Citizens Financial Services (CZFS) 10-K 10 Mar 16 2015 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Feb. 23, 2016	Jun. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	CITIZENS FINANCIAL SERVICES INC
Entity Central Index Key	739,421
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 131,083,374
Entity Common Stock, Shares Outstanding		3,335,876
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015

Consolidated Balance Sheet

Consolidated Balance Sheet - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Cash and cash equivalents:
Noninterest-bearing	$ 14,088	$ 10,091
Interest-bearing	10,296	1,332
Total cash and cash equivalents	24,384	11,423
Interest bearing time deposits with other banks	7,696	5,960
Available-for-sale securities	359,737	306,146
Loans held for sale	603	497
Loans (net of allowance for loan losses:2015, $7,106; 2014, $6,815)	687,925	547,290
Premises and equipment	17,263	12,357
Accrued interest receivable	4,211	3,644
Goodwill	21,089	10,256
Bank owned life insurance	25,535	20,309
Other intangibles	2,437	473
Other assets	12,104	6,693
TOTAL ASSETS	1,162,984	925,048
Deposits:
Noninterest-bearing	150,960	95,526
Interest-bearing	837,071	678,407
Total deposits	988,031	773,933
Borrowed funds	41,631	41,799
Accrued interest payable	734	756
Other liabilities	12,828	8,032
TOTAL LIABILITIES	1,043,224	824,520
STOCKHOLDERS' EQUITY:
Preferred Stock $1.00 par value; authorized 3,000,000 shares 2015 and 2014; none issued in 2015 or 2014	0	0
Common Stock $1.00 par value; authorized 15,000,000 shares 2015 and 2014; issued 3,671,751 and 3,335,236 shares in 2015 and 2014, respectively	3,672	3,335
Additional paid-in capital	40,715	25,150
Retained earnings	85,790	79,512
Accumulated other comprehensive income (loss)	(236)	767
Treasury stock, at cost: 335,876 and 296,280 shares for 2015 and 2014, respectively	(10,181)	(8,236)
TOTAL STOCKHOLDERS' EQUITY	119,760	100,528
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,162,984	$ 925,048

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
ASSETS:
Loans, allowance for loan losses	$ 7,106	$ 6,815
STOCKHOLDERS' EQUITY:
Preferred Stock , par value (in dollars per share)	$ 1	$ 1
Preferred Stock , authorized (in shares)	3,000,000	3,000,000
Preferred Stock , issued (in shares)	0	0
Common Stock, par value (in dollars per share)	$ 1	$ 1
Common Stock, authorized (in shares)	15,000,000	15,000,000
Common Stock, issued (in shares)	3,671,751	3,335,236
Treasury stock, shares (in shares)	335,876	296,280

Consolidated Statement of Incom

Consolidated Statement of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans	$ 29,039	$ 28,324	$ 28,982
Interest-bearing deposits with banks	142	82	40
Investment securities:
Taxable	3,102	3,337	3,721
Nontaxable	3,152	3,354	3,405
Dividends	218	194	86
TOTAL INTEREST AND DIVIDEND INCOME	35,653	35,291	36,234
INTEREST EXPENSE:
Deposits	4,113	4,347	5,107
Borrowed funds	707	606	1,208
TOTAL INTEREST EXPENSE	4,820	4,953	6,315
NET INTEREST INCOME	30,833	30,338	29,919
Provision for loan losses	480	585	405
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	30,353	29,753	29,514
NON-INTEREST INCOME:
Service charges	4,126	4,297	4,453
Trust	673	688	694
Brokerage and insurance	720	567	444
Investment securities gains, net	429	616	441
Gains on loans sold	404	236	443
Earnings on bank owned life insurance	628	507	502
Other	443	445	446
TOTAL NON-INTEREST INCOME	7,423	7,356	7,423
NON-INTEREST EXPENSES:
Salaries and employee benefits	12,504	11,505	11,392
Occupancy	1,424	1,287	1,271
Furniture and equipment	506	362	492
Professional fees	846	820	781
Federal depository insurance	464	461	450
Pennsylvania shares tax	713	686	640
Merger and acquisition	1,103	237	55
ORE expenses	969	299	191
Other	4,900	4,508	4,538
TOTAL NON-INTEREST EXPENSES	23,429	20,165	19,810
Income before provision for income taxes	14,347	16,944	17,127
Provision for income taxes	2,721	3,559	3,752
NET INCOME	$ 11,626	$ 13,385	$ 13,375
PER COMMON SHARE DATA:
NET INCOME - BASIC (in dollars per share)	$ 3.84	$ 4.41	$ 4.38
NET INCOME - DILUTED (in dollars per share)	3.83	4.40	4.38
CASH DIVIDENDS PER SHARE (in dollars per share)	$ 1.73	$ 2.17	$ 1.21
Number of shares used in computation - basic (in shares)	3,031,282	3,038,298	3,055,034
Number of shares used in computation - diluted (in shares)	3,032,642	3,039,593	3,056,204

Consolidated Statement in Compr

Consolidated Statement in Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statement of Changes in Comprehensive Income [Abstract]
Net income	$ 11,626	$ 13,385	$ 13,375
Securities available for sale
Net unrealized gain (loss) during the period	(920)	5,465	(9,955)
Income tax expense (benefit)	(314)	1,857	(3,384)
Securities available for sale	(606)	3,608	(6,571)
Reclassification adjustment for gains included in income	(429)	(616)	(441)
Income tax (benefit)	(146)	(209)	(150)
Reclassification	(283)	(407)	(291)
Unrealized gain on interest rate swap	0	0	200
Income tax expense	0	0	68
Other comprehensive gain on interest rate swap	0	0	132
Change in unrecognized pension costs	(172)	(1,832)	1,325
Income tax (benefit) expense	(58)	(623)	451
Pension costs	(114)	(1,209)	874
Net other comprehensive income (loss)	(1,003)	1,992	(5,856)
Comprehensive income	$ 10,623	$ 15,377	$ 7,519

Consolidated Statement of Chang

Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2012	$ 3,161	$ 16,468	$ 71,813	$ 4,631	$ (6,598)	$ 89,475
Balance (in shares) at Dec. 31, 2012	3,161,324
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income			13,375			13,375
Net other comprehensive income (loss)				(5,856)		(5,856)
Stock dividend	$ 145	7,022	(7,167)			0
Stock dividend (in shares)	144,193
Purchase of treasury stock					(1,483)	(1,483)
Restricted stock and Board of Director awards		(149)			34	(115)
Restricted stock vesting		218				218
Forfeited restricted stock		2			(2)	0
Cash dividend reinvestment paid from treasury stock		1	(138)		137	0
Cash dividends			(3,558)			(3,558)
Balance at Dec. 31, 2013	$ 3,306	23,562	74,325	(1,225)	(7,912)	92,056
Balance (in shares) at Dec. 31, 2013	3,305,517
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income			13,385			13,385
Net other comprehensive income (loss)				1,992		1,992
Stock dividend	$ 29	1,568	(1,597)			0
Stock dividend (in shares)	29,719
Purchase of treasury stock					(814)	(814)
Restricted stock and Board of Director awards		(189)			19	(170)
Restricted stock vesting		200				200
Cash dividend reinvestment paid from treasury stock		9	(480)		471	0
Cash dividends			(6,121)			(6,121)
Balance at Dec. 31, 2014	$ 3,335	25,150	79,512	767	(8,236)	100,528
Balance (in shares) at Dec. 31, 2014	3,335,236
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income			11,626			11,626
Net other comprehensive income (loss)				(1,003)		(1,003)
Stock issued for acquisition	$ 337	15,647	0			15,984
Stock issued for acquisition (in shares)	336,515
Purchase of treasury stock					(2,455)	(2,455)
Restricted stock and Board of Director awards		(256)			308	52
Restricted stock vesting		179				179
Forfeited restricted stock		7			(7)	0
Cash dividend reinvestment paid from treasury stock		(12)	(197)		209	0
Cash dividends			(5,151)			(5,151)
Balance at Dec. 31, 2015	$ 3,672	$ 40,715	$ 85,790	$ (236)	$ (10,181)	$ 119,760
Balance (in shares) at Dec. 31, 2015	3,671,751

Consolidated Statement of Chan7

Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statement of Changes in Stockholders' Equity [Abstract]
Purchase of treasury stock (in shares)	49,465	15,474	31,092
Forfeited restricted stock (in shares)	139		55
Cash dividend reinvestment paid from treasury stock (in shares)	3,956	9,277	2,877
Cash dividends (in dollars per share)	$ 1.73	$ 2.17	$ 1.21

Consolidated Statement of Cash

Consolidated Statement of Cash Flows $ in Thousands	12 Months Ended
	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Dec. 31, 2013USD ($)	Dec. 11, 2015USD ($)
Cash Flows from Operating Activities:
Net income	$ 11,626	$ 13,385	$ 13,375
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	480	585	405
Depreciation and amortization	464	472	428
Amortization and accretion on investment securities	2,057	2,133	2,427
Deferred income taxes	(192)	478	670
Investment securities gains, net	(429)	(616)	(441)
Earnings on bank owned life insurance	(628)	(507)	(502)
Stock awards	179	200	218
Originations of loans held for sale	(18,945)	(11,129)	(20,239)
Proceeds from sales of loans held for sale	19,243	11,146	21,862
Realized gains on loans sold	(404)	(236)	(443)
(Increase) decrease in accrued interest receivable	(285)	84	88
Increase (decrease) in accrued interest payable	(36)	(139)	(248)
Other, net	(319)	322	217
Net cash provided by operating activities	12,811	16,178	17,817
Available-for-sale securities:
Proceeds from sales of available-for-sale securities	30,464	28,989	25,461
Proceeds from maturity and principal repayments of securities	48,103	41,756	78,596
Purchase of securities	(111,304)	(56,257)	(123,488)
Proceeds from redemption of Regulatory Stock	4,476	4,706	1,634
Purchase of Regulatory Stock	(3,879)	(2,815)	(1,997)
Net increase in loans	(25,981)	(15,331)	(38,620)
Purchase of interest bearing time deposits	(500)	(3,480)	(2,480)
Purchase of bank owned life insurance	0	(5,123)	0
Purchase of premises, equipment and software	(776)	(1,309)	(328)
Proceeds from sale of foreclosed assets held for sale	565	647	285
Acquisition, net of cash paid	77,895	0	0
Net cash provided by (used in) investing activities	19,063	(8,217)	(60,937)
Cash Flows from Financing Activities:
Net (decrease) increase in deposits	(11,132)	25,617	11,220
Proceeds from long-term borrowings	5,291	6,820	0
Repayments of long-term borrowings	(700)	(4,200)	(20,781)
Net increase (decrease) in short-term borrowed funds	(4,759)	(27,753)	41,587
Purchase of treasury stock	(2,455)	(814)	(1,483)
Purchase of restricted stock	(7)	(170)	(115)
Dividends paid	(5,151)	(6,121)	(3,558)
Net cash (used in) provided by financing activities	(18,913)	(6,621)	26,870
Net increase (decrease) in cash and cash equivalents	12,961	1,340	(16,250)
Cash and Cash Equivalents at Beginning of Year	11,423	10,083	26,333
Cash and Cash Equivalents at End of Year	24,384	11,423	10,083
Supplemental Disclosures of Cash Flow Information:
Interest paid	4,841	5,092	6,563
Income taxes paid	3,375	2,835	3,245
Non-cash activities:
Real estate acquired in settlement of loans	323	1,095	1,051
Real estate transferred from other assets	0	549	$ 0
Non-cash assets acquired
Goodwill	$ 21,089	$ 10,256
First National Bank of Fredericksburg [Member]
Non-cash assets acquired
Securities available for sale				$ 23,831
Interest bearing time deposits with other banks				1,236
Loans				115,211
Premises and equipment				4,743
Accrued interest receivable				282
Bank-owned life insurance				4,598
Intangibles				1,981
Deferred tax asset				2,979
Other assets				2,332
Goodwill				10,833
Total Non-cash assets acquired				168,026
Liabilities assumed
Noninterest-bearing deposits				71,971
Interest-bearing deposits				153,259
Accrued interest payable				14
Other liabilities				4,693
Total liabilities assumed				229,937
Net non-cash liabilities acquired				(61,911)
Cash and cash equivalents acquired				$ 83,514

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Organization Citizens Financial Services, Inc. (individually and collectively, the “Company”) is headquartered in Mansfield, Pennsylvania, and provides a full range of banking and related services through its wholly owned subsidiary, First Citizens Community Bank (the “Bank”), and its wholly owned subsidiary, First Citizens Insurance Agency, Inc. On December 11, 2015, the Company completed its acquisition of The First National Bank of Fredericksburg (FNB). As of December 31, 2015, the Bank operates twenty five full-service banking branches in Potter, Tioga, Bradford, Clinton, Lebanon, Berks and Schuylkill counties, Pennsylvania and Allegany County, New York. The Bank also provides trust services, including the administration of trusts and estates, retirement plans, and other employee benefit plans, along with a brokerage division that provides a comprehensive menu of investment services. The Bank serves individual and corporate customers and is subject to competition from other financial institutions and intermediaries with respect to these services. The Company and Bank are supervised by the Board of Governors of the Federal Reserve System, while the Bank is subject to additional regulation and supervision by the Pennsylvania Department of Banking. A summary of significant accounting and reporting policies applied in the presentation of the accompanying financial statements follows: Basis of Presentation The financial statements are consolidated to include the accounts of the Company and its subsidiary, First Citizens Community Bank, and its subsidiary, First Citizens Insurance Agency, Inc. These statements have been prepared in accordance with U.S. generally accepted accounting principles. All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements. Use of Estimates In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to determination of the allowance for loan losses and deferred tax assets and liabilities. Operating Segments An operating segment is defined as a component of an enterprise that engages in business activities that generates revenue and incurs expense, and the operating results of which are reviewed by the chief operating decision maker in the determination of resource allocation and performance. While the Company’s chief decision makers monitor the revenue streams of the various Company’s products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Consistent with our internal reporting, the Company’s business activities are reported as one segment, which is community banking. Cash and Cash Equivalents Cash equivalents include cash on hand, deposits in banks and interest-earning deposits. Interest-earning deposits with original maturities of 90 days or less are considered cash equivalents. Net cash flows are reported for loan, deposits and short term borrowing transactions. Interest bearing time deposits with other banks are not included with cash and cash equivalents as the original maturities were greater than 90 days. Investment Securities Investment securities at the time of purchase are classified as one of the three following types: Held-to-Maturity Securities Trading Securities Available-for-Sale Securities The amortized cost of investment in debt securities is adjusted for amortization of premiums and accretion of discounts, computed by a method that results in a level yield. Gains and losses on the sale of investment securities are computed on the basis of specific identification of the adjusted cost of each security. Securities are periodically reviewed for other-than-temporary impairment. For debt securities, management considers whether the present value of future cash flows expected to be collected are less than the security’s amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company’s intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. For equity securities where the fair value has been significantly below cost for one year, the Company’s policy is to recognize an impairment loss unless sufficient evidence is available that the decline is not other than temporary and a recovery period can be predicted. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statement of Income. Common stock of the Federal Reserve Bank, Federal Home Loan Bank of Pittsburgh (FHLB) and correspondent banks represent ownership in institutions which are wholly owned by other financial institutions. These equity securities are accounted for at cost and are classified as other assets. The fair value of investments, except certain state and municipal securities, is based on bid prices published in financial newspapers or bid quotations received from securities dealers. The fair value of certain state and municipal securities is not readily available through market sources other than dealer quotations, so fair value is based on quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued. Loans Held for Sale Certain newly originated fixed-rate residential mortgage loans are classified as held for sale, because it is management’s intent to sell these residential mortgage loans. The residential mortgage loans held for sale are carried at the lower of aggregate cost or market value. Loans Interest on all loans is recognized on the accrual basis based upon the principal amount outstanding. The accrual of interest income on loans is discontinued when, in the opinion of management, doubt exists as to the ability to collect such interest. Payments received on non-accrual loans are applied to the outstanding principal balance or recorded as interest income, depending upon our assessment of our ultimate ability to collect principal and interest. Loans are returned to the accrual status when factors indicating doubtful collectability cease to exist. The Company recognizes nonrefundable loan origination fees and certain direct loan origination costs over the life of the related loan as an adjustment of loan yield using the interest method. Allowance for Loan Losses The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses which is charged to operations. The provision is based upon management’s periodic evaluation of individual loans, the overall risk characteristics of the various portfolio segments, past experience with losses, the impact of economic conditions on borrowers, and other relevant factors. The estimates used in determining the adequacy of the allowance for loan losses are particularly susceptible to significant change in the near term. Impaired loans are other commercial and agricultural, municipal, agricultural real estate, commercial real estate loans and certain residential mortgages cross collateralized with commercial relationships for which it is probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Company individually evaluates such loans for impairment and does not aggregate loans by major risk classifications. The definition of “impaired loans” is not the same as the definition of “non-accrual loans,” although the two categories overlap. The Company may choose to place a loan on non-accrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial, agricultural, municipal or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of impaired loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value; or, as a practical expedient in the case of a collateral dependent loan, the difference between the fair value of the collateral and the recorded amount of the loans. Mortgage loans on one to four family properties and all consumer loans are large groups of smaller balance homogeneous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which is defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed. The Company allocates the allowance based on the factors described below, which conform to the Company’s loan classification policy. In reviewing risk within the Bank’s loan portfolio, management has determined there to be several different risk categories within the loan portfolio. The allowance for loan losses consists of amounts applicable to: (i) residential real estate loans; (ii) commercial and agricultural real estate loans; (iii) construction; (iv) consumer loans; (v) other commercial and agricultural loans and (vi) state and political subdivision loans. Factors considered in this process include general loan terms, collateral, and availability of historical data to support the analysis. Historical loss percentages for each risk category are calculated and used as the basis for calculating allowance allocations. Certain qualitative factors are evaluated to determine additional inherent risks in the loan portfolio, which are not necessarily reflected in the historical loss percentages. These factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non classified loans. The following qualitative factors are analyzed: · Level of and trends in delinquencies, impaired/classified loans Change in volume and severity of past due loans Volume of non-accrual loans Volume and severity of classified, adversely or graded loans · Level of and trends in charge-offs and recoveries · Trends in volume, terms and nature of the loan portfolio · Effects of any changes in risk selection and underwriting standards and any other changes in lending and recovery policies, procedures and practices · Changes in the quality of the Bank’s loan review system · Experience, ability and depth of lending management and other relevant staff · National, state, regional and local economic trends and business conditions General economic conditions Unemployment rates Inflation / CPI Changes in values of underlying collateral for collateral-dependent loans · Industry conditions including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses. · Existence and effect of any credit concentrations, and changes in the level of such concentrations · Any change in the level of board oversight The Company also maintains an unallocated allowance to account for any factors or conditions that may cause a potential loss but are not specifically addressed in the process described above. The Company analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses. Loan Charge-off Policies Consumer loans are generally fully or partially charged down to the fair value of collateral securing the asset when the loan is 180 days past due for open-end loans or 120 days past due for closed-end loans unless the loan is well secured and in the process of collection. All other loans are generally charged down to the net realizable value when the loan is 90 days past due. Troubled Debt Restructurings In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a Troubled Debt Restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate allowance for loans that are identified as impaired through a TDR. TDRs are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Purchased Credit Impaired Loans The Company purchased loans in connection with its acquisition of FNB in 2015, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired (PCI) loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses. Over the life of the loan, expected cash flows continue to be estimated. If this subsequent estimated indicated that the present value of expected cash flows is less than the carrying amount, a charge to the allowance for loan loss is made through a provision. If the estimate indicates that the present value of the expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. Such purchased credit impaired loans are accounted for individually, and the Company estimates the amount and timing of expected cash flows for each loan. The expected cash flows in excess of the amount paid is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan’s contractual principal and interest over expected cash flows is not amortized over the remaining life of the loan (nonaccretable difference). For loans purchased that did not show evidence of credit deterioration, the difference between the fair value of the loan at the acquisition date and the loan’s face value is being amortized as a yield adjustment over the estimated remaining life of the loan using the effective interest method. Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell. Prior to foreclosure, the value of the underlying loan is written down to fair market value of the real estate or other assets to be acquired by a charge to the allowance for loan losses, if necessary. Any subsequent write-downs are charged against operating expenses. Operating expenses of such properties, net of related income and losses on disposition, are included in other expenses and gains and losses are included in other non-interest income or other non-interest expense. Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost, less accumulated depreciation. Depreciation expense is computed on straight line and accelerated methods over the estimated useful lives of the assets, which range from 3 to 15 years for furniture, fixtures and equipment and 5 to 40 years for building premises. Repair and maintenance expenditures which extend the useful life of an asset are capitalized and other repair expenditures are expensed as incurred. When premises or equipment are retired or sold, the remaining cost and accumulated depreciation are removed from the accounts and any gain or loss is credited to income or charged to expense, respectively. Intangible Assets Intangible assets include core deposit intangibles, covenants not to compete and mortgage servicing rights (MSRs). Core deposit intangibles are a measure of the value of consumer demand and savings deposits acquired in business combinations accounted for as purchases. Covenants not to compete are payments made to former employees as compensation for agreeing not to work for competitors. The core deposit intangibles are being amortized over 10 years using the sum-of-the-years digits method of amortization, while the covenant not to compete is being amortized over four years on a straight line basis. MSR’s arose from the Company originating certain loans for the express purpose of selling such loans in the secondary market. The Company maintains all servicing rights for these loans. The loans held for sale are carried at lower of cost or market. Originated MSRs are recorded by allocating total costs incurred between the loan and servicing rights based on their relative fair values. MSRs are amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio and measured annually for impairment. The recoverability of the carrying value of intangible assets is evaluated on an ongoing basis, and permanent declines in value, if any, are charged to expense. Goodwill The Company utilizes a two-step process for testing the impairment of goodwill on at least an annual basis. This approach could cause more volatility in the Company’s reported net income because impairment losses, if any, could occur irregularly and in varying amounts. The Company performs an annual impairment analysis of goodwill. Based on the fair value of the reporting unit, no impairment of goodwill was recognized in 2015, 2014 or 2013. Bank Owned Life Insurance The Company has purchased life insurance policies on certain employees. As of December 31, 2014, the Company was the owner and sole beneficiary of the policies. Effective January 1, 2015, the insurance policies were restructured so that any death benefits received from a policy while the insured person is an active employee of the Bank will be split with the beneficiary of the policy. Under these restructured agreements, the Bank receives the cash surrender value of the policy plus 50% of the benefit in excess of the cash surrender value and the remaining amount of the payout will be given to the beneficiary of the policy. Additionally, as a result of the acquisition of FNB, the Company acquired life insurance policies on former FNB employees and directors. The policies obtained as part of the acquisition provide a fixed dollar benefit to the former employee or director beneficiaries, whether or not the insured person is affiliated with the Company at the time of his or her death. Bank owned life insurance is recorded at its cash surrender value, or the amount that can be realized. Increases in the cash surrender value are recognized as other non-interest income. Income Taxes The Company and the Bank file a consolidated federal income tax return. Deferred tax assets and liabilities are computed based on the difference between the financial statement basis and income tax basis of assets and liabilities using the enacted marginal tax rates. Deferred income tax expenses or benefits are based on the changes in the net deferred tax asset or liability from period to period. Employee Benefit Plans The Company has noncontributory defined benefit pension plans covering employees hired before January 1, 2007 and employees acquired as part of the FNB acquisition. It is the Company’s policy to fund pension costs on a current basis to the extent deductible under existing tax regulations. Such contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. The Company has a defined contribution, 401(k) plan covering eligible employees. The employee may also contribute to the plan on a voluntary basis, up to a maximum percentage allowable not to exceed the limits of Code Sections 401(k). Under the plan, the Company also makes contributions on behalf of eligible employees, which vest immediately. For employees hired after January 1, 2007, in lieu of the pension plan, an additional annual discretionary 401(k) plan contribution is made and is equal to a percentage of an employee’s base compensation. The Company also has a profit-sharing plan for employees which provide tax-deferred salary savings to plan participants. The Company has a deferred compensation plan for directors who have elected to defer all or portions of their fees until their retirement or termination from service. The Company has a restricted stock plan which covers eligible employees and non-employee corporate directors. Under the plan, awards are granted based upon performance related requirements and are subject to certain vesting criteria. Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. The Company maintains a non-qualified supplemental executive retirement plan (“SERP”) for certain executives to compensate those executive participants in the Company’s noncontributory defined benefit pension plan whose benefits are limited by compensation limitations under current tax law. The SERP is considered an unfunded plan for tax and ERISA purposes and all obligations arising under the SERP are payable from the general assets of the Company. Expenses under the SERP are recognized as earned over the expected years of service. Derivative Financial Instruments The Company entered into an interest rate swap derivative to convert floating-rate debt to fixed-rate debt. This derivative matured in 2013 and was not replaced. The Company's interest rate swap agreement involved an agreement to pay a fixed rate and receive a floating rate, at specified intervals, calculated on an agreed-upon notional amount. The Company's objective in entering into this interest rate financial instrument was to mitigate its exposure to significant unplanned fluctuations in earnings caused by volatility in interest rates. As of December 31, 2012, the derivative instrument entered into was designated as a hedge of underlying exposures. The Company did not use this instrument for trading or speculative purposes. Derivative instruments used by the Company involve, to varying degrees, elements of credit risk, in the event a counter party should default, and market risk, as the instruments are subject to interest rate fluctuations. Credit risk is managed through the use of counterparty diversification and monitoring of counterparty financial condition. All derivatives are recognized on the balance sheet at their fair value. The derivative entered into by the Company qualified for and was designated as a cash flow hedge. Changes in the fair value of a derivative that is highly effective, and that is designated and qualifies as a cash flow hedge to the extent that the hedge is effective, are recorded in other comprehensive income (loss) until earnings are affected by the variability of cash flows of the hedged transaction (e.g. until periodic settlements of a variable asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. There was no net gain or loss recognized in earnings related to our derivative instruments during the year ended December 31, 2013. Advertising Costs Advertising costs are generally expensed as incurred. Comprehensive Income The Company is required to present comprehensive income in a full set of general purpose financial statements for all periods presented. Other comprehensive income (loss) is comprised of unrealized holding gains (losses) on the available-for-sale securities portfolio, unrecognized pension costs, and unrealized gain (loss) on interest rate swap. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30) In May 2015, the FASB issued ASU 2015-08 , Business Combinations – Pushdown Accounting – Amendment to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers Topic 606 In August 2015, the FASB issued ASU 2015-15, Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities requires In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial statements. Treasury Stock The purchase of the Company’s common stock is recorded at cost. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a last-in-first-out basis. Cash Flows The Company utilizes the net reporting of cash receipts and cash payments for deposit, short-term borrowing and lending activities. The Company considers amounts due from banks and interest-bearing deposits in banks as cash equivalents. Trust Assets and Income Assets held by the Company in a fiduciary or agency capacity for its customers are not included in the consolidated financial statements since such items are not assets of the Company. In accordance with industry practice, fees are recorded on the cash basis and approximate the fees which would have been recognized on the accrual basis. Earnings Per Share The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company. 2015 2014 2013 Basic earnings per share computation: Net income applicable to common stock $11,626,000 $13,385,000 $13,375,000 Weighted average common shares outstanding 3,031,282 3,038,298 3,055,034 Earnings per share - basic $3.84 $4.41 $4.38 Diluted earnings per share computation: Net income applicable to common stock $11,626,000 $13,385,000 $13,375,000 Weighted average common shares outstanding for basic earnings per share 3,031,282 3,038,298 3,055,034 Add: Dilutive effects of restricted stock 1,360 1,295 1,170 Weighted average common shares outstanding for dilutive earnings per share 3,032,642 3,039,593 3,056,204 Earnings per share - dilutive $3.83 $4.40 $4.38 Nonvested shares of restricted stock totaling 2,105, 2,248 and 2,555 were outstanding during 2015, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive. These anti-dilutive shares had prices ranging from $50.15-$53.15, $37.10-$50.50 and $34.70-$44.50 for 2015, 2014 and 2013, respectively. Reclassification Certain of the prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no effect on net income or stockholders’ equity.

RESTRICTIONS ON CASH AND DUE FR

RESTRICTIONS ON CASH AND DUE FROM BANKS	12 Months Ended
	Dec. 31, 2015
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract]
RESTRICTIONS ON CASH AND DUE FROM BANKS	2. RESTRICTIONS ON CASH AND DUE FROM BANKS The Bank is required to maintain reserves, in the form of cash balances with the Federal Reserve Bank, against its deposit liabilities. The amount of such reserves was $1,646,000 and $1,526,000 at December 31, 2015 and 2014, respectively. Non-retirement account deposits with one financial institution are insured up to $250,000. At times, the Company maintains cash and cash equivalents with other financial institutions in excess of the insured amount.

