Kentucky Bancshares (KTYB) 10-Q 12 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 31, 2016
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, 2016
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		2,993,851
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS (un

CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 15,459	$ 26,546
Federal funds sold	1,169	1,502
Cash and cash equivalents	16,628	28,048
Interest bearing time deposits	4,829	4,874
Securities available for sale	266,722	264,212
Trading Assets	5,704	5,531
Mortgage loans held for sale	1,485	624
Loans	653,277	624,121
Allowance for loan losses	(7,259)	(6,521)
Net loans	646,018	617,600
Federal Home Loan Bank stock	7,034	7,034
Real estate owned, net	2,440	2,347
Bank premises and equipment, net	16,345	16,597
Interest receivable	3,641	3,681
Mortgage servicing rights	1,233	1,277
Goodwill	14,001	14,001
Other intangible assets	617	773
Other assets	7,371	8,085
Total assets	994,068	974,684
Deposits
Non-interest bearing	205,693	209,289
Time deposits, $250,000 and over	67,927	61,199
Other interest bearing	477,776	488,493
Total deposits	751,396	758,981
Repurchase agreements	26,057	18,514
Long-term Federal Home Loan Bank advances	99,617	87,833
Note payable	4,695	4,794
Subordinated debentures	7,217	7,217
Interest payable	693	659
Other liabilities	8,594	7,273
Total liabilities	898,269	885,271
Stockholders' equity
Preferred stock, 300,000 shares authorized and unissued
Common stock, no par value; 10,000,000 shares authorized; 2,993,851 and 2,989,205 shares issued and outstanding in June 2016 and December 2015	20,829	20,730
Retained earnings	70,568	68,324
Accumulated other comprehensive income	4,402	359
Total stockholders' equity	95,799	89,413
Total liabilities and stockholders’ equity	$ 994,068	$ 974,684

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (unaudited) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
CONSOLIDATED BALANCE SHEETS
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	2,993,851	2,989,205
Common stock, shares outstanding	2,993,851	2,989,205

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
INTEREST INCOME
Loans, including fees	$ 7,423	$ 6,346	$ 14,802	$ 12,555
Securities
Taxable	866	692	1,773	1,425
Tax exempt	661	690	1,318	1,366
Trading assets	31	39	73	83
Other	105	68	218	137
Total interest income	9,086	7,835	18,184	15,566
INTEREST EXPENSE:
Deposits	555	493	1,112	979
Repurchase agreements	27	24	53	47
Federal Home Loan Bank advances	393	397	777	799
Note payable	59		120
Subordinated debentures	67	58	128	115
Total interest expense	1,101	972	2,190	1,940
Net interest income	7,985	6,863	15,994	13,626
Provision for loan losses	225	350	600	650
Net interest income after provision	7,760	6,513	15,394	12,976
NON-INTEREST INCOME:
Service charges	1,264	1,091	2,381	1,995
Loan service fee income, net	(2)	55	49	108
Trust department income	261	259	524	536
Gain on sale of available for sale securities, net	151	243	277	251
Gain (loss) on trading assets	60	(48)	100	(53)
Gain on sale of mortgage loans	457	441	756	768
Brokerage income	250	136	434	242
Debit card interchange income	710	623	1,354	1,164
Other	135	822	158	881
Total other income	3,286	3,622	6,033	5,892
NON-INTEREST EXPENSE:
Salaries and employee benefits	4,562	4,150	8,932	7,944
Occupancy expenses	939	854	1,857	1,786
Repossession expenses, net	31	237	143	282
FDIC Insurance	164	145	338	301
Legal and professional fees	513	293	891	578
Data processing	427	386	853	753
Debit card expenses	368	293	687	549
Amortization expense of intangible assets, excluding mortgage servicing right	77	30	156	61
Advertising and marketing	225	212	450	425
Taxes other than payroll, property and income	279	229	554	459
Telephone	94	77	185	145
Postage	101	90	190	171
Loan fees	46	104	91	197
Other	782	608	1,609	1,274
Total other expenses	8,608	7,708	16,936	14,925
Income before taxes	2,438	2,427	4,491	3,943
Income taxes	356	305	572	306
Net income	2,082	2,122	3,919	3,637
Other Comprehensive Income, net of tax:
Change in Unrealized Gains on Securities	1,656	(2,160)	4,043	(1,223)
Comprehensive income (Loss)	$ 3,738	$ (38)	$ 7,962	$ 2,414
Earnings per share
Basic (in dollars per share)	$ 0.70	$ 0.77	$ 1.31	$ 1.33
Diluted (in dollars per share)	0.70	0.77	1.31	1.33
Dividends per share (in dollars per share)	$ 0.27	$ 0.26	$ 0.54	$ 0.52

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income	Total
Beginning Balance at Dec. 31, 2014			$ 791
Increase (Decrease) in Stockholders' Equity
Net income				$ 3,637
Ending Balance at Jun. 30, 2015			(432)
Beginning Balance at Mar. 31, 2015			1,728
Increase (Decrease) in Stockholders' Equity
Net income				2,122
Ending Balance at Jun. 30, 2015			(432)
Beginning Balance at Dec. 31, 2015	$ 20,730	$ 68,324	359	89,413
Balances (in shares) at Dec. 31, 2015	2,989,205
Increase (Decrease) in Stockholders' Equity
Common stock issued (including employee stock grants of 6,170 shares and director stock awards of 1,352 shares)	$ 49			49
Common stock issued (in shares)	7,522
Stock compensation expense	$ 80			80
Common stock purchased and retired	$ (30)	(57)		(87)
Common stock purchased and retired (in shares)	(2,876)
Other comprehensive income			4,043	4,043
Net income		3,919		3,919
Dividends declared - $0.54 per share		(1,618)		(1,618)
Ending Balance at Jun. 30, 2016	$ 20,829	70,568	4,402	95,799
Balances (in shares) at Jun. 30, 2016	2,993,851
Beginning Balance at Mar. 31, 2016			2,746
Increase (Decrease) in Stockholders' Equity
Net income				2,082
Ending Balance at Jun. 30, 2016	$ 20,829	$ 70,568	$ 4,402	$ 95,799
Balances (in shares) at Jun. 30, 2016	2,993,851

CONSOLIDATED STATEMENTS OF CHA6

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (unaudited)	6 Months Ended
	Jun. 30, 2016$ / sharesshares
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
Common stock issued including tax benefit, net - stock grants (in shares)	6,170
Common stock issued including tax benefit, net - employee gifts (in shares)	1,352
Dividends per share (in dollars per share) | $ / shares	$ 0.54

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash Flows From Operating Activities
Net income	$ 3,919	$ 3,637
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	819	843
Securities amortization (accretion), net	527	494
Stock based compensation expense	80	66
Provision for loan losses	600	650
Securities available for sale gains, net	(277)	(251)
Net change in trading assets	(173)	(30)
Originations of loans held for sale	(23,913)	(24,562)
Proceeds from sale of loans	23,808	24,387
Losses (gains) on other real estate		59
Gain on sale of mortgage loans	(756)	(768)
Write-downs of other real estate, net	85	227
Changes in:
Interest receivable	40	(362)
Other assets	714	(469)
Interest payable	34	16
Other liabilities	(735)	(2,165)
Net cash from operating activities	4,772	1,772
Cash Flows From Investing Activities
Net change in interest bearing time deposits	45
Purchases of securities, available for sale	(48,094)	(20,074)
Proceeds from sales of securities	21,388	9,051
Proceeds from principal payments, maturities and calls of securities	30,087	18,313
Net change in loans	(29,073)	(11,543)
Purchases of bank premises and equipment	(547)	(440)
Proceeds from the sale of other real estate	15	4,057
Net cash from investing activities	(26,179)	(636)
Cash Flows From Financing Activities:
Net change in deposits	(7,585)	(10,853)
Net change in repurchase agreements and other borrowings	7,543	3,689
Proceeds from short-term Federal Home Loan Bank advances	30,000	15,000
Repayment of short-term Federal Home Loan Bank advances	(30,000)	(10,000)
Proceeds from long-term Federal Home Loan Bank advances	15,000	4,682
Repayment of long-term Federal Home Loan Bank advances	(3,216)	(3,050)
Repayments on note payable	(99)
Proceeds from issuance of common stock	49	2
Purchase of common stock	(87)	(10)
Dividends paid	(1,618)	(1,417)
Net cash from financing activities	9,987	(1,957)
Net change in cash and cash equivalents	(11,420)	(821)
Cash and cash equivalents at beginning of period	28,048	17,169
Cash and cash equivalents at end of period	16,628	16,348
Supplemental disclosures of cash flow information Cash paid during the year for:
Interest expense	2,156	1,924
Supplemental disclosures of non-cash investing activities
Real estate acquired through foreclosure	$ 235	$ 3,334

