10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended    March 31, 2016

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to ______

Commission file number    001-35021

EVANS BANCORP, INC..                

(Exact name of registrant as specified in its charter)

New York16-1332767

(State or other jurisdiction of         (I.R.S. Employer

incorporation or organization)       Identification No.)

One Grimsby Drive, Hamburg, NY 14075

(Address of principal executive offices)  (Zip Code)

(716) 926-2000.

(Registrant's telephone number, including area code)

Not Applicable

 (Former name, former address and former fiscal year, if changed

 since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐Accelerated filer ☒

Non-accelerated filer ☐ (Do not check if smaller reporting company) Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐  No  ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

Common Stock, $.50 par value 4,284,566 shares as of May 2, 2016

INDEX

EVANS BANCORP, INC. AND SUBSIDIARIES

PART 1.   FINANCIAL INFORMATION		PAGE
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheets – March 31, 2016 and December 31, 2015	1
	Unaudited Consolidated Statements of Income – Three months ended March 31, 2016 and 2015	2
	Unaudited Statements of Consolidated Comprehensive Income – Three months ended March 31, 2016 and 2015	3
	Unaudited Consolidated Statements of Changes in Stockholder’s Equity – Three months ended March 31, 2016 and 2015	4
	Unaudited Consolidated Statements of Cash Flows - Three months ended March 31, 2016 and 2015	5
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 6.	Exhibits	45
	Signatures	46

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2016 AND DECEMBER 31, 2015
(in thousands, except share and per share amounts)
	March 31,		December 31,
	2016		2015
ASSETS
Cash and due from banks	$	11,287	$	11,813
Interest-bearing deposits at banks		22,105		10,808
Securities:
Available for sale, at fair value (amortized cost: $112,874 at March 31, 2016;		114,687		97,141
$96,374 at December 31, 2015)
Held to maturity, at amortized cost (fair value: $1,595 at March 31, 2016;		1,607		1,617
$1,584 at December 31, 2015)
Federal Home Loan Bank common stock, at cost		1,296		1,296
Federal Reserve Bank common stock, at cost		1,492		1,487
Loans, net of allowance for loan losses of $13,119 at March 31, 2016
and $12,883 at December 31, 2015		783,654		761,101
Properties and equipment, net of accumulated depreciation of $16,072 at March 31, 2016
and $15,799 at December 31, 2015		11,078		11,051
Goodwill		8,101		8,101
Bank-owned life insurance		21,114		20,978
Other assets		13,494		13,714
TOTAL ASSETS	$	989,915	$	939,107
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand	$	174,276	$	183,098
NOW		95,622		83,674
Regular savings		463,672		439,993
Time		115,479		96,217
Total deposits		849,049		802,982
Securities sold under agreement to repurchase		12,894		10,821
Other borrowings		10,000		10,000
Other liabilities		14,482		12,718
Junior subordinated debentures		11,330		11,330
Total liabilities		897,755		847,851
CONTINGENT LIABILITIES AND COMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.50 par value, 10,000,000 shares authorized; 4,279,296
and 4,260,203 shares issued at March 31, 2016 and December 31, 2015,
respectively, and 4,279,210 and 4,257,179 outstanding at March 31, 2016
and December 31, 2015, respectively		2,142		2,132
Capital surplus		43,435		43,318
Treasury stock, at cost, 86 and 3,024 shares at March 31, 2016 and		-		-
December 31, 2015, respectively
Retained earnings		47,704		47,616
Accumulated other comprehensive loss, net of tax		(1,121)		(1,810)
Total stockholders' equity		92,160		91,256
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	989,915	$	939,107
See Notes to Unaudited Consolidated Financial Statements

1

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands, except share and per share amounts)
	Three Months Ended March 31,
	2016		2015
INTEREST INCOME
Loans	$	8,730	$	7,813
Interest bearing deposits at banks		11		1
Securities:
Taxable		377		405
Non-taxable		238		237
Total interest income		9,356		8,456
INTEREST EXPENSE
Deposits		959		781
Other borrowings		50		15
Junior subordinated debentures		87		79
Total interest expense		1,096		875
NET INTEREST INCOME		8,260		7,581
PROVISION FOR LOAN LOSSES		208		201
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		8,052		7,380
NON-INTEREST INCOME
Bank charges		443		409
Insurance service and fees		1,748		1,829
Gain on loans sold		15		22
Bank-owned life insurance		136		137
Interchange fee income		318		294
Other		334		375
Total non-interest income		2,994		3,066
NON-INTEREST EXPENSE
Salaries and employee benefits		5,514		4,794
Occupancy		699		695
Repairs and maintenance		176		173
Advertising and public relations		285		211
Professional services		580		511
Technology and communications		422		259
Litigation expense		(100)		-
FDIC insurance		159		147
Other		793		722
Total non-interest expense		8,528		7,512
INCOME BEFORE INCOME TAXES		2,518		2,934
INCOME TAX PROVISION		804		1,029
NET INCOME	$	1,714	$	1,905
Net income per common share-basic	$	0.40	$	0.45
Net income per common share-diluted	$	0.40	$	0.44
Cash dividends per common share	$	0.38	$	0.36
Weighted average number of common shares outstanding		4,263,109		4,213,509
Weighted average number of diluted shares outstanding		4,328,034		4,291,676
See Notes to Unaudited Consolidated Financial Statements

2

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands, except share and per share amounts)
	Three Months Ended March 31,
	2016			2015
NET INCOME		$	1,714		$	1,905
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gain on available-for-sale securities:
Unrealized gain on available-for-sale securities	649			331
Less: Reclassification of gain on sale of securities	-			-
			649			331
Defined benefit pension plans:
Amortization of prior service cost	5			5
Amortization of actuarial assumptions	35			24
Total			40			29
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX			689			360
COMPREHENSIVE INCOME		$	2,403		$	2,265
See Notes to Unaudited Consolidated Financial Statements

3

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands, except share and per share amounts)
							Accumulated
							Other
	Common		Capital		Retained		Comprehensive		Treasury
	Stock		Surplus		Earnings		Income (Loss)		Stock		Total
Balance, December 31, 2014	$	2,123	$	43,102	$	42,822	$	(1,508)	$	(751)	$	85,788
Net Income						1,905						1,905
Other comprehensive income								360				360
Cash dividends ($0.36 per common share)						(1,517)						(1,517)
Stock options and restricted stock expense				117								117
Excess tax benefit from stock-based compensation				14								14
Repurchased 1,397 shares in Treasury stock										(34)		(34)
Reissued 20,942 restricted shares				(503)						503		-
Reissued 4,872 shares through stock option exercise				(48)						116		68
Balance, March 31, 2015	$	2,123	$	42,682	$	43,210	$	(1,148)	$	(166)	$	86,701
Balance, December 31, 2015	$	2,132	$	43,318	$	47,616	$	(1,810)	$	-	$	91,256
Net Income						1,714						1,714
Other comprehensive income								689				689
Cash dividends ($0.38 per common share)						(1,626)						(1,626)
Stock options and restricted stock expense				118								118
Excess tax benefit from stock-based compensation				9								9
Issued 19,093 restricted shares		10		(10)								-
Reissued 2,938 restricted shares, net of forfeitures												-
Balance, March 31, 2016	$	2,142	$	43,435	$	47,704	$	(1,121)	$	-	$	92,160
See Notes to Unaudited Consolidated Financial Statements

4

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands)
	Three Months Ended March 31,
		2016		2015
OPERATING ACTIVITIES:
Interest received	$	9,090	$	8,256
Fees received		2,839		2,779
Interest paid		(1,068)		(896)
Cash paid to employees and vendors		(8,353)		(7,804)
Income taxes paid		(9)		(1)
Proceeds from sale of loans held for resale		880		2,658
Originations of loans held for resale		(335)		(4,995)
Net cash provided by (used in) operating activities		3,044		(3)
INVESTING ACTIVITIES:
Available for sales securities:
Purchases		(20,471)		(4,244)
Proceeds from maturities, calls, and payments		3,883		2,451
Held to maturity securities:
Proceeds from maturities, calls, and payments		11		11
Additions to properties and equipment		(300)		(111)
Purchase of tax credit investment		(359)		(667)
Net increase in loans		(23,176)		(3,595)
Net cash used in investing activities		(40,412)		(6,155)
FINANCING ACTIVITIES:
Proceeds from (repayments of) borrowings, net		2,072		(16,803)
Net increase in deposits		46,067		72,723
Repurchase of treasury stock		-		(34)
Reissuance of treasury stock		-		68
Net cash provided by financing activities		48,139		55,954
Net increase in cash and cash equivalents		10,771		49,796
CASH AND CASH EQUIVALENTS:
Beginning of period		22,621		10,898
End of period	$	33,392	$	60,694

(continued)

5

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EVANS BANCORP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands)
	Three Months Ended March 31,
		2016		2015
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income	$	1,714	$	1,905
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization		359		356
Deferred tax expense		36		42
Provision for loan losses		208		201
Gain on loans sold		(15)		(22)
Stock options and restricted stock expense		118		117
Proceeds from sale of loans held for resale		880		2,658
Originations of loans held for resale		(335)		(4,995)
Changes in assets and liabilities affecting cash flow:
Other assets		561		327
Other liabilities		(482)		(592)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	3,044	$	(3)
See Notes to Unaudited Consolidated Financial Statements

6

PART 1 – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

EVANS BANCORP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

THREEMONTH PERIODS ENDED MARCH  31, 2016 AND 2015

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies followed by Evans Bancorp, Inc. (the “Company”), a financial holding company, and its two direct, wholly-owned subsidiaries: (i) Evans Bank, National Association (the “Bank”), and the Bank’s subsidiaries, Evans National Leasing, Inc. (“ENL”), Evans National Holding Corp. (“ENHC”) and Suchak Data Systems, LLC (“SDS”); and (ii) Evans National Financial Services, LLC (“ENFS”), and ENFS’s subsidiary, The Evans Agency, LLC (“TEA”), and TEA’s subsidiaries, Frontier Claims Services, Inc. (“FCS”) and ENB Associates Inc. (“ENBA”), in the preparation of the accompanying interim unaudited consolidated financial statements conform with U.S. generally accepted accounting principles (“GAAP”) and with general practice within the industries in which it operates.  Except as the context otherwise requires, the Company and its direct and indirect subsidiaries are collectively referred to in this report as the “Company.”

The results of operations for the three and three month periods ended March  31, 2016 are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements and the Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015.

7

2. SECURITIES

The amortized cost of securities and their approximate fair value at March  31, 2016 and December 31, 2015 were as follows:

	March 31, 2016
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. government agencies	$	24,835	$	387	$	(15)	$	25,207
States and political subdivisions		36,659		1,046		(23)		37,682
Total debt securities	$	61,494	$	1,433	$	(38)	$	62,889
Mortgage-backed securities:
FNMA	$	18,427	$	276	$	(26)	$	18,677
FHLMC		4,393		96		(32)		4,457
GNMA		11,044		120		(30)		11,134
CMO		17,516		116		(102)		17,530
Total mortgage-backed securities	$	51,380	$	608	$	(190)	$	51,798
Total securities designated as available for sale	$	112,874	$	2,041	$	(228)	$	114,687
Held to Maturity:
Debt securities
States and political subdivisions	$	1,607	$	12	$	(24)	$	1,595
Total securities designated as held to maturity	$	1,607	$	12	$	(24)	$	1,595

	December 31, 2015
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. government agencies	$	21,914	$	166	$	(234)	$	21,846
States and political subdivisions		36,838		874		(29)		37,683
Total debt securities	$	58,752	$	1,040	$	(263)	$	59,529
Mortgage-backed securities:
FNMA	$	12,312	$	168	$	(25)	$	12,455
FHLMC		4,629		61		(56)		4,634
GNMA		7,047		82		(61)		7,068
CMO		13,634		24		(203)		13,455
Total mortgage-backed securities	$	37,622	$	335	$	(345)	$	37,612
Total securities designated as available for sale	$	96,374	$	1,375	$	(608)	$	97,141
Held to Maturity:
Debt securities
States and political subdivisions	$	1,617	$	6	$	(39)	$	1,584
Total securities designated as held to maturity	$	1,617	$	6	$	(39)	$	1,584

8

Available for sale securities with a total fair value of $98.4 million and $86.0 million at March  31, 2016 and December 31, 2015, respectively, were pledged as collateral to secure public deposits and for other purposes required or permitted by law.

The Company uses the Federal Home Loan Bank of New York (“FHLBNY”) as its primary source of overnight funds and also has several long-term advances with FHLBNY.  The Company had $10.0 million in borrowed funds at FHLBNY at each ofMarch 31, 2016and December 31, 2015.  The Company has placed sufficient collateral in the form of residential and commercial real estate loans at FHLBNY that meet FHLB collateral requirements.  As a member of the Federal Home Loan Bank (“FHLB”) System, the Bank is required to hold stock in FHLBNY.  The Bank held $1.3 million in FHLBNY stock ateach of March  31, 2016 and December 31, 2015 at cost.  The Company regularly evaluates investments in FHLBNY for impairment, considering liquidity, operating performance, capital position, stock repurchase and dividend history.  As of March 31, 2016, the Bank’s investment in FHLBNY stock was not impaired.

The Bank, as a member of the Federal Reserve Bank (“FRB”) system, is currently required to purchase and hold shares of capital stock in the FRB in an amount equal to 6% of its capital and surplus. The Bank’s investment in FRBcapital stock totaled $1.5 million at each of March 31, 2016 and December 31, 2015, at cost.  Based on the current capital adequacy and liquidity position of the FRB, management believes there is no impairment in the Company’s investment at March 31, 2016 and the cost of the investment approximates fair value.

The scheduled maturities of debt and mortgage-backed securities at March  31, 2016 and December 31, 2015 are summarized below.  All maturity amounts are contractual maturities.  Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.

	March 31, 2016				December 31, 2015
	Amortized		Estimated		Amortized		Estimated
	cost		fair value		cost		fair value
		(in thousands)				(in thousands)
Debt securities available for sale:
Due in one year or less	$	4,377	$	4,428	$	4,082	$	4,142
Due after one year through five years		29,114		29,716		29,113		29,448
Due after five years through ten years		21,802		22,341		19,356		19,615
Due after ten years		6,201		6,404		6,201		6,324
		61,494		62,889		58,752		59,529
Mortgage-backed securities
available for sale		51,380		51,798		37,622		37,612
Total available for sale securities	$	112,874	$	114,687	$	96,374	$	97,141
Debt securities held to maturity:
Due in one year or less	$	315	$	314	$	309	$	308
Due after one year through five years		358		352		374		365
Due after five years through ten years		828		827		828		815
Due after ten years		106		102		106		96
		1,607		1,595		1,617		1,584
Total held to maturity securities	$	1,607	$	1,595	$	1,617	$	1,584

Information regarding unrealized losses within the Company’s available for sale securities at March  31, 2016 and December 31, 2015 is summarized below.  The securities are primarily U.S. government-guaranteed agency securities or municipal securities.  All unrealized losses are considered temporary and related to market interest rate fluctuations.

9

	March 31, 2016
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. government agencies	$	-	$	-	$	1,985	$	(15)	$	1,985	$	(15)
States and political subdivisions		1,196		(1)		1,115		(22)		2,311		(23)
Total debt securities	$	1,196	$	(1)	$	3,100	$	(37)	$	4,296	$	(38)
Mortgage-backed securities:
FNMA	$	6,581	$	(26)	$	-	$	-	$	6,581	$	(26)
FHLMC		-		-		1,216		(32)		1,216		(32)
GNMA		4,427		(22)		1,614		(8)		6,041		(30)
CMO'S		5,984		(81)		3,637		(21)		9,621		(102)
Total mortgage-backed securities	$	16,992	$	(129)	$	6,467	$	(61)	$	23,459	$	(190)
Held To Maturity:
Debt securities:
States and political subdivisions	$	630	$	(7)	$	426	$	(17)	$	1,056	$	(24)
Total temporarily impaired
securities	$	18,818	$	(137)	$	9,993	$	(115)	$	28,811	$	(252)

	December 31, 2015
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. government agencies	$	4,531	$	(89)	$	5,855	$	(145)	$	10,386	$	(234)
States and political subdivisions		3,133		(6)		1,117		(23)		4,250		(29)
Total debt securities	$	7,664	$	(95)	$	6,972	$	(168)	$	14,636	$	(263)
Mortgage-backed securities:
FNMA	$	3,856	$	(25)	$	-	$	-	$	3,856	$	(25)
FHLMC		-		-		1,234		(56)		1,234		(56)
GNMA		3,480		(55)		471		(6)		3,951		(61)
CMO'S		6,677		(89)		3,661		(114)		10,338		(203)
Total mortgage-backed securities	$	14,013	$	(169)	$	5,366	$	(176)	$	19,379	$	(345)
Held To Maturity:
Debt securities:
States and political subdivisions	$	626	$	(11)	$	495	$	(28)	$	1,121	$	(39)
Total temporarily impaired
securities	$	22,303	$	(275)	$	12,833	$	(372)	$	35,136	$	(647)

10

Management has assessed the securities available for sale in an unrealized loss position at March  31, 2016 and December 31, 2015 and determined the decline in fair value below amortized cost to be temporary.  In making this determination, management considered the period of time the securities were in a loss position, the percentage decline in comparison to the securities’ amortized cost, and the financial condition of the issuer (primarily government or government-sponsored enterprises).  In addition, management does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost.  Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers.

The Company had not recorded any other-than-temporary impairment (“OTTI”) charges as of March  31, 2016 and did not record any OTTI charges during 2015.  Nevertheless, it remains possible that there could be deterioration in the asset quality of the securities portfolio in the future.  The credit worthiness of the Company’s portfolio is largely reliant on the ability of U.S. government sponsored agencies such as FHLB, Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”), and municipalities throughout New York State to meet their obligations.  In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio.  The relatively stable past performance is not a guarantee for similar performance of the Company’s securities portfolio going forward.

3.  FAIR VALUE MEASUREMENTS

The Company follows the provisions of ASC Topic 820, “Fair Value Measurements.”  Those provisions relate to financial assets and liabilities carried at fair value and fair value disclosures related to financial assets and liabilities. ASC Topic 820 defines fair value and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

There are three levels of inputs to fair value measurements:

· Level 1, meaning the use of quoted prices for identical instruments in active markets;

· Level 2, meaning the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; and

· Level 3, meaning the use of unobservable inputs.

Observable market data should be used when available.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS

The following table presents, for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a recurring basis March  31, 2016 and December 31, 2015:

(in thousands)		Level 1		Level 2		Level 3		Fair Value
March 31, 2016
Securities available-for-sale:
U.S. government agencies	$	-	$	25,207	$	-	$	25,207
States and political subdivisions		-		37,682		-		37,682
Mortgage-backed securities		-		51,798		-		51,798
Mortgage servicing rights		-		-		496		496
December 31, 2015
Securities available-for-sale:
U.S. government agencies	$	-	$	21,846	$	-	$	21,846
States and political subdivisions		-		37,683		-		37,683
Mortgage-backed securities		-		37,612		-		37,612
Mortgage servicing rights		-		-		557		557

11

Securities available for sale

Fair values for securities are determined using independent pricing services and market-participating brokers.  The Company’s independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flow and, when available, loan performance data.  Because many fixed income securities do not trade on a daily basis, the evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations.  In addition, model processes, such as the Option Adjusted Spread model, are used to assess interest rate impact and develop prepayment scenarios.  The models and the process take into account market convention.  For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models.  The company’s service provider may occasionally determine that it does not have sufficient verifiable information to value a particular security.  In these cases the Company will utilize valuations from another pricing service.

Management believes that it has a sufficient understanding of the third party service’s valuation models, assumptions and inputs used in determining the fair value of securities to enable management to maintain an appropriate system of internal control.  On a quarterly basis, the Company reviews changes in the market value of its security portfolio.  Individual changes in valuations are reviewed for consistency with general interest rate movements and any known credit concerns for specific securities.  Additionally, on an annual basis, the Company has its entire security portfolio priced by a second pricing service to determine consistency with another market evaluator.  If, during the Company’s review or when comparing with another servicer, a material difference between pricing evaluations were to exist, the Company would submit an inquiry to the service provider regarding the data used to value a particular security.  If the Company determines it has market information that would support a different valuation than the initial evaluation it can submit a challenge for a change to that security’s valuation.  There were no material differences in valuations noted in the first quarter of 2016 or during fiscal year 2015.

Securities available for sale are classified as Level 2 in the fair value hierarchy as the valuation provided by the third-party provider uses observable market data.

Mortgage servicing rights

Mortgage servicing rights (“MSRs”) do not trade in an active, open market with readily observable prices. Accordingly, the Company obtains the fair value of the MSRs using a third-party pricing provider. The provider determines the fair value by discounting projected net servicing cash flows of the remaining servicing portfolio.  The valuation model used by the provider considers market loan prepayment predictions and other economic factors which management considers to be significant unobservable inputs.  The fair value of MSRs is mostly affected by changes in mortgage interest rates since rate changes cause the loan prepayment acceleration factors to increase or decrease.  Management has a sufficient understanding of the third party service’s valuation models, assumptions and inputs used in determining the fair value of MSRs to enable management to maintain an appropriate system of internal control.  Mortgage servicing rights are classified within Level 3 of the fair value hierarchy as the valuation is model driven and primarily based on unobservable inputs.

The following table summarizes the changes in fair value for mortgage servicing rights during the three month periods ended March  31, 2016 and 2015, respectively:

	Three months ended March 31,
(in thousands)	2016		2015
Mortgage servicing rights - January 1	$	557	$	518
Gains (losses) included in earnings		(69)		(45)
Additions from loan sales		8		24
Mortgage servicing rights - March 31	$	496	$	497

12

Quantitative information about the significant unobservable inputs used in the fair value measurement of MSRs at the respective dates is as follows:

	March 31, 2016		December 31, 2015
Servicing fees	0.25	%	0.25	%
Discount rate	9.52	%	9.52	%
Prepayment rate (CPR)	9.93	%	8.55	%

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements.  The following table presents for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a nonrecurring basis at March 31, 2016 and December 31, 2015:

(in thousands)		Level 1	Level 2	Level 3		Fair Value
March 31, 2016
Impaired loans	$	-	-	17,849	$	17,849
December 31, 2015
Impaired loans	$	-	-	17,758	$	17,758

Impaired loans

The Company evaluatesand values impaired loans at the time the loan is identified as impaired, and the fair values of such loans are estimated using Level 3 inputs in the fair value hierarchy.Each loan’s collateral has a unique appraisal and management’s discount of the value is based on factors unique to each impaired loan.  The significant unobservable input in determining the fair value is management’s subjective discount on appraisals of the collateral securing the loan, which ranges from 10%-50%.  Collateral may consist of real estate and/or business assets including equipment, inventory and/or accounts receivable and the value of these assets is determined based on appraisals by qualified licensed appraisers hired by the Company.Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, estimated costs to sell, and/or management’s expertise and knowledge of the client and the client’s business.

13

The Company has an appraisal policy in which appraisals are obtained upon a commercial loan being downgraded on the Company internal loan rating scale to a 5 (special mention) or a 6 (substandard) depending on the amount of the loan, the type of loan and the type of collateral.  All impaired commercial loans are either graded a 6 or 7 on the internal loan rating scale.  For consumer loans, the Company obtains appraisals when a loan becomes 90 days past due or is determined to be impaired, whichever occurs first.  Subsequent to the downgrade or reaching 90 days past due, if the loan remains outstanding and impaired for at least one year more, management may require another follow-up appraisal.  Between receipts of updated appraisals, if necessary, management may perform an internal valuation based on any known changing conditions in the marketplace such as sales of similar properties, a change in the condition of the collateral, or feedback from local appraisers.  Impaired loans had a gross value of $19.5 million, with a allowance for loan loss of $1.7 million, at each of March  31, 2016 and December 31, 2015.

FAIR VALUE OF FINANCIAL INSTRUMENTS

At March 31, 2016 and December 31, 2015, the estimated fair values of the Company’s financial instruments, including those that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows:

	March 31, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
		(in thousands)				(in thousands)
Financial assets:
Level 1:
Cash and cash equivalents	$	33,392	$	33,392	$	22,621	$	22,621
Level 2:
Available for sale securities		114,687		114,687		97,141		97,141
FHLB and FRB stock		2,788		2,788		2,783		2,783
Level 3:
Held to maturity securities		1,607		1,595		1,617		1,584
Loans, net		783,654		795,249		761,101		772,472
Mortgage servicing rights		496		496		557		557
Financial liabilities:
Level 1:
Demand deposits	$	174,276	$	174,276	$	183,098	$	183,098
NOW deposits		95,622		95,622		83,674		83,674
Regular savings deposits		463,672		463,672		439,993		439,993
Level 2:
Securities sold under agreement to
repurchase		12,894		12,894		10,821		10,821
Other borrowed funds		10,000		10,080		10,000		9,874
Junior subordinated debentures		11,330		11,330		11,330		11,330
Level 3:
Time deposits		115,479		116,402		96,217		96,975

14

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practical to estimate that value.

