Kentucky Bancshares (KTYB) 10-Q 13 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Document and Entity Information
Entity Registrant Name	KENTUCKY BANCSHARES INC /KY/
Entity Central Index Key	1,000,232
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		2,988,205
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS(una

CONSOLIDATED BALANCE SHEETS(unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 16,143	$ 16,771
Federal funds sold	205	398
Cash and cash equivalents	16,348	17,169
Interest bearing time deposits	1,280	1,280
Securities available for sale	237,476	246,861
Trading Assets	5,400	5,370
Mortgage loans held for sale	1,719	776
Loans	546,085	538,305
Allowance for loan losses	(5,950)	(6,012)
Net loans	540,135	532,293
Federal Home Loan Bank stock	5,981	5,981
Real estate owned, net	3,595	4,603
Bank premises and equipment, net	16,270	16,479
Interest receivable	3,661	3,299
Mortgage servicing rights	1,261	1,209
Goodwill	13,117	13,117
Other intangible assets	116	177
Other assets	6,595	6,595
Total assets	852,954	855,209
Deposits
Non-interest bearing	179,909	176,743
Time deposits, $250,000 and over	55,229	52,913
Other interest bearing	408,878	425,213
Total deposits	644,016	654,869
Repurchase agreements and other borrowings	13,690	12,457
Federal funds purchased	2,456
Short-term Federal Home Loan Bank advances	15,000	10,000
Long-term Federal Home Loan Bank advances	85,417	83,785
Subordinated debentures	7,217	7,217
Interest payable	658	642
Other liabilities	5,503	8,297
Total liabilities	$ 773,957	$ 777,267
Stockholders' equity
Preferred stock, 300,000 shares authorized and unissued
Common stock, no par value; 10,000,000 shares authorized; 2,725,631 and 2,720,098 shares issued and outstanding on June 30, 2015 and December 31, 2014	$ 12,728	$ 12,662
Retained earnings	66,701	64,489
Accumulated other comprehensive income (loss)	(432)	791
Total stockholders' equity	78,997	77,942
Total liabilities and stockholders' equity	$ 852,954	$ 855,209

CONSOLIDATED BALANCE SHEETS(un3

CONSOLIDATED BALANCE SHEETS(unaudited) (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS(unaudited)
Preferred stock, shares authorized	300,000	300,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	2,725,631	2,720,098
Common stock, shares outstanding	2,725,631	2,720,098

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
INTEREST INCOME:
Loans, including fees	$ 6,346	$ 5,896	$ 12,555	$ 11,657
Securities
Taxable	692	680	1,425	1,355
Tax exempt	690	718	1,366	1,451
Trading Assets	39	43	83	80
Other	68	69	137	145
Total interest income	7,835	7,406	15,566	14,688
INTEREST EXPENSE:
Deposits	493	535	979	1,074
Repurchase agreements and other borrowings	24	25	47	48
Federal Home Loan Bank advances	397	309	799	623
Subordinated debentures	58	58	115	115
Total interest expense	972	927	1,940	1,860
Net interest income	6,863	6,479	13,626	12,828
Provision for loan losses	350	100	650	200
Net interest income after provision	6,513	6,379	12,976	12,628
NON-INTEREST INCOME:
Service charges	1,091	1,062	1,995	2,073
Loan service fee income, net	55	5	108	34
Trust department income	259	239	536	461
Gain on sale of available for sale securities, net	243	245	251	433
Gain (loss) on trading assets	(48)	91	(53)	162
Gain on sale of mortgage loans	441	241	768	398
Brokerage income	136	210	242	290
Debit card interchange income	623	530	1,164	1,009
Other	822	45	881	77
Total other income	3,622	2,668	5,892	4,937
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,150	3,661	7,944	7,263
Occupancy expenses	854	830	1,786	1,678
Repossession expenses, net	237	25	282	23
FDIC Insurance	145	140	301	268
Legal and professional fees	293	322	578	458
Data processing	386	331	753	668
Debit card expenses	293	262	549	496
Amortization	30	37	61	74
Advertising and marketing	212	232	425	441
Taxes other than payroll, property and income	229	197	459	422
Telephone	77	87	145	176
Postage	90	85	171	157
Loan fees	104	83	197	160
Other	608	483	1,274	945
Total other expenses	7,708	6,775	14,925	13,229
Income before taxes	2,427	2,272	3,943	4,336
Income taxes	305	368	306	661
Net income	2,122	1,904	3,637	3,675
Other Comprehensive Income (Loss), net of tax:
Change in Unrealized Gains on Securities	(2,160)	1,730	(1,223)	4,981
Comprehensive Income (Loss)	$ (38)	$ 3,634	$ 2,414	$ 8,656
Earnings per share
Basic (in dollars per share)	$ 0.77	$ 0.70	$ 1.33	$ 1.36
Diluted (in dollars per share)	0.77	0.70	1.33	1.36
Dividends per share (in dollars per share)	$ 0.26	$ 0.25	$ 0.52	$ 0.50

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands	Common Stock Including Additional Paid in Capital	Retained Earnings	Accumulated Other Comprehensive Income/(Loss)	Total
Balances at Dec. 31, 2014	$ 12,662	$ 64,489	$ 791	$ 77,942
Balances (in shares) at Dec. 31, 2014	2,720,098
Increase (Decrease) in Stockholders' Equity
Common stock issued, net of forfeitures	$ 2			2
Common stock issued, net of forfeitures (in shares)	5,872
Stock based compensation expense	$ 66			66
Common stock purchased and retired	$ (2)	(8)		(10)
Common stock purchased and retired (in shares)	(339)
Net change in unrealized gain (loss) on securities available for sale, net of tax and reclassifications			(1,223)	(1,223)
Net income		3,637		3,637
Dividends declared - $0.52 per share		(1,417)		(1,417)
Balances at Jun. 30, 2015	$ 12,728	$ 66,701	$ (432)	$ 78,997
Balances (in shares) at Jun. 30, 2015	2,725,631

CONSOLIDATED STATEMENT OF CHAN6

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)
Dividends per share (in dollars per share)	$ 0.26	$ 0.25	$ 0.52	$ 0.50

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows From Operating Activities
Net Income	$ 3,637	$ 3,675
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	843	904
Securities amortization (accretion), net	494	303
Stock based compensation expense	66	55
Provision for loan losses	650	200
Securities available for sale gains, net	(251)	(433)
Net change in trading assets	(30)	(5,242)
Originations of loans held for sale	(24,562)	(13,757)
Proceeds from sale of loans	24,387	13,883
Losses (gain) on other real estate	59	(70)
Gain on sale of mortgage loans	(768)	(398)
Write-downs of other real estate, net	227	10
Changes in:
Interest receivable	(362)	364
Other assets	(469)	1,369
Interest payable	16	(57)
Other liabilities	(2,165)	(1,707)
Net cash from operating activities	1,772	(901)
Cash Flows From Investing Activities
Purchases of securities available for sale	(20,074)	(34,977)
Proceeds from sales of securities	9,051	40,030
Proceeds from principal payments, sales, maturities and calls of securities	18,313	8,853
Net change in loans	(11,543)	(27,925)
Proceeds from redemption of Federal Home Loan Bank stock		750
Purchases of bank premises and equipment	(440)	(705)
Proceeds from the sale of other real estate	4,057	1,551
Net cash from investing activities	(636)	(12,423)
Cash Flows From Financing Activities:
Net change in deposits	(10,853)	(19,991)
Net change in repurchase agreements and other borrowings	3,689	3,079
short-term advances from Federal Home Loan Bank	15,000	105,000
payment on short-term Federal Home Loan Bank advances	(10,000)	(85,000)
Long-term advances from Federal Home Loan Bank	4,682	6,538
Payments on long-term Federal Home Loan Bank advances	(3,050)	(2,971)
Proceeds from issuance of common stock	2
Purchase of common stock	(10)	(91)
Dividends paid	(1,417)	(1,361)
Net cash from financing activities	(1,957)	5,203
Net change in cash and cash equivalents	(821)	(8,121)
Cash and cash equivalents at beginning of period	17,169	23,160
Cash and cash equivalents at end of period	16,348	15,039
Cash paid during the year for:
Interest expense	1,924	1,917
Income taxes		700
Supplemental disclosures of non-cash investing activities
Real estate acquired through foreclosure	$ 3,334	$ 419

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial information presented as of any date other than December 31 has been prepared from the Company’s books and records without audit. The accompanying consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, but is not required for interim reporting purposes, has been condensed or omitted. There have been no significant changes to the Company’s accounting and reporting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of such financial statements, have been included. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Basis of Presentation : The consolidated financial statements include the accounts of Kentucky Bancshares, Inc. (the “Company”, “we”, “our” or “us”), its wholly-owned subsidiaries, Kentucky Bank (the “Bank”) and KBI Insurance Company, Inc., and the Bank’s wholly-owned subsidiary, KB Special Assets Unit, LLC. Intercompany transactions and balances have been eliminated in consolidation. Nature of Operations : The Bank operates under a state bank charter and provides full banking services, including trust services, to customers located in Bourbon, Clark, Elliott, Fayette, Harrison, Jessamine, Madison, Rowan, Scott, Woodford and adjoining counties in Kentucky. Management continues to consider opportunities for branch expansion and will also consider acquisition opportunities that help advance its strategic objectives. As a state bank, the Bank is subject to regulation by the Kentucky Department of Financial Institutions and the Federal Deposit Insurance Corporation (“FDIC”). The Company, a bank holding company, is regulated by the Federal Reserve. On July 9, 2014, a new subsidiary of the Company was incorporated under the name KBI Insurance Company, Inc. KBI Insurance Company, Inc. is a subsidiary of Kentucky Bancshares, Inc. and is located in Las Vegas, Nevada. It is a captive insurance subsidiary which provides various liability and property damage insurance policies for Kentucky Bancshares, Inc. and its related subsidiaries. KBI Insurance Company, Inc. is regulated by the State of Nevada Division of Insurance. Our transfer, registrar and dividend agent, Registrar and Transfer Company, was recently acquired by Computershare. The migration to Computershare occurred October 31, 2014. Estimates in the Financial Statements : The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the financial statements. Trading Assets : The Company engages in trading activities for its own account. Securities that are held principally for resale in the near term are recorded at fair value with changes in fair value included in earnings. Interest and dividends are included in net interest income. Loss Contingencies : Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Reclassifications : Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior period net income or stockholders’ equity. Adoption of New Accounting Standards In January 2014, FASB issued Accounting Standards Update 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force) . The ASU clarifies when an insubstance repossession or foreclosure occurs and a creditor is considered to have received physical possession of real estate property collateralizing a consumer mortgage loan. Specifically, the new ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. Additional disclosures are required detailing the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgages collateralized by real estate property that are in the process of foreclosure. The new guidance is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements, but will result in additional disclosures. In May 2014, FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) . The ASU creates a new topic, Topic 606, to provide guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2016. Early adoption is not permitted. Management is currently evaluating the impact of the adoption of this guidance on the Company’s financial statements. However, in April 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year making the amendments effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Companies have the option to apply ASU 2014-09 as of the original effective date. In June 2014, FASB issued Accounting Standards Update 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The amendments in this update require two accounting changes. First, the amendments in this update change the accounting for repurchase-to-maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the amendments require separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counter-party, which will result in secured borrowing accounting for the repurchase agreement. This update also requires certain disclosures for these types of transactions. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-11 did not have a material impact on the Company’s financial statements.

