926		—		—		1,285,215		1,285,215
Accrued interest receivable	4,633		63		885		3,685		4,633
Derivative assets	6,466		—		6,466		—		6,466

Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,410,962	$	1,410,962	$	—	$	—	$	1,410,962
Time deposits	161,176		—		163,761		—		163,761
Accrued interest payable	299		27		272		—		299
Derivative liabilities	6,831		—		6,466		365		6,831

(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, 2018 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	$	33,040	$	33,040	$	—	$	—	$	33,040
Interest-bearing deposits in other financial institutions	96,932		96,932		—		—		96,932
Equity investments	1,909		1,909		—		—		1,909
Securities available for sale	242,258		—		242,258		—		242,258
Securities held to maturity	4,875		—		1,838		3,020		4,858
FHLBNY and FRBNY stock	3,138		—		—		—		N/A
Loans, net and loans held for sale	1,293,464		—		—		1,287,495		1,287,495
Accrued interest receivable	4,480		80		697		3,703		4,480
Derivative assets	3,142		—		3,142		—		3,142

Financial liabilities:
Deposits:
Demand, savings, and insured money market accounts	$	1,419,011	$	1,419,011	$	—	$	—	$	1,419,011
Time deposits	150,226		—		150,938		—		150,938
Securities sold under agreements to repurchase	—		—		—		—		—
FHLBNY overnight advances	—		—		—		—		—
FHLBNY term advances	—		—		—		—		—
Accrued interest payable	232		26		206		—		232
Derivative liabilities	3,282		—		3,142		140		3,282