Cash and Cash Equivalents.  For these short-term instruments, the carrying amount is a reasonable estimate of fair value.  “Cash and Cash Equivalents” includes interest-bearing deposits at other banks.

FHLB and FRB stock.  The carrying value of FHLB and FRB stock, which are non-marketable equity investments, approximate fair value.

Securities held to maturity.  The Company holds certain municipal bonds as held-to-maturity.  These bonds are generally small in dollar amount and are issued only by certain local municipalities within the Company’s market area.  The original terms are negotiated directly and on an individual basis consistent with our loan and credit guidelines.  These bonds are not traded on the open market and management intends to hold the bonds to maturity.  The fair value of held-to-maturity securities is estimated by discounting the future cash flows using the current rates at which similar agreements would be made with municipalities with similar credit ratings and for the same remaining maturities.

Loans and Leases, net.  The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, net of the appropriate portion of the allowance for loan losses.  For variable rate loans, the carrying amount is a reasonable estimate of fair value.  This fair value calculation is not necessarily indicative of the exit price, as defined in ASC 820.

Deposits.  The fair value of demand deposits, NOW accounts, muni-vest accounts and regular savings accounts is the amount payable on demand at the reporting date.  The fair value of time deposits is estimated using the rates currently offered for deposits of similar remaining maturities.

Junior Subordinated Debentures.  There is no active market for the Company’s debentures and there have been no issuances of similar instruments in recent years.  The Company looked at a market bond index to estimate a discount margin to value the debentures.  The discount margin was very similar to the spread to LIBOR established at the issuance of the debentures.  As a result, the Company determined that the fair value of the adjustable-rate debentures approximates their face amount.

Securities Sold Under Agreement to Repurchase.The fair value of the securities sold under agreement to repurchase approximates its carrying value as the repurchase agreements are one day agreements.

Other Borrowed Funds.  The fair value of the short-term portion of other borrowed funds approximates its carrying value.  The fair value of the long-term portion of other borrowed funds is estimated using a discounted cash flow analysis based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

15

4. LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Loan Portfolio Composition

The following table presents selected information on the composition of the Company’s loan portfolio as of the dates indicated:

	March 31, 2016		December 31, 2015
Mortgage loans on real estate:	(in thousands)
Residential mortgages	$	105,545	$	103,941
Commercial and multi-family		406,206		399,819
Construction-Residential		1,149		1,546
Construction-Commercial		68,692		60,892
Home equities		61,593		61,042
Total real estate loans		643,185		627,240
Commercial and industrial loans		150,813		144,330
Consumer loans		1,684		1,596
Other		488		139
Net deferred loan origination costs		603		679
Total gross loans		796,773		773,984
Allowance for loan losses		(13,119)		(12,883)
Loans, net	$	783,654	$	761,101

The Bank sells certain fixed rate residential mortgages to FNMA while maintaining the servicing rights for those mortgages.  In the three month period ended March 31, 2016, the Bank sold mortgages to FNMA totaling $0.9 million, as compared with $2.6 million in mortgages sold to FNMA in the three month period ended March 31, 2015.  At March  31, 2016, the Bank had a loan servicing portfolio principal balance of $75.8 million upon which it earns servicing fees, as compared with $77.3 million at December 31, 2015.  The value of the mortgage servicing rights for that portfolio was $0.5 million at March  31, 2016 and $0.6 million at December 31, 2015.  At March 31, 2016, there were no residential mortgage loans held-for-sale, compared with $0.5 million in residential mortgages held-for-sale at December 31, 2015.  The Company had no commercial loans held-for-sale at March  31, 2016 or December 31, 2015.  The Company has never been contacted by FNMA to repurchase any loans due to improper documentation or fraud.

As noted in Note 1, these financial statements should be read in conjunction with the Audited Consolidated Financial Statements and the Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015.  Disclosures related to the basis for accounting for loans, the method for recognizing interest income on loans, the policy for placing loans on nonaccrual status and the subsequent recording of payments and resuming accrual of interest, the policy for determining past due status, a description of the Company’s accounting policies and methodology used to estimate the allowance for loan losses, the policy for charging-off loans, the accounting policies for impaired loans, and more descriptive information on the Company’s credit risk ratings are all contained in the Notes to the Audited Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.  Unless otherwise noted in this Form 10-Q, the policies and methodology described in the Annual Report for the year ended December 31, 2015 are consistent with those utilized by the Company in the three-month period ended March  31, 2016.

16

Credit Quality Indicators

The Bank monitors the credit risk in its loan portfolio by reviewing certain credit quality indicators (“CQI”).  The primary CQI for its commercial mortgage and commercial and industrial (“C&I”) portfolios is the individual loan’s credit risk rating.  The following list provides a description of the credit risk ratings that are used internally by the Bank when assessing the adequacy of its allowance for loan and lease losses:

· 1-3-Pass

· 4-Watch

· 5-O.A.E.M. (Other Assets Especially Mentioned) or Special Mention

· 6-Substandard

· 7-Doubtful

· 8-Loss

The Company’s consumer loans, including residential mortgages and home equities, are not individually risk rated or reviewed in the Company’s loan review process.  Consumers are not required to provide the Company with updated financial information as are commercial customers.  Consumer loans also carry smaller balances.  Given the lack of updated information after the initial underwriting of the loan and small size of individual loans, the Company uses delinquency status as the primary credit quality indicator for consumer loans.However, once a consumer loan is identified as impaired, it is individually evaluated for impairment.

The following tables provide data, at the class level, of credit quality indicators of certain loans for the dates specified:

March 31, 2016
(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
3	$	40,299	$	324,754	$	365,053	$	81,975
4		22,985		62,966		85,951		51,685
5		1,224		11,409		12,633		10,320
6		4,184		7,077		11,261		6,719
7		-		-		-		114
Total	$	68,692	$	406,206	$	474,898	$	150,813

December 31, 2015
(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
3	$	42,383	$	340,837	$	383,220	$	80,379
4		13,098		40,019		53,117		47,509
5		1,224		11,772		12,996		8,973
6		4,187		7,191		11,378		7,350
7		-		-		-		119
Total	$	60,892	$	399,819	$	460,711	$	144,330

17

Past Due Loans

The following tables provide an analysis of the age of the recorded investment in loans that are past due as of the dates indicated:

March 31, 2016
(in thousands)
							Total Past		Current		Total		90+ Days		Non-accruing
	30-59 days		60-89 days		90+ days		Due		Balance		Balance		Accruing		Loans
Commercial and industrial	$	607	$	217	$	537	$	1,361	$	149,452	$	150,813	$	175	$	5,331
Residential real estate:
Residential		1,014		-		521		1,535		104,010		105,545		-		737
Construction		-		-		-		-		1,149		1,149		-		-
Commercial real estate:
Commercial		5,533		-		3,291		8,824		397,382		406,206		2,839		3,698
Construction		456		-		3,728		4,184		64,508		68,692		-		4,184
Home equities		94		104		762		960		60,633		61,593		-		963
Consumer		7		-		-		7		1,677		1,684		-		14
Other		-		-		-		-		488		488		-		-
Total Loans	$	7,711	$	321	$	8,839	$	16,871	$	779,299	$	796,170	$	3,014	$	14,927

NOTE: Loan balances do not include $603 thousand in net deferred loan origination costs as of March 31, 2016.

18

December 31, 2015
(in thousands)
							Total Past		Current		Total		90+ Days		Non-accruing
	30-59 days		60-89 days		90+ days		Due		Balance		Balance		Accruing		Loans
Commercial and industrial	$	160	$	224	$	66	$	450	$	143,880	$	144,330	$	40	$	5,312
Residential real estate:
Residential		822		402		569		1,793		102,148		103,941		-		1,400
Construction		-		-		-		-		1,546		1,546		-		-
Commercial real estate:
Commercial		1,919		963		457		3,339		396,480		399,819		457		3,574
Construction		-		-		-		-		60,892		60,892		-		4,187
Home equities		253		236		267		756		60,286		61,042		-		1,058
Consumer		8		-		-		8		1,588		1,596		-		14
Other		-		-		-		-		139		139		-		-
Total Loans	$	3,162	$	1,825	$	1,359	$	6,346	$	766,959	$	773,305	$	497	$	15,545

NOTE: Loan balances do not include $679 thousand in net deferred loan origination costs as of December 31, 2015.

19

Allowance for loan losses

The following tables present the activity in the allowance for loan losses according to portfolio segment, for the three month periods ended March 31, 2016 and 2015:

March 31, 2016
(in thousands)	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer **		Residential Mortgages*		HELOC		Unallocated		Total
Allowance for loan
losses:
Beginning balance	$	4,383	$	7,135	$	85	$	909	$	371	$	-	$	12,883
Charge-offs		(13)		-		(7)		-		-		-		(20)
Recoveries		7		38		3		-		-		-		48
Provision (Credit)		203		269		12		(213)		(63)		-		208
Ending balance	$	4,580	$	7,442	$	93	$	696	$	308	$	-	$	13,119
Allowance for loan
losses:
Ending balance:
Individually evaluated
for impairment	$	516	$	1,134	$	41	$	2	$	-	$	-	$	1,693
Collectively evaluated
for impairment		4,064		6,308		52		694		308		-		11,426
Total	$	4,580	$	7,442	$	93	$	696	$	308	$	-	$	13,119
Loans:
Ending balance:
Individually evaluated
for impairment	$	5,382	$	10,092	$	41	$	2,482	$	1,545	$	-	$	19,542
Collectively evaluated
for impairment		145,431		464,806		2,131		104,212		60,048		-		776,628
Total	$	150,813	$	474,898	$	2,172	$	106,694	$	61,593	$	-	$	796,170

* Includes construction loans

** Includes all other consumer loans

NOTE: Loan balances do not include $603 thousand in net deferred loan origination costs as of March 31, 2016.

20

March 31, 2015
(in thousands)	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer **		Residential Mortgages*		HELOC		Unallocated		Total
Allowance for loan
and lease losses:
Beginning balance	$	4,896	$	5,650	$	78	$	941	$	819	$	149	$	12,533
Charge-offs		-		-		(6)		-		-		-		(6)
Recoveries		38		10		1		-		-		-		49
Provision (Credit)		55		170		(3)		(17)		(4)		-		201
Ending balance	$	4,989	$	5,830	$	70	$	924	$	815	$	149	$	12,777
Allowance for loan
and lease losses:
Ending balance:
Individually evaluated
for impairment	$	978	$	124	$	47	$	3	$	-	$	-	$	1,152
Collectively evaluated
for impairment		4,011		5,706		23		921		815		149		11,625
Total	$	4,989	$	5,830	$	70	$	924	$	815	$	149	$	12,777
Loans and leases:
Ending balance:
Individually evaluated
for impairment	$	6,577	$	5,604	$	47	$	2,512	$	981	$	-	$	15,721
Collectively evaluated
for impairment		125,839		400,776		1,779		98,274		58,708		-		685,376
Total	$	132,416	$	406,380	$	1,826	$	100,786	$	59,689	$	-	$	701,097

* Includes construction loans

** Includes all other consumer loans

NOTE: Loan balances do not include $641 thousand in net deferred loan origination costs as of March 31, 2015.

21

Impaired Loans

The following tables provide data, at the class level, of impaired loans as of the dates indicated:

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With no related allowance recorded:		(in thousands)
Commercial and industrial	$	1,908	$	1,975	$	-	$	2,074	$	16	$	2
Residential real estate:
Residential		2,427		2,483		-		2,462		10		12
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		3,999		4,039		-		4,062		22		16
Construction		834		834		-		834		-		12
Home equities		1,545		1,607		-		1,560		13		6
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total impaired loans	$	10,713	$	10,938	$	-	$	10,992	$	61	$	48

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With a related allowance recorded:		(in thousands)
Commercial and industrial	$	3,474	$	3,775	$	516	$	3,711	$	40	$	-
Residential real estate:
Residential		55		55		2		55		-		-
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		1,075		1,083		232		1,079		12		-
Construction		4,184		4,200		902		4,186		48		-
Home equities		-		-		-		-		-		-
Consumer		41		56		41		43		1		1
Other		-		-		-		-		-		-
Total impaired loans	$	8,829	$	9,169	$	1,693	$	9,074	$	101	$	1

22

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
Total:		(in thousands)
Commercial and industrial	$	5,382	$	5,750	$	516	$	5,785	$	56	$	2
Residential real estate:
Residential		2,482		2,538		2		2,517		10		12
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		5,074		5,122		232		5,141		34		16
Construction		5,018		5,034		902		5,020		48		12
Home equities		1,545		1,607		-		1,560		13		6
Consumer		41		56		41		43		1		1
Other		-		-		-		-		-		-
Total impaired loans	$	19,542	$	20,107	$	1,693	$	20,066	$	162	$	49

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With no related allowance recorded:		(in thousands)
Commercial and industrial	$	1,750	$	1,811	$	-	$	1,945	$	58	$	47
Residential real estate:
Residential		2,444		2,555		-		2,474		90		63
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		3,888		3,908		-		3,930		27		179
Construction		834		834		-		834		-		31
Home equities		1,644		1,711		-		1,661		40		52
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total impaired loans	$	10,560	$	10,819	$	-	$	10,844	$	215	$	372

23

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With a related allowance recorded:		(in thousands)
Commercial and industrial	$	3,572	$	3,835	$	552	$	3,966	$	255	$	9
Residential real estate:
Residential		55		55		2		55		1		2
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		1,083		1,083		235		1,083		4		42
Construction		4,188		4,201		911		4,188		29		166
Home equities		-		-		-		-		-		-
Consumer		42		57		42		45		2		6
Other		-		-		-		-		-		-
Total impaired loans	$	8,940	$	9,231	$	1,742	$	9,337	$	291	$	225

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
Total:		(in thousands)
Commercial and industrial	$	5,322	$	5,646	$	552	$	5,911	$	313	$	56
Residential real estate:
Residential		2,499		2,610		2		2,529		91		65
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		4,971		4,991		235		5,013		31		221
Construction		5,022		5,035		911		5,022		29		197
Home equities		1,644		1,711		-		1,661		40		52
Consumer		42		57		42		45		2		6
Other		-		-		-		-		-		-
Total impaired loans	$	19,500	$	20,050	$	1,742	$	20,181	$	506	$	597

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Non-performing loans

The following table sets forth information regarding non-performing loans as of the dates specified:

	March 31, 2016			December 31, 2015
		(in thousands)
Non-accruing loans:
Commercial and industrial loans	$	5,331		$	5,312
Residential real estate:
Residential		737			1,400
Construction		-			-
Commercial real estate:
Commercial and multi-family		3,698			3,574
Construction		4,184			4,187
Home equities		963			1,058
Consumer loans		14			14
Other		-			-
Total non-accruing loans	$	14,927		$	15,545
Accruing loans 90+ days past due		3,014			497
Total non-performing loans	$	17,941		$	16,042
Total non-performing loans
to total assets		1.81	%		1.71	%
Total non-performing loans
to total loans		2.25	%		2.07	%

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Troubled debt restructurings

The Company had $5.7 million and $5.8 million in loans that were restructured in a troubled debt restructuring (“TDR”) at March 31, 2016 and December 31, 2015, respectively.  Of those balances, $1.1 million and $1.8 million were in non-accrual status at March 31, 2016 and December 31, 2015, respectively.  Any TDR that is placed on non-accrual is not reverted back to accruing status until the borrower makes timely payments as contracted for at least six months and future collection under the revised terms is probable.  All of the Company’s restructurings were allowed in an effort to maximize its ability to collect on loans where borrowers were experiencing financial difficulty.

The reserve for a TDR is based upon the present value of the future expected cash flows discounted at the loan’s original effective rate or upon the fair value of the collateral less costs to sell, if the loan is deemed collateral dependent.  This reserve methodology is used because all TDR loans are considered impaired.  As of March 31, 2016, there were no commitments to lend additional funds to debtors owing on loans whose terms have been modified in TDRs.

The following tables summarize the loans that were classified as troubled debt restructurings as of the dates indicated:

		March 31, 2016
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	533	$	481	$	52	$	160
Residential real estate:
Residential		1,869		124		1,745		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		1,702		327		1,375		-
Construction		834		-		834		-
Home equities		761		179		582		-
Consumer loans		27		-		27		27
Other		-		-		-		-
Total troubled restructured loans	$	5,726	$	1,111	$	4,615	$	187

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		December 31, 2015
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	517	$	508	$	9	$	165
Residential real estate:
Residential		1,789		689		1,100		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		1,732		334		1,398		-
Construction		834		-		834		-
Home equities		867		281		586		-
Consumer loans		28		-		28		28
Other		-		-		-		-
Total troubled restructured loans	$	5,767	$	1,812	$	3,955	$	193

The Company’s TDRs have various agreements that involve deferral of principal payments, or interest-only payments, for a period (usually 12 months or less) to allow the customer time to improve cash flow or sell the property.  Other common types of concessions leading to the designation of a TDR are lines of credit that are termed out and extensions of maturities at rates that are less than market given the risk profile of the borrower.

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The following table shows the data for TDR activity by type of concession granted to the borrower for the three month periods ended March 31, 2016 and 2015:

	Three months ended March 31, 2016					Three months ended March 31, 2015
	(in thousands)					(in thousands)
Troubled Debt Restructurings by Type of Concession	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial:
Deferral of principal	-	$	-	$	-	3	$	541	$	541
Extension of maturity	1		24		24	-		-		-
Term-out line of credit	1		20		20	-		-		-
Residential Real Estate & Construction:
Extension of maturity	1		95		95	-		-		-
Commercial Real Estate & Construction	-		-		-	-		-		-
Home Equities	-		-		-	-		-		-
Consumer loans	-		-		-	-		-		-
Other	-		-		-	-		-		-

The general practice of the Bank is to work with borrowers so that they are able to pay back their loan in full.  If a borrower continues to be delinquent or cannot meet the terms of a TDR and the loan is determined to be uncollectible, the loan will be charged-off.  The following table presents loans which were classified as TDRs during the previous 12 months which defaulted during the three month periods ended March 31, 2016 and 2015:

	Three months ended March 31, 2016			Three months ended March 31, 2015
	(in thousands)			(in thousands)
Troubled Debt Restructurings	Number of	Recorded		Number of	Recorded
That Subsequently Defaulted	Contracts	Investment		Contracts	Investment
Commercial and Industrial	-	$	-	-	$	-
Residential Real Estate:
Residential	-		-	-		-
Construction	-		-	-		-
Commercial Real Estate:
Commercial and multi-family	-		-	-		-
Construction	-		-	-		-
Home Equities	-		-	1		19
Consumer loans	-		-	-		-
Other	-		-	-		-

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5. PER SHARE DATA

The common stock per share information is based upon the weighted average number of shares outstanding during each period.  For the three periods ended March 31, 2016 and 2015, the Company had an average of 64,925 and78,167dilutive shares outstanding, respectively.

Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and not included in calculating diluted earnings per share.  For the three month periods ended March 31, 2016 and 2015, there was an average of 49,550 and38,630 anti-dilutive shares outstanding, respectively, that were not included in calculating diluted earnings per share because their effect was anti-dilutive.

6. OTHER COMPREHENSIVE INCOME

The following tables summarize the changes in the components of accumulated other comprehensive income (loss) during the three month periods ended March 31, 2016 and 2015:

	Balance at December 31, 2015		Net Change		Balance at March 31, 2016
	(in thousands)
Net unrealized gain on investment securities	$	475	$	649	$	1,124
Net defined benefit pension plan adjustments		(2,285)		40		(2,245)
Total	$	(1,810)	$	689	$	(1,121)
	Balance at December 31, 2014		Net Change		Balance at March 31, 2015
	(in thousands)
Net unrealized gain on investment securities	$	911	$	331	$	1,242
Net defined benefit pension plan adjustments		(2,419)		29		(2,390)
Total	$	(1,508)	$	360	$	(1,148)

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	Three months ended March 31, 2016 (in thousands)						Three months ended March 31, 2015 (in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized gain on investment securities:
Unrealized gain on investment securities	$	1,047	$	(398)	$	649	$	541	$	(210)	$	331
Reclassification from accumulated other
comprehensive income for gains (losses)		-		-		-		-		-		-
Net change		1,047		(398)		649		541		(210)		331
Defined benefit pension plan adjustments:
Net actuarial gain (loss)	$	-	$	-	$	-	$	-	$	-	$	-
Reclassifications from accumulated other
comprehensive income for gains (losses)
Amortization of prior service cost (a)		8		(3)		5		7		(2)		5
Amortization of actuarial loss (a)		56		(21)		35		48		(24)		24
Net change		64		(24)		40		55		(26)		29
Other Comprehensive Income (Loss)	$	1,111	$	(422)	$	689	$	596	$	(236)	$	360

(a)   Included in net periodic pension cost, as described in Note 9 – “Net Periodic Benefit Costs”

7. SEGMENT INFORMATION

The Company is comprised of two primary business segments, banking and insurance agency activities. The following tables set forth information regarding these segments for the three month periods ended March 31, 2016 and 2015.

	Three months ended March 31, 2016
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	8,291	$	(31)	$	8,260
Provision for loan losses		208		-		208
Net interest income (expense) after
provision for loan losses		8,083		(31)		8,052
Non-interest income		1,246		-		1,246
Insurance service and fees		116		1,632		1,748
Non-interest expense		7,327		1,201		8,528
Income before income taxes		2,118		400		2,518
Income tax provision		650		154		804
Net income	$	1,468	$	246	$	1,714

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	Three months ended March 31, 2015
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	7,609	$	(28)	$	7,581
Provision for loan losses		201		-		201
Net interest income (expense) after
provision for loan losses		7,408		(28)		7,380
Non-interest income		1,237		-		1,237
Insurance service and fees		162		1,667		1,829
Non-interest expense		6,481		1,031		7,512
Income before income taxes		2,326		608		2,934
Income tax provision		794		235		1,029
Net income	$	1,532	$	373	$	1,905

8. CONTINGENT LIABILITIES AND COMMITMENTS

The unaudited consolidated financial statements do not reflect various commitments and contingent liabilities, which arise in the normal course of business, and which involve elements of credit risk, interest rate risk and liquidity risk. These commitments and contingent liabilities consist of commitments to extend credit and standby letters of credit. A summary of the Bank’s commitments and contingent liabilities is as follows:

	March 31,		December 31,
	2016		2015
	(in thousands)
Commitments to extend credit	$	226,787	$	206,346
Standby letters of credit		3,550		3,794
Total	$	230,337	$	210,140

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Commitments to extend credit and standby letters of credit include some exposure to credit loss in the event of nonperformance by the customer. The Bank’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Company’s unaudited consolidated balance sheets. Because these instruments have fixed maturity dates, and because they may expire without being drawn upon, they do not necessarily represent cash requirements of the Bank. The Bank did not incur any losses on its commitments and did not record a reserve for its commitments during the first three months of 2016 or during 2015.

Certain lending commitments for construction residential mortgage loans are considered derivative instruments under the guidelines of GAAP.  The changes in the fair value of these commitments, due to interest rate risk, are not recorded on the consolidated balance sheets as the fair value of these derivatives is not considered to be material.

9. NET PERIODIC BENEFIT COSTS

On January 31, 2008, the Bank froze its defined benefit pension plan.  The plan covered substantially all Bank employees.  The plan provides benefits that are based on the employees’ compensation and years of service.  Under the freeze, eligible employees will receive, at retirement, the benefits already earned through January 31, 2008, but have not accrued any additional benefits since then.  As a result, service cost is no longer incurred.

The Bank uses an actuarial method of amortizing prior service cost and unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank used recognized the prior service cost and net gains or losses over the average remaining service period of active employees.

The Bank also maintains a nonqualified supplemental executive retirement plan covering certain members of the Company’s senior management. The Bank uses an actuarial method of amortizing unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank uses recognizes the net gains or losses over the average remaining service period of active employees.

The Bank did notcontribute to the defined benefit pension plan during the first three months of 2016 but expects to contribute $140 thousand to the pension plan at a later date in 2016.