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2016
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, 2015. 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, 2015. 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 : 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. 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. 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 Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This 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 encourages an entity to 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. Accounting Standards Update (“ASU”) ASU No. 2016-1, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued an update (ASU 2016-1, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) which will require entities to measure many equity investments at fair value and recognize changes in fair value in net income. This update does not apply to equity investments that result in consolidation, those accounted for under the equity method and certain others, and will eliminate use of the available for sale classification for equity securities while providing a new measurement alternative for equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company does not anticipate this update will have a material impact on its Consolidated Financial Statements. Accounting Standards Update (“ASU”) ASU No. 2016-2, Leases (Topic 842) This ASU is a standard that applies to all lease contracts. A lease contract is defined as a contract, or part of a contract, that conveys the right to control the use of an asset for a period in exchange for consideration. Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet. Under this ASU, after determining that a contract contains a lease, a lessee will need to evaluate whether the lease is a finance or an operating lease at the commencement of a new lease and upon change in the lease term or change in the lessee’s option to purchase the asset. The classification criteria for distinguishing between finance leases and operating leases under this ASU are substantially similar to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. All leases, whether finance or operating, will be on balance sheet unless they are subject to a short-term (12 months or less) lease accounting policy election. The lease term includes periods subject to an option to extend the lease if the lessee is reasonably certain to exercise that option. This means leases of 12 months or less with extension options that meet that criteria will be recorded on the balance sheet. Finance leases under this ASU will recognize amortization expense on the asset separately from interest expense on the liability, similar to capital lease guidance under existing GAAP. Operating leases under this ASU will recognize lease expense that includes amortization expense on the leased asset and interest on the liability. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is a lessee for a material level of operating leases and is analyzing the impact of this ASU on its consolidated financial statements. Accounting Standards Update (“ASU”) ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting. The amendments are intended to improve the accounting for employee shared-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but the Company does not expect these ammendments to have a material impact. Accounting Standards Update (“ASU”) ASU No. 2016-13, Financial Instruments (Topic 326) In June 2016, the FASB issued ASU No. 2016-13, . The final standard will change estimates for credit losses related to financial assets measured at amortized cost such as loans, held-to-maturity debt securities, and certain other contracts. For estimating credit losses, the FASB is replacing the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The largest impact will be on the allowance for loan and lease losses. The standard will become effective for fiscal years beginning after December 15, 2019 for public companies. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

SECURITIES

SECURITIES	6 Months Ended
	Jun. 30, 2016
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, 2016 U. S. government agencies $ $ $ — $ States and political subdivisions — Mortgage-backed - residential Equity securities — Total $ $ $ $ December 31, 2015 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, 2016 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 9. 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 2016 and 2015 were $ 21.4 million and $9.1 million. Gross gains of $277 thousand and $251 thousand and gross losses of $0 and $0 were realized on those sales, respectively. The tax provision related to these realized net gains was $94 thousand and $85 thousand, respectively. Proceeds from sales of securities during the three months ended June 30, 2016 and June 30, 2015 were $ 12.1 million and $9.1 million. Gross gains of $151 thousand and $243 thousand and gross losses of $0 and $0 were realized on those sales, respectively. The tax provision related to these realized net gains was $51 thousand and $83 thousand, respectively. Securities with unrealized losses June 30, 2016 and at December 31, 2015 not recognized in income are as follows: June 30, 2016 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, 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 $ $ $ $ $ $ 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 $5.7 million are primarily comprised of cash and cash equivalents and municipal securities which are generally held for 60 days or less.

LOANS

LOANS	6 Months Ended
	Jun. 30, 2016
LOANS
LOANS	3. LOANS Loans at period-end are as follows: (in thousands) 6/30/2016 12/31/2015 Commercial $ $ Real estate construction Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer Other Total $ $ The above loan balances include loans purchased in the Madison Financial Corporation acquisition. Loan balances acquired in the Madison Financial Corporation acquisition have no allocated allowance for loan losses. The composition of loans acquired as of June 30, 2016 is as follows: 6/30/2016 12/31/2015 Commercial $ $ Real estate construction Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer 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, 2016 (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, 2016 (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, 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 - - $ $ $ $ $ Purchased Credit Impaired Loans: The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is as follows: 6/30/2016 12/31/2015 Commercial $ — $ Real estate mortgage: Construction — 1-4 family residential Non-farm & non-residential Agricultural $ $ There was no associated allowance for loan losses as of June 30, 2016 or December 31, 2015 for purchased credit impaired loans. The contractual principal balance of these loans was $ 3.2 million at June 30, 2016 and $4.2 million at December 31, 2015. Accretable yield, or income expected to be collected, is as follows. There was no accretion recorded in income related to purchased credit impaired loans for the three months or six months ended June 30, 2015. Three Months Ended Six Months Ended 6/30/2016 6/30/2016 Balance, beginning of period $ $ New loans purchased — — Accretion of income Balance, end of period $ $ The following tables present the balance in the allowance for loan losses and the recorded investment (excluding accrued interest receivable amounting to $ 2.3 million as of June 30, 2016 and $2.3 million at December 31, 2015) in loans by portfolio segment and based on impairment method as of June 30, 2016 and December 31, 2015: Individually Collectively Purchased As of June 30, 2016 Evaluated for Evaluated for Credit (in thousands) Impairment Impairment Impaired 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 — — $ $ $ $ Individually Collectively Purchased As of December 31, 2015 Evaluated for Evaluated for Credit (in thousands) Impairment Impairment Impaired 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 — — Total $ $ $ $ The following table presents loans individually evaluated for impairment by class of loans as of and for the six months ended June 30, 2016 (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: Construction 1-4 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 for the six months ended June 30, 2015: Year to Date Year to Date Average Interest Cash Basis Recorded Income Interest (in thousands): 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 table presents loans individually evaluated for impairment by class of loans as of and for the year ended December 31, 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 construction $ $ $ — $ $ $ 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 ended June 30, 2016 and June 30, 2015: Three Months Ending June 30, 2016 Average Interest Cash Basis Recorded Income Interest (in thousands): Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: $ 1-4 family residential Agricultural With an allowance recorded: Real estate mortgage: Construction — 1-4 family residential Non-farm & non-residential Agricultural — — Total $ $ $ 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 — — Total $ $ $ 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, 2016 and December 31, 2015: Loans Past Due Over 90 Days As of June 30, 2016 Still Troubled Debt (in thousands) Nonaccrual Accruing Restructurings Commercial $ — $ — $ — Real estate construction — — — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential Agricultural — Consumer — Total $ $ $ Loans included in totals above acquired from Madison Financial Corporation $ $ — $ — Loans Past Due Over 90 Days As of December 31, 2015 Still Troubled Debt (in thousands) Nonaccrual Accruing Restructurings Commercial $ $ — $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — — — Non-farm & non-residential Agricultural — — Consumer — Other — — — Total $ $ $ Loans included in totals above acquired from Madison Financial Corporation $ $ $ — Nonaccrual loans secured by real estate make up 97.3% of the total nonaccrual loan balances at June 30, 2016. 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, 2016 and December 31, 2015 by class of loans: 30–59 60–89 Greater than Total As of June 30, 2016 Days Days 90 Days Past Due & Loans Not (in thousands) 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 $ $ $ $ $ $ Loans included in totals above acquired from Madison Financial Corp. $ $ — $ — $ $ $ 30–59 60–89 Greater than Total As of December 31, 2015 Days Days 90 Days Past Due & Loans Not (in thousands) 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 $ $ $ $ $ $ Loans included in totals above acquired from Madison Financial Corp. $ $ $ $ $ $ Troubled Debt Restructurings: The Company has allocated $ 79 thousand in specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2016. The Company allocated $ 101 thousand for specific reserves to customers whose loan terms had been modified in troubled debt restructuring as of December 31, 2015. The Company has not committed to lend additional amounts as of June 30, 2016 and December 31, 2015 to customers with outstanding loans that are classified as troubled debt restructurings. During 2015, one loan which had a balance of $4 million and was classified as a troubled debt restructuring as of December 31, 2014, was placed on non-accrual and reported as such as of June 30, 2016 and December 31, 2015. No loans were modified as troubled debt restructurings during the first six months ended of 2016 or 2015. 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, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: As of June 30, 2016 Special (in thousands) Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — Non-farm & non-residential — Agricultural Total $ $ $ $ Loans included in totals above acquired from Madison Financial Corporation $ $ $ $ — As of December 31, 2015 Special (in thousands) Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential — Multi-family residential — Non-farm & non-residential — Agricultural — Total $ $ $ $ — Loans included in totals above acquired from Madison Financial Corporation $ $ $ $ — 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 $ 23 thousand at June 30, 2016 and $6 thousand at December 31, 2015 .

REAL ESTATE OWNED

REAL ESTATE OWNED	6 Months Ended
	Jun. 30, 2016
REAL ESTATE OWNED
REAL ESTATE OWNED	4. REAL ESTATE OWNED Activity in real estate owned, net was as follows: Six Months Ended June 30, 2016 2015 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, 2016 2015 Beginning of year $ $ Write-downs of other real estate, net Reductions from sale — End of Period $ $ Expenses related to foreclosed assets include: Six Months Ended June 30, 2016 2015 Net loss on sales $ — $ Additions to valuation allowance, net Operating expenses, net of rental income Repossession expense, net Net expenses $ $ Three Months Ended June 30, 2016 2015 (in thousands) Net loss on sales $ — $ Additions to valuation allowance, net — Operating expenses, net of rental income Repossession expenses, net For the period $ $

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2016
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, 2016 2015 (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, 2016 2015 (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 1 ,200 shares of common stock for the six and three months ended June 30, 2016 and 2,400 shares of common stock for the six and three months ended June 30, 2015 were excluded from diluted earnings per share because their impact was antidilutive.

STOCK COMPENSATION

STOCK COMPENSATION	6 Months Ended
	Jun. 30, 2016
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 2016 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 year $ months $ — Vested and expected to vest $ months $ — Exercisable, end of period $ months $ — As of June 30, 2016, 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 were 50,000 . There were 0 shares issued during the first six months of 2016 and 5 ,38 5 shares issued during the first six months of 2015. The plan is now expired and no additional shares will be issued from the 2005 plan. There were no shares forfeited during the first six months of both 2016 and 2015. 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, 2016 $ $ Granted — — — Vested Forfeited — — — Nonvested at June 30, 2016 $ $ As of June 30, 2016, there was $ 230 thousand 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 2.7 years. As June 30, 2016, no additional shares are available for issuance 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 6,170 shares issued during the first six months of 2016 and 465 shares were issued during the first six months of 2015. There were no shares forfeited during the first six months of both 2016 or 2015. 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, 2016 $ $ Granted Vested Forfeited — — — Nonvested at June 30, 2016 $ $ As of June 30, 2016, there was $ 205 thousand 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 4. 3 years. As of June 30, 2016, 140,013 shares are still available for issuance.