SECURITIES

SECURITIES	6 Months Ended
	Jun. 30, 2015
SECURITIES
SECURITIES	2. SECURITIES SECURITIES AVAILABLE FOR SALE Period-end securities are as follows: (in thousands) Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Available for Sale June 30, 2015 U.S. government agencies $ $ $ ) $ States and political subdivisions ) Mortgage-backed - residential ) Equity securities — Total $ $ $ ) $ December 31, 2014 U.S. government agencies $ $ $ ) $ States and political subdivisions ) Mortgage-backed - residential ) Equity securities — Total $ $ $ ) $ The amortized cost and fair value of securities at June 30, 2015 by contractual maturity are shown below. 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. Securities not due at a single maturity are shown separately. Further discussion concerning Fair Value Measurements can be found in Note 8. (in thousands) Amortized Fair Cost Value Due in one year or less $ $ Due after one year through five years Due after five years through ten years Due after ten years Mortgage-backed - residential Equity Total $ $ Proceeds from sales of securities during the first six months of 2015 and 2014 were $9.1 million and $40.0 million. Gross gains of $251 thousand and $785 thousand and gross losses of $0 and $352 thousand were realized on those sales, respectively. The tax provision related to these realized net gains was $85 and $147 thousand, respectively. Proceeds from sales of securities during the three months ending June 30, 2015 and June 30, 2014 were $9.1 million and $23.5 million. Gross gains of $243 thousand and $477 thousand and gross losses of $0 and $232 were realized on those sales, respectively. The tax provision related to these realized gains and losses was $83 thousand for both periods, respectively. Securities with unrealized losses June 30, 2015 and at December 31, 2014 not recognized in income are as follows: June 30, 2015 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Description of Securities Value Loss Value Loss Value Loss U.S. Government agencies $ $ ) $ $ ) $ $ ) States and municipals ) ) ) Mortgage-backed - residential ) ) ) Total temporarily impaired $ $ ) $ $ ) $ $ ) December 31, 2014 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Description of Securities Value Loss Value Loss Value Loss U.S. Government agencies $ $ ) $ $ ) $ $ ) States and municipals ) ) ) Mortgage-backed - residential ) ) ) Total temporarily impaired $ $ ) $ $ ) $ $ ) The Company evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. In analyzing an issuer’s financial condition, we may consider many factors including, (1) whether the securities are issued by the federal government or its agencies, (2) whether downgrades by bond rating agencies have occurred, (3) the results of reviews of the issuer’s financial condition and near-term prospects, (4) the length of time and the extent to which the fair value has been less than cost, and (5) whether we intend to sell the investment security or more likely than not will be required to sell the investment security before its anticipated recovery. Unrealized losses on securities included in the tables above have not been recognized into income because (1) all rated securities are investment grade and are of high credit quality, (2) management does not intend to sell and it is more likely than not that management would not be required to sell the securities prior to their anticipated recovery, (3) management believes the decline in fair value is largely due to changes in interest rates and (4) management believes the declines in fair value are temporary. The Company believes the fair value is expected to recover as the securities approach maturity. TRADING ASSETS The trading assets of $5.4 million are primarily comprised of municipal securities which are held for a minimal period of time.

LOANS

LOANS	6 Months Ended
	Jun. 30, 2015
LOANS
LOANS	3. LOANS Loans at period-end are as follows: (in thousands) 6/30/15 12/31/14 Commercial $ $ Real estate construction Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer Other Total $ $ Activity in the allowance for loan losses for the six month and three month periods indicated was as follows: Six Months Ended June 30, 2015 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ $ — $ $ Real estate Construction — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential — — Agricultural ) Consumer Other Unallocated — — $ $ $ $ $ Three Months Ended June 30, 2015 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ — $ — $ $ Real estate Construction — — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential — — Agricultural — ) Consumer Other Unallocated — — $ $ $ $ $ Six Months Ended June 30, 2014 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ $ — $ $ Real estate Construction — ) Real estate mortgage: 1-4 family residential Multi-family residential — — ) Non-farm & non-residential — ) Agricultural — ) Consumer Other Unallocated — — $ $ $ $ $ Three Months Ended June 30, 2014 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ — $ — $ $ Real estate Construction — Real estate mortgage: 1-4 family residential Multi-family residential — — ) Non-farm & non-residential — — ) Agricultural — ) Consumer Other Unallocated — — ) $ $ $ $ $ The following tables present the balance in the allowance for loan losses and the recorded investment (excluding accrued interest receivable amounting to $2.4 million as of June 30, 2015 and $2.0 million at December 31, 2014) in loans by portfolio segment and based on impairment method as of June 30, 2015 and December 31, 2014: As of June 30, 2015 (in thousands) Individually Collectively Evaluated for Evaluated for Impairment Impairment Total Allowance for Loan Losses: Commercial $ — $ $ Real estate construction — Real estate mortgage 1-4 family residential Multi-family residential — Non-farm & non-residential Agricultural Consumer — Other — Unallocated — $ $ $ Loans: Commercial $ — $ $ Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — Non-farm & non-residential Agricultural Consumer — Other — $ $ $ As of December 31, 2014 (in thousands) Individually Collectively Evaluated for Evaluated for Impairment Impairment Total Allowance for Loan Losses: Commercial $ — $ $ Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer — Other — Unallocated — $ $ $ Loans: Commercial $ — $ $ Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer — Other — $ $ $ The following table presents loans individually evaluated for impairment by class of loans as of and for the six months ended June 30, 2015 (in thousands): Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential — Agricultural — With an allowance recorded: Real estate mortgage: 1-4 family residential Non-farm & non-residential Multi-family residential — — — — — Agricultural — — Consumer — — — — — — Other — — — — — Total $ $ $ $ $ $ The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. The following table presents loans individually evaluated for impairment by class of loans for the six months ended June 30, 2014 (in thousands): Year to Date Year to Date Average Interest Cash Basis Recorded Income Interest Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential — — Non-farm & non-residential — Agricultural With an allowance recorded: Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Total $ $ $ The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. The following table presents loans individually evaluated for impairment by class of loans as of and for the year ended December 31, 2014 (in thousands): Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential $ $ $ — $ $ $ Non-farm & non-residential — — — — — Agricultural — With an allowance recorded: Real estate mortgage 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Total $ $ $ $ $ $ The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. The following tables present loans individually evaluated for impairment by class of loans for the three months ending June 30, 2015 and June 30, 2014 (in thousands): Three Months Ending June 30, 2015 Average Interest Cash Basis Recorded Income Interest Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential $ $ $ Agricultural With an allowance recorded: Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential Agricultural — — Consumer — — — Other — — — Total $ $ $ The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. Three Months Ending June 30, 2014 Average Interest Cash Basis Recorded Income Interest Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential $ $ — $ — Agricultural With an allowance recorded: Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Total $ $ $ The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. The following tables present the recorded investment in nonaccrual, loans past due over 90 days still on accrual and accruing troubled debt restructurings by class of loans as of June 30, 2015 and December 31, 2014: As of June 30, 2015 (in thousands) Loans Past Due Over 90 Days Accruing Still Troubled Debt Nonaccrual Accruing Restructurings Real estate construction $ $ — $ — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Consumer — Total $ $ $ As of December 31, 2014 (in thousands) Loans Past Due Over 90 Days Accruing Still Troubled Debt Nonaccrual Accruing Restructurings Commercial $ $ — $ — Real estate construction — — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Consumer — Total $ $ $ Nonaccrual loans secured by real estate make up 98.9% of the total nonaccruals at June 30, 2015. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. A loan is considered impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. All amounts due according to the contractual terms means that both the contractual interest payments and the contractual principal payments of a loan will be collected as scheduled in the loan agreement. Nonaccrual loans are loans for which payments in full of principal or interest is not expected or which principal or interest has been in default for a period of 90 days or more unless the asset is both well secured and in the process of collection. Other impaired loans may be loans showing signs of weakness or interruptions in cash flow, but ultimately are current or less than 90 days past due with respect to principal and interest and for which we anticipate full payment of principal and interest but not in accordance with contractual terms. Additional factors considered by management in determining impairment and non-accrual status include payment status, collateral value, availability of current financial information, and the probability of collecting all contractual principal and interest payments. The following tables present the aging of the recorded investment in past due and non-accrual loans as of June 30, 2015 and December 31, 2014 by class of loans: As of June 30, 2015 (in thousands) 30—59 60—89 Loans Past Due Total Days Days Over 90 Days Past Due & Loans Not Past Due Past Due Still Accruing Non-accrual Non-accrual Past Due Commercial $ $ — $ — $ — $ $ Real estate construction — — — Real estate mortgage: 1-4 family residential Multi-family residential — — — Non-farm & non-residential — — — Agricultural — Consumer Other — — — — — Total $ $ $ $ $ $ As of December 31, 2014 ( in thousands) 30—59 60—89 Greater than Total Days Days 90 Days Past Due & Loans Not Past Due Past Due Past Due Non-accrual Non-accrual Past Due Commercial $ $ — $ — $ $ $ Real estate construction — — — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — — Agricultural — Consumer Other — — — — — Total $ $ $ $ $ $ Troubled Debt Restructurings: The Company has allocated $387 thousand in specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2015. The Company allocated $369 thousand for specific reserves to customers whose loan terms had been modified in troubled debt restructuring as of December 31, 2014. The Company has not committed to lend additional amounts as of June 30, 2015 and December 31, 2014 to customers with outstanding loans that are classified as troubled debt restructurings. All loans which have undergone a troubled debt restructuring modification are performing. Further, there were no troubled debt restructurings for which there was a payment default within twelve months following the modification during the periods ending June 30, 2015 and 2014. No loans were modified as troubled debt restructurings during the six or three months ending June 30, 2015 and 2014. Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings: Special Mention. Loans classified as special mention have one or more potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined and documented weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. As of June 30, 2015 and December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: As of June 30, 2015 ( in thousands) Special Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Total $ $ $ $ As of December 31, 2014 ( in thousands) Special Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Total $ $ $ $ For consumer loans, the Company evaluates the credit quality based on the aging of the recorded investment in loans, which was previously presented. Non-performing consumer loans are loans which are greater than 90 days past due or on non-accrual status, and total $20 thousand at June 30, 2015 and $6 thousand at December 31, 2014.

REAL ESTATE OWNED

REAL ESTATE OWNED	6 Months Ended
	Jun. 30, 2015
REAL ESTATE OWNED
REAL ESTATE OWNED	4. REAL ESTATE OWNED Activity in real estate owned, net was as follows: Six Months Ended June 30 2015 2014 (in thousands) Beginning of year $ $ Additions Sales ) ) (Additions) subtractions to valuation allowance, net End of period $ $ Activity in the valuation allowance was as follows: Six Months Ended June 30 2015 2014 (in thousands) Beginning of year $ $ Write-downs of other real estate, net Reduction from sale ) ) End of period $ $ Expenses related to foreclosed assets include: Six Months Ended June 30 2015 2014 (in thousands) Net loss (gain) on sales reported in other income $ $ ) Write-downs of other real estate, net Operating expenses (receipts), net of rental income Repossession expenses, net For the period $ $ ) Three Months Ended June 30 2015 2014 (in thousands) Net loss (gain) on sales reported in other income $ $ ) Write-downs of other real estate, net Operating expenses (receipts), net of rental income Repossession expenses, net For the period $ $

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2015
EARNINGS PER SHARE
EARNINGS PER SHARE	5. EARNINGS PER SHARE Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock based compensation agreements. The factors used in the earnings per share computation follow: Six Months Ended June 30 2015 2014 (in thousands) Basic Earnings Per Share Net Income $ $ Weighted average common shares outstanding Basic earnings per share $ $ Diluted Earnings Per Share Net Income $ $ Weighted average common shares outstanding Weighted average common and dilutive potential common shares outstanding Diluted earnings per share $ $ Three Months Ended June 30 2015 2014 (in thousands) Basic Earnings Per Share Net Income $ $ Weighted average common shares outstanding Basic earnings per share $ $ Diluted Earnings Per Share Net Income $ $ Weighted average common shares outstanding Weighted average common and dilutive potential common shares outstanding Diluted earnings per share $ $ Stock options for 2,400 shares of common stock for the six and three months ended June 30, 2015 and 12,725 shares of common stock for the six and three months ended June 30, 2014 were excluded from diluted earnings per share because their impact was antidilutive.