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The following table presents the net periodic cost for the Bank’s defined benefit pension plan and supplemental executive retirement plan for the three month periods ended March 31, 2016 and 2015:

		Three months ended March 31,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2016		2015		2016		2015
Service cost	$	-	$	-	$	47	$	48
Interest cost		55		51		36		37
Expected return on plan assets		(65)		(77)		-		-
Amortization of prior service cost		-		-		8		7
Amortization of the net loss		22		17		34		31
Net periodic cost (benefit)	$	12	$	(9)	$	125	$	123

10.  RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers.  The objective of this ASU is to require entities to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  This ASU will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective.  The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period.  Early application is not permitted.  The standard allows an entity to apply the amendments in the ASU using either the retrospective or cumulative effect transition method.  The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  The main objective of this ASU is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information.  The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years.  The Company is evaluating the impact of the standard on its financial reporting.  The ASU will not impact results of operations or the financial position of the Company.

ASU 2016-02, Leases.  The objective of this ASU is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements to meet that objective.  The main difference between previous GAAP and this ASU is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP.  Under this new guidance, a lessee should recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term.  The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP.  Information about the Company’s operating lease obligations is disclosed in Note 16 to the Company’s Financial Statements on Form 10-K for the year ended December 31, 2015.  The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

ASU 2016-09, Improvements to Employee Share-Based Payment Accounting.  This ASU is part of the FASB’s Simplification Initiative.  The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  Some of the areas of simplification apply only to nonpublic entities.  Although the impact on the Company’s financial statements is not expected to be material, the area of this ASU that will impact the Company is the elimination of the concept of a tax windfall pool.  Currently, an entity must determine for each award whether the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes results in either an excess benefit or a tax deficiency.  Excess tax benefits are recognized in additional paid-in-capital; tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or in the income statement.  Excess tax benefits are not recognized until the deduction reduces taxes payable.  Under

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the new standard, all excess tax benefits and tax deficiencies will be recognized as income tax expense or benefit in the income statement.  The amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods.

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties.  When used in this report, or in the documents incorporated by reference herein, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “seek,” and similar expressions identify such forward-looking statements.  These forward-looking statements include statements regarding the Company’s business plans, prospects, growth and operating strategies, statements regarding the asset quality of the Company’s loan and investment portfolios, and estimates of the Company’s risks and future costs and benefits.

These forward-looking statements are based largely on the expectations of the Company’s management and are subject to a number of risks and uncertainties, including but not limited to: general economic conditions, either nationally or in the Company’s market areas, that are worse than expected; increased competition among depository or other financial institutions; inflation and changes in the interest rate environment that reduce the Company’s margins or reduce the fair value of financial instruments; changes in laws or government regulations affecting financial institutions, including changes in regulatory fees, monetary policy, and capital requirements; the Company’s ability to enter new markets successfully and capitalize on growth opportunities; the Company’s ability to successfully integrate acquired entities; changes in accounting pronouncements and practices, as adopted by financial institution regulatory agencies, the Financial Accounting Standards Board and the Public Company Accounting Oversight Board; changes in tax policies, rates and regulations of federal, state and local tax authorities; changes in consumer spending, borrowing and saving habits; changes in the Company’s organization, compensation and benefit plans; and other factors discussed elsewhere in this Quarterly Report on Form 10-Q, as well as in the Company’s periodic reports filed with the SEC, in particular the “Risk Factors” discussed in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.  Many of these factors are beyond the Company’s control and are difficult to predict.

Because of these and other uncertainties, the Company’s actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein.  Forward-looking statements speak only as of the date they are made.  The Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new, updated information, future events or otherwise.

APPLICATION OF CRITICAL ACCOUNTING ESTIMATES

The Company’s Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with U.S. GAAP and follow general practices within the industries in which it operates.  Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the Company’s Unaudited Consolidated Financial Statements and Notes.  These estimates, assumptions, and judgments are based on information available as of the date of the Unaudited Consolidated Financial Statements.  Accordingly, as this information changes, the Unaudited Consolidated Financial Statements could reflect different estimates, assumptions, and judgments.  Certain policies inherently have a greater reliance on the use of estimates, assumptions, and judgments, and as such, have a greater possibility of producing results that could be materially different than originally reported.  Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event.  Carrying assets and liabilities at fair value inherently results in more financial statement volatility.  The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources, when available.  When third-party information is not available, valuation adjustments are estimated in good faith by management primarily through the use of internal cash flow modeling techniques.  Refer to Note 3 – “Fair Value Measurements” to the Company’s Unaudited Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q for further detail on fair value measurement.

Significant accounting policies followed by the Company are presented in Note 1 – “Organization and Summary of Significant Accounting Policies” to the Audited Consolidated Financial Statements included in Item 8 in its Annual Report on Form 10-K for the year ended December 31, 2015.  These policies, along with the disclosures presented in the other Notes to the Company's Audited Consolidated Financial Statements contained in its Annual Report on Form 10-K and in this financial review, provide information on how significant assets and liabilities are presented in the Company’s Unaudited Consolidated Financial Statements and how those values are determined.

Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for loan losses and valuation of goodwill to

35

be the accounting areas that require the most subjective or complex judgments, and, as such, could be most subject to revision as new information becomes available.

Allowance for Loan Losses

The allowance for loan losses represents management’s estimate of probable losses in the Company’s loan portfolio.  Determining the amount of the allowance for loan losses is considered a critical accounting estimate because it requires significant judgment on the part of management and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of current economic trends and conditions, all of which may be susceptible to significant change.  The loan portfolio also represents the largest asset type on the Company’s Unaudited Consolidated Balance Sheets.  Note 1 to the Audited Consolidated Financial Statements included in Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 describes the methodology used to determine the allowance for loan losses.

Goodwill

The amount of goodwill reflected in the Company’s Unaudited Consolidated Financial Statements is required to be tested by management for impairment on at least an annual basis.  The test for impairment of goodwill on the identified reporting unit is considered a critical accounting estimate because it requires judgment on the part of management and the use of estimates related to the growth assumptions and market multiples used in the valuation model.  The goodwill impairment testing is performed annually as of December 31st.  No impairment charges were incurred in the most recent test and the fair value of the tested reporting unit substantially exceeded its fair value.  There were no triggering events in the three month period ended March 31, 2016 that resulted in an interim impairment test.

ANALYSIS OF FINANCIAL CONDITION

Loan Activity

Total loans grew to $797 million at March 31, 2016, a $23 million, or 3%, increase from total loans of $774 million at December 31, 2015, and a $95 million, or 14%, increase from total loans of $702 million at March 31, 2015.

Loans secured by real estate were $643 million at March 31, 2016, reflecting a $16 million, or 3%, increase from $627 million at December 31, 2015.  The most significant growth was in commercial construction loans, which grew $8 million, or 13%, in the first quarter to $69 million at March 31, 2016 as the Company’s footprint in Western New York continued to experience strong commercial construction loan demand.  The Company’s commercial real estate portfolio, which has historically been the fastest growing part of the real estate portfolio, grew to $406 million at the recent quarter end, a $6 million, or 2%, increase from $400 million at December 31, 2015, while the Company’s residential real estate loan portfolio increased $2 million, or 2%, to $106 million from $104 million over that same period. 

In the first quarter of 2016, residential mortgage originations of $5 million were lower than the previous quarter’s originations of $10 million and $7 million in last year’s first quarter.  Residential mortgages sold in the first quarter of 2016 equated to approximately 19% of the residential mortgages originated by the Company during this quarter, as compared with 16% of residential mortgages originated during the fourth quarter of 2015 and 41% in the first quarter of 2015.

The Company has focused on growth opportunities in commercial and industrial (“C&I”) lending as a way to diversify its overall loan portfolio.  The C&I portfolio grew to $151 million at March 31, 2016, representing a $7 million, or 5%, increase from $144 million at December 31, 2015.

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Credit Quality of Loan Portfolio

Total non-performing loans, defined as accruing loans greater than 90 days past due and non-accrual loans, totaled $18 million, or 2.25% of total loans outstanding, as of March 31, 2016, compared with $16 million, or 2.07% of total loans outstanding, as of December 31, 2015, and $12 million, or 1.68% of total loans outstanding at March 31, 2015.  The $2 million increase in non-performing loans as compared tothe 2015 year-end was due to a single commercial real estate loan moving from performing status to 90 days past due and accruing.  Loans 90 days past due and still accruing are considered well secured and in the process of collection and are therefore not impaired and in nonaccrual status.  In addition to the $2 million commercial real estate loan that is 90 days past due and still accruing at March 31, 2016, the remainder of the $6 million increase in non-performing loans since the end of last year’s first quarter is primarily attributable to a single redevelopment project that defaulted in the fourth quarter of 2015 and was moved to nonaccrual status.

Commercial credits graded as “special mention” and “substandard” were $41 million at March 31, 2016, or roughly unchanged from the balance at December 31, 2015.  As noted in Note 4 to the Company’s Unaudited Financial Statements included in Part I of this Quarterly Report on Form 10-Q, internal risk ratings are the credit quality indicators used by the Company’s management to determine the appropriate allowance for loan losses for commercial credits.  “Special mention” and “substandard” loans are weaker credits with a higher risk of loss categorized as “criticized” credits rather than “pass” or “watch” credits.

The allowance for loan losses totaled $13 million, or 1.65% of total loans outstanding as of March 31, 2016, compared with $13 million, or 1.66% of total loans outstanding at December 31, 2015 and $13million, or 1.82% of total loans outstanding as of March 31, 2015.  The decrease in the allowance to loan ratio since last year’s first quarter-endwas driven by the strong loan growth without a proportional increase in the allowance.  A single large charge-off in the fourth quarter of 2015 lowered the allowance, somewhat offsetting the increase in the allowance over the past year due to the provision for loan growth.  The net charge-off(recovery) ratio for the firstquarter of 2016 was (0.02) % of average net loans, compared with a ratio of 0.42% and (0.03) % in the fourth and first quarters of 2015, respectively.

Investing Activities

Total securities were $116 million at March 31, 2016, compared with $99 million at December 31, 2015 and $100 million at March 31, 2015.  Interest-bearing deposits at other banks, which consist of overnight funds kept at correspondent banks and the Federal Reserve, increased to $22 million at March 31, 2016 from  $11 million at December 31, 2015, but were down from $46 million at March 31, 2015.  The increase in interest-bearing deposits at banks from the 2015 year-end is largely a result of an increase in seasonal municipal deposits.  Given the expected short duration of these deposits, management has invested the funds in short-term assets.  A portion of the Bank’s excess liquidity from strong savings and time deposit growth was invested in investment securities purchased in the first quarter of 2016, including $11 million in U.S. government agency mortgage-backed securities, $4 million in U.S. government collateralized mortgage obligations, and $5 million in other U.S. government agency bonds.Securities and interest-bearing deposits at correspondent banks made up 14% of the Bank’s total average interest earning assets in the first quarter of 2016,  consistent with the ratio in the fourth and first quarters of 2015, respectively.

The Company’s highest concentration in its securities portfolio was in available for sale U.S. government sponsored mortgage-backed securities at 44% of total investment securities at March 31, 2016, compared with 38%  at December 31, 2015 and 40% at March 31, 2015.  The concentration in tax-advantaged debt securities issued by state and political subdivisions and U.S. government-sponsored agency bonds was 34% and 22%, respectively, of the total securities portfolio at March 31, 2016, compared with 40% and 22% at December 31, 2015 and 33% and 27% at March 31, 2015.

Management believes that the credit quality of the securities portfolio as a whole is strong, as the portfolio has no individual securities in a significant unrealized loss position.  Interest rates decreased in the first quarter,  resulting in  anincrease in the net unrealized gain position of the available-for-sale investment portfolio to $1.8 million at March 31, 2016 from $0.8 million at December 31, 2015.  The net unrealized gain position was $2.0 million at March 31, 2015.

The Company monitors extension and prepayment risk in the securities portfolio to limit potential exposures.  The Company has no direct exposure to subprime mortgages, nor does the Company hold private mortgage-backed securities, credit default swaps, or FNMA or FHLMC preferred stock investments in its investment portfolio.

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Funding Activities

Total deposits at March 31, 2016 were $849 million, a $46 million, or 6%, increase from $803 million at December 31, 2015,  and a $69 million, or 9% increase, when compared with total deposits of $780 million at March 31, 2015.  Seasonal municipal deposits represented $25 million of the first quarter’s growth as municipalities collect property taxes in the first quarter before using those funds throughout the remainder of the fiscal year.  The rest of the growth in the Company’s total deposits from December 31, 2015 was due mainly to increases in savings deposits andtime deposits.  With impending market disruption in the Western New York market due to a significant announced merger, the Company has maintained promotional savings and time deposit rates in an effort to attract new customers. 

The Company had $10 million in other borrowings, which reflected a long-term advance with the FHLBNY scheduled to mature in 2020, at each of March 31, 2016 and December 31, 2015, compared with no other borrowings at March 31, 2015.

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ANALYSIS OF RESULTS OF OPERATIONS

Average Balance Sheet

The following tables present the significant categories of the assets and liabilities of the Company, interest income and interest expense, and the corresponding yields earned and rates paid for the periods indicated.  The assets and liabilities are presented as daily averages.  The average loan balances include both performing and non-performing loans. Investments are included at amortized cost. Yields are presented on a non-tax-equivalent basis.

	Three months ended March 31, 2016						Three months ended March 31, 2015
	Average		Interest				Average		Interest
	Outstanding		Earned/		Yield/		Outstanding		Earned/		Yield/
	Balance		Paid		Rate		Balance		Paid		Rate
	(dollars in thousands)						(dollars in thousands)
ASSETS
Interest-earning assets:
Loans, net	$	772,672	$	8,730	4.52	%	$	682,653	$	7,813	4.58	%
Taxable securities		64,796		377	2.33	%		68,373		405	2.37	%
Tax-exempt securities		38,298		238	2.49	%		32,513		237	2.92	%
Interest bearing deposits at banks		18,862		11	0.23	%		6,624		1	0.06	%
Total interest-earning assets		894,628	$	9,356	4.18	%		790,163	$	8,456	4.28	%
Non interest-earning assets:
Cash and due from banks		12,733						11,480
Premises and equipment, net		11,092						10,164
Other assets		42,550						42,728
Total Assets	$	961,003					$	854,535
LIABILITIES & STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
NOW	$	88,220	$	85	0.39	%	$	77,072	$	79	0.41	%
Regular savings		447,318		531	0.47	%		370,017		269	0.29	%
Time deposits		108,954		343	1.26	%		112,224		435	1.55	%
Other borrowed funds		10,427		44	1.69	%		9,156		8	0.35	%
Junior subordinated debentures		11,330		87	3.07	%		11,330		78	2.75	%
Securities sold U/A to repurchase		12,493		6	0.19	%		13,366		6	0.18	%
Total interest-bearing liabilities		678,742	$	1,096	0.65	%		593,165	$	875	0.59	%
Noninterest-bearing liabilities:
Demand deposits		176,074						159,388
Other		13,879						14,785
Total liabilities	$	868,695					$	767,338
Stockholders' equity		92,308						87,197
Total Liabilities and Equity	$	961,003					$	854,535
Net interest earnings			$	8,260					$	7,581
Net interest margin					3.69	%					3.84	%
Interest rate spread					3.53	%					3.69	%

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Net Income

Net income was $1.7 million, or $0.40 per diluted share, in the first quarter of 2016,down from $1.8 million, or $0.41 per diluted share, in the fourth quarter of 2015, and $1.9 million, or $0.44 per diluted share, in the first quarter of 2015.  The decrease from the linked quarter reflects lower net interest income of $0.2 million.  The year over year decrease is primarily due to increased non-interest expenses of $1.0 million, somewhat offset by an increase in net interest income of $0.7 million.  Return on average equity was 7.43% for the first quarter of 2016compared with 7.72% in the fourth quarter of 2015 and 8.74% in the first quarter of 2015.

Other Results of Operations – Quarterly Comparison

Net interest income was $8.3 million in the first quarter of 2016,  down $0.2 million or 2% from the fourth quarter of 2015, but up $0.7 million or 9% from the prioryear’s first quarter.  The decrease in net interest income from the linked quarter reflects the accelerated interest income recognized in the fourth quarter from the payoff of a large investment security as well as one additional day in the fourth quarter, somewhat offset by growth in average interest-earning assets.  The increase in net interest income from last year’s first quarter reflected growth in average interest-earnings assets, particularly loans.  The positive impact from higher interest-earning assets was somewhat offset by a reduced net interest margin.

Net interest margin was 3.69%  in the first quarter of 2016, compared with 3.91% in the fourth quarter of 2015 and3.84% in last year’sfirstquarter.  The yield on interest-earning assets was 4.18% in the recent quarter, compared with 4.37% in the fourth quarter of 2015 and 4.28% in the first quarter of 2015.  The decrease from the fourth quarter of 2015 is predominantly a result of a large investment security payoff in the fourth quarter, as reflected in the decrease in the yield on investment securities from 3.59% in the last quarter of 2015 to 2.39% in the initial quarter of 2016.  The decrease from the previous year’s first quarter reflects continued loan and investment security re-pricing in a persistent low interest rate environment.  The cost of interest-bearing liabilities was 0.65% in the first quarter of 2016, higher than 0.62% in the fourth quarter of 2015 and 0.59% in the first quarter of 2015.  The increase from the linked quarter and prior year first quarter reflects a continued shift in the regular savings deposit mix as both new and existing customers move to the Bank’s highest rate product. 

The provision for loan losses was $208 thousand in thefirst quarter of 2016, in line with the provision of $204 thousand and $201 thousand in the fourth and first quarters of the prior year, respectively.

Non-interest income was $3.0 million, or 27% of total revenue, in the recent quarter, up $0.1 million or 3% from the fourth quarter of 2015, but down $0.1 million or 2% from last year’s first quarter.  This increase from the linked quarter reflects seasonal profit sharing revenue at TEA as insurance service and fee income increased $0.2 million.  The decrease from last year’s first quarter is due to a $0.1 million decline in insurance service and fee income.  The lower insurance service and fee income is attributable to reduced financial services fee income and lower profit sharing revenue and FCS income.  The lower profit sharing revenue and FCS income reflects higher loss rates and fewer insurance claims, respectively, due to inclement weather in the previous winter.  

Total non-interest expense was $8.5 million in the first quarter of 2016, a decrease of $0.1 million or 2% from the fourth quarter of 2015, but an increase of $1.0 million or 14% from the prior-year period.  The decrease from the final quarter of 2015 resulted from a decrease in other expenses of $0.4 million and litigation expense of $0.1 million, offset by an increase in salaries and employee benefits of $0.1 million, professional services costs of $0.1 million, and technology and communications expenses of $0.1 million.  The decline in other expenses resulted from several items including lower loan expenses and lower travel, postage and supplies costs related to the Bank’s core banking system conversion project.  The decrease in litigation expense was attributable to reimbursement under a Bank insurance policy covering a portion of the cost associated with the settlement of litigation with the New York State Attorney General, as previously disclosed by the Company.  Salaries and benefits were higher in the first quarter when compared with the fourth quarter due to seasonal expenses such as health savings account contributions and payroll taxes, as well as merit increases and an increase in headcount.  The higher professional services costs and technology and communications costs in the first quarter of 2016 compared with the last quarter of 2015 were attributable to the Bank’s core banking system conversion project.

The increase of $1.0 million in non-interest expenses in the first quarter of 2016 when compared with the initial quarter of 2015 was largely driven by an increase in salaries and benefits costs of $0.7 million, as well as higher technology and communications costs of $0.2 million and higher advertising and professional services costs of $0.1 million each.  Higher salaries and benefits costs were due to higher salaries from added headcount related to the Company’s growth strategy as well as annual merit increases and higher benefits costs, particularly health insurance.  The increased technology and communications costs were related to the core conversion project.  The increase in professional services costs was primarily attributable to the core conversion project due to the hiring of temporary contractors, and costs related to the Company’s recent filing of a Registration Statement on Form S-3.

Income tax expense for the quarter ended March 31, 2016 was $0.8 million, representing an effective tax rate of 31.9% compared with an effective tax rate of 29.5% in the fourth quarter of 2015 and 35.1% in the first quarter of 2015.  The Company records income tax expense based on the expected effective tax rate for the year plus or minus applicable discreet items.  The decrease from last year’s first

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quarter was due to one-time adjustments to deferred tax assets in the previous year’s first quarter as a result of statutory changes that came into effect on January 1, 2015.

CAPITAL

The Company consistently maintains regulatory capital ratios significantly above the federal “well capitalized” standard, including a  Tier 1 leverage ratio of 10.18% and 10.45%at March 31, 2016 and December 31, 2015, respectively.  New minimum capital ratios, known as “Basel III”, became effective for the Company and the Bank on January 1, 2015 and will be fully phased-in on January 1, 2019.  As of March 31, 2016, the Company and the Bank met all applicable capital adequacy requirements under the Basel III capital rules.

Book value per share of the Company’s common stock was $21.54 at March 31, 2016, compared with $21.44 at December 31, 2015.  Tangible book value per share (a non-GAAP measure) at March 31, 2016 was $19.64, compared with $19.53 at December 31, 2015.

Tangible book value per share is a non-GAAP financial measure.  The Company calculates tangible book value per share by dividing tangible book value by the number of common shares outstanding, as compared to GAAP book value per share, which the Company calculates by dividing GAAP book value by the number of common shares outstanding.  Management believes that this information is consistent with treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios.  Accordingly, management believes that this non-GAAP financial measure provides information that is important to investors and that is useful in understanding the Company’s capital position and ratios.  Further, management believes that presentation of this measure, together with the accompanying reconciliation, provides a complete understanding of factors and trends affecting the Company’s business and allows investors to view the Company’s performance in a manner similar to management, the financial services industry, bank stock analysts and regulatory agencies.  However, this non-GAAP financial measure is supplemental and is not a substitute for an analysis based on GAAP financial measures.  Note that other companies may use different calculations for this measure, and, therefore, the Company’s presentation of tangible book value per share may not be comparable to similarly titled measures reported by other companies.  Investors should review the Company’s consolidated financial statements in their entirety and should not rely on any single financial measure.

A reconciliation of this non-GAAP financial measure, tangible book value per share, to the most directly comparable GAAP financial measure, book value, is set forth in the following table:

($ in thousands, except per share data)	March 31, 2016		December 31, 2015
Stockholders' equity ("book value")	$	92,160	$	91,256
Goodwill (related to insurance agency reporting unit)		(8,101)		(8,101)
Tangible book value (non-GAAP)	$	84,059	$	83,155
Number of common shares outstanding		4,279,296		4,257,179
Tangible book value per share	$	19.64	$	19.53

On February 16, 2016, the Company declared a cash dividend of $0.38 per share on the Company’s outstanding common stock. The dividend was paid on April 5, 2016 to shareholders of record as of March 15, 2016.

LIQUIDITY

The Bank utilizes cash flows from the investment portfolio and federal funds sold balances to manage the liquidity requirements related to loan demand and deposit fluctuations.  The Bank also has many borrowing options. As a member of the FHLB, the Bank is able to borrow funds at competitive rates.  Advances of up to $208.6million can be drawn on the FHLB via an Overnight Line of Credit Agreement between the Bank and the FHLB.  An amount equal to 25% of the Bank’s total assets could be borrowed through the advance programs under certain qualifying circumstances.  The Bank also has the ability to purchase up to $14.0 million in federal funds from its correspondent banks.  By placing sufficient collateral in safekeeping at the Federal Reserve Bank, the Bank could borrow at the discount window.  The Bank’s liquidity needs also can be met by more aggressively pursuing time deposits, or accessing the brokered time deposit market, including the Certificate of Deposit Account Registry Service (“CDARS”) network.  The

41

Company’s primary source of liquidity is dividends from the Bank.  Additionally, the Company has access to capital markets as a funding source.

Cash flows from the Bank’s investment portfolio are laddered, so that securities mature at regular intervals, to provide funds from principal and interest payments at various times as liquidity needs may arise.  Contractual maturities are also laddered, with consideration as to the volatility of market prices.  At March 31, 2016, approximately 4.1% of the Bank’s securities had contractual maturity dates of one year or less and approximately 29.9% had maturity dates of five years or less.

Management, on an ongoing basis, closely monitors the Company’s liquidity position for compliance with internal policies, and believes that available sources of liquidity are adequate to meet funding needs in the normal course of business.  As part of that monitoring process, management calculates the 90-day liquidity each month by analyzing the cash needs of the Bank.  Included in the calculation are liquid assets and potential liabilities.  Management stresses the potential liabilities calculation to ensure a strong liquidity position.  Included in the calculation are assumptions of some significant deposit run-off as well as funds needed for loan closings and investment purchases. At March 31, 2016, in the Company’s internal stress test, the Company had net short-term liquidity of $210.1 million as compared with $282.0 million at December 31, 2015, due to the usage of cash for loan growth.  Available assets of $142.2 million, divided by public and purchased funds of $148.0 million, resulted in a long-term liquidity ratio of 96% at March 31, 2016, compared with 102% at December 31, 2015.

