Highlands Bankshares 10-K 30 Mar 17 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)shares
Personal Loans [Member] [Default Label]
Entity Registrant Name	HIGHLANDS BANKSHARES INC /VA/
Entity Central Index Key	1,008,579
Document Period End Date	Dec. 31, 2016
Document Type	10-K
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float | $	$ 0
Entity Common Stock, Shares Outstanding | shares	0
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	FY

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 27,391	$ 26,713
Federal funds sold	22,994	20,178
Total Cash and Cash Equivalents	50,385	46,891
Investment securities available-for-sale (Note 3)	95,073	79,860
Other Investments, at cost (Note 4)	6,637	6,592
Loans Held for Sale	1,255	0
Loans, net of allowance for loan losses of $4,829 and $5,654 in 2016 and 2015, respectively (Note 5)	404,838	426,429
Premises and equipment, net (Note 6)	17,814	20,612
Real Estate held for Sale	1,680	0
Deferred Tax Assets, net (Note 8)	12,989	12,126
Interest receivable	2,047	1,761
Bank owned life Insurance	14,314	14,585
Other real estate owned, net	2,768	5,694
Other assets	2,878	2,432
Total Assets	612,678	616,982
Deposits (Note 9)
Noninterest bearing	134,488	129,634
Interest bearing	355,381	365,278
Total Deposits	489,869	494,912
Interest, taxes and other liabilities	1,353	761
Short term borrowings (Note 10)	27,552	20,052
Long-term debt (Note 11)	40,146	47,698
Total Other Liabilities	69,051	68,511
Total Liabilities	558,920	563,422
STOCKHOLDERS' EQUITY
Common stock, 8,199 and 7,851 shares issued in 2016 and 2015, respectively, authorized 40,000 shares, par value $0.625 per share (Note 15)	5,124	4,907
Preferred stock, 2,092 shares issued in 2016 and 2015, authorized 10,000 shares, par value $2.00 per share	4,184	4,184
Additional paid-in capital	18,891	17,944
Retained earnings	26,785	26,773
Accumulated other comprehensive income (loss)	(1,226)	(248)
Total Stockholders' Equity	53,758	53,560
Total Liabilities and Stockholders' Equity	$ 612,678	$ 616,982

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
ASSETS
Loans, allowance for loan losses	$ 4,829	$ 5,654
STOCKHOLDERS' EQUITY
Common stock, shares issued (in shares)	8,199	7,851
Common stock, shares authorized (in shares)	40,000	40,000
Common stock, par value	$ 0.625	$ 0.625
Preferred stock,shares issued	2,092	2,092
Preferred stock,authorized (in shares)	10,000	10,000
Preferred stock,par value	$ 2	$ 2

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
INTEREST INCOME
Loans receivable and fees on loans	$ 21,327	$ 20,930
Securities available for sale:
Taxable	1,408	1,165
Tax-exempt	333	361
Other investment income	227	222
Federal funds sold	99	85
Total Interest Income	23,394	22,763
INTEREST EXPENSE
Deposits	1,794	2,169
Other borrowed funds	2,381	2,388
Total interest expense	4,175	4,557
Net interest income	19,219	18,206
PROVISION FOR LOAN LOSSES (Note 5)	1,526	1,469
Net interest income after provision for loan losses	17,693	16,737
NON-INTEREST INCOME
Securities gains	47	16
Mortgage Banking Income	525	0
Service charges on deposit accounts	1,786	1,685
Other service charges, commissions and fees	1,748	1,647
Other operating income	762	584
Total Non-Interest Income	4,868	3,932
NON-INTEREST EXPENSE
Salaries and employee benefits (Note 14)	12,005	10,242
Occupancy expense of bank premises	1,332	1,131
Furniture and equipment expense	1,516	1,370
Other operating expenses (Note 17 and 23)	6,173	6,049
Foreclosed Assets - Write-down and operating expenses	1,883	1,745
Total Non-Interest Expenses	22,909	20,537
Income (Loss) Before Income Taxes	(348)	132
Income Tax Benefit (Note 8)	(360)	(1,205)
Net Income	$ 12	$ 1,337
Earnings Per Common Share (Note 13)	$ 0	$ 0.17
Diluted Earnings Per Common Share (Note 13)	$ 0	$ 0.13