INVESTMENT SECURITIES

INVESTMENT SECURITIES	12 Months Ended
	Dec. 31, 2015
INVESTMENT SECURITIES [Abstract]
INVESTMENT SECURITIES	3. INVESTMENT SECURITIES The amortized cost and fair value of investment securities at December 31, 2015 and 2014 were as follows (in thousands) Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 Cost Gains Losses Value Available-for-sale securities: U.S. Agency securities $ 199,749 $ 369 $ (527) $ 199,591 U.S. Treasuries 10,103 - (21) 10,082 Obligations of state and political subdivisions 99,856 3,080 (73) 102,863 Corporate obligations 14,583 68 (86) 14,565 Mortgage-backed securities in government sponsored entities 30,107 186 (89) 30,204 Equity securities in financial institutions 2,001 436 (5) 2,432 Total available-for-sale securities $ 356,399 $ 4,139 $ (801) $ 359,737 December 31, 2014 Cost Gains Losses Value Available-for-sale securities: U.S. Agency securities $ 150,847 $ 638 $ (600) $ 150,885 U.S. Treasuries 4,944 - (95) 4,849 Obligations of state and political subdivisions 101,281 3,854 (99) 105,036 Corporate obligations 13,853 190 (85) 13,958 Mortgage-backed securities in government sponsored entities 29,397 368 (37) 29,728 Equity securities in financial institutions 1,137 553 - 1,690 Total available-for-sale securities $ 301,459 $ 5,603 $ (916) $ 306,146 The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2015 and 2014 (in thousands). As of December 31, 2015, the Company owned 91 securities whose fair value was less than their cost basis. Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized 2015 Value Losses Value Losses Value Losses U.S. agency securities $ 123,591 $ (527) $ - $ - $ 123,591 $ (527) U.S. Treasuries 10,082 (21) - - 10,082 (21) Obligations of states and political subdivisions 7,023 (57) 2,914 (16) 9,937 (73) Corporate obligations 5,822 (61) 2,138 (25) 7,960 (86) Mortgage-backed securities in government sponsored entities 9,830 (77) 227 (12) 10,057 (89) Equity securities in financial institutions 106 (5) - - 106 (5) Total securities $ 156,454 $ (748) $ 5,279 $ (53) $ 161,733 $ (801) 2014 U.S. agency securities $ 27,382 $ (110) $ 43,642 $ (490) $ 71,024 $ (600) U.S. Treasuries - - 4,849 (95) 4,849 (95) Obligations of states and political subdivisions 3,596 (19) 8,584 (80) 12,180 (99) Corporate obligations 505 (1) 7,707 (84) 8,212 (85) Mortgage-backed securities in government sponsored entities 5,025 (4) 2,229 (33) 7,254 (37) Total securities $ 36,508 $ (134) $ 67,011 $ (782) $ 103,519 $ (916) As of December 31, 2015, the Company’s investment securities portfolio contained unrealized losses on agency securities issued or backed by the full faith and credit of the United States government or are generally viewed as having the implied guarantee of the U.S. government, U.S treasury notes, obligations of states and political subdivisions, corporate obligations, mortgage backed securities in government sponsored entities and equity securities in financial institutions. For fixed maturity investments management considers whether the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company’s intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. For equity securities where the fair value has been significantly below cost for one year, the Company’s policy is to recognize an impairment loss unless sufficient evidence is available that the decline is not other than temporary and a recovery period can be predicted. As of December 31, 2015 and 2014, the Company had concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or company-specific rating changes that are not expected to result in the non-collection of principal and interest during the period. Proceeds from sales of securities available-for-sale during 2015, 2014 and 2013 were $30,464,000, $28,989,000 and $25,461,000, respectively. The gross gains realized during 2015 consisted of $196,000, $69,000, $99,000 and $76,000 from the sales of five agency securities, five mortgage backed securities, seven municipal securities and an entire equity security position, respectively. The gross loss of $11,000 was made from the sale of one US treasury security. The gross gains realized during 2014 consisted of $177,000, $197,000, $172,000 and $101,000 from the sales eight agency securities, seven mortgage backed securities, one municipal security and a portion of one equity security, respectively. The gross loss of $31,000 was made from the sale of two US treasury securities The gross gains realized during 2013 consisted of realized gains of $86,000, $356,000, $296,000, $87,000 and $2,000 from the sale of seven agency securities, nine mortgage backed securities, portions of three equity securities, four municipal securities and one corporate security, respectively. The gross losses incurred during 2013 were made up of realized losses of $246,000 and $140,000 from the sale of a corporate security and two mortgage backed securities, respectively. Gross gains and gross losses were realized as follows (in thousands): 2015 2014 2013 Gross gains $ 440 $ 647 $ 827 Gross losses (11) (31) (386) Net gains $ 429 $ 616 $ 441 Investment securities with an approximate carrying value of $203,769,000 and $186,388,000 at December 31, 2015 and 2014, respectively, were pledged to secure public funds and certain other deposits as provided by law and certain borrowing arrangements of the Company. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of debt securities at December 31, 2015, by contractual maturity are shown below (in thousands). Municipal securities that have been refunded and will therefore pay-off on the call date are reflected in the table below utilizing the call date as the date of repayment as payment is guaranteed on that day: Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 19,839 $ 19,878 Due after one year through five years 203,928 204,375 Due after five years through ten years 41,041 41,905 Due after ten years 89,590 91,147 Total $ 354,398 $ 357,305

LOANS AND RELATED ALLOWANCE FOR

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES	12 Months Ended
	Dec. 31, 2015
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES [Abstract]
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES	4. LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES The Company grants commercial, industrial, agricultural, residential, and consumer loans primarily to customers throughout north central and south central Pennsylvania and southern New York. Although the Company has a diversified loan portfolio at December 31, 2015 and 2014, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio, as well as how those segments are analyzed within the allowance for loan losses as of December 31, 2015 and 2014 (in thousands): 2015 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 203,407 $ 304 $ 35 $ 203,068 Commercial and agricultural 295,364 6,235 2,908 286,221 Construction 15,011 - - 15,011 Consumer 11,543 - 9 11,534 Other commercial and agricultural loans 71,206 5,745 866 64,595 State and political subdivision loans 98,500 - - 98,500 Total 695,031 12,284 3,818 678,929 Allowance for loan losses 7,106 355 - 6,751 Net loans $ 687,925 $ 11,929 $ 3,818 $ 672,178 2014 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 185,438 $ 316 $ - $ 185,122 Commercial and agricultural 215,584 6,112 - 209,472 Construction 6,353 - - 6,353 Consumer 8,497 - - 8,497 Other commercial and agricultural loans 58,516 2,394 - 56,122 State and political subdivision loans 79,717 - - 79,717 Total 554,105 8,822 - 545,283 Allowance for loan losses 6,815 98 - 6,717 Net loans $ 547,290 $ 8,724 $ - $ 538,566 Purchased loans acquired are recorded at fair value on their purchase date without a carryover of the related allowance for loan losses. Upon acquisition, the Company evaluated whether an acquired loan was within the scope of ASC 310-30, Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality. Purchased credit-impaired loans are loans that have evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. There were no material increases or decreases in the expected cash flows of these loans between December 11, 2015 (the “acquisition date”) and December 31, 2015. The fair value of purchased credit-impaired loans, on the acquisition date, was determined, primarily based on the fair value of loan collateral. The carrying value of purchased loans acquired with deteriorated credit quality was $3,818,000 at December 31, 2015. On the acquisition date, the preliminary estimate of the unpaid principal balance for all loans evidencing credit impairment acquired in the FNB acquisition was $6,969,000 and the estimated fair value of the loans was $3,809,000. Total contractually required payments on these loans, including interest, at the acquisition date was $9,913,000. However, the Company’s preliminary estimate of expected cash flows was $4,474,000. At such date, the Company established a credit risk related non-accretable discount (a discount representing amounts which are not expected to be collected from the customer nor liquidation of collateral) of $5,439,000 relating to these impaired loans, reflected in the recorded net fair value. Such amount is reflected as a non-accretable fair value adjustment to loans. The Company further estimated the timing and amount of expected cash flows in excess of the estimated fair value and established an accretable discount of $665,000 on the acquisition date relating to these impaired loans. The table below presents the components of the purchase accounting adjustments related to the purchased impaired loans acquired in the FNB Acquisition as of December 11, 2015: (In Thousands) December 11, 2015 Contractually required principal and interest at acquisition $ 9,913 Non-accretable discount (5,439) Expected cash flows 4,474 Accretable discount (665) Estimated fair value $ 3,809 Changes in the amortizable yield for purchased credit-impaired loans were as follows for the month ended December 31, 2015: (In Thousands) December 31, 2015 Balance at beginning of period $ 665 Accretion (28) Balance at end of period $ 637 The following table presents additional information regarding loans acquired with specific evidence of deterioration in credit quality under ASC 310-30: (In Thousands) December 11, 2015 December 31, 2015 Outstanding balance $ 6,969 $ 6,950 Carrying amount 3,809 3,818 Real estate loans serviced for Freddie Mac, Fannie Mae and the FHLB, which are not included in the Consolidated Balance Sheet, totaled $133,210,000 and $84,676,000 at December 31, 2015 and 2014, respectively. Loans sold to Freddie Mac and Fannie Mae were sold without recourse and total $92,773,000 and $84,676,000 at December 31, 2015 and 2014, respectively. Additionally, the Bank acquired a portfolio of loans sold to the FHLB during the acquisition of FNB, which were sold under the Mortgage Partnership Finance Program ("MPF"). The Bank is no longer an active participant in the MPF program. The MPF portfolio balance was $40,437,000 at December 31, 2015, respectively. The FHLB maintains a first-loss position for the MPF portfolio that totals $104,000. Should the FHLB exhaust its first-loss position, recourse to the Bank's credit enhancement would be up to the next $4,345,000 of losses. The Bank has not experienced any losses for the MPF portfolio. As of December 31, 2015 and 2014, net unamortized loan fees and costs of $1,170,000 and $1,173,000, respectively, were included in the carrying value of loans. The segments of the Bank’s loan portfolio are disaggregated into classes to a level that allows management to monitor risk and performance. Residential real estate mortgages consists of 15 to 30 year first mortgages on residential real estate, while residential real estate home equities are consumer purpose installment loans or lines of credit secured by a mortgage which is often a second lien on residential real estate with terms of 15 years or less. Commercial real estate are business purpose loans secured by a mortgage on commercial real estate. Agricultural real estate are loans secured by a mortgage on real estate used in agriculture production. Construction real estate are loans secured by residential or commercial real estate used during the construction phase of residential and commercial projects. Consumer loans are typically unsecured or primarily secured by collateral other than real estate and overdraft lines of credit connected with customer deposit accounts. Other commercial loans are loans for commercial purposes primarily secured by non-real estate collateral. Other agricultural loans are loans for agricultural purposes primarily secured by non real estate collateral. State and political subdivisions are loans for state and local municipalities for capital and operating expenses or tax free loans used to finance commercial development. Management considers other commercial and agricultural loans, commercial and agricultural real estate loans and state and political subdivision loans which are 90 days or more past due to be impaired. Certain residential mortgages, home equity and consumer loans that are cross collateralized with commercial relationships determined to be impaired may be classified as impaired as well. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance allocation or a charge-off to the allowance. The following table includes the recorded investment and unpaid principal balances for impaired loans by class, with the associated allowance amount as of December 31, 2015 and 2014, if applicable (in thousands): Recorded Recorded Unpaid Investment Investment Total Principal With No With Recorded Related Balance Allowance Allowance Investment Allowance 2015 Real estate loans: Mortgages $ 281 $ 114 $ 129 $ 243 $ 26 Home Equity 61 - 61 61 11 Commercial 8,654 5,843 225 6,068 62 Agricultural 167 167 - 167 - Construction - - - - - Consumer - - - - - Other commercial loans 5,535 4,653 987 5,640 256 Other agricultural loans 105 105 - 105 - State and political subdivision loans - - - - - Total $ 14,803 $ 10,882 $ 1,402 $ 12,284 $ 355 2014 Real estate loans: Mortgages $ 222 $ 125 $ 66 $ 191 $ 13 Home Equity 130 60 65 125 12 Commercial 8,433 5,708 404 6,112 72 Agricultural - - - - - Construction - - - - - Consumer - - - - - Other commercial loans 2,480 2,346 48 2,394 1 Other agricultural loans - - - - - State and political subdivision loans - - - - - Total $ 11,265 $ 8,239 $ 583 $ 8,822 $ 98 The following table includes the average investment in impaired loans and the income recognized on impaired loans for 2015, 2014 and 2013 (in thousands): Interest Average Interest Income Recorded Income Recognized 2015 Investment Recognized Cash Basis Real estate loans: Mortgages $ 240 $ 12 $ - Home Equity 88 4 - Commercial 5,683 63 5 Agricultural 56 2 - Construction - - - Consumer - - - Other commercial loans 2,700 98 6 Other agricultural loans 37 1 - State and political subdivision loans - - - Total $ 8,804 $ 180 $ 11 2014 Real estate loans: Mortgages $ 198 $ 9 $ - Home Equity 130 4 - Commercial 7,270 54 - Agricultural - - - Construction - - - Consumer 10 - - Other commercial loans 2,031 79 - Other agricultural loans - - - State and political subdivision loans - - - Total $ 9,639 $ 146 $ - 2013 Real estate loans: Mortgages $ 327 $ 7 $ - Home Equity 136 4 - Commercial 8,499 457 377 Agricultural - - - Construction - - - Consumer 5 - - Other commercial loans 1,761 79 - Other agricultural loans - - - State and political subdivision loans - - - Total $ 10,728 $ 547 $ 377 Credit Quality Information For commercial real estate, agricultural real estate, construction, other commercial, other agricultural loans and state and political subdivision loans, management uses a nine point internal risk rating system to monitor the credit quality. · Pass (Grades 1-5) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. · Special Mention (Grade 6) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected. · Substandard (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. · Doubtful (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances. · Loss (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Bank’s loan rating process includes several layers of internal and external oversight. The Company’s loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management. All commercial and agricultural loans are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Bank engages an external consultant on at least an annual basis. The external consultant is engaged to 1) review a minimum of 55% of the dollar volume of the commercial loan portfolio on an annual basis, 2) review new loans originated for over $1.0 million in the last years, 3) review a majority of borrowers with commitments greater than or equal to $1.0 million, 4) review selected loan relationships over $750,000 which are over 30 days past due, or classified Special Mention, Substandard, Doubtful, or Loss, and 5) such other loans which management or the consultant deems appropriate. The following tables represent credit exposures by internally assigned grades as of December 31, 2015 and 2014 (in thousands): Pass Special Mention Substandard Doubtful Loss Ending Balance 2015 Real estate loans: Commercial $ 217,544 $ 4,150 $ 15,816 $ 32 $ - $ 237,542 Agricultural 53,695 2,865 1,262 - - 57,822 Construction 14,422 589 - - - 15,011 Other commercial loans 51,297 446 5,669 137 - 57,549 Other agricultural loans 13,318 234 105 - - 13,657 State and political subdivision loans 98,500 - - - - 98,500 Total $ 448,776 $ 8,284 $ 22,852 $ 169 $ - $ 480,081 2014 Real estate loans: Commercial $ 169,383 $ 8,948 $ 12,614 $ - $ - $ 190,945 Agricultural 19,575 3,394 1,670 - - 24,639 Construction 6,353 - - - - 6,353 Other commercial loans 40,683 4,413 2,355 - - 47,451 Other agricultural loans 9,221 727 1,117 - - 11,065 State and political subdivision loans 79,717 - - - - 79,717 Total $ 324,932 $ 17,482 $ 17,756 $ - $ - $ 360,170 For residential real estate mortgages, home equities and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below and all loans past due 90 or more days. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2015 and 2014 (in thousands): 2015 Performing Non-performing PCI Total Real estate loans: Mortgages $ 139,734 $ 1,270 $ 35 $ 141,039 Home Equity 62,236 132 - 62,368 Consumer 11,470 64 9 11,543 Total $ 213,440 $ 1,466 $ 44 $ 214,950 2014 Performing Non-performing PCI Total Real estate loans: Mortgages $ 121,968 $ 890 $ - $ 122,858 Home Equity 62,296 284 - 62,580 Consumer 8,444 53 - 8,497 Total $ 192,708 $ 1,227 $ - $ 193,935 Aging Analysis of Past Due Loans by Class Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loans as of December 31, 2015 and 2014 (in thousands): 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2015 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 487 $ 283 $ 687 $ 1,457 $ 139,547 $ 35 $ 141,039 $ 321 Home Equity 630 15 121 766 61,602 - 62,368 73 Commercial 824 57 4,139 5,020 230,352 2,170 237,542 60 Agricultural 177 167 - 344 56,740 738 57,822 - Construction - - - - 15,011 - 15,011 - Consumer 239 37 49 325 11,209 9 11,543 9 Other commercial loans 143 214 1,010 1,367 55,316 866 57,549 160 Other agricultural loans 9 - - 9 13,648 - 13,657 - State and political subdivision loans - - - - 98,500 - 98,500 - Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 $ 623 Loans considered non-accrual $ 54 $ 171 $ 5,383 $ 5,608 $ 923 $ - $ 6,531 Loans still accruing 2,455 602 623 3,680 681,002 3,818 688,500 Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2014 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 318 $ 230 $ 675 $ 1,223 $ 121,635 $ - $ 122,858 $ 214 Home Equity 442 99 260 801 61,779 - 62,580 132 Commercial 97 231 1,432 1,760 189,185 - 190,945 310 Agricultural - - - - 24,639 - 24,639 - Construction - - - - 6,353 - 6,353 - Consumer 119 4 7 130 8,367 - 8,497 6 Other commercial loans 503 258 476 1,237 46,214 - 47,451 174 Other agricultural loans - - - - 11,065 - 11,065 - State and political subdivision loans - - - - 79,717 - 79,717 - Total $ 1,479 $ 822 $ 2,850 $ 5,151 $ 548,954 $ - $ 554,105 $ 836 Loans considered non-accrual $ 48 $ 181 $ 2,014 $ 2,243 $ 4,356 $ - $ 6,599 Loans still accruing 1,431 641 836 2,908 544,598 - 547,506 Total $ 1,479 $ 822 $ 2,850 $ 5,151 $ 548,954 $ - $ 554,105 Nonaccrual Loans Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans or if full payment of principal and interest is not expected. The following table reflects the loans on nonaccrual status as of December 31, 2015 and 2014, respectively. The balances are presented by class of loan (in thousands): 2015 2014 Real estate loans: Mortgages $ 949 $ 676 Home Equity 59 152 Commercial 4,422 5,010 Agricultural 34 - Construction - - Consumer 55 47 Other commercial loans 1,012 714 Other agricultural loans - - State and political subdivision - - $ 6,531 $ 6,599 Interest income on loans would have increased by approximately $463,000, $527,000 and, $632,000 during 2015, 2014 and 2013, respectively, if these loans had performed in accordance with their terms. Troubled Debt Restructurings (TDR) In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a TDR. Management strives to identify borrowers in financial difficulty early and work with them to modify more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring by calculating the present value of the revised loan terms and comparing this balance to the Company’s investment in the loan prior to the restructuring. As these loans are individually evaluated, they are excluded from pooled portfolios when calculating the allowance for loan and lease losses and a separate allocation within the allowance for loan and lease losses is provided. Management continually evaluates loans that are considered TDRs, including payment history under the modified loan terms, the borrower’s ability to continue to repay the loan based on continued evaluation of their operating results and cash flows from operations. Based on this evaluation management would no longer consider a loan to be a TDR when the relevant facts support such a conclusion. As of December 31, 2015, 2014 and 2013, included within the allowance for loan losses are reserves of $37,000, $26,000 and $28,000, respectively, that are associated with loans modified as TDRs . Loan modifications that are considered TDRs completed during the years ended December 31, 2015, 2014 and 2013 were as follows (dollars in thousands): Number of contracts Pre-modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Interest Modification Term Modification Interest Modification Term Modification Interest Modification Term Modification Real estate loans: Mortgages 1 1 $ 71 $ 19 $ 71 $ 19 Total 1 1 $ 71 $ 19 $ 71 $ 19 Real estate loans: Commercial - 2 $ - $ 153 $ - $ 153 Total - 2 $ - $ 153 $ - $ 153 Real estate loans: Mortgages 1 - $ 72 $ - $ 72 $ - Commercial - 2 - 1,365 - 1,365 Other commercial loans - 2 - 1,530 - 1,530 Total 1 4 $ 72 $ 2,895 $ 72 $ 2,895 Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The following table presents the recorded investment in loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2015, 2014 and 2013, respectively, and that subsequently defaulted during these reporting periods (dollars in thousands): 2015 2014 2013 Number of contracts Recorded investment Number of contracts Recorded investment Number of contracts Recorded investment Real estate loans: Commercial - $ 1 $ 50 1 $ 55 Other commercial loans - - - - 1 Total recidivism - $ 1 $ 50 2 $ 61 Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell, and are included in other assets on the Consolidated Balance Sheet. As of December 31, 2015 and 2014 included with other assets are $1,354,000 and $1,792,000, respectively, of foreclosed assets. As of December 31, 2015, included within the foreclosed assets is $339,000 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of December 31, 2015, the Company has initiated formal foreclosure proceedings on $1,199,000 of consumer residential mortgages, which have not yet been transferred into foreclosed assets. Allowance for Loan Losses The following tables roll forward the balance of the allowance for loan and lease losses for the years ended December 31, 2015, 2014 and 2013 and is segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2015, 2014 and 2013 (in thousands): Balance at December 31, 2014 Charge-offs Recoveries Provision Balance at December 31, 2015 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 878 $ (66) $ - $ 93 $ 905 $ 37 $ 868 Commercial and agricultural 3,870 (84) 14 (15) 3,785 62 3,723 Construction 26 - - (2) 24 - 24 Consumer 84 (47) 33 32 102 - 102 Other commercial and agricultural loans 1,224 (41) 2 120 1,305 256 1,049 State and political - subdivision loans 545 - - 48 593 - 593 Unallocated 188 - - 204 392 - 392 Total $ 6,815 $ (238) $ 49 $ 480 $ 7,106 $ 355 $ 6,751 Balance at December 31, 2013 Charge-offs Recoveries Provision Balance at December 31, 2014 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 946 $ (97) $ - $ 29 $ 878 $ 25 $ 853 Commercial and agricultural 4,558 (516) 15 (187) 3,870 72 3,798 Construction 50 - - (24) 26 - 26 Consumer 105 (47) 27 (1) 84 - 84 Other commercial and agricultural loans 942 (250) - 532 1,224 1 1,223 State and political - subdivision loans 330 - - 215 545 - 545 Unallocated 167 - - 21 188 - 188 Total $ 7,098 $ (910) $ 42 $ 585 $ 6,815 $ 98 $ 6,717 Balance at December 31, 2012 Charge-offs Recoveries Provision Balance at December 31, 2013 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 875 $ (17) $ 5 $ 83 $ 946 $ 27 $ 919 Commercial and agricultural 4,437 (62) 5 178 4,558 305 4,253 Construction 38 - - 12 50 - 50 Consumer 119 (54) 33 7 105 - 105 Other commercial and agricultural loans 728 (1) - 215 942 1 941 State and political - subdivision loans 271 - - 59 330 - 330 Unallocated 316 - - (149) 167 - 167 Total $ 6,784 $ (134) $ 43 $ 405 $ 7,098 $ 333 $ 6,765 As discussed in Footnote 1, management evaluates various qualitative factors on a quarterly basis. The following are factors that experienced changes during: 2015 · The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all loan categories due to an increase in the unemployment rates in the local economy during 2015 and the reduction in natural gas exploration and extraction activity. · The qualitative factors for changes in levels of and trends in delinquencies and impaired/classified loans were decreased for commercial and agricultural real estate due to the decrease in the amount of loans classified as substandard, excluding loans acquired as part of the FNB acquisition. While there has been an increase in delinquencies of commercial and agricultural real estate loans, the qualitative factor was not increased. The increase in delinquencies is attributable to one relationship, which is classified as impaired and management does not believe that this delinquency is a reflection of a further decrease in the credit quality of the commercial and agricultural real estate loan portfolio. · The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for other commercial and agricultural loans due to an increase in the amount of loans classified as substandard. · The qualitative factor for levels of and trends in charge-offs and recoveries was decreased for commercial and agricultural real estate and other commercial and agricultural loans due to the decrease in charge-offs compared to the prior year as charge-offs returned to historical norms for the Bank. · The qualitative factor for experience, ability and depth of lending management and other relevant staff was decreased for commercial real estate, agricultural real estate, other commercial and other agricultural loans due to the length of time employees involved throughout the loan process have been in their positions. · The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses was increased for commercial and agricultural related loans due to the decrease in the price received for product sold and the increase in feed costs that has occurred in 2015, which negatively affected customer earnings. · The qualitative factor for levels of and trends in charge-offs and recoveries was increased for residential real estate loans due to the increase in charge-offs compared to historical norms for the Company. · The qualitative factors for changes in levels of and trends in delinquencies and impaired/classified loans was increased for residential mortgages due to increases in the amount of non-performing loans. 2014 · The qualitative factor for national, state, regional and local economic trends and business conditions was decreased for all loan categories due to a decrease in both local and state the unemployment rates. · The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were decreased for commercial and agricultural real estate due to the decrease in the Company’s classified loans to its lowest level in three years and a decrease in the amount of loans past due. This was the primary cause of the negative provision of $187,000, as substandard loans decreased $11,168,000 from 2013 to 2014. · The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for other commercial loans due to an increase in classified loans and delinquency during 2014. · The qualitative factor for levels of and trends in charge-offs and recoveries was increased for commercial real estate and other commercial loans due to the increase in charge-offs compared to historical norms for the Bank. · The qualitative factor for experience, ability and depth of lending management and other relevant staff was decreased for all loan categories due to the length of time employees involved throughout the loan process have been in their positions. · The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses was decreased for agricultural related loans due to the improvement in the agricultural economy as reflected by milk and commodity prices and our customers financial results. 2013 · The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all loan categories due to rising unemployment rates in the local economy as a result of the slowdown in Marcellus shale natural gas exploration activities. · The qualitative factor for trends in volume, terms and nature of the loan portfolio was increased for commercial and agricultural real estate, other commercial and agricultural loans and state and political subdivision loan categories due to the increase of the number of loans that are participations that were purchased from other banks and therefore subject to different underwriting standards.

PREMISES & EQUIPMENT

PREMISES & EQUIPMENT	12 Months Ended
	Dec. 31, 2015
PREMISES & EQUIPMENT [Abstract]
PREMISES & EQUIPMENT	5. PREMISES & EQUIPMENT Premises and equipment at December 31, 2015 and 2014 are summarized as follows (in thousands): December 31, 2015 2014 Land $ 5,110 $ 3,295 Buildings 17,349 12,456 Furniture, fixtures and equipment 6,636 6,187 Construction in process 88 1,836 29,183 23,774 Less: accumulated depreciation 11,920 11,417 Premises and equipment, net $ 17,263 $ 12,357 Depreciation expense amounted to $608,000, $537,000 and $598,000 for 2015, 2014 and 2013, respectively.

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2015
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]
GOODWILL AND OTHER INTANGIBLE ASSETS	6. GOODWILL AND OTHER INTANGIBLE ASSETS The following table provides the gross carrying value and accumulated amortization of intangible assets as of December 31, 2015 and 2014 (in thousands): December 31, 2015 December 31, 2014 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Amortized intangible assets (1): MSRs $ 1,336 $ (638) $ 698 $ 1,023 $ (550) $ 473 Core deposit intangibles 1,641 (25) 1,616 - - - Covenant not to compete 125 (2) 123 - - - Total amortized intangible assets $ 3,102 $ (665) $ 2,437 $ 1,023 $ (550) $ 473 Unamortized intangible assets: Goodwill $ 21,089 $ 10,256 (1) Excludes fully amortized intangible assets The following table provides the current year and estimated future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing asset balances at December 31, 2015. Future amortization expense may vary from these projections (in thousands): MSRs Core deposit intangibles Covenant not to compete Total Year ended December 31, 2015 (actual) $ 129 $ 25 $ 2 $ 156 Estimate for year ended December 31, 2016 173 296 31 500 2017 142 266 31 439 2018 113 236 31 380 2019 88 206 30 324 2020 66 177 — 243

FEDERAL HOME LOAN BANK (FHLB) S

FEDERAL HOME LOAN BANK (FHLB) STOCK	12 Months Ended
	Dec. 31, 2015
FEDERAL HOME LOAN BANK (FHLB) STOCK [Abstract]
FEDERAL HOME LOAN BANK (FHLB) STOCK	7. FEDERAL HOME LOAN BANK (FHLB) STOCK The Bank is a member of the FHLB of Pittsburgh and as such, is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. As of December 31, 2015 and 2014, the Bank holds $2,800,000 and $1,761,000, respectively. The stock does not have a readily determinable fair value and as such is classified as restricted stock, carried at cost and evaluated by management. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) A significant decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB. Management evaluated the stock and concluded that the stock was not impaired for the periods presented herein. Management considered that the FHLB’s regulatory capital ratios have improved, liquidity appears adequate, new shares of FHLB stock continue to exchange hands at the $100 par value and the FHLB has repurchased shares of excess capital stock from its members and has paid a quarterly cash dividend.

DEPOSITS

DEPOSITS	12 Months Ended
	Dec. 31, 2015
DEPOSITS [Abstract]
DEPOSITS	8. DEPOSITS The following table shows the breakdown of deposits as of December 31, 2015 and 2014, by deposit type (dollars in thousands): 2015 2014 Non-interest-bearing deposits $ 150,960 $ 95,526 NOW accounts 279,655 226,038 Savings deposits 170,277 108,252 Money market deposit accounts 105,229 95,350 Certificates of deposit 281,910 248,767 Total $ 988,031 $ 773,933 Certificates of deposit of $250,000 or more amounted to $51,818,000 and $47,310,000 at December 31, 2015 and 2014, respectively. Following are maturities of certificates of deposit as of December 31, 2015 (in thousands): 2016 $ 128,954 2017 61,608 2018 38,240 2019 18,761 2020 24,594 Thereafter 9,753 Total certificates of deposit $ 281,910

BORROWED FUNDS AND REPURCHASE A

BORROWED FUNDS AND REPURCHASE AGREEMENTS	12 Months Ended
	Dec. 31, 2015
BORROWED FUNDS AND REPURCHASE AGREEMENTS [Abstract]
BORROWED FUNDS AND REPURCHASE AGREEMENTS	9. BORROWED FUNDS AND REPURCHASE AGREEMENTS The following table shows the breakdown of borrowed funds as of December 31, 2015 and 2014, (dollars in thousands): Securities Sold Under Total Agreements to FHLB Federal Funds FRB Notes Term Borrowed Repurchase(a) Advances(b) Line (c) BIC Line (d) Payable(e) Loans(f) Funds 2015 Balance at December 31 $ 16,008 $ 1,598 $ - $ - $ 7,500 $ 16,525 $ 41,631 Highest balance at any month-end 16,008 26,996 - - 7,500 20,569 71,073 Average balance 5,998 5,218 - - 7,500 17,984 36,700 Weighted average interest rate: Paid during the year 0.82% 0.35% 0.00% 0.77% 3.14% 2.25% 1.93% As of year-end 0.45% 0.43% 0.00% 0.00% 3.33% 2.44% 1.74% 2014 Balance at December 31 $ 5,906 $ 16,593 $ - $ - $ 7,500 $ 11,800 $ 41,799 Highest balance at any month-end 7,277 39,902 - - 7,500 18,200 72,879 Average balance 6,535 9,991 1 1 7,500 15,180 39,208 Weighted average interest rate: Paid during the year 0.91% 0.27% 0.76% 0.75% 3.09% 1.89% 1.55% As of year-end 0.99% 0.24% 0.00% 0.00% 3.04% 2.54% 1.50% 2013 Balance at December 31 $ 7,278 $ 42,954 $ - $ - $ 7,500 $ 9,200 $ 66,932 Highest balance at any month-end 8,923 42,954 - - 7,500 30,000 89,377 Average balance 7,821 4,871 - - 7,500 22,022 42,214 Weighted average interest rate: Paid during the year 0.88% 0.25% 0.73% 0.75% 5.82% 3.13% 2.86% As of year-end 0.87% 0.25% 0.00% 0.00% 3.04% 2.78% 0.96% (a) We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31, 2015 and December 31, 2014 is presented in the following tables. Remaining Contractual Maturity of the Agreements Overnight and Up to Greater than 2015 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 18,144 $ - $ - $ 2,049 $ 20,193 Total carrying value of collateral pledged 18,144 - - 2,049 20,193 Total liability recognized for repurchase agreements 16,008 2014 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 10,368 $ 1,015 $ - $ 2,940 $ 14,323 Total carrying value of collateral pledged 10,368 1,015 - 2,940 14,323 Total liability recognized for repurchase agreements 5,906 (b) FHLB Advances consist of an “Open RepoPlus” agreement with the FHLB of Pittsburgh. FHLB “Open RepoPlus” advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher. The Company has a borrowing limit of $254,270,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company’s FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans. (c) The federal funds line consists of an unsecured line from a third party bank at market rates. The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances. No specific collateral is required to be pledged for these borrowings. (d) The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession. As of December 31, 2015, the Company has a borrowing limit of $7,949,000, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $16,146,000 and $17,071,000 as of December 31, 2015 and 2014, respectively. (e) In December 2003, the Company formed a special purpose entity (“Entity”) to issue $7,500,000 of floating rate obligated mandatory redeemable securities as part of a pooled offering. The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80. The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter. The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable. Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008. Under current accounting rules, the Company’s minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet. The Entity is not consolidated as part of the Company’s consolidated financial statements. (f) December 31, December 31, Interest Rate Maturity 2015 2014 Fixed: 2.29% October 2, 2017 2,000 2,000 2.72% July 12, 2018 1,000 1,000 1.87% February 4, 2019 2,000 2,000 2.61% February 3, 2021 2,000 2,000 3.52% July 12, 2021 2,000 2,000 2.37% August 20, 2021 2,800 2,800 2.08% January 6, 2022 4,725 - Total term loans $ 16,525 $ 11,800 Following are maturities of borrowed funds as of December 31, 2015 (in thousands): 2016 $ 24,546 2017 2,000 2018 1,000 2019 2,000 2020 560 Thereafter 11,525 Total borrowed funds $ 41,631