REPURCHASE AGREEMENTS

REPURCHASE AGREEMENTS	6 Months Ended
	Jun. 30, 2016
REPURCHASE AGREEMENTS
REPURCHASE AGREEMENTS	7. REPURCHASE AGREEMENTS Repurchase agreements totaled $ 26.1 million as of June 30, 2016. Of this, $ 20.1 million were overnight obligations and $6.0 million had terms extending through May 2020 and a weighted average life of 2 .2 years. The Company pledged agency-backed securities with a carrying amount of $ 33.2 million to secure repurchase agreements as of June 30, 2016.

OTHER BORROWINGS

OTHER BORROWINGS	6 Months Ended
	Jun. 30, 2016
OTHER BORROWINGS
OTHER BORROWINGS	8. OTHER BORROWINGS On July 20, 2015, the Company borrowed $5 million which had an outstanding balance of $4.7 million at June 30, 2016. The term loan has a fixed interest rate of 5.02 %, requires quarterly principal and interest payments, matures July 20, 2025 and is collateralized by the Company’s stock. The maturity schedule for the term loan as of June 30, 2016 is as follows: 2016 $ 2017 2018 2019 2020 Thereafter $

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2016
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	9. 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 $100 thousand for the first six months of 2016 and $14 thousand for the first six months of 2015, and $19 thousand for the three months ended June 30, 2016 and $42 thousand for the three months ended June 30, 2015, 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 $85 thousand for the six months ended June 30, 2016 and $ 227 thousand for the six months ended June 30, 2015 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, 2016 (in thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying 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, 2015 (in thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying 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 2016 or 2015. Assets measured at fair value on a non-recurring basis are summarized below: Fair Value Measurements at June 30, 2016 Using : Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Description Impaired loans: Real Estate Mortgage: Construction $ — — $ 1-4 family Residential — — Non-farm & non-residential — — Other real estate owned, net: Residential — — Loan servicing rights — — Fair Value Measurements at December 31, 2015 Using : Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Description Impaired loans: Real Estate Mortgage: Multi-family residential — — $ Non-farm & non-residential — — Agricultural — — — — Other real estate owned, net: 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 $ 1.1 million, which includes a valuation allowance of $ 109 thousand at June 30, 2016. During the first six months of 2016, two new loans became impaired resulting in additional loan loss provision expense of $34 thousand. The total allowance for specific impaired loans decreased $32 thousand for the six months ended June 30, 2016 and decreased $301 thousand for the six months ended June 30, 2015. The total allowance for specific impaired loans decreased $399 thousand for the three months ended June 30, 2016 and decreased $101 thousand for the three months ended June 30, 2015. The decrease of $399 thousand in the allowance for specific impaired loans during the second quarter of 2016 was mostly attributed to one loan, which had a specific reserve of $350 thousand at March 31, 2016, no longer requiring a specific reserve at June 30, 2016. This loan had no specific reserve at December 31, 2015. Other real estate owned, which is measured at fair value less costs to sell, had a net carrying amount of $1.4 million, which is made up of the outstanding balance of $ 2.1 million, net of a valuation allowance of $701 thousand at June 30, 2016. The Company recorded $85 thousand in write-downs of other real estate owned properties for the six months ended June 30, 2016. The Company recorded $227 thousand in net write-downs of other real estate owned properties during the six months ended June 30, 2015. The Company recorded no write-downs of other real estate owned properties during the three months ended June 30, 2016 and $201 thousand in write-downs of other real-estate owned properties during the three months ended June 30, 2015. Impaired loan servicing rights, which are carried at the lower of cost or fair value, were carried at their fair value of $ 1.1 million, which is made up of the outstanding balance of $1.2 million , net of a valuation allowance of $61 thousand at June 30, 2016. For the first six months of 2016, the Company recorded net write-downs of $42 thousand and a net recovery of prior write-downs of $ 34 thousand for the six months ended June 30, 2015. For the three months ended June 30, 2016, the Company recorded net write-downs of $45 thousand. For the three months ended June 30, 2015, the Company recorded a net recovery of $20 thousand. At December 31, 2015, impaired loan servicing rights were carried at their fair value of $87 thousand, which is made up of the outstanding balance of $106 thousand, net of a valuation allowance of $19 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, 2016 and December 31, 2015: Range June 30, 2016 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Construction sales comparison adjustment for differences between the comparable sales 1% -4% (3)% 1-4 family sales comparison adjustment for differences between the comparable sales 0% -12% (7)% Non-farm & non-residential sales comparison adjustment for differences between the comparable sales 4% -44% (23)% Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 10% -28% (19)% income approach capitalization rate 10% -10% (10)% Loan Servicing Rights discounted cash flow discount rate 9% -20% (11)% Range December 31, 2015 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Real estate mortgage: 1-4 family residential sales comparison adjustment for differences between the comparable sales 1% -12% (7)% Non-farm & non-residential sales comparison adjustment for differences between the comparable sales 23% -31% (27)% Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 10% -28% (19)% income approach capitalization rate 10% -10% (10)% Loan Servicing Rights discounted cash flow discount rate 8% -21% (11)% Fair Value of Financial Instruments The carrying amounts and estimated fair values of financial instruments, at June 30, 2016 and December 31, 2015 are as follows: June 30, 2016: 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 Interest receivable — Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase — — FHLB advances — — Note payable Subordinated debentures — — Interest payable — December 31, 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 Interest receivable — Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase — — FHLB advances — — Note payable — — 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 cash equivalents approximate fair values and are classified as Level 1. Interest Bearing Deposits – The carrying amounts of interest bearing deposits 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 mortgage 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, Borrowings and Subordinated Debentures - The fair values of the Company’s FHLB advances and other borrowings 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, 2016
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT	10. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT Changes in Accumulated Other Comprehensive Income by Component (unaudited) (in thousands) Unrealized Gains and Losses on Available for Sale Securities For the Six Months Ended June 30, 2016 2015 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 $ $ Unrealized Gains and Losses on Available for Sale Securities For the Three Months Ended June 30, 2016 2015 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 $ $ The following is significant amounts reclassified out of each component of accumulated other comprehensive Income (Loss) for the six months ended June 30, 2016 and 2015: June 30, 201 6 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 $ Gain on sale of available for sale securities, net Income taxes Net income 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 $ Gain on sale of available for sale securities, net Income taxes Net income The following is significant amounts reclassified out of each component of accumulated other comprehensive Income (Loss) for the three months ended June 30, 2016 and 2015: June 30, 2016 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 $ Gain on sale of available for sale securities, net Provision for income taxes Net of tax 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 $ Gain on sale of available for sale securities, net Provision for income taxes Net of tax

SUMMARY OF SIGNIFICANT ACCOUN18

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2016
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 : 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. 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.
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 Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This 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 encourages an entity to 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. Accounting Standards Update (“ASU”) ASU No. 2016-1, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued an update (ASU 2016-1, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) which will require entities to measure many equity investments at fair value and recognize changes in fair value in net income. This update does not apply to equity investments that result in consolidation, those accounted for under the equity method and certain others, and will eliminate use of the available for sale classification for equity securities while providing a new measurement alternative for equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical expedient. The guidance in this ASU will become effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company does not anticipate this update will have a material impact on its Consolidated Financial Statements. Accounting Standards Update (“ASU”) ASU No. 2016-2, Leases (Topic 842) This ASU is a standard that applies to all lease contracts. A lease contract is defined as a contract, or part of a contract, that conveys the right to control the use of an asset for a period in exchange for consideration. Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet. Under this ASU, after determining that a contract contains a lease, a lessee will need to evaluate whether the lease is a finance or an operating lease at the commencement of a new lease and upon change in the lease term or change in the lessee’s option to purchase the asset. The classification criteria for distinguishing between finance leases and operating leases under this ASU are substantially similar to the classification criteria for distinguishing between capital leases and operating leases under previous GAAP. All leases, whether finance or operating, will be on balance sheet unless they are subject to a short-term (12 months or less) lease accounting policy election. The lease term includes periods subject to an option to extend the lease if the lessee is reasonably certain to exercise that option. This means leases of 12 months or less with extension options that meet that criteria will be recorded on the balance sheet. Finance leases under this ASU will recognize amortization expense on the asset separately from interest expense on the liability, similar to capital lease guidance under existing GAAP. Operating leases under this ASU will recognize lease expense that includes amortization expense on the leased asset and interest on the liability. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is a lessee for a material level of operating leases and is analyzing the impact of this ASU on its consolidated financial statements. Accounting Standards Update (“ASU”) ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting. The amendments are intended to improve the accounting for employee shared-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but the Company does not expect these ammendments to have a material impact. Accounting Standards Update (“ASU”) ASU No. 2016-13, Financial Instruments (Topic 326) In June 2016, the FASB issued ASU No. 2016-13, . The final standard will change estimates for credit losses related to financial assets measured at amortized cost such as loans, held-to-maturity debt securities, and certain other contracts. For estimating credit losses, the FASB is replacing the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The largest impact will be on the allowance for loan and lease losses. The standard will become effective for fiscal years beginning after December 15, 2019 for public companies. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

SECURITIES (Tables)

SECURITIES (Tables)	6 Months Ended
	Jun. 30, 2016
SECURITIES
Schedule of 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, 2016 U. S. government agencies $ $ $ — $ States and political subdivisions — Mortgage-backed - residential Equity securities — Total $ $ $ $ December 31, 2015 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	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	Securities with unrealized losses June 30, 2016 and at December 31, 2015 not recognized in income are as follows: June 30, 2016 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, 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 $ $ $ $ $ $

LOANS (Tables)