STOCK COMPENSATION

STOCK COMPENSATION	6 Months Ended
	Jun. 30, 2015
STOCK COMPENSATION
STOCK COMPENSATION	6. STOCK COMPENSATION We have four stock based compensation plans as described below. Two Stock Option Plans Under its expired 1999 Employee Stock Option Plan, the Company has granted certain officers and key employees stock option awards which vest and become fully exercisable at the end of five years and provided for issuance of up to 100,000 options. Under the expired 1993 Non-Employee Directors Stock Ownership Incentive Plan, the Company also granted certain directors stock option awards which vest and become fully exercisable immediately and provided for issuance of up to 20,000 options. For each Stock Option Plan, the exercise price of each option, which has a ten year life, was equal to the market price of the Company’s stock on the date of grant. Summary of activity in the stock option plan for the first six months of 2015 follows: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, beginning of year $ Granted — — Forfeited or expired ) Exercised — — Outstanding, end of period $ 18.5 months $ — Vested and expected to vest $ 18.5 months $ — Exercisable, end of period $ 18.5 months $ — As of June 30, 2015, there was $0 of total unrecognized compensation cost related to nonvested stock options granted under the Plan. Since both stock option plans have expired, neither plan allows for additional options to be issued. 2005 Restricted Stock Grant Plan On May 10, 2005, the Company’s stockholders approved a restricted stock grant plan. Total shares issuable under the plan are 50,000. There were 5,385 shares issued during the first six months of 2015 and 7,475 shares issued during the first six months of 2014. There were no shares forfeited during the first six months of 2015 or 2014. A summary of changes in the Company’s nonvested shares for the year follows: Weighted-Average Fair Grant-Date Value Nonvested Shares Shares Fair Value Per Share Nonvested at January 1, 2015 $ $ Granted Vested ) ) Forfeited — — — Nonvested at June 30, 2015 $ $ As of June 30, 2015, there was $349,393 of total unrecognized compensation cost related to nonvested shares granted under the restricted stock grant plan. The cost is expected to be recognized over a weighted-average period of 3.1 years. As of June 30, 2015, no additional shares are available for issue under the restricted stock grant plan. 2009 Stock Award Plan On May 13, 2009, the Company’s stockholders approved a stock award plan that provides for the granting of both incentive and nonqualified stock options and other share based awards. Total shares issuable under the plan are 150,000. There were 465 shares issued during the first six months of 2015 and none in 2014. There were no shares forfeited during the first six months of 2015 or 2014. A summary of changes in the Company’s nonvested shares for the year follows: Weighted-Average Fair Grant-Date Value Nonvested Shares Shares Fair Value Per Share Nonvested at January 1, 2015 $ $ Granted Vested ) ) Forfeited — — — Nonvested at June 30, 2015 $ $ As of June 30, 2015, there was $22,582 of total unrecognized compensation cost related to nonvested shares granted under the restricted stock grant plan. The cost is expected to be recognized over a weighted-average period of 2.9 years. As of June 30, 2015, 148,635 shares are still available for issuance.

OTHER BORROWINGS

OTHER BORROWINGS	6 Months Ended
	Jun. 30, 2015
OTHER BORROWINGS
OTHER BORROWINGS	7. OTHER BORROWINGS At December 31, 2014 the Company had a $5 million revolving promissory note with a maturity date of July 26, 2015. The Company has no outstanding balances related to this promissory note at June 30, 2015 or December 31, 2014. Upon maturity, the Company renewed the revolving promissory note. The new note has similar terms as the original note and matures July 19, 2016. On July 20, 2015, the Company borrowed $5 million. The term loan has a fixed interest rate of 5.02%, requires quarterly principal and interest payments and matures July 20, 2025.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2015
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	8. FAIR VALUE MEASUREMENTS ASC Topic 820, “Fair Value Measurements and Disclosures”, defines fair value, establishes a framework for measuring fair value, and sets forth disclosures about fair value measurements. ASC Topic 825, “Financial Instruments” , allows entities to choose to measure certain financial assets and liabilities at fair value. The Company has not elected the fair value option for any financial assets or liabilities. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This Topic describes three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2 — Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 — Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value: Investment Securities and Trading Assets : The fair values for available for sale investment securities and trading assets are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Impaired Loans : The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent third party real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying such loans. Such adjustments were $14 thousand for 2015 and $387 for 2014 and resulted in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy. Other Real Estate Owned : Assets acquired through or instead of loan foreclosure and classified as other real estate owned (OREO) are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach with data from comparable properties. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments were $372 thousand as of June 30, 2015 and $25 thousand as of June 30, 2014 and resulted in a Level 3 classification of the inputs for determining fair value. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Mortgage Servicing Rights : Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively based on a valuation model that calculates the present value of estimated future net servicing income, resulting in a Level 3 classification. Assets and Liabilities Measured on a Recurring Basis Available for sale investment securities and trading assets are the Company’s only balance sheet items that meet the disclosure requirements for instruments measured at fair value on a recurring basis. Disclosures are as follows in the tables below. Fair Value Measurements at June 30, 2015 Using (In thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) U. S. government agencies $ $ — $ $ — States and municipals — — Mortgage-backed - residential — — Equity securities — — Trading Assets — — Total $ $ $ $ — Fair Value Measurements at December 31, 2014 Using (In thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) U. S. government agencies $ $ — $ $ — States and municipals — — Mortgage-backed - residential — — Equity securities — — Trading Assets — — Total $ $ $ $ — There were no transfers between level 1 and level 2 during 2015 or 2014. Assets measured at fair value on a non-recurring basis are summarized below: Fair Value Measurements at June 30, 2015 Using: Quoted Prices In Active Other Markets for Significant Significant Identical Observable Unobservable (In thousands) Carrying Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) Impaired loans: Real Estate Mortgage: Non-farm & non-residential — — Agricultural — — Other real estate owned: Residential — — Commercial Loan servicing rights — — Fair Value Measurements at December 31, 2014 Using: Quoted Prices In Active Other Markets for Significant Significant Identical Observable Unobservable (In thousands) Carrying Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) Impaired loans: Real Estate Mortgage: Multi-family residential — — Non-farm & non-residential — — Agricultural — — Other real estate owned: Residential — — Loan servicing rights — — Impaired loans , which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $270 thousand, which includes a valuation allowance of $270 thousand at June 30, 2015. During the first six months of 2015, no new loans became impaired. The total allowance for specific impaired loans decreased $301 thousand for the six months ending June 30, 2015 and decreased $101 thousand for the three months ending June 30, 2015. During the first six months of 2014, five new loans became impaired resulting in an additional provision for loan losses of $536 thousand. The total allowance for specific impaired loans increased $106 thousand for the six months ending June 30, 2014 and decreased $28 thousand for the three months ending June 30, 2014. Other real estate owned, which is measured at fair value less costs to sell, had a net carrying amount of $2.0 million, which is made up of the outstanding balance of $3.2 million, net of a valuation allowance of $1.2 million at June 30, 2015. The Company recorded $227 thousand in write-downs of other real estate owned properties for the six months ending June 30, 2015 and $201 thousand for the three months ending June 30, 2015. The Company recorded $10 thousand in write-downs of other real estate owned properties for the six months and three months ending June 30, 2014. Loan servicing rights, which are carried at the lower of cost or fair value, were carried at their fair value of $277 thousand, which is made up of the outstanding balance of $322 thousand, net of a valuation allowance of $45 thousand at June 30, 2015. The Company recorded a net recovery of prior write-downs of $34 thousand for the six months ending June 30, 2015 and a recovery of prior write-downs totaling $20 thousand for the three months ending June 30, 2015. For the first six months of 2014, the Company recorded net write-downs of $12 thousand and write-downs totaling $17 thousand for the three months ending June 30, 2014. At December 31, 2014, loan servicing rights were carried at their fair value of $292 thousand, which is made up of the outstanding balance of $371 thousand, net of a valuation allowance of $79 thousand. The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2015 and December 31, 2014: Range June 30, 2015 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Non-farm & non-residential sales approach adjustment for differences between the comparable sales 0%-0% (0%) Agricultural sales approach adjustment for differences between the comparable sales 5%-44% (24%) Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 0%-28% (16%) income approach capitalization rate 8%-8% Commercial income approach capitalization rate 10%-10% Loan Servicing Rights discounted cash flow discount rates (12%-12%) (12%) Range December 31, 2014 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Real estate mortgage: Multi-family residential sales comparison adjustment for differences between the comparable sales 10%-10% (10%) Non-farm & non-residential sales comparison adjustment for differences between the comparable sales 0%-0% (0%) Agricultural sales comparison adjustment for differences between the comparable sales 5%-53% (43%) Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 0%-48% (11%) income approach capitalization rate 8%-10% Loan Servicing Rights discounted cash flow discount rates 12%-12% (12%) Fair Value of Financial Instruments The carrying amounts and estimated fair values of financial instruments, at June 30, 2015 and December 31, 2014 are as follows: June 30, 2015: Carrying (in thousands) Value Level 1 Level 2 Level 3 Total Financial assets Cash and cash equivalents $ $ $ — $ — $ Interest bearing deposits — — Securities — Trading Assets — Mortgage loans held for sale — — Loans, net — — FHLB Stock N/A N/A N/A N/A Interest receivable Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase and other borrowings — — Federal Funds Purchased — — FHLB advances — — Subordinated Debentures — — Interest payable — December 31, 2014: Carrying (in thousands) Value Level 1 Level 2 Level 3 Total Financial assets Cash and cash equivalents $ $ $ — $ — $ Interest bearing deposits Securities — Trading assets Mortgage loans held for sale — — Loans, net — — FHLB Stock N/A N/A N/A N/A Interest receivable — Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase and other borrowings — — FHLB advances — — Subordinated Debentures — — Interest Payable The methods and assumptions, not previously presented, used to estimate fair values are described as follows: Cash and Cash Equivalents - The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1. FHLB Stock - It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability. Loans - Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods used to estimate the fair value of loans do not necessarily represent an exit price. The fair value of loans held for sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification. Deposits - The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. Securities Sold Under Agreements to Repurchase and Other Borrowings - The carrying amounts of borrowings under repurchase agreements approximate their fair values resulting in a Level 2 classification. The carrying amount of the Company’s variable rate borrowings approximate their fair values resulting in a Level 2 classification. Federal Funds Purchased - The carrying amounts of federal funds purchased approximate fair values and are classified as Level 1. FHLB Advances and Subordinated Debentures - The fair values of the Company’s FHLB advances are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification. The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification. Accrued Interest Receivable/Payable - The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification based on the level of the related asset/liability. Off-balance Sheet Instruments - Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of off-balance sheet instruments is not material.