Management does not anticipate engaging in any activities, either currently or in the long term, for which adequate funding would not be available and which would therefore result in significant pressure on liquidity.

The Company believes that the Bank maintains a sufficient level of U.S. government and government agency securities and New York State municipal bonds that can be pledged as collateral for municipal deposits.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Additional information responsive to this Item is contained in the Liquidity section of Management’s Discussion and Analysis of Financial Condition and Results of Operations, which information is incorporated herein by reference.

Market risk is the risk of loss from adverse changes in market prices and/or interest rates of the Bank’s financial instruments. The primary market risk that the Company is exposed to is interest rate risk. The core banking activities of lending and deposit-taking expose the Bank to interest rate risk, which occurs when assets and liabilities reprice at different times and by different amounts as interest rates change. As a result, net interest income earned by the Bank is subject to the effects of changing interest rates. The Bank measures interest rate risk by calculating the variability of net interest income in future periods under various interest rate scenarios using projected balances for interest-earning assets and interest-bearing liabilities. Management’s philosophy toward interest rate risk management is to limit the variability of net interest income to changes in net interest rates. The balances of financial instruments used in the projections are based on expected growth from forecasted business opportunities, anticipated prepayments of loans, and expected maturities of investment securities, loans, and deposits. Management supplements the modeling technique described above with analysis of market values of the Bank’s financial instruments and changes to such market values given changes in the interest rates.

The Bank’s Asset-Liability Committee, which includes members of senior management, monitors the Bank’s interest rate sensitivity with the aid of a model that considers the impact of ongoing lending and deposit taking activities, as well as interrelationships in the magnitude and timing of the repricing of financial instruments, including the effect of changing interest rates on expected prepayments and maturities. When deemed prudent, management has taken actions, and intends to do so in the future, to mitigate exposure to interest rate risk through the use of on- or off-balance sheet financial instruments. Possible actions include, but are not limited to, changing the pricing of loan and deposit products, and modifying the composition of interest-earning assets and interest-bearing liabilities, and reliance on other financial instruments used for interest rate risk management purposes.

42

The following table demonstrates the possible impact of changes in interest rates on the Bank’s net interest income over a 12-month period of time:

SENSITIVITY OF NET INTEREST INCOME TO CHANGES IN INTEREST RATES

	Calculated increase
	in projected annual net interest income
	(in thousands)
		March 31, 2016		December 31, 2015
Changes in interest rates
+200 basis points	$	1,786	$	1,034
+100 basis points		2,305		1,856
-100 basis points		NM		NM
-200 basis points		NM		NM

Many assumptions were utilized by management to calculate the impact that changes in interest rates may have on the Bank’s net interest income. The more significant assumptions related to the rate of prepayments of mortgage-related assets, loan and deposit volumes and pricing, and deposit maturities. The Bank assumed immediate changes in rates including 200 basis point rate changes. In each of the 100 and 200 basis point rate reduction scenarios, the applicable rate changes are limited to lesser amounts such that interest rates are not less than zero. These assumptions are inherently uncertain and, as a result, the Bank cannot precisely predict the impact of changes in interest rates on net interest income. Actual results may differ significantly due to the timing, magnitude, and frequency of interest rate changes in market conditions and interest rate differentials (spreads) between maturity/repricing categories, as well as any actions such as those previously described, which management may take to counter such changes. In light of the uncertainties and assumptions associated with the process, the amounts presented in the table and changes in such amounts are not considered significant to the Bank’s projected net interest income.

ITEM 4 - CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2016 (the end of the period covered by this Report).  Based on that evaluation, the Company’s principal executive and principal financial officers concluded that as of March 31, 2016 the Company’s disclosure controls and procedures were effective.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No changes in the Company’s internal control over financial reporting were identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the fiscal quarter ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

The nature of the Company’s business generates a certain amount of litigation involving matters arising in the ordinary course of business.

In the opinion of management, there are no proceedings pending to which the Company is a party or to which its property is subject, which, if determined adversely, would have a material effect on the Company’s results of operations or financial condition.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In March 2013, the Company announced it had been authorized by its Board of Directors to purchase up to 100,000 shares of the Company’s outstanding common stock.  In the first quarter of 2016, the Company did not purchase any shares of its common stock.

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that may yet be Purchased Under the Plans or Programs
January 2016:
January 1, 2016 - January 31, 2016		-	$	-	-	18,492
February 2016:
February 1, 2016 - February 29, 2016		-	$	-	-	18,492
March 2016:
March 1, 2016 - March 31, 2016		-	$	-	-	18,492
Total:		-	$	-	-	18,492

(1) On March 25, 2013, the Board of Directors authorized the Company to repurchase up to 100,000 shares of the Company’s common stock.  The repurchase program has no fixed expiration date but may be suspended or discontinued at any time.  The Company did not make any repurchases during the quarter ended March 31, 2016.

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ITEM 6 – EXHIBITS

The information called for by this item is incorporated herein by reference to the Exhibit Index included immediately following the signature page to this Quarterly Report on Form 10-Q.

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Evans Bancorp, Inc.

DATE

May 2, 2016

/s/ David J. Nasca

David J. Nasca

President and CEO

(Principal Executive Officer)

DATE

May 2, 2016

/s/ John B. Connerton

John B.  Connerton

Treasurer

(Principal Financial Officer)

46

EXHIBIT INDEX

Exhibit No.	Name
31.1	Certification of Principal Executive Officer pursuant to
	Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Principal Financial Officer pursuant to
	Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18
	USC Section 1350 Chapter 63 of Title 18, United States Code,
	as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18
	USC Section 1350 Chapter 63 of Title 18, United States Code,
	as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	of 2002.
101	The following materials from Evans Bancorp, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Balance Sheets – March 31, 2016 and December 31, 2015; (ii) Unaudited Consolidated Statements of Income – Three months ended March 31, 2016 and 2015; (iii) Unaudited Statements of Consolidated Comprehensive Income – Three months ended March 31, 2016 and 2015; (iv) Unaudited Consolidated Statements of Stockholders' Equity – Three months ended March 31, 2016 and 2015; (v) Unaudited Consolidated Statements of Cash Flows – Three months ended March 31, 2016 and 2015; and (vi) Notes to Unaudited Consolidated Financial Statements.

47

EX-31.1

Exhibit 31.1

Certification

I, David J. Nasca, certify that:

1. I have reviewed this report on Form 10-Q of Evans Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2016

/s/ David J. Nasca

David J. Nasca

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification

I, John B. Connerton, certify that:

1. I have reviewed this report on Form 10-Q of Evans Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2016

/s/ John B. Connerton

John B. Connerton

Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David J. Nasca, the President and Chief Executive Officer of Evans Bancorp, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Quarterly Report of Evans Bancorp, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2016 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and (2) the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Evans Bancorp, Inc.

Date: May 2, 2016

By:	/s/ David J. Nasca
Name:	David J. Nasca
Title:	President and Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, John B. Connerton, the Treasurer of Evans Bancorp, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Quarterly Report of Evans Bancorp, Inc. on Form 10-Q for the fiscal quarter ended March 31, 2016 fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and (2) the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Evans Bancorp, Inc.

Date: May 2, 2016

By:	/s/ John B. Connerton
Name:	John B. Connerton
Title:	Treasurer
	(Principal Financial Officer)

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Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	EVANS BANCORP INC
Entity Filer Category	Accelerated Filer
Entity Central Index Key	0000842518
Amendment Flag	false
Document Type	10-Q
Document Fiscal Period Focus	Q1
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		4,284,566

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Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 11,287	$ 11,813
Interest-bearing deposits at banks	22,105	10,808
Securities:
Available for sale, at fair value (amortized cost: $112,874 at March 31, 2016; $96,374 at December 31, 2015)	114,687	97,141
Held to maturity, at amortized cost (fair value: $1,595 at March 31, 2016; $1,584 at December 31, 2015)	1,607	1,617
Federal Home Loan Bank common stock, at cost	1,296	1,296
Federal Reserve Bank common stock, at cost	1,492	1,487
Loans, net of allowance for loan losses of $13,119 at March 31, 2016 and $12,883 at December 31, 2015	783,654	761,101
Properties and equipment, net of accumulated depreciation of $16,072 at March 31, 2016 and $15,799 at December 31, 2015	11,078	11,051
Goodwill	8,101	8,101
Bank-owned life insurance	21,114	20,978
Other assets	13,494	13,714
TOTAL ASSETS	989,915	939,107
Deposits:
Demand	174,276	183,098
NOW	95,622	83,674
Regular savings	463,672	439,993
Time	115,479	96,217
Total deposits	849,049	802,982
Securities sold under agreement to repurchase	12,894	10,821
Other borrowings	10,000	10,000
Other liabilities	14,482	12,718
Junior subordinated debentures	11,330	11,330
Total liabilities	$ 897,755	$ 847,851
CONTINGENT LIABILITIES AND COMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.50 par value, 10,000,000 shares authorized; 4,279,296 and 4,260,203 shares issued at March 31, 2016 and December 31, 2015, respectively, and 4,279,210 and 4,257,179 outstanding at March 31, 2016 and December 31, 2015, respectively	$ 2,142	$ 2,132
Capital surplus	$ 43,435	$ 43,318
Treasury stock, at cost, 86 and 3,024 shares at March 31, 2016 and December 31, 2015, respectively
Retained earnings	$ 47,704	$ 47,616
Accumulated other comprehensive loss, net of tax	(1,121)	(1,810)
Total stockholders' equity	92,160	91,256
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 989,915	$ 939,107

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Securities:
Available for sale, amortized cost	$ 112,874	$ 96,374
Held to maturity, fair value	1,595	1,584
Loans, allowance for loan losses	13,119	12,883
Properties and equipment, accumulated depreciation	$ 16,072	$ 15,799
STOCKHOLDERS' EQUITY:
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	4,279,296	4,260,203
Common stock, shares outstanding	4,279,210	4,257,179
Treasury stock, shares	86	3,024

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Consolidated Statements Of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
INTEREST INCOME
Loans	$ 8,730	$ 7,813
Interest bearing deposits at banks	11	1
Securities:
Taxable	377	405
Non-taxable	238	237
Total interest income	9,356	8,456
INTEREST EXPENSE
Deposits	959	781
Other borrowings	50	15
Junior subordinated debentures	87	79
Total interest expense	1,096	875
NET INTEREST INCOME	8,260	7,581
PROVISION FOR LOAN LOSSES	208	201
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	8,052	7,380
NON-INTEREST INCOME
Bank charges	443	409
Insurance service and fees	1,748	1,829
Gain on loans sold	15	22
Bank-owned life insurance	136	137
Interchange fee income	318	294
Other	334	375
Total non-interest income	2,994	3,066
NON-INTEREST EXPENSE
Salaries and employee benefits	5,514	4,794
Occupancy	699	695
Repairs and maintenance	176	173
Advertising and public relations	285	211
Professional services	580	511
Technology and communications	422	259
Litigation expense	(100)
FDIC insurance	159	147
Other	793	722
Total non-interest expense	8,528	7,512
INCOME BEFORE INCOME TAXES	2,518	2,934
INCOME TAX PROVISION	804	1,029
NET INCOME	$ 1,714	$ 1,905
Net income per common share-basic	$ 0.40	$ 0.45
Net income per common share-diluted	0.40	0.44
Cash dividends per common share	$ 0.38	$ 0.36
Weighted average number of common shares outstanding	4,263,109	4,213,509
Weighted average number of diluted shares outstanding	4,328,034	4,291,676

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Statements Of Consolidated Comprehensive Income - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Statements Of Consolidated Comprehensive Income [Abstract]
NET INCOME		$ 1,714	$ 1,905
Unrealized gain on available-for-sale securities:
Unrealized gain on available-for-sale securities		$ 649	$ 331
Less: Reclassification of gain on sale of securities
Net change, Net-of-Tax Amount		$ 649	$ 331
Defined benefit pension plans:
Amortization of prior service cost	[1]	5	5
Amortization of actuarial loss	[1]	35	24
Net change, Net-of-Tax Amount		40	29
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX		689	360
COMPREHENSIVE INCOME		$ 2,403	$ 2,265

[1] Included in net periodic pension cost, as described in Note 9 - "Net Periodic Benefit Costs"

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Consolidated Statements Of Changes In Stockholders’ Equity - USD ($) $ in Thousands	Common Stock [Member]	Capital Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2014	$ 2,123	$ 43,102	$ 42,822	$ (1,508)	$ (751)	$ 85,788
Net income			1,905			1,905
Other comprehensive income				360		360
Cash dividends			(1,517)			(1,517)
Stock options and restricted stock expense		117				117
Excess tax benefit from stock-based compensation		14				14
Repurchased shares in Treasury stock					(34)	(34)
Reissued restricted shares, net of forfeitures		(503)			503
Reissued shares through stock option exercise		(48)			116	68
Balance at Mar. 31, 2015	2,123	42,682	43,210	(1,148)	$ (166)	86,701
Balance at Dec. 31, 2015	2,132	43,318	47,616	(1,810)		91,256
Net income			1,714			1,714
Other comprehensive income				689		689
Cash dividends			(1,626)			(1,626)
Stock options and restricted stock expense		118				118
Excess tax benefit from stock-based compensation		9				9
Issued restricted shares	10	(10)
Balance at Mar. 31, 2016	$ 2,142	$ 43,435	$ 47,704	$ (1,121)		$ 92,160

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Consolidated Statements Of Changes In Stockholders’ Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Consolidated Statements Of Changes In Stockholders’ Equity [Abstract]
Cash dividends per common share	$ 0.38	$ 0.36
Shares repurchased in Treasury stock		1,397
Restricted shares issued	19,093
Restricted shares reissued, net of forfeitures	2,938	20,942
Shares reissued through stock option exercise		4,872

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
OPERATING ACTIVITIES:
Interest received	$ 9,090	$ 8,256
Fees received	2,839	2,779
Interest paid	(1,068)	(896)
Cash paid to employees and vendors	(8,353)	(7,804)
Income taxes paid	(9)	(1)
Proceeds from sale of loans held for resale	880	2,658
Originations of loans held for resale	(335)	(4,995)
Net cash provided by (used in) operating activities	3,044	(3)
INVESTING ACTIVITIES:
Purchases of available for sale securities	(20,471)	(4,244)
Proceeds from maturities, calls, and payments of available for sale securities	3,883	2,451
Proceeds from maturities, calls, and payments of held to maturity securities	11	11
Additions to properties and equipment	(300)	(111)
Purchase of tax credit investment	(359)	(667)
Net increase in loans	(23,176)	(3,595)
Net cash used in investing activities	(40,412)	(6,155)
FINANCING ACTIVITIES:
Proceeds from (repayments of) borrowings, net	2,072	(16,803)
Net increase in deposits	46,067	72,723
Repurchase of treasury stock		(34)
Reissuance of treasury stock		68
Net cash provided by financing activities	48,139	55,954
Net increase in cash and cash equivalents	10,771	49,796
CASH AND CASH EQUIVALENTS:
Beginning of period	22,621	10,898
End of period	33,392	60,694
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income	1,714	1,905
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	359	356
Deferred tax expense	36	42
Provision for loan losses	208	201
Gain on loans sold	(15)	(22)
Stock options and restricted stock expense	118	117
Proceeds from sale of loans held for resale	880	2,658
Originations of loans held for resale	(335)	(4,995)
Changes in assets and liabilities affecting cash flow:
Other assets	561	327
Other liabilities	(482)	(592)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$ 3,044	$ (3)

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Organization And Summary Of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Organization And Summary Of Significant Accounting Policies [Abstract]

Organization And Summary Of Significant Accounting Policies

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies followed by Evans Bancorp, Inc. (the “Company”), a financial holding company, and its two direct, wholly-owned subsidiaries: (i) Evans Bank, National Association (the “Bank”), and the Bank’s subsidiaries, Evans National Leasing, Inc. (“ENL”), Evans National Holding Corp. (“ENHC”) and Suchak Data Systems, LLC (“SDS”); and (ii) Evans National Financial Services, LLC (“ENFS”), and ENFS’s subsidiary, The Evans Agency, LLC (“TEA”), and TEA’s subsidiaries, Frontier Claims Services, Inc. (“FCS”) and ENB Associates Inc. (“ENBA”), in the preparation of the accompanying interim unaudited consolidated financial statements conform with U.S. generally accepted accounting principles (“GAAP”) and with general practice within the industries in which it operates.  Except as the context otherwise requires, the Company and its direct and indirect subsidiaries are collectively referred to in this report as the “Company.”

The results of operations for the three and three month periods ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year.  The accompanying unaudited consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements and the Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015.

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Securities

3 Months Ended

Mar. 31, 2016

Securities [Abstract]

Securities

2. SECURITIES

The amortized cost of securities and their approximate fair value at March  31, 2016 and December 31, 2015 were as follows:

	March 31, 2016
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. government agencies	$	24,835	$	387	$	(15)	$	25,207
States and political subdivisions		36,659		1,046		(23)		37,682
Total debt securities	$	61,494	$	1,433	$	(38)	$	62,889
Mortgage-backed securities:
FNMA	$	18,427	$	276	$	(26)	$	18,677
FHLMC		4,393		96		(32)		4,457
GNMA		11,044		120		(30)		11,134
CMO		17,516		116		(102)		17,530
Total mortgage-backed securities	$	51,380	$	608	$	(190)	$	51,798
Total securities designated as available for sale	$	112,874	$	2,041	$	(228)	$	114,687
Held to Maturity:
Debt securities
States and political subdivisions	$	1,607	$	12	$	(24)	$	1,595
Total securities designated as held to maturity	$	1,607	$	12	$	(24)	$	1,595

	December 31, 2015
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. government agencies	$	21,914	$	166	$	(234)	$	21,846
States and political subdivisions		36,838		874		(29)		37,683
Total debt securities	$	58,752	$	1,040	$	(263)	$	59,529
Mortgage-backed securities:
FNMA	$	12,312	$	168	$	(25)	$	12,455
FHLMC		4,629		61		(56)		4,634
GNMA		7,047		82		(61)		7,068
CMO		13,634		24		(203)		13,455
Total mortgage-backed securities	$	37,622	$	335	$	(345)	$	37,612
Total securities designated as available for sale	$	96,374	$	1,375	$	(608)	$	97,141
Held to Maturity:
Debt securities
States and political subdivisions	$	1,617	$	6	$	(39)	$	1,584
Total securities designated as held to maturity	$	1,617	$	6	$	(39)	$	1,584

Available for sale securities with a total fair value of $98.4 million and $86.0 million at March  31, 2016 and December 31, 2015, respectively, were pledged as collateral to secure public deposits and for other purposes required or permitted by law.

The Company uses the Federal Home Loan Bank of New York (“FHLBNY”) as its primary source of overnight funds and also has several long-term advances with FHLBNY.  The Company had $10.0 million in borrowed funds at FHLBNY at each ofMarch 31, 2016and December 31, 2015.  The Company has placed sufficient collateral in the form of residential and commercial real estate loans at FHLBNY that meet FHLB collateral requirements.  As a member of the Federal Home Loan Bank (“FHLB”) System, the Bank is required to hold stock in FHLBNY.  The Bank held $1.3 million in FHLBNY stock ateach of March  31, 2016 and December 31, 2015 at cost.  The Company regularly evaluates investments in FHLBNY for impairment, considering liquidity, operating performance, capital position, stock repurchase and dividend history.  As of March 31, 2016, the Bank’s investment in FHLBNY stock was not impaired.

The Bank, as a member of the Federal Reserve Bank (“FRB”) system, is currently required to purchase and hold shares of capital stock in the FRB in an amount equal to 6% of its capital and surplus. The Bank’s investment in FRBcapital stock totaled $1.5 million at each of March 31, 2016 and December 31, 2015, at cost.  Based on the current capital adequacy and liquidity position of the FRB, management believes there is no impairment in the Company’s investment at March 31, 2016 and the cost of the investment approximates fair value.

The scheduled maturities of debt and mortgage-backed securities at March  31, 2016 and December 31, 2015 are summarized below.  All maturity amounts are contractual maturities.  Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.

	March 31, 2016				December 31, 2015
	Amortized		Estimated		Amortized		Estimated
	cost		fair value		cost		fair value
		(in thousands)				(in thousands)
Debt securities available for sale:
Due in one year or less	$	4,377	$	4,428	$	4,082	$	4,142
Due after one year through five years		29,114		29,716		29,113		29,448
Due after five years through ten years		21,802		22,341		19,356		19,615
Due after ten years		6,201		6,404		6,201		6,324
		61,494		62,889		58,752		59,529
Mortgage-backed securities
available for sale		51,380		51,798		37,622		37,612
Total available for sale securities	$	112,874	$	114,687	$	96,374	$	97,141
Debt securities held to maturity:
Due in one year or less	$	315	$	314	$	309	$	308
Due after one year through five years		358		352		374		365
Due after five years through ten years		828		827		828		815
Due after ten years		106		102		106		96
		1,607		1,595		1,617		1,584
Total held to maturity securities	$	1,607	$	1,595	$	1,617	$	1,584

Information regarding unrealized losses within the Company’s available for sale securities at March  31, 2016 and December 31, 2015 is summarized below.  The securities are primarily U.S. government-guaranteed agency securities or municipal securities.  All unrealized losses are considered temporary and related to market interest rate fluctuations.

	March 31, 2016
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. government agencies	$	-	$	-	$	1,985	$	(15)	$	1,985	$	(15)
States and political subdivisions		1,196		(1)		1,115		(22)		2,311		(23)
Total debt securities	$	1,196	$	(1)	$	3,100	$	(37)	$	4,296	$	(38)
Mortgage-backed securities:
FNMA	$	6,581	$	(26)	$	-	$	-	$	6,581	$	(26)
FHLMC		-		-		1,216		(32)		1,216		(32)
GNMA		4,427		(22)		1,614		(8)		6,041		(30)
CMO'S		5,984		(81)		3,637		(21)		9,621		(102)
Total mortgage-backed securities	$	16,992	$	(129)	$	6,467	$	(61)	$	23,459	$	(190)
Held To Maturity:
Debt securities:
States and political subdivisions	$	630	$	(7)	$	426	$	(17)	$	1,056	$	(24)
Total temporarily impaired
securities	$	18,818	$	(137)	$	9,993	$	(115)	$	28,811	$	(252)

	December 31, 2015
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. government agencies	$	4,531	$	(89)	$	5,855	$	(145)	$	10,386	$	(234)
States and political subdivisions		3,133		(6)		1,117		(23)		4,250		(29)
Total debt securities	$	7,664	$	(95)	$	6,972	$	(168)	$	14,636	$	(263)
Mortgage-backed securities:
FNMA	$	3,856	$	(25)	$	-	$	-	$	3,856	$	(25)
FHLMC		-		-		1,234		(56)		1,234		(56)
GNMA		3,480		(55)		471		(6)		3,951		(61)
CMO'S		6,677		(89)		3,661		(114)		10,338		(203)
Total mortgage-backed securities	$	14,013	$	(169)	$	5,366	$	(176)	$	19,379	$	(345)
Held To Maturity:
Debt securities:
States and political subdivisions	$	626	$	(11)	$	495	$	(28)	$	1,121	$	(39)
Total temporarily impaired
securities	$	22,303	$	(275)	$	12,833	$	(372)	$	35,136	$	(647)

Management has assessed the securities available for sale in an unrealized loss position at March  31, 2016 and December 31, 2015 and determined the decline in fair value below amortized cost to be temporary.  In making this determination, management considered the period of time the securities were in a loss position, the percentage decline in comparison to the securities’ amortized cost, and the financial condition of the issuer (primarily government or government-sponsored enterprises).  In addition, management does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost.  Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers.

The Company had not recorded any other-than-temporary impairment (“OTTI”) charges as of March  31, 2016 and did not record any OTTI charges during 2015.  Nevertheless, it remains possible that there could be deterioration in the asset quality of the securities portfolio in the future.  The credit worthiness of the Company’s portfolio is largely reliant on the ability of U.S. government sponsored agencies such as FHLB, Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”), and municipalities throughout New York State to meet their obligations.  In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio.  The relatively stable past performance is not a guarantee for similar performance of the Company’s securities portfolio going forward.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Measurements [Abstract]

Fair Value Measurements

3.  FAIR VALUE MEASUREMENTS

The Company follows the provisions of ASC Topic 820, “Fair Value Measurements.”  Those provisions relate to financial assets and liabilities carried at fair value and fair value disclosures related to financial assets and liabilities. ASC Topic 820 defines fair value and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

There are three levels of inputs to fair value measurements:

· Level 1, meaning the use of quoted prices for identical instruments in active markets;

· Level 2, meaning the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; and

· Level 3, meaning the use of unobservable inputs.