LOANS (Tables)	6 Months Ended
	Jun. 30, 2016
LOANS
Schedule of loans	(in thousands) 6/30/2016 12/31/2015 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, 2016 (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, 2016 (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, 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 - - $ $ $ $ $
Schedule of allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method	Individually Collectively Purchased As of June 30, 2016 Evaluated for Evaluated for Credit (in thousands) Impairment Impairment Impaired 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 — — $ $ $ $ Individually Collectively Purchased As of December 31, 2015 Evaluated for Evaluated for Credit (in thousands) Impairment Impairment Impaired 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 — — Total $ $ $ $
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, 2016 (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: Construction 1-4 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 for the six months ended June 30, 2015: Year to Date Year to Date Average Interest Cash Basis Recorded Income Interest (in thousands): 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 table presents loans individually evaluated for impairment by class of loans as of and for the year ended December 31, 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 construction $ $ $ — $ $ $ 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 ended June 30, 2016 and June 30, 2015: Three Months Ending June 30, 2016 Average Interest Cash Basis Recorded Income Interest (in thousands): Investment Recognized Recognized With no related allowance recorded: Real estate mortgage: $ 1-4 family residential Agricultural With an allowance recorded: Real estate mortgage: Construction — 1-4 family residential Non-farm & non-residential Agricultural — — Total $ $ $ 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 — — 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	Loans Past Due Over 90 Days As of June 30, 2016 Still Troubled Debt (in thousands) Nonaccrual Accruing Restructurings Commercial $ — $ — $ — Real estate construction — — — Real estate mortgage: 1-4 family residential Multi-family residential — — Non-farm & non-residential Agricultural — Consumer — Total $ $ $ Loans included in totals above acquired from Madison Financial Corporation $ $ — $ — Loans Past Due Over 90 Days As of December 31, 2015 Still Troubled Debt (in thousands) Nonaccrual Accruing Restructurings Commercial $ $ — $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — — — Non-farm & non-residential Agricultural — — Consumer — Other — — — Total $ $ $ Loans included in totals above acquired from Madison Financial Corporation $ $ $ —
Schedule of aging of the recorded investment in past due and non-accrual loans	30–59 60–89 Greater than Total As of June 30, 2016 Days Days 90 Days Past Due & Loans Not (in thousands) 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 $ $ $ $ $ $ Loans included in totals above acquired from Madison Financial Corp. $ $ — $ — $ $ $ 30–59 60–89 Greater than Total As of December 31, 2015 Days Days 90 Days Past Due & Loans Not (in thousands) 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 $ $ $ $ $ $ Loans included in totals above acquired from Madison Financial Corp. $ $ $ $ $ $
Schedule of risk category of loans by class of loans	As of June 30, 2016 Special (in thousands) Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential Multi-family residential — Non-farm & non-residential — Agricultural Total $ $ $ $ Loans included in totals above acquired from Madison Financial Corporation $ $ $ $ — As of December 31, 2015 Special (in thousands) Pass Mention Substandard Doubtful Commercial $ $ $ $ — Real estate construction — Real estate mortgage: 1-4 family residential — Multi-family residential — Non-farm & non-residential — Agricultural — Total $ $ $ $ — Loans included in totals above acquired from Madison Financial Corporation $ $ $ $ —
Madison Financial Corp
LOANS
Schedule of loans	6/30/2016 12/31/2015 Commercial $ $ Real estate construction Real estate mortgage: 1-4 family residential Multi-family residential Non-farm & non-residential Agricultural Consumer Total $ $
Schedule of carrying amount of purchased credit impaired loans	6/30/2016 12/31/2015 Commercial $ — $ Real estate mortgage: Construction — 1-4 family residential Non-farm & non-residential Agricultural $ $
Schedule of accretable yield or income expected to be collected	Three Months Ended Six Months Ended 6/30/2016 6/30/2016 Balance, beginning of period $ $ New loans purchased — — Accretion of income Balance, end of period $ $

REAL ESTATE OWNED (Tables)

REAL ESTATE OWNED (Tables)	6 Months Ended
	Jun. 30, 2016
REAL ESTATE OWNED
Schedule of activity in real estate owned	Six Months Ended June 30, 2016 2015 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, 2016 2015 Beginning of year $ $ Write-downs of other real estate, net Reductions from sale — End of Period $ $
Schedule of expenses related to foreclosed assets	Six Months Ended June 30, 2016 2015 Net loss on sales $ — $ Additions to valuation allowance, net Operating expenses, net of rental income Repossession expense, net Net expenses $ $ Three Months Ended June 30, 2016 2015 (in thousands) Net loss on sales $ — $ Additions to valuation allowance, net — Operating expenses, net of rental income Repossession expenses, net For the period $ $

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2016
EARNINGS PER SHARE
Schedule of factors used in the earnings per share computation	Six Months Ended June 30, 2016 2015 (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, 2016 2015 (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, 2016
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 year $ months $ — Vested and expected to vest $ months $ — Exercisable, end of period $ 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, 2016 $ $ Granted — — — Vested Forfeited — — — Nonvested at June 30, 2016 $ $
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, 2016 $ $ Granted Vested Forfeited — — — Nonvested at June 30, 2016 $ $

OTHER BORROWINGS (Tables)

OTHER BORROWINGS (Tables)	6 Months Ended
	Jun. 30, 2016
OTHER BORROWINGS
Maturity schedule for the term loan	2016 $ 2017 2018 2019 2020 Thereafter $

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2016
FAIR VALUE MEASUREMENTS
Schedule of assets measured at fair value on a recurring basis	Fair Value Measurements at June 30, 2016 (in thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying 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, 2015 (in thousands): Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying 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, 2016 Using : Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Description Impaired loans: Real Estate Mortgage: Construction $ — — $ 1-4 family Residential — — Non-farm & non-residential — — Other real estate owned, net: Residential — — Loan servicing rights — — Fair Value Measurements at December 31, 2015 Using : Quoted Prices In Active Markets for Significant Other Significant Identical Observable Unobservable Carrying Assets Inputs Inputs (In thousands) Value (Level 1) (Level 2) (Level 3) Description Impaired loans: Real Estate Mortgage: Multi-family residential — — $ Non-farm & non-residential — — Agricultural — — — — Other real estate owned, net: 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, 2016 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Construction sales comparison adjustment for differences between the comparable sales 1% -4% (3)% 1-4 family sales comparison adjustment for differences between the comparable sales 0% -12% (7)% Non-farm & non-residential sales comparison adjustment for differences between the comparable sales 4% -44% (23)% Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 10% -28% (19)% income approach capitalization rate 10% -10% (10)% Loan Servicing Rights discounted cash flow discount rate 9% -20% (11)% Range December 31, 2015 Fair Valuation Unobservable (Weighted (In thousands) Value Technique(s) Input(s) Average) Impaired loans Real estate mortgage: 1-4 family residential sales comparison adjustment for differences between the comparable sales 1% -12% (7)% Non-farm & non-residential sales comparison adjustment for differences between the comparable sales 23% -31% (27)% Other real estate owned: Residential sales comparison adjustment for differences between the comparable sales 10% -28% (19)% income approach capitalization rate 10% -10% (10)% Loan Servicing Rights discounted cash flow discount rate 8% -21% (11)%
Schedule of carrying amounts and estimated fair values of financial instruments	June 30, 2016: 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 Interest receivable — Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase — — FHLB advances — — Note payable Subordinated debentures — — Interest payable — December 31, 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 Interest receivable — Financial liabilities Deposits $ $ $ $ — $ Securities sold under agreements to repurchase — — FHLB advances — — Note payable — — Subordinated debentures — — Interest payable —

CHANGES IN ACCUMULATED OTHER 26

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Tables)	6 Months Ended
	Jun. 30, 2016
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 (unaudited) (in thousands) Unrealized Gains and Losses on Available for Sale Securities For the Six Months Ended June 30, 2016 2015 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 $ $ Unrealized Gains and Losses on Available for Sale Securities For the Three Months Ended June 30, 2016 2015 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 $ $
Significant amounts reclassified out of each component of AOCI	June 30, 201 6 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 $ Gain on sale of available for sale securities, net Income taxes Net income 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 $ Gain on sale of available for sale securities, net Income taxes Net income The following is significant amounts reclassified out of each component of accumulated other comprehensive Income (Loss) for the three months ended June 30, 2016 and 2015: June 30, 2016 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 $ Gain on sale of available for sale securities, net Provision for income taxes Net of tax 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 $ Gain on sale of available for sale securities, net Provision for income taxes Net of tax

SECURITIES - AVAILABLE FOR SALE

SECURITIES - AVAILABLE FOR SALE (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Securities Available for Sale
Amortized Cost	$ 260,052	$ 263,667
Gross Unrealized Gains	6,980	2,929
Gross Unrealized Losses	(310)	(2,384)
Fair Value	266,722	264,212
U.S. government agencies
Securities Available for Sale
Amortized Cost	35,736	49,012
Gross Unrealized Gains	588	51
Gross Unrealized Losses		(200)
Fair Value	36,324	48,863
States and municipals
Securities Available for Sale
Amortized Cost	90,751	89,501
Gross Unrealized Gains	4,659	2,644
Gross Unrealized Losses		(183)
Fair Value	95,410	91,962
Mortgage-backed - residential
Securities Available for Sale
Amortized Cost	133,245	124,834
Gross Unrealized Gains	1,703	210
Gross Unrealized Losses	(310)	(2,001)
Fair Value	134,638	123,043
Equity securities
Securities Available for Sale
Amortized Cost	320	320
Gross Unrealized Gains	30	24
Fair Value	$ 350	$ 344

SECURITIES - AMORTIZED COST AND

SECURITIES - AMORTIZED COST AND FAIR VALUE BY CONTRACTUAL MATURITY (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Amortized Cost
Due after one year through five years	$ 23,522		$ 23,522
Due after five years through ten years	56,998		56,998
Due after ten years	45,967		45,967
Securities due at a single maturity date	126,487		126,487
Amortized Cost	260,052		260,052		$ 263,667
Fair Value
Due after one year through five years	24,190		24,190
Due after five years through ten years	58,900		58,900
Due after ten years	48,644		48,644
Securities due at a single maturity date	131,734		131,734
Fair Value	266,722		266,722		264,212
Sales of securities
Proceeds from sales of securities	12,100	$ 9,100	21,388	$ 9,051
Gross gains realized on sales of securities	151	243	277	251
Gross losses realized on sales of securities	0	0	0	0
Tax provision related to realized gains	51	$ 83	94	$ 85
Mortgage-backed - residential
Amortized Cost
Amortized Cost	133,245		133,245		124,834
Fair Value
Fair Value	134,638		134,638		123,043
Equity securities
Amortized Cost
Amortized Cost	320		320		320
Fair Value
Fair Value	$ 350		$ 350		$ 344