CHANGES IN ACCUMULATED OTHER CO

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT	6 Months Ended
	Jun. 30, 2015
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT	9. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT Changes in Accumulated Other Comprehensive Income by Component (1) (unaudited) (in thousands) Unrealized Gains and Losses on Available for Sale Securities For the Six Months Ending June 30 2015 2014 Beginning Balance $ $ ) Unrealized holding gains (losses) for the period, net of tax ) Reclassification adjustment for: Securities gains realized in income ) ) Income taxes ) ) Securities gains realized in income, net ) ) Net current period other comprehensive income ) Ending balance $ ) $ ) (1) All amounts are net of tax. Unrealized Gains and Losses on Available for Sale Securities For the Three Months Ending June 30 2015 2014 Beginning Balance $ $ ) Unrealized holding gains (losses) for the period, net of tax ) Reclassification adjustment for: Securities gains realized in income, net ) ) Income taxes ) ) ) ) Net current period other comprehensive income ) Ending balance $ ) $ ) (2) All amounts are net of tax. The following is significant amounts reclassified out of each component of accumulated other comprehensive Income (Loss) for the six months ending June 30, 2015 and 2014: June 30, 2015 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax June 30, 2014 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax The following is significant amounts reclassified out of each component of accumulated other comprehensive Income (Loss) for the three months ending June 30, 2015 and 2014: June 30, 2015 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax June 30, 2014 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax

SUBSEQUENT EVENT

SUBSEQUENT EVENT	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENT	10. SUBSEQUENT EVENT Effective with the close of business on July 24, 2015, Kentucky Bancshares completed its purchase of Madison Financial Corporation and its wholly-owned subsidiary Madison Bank, both of which were headquartered in Richmond, Kentucky. Under terms of an agreement and plan of share exchange dated January 21, 2015, the Company paid 1.1927 shares of Kentucky Bancshares common stock for each issued and outstanding share of Madison Financial Corporation stock. The transaction was valued at approximately $7.2 million. Following the acquisition, Madison Bank and its three branch locations, were merged into Kentucky Bank. At June 30, 2015, Madison Bank had total assets of $119 million, total loans of $81 million and total deposits of $95 million. Management has not yet completed all of the analyses needed to estimate the fair value of the assets and liabilities acquired, both tangible and intangible.

REPURCHASE AGREEMENTS

REPURCHASE AGREEMENTS	6 Months Ended
	Jun. 30, 2015
REPURCHASE AGREEMENTS AND OTHER BORROWINGS
REPURCHASE AGREEMENTS	11. REPURCHASE AGREEMENTS Repurchase agreements totaled $13.7 million as of June 30, 2015. Of this, $7.7 million were overnight obligations and $6.0 million had terms extending through May 2019 and an average weighted life of 2.5 years. The Company pledged agency-backed securities with a carrying amount of $16.6 million to secure repurchase agreements as of June 30, 2015.

SUMMARY OF SIGNIFICANT ACCOUN19

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation : The consolidated financial statements include the accounts of Kentucky Bancshares, Inc. (the “Company”, “we”, “our” or “us”), its wholly-owned subsidiaries, Kentucky Bank (the “Bank”) and KBI Insurance Company, Inc., and the Bank’s wholly-owned subsidiary, KB Special Assets Unit, LLC. Intercompany transactions and balances have been eliminated in consolidation.
Nature of Operations	Nature of Operations : The Bank operates under a state bank charter and provides full banking services, including trust services, to customers located in Bourbon, Clark, Elliott, Fayette, Harrison, Jessamine, Madison, Rowan, Scott, Woodford and adjoining counties in Kentucky. Management continues to consider opportunities for branch expansion and will also consider acquisition opportunities that help advance its strategic objectives. As a state bank, the Bank is subject to regulation by the Kentucky Department of Financial Institutions and the Federal Deposit Insurance Corporation (“FDIC”). The Company, a bank holding company, is regulated by the Federal Reserve. On July 9, 2014, a new subsidiary of the Company was incorporated under the name KBI Insurance Company, Inc. KBI Insurance Company, Inc. is a subsidiary of Kentucky Bancshares, Inc. and is located in Las Vegas, Nevada. It is a captive insurance subsidiary which provides various liability and property damage insurance policies for Kentucky Bancshares, Inc. and its related subsidiaries. KBI Insurance Company, Inc. is regulated by the State of Nevada Division of Insurance. Our transfer, registrar and dividend agent, Registrar and Transfer Company, was recently acquired by Computershare. The migration to Computershare occurred October 31, 2014.
Estimates in the Financial Statements	Estimates in the Financial Statements : The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the financial statements.
Trading Assets	Trading Assets : The Company engages in trading activities for its own account. Securities that are held principally for resale in the near term are recorded at fair value with changes in fair value included in earnings. Interest and dividends are included in net interest income.
Loss Contingencies	Loss Contingencies : Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.
Reclassifications	Reclassifications : Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior period net income or stockholders’ equity.
Adoption of New Accounting Standards	Adoption of New Accounting Standards In January 2014, FASB issued Accounting Standards Update 2014-04, Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force) . The ASU clarifies when an insubstance repossession or foreclosure occurs and a creditor is considered to have received physical possession of real estate property collateralizing a consumer mortgage loan. Specifically, the new ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. Additional disclosures are required detailing the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgages collateralized by real estate property that are in the process of foreclosure. The new guidance is effective for annual periods, and interim reporting periods within those annual periods, beginning after December 15, 2014. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements, but will result in additional disclosures. In May 2014, FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) . The ASU creates a new topic, Topic 606, to provide guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2016. Early adoption is not permitted. Management is currently evaluating the impact of the adoption of this guidance on the Company’s financial statements. However, in April 2015, the FASB voted to defer the effective date of ASU 2014-09 by one year making the amendments effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Companies have the option to apply ASU 2014-09 as of the original effective date. In June 2014, FASB issued Accounting Standards Update 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The amendments in this update require two accounting changes. First, the amendments in this update change the accounting for repurchase-to-maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the amendments require separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counter-party, which will result in secured borrowing accounting for the repurchase agreement. This update also requires certain disclosures for these types of transactions. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-11 did not have a material impact on the Company’s financial statements.

SECURITIES (Tables)

SECURITIES (Tables)	6 Months Ended
	Jun. 30, 2015
SECURITIES
Schedule of securities available for sale	(in thousands) Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Available for Sale June 30, 2015 U.S. government agencies $ $ $ ) $ States and political subdivisions ) Mortgage-backed - residential ) Equity securities — Total $ $ $ ) $ December 31, 2014 U.S. government agencies $ $ $ ) $ States and political subdivisions ) Mortgage-backed - residential ) Equity securities — Total $ $ $ ) $
Schedule of amortized cost and fair value of securities by contractual maturity	(in thousands) Amortized Fair Cost Value Due in one year or less $ $ Due after one year through five years Due after five years through ten years Due after ten years Mortgage-backed - residential Equity Total $ $
Schedule of securities with unrealized losses not recognized in income	June 30, 2015 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Description of Securities Value Loss Value Loss Value Loss U.S. Government agencies $ $ ) $ $ ) $ $ ) States and municipals ) ) ) Mortgage-backed - residential ) ) ) Total temporarily impaired $ $ ) $ $ ) $ $ ) December 31, 2014 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Description of Securities Value Loss Value Loss Value Loss U.S. Government agencies $ $ ) $ $ ) $ $ ) States and municipals ) ) ) Mortgage-backed - residential ) ) ) Total temporarily impaired $ $ ) $ $ ) $ $ )

LOANS (Tables)

LOANS (Tables)	6 Months Ended
	Jun. 30, 2015
LOANS
Schedule of loans	(in thousands) 6/30/15 12/31/14 Commercial $ $ Real estate construction Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer Other Total $ $
Schedule of activity in the allowance for loan losses	Six Months Ended June 30, 2015 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ $ — $ $ Real estate Construction — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential — — Agricultural ) Consumer Other Unallocated — — $ $ $ $ $ Three Months Ended June 30, 2015 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ — $ — $ $ Real estate Construction — — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential — — Agricultural — ) Consumer Other Unallocated — — $ $ $ $ $ Six Months Ended June 30, 2014 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ $ — $ $ Real estate Construction — ) Real estate mortgage: 1-4 family residential Multi-family residential — — ) Non-farm & non-residential — ) Agricultural — ) Consumer Other Unallocated — — $ $ $ $ $ Three Months Ended June 30, 2014 (in thousands) Beginning Ending Balance Charge-offs Recoveries Provision Balance Commercial $ $ — $ — $ $ Real estate Construction — Real estate mortgage: 1-4 family residential Multi-family residential — — ) Non-farm & non-residential — — ) Agricultural — ) Consumer Other Unallocated — — ) $ $ $ $ $
Schedule of allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method	As of June 30, 2015 (in thousands) Individually Collectively Evaluated for Evaluated for Impairment Impairment Total Allowance for Loan Losses: Commercial $ — $ $ Real estate construction — Real estate mortgage 1-4 family residential Multi-family residential — Non-farm & non-residential Agricultural Consumer — Other — Unallocated — $ $ $ Loans: Commercial $ — $ $ Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — Non-farm & non-residential Agricultural Consumer — Other — $ $ $ As of December 31, 2014 (in thousands) Individually Collectively Evaluated for Evaluated for Impairment Impairment Total Allowance for Loan Losses: Commercial $ — $ $ Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer — Other — Unallocated — $ $ $ Loans: Commercial $ — $ $ Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer — Other — $ $ $
Schedule of loans individually evaluated for impairment by class of loans	The following table presents loans individually evaluated for impairment by class of loans as of and for the six months ended June 30, 2015 (in thousands): Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential — Agricultural — With an allowance recorded: Real estate mortgage: 1-4 family residential Non-farm & non-residential Multi-family residential — — — — — Agricultural — — Consumer — — — — — — Other — — — — — Total $ $ $ $ $ $ The following table presents loans individually evaluated for impairment by class of loans for the six months ended June 30, 2014 (in thousands): Year to Date Year to Date Average Interest Cash Basis Recorded Income Interest Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential — — Non-farm & non-residential — Agricultural With an allowance recorded: Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Total $ $ $ The following table presents loans individually evaluated for impairment by class of loans as of and for the year ended December 31, 2014 (in thousands): Unpaid Allowance for Average Interest Cash Basis Principal Recorded Loan Losses Recorded Income Interest Balance Investment Allocated Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential $ $ $ — $ $ $ Non-farm & non-residential — — — — — Agricultural — With an allowance recorded: Real estate mortgage 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Total $ $ $ $ $ $ The following tables present loans individually evaluated for impairment by class of loans for the three months ending June 30, 2015 and June 30, 2014 (in thousands): Three Months Ending June 30, 2015 Average Interest Cash Basis Recorded Income Interest Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential $ $ $ Agricultural With an allowance recorded: Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential Agricultural — — Consumer — — — Other — — — Total $ $ $ Three Months Ending June 30, 2014 Average Interest Cash Basis Recorded Income Interest Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: 1-4 family residential $ $ — $ — Agricultural With an allowance recorded: Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Total $ $ $
Schedule of recorded investment in nonaccrual, loans past due over 90 days still on accrual and accruing troubled debt restructurings by class of loans	As of June 30, 2015 (in thousands) Loans Past Due Over 90 Days Accruing Still Troubled Debt Nonaccrual Accruing Restructurings Real estate construction $ $ — $ — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Consumer — Total $ $ $ As of December 31, 2014 (in thousands) Loans Past Due Over 90 Days Accruing Still Troubled Debt Nonaccrual Accruing Restructurings Commercial $ $ — $ — Real estate construction — — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Consumer — Total $ $ $
Schedule of aging of the recorded investment in past due and non-accrual loans	As of June 30, 2015 (in thousands) 30—59 60—89 Loans Past Due Total Days Days Over 90 Days Past Due & Loans Not Past Due Past Due Still Accruing Non-accrual Non-accrual Past Due Commercial $ $ — $ — $ — $ $ Real estate construction — — — Real estate mortgage: 1-4 family residential Multi-family residential — — — Non-farm & non-residential — — — Agricultural — Consumer Other — — — — — Total $ $ $ $ $ $ As of December 31, 2014 ( in thousands) 30—59 60—89 Greater than Total Days Days 90 Days Past Due & Loans Not Past Due Past Due Past Due Non-accrual Non-accrual Past Due Commercial $ $ — $ — $ $ $ Real estate construction — — — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — — Agricultural — Consumer Other — — — — — Total $ $ $ $ $ $
Schedule of risk category of loans by class of loans	As of June 30, 2015 ( in thousands) Special Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Total $ $ $ $ As of December 31, 2014 ( in thousands) Special Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential — Agricultural — Total $ $ $ $