Observable market data should be used when available.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS

The following table presents, for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a recurring basis March  31, 2016 and December 31, 2015:

(in thousands)		Level 1		Level 2		Level 3		Fair Value
March 31, 2016
Securities available-for-sale:
U.S. government agencies	$	-	$	25,207	$	-	$	25,207
States and political subdivisions		-		37,682		-		37,682
Mortgage-backed securities		-		51,798		-		51,798
Mortgage servicing rights		-		-		496		496
December 31, 2015
Securities available-for-sale:
U.S. government agencies	$	-	$	21,846	$	-	$	21,846
States and political subdivisions		-		37,683		-		37,683
Mortgage-backed securities		-		37,612		-		37,612
Mortgage servicing rights		-		-		557		557

Securities available for sale

Fair values for securities are determined using independent pricing services and market-participating brokers.  The Company’s independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information for structured securities, cash flow and, when available, loan performance data.  Because many fixed income securities do not trade on a daily basis, the evaluated pricing applications apply information as applicable through processes, such as benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations.  In addition, model processes, such as the Option Adjusted Spread model, are used to assess interest rate impact and develop prepayment scenarios.  The models and the process take into account market convention.  For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models.  The company’s service provider may occasionally determine that it does not have sufficient verifiable information to value a particular security.  In these cases the Company will utilize valuations from another pricing service.

Management believes that it has a sufficient understanding of the third party service’s valuation models, assumptions and inputs used in determining the fair value of securities to enable management to maintain an appropriate system of internal control.  On a quarterly basis, the Company reviews changes in the market value of its security portfolio.  Individual changes in valuations are reviewed for consistency with general interest rate movements and any known credit concerns for specific securities.  Additionally, on an annual basis, the Company has its entire security portfolio priced by a second pricing service to determine consistency with another market evaluator.  If, during the Company’s review or when comparing with another servicer, a material difference between pricing evaluations were to exist, the Company would submit an inquiry to the service provider regarding the data used to value a particular security.  If the Company determines it has market information that would support a different valuation than the initial evaluation it can submit a challenge for a change to that security’s valuation.  There were no material differences in valuations noted in the first quarter of 2016 or during fiscal year 2015.

Securities available for sale are classified as Level 2 in the fair value hierarchy as the valuation provided by the third-party provider uses observable market data.

Mortgage servicing rights

Mortgage servicing rights (“MSRs”) do not trade in an active, open market with readily observable prices. Accordingly, the Company obtains the fair value of the MSRs using a third-party pricing provider. The provider determines the fair value by discounting projected net servicing cash flows of the remaining servicing portfolio.  The valuation model used by the provider considers market loan prepayment predictions and other economic factors which management considers to be significant unobservable inputs.  The fair value of MSRs is mostly affected by changes in mortgage interest rates since rate changes cause the loan prepayment acceleration factors to increase or decrease.  Management has a sufficient understanding of the third party service’s valuation models, assumptions and inputs used in determining the fair value of MSRs to enable management to maintain an appropriate system of internal control.  Mortgage servicing rights are classified within Level 3 of the fair value hierarchy as the valuation is model driven and primarily based on unobservable inputs.

The following table summarizes the changes in fair value for mortgage servicing rights during the three month periods ended March  31, 2016 and 2015, respectively:

	Three months ended March 31,
(in thousands)	2016		2015
Mortgage servicing rights - January 1	$	557	$	518
Gains (losses) included in earnings		(69)		(45)
Additions from loan sales		8		24
Mortgage servicing rights - March 31	$	496	$	497

Quantitative information about the significant unobservable inputs used in the fair value measurement of MSRs at the respective dates is as follows:

	March 31, 2016		December 31, 2015
Servicing fees	0.25	%	0.25	%
Discount rate	9.52	%	9.52	%
Prepayment rate (CPR)	9.93	%	8.55	%

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A NONRECURRING BASIS

The Company is required, on a nonrecurring basis, to adjust the carrying value of certain assets or provide valuation allowances related to certain assets using fair value measurements.  The following table presents for each of the fair-value hierarchy levels as defined in this footnote, those financial instruments which are measured at fair value on a nonrecurring basis at March 31, 2016 and December 31, 2015:

(in thousands)		Level 1	Level 2	Level 3		Fair Value
March 31, 2016
Impaired loans	$	-	-	17,849	$	17,849
December 31, 2015
Impaired loans	$	-	-	17,758	$	17,758

Impaired loans

The Company evaluatesand values impaired loans at the time the loan is identified as impaired, and the fair values of such loans are estimated using Level 3 inputs in the fair value hierarchy.Each loan’s collateral has a unique appraisal and management’s discount of the value is based on factors unique to each impaired loan.  The significant unobservable input in determining the fair value is management’s subjective discount on appraisals of the collateral securing the loan, which ranges from 10%-50%.  Collateral may consist of real estate and/or business assets including equipment, inventory and/or accounts receivable and the value of these assets is determined based on appraisals by qualified licensed appraisers hired by the Company.Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, estimated costs to sell, and/or management’s expertise and knowledge of the client and the client’s business.

The Company has an appraisal policy in which appraisals are obtained upon a commercial loan being downgraded on the Company internal loan rating scale to a 5 (special mention) or a 6 (substandard) depending on the amount of the loan, the type of loan and the type of collateral.  All impaired commercial loans are either graded a 6 or 7 on the internal loan rating scale.  For consumer loans, the Company obtains appraisals when a loan becomes 90 days past due or is determined to be impaired, whichever occurs first.  Subsequent to the downgrade or reaching 90 days past due, if the loan remains outstanding and impaired for at least one year more, management may require another follow-up appraisal.  Between receipts of updated appraisals, if necessary, management may perform an internal valuation based on any known changing conditions in the marketplace such as sales of similar properties, a change in the condition of the collateral, or feedback from local appraisers.  Impaired loans had a gross value of $19.5 million, with a allowance for loan loss of $1.7 million, at each of March  31, 2016 and December 31, 2015.

FAIR VALUE OF FINANCIAL INSTRUMENTS

At March 31, 2016 and December 31, 2015, the estimated fair values of the Company’s financial instruments, including those that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows:

	March 31, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
		(in thousands)				(in thousands)
Financial assets:
Level 1:
Cash and cash equivalents	$	33,392	$	33,392	$	22,621	$	22,621
Level 2:
Available for sale securities		114,687		114,687		97,141		97,141
FHLB and FRB stock		2,788		2,788		2,783		2,783
Level 3:
Held to maturity securities		1,607		1,595		1,617		1,584
Loans, net		783,654		795,249		761,101		772,472
Mortgage servicing rights		496		496		557		557
Financial liabilities:
Level 1:
Demand deposits	$	174,276	$	174,276	$	183,098	$	183,098
NOW deposits		95,622		95,622		83,674		83,674
Regular savings deposits		463,672		463,672		439,993		439,993
Level 2:
Securities sold under agreement to
repurchase		12,894		12,894		10,821		10,821
Other borrowed funds		10,000		10,080		10,000		9,874
Junior subordinated debentures		11,330		11,330		11,330		11,330
Level 3:
Time deposits		115,479		116,402		96,217		96,975

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practical to estimate that value.

Cash and Cash Equivalents.  For these short-term instruments, the carrying amount is a reasonable estimate of fair value.  “Cash and Cash Equivalents” includes interest-bearing deposits at other banks.

FHLB and FRB stock.  The carrying value of FHLB and FRB stock, which are non-marketable equity investments, approximate fair value.

Securities held to maturity.  The Company holds certain municipal bonds as held-to-maturity.  These bonds are generally small in dollar amount and are issued only by certain local municipalities within the Company’s market area.  The original terms are negotiated directly and on an individual basis consistent with our loan and credit guidelines.  These bonds are not traded on the open market and management intends to hold the bonds to maturity.  The fair value of held-to-maturity securities is estimated by discounting the future cash flows using the current rates at which similar agreements would be made with municipalities with similar credit ratings and for the same remaining maturities.

Loans and Leases, net.  The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, net of the appropriate portion of the allowance for loan losses.  For variable rate loans, the carrying amount is a reasonable estimate of fair value.  This fair value calculation is not necessarily indicative of the exit price, as defined in ASC 820.

Deposits.  The fair value of demand deposits, NOW accounts, muni-vest accounts and regular savings accounts is the amount payable on demand at the reporting date.  The fair value of time deposits is estimated using the rates currently offered for deposits of similar remaining maturities.

Junior Subordinated Debentures.  There is no active market for the Company’s debentures and there have been no issuances of similar instruments in recent years.  The Company looked at a market bond index to estimate a discount margin to value the debentures.  The discount margin was very similar to the spread to LIBOR established at the issuance of the debentures.  As a result, the Company determined that the fair value of the adjustable-rate debentures approximates their face amount.

Securities Sold Under Agreement to Repurchase.The fair value of the securities sold under agreement to repurchase approximates its carrying value as the repurchase agreements are one day agreements.

Other Borrowed Funds.  The fair value of the short-term portion of other borrowed funds approximates its carrying value.  The fair value of the long-term portion of other borrowed funds is estimated using a discounted cash flow analysis based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

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Loans And The Allowance For Loan Losses

3 Months Ended

Mar. 31, 2016

Loans And The Allowance For Loan Losses [Abstract]

Loans And The Allowance For Loan Losses

4. LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Loan Portfolio Composition

The following table presents selected information on the composition of the Company’s loan portfolio as of the dates indicated:

	March 31, 2016		December 31, 2015
Mortgage loans on real estate:	(in thousands)
Residential mortgages	$	105,545	$	103,941
Commercial and multi-family		406,206		399,819
Construction-Residential		1,149		1,546
Construction-Commercial		68,692		60,892
Home equities		61,593		61,042
Total real estate loans		643,185		627,240
Commercial and industrial loans		150,813		144,330
Consumer loans		1,684		1,596
Other		488		139
Net deferred loan origination costs		603		679
Total gross loans		796,773		773,984
Allowance for loan losses		(13,119)		(12,883)
Loans, net	$	783,654	$	761,101

The Bank sells certain fixed rate residential mortgages to FNMA while maintaining the servicing rights for those mortgages.  In the three month period ended March 31, 2016, the Bank sold mortgages to FNMA totaling $0.9 million, as compared with $2.6 million in mortgages sold to FNMA in the three month period ended March 31, 2015.  At March  31, 2016, the Bank had a loan servicing portfolio principal balance of $75.8 million upon which it earns servicing fees, as compared with $77.3 million at December 31, 2015.  The value of the mortgage servicing rights for that portfolio was $0.5 million at March  31, 2016 and $0.6 million at December 31, 2015.  At March 31, 2016, there were no residential mortgage loans held-for-sale, compared with $0.5 million in residential mortgages held-for-sale at December 31, 2015.  The Company had no commercial loans held-for-sale at March  31, 2016 or December 31, 2015.  The Company has never been contacted by FNMA to repurchase any loans due to improper documentation or fraud.

As noted in Note 1, these financial statements should be read in conjunction with the Audited Consolidated Financial Statements and the Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015.  Disclosures related to the basis for accounting for loans, the method for recognizing interest income on loans, the policy for placing loans on nonaccrual status and the subsequent recording of payments and resuming accrual of interest, the policy for determining past due status, a description of the Company’s accounting policies and methodology used to estimate the allowance for loan losses, the policy for charging-off loans, the accounting policies for impaired loans, and more descriptive information on the Company’s credit risk ratings are all contained in the Notes to the Audited Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.  Unless otherwise noted in this Form 10-Q, the policies and methodology described in the Annual Report for the year ended December 31, 2015 are consistent with those utilized by the Company in the three-month period ended March  31, 2016.

Credit Quality Indicators

The Bank monitors the credit risk in its loan portfolio by reviewing certain credit quality indicators (“CQI”).  The primary CQI for its commercial mortgage and commercial and industrial (“C&I”) portfolios is the individual loan’s credit risk rating.  The following list provides a description of the credit risk ratings that are used internally by the Bank when assessing the adequacy of its allowance for loan and lease losses:

· 1-3-Pass

· 4-Watch

· 5-O.A.E.M. (Other Assets Especially Mentioned) or Special Mention

· 6-Substandard

· 7-Doubtful

· 8-Loss

The Company’s consumer loans, including residential mortgages and home equities, are not individually risk rated or reviewed in the Company’s loan review process.  Consumers are not required to provide the Company with updated financial information as are commercial customers.  Consumer loans also carry smaller balances.  Given the lack of updated information after the initial underwriting of the loan and small size of individual loans, the Company uses delinquency status as the primary credit quality indicator for consumer loans.However, once a consumer loan is identified as impaired, it is individually evaluated for impairment.

The following tables provide data, at the class level, of credit quality indicators of certain loans for the dates specified:

March 31, 2016
(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
3	$	40,299	$	324,754	$	365,053	$	81,975
4		22,985		62,966		85,951		51,685
5		1,224		11,409		12,633		10,320
6		4,184		7,077		11,261		6,719
7		-		-		-		114
Total	$	68,692	$	406,206	$	474,898	$	150,813

December 31, 2015
(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
3	$	42,383	$	340,837	$	383,220	$	80,379
4		13,098		40,019		53,117		47,509
5		1,224		11,772		12,996		8,973
6		4,187		7,191		11,378		7,350
7		-		-		-		119
Total	$	60,892	$	399,819	$	460,711	$	144,330

Past Due Loans

The following tables provide an analysis of the age of the recorded investment in loans that are past due as of the dates indicated:

March 31, 2016
(in thousands)
							Total Past		Current		Total		90+ Days		Non-accruing
	30-59 days		60-89 days		90+ days		Due		Balance		Balance		Accruing		Loans
Commercial and industrial	$	607	$	217	$	537	$	1,361	$	149,452	$	150,813	$	175	$	5,331
Residential real estate:
Residential		1,014		-		521		1,535		104,010		105,545		-		737
Construction		-		-		-		-		1,149		1,149		-		-
Commercial real estate:
Commercial		5,533		-		3,291		8,824		397,382		406,206		2,839		3,698
Construction		456		-		3,728		4,184		64,508		68,692		-		4,184
Home equities		94		104		762		960		60,633		61,593		-		963
Consumer		7		-		-		7		1,677		1,684		-		14
Other		-		-		-		-		488		488		-		-
Total Loans	$	7,711	$	321	$	8,839	$	16,871	$	779,299	$	796,170	$	3,014	$	14,927

NOTE: Loan balances do not include $603 thousand in net deferred loan origination costs as of March 31, 2016.

December 31, 2015
(in thousands)
							Total Past		Current		Total		90+ Days		Non-accruing
	30-59 days		60-89 days		90+ days		Due		Balance		Balance		Accruing		Loans
Commercial and industrial	$	160	$	224	$	66	$	450	$	143,880	$	144,330	$	40	$	5,312
Residential real estate:
Residential		822		402		569		1,793		102,148		103,941		-		1,400
Construction		-		-		-		-		1,546		1,546		-		-
Commercial real estate:
Commercial		1,919		963		457		3,339		396,480		399,819		457		3,574
Construction		-		-		-		-		60,892		60,892		-		4,187
Home equities		253		236		267		756		60,286		61,042		-		1,058
Consumer		8		-		-		8		1,588		1,596		-		14
Other		-		-		-		-		139		139		-		-
Total Loans	$	3,162	$	1,825	$	1,359	$	6,346	$	766,959	$	773,305	$	497	$	15,545

NOTE: Loan balances do not include $679 thousand in net deferred loan origination costs as of December 31, 2015.

Allowance for loan losses

The following tables present the activity in the allowance for loan losses according to portfolio segment, for the three month periods ended March 31, 2016 and 2015:

March 31, 2016
(in thousands)	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer **		Residential Mortgages*		HELOC		Unallocated		Total
Allowance for loan
losses:
Beginning balance	$	4,383	$	7,135	$	85	$	909	$	371	$	-	$	12,883
Charge-offs		(13)		-		(7)		-		-		-		(20)
Recoveries		7		38		3		-		-		-		48
Provision (Credit)		203		269		12		(213)		(63)		-		208
Ending balance	$	4,580	$	7,442	$	93	$	696	$	308	$	-	$	13,119
Allowance for loan
losses:
Ending balance:
Individually evaluated
for impairment	$	516	$	1,134	$	41	$	2	$	-	$	-	$	1,693
Collectively evaluated
for impairment		4,064		6,308		52		694		308		-		11,426
Total	$	4,580	$	7,442	$	93	$	696	$	308	$	-	$	13,119
Loans:
Ending balance:
Individually evaluated
for impairment	$	5,382	$	10,092	$	41	$	2,482	$	1,545	$	-	$	19,542
Collectively evaluated
for impairment		145,431		464,806		2,131		104,212		60,048		-		776,628
Total	$	150,813	$	474,898	$	2,172	$	106,694	$	61,593	$	-	$	796,170

* Includes construction loans

** Includes all other consumer loans

NOTE: Loan balances do not include $603 thousand in net deferred loan origination costs as of March 31, 2016.

March 31, 2015
(in thousands)	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer **		Residential Mortgages*		HELOC		Unallocated		Total
Allowance for loan
and lease losses:
Beginning balance	$	4,896	$	5,650	$	78	$	941	$	819	$	149	$	12,533
Charge-offs		-		-		(6)		-		-		-		(6)
Recoveries		38		10		1		-		-		-		49
Provision (Credit)		55		170		(3)		(17)		(4)		-		201
Ending balance	$	4,989	$	5,830	$	70	$	924	$	815	$	149	$	12,777
Allowance for loan
and lease losses:
Ending balance:
Individually evaluated
for impairment	$	978	$	124	$	47	$	3	$	-	$	-	$	1,152
Collectively evaluated
for impairment		4,011		5,706		23		921		815		149		11,625
Total	$	4,989	$	5,830	$	70	$	924	$	815	$	149	$	12,777
Loans and leases:
Ending balance:
Individually evaluated
for impairment	$	6,577	$	5,604	$	47	$	2,512	$	981	$	-	$	15,721
Collectively evaluated
for impairment		125,839		400,776		1,779		98,274		58,708		-		685,376
Total	$	132,416	$	406,380	$	1,826	$	100,786	$	59,689	$	-	$	701,097

* Includes construction loans

** Includes all other consumer loans

NOTE: Loan balances do not include $641 thousand in net deferred loan origination costs as of March 31, 2015.

Impaired Loans

The following tables provide data, at the class level, of impaired loans as of the dates indicated:

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With no related allowance recorded:		(in thousands)
Commercial and industrial	$	1,908	$	1,975	$	-	$	2,074	$	16	$	2
Residential real estate:
Residential		2,427		2,483		-		2,462		10		12
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		3,999		4,039		-		4,062		22		16
Construction		834		834		-		834		-		12
Home equities		1,545		1,607		-		1,560		13		6
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total impaired loans	$	10,713	$	10,938	$	-	$	10,992	$	61	$	48

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With a related allowance recorded:		(in thousands)
Commercial and industrial	$	3,474	$	3,775	$	516	$	3,711	$	40	$	-
Residential real estate:
Residential		55		55		2		55		-		-
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		1,075		1,083		232		1,079		12		-
Construction		4,184		4,200		902		4,186		48		-
Home equities		-		-		-		-		-		-
Consumer		41		56		41		43		1		1
Other		-		-		-		-		-		-
Total impaired loans	$	8,829	$	9,169	$	1,693	$	9,074	$	101	$	1

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
Total:		(in thousands)
Commercial and industrial	$	5,382	$	5,750	$	516	$	5,785	$	56	$	2
Residential real estate:
Residential		2,482		2,538		2		2,517		10		12
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		5,074		5,122		232		5,141		34		16
Construction		5,018		5,034		902		5,020		48		12
Home equities		1,545		1,607		-		1,560		13		6
Consumer		41		56		41		43		1		1
Other		-		-		-		-		-		-
Total impaired loans	$	19,542	$	20,107	$	1,693	$	20,066	$	162	$	49

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With no related allowance recorded:		(in thousands)
Commercial and industrial	$	1,750	$	1,811	$	-	$	1,945	$	58	$	47
Residential real estate:
Residential		2,444		2,555		-		2,474		90		63
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		3,888		3,908		-		3,930		27		179
Construction		834		834		-		834		-		31
Home equities		1,644		1,711		-		1,661		40		52
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total impaired loans	$	10,560	$	10,819	$	-	$	10,844	$	215	$	372

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With a related allowance recorded:		(in thousands)
Commercial and industrial	$	3,572	$	3,835	$	552	$	3,966	$	255	$	9
Residential real estate:
Residential		55		55		2		55		1		2
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		1,083		1,083		235		1,083		4		42
Construction		4,188		4,201		911		4,188		29		166
Home equities		-		-		-		-		-		-
Consumer		42		57		42		45		2		6
Other		-		-		-		-		-		-
Total impaired loans	$	8,940	$	9,231	$	1,742	$	9,337	$	291	$	225

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
Total:		(in thousands)
Commercial and industrial	$	5,322	$	5,646	$	552	$	5,911	$	313	$	56
Residential real estate:
Residential		2,499		2,610		2		2,529		91		65
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		4,971		4,991		235		5,013		31		221
Construction		5,022		5,035		911		5,022		29		197
Home equities		1,644		1,711		-		1,661		40		52
Consumer		42		57		42		45		2		6
Other		-		-		-		-		-		-
Total impaired loans	$	19,500	$	20,050	$	1,742	$	20,181	$	506	$	597

Non-performing loans

The following table sets forth information regarding non-performing loans as of the dates specified:

	March 31, 2016			December 31, 2015
		(in thousands)
Non-accruing loans:
Commercial and industrial loans	$	5,331		$	5,312
Residential real estate:
Residential		737			1,400
Construction		-			-
Commercial real estate:
Commercial and multi-family		3,698			3,574
Construction		4,184			4,187
Home equities		963			1,058
Consumer loans		14			14
Other		-			-
Total non-accruing loans	$	14,927		$	15,545
Accruing loans 90+ days past due		3,014			497
Total non-performing loans	$	17,941		$	16,042
Total non-performing loans
to total assets		1.81	%		1.71	%
Total non-performing loans
to total loans		2.25	%		2.07	%

Troubled debt restructurings

The Company had $5.7 million and $5.8 million in loans that were restructured in a troubled debt restructuring (“TDR”) at March 31, 2016 and December 31, 2015, respectively.  Of those balances, $1.1 million and $1.8 million were in non-accrual status at March 31, 2016 and December 31, 2015, respectively.  Any TDR that is placed on non-accrual is not reverted back to accruing status until the borrower makes timely payments as contracted for at least six months and future collection under the revised terms is probable.  All of the Company’s restructurings were allowed in an effort to maximize its ability to collect on loans where borrowers were experiencing financial difficulty.

The reserve for a TDR is based upon the present value of the future expected cash flows discounted at the loan’s original effective rate or upon the fair value of the collateral less costs to sell, if the loan is deemed collateral dependent.  This reserve methodology is used because all TDR loans are considered impaired.  As of March 31, 2016, there were no commitments to lend additional funds to debtors owing on loans whose terms have been modified in TDRs.

The following tables summarize the loans that were classified as troubled debt restructurings as of the dates indicated:

		March 31, 2016
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	533	$	481	$	52	$	160
Residential real estate:
Residential		1,869		124		1,745		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		1,702		327		1,375		-
Construction		834		-		834		-
Home equities		761		179		582		-
Consumer loans		27		-		27		27
Other		-		-		-		-
Total troubled restructured loans	$	5,726	$	1,111	$	4,615	$	187

		December 31, 2015
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	517	$	508	$	9	$	165
Residential real estate:
Residential		1,789		689		1,100		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		1,732		334		1,398		-
Construction		834		-		834		-
Home equities		867		281		586		-
Consumer loans		28		-		28		28
Other		-		-		-		-
Total troubled restructured loans	$	5,767	$	1,812	$	3,955	$	193

The Company’s TDRs have various agreements that involve deferral of principal payments, or interest-only payments, for a period (usually 12 months or less) to allow the customer time to improve cash flow or sell the property.  Other common types of concessions leading to the designation of a TDR are lines of credit that are termed out and extensions of maturities at rates that are less than market given the risk profile of the borrower.