SECURITIES - UNREALIZED LOSSES

SECURITIES - UNREALIZED LOSSES (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Securities with unrealized losses
Less than 12 Months, Fair Value	$ 22,211	$ 104,079
Less than 12 Months, Unrealized Loss	(168)	(1,389)
12 Months or More, Fair Value	10,390	57,846
12 Months or More, Unrealized Loss	(142)	(995)
Total, Fair Value	32,601	161,925
Total, Unrealized Loss	(310)	(2,384)
Trading Assets
Trading Assets	5,704	5,531
U.S. government agencies
Securities with unrealized losses
Less than 12 Months, Fair Value		15,243
Less than 12 Months, Unrealized Loss		(56)
12 Months or More, Fair Value		30,293
12 Months or More, Unrealized Loss		(144)
Total, Fair Value		45,536
Total, Unrealized Loss		(200)
States and municipals
Securities with unrealized losses
Less than 12 Months, Fair Value		10,938
Less than 12 Months, Unrealized Loss		(102)
12 Months or More, Fair Value		4,065
12 Months or More, Unrealized Loss		(81)
Total, Fair Value		15,003
Total, Unrealized Loss		(183)
Trading Assets
Trading Assets	5,700
Mortgage-backed - residential
Securities with unrealized losses
Less than 12 Months, Fair Value	22,211	77,898
Less than 12 Months, Unrealized Loss	(168)	(1,231)
12 Months or More, Fair Value	10,390	23,488
12 Months or More, Unrealized Loss	(142)	(770)
Total, Fair Value	32,601	101,386
Total, Unrealized Loss	$ (310)	$ (2,001)

LOANS (Details)

LOANS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Loans
Loans	$ 653,277	$ 624,121
Allowance for loan losses	0	0
Madison Financial Corp
Loans
Loans	44,965	56,751
Allowance for loan losses	0
Commercial
Loans
Loans	72,450	55,929
Commercial | Madison Financial Corp
Loans
Loans	1,371	1,505
Real estate construction
Loans
Loans	31,197	29,320
Real estate construction | Madison Financial Corp
Loans
Loans	1,170	1,616
1-4 family residential
Loans
Loans	242,462	230,721
1-4 family residential | Madison Financial Corp
Loans
Loans	14,102	16,376
Multi-family residential
Loans
Loans	39,082	38,281
Multi-family residential | Madison Financial Corp
Loans
Loans	5,521	5,652
Non-farm & non-residential
Loans
Loans	180,729	183,692
Non-farm & non-residential | Madison Financial Corp
Loans
Loans	20,630	29,029
Agricultural
Loans
Loans	68,236	66,782
Agricultural | Madison Financial Corp
Loans
Loans	1,982	2,194
Consumer
Loans
Loans	18,894	18,880
Consumer | Madison Financial Corp
Loans
Loans	189	379
Other
Loans
Loans	$ 227	$ 516

LOANS - ACTIVITY IN ALLOWANCE (

LOANS - ACTIVITY IN ALLOWANCE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Activity in allowance for loan losses
Beginning Balance	$ 7,147	$ 5,920	$ 6,521	$ 6,012
Charge-offs	(301)	(547)	(726)	(1,169)
Recoveries	188	227	864	457
Provision	225	350	600	650
Ending Balance	7,259	5,950	7,259	5,950
Carrying amount	2,293		2,293		$ 3,136
Allowance for loan losses	0		0		0
Contractual fair value of purchased credit impaired loans	3,200		3,200		4,200
Accretable yield, or income expected to be collected
Balance, beginning of period	339		408
Accretion of income	111		180
Balance, end of period	228		228
Commercial
Activity in allowance for loan losses
Beginning Balance	508	340	486	339
Charge-offs				(25)
Recoveries	3		34
Provision	155	59	146	85
Ending Balance	666	399	666	399
Carrying amount					4
Construction
Activity in allowance for loan losses
Carrying amount					8
Real estate construction
Activity in allowance for loan losses
Beginning Balance	876	438	411	446
Recoveries	7		13	2
Provision	(331)	38	128	28
Ending Balance	552	476	552	476
1-4 family residential
Activity in allowance for loan losses
Beginning Balance	2,176	1,825	2,081	1,829
Charge-offs	(52)	(120)	(64)	(152)
Recoveries	2	2	7	5
Provision	178	100	280	125
Ending Balance	2,304	1,807	2,304	1,807
Carrying amount	1,837		1,837		2,039
Multi-family residential
Activity in allowance for loan losses
Beginning Balance	472	499	458	495
Charge-offs		(94)		(94)
Recoveries	1	2	4	2
Provision	34	35	45	39
Ending Balance	507	442	507	442
Non-farm & non-residential
Activity in allowance for loan losses
Beginning Balance	1,181	1,030	1,213	813
Recoveries	7		273
Provision	(30)	44	(328)	261
Ending Balance	1,158	1,074	1,158	1,074
Carrying amount	174		174		667
Agricultural
Activity in allowance for loan losses
Beginning Balance	727	723	678	998
Charge-offs		0		(242)
Recoveries	12	11	23	12
Provision	62	(156)	100	(190)
Ending Balance	801	578	801	578
Carrying amount	282		282		$ 418
Consumer
Activity in allowance for loan losses
Beginning Balance	531	497	525	520
Charge-offs	(53)	(82)	(163)	(163)
Recoveries	13	12	70	27
Provision	59	107	118	150
Ending Balance	550	534	550	534
Other
Activity in allowance for loan losses
Beginning Balance	60	34	60	32
Charge-offs	(196)	(251)	(499)	(493)
Recoveries	143	200	440	409
Provision	43	72	49	107
Ending Balance	50	55	50	55
Unallocated
Activity in allowance for loan losses
Beginning Balance	616	534	609	540
Provision	55	51	62	45
Ending Balance	671	$ 585	671	$ 585
Madison Financial Corp
Activity in allowance for loan losses
Allowance for loan losses	$ 0		$ 0

LOANS - ALLOWANCE FOR LOAN LOSS

LOANS - ALLOWANCE FOR LOAN LOSSES AND RECORDED INVESTMENT (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Loans
Accrued interest receivable	$ 2,300		$ 2,300
Allowance for Loan Losses:
Individually Evaluated for Impairment	616		648
Collectively Evaluated for Impairment	6,643		5,873
Total	7,259	$ 7,147	6,521	$ 5,950	$ 5,920	$ 6,012
Loans:
Individually Evaluated for Impairment	8,233		9,469
Collectively Evaluated for Impairment	642,062		610,432
Total	653,277		624,121
Commercial
Allowance for Loan Losses:
Collectively Evaluated for Impairment	666		486
Total	666	508	486	399	340	339
Loans:
Collectively Evaluated for Impairment	72,450		55,924
Total	72,450		55,929
Real estate construction
Allowance for Loan Losses:
Individually Evaluated for Impairment	16
Collectively Evaluated for Impairment	536		411
Total	552	876	411	476	438	446
Loans:
Individually Evaluated for Impairment	180		835
Collectively Evaluated for Impairment	31,017		28,474
Total	31,197		29,320
1-4 family residential
Allowance for Loan Losses:
Individually Evaluated for Impairment	127		128
Collectively Evaluated for Impairment	2,177		1,953
Total	2,304	2,176	2,081	1,807	1,825	1,829
Loans:
Individually Evaluated for Impairment	1,301		1,454
Collectively Evaluated for Impairment	239,243		226,523
Total	242,462		230,721
Multi-family residential
Allowance for Loan Losses:
Collectively Evaluated for Impairment	507		458
Total	507	472	458	442	499	495
Loans:
Collectively Evaluated for Impairment	39,082		38,281
Total	39,082		38,281
Non-farm & non-residential
Allowance for Loan Losses:
Individually Evaluated for Impairment	46		181
Collectively Evaluated for Impairment	1,112		1,032
Total	1,158	1,181	1,213	1,074	1,030	813
Loans:
Individually Evaluated for Impairment	2,141		2,882
Collectively Evaluated for Impairment	177,930		179,913
Total	180,729		183,692
Agricultural
Allowance for Loan Losses:
Individually Evaluated for Impairment	427		339
Collectively Evaluated for Impairment	374		339
Total	801	727	678	578	723	998
Loans:
Individually Evaluated for Impairment	4,611		4,298
Collectively Evaluated for Impairment	63,219		61,921
Total	68,236		66,782
Consumer
Allowance for Loan Losses:
Collectively Evaluated for Impairment	550		525
Total	550	531	525	534	497	520
Loans:
Collectively Evaluated for Impairment	18,894		18,880
Total	18,894		18,880
Other
Allowance for Loan Losses:
Collectively Evaluated for Impairment	50		60
Total	50	60	60	55	34	32
Loans:
Collectively Evaluated for Impairment	227		516
Total	227		516
Unallocated
Allowance for Loan Losses:
Collectively Evaluated for Impairment	671		609
Total	671	$ 616	609	$ 585	$ 534	$ 540
Receivables Acquired with Deteriorated Credit Quality
Loans:
Purchased Credit Impairment	2,982		4,220
Receivables Acquired with Deteriorated Credit Quality | Commercial
Loans:
Purchased Credit Impairment			5
Receivables Acquired with Deteriorated Credit Quality | Real estate construction
Loans:
Purchased Credit Impairment			11
Receivables Acquired with Deteriorated Credit Quality | 1-4 family residential
Loans:
Purchased Credit Impairment	1,918		2,744
Receivables Acquired with Deteriorated Credit Quality | Non-farm & non-residential
Loans:
Purchased Credit Impairment	658		897
Receivables Acquired with Deteriorated Credit Quality | Agricultural
Loans:
Purchased Credit Impairment	$ 406		$ 563