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS	12 Months Ended
	Dec. 31, 2015
EMPLOYEE BENEFIT PLANS [Abstract]
EMPLOYEE BENEFIT PLANS	10. EMPLOYEE BENEFIT PLANS Noncontributory Defined Benefit Pension Plan The Bank sponsors a trusteed, noncontributory defined benefit pension plans covering substantially all employees and officers hired prior to January 1, 2007. Additionally, the Bank assumed the noncontributory defined benefit pension plan of FNB when it was acquired during 2015. The FNB plan was frozen prior to the acquisition and therefore, no additional benefits will accrue for employees covered under that plan. These two plans are collectively referred to herein as “the Plans”. The pension plans call for benefits to be paid to eligible employees at retirement based primarily upon years of service with the Bank and compensation rates during employment. Upon retirement or other termination of employment, employees can elect either an annuity benefit or a lump sum distribution of vested benefits in the pension plan. The Bank’s funding policy is to make annual contributions, if needed, based upon the funding formula developed by the pension plans’ actuary. For the years ended December 31, 2015, 2014 and 2013, contributions to the pension plans totaled $400,000, $300,000 and $1,000,000, respectively. In lieu of the pension plan, employees with a hire date of January 1, 2007 or later are eligible to receive, after meeting length of service requirements, an annual discretionary 401(k) plan contribution from the Bank equal to a percentage of an employee’s base compensation. The contribution amount is placed in a separate account within the 401(k) plan and is subject to a vesting requirement. Contributions by the Company totaled $61,000, $46,000 and $40,000 for 2015, 2014 and 2013, respectively. The following table sets forth the obligation and funded status as of December 31 (in thousands): 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ 11,777 $ 9,739 Benefit obligation acquired as part of FNB acquisition 6,377 - Service cost 352 307 Interest cost 424 415 Actuarial (Gain) / Loss (456) 1,645 Benefits paid (665) (329) Benefit obligation at end of year 17,809 11,777 Change in plan assets Fair value of plan assets at beginning of year 11,039 10,519 Fair value of plan assets at acquisition 4,053 - Actual return (loss) on plan assets (41) 549 Employer contribution 400 300 Benefits paid (665) (329) Fair value of plan assets at end of year 14,786 11,039 Funded status $ (3,023) $ (738) Amounts not yet recognized as a component of net periodic pension cost (in thousands): Amounts recognized in accumulated other comprehensive loss consists of: 2015 2014 Net loss $ 3,919 $ 3,795 Prior service cost (222) (270) Total $ 3,697 $ 3,525 The accumulated benefit obligation for the defined benefit pension plan was $17,809,000 and $11,777,000 at December 31, 2015 and 2014, respectively. The components of net periodic benefit costs for the years ended December 31 are as follows (in thousands): 2015 2014 2013 Service cost $ 352 $ 307 $ 342 Interest cost 424 415 363 Return on plan assets (791) (786) (673) Net amortization and deferral 205 51 257 Net periodic benefit cost $ 190 $ (13) $ 289 The estimated net loss and prior service cost that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost in 2016 is $288,000 and $(47,000), respectively. The weighted-average assumptions used to determine benefit obligations at December 31, 2015 and 2014 is summarized in the following table. The change in the discount rate is the primary driver of the actuarial gain that occurred in 2015 of $456,000. 2015 2014 Discount rate 3.94% 3.50% Rate of compensation increase 3.00% 3.00% The weighted-average assumptions used to determine net periodic benefit cost (income) for the year ended December 31: 2015 2014 2013 Discount rate 3.61% 4.30% 3.30% Expected long-term return on plan assets 7.00% 7.50% 7.50% Rate of compensation increase 3.00% 3.00% 3.00% The long-term rate of return on plan assets gives consideration to returns currently being earned on plan assets as well as future rates expected to be earned. The investment objective is to maximize total return consistent with the interests of the participants and beneficiaries, and prudent investment management. The allocation of the pension plan assets is determined on the basis of sound economic principles and is continually reviewed in light of changes in market conditions. Asset allocation favors equity securities, with a target allocation of 50-70%. The target allocation for debt securities is 30-50%. At December 31, 2015, the pension plan had a sufficient cash and money market position in order to re-allocate the equity portfolio for diversification purposes and reduce risk in the total portfolio. The following table sets forth by level, within the fair value hierarchy as defined in footnote 17, the Plan’s assets at fair value as of December 31, 2015 and 2014 (in thousands): 2015 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 1,704 $ - $ - $ 1,704 11.5% Equity Securities U.S. Companies 3,821 - - 3,821 25.8% Mutual Funds and ETF's 6,085 - - 6,085 41.3% Corporate Bonds - 3,019 - 3,019 20.4% Municipal Bonds - 107 - 107 0.7% U.S. Agency Securities - 50 - 50 0.3% Total $ 11,610 $ 3,176 $ - $ 14,786 100.0% 2014 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 516 $ - $ - $ 516 4.7% Equity Securities U.S. Companies 3,761 - - 3,761 34.0% Mutual Funds and ETF's 3,960 - - 3,960 35.9% Corporate Bonds - 2,604 - 2,604 23.6% U.S. Agency Securities - 198 - 198 1.8% Total $ 8,237 $ 2,802 $ - $ 11,039 100.0% Equity securities include the Company’s common stock in the amounts of $502,000 (3.4% of total plan assets) and $550,000 (5.0% of total plan assets) at December 31, 2015 and 2014, respectively. The Bank expects to contribute $500,000 to its pension plans in 2016. Expected future benefit payments that the Bank estimates from its pension plan are as follows (in thousands): 2016 $ 586 2017 710 2018 653 2019 2,134 2020 1,536 2021 - 2025 6,573 Defined Contribution Plan The Company sponsors a voluntary 401(k) savings plan which eligible employees can elect to contribute up to the maximum amount allowable not to exceed the limits of IRS Code Sections 401(k). Under the plan, the Company also makes required contributions on behalf of the eligible employees. The Company’s contributions vest immediately. Contributions by the Company totaled $285,000, $267,000 and $255,000 for 2015, 2014 and 2013, respectively. Directors’ Deferred Compensation Plan The Company’s directors may elect to defer all or portions of their fees until their retirement or termination from service. Amounts deferred under the deferred compensation plan earn interest based upon the highest current rate offered to certificate of deposit customers. Amounts deferred under the deferred compensation plan are not guaranteed and represent a general liability of the Company. As of December 31, 2015 and 2014, an obligation of $958,000 and $969,000, respectively, was included in other liabilities for this plan in the Consolidated Balance Sheet. Amounts included in interest expense on the deferred amounts totaled $22,000, $20,000 and $16,000 for the years ended December 31, 2015, 2014 and 2013, respectively. Restricted Stock Plan The Company maintains a Restricted Stock Plan (the Plan) whereby employees and non-employee corporate directors are eligible to receive awards of restricted stock based upon performance related requirements. Awards granted under the Plan are in the form of the Company’s common stock and are subject to certain vesting requirements including in the case of employees, continuous employment or service with the Company. In total, 100,000 shares of the Company’s common stock have been authorized under the Plan, which terminates April 18, 2016. As of December 31, 2015, 59,162 shares remain available to be issued under the Plan. The Plan assists the Company in attracting, retaining and motivating employees to make substantial contributions to the success of the Company and to increase the emphasis on the use of equity as a key component of compensation. The following table details the vesting, awarding and forfeiting of restricted shares during 2015: 2015 Weighted Average Shares Market Price Outstanding, beginning of year 6,971 $ 48.55 Granted 4,996 49.02 Forfeited (139) 51.49 Vested (3,559) 45.76 Outstanding, end of year 8,269 $ 49.98 Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. Compensation expense related to restricted stock was $172,000, $157,000 and $155,000 for the years ended December 31, 2015, 2014 and 2013, respectively. The weighted-average grant-date fair value of restricted shares granted during 2015, 2014 and 2013 was $49.02, $52.82 and $48.21, respectively. At December 31, 2015 the total compensation cost related to nonvested awards that has not yet been recognized was $413,000, which is expected to be recognized over the next 3 years. Supplemental Executive Retirement Plan The Company maintains a non-qualified supplemental executive retirement plan (“SERP”) for certain executives to compensate those executive participants in the Company’s noncontributory defined benefit pension plan whose benefits are limited by compensation limitations under current tax law. At December 31, 2015 and 2014, an obligation of $1,339,000 and $1,198,000, respectively, was included in other liabilities for the SERP in the Consolidated Balance Sheet. Expenses related to the SERP totaled $141,000, $152,000 and $145,000 for the years ended December 31, 2015, 2014 and 2013. Salary Continuation Plan The Company maintains a salary continuation plan for certain employees acquired through the acquisition of the FNB. At December 31 2015 an obligation of $710,000 was included in other liabilities for this plan in the Consolidated Balance Sheet. There were no expenses related to this plan during the year ended December 31, 2015. Continuation of Life Insurance Plan The Company, as part of the acquisition of FNB, has promised a continuation of life insurance coverage to certain persons post-retirement. GAAP requires the recording of post-retirement costs and a liability equal to the present value of the cost of post-retirement insurance during the person’s term of service. The estimated present value of future benefits to be paid totaled $574,000 at December 31, 2015, which is included in other liabilities in the Consolidated Balance Sheet. There were no expenses related to this plan during the year ended December 31, 2015.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2015
INCOME TAXES [Abstract]
INCOME TAXES	11. INCOME TAXES The provision for income taxes consists of the following (in thousands): Year Ended December 31, 2015 2014 2013 Currently payable $ 2,913 $ 3,081 $ 3,082 Deferred taxes (192) 478 670 Provision for income taxes $ 2,721 $ 3,559 $ 3,752 The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2015 and 2014, respectively (in thousands): 2015 2014 Deferred tax assets: Allowance for loan losses $ 4,238 $ 2,317 Deferred compensation 772 503 Merger & acquisition costs 20 24 Allowance for losses on available-for-sale securities 436 420 Pension and other retirement obligation 1,483 658 Interest on non-accrual loans 1,001 825 Incentive plan accruals 362 352 Other real estate owned 136 24 Low income housing tax credits 63 33 NOL carry forward 950 - AMT Credit Carryforward 152 - Other 157 78 Total $ 9,770 $ 5,234 Deferred tax liabilities: Premises and equipment $ (919) $ (306) Investment securities accretion (177) (302) Loan fees and costs (154) (166) Goodwill and core deposit intangibles (3,594) (2,734) Mortgage servicing rights (238) (161) Unrealized gains on available-for-sale securities (1,135) (1,594) Other (44) - Total (6,261) (5,263) Deferred tax asset (liability), net $ 3,509 $ (29) No valuation allowance was established at December 31, 2015 and 2014, due to the Company’s ability to carryback to taxes paid in previous years and certain tax strategies, coupled with the anticipated future taxable income as evidenced by the Company’s earnings potential. The total provision for income taxes is different from that computed at the statutory rates due to the following items (in thousands): Year Ended December 31, 2015 2014 2013 Provision at statutory rates on pre-tax income $ 4,878 $ 5,761 $ 5,823 Effect of tax-exempt income (1,915) (1,865) (1,752) Low income housing tax credits (198) (198) (198) Bank owned life insurance (214) (172) (171) Nondeductible interest 61 60 70 Nondeductible merger and acquisition expenses 102 - - Other items 7 (27) (20) Provision for income taxes $ 2,721 $ 3,559 $ 3,752 Statutory tax rates 34% 34% 34% Effective tax rates 19.0% 21.0% 21.9% The Company prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. With limited exception, the Company’s federal and state income tax returns for taxable years through 2011 have been closed for purposes of examination by the federal and state taxing jurisdictions. Investments in Qualified Affordable Housing Projects As of December 31, 2015 and 2014, the Company was invested in four partnerships that provide affordable housing. The balance of the investments, which is included within other assets in the Consolidated Balance Sheet, was $959,000 and $1,218,000 as of December 31, 2015 and 2014, respectively. Investments purchased prior to January 1, 2015, are accounted for utilizing the effective yield method. As of December 31, 2015, the Company has $1,044,000 of tax credits remaining that will be recognized over seven years. Tax credits of $198,000 were recognized as a reduction of tax expense during 2015. Included within other expenses on the Consolidated Statement of Income was $259,000 of amortization of the investments in qualified affordable housing projects.

OTHER COMPREHENSIVE INCOME

OTHER COMPREHENSIVE INCOME	12 Months Ended
	Dec. 31, 2015
OTHER COMPREHENSIVE INCOME [Abstract]
OTHER COMPREHENSIVE INCOME	12. OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive income (loss), net of tax, as of December 31, were as follows (in thousands): 2015 2014 Net unrealized gain on securities available for sale $ 3,339 $ 4,687 Tax effect (1,135) (1,594) Net -of-tax amount 2,204 3,093 Unrecognized pension costs (3,697) (3,525) Tax effect 1,257 1,199 Net -of-tax amount (2,440) (2,326) Total accumulated other comprehensive income (loss) $ (236) $ 767 The following tables present the changes in accumulated other comprehensive (loss) income by component net of tax for the years ended December 31, 2015, 2014 and 2013 (in thousands): Unrealized gain (loss) on available for sale securities (a) Unrealized gain (loss) on interest rate swap (a) Defined Benefit Pension Items (a) Total Balance as of December 31, 2012 $ 6,754 $ (132) $ (1,991) $ 4,631 Other comprehensive income (loss) before reclassifications (net of tax) (6,571) 132 704 (5,735) Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (291) - 170 (121) Net current period other comprehensive income (loss) (6,862) 132 874 (5,856) Balance as of December 31, 2013 $ (108) $ - $ (1,117) $ (1,225) Balance as of December 31, 2013 $ (108) $ - $ (1,117) $ (1,225) Other comprehensive income (loss) before reclassifications (net of tax) 3,608 - (1,243) 2,365 Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (407) - 34 (373) Net current period other comprehensive income (loss) 3,201 - (1,209) 1,992 Balance as of December 31, 2014 $ 3,093 $ - $ (2,326) $ 767 Balance as of December 31, 2014 $ 3,093 $ - $ (2,326) $ 767 Other comprehensive loss before reclassifications (net of tax) (606) - (249) (855) Amounts reclassified from accumulated other comprehensive loss (net of tax) (283) - 135 (148) Net current period other comprehensive loss (889) - (114) (1,003) Balance as of December 31, 2015 $ 2,204 $ - $ (2,440) $ (236) (a) Amounts in parentheses indicate debits The following table presents the significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2015, 2014 and 2013: Details about accumulated other comprehensive income (loss) Amount reclassified from accumulated comprehensive income (loss) (a) Affected line item in the statement where net Income is presented December 31, 2015 2014 2013 Unrealized gains and losses on available for sale securities $ 429 $ 616 $ 441 Investment securities gains, net (146) (209) (150) Provision for income taxes $ 283 $ 407 $ 291 Net of tax Defined benefit pension items $ (205) $ (51) $ (257) Salaries and employee benefits 70 17 87 Provision for income taxes $ (135) $ (34) $ (170) Net of tax Total reclassifications $ 148 $ 373 $ 121 (a) Amounts in parentheses indicate debits to profit/loss

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2015
RELATED PARTY TRANSACTIONS [Abstract]
RELATED PARTY TRANSACTIONS	13. RELATED PARTY TRANSACTIONS Certain executive officers and directors of the Company, or companies in which they have 10 percent or more beneficial ownership, were indebted to the Bank. Such loans were made in the ordinary course of business at the Bank’s normal credit terms and do not present more than a normal risk of collection. A summary of loan activity for the years ended December 31, 2015 and 2014 with officers, directors, stockholders and associates of such persons is listed below (in thousands): Year Ended December 31, 2015 2014 Balance, beginning of year $ 4,314 $ 4,263 New loans 5,828 2,212 Repayments (4,799) (2,161) Balance, end of year $ 5,343 $ 4,314

REGULATORY MATTERS

REGULATORY MATTERS	12 Months Ended
	Dec. 31, 2015
REGULATORY MATTERS [Abstract]
REGULATORY MATTERS	14. REGULATORY MATTERS Dividend Restrictions: The approval of the Federal Reserve Board is required for a bank to pay dividends up to the Company if the total of all dividends declared in any calendar year exceeds the Bank’s net income (as defined) for that year combined with its retained net income for the preceding two calendar years. Under this formula, the Bank can declare dividends in 2016 without approval of the FRB or PDB of approximately $6,340,000, plus the Bank’s 2016 year-to-date net income at the time of the dividend declaration. Loans: The Bank is subject to regulatory restrictions which limit its ability to loan funds to the Company. At December 31, 2015, the Bank’s regulatory lending limit amounted to approximately $16,235,000. Regulatory Capital Requirements: Federal regulations require the Company and the Bank to maintain minimum amounts of capital. Specifically, each is required to maintain certain minimum dollar amounts and ratios of Total, Tier I and Common Equity Tier I capital to risk-weighted assets and of Tier I capital to average total assets. In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (FDICIA) established five capital categories ranging from “well capitalized” to “critically under-capitalized.” Should any institution fail to meet the requirements to be considered “adequately capitalized”, it would become subject to a series of increasingly restrictive regulatory actions. As of December 31, 2015 and 2014, the FRB categorized the Company and the Bank as well capitalized, under the regulatory framework for prompt corrective action. To be categorized as a well capitalized financial institution, Total risk-based, Tier I risk-based, Common Equity Tier I risk based and Tier I leverage capital ratios must be at least 10%, 8%, 6.5% and 5%, respectively. The Company and Bank’s computed risk-based capital ratios are as follows as of December 31, 2015 and 2014 (dollars in thousands): Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions 2015 Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets): Company $ 114,886 16.23% $ 56,630 8.00% $ 70,787 10.00% Bank $ 108,232 15.34% $ 56,443 8.00% $ 70,554 10.00% Tier 1 Capital (to Risk Weighted Assets): Company $ 107,612 15.20% $ 42,472 6.00% $ 56,630 8.00% Bank $ 100,958 14.31% $ 42,332 6.00% $ 56,443 8.00% Common Equity Tier 1 Capital (to Risk Weighted Assets): Company $ 100,112 14.14% $ 31,854 4.50% $ 46,012 6.50% Bank $ 100,958 14.31% $ 31,749 4.50% $ 45,860 6.50% Tier 1 Capital (to Average Assets): Company $ 107,612 11.01% $ 39,083 4.00% $ 48,854 5.00% Bank $ 100,958 10.35% $ 39,006 4.00% $ 48,757 5.00% Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions 2014 Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets): Company $ 106,891 18.55% $ 46,105 8.00% $ 57,631 10.00% Bank $ 97,498 16.97% $ 45,969 8.00% $ 57,462 10.00% Tier 1 Capital (to Risk Weighted Assets): Company $ 99,692 17.30% $ 23,053 4.00% $ 34,579 6.00% Bank $ 90,500 15.75% $ 22,985 4.00% $ 34,477 6.00% Common Equity Tier 1 Capital (to Risk Weighted Assets): Company N/A N/A N/A N/A N/A N/A Bank N/A N/A N/A N/A N/A N/A Tier 1 Capital (to Average Assets): Company $ 99,692 10.99% $ 36,272 4.00% $ 45,341 5.00% Bank $ 90,500 10.00% $ 36,218 4.00% $ 45,273 5.00% This annual report has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation.

COMMITMENTS AND CONTINGENT LIAB

COMMITMENTS AND CONTINGENT LIABILITIES	12 Months Ended
	Dec. 31, 2015
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract]
COMMITMENTS AND CONTINGENT LIABILITIES	15. COMMITMENTS AND CONTINGENT LIABILITIES The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate or liquidity risk in excess of the amount recognized in the consolidated balance sheet. Credit Extension Commitments The Company’s exposure to credit loss from nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Financial instruments, whose contract amounts represent credit risk at December 31, 2015 and 2014, are as follows (in thousands): 2015 2014 Commitments to extend credit $143,134 $108,951 Standby letters of credit 13,751 10,389 $156,885 $119,340 Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company on extension of credit is based on management’s credit assessment of the counter party. Standby letters of credit are conditional commitments issued by the Company to guarantee a financial agreement between a customer and a third party. Performance letters of credit represent conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These instruments are issued primarily to support bid or performance related contracts. The coverage period for these instruments is typically a one-year period with an annual renewal option subject to prior approval by management. Fees earned from the issuance of these letters are recognized during the coverage period. For secured letters of credit, the collateral is typically Bank deposit instruments or customer business assets. The Company also offers limited overdraft protection as a non-contractual courtesy which is available to demand deposit accounts in good standing for business, personal or household use. The non-contractual amount of financial instruments with off-balance sheet risk at December 31, 2015 was $12,485,000. The Company reserves the right to discontinue this service without prior notice. Litigation Matters The Company is subject to lawsuits and claims arising out of its business. There are no legal proceedings or claims currently pending or threatened other than those encountered during the normal course of business, which include various foreclosure proceedings. As a result of these proceedings, it is not unusual for customers to countersue the Bank, which are vigorously challenged by the Bank.

OPERATING LEASES

OPERATING LEASES	12 Months Ended
	Dec. 31, 2015
OPERATING LEASES [Abstract]
OPERATING LEASES	16. OPERATING LEASES The following schedule shows future minimum rental payments under operating leases with noncancellable terms in excess of one year as of December 31, 2015 (in thousands): 2016 $ 254 2017 188 2018 191 2019 194 2020 81 Thereafter 185 Total $ 1,093 The Company’s operating lease obligations represent short and long-term lease and rental payments for facilities. Total rental expense for all operating leases for the years ended December 31, 2015, 2014 and 2013 were $175,000, $171,000 and $162,000, respectively.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	12 Months Ended
	Dec. 31, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	17. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company established a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. The three broad levels defined by this hierarchy are as follows: Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. Level III: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Company's creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Our valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s monthly and/or quarterly valuation process. Financial Instruments Recorded at Fair Value on a Recurring Basis The fair values of securities available for sale are determined by quoted prices in active markets, when available, and classified as Level I. If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique, widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities and classified as Level II. The fair values consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. In cases where significant credit valuation adjustments are incorporated into the estimation of fair value, reported amounts are classified as Level III inputs. The following tables present the assets reported on the consolidated balance sheet at their fair value on a recurring basis as of December 31, 2015 and 2014 (in thousands) by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 2015 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. agency securities $ - $ 199,591 $ - $ 199,591 U.S. treasuries securities 10,082 - - 10,082 Obligations of state and political subdivisions - 102,863 - 102,863 Corporate obligations - 14,565 - 14,565 Mortgage-backed securities in government sponsored entities - 30,204 - 30,204 Equity securities in financial institutions 2,432 - - 2,432 2014 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. agency securities $ - $ 150,885 $ - $ 150,885 U.S. treasuries 4,849 - - 4,849 Obligations of state and political subdivisions - 105,036 - 105,036 Corporate obligations - 13,958 - 13,958 Mortgage-backed securities in government sponsored entities - 29,728 - 29,728 Equity securities in financial institutions 1,690 - - 1,690 Financial Instruments, Non-Financial Assets and Non-Financial Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company may be required, from time to time, to measure certain financial assets, financial liabilities, non-financial assets and non-financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period. Certain non-financial assets measured at fair value on a non-recurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment. Non-financial assets measured at fair value on a non-recurring basis during 2015 and 2014 include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge-off to the allowance for possible loan losses and certain foreclosed assets which, subsequent to their initial recognition, were remeasured at fair value through a write-down included in other non-interest expense. Assets measured at fair value on a nonrecurring basis as of December 31, 2015 and 2014 (in thousands) are included in the table below: 2015 Level I Level II Level III Total Impaired Loans $ - $ - $ 894 $ 894 Other real estate owned - - 1,197 1,197 2014 Level I Level II Level III Total Impaired Loans $ - $ - $ 846 $ 846 Other real estate owned - - 893 893 · Impaired Loans - · Other Real Estate owned – The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques. Quantitative Information about Level 3 Fair Value Measurements 2015 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 894 Appraised Collateral Values Discount for time since appraisal 0-70% 46.50% Selling costs 4%-10% 7.75% Holding period 0 - 12 months 10 months Other real estate owned 1,197 Appraised Collateral Values Discount for time since appraisal 0-75% 25% 2014 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 846 Appraised Collateral Values Discount for time since appraisal 0-20% 2.00% Selling costs 4%-10% 8.54% Holding period 12 months 12 months Other real estate owned 893 Appraised Collateral Values Discount for time since appraisal 0-20% 20% The fair values of the Company’s financial instruments are as follows (in thousands): Carrying December 31, 2015 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 24,384 $ 24,384 $ 24,384 $ - $ - Interest bearing time deposits with other banks 7,696 7,705 - - 7,705 Available-for-sale securities 359,737 359,737 12,514 347,223 - Loans held for sale 603 603 603 Net loans 687,925 712,524 - - 712,524 Bank owned life insurance 25,535 25,535 25,535 - - Regulatory stock 3,459 3,459 3,459 - - Accrued interest receivable 4,211 4,211 4,211 - - Financial liabilities: Deposits $ 988,031 $ 987,542 $ 706,121 $ - $ 281,421 Borrowed funds 41,631 38,863 1,598 - 37,265 Accrued interest payable 734 734 734 - - Carrying December 31, 2014 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 11,423 $ 11,423 $ 11,423 $ - $ - Interest bearing time deposits with other banks 5,960 5,969 - - 5,969 Available-for-sale securities 306,146 306,146 6,539 299,607 - Loans held for sale 497 497 497 Net loans 547,290 564,944 - - 564,944 Bank owned life insurance 20,309 20,309 20,309 - - Regulatory stock 2,035 2,035 2,035 - - Accrued interest receivable 3,644 3,644 3,644 - - Financial liabilities: Deposits $ 773,933 $ 774,387 $ 525,166 $ - $ 249,221 Borrowed funds 41,799 38,219 16,593 - 21,626 Accrued interest payable 756 756 756 - - Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions can significantly affect the estimates. Estimated fair values have been determined by the Company using historical data, as generally provided in the Company’s regulatory reports, and an estimation methodology suitable for each category of financial instruments. The Company’s fair value estimates, methods and assumptions are set forth below for the Company’s other financial instruments. Cash and Cash Equivalents: The carrying amounts for cash and due from banks approximate fair value because they have original maturities of 90 days or less and do not present unanticipated credit concerns. Accrued Interest Receivable and Payable: The carrying amounts for accrued interest receivable and payable approximate fair value because they are generally received or paid in 90 days or less and do not present unanticipated credit concerns. Interest bearing time deposits with other banks: The fair value of interest bearing time deposits with other banks is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. Available-For-Sale Securities: The fair values of available-for-sale securities are based on quoted market prices as of the balance sheet date. For certain instruments, fair value is estimated by obtaining quotes from independent dealers. Loans: Fair values are estimated for portfolios of loans with similar financial characteristics. The fair value of performing loans has been estimated by discounting expected future cash flows. The discount rate used in these calculations is derived from the Treasury yield curve adjusted for credit quality, operating expense and prepayment option price, and is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. The estimate of maturity is based on the Company’s historical experience with repayments for each loan classification, modified as required by an estimate of the effect of current economic and lending conditions. Fair value for significant nonperforming loans is based on recent external appraisals or estimated cash flows discounted using a rate commensurate with the risk associated with the estimated cash flows. Assumptions regarding credit risk, cash flows, and discount rates are judgmentally determined using available market information and specific borrower information. Bank Owned Life Insurance: The carrying value of bank owned life insurance approximates fair value based on applicable redemption provisions. Regulatory Stock: The carrying value of regulatory stock approximates fair value based on applicable redemption provisions. Deposits: The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings and NOW accounts, and money market accounts, is equal to the amount payable on demand. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The deposits’ fair value estimates do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market, commonly referred to as the core deposit intangible. Borrowed Funds: The fair value of borrowed funds is based on the discounted value of contractual cash flows. The discount rate is the rates available to the Company for borrowed funds with similar terms and remaining maturities.

CONDENSED FINANCIAL INFORMATION

CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY	12 Months Ended
	Dec. 31, 2015
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY [Abstract]
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY	18. CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY The following is condensed financial information for Citizens Financial Services, Inc.: CITIZENS FINANCIAL SERVICES, INC. CONDENSED BALANCE SHEET December 31, (in thousands) 2015 2014 Assets: Cash $ 4,593 $ 7,911 Available-for-sale securities 2,332 1,556 Investment in subsidiary: First Citizens Community Bank 120,370 98,542 Other assets 557 511 Total assets $ 127,852 $ 108,520 Liabilities: Other liabilities $ 592 $ 492 Borrowed funds 7,500 7,500 Total liabilities 8,092 7,992 Stockholders' equity 119,760 100,528 Total liabilities and stockholders' equity $ 127,852 $ 108,520 CITIZENS FINANCIAL SERVICES, INC. CONDENSED STATEMENT OF INCOME Year Ended December 31, (in thousands) 2015 2014 2013 Dividends from: Bank subsidiary $ 5,582 $ 14,332 $ 4,142 Available-for-sale securities 71 56 51 Total income 5,653 14,388 4,193 Realized securities gains 76 - 183 Expenses 892 555 638 Income before equity in undistributed earnings of subsidiary 4,837 13,833 3,738 Equity in undistributed earnings - First Citizens Community Bank 6,789 (448) 9,637 Net income $ 11,626 $ 13,385 $ 13,375 Comprehensive income $ 10,623 $ 15,377 $ 7,519 CITIZENS FINANCIAL SERVICES, INC. STATEMENT OF CASH FLOWS Year Ended December 31, (in thousands) 2015 2014 2013 Cash flows from operating activities: Net income $ 11,626 $ 13,385 $ 13,375 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (6,789) 448 (9,637) Investment securities gains, net (76) - (183) Other, net 322 174 309 Net cash provided by operating activities 5,083 14,007 3,864 Cash flows from investing activities: Purchases of available-for-sale securities (901) (602) (1) Proceeds from the sale of available-for-sale securities 113 - 538 Net cash provided by (used in) investing activities (788) (602) 537 Cash flows from financing activities: Cash dividends paid (5,151) (6,121) (3,558) Purchase of treasury stock (2,455) (814) (1,483) Purchase of restricted stock (7) (170) (115) Net cash used in financing activities (7,613) (7,105) (5,156) Net (decrease) increase in cash (3,318) 6,300 (755) Cash at beginning of year 7,911 1,611 2,366 Cash at end of year $ 4,593 $ 7,911 $ 1,611

CONSOLIDATED CONDENSED QUARTERL

CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED)	12 Months Ended
	Dec. 31, 2015
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) [Abstract]
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED)	19. CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) The following table presents summarized quarterly financial data for 2015 and 2014: (in thousands, except per share data) Three Months Ended, 2015 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 8,771 $ 8,768 $ 8,863 $ 9,251 Interest expense 1,184 1,207 1,218 1,211 Net interest income 7,587 7,561 7,645 8,040 Provision for loan losses 120 120 120 120 Non-interest income 1,602 1,780 1,736 1,876 Investment securities gains (losses), net 126 175 129 (1) Non-interest expenses 5,335 5,428 5,852 6,814 Income before provision for income taxes 3,860 3,968 3,538 2,981 Provision for income taxes 740 779 681 521 Net income $ 3,120 $ 3,189 $ 2,857 $ 2,460 Earnings Per Share Basic $ 1.03 $ 1.06 $ 0.95 $ 0.80 Earnings Per Share Diluted $ 1.03 $ 1.06 $ 0.95 $ 0.79 Three Months Ended, 2014 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 8,781 $ 8,889 $ 8,808 $ 8,813 Interest expense 1,269 1,239 1,234 1,211 Net interest income 7,512 7,650 7,574 7,602 Provision for loan losses 180 150 150 105 Non-interest income 1,616 1,680 1,682 1,762 Investment securities gains, net 171 75 242 128 Non-interest expenses 5,091 5,000 5,067 5,007 Income before provision for income taxes 4,028 4,255 4,281 4,380 Provision for income taxes 852 890 913 904 Net income $ 3,176 $ 3,365 $ 3,368 $ 3,476 Earnings Per Share Basic $ 1.05 $ 1.11 $ 1.11 $ 1.14 Earnings Per Share Diluted $ 1.04 $ 1.11 $ 1.11 $ 1.14