The following table shows the data for TDR activity by type of concession granted to the borrower for the three month periods ended March 31, 2016 and 2015:

	Three months ended March 31, 2016					Three months ended March 31, 2015
	(in thousands)					(in thousands)
Troubled Debt Restructurings by Type of Concession	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial:
Deferral of principal	-	$	-	$	-	3	$	541	$	541
Extension of maturity	1		24		24	-		-		-
Term-out line of credit	1		20		20	-		-		-
Residential Real Estate & Construction:
Extension of maturity	1		95		95	-		-		-
Commercial Real Estate & Construction	-		-		-	-		-		-
Home Equities	-		-		-	-		-		-
Consumer loans	-		-		-	-		-		-
Other	-		-		-	-		-		-

The general practice of the Bank is to work with borrowers so that they are able to pay back their loan in full.  If a borrower continues to be delinquent or cannot meet the terms of a TDR and the loan is determined to be uncollectible, the loan will be charged-off.  The following table presents loans which were classified as TDRs during the previous 12 months which defaulted during the three month periods ended March 31, 2016 and 2015:

	Three months ended March 31, 2016			Three months ended March 31, 2015
	(in thousands)			(in thousands)
Troubled Debt Restructurings	Number of	Recorded		Number of	Recorded
That Subsequently Defaulted	Contracts	Investment		Contracts	Investment
Commercial and Industrial	-	$	-	-	$	-
Residential Real Estate:
Residential	-		-	-		-
Construction	-		-	-		-
Commercial Real Estate:
Commercial and multi-family	-		-	-		-
Construction	-		-	-		-
Home Equities	-		-	1		19
Consumer loans	-		-	-		-
Other	-		-	-		-

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Per Share Data

3 Months Ended

Mar. 31, 2016

Per Share Data [Abstract]

Per Share Data

5. PER SHARE DATA

The common stock per share information is based upon the weighted average number of shares outstanding during each period.  For the three periods ended March 31, 2016 and 2015, the Company had an average of 64,925 and78,167dilutive shares outstanding, respectively.

Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and not included in calculating diluted earnings per share.  For the three month periods ended March 31, 2016 and 2015, there was an average of 49,550 and38,630 anti-dilutive shares outstanding, respectively, that were not included in calculating diluted earnings per share because their effect was anti-dilutive.

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Other Comprehensive Income

3 Months Ended

Mar. 31, 2016

Other Comprehensive Income [Abstract]

Other Comprehensive Income

6. OTHER COMPREHENSIVE INCOME

The following tables summarize the changes in the components of accumulated other comprehensive income (loss) during the three month periods ended March 31, 2016 and 2015:

	Balance at December 31, 2015		Net Change		Balance at March 31, 2016
	(in thousands)
Net unrealized gain on investment securities	$	475	$	649	$	1,124
Net defined benefit pension plan adjustments		(2,285)		40		(2,245)
Total	$	(1,810)	$	689	$	(1,121)
	Balance at December 31, 2014		Net Change		Balance at March 31, 2015
	(in thousands)
Net unrealized gain on investment securities	$	911	$	331	$	1,242
Net defined benefit pension plan adjustments		(2,419)		29		(2,390)
Total	$	(1,508)	$	360	$	(1,148)

	Three months ended March 31, 2016 (in thousands)						Three months ended March 31, 2015 (in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized gain on investment securities:
Unrealized gain on investment securities	$	1,047	$	(398)	$	649	$	541	$	(210)	$	331
Reclassification from accumulated other
comprehensive income for gains (losses)		-		-		-		-		-		-
Net change		1,047		(398)		649		541		(210)		331
Defined benefit pension plan adjustments:
Net actuarial gain (loss)	$	-	$	-	$	-	$	-	$	-	$	-
Reclassifications from accumulated other
comprehensive income for gains (losses)
Amortization of prior service cost (a)		8		(3)		5		7		(2)		5
Amortization of actuarial loss (a)		56		(21)		35		48		(24)		24
Net change		64		(24)		40		55		(26)		29
Other Comprehensive Income (Loss)	$	1,111	$	(422)	$	689	$	596	$	(236)	$	360

(a)   Included in net periodic pension cost, as described in Note 9 – “Net Periodic Benefit Costs”

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Segment Information

3 Months Ended

Mar. 31, 2016

Segment Information [Abstract]

Segment Information

7. SEGMENT INFORMATION

The Company is comprised of two primary business segments, banking and insurance agency activities. The following tables set forth information regarding these segments for the three month periods ended March 31, 2016 and 2015.

	Three months ended March 31, 2016
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	8,291	$	(31)	$	8,260
Provision for loan losses		208		-		208
Net interest income (expense) after
provision for loan losses		8,083		(31)		8,052
Non-interest income		1,246		-		1,246
Insurance service and fees		116		1,632		1,748
Non-interest expense		7,327		1,201		8,528
Income before income taxes		2,118		400		2,518
Income tax provision		650		154		804
Net income	$	1,468	$	246	$	1,714

	Three months ended March 31, 2015
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	7,609	$	(28)	$	7,581
Provision for loan losses		201		-		201
Net interest income (expense) after
provision for loan losses		7,408		(28)		7,380
Non-interest income		1,237		-		1,237
Insurance service and fees		162		1,667		1,829
Non-interest expense		6,481		1,031		7,512
Income before income taxes		2,326		608		2,934
Income tax provision		794		235		1,029
Net income	$	1,532	$	373	$	1,905

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Contingent Liabilities And Commitments

3 Months Ended

Mar. 31, 2016

Contingent Liabilities And Commitments [Abstract]

Contingent Liabilities And Commitments

8. CONTINGENT LIABILITIES AND COMMITMENTS

The unaudited consolidated financial statements do not reflect various commitments and contingent liabilities, which arise in the normal course of business, and which involve elements of credit risk, interest rate risk and liquidity risk. These commitments and contingent liabilities consist of commitments to extend credit and standby letters of credit. A summary of the Bank’s commitments and contingent liabilities is as follows:

	March 31,		December 31,
	2016		2015
	(in thousands)
Commitments to extend credit	$	226,787	$	206,346
Standby letters of credit		3,550		3,794
Total	$	230,337	$	210,140

Commitments to extend credit and standby letters of credit include some exposure to credit loss in the event of nonperformance by the customer. The Bank’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Company’s unaudited consolidated balance sheets. Because these instruments have fixed maturity dates, and because they may expire without being drawn upon, they do not necessarily represent cash requirements of the Bank. The Bank did not incur any losses on its commitments and did not record a reserve for its commitments during the first three months of 2016 or during 2015.

Certain lending commitments for construction residential mortgage loans are considered derivative instruments under the guidelines of GAAP.  The changes in the fair value of these commitments, due to interest rate risk, are not recorded on the consolidated balance sheets as the fair value of these derivatives is not considered to be material.

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Net Periodic Benefit Costs

3 Months Ended

Mar. 31, 2016

Net Periodic Benefit Costs [Abstract]

Net Periodic Benefit Costs

9. NET PERIODIC BENEFIT COSTS

On January 31, 2008, the Bank froze its defined benefit pension plan.  The plan covered substantially all Bank employees.  The plan provides benefits that are based on the employees’ compensation and years of service.  Under the freeze, eligible employees will receive, at retirement, the benefits already earned through January 31, 2008, but have not accrued any additional benefits since then.  As a result, service cost is no longer incurred.

The Bank uses an actuarial method of amortizing prior service cost and unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank used recognized the prior service cost and net gains or losses over the average remaining service period of active employees.

The Bank also maintains a nonqualified supplemental executive retirement plan covering certain members of the Company’s senior management. The Bank uses an actuarial method of amortizing unrecognized net gains or losses which result from actual expense and assumptions being different than those that are projected. The amortization method the Bank uses recognizes the net gains or losses over the average remaining service period of active employees.

The Bank did notcontribute to the defined benefit pension plan during the first three months of 2016 but expects to contribute $140 thousand to the pension plan at a later date in 2016.

The following table presents the net periodic cost for the Bank’s defined benefit pension plan and supplemental executive retirement plan for the three month periods ended March 31, 2016 and 2015:

		Three months ended March 31,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2016		2015		2016		2015
Service cost	$	-	$	-	$	47	$	48
Interest cost		55		51		36		37
Expected return on plan assets		(65)		(77)		-		-
Amortization of prior service cost		-		-		8		7
Amortization of the net loss		22		17		34		31
Net periodic cost (benefit)	$	12	$	(9)	$	125	$	123

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

10.  RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers.  The objective of this ASU is to require entities to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  This ASU will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective.  The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period.  Early application is not permitted.  The standard allows an entity to apply the amendments in the ASU using either the retrospective or cumulative effect transition method.  The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  The main objective of this ASU is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information.  The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years.  The Company is evaluating the impact of the standard on its financial reporting.  The ASU will not impact results of operations or the financial position of the Company.

ASU 2016-02, Leases.  The objective of this ASU is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements to meet that objective.  The main difference between previous GAAP and this ASU is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP.  Under this new guidance, a lessee should recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term.  The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP.  Information about the Company’s operating lease obligations is disclosed in Note 16 to the Company’s Financial Statements on Form 10-K for the year ended December 31, 2015.  The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

ASU 2016-09, Improvements to Employee Share-Based Payment Accounting.  This ASU is part of the FASB’s Simplification Initiative.  The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  Some of the areas of simplification apply only to nonpublic entities.  Although the impact on the Company’s financial statements is not expected to be material, the area of this ASU that will impact the Company is the elimination of the concept of a tax windfall pool.  Currently, an entity must determine for each award whether the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes results in either an excess benefit or a tax deficiency.  Excess tax benefits are recognized in additional paid-in-capital; tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or in the income statement.  Excess tax benefits are not recognized until the deduction reduces taxes payable.  Under the new standard, all excess tax benefits and tax deficiencies will be recognized as income tax expense or benefit in the income statement.  The amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods.

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Securities (Tables)

3 Months Ended

Mar. 31, 2016

Securities [Abstract]

Schedule Of Amortized Cost And Approximate Fair Value Of Securities

	March 31, 2016
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. government agencies	$	24,835	$	387	$	(15)	$	25,207
States and political subdivisions		36,659		1,046		(23)		37,682
Total debt securities	$	61,494	$	1,433	$	(38)	$	62,889
Mortgage-backed securities:
FNMA	$	18,427	$	276	$	(26)	$	18,677
FHLMC		4,393		96		(32)		4,457
GNMA		11,044		120		(30)		11,134
CMO		17,516		116		(102)		17,530
Total mortgage-backed securities	$	51,380	$	608	$	(190)	$	51,798
Total securities designated as available for sale	$	112,874	$	2,041	$	(228)	$	114,687
Held to Maturity:
Debt securities
States and political subdivisions	$	1,607	$	12	$	(24)	$	1,595
Total securities designated as held to maturity	$	1,607	$	12	$	(24)	$	1,595

	December 31, 2015
	(in thousands)
	Amortized		Unrealized				Fair
	Cost		Gains		Losses		Value
Available for Sale:
Debt securities:
U.S. government agencies	$	21,914	$	166	$	(234)	$	21,846
States and political subdivisions		36,838		874		(29)		37,683
Total debt securities	$	58,752	$	1,040	$	(263)	$	59,529
Mortgage-backed securities:
FNMA	$	12,312	$	168	$	(25)	$	12,455
FHLMC		4,629		61		(56)		4,634
GNMA		7,047		82		(61)		7,068
CMO		13,634		24		(203)		13,455
Total mortgage-backed securities	$	37,622	$	335	$	(345)	$	37,612
Total securities designated as available for sale	$	96,374	$	1,375	$	(608)	$	97,141
Held to Maturity:
Debt securities
States and political subdivisions	$	1,617	$	6	$	(39)	$	1,584
Total securities designated as held to maturity	$	1,617	$	6	$	(39)	$	1,584

Scheduled Maturities Of Debt And Mortgage-Backed Securities

	March 31, 2016				December 31, 2015
	Amortized		Estimated		Amortized		Estimated
	cost		fair value		cost		fair value
		(in thousands)				(in thousands)
Debt securities available for sale:
Due in one year or less	$	4,377	$	4,428	$	4,082	$	4,142
Due after one year through five years		29,114		29,716		29,113		29,448
Due after five years through ten years		21,802		22,341		19,356		19,615
Due after ten years		6,201		6,404		6,201		6,324
		61,494		62,889		58,752		59,529
Mortgage-backed securities
available for sale		51,380		51,798		37,622		37,612
Total available for sale securities	$	112,874	$	114,687	$	96,374	$	97,141
Debt securities held to maturity:
Due in one year or less	$	315	$	314	$	309	$	308
Due after one year through five years		358		352		374		365
Due after five years through ten years		828		827		828		815
Due after ten years		106		102		106		96
		1,607		1,595		1,617		1,584
Total held to maturity securities	$	1,607	$	1,595	$	1,617	$	1,584

Unrealized Losses On Securities

	March 31, 2016
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. government agencies	$	-	$	-	$	1,985	$	(15)	$	1,985	$	(15)
States and political subdivisions		1,196		(1)		1,115		(22)		2,311		(23)
Total debt securities	$	1,196	$	(1)	$	3,100	$	(37)	$	4,296	$	(38)
Mortgage-backed securities:
FNMA	$	6,581	$	(26)	$	-	$	-	$	6,581	$	(26)
FHLMC		-		-		1,216		(32)		1,216		(32)
GNMA		4,427		(22)		1,614		(8)		6,041		(30)
CMO'S		5,984		(81)		3,637		(21)		9,621		(102)
Total mortgage-backed securities	$	16,992	$	(129)	$	6,467	$	(61)	$	23,459	$	(190)
Held To Maturity:
Debt securities:
States and political subdivisions	$	630	$	(7)	$	426	$	(17)	$	1,056	$	(24)
Total temporarily impaired
securities	$	18,818	$	(137)	$	9,993	$	(115)	$	28,811	$	(252)

	December 31, 2015
		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
		(in thousands)
Available for Sale:
Debt securities:
U.S. government agencies	$	4,531	$	(89)	$	5,855	$	(145)	$	10,386	$	(234)
States and political subdivisions		3,133		(6)		1,117		(23)		4,250		(29)
Total debt securities	$	7,664	$	(95)	$	6,972	$	(168)	$	14,636	$	(263)
Mortgage-backed securities:
FNMA	$	3,856	$	(25)	$	-	$	-	$	3,856	$	(25)
FHLMC		-		-		1,234		(56)		1,234		(56)
GNMA		3,480		(55)		471		(6)		3,951		(61)
CMO'S		6,677		(89)		3,661		(114)		10,338		(203)
Total mortgage-backed securities	$	14,013	$	(169)	$	5,366	$	(176)	$	19,379	$	(345)
Held To Maturity:
Debt securities:
States and political subdivisions	$	626	$	(11)	$	495	$	(28)	$	1,121	$	(39)
Total temporarily impaired
securities	$	22,303	$	(275)	$	12,833	$	(372)	$	35,136	$	(647)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Measurements [Abstract]

Financial Instruments Measured At Fair Value On Recurring Basis

(in thousands)		Level 1		Level 2		Level 3		Fair Value
March 31, 2016
Securities available-for-sale:
U.S. government agencies	$	-	$	25,207	$	-	$	25,207
States and political subdivisions		-		37,682		-		37,682
Mortgage-backed securities		-		51,798		-		51,798
Mortgage servicing rights		-		-		496		496
December 31, 2015
Securities available-for-sale:
U.S. government agencies	$	-	$	21,846	$	-	$	21,846
States and political subdivisions		-		37,683		-		37,683
Mortgage-backed securities		-		37,612		-		37,612
Mortgage servicing rights		-		-		557		557

Changes In Fair Value For Mortgage Servicing Rights

	Three months ended March 31,
(in thousands)	2016		2015
Mortgage servicing rights - January 1	$	557	$	518
Gains (losses) included in earnings		(69)		(45)
Additions from loan sales		8		24
Mortgage servicing rights - March 31	$	496	$	497

Quantitative Information About Significant Unobservable Inputs For MSRs

	March 31, 2016		December 31, 2015
Servicing fees	0.25	%	0.25	%
Discount rate	9.52	%	9.52	%
Prepayment rate (CPR)	9.93	%	8.55	%

Financial Instruments Measured At Fair Value On Nonrecurring Basis

(in thousands)		Level 1	Level 2	Level 3		Fair Value
March 31, 2016
Impaired loans	$	-	-	17,849	$	17,849
December 31, 2015
Impaired loans	$	-	-	17,758	$	17,758

Estimated Fair Values Of Financial Instruments

	March 31, 2016				December 31, 2015
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
		(in thousands)				(in thousands)
Financial assets:
Level 1:
Cash and cash equivalents	$	33,392	$	33,392	$	22,621	$	22,621
Level 2:
Available for sale securities		114,687		114,687		97,141		97,141
FHLB and FRB stock		2,788		2,788		2,783		2,783
Level 3:
Held to maturity securities		1,607		1,595		1,617		1,584
Loans, net		783,654		795,249		761,101		772,472
Mortgage servicing rights		496		496		557		557
Financial liabilities:
Level 1:
Demand deposits	$	174,276	$	174,276	$	183,098	$	183,098
NOW deposits		95,622		95,622		83,674		83,674
Regular savings deposits		463,672		463,672		439,993		439,993
Level 2:
Securities sold under agreement to
repurchase		12,894		12,894		10,821		10,821
Other borrowed funds		10,000		10,080		10,000		9,874
Junior subordinated debentures		11,330		11,330		11,330		11,330
Level 3:
Time deposits		115,479		116,402		96,217		96,975

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Loans And The Allowance For Loan Losses (Tables)

3 Months Ended

Mar. 31, 2016

Loans And The Allowance For Loan Losses [Abstract]

Schedule Of Loan Portfolio Composition

	March 31, 2016		December 31, 2015
Mortgage loans on real estate:	(in thousands)
Residential mortgages	$	105,545	$	103,941
Commercial and multi-family		406,206		399,819
Construction-Residential		1,149		1,546
Construction-Commercial		68,692		60,892
Home equities		61,593		61,042
Total real estate loans		643,185		627,240
Commercial and industrial loans		150,813		144,330
Consumer loans		1,684		1,596
Other		488		139
Net deferred loan origination costs		603		679
Total gross loans		796,773		773,984
Allowance for loan losses		(13,119)		(12,883)
Loans, net	$	783,654	$	761,101

Data, At Class Level, Of Credit Quality Indicators Of Certain Loans

March 31, 2016
(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
3	$	40,299	$	324,754	$	365,053	$	81,975
4		22,985		62,966		85,951		51,685
5		1,224		11,409		12,633		10,320
6		4,184		7,077		11,261		6,719
7		-		-		-		114
Total	$	68,692	$	406,206	$	474,898	$	150,813

December 31, 2015
(in thousands)
Corporate Credit Exposure – By Credit Rating	Commercial Real Estate Construction		Commercial and Multi-Family Mortgages		Total Commercial Real Estate		Commercial and Industrial
3	$	42,383	$	340,837	$	383,220	$	80,379
4		13,098		40,019		53,117		47,509
5		1,224		11,772		12,996		8,973
6		4,187		7,191		11,378		7,350
7		-		-		-		119
Total	$	60,892	$	399,819	$	460,711	$	144,330

Recorded Investment In Loans Past Due

March 31, 2016
(in thousands)
							Total Past		Current		Total		90+ Days		Non-accruing
	30-59 days		60-89 days		90+ days		Due		Balance		Balance		Accruing		Loans
Commercial and industrial	$	607	$	217	$	537	$	1,361	$	149,452	$	150,813	$	175	$	5,331
Residential real estate:
Residential		1,014		-		521		1,535		104,010		105,545		-		737
Construction		-		-		-		-		1,149		1,149		-		-
Commercial real estate:
Commercial		5,533		-		3,291		8,824		397,382		406,206		2,839		3,698
Construction		456		-		3,728		4,184		64,508		68,692		-		4,184
Home equities		94		104		762		960		60,633		61,593		-		963
Consumer		7		-		-		7		1,677		1,684		-		14
Other		-		-		-		-		488		488		-		-
Total Loans	$	7,711	$	321	$	8,839	$	16,871	$	779,299	$	796,170	$	3,014	$	14,927

NOTE: Loan balances do not include $603 thousand in net deferred loan origination costs as of March 31, 2016.

December 31, 2015
(in thousands)
							Total Past		Current		Total		90+ Days		Non-accruing
	30-59 days		60-89 days		90+ days		Due		Balance		Balance		Accruing		Loans
Commercial and industrial	$	160	$	224	$	66	$	450	$	143,880	$	144,330	$	40	$	5,312
Residential real estate:
Residential		822		402		569		1,793		102,148		103,941		-		1,400
Construction		-		-		-		-		1,546		1,546		-		-
Commercial real estate:
Commercial		1,919		963		457		3,339		396,480		399,819		457		3,574
Construction		-		-		-		-		60,892		60,892		-		4,187
Home equities		253		236		267		756		60,286		61,042		-		1,058
Consumer		8		-		-		8		1,588		1,596		-		14
Other		-		-		-		-		139		139		-		-
Total Loans	$	3,162	$	1,825	$	1,359	$	6,346	$	766,959	$	773,305	$	497	$	15,545

NOTE: Loan balances do not include $679 thousand in net deferred loan origination costs as of December 31, 2015.

Schedule Of Allowance For Loan Losses According To Portfolio Segment

March 31, 2016
(in thousands)	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer **		Residential Mortgages*		HELOC		Unallocated		Total
Allowance for loan
losses:
Beginning balance	$	4,383	$	7,135	$	85	$	909	$	371	$	-	$	12,883
Charge-offs		(13)		-		(7)		-		-		-		(20)
Recoveries		7		38		3		-		-		-		48
Provision (Credit)		203		269		12		(213)		(63)		-		208
Ending balance	$	4,580	$	7,442	$	93	$	696	$	308	$	-	$	13,119
Allowance for loan
losses:
Ending balance:
Individually evaluated
for impairment	$	516	$	1,134	$	41	$	2	$	-	$	-	$	1,693
Collectively evaluated
for impairment		4,064		6,308		52		694		308		-		11,426
Total	$	4,580	$	7,442	$	93	$	696	$	308	$	-	$	13,119
Loans:
Ending balance:
Individually evaluated
for impairment	$	5,382	$	10,092	$	41	$	2,482	$	1,545	$	-	$	19,542
Collectively evaluated
for impairment		145,431		464,806		2,131		104,212		60,048		-		776,628
Total	$	150,813	$	474,898	$	2,172	$	106,694	$	61,593	$	-	$	796,170

* Includes construction loans

** Includes all other consumer loans

NOTE: Loan balances do not include $603 thousand in net deferred loan origination costs as of March 31, 2016.

March 31, 2015
(in thousands)	Commercial and Industrial		Commercial Real Estate Mortgages*		Consumer **		Residential Mortgages*		HELOC		Unallocated		Total
Allowance for loan
and lease losses:
Beginning balance	$	4,896	$	5,650	$	78	$	941	$	819	$	149	$	12,533
Charge-offs		-		-		(6)		-		-		-		(6)
Recoveries		38		10		1		-		-		-		49
Provision (Credit)		55		170		(3)		(17)		(4)		-		201
Ending balance	$	4,989	$	5,830	$	70	$	924	$	815	$	149	$	12,777
Allowance for loan
and lease losses:
Ending balance:
Individually evaluated
for impairment	$	978	$	124	$	47	$	3	$	-	$	-	$	1,152
Collectively evaluated
for impairment		4,011		5,706		23		921		815		149		11,625
Total	$	4,989	$	5,830	$	70	$	924	$	815	$	149	$	12,777
Loans and leases:
Ending balance:
Individually evaluated
for impairment	$	6,577	$	5,604	$	47	$	2,512	$	981	$	-	$	15,721
Collectively evaluated
for impairment		125,839		400,776		1,779		98,274		58,708		-		685,376
Total	$	132,416	$	406,380	$	1,826	$	100,786	$	59,689	$	-	$	701,097

* Includes construction loans

** Includes all other consumer loans

NOTE: Loan balances do not include $641 thousand in net deferred loan origination costs as of March 31, 2015.