LOANS - INDIVIDUALLY EVALUATED

LOANS - INDIVIDUALLY EVALUATED FOR IMPAIRMENT (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Unpaid Principal Balance
Total	$ 8,233		$ 8,233		$ 9,469
Recorded Investment
Total	8,233		8,233		9,469
Allowance for Loan Losses Allocated.	616		616		648
Average Recorded Investment
Total	8,849	$ 9,357	8,212	$ 10,716	11,920
Interest Income Recognized
Total	60	80	117	138	93
Cash Basis Interest Recognized
Total	60	80	117	138	93
Real estate construction
Recorded Investment
With no related allowance recorded					835
Average Recorded Investment
With no related allowance recorded					820
Interest Income Recognized
With no related allowance recorded					29
Cash Basis Interest Recognized
With no related allowance recorded					29
Multi-family residential
Average Recorded Investment
With an allowance recorded		47		119	24
1-4 family residential
Unpaid Principal Balance
With no related allowance recorded	238		238		370
With an allowance recorded	1,063		1,063		1,083
Recorded Investment
With no related allowance recorded	238		238		370
With an allowance recorded	1,063		1,063		1,083
Allowance for Loan Losses Allocated.	127		127		128
Average Recorded Investment
With no related allowance recorded	947	1,476	304	1,524	1,493
With an allowance recorded	720	556	1,067	556	1,916
Interest Income Recognized
With no related allowance recorded	40	28	4	42	15
With an allowance recorded	1	5	27	10	6
Cash Basis Interest Recognized
With no related allowance recorded	2	28	4	42	15
With an allowance recorded	5	5	27	10	6
Agricultural
Unpaid Principal Balance
With no related allowance recorded	654		654		469
With an allowance recorded	3,957		3,957		3,830
Recorded Investment
With no related allowance recorded	654		654		469
With an allowance recorded	3,957		3,957		3,830
Allowance for Loan Losses Allocated.	427		427		339
Average Recorded Investment
With no related allowance recorded	292	322	393	362	335
With an allowance recorded	3,957	4,025	3,689	5,215	4,379
Interest Income Recognized
With no related allowance recorded	47	17	25	27	14
Cash Basis Interest Recognized
With no related allowance recorded	3	17	25	27	14
Non-farm & non-residential
Unpaid Principal Balance
With an allowance recorded	2,141		2,141		2,882
Recorded Investment
With an allowance recorded	2,141		2,141		2,882
Allowance for Loan Losses Allocated.	46		46		181
Average Recorded Investment
With no related allowance recorded					68
With an allowance recorded	2,070	2,931	2,070	2,940	2,885
Interest Income Recognized
With an allowance recorded	23	30	41	59	29
Cash Basis Interest Recognized
With an allowance recorded	18	$ 30	41	$ 59	$ 29
Construction
Unpaid Principal Balance
With an allowance recorded	180		180
Recorded Investment
With an allowance recorded	180		180
Allowance for Loan Losses Allocated.	16		16
Average Recorded Investment
With an allowance recorded	2,394		689
Interest Income Recognized
With an allowance recorded			20
Cash Basis Interest Recognized
With an allowance recorded	$ 32		$ 20

LOANS - NONACCRUAL, LOANS PAST

LOANS - NONACCRUAL, LOANS PAST DUE OVER 90 DAYS STILL ACCRUING AND TDR (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Loans
Nonaccrual	$ 5,628	$ 6,351
Loans Past Due Over 90 Days Still Accruing	614	1,000
Troubled Debt Restructurings	$ 2,213	2,245
Percentage of nonaccrual loans secured by real estate	97.30%
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
Madison Financial Corp
Loans
Nonaccrual	$ 642	1,107
Loans Past Due Over 90 Days Still Accruing		446
Commercial
Loans
Nonaccrual		6
Real estate construction
Loans
Nonaccrual		145
Loans Past Due Over 90 Days Still Accruing		365
1-4 family residential
Loans
Nonaccrual	1,165	1,531
Loans Past Due Over 90 Days Still Accruing	186	471
Troubled Debt Restructurings	461	468
Multi-family residential
Loans
Nonaccrual	126
Non-farm & non-residential
Loans
Nonaccrual	78	481
Loans Past Due Over 90 Days Still Accruing	390	137
Troubled Debt Restructurings	1,752	1,777
Agricultural
Loans
Nonaccrual	4,251	4,171
Loans Past Due Over 90 Days Still Accruing	23
Consumer
Loans
Nonaccrual	8	17
Loans Past Due Over 90 Days Still Accruing	$ 15	$ 27

LOANS - AGING OF RECORDED INVES

LOANS - AGING OF RECORDED INVESTMENT IN PAST DUE AND NON-ACCRUAL LOANS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Aging of recorded investment in past due and non-accrual loans
Greater than 90 Days Past Due	$ 614	$ 1,000
Non-accrual	5,628	6,351
Total Past Due and Non-accrual	8,837	12,278
Loans Not Past Due	644,440	611,843
30 to 59 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	2,220	4,147
60 to 89 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	375	780
Madison Financial Corp
Aging of recorded investment in past due and non-accrual loans
Greater than 90 Days Past Due		446
Non-accrual	642	1,107
Total Past Due and Non-accrual	803	1,642
Loans Not Past Due	44,162	55,109
Madison Financial Corp | 30 to 59 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	161	5
Madison Financial Corp | 60 to 89 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due		84
Commercial
Aging of recorded investment in past due and non-accrual loans
Non-accrual		6
Total Past Due and Non-accrual	354	2,428
Loans Not Past Due	72,096	53,501
Commercial | 30 to 59 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	350	2,323
Commercial | 60 to 89 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	4	99
Real estate construction
Aging of recorded investment in past due and non-accrual loans
Greater than 90 Days Past Due		365
Non-accrual		145
Total Past Due and Non-accrual		510
Loans Not Past Due	31,197	28,810
1-4 family residential
Aging of recorded investment in past due and non-accrual loans
Greater than 90 Days Past Due	186	471
Non-accrual	1,165	1,531
Total Past Due and Non-accrual	3,207	3,774
Loans Not Past Due	239,255	226,947
1-4 family residential | 30 to 59 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	1,499	1,508
1-4 family residential | 60 to 89 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	357	264
Multi-family residential
Aging of recorded investment in past due and non-accrual loans
Non-accrual	126
Total Past Due and Non-accrual	126
Loans Not Past Due	38,956	38,281
Non-farm & non-residential
Aging of recorded investment in past due and non-accrual loans
Greater than 90 Days Past Due	390	137
Non-accrual	78	481
Total Past Due and Non-accrual	712	776
Loans Not Past Due	180,017	182,916
Non-farm & non-residential | 30 to 59 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	244	37
Non-farm & non-residential | 60 to 89 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due		121
Agricultural
Aging of recorded investment in past due and non-accrual loans
Greater than 90 Days Past Due	23
Non-accrual	4,251	4,171
Total Past Due and Non-accrual	4,338	4,651
Loans Not Past Due	63,898	62,131
Agricultural | 30 to 59 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	64	229
Agricultural | 60 to 89 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due		251
Consumer
Aging of recorded investment in past due and non-accrual loans
Greater than 90 Days Past Due	15	27
Non-accrual	8	17
Total Past Due and Non-accrual	100	139
Loans Not Past Due	18,794	18,741
Consumer | 30 to 59 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	63	50
Consumer | 60 to 89 Days Past Due
Aging of recorded investment in past due and non-accrual loans
Recorded Investment Past Due	14	45
Other
Aging of recorded investment in past due and non-accrual loans
Loans Not Past Due	$ 227	$ 516

LOANS - TROUBLED DEBT RESTRUCTU

LOANS - TROUBLED DEBT RESTRUCTURINGS (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2016USD ($)loan	Jun. 30, 2015loan	Dec. 31, 2015USD ($)loan
LOANS
Reserves to customers whose loan terms have been modified in troubled debt restructurings	$ 79		$ 101
Number of loans that met the definition of troubled debt restructurings | loan	0	0	1
Pre-Modification Outstanding Recorded Investment			$ 4,000