ACQUISITION OF FNB

ACQUISITION OF FNB	12 Months Ended
	Dec. 31, 2015
ACQUISITION OF FNB [Abstract]
ACQUISITION OF FNB	20. ACQUISITION OF FNB In the second quarter of 2015, the Company announced the signing of a definitive merger agreement to acquire 100% of the outstanding equity interest of FNB for $630 per share in cash and stock. FNB was a Pennsylvania bank that conducted its business from a main office in Lebanon County, Pennsylvania with four branches in Lebanon County, two branches in Schuylkill County, Pennsylvania, and one Branch in Berks County, Pennsylvania. The transaction closed on December 11, 2015, with FNB having been merged into First Citizens Community Bank, with First Citizens Community Bank as the surviving entity. The acquisition established the Company’s presence in the Lebanon, Berks and Schuylkill Counties, Pennsylvania markets. Under the terms of the merger agreement, the Company acquired all of the outstanding shares of FNB for a total purchase price of approximately $21,603,000. As a result of the acquisition, the Company issued 336,515 common shares and $5.6 million in cash to the former shareholders of FNB. The shares were issued with a value of $47.50 per share, which was based on the close price of the Company’s stock on December 11, 2015. The acquired assets and assumed liabilities were measured at estimated fair values. Management made significant estimates and exercised significant judgment in accounting for the acquisition. Management measured loan fair values based on loan file reviews, appraised collateral values, expected cash flows, and historical loss factors of FNB. Real estate acquired through foreclosure was primarily valued based on appraised collateral values. The Company also recorded an identifiable intangible asset representing the core deposit base of FNB based on management’s evaluation of the cost of such deposits relative to alternative funding sources. The Company also recorded an identifiable intangible asset representing a covenant not-to-compete with the former President of FNB. Management used significant estimates including the average lives of depository accounts, future interest rate levels, and the cost of servicing various depository products. Management used market quotations to determine the fair value of investment securities. The business combination resulted in the acquisition of loans with and without evidence of credit quality deterioration. FNB’s loans were deemed to have credit impairment at the acquisition date if the Company did not expect to receive all contractually required cash flows due to concerns about credit quality. Such loans were fair valued and the difference between contractually required payments at the acquisition date and cash flows expected to be collected was recorded as a non-accretable difference. At the acquisition date, the Company recorded $3,809,000 of purchased credit-impaired loans. The method of measuring carrying value of purchased loans differs from loans originated by the Company (originated loans), and as such, the Company identifies purchased loans and purchased loans with a credit quality discount and originated loans at amortized cost. FNB’s loans without evidence of credit deterioration were fair valued by discounting both expected principal and interest cash flows using an observable discount rate for similar instruments that a market participant would consider in determining fair value. Additionally, consideration was given to management’s best estimates of default rates and pre-payment speeds. The following table summarizes the purchase of FNB as of December 11, 2015: (In Thousands, Except Per Share Data) Purchase Price Consideration in Common Stock Citizens Financial Services, Inc. shares issued 336,515 Value assigned to Citizens Financial Services, Inc. common share $ 47.50 Purchase price assigned to FNB common shares exchanged for Citizens Financial Services, Inc. $ 15,984 Purchase Price Consideration - Cash for Common Stock Purchase price assigned to The First National Bank of Fredericksburg common shares exchanged for cash 5,619 Total Purchase Price 21,603 Net Assets Acquired: The First National Bank of Fredericksburg shareholders’ equity $ 12,298 Adjustments to reflect assets acquired at fair value: Loans Interest rate 31 General credit (1,362) Specific credit - non-amortizing (2,495) Specific credit - amortizing (665) Core deposit intangible 1,641 Covenant not to compete 125 Premises and equipment 1,203 Leased premises contracts (359) Other assets (358) Deferred tax assets 785 Adjustments to reflect liabilities acquired at fair value: Time deposits (74) 10,770 Goodwill resulting from merger $ 10,833 The following condensed statement reflects the amounts recognized as of the acquisition date for each major class of asset acquired and liability assumed: (In Thousands) Total purchase price $ 21,603 Assets (liabilities) acquired: Cash and cash equivalents $ 83,514 Interest bearing time deposits with other banks 1,236 Securities available for sale 23,831 Loans 115,211 Premises and equipment, net 4,743 Accrued interest receivable 282 Bank-owned life insurance 4,598 Intangibles 1,981 Deferred tax asset 2,979 Other assets 2,332 Time deposits (42,675) Deposits other than time deposits (182,555) Accrued interest payable (14) Other liabilities (4,693) 10,770 Goodwill resulting from the FNB merger $ 10,833 The Company recorded goodwill and other intangibles associated with the purchase of FNB totaling $12,814,000. Goodwill is not amortized, but is periodically evaluated for impairment. The Company did not recognize any impairment from December 11, 2015 to December 31, 2015. None of the goodwill acquired is expected to be deductible for tax purposes. Identifiable intangibles are amortized to their estimated residual values over the expected useful lives. Such lives are also periodically reassessed to determine if any amortization period adjustments are required. For the period from December 11, 2015 to December 31, 2015, no such adjustments were recorded. The identifiable intangible assets consist of a core deposit intangible, covenant not to compete intangible and MSRs which are being amortized on an accelerated basis over the useful life of such assets. The gross carrying amount of the core deposit intangible, covenant not to compete and MSRs intangible at December 31, 2015 was $1,641,000, $125,000 and $215,000, respectively, with $25,000, $2,000 and $0 accumulated amortization, respectively, as of that date. As of December 31, 2015, the current year and estimated future amortization expense for the core deposit, covenant not to compete intangible and MSRs was (in thousands): 2015 $ 27 2016 366 2017 332 2018 298 2019 264 2020 200 Thereafter 494 Total $ 1,981 Amounts recognized separately from the acquisition include primarily legal fees, investment banking fees, system conversion costs, severance costs and contract termination costs. These costs were included in merger and acquisition expenses within non-interest expenses on the Consolidated Statement of Income and amounted to approximately $1,103,000 for the year ended December 31, 2015. Results of operations for FNB prior to the acquisition date are not included in the Consolidated Statement of Income for the year ended December 31, 2015. Due to the significant amount of fair value adjustments, historical results of FNB are not relevant to the Company’s results of operations. Therefore, no pro forma information is presented. The following table presents financial information regarding the former FNB operations included in our Consolidated Statement of Income from the date of acquisition through December 31, 2015 under the column “Actual from Acquisition Date through December 31, 2015”. In addition, the following table presents unaudited pro forma information as if the acquisition of FNB had occurred on January 1, 2014 under the “Pro Forma” columns. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited proforma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings as a result of the integration and consolidation of the acquisition. Merger and acquisition integration costs and amortization of fair value adjustments are included in the numbers below. Pro Formas Actual from Acquisition Date Through December 31, 2015 Twelve Months Ended December 31, (In Thousands, Except Per Share Data) 2015 2014 Net interest income $ 401 $ 37,736 $ 37,634 Non-interest income 21 8,576 8,184 Net income (22) 8,640 14,019 Pro forma earnings per share: Basic $ 2.57 $ 4.15 Diluted $ 2.57 $ 4.15

SUMMARY OF SIGNIFICANT ACCOUN29

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation	Basis of Presentation The financial statements are consolidated to include the accounts of the Company and its subsidiary, First Citizens Community Bank, and its subsidiary, First Citizens Insurance Agency, Inc. These statements have been prepared in accordance with U.S. generally accepted accounting principles. All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements.
Use of Estimates	Use of Estimates In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to determination of the allowance for loan losses and deferred tax assets and liabilities.
Operating Segments	Operating Segments An operating segment is defined as a component of an enterprise that engages in business activities that generates revenue and incurs expense, and the operating results of which are reviewed by the chief operating decision maker in the determination of resource allocation and performance. While the Company’s chief decision makers monitor the revenue streams of the various Company’s products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Consistent with our internal reporting, the Company’s business activities are reported as one segment, which is community banking.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash equivalents include cash on hand, deposits in banks and interest-earning deposits. Interest-earning deposits with original maturities of 90 days or less are considered cash equivalents. Net cash flows are reported for loan, deposits and short term borrowing transactions. Interest bearing time deposits with other banks are not included with cash and cash equivalents as the original maturities were greater than 90 days.
Investment Securities	Investment Securities Investment securities at the time of purchase are classified as one of the three following types: Held-to-Maturity Securities Trading Securities Available-for-Sale Securities The amortized cost of investment in debt securities is adjusted for amortization of premiums and accretion of discounts, computed by a method that results in a level yield. Gains and losses on the sale of investment securities are computed on the basis of specific identification of the adjusted cost of each security. Securities are periodically reviewed for other-than-temporary impairment. For debt securities, management considers whether the present value of future cash flows expected to be collected are less than the security’s amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company’s intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. For equity securities where the fair value has been significantly below cost for one year, the Company’s policy is to recognize an impairment loss unless sufficient evidence is available that the decline is not other than temporary and a recovery period can be predicted. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statement of Income. Common stock of the Federal Reserve Bank, Federal Home Loan Bank of Pittsburgh (FHLB) and correspondent banks represent ownership in institutions which are wholly owned by other financial institutions. These equity securities are accounted for at cost and are classified as other assets. The fair value of investments, except certain state and municipal securities, is based on bid prices published in financial newspapers or bid quotations received from securities dealers. The fair value of certain state and municipal securities is not readily available through market sources other than dealer quotations, so fair value is based on quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued.
Loans Held for Sale	Loans Held for Sale Certain newly originated fixed-rate residential mortgage loans are classified as held for sale, because it is management’s intent to sell these residential mortgage loans. The residential mortgage loans held for sale are carried at the lower of aggregate cost or market value.
Loans	Loans Interest on all loans is recognized on the accrual basis based upon the principal amount outstanding. The accrual of interest income on loans is discontinued when, in the opinion of management, doubt exists as to the ability to collect such interest. Payments received on non-accrual loans are applied to the outstanding principal balance or recorded as interest income, depending upon our assessment of our ultimate ability to collect principal and interest. Loans are returned to the accrual status when factors indicating doubtful collectability cease to exist. The Company recognizes nonrefundable loan origination fees and certain direct loan origination costs over the life of the related loan as an adjustment of loan yield using the interest method.
Allowance for Loan Losses	Allowance for Loan Losses The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses which is charged to operations. The provision is based upon management’s periodic evaluation of individual loans, the overall risk characteristics of the various portfolio segments, past experience with losses, the impact of economic conditions on borrowers, and other relevant factors. The estimates used in determining the adequacy of the allowance for loan losses are particularly susceptible to significant change in the near term. Impaired loans are other commercial and agricultural, municipal, agricultural real estate, commercial real estate loans and certain residential mortgages cross collateralized with commercial relationships for which it is probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Company individually evaluates such loans for impairment and does not aggregate loans by major risk classifications. The definition of “impaired loans” is not the same as the definition of “non-accrual loans,” although the two categories overlap. The Company may choose to place a loan on non-accrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial, agricultural, municipal or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of impaired loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value; or, as a practical expedient in the case of a collateral dependent loan, the difference between the fair value of the collateral and the recorded amount of the loans. Mortgage loans on one to four family properties and all consumer loans are large groups of smaller balance homogeneous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which is defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed. The Company allocates the allowance based on the factors described below, which conform to the Company’s loan classification policy. In reviewing risk within the Bank’s loan portfolio, management has determined there to be several different risk categories within the loan portfolio. The allowance for loan losses consists of amounts applicable to: (i) residential real estate loans; (ii) commercial and agricultural real estate loans; (iii) construction; (iv) consumer loans; (v) other commercial and agricultural loans and (vi) state and political subdivision loans. Factors considered in this process include general loan terms, collateral, and availability of historical data to support the analysis. Historical loss percentages for each risk category are calculated and used as the basis for calculating allowance allocations. Certain qualitative factors are evaluated to determine additional inherent risks in the loan portfolio, which are not necessarily reflected in the historical loss percentages. These factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non classified loans. The following qualitative factors are analyzed: · Level of and trends in delinquencies, impaired/classified loans Change in volume and severity of past due loans Volume of non-accrual loans Volume and severity of classified, adversely or graded loans · Level of and trends in charge-offs and recoveries · Trends in volume, terms and nature of the loan portfolio · Effects of any changes in risk selection and underwriting standards and any other changes in lending and recovery policies, procedures and practices · Changes in the quality of the Bank’s loan review system · Experience, ability and depth of lending management and other relevant staff · National, state, regional and local economic trends and business conditions General economic conditions Unemployment rates Inflation / CPI Changes in values of underlying collateral for collateral-dependent loans · Industry conditions including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses. · Existence and effect of any credit concentrations, and changes in the level of such concentrations · Any change in the level of board oversight The Company also maintains an unallocated allowance to account for any factors or conditions that may cause a potential loss but are not specifically addressed in the process described above. The Company analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses.
Loan Charge-off Policies	Loan Charge-off Policies Consumer loans are generally fully or partially charged down to the fair value of collateral securing the asset when the loan is 180 days past due for open-end loans or 120 days past due for closed-end loans unless the loan is well secured and in the process of collection. All other loans are generally charged down to the net realizable value when the loan is 90 days past due.
Troubled Debt Restructurings	Troubled Debt Restructurings In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a Troubled Debt Restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate allowance for loans that are identified as impaired through a TDR. TDRs are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment.
Purchased Credit Impaired Loans	Purchased Credit Impaired Loans The Company purchased loans in connection with its acquisition of FNB in 2015, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired (PCI) loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses. Over the life of the loan, expected cash flows continue to be estimated. If this subsequent estimated indicated that the present value of expected cash flows is less than the carrying amount, a charge to the allowance for loan loss is made through a provision. If the estimate indicates that the present value of the expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. Such purchased credit impaired loans are accounted for individually, and the Company estimates the amount and timing of expected cash flows for each loan. The expected cash flows in excess of the amount paid is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan’s contractual principal and interest over expected cash flows is not amortized over the remaining life of the loan (nonaccretable difference). For loans purchased that did not show evidence of credit deterioration, the difference between the fair value of the loan at the acquisition date and the loan’s face value is being amortized as a yield adjustment over the estimated remaining life of the loan using the effective interest method.
Foreclosed Assets Held For Sale	Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell. Prior to foreclosure, the value of the underlying loan is written down to fair market value of the real estate or other assets to be acquired by a charge to the allowance for loan losses, if necessary. Any subsequent write-downs are charged against operating expenses. Operating expenses of such properties, net of related income and losses on disposition, are included in other expenses and gains and losses are included in other non-interest income or other non-interest expense.
Premises and Equipment	Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost, less accumulated depreciation. Depreciation expense is computed on straight line and accelerated methods over the estimated useful lives of the assets, which range from 3 to 15 years for furniture, fixtures and equipment and 5 to 40 years for building premises. Repair and maintenance expenditures which extend the useful life of an asset are capitalized and other repair expenditures are expensed as incurred. When premises or equipment are retired or sold, the remaining cost and accumulated depreciation are removed from the accounts and any gain or loss is credited to income or charged to expense, respectively.
Intangible Assets	Intangible Assets Intangible assets include core deposit intangibles, covenants not to compete and mortgage servicing rights (MSRs). Core deposit intangibles are a measure of the value of consumer demand and savings deposits acquired in business combinations accounted for as purchases. Covenants not to compete are payments made to former employees as compensation for agreeing not to work for competitors. The core deposit intangibles are being amortized over 10 years using the sum-of-the-years digits method of amortization, while the covenant not to compete is being amortized over four years on a straight line basis. MSR’s arose from the Company originating certain loans for the express purpose of selling such loans in the secondary market. The Company maintains all servicing rights for these loans. The loans held for sale are carried at lower of cost or market. Originated MSRs are recorded by allocating total costs incurred between the loan and servicing rights based on their relative fair values. MSRs are amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio and measured annually for impairment. The recoverability of the carrying value of intangible assets is evaluated on an ongoing basis, and permanent declines in value, if any, are charged to expense.
Goodwill	Goodwill The Company utilizes a two-step process for testing the impairment of goodwill on at least an annual basis. This approach could cause more volatility in the Company’s reported net income because impairment losses, if any, could occur irregularly and in varying amounts. The Company performs an annual impairment analysis of goodwill. Based on the fair value of the reporting unit, no impairment of goodwill was recognized in 2015, 2014 or 2013.
Bank Owned Life Insurance	Bank Owned Life Insurance The Company has purchased life insurance policies on certain employees. As of December 31, 2014, the Company was the owner and sole beneficiary of the policies. Effective January 1, 2015, the insurance policies were restructured so that any death benefits received from a policy while the insured person is an active employee of the Bank will be split with the beneficiary of the policy. Under these restructured agreements, the Bank receives the cash surrender value of the policy plus 50% of the benefit in excess of the cash surrender value and the remaining amount of the payout will be given to the beneficiary of the policy. Additionally, as a result of the acquisition of FNB, the Company acquired life insurance policies on former FNB employees and directors. The policies obtained as part of the acquisition provide a fixed dollar benefit to the former employee or director beneficiaries, whether or not the insured person is affiliated with the Company at the time of his or her death. Bank owned life insurance is recorded at its cash surrender value, or the amount that can be realized. Increases in the cash surrender value are recognized as other non-interest income.
Income Taxes	Income Taxes The Company and the Bank file a consolidated federal income tax return. Deferred tax assets and liabilities are computed based on the difference between the financial statement basis and income tax basis of assets and liabilities using the enacted marginal tax rates. Deferred income tax expenses or benefits are based on the changes in the net deferred tax asset or liability from period to period.
Employee Benefit Plans	Employee Benefit Plans The Company has noncontributory defined benefit pension plans covering employees hired before January 1, 2007 and employees acquired as part of the FNB acquisition. It is the Company’s policy to fund pension costs on a current basis to the extent deductible under existing tax regulations. Such contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. The Company has a defined contribution, 401(k) plan covering eligible employees. The employee may also contribute to the plan on a voluntary basis, up to a maximum percentage allowable not to exceed the limits of Code Sections 401(k). Under the plan, the Company also makes contributions on behalf of eligible employees, which vest immediately. For employees hired after January 1, 2007, in lieu of the pension plan, an additional annual discretionary 401(k) plan contribution is made and is equal to a percentage of an employee’s base compensation. The Company also has a profit-sharing plan for employees which provide tax-deferred salary savings to plan participants. The Company has a deferred compensation plan for directors who have elected to defer all or portions of their fees until their retirement or termination from service. The Company has a restricted stock plan which covers eligible employees and non-employee corporate directors. Under the plan, awards are granted based upon performance related requirements and are subject to certain vesting criteria. Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. The Company maintains a non-qualified supplemental executive retirement plan (“SERP”) for certain executives to compensate those executive participants in the Company’s noncontributory defined benefit pension plan whose benefits are limited by compensation limitations under current tax law. The SERP is considered an unfunded plan for tax and ERISA purposes and all obligations arising under the SERP are payable from the general assets of the Company. Expenses under the SERP are recognized as earned over the expected years of service.
Derivative Financial Instruments	Derivative Financial Instruments The Company entered into an interest rate swap derivative to convert floating-rate debt to fixed-rate debt. This derivative matured in 2013 and was not replaced. The Company's interest rate swap agreement involved an agreement to pay a fixed rate and receive a floating rate, at specified intervals, calculated on an agreed-upon notional amount. The Company's objective in entering into this interest rate financial instrument was to mitigate its exposure to significant unplanned fluctuations in earnings caused by volatility in interest rates. As of December 31, 2012, the derivative instrument entered into was designated as a hedge of underlying exposures. The Company did not use this instrument for trading or speculative purposes. Derivative instruments used by the Company involve, to varying degrees, elements of credit risk, in the event a counter party should default, and market risk, as the instruments are subject to interest rate fluctuations. Credit risk is managed through the use of counterparty diversification and monitoring of counterparty financial condition. All derivatives are recognized on the balance sheet at their fair value. The derivative entered into by the Company qualified for and was designated as a cash flow hedge. Changes in the fair value of a derivative that is highly effective, and that is designated and qualifies as a cash flow hedge to the extent that the hedge is effective, are recorded in other comprehensive income (loss) until earnings are affected by the variability of cash flows of the hedged transaction (e.g. until periodic settlements of a variable asset or liability are recorded in earnings). Any hedge ineffectiveness (which represents the amount by which the changes in the fair value of the derivative exceed the variability in the cash flows of the forecasted transaction) is recorded in current-period earnings. There was no net gain or loss recognized in earnings related to our derivative instruments during the year ended December 31, 2013.
Advertising Costs	Advertising Costs Advertising costs are generally expensed as incurred.
Comprehensive Income	Comprehensive Income The Company is required to present comprehensive income in a full set of general purpose financial statements for all periods presented. Other comprehensive income (loss) is comprised of unrealized holding gains (losses) on the available-for-sale securities portfolio, unrecognized pension costs, and unrealized gain (loss) on interest rate swap.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30) In May 2015, the FASB issued ASU 2015-08 , Business Combinations – Pushdown Accounting – Amendment to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers Topic 606 In August 2015, the FASB issued ASU 2015-15, Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities requires In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial statements.
Treasury Stock	Treasury Stock The purchase of the Company’s common stock is recorded at cost. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a last-in-first-out basis.
Cash Flows	Cash Flows The Company utilizes the net reporting of cash receipts and cash payments for deposit, short-term borrowing and lending activities. The Company considers amounts due from banks and interest-bearing deposits in banks as cash equivalents.
Trust Assets and Income	Trust Assets and Income Assets held by the Company in a fiduciary or agency capacity for its customers are not included in the consolidated financial statements since such items are not assets of the Company. In accordance with industry practice, fees are recorded on the cash basis and approximate the fees which would have been recognized on the accrual basis.
Earnings Per Share	Earnings Per Share The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company. 2015 2014 2013 Basic earnings per share computation: Net income applicable to common stock $11,626,000 $13,385,000 $13,375,000 Weighted average common shares outstanding 3,031,282 3,038,298 3,055,034 Earnings per share - basic $3.84 $4.41 $4.38 Diluted earnings per share computation: Net income applicable to common stock $11,626,000 $13,385,000 $13,375,000 Weighted average common shares outstanding for basic earnings per share 3,031,282 3,038,298 3,055,034 Add: Dilutive effects of restricted stock 1,360 1,295 1,170 Weighted average common shares outstanding for dilutive earnings per share 3,032,642 3,039,593 3,056,204 Earnings per share - dilutive $3.83 $4.40 $4.38 Nonvested shares of restricted stock totaling 2,105, 2,248 and 2,555 were outstanding during 2015, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive. These anti-dilutive shares had prices ranging from $50.15-$53.15, $37.10-$50.50 and $34.70-$44.50 for 2015, 2014 and 2013, respectively.
Reclassification	Reclassification Certain of the prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no effect on net income or stockholders’ equity.

SUMMARY OF SIGNIFICANT ACCOUN30

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Computation of earnings per share	The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company. 2015 2014 2013 Basic earnings per share computation: Net income applicable to common stock $11,626,000 $13,385,000 $13,375,000 Weighted average common shares outstanding 3,031,282 3,038,298 3,055,034 Earnings per share - basic $3.84 $4.41 $4.38 Diluted earnings per share computation: Net income applicable to common stock $11,626,000 $13,385,000 $13,375,000 Weighted average common shares outstanding for basic earnings per share 3,031,282 3,038,298 3,055,034 Add: Dilutive effects of restricted stock 1,360 1,295 1,170 Weighted average common shares outstanding for dilutive earnings per share 3,032,642 3,039,593 3,056,204 Earnings per share - dilutive $3.83 $4.40 $4.38

INVESTMENT SECURITIES (Tables)

INVESTMENT SECURITIES (Tables)	12 Months Ended
	Dec. 31, 2015
INVESTMENT SECURITIES [Abstract]
Summary of amortized cost and fair value of investment securities	The amortized cost and fair value of investment securities at December 31, 2015 and 2014 were as follows (in thousands) Gross Gross Amortized Unrealized Unrealized Fair December 31, 2015 Cost Gains Losses Value Available-for-sale securities: U.S. Agency securities $ 199,749 $ 369 $ (527) $ 199,591 U.S. Treasuries 10,103 - (21) 10,082 Obligations of state and political subdivisions 99,856 3,080 (73) 102,863 Corporate obligations 14,583 68 (86) 14,565 Mortgage-backed securities in government sponsored entities 30,107 186 (89) 30,204 Equity securities in financial institutions 2,001 436 (5) 2,432 Total available-for-sale securities $ 356,399 $ 4,139 $ (801) $ 359,737 December 31, 2014 Cost Gains Losses Value Available-for-sale securities: U.S. Agency securities $ 150,847 $ 638 $ (600) $ 150,885 U.S. Treasuries 4,944 - (95) 4,849 Obligations of state and political subdivisions 101,281 3,854 (99) 105,036 Corporate obligations 13,853 190 (85) 13,958 Mortgage-backed securities in government sponsored entities 29,397 368 (37) 29,728 Equity securities in financial institutions 1,137 553 - 1,690 Total available-for-sale securities $ 301,459 $ 5,603 $ (916) $ 306,146
Unrealized losses and fair value of investments	The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2015 and 2014 (in thousands). As of December 31, 2015, the Company owned 91 securities whose fair value was less than their cost basis. Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized 2015 Value Losses Value Losses Value Losses U.S. agency securities $ 123,591 $ (527) $ - $ - $ 123,591 $ (527) U.S. Treasuries 10,082 (21) - - 10,082 (21) Obligations of states and political subdivisions 7,023 (57) 2,914 (16) 9,937 (73) Corporate obligations 5,822 (61) 2,138 (25) 7,960 (86) Mortgage-backed securities in government sponsored entities 9,830 (77) 227 (12) 10,057 (89) Equity securities in financial institutions 106 (5) - - 106 (5) Total securities $ 156,454 $ (748) $ 5,279 $ (53) $ 161,733 $ (801) 2014 U.S. agency securities $ 27,382 $ (110) $ 43,642 $ (490) $ 71,024 $ (600) U.S. Treasuries - - 4,849 (95) 4,849 (95) Obligations of states and political subdivisions 3,596 (19) 8,584 (80) 12,180 (99) Corporate obligations 505 (1) 7,707 (84) 8,212 (85) Mortgage-backed securities in government sponsored entities 5,025 (4) 2,229 (33) 7,254 (37) Total securities $ 36,508 $ (134) $ 67,011 $ (782) $ 103,519 $ (916)
Gross gains and losses on available-for-sale securities	Gross gains and gross losses were realized as follows (in thousands): 2015 2014 2013 Gross gains $ 440 $ 647 $ 827 Gross losses (11) (31) (386) Net gains $ 429 $ 616 $ 441
Summary of amortized cost and fair value of debt securities by contractual maturity	The amortized cost and fair value of debt securities at December 31, 2015, by contractual maturity are shown below (in thousands). Municipal securities that have been refunded and will therefore pay-off on the call date are reflected in the table below utilizing the call date as the date of repayment as payment is guaranteed on that day: Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 19,839 $ 19,878 Due after one year through five years 203,928 204,375 Due after five years through ten years 41,041 41,905 Due after ten years 89,590 91,147 Total $ 354,398 $ 357,305

LOANS AND RELATED ALLOWANCE F32

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Tables)	12 Months Ended
	Dec. 31, 2015
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES [Abstract]
Summary of loan portfolio and allowance for loan losses	The following table summarizes the primary segments of the loan portfolio, as well as how those segments are analyzed within the allowance for loan losses as of December 31, 2015 and 2014 (in thousands): 2015 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 203,407 $ 304 $ 35 $ 203,068 Commercial and agricultural 295,364 6,235 2,908 286,221 Construction 15,011 - - 15,011 Consumer 11,543 - 9 11,534 Other commercial and agricultural loans 71,206 5,745 866 64,595 State and political subdivision loans 98,500 - - 98,500 Total 695,031 12,284 3,818 678,929 Allowance for loan losses 7,106 355 - 6,751 Net loans $ 687,925 $ 11,929 $ 3,818 $ 672,178 2014 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 185,438 $ 316 $ - $ 185,122 Commercial and agricultural 215,584 6,112 - 209,472 Construction 6,353 - - 6,353 Consumer 8,497 - - 8,497 Other commercial and agricultural loans 58,516 2,394 - 56,122 State and political subdivision loans 79,717 - - 79,717 Total 554,105 8,822 - 545,283 Allowance for loan losses 6,815 98 - 6,717 Net loans $ 547,290 $ 8,724 $ - $ 538,566
Impaired loans acquired	The table below presents the components of the purchase accounting adjustments related to the purchased impaired loans acquired in the FNB Acquisition as of December 11, 2015: (In Thousands) December 11, 2015 Contractually required principal and interest at acquisition $ 9,913 Non-accretable discount (5,439) Expected cash flows 4,474 Accretable discount (665) Estimated fair value $ 3,809
Amortizable yield for purchased credit impaired loans	Changes in the amortizable yield for purchased credit-impaired loans were as follows for the month ended December 31, 2015: (In Thousands) December 31, 2015 Balance at beginning of period $ 665 Accretion (28) Balance at end of period $ 637
Loans acquired with specific evidence of deterioration in credit quality	The following table presents additional information regarding loans acquired with specific evidence of deterioration in credit quality under ASC 310-30: (In Thousands) December 11, 2015 December 31, 2015 Outstanding balance $ 6,969 $ 6,950 Carrying amount 3,809 3,818
Impaired financing receivables with associated allowance amount	The following table includes the recorded investment and unpaid principal balances for impaired loans by class, with the associated allowance amount as of December 31, 2015 and 2014, if applicable (in thousands): Recorded Recorded Unpaid Investment Investment Total Principal With No With Recorded Related Balance Allowance Allowance Investment Allowance 2015 Real estate loans: Mortgages $ 281 $ 114 $ 129 $ 243 $ 26 Home Equity 61 - 61 61 11 Commercial 8,654 5,843 225 6,068 62 Agricultural 167 167 - 167 - Construction - - - - - Consumer - - - - - Other commercial loans 5,535 4,653 987 5,640 256 Other agricultural loans 105 105 - 105 - State and political subdivision loans - - - - - Total $ 14,803 $ 10,882 $ 1,402 $ 12,284 $ 355 2014 Real estate loans: Mortgages $ 222 $ 125 $ 66 $ 191 $ 13 Home Equity 130 60 65 125 12 Commercial 8,433 5,708 404 6,112 72 Agricultural - - - - - Construction - - - - - Consumer - - - - - Other commercial loans 2,480 2,346 48 2,394 1 Other agricultural loans - - - - - State and political subdivision loans - - - - - Total $ 11,265 $ 8,239 $ 583 $ 8,822 $ 98 The following table includes the average investment in impaired loans and the income recognized on impaired loans for 2015, 2014 and 2013 (in thousands): Interest Average Interest Income Recorded Income Recognized 2015 Investment Recognized Cash Basis Real estate loans: Mortgages $ 240 $ 12 $ - Home Equity 88 4 - Commercial 5,683 63 5 Agricultural 56 2 - Construction - - - Consumer - - - Other commercial loans 2,700 98 6 Other agricultural loans 37 1 - State and political subdivision loans - - - Total $ 8,804 $ 180 $ 11 2014 Real estate loans: Mortgages $ 198 $ 9 $ - Home Equity 130 4 - Commercial 7,270 54 - Agricultural - - - Construction - - - Consumer 10 - - Other commercial loans 2,031 79 - Other agricultural loans - - - State and political subdivision loans - - - Total $ 9,639 $ 146 $ - 2013 Real estate loans: Mortgages $ 327 $ 7 $ - Home Equity 136 4 - Commercial 8,499 457 377 Agricultural - - - Construction - - - Consumer 5 - - Other commercial loans 1,761 79 - Other agricultural loans - - - State and political subdivision loans - - - Total $ 10,728 $ 547 $ 377
Summary of financing receivable credit exposures by internally assigned grades	The following tables represent credit exposures by internally assigned grades as of December 31, 2015 and 2014 (in thousands): Pass Special Mention Substandard Doubtful Loss Ending Balance 2015 Real estate loans: Commercial $ 217,544 $ 4,150 $ 15,816 $ 32 $ - $ 237,542 Agricultural 53,695 2,865 1,262 - - 57,822 Construction 14,422 589 - - - 15,011 Other commercial loans 51,297 446 5,669 137 - 57,549 Other agricultural loans 13,318 234 105 - - 13,657 State and political subdivision loans 98,500 - - - - 98,500 Total $ 448,776 $ 8,284 $ 22,852 $ 169 $ - $ 480,081 2014 Real estate loans: Commercial $ 169,383 $ 8,948 $ 12,614 $ - $ - $ 190,945 Agricultural 19,575 3,394 1,670 - - 24,639 Construction 6,353 - - - - 6,353 Other commercial loans 40,683 4,413 2,355 - - 47,451 Other agricultural loans 9,221 727 1,117 - - 11,065 State and political subdivision loans 79,717 - - - - 79,717 Total $ 324,932 $ 17,482 $ 17,756 $ - $ - $ 360,170 For residential real estate mortgages, home equities and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below and all loans past due 90 or more days. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2015 and 2014 (in thousands): 2015 Performing Non-performing PCI Total Real estate loans: Mortgages $ 139,734 $ 1,270 $ 35 $ 141,039 Home Equity 62,236 132 - 62,368 Consumer 11,470 64 9 11,543 Total $ 213,440 $ 1,466 $ 44 $ 214,950 2014 Performing Non-performing PCI Total Real estate loans: Mortgages $ 121,968 $ 890 $ - $ 122,858 Home Equity 62,296 284 - 62,580 Consumer 8,444 53 - 8,497 Total $ 192,708 $ 1,227 $ - $ 193,935
Age analysis of past due financing receivables	The following table includes an aging analysis of the recorded investment of past due loans as of December 31, 2015 and 2014 (in thousands): 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2015 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 487 $ 283 $ 687 $ 1,457 $ 139,547 $ 35 $ 141,039 $ 321 Home Equity 630 15 121 766 61,602 - 62,368 73 Commercial 824 57 4,139 5,020 230,352 2,170 237,542 60 Agricultural 177 167 - 344 56,740 738 57,822 - Construction - - - - 15,011 - 15,011 - Consumer 239 37 49 325 11,209 9 11,543 9 Other commercial loans 143 214 1,010 1,367 55,316 866 57,549 160 Other agricultural loans 9 - - 9 13,648 - 13,657 - State and political subdivision loans - - - - 98,500 - 98,500 - Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 $ 623 Loans considered non-accrual $ 54 $ 171 $ 5,383 $ 5,608 $ 923 $ - $ 6,531 Loans still accruing 2,455 602 623 3,680 681,002 3,818 688,500 Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2014 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 318 $ 230 $ 675 $ 1,223 $ 121,635 $ - $ 122,858 $ 214 Home Equity 442 99 260 801 61,779 - 62,580 132 Commercial 97 231 1,432 1,760 189,185 - 190,945 310 Agricultural - - - - 24,639 - 24,639 - Construction - - - - 6,353 - 6,353 - Consumer 119 4 7 130 8,367 - 8,497 6 Other commercial loans 503 258 476 1,237 46,214 - 47,451 174 Other agricultural loans - - - - 11,065 - 11,065 - State and political subdivision loans - - - - 79,717 - 79,717 - Total $ 1,479 $ 822 $ 2,850 $ 5,151 $ 548,954 $ - $ 554,105 $ 836 Loans considered non-accrual $ 48 $ 181 $ 2,014 $ 2,243 $ 4,356 $ - $ 6,599 Loans still accruing 1,431 641 836 2,908 544,598 - 547,506 Total $ 1,479 $ 822 $ 2,850 $ 5,151 $ 548,954 $ - $ 554,105
Summary of financing receivables on nonaccrual status	The following table reflects the loans on nonaccrual status as of December 31, 2015 and 2014, respectively. The balances are presented by class of loan (in thousands): 2015 2014 Real estate loans: Mortgages $ 949 $ 676 Home Equity 59 152 Commercial 4,422 5,010 Agricultural 34 - Construction - - Consumer 55 47 Other commercial loans 1,012 714 Other agricultural loans - - State and political subdivision - - $ 6,531 $ 6,599
Summary of troubled debt restructurings on financing receivables	Loan modifications that are considered TDRs completed during the years ended December 31, 2015, 2014 and 2013 were as follows (dollars in thousands): Number of contracts Pre-modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Interest Modification Term Modification Interest Modification Term Modification Interest Modification Term Modification Real estate loans: Mortgages 1 1 $ 71 $ 19 $ 71 $ 19 Total 1 1 $ 71 $ 19 $ 71 $ 19 Real estate loans: Commercial - 2 $ - $ 153 $ - $ 153 Total - 2 $ - $ 153 $ - $ 153 Real estate loans: Mortgages 1 - $ 72 $ - $ 72 $ - Commercial - 2 - 1,365 - 1,365 Other commercial loans - 2 - 1,530 - 1,530 Total 1 4 $ 72 $ 2,895 $ 72 $ 2,895 Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The following table presents the recorded investment in loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2015, 2014 and 2013, respectively, and that subsequently defaulted during these reporting periods (dollars in thousands): 2015 2014 2013 Number of contracts Recorded investment Number of contracts Recorded investment Number of contracts Recorded investment Real estate loans: Commercial - $ 1 $ 50 1 $ 55 Other commercial loans - - - - 1 Total recidivism - $ 1 $ 50 2 $ 61
Roll forward of allowance for loan losses by portfolio segment	The following tables roll forward the balance of the allowance for loan and lease losses for the years ended December 31, 2015, 2014 and 2013 and is segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2015, 2014 and 2013 (in thousands): Balance at December 31, 2014 Charge-offs Recoveries Provision Balance at December 31, 2015 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 878 $ (66) $ - $ 93 $ 905 $ 37 $ 868 Commercial and agricultural 3,870 (84) 14 (15) 3,785 62 3,723 Construction 26 - - (2) 24 - 24 Consumer 84 (47) 33 32 102 - 102 Other commercial and agricultural loans 1,224 (41) 2 120 1,305 256 1,049 State and political - subdivision loans 545 - - 48 593 - 593 Unallocated 188 - - 204 392 - 392 Total $ 6,815 $ (238) $ 49 $ 480 $ 7,106 $ 355 $ 6,751 Balance at December 31, 2013 Charge-offs Recoveries Provision Balance at December 31, 2014 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 946 $ (97) $ - $ 29 $ 878 $ 25 $ 853 Commercial and agricultural 4,558 (516) 15 (187) 3,870 72 3,798 Construction 50 - - (24) 26 - 26 Consumer 105 (47) 27 (1) 84 - 84 Other commercial and agricultural loans 942 (250) - 532 1,224 1 1,223 State and political - subdivision loans 330 - - 215 545 - 545 Unallocated 167 - - 21 188 - 188 Total $ 7,098 $ (910) $ 42 $ 585 $ 6,815 $ 98 $ 6,717 Balance at December 31, 2012 Charge-offs Recoveries Provision Balance at December 31, 2013 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 875 $ (17) $ 5 $ 83 $ 946 $ 27 $ 919 Commercial and agricultural 4,437 (62) 5 178 4,558 305 4,253 Construction 38 - - 12 50 - 50 Consumer 119 (54) 33 7 105 - 105 Other commercial and agricultural loans 728 (1) - 215 942 1 941 State and political - subdivision loans 271 - - 59 330 - 330 Unallocated 316 - - (149) 167 - 167 Total $ 6,784 $ (134) $ 43 $ 405 $ 7,098 $ 333 $ 6,765