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements Of Comprehensive Income
Net Income	$ 12	$ 1,337
Other Comprehensive Income
Unrealized gains (losses) on securities during the period	(1,434)	(504)
Less: reclassification adjustment for gains included in securities gains in the Consolidated Statement of Income	(47)	(16)
Other Comprehensive Income (Loss) before tax	(1,481)	(520)
Income tax expense (benefit) related to other comprehensive income (loss)	(503)	(177)
Other Comprehensive Income (Loss)	(978)	(343)
Comprehensive Income (loss)	$ (966)	$ 994

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Preferred Stock	Additional Paid In Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total
Balance at Dec. 31, 2014	$ 4,907	$ 4,184	$ 18,180	$ 25,436	$ 95	$ 52,802
Balance (in shares) at Dec. 31, 2014	7,851	2,092
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				1,337		1,337
Additional Paid in Capital			(236)			(236)
Other comprehensive income (loss)					(343)	(343)
Balance at Dec. 31, 2015	$ 4,907	$ 4,184	17,944	26,773	(248)	53,560
Balance (in shares) at Dec. 31, 2015	7,851	2,092
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				12		12
Common Stock Issuance	$ 163		947			1,110
Common Stock Issuance, Shares	262
Other comprehensive income (loss)					(978)	(978)
Grant of Restricted Stock	$ 54		(54)			0
Grant of Restricted Stock, Shares	86
Compensation expense on restricted stock			54			54
Balance at Dec. 31, 2016	$ 5,124	$ 4,184	$ 18,891	$ 26,785	$ (1,226)	$ 53,758
Balance (in shares) at Dec. 31, 2016	8,199	2,092

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 12	$ 1,337
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	1,526	1,469
Restricted stock expense	54	0
Provision for deferred income taxes	297	232
Depreciation and amortization	954	1,024
Valuation adjustment of deferred tax assets	0	(1,000)
Net realized gains on available-for-sale securities	(47)	(16)
Net amortization on securities	916	1,059
Valuation adjustment of other real estate owned	890	1,275
Valuation adjustment of Real Estate Held for Sale	315	0
Origination of loans held for sale	(16,969)	0
Proceeds from loans held for sale	15,714	0
(Increase) decrease in interest receivable	(286)	(474)
(Increase) decrease in other assets	(5)	(175)
Increase (decrease) in interest, taxes and other liabilities	592	253
Net cash provided by operating activities	3,963	4,984
Securities available for sale:
Proceeds from sale of debt and equity securities	21,164	1,025
Proceeds from maturities of debt and equity securities	19,035	17,759
Purchase of debt and equity securities	(57,759)	(15,875)
(Purchase) redemption of other investments	(45)	175
Net (increase) decrease in loans	18,433	(30,510)
Proceeds from sales of other real estate owned	3,060	3,447
Premises and equipment expenditures	(372)	(1,288)
Net cash provided by (used in) investing activities	3,516	(25,267)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in certificates of deposit	(15,163)	(14,089)
Net increase in demand, savings and other deposits	10,120	25,504
Net increase (decrease) in short term borrowings	7,500	1
Net decrease in long-term debt	(7,552)	(52)
Issuance of common stock	1,110	0
Net cash provided by financing activities	(3,985)	11,364
Net increase (decrease) in cash and cash equivalents	3,494	(8,919)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	46,891	55,810
CASH AND CASH EQUIVALENTS AT END OF YEAR	50,385	46,891
Cash paid during the year for:
Interest	4,186	6,630
Income taxes	0	0
SUPPLEMENTAL DISCLOSURES OF NONCASH TRANSACTIONS
Transfer of loans to other real estate owned	1,632	4,131
Loans originated from sales of other real estate owned	$ 105	$ 390