REAL ESTATE OWNED (Tables)

REAL ESTATE OWNED (Tables)	6 Months Ended
	Jun. 30, 2015
REAL ESTATE OWNED
Schedule of activity in real estate owned	Six Months Ended June 30 2015 2014 (in thousands) Beginning of year $ $ Additions Sales ) ) (Additions) subtractions to valuation allowance, net End of period $ $
Schedule of activity in the valuation allowance	Six Months Ended June 30 2015 2014 (in thousands) Beginning of year $ $ Write-downs of other real estate, net Reduction from sale ) ) End of period $ $
Schedule of expenses related to foreclosed assets	Six Months Ended June 30 2015 2014 (in thousands) Net loss (gain) on sales reported in other income $ $ ) Write-downs of other real estate, net Operating expenses (receipts), net of rental income Repossession expenses, net For the period $ $ ) Three Months Ended June 30 2015 2014 (in thousands) Net loss (gain) on sales reported in other income $ $ ) Write-downs of other real estate, net Operating expenses (receipts), net of rental income Repossession expenses, net For the period $ $

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
EARNINGS PER SHARE
Schedule of factors used in the earnings per share computation	Six Months Ended June 30 2015 2014 (in thousands) Basic Earnings Per Share Net Income $ $ Weighted average common shares outstanding Basic earnings per share $ $ Diluted Earnings Per Share Net Income $ $ Weighted average common shares outstanding Weighted average common and dilutive potential common shares outstanding Diluted earnings per share $ $ Three Months Ended June 30 2015 2014 (in thousands) Basic Earnings Per Share Net Income $ $ Weighted average common shares outstanding Basic earnings per share $ $ Diluted Earnings Per Share Net Income $ $ Weighted average common shares outstanding Weighted average common and dilutive potential common shares outstanding Diluted earnings per share $ $

STOCK COMPENSATION (Tables)

STOCK COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2015
Stock Based Compensation
Summary of activity for the Stock Option Plans	Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding, beginning of year $ Granted — — Forfeited or expired ) Exercised — — Outstanding, end of period $ 18.5 months $ — Vested and expected to vest $ 18.5 months $ — Exercisable, end of period $ 18.5 months $ —
2005 Restricted Stock Grant Plan
Stock Based Compensation
Summary of changes in nonvested shares of restricted stock	Weighted-Average Fair Grant-Date Value Nonvested Shares Shares Fair Value Per Share Nonvested at January 1, 2015 $ $ Granted Vested ) ) Forfeited — — — Nonvested at June 30, 2015 $ $
2009 Stock Award Plan
Stock Based Compensation
Summary of changes in nonvested shares of stock award plan	Weighted-Average Fair Grant-Date Value Nonvested Shares Shares Fair Value Per Share Nonvested at January 1, 2015 $ $ Granted Vested ) ) Forfeited — — — Nonvested at June 30, 2015 $ $

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
FAIR VALUE MEASUREMENTS
Schedule of assets measured at fair value on a recurring basis	Fair Value Measurements at June 30, 2015 Using (In thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) U. S. government agencies $ $ — $ $ — States and municipals — — Mortgage-backed - residential — — Equity securities — — Trading Assets — — Total $ $ $ $ — Fair Value Measurements at December 31, 2014 Using (In thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Fair Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) U. S. government agencies $ $ — $ $ — States and municipals — — Mortgage-backed - residential — — Equity securities — — Trading Assets — — Total $ $ $ $ —
Schedule of assets measured at fair value on a non-recurring basis	Fair Value Measurements at June 30, 2015 Using: Quoted Prices In Active Other Markets for Significant Significant Identical Observable Unobservable (In thousands) Carrying Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) Impaired loans: Real Estate Mortgage: Non-farm & non-residential — — Agricultural — — Other real estate owned: Residential — — Commercial Loan servicing rights — — Fair Value Measurements at December 31, 2014 Using: Quoted Prices In Active Other Markets for Significant Significant Identical Observable Unobservable (In thousands) Carrying Assets Inputs Inputs Description Value (Level 1) (Level 2) (Level 3) Impaired loans: Real Estate Mortgage: Multi-family residential — — Non-farm & non-residential — — Agricultural — — Other real estate owned: Residential — — Loan servicing rights — —
Schedule of quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis	Range June 30, 2015 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Non-farm & non-residential sales approach adjustment for differences between the comparable sales 0%-0% (0%) Agricultural sales approach adjustment for differences between the comparable sales 5%-44% (24%) Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 0%-28% (16%) income approach capitalization rate 8%-8% Commercial income approach capitalization rate 10%-10% Loan Servicing Rights discounted cash flow discount rates (12%-12%) (12%) Range December 31, 2014 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Real estate mortgage: Multi-family residential sales comparison adjustment for differences between the comparable sales 10%-10% (10%) Non-farm & non-residential sales comparison adjustment for differences between the comparable sales 0%-0% (0%) Agricultural sales comparison adjustment for differences between the comparable sales 5%-53% (43%) Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 0%-48% (11%) income approach capitalization rate 8%-10% Loan Servicing Rights discounted cash flow discount rates 12%-12% (12%)
Schedule of carrying amounts and estimated fair values of financial instruments	June 30, 2015: Carrying (in thousands) Value Level 1 Level 2 Level 3 Total Financial assets Cash and cash equivalents $ $ $ — $ — $ Interest bearing deposits — — Securities — Trading Assets — Mortgage loans held for sale — — Loans, net — — FHLB Stock N/A N/A N/A N/A Interest receivable Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase and other borrowings — — Federal Funds Purchased — — FHLB advances — — Subordinated Debentures — — Interest payable — December 31, 2014: Carrying (in thousands) Value Level 1 Level 2 Level 3 Total Financial assets Cash and cash equivalents $ $ $ — $ — $ Interest bearing deposits Securities — Trading assets Mortgage loans held for sale — — Loans, net — — FHLB Stock N/A N/A N/A N/A Interest receivable — Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase and other borrowings — — FHLB advances — — Subordinated Debentures — — Interest Payable

CHANGES IN ACCUMULATED OTHER 26

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Tables)	6 Months Ended
	Jun. 30, 2015
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT
Schedule of changes in Accumulated Other Comprehensive Income (Loss) by Component	Changes in Accumulated Other Comprehensive Income by Component (1) (unaudited) (in thousands) Unrealized Gains and Losses on Available for Sale Securities For the Six Months Ending June 30 2015 2014 Beginning Balance $ $ ) Unrealized holding gains (losses) for the period, net of tax ) Reclassification adjustment for: Securities gains realized in income ) ) Income taxes ) ) Securities gains realized in income, net ) ) Net current period other comprehensive income ) Ending balance $ ) $ ) (1) All amounts are net of tax. Unrealized Gains and Losses on Available for Sale Securities For the Three Months Ending June 30 2015 2014 Beginning Balance $ $ ) Unrealized holding gains (losses) for the period, net of tax ) Reclassification adjustment for: Securities gains realized in income, net ) ) Income taxes ) ) ) ) Net current period other comprehensive income ) Ending balance $ ) $ ) (2) All amounts are net of tax.
Significant amounts reclassified out of each component of AOCI	The following is significant amounts reclassified out of each component of accumulated other comprehensive Income (Loss) for the six months ending June 30, 2015 and 2014: June 30, 2015 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax June 30, 2014 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax The following is significant amounts reclassified out of each component of accumulated other comprehensive Income (Loss) for the three months ending June 30, 2015 and 2014: June 30, 2015 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax June 30, 2014 Details about Amount Affected Line Item Accumulated Other Reclassified From in the Statement Comprehensive Accumulated Other Where Net Income Components Comprehensive Income Income is Presented Unrealized gains and losses on available-for-sale securities $ ) Securities gains realized in income, net Provision for income taxes ) Net of tax

SECURITIES (Details)

SECURITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Securities Available for Sale
Amortized Cost	$ 238,130	$ 245,662
Gross Unrealized Gains	2,333	3,528
Gross Unrealized Losses	(2,987)	(2,329)
Fair Value	237,476	246,861
U.S. government agencies
Securities Available for Sale
Amortized Cost	55,817	61,721
Gross Unrealized Gains	27	1
Gross Unrealized Losses	(766)	(1,136)
Fair Value	55,078	60,586
States and political subdivisions
Securities Available for Sale
Amortized Cost	87,055	86,322
Gross Unrealized Gains	2,105	3,234
Gross Unrealized Losses	(965)	(275)
Fair Value	88,195	89,281
Mortgage-backed - residential
Securities Available for Sale
Amortized Cost	94,988	97,349
Gross Unrealized Gains	176	267
Gross Unrealized Losses	(1,256)	(918)
Fair Value	93,908	96,698
Equity
Securities Available for Sale
Amortized Cost	270	270
Gross Unrealized Gains	25	26
Fair Value	$ 295	$ 296

SECURITIES (Details 2)

SECURITIES (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Amortized Cost
Due in one year or less	$ 40		$ 40
Due after one year through five years	17,392		17,392
Due after five years through ten years	75,717		75,717
Due after ten years	49,723		49,723
Securities due at a single maturity date	142,872		142,872
Total	238,130		238,130		$ 245,662
Fair Value
Due in one year or less	40		40
Due after one year through five years	17,299		17,299
Due after five years through ten years	75,588		75,588
Due after ten years	50,346		50,346
Securities due at a single maturity date	143,273		143,273
Fair Value	237,476		237,476		246,861
Proceeds from sales of securities	9,100	$ 23,500	9,100	$ 40,000
Gross gains realized on sales of securities	243	477	251	785
Gross losses realized on sales of securities	0	232	0	352
Tax provision related to realized gains	83	$ 83	85	$ 147
Mortgage-backed - residential
Amortized Cost
Mortgage-backed - residential	94,988		94,988
Total	94,988		94,988		97,349
Fair Value
Mortgage-backed - residential	93,908		93,908
Fair Value	93,908		93,908		96,698
Equity
Amortized Cost
Amortized cost of equity securities	270		270
Total	270		270		270
Fair Value
Fair Value Equity Securities	295		295
Fair Value	$ 295		$ 295		$ 296

SECURITIES (Details 3)

SECURITIES (Details 3) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Securities with unrealized losses
Less than 12 Months, Fair Value	$ 88,712	$ 64,224
Less than 12 Months, Unrealized Loss	(1,252)	(775)
12 Months or More, Fair Value	60,768	73,551
12 Months or More, Unrealized Loss	(1,735)	(1,554)
Total, Fair Value	149,480	137,775
Total, Unrealized Loss	(2,987)	(2,329)
Trading Assets
Trading Assets	5,400	5,370
U.S. government agencies
Securities with unrealized losses
Less than 12 Months, Fair Value	8,873	12,528
Less than 12 Months, Unrealized Loss	(66)	(176)
12 Months or More, Fair Value	36,854	45,066
12 Months or More, Unrealized Loss	(700)	(960)
Total, Fair Value	45,727	57,594
Total, Unrealized Loss	(766)	(1,136)
States and political subdivisions
Securities with unrealized losses
Less than 12 Months, Fair Value	19,875	5,011
Less than 12 Months, Unrealized Loss	(414)	(27)
12 Months or More, Fair Value	9,126	9,738
12 Months or More, Unrealized Loss	(551)	(248)
Total, Fair Value	29,001	14,749
Total, Unrealized Loss	(965)	(275)
Trading Assets
Trading Assets	5,400
Mortgage-backed - residential
Securities with unrealized losses
Less than 12 Months, Fair Value	59,964	46,685
Less than 12 Months, Unrealized Loss	(772)	(572)
12 Months or More, Fair Value	14,788	18,747
12 Months or More, Unrealized Loss	(484)	(346)
Total, Fair Value	74,752	65,432
Total, Unrealized Loss	$ (1,256)	$ (918)