PREMISES & EQUIPMENT (Tables)

PREMISES & EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2015
PREMISES & EQUIPMENT [Abstract]
Summary of premises and equipment	Premises and equipment at December 31, 2015 and 2014 are summarized as follows (in thousands): December 31, 2015 2014 Land $ 5,110 $ 3,295 Buildings 17,349 12,456 Furniture, fixtures and equipment 6,636 6,187 Construction in process 88 1,836 29,183 23,774 Less: accumulated depreciation 11,920 11,417 Premises and equipment, net $ 17,263 $ 12,357

GOODWILL AND OTHER INTANGIBLE34

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2015
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]
Schedule of gross carrying value and accumulated amortization of intangible assets	The following table provides the gross carrying value and accumulated amortization of intangible assets as of December 31, 2015 and 2014 (in thousands): December 31, 2015 December 31, 2014 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Amortized intangible assets (1): MSRs $ 1,336 $ (638) $ 698 $ 1,023 $ (550) $ 473 Core deposit intangibles 1,641 (25) 1,616 - - - Covenant not to compete 125 (2) 123 - - - Total amortized intangible assets $ 3,102 $ (665) $ 2,437 $ 1,023 $ (550) $ 473 Unamortized intangible assets: Goodwill $ 21,089 $ 10,256 (1) Excludes fully amortized intangible assets
Schedule of future amortization expense for amortized intangible assets	The following table provides the current year and estimated future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing asset balances at December 31, 2015. Future amortization expense may vary from these projections (in thousands): MSRs Core deposit intangibles Covenant not to compete Total Year ended December 31, 2015 (actual) $ 129 $ 25 $ 2 $ 156 Estimate for year ended December 31, 2016 173 296 31 500 2017 142 266 31 439 2018 113 236 31 380 2019 88 206 30 324 2020 66 177 — 243

DEPOSITS (Tables)

DEPOSITS (Tables)	12 Months Ended
	Dec. 31, 2015
DEPOSITS [Abstract]
Summary of deposits	The following table shows the breakdown of deposits as of December 31, 2015 and 2014, by deposit type (dollars in thousands): 2015 2014 Non-interest-bearing deposits $ 150,960 $ 95,526 NOW accounts 279,655 226,038 Savings deposits 170,277 108,252 Money market deposit accounts 105,229 95,350 Certificates of deposit 281,910 248,767 Total $ 988,031 $ 773,933
Maturities of certificates of deposit	Following are maturities of certificates of deposit as of December 31, 2015 (in thousands): 2016 $ 128,954 2017 61,608 2018 38,240 2019 18,761 2020 24,594 Thereafter 9,753 Total certificates of deposit $ 281,910

BORROWED FUNDS AND REPURCHASE36

BORROWED FUNDS AND REPURCHASE AGREEMENTS (Tables)	12 Months Ended
	Dec. 31, 2015
BORROWED FUNDS AND REPURCHASE AGREEMENTS [Abstract]
Borrowed funds	The following table shows the breakdown of borrowed funds as of December 31, 2015 and 2014, (dollars in thousands): Securities Sold Under Total Agreements to FHLB Federal Funds FRB Notes Term Borrowed Repurchase(a) Advances(b) Line (c) BIC Line (d) Payable(e) Loans(f) Funds 2015 Balance at December 31 $ 16,008 $ 1,598 $ - $ - $ 7,500 $ 16,525 $ 41,631 Highest balance at any month-end 16,008 26,996 - - 7,500 20,569 71,073 Average balance 5,998 5,218 - - 7,500 17,984 36,700 Weighted average interest rate: Paid during the year 0.82% 0.35% 0.00% 0.77% 3.14% 2.25% 1.93% As of year-end 0.45% 0.43% 0.00% 0.00% 3.33% 2.44% 1.74% 2014 Balance at December 31 $ 5,906 $ 16,593 $ - $ - $ 7,500 $ 11,800 $ 41,799 Highest balance at any month-end 7,277 39,902 - - 7,500 18,200 72,879 Average balance 6,535 9,991 1 1 7,500 15,180 39,208 Weighted average interest rate: Paid during the year 0.91% 0.27% 0.76% 0.75% 3.09% 1.89% 1.55% As of year-end 0.99% 0.24% 0.00% 0.00% 3.04% 2.54% 1.50% 2013 Balance at December 31 $ 7,278 $ 42,954 $ - $ - $ 7,500 $ 9,200 $ 66,932 Highest balance at any month-end 8,923 42,954 - - 7,500 30,000 89,377 Average balance 7,821 4,871 - - 7,500 22,022 42,214 Weighted average interest rate: Paid during the year 0.88% 0.25% 0.73% 0.75% 5.82% 3.13% 2.86% As of year-end 0.87% 0.25% 0.00% 0.00% 3.04% 2.78% 0.96% (a) We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. (b) FHLB Advances consist of an “Open RepoPlus” agreement with the FHLB of Pittsburgh. FHLB “Open RepoPlus” advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher. The Company has a borrowing limit of $254,270,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company’s FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans. (c) The federal funds line consists of an unsecured line from a third party bank at market rates. The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances. No specific collateral is required to be pledged for these borrowings. (d) The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession. As of December 31, 2015, the Company has a borrowing limit of $7,949,000, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $16,146,000 and $17,071,000 as of December 31, 2015 and 2014, respectively. (e) In December 2003, the Company formed a special purpose entity (“Entity”) to issue $7,500,000 of floating rate obligated mandatory redeemable securities as part of a pooled offering. The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80. The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter. The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable. Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008. Under current accounting rules, the Company’s minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet. The Entity is not consolidated as part of the Company’s consolidated financial statements. (f)
Remaining contractual maturity of repurchase agreements	The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31, 2015 and December 31, 2014 is presented in the following tables. Remaining Contractual Maturity of the Agreements Overnight and Up to Greater than 2015 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 18,144 $ - $ - $ 2,049 $ 20,193 Total carrying value of collateral pledged 18,144 - - 2,049 20,193 Total liability recognized for repurchase agreements 16,008 2014 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 10,368 $ 1,015 $ - $ 2,940 $ 14,323 Total carrying value of collateral pledged 10,368 1,015 - 2,940 14,323 Total liability recognized for repurchase agreements 5,906
Federal Home Loan Bank loans by branch	Term Loans consist of separate loans with the FHLB of Pittsburgh as follows (in thousands): December 31, December 31, Interest Rate Maturity 2015 2014 Fixed: 2.29% October 2, 2017 2,000 2,000 2.72% July 12, 2018 1,000 1,000 1.87% February 4, 2019 2,000 2,000 2.61% February 3, 2021 2,000 2,000 3.52% July 12, 2021 2,000 2,000 2.37% August 20, 2021 2,800 2,800 2.08% January 6, 2022 4,725 - Total term loans $ 16,525 $ 11,800
Maturities of borrowed funds	Following are maturities of borrowed funds as of December 31, 2015 (in thousands): 2016 $ 24,546 2017 2,000 2018 1,000 2019 2,000 2020 560 Thereafter 11,525 Total borrowed funds $ 41,631

EMPLOYEE BENEFIT PLANS (Tables)

EMPLOYEE BENEFIT PLANS (Tables)	12 Months Ended
	Dec. 31, 2015
EMPLOYEE BENEFIT PLANS [Abstract]
Obligation and net funded status	The following table sets forth the obligation and funded status as of December 31 (in thousands): 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ 11,777 $ 9,739 Benefit obligation acquired as part of FNB acquisition 6,377 - Service cost 352 307 Interest cost 424 415 Actuarial (Gain) / Loss (456) 1,645 Benefits paid (665) (329) Benefit obligation at end of year 17,809 11,777 Change in plan assets Fair value of plan assets at beginning of year 11,039 10,519 Fair value of plan assets at acquisition 4,053 - Actual return (loss) on plan assets (41) 549 Employer contribution 400 300 Benefits paid (665) (329) Fair value of plan assets at end of year 14,786 11,039 Funded status $ (3,023) $ (738) Amounts not yet recognized as a component of net periodic pension cost (in thousands): Amounts recognized in accumulated other comprehensive loss consists of: 2015 2014 Net loss $ 3,919 $ 3,795 Prior service cost (222) (270) Total $ 3,697 $ 3,525
Components of net periodic benefit costs	The components of net periodic benefit costs for the years ended December 31 are as follows (in thousands): 2015 2014 2013 Service cost $ 352 $ 307 $ 342 Interest cost 424 415 363 Return on plan assets (791) (786) (673) Net amortization and deferral 205 51 257 Net periodic benefit cost $ 190 $ (13) $ 289
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost (income)	The weighted-average assumptions used to determine benefit obligations at December 31, 2015 and 2014 is summarized in the following table. The change in the discount rate is the primary driver of the actuarial gain that occurred in 2015 of $456,000. 2015 2014 Discount rate 3.94% 3.50% Rate of compensation increase 3.00% 3.00% The weighted-average assumptions used to determine net periodic benefit cost (income) for the year ended December 31: 2015 2014 2013 Discount rate 3.61% 4.30% 3.30% Expected long-term return on plan assets 7.00% 7.50% 7.50% Rate of compensation increase 3.00% 3.00% 3.00%
Fair value of plan assets	The following table sets forth by level, within the fair value hierarchy as defined in footnote 17, the Plan’s assets at fair value as of December 31, 2015 and 2014 (in thousands): 2015 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 1,704 $ - $ - $ 1,704 11.5% Equity Securities U.S. Companies 3,821 - - 3,821 25.8% Mutual Funds and ETF's 6,085 - - 6,085 41.3% Corporate Bonds - 3,019 - 3,019 20.4% Municipal Bonds - 107 - 107 0.7% U.S. Agency Securities - 50 - 50 0.3% Total $ 11,610 $ 3,176 $ - $ 14,786 100.0% 2014 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 516 $ - $ - $ 516 4.7% Equity Securities U.S. Companies 3,761 - - 3,761 34.0% Mutual Funds and ETF's 3,960 - - 3,960 35.9% Corporate Bonds - 2,604 - 2,604 23.6% U.S. Agency Securities - 198 - 198 1.8% Total $ 8,237 $ 2,802 $ - $ 11,039 100.0%
Expected future benefit payments	The Bank expects to contribute $500,000 to its pension plans in 2016. Expected future benefit payments that the Bank estimates from its pension plan are as follows (in thousands): 2016 $ 586 2017 710 2018 653 2019 2,134 2020 1,536 2021 - 2025 6,573
Schedule of vesting, awarding and forfeiting of restricted shares	The following table details the vesting, awarding and forfeiting of restricted shares during 2015: 2015 Weighted Average Shares Market Price Outstanding, beginning of year 6,971 $ 48.55 Granted 4,996 49.02 Forfeited (139) 51.49 Vested (3,559) 45.76 Outstanding, end of year 8,269 $ 49.98

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2015
INCOME TAXES [Abstract]
Provision for income taxes (benefit)	The provision for income taxes consists of the following (in thousands): Year Ended December 31, 2015 2014 2013 Currently payable $ 2,913 $ 3,081 $ 3,082 Deferred taxes (192) 478 670 Provision for income taxes $ 2,721 $ 3,559 $ 3,752
Deferred tax assets	The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2015 and 2014, respectively (in thousands): 2015 2014 Deferred tax assets: Allowance for loan losses $ 4,238 $ 2,317 Deferred compensation 772 503 Merger & acquisition costs 20 24 Allowance for losses on available-for-sale securities 436 420 Pension and other retirement obligation 1,483 658 Interest on non-accrual loans 1,001 825 Incentive plan accruals 362 352 Other real estate owned 136 24 Low income housing tax credits 63 33 NOL carry forward 950 - AMT Credit Carryforward 152 - Other 157 78 Total $ 9,770 $ 5,234 Deferred tax liabilities: Premises and equipment $ (919) $ (306) Investment securities accretion (177) (302) Loan fees and costs (154) (166) Goodwill and core deposit intangibles (3,594) (2,734) Mortgage servicing rights (238) (161) Unrealized gains on available-for-sale securities (1,135) (1,594) Other (44) - Total (6,261) (5,263) Deferred tax asset (liability), net $ 3,509 $ (29)
Reconciliation of statutory tax rates to effective tax rates	The total provision for income taxes is different from that computed at the statutory rates due to the following items (in thousands): Year Ended December 31, 2015 2014 2013 Provision at statutory rates on pre-tax income $ 4,878 $ 5,761 $ 5,823 Effect of tax-exempt income (1,915) (1,865) (1,752) Low income housing tax credits (198) (198) (198) Bank owned life insurance (214) (172) (171) Nondeductible interest 61 60 70 Nondeductible merger and acquisition expenses 102 - - Other items 7 (27) (20) Provision for income taxes $ 2,721 $ 3,559 $ 3,752 Statutory tax rates 34% 34% 34% Effective tax rates 19.0% 21.0% 21.9%

OTHER COMPREHENSIVE INCOME (Tab

OTHER COMPREHENSIVE INCOME (Tables)	12 Months Ended
	Dec. 31, 2015
OTHER COMPREHENSIVE INCOME [Abstract]
Components of accumulated other comprehensive income (loss), net of tax	The components of accumulated other comprehensive income (loss), net of tax, as of December 31, were as follows (in thousands): 2015 2014 Net unrealized gain on securities available for sale $ 3,339 $ 4,687 Tax effect (1,135) (1,594) Net -of-tax amount 2,204 3,093 Unrecognized pension costs (3,697) (3,525) Tax effect 1,257 1,199 Net -of-tax amount (2,440) (2,326) Total accumulated other comprehensive income (loss) $ (236) $ 767
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive income	The following tables present the changes in accumulated other comprehensive (loss) income by component net of tax for the years ended December 31, 2015, 2014 and 2013 (in thousands): Unrealized gain (loss) on available for sale securities (a) Unrealized gain (loss) on interest rate swap (a) Defined Benefit Pension Items (a) Total Balance as of December 31, 2012 $ 6,754 $ (132) $ (1,991) $ 4,631 Other comprehensive income (loss) before reclassifications (net of tax) (6,571) 132 704 (5,735) Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (291) - 170 (121) Net current period other comprehensive income (loss) (6,862) 132 874 (5,856) Balance as of December 31, 2013 $ (108) $ - $ (1,117) $ (1,225) Balance as of December 31, 2013 $ (108) $ - $ (1,117) $ (1,225) Other comprehensive income (loss) before reclassifications (net of tax) 3,608 - (1,243) 2,365 Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (407) - 34 (373) Net current period other comprehensive income (loss) 3,201 - (1,209) 1,992 Balance as of December 31, 2014 $ 3,093 $ - $ (2,326) $ 767 Balance as of December 31, 2014 $ 3,093 $ - $ (2,326) $ 767 Other comprehensive loss before reclassifications (net of tax) (606) - (249) (855) Amounts reclassified from accumulated other comprehensive loss (net of tax) (283) - 135 (148) Net current period other comprehensive loss (889) - (114) (1,003) Balance as of December 31, 2015 $ 2,204 $ - $ (2,440) $ (236) (a) Amounts in parentheses indicate debits The following table presents the significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ended December 31, 2015, 2014 and 2013: Details about accumulated other comprehensive income (loss) Amount reclassified from accumulated comprehensive income (loss) (a) Affected line item in the statement where net Income is presented December 31, 2015 2014 2013 Unrealized gains and losses on available for sale securities $ 429 $ 616 $ 441 Investment securities gains, net (146) (209) (150) Provision for income taxes $ 283 $ 407 $ 291 Net of tax Defined benefit pension items $ (205) $ (51) $ (257) Salaries and employee benefits 70 17 87 Provision for income taxes $ (135) $ (34) $ (170) Net of tax Total reclassifications $ 148 $ 373 $ 121 (a) Amounts in parentheses indicate debits to profit/loss

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	12 Months Ended
	Dec. 31, 2015
RELATED PARTY TRANSACTIONS [Abstract]
Summary of loan activity with officers, directors, stockholders and associates	A summary of loan activity for the years ended December 31, 2015 and 2014 with officers, directors, stockholders and associates of such persons is listed below (in thousands): Year Ended December 31, 2015 2014 Balance, beginning of year $ 4,314 $ 4,263 New loans 5,828 2,212 Repayments (4,799) (2,161) Balance, end of year $ 5,343 $ 4,314

REGULATORY MATTERS (Tables)

REGULATORY MATTERS (Tables)	12 Months Ended
	Dec. 31, 2015
REGULATORY MATTERS [Abstract]
Capital ratios under banking regulations	The Company and Bank’s computed risk-based capital ratios are as follows as of December 31, 2015 and 2014 (dollars in thousands): Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions 2015 Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets): Company $ 114,886 16.23% $ 56,630 8.00% $ 70,787 10.00% Bank $ 108,232 15.34% $ 56,443 8.00% $ 70,554 10.00% Tier 1 Capital (to Risk Weighted Assets): Company $ 107,612 15.20% $ 42,472 6.00% $ 56,630 8.00% Bank $ 100,958 14.31% $ 42,332 6.00% $ 56,443 8.00% Common Equity Tier 1 Capital (to Risk Weighted Assets): Company $ 100,112 14.14% $ 31,854 4.50% $ 46,012 6.50% Bank $ 100,958 14.31% $ 31,749 4.50% $ 45,860 6.50% Tier 1 Capital (to Average Assets): Company $ 107,612 11.01% $ 39,083 4.00% $ 48,854 5.00% Bank $ 100,958 10.35% $ 39,006 4.00% $ 48,757 5.00% Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions 2014 Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets): Company $ 106,891 18.55% $ 46,105 8.00% $ 57,631 10.00% Bank $ 97,498 16.97% $ 45,969 8.00% $ 57,462 10.00% Tier 1 Capital (to Risk Weighted Assets): Company $ 99,692 17.30% $ 23,053 4.00% $ 34,579 6.00% Bank $ 90,500 15.75% $ 22,985 4.00% $ 34,477 6.00% Common Equity Tier 1 Capital (to Risk Weighted Assets): Company N/A N/A N/A N/A N/A N/A Bank N/A N/A N/A N/A N/A N/A Tier 1 Capital (to Average Assets): Company $ 99,692 10.99% $ 36,272 4.00% $ 45,341 5.00% Bank $ 90,500 10.00% $ 36,218 4.00% $ 45,273 5.00%

COMMITMENTS AND CONTINGENT LI42

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2015
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract]
Financial instruments whose contract amounts represent credit risk	Financial instruments, whose contract amounts represent credit risk at December 31, 2015 and 2014, are as follows (in thousands): 2015 2014 Commitments to extend credit $143,134 $108,951 Standby letters of credit 13,751 10,389 $156,885 $119,340

OPERATING LEASES (Tables)

OPERATING LEASES (Tables)	12 Months Ended
	Dec. 31, 2015
OPERATING LEASES [Abstract]
Future minimum rental payments under operating leases	The following schedule shows future minimum rental payments under operating leases with noncancellable terms in excess of one year as of December 31, 2015 (in thousands): 2016 $ 254 2017 188 2018 191 2019 194 2020 81 Thereafter 185 Total $ 1,093

FAIR VALUE OF FINANCIAL INSTR44

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	12 Months Ended
	Dec. 31, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
Summary of assets measured at fair value on a recurring basis	The following tables present the assets reported on the consolidated balance sheet at their fair value on a recurring basis as of December 31, 2015 and 2014 (in thousands) by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 2015 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. agency securities $ - $ 199,591 $ - $ 199,591 U.S. treasuries securities 10,082 - - 10,082 Obligations of state and political subdivisions - 102,863 - 102,863 Corporate obligations - 14,565 - 14,565 Mortgage-backed securities in government sponsored entities - 30,204 - 30,204 Equity securities in financial institutions 2,432 - - 2,432 2014 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. agency securities $ - $ 150,885 $ - $ 150,885 U.S. treasuries 4,849 - - 4,849 Obligations of state and political subdivisions - 105,036 - 105,036 Corporate obligations - 13,958 - 13,958 Mortgage-backed securities in government sponsored entities - 29,728 - 29,728 Equity securities in financial institutions 1,690 - - 1,690
Summary of assets measured at fair value on non-recurring basis	Assets measured at fair value on a nonrecurring basis as of December 31, 2015 and 2014 (in thousands) are included in the table below: 2015 Level I Level II Level III Total Impaired Loans $ - $ - $ 894 $ 894 Other real estate owned - - 1,197 1,197 2014 Level I Level II Level III Total Impaired Loans $ - $ - $ 846 $ 846 Other real estate owned - - 893 893
Significant unobservable inputs used in fair value measurement process	The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques. Quantitative Information about Level 3 Fair Value Measurements 2015 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 894 Appraised Collateral Values Discount for time since appraisal 0-70% 46.50% Selling costs 4%-10% 7.75% Holding period 0 - 12 months 10 months Other real estate owned 1,197 Appraised Collateral Values Discount for time since appraisal 0-75% 25% 2014 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 846 Appraised Collateral Values Discount for time since appraisal 0-20% 2.00% Selling costs 4%-10% 8.54% Holding period 12 months 12 months Other real estate owned 893 Appraised Collateral Values Discount for time since appraisal 0-20% 20%
Fair value of financial instruments	The fair values of the Company’s financial instruments are as follows (in thousands): Carrying December 31, 2015 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 24,384 $ 24,384 $ 24,384 $ - $ - Interest bearing time deposits with other banks 7,696 7,705 - - 7,705 Available-for-sale securities 359,737 359,737 12,514 347,223 - Loans held for sale 603 603 603 Net loans 687,925 712,524 - - 712,524 Bank owned life insurance 25,535 25,535 25,535 - - Regulatory stock 3,459 3,459 3,459 - - Accrued interest receivable 4,211 4,211 4,211 - - Financial liabilities: Deposits $ 988,031 $ 987,542 $ 706,121 $ - $ 281,421 Borrowed funds 41,631 38,863 1,598 - 37,265 Accrued interest payable 734 734 734 - - Carrying December 31, 2014 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 11,423 $ 11,423 $ 11,423 $ - $ - Interest bearing time deposits with other banks 5,960 5,969 - - 5,969 Available-for-sale securities 306,146 306,146 6,539 299,607 - Loans held for sale 497 497 497 Net loans 547,290 564,944 - - 564,944 Bank owned life insurance 20,309 20,309 20,309 - - Regulatory stock 2,035 2,035 2,035 - - Accrued interest receivable 3,644 3,644 3,644 - - Financial liabilities: Deposits $ 773,933 $ 774,387 $ 525,166 $ - $ 249,221 Borrowed funds 41,799 38,219 16,593 - 21,626 Accrued interest payable 756 756 756 - -

CONDENSED FINANCIAL INFORMATI45

CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Tables)	12 Months Ended
	Dec. 31, 2015
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY [Abstract]
Condensed financial information	The following is condensed financial information for Citizens Financial Services, Inc.: CITIZENS FINANCIAL SERVICES, INC. CONDENSED BALANCE SHEET December 31, (in thousands) 2015 2014 Assets: Cash $ 4,593 $ 7,911 Available-for-sale securities 2,332 1,556 Investment in subsidiary: First Citizens Community Bank 120,370 98,542 Other assets 557 511 Total assets $ 127,852 $ 108,520 Liabilities: Other liabilities $ 592 $ 492 Borrowed funds 7,500 7,500 Total liabilities 8,092 7,992 Stockholders' equity 119,760 100,528 Total liabilities and stockholders' equity $ 127,852 $ 108,520 CITIZENS FINANCIAL SERVICES, INC. CONDENSED STATEMENT OF INCOME Year Ended December 31, (in thousands) 2015 2014 2013 Dividends from: Bank subsidiary $ 5,582 $ 14,332 $ 4,142 Available-for-sale securities 71 56 51 Total income 5,653 14,388 4,193 Realized securities gains 76 - 183 Expenses 892 555 638 Income before equity in undistributed earnings of subsidiary 4,837 13,833 3,738 Equity in undistributed earnings - First Citizens Community Bank 6,789 (448) 9,637 Net income $ 11,626 $ 13,385 $ 13,375 Comprehensive income $ 10,623 $ 15,377 $ 7,519 CITIZENS FINANCIAL SERVICES, INC. STATEMENT OF CASH FLOWS Year Ended December 31, (in thousands) 2015 2014 2013 Cash flows from operating activities: Net income $ 11,626 $ 13,385 $ 13,375 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (6,789) 448 (9,637) Investment securities gains, net (76) - (183) Other, net 322 174 309 Net cash provided by operating activities 5,083 14,007 3,864 Cash flows from investing activities: Purchases of available-for-sale securities (901) (602) (1) Proceeds from the sale of available-for-sale securities 113 - 538 Net cash provided by (used in) investing activities (788) (602) 537 Cash flows from financing activities: Cash dividends paid (5,151) (6,121) (3,558) Purchase of treasury stock (2,455) (814) (1,483) Purchase of restricted stock (7) (170) (115) Net cash used in financing activities (7,613) (7,105) (5,156) Net (decrease) increase in cash (3,318) 6,300 (755) Cash at beginning of year 7,911 1,611 2,366 Cash at end of year $ 4,593 $ 7,911 $ 1,611

CONSOLIDATED CONDENSED QUARTE46

CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) (Tables)	12 Months Ended
	Dec. 31, 2015
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) [Abstract]
Consolidated condensed quarterly data	The following table presents summarized quarterly financial data for 2015 and 2014: (in thousands, except per share data) Three Months Ended, 2015 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 8,771 $ 8,768 $ 8,863 $ 9,251 Interest expense 1,184 1,207 1,218 1,211 Net interest income 7,587 7,561 7,645 8,040 Provision for loan losses 120 120 120 120 Non-interest income 1,602 1,780 1,736 1,876 Investment securities gains (losses), net 126 175 129 (1) Non-interest expenses 5,335 5,428 5,852 6,814 Income before provision for income taxes 3,860 3,968 3,538 2,981 Provision for income taxes 740 779 681 521 Net income $ 3,120 $ 3,189 $ 2,857 $ 2,460 Earnings Per Share Basic $ 1.03 $ 1.06 $ 0.95 $ 0.80 Earnings Per Share Diluted $ 1.03 $ 1.06 $ 0.95 $ 0.79 Three Months Ended, 2014 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 8,781 $ 8,889 $ 8,808 $ 8,813 Interest expense 1,269 1,239 1,234 1,211 Net interest income 7,512 7,650 7,574 7,602 Provision for loan losses 180 150 150 105 Non-interest income 1,616 1,680 1,682 1,762 Investment securities gains, net 171 75 242 128 Non-interest expenses 5,091 5,000 5,067 5,007 Income before provision for income taxes 4,028 4,255 4,281 4,380 Provision for income taxes 852 890 913 904 Net income $ 3,176 $ 3,365 $ 3,368 $ 3,476 Earnings Per Share Basic $ 1.05 $ 1.11 $ 1.11 $ 1.14 Earnings Per Share Diluted $ 1.04 $ 1.11 $ 1.11 $ 1.14