Data, At Class Level, Of Impaired Loans

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With no related allowance recorded:		(in thousands)
Commercial and industrial	$	1,908	$	1,975	$	-	$	2,074	$	16	$	2
Residential real estate:
Residential		2,427		2,483		-		2,462		10		12
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		3,999		4,039		-		4,062		22		16
Construction		834		834		-		834		-		12
Home equities		1,545		1,607		-		1,560		13		6
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total impaired loans	$	10,713	$	10,938	$	-	$	10,992	$	61	$	48

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With a related allowance recorded:		(in thousands)
Commercial and industrial	$	3,474	$	3,775	$	516	$	3,711	$	40	$	-
Residential real estate:
Residential		55		55		2		55		-		-
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		1,075		1,083		232		1,079		12		-
Construction		4,184		4,200		902		4,186		48		-
Home equities		-		-		-		-		-		-
Consumer		41		56		41		43		1		1
Other		-		-		-		-		-		-
Total impaired loans	$	8,829	$	9,169	$	1,693	$	9,074	$	101	$	1

		At March 31, 2016
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
Total:		(in thousands)
Commercial and industrial	$	5,382	$	5,750	$	516	$	5,785	$	56	$	2
Residential real estate:
Residential		2,482		2,538		2		2,517		10		12
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		5,074		5,122		232		5,141		34		16
Construction		5,018		5,034		902		5,020		48		12
Home equities		1,545		1,607		-		1,560		13		6
Consumer		41		56		41		43		1		1
Other		-		-		-		-		-		-
Total impaired loans	$	19,542	$	20,107	$	1,693	$	20,066	$	162	$	49

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With no related allowance recorded:		(in thousands)
Commercial and industrial	$	1,750	$	1,811	$	-	$	1,945	$	58	$	47
Residential real estate:
Residential		2,444		2,555		-		2,474		90		63
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		3,888		3,908		-		3,930		27		179
Construction		834		834		-		834		-		31
Home equities		1,644		1,711		-		1,661		40		52
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
Total impaired loans	$	10,560	$	10,819	$	-	$	10,844	$	215	$	372

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
With a related allowance recorded:		(in thousands)
Commercial and industrial	$	3,572	$	3,835	$	552	$	3,966	$	255	$	9
Residential real estate:
Residential		55		55		2		55		1		2
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		1,083		1,083		235		1,083		4		42
Construction		4,188		4,201		911		4,188		29		166
Home equities		-		-		-		-		-		-
Consumer		42		57		42		45		2		6
Other		-		-		-		-		-		-
Total impaired loans	$	8,940	$	9,231	$	1,742	$	9,337	$	291	$	225

		At December 31, 2015
		Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Foregone		Interest Income Recognized
Total:		(in thousands)
Commercial and industrial	$	5,322	$	5,646	$	552	$	5,911	$	313	$	56
Residential real estate:
Residential		2,499		2,610		2		2,529		91		65
Construction		-		-		-		-		-		-
Commercial real estate:
Commercial		4,971		4,991		235		5,013		31		221
Construction		5,022		5,035		911		5,022		29		197
Home equities		1,644		1,711		-		1,661		40		52
Consumer		42		57		42		45		2		6
Other		-		-		-		-		-		-
Total impaired loans	$	19,500	$	20,050	$	1,742	$	20,181	$	506	$	597

Schedule Of Non-Performing Loans

	March 31, 2016			December 31, 2015
		(in thousands)
Non-accruing loans:
Commercial and industrial loans	$	5,331		$	5,312
Residential real estate:
Residential		737			1,400
Construction		-			-
Commercial real estate:
Commercial and multi-family		3,698			3,574
Construction		4,184			4,187
Home equities		963			1,058
Consumer loans		14			14
Other		-			-
Total non-accruing loans	$	14,927		$	15,545
Accruing loans 90+ days past due		3,014			497
Total non-performing loans	$	17,941		$	16,042
Total non-performing loans
to total assets		1.81	%		1.71	%
Total non-performing loans
to total loans		2.25	%		2.07	%

Loans Classified As Troubled Debt Restructurings

		March 31, 2016
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	533	$	481	$	52	$	160
Residential real estate:
Residential		1,869		124		1,745		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		1,702		327		1,375		-
Construction		834		-		834		-
Home equities		761		179		582		-
Consumer loans		27		-		27		27
Other		-		-		-		-
Total troubled restructured loans	$	5,726	$	1,111	$	4,615	$	187

		December 31, 2015
		(in thousands)
		Total		Nonaccruing		Accruing		Related Allowance
Commercial and industrial	$	517	$	508	$	9	$	165
Residential real estate:
Residential		1,789		689		1,100		-
Construction		-		-		-		-
Commercial real estate:
Commercial and multi-family		1,732		334		1,398		-
Construction		834		-		834		-
Home equities		867		281		586		-
Consumer loans		28		-		28		28
Other		-		-		-		-
Total troubled restructured loans	$	5,767	$	1,812	$	3,955	$	193

TDR Activity By Type Of Concession Granted To Borrower

	Three months ended March 31, 2016					Three months ended March 31, 2015
	(in thousands)					(in thousands)
Troubled Debt Restructurings by Type of Concession	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial:
Deferral of principal	-	$	-	$	-	3	$	541	$	541
Extension of maturity	1		24		24	-		-		-
Term-out line of credit	1		20		20	-		-		-
Residential Real Estate & Construction:
Extension of maturity	1		95		95	-		-		-
Commercial Real Estate & Construction	-		-		-	-		-		-
Home Equities	-		-		-	-		-		-
Consumer loans	-		-		-	-		-		-
Other	-		-		-	-		-		-

Loans Classified As TDRs Which Defaulted

	Three months ended March 31, 2016			Three months ended March 31, 2015
	(in thousands)			(in thousands)
Troubled Debt Restructurings	Number of	Recorded		Number of	Recorded
That Subsequently Defaulted	Contracts	Investment		Contracts	Investment
Commercial and Industrial	-	$	-	-	$	-
Residential Real Estate:
Residential	-		-	-		-
Construction	-		-	-		-
Commercial Real Estate:
Commercial and multi-family	-		-	-		-
Construction	-		-	-		-
Home Equities	-		-	1		19
Consumer loans	-		-	-		-
Other	-		-	-		-

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Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2016

Other Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

	Balance at December 31, 2015		Net Change		Balance at March 31, 2016
	(in thousands)
Net unrealized gain on investment securities	$	475	$	649	$	1,124
Net defined benefit pension plan adjustments		(2,285)		40		(2,245)
Total	$	(1,810)	$	689	$	(1,121)
	Balance at December 31, 2014		Net Change		Balance at March 31, 2015
	(in thousands)
Net unrealized gain on investment securities	$	911	$	331	$	1,242
Net defined benefit pension plan adjustments		(2,419)		29		(2,390)
Total	$	(1,508)	$	360	$	(1,148)

Components Of Other Comprehensive Income (Loss)

	Three months ended March 31, 2016 (in thousands)						Three months ended March 31, 2015 (in thousands)
	Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount		Before-Tax Amount		Income Tax (Provision) Benefit		Net-of-Tax Amount
Unrealized gain on investment securities:
Unrealized gain on investment securities	$	1,047	$	(398)	$	649	$	541	$	(210)	$	331
Reclassification from accumulated other
comprehensive income for gains (losses)		-		-		-		-		-		-
Net change		1,047		(398)		649		541		(210)		331
Defined benefit pension plan adjustments:
Net actuarial gain (loss)	$	-	$	-	$	-	$	-	$	-	$	-
Reclassifications from accumulated other
comprehensive income for gains (losses)
Amortization of prior service cost (a)		8		(3)		5		7		(2)		5
Amortization of actuarial loss (a)		56		(21)		35		48		(24)		24
Net change		64		(24)		40		55		(26)		29
Other Comprehensive Income (Loss)	$	1,111	$	(422)	$	689	$	596	$	(236)	$	360

(a)   Included in net periodic pension cost, as described in Note 9 – “Net Periodic Benefit Costs”

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Information [Abstract]

Schedule Of Business Segments

	Three months ended March 31, 2016
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	8,291	$	(31)	$	8,260
Provision for loan losses		208		-		208
Net interest income (expense) after
provision for loan losses		8,083		(31)		8,052
Non-interest income		1,246		-		1,246
Insurance service and fees		116		1,632		1,748
Non-interest expense		7,327		1,201		8,528
Income before income taxes		2,118		400		2,518
Income tax provision		650		154		804
Net income	$	1,468	$	246	$	1,714

	Three months ended March 31, 2015
		Banking		Insurance Agency
		Activities		Activities		Total
		(in thousands)
Net interest income (expense)	$	7,609	$	(28)	$	7,581
Provision for loan losses		201		-		201
Net interest income (expense) after
provision for loan losses		7,408		(28)		7,380
Non-interest income		1,237		-		1,237
Insurance service and fees		162		1,667		1,829
Non-interest expense		6,481		1,031		7,512
Income before income taxes		2,326		608		2,934
Income tax provision		794		235		1,029
Net income	$	1,532	$	373	$	1,905

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Contingent Liabilities And Commitments (Tables)

3 Months Ended

Mar. 31, 2016

Contingent Liabilities And Commitments [Abstract]

Summary Of Commitments And Contingent Liabilities

	March 31,		December 31,
	2016		2015
	(in thousands)
Commitments to extend credit	$	226,787	$	206,346
Standby letters of credit		3,550		3,794
Total	$	230,337	$	210,140

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Net Periodic Benefit Costs (Tables)

3 Months Ended

Mar. 31, 2016

Net Periodic Benefit Costs [Abstract]

Schedule Of Net Periodic Cost

		Three months ended March 31,
		(in thousands)
					Supplemental Executive
	Pension Benefits				Retirement Plan
	2016		2015		2016		2015
Service cost	$	-	$	-	$	47	$	48
Interest cost		55		51		36		37
Expected return on plan assets		(65)		(77)		-		-
Amortization of prior service cost		-		-		8		7
Amortization of the net loss		22		17		34		31
Net periodic cost (benefit)	$	12	$	(9)	$	125	$	123

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Organization And Summary Of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2016 entity
Organization And Summary Of Significant Accounting Policies [Abstract]
Number of subsidiaries	2

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Securities (Narrative) (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Investments In Debt And Marketable Equity Securities [Line Items]
Available for sale securities pledged as collateral	$ 98,400,000	$ 86,000,000
Advances from Federal Home Loan Banks	10,000,000	10,000,000
FHLBNY stock	1,296,000	1,296,000
Impairment charges	$ 0	0
Percentage of required FRB stock to capital and surplus	6.00%
FRB capital stock, at cost	$ 1,492,000	$ 1,487,000
Investment In FHLBNY Stock [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Impairment charges	0
Investment In FRB Stock [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Impairment charges	$ 0

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Securities (Schedule Of Amortized Cost And Approximate Fair Value Of Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	$ 112,874	$ 96,374
Available for Sale, Unrealized Gains	2,041	1,375
Available for Sale, Unrealized Losses	(228)	(608)
Available for Sale, Fair Value	114,687	97,141
Held to Maturity, Amortized Cost	1,607	1,617
Held to Maturity, Unrealized Gains	12	6
Held to Maturity, Unrealized Losses	(24)	(39)
Held to Maturity, Fair Value	1,595	1,584
FNMA [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	18,427	12,312
Available for Sale, Unrealized Gains	276	168
Available for Sale, Unrealized Losses	(26)	(25)
Available for Sale, Fair Value	18,677	12,455
FHLMC [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	4,393	4,629
Available for Sale, Unrealized Gains	96	61
Available for Sale, Unrealized Losses	(32)	(56)
Available for Sale, Fair Value	4,457	4,634
GNMA [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	11,044	7,047
Available for Sale, Unrealized Gains	120	82
Available for Sale, Unrealized Losses	(30)	(61)
Available for Sale, Fair Value	11,134	7,068
CMO [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	17,516	13,634
Available for Sale, Unrealized Gains	116	24
Available for Sale, Unrealized Losses	(102)	(203)
Available for Sale, Fair Value	17,530	13,455
U.S. Government Agencies [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	24,835	21,914
Available for Sale, Unrealized Gains	387	166
Available for Sale, Unrealized Losses	(15)	(234)
Available for Sale, Fair Value	25,207	21,846
States and Political Subdivisions [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	36,659	36,838
Available for Sale, Unrealized Gains	1,046	874
Available for Sale, Unrealized Losses	(23)	(29)
Available for Sale, Fair Value	37,682	37,683
Held to Maturity, Amortized Cost	1,607	1,617
Held to Maturity, Unrealized Gains	12	6
Held to Maturity, Unrealized Losses	(24)	(39)
Held to Maturity, Fair Value	1,595	1,584
Total Debt Securities [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	61,494	58,752
Available for Sale, Unrealized Gains	1,433	1,040
Available for Sale, Unrealized Losses	(38)	(263)
Available for Sale, Fair Value	62,889	59,529
Total Mortgage-Backed Securities [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Amortized Cost	51,380	37,622
Available for Sale, Unrealized Gains	608	335
Available for Sale, Unrealized Losses	(190)	(345)
Available for Sale, Fair Value	$ 51,798	$ 37,612

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Securities (Scheduled Maturities Of Debt And Mortgage-Backed Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Securities [Abstract]
Debt securities available for sale, Due in one year or less, Amortized cost	$ 4,377	$ 4,082
Debt securities available for sale, Due after one year through five years, Amortized cost	29,114	29,113
Debt securities available for sale, Due after five years through ten years, Amortized cost	21,802	19,356
Debt securities available for sale, Due after ten years, Amortized cost	6,201	6,201
Debt securities available for sale, Amortized cost	61,494	58,752
Mortgage-backed securities available for sale, Amortized cost	51,380	37,622
Available for Sale, Amortized Cost	112,874	96,374
Debt securities available for sale, Due in one year or less, Estimated fair value	4,428	4,142
Debt securities available for sale, Due after one year through five years, Estimated fair value	29,716	29,448
Debt securities available for sale, Due after five years through ten years, Estimated fair value	22,341	19,615
Debt securities available for sale, Due after ten years, Estimated fair value	6,404	6,324
Debt securities available for sale, Estimated fair value	62,889	59,529
Mortgage-backed securities available for sale, Estimated fair value	51,798	37,612
Available for Sale, Estimated Fair Value	114,687	97,141
Debt securities held to maturity, Due in one year or less, Amortized cost	315	309
Debt securities held to maturity, Due after one year through five years, Amortized cost	358	374
Debt securities held to maturity, Due after five years through ten years, Amortized cost	828	828
Debt securities held to maturity, Due after ten years, Amortized cost	106	106
Held to Maturity, Amortized Cost	1,607	1,617
Debt securities held to maturity, Due in one year or less, Estimated fair value	314	308
Debt securites held to maturity, Due after one year through five years, Estimated fair value	352	365
Debt securites held to maturity, Due after five years through ten years, Estimated fair value	827	815
Debt securities held to maturity, Due after ten years, Estimated fair value	102	96
Held to Maturity, Estimated Fair Value	$ 1,595	$ 1,584

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Securities (Unrealized Losses On Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investments In Debt And Marketable Equity Securities [Line Items]
Held To Maturity, Total, Unrealized Losses	$ (24)	$ (39)
Total temporarily impaired securities, Less than 12 months, Fair Value	18,818	22,303
Total temporarily impaired securities, 12 months or longer, Fair Value	9,993	12,833
Total temporarily impaired securities, Total, Fair Value	28,811	35,136
Total temporarily impaired securities, Less than 12 months, Unrealized Losses	(137)	(275)
Total temporarily impaired securities, 12 months or longer, Unrealized Losses	(115)	(372)
Total temporarily impaired securities, Total, Unrealized Losses	(252)	(647)
U.S. Government Agencies [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value		4,531
Available for Sale, 12 months or longer, Fair Value	1,985	5,855
Available for Sale, Total, Fair Value	1,985	10,386
Available for Sale, Less than 12 months, Unrealized Losses		(89)
Available for Sale, 12 months or longer, Unrealized Losses	(15)	(145)
Available for Sale, Total, Unrealized Losses	(15)	(234)
States and Political Subdivisions [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	1,196	3,133
Available for Sale, 12 months or longer, Fair Value	1,115	1,117
Available for Sale, Total, Fair Value	2,311	4,250
Available for Sale, Less than 12 months, Unrealized Losses	(1)	(6)
Available for Sale, 12 months or longer, Unrealized Losses	(22)	(23)
Available for Sale, Total, Unrealized Losses	(23)	(29)
Held To Maturity, Less than 12 months, Fair Value	630	626
Held To Maturity, 12 months or longer, Fair Value	426	495
Held To Maturity, Total, Fair Value	1,056	1,121
Held To Maturity, Less than 12 months, Unrealized Losses	(7)	(11)
Held To Maturity, 12 months or longer, Unrealized Losses	(17)	(28)
Held To Maturity, Total, Unrealized Losses	(24)	(39)
Total Debt Securities [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	1,196	7,664
Available for Sale, 12 months or longer, Fair Value	3,100	6,972
Available for Sale, Total, Fair Value	4,296	14,636
Available for Sale, Less than 12 months, Unrealized Losses	(1)	(95)
Available for Sale, 12 months or longer, Unrealized Losses	(37)	(168)
Available for Sale, Total, Unrealized Losses	(38)	(263)
Total Mortgage-Backed Securities [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	16,992	14,013
Available for Sale, 12 months or longer, Fair Value	6,467	5,366
Available for Sale, Total, Fair Value	23,459	19,379
Available for Sale, Less than 12 months, Unrealized Losses	(129)	(169)
Available for Sale, 12 months or longer, Unrealized Losses	(61)	(176)
Available for Sale, Total, Unrealized Losses	(190)	(345)
FNMA [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	6,581	3,856
Available for Sale, Total, Fair Value	6,581	3,856
Available for Sale, Less than 12 months, Unrealized Losses	(26)	(25)
Available for Sale, Total, Unrealized Losses	(26)	(25)
FHLMC [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, 12 months or longer, Fair Value	1,216	1,234
Available for Sale, Total, Fair Value	1,216	1,234
Available for Sale, 12 months or longer, Unrealized Losses	(32)	(56)
Available for Sale, Total, Unrealized Losses	(32)	(56)
GNMA [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	4,427	3,480
Available for Sale, 12 months or longer, Fair Value	1,614	471
Available for Sale, Total, Fair Value	6,041	3,951
Available for Sale, Less than 12 months, Unrealized Losses	(22)	(55)
Available for Sale, 12 months or longer, Unrealized Losses	(8)	(6)
Available for Sale, Total, Unrealized Losses	(30)	(61)
CMO [Member]
Investments In Debt And Marketable Equity Securities [Line Items]
Available for Sale, Less than 12 months, Fair Value	5,984	6,677
Available for Sale, 12 months or longer, Fair Value	3,637	3,661
Available for Sale, Total, Fair Value	9,621	10,338
Available for Sale, Less than 12 months, Unrealized Losses	(81)	(89)
Available for Sale, 12 months or longer, Unrealized Losses	(21)	(114)
Available for Sale, Total, Unrealized Losses	$ (102)	$ (203)

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Impaired loans	$ 19,542	$ 19,500
Impaired loans, allowance for loan loss	$ 1,693	$ 1,742
Minimum [Member]
Discount on appraisals of the collateral securing the loan	10.00%
Maximum [Member]
Discount on appraisals of the collateral securing the loan	50.00%

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Fair Value Measurements (Financial Instruments Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 114,687	$ 97,141
Mortgage servicing rights	$ 496	$ 557
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage servicing rights
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage servicing rights	$ 496	$ 557
U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 25,207	$ 21,846
U.S. Government Agencies [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale
U.S. Government Agencies [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 25,207	$ 21,846
States and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 37,682	$ 37,683
States and Political Subdivisions [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale
States and Political Subdivisions [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 37,682	$ 37,683
Total Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 51,798	$ 37,612
Total Mortgage-Backed Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale
Total Mortgage-Backed Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 51,798	$ 37,612

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Fair Value Measurements (Changes In Fair Value For Mortgage Servicing Rights) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Fair Value Measurements [Abstract]
Mortgage servicing rights - Beginning balance	$ 557	$ 518
Gains (losses) included in earnings	(69)	(45)
Additions from loan sales	8	24
Mortgage servicing rights - Ending balance	$ 496	$ 497

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Fair Value Measurements (Quantitative Information About Significant Unobservable Inputs For MSRs) (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Fair Value Measurements [Abstract]
Servicing fees	0.25%	0.25%
Discount rate	9.52%	9.52%
Prepayment rate (CPR)	9.93%	8.55%

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Fair Value Measurements (Financial Instruments Measured At Fair Value On Nonrecurring Basis) (Details) - Fair Value, Measurements, Nonrecurring Basis [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 17,849	$ 17,758
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 17,849	$ 17,758

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Fair Value Measurements (Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	$ 114,687	$ 97,141
Held to maturity securities	1,595	1,584
Loans, net	783,654	761,101
Mortgage servicing rights	496	557
Demand deposits	174,276	183,098
NOW deposits	95,622	83,674
Regular savings deposits	463,672	439,993
Securities sold under agreement to repurchase	12,894	10,821
Other borrowed funds	10,000	10,000
Junior subordinated debentures	11,330	11,330
Time deposits	$ 115,479	$ 96,217
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage servicing rights
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage servicing rights	$ 496	$ 557
Carrying Amount [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	33,392	22,621
Demand deposits	174,276	183,098
NOW deposits	95,622	83,674
Regular savings deposits	463,672	439,993
Carrying Amount [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	114,687	97,141
FHLB and FRB stock	2,788	2,783
Securities sold under agreement to repurchase	12,894	10,821
Other borrowed funds	10,000	10,000
Junior subordinated debentures	11,330	11,330
Carrying Amount [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held to maturity securities	1,607	1,617
Loans, net	783,654	761,101
Mortgage servicing rights	496	557
Time deposits	115,479	96,217
Fair Value [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	33,392	22,621
Demand deposits	174,276	183,098
NOW deposits	95,622	83,674
Regular savings deposits	463,672	439,993
Fair Value [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale securities	114,687	97,141
FHLB and FRB stock	2,788	2,783
Securities sold under agreement to repurchase	12,894	10,821
Other borrowed funds	10,080	9,874
Junior subordinated debentures	11,330	11,330
Fair Value [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held to maturity securities	1,595	1,584
Loans, net	795,249	772,472
Mortgage servicing rights	496	557
Time deposits	$ 116,402	$ 96,975

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Loans And The Allowance For Loan Losses (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired loans with no related allowance recorded	$ 10,713,000		$ 10,560,000
Loans restructured in troubled debt restructurings	5,726,000		5,767,000
Troubled debt restructurings in non-accrual status	$ 1,111,000		1,812,000
Period of timely payments before reversion to accruing status	6 months
Commitments to lend additional funds to debtors owing on loans whose terms have been modified in TDRs	$ 0
Residential Real Estate: Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgages sold to FNMA	900,000	$ 2,600,000
Unpaid principal balance	75,800,000		77,300,000
Mortgage servicing rights	500,000		600,000
Mortgage loans held-for-sale	0		500,000
Impaired loans with no related allowance recorded	2,427,000		2,444,000
Loans restructured in troubled debt restructurings	1,869,000		1,789,000
Troubled debt restructurings in non-accrual status	124,000		689,000
Commercial Real Estate: Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans held-for-sale	0		0
Impaired loans with no related allowance recorded	3,999,000		3,888,000
Loans restructured in troubled debt restructurings	1,702,000		1,732,000
Troubled debt restructurings in non-accrual status	327,000		334,000
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired loans with no related allowance recorded	1,908,000		1,750,000
Loans restructured in troubled debt restructurings	533,000		517,000
Troubled debt restructurings in non-accrual status	$ 481,000		$ 508,000

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Loans And The Allowance For Loan Losses (Schedule Of Loan Portfolio Composition) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total real estate loans	$ 643,185	$ 627,240
Commercial and industrial loans	150,813	144,330
Consumer loans	1,684	1,596
Other	488	139
Net deferred loan origination costs	603	679	$ 641
Total gross loans	796,773	773,984
Allowance for loan losses	(13,119)	(12,883)
Loans, net	783,654	761,101
Residential Real Estate: Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total real estate loans	105,545	103,941
Commercial Real Estate: Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total real estate loans	406,206	399,819
Residential Real Estate: Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total real estate loans	1,149	1,546
Commercial Real Estate: Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total real estate loans	68,692	60,892
Home Equities [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total real estate loans	$ 61,593	$ 61,042

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Loans And The Allowance For Loan Losses (Data, At Class Level, Of Credit Quality Indicators Of Certain Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	$ 796,170	$ 773,305
Commercial Real Estate: Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	68,692	60,892
Commercial Real Estate: Construction [Member] | Corporate Credit Exposure—By Credit Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	40,299	42,383
Commercial Real Estate: Construction [Member] | Corporate Credit Exposure—By Credit Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	22,985	13,098
Commercial Real Estate: Construction [Member] | Corporate Credit Exposure—By Credit Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,224	1,224
Commercial Real Estate: Construction [Member] | Corporate Credit Exposure—By Credit Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	4,184	4,187
Commercial Real Estate: Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	406,206	399,819
Commercial Real Estate: Commercial [Member] | Corporate Credit Exposure—By Credit Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	324,754	340,837
Commercial Real Estate: Commercial [Member] | Corporate Credit Exposure—By Credit Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	62,966	40,019
Commercial Real Estate: Commercial [Member] | Corporate Credit Exposure—By Credit Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	11,409	11,772
Commercial Real Estate: Commercial [Member] | Corporate Credit Exposure—By Credit Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	7,077	7,191
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	150,813	144,330
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	81,975	80,379
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	51,685	47,509
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	10,320	8,973
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	6,719	7,350
Commercial And Industrial [Member] | Corporate Credit Exposure—By Credit Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	114	119
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	474,898	460,711
Commercial Real Estate [Member] | Corporate Credit Exposure—By Credit Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	365,053	383,220
Commercial Real Estate [Member] | Corporate Credit Exposure—By Credit Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	85,951	53,117
Commercial Real Estate [Member] | Corporate Credit Exposure—By Credit Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	12,633	12,996
Commercial Real Estate [Member] | Corporate Credit Exposure—By Credit Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	$ 11,261	$ 11,378