LOANS - RISK CATEGORY OF LOANS

LOANS - RISK CATEGORY OF LOANS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Credit Quality Indicators
Loans	$ 653,277	$ 624,121
Madison Financial Corp
Credit Quality Indicators
Loans	44,965	56,751
Pass
Credit Quality Indicators
Loans	598,834	571,575
Pass | Madison Financial Corp
Credit Quality Indicators
Loans	37,875	44,367
Special Mention
Credit Quality Indicators
Loans	20,015	17,442
Special Mention | Madison Financial Corp
Credit Quality Indicators
Loans	4,148	2,533
Substandard
Credit Quality Indicators
Loans	15,278	15,706
Substandard | Madison Financial Corp
Credit Quality Indicators
Loans	2,942	3,189
Doubtful
Credit Quality Indicators
Loans	29
Commercial
Credit Quality Indicators
Loans	72,450	55,929
Commercial | Madison Financial Corp
Credit Quality Indicators
Loans	1,371	1,505
Commercial | Pass
Credit Quality Indicators
Loans	71,041	54,392
Commercial | Special Mention
Credit Quality Indicators
Loans	1,197	1,323
Commercial | Substandard
Credit Quality Indicators
Loans	212	215
Real estate construction
Credit Quality Indicators
Loans	31,197	29,320
Real estate construction | Madison Financial Corp
Credit Quality Indicators
Loans	1,170	1,616
Real estate construction | Pass
Credit Quality Indicators
Loans	28,337	26,835
Real estate construction | Special Mention
Credit Quality Indicators
Loans	2,183	1,402
Real estate construction | Substandard
Credit Quality Indicators
Loans	677	1,083
1-4 family residential
Credit Quality Indicators
Loans	242,462	230,721
1-4 family residential | Madison Financial Corp
Credit Quality Indicators
Loans	14,102	16,376
1-4 family residential | Pass
Credit Quality Indicators
Loans	230,497	216,661
1-4 family residential | Special Mention
Credit Quality Indicators
Loans	5,169	6,155
1-4 family residential | Substandard
Credit Quality Indicators
Loans	6,770	7,903
1-4 family residential | Doubtful
Credit Quality Indicators
Loans	26
Multi-family residential
Credit Quality Indicators
Loans	39,082	38,281
Multi-family residential | Madison Financial Corp
Credit Quality Indicators
Loans	5,521	5,652
Multi-family residential | Pass
Credit Quality Indicators
Loans	34,236	35,221
Multi-family residential | Special Mention
Credit Quality Indicators
Loans	3,914	2,916
Multi-family residential | Substandard
Credit Quality Indicators
Loans	932	143
Non-farm & non-residential
Credit Quality Indicators
Loans	180,729	183,692
Non-farm & non-residential | Madison Financial Corp
Credit Quality Indicators
Loans	20,630	29,029
Non-farm & non-residential | Pass
Credit Quality Indicators
Loans	175,919	178,289
Non-farm & non-residential | Special Mention
Credit Quality Indicators
Loans	3,820	4,448
Non-farm & non-residential | Substandard
Credit Quality Indicators
Loans	990	955
Agricultural
Credit Quality Indicators
Loans	68,236	66,782
Agricultural | Madison Financial Corp
Credit Quality Indicators
Loans	1,982	2,194
Agricultural | Pass
Credit Quality Indicators
Loans	58,804	60,177
Agricultural | Special Mention
Credit Quality Indicators
Loans	3,732	1,198
Agricultural | Substandard
Credit Quality Indicators
Loans	5,697	5,407
Agricultural | Doubtful
Credit Quality Indicators
Loans	3
Consumer
Credit Quality Indicators
Loans	18,894	18,880
Consumer | Madison Financial Corp
Credit Quality Indicators
Loans	189	379
Consumer | Non-performing
Credit Quality Indicators
Loans	$ 23	$ 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		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Activity in real estate owned
Beginning of year			$ 2,347	$ 4,603	$ 4,603
Additions					193	$ 3,334
Sales			(15)	(4,727)
(Additions) subtractions to valuation allowance, net			(85)	385
End of period	$ 2,440	$ 3,595	2,440	3,595	2,347	4,603
Activity in the valuation allowance
Beginning of year			616	1,583	1,583
Write-downs of other real estate, net					85	227
Reductions from sale				(612)
End of period	701	1,198	701	1,198	$ 616	$ 1,583
Expenses related to foreclosed assets
Net loss (gain) on sales		20		59
Additions to valuation allowance, net		201	85	227
Operating expenses (receipts), net of rental income	31	36	58	55
Repossession expenses, net	31	237	143	282
Net expenses	$ 31	$ 257	$ 143	$ 341

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, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Basic Earnings Per Share
Net income	$ 2,082	$ 2,122	$ 3,919	$ 3,637
Weighted average common shares outstanding	2,977	2,707	2,977	2,707
Basic earnings per share (in dollars per share)	$ 0.70	$ 0.77	$ 1.31	$ 1.33
Diluted Earnings Per Share
Net income	$ 2,082	$ 2,122	$ 3,919	$ 3,637
Weighted average common shares outstanding	2,977	2,707	2,977	2,707
Weighted average common and dilutive potential common shares outstanding	2,977	2,707	2,977	2,707
Diluted earnings per share (in dollars per share)	$ 0.70	$ 0.77	$ 1.31	$ 1.33

EARNINGS PER SHARE - ANTIDILUTI

EARNINGS PER SHARE - ANTIDILUTIVE SECURITIES (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Stock options
Antidilutive securities
Antidilutive shares excluded from computation of diluted earnings per share	1,200	2,400	1,200	2,400

STOCK COMPENSATION (Details)

STOCK COMPENSATION (Details) - Stock options	6 Months Ended
	Jun. 30, 2016shares
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 - ACTIVITY (

STOCK COMPENSATION - ACTIVITY (Details) - Stock Option Plans $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)$ / sharesshares
Shares
Outstanding, beginning of year (in shares) | shares	2,400
Forfeited or expired (in shares) | shares	(1,200)
Outstanding, end of year (in shares) | shares	1,200
Vested and expected to vest (in shares) | shares	1,200
Exercisable, end of period (in shares) | shares	1,200
Weighted Average Exercise Price
Outstanding, beginning of year (in dollars per share) | $ / shares	$ 30.37
Forfeited or expired (in dollars per share) | $ / shares	29.75
Outstanding, end of year (in dollars per share) | $ / shares	31
Vested and expected to vest (in dollars per share) | $ / shares	31
Exercisable, end of period (in dollars per share) | $ / shares	$ 31
Weighted Average Remaining Contractual Term
Outstanding, end of period	14 months
Vested and expected to vest	14 months
Exercisable, end of period	14 months
Additional disclosures
Total unrecognized compensation cost related to nonvested stock options granted | $	$ 0

STOCK COMPENSATION - NONVESTED

STOCK COMPENSATION - NONVESTED SHARES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
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)	12,696
Granted (in shares)	0	5,385
Vested (in shares)	(5,799)
Forfeited (in shares)	0	0
Nonvested at the end of the period (in shares)	6,897
Weighted-Average Grant-Date Fair Value
Nonvested shares, balance at the beginning of the period (in dollars)	$ 271,365
Vested (in dollars)	(125,087)
Nonvested shares, balance at the end of the period (in dollars)	$ 146,278
Fair Value Per Share
Nonvested shares, balance at the beginning of the period (in dollars per share)	$ 21.37
Vested (in dollars per share)	21.57
Nonvested shares, balance at the end of the period (in dollars per share)	$ 21.21
Additional disclosures
Total unrecognized compensation cost related to nonvested shares granted	$ 230,000
Period over which cost is expected to be recognized	2 years 8 months 12 days
2009 Stock Award Plan
Stock Based Compensation
Number of shares authorized for issuance	150,000
Shares available for issuance	140,013
Shares
Nonvested at the beginning of the period (in shares)	6,800
Granted (in shares)	6,170	465
Vested (in shares)	(353)
Forfeited (in shares)	0	0
Nonvested at the end of the period (in shares)	12,617
Weighted-Average Grant-Date Fair Value
Nonvested shares, balance at the beginning of the period (in dollars)	$ 170,263
Granted (in dollars)	182,941
Vested (in dollars)	(9,749)
Nonvested shares, balance at the end of the period (in dollars)	$ 343,455
Fair Value Per Share
Nonvested shares, balance at the beginning of the period (in dollars per share)	$ 25.04
Granted (in dollars per share)	29.65
Vested (in dollars per share)	27.62
Nonvested shares, balance at the end of the period (in dollars per share)	$ 27.22
Additional disclosures
Total unrecognized compensation cost related to nonvested shares granted	$ 205,000
2009 Stock Award Plan | Restricted stock
Additional disclosures
Period over which cost is expected to be recognized	4 years 3 months 18 days

REPURCHASE AGREEMENTS (Details)

REPURCHASE AGREEMENTS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
REPURCHASE AGREEMENTS
Repurchase agreements	$ 26,057	$ 18,514
Average weighted life	2 years 2 months 12 days
Carrying amount of agency-backed securities pledged to secure repurchase agreements	$ 33,200
Overnight obligations
REPURCHASE AGREEMENTS
Repurchase agreements	20,100
Terms extending through May 2019
REPURCHASE AGREEMENTS
Repurchase agreements	$ 6,000

OTHER BORROWINGS (Details)

OTHER BORROWINGS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jul. 20, 2015
OTHER BORROWINGS
Amount outstanding	$ 4,695	$ 4,794
Term loan
OTHER BORROWINGS
Debt instrument, face amount			$ 5,000
Amount outstanding	4,700
Fixed interest rate			5.02%
Maturity schedule of term loan
2,016	203
2,017	420
2,018	441
2,019	464
2,020	488
Thereafter	2,679
Total term loan maturities	$ 4,695

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Fair value on instruments on recurring basis
Securities available for sale	$ 266,722		$ 266,722		$ 264,212
Transfers from Level 1 to Level 2	0		0		0
Transfers from Level 2 to Level 1	0		0		0
Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	266,722		266,722		264,212
Recurring | Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	272,426		272,426		269,743
Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1)
Fair value on instruments on recurring basis
Securities available for sale	6,054		6,054		5,875
Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	266,372		266,372		263,868
Impaired Loans
Fair value on instruments on recurring basis
Adjustments for differences between the comparable sales and income data available	19	$ 42	100		14
Other Real Estate Owned
Fair value on instruments on recurring basis
Adjustments for differences between the comparable sales and income data available			85	$ 227
U.S. government agencies
Fair value on instruments on recurring basis
Securities available for sale	36,324		36,324		48,863
U.S. government agencies | Recurring | Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	36,324		36,324		48,863
U.S. government agencies | Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	36,324		36,324		48,863
States and municipals
Fair value on instruments on recurring basis
Securities available for sale	95,410		95,410		91,962
States and municipals | Recurring | Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	95,410		95,410		91,962
States and municipals | Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	95,410		95,410		91,962
Mortgage-backed - residential
Fair value on instruments on recurring basis
Securities available for sale	134,638		134,638		123,043
Mortgage-backed - residential | Recurring | Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	134,638		134,638		123,043
Mortgage-backed - residential | Recurring | Significant Other Observable Inputs (Level 2)
Fair value on instruments on recurring basis
Securities available for sale	134,638		134,638		123,043
Equity securities
Fair value on instruments on recurring basis
Securities available for sale	350		350		344
Equity securities | Recurring | Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	350		350		344
Equity securities | Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1)
Fair value on instruments on recurring basis
Securities available for sale	350		350		344
Trading Assets | Recurring | Carrying Value
Fair value on instruments on recurring basis
Securities available for sale	5,704		5,704		5,531
Trading Assets | Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1)
Fair value on instruments on recurring basis
Securities available for sale	$ 5,704		$ 5,704		$ 5,531