ACQUISITION OF FNB (Tables)

ACQUISITION OF FNB (Tables)	12 Months Ended
	Dec. 31, 2015
Business Acquisition [Line Items]
Summarizes the purchase of FNB	The following table summarizes the purchase of FNB as of December 11, 2015: (In Thousands, Except Per Share Data) Purchase Price Consideration in Common Stock Citizens Financial Services, Inc. shares issued 336,515 Value assigned to Citizens Financial Services, Inc. common share $ 47.50 Purchase price assigned to FNB common shares exchanged for Citizens Financial Services, Inc. $ 15,984 Purchase Price Consideration - Cash for Common Stock Purchase price assigned to The First National Bank of Fredericksburg common shares exchanged for cash 5,619 Total Purchase Price 21,603 Net Assets Acquired: The First National Bank of Fredericksburg shareholders’ equity $ 12,298 Adjustments to reflect assets acquired at fair value: Loans Interest rate 31 General credit (1,362) Specific credit - non-amortizing (2,495) Specific credit - amortizing (665) Core deposit intangible 1,641 Covenant not to compete 125 Premises and equipment 1,203 Leased premises contracts (359) Other assets (358) Deferred tax assets 785 Adjustments to reflect liabilities acquired at fair value: Time deposits (74) 10,770 Goodwill resulting from merger $ 10,833
Schedule of asset acquired and liability assumed	The following condensed statement reflects the amounts recognized as of the acquisition date for each major class of asset acquired and liability assumed: (In Thousands) Total purchase price $ 21,603 Assets (liabilities) acquired: Cash and cash equivalents $ 83,514 Interest bearing time deposits with other banks 1,236 Securities available for sale 23,831 Loans 115,211 Premises and equipment, net 4,743 Accrued interest receivable 282 Bank-owned life insurance 4,598 Intangibles 1,981 Deferred tax asset 2,979 Other assets 2,332 Time deposits (42,675) Deposits other than time deposits (182,555) Accrued interest payable (14) Other liabilities (4,693) 10,770 Goodwill resulting from the FNB merger $ 10,833
Schedule of future amortization expense for core deposit intangible and MSR	The following table provides the current year and estimated future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing asset balances at December 31, 2015. Future amortization expense may vary from these projections (in thousands): MSRs Core deposit intangibles Covenant not to compete Total Year ended December 31, 2015 (actual) $ 129 $ 25 $ 2 $ 156 Estimate for year ended December 31, 2016 173 296 31 500 2017 142 266 31 439 2018 113 236 31 380 2019 88 206 30 324 2020 66 177 — 243
Summary of integration costs and amortization of fair value adjustments	Merger and acquisition integration costs and amortization of fair value adjustments are included in the numbers below. Pro Formas Actual from Acquisition Date Through December 31, 2015 Twelve Months Ended December 31, (In Thousands, Except Per Share Data) 2015 2014 Net interest income $ 401 $ 37,736 $ 37,634 Non-interest income 21 8,576 8,184 Net income (22) 8,640 14,019 Pro forma earnings per share: Basic $ 2.57 $ 4.15 Diluted $ 2.57 $ 4.15

SUMMARY OF SIGNIFICANT ACCOUN48

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended								12 Months Ended
	Dec. 31, 2015USD ($)Security$ / shares	Sep. 30, 2015USD ($)$ / shares	Jun. 30, 2015USD ($)$ / shares	Mar. 31, 2015USD ($)$ / shares	Dec. 31, 2014USD ($)$ / shares	Sep. 30, 2014USD ($)$ / shares	Jun. 30, 2014USD ($)$ / shares	Mar. 31, 2014USD ($)$ / shares	Dec. 31, 2015USD ($)BranchesSegmentSecurityProperty$ / sharesshares	Dec. 31, 2014USD ($)$ / sharesshares	Dec. 31, 2013USD ($)$ / sharesshares
Business and Organization [Abstract]
Number of full service banking offices | Branches									25
Operating Segments [Abstract]
Number of operating segments | Segment									1
Cash and Cash Equivalents [Abstract]
Interest earning deposits maturity, Maximum for inclusion as cash equivalents									90 days
Investment Securities [Abstract]
Number of classifications of investment securities | Security	3								3
Held-to-maturity securities	$ 0				$ 0				$ 0	$ 0
Trading securities	0				0				$ 0	0
Number of years significantly below cost to recognize an impairment									1 year
Allowance for Loan Losses [Abstract]
Size of family properties, minimum | Property									1
Size of family properties, maximum | Property									4
Number of days past for loan to be considered impaired, Maximum									90 days
Goodwill [Abstract]
Goodwill impairment loss									$ 0	0	$ 0
Bank Owned Life Insurance [Abstract]
Benefit in excess of the cash surrender value									50.00%
Derivative Financial Instruments [Abstract]
Net gain or loss recognized in earnings											0
Basic earnings per share computation [Abstract]
Net income applicable to common stock	$ 2,460,000	$ 2,857,000	$ 3,189,000	$ 3,120,000	$ 3,476,000	$ 3,368,000	$ 3,365,000	$ 3,176,000	$ 11,626,000	$ 13,385,000	$ 13,375,000
Weighted average common shares outstanding (in shares) | shares									3,031,282	3,038,298	3,055,034
Earnings per share - basic (in dollars per share) | $ / shares	$ 0.80	$ 0.95	$ 1.06	$ 1.03	$ 1.14	$ 1.11	$ 1.11	$ 1.05	$ 3.84	$ 4.41	$ 4.38
Diluted earnings per share computation [Abstract]
Net income applicable to common stock	$ 2,460,000	$ 2,857,000	$ 3,189,000	$ 3,120,000	$ 3,476,000	$ 3,368,000	$ 3,365,000	$ 3,176,000	$ 11,626,000	$ 13,385,000	$ 13,375,000
Weighted average common shares outstanding for basic earnings per share (in shares) | shares									3,031,282	3,038,298	3,055,034
Add: Dilutive effects of restricted stock (in shares) | shares									1,360	1,295	1,170
Weighted average common shares outstanding for dilutive earnings per share (in shares) | shares									3,032,642	3,039,593	3,056,204
Earnings per share - dilutive (in dollars per share) | $ / shares	$ 0.79	$ 0.95	$ 1.06	$ 1.03	$ 1.14	$ 1.11	$ 1.11	$ 1.04	$ 3.83	$ 4.40	$ 4.38
Minimum [Member]
Allowance for Loan Losses [Abstract]
Number of days past for loan to be considered impaired, Maximum									90 days
Furniture, Fixtures and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life									3 years
Furniture, Fixtures and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life									15 years
Building Premises [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life									5 years
Building Premises [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life									40 years
Core Deposits [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Life									10 years
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Life									4 years
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive restricted stock excluded from net income per share calculations (in shares) | shares									2,105	2,248	2,555
Restricted Stock [Member] | Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock share price range (in dollars per share) | $ / shares	50.15				37.10				$ 50.15	$ 37.10	$ 34.70
Restricted Stock [Member] | Maximum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock share price range (in dollars per share) | $ / shares	$ 53.15				$ 50.50				$ 53.15	$ 50.50	$ 44.50

RESTRICTIONS ON CASH AND DUE 49

RESTRICTIONS ON CASH AND DUE FROM BANKS (Details) - USD ($)	Dec. 31, 2015	Dec. 31, 2014
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract]
Cash reserves at the Federal Reserve Bank	$ 1,646,000	$ 1,526,000
Cash FDIC insured amount, maximum	$ 250,000

INVESTMENT SECURITIES (Details)

INVESTMENT SECURITIES (Details)	12 Months Ended
	Dec. 31, 2015USD ($)Security	Dec. 31, 2014USD ($)Security	Dec. 31, 2013USD ($)Security
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract]
Amortized Cost	$ 356,399,000	$ 301,459,000
Gross Unrealized Gains	4,139,000	5,603,000
Gross Unrealized Losses	(801,000)	(916,000)
Fair Value	$ 359,737,000	306,146,000
Number of securities owned with fair value than cost | Security	91
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract]
Less than Twelve Months, Fair Value	$ 156,454,000	36,508,000
Twelve Months or Greater, Fair Value	5,279,000	67,011,000
Total, Fair Value	161,733,000	103,519,000
Less than Twelve Months, Gross Unrealized Losses	(748,000)	(134,000)
Twelve Months or Greater, Gross Unrealized Losses	(53,000)	(782,000)
Total, Gross Unrealized Losses	$ (801,000)	(916,000)
Duration securities impaired, Minimum	1 year
Proceeds from sale of securities available-for-sale	$ 30,464,000	28,989,000	$ 25,461,000
Realized investment gains (losses) [Abstract]
Gross gains	440,000	647,000	827,000
Gross losses	(11,000)	(31,000)	(386,000)
Net gains	429,000	616,000	441,000
Investment securities pledged as collateral	203,769,000	186,388,000
Amortized Cost [Abstract]
Due in one year or less	19,839,000
Due after one year through five years	203,928,000
Due after five years through ten years	41,041,000
Due after ten years	89,590,000
Total	354,398,000
Fair Value [Abstract]
Due in one year or less	19,878,000
Due after one year through five years	204,375,000
Due after five years through ten years	41,905,000
Due after ten years	91,147,000
Total	357,305,000
U.S. Agency Securities [Member]
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract]
Amortized Cost	199,749,000	150,847,000
Gross Unrealized Gains	369,000	638,000
Gross Unrealized Losses	(527,000)	(600,000)
Fair Value	199,591,000	150,885,000
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract]
Less than Twelve Months, Fair Value	123,591,000	27,382,000
Twelve Months or Greater, Fair Value	0	43,642,000
Total, Fair Value	123,591,000	71,024,000
Less than Twelve Months, Gross Unrealized Losses	(527,000)	(110,000)
Twelve Months or Greater, Gross Unrealized Losses	0	(490,000)
Total, Gross Unrealized Losses	(527,000)	(600,000)
Realized investment gains (losses) [Abstract]
Gross gains	$ 196,000	$ 177,000	$ 86,000
Available-for-sale securities sold at a gross gain | Security	5	8	7
U.S. Treasuries [Member]
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract]
Amortized Cost	$ 10,103,000	$ 4,944,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(21,000)	(95,000)
Fair Value	10,082,000	4,849,000
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract]
Less than Twelve Months, Fair Value	10,082,000	0
Twelve Months or Greater, Fair Value	0	4,849,000
Total, Fair Value	10,082,000	4,849,000
Less than Twelve Months, Gross Unrealized Losses	(21,000)	0
Twelve Months or Greater, Gross Unrealized Losses	0	(95,000)
Total, Gross Unrealized Losses	(21,000)	(95,000)
Realized investment gains (losses) [Abstract]
Gross gains			$ 95,000
Gross losses	$ 11,000	$ 31,000
Available-for-sale securities sold at a gross gain | Security	1		2
Available-for-sale securities sold at a gross loss | Security		2
Obligations of State and Political Subdivisions [Member]
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract]
Amortized Cost	$ 99,856,000	$ 101,281,000
Gross Unrealized Gains	3,080,000	3,854,000
Gross Unrealized Losses	(73,000)	(99,000)
Fair Value	102,863,000	105,036,000
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract]
Less than Twelve Months, Fair Value	7,023,000	3,596,000
Twelve Months or Greater, Fair Value	2,914,000	8,584,000
Total, Fair Value	9,937,000	12,180,000
Less than Twelve Months, Gross Unrealized Losses	(57,000)	(19,000)
Twelve Months or Greater, Gross Unrealized Losses	(16,000)	(80,000)
Total, Gross Unrealized Losses	(73,000)	(99,000)
Realized investment gains (losses) [Abstract]
Gross gains	$ 99,000	$ 172,000	$ 87,000
Available-for-sale securities sold at a gross gain | Security	7	1	4
Corporate Obligations [Member]
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract]
Amortized Cost	$ 14,583,000	$ 13,853,000
Gross Unrealized Gains	68,000	190,000
Gross Unrealized Losses	(86,000)	(85,000)
Fair Value	14,565,000	13,958,000
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract]
Less than Twelve Months, Fair Value	5,822,000	505,000
Twelve Months or Greater, Fair Value	2,138,000	7,707,000
Total, Fair Value	7,960,000	8,212,000
Less than Twelve Months, Gross Unrealized Losses	(61,000)	(1,000)
Twelve Months or Greater, Gross Unrealized Losses	(25,000)	(84,000)
Total, Gross Unrealized Losses	(86,000)	(85,000)
Realized investment gains (losses) [Abstract]
Gross gains			$ 2,000
Gross losses			$ 246,000
Available-for-sale securities sold at a gross gain | Security			1
Available-for-sale securities sold at a gross loss | Security			1
Mortgage-backed Securities in Government Sponsored Entities [Member]
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract]
Amortized Cost	30,107,000	29,397,000
Gross Unrealized Gains	186,000	368,000
Gross Unrealized Losses	(89,000)	(37,000)
Fair Value	30,204,000	29,728,000
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract]
Less than Twelve Months, Fair Value	9,830,000	5,025,000
Twelve Months or Greater, Fair Value	227,000	2,229,000
Total, Fair Value	10,057,000	7,254,000
Less than Twelve Months, Gross Unrealized Losses	(77,000)	(4,000)
Twelve Months or Greater, Gross Unrealized Losses	(12,000)	(33,000)
Total, Gross Unrealized Losses	(89,000)	(37,000)
Realized investment gains (losses) [Abstract]
Gross gains	$ 69,000	$ 197,000	$ 356,000
Gross losses			$ 140,000
Available-for-sale securities sold at a gross gain | Security	5	7	9
Available-for-sale securities sold at a gross loss | Security			2
Equity Securities in Financial Institutions [Member]
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract]
Amortized Cost	$ 2,001,000	$ 1,137,000
Gross Unrealized Gains	436,000	553,000
Gross Unrealized Losses	(5,000)	0
Fair Value	2,432,000	1,690,000
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract]
Less than Twelve Months, Fair Value	106,000
Twelve Months or Greater, Fair Value	0
Total, Fair Value	106,000
Less than Twelve Months, Gross Unrealized Losses	(5,000)
Twelve Months or Greater, Gross Unrealized Losses	0
Total, Gross Unrealized Losses	(5,000)
Realized investment gains (losses) [Abstract]
Gross gains	$ 76,000	$ 101,000	$ 296,000
Available-for-sale securities sold at a gross gain | Security	1	1	3

LOANS AND RELATED ALLOWANCE F51

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Details) - USD ($)	1 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2015	Dec. 11, 2015
Segments of loan portfolio and allowance for loan losses [Abstract]
Total Loans			$ 554,105,000		$ 695,031,000
Allowance for loan losses			6,815,000		7,106,000
Allowance for loan losses related to individually evaluated for impairment			98,000		355,000
Allowance for loan losses related to Loans Acquired With Deteriorated Credit Quality			0		0
Allowance for loan losses related to collectively evaluated for impairment			6,717,000		6,751,000
Net loans			547,290,000		687,925,000
Net loans, individually evaluated for impairment			8,724,000		11,929,000
Net loans, loans acquired with deteriorated credit quality			0		3,818,000
Net loans, collectively evaluated for impairment			538,566,000		672,178,000
Loans acquired with deteriorated credit quality			0		3,818,000
Individually evaluated for impairment			8,822,000		12,284,000
Collectively evaluated for impairment			545,283,000		678,929,000
Real estate loans serviced for Freddie Mac and Fannie Mae			84,676,000		133,210,000
Real estate loans sold to Freddie Mac and Fannie Mae without recourse		$ 92,773,000	84,676,000
Portfolio balance under MPF					40,437,000
First-loss position for MPF maintained by FHLB					104,000
Credit enhancement for MPF by FHLB		$ 4,345,000
Net unamortized loan fees and costs			1,173,000		1,170,000
Number of days past for loan to be considered impaired, Minimum		90 days
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		$ 6,815,000	7,098,000	$ 6,784,000
Charge-offs		(238,000)	(910,000)	(134,000)
Recoveries		49,000	42,000	43,000
Provision		480,000	585,000	405,000
Balance at end of period	$ 7,106,000	$ 7,106,000	6,815,000	7,098,000
Individually evaluated for impairment			98,000	333,000	355,000
Collectively evaluated for impairment			6,717,000	6,765,000	6,751,000
Minimum [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Number of days past for loan to be considered impaired, Minimum		90 days
First Mortgage [Member] | Minimum [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Period of mortgage on real estate		15 years
First Mortgage [Member] | Maximum [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Period of mortgage on real estate		30 years
Second Mortgage [Member] | Maximum [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Period of mortgage on real estate		15 years
Residential Real Estate Loans [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Total Loans			185,438,000		203,407,000
Loans acquired with deteriorated credit quality			0		35,000
Individually evaluated for impairment			316,000		304,000
Collectively evaluated for impairment			185,122,000		203,068,000
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		$ 878,000	946,000	875,000
Charge-offs		(66,000)	(97,000)	(17,000)
Recoveries		0	0	5,000
Provision		93,000	29,000	83,000
Balance at end of period	905,000	905,000	878,000	946,000
Individually evaluated for impairment			25,000	27,000	37,000
Collectively evaluated for impairment			853,000	919,000	868,000
Commercial and Agricultural Real Estate Loans [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Total Loans			215,584,000		295,364,000
Loans acquired with deteriorated credit quality			0		2,908,000
Individually evaluated for impairment			6,112,000		6,235,000
Collectively evaluated for impairment			209,472,000		286,221,000
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		3,870,000	4,558,000	4,437,000
Charge-offs		(84,000)	(516,000)	(62,000)
Recoveries		14,000	15,000	5,000
Provision		(15,000)	(187,000)	178,000
Balance at end of period	3,785,000	3,785,000	3,870,000	4,558,000
Individually evaluated for impairment			72,000	305,000	62,000
Collectively evaluated for impairment			3,798,000	4,253,000	3,723,000
Change in loan portfolio		(11,168,000)	(187,000)
Construction [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Total Loans			6,353,000		15,011,000
Loans acquired with deteriorated credit quality			0		0
Individually evaluated for impairment			0		0
Collectively evaluated for impairment			6,353,000		15,011,000
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		26,000	50,000	38,000
Charge-offs		0	0	0
Recoveries		0	0	0
Provision		(2,000)	(24,000)	12,000
Balance at end of period	24,000	24,000	26,000	50,000
Individually evaluated for impairment			0	0	0
Collectively evaluated for impairment			26,000	50,000	24,000
Consumer [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Total Loans			8,497,000		11,543,000
Loans acquired with deteriorated credit quality			0		9,000
Individually evaluated for impairment			0		0
Collectively evaluated for impairment			8,497,000		11,534,000
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		84,000	105,000	119,000
Charge-offs		(47,000)	(47,000)	(54,000)
Recoveries		33,000	27,000	33,000
Provision		32,000	(1,000)	7,000
Balance at end of period	102,000	102,000	84,000	105,000
Individually evaluated for impairment			0	0	0
Collectively evaluated for impairment			84,000	105,000	102,000
Other Commercial and Agricultural Loans [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Total Loans			58,516,000		71,206,000
Loans acquired with deteriorated credit quality			0		866,000
Individually evaluated for impairment			2,394,000		5,745,000
Collectively evaluated for impairment			56,122,000		64,595,000
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		1,224,000	942,000	728,000
Charge-offs		(41,000)	(250,000)	(1,000)
Recoveries		2,000	0	0
Provision		120,000	532,000	215,000
Balance at end of period	1,305,000	1,305,000	1,224,000	942,000
Individually evaluated for impairment			1,000	1,000	256,000
Collectively evaluated for impairment			1,223,000	941,000	1,049,000
State and Political Subdivision Loans [Member]
Segments of loan portfolio and allowance for loan losses [Abstract]
Total Loans			79,717,000		98,500,000
Loans acquired with deteriorated credit quality			0		0
Individually evaluated for impairment			0		0
Collectively evaluated for impairment			79,717,000		98,500,000
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		545,000	330,000	271,000
Charge-offs		0	0	0
Recoveries		0	0	0
Provision		48,000	215,000	59,000
Balance at end of period	593,000	593,000	545,000	330,000
Individually evaluated for impairment			0	0	0
Collectively evaluated for impairment			545,000	330,000	593,000
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at beginning of period		188,000	167,000	316,000
Charge-offs		0	0	0
Recoveries		0	0	0
Provision		204,000	21,000	(149,000)
Balance at end of period	392,000	392,000	188,000	167,000
Individually evaluated for impairment			0	0	0
Collectively evaluated for impairment			$ 188,000	$ 167,000	392,000
First National Bank of Fredericksburg [Member]
Components of the purchase accounting adjustments related to the purchased impaired loans in FNB Acquisition [Abstract]
Contractually required principal and interest at acquisition						$ 9,913,000
Non-accretable discount						(5,439,000)
Expected cash flows						4,474,000
Accretable discount	(665,000)	(637,000)			(637,000)	(665,000)
Estimated fair value						3,809,000
Changes in the amortizable yield for purchased credit-impaired loans [Roll Forward]
Balance at beginning of period	665,000
Accretion	(28,000)
Balance at end of period	$ 637,000	$ 637,000
Loans acquired with specific evidence of deterioration in credit quality [Abstract]
Outstanding balance					6,950,000	6,969,000
Carrying amount					$ 3,818,000	$ 3,809,000

LOANS AND RELATED ALLOWANCE F52

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES IMPAIRED FINANCING RECEIVABLE (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	$ 14,803	$ 11,265
Recorded Investment With No Allowance	10,882	8,239
Recorded Investment With Allowance	1,402	583
Total Recorded Investment	12,284	8,822
Related Allowance	355	98
Average Recorded Investment	8,804	9,639	$ 10,728
Interest Income Recognized	180	146	547
Interest Income Recognized Cash Basis	11	0	377
Real Estate Loans [Member] | Mortgages [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	281	222
Recorded Investment With No Allowance	114	125
Recorded Investment With Allowance	129	66
Total Recorded Investment	243	191
Related Allowance	26	13
Average Recorded Investment	240	198	327
Interest Income Recognized	12	9	7
Interest Income Recognized Cash Basis	0	0	0
Real Estate Loans [Member] | Home Equity [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	61	130
Recorded Investment With No Allowance	0	60
Recorded Investment With Allowance	61	65
Total Recorded Investment	61	125
Related Allowance	11	12
Average Recorded Investment	88	130	136
Interest Income Recognized	4	4	4
Interest Income Recognized Cash Basis	0	0	0
Real Estate Loans [Member] | Commercial [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	8,654	8,433
Recorded Investment With No Allowance	5,843	5,708
Recorded Investment With Allowance	225	404
Total Recorded Investment	6,068	6,112
Related Allowance	62	72
Average Recorded Investment	5,683	7,270	8,499
Interest Income Recognized	63	54	457
Interest Income Recognized Cash Basis	5	0	377
Real Estate Loans [Member] | Agricultural [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	167	0
Recorded Investment With No Allowance	167	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	167	0
Related Allowance	0	0
Average Recorded Investment	56	0	0
Interest Income Recognized	2	0	0
Interest Income Recognized Cash Basis	0	0	0
Real Estate Loans [Member] | Construction [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	0	0
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	0	0
Related Allowance	0	0
Average Recorded Investment	0	0	0
Interest Income Recognized	0	0	0
Interest Income Recognized Cash Basis	0	0	0
Consumer [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	0	0
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	0	0
Related Allowance	0	0
Average Recorded Investment	0	10	5
Interest Income Recognized	0	0	0
Interest Income Recognized Cash Basis	0	0	0
Other Commercial Loans [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	5,535	2,480
Recorded Investment With No Allowance	4,653	2,346
Recorded Investment With Allowance	987	48
Total Recorded Investment	5,640	2,394
Related Allowance	256	1
Average Recorded Investment	2,700	2,031	1,761
Interest Income Recognized	98	79	79
Interest Income Recognized Cash Basis	6	0	0
Other Agricultural Loans [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	105	0
Recorded Investment With No Allowance	105	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	105	0
Related Allowance	0	0
Average Recorded Investment	37	0	0
Interest Income Recognized	1	0	0
Interest Income Recognized Cash Basis	0	0	0
State and Political Subdivision Loans [Member]
Impaired Financing Receivable [Abstract]
Unpaid Principal Balance	0	0
Recorded Investment With No Allowance	0	0
Recorded Investment With Allowance	0	0
Total Recorded Investment	0	0
Related Allowance	0	0
Average Recorded Investment	0	0	0
Interest Income Recognized	0	0	0
Interest Income Recognized Cash Basis	$ 0	$ 0	$ 0

LOANS AND RELATED ALLOWANCE F53

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES CREDIT QUALITY INDICATOR (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Financing Receivable by credit exposure [Abstract]
Total	$ 214,950,000	$ 193,935,000
Minimum [Member]
Financing Receivable, Recorded Investment [Line Items]
Percentage of dollar volume of commercial loan portfolio to be reviewed, minimum	55.00%	60.00%
Amount over which all new loans to be reviewed, minimum	$ 1,000,000
Amount over which all relationships to be reviewed, minimum	1,000,000
Amount which is 30 days past due to be reviewed for all aggregate loan relationships, minimum	750,000
Real Estate Loans [Member] | Commercial [Member]
Financing Receivable by credit exposure [Abstract]
Total	237,542,000	$ 190,945,000
Real Estate Loans [Member] | Agricultural [Member]
Financing Receivable by credit exposure [Abstract]
Total	57,822,000	24,639,000
Real Estate Loans [Member] | Home Equity [Member]
Financing Receivable by credit exposure [Abstract]
Total	62,368,000	62,580,000
Real Estate Loans [Member] | Mortgages [Member]
Financing Receivable by credit exposure [Abstract]
Total	141,039,000	122,858,000
Real Estate Loans [Member] | Construction [Member]
Financing Receivable by credit exposure [Abstract]
Total	15,011,000	6,353,000
Consumer [Member]
Financing Receivable by credit exposure [Abstract]
Total	11,543,000	8,497,000
Other Commercial Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	57,549,000	47,451,000
Other Agricultural Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	13,657,000	11,065,000
State and Political Subdivision Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	98,500,000	79,717,000
Pass [Member]
Financing Receivable by credit exposure [Abstract]
Total	448,776,000	324,932,000
Pass [Member] | Real Estate Loans [Member] | Commercial [Member]
Financing Receivable by credit exposure [Abstract]
Total	217,544,000	169,383,000
Pass [Member] | Real Estate Loans [Member] | Agricultural [Member]
Financing Receivable by credit exposure [Abstract]
Total	53,695,000	19,575,000
Pass [Member] | Real Estate Loans [Member] | Construction [Member]
Financing Receivable by credit exposure [Abstract]
Total	14,422,000	6,353,000
Pass [Member] | Other Commercial Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	51,297,000	40,683,000
Pass [Member] | Other Agricultural Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	13,318,000	9,221,000
Pass [Member] | State and Political Subdivision Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	98,500,000	79,717,000
Special Mention [Member]
Financing Receivable by credit exposure [Abstract]
Total	8,284,000	17,482,000
Special Mention [Member] | Real Estate Loans [Member] | Commercial [Member]
Financing Receivable by credit exposure [Abstract]
Total	4,150,000	8,948,000
Special Mention [Member] | Real Estate Loans [Member] | Agricultural [Member]
Financing Receivable by credit exposure [Abstract]
Total	2,865,000	3,394,000
Special Mention [Member] | Real Estate Loans [Member] | Construction [Member]
Financing Receivable by credit exposure [Abstract]
Total	589,000	0
Special Mention [Member] | Other Commercial Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	446,000	4,413,000
Special Mention [Member] | Other Agricultural Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	234,000	727,000
Special Mention [Member] | State and Political Subdivision Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Substandard [Member]
Financing Receivable by credit exposure [Abstract]
Total	22,852,000	17,756,000
Substandard [Member] | Real Estate Loans [Member] | Commercial [Member]
Financing Receivable by credit exposure [Abstract]
Total	15,816,000	12,614,000
Substandard [Member] | Real Estate Loans [Member] | Agricultural [Member]
Financing Receivable by credit exposure [Abstract]
Total	1,262,000	1,670,000
Substandard [Member] | Real Estate Loans [Member] | Construction [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Substandard [Member] | Other Commercial Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	5,669,000	2,355,000
Substandard [Member] | Other Agricultural Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	105,000	1,117,000
Substandard [Member] | State and Political Subdivision Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Doubtful [Member]
Financing Receivable by credit exposure [Abstract]
Total	169,000	0
Doubtful [Member] | Real Estate Loans [Member] | Commercial [Member]
Financing Receivable by credit exposure [Abstract]
Total	32,000	0
Doubtful [Member] | Real Estate Loans [Member] | Agricultural [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Doubtful [Member] | Real Estate Loans [Member] | Construction [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Doubtful [Member] | Other Commercial Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	137,000	0
Doubtful [Member] | Other Agricultural Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Doubtful [Member] | State and Political Subdivision Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Loss [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Loss [Member] | Real Estate Loans [Member] | Commercial [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Loss [Member] | Real Estate Loans [Member] | Agricultural [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Loss [Member] | Real Estate Loans [Member] | Construction [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Loss [Member] | Other Commercial Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Loss [Member] | Other Agricultural Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Loss [Member] | State and Political Subdivision Loans [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
Internally Assigned Grade [Member]
Financing Receivable by credit exposure [Abstract]
Total	480,081,000	360,170,000
Performing [Member]
Financing Receivable by credit exposure [Abstract]
Total	213,440,000	192,708,000
Performing [Member] | Real Estate Loans [Member] | Home Equity [Member]
Financing Receivable by credit exposure [Abstract]
Total	62,236,000	62,296,000
Performing [Member] | Real Estate Loans [Member] | Mortgages [Member]
Financing Receivable by credit exposure [Abstract]
Total	139,734,000	121,968,000
Performing [Member] | Consumer [Member]
Financing Receivable by credit exposure [Abstract]
Total	11,470,000	8,444,000
Nonperforming [Member]
Financing Receivable by credit exposure [Abstract]
Total	1,466,000	1,227,000
Nonperforming [Member] | Real Estate Loans [Member] | Home Equity [Member]
Financing Receivable by credit exposure [Abstract]
Total	132,000	284,000
Nonperforming [Member] | Real Estate Loans [Member] | Mortgages [Member]
Financing Receivable by credit exposure [Abstract]
Total	1,270,000	890,000
Nonperforming [Member] | Consumer [Member]
Financing Receivable by credit exposure [Abstract]
Total	64,000	53,000
PCI [Member]
Financing Receivable by credit exposure [Abstract]
Total	44,000	0
PCI [Member] | Real Estate Loans [Member] | Home Equity [Member]
Financing Receivable by credit exposure [Abstract]
Total	0	0
PCI [Member] | Real Estate Loans [Member] | Mortgages [Member]
Financing Receivable by credit exposure [Abstract]
Total	35,000	0
PCI [Member] | Consumer [Member]
Financing Receivable by credit exposure [Abstract]
Total	$ 9,000	$ 0