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Loans And The Allowance For Loan Losses (Recorded Investment In Loans Past Due) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 16,871	$ 6,346
Current Balance	779,299	766,959
Total Balance	796,170	773,305
90+ Days Accruing	3,014	497
Non-accruing Loans	14,927	15,545
Net deferred loan origination costs	603	679	$ 641
30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	7,711	3,162
60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	321	1,825
90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	8,839	1,359
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,361	450
Current Balance	149,452	143,880
Total Balance	150,813	144,330
90+ Days Accruing	175	40
Non-accruing Loans	5,331	5,312
Commercial And Industrial [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	607	160
Commercial And Industrial [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	217	224
Commercial And Industrial [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	537	66
Residential Real Estate: Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,535	1,793
Current Balance	104,010	102,148
Total Balance	105,545	103,941
Non-accruing Loans	737	1,400
Residential Real Estate: Residential [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,014	822
Residential Real Estate: Residential [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		402
Residential Real Estate: Residential [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	521	569
Residential Real Estate: Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Balance	1,149	1,546
Total Balance	$ 1,149	$ 1,546
Non-accruing Loans
Commercial Real Estate: Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 8,824	$ 3,339
Current Balance	397,382	396,480
Total Balance	406,206	399,819
90+ Days Accruing	2,839	457
Non-accruing Loans	3,698	3,574
Commercial Real Estate: Commercial [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5,533	1,919
Commercial Real Estate: Commercial [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		963
Commercial Real Estate: Commercial [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,291	457
Commercial Real Estate: Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	4,184
Current Balance	64,508	60,892
Total Balance	68,692	60,892
Non-accruing Loans	4,184	4,187
Commercial Real Estate: Construction [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	456
Commercial Real Estate: Construction [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,728
Home Equities [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	960	756
Current Balance	60,633	60,286
Total Balance	61,593	61,042
Non-accruing Loans	963	1,058
Home Equities [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	94	253
Home Equities [Member] | 60-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	104	236
Home Equities [Member] | 90+ Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	762	267
Consumer Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	7	8
Current Balance	1,677	1,588
Total Balance	1,684	1,596
Non-accruing Loans	14	14
Consumer Loans [Member] | 30-59 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	7	8
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Balance	488	139
Total Balance	$ 488	$ 139
Non-accruing Loans

XML

Loans And The Allowance For Loan Losses (Schedule Of Allowance For Loan Losses According To Portfolio Segment) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance		$ 12,883	$ 12,533
Allowance for loan losses: Charge-offs		(20)	(6)
Allowance for loan losses: Recoveries		48	49
Allowance for loan losses: Provision (Credit)		208	201
Allowance for loan losses: Ending balance		13,119	12,777
Allowance for loan losses: Individually evaluated for impairment				$ 1,693		$ 1,152
Allowance for loan losses: Collectively evaluated for impairment				11,426		11,625
Allowance for loan losses: Total		12,883	12,533	13,119	$ 12,883	12,777
Loans: Individually evaluated for impairment				19,542		15,721
Loans: Collectively evaluated for impairment				776,628		685,376
Loans: Total				796,170		701,097
Net deferred loan origination costs				603	679	641
Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance		4,383	4,896
Allowance for loan losses: Charge-offs		(13)
Allowance for loan losses: Recoveries		7	38
Allowance for loan losses: Provision (Credit)		203	55
Allowance for loan losses: Ending balance		4,580	4,989
Allowance for loan losses: Individually evaluated for impairment				516		978
Allowance for loan losses: Collectively evaluated for impairment				4,064		4,011
Allowance for loan losses: Total		4,383	4,896	4,580	4,383	4,989
Loans: Individually evaluated for impairment				5,382		6,577
Loans: Collectively evaluated for impairment				145,431		125,839
Loans: Total				150,813		132,416
Home Equities [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance		371	819
Allowance for loan losses: Provision (Credit)		(63)	(4)
Allowance for loan losses: Ending balance		308	815
Allowance for loan losses: Collectively evaluated for impairment				308		815
Allowance for loan losses: Total		371	819	308	371	815
Loans: Individually evaluated for impairment				1,545		981
Loans: Collectively evaluated for impairment				60,048		58,708
Loans: Total				61,593		59,689
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	[1]	7,135	5,650
Allowance for loan losses: Recoveries	[1]	38	10
Allowance for loan losses: Provision (Credit)	[1]	269	170
Allowance for loan losses: Ending balance	[1]	7,442	5,830
Allowance for loan losses: Individually evaluated for impairment	[1]			1,134		124
Allowance for loan losses: Collectively evaluated for impairment	[1]			6,308		5,706
Allowance for loan losses: Total	[1]	7,135	5,650	7,442	7,135	5,830
Loans: Individually evaluated for impairment	[1]			10,092		5,604
Loans: Collectively evaluated for impairment	[1]			464,806		400,776
Loans: Total	[1]			474,898		406,380
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	[2]	85	78
Allowance for loan losses: Charge-offs	[2]	(7)	(6)
Allowance for loan losses: Recoveries	[2]	3	1
Allowance for loan losses: Provision (Credit)	[2]	12	(3)
Allowance for loan losses: Ending balance	[2]	93	70
Allowance for loan losses: Individually evaluated for impairment	[2]			41		47
Allowance for loan losses: Collectively evaluated for impairment	[2]			52		23
Allowance for loan losses: Total	[2]	85	78	93	85	70
Loans: Individually evaluated for impairment	[2]			41		47
Loans: Collectively evaluated for impairment	[2]			2,131		1,779
Loans: Total	[2]			2,172		1,826
Residential Mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance	[1]	909	941
Allowance for loan losses: Provision (Credit)	[1]	(213)	(17)
Allowance for loan losses: Ending balance	[1]	696	924
Allowance for loan losses: Individually evaluated for impairment	[1]			2		3
Allowance for loan losses: Collectively evaluated for impairment	[1]			694		921
Allowance for loan losses: Total	[1]	$ 909	941	696	$ 909	924
Loans: Individually evaluated for impairment	[1]			2,482		2,512
Loans: Collectively evaluated for impairment	[1]			104,212		98,274
Loans: Total	[1]			$ 106,694		100,786
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses: Beginning balance			149
Allowance for loan losses: Charge-offs
Allowance for loan losses: Recoveries
Allowance for loan losses: Provision (Credit)
Allowance for loan losses: Ending balance			149
Allowance for loan losses: Individually evaluated for impairment
Allowance for loan losses: Collectively evaluated for impairment						149
Allowance for loan losses: Total			$ 149			$ 149
Loans: Individually evaluated for impairment
Loans: Collectively evaluated for impairment
Loans: Total

[1] Includes construction loans

[2] Includes all other consumer loans

XML

Loans And The Allowance For Loan Losses (Data, At Class Level, Of Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	$ 10,713	$ 10,560
Impaired Loans, Recorded Investment, With a related allowance recorded	8,829	8,940
Impaired Loans, Recorded Investment, Total	19,542	19,500
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	10,938	10,819
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	9,169	9,231
Impaired Loans, Unpaid Principal Balance, Total	20,107	20,050
Impaired Loans, Related Allowance	1,693	1,742
Impaired Loans, Average Recorded Investment, With no related allowance recorded	10,992	10,844
Impaired Loans, Average Recorded Investment, With a related allowance recorded	9,074	9,337
Impaired Loans, Average Recorded Investment, Total	20,066	20,181
Impaired Loans, Interest Income Foregone, With no related allowance recorded	61	215
Impaired Loans, Interest Income Foregone, With a related allowance recorded	101	291
Impaired Loans, Interest Income Foregone, Total	162	506
Impaired Loans, Interest Income Recognized, With no related allowance recorded	48	372
Impaired Loans, Interest Income Recognized, With a related allowance recorded	1	225
Impaired Loans, Interest Income Recognized, Total	49	597
Commercial And Industrial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	1,908	1,750
Impaired Loans, Recorded Investment, With a related allowance recorded	3,474	3,572
Impaired Loans, Recorded Investment, Total	5,382	5,322
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	1,975	1,811
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	3,775	3,835
Impaired Loans, Unpaid Principal Balance, Total	5,750	5,646
Impaired Loans, Related Allowance	516	552
Impaired Loans, Average Recorded Investment, With no related allowance recorded	2,074	1,945
Impaired Loans, Average Recorded Investment, With a related allowance recorded	3,711	3,966
Impaired Loans, Average Recorded Investment, Total	5,785	5,911
Impaired Loans, Interest Income Foregone, With no related allowance recorded	16	58
Impaired Loans, Interest Income Foregone, With a related allowance recorded	40	255
Impaired Loans, Interest Income Foregone, Total	56	313
Impaired Loans, Interest Income Recognized, With no related allowance recorded	2	47
Impaired Loans, Interest Income Recognized, With a related allowance recorded		9
Impaired Loans, Interest Income Recognized, Total	2	56
Residential Real Estate: Residential [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	2,427	2,444
Impaired Loans, Recorded Investment, With a related allowance recorded	55	55
Impaired Loans, Recorded Investment, Total	2,482	2,499
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	2,483	2,555
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	55	55
Impaired Loans, Unpaid Principal Balance, Total	2,538	2,610
Impaired Loans, Related Allowance	2	2
Impaired Loans, Average Recorded Investment, With no related allowance recorded	2,462	2,474
Impaired Loans, Average Recorded Investment, With a related allowance recorded	55	55
Impaired Loans, Average Recorded Investment, Total	2,517	2,529
Impaired Loans, Interest Income Foregone, With no related allowance recorded	10	90
Impaired Loans, Interest Income Foregone, With a related allowance recorded		1
Impaired Loans, Interest Income Foregone, Total	10	91
Impaired Loans, Interest Income Recognized, With no related allowance recorded	12	63
Impaired Loans, Interest Income Recognized, With a related allowance recorded		2
Impaired Loans, Interest Income Recognized, Total	$ 12	$ 65
Residential Real Estate: Construction [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded
Impaired Loans, Recorded Investment, With a related allowance recorded
Impaired Loans, Recorded Investment, Total
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded
Impaired Loans, Unpaid Principal Balance, Total
Impaired Loans, Related Allowance
Impaired Loans, Average Recorded Investment, With no related allowance recorded
Impaired Loans, Average Recorded Investment, With a related allowance recorded
Impaired Loans, Average Recorded Investment, Total
Impaired Loans, Interest Income Foregone, With no related allowance recorded
Impaired Loans, Interest Income Foregone, With a related allowance recorded
Impaired Loans, Interest Income Foregone, Total
Impaired Loans, Interest Income Recognized, With no related allowance recorded
Impaired Loans, Interest Income Recognized, With a related allowance recorded
Impaired Loans, Interest Income Recognized, Total
Commercial Real Estate: Commercial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	$ 3,999	$ 3,888
Impaired Loans, Recorded Investment, With a related allowance recorded	1,075	1,083
Impaired Loans, Recorded Investment, Total	5,074	4,971
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	4,039	3,908
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	1,083	1,083
Impaired Loans, Unpaid Principal Balance, Total	5,122	4,991
Impaired Loans, Related Allowance	232	235
Impaired Loans, Average Recorded Investment, With no related allowance recorded	4,062	3,930
Impaired Loans, Average Recorded Investment, With a related allowance recorded	1,079	1,083
Impaired Loans, Average Recorded Investment, Total	5,141	5,013
Impaired Loans, Interest Income Foregone, With no related allowance recorded	22	27
Impaired Loans, Interest Income Foregone, With a related allowance recorded	12	4
Impaired Loans, Interest Income Foregone, Total	34	31
Impaired Loans, Interest Income Recognized, With no related allowance recorded	16	179
Impaired Loans, Interest Income Recognized, With a related allowance recorded		42
Impaired Loans, Interest Income Recognized, Total	16	221
Commercial Real Estate: Construction [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	834	834
Impaired Loans, Recorded Investment, With a related allowance recorded	4,184	4,188
Impaired Loans, Recorded Investment, Total	5,018	5,022
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	834	834
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	4,200	4,201
Impaired Loans, Unpaid Principal Balance, Total	5,034	5,035
Impaired Loans, Related Allowance	902	911
Impaired Loans, Average Recorded Investment, With no related allowance recorded	834	834
Impaired Loans, Average Recorded Investment, With a related allowance recorded	4,186	4,188
Impaired Loans, Average Recorded Investment, Total	5,020	5,022
Impaired Loans, Interest Income Foregone, With a related allowance recorded	48	29
Impaired Loans, Interest Income Foregone, Total	48	29
Impaired Loans, Interest Income Recognized, With no related allowance recorded	$ 12	31
Impaired Loans, Interest Income Recognized, With a related allowance recorded		166
Impaired Loans, Interest Income Recognized, Total	$ 12	197
Home Equities [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded	$ 1,545	$ 1,644
Impaired Loans, Recorded Investment, With a related allowance recorded
Impaired Loans, Recorded Investment, Total	$ 1,545	$ 1,644
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded	$ 1,607	$ 1,711
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded
Impaired Loans, Unpaid Principal Balance, Total	$ 1,607	$ 1,711
Impaired Loans, Related Allowance
Impaired Loans, Average Recorded Investment, With no related allowance recorded	$ 1,560	$ 1,661
Impaired Loans, Average Recorded Investment, With a related allowance recorded
Impaired Loans, Average Recorded Investment, Total	$ 1,560	$ 1,661
Impaired Loans, Interest Income Foregone, With no related allowance recorded	$ 13	$ 40
Impaired Loans, Interest Income Foregone, With a related allowance recorded
Impaired Loans, Interest Income Foregone, Total	$ 13	$ 40
Impaired Loans, Interest Income Recognized, With no related allowance recorded	$ 6	$ 52
Impaired Loans, Interest Income Recognized, With a related allowance recorded
Impaired Loans, Interest Income Recognized, Total	$ 6	$ 52
Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded
Impaired Loans, Recorded Investment, With a related allowance recorded	$ 41	$ 42
Impaired Loans, Recorded Investment, Total	$ 41	$ 42
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded	$ 56	$ 57
Impaired Loans, Unpaid Principal Balance, Total	56	57
Impaired Loans, Related Allowance	$ 41	$ 42
Impaired Loans, Average Recorded Investment, With no related allowance recorded
Impaired Loans, Average Recorded Investment, With a related allowance recorded	$ 43	$ 45
Impaired Loans, Average Recorded Investment, Total	$ 43	$ 45
Impaired Loans, Interest Income Foregone, With no related allowance recorded
Impaired Loans, Interest Income Foregone, With a related allowance recorded	$ 1	$ 2
Impaired Loans, Interest Income Foregone, Total	$ 1	$ 2
Impaired Loans, Interest Income Recognized, With no related allowance recorded
Impaired Loans, Interest Income Recognized, With a related allowance recorded	$ 1	$ 6
Impaired Loans, Interest Income Recognized, Total	$ 1	$ 6
Other [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment, With no related allowance recorded
Impaired Loans, Recorded Investment, With a related allowance recorded
Impaired Loans, Recorded Investment, Total
Impaired Loans, Unpaid Principal Balance, With no related allowance recorded
Impaired Loans, Unpaid Principal Balance, With a related allowance recorded
Impaired Loans, Unpaid Principal Balance, Total
Impaired Loans, Related Allowance
Impaired Loans, Average Recorded Investment, With no related allowance recorded
Impaired Loans, Average Recorded Investment, With a related allowance recorded
Impaired Loans, Average Recorded Investment, Total
Impaired Loans, Interest Income Foregone, With no related allowance recorded
Impaired Loans, Interest Income Foregone, With a related allowance recorded
Impaired Loans, Interest Income Foregone, Total
Impaired Loans, Interest Income Recognized, With no related allowance recorded
Impaired Loans, Interest Income Recognized, With a related allowance recorded
Impaired Loans, Interest Income Recognized, Total

XML

Loans And The Allowance For Loan Losses (Schedule Of Non-Performing Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans	$ 14,927	$ 15,545
Accruing loans 90+ days past due	3,014	497
Total non-performing loans	$ 17,941	$ 16,042
Total non-performing loans to total assets	1.81%	1.71%
Total non-performing loans to total loans	2.25%	2.07%
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans	$ 5,331	$ 5,312
Accruing loans 90+ days past due	175	40
Residential Real Estate: Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans	$ 737	$ 1,400
Residential Real Estate: Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans
Commercial Real Estate: Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans	$ 3,698	$ 3,574
Accruing loans 90+ days past due	2,839	457
Commercial Real Estate: Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans	4,184	4,187
Home Equities [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans	963	1,058
Consumer Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans	$ 14	$ 14
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-accruing loans

XML

Loans And The Allowance For Loan Losses (Loans Classified As Troubled Debt Restructurings) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total	$ 5,726	$ 5,767
Troubled restructured loans, Nonaccruing	1,111	1,812
Troubled restructured loans, Accruing	4,615	3,955
Troubled restructured loans, Related Allowance	187	193
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total	533	517
Troubled restructured loans, Nonaccruing	481	508
Troubled restructured loans, Accruing	52	9
Troubled restructured loans, Related Allowance	160	165
Residential Real Estate: Residential [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total	1,869	1,789
Troubled restructured loans, Nonaccruing	124	689
Troubled restructured loans, Accruing	$ 1,745	$ 1,100
Residential Real Estate: Construction [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total
Troubled restructured loans, Nonaccruing
Troubled restructured loans, Accruing
Troubled restructured loans, Related Allowance
Commercial Real Estate: Commercial [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total	$ 1,702	$ 1,732
Troubled restructured loans, Nonaccruing	327	334
Troubled restructured loans, Accruing	1,375	1,398
Commercial Real Estate: Construction [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total	834	834
Troubled restructured loans, Accruing	834	834
Home Equities [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total	761	867
Troubled restructured loans, Nonaccruing	179	281
Troubled restructured loans, Accruing	582	586
Consumer Loans [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total	27	28
Troubled restructured loans, Accruing	27	28
Troubled restructured loans, Related Allowance	$ 27	$ 28
Other [Member]
Financing Receivable, Modifications [Line Items]
Troubled restructured loans, Total
Troubled restructured loans, Nonaccruing
Troubled restructured loans, Accruing
Troubled restructured loans, Related Allowance

XML

Loans And The Allowance For Loan Losses (TDR Activity By Type Of Concession Granted To Borrower) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) contract	Mar. 31, 2015 USD ($) contract
Commercial And Industrial [Member] | Deferral Of Principal [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract		3
Pre-Modification Outstanding Recorded Investment		$ 541
Post-Modification Outstanding Recorded Investment		$ 541
Commercial And Industrial [Member] | Extension Of Maturity [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 24
Post-Modification Outstanding Recorded Investment	$ 24
Commercial And Industrial [Member] | Term-Out Line Of Credit [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 20
Post-Modification Outstanding Recorded Investment	$ 20
Home Equities [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Consumer Loans [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Other [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Residential Mortgages [Member] | Extension Of Maturity [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 95
Post-Modification Outstanding Recorded Investment	$ 95
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment

XML

Loans And The Allowance For Loan Losses (Loans Classified As TDRs Which Defaulted) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) contract	Mar. 31, 2015 USD ($) contract
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $
Residential Real Estate: Residential [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $
Residential Real Estate: Construction [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $
Commercial Real Estate: Commercial [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $
Commercial Real Estate: Construction [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $
Home Equities [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract		1
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $		$ 19
Consumer Loans [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $
Other [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts | contract
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment | $

XML

Per Share Data (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Per Share Data [Abstract]
Potentially dilutive shares of common stock	64,925	78,167
Anti-dilutive shares	49,550	38,630

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Other Comprehensive Income (Schedule Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ (1,810)	$ (1,508)
Net Change	689	360
Ending Balance	(1,121)	(1,148)
Net Unrealized Gain On Investment Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	475	911
Net Change	649	331
Ending Balance	1,124	1,242
Net Defined Benefit Pension Plan Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(2,285)	(2,419)
Net Change	40	29
Ending Balance	$ (2,245)	$ (2,390)

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Other Comprehensive Income (Components Of Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Other Comprehensive Income [Abstract]
Unrealized gain on investment securities, Before-Tax Amount		$ 1,047	$ 541
Reclassification from accumulated other comprehensive income for gains (losses), Before-Tax Amount
Net change, Before-Tax Amount		$ 1,047	$ 541
Net actuarial gain (loss), Before-Tax Amount
Amortization of prior service cost, Before-Tax Amount	[1]	$ 8	$ 7
Amortization of actuarial loss, Before-Tax Amount	[1]	56	48
Net change, Before-Tax Amount		64	55
Other Comprehensive Income (Loss), Before-Tax Amount		1,111	596
Unrealized gain on investment securities, Income Tax (Provision) Benefit		$ (398)	$ (210)
Reclassification from other comprehensive income from gains (losses), Income Tax (Provision) Benefit
Net change, Income Tax (Provision) Benefit		$ (398)	$ (210)
Net actuarial gain (loss), Income Tax (Provision) Benefit
Amortization of prior service cost, Income Tax (Provision) Benefit	[1]	$ (3)	$ (2)
Amortization of actuarial loss, Income Tax (Provision) Benefit	[1]	(21)	(24)
Net change, Income Tax (Provision) Benefit		(24)	(26)
Other Comprehensive Income (Loss), Income Tax (Provision) Benefit		(422)	(236)
Unrealized gain on investment securities, Net-of-Tax Amount		$ 649	$ 331
Reclassification from accumulated other comprehensive income for gains (losses), Net-of-Tax Amount
Net change, Net-of-Tax Amount		$ 649	$ 331
Net actuarial gain (loss), Net-of-Tax Amount
Amortization of prior service cost, Net-of-Tax Amount	[1]	$ 5	$ 5
Amortization of actuarial loss, Net-of-Tax Amount	[1]	35	24
Net change, Net-of-Tax Amount		40	29
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX		$ 689	$ 360

[1] Included in net periodic pension cost, as described in Note 9 - "Net Periodic Benefit Costs"

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Segment Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) segment	Mar. 31, 2015 USD ($)
Segment Reporting Information [Line Items]
Number of primary business segments | segment	2
Net interest income (expense)	$ 8,260	$ 7,581
Provision for loan losses	208	201
Net interest income (expense) after provision for loan losses	8,052	7,380
Non-interest income	2,994	3,066
Insurance service and fees	1,748	1,829
Non-interest expense	8,528	7,512
Income before income taxes	2,518	2,934
Income tax provision	804	1,029
Net income	1,714	1,905
Operating Segments [Member]
Segment Reporting Information [Line Items]
Net interest income (expense)	8,260	7,581
Provision for loan losses	208	201
Net interest income (expense) after provision for loan losses	8,052	7,380
Non-interest income	1,246	1,237
Insurance service and fees	1,748	1,829
Non-interest expense	8,528	7,512
Income before income taxes	2,518	2,934
Income tax provision	804	1,029
Net income	1,714	1,905
Banking Activities [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net interest income (expense)	8,291	7,609
Provision for loan losses	208	201
Net interest income (expense) after provision for loan losses	8,083	7,408
Non-interest income	1,246	1,237
Insurance service and fees	116	162
Non-interest expense	7,327	6,481
Income before income taxes	2,118	2,326
Income tax provision	650	794
Net income	1,468	1,532
Insurance Agency Activities [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net interest income (expense)	(31)	(28)
Net interest income (expense) after provision for loan losses	(31)	(28)
Insurance service and fees	1,632	1,667
Non-interest expense	1,201	1,031
Income before income taxes	400	608
Income tax provision	154	235
Net income	$ 246	$ 373

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Contingent Liabilities And Commitments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Loss Contingencies [Line Items]
Commitments and contingent liabilities	$ 230,337,000		$ 210,140,000
Losses on commitments	0	$ 0
Commitments To Extend Credit [Member]
Loss Contingencies [Line Items]
Commitments and contingent liabilities	226,787,000		206,346,000
Standby Letters Of Credit [Member]
Loss Contingencies [Line Items]
Commitments and contingent liabilities	$ 3,550,000		$ 3,794,000

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Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 55	$ 51
Expected return on plan assets	(65)	(77)
Amortization of the net loss	22	17
Net periodic cost (benefit)	12	(9)
Contributions to defined benefit pension plan	0
Expected contribution to pension plan in 2016	140
Supplemental Executive Retirement Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	47	48
Interest cost	36	37
Amortization of prior service cost	8	7
Amortization of the net loss	34	31
Net periodic cost (benefit)	$ 125	$ 123