LOANS (Details)

LOANS (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Loans
Loans	$ 546,085	$ 538,305
Commercial
Loans
Loans	50,236	47,185
Real estate construction
Loans
Loans	21,320	16,938
1-4 family residential
Loans
Loans	196,215	189,458
Multi-family residential
Loans
Loans	34,121	34,415
Non-farm & non-residential
Loans
Loans	158,041	161,822
Agricultural
Loans
Loans	68,921	71,345
Consumer
Loans
Loans	17,031	16,863
Other
Loans
Loans	$ 200	$ 279

LOANS (Details 2)

LOANS (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Activity in allowance for loan losses
Beginning Balance	$ 5,920	$ 5,616	$ 6,012	$ 5,441
Charge-offs	547	206	1,169	643
Recoveries	227	104	457	616
Provision	350	100	650	200
Ending Balance	5,950	5,614	5,950	5,614
Commercial
Activity in allowance for loan losses
Beginning Balance	340	208	339	230
Charge-offs			25	200
Provision	59	23	85	201
Ending Balance	399	231	399	231
Real estate construction
Activity in allowance for loan losses
Beginning Balance	438	329	446	358
Recoveries		4	2	8
Provision	38	26	28	(7)
Ending Balance	476	359	476	359
1-4 family residential
Activity in allowance for loan losses
Beginning Balance	1,825	2,111	1,829	2,169
Charge-offs	120	25	152	88
Recoveries	2	4	5	16
Provision	100	234	125	227
Ending Balance	1,807	2,324	1,807	2,324
Multi-family residential
Activity in allowance for loan losses
Beginning Balance	499	401	495	427
Charge-offs	94		94
Recoveries	2		2
Provision	35	(74)	39	(100)
Ending Balance	442	327	442	327
Non-farm & non-residential
Activity in allowance for loan losses
Beginning Balance	1,030	930	813	564
Recoveries				367
Provision	44	(196)	261	(197)
Ending Balance	1,074	734	1,074	734
Agricultural
Activity in allowance for loan losses
Beginning Balance	723	553	998	578
Charge-offs			242
Recoveries	11	1	12	25
Provision	(156)	(8)	(190)	(57)
Ending Balance	578	546	578	546
Consumer
Activity in allowance for loan losses
Beginning Balance	497	550	520	548
Charge-offs	82	76	163	153
Recoveries	12	23	27	41
Provision	107	46	150	107
Ending Balance	534	543	534	543
Other
Activity in allowance for loan losses
Beginning Balance	34	11	32	51
Charge-offs	251	105	493	202
Recoveries	200	72	409	159
Provision	72	55	107	25
Ending Balance	55	33	55	33
Unallocated
Activity in allowance for loan losses
Beginning Balance	534	523	540	516
Provision	51	(6)	45	1
Ending Balance	$ 585	$ 517	$ 585	$ 517

LOANS (Details 3)

LOANS (Details 3) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Loans
Accrued interest receivable	$ 2,400		$ 2,000
Allowance for Loan Losses:
Individually Evaluated for Impairment	698		998
Collectively Evaluated for Impairment	5,252		5,014
Total	5,950	$ 5,920	6,012	$ 5,614	$ 5,616	$ 5,441
Loans:
Individually Evaluated for Impairment	9,166		13,799
Collectively Evaluated for Impairment	536,919		524,506
Total	546,085		538,305
Commercial
Allowance for Loan Losses:
Collectively Evaluated for Impairment	399		339
Total	399	340	339	231	208	230
Loans:
Collectively Evaluated for Impairment	50,236		47,185
Total	50,236		47,185
Real estate construction
Allowance for Loan Losses:
Collectively Evaluated for Impairment	476		446
Total	476	438	446	359	329	358
Loans:
Collectively Evaluated for Impairment	21,320		16,938
Total	21,320		16,938
1-4 family residential
Allowance for Loan Losses:
Individually Evaluated for Impairment	170		56
Collectively Evaluated for Impairment	1,637		1,773
Total	1,807	1,825	1,829	2,324	2,111	2,169
Loans:
Individually Evaluated for Impairment	1,979		2,098
Collectively Evaluated for Impairment	194,236		187,360
Total	196,215		189,458
Multi-family residential
Allowance for Loan Losses:
Individually Evaluated for Impairment			94
Collectively Evaluated for Impairment	442		401
Total	442	499	495	327	401	427
Loans:
Individually Evaluated for Impairment			264
Collectively Evaluated for Impairment	34,121		34,151
Total	34,121		34,415
Non-farm & non-residential
Allowance for Loan Losses:
Individually Evaluated for Impairment	259		136
Collectively Evaluated for Impairment	815		677
Total	1,074	1,030	813	734	930	564
Loans:
Individually Evaluated for Impairment	2,922		2,958
Collectively Evaluated for Impairment	155,119		158,864
Total	158,041		161,822
Agricultural
Allowance for Loan Losses:
Individually Evaluated for Impairment	269		712
Collectively Evaluated for Impairment	309		286
Total	578	723	998	546	553	578
Loans:
Individually Evaluated for Impairment	4,265		8,479
Collectively Evaluated for Impairment	64,656		62,866
Total	68,921		71,345
Consumer
Allowance for Loan Losses:
Collectively Evaluated for Impairment	534		520
Total	534	497	520	543	550	548
Loans:
Collectively Evaluated for Impairment	17,031		16,863
Total	17,031		16,863
Other
Allowance for Loan Losses:
Collectively Evaluated for Impairment	55		32
Total	55	34	32	33	11	51
Loans:
Collectively Evaluated for Impairment	200		279
Total	200		279
Unallocated
Allowance for Loan Losses:
Collectively Evaluated for Impairment	585		540
Total	$ 585	$ 534	$ 540	$ 517	$ 523	$ 516

LOANS (Details 4)

LOANS (Details 4) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Unpaid Principal Balance
Total	$ 9,166		$ 9,166		$ 13,799
Recorded Investment
Total	9,166		9,166		13,799
Allowance for Loan Losses Allocated	698		698		998
Average Recorded Investment
Total	9,357	$ 14,393	10,716	$ 14,344	14,183
Interest Income Recognized
Total	80	183	138	221	308
Cash Basis Interest Recognized
Total	80	183	138	221	308
1-4 family residential
Unpaid Principal Balance
With no related allowance recorded	1,345		1,345		1,618
With an allowance recorded	634		634		480
Recorded Investment
With no related allowance recorded	1,345		1,345		1,618
With an allowance recorded	634		634		480
Allowance for Loan Losses Allocated	170		170		56
Average Recorded Investment
With no related allowance recorded	1,476	1,562	1,524	1,002	1,147
With an allowance recorded	556	1,377	556	1,991	990
Interest Income Recognized
With no related allowance recorded	28		42		25
With an allowance recorded	5	38	10	44	18
Cash Basis Interest Recognized
With no related allowance recorded	28		42		25
With an allowance recorded	5	38	10	44	18
Multi-family residential
Unpaid Principal Balance
With an allowance recorded					264
Recorded Investment
With an allowance recorded					264
Allowance for Loan Losses Allocated					94
Average Recorded Investment
With an allowance recorded	47	310		323	284
Interest Income Recognized
With an allowance recorded		1		5	5
Cash Basis Interest Recognized
With an allowance recorded		1		5	5
Non-farm & non-residential
Unpaid Principal Balance
With an allowance recorded	2,922		2,922		2,958
Recorded Investment
With an allowance recorded	2,922		2,922		2,958
Allowance for Loan Losses Allocated	259		259		136
Average Recorded Investment
With no related allowance recorded				267	552
With an allowance recorded	2,931	3,553	2,940	3,043	3,173
Interest Income Recognized
With an allowance recorded	30	48	59	73	115
Cash Basis Interest Recognized
With an allowance recorded	30	48	59	73	115
Agricultural
Unpaid Principal Balance
With no related allowance recorded	205		205		442
With an allowance recorded	4,060		4,060		8,037
Recorded Investment
With no related allowance recorded	205		205		442
With an allowance recorded	4,060		4,060		8,037
Allowance for Loan Losses Allocated	269		269		712
Average Recorded Investment
With no related allowance recorded	322	2,836	362	2,684	2,696
With an allowance recorded	4,025	4,755	5,215	5,034	5,341
Interest Income Recognized
With no related allowance recorded	17	77	27	80	29
With an allowance recorded		19		19	116
Cash Basis Interest Recognized
With no related allowance recorded	$ 17	77	$ 27	80	29
With an allowance recorded		$ 19		$ 19	$ 116

LOANS (Details 5)

LOANS (Details 5) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Loans
Nonaccrual	$ 1,367	$ 6,577
Loans Past Due Over 90 Days Still Accruing	267	24
Accruing Troubled Debt Restructurings	$ 6,106	6,138
Percentage of nonaccrual loans secured by real estate	98.90%
Minimum period for which principal or interest is in default for loans to be considered as nonaccrual	90 days
Maximum period past due for loans to be considered as impaired	90 days
Commercial
Loans
Nonaccrual		25
Real estate construction
Loans
Nonaccrual	$ 138	142
1-4 family residential
Loans
Nonaccrual	834	1,390
Loans Past Due Over 90 Days Still Accruing	99	23
Accruing Troubled Debt Restructurings	474	480
Multi-family residential
Loans
Nonaccrual		264
Loans Past Due Over 90 Days Still Accruing	131
Non-farm & non-residential
Loans
Nonaccrual	380	380
Accruing Troubled Debt Restructurings	1,803	1,829
Agricultural
Loans
Nonaccrual		4,371
Loans Past Due Over 90 Days Still Accruing	32
Accruing Troubled Debt Restructurings	3,829	3,829
Consumer
Loans
Nonaccrual	15	5
Loans Past Due Over 90 Days Still Accruing	$ 5	$ 1

LOANS (Details 6)

LOANS (Details 6) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Aging of recorded investment in past due and non-accrual loans
30-59 Days Past Due	$ 2,021	$ 1,827
60-89 Days Past Due	406	399
Greater than 90 Days Past Due	267	24
Non-accrual	1,367	6,577
Total Past Due and Non-accrual	4,061	8,827
Loans Not Past Due	542,024	529,478
Commercial
Aging of recorded investment in past due and non-accrual loans
30-59 Days Past Due	365	92
Non-accrual		25
Total Past Due and Non-accrual	365	117
Loans Not Past Due	49,871	47,068
Real estate construction
Aging of recorded investment in past due and non-accrual loans
Non-accrual	138	142
Total Past Due and Non-accrual	138	142
Loans Not Past Due	21,182	16,796
1-4 family residential
Aging of recorded investment in past due and non-accrual loans
30-59 Days Past Due	1,570	1,531
60-89 Days Past Due	381	232
Greater than 90 Days Past Due	99	23
Non-accrual	834	1,390
Total Past Due and Non-accrual	2,884	3,176
Loans Not Past Due	193,331	186,282
Multi-family residential
Aging of recorded investment in past due and non-accrual loans
60-89 Days Past Due		131
Greater than 90 Days Past Due	131
Non-accrual		264
Total Past Due and Non-accrual	131	395
Loans Not Past Due	33,990	34,020
Non-farm & non-residential
Aging of recorded investment in past due and non-accrual loans
30-59 Days Past Due		67
Non-accrual	380	380
Total Past Due and Non-accrual	380	447
Loans Not Past Due	157,661	161,375
Agricultural
Aging of recorded investment in past due and non-accrual loans
30-59 Days Past Due	17	7
60-89 Days Past Due	6	11
Greater than 90 Days Past Due	32
Non-accrual		4,371
Total Past Due and Non-accrual	55	4,389
Loans Not Past Due	68,866	66,956
Consumer
Aging of recorded investment in past due and non-accrual loans
30-59 Days Past Due	69	130
60-89 Days Past Due	19	25
Greater than 90 Days Past Due	5	1
Non-accrual	15	5
Total Past Due and Non-accrual	108	161
Loans Not Past Due	16,923	16,702
Other
Aging of recorded investment in past due and non-accrual loans
Loans Not Past Due	$ 200	$ 279