LOANS AND RELATED ALLOWANCE F54

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES PAST DUE (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Recorded investment of past due [Abstract]
Total Past Due	$ 9,288,000	$ 5,151,000
Current	681,925,000	548,954,000
PCI	3,818,000	0
Total Loans	695,031,000	554,105,000
90 Days and Accruing	623,000	836,000
Financing receivables on nonaccrual status [Abstract]
Total Past Due And Non-accrual	5,608,000	2,243,000
Current And Non-accrual	923,000	4,356,000
PCI Loans considered non accrual	0	0
Financing receivable nonaccrual status	6,531,000	6,599,000
Foregone interest income	463,000	527,000	$ 632,000
Financing receivables on accrual status [Abstract]
Total Past Due And Still Accruing	3,680,000	2,908,000
Current And Still Accruing	681,002,000	544,598,000
PCI Loans still accruing	3,818,000	0
Total Financing Receivables And Still Accruing	$ 688,500,000	547,506,000
Minimum [Member]
Financing receivables on nonaccrual status [Abstract]
Period of past due after which loans considered as non accrual	90 days
30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	$ 2,509,000	1,479,000
Financing receivables on nonaccrual status [Abstract]
Total Past Due And Non-accrual	54,000	48,000
Financing receivables on accrual status [Abstract]
Total Past Due And Still Accruing	2,455,000	1,431,000
60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	773,000	822,000
Financing receivables on nonaccrual status [Abstract]
Total Past Due And Non-accrual	171,000	181,000
Financing receivables on accrual status [Abstract]
Total Past Due And Still Accruing	602,000	641,000
90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	6,006,000	2,850,000
Financing receivables on nonaccrual status [Abstract]
Total Past Due And Non-accrual	5,383,000	2,014,000
Financing receivables on accrual status [Abstract]
Total Past Due And Still Accruing	623,000	836,000
Consumer [Member]
Recorded investment of past due [Abstract]
Total Past Due	325,000	130,000
Current	11,209,000	8,367,000
PCI	9,000	0
Total Loans	11,543,000	8,497,000
90 Days and Accruing	9,000	6,000
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	55,000	47,000
Consumer [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	239,000	119,000
Consumer [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	37,000	4,000
Consumer [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	49,000	7,000
Other Commercial Loans [Member]
Recorded investment of past due [Abstract]
Total Past Due	1,367,000	1,237,000
Current	55,316,000	46,214,000
PCI	866,000	0
Total Loans	57,549,000	47,451,000
90 Days and Accruing	160,000	174,000
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	1,012,000	714,000
Other Commercial Loans [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	143,000	503,000
Other Commercial Loans [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	214,000	258,000
Other Commercial Loans [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	1,010,000	476,000
Other Agricultural Loans [Member]
Recorded investment of past due [Abstract]
Total Past Due	9,000	0
Current	13,648,000	11,065,000
PCI	0	0
Total Loans	13,657,000	11,065,000
90 Days and Accruing	0	0
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	0	0
Other Agricultural Loans [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	9,000	0
Other Agricultural Loans [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
Other Agricultural Loans [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
State and Political Subdivision Loans [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
Current	98,500,000	79,717,000
PCI	0	0
Total Loans	98,500,000	79,717,000
90 Days and Accruing	0	0
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	0	0
State and Political Subdivision Loans [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
State and Political Subdivision Loans [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
State and Political Subdivision Loans [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
Real Estate Loans [Member] | Mortgages [Member]
Recorded investment of past due [Abstract]
Total Past Due	1,457,000	1,223,000
Current	139,547,000	121,635,000
PCI	35,000	0
Total Loans	141,039,000	122,858,000
90 Days and Accruing	321,000	214,000
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	949,000	676,000
Real Estate Loans [Member] | Mortgages [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	487,000	318,000
Real Estate Loans [Member] | Mortgages [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	283,000	230,000
Real Estate Loans [Member] | Mortgages [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	687,000	675,000
Real Estate Loans [Member] | Home Equity [Member]
Recorded investment of past due [Abstract]
Total Past Due	766,000	801,000
Current	61,602,000	61,779,000
PCI	0	0
Total Loans	62,368,000	62,580,000
90 Days and Accruing	73,000	132,000
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	59,000	152,000
Real Estate Loans [Member] | Home Equity [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	630,000	442,000
Real Estate Loans [Member] | Home Equity [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	15,000	99,000
Real Estate Loans [Member] | Home Equity [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	121,000	260,000
Real Estate Loans [Member] | Commercial [Member]
Recorded investment of past due [Abstract]
Total Past Due	5,020,000	1,760,000
Current	230,352,000	189,185,000
PCI	2,170,000	0
Total Loans	237,542,000	190,945,000
90 Days and Accruing	60,000	310,000
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	4,422,000	5,010,000
Real Estate Loans [Member] | Commercial [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	824,000	97,000
Real Estate Loans [Member] | Commercial [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	57,000	231,000
Real Estate Loans [Member] | Commercial [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	4,139,000	1,432,000
Real Estate Loans [Member] | Agricultural [Member]
Recorded investment of past due [Abstract]
Total Past Due	344,000	0
Current	56,740,000	24,639,000
PCI	738,000	0
Total Loans	57,822,000	24,639,000
90 Days and Accruing	0	0
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	34,000	0
Real Estate Loans [Member] | Agricultural [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	177,000	0
Real Estate Loans [Member] | Agricultural [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	167,000	0
Real Estate Loans [Member] | Agricultural [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
Real Estate Loans [Member] | Construction [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
Current	15,011,000	6,353,000
PCI	0	0
Total Loans	15,011,000	6,353,000
90 Days and Accruing	0	0
Financing receivables on nonaccrual status [Abstract]
Financing receivable nonaccrual status	0	0
Real Estate Loans [Member] | Construction [Member] | 30 to 59 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
Real Estate Loans [Member] | Construction [Member] | 60 to 89 Days Past Due [Member]
Recorded investment of past due [Abstract]
Total Past Due	0	0
Real Estate Loans [Member] | Construction [Member] | 90 Days Or Greater [Member]
Recorded investment of past due [Abstract]
Total Past Due	$ 0	$ 0

LOANS AND RELATED ALLOWANCE F55

LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES TDR (Details)	12 Months Ended
	Dec. 31, 2015USD ($)Contract	Dec. 31, 2014USD ($)Contract	Dec. 31, 2013USD ($)Contract
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES [Abstract]
Reserves of allowance for loan losses	$ 37,000	$ 26,000	$ 28,000
Recidivism receivables [Abstract]
Total recidivism, Number of contracts | Contract	0	1	2
Total recidivism, Recorded investment	$ 0	$ 50,000	$ 61,000
Foreclosed assets held for sale [Abstract]
Foreclosed assets held for sale	$ 1,354,000	$ 1,792,000
Interest Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract	1	0	1
Pre-modification Outstanding Recorded Investment	$ 71,000	$ 0	$ 72,000
Post-Modification Outstanding Recorded Investment	$ 71,000	$ 0	$ 72,000
Term Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract	1	2	4
Pre-modification Outstanding Recorded Investment	$ 19,000	$ 153,000	$ 2,895,000
Post-Modification Outstanding Recorded Investment	$ 19,000	$ 153,000	$ 2,895,000
Mortgages [Member] | Interest Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract			1
Pre-modification Outstanding Recorded Investment			$ 72,000
Post-Modification Outstanding Recorded Investment			$ 72,000
Mortgages [Member] | Term Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract			0
Pre-modification Outstanding Recorded Investment			$ 0
Post-Modification Outstanding Recorded Investment			$ 0
Commercial [Member] | Interest Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract			0
Pre-modification Outstanding Recorded Investment			$ 0
Post-Modification Outstanding Recorded Investment			$ 0
Commercial [Member] | Term Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract			2
Pre-modification Outstanding Recorded Investment			$ 1,365,000
Post-Modification Outstanding Recorded Investment			$ 1,365,000
Real Estate Loans [Member] | Mortgages [Member] | Interest Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract	1
Pre-modification Outstanding Recorded Investment	$ 71,000
Post-Modification Outstanding Recorded Investment	$ 71,000
Real Estate Loans [Member] | Mortgages [Member] | Term Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract	1
Pre-modification Outstanding Recorded Investment	$ 19,000
Post-Modification Outstanding Recorded Investment	$ 19,000
Real Estate Loans [Member] | Commercial [Member]
Recidivism receivables [Abstract]
Total recidivism, Number of contracts | Contract	0	1	1
Total recidivism, Recorded investment	$ 0	$ 50,000	$ 55,000
Real Estate Loans [Member] | Commercial [Member] | Interest Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract		0
Pre-modification Outstanding Recorded Investment		$ 0
Post-Modification Outstanding Recorded Investment		$ 0
Real Estate Loans [Member] | Commercial [Member] | Term Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract		2
Pre-modification Outstanding Recorded Investment		$ 153,000
Post-Modification Outstanding Recorded Investment		$ 153,000
Other Commercial Loans [Member]
Recidivism receivables [Abstract]
Total recidivism, Number of contracts | Contract	0	0	1
Total recidivism, Recorded investment	$ 0	$ 0	$ 6,000
Other Commercial Loans [Member] | Interest Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract			0
Pre-modification Outstanding Recorded Investment			$ 0
Post-Modification Outstanding Recorded Investment			$ 0
Other Commercial Loans [Member] | Term Modification [Member]
Financing receivable modifications [Abstract]
Number of contracts | Contract			2
Pre-modification Outstanding Recorded Investment			$ 1,530,000
Post-Modification Outstanding Recorded Investment			$ 1,530,000
Consumer Residential Mortgages [Member]
Foreclosed assets held for sale [Abstract]
Foreclosed assets held for sale		339,000
Formal foreclosure proceedings on potential foreclosure assets		$ 1,199,000

PREMISES & EQUIPMENT (Details)

PREMISES & EQUIPMENT (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 29,183,000	$ 23,774,000
Less: accumulated depreciation	11,920,000	11,417,000
Premises and equipment, net	17,263,000	12,357,000
Depreciation expense	608,000	537,000	$ 598,000
Land [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	5,110,000	3,295,000
Buildings [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	17,349,000	12,456,000
Furniture, Fixtures and Equipment [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	6,636,000	6,187,000
Construction in Process [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment, gross	$ 88,000	$ 1,836,000

GOODWILL AND OTHER INTANGIBLE57

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014
Amortized intangible assets [Abstract]
Gross carrying value	[1]	$ 3,102	$ 1,023
Accumulated amortization	[1]	(665)	(550)
Net carrying value	[1]	2,437	473
Unamortized intangible assets [Abstract]
Goodwill		21,089	10,256
Actual and Estimated Future Amortization Expense [Abstract]
Amortization expense		156
Estimated Amortization Expense [Abstract]
2,016		500
2,017		439
2,018		380
2,019		324
2,020		243
MSRs [Member]
Amortized intangible assets [Abstract]
Gross carrying value	[1]	1,336	1,023
Accumulated amortization	[1]	(638)	(550)
Net carrying value	[1]	698	473
Actual and Estimated Future Amortization Expense [Abstract]
Amortization expense		129
Estimated Amortization Expense [Abstract]
2,016		173
2,017		142
2,018		113
2,019		88
2,020		66
Core deposit intangibles [Member]
Amortized intangible assets [Abstract]
Gross carrying value	[1]	1,641	0
Accumulated amortization	[1]	(25)	0
Net carrying value	[1]	1,616	0
Actual and Estimated Future Amortization Expense [Abstract]
Amortization expense		25
Estimated Amortization Expense [Abstract]
2,016		296
2,017		266
2,018		236
2,019		206
2,020		177
Covenant not to compete [Member]
Amortized intangible assets [Abstract]
Gross carrying value	[1]	125	0
Accumulated amortization	[1]	(2)	0
Net carrying value	[1]	123	$ 0
Actual and Estimated Future Amortization Expense [Abstract]
Amortization expense		2
Estimated Amortization Expense [Abstract]
2,016		31
2,017		31
2,018		31
2,019		30
2,020		$ 0
[1]	Excludes fully amortized intangible assets

FEDERAL HOME LOAN BANK (FHLB)58

FEDERAL HOME LOAN BANK (FHLB) STOCK (Details) - USD ($)	Dec. 31, 2015	Dec. 31, 2014
FEDERAL HOME LOAN BANK (FHLB) STOCK [Abstract]
Federal home loan bank stock	$ 2,800,000	$ 1,761,000
FHLB Stock, at par value (in dollars per share)	$ 100

DEPOSITS (Details)

DEPOSITS (Details) - USD ($)	Dec. 31, 2015	Dec. 31, 2014
DEPOSITS [Abstract]
Non-interest-bearing deposits	$ 150,960,000	$ 95,526,000
NOW accounts	279,655,000	226,038,000
Savings deposits	170,277,000	108,252,000
Money market deposit accounts	105,229,000	95,350,000
Certificates of deposit	281,910,000	248,767,000
Total deposits	988,031,000	773,933,000
Certificates of deposit of $250,000 or more [Abstract]
Certificates of deposit of $250,000 or more	51,818,000	$ 47,310,000
Maturities of certificates of deposit [Abstract]
2,016	128,954,000
2,017	61,608,000
2,018	38,240,000
2,019	18,761,000
2,020	24,594,000
Thereafter	9,753,000
Total certificates of deposit	$ 281,910,000

BORROWED FUNDS AND REPURCHASE60

BORROWED FUNDS AND REPURCHASE AGREEMENTS (Details) - USD ($)		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2008	Dec. 31, 2003
Debt Instrument [Line Items]
Borrowed funds		$ 41,631,000	$ 41,799,000	$ 66,932,000
Highest balance at any month-end		71,073,000	72,879,000	89,377,000
Average balance		$ 36,700,000	$ 39,208,000	$ 42,214,000
Weighted average interest rate paid during the year		1.93%	1.55%	2.86%
Weighted average interest rate as of year end		1.74%	1.50%	0.96%
Maturities of borrowed funds [Abstract]
2,016		$ 24,546,000
2,017		2,000,000
2,018		1,000,000
2,019		2,000,000
2,020		560,000
Thereafter		11,525,000
Total borrowed funds		41,631,000	$ 41,799,000	$ 66,932,000
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		20,193,000	14,323,000
Total liability recognized for repurchase agreements		16,008,000	5,906,000
U.S. Agency Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		20,193,000	14,323,000
Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		18,144,000	10,368,000
Overnight and Continuous [Member] | U.S. Agency Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		18,144,000	10,368,000
Up to 30 Days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		0	1,015,000
Up to 30 Days [Member] | U.S. Agency Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		0	1,015,000
30 - 90 Days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		0	0
30 - 90 Days [Member] | U.S. Agency Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		0	0
Greater than 90 Days [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		2,049,000	2,940,000
Greater than 90 Days [Member] | U.S. Agency Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total carrying value of collateral pledged		2,049,000	2,940,000
Securities Sold Under Agreements to Repurchase [Member]
Debt Instrument [Line Items]
Borrowed funds	[1]	16,008,000	5,906,000	7,278,000
Highest balance at any month-end	[1]	16,008,000	7,277,000	8,923,000
Average balance	[1]	$ 5,998,000	$ 6,535,000	$ 7,821,000
Weighted average interest rate paid during the year	[1]	0.82%	0.91%	0.88%
Weighted average interest rate as of year end	[1]	0.45%	0.99%	0.87%
Maturities of borrowed funds [Abstract]
Total borrowed funds	[1]	$ 16,008,000	$ 5,906,000	$ 7,278,000
FHLB Advances [Member]
Debt Instrument [Line Items]
Borrowed funds	[2]	1,598,000	16,593,000	42,954,000
Federal Home Loan Bank, advances, highest balance at any month-end	[2]	26,996,000	39,902,000	42,954,000
Federal Home Loan Bank, advances, average balance	[2]	$ 5,218,000	$ 9,991,000	$ 4,871,000
Federal Home Loan Bank, advances, weighted average interest rate paid during the year	[2]	0.35%	0.27%	0.25%
Federal Home Loan Bank, advances, weighted average interest rate as of year-end	[2]	0.43%	0.24%	0.25%
Maximum borrowing limit		$ 254,270,000
Maturities of borrowed funds [Abstract]
Total borrowed funds	[2]	1,598,000	$ 16,593,000	$ 42,954,000
Federal Funds Line [Member]
Debt Instrument [Line Items]
Borrowed funds	[3]	0	0	0
Highest balance at any month-end	[3]	0	0	0
Average balance	[3]	$ 0	$ 1,000	$ 0
Weighted average interest rate paid during the year	[3]	0.00%	0.76%	0.73%
Weighted average interest rate as of year end	[3]	0.00%	0.00%	0.00%
Maximum borrowing limit		$ 10,000,000
Maturities of borrowed funds [Abstract]
Total borrowed funds	[3]	0	$ 0	$ 0
FRB BIC Line [Member]
Debt Instrument [Line Items]
Borrowed funds	[4]	0	0	0
Highest balance at any month-end	[4]	0	0	0
Average balance	[4]	$ 0	$ 1,000	$ 0
Weighted average interest rate paid during the year	[4]	0.77%	0.75%	0.75%
Weighted average interest rate as of year end	[4]	0.00%	0.00%	0.00%
Maximum borrowing limit		$ 7,949,000
Carrying value of securities pledged as collateral		16,146,000	$ 17,071,000
Maturities of borrowed funds [Abstract]
Total borrowed funds	[4]	0	0	$ 0
Notes Payable [Member]
Debt Instrument [Line Items]
Borrowed funds	[5]	7,500,000	7,500,000	7,500,000
Highest balance at any month-end	[5]	7,500,000	7,500,000	7,500,000
Average balance	[5]	$ 7,500,000	$ 7,500,000	$ 7,500,000
Weighted average interest rate paid during the year	[5]	3.14%	3.09%	5.82%
Weighted average interest rate as of year end	[5]	3.33%	3.04%	3.04%
Face amount of debt		$ 7,500,000
Variable rate basis		3 month LIBOR
Basis spread on variable rate		2.80%
Unamortized debt issuance costs						$ 75,000
Notional amount of derivative liability					$ 7,500,000
Maturities of borrowed funds [Abstract]
Total borrowed funds	[5]	$ 7,500,000	$ 7,500,000	$ 7,500,000
Term Loans [Member]
Debt Instrument [Line Items]
Borrowed funds	[6]	16,525,000	11,800,000	9,200,000
Highest balance at any month-end	[6]	20,569,000	18,200,000	30,000,000
Average balance	[6]	$ 17,984,000	$ 15,180,000	$ 22,022,000
Weighted average interest rate paid during the year	[6]	2.25%	1.89%	3.13%
Weighted average interest rate as of year end	[6]	2.44%	2.54%	2.78%
Maturities of borrowed funds [Abstract]
Total borrowed funds	[6]	$ 16,525,000	$ 11,800,000	$ 9,200,000
Term Loans [Member] | October 2, 2017 [Member]
Debt Instrument [Line Items]
Borrowed funds		$ 2,000,000	2,000,000
Stated interest rate		2.29%
Maturity date		Oct. 2, 2017
Maturities of borrowed funds [Abstract]
Total borrowed funds		$ 2,000,000	2,000,000
Term Loans [Member] | July 12, 2018 [Member]
Debt Instrument [Line Items]
Borrowed funds		$ 1,000,000	1,000,000
Stated interest rate		2.72%
Maturity date		Jul. 12, 2018
Maturities of borrowed funds [Abstract]
Total borrowed funds		$ 1,000,000	1,000,000
Term Loans [Member] | February 4, 2019 [Member]
Debt Instrument [Line Items]
Borrowed funds		$ 2,000,000	2,000,000
Stated interest rate		1.87%
Maturity date		Feb. 4, 2019
Maturities of borrowed funds [Abstract]
Total borrowed funds		$ 2,000,000	2,000,000
Term Loans [Member] | February 3, 2021 [Member]
Debt Instrument [Line Items]
Borrowed funds		$ 2,000,000	2,000,000
Stated interest rate		2.61%
Maturity date		Feb. 3, 2021
Maturities of borrowed funds [Abstract]
Total borrowed funds		$ 2,000,000	2,000,000
Term Loans [Member] | July 12, 2021 [Member]
Debt Instrument [Line Items]
Borrowed funds		$ 2,000,000	2,000,000
Stated interest rate		3.52%
Maturity date		Jul. 12, 2021
Maturities of borrowed funds [Abstract]
Total borrowed funds		$ 2,000,000	2,000,000
Term Loans [Member] | August 20, 2021 [Member]
Debt Instrument [Line Items]
Borrowed funds		$ 2,800,000	2,800,000
Stated interest rate		2.37%
Maturity date		Aug. 20, 2021
Maturities of borrowed funds [Abstract]
Total borrowed funds		$ 2,800,000	2,800,000
Term Loans [Member] | January, 06 2022 [Member]
Debt Instrument [Line Items]
Borrowed funds		$ 4,725,000	0
Stated interest rate		2.08%
Maturity date		Jan. 6, 2022
Maturities of borrowed funds [Abstract]
Total borrowed funds		$ 4,725,000	$ 0
[1]	We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31, 2015 and December 31, 2014 is presented in the following tables. Remaining Contractual Maturity of the Agreements Overnight and Up to Greater than 2015 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 18,144 $ - $ - $ 2,049 $ 20,193 Total carrying value of collateral pledged 18,144 - - 2,049 20,193 Total liability recognized for repurchase agreements 16,008 2014 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 10,368 $ 1,015 $ - $ 2,940 $ 14,323 Total carrying value of collateral pledged 10,368 1,015 - 2,940 14,323 Total liability recognized for repurchase agreements 5,906
[2]	FHLB Advances consist of an "Open RepoPlus" agreement with the FHLB of Pittsburgh. FHLB "Open RepoPlus" advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher. The Company has a borrowing limit of $254,270,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company's FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans.
[3]	The federal funds line consists of an unsecured line from a third party bank at market rates. The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances. No specific collateral is required to be pledged for these borrowings.
[4]	The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession. As of December 31, 2015, the Company has a borrowing limit of $7,949,000, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $16,146,000 and $17,071,000 as of December 31, 2015 and 2014, respectively.
[5]	In December 2003, the Company formed a special purpose entity ("Entity") to issue $7,500,000 of floating rate obligated mandatory redeemable securities as part of a pooled offering. The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80. The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter. The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable. Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008. Under current accounting rules, the Company's minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet. The Entity is not consolidated as part of the Company's consolidated financial statements.
[6]	(f) Term Loans consist of separate loans with the FHLB of Pittsburgh as follows (in thousands): December 31, December 31, Interest Rate Maturity 2015 2014 Fixed: 2.29% October 2, 2017 2,000 2,000 2.72% July 12, 2018 1,000 1,000 1.87% February 4, 2019 2,000 2,000 2.61% February 3, 2021 2,000 2,000 3.52% July 12, 2021 2,000 2,000 2.37% August 20, 2021 2,800 2,800 2.08% January 6, 2022 4,725 - Total term loans $ 16,525 $ 11,800

EMPLOYEE BENEFIT PLANS (Details

EMPLOYEE BENEFIT PLANS (Details)	12 Months Ended
	Dec. 31, 2015USD ($)Plan$ / sharesshares	Dec. 31, 2014USD ($)$ / sharesshares	Dec. 31, 2013USD ($)$ / shares
EMPLOYEE BENEFIT PLANS [Abstract]
Number of plans | Plan	2
Employer discretionary contribution to 401 (k) plan	$ 61,000	$ 46,000	$ 40,000
Amounts recognized in accumulated other comprehensive loss consists of [Abstract]
Total	(114,000)	(1,209,000)	874,000
Expected future benefit payments [Abstract]
Employer contribution to 401 (k) defined contribution plan	285,000	267,000	255,000
Additional General Disclosures [Abstract]
Share-based compensation expense	179,000	200,000	218,000
Directors [Member]
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items]
Deferred compensation liability	958,000	969,000
Deferred interest expense	22,000	20,000	16,000
Pension Plan [Member]
Change in benefit obligation [Roll Forward]
Benefit obligation at beginning of year	11,777,000	9,739,000
Benefit obligation acquired as part of FNB acquisition	6,377,000	0
Service cost	352,000	307,000	342,000
Interest cost	424,000	415,000	363,000
Actuarial (Gain) / Loss	(456,000)	1,645,000
Benefits paid	(665,000)	(329,000)
Benefit obligation at end of year	17,809,000	11,777,000	9,739,000
Change in plan assets [Roll Forward]
Fair value of plan assets at beginning of year	11,039,000	10,519,000
Fair value of plan assets at acquisition	4,053,000	0
Actual return (loss) on plan assets	(41,000)	549,000
Employer contributions	400,000	300,000	1,000,000
Benefits paid	(665,000)	(329,000)
Fair value of plan assets at end of year	14,786,000	11,039,000	10,519,000
Funded status	(3,023,000)	(738,000)
Amounts recognized in accumulated other comprehensive loss consists of [Abstract]
Net loss	3,919,000	3,795,000
Prior service cost	(222,000)	(270,000)
Total	3,697,000	3,525,000
Components of net periodic benefit cost [Abstract]
Service cost	352,000	307,000	342,000
Interest cost	424,000	415,000	363,000
Return on plan assets	(791,000)	(786,000)	(673,000)
Net amortization and deferral	205,000	51,000	257,000
Net periodic benefit cost	190,000	$ (13,000)	$ 289,000
Amounts that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost in 2015, related to estimated net loss	288,000
Amounts that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost in 2015 related to prior service cost	$ (47,000)
Weighted-average assumptions used to determine benefit obligations [Abstract]
Discount rate	3.94%	3.50%
Rate of compensation increase	3.00%	3.00%
Weighted-average assumptions used to determine net periodic benefit cost (income) [Abstract]
Discount rate	3.61%	4.30%	3.30%
Expected long-term return on plan assets	7.00%	7.50%	7.50%
Rate of compensation increase	3.00%	3.00%	3.00%
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 14,786,000	$ 11,039,000
Allocation (in hundredths)	100.00%	100.00%
Expected employer contribution to pension plan	$ 500,000
Expected future benefit payments [Abstract]
2,016	586,000
2,017	710,000
2,018	653,000
2,019	2,134,000
2,020	1,536,000
2021 - 2025	6,573,000
Pension Plan [Member] | Level I [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	11,610,000	$ 8,237,000
Pension Plan [Member] | Level II [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	3,176,000	2,802,000
Pension Plan [Member] | Level III [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0	0
Pension Plan [Member] | Cash and Cash Equivalents [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 1,704,000	$ 516,000
Allocation (in hundredths)	11.50%	4.70%
Pension Plan [Member] | Cash and Cash Equivalents [Member] | Level I [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 1,704,000	$ 516,000
Pension Plan [Member] | Cash and Cash Equivalents [Member] | Level II [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0	0
Pension Plan [Member] | Cash and Cash Equivalents [Member] | Level III [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 0	0
Pension Plan [Member] | Equity Securities U.S. Companies [Member]
Target Allocations of Assets [Abstract]
Target plan asset allocations range minimum	50.00%
Target plan asset allocations range maximum	70.00%
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 3,821,000	$ 3,761,000
Allocation (in hundredths)	25.80%	34.00%
Pension Plan [Member] | Equity Securities U.S. Companies [Member] | Level I [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 3,821,000	$ 3,761,000
Pension Plan [Member] | Equity Securities U.S. Companies [Member] | Level II [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0	0
Pension Plan [Member] | Equity Securities U.S. Companies [Member] | Level III [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0	0
Pension Plan [Member] | Mutual Funds and ETF's [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 6,085,000	$ 3,960,000
Allocation (in hundredths)	41.30%	35.90%
Pension Plan [Member] | Mutual Funds and ETF's [Member] | Level I [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 6,085,000	$ 3,960,000
Pension Plan [Member] | Mutual Funds and ETF's [Member] | Level II [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0	0
Pension Plan [Member] | Mutual Funds and ETF's [Member] | Level III [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 0	0
Pension Plan [Member] | Corporate Bonds [Member]
Target Allocations of Assets [Abstract]
Target plan asset allocations range minimum	30.00%
Target plan asset allocations range maximum	50.00%
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 3,019,000	$ 2,604,000
Allocation (in hundredths)	20.40%	23.60%
Pension Plan [Member] | Corporate Bonds [Member] | Level I [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 0	$ 0
Pension Plan [Member] | Corporate Bonds [Member] | Level II [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	3,019,000	2,604,000
Pension Plan [Member] | Corporate Bonds [Member] | Level III [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0	0
Pension Plan [Member] | Municipal Bonds [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 107,000
Allocation (in hundredths)	0.70%
Pension Plan [Member] | Municipal Bonds [Member] | Level I [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 0
Pension Plan [Member] | Municipal Bonds [Member] | Level II [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	107,000
Pension Plan [Member] | Municipal Bonds [Member] | Level III [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0
Pension Plan [Member] | U.S. Agency Securities [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 50,000	$ 198,000
Allocation (in hundredths)	0.30%	1.80%
Pension Plan [Member] | U.S. Agency Securities [Member] | Level I [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 0	$ 0
Pension Plan [Member] | U.S. Agency Securities [Member] | Level II [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	50,000	198,000
Pension Plan [Member] | U.S. Agency Securities [Member] | Level III [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	0	0
Pension Plan [Member] | Common Stock [Member]
Plan assets at fair value [Abstract]
Fair value of plan assets	$ 502,000	$ 550,000
Allocation (in hundredths)	3.40%	5.00%
Supplemental Executive Retirement Plans [Member]
Expected future benefit payments [Abstract]
Obligation included in other liabilities	$ 1,339,000	$ 1,198,000
Cost recognized	141,000	$ 152,000	$ 145,000
Continuation of Life Insurance Plan [Member]
Expected future benefit payments [Abstract]
Obligation included in other liabilities	574,000
Cost recognized	0
Salary Continuation Plan [Member]
Expected future benefit payments [Abstract]
Obligation included in other liabilities	710,000
Cost recognized	$ 0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares) | shares	100,000
Number of shares available for grant (in shares) | shares	59,162
Shares [Roll Forward]
Outstanding, beginning of year (in shares) | shares	6,971
Granted (in shares) | shares	4,996
Forfeited (in shares) | shares	(139)
Vested (in shares) | shares	(3,559)
Outstanding, end of year (in shares) | shares	8,269	6,971
Weighted Average Market Price [Roll Forward]
Outstanding, beginning of year (in dollars per share) | $ / shares	$ 48.55
Granted (in dollars per share) | $ / shares	49.02	$ 52.82	$ 48.21
Forfeited (in dollars per share) | $ / shares	51.49
Vested (in dollars per share) | $ / shares	45.76
Outstanding, end of year (in dollars per share) | $ / shares	$ 49.98	$ 48.55
Additional General Disclosures [Abstract]
Share-based compensation expense	$ 172,000	$ 157,000	$ 155,000
Compensation cost related to nonvested awards that has not yet recognized	$ 413,000
Period over which compensation cost is expected to be recognized	3 years

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended								12 Months Ended
	Dec. 31, 2015USD ($)	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)	Mar. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Sep. 30, 2014USD ($)	Jun. 30, 2014USD ($)	Mar. 31, 2014USD ($)	Dec. 31, 2015USD ($)Partnership	Dec. 31, 2014USD ($)Partnership	Dec. 31, 2013USD ($)
Provision for income taxes [Abstract]
Currently payable									$ 2,913,000	$ 3,081,000	$ 3,082,000
Deferred taxes									(192,000)	478,000	670,000
Provision for income taxes	$ 521,000	$ 681,000	$ 779,000	$ 740,000	$ 904,000	$ 913,000	$ 890,000	$ 852,000	2,721,000	3,559,000	3,752,000
Deferred tax assets [Abstract]
Allowance for loan losses	4,238,000				2,317,000				4,238,000	2,317,000
Deferred compensation	772,000				503,000				772,000	503,000
Merger & acquisition costs	20,000				24,000				20,000	24,000
Allowance for losses on available-for-sale securities	436,000				420,000				436,000	420,000
Pensions and other retirement obligation	1,483,000				658,000				1,483,000	658,000
Interest on non-accrual loans	1,001,000				825,000				1,001,000	825,000
Incentive plan accruals	362,000				352,000				362,000	352,000
Other real estate owned expenses	136,000				24,000				136,000	24,000
Low income housing tax credits	63,000				33,000				63,000	33,000
NOL carry forward	950,000				0				950,000	0
AMT Credit Carryforward	152,000				0				152,000	0
Other	157,000				78,000				157,000	78,000
Total	9,770,000				5,234,000				9,770,000	5,234,000
Deferred tax liabilities [Abstract]
Premises and equipment	(919,000)				(306,000)				(919,000)	(306,000)
Investment securities accretion	(177,000)				(302,000)				(177,000)	(302,000)
Loan fees and costs	(154,000)				(166,000)				(154,000)	(166,000)
Goodwill and core deposit intangibles	(3,594,000)				(2,734,000)				(3,594,000)	(2,734,000)
Mortgage servicing rights	(238,000)				(161,000)				(238,000)	(161,000)
Unrealized gains on available-for-sale securities	(1,135,000)				(1,594,000)				(1,135,000)	(1,594,000)
Other	(44,000)				0				(44,000)	0
Total	(6,261,000)				(5,263,000)				(6,261,000)	(5,263,000)
Deferred tax asset, net	3,509,000								3,509,000
Deferred tax liability, net					(29,000)					(29,000)
Valuation allowance	0				0				0	0
Total provision for income taxes reconciliation [Abstract]
Provision at statutory rates on pre-tax income									4,878,000	5,761,000	5,823,000
Effect of tax-exempt income									(1,915,000)	(1,865,000)	(1,752,000)
Low income housing tax credits									(198,000)	(198,000)	(198,000)
Bank owned life insurance									(214,000)	(172,000)	(171,000)
Nondeductible interest									61,000	60,000	70,000
Nondeductible merger and acquisition expenses									102,000	0	0
Other items									7,000	(27,000)	(20,000)
Provision for income taxes	521,000	$ 681,000	$ 779,000	$ 740,000	904,000	$ 913,000	$ 890,000	$ 852,000	$ 2,721,000	$ 3,559,000	$ 3,752,000
Statutory tax rates									34.00%	34.00%	34.00%
Effective tax rates									19.00%	21.00%	21.90%
Minimum percentages of tax position liable to be realized upon ultimate settlement									50.00%
Liability for uncertain tax positions	0				0				$ 0	$ 0
Unrecognized tax benefits	0				0				$ 0	$ 0
Number of investments in Partnerships | Partnership									4	4
Investment amount in partnerships	959,000				$ 1,218,000				$ 959,000	$ 1,218,000
Tax Credit Carryforward [Line Items]
Investment tax credits	$ 1,044,000								1,044,000
Amortization of investments in qualified affordable housing projects									$ 259,000
Investment Tax Credit Carryforward [Member]
Tax Credit Carryforward [Line Items]
Tax credits recognition period									7 years
Tax credits recognized as reduction of tax expense amount									$ 198,000

OTHER COMPREHENSIVE INCOME (Det

OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2015	Dec. 31, 2014
Components of accumulated other comprehensive income (loss), net of tax [Abstract]
Net unrealized gain on securities available for sale					$ 3,339	$ 4,687
Tax effect					(1,135)	(1,594)
Net -of-tax amount					2,204	3,093
Unrecognized pension costs					(3,697)	(3,525)
Tax effect					1,257	1,199
Net -of-tax amount					(2,440)	(2,326)
Total accumulated other comprehensive income (loss)		$ (236)	$ 767	$ (1,225)	(236)	767
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance		767	(1,225)	4,631
Other comprehensive income (loss) before reclassifications (net of tax)		(855)	2,365	(5,735)
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax)		(148)	(373)	(121)
Net current period other comprehensive income (loss)		(1,003)	1,992	(5,856)
Ending Balance		(236)	767	(1,225)
Unrealized Gains (Loss) on Available For Sale Securities [Member]
Components of accumulated other comprehensive income (loss), net of tax [Abstract]
Total accumulated other comprehensive income (loss)	[1]	3,093	3,093	6,754	2,204	3,093
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	[1]	3,093	(108)	6,754
Other comprehensive income (loss) before reclassifications (net of tax)	[1]	(606)	3,608	(6,571)
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax)	[1]	(283)	(407)	(291)
Net current period other comprehensive income (loss)	[1]	(889)	3,201	(6,862)
Ending Balance	[1]	2,204	3,093	(108)
Unrealized Gain (Loss) on Interest Rate Swap [Member]
Components of accumulated other comprehensive income (loss), net of tax [Abstract]
Total accumulated other comprehensive income (loss)	[1]	0	0	0	0	0
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	[1]	0	0	(132)
Other comprehensive income (loss) before reclassifications (net of tax)	[1]	0	0	132
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax)	[1]	0	0	0
Net current period other comprehensive income (loss)	[1]	0	0	132
Ending Balance	[1]	0	0	0
Defined Benefit Pension Items [Member]
Components of accumulated other comprehensive income (loss), net of tax [Abstract]
Total accumulated other comprehensive income (loss)	[1]	(2,326)	(2,326)	(1,991)	$ (2,440)	$ (2,326)
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	[1]	(2,326)	(1,117)	(1,991)
Other comprehensive income (loss) before reclassifications (net of tax)	[1]	(249)	(1,243)	704
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax)	[1]	135	34	170
Net current period other comprehensive income (loss)	[1]	(114)	(1,209)	874
Ending Balance	[1]	$ (2,440)	$ (2,326)	$ (1,117)
[1]	Amounts in parentheses indicate debits.