FAIR VALUE MEASUREMENTS - FAIR

FAIR VALUE MEASUREMENTS - FAIR VALUE ON NON-RECURRING (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Impaired Loans
Valuation allowance of impaired loans	$ 616		$ 616		$ 648
Loan loss provision expense for impaired loans			34
Other real estate owned, net:
Outstanding balance of other real estate owned	2,440	$ 3,595	2,440	$ 3,595	2,347	$ 4,603
Valuation allowance of other real estate owned	701	1,198	701	1,198	616	$ 1,583
Loan servicing rights
Mortgage servicing rights	1,233		1,233		1,277
Non-recurring
Impaired Loans
Impaired loans, at fair value	1,100		1,100
Valuation allowance of impaired loans	109		109
Decreased in allowance for specific impaired loans	399	101	(32)	301
Loan specific reserve			350		0
Other real estate owned, net:
Other real estate owned	1,400		1,400
Outstanding balance of other real estate owned	2,100		2,100
Valuation allowance of other real estate owned	701		701
Write downs of other real estate owned	0	201	85	227
Loan servicing rights
Mortgage servicing rights	1,100		1,100		87
Balance of loan servicing rights	1,200		1,200		106
Valuation allowance of loan servicing rights	61		61		19
Write-downs of loan servicing rights	45			$ 42
Recovery of prior write-downs		$ 20	34
Non-recurring | Carrying Value
Loan servicing rights
Mortgage servicing rights	1,106		1,106		87
Non-recurring | Significant Unobservable Inputs (Level 3)
Loan servicing rights
Mortgage servicing rights	1,106		1,106		87
Non-recurring | Construction | Carrying Value
Impaired Loans
Impaired loans, at fair value	164		164
Non-recurring | Construction | Significant Unobservable Inputs (Level 3)
Impaired Loans
Impaired loans, at fair value	164		164
Non-recurring | 1-4 family residential | Carrying Value
Impaired Loans
Impaired loans, at fair value	526		526
Non-recurring | 1-4 family residential | Significant Unobservable Inputs (Level 3)
Impaired Loans
Impaired loans, at fair value	526		526
Non-recurring | Multi-family residential | Carrying Value
Impaired Loans
Impaired loans, at fair value					540
Non-recurring | Multi-family residential | Significant Unobservable Inputs (Level 3)
Impaired Loans
Impaired loans, at fair value					540
Non-recurring | Non-farm & non-residential | Carrying Value
Impaired Loans
Impaired loans, at fair value	371		371		285
Non-recurring | Non-farm & non-residential | Significant Unobservable Inputs (Level 3)
Impaired Loans
Impaired loans, at fair value	371		371		285
Non-recurring | Residential | Carrying Value
Other real estate owned, net:
Other real estate owned	1,419		1,419		1,504
Non-recurring | Residential | Significant Unobservable Inputs (Level 3)
Other real estate owned, net:
Other real estate owned	$ 1,419		$ 1,419		$ 1,504

FAIR VALUE MEASUREMENTS - QUANT

FAIR VALUE MEASUREMENTS - QUANTITATIVE INFORMATION (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value Measurements
Loan servicing rights	$ 1,233	$ 1,277
Non-recurring
Fair Value Measurements
Impaired loans, at fair value	1,100
Other real estate owned	1,400
Loan servicing rights	1,100	87
Non-recurring | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Loan servicing rights	1,106	87
Non-recurring | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Loan servicing rights	1,106	87
Non-recurring | Construction | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	164
Non-recurring | Construction | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	164
Non-recurring | 1-4 family residential | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	526
Non-recurring | 1-4 family residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	526	540
Non-recurring | Multi-family residential | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value		540
Non-recurring | Non-farm & non-residential | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	371	285
Non-recurring | Non-farm & non-residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Impaired loans, at fair value	371	285
Non-recurring | Residential | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Other real estate owned	1,419	1,504
Non-recurring | Residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Other real estate owned	808	$ 1,504
Non-recurring | Residential | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Other real estate owned	$ 611
Non-recurring | Minimum | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Discount rate	9.00%	8.00%
Non-recurring | Minimum | Construction | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	1.00%
Non-recurring | Minimum | 1-4 family residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	0.00%	1.00%
Non-recurring | Minimum | Non-farm & non-residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	4.00%	23.00%
Non-recurring | Minimum | Residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	10.00%	10.00%
Non-recurring | Minimum | Residential | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)		10.00%
Non-recurring | Maximum | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Discount rate	20.00%	21.00%
Non-recurring | Maximum | Construction | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	4.00%
Non-recurring | Maximum | 1-4 family residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	12.00%	12.00%
Non-recurring | Maximum | Non-farm & non-residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	44.00%	31.00%
Non-recurring | Maximum | Residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	28.00%	28.00%
Non-recurring | Maximum | Residential | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	10.00%	10.00%
Non-recurring | Weighted average | Discounted cash flow | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Discount rate	11.00%	11.00%
Non-recurring | Weighted average | Construction | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	3.00%
Non-recurring | Weighted average | 1-4 family residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	7.00%	7.00%
Non-recurring | Weighted average | Non-farm & non-residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	23.00%	27.00%
Non-recurring | Weighted average | Residential | Sales comparison | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
adjustment for differences between the comparable sales (as a percent)	19.00%	19.00%
Non-recurring | Weighted average | Residential | Income approach | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Capitalization rate (as a percent)	10.00%	10.00%

FAIR VALUE MEASUREMENTS - FAI49

FAIR VALUE MEASUREMENTS - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financial assets
Interest bearing time deposits	$ 4,829	$ 4,874
Securities	266,722	264,212
Trading assets	5,704	5,531
Mortgage loans held for sale	1,485	624
Interest receivable	3,641	3,681
Financial liabilities
Interest payable	693	659
Carrying Value
Financial assets
Cash and cash equivalents	16,628	28,048
Interest bearing time deposits	4,829	4,874
Securities	266,722	264,212
Trading assets	5,704	5,531
Mortgage loans held for sale	1,485	624
Loans, net	646,018	617,600
FHLB stock	7,034	7,034
Interest receivable	3,641	3,681
Financial liabilities
Deposits	751,396	758,981
Securities sold under agreements to repurchase and other borrowings	26,057	18,514
FHLB advances	99,617	87,833
Note payable	4,695	4,794
Subordinated debentures	7,217	7,217
Interest payable	693	659
Fair Value
Financial assets
Cash and cash equivalents	16,628	28,048
Interest bearing time deposits	4,829	4,874
Securities	266,722	264,212
Trading assets	5,704	5,531
Mortgage loans held for sale	1,532	633
Loans, net	645,250	616,206
Interest receivable	3,641	3,681
Financial liabilities
Deposits	752,705	760,338
Securities sold under agreements to repurchase and other borrowings	26,108	18,523
FHLB advances	98,366	82,349
Note payable	5,273	5,431
Subordinated debentures	7,208	7,206
Interest payable	693	659
Quoted Prices In Active Markets for Identical Assets (Level 1) | Fair Value
Financial assets
Cash and cash equivalents	16,628	28,048
Interest bearing time deposits	4,829	4,874
Securities	350	344
Trading assets	5,704	5,531
Financial liabilities
Deposits	557,472	557,146
Significant Other Observable Inputs (Level 2) | Fair Value
Financial assets
Securities	266,372	263,868
Mortgage loans held for sale	1,532	633
Interest receivable	1,322	1,358
Financial liabilities
Deposits	195,233	203,192
Securities sold under agreements to repurchase and other borrowings	26,108	18,523
FHLB advances	98,366	82,349
Note payable	5,273	5,431
Interest payable	623	649
Significant Unobservable Inputs (Level 3) | Fair Value
Financial assets
Loans, net	645,250	616,206
Interest receivable	2,319	2,323
Financial liabilities
Subordinated debentures	7,208	7,206
Interest payable	$ 70	$ 10

CHANGES IN ACCUMULATED OTHER 50

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance			$ 89,413
Reclassification adjustment for:
Net current period other comprehensive income	$ 1,656	$ (2,160)	4,043	$ (1,223)
Ending Balance	95,799		95,799
Accumulated Other Comprehensive Income
Changes in accumulated other comprehensive income (loss) by component
Beginning Balance	2,746	1,728	359	791
Reclassification adjustment for:
Ending Balance	4,402	(432)	4,402	(432)
Unrealized Gains and Losses on Available for Sale Securities
Changes in accumulated other comprehensive income (loss) by component
Unrealized holding gains (losses) for the period, net of tax	1,756	(2,000)	4,226	(1,057)
Reclassification adjustment for:
Securities gains realized in income	151	243	277	251
Income taxes	(51)	(83)	(94)	(85)
Reclassification, net of tax	100	160	183	166
Net current period other comprehensive income	$ 1,656	$ (2,160)	$ 4,043	$ (1,223)

CHANGES IN ACCUMULATED OTHER 51

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT - RECLASSIFIED (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassifications out of AOCI by component
Gain on sale of available for sale securities, net	$ 151	$ 243	$ 277	$ 251
Income taxes	356	305	572	306
Net income	2,082	2,122	3,919	3,637
Unrealized Gains and Losses on Available for Sale Securities | Amount Reclassified From Accumulated Other Comprehensive Income
Reclassifications out of AOCI by component
Gain on sale of available for sale securities, net	151	243	277	251
Income taxes	51	83	94	85
Net income	$ 100	$ 160	$ 183	$ 166