LOANS (Details 7)

LOANS (Details 7) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)loan	Jun. 30, 2014loan	Jun. 30, 2015USD ($)loan	Jun. 30, 2014USD ($)loan	Dec. 31, 2014USD ($)
LOANS
Reserves to customers whose loan terms have been modified in troubled debt restructurings	$ 387		$ 387		$ 369
Trouble debt restructuring defaulted on payment			$ 0	$ 0
Number of loans modified | loan	0	0	0	0

LOANS (Details 8)

LOANS (Details 8) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Credit Quality Indicators
Loans	$ 546,085	$ 538,305
Pass
Credit Quality Indicators
Loans	498,045	484,879
Special Mention
Credit Quality Indicators
Loans	22,511	20,844
Substandard
Credit Quality Indicators
Loans	8,244	15,278
Doubtful
Credit Quality Indicators
Loans	56	160
Commercial
Credit Quality Indicators
Loans	50,236	47,185
Commercial | Pass
Credit Quality Indicators
Loans	48,623	45,602
Commercial | Special Mention
Credit Quality Indicators
Loans	1,396	1,307
Commercial | Substandard
Credit Quality Indicators
Loans	217	275
Real estate construction
Credit Quality Indicators
Loans	21,320	16,938
Real estate construction | Pass
Credit Quality Indicators
Loans	19,843	15,529
Real estate construction | Special Mention
Credit Quality Indicators
Loans	1,242	1,267
Real estate construction | Substandard
Credit Quality Indicators
Loans	235	142
1-4 family residential
Credit Quality Indicators
Loans	196,215	189,458
1-4 family residential | Pass
Credit Quality Indicators
Loans	183,844	176,791
1-4 family residential | Special Mention
Credit Quality Indicators
Loans	6,194	5,439
1-4 family residential | Substandard
Credit Quality Indicators
Loans	6,121	7,068
1-4 family residential | Doubtful
Credit Quality Indicators
Loans	56	160
Multi-family residential
Credit Quality Indicators
Loans	34,121	34,415
Multi-family residential | Pass
Credit Quality Indicators
Loans	33,966	33,990
Multi-family residential | Substandard
Credit Quality Indicators
Loans	155	425
Non-farm & non-residential
Credit Quality Indicators
Loans	158,041	161,822
Non-farm & non-residential | Pass
Credit Quality Indicators
Loans	151,237	154,857
Non-farm & non-residential | Special Mention
Credit Quality Indicators
Loans	6,074	5,178
Non-farm & non-residential | Substandard
Credit Quality Indicators
Loans	732	1,787
Agricultural
Credit Quality Indicators
Loans	68,921	71,345
Agricultural | Pass
Credit Quality Indicators
Loans	60,532	58,110
Agricultural | Special Mention
Credit Quality Indicators
Loans	7,605	7,653
Agricultural | Substandard
Credit Quality Indicators
Loans	784	5,581
Consumer
Credit Quality Indicators
Loans	17,031	16,863
Consumer | Non-performing
Credit Quality Indicators
Loans	$ 20	$ 6
Minimum period past due for loans to be considered as non-performing	90 days

REAL ESTATE OWNED (Details)

REAL ESTATE OWNED (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Activity in real estate owned
Beginning of year			$ 4,603	$ 3,379
Additions			3,334	419
Sales			(4,727)	(1,540)
(Additions) subtractions to valuation allowance, net			(385)	(48)
End of period	$ 3,595	$ 2,306	3,595	2,306
Activity in the valuation allowance
Beginning of year			1,583	1,524
Write-downs of other real estate, net	201	10	227	10
Reduction from sale			(612)	(58)
End of period	1,198	1,476	1,198	1,476
Expenses related to foreclosed assets
Net loss (gain) on sales reported in other income	20	(24)	59	(70)
Write-downs of other real estate, net	201	10	227	10
Operating expenses (receipts), net of rental income	36	15	55	13
Repossession expenses, net	237	25	282	23
End of year	$ 257	$ 1	$ 341	$ (47)

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic Earnings Per Share
Net Income	$ 2,122	$ 1,904	$ 3,637	$ 3,675
Weighted average common shares outstanding	2,707	2,708	2,707	2,708
Basic earnings per share (in dollars per share)	$ 0.77	$ 0.70	$ 1.33	$ 1.36
Diluted Earnings Per Share
Net income	$ 2,122	$ 1,904	$ 3,637	$ 3,675
Weighted average common shares outstanding	2,707	2,708	2,707	2,708
Weighted average common and dilutive potential common shares outstanding	2,707	2,708	2,707	2,708
Diluted earnings per share (in dollars per share)	$ 0.77	$ 0.70	$ 1.33	$ 1.36

EARNINGS PER SHARE (Details 2)

EARNINGS PER SHARE (Details 2) - shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Stock options
Antidilutive securities
Antidilutive shares excluded from computation of diluted earnings per share	2,400	12,725

STOCK COMPENSATION (Details)

STOCK COMPENSATION (Details) - Jun. 30, 2015 - Stock options - shares	Total
Stock Option Plans
Stock Based Compensation
Life of awards	10 years
1999 Plan
Stock Based Compensation
Vesting period	5 years
Number of shares authorized for issuance	100,000
1993 Non-Employee Directors Stock Ownership Incentive Plan
Stock Based Compensation
Number of shares authorized for issuance	20,000

STOCK COMPENSATION (Details 2)

STOCK COMPENSATION (Details 2) - Jun. 30, 2015 - Stock Option Plans - USD ($) $ / shares in Units, $ in Thousands	Total
Shares
Outstanding, beginning of year (in shares)	12,625
Forfeited or expired (in shares)	(10,225)
Outstanding, end of period (in shares)	2,400
Vested and expected to vest (in shares)	2,400
Exercisable, end of period (in shares)	2,400
Weighted Average Exercise Price
Outstanding, beginning of year (in dollars per share)	$ 30.46
Forfeited or expired (in dollars per share)	30.48
Outstanding, end of period (in dollars per share)	30.38
Vested and expected to vest (in dollars per share)	$ 30.38
Weighted Average Remaining Contractual Term
Outstanding, end of period	18 months 15 days
Vested and expected to vest	18 months 15 days
Exercisable, end of period	18 months 15 days
Additional disclosures
Unrecognized compensation cost related to nonvested stock options granted	$ 0

STOCK COMPENSATION (Details 3)

STOCK COMPENSATION (Details 3) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
2005 Restricted Stock Grant Plan | Restricted stock
Stock Based Compensation
Number of shares authorized for issuance	50,000
Shares available for issuance	0
Shares
Nonvested at the beginning of the period (in shares)	17,694
Granted (in shares)	5,385	7,475
Vested (in shares)	(5,175)
Forfeited (in shares)	0	0
Nonvested at the end of the period (in shares)	17,904
Weighted-Average Grant-Date Fair Value
Nonvested shares, balance at the beginning of the period (in dollars)	$ 365,586
Granted (in dollars)	147,280
Vested (in dollars)	(101,767)
Nonvested shares, balance at the end of the period (in dollars)	$ 411,099
Fair Value Per Share
Nonvested shares, balance at the beginning of the period (in dollars per share)	$ 20.66
Granted (in dollars per share)	27.35
Vested (in dollars per share)	19.67
Nonvested shares, balance at the end of the period (in dollars per share)	$ 22.96
Additional disclosures
Total unrecognized compensation cost related to nonvested shares granted	$ 349,393
Period over which cost is expected to be recognized	3 years 1 month 6 days
2009 Stock Award Plan
Stock Based Compensation
Number of shares authorized for issuance	150,000
Shares available for issuance	148,635
Shares
Nonvested at the beginning of the period (in shares)	720
Granted (in shares)	465
Vested (in shares)	(180)
Nonvested at the end of the period (in shares)	1,005
Weighted-Average Grant-Date Fair Value
Nonvested shares, balance at the beginning of the period (in dollars)	$ 16,704
Granted (in dollars)	12,718
Vested (in dollars)	(4,176)
Nonvested shares, balance at the end of the period (in dollars)	$ 25,246
Fair Value Per Share
Nonvested shares, balance at the beginning of the period (in dollars per share)	$ 23.20
Granted (in dollars per share)	27.35
Vested (in dollars per share)	23.20
Nonvested shares, balance at the end of the period (in dollars per share)	$ 25.12
Additional disclosures
Total unrecognized compensation cost related to nonvested shares granted	$ 22,582
2009 Stock Award Plan | Restricted stock
Additional disclosures
Period over which cost is expected to be recognized	2 years 10 months 24 days

OTHER BORROWINGS (Details)

OTHER BORROWINGS (Details) - USD ($) $ in Millions	Jul. 20, 2015	Jun. 30, 2015	Dec. 31, 2014
OTHER BORROWINGS
Borrowings	$ 5
Fixed interest rate	5.02%
Revolving promissory note
OTHER BORROWINGS
Maximum borrowing capacity			$ 5
Outstanding balance		$ 0	$ 0

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Fair value on instruments on recurring basis
Securities available for sale	$ 237,476		$ 246,861
Transfers from Level 1 to Level 2	0		0
Transfers from Level 2 to Level 1	0		0
Impaired Loans
Fair value on instruments on recurring basis
Adjustments for differences between the comparable sales and income data available	14	$ 387
Other Real Estate Owned
Fair value on instruments on recurring basis
Adjustments for differences between the comparable sales and income data available	372	$ 25
Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	237,476		246,861
Quoted Prices In Active Markets for Identical Assets (Level 1)
Fair value on instruments on recurring basis
Securities available for sale	295		296
Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	237,181		246,565
Recurring | Fair Value
Fair value on instruments on recurring basis
Securities available for sale	242,876		252,231
Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1)
Fair value on instruments on recurring basis
Securities available for sale	5,695		5,666
Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	237,181		246,565
U.S. government agencies
Fair value on instruments on recurring basis
Securities available for sale	55,078		60,586
U.S. government agencies | Recurring | Fair Value
Fair value on instruments on recurring basis
Securities available for sale	55,078		60,586
U.S. government agencies | Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	55,078		60,586
States and political subdivisions
Fair value on instruments on recurring basis
Securities available for sale	88,195		89,281
States and political subdivisions | Recurring | Fair Value
Fair value on instruments on recurring basis
Securities available for sale	88,195		89,281
States and political subdivisions | Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	88,195		89,281
Mortgage-backed - residential
Fair value on instruments on recurring basis
Securities available for sale	93,908		96,698
Mortgage-backed - residential | Recurring | Fair Value
Fair value on instruments on recurring basis
Securities available for sale	93,908		96,698
Mortgage-backed - residential | Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	93,908		96,698
Equity
Fair value on instruments on recurring basis
Securities available for sale	295		296
Equity | Recurring | Fair Value
Fair value on instruments on recurring basis
Securities available for sale	295		296
Equity | Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1)
Fair value on instruments on recurring basis
Securities available for sale	295		296
Trading Assets | Recurring | Fair Value
Fair value on instruments on recurring basis
Securities available for sale	5,400		5,370
Trading Assets | Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1)
Fair value on instruments on recurring basis
Securities available for sale	$ 5,400		$ 5,370