OTHER COMPREHENSIVE INCOME, REC

OTHER COMPREHENSIVE INCOME, RECLASSIFICATION (Details) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
		Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment securities gains, net		$ (1)	$ 129	$ 175	$ 126	$ 128	$ 242	$ 75	$ 171	$ 429	$ 616	$ 441
Salaries and employee benefits										(12,504)	(11,505)	(11,392)
Provision for income taxes		(521)	(681)	(779)	(740)	(904)	(913)	(890)	(852)	(2,721)	(3,559)	(3,752)
NET INCOME		$ 2,460	$ 2,857	$ 3,189	$ 3,120	$ 3,476	$ 3,368	$ 3,365	$ 3,176	11,626	13,385	13,375
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
NET INCOME	[1]									148	373	121
Unrealized Gains and Losses on Available For Sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment securities gains, net	[1]									429	616	441
Provision for income taxes	[1]									(146)	(209)	(150)
NET INCOME	[1]									283	407	291
Defined Benefit Pension Items [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	[1]									(205)	51	257
Provision for income taxes	[1]									70	(17)	(87)
NET INCOME	[1]									$ (135)	$ 34	$ 170
[1]	Amounts in parentheses indicate debits to profit/loss

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - Officers, Directors, Stockholders and Associates [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Loans to Related Parties [Roll Forward]
Balance, beginning of year	$ 4,314	$ 4,263
New loans	5,828	2,212
Repayments	(4,799)	(2,161)
Balance, end of year	$ 5,343	$ 4,314

REGULATORY MATTERS (Details)

REGULATORY MATTERS (Details)	12 Months Ended
	Dec. 31, 2015USD ($)Category	Dec. 31, 2014USD ($)
Dividend Restrictions [Abstract]
Number of preceding years retained net income used for restrictions on dividend declaration	2 years
Dividends that can be declared without the approval of the Comptroller of the Currency	$ 6,340,000
Loans [Abstract]
Regulatory lending limit	$ 16,235,000
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Number of capital categories | Category	5
Total risk-based capital to average assets to be considered well capitalized, Minimum	10.00%
Tier 1 risk-based capital to average assets ratio to be considered well capitalized, Minimum	8.00%
Tier 1 risk-based common equity to average assets ratio to be considered well capitalized, Minimum	6.50%
Tier 1 leverage capital to average assets to be considered well capitalized, Minimum	5.00%
Bank [Member]
Actual Amount [Abstract]
Total capital (to risk-weighted assets)	$ 108,232,000	$ 97,498,000
Tier 1 capital (to risk-weighted assets)	100,958,000	90,500,000
Common equity tier 1 capital (to risk weighted assets)	100,958,000
Tier 1 capital (to average assets)	$ 100,958,000	$ 90,500,000
Actual Ratio [Abstract]
Total capital (to risk-weighted assets)	15.34%	16.97%
Tier 1 capital (to risk-weighted assets)	14.31%	15.75%
Common equity Tier 1 capital (to risk weighted assets)	14.31%
Tier 1 capital (to average assets)	10.35%	10.00%
For Capital Adequacy Purposes Amount [Abstract]
Total capital (to risk-weighted assets)	$ 56,443,000	$ 45,969,000
Tier 1 capital (to risk-weighted assets)	42,332,000	22,985,000
Common equity Tier 1 capital (to risk weighted assets)	31,749,000
Tier 1 capital (to average assets)	$ 39,006,000	$ 36,218,000
For Capital Adequacy Purposes Ratio [Abstract]
Total capital (to risk-weighted assets)	8.00%	8.00%
Tier 1 capital (to risk-weighted assets)	6.00%	4.00%
Common equity Tier 1 capital (to risk weighted assets)	4.50%
Tier 1 capital (to average assets)	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount [Abstract]
Total capital (to risk-weighted assets)	$ 70,554,000	$ 57,462,000
Tier 1 capital (to risk-weighted assets)	56,443,000	34,477,000
Common equity Tier 1 capital (to risk weighted assets)	45,860,000
Tier 1 capital (to average assets)	$ 48,757,000	$ 45,273,000
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio [Abstract]
Total capital (to risk-weighted assets)	10.00%	10.00%
Tier 1 capital (to risk-weighted assets)	8.00%	6.00%
Common equity Tier 1 capital (to risk weighted assets)	6.50%
Tier 1 capital (to average assets)	5.00%	5.00%
Company [Member]
Actual Amount [Abstract]
Total capital (to risk-weighted assets)	$ 114,886,000	$ 106,891,000
Tier 1 capital (to risk-weighted assets)	107,612,000	99,692,000
Common equity tier 1 capital (to risk weighted assets)	100,112,000
Tier 1 capital (to average assets)	$ 107,612,000	$ 99,692,000
Actual Ratio [Abstract]
Total capital (to risk-weighted assets)	16.23%	18.55%
Tier 1 capital (to risk-weighted assets)	15.20%	17.30%
Common equity Tier 1 capital (to risk weighted assets)	14.14%
Tier 1 capital (to average assets)	11.01%	10.99%
For Capital Adequacy Purposes Amount [Abstract]
Total capital (to risk-weighted assets)	$ 56,630,000	$ 46,105,000
Tier 1 capital (to risk-weighted assets)	42,472,000	23,053,000
Common equity Tier 1 capital (to risk weighted assets)	31,854,000
Tier 1 capital (to average assets)	$ 39,083,000	$ 36,272,000
For Capital Adequacy Purposes Ratio [Abstract]
Total capital (to risk-weighted assets)	8.00%	8.00%
Tier 1 capital (to risk-weighted assets)	6.00%	4.00%
Common equity Tier 1 capital (to risk weighted assets)	4.50%
Tier 1 capital (to average assets)	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount [Abstract]
Total capital (to risk-weighted assets)	$ 70,787,000	$ 57,631,000
Tier 1 capital (to risk-weighted assets)	56,630,000	34,579,000
Common equity Tier 1 capital (to risk weighted assets)	46,012,000
Tier 1 capital (to average assets)	$ 48,854,000	$ 45,341,000
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio [Abstract]
Total capital (to risk-weighted assets)	10.00%	10.00%
Tier 1 capital (to risk-weighted assets)	8.00%	6.00%
Common equity Tier 1 capital (to risk weighted assets)	6.50%
Tier 1 capital (to average assets)	5.00%	5.00%

COMMITMENTS AND CONTINGENT LI67

COMMITMENTS AND CONTINGENT LIABILITIES (Details)	12 Months Ended
	Dec. 31, 2015USD ($)Claim	Dec. 31, 2014USD ($)
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual obligation	$ 156,885,000	$ 119,340,000
Coverage period for instruments	1 year
Non-contractual obligation	$ 12,485,000
Number of claims pending | Claim	0
Commitments to Extend Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual obligation	$ 143,134,000	108,951,000
Standby Letter of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual obligation	$ 13,751,000	$ 10,389,000

OPERATING LEASES (Details)

OPERATING LEASES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Future minimum rental payments under operating leases [Abstract]
2,016	$ 254,000
2,017	188,000
2,018	191,000
2,019	194,000
2,020	81,000
Thereafter	185,000
Total	1,093,000
Total rental expense	$ 175,000	$ 171,000	$ 162,000

FAIR VALUE OF FINANCIAL INSTR69

FAIR VALUE OF FINANCIAL INSTRUMENTS MEASURED ON A RECURRING AND NONRECURRING BASIS (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Fair value assets and liabilities measured on non-recurring basis [Abstract]
Impaired Loans	$ 12,284	$ 8,822
Recurring [Member]
Securities available for sale [Abstract]
U.S. agency securities	199,591	150,885
U.S. treasuries securities	10,082	4,849
Obligations of state and political subdivisions	102,863	105,036
Corporate obligations	14,565	13,958
Mortgage-backed securities in government sponsored entities	30,204	29,728
Equity securities in financial institutions	2,432	1,690
Recurring [Member] | Level I [Member]
Securities available for sale [Abstract]
U.S. agency securities	0	0
U.S. treasuries securities	10,082	4,849
Obligations of state and political subdivisions	0	0
Corporate obligations	0	0
Mortgage-backed securities in government sponsored entities	0	0
Equity securities in financial institutions	2,432	1,690
Recurring [Member] | Level II [Member]
Securities available for sale [Abstract]
U.S. agency securities	199,591	150,885
U.S. treasuries securities	0	0
Obligations of state and political subdivisions	102,863	105,036
Corporate obligations	14,565	13,958
Mortgage-backed securities in government sponsored entities	30,204	29,728
Equity securities in financial institutions	0	0
Recurring [Member] | Level III [Member]
Securities available for sale [Abstract]
U.S. agency securities	0	0
U.S. treasuries securities	0	0
Obligations of state and political subdivisions	0	0
Corporate obligations	0	0
Mortgage-backed securities in government sponsored entities	0	0
Equity securities in financial institutions	0	0
Nonrecurring [Member]
Fair value assets and liabilities measured on non-recurring basis [Abstract]
Impaired Loans	894	846
Other real estate owned	1,197	893
Nonrecurring [Member] | Level I [Member]
Fair value assets and liabilities measured on non-recurring basis [Abstract]
Impaired Loans	0	0
Other real estate owned	0	0
Nonrecurring [Member] | Level II [Member]
Fair value assets and liabilities measured on non-recurring basis [Abstract]
Impaired Loans	0	0
Other real estate owned	0	0
Nonrecurring [Member] | Level III [Member]
Fair value assets and liabilities measured on non-recurring basis [Abstract]
Impaired Loans	894	846
Other real estate owned	$ 1,197	$ 893

FAIR VALUE OF FINANCIAL INSTR70

FAIR VALUE OF FINANCIAL INSTRUMENTS, QUANTITATIVE INFORMATION (Details) - Appraised Collateral Values [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Impaired Loans [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value	$ 894	$ 846
Valuation Technique(s)	Appraised Collateral Values	Appraised Collateral Values
Holding period		12 months
Impaired Loans [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Discount for time since appraisal	0.00%	0.00%
Selling costs	4.00%	4.00%
Holding period	0 months
Impaired Loans [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Discount for time since appraisal	70.00%	20.00%
Selling costs	10.00%	10.00%
Holding period	12 months
Impaired Loans [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Discount for time since appraisal	46.50%	2.00%
Selling costs	7.75%	8.54%
Holding period	10 months	12 months
Other Real Estate Owned [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value	$ 1,197	$ 893
Valuation Technique(s)	Appraised Collateral Values	Appraised Collateral Values
Other Real Estate Owned [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Discount for time since appraisal	0.00%	0.00%
Other Real Estate Owned [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Discount for time since appraisal	75.00%	20.00%
Other Real Estate Owned [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Discount for time since appraisal	25.00%	20.00%

FAIR VALUE OF FINANCIAL INSTR71

FAIR VALUE OF FINANCIAL INSTRUMENTS BY BALANCE SHEET GROUPING (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Financial Assets [Abstract]
Available-for-sale securities	$ 359,737	$ 306,146
Financial Liabilities [Abstract]
Consideration period for recognition of cash and due from banks	90 days
Consideration period for recognition of accrued interest receivable and payable	90 days
Level I [Member]
Financial Assets [Abstract]
Cash and due from banks	$ 24,384	11,423
Interest bearing time deposits with other banks	0	0
Available-for-sale securities	12,514	6,539
Loans held for sale	603	497
Net loans	0	0
Bank owned life insurance	25,535	20,309
Regulatory stock	3,459	2,035
Accrued interest receivable	4,211	3,644
Financial Liabilities [Abstract]
Deposits	706,121	525,166
Borrowed funds	1,598	16,593
Accrued interest payable	734	756
Level II [Member]
Financial Assets [Abstract]
Cash and due from banks	0	0
Interest bearing time deposits with other banks	0	0
Available-for-sale securities	347,223	299,607
Net loans	0	0
Bank owned life insurance	0	0
Regulatory stock	0	0
Accrued interest receivable	0	0
Financial Liabilities [Abstract]
Deposits	0	0
Borrowed funds	0	0
Accrued interest payable	0	0
Level III [Member]
Financial Assets [Abstract]
Cash and due from banks	0	0
Interest bearing time deposits with other banks	7,705	5,969
Available-for-sale securities	0	0
Net loans	712,524	564,944
Bank owned life insurance	0	0
Regulatory stock	0	0
Accrued interest receivable	0	0
Financial Liabilities [Abstract]
Deposits	281,421	249,221
Borrowed funds	37,265	21,626
Accrued interest payable	0	0
Carrying Amount [Member]
Financial Assets [Abstract]
Cash and due from banks	24,384	11,423
Interest bearing time deposits with other banks	7,696	5,960
Available-for-sale securities	359,737	306,146
Loans held for sale	603	497
Net loans	687,925	547,290
Bank owned life insurance	25,535	20,309
Regulatory stock	3,459	2,035
Accrued interest receivable	4,211	3,644
Financial Liabilities [Abstract]
Deposits	988,031	773,933
Borrowed funds	41,631	41,799
Accrued interest payable	734	756
Fair Value [Member]
Financial Assets [Abstract]
Cash and due from banks	24,384	11,423
Interest bearing time deposits with other banks	7,705	5,969
Available-for-sale securities	359,737	306,146
Loans held for sale	603	497
Net loans	712,524	564,944
Bank owned life insurance	25,535	20,309
Regulatory stock	3,459	2,035
Accrued interest receivable	4,211	3,644
Financial Liabilities [Abstract]
Deposits	987,542	774,387
Borrowed funds	38,863	38,219
Accrued interest payable	$ 734	$ 756

CONDENSED FINANCIAL INFORMATI72

CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Assets [Abstract]
Cash	$ 14,088				$ 10,091				$ 14,088	$ 10,091
Available-for-sale securities	359,737				306,146				359,737	306,146
Investments in subsidiary [Abstract]
Other assets	12,104				6,693				12,104	6,693
TOTAL ASSETS	1,162,984				925,048				1,162,984	925,048
Liabilities [Abstract]
Other liabilities	12,828				8,032				12,828	8,032
Borrowed funds	41,631				41,799				41,631	41,799	$ 66,932
TOTAL LIABILITIES	1,043,224				824,520				1,043,224	824,520
Stockholders' equity	119,760				100,528				119,760	100,528	92,056	$ 89,475
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,162,984				925,048				1,162,984	925,048
Dividends from [Abstract]
TOTAL INTEREST AND DIVIDEND INCOME	9,251	$ 8,863	$ 8,768	$ 8,771	8,813	$ 8,808	$ 8,889	$ 8,781	35,653	35,291	36,234
Realized securities gains	(1)	129	175	126	128	242	75	171	429	616	441
Expenses									4,900	4,508	4,538
NET INCOME	2,460	2,857	3,189	3,120	3,476	3,368	3,365	3,176	11,626	13,385	13,375
Comprehensive income									10,623	15,377	7,519
Cash flows from operating activities [Abstract]
Net income	2,460	2,857	3,189	3,120	3,476	3,368	3,365	3,176	11,626	13,385	13,375
Adjustments to reconcile net income to net cash provided by operating activities [Abstract]
Investment securities gains, net	1	$ (129)	$ (175)	$ (126)	(128)	$ (242)	$ (75)	$ (171)	(429)	(616)	(441)
Other, net									(319)	322	217
Net cash provided by operating activities									12,811	16,178	17,817
Cash flows from investing activities [Abstract]
Purchases of available-for-sale securities									(111,304)	(56,257)	(123,488)
Proceeds from the sale of available-for-sale securities									30,464	28,989	25,461
Net cash provided by (used in) investing activities									19,063	(8,217)	(60,937)
Cash flows from financing activities [Abstract]
Cash dividends paid									(5,151)	(6,121)	(3,558)
Purchase of treasury stock									(2,455)	(814)	(1,483)
Purchase of restricted stock									(7)	(170)	(115)
Net cash (used in) provided by financing activities									(18,913)	(6,621)	26,870
Net increase (decrease) in cash and cash equivalents									12,961	1,340	(16,250)
Cash at beginning of year	24,384				11,423				24,384	11,423	10,083	26,333
Cash at end of year	24,384				11,423				24,384	11,423	10,083	26,333
Company [Member]
Assets [Abstract]
Cash	4,593				7,911				4,593	7,911
Available-for-sale securities	2,332				1,556				2,332	1,556
Investments in subsidiary [Abstract]
First Citizens Community Bank	120,370				98,542				120,370	98,542
Other assets	557				511				557	511
TOTAL ASSETS	127,852				108,520				127,852	108,520
Liabilities [Abstract]
Other liabilities	592				492				592	492
Borrowed funds	7,500				7,500				7,500	7,500
TOTAL LIABILITIES	8,092				7,992				8,092	7,992
Stockholders' equity	119,760				100,528				119,760	100,528
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	127,852				108,520				127,852	108,520
Dividends from [Abstract]
Bank subsidiary									5,582	14,332	4,142
Available-for-sale securities									71	56	51
TOTAL INTEREST AND DIVIDEND INCOME									5,653	14,388	4,193
Realized securities gains									76	0	183
Expenses									892	555	638
Income before equity in undistributed earnings of subsidiary									4,837	13,833	3,738
Equity in undistributed earnings - First Citizens Community Bank									6,789	(448)	9,637
NET INCOME									11,626	13,385	13,375
Comprehensive income									10,623	15,377	7,519
Cash flows from operating activities [Abstract]
Net income									11,626	13,385	13,375
Adjustments to reconcile net income to net cash provided by operating activities [Abstract]
Equity in undistributed earnings of subsidiaries									(6,789)	448	(9,637)
Investment securities gains, net									(76)	0	(183)
Other, net									322	174	309
Net cash provided by operating activities									5,083	14,007	3,864
Cash flows from investing activities [Abstract]
Purchases of available-for-sale securities									(901)	(602)	(1)
Proceeds from the sale of available-for-sale securities									113	0	538
Net cash provided by (used in) investing activities									(788)	(602)	537
Cash flows from financing activities [Abstract]
Cash dividends paid									(5,151)	(6,121)	(3,558)
Purchase of treasury stock									(2,455)	(814)	(1,483)
Purchase of restricted stock									(7)	(170)	(115)
Net cash (used in) provided by financing activities									(7,613)	(7,105)	(5,156)
Net increase (decrease) in cash and cash equivalents									(3,318)	6,300	(755)
Cash at beginning of year	4,593				7,911				4,593	7,911	1,611	2,366
Cash at end of year	$ 4,593				$ 7,911				$ 4,593	$ 7,911	$ 1,611	$ 2,366

CONSOLIDATED CONDENSED QUARTE73

CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) [Abstract]
Interest income	$ 9,251	$ 8,863	$ 8,768	$ 8,771	$ 8,813	$ 8,808	$ 8,889	$ 8,781	$ 35,653	$ 35,291	$ 36,234
Interest expense	1,211	1,218	1,207	1,184	1,211	1,234	1,239	1,269	4,820	4,953	6,315
NET INTEREST INCOME	8,040	7,645	7,561	7,587	7,602	7,574	7,650	7,512	30,833	30,338	29,919
Provision for loan losses	120	120	120	120	105	150	150	180	480	585	405
Non-interest income	1,876	1,736	1,780	1,602	1,762	1,682	1,680	1,616	7,423	7,356	7,423
Investment securities gains (losses), net	(1)	129	175	126	128	242	75	171	429	616	441
Non-interest expenses	6,814	5,852	5,428	5,335	5,007	5,067	5,000	5,091	23,429	20,165	19,810
Income before provision for income taxes	2,981	3,538	3,968	3,860	4,380	4,281	4,255	4,028	14,347	16,944	17,127
Provision for income taxes	521	681	779	740	904	913	890	852	2,721	3,559	3,752
NET INCOME	$ 2,460	$ 2,857	$ 3,189	$ 3,120	$ 3,476	$ 3,368	$ 3,365	$ 3,176	$ 11,626	$ 13,385	$ 13,375
Earnings Per Share Basic (in dollars per share)	$ 0.80	$ 0.95	$ 1.06	$ 1.03	$ 1.14	$ 1.11	$ 1.11	$ 1.05	$ 3.84	$ 4.41	$ 4.38
Earnings Per Share Diluted (in dollars per share)	$ 0.79	$ 0.95	$ 1.06	$ 1.03	$ 1.14	$ 1.11	$ 1.11	$ 1.04	$ 3.83	$ 4.40	$ 4.38

ACQUISITION OF FNB (Details)

ACQUISITION OF FNB (Details) $ / shares in Units, shares in Thousands		Dec. 11, 2015USD ($)$ / sharesshares	Dec. 31, 2015USD ($)	Dec. 31, 2015USD ($)	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)Branches$ / shares	Mar. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Sep. 30, 2014USD ($)	Jun. 30, 2014USD ($)	Mar. 31, 2014USD ($)	Dec. 31, 2015USD ($)$ / shares	Dec. 31, 2014USD ($)$ / shares	Dec. 31, 2013USD ($)
Adjustments to reflect liabilities acquired at fair value: [Abstract]
Goodwill resulting from merger			$ 21,089,000	$ 21,089,000				$ 10,256,000				$ 21,089,000	$ 10,256,000
Finite-Lived Intangible Assets, Gross	[1]		3,102,000	3,102,000				1,023,000				3,102,000	1,023,000
Finite-Lived Intangible Assets, Accumulated Amortization	[1]		(665,000)	(665,000)				(550,000)				(665,000)	(550,000)
Merger and acquisition												1,103,000	237,000	$ 55,000
Assets (liabilities) acquired [Abstract]
Goodwill resulting from the FNB merger			21,089,000	21,089,000				10,256,000				21,089,000	10,256,000
Estimated future amortization expense core deposit intangible and MSR [Abstract]
2,016			500,000	500,000								500,000
2,017			439,000	439,000								439,000
2,018			380,000	380,000								380,000
2,019			324,000	324,000								324,000
2,020			243,000	243,000								243,000
Total	[1]		2,437,000	2,437,000				473,000				2,437,000	473,000
Integration costs and amortization of fair value
Net interest income				8,040,000	$ 7,645,000	$ 7,561,000	$ 7,587,000	7,602,000	$ 7,574,000	$ 7,650,000	$ 7,512,000	30,833,000	30,338,000	29,919,000
Non-interest income				1,876,000	1,736,000	1,780,000	1,602,000	1,762,000	1,682,000	1,680,000	1,616,000	7,423,000	7,356,000	7,423,000
Net income				2,460,000	$ 2,857,000	$ 3,189,000	$ 3,120,000	3,476,000	$ 3,368,000	$ 3,365,000	$ 3,176,000	11,626,000	13,385,000	$ 13,375,000
Core Deposits [Member]
Adjustments to reflect liabilities acquired at fair value: [Abstract]
Finite-Lived Intangible Assets, Gross	[1]		1,641,000	1,641,000				0				1,641,000	0
Finite-Lived Intangible Assets, Accumulated Amortization	[1]		(25,000)	(25,000)				0				(25,000)	0
Estimated future amortization expense core deposit intangible and MSR [Abstract]
2,016			296,000	296,000								296,000
2,017			266,000	266,000								266,000
2,018			236,000	236,000								236,000
2,019			206,000	206,000								206,000
2,020			177,000	177,000								177,000
Total	[1]		1,616,000	1,616,000				0				1,616,000	0
Covenant not to Compete [Member]
Adjustments to reflect liabilities acquired at fair value: [Abstract]
Finite-Lived Intangible Assets, Gross	[1]		125,000	125,000				0				125,000	0
Finite-Lived Intangible Assets, Accumulated Amortization	[1]		(2,000)	(2,000)				0				(2,000)	0
Estimated future amortization expense core deposit intangible and MSR [Abstract]
2,016			31,000	31,000								31,000
2,017			31,000	31,000								31,000
2,018			31,000	31,000								31,000
2,019			30,000	30,000								30,000
2,020			0	0								0
Total	[1]		123,000	123,000				$ 0				123,000	0
First National Bank of Fredericksburg [Member]
Summarizes the purchase of FNB [Abstract]
Merger agreement per share in cash and stock (in dollars per share) | $ / shares						$ 630
Ownership percentage						100.00%
Business acquisition credit impaired loans purchased		$ 3,809,000
Purchase Price Consideration - Cash for Common Stock [Abstract]
Purchase price assigned to The First National Bank of Fredericksburg common shares exchanged for cash		5,619,000
Total Purchase Price		21,603,000
Net Assets Acquired [Abstract]
The First National Bank of Fredericksburg shareholders' equity		12,298,000
Loans [Abstract]
Interest rate		31,000
General credit		(1,362,000)
Specific credit - non-amortizing		(2,495,000)
Specific credit - amortizing		(665,000)
Core deposit intangible		1,641,000
Covenant not to compete		125,000
Premises and equipment		1,203,000
Leased premises contracts		(359,000)
Other assets		(358,000)
Deferred tax assets		785,000
Adjustments to reflect liabilities acquired at fair value: [Abstract]
Time deposits		(74,000)
Acquired and liabilities assumed, net		10,770,000
Goodwill resulting from merger		10,833,000
Goodwill and other intangibles		12,814,000
Merger and acquisition												1,103,000
Asset acquired and liability assumed [Abstract]
Total Purchase Price		21,603,000
Assets (liabilities) acquired [Abstract]
Cash and cash equivalents		83,514,000
Interest bearing time deposits with other banks		1,236,000
Securities available for sale		23,831,000
Loans		115,211,000
Premises and equipment, net		4,743,000
Accrued interest receivable		282,000
Bank-owned life insurance		4,598,000
Intangibles		1,981,000
Deferred tax asset		2,979,000
Other assets		2,332,000
Time deposits		(42,675,000)
Deposits other than time deposits		(182,555,000)
Accrued interest payable		(14,000)
Other liabilities		(4,693,000)
Acquired and liabilities assumed, net		10,770,000
Goodwill resulting from the FNB merger		$ 10,833,000
Estimated future amortization expense core deposit intangible and MSR [Abstract]
2,015			27,000	27,000								27,000
2,016			366,000	366,000								366,000
2,017			332,000	332,000								332,000
2,018			298,000	298,000								298,000
2,019			264,000	264,000								264,000
2,020			200,000	200,000								200,000
Thereafter			494,000	494,000								494,000
Total			1,981,000	1,981,000								1,981,000
Integration costs and amortization of fair value
Net interest income			401,000
Non-interest income			21,000
Net income			(22,000)
Proforma net interest income												37,736,000	37,634,000
Proforma non-interest income												8,576,000	8,184,000
Proforma net income												$ 8,640,000	$ 14,019,000
Pro forma earnings per share [Abstract]
Basic (in dollars per share) | $ / shares												$ 2.57	$ 4.15
Diluted (in dollars per share) | $ / shares												$ 2.57	$ 4.15
First National Bank of Fredericksburg [Member] | Core Deposits [Member]
Adjustments to reflect liabilities acquired at fair value: [Abstract]
Finite-Lived Intangible Assets, Gross			1,641,000	1,641,000								$ 1,641,000
Finite-Lived Intangible Assets, Accumulated Amortization			25,000	25,000								25,000
First National Bank of Fredericksburg [Member] | Covenant not to Compete [Member]
Adjustments to reflect liabilities acquired at fair value: [Abstract]
Finite-Lived Intangible Assets, Gross			125,000	125,000								125,000
Finite-Lived Intangible Assets, Accumulated Amortization			2,000	2,000								2,000
First National Bank of Fredericksburg [Member] | MSR [Member]
Adjustments to reflect liabilities acquired at fair value: [Abstract]
Finite-Lived Intangible Assets, Gross			215,000	215,000								215,000
Finite-Lived Intangible Assets, Accumulated Amortization			$ 0	$ 0								$ 0
First National Bank of Fredericksburg [Member] | Lebanon County [Member]
Summarizes the purchase of FNB [Abstract]
Number of Branches | Branches						4
First National Bank of Fredericksburg [Member] | Schuylkill County [Member]
Summarizes the purchase of FNB [Abstract]
Number of Branches | Branches						2
First National Bank of Fredericksburg [Member] | Berks County [Member]
Summarizes the purchase of FNB [Abstract]
Number of Branches | Branches						1
First National Bank of Fredericksburg [Member] | Common Stock [Member]
Purchase Price Consideration in Common Stock [Abstract]
Citizens Financial Services, Inc. shares issued | shares		336,515
Value assigned to Citizens Financial Services, Inc. common share (in dollars per share) | $ / shares		$ 47.5
Purchase price assigned to FNB common shares exchanged for Citizens Financial Services, Inc.		$ 15,984,000
[1]	Excludes fully amortized intangible assets