FAIR VALUE MEASUREMENTS (Deta46

FAIR VALUE MEASUREMENTS (Details 2) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)loan	Jun. 30, 2014USD ($)loan	Dec. 31, 2014USD ($)	Dec. 31, 2013USD ($)
Impaired Loans
Valuation allowance of impaired loans	$ 698		$ 698		$ 998
Other real estate owned, net:
Outstanding balance of other real estate owned	3,595	$ 2,306	3,595	$ 2,306	4,603	$ 3,379
Valuation allowance of other real estate owned	1,198	1,476	1,198	$ 1,476	1,583	$ 1,524
Loan servicing rights
Mortgage servicing rights	1,261		1,261		1,209
Non-recurring
Impaired Loans
Impaired loans, at fair value	270		270
Valuation allowance of impaired loans	270		$ 270
Number of impaired loans | loan			0	5
Impaired loans, additional provision for loan losses				$ 536
Decrease in allowance for specific impaired loans	(101)	28	$ (301)	106
Other real estate owned, net:
Other real estate owned	2,000		2,000
Outstanding balance of other real estate owned	3,200		3,200
Valuation allowance of other real estate owned	1,200		1,200
Write downs of other real estate owned	201	10	227	10
Loan servicing rights
Mortgage servicing rights	277		277		292
Outstanding balance of loan servicing rights	322		322		371
Valuation allowance of loan servicing rights		45		45	79
Write-downs of loan servicing rights	20	$ 17	34	$ 12
Non-recurring | Carrying Value
Loan servicing rights
Mortgage servicing rights	277		277		292
Non-recurring | Significant Unobservable Inputs (Level 3)
Loan servicing rights
Mortgage servicing rights	277		277		292
Non-recurring | Multi-family residential | Carrying Value
Impaired Loans
Impaired loans, at fair value					169
Non-recurring | Multi-family residential | Significant Unobservable Inputs (Level 3)
Impaired Loans
Impaired loans, at fair value					169
Non-recurring | Non-farm & non-residential | Carrying Value
Impaired Loans
Impaired loans, at fair value	226		226		366
Non-recurring | Non-farm & non-residential | Significant Unobservable Inputs (Level 3)
Impaired Loans
Impaired loans, at fair value	226		226		366
Non-recurring | Agricultural | Carrying Value
Impaired Loans
Impaired loans, at fair value	44		44		3,729
Non-recurring | Agricultural | Significant Unobservable Inputs (Level 3)
Impaired Loans
Impaired loans, at fair value	44		44		3,729
Non-recurring | Residential | Carrying Value
Other real estate owned, net:
Other real estate owned	1,651		1,651		1,670
Non-recurring | Residential | Significant Unobservable Inputs (Level 3)
Other real estate owned, net:
Other real estate owned	1,651		1,651		$ 1,670
Non-recurring | Commercial | Carrying Value
Other real estate owned, net:
Other real estate owned	347		347
Non-recurring | Commercial | Significant Unobservable Inputs (Level 3)
Other real estate owned, net:
Other real estate owned	$ 347		$ 347

FAIR VALUE MEASUREMENTS (Deta47

FAIR VALUE MEASUREMENTS (Details 3) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Fair Value Measurements
Loan servicing rights	$ 1,261	$ 1,209
Non-recurring
Fair Value Measurements
Impaired loans, at fair value	270
Other real estate owned	2,000
Loan servicing rights	277	292
Non-recurring | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Loan servicing rights	277	292
Non-recurring | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Loan servicing rights	$ 277	$ 292
Non-recurring | Minimum | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Discount rates	12.00%	12.00%
Non-recurring | Maximum | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Discount rates	12.00%	12.00%
Non-recurring | Weighted average | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Discount rates	12.00%	12.00%
Multi-family residential | Non-recurring | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value		$ 169
Multi-family residential | Non-recurring | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value		$ 169
Multi-family residential | Non-recurring | Minimum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		10.00%
Multi-family residential | Non-recurring | Maximum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		10.00%
Multi-family residential | Non-recurring | Weighted average | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		10.00%
Non-farm & non-residential | Non-recurring | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	$ 226	$ 366
Non-farm & non-residential | Non-recurring | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value		$ 366
Non-farm & non-residential | Non-recurring | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	$ 226
Non-farm & non-residential | Non-recurring | Minimum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		0.00%
Non-farm & non-residential | Non-recurring | Minimum | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	0.00%
Non-farm & non-residential | Non-recurring | Maximum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		0.00%
Non-farm & non-residential | Non-recurring | Maximum | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	0.00%
Non-farm & non-residential | Non-recurring | Weighted average | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		0.00%
Non-farm & non-residential | Non-recurring | Weighted average | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	0.00%
Agricultural | Non-recurring | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	$ 44	$ 3,729
Agricultural | Non-recurring | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value		$ 3,729
Agricultural | Non-recurring | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	$ 44
Agricultural | Non-recurring | Minimum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		5.00%
Agricultural | Non-recurring | Minimum | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	5.00%
Agricultural | Non-recurring | Maximum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		53.00%
Agricultural | Non-recurring | Maximum | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	44.00%
Agricultural | Non-recurring | Weighted average | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)		43.00%
Agricultural | Non-recurring | Weighted average | Sales approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	24.00%
Residential | Non-recurring | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Other real estate owned	$ 1,651	$ 1,670
Residential | Non-recurring | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Other real estate owned	$ 1,651	$ 1,670
Residential | Non-recurring | Minimum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	0.00%	0.00%
Residential | Non-recurring | Minimum | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	8.00%	8.00%
Residential | Non-recurring | Maximum | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	28.00%	48.00%
Residential | Non-recurring | Maximum | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	8.00%	10.00%
Residential | Non-recurring | Weighted average | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Adjustment for differences between the comparable sales and income data available (as a percent)	16.00%	11.00%
Residential | Non-recurring | Weighted average | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	8.00%	9.00%
Commercial | Non-recurring | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Other real estate owned	$ 347
Commercial | Non-recurring | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Other real estate owned	$ 347
Commercial | Non-recurring | Minimum | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	10.00%
Commercial | Non-recurring | Maximum | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	10.00%
Commercial | Non-recurring | Weighted average | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	10.00%

FAIR VALUE MEASUREMENTS (Deta48

FAIR VALUE MEASUREMENTS (Details 4) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financial Assets
Interest bearing deposits	$ 1,280	$ 1,280
Securities	237,476	246,861
Trading Assets	5,400	5,370
Mortgage loans held for sale	1,719	776
Interest receivable	3,661	3,299
Financial liabilities
Interest payable	658	642
Quoted Prices In Active Markets for Identical Assets (Level 1)
Financial Assets
Cash and cash equivalents	16,348	17,169
Interest bearing deposits	1,280	1,280
Securities	295	296
Trading Assets	5,400	5,370
Interest receivable	3
Financial liabilities
Deposits	461,492	470,912
Federal Funds Purchased	2,456
Significant Other Observable Inputs (Level 2)
Financial Assets
Securities	237,181	246,565
Mortgage loans held for sale	1,733	782
Interest receivable	1,296	1,274
Financial liabilities
Deposits	183,880	185,429
Securities sold under agreements to repurchase and other borrowings	13,697	12,620
FHLB advances	95,450	88,373
Interest payable	648	633
Significant Unobservable Inputs (Level 3)
Financial Assets
Loans, net	537,951	535,213
Interest receivable	2,362	2,025
Financial liabilities
Subordinated debentures	7,204	7,209
Interest payable	10	9
Carrying Value
Financial Assets
Cash and cash equivalents	16,348	17,169
Interest bearing deposits	1,280	1,280
Securities	237,476	246,861
Trading Assets	5,400	5,370
Mortgage loans held for sale	1,719	776
Loans, net	540,135	532,293
FHLB stock	5,981	5,981
Interest receivable	3,661	3,299
Financial liabilities
Deposits	644,016	654,869
Securities sold under agreements to repurchase and other borrowings	13,690	12,457
Federal Funds Purchased	2,456
FHLB advances	100,417	93,785
Subordinated debentures	7,217	7,217
Interest payable	658	642
Fair Value
Financial Assets
Cash and cash equivalents	16,348	17,169
Interest bearing deposits	1,280	1,280
Securities	237,476	246,861
Trading Assets	5,400	5,370
Mortgage loans held for sale	1,733	782
Loans, net	$ 537,951	535,213
FHLB stock
Interest receivable	$ 3,661	3,299
Financial liabilities
Deposits	645,372	656,341
Securities sold under agreements to repurchase and other borrowings	13,697	12,620
Federal Funds Purchased	2,456
FHLB advances	95,450	88,373
Subordinated debentures	7,204	7,209
Interest payable	$ 658	$ 642

CHANGES IN ACCUMULATED OTHER 49

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance	$ 1,728	$ (1,875)	$ 791	$ (5,126)
Unrealized holding gains (losses) for the period, net of tax	(2,000)	1,892	(1,057)	5,267
Reclassification adjustment for:
Reclassification of realized amount	(243)	(245)	(251)	(433)
Income taxes	(83)	(83)	(85)	(147)
Securities gains realized in income, net	(160)	(162)	(166)	(286)
Net current period other comprehensive income	(2,160)	1,730	(1,223)	4,981
Ending Balance	$ (432)	$ (145)	$ (432)	$ (145)

CHANGES IN ACCUMULATED OTHER 50

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Reclassifications out of AOCI by component
Securities gains realized in income, net	$ (243)	$ (245)	$ (251)	$ (433)
Provision for income taxes	305	368	306	661
Net of tax	(2,122)	(1,904)	(3,637)	(3,675)
Unrealized Gains and Losses on Available for Sale Securities | Amount Reclassified From Accumulated Other Comprehensive Income
Reclassifications out of AOCI by component
Securities gains realized in income, net	(243)	(245)	(251)	(433)
Provision for income taxes	83	83	85	147
Net of tax	$ (160)	$ (162)	$ (166)	$ (286)

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - Madison Financial Corporation And Wholly Owned Subsidiary $ in Millions	Jul. 24, 2015USD ($)itemshares	Jun. 30, 2015USD ($)
Total assets		$ 119
Total loans		81
Total deposits		$ 95
Subsequent Event
Exchange for each issued and outstanding share of Madison common stock by Kentucky Bancshares | shares	1.1927
Transaction value	$ 7.2
Number of branch locations merged | item	3

REPURCHASE AGREEMENTS (Details)

REPURCHASE AGREEMENTS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
REPURCHASE AGREEMENTS
Repurchase agreements and other borrowings	$ 13,690	$ 12,457
Average weighted life	2 years 6 months
Carrying amount of agency-backed securities pledged to secure repurchase agreements	$ 16,600
Overnight obligations
REPURCHASE AGREEMENTS
Repurchase agreements and other borrowings	7,700
Terms extending through May 2019
REPURCHASE AGREEMENTS
Repurchase agreements and other borrowings	$ 6,000

Uncategorized Items - ktyb-2015

Label	Element	Value
Gain (Loss) on Sale of Mortgage Loans	us-gaap_GainLossOnSaleOfMortgageLoans	$ 241
Gain (Loss) on Sale of Mortgage Loans	us-gaap_GainLossOnSaleOfMortgageLoans	$ 441