1. Summary of Significant Accou

1. Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2016
Summary Of Significant Accounting Policies
Summary of Significant Accounting Policies	Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of Highlands Bankshares, Inc., (the “Parent Company”) and its wholly-owned subsidiary, Highlands Union Bank (the "Bank"). The statements also include Highlands Union Insurance Services, Inc., Highlands Union Financial Services, Inc., and Russell Road Properties, LLC which are wholly owned subsidiaries of the Bank. Russell Road Properties, LLC, formed in March of 2015 to hold and manage certain properties acquired by the Bank through foreclosure or deed in lieu of foreclosure. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and reporting policies of Highlands Bankshares, Inc. and its subsidiaries, (collectively the “Company”) conform to U.S. generally accepted accounting principles and to standard practices within the banking industry. Nature of Operations The Company operates in Abingdon, Virginia, and surrounding southwest Virginia, eastern Tennessee, and western North Carolina under the laws of the Commonwealth of Virginia. The Parent Company was organized on December 29, 1995. The Parent Company is supervised by the Federal Reserve Bank under the Bank Holding Company Act of 1956, as amended. The Bank began banking operations on April 27, 1985 under a state bank charter and provides a wide range of financial services to individuals and businesses. The Bank’s primary lending products include mortgage, consumer and commercial loans, and its primary deposit products are checking, savings, and certificates of deposit. As a state bank and a member of the Federal Reserve Bank of Richmond, the Bank is subject to regulation by the Virginia State Bureau of Financial Institutions, the Federal Deposit Insurance Corporation, and the Federal Reserve Bank. Highlands Union Insurance Services, Inc. became effective October 8, 1999 for the purpose of selling insurance through Bankers Insurance LLC. The only activity in Highlands Union Financial Services is the receipt of life insurance commissions. Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and due from banks and federal funds sold, all of which mature within ninety days. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. Securities Available-for-Sale Securities classified as available-for-sale are those debt and equity securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company's assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities available-for-sale are carried at fair value. Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred income tax effect. Realized gains or losses are included in earnings on the trade date and are determined on the basis of the amortized cost of specific securities sold. Premiums and discounts are recognized in interest income using the interest method over the period to maturity. On a quarterly basis the Company reviews any securities which are considered to be impaired as defined by accounting guidance. During this review, the Company determines if the impairment is deemed to be other than temporary. If it is determined that the impairment is other than temporary, i.e. impaired because of credit issues, the investment is written down by a charge in the Statement of Income. Loans The Company makes mortgage, commercial and consumer loans to customers. Included in mortgage lending are loans secured by real estate such as single family and multifamily dwelling units as well as commercial properties both owner occupied and held for lease to others. Commercial loans include those primarily secured by business assets or land or may be unsecured. Consumer loans include second mortgages and equity lines of credit and other personal loans which may be secured or unsecured. The Company also makes farmland loans and other agricultural type loans such as financing farming activities. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid balance. Loan origination fees, net of certain direct origination costs, are deferred and amortized to income over the estimated lives of the loans using the straight-line method which is not materially different from the interest method. The accrual of interest on a loan is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Credit card loans and other personal loans are typically charged off no later than 180 days past due. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Payments on non-accrual loans are applied to principal or applied on a cash basis. All interest accrued but not collected for loans that are placed on non-accrual or charged off status is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans Held for Sale The Company’s mortgage division, Highlands Home Mortgage, originates certain single family, residential mortgage loans for sale on a presold basis. The division began operations in the second quarter of 2016. The loans are sold to various investors on a servicing released basis using a best efforts approach. The Company does not consider either the rate lock commitment or the purchased commitment a derivative contract. Allowance for Loan Losses The Company monitors and maintains an allowance for loan losses to absorb an estimate of probable losses inherent in the loan portfolio. The Company maintains policies and procedures that address the systems of controls over the following areas of maintenance of the allowance: the systematic methodology used to determine the appropriate level of the allowance to provide assurance the loan loss reserve is maintained in accordance with accounting principles generally accepted in the United States of America; the accounting policies for loan charge-offs and recoveries; the assessment and measurement of impairment in the loan portfolio; and the loan grading system. The Company’s Credit Review and Analysis Department evaluates various loans individually for impairment as required by Financial Accounting Standards Board ASC 310, Receivables –Subsequent Measurement Accounting for Contingencies The amounts of estimated impairment for individually evaluated loans and groups of loans are added together for a total estimate of loan losses. This estimate of losses is compared to the allowance for loan losses of the Company as of the evaluation date and, if the estimate of losses is greater than the allowance, an additional provision to the allowance is made. If the estimate of losses is less than the allowance, the degree to which the allowance exceeds the estimate is evaluated to determine whether the allowance falls outside a range of estimates. If the estimate of losses is below the range of reasonable estimates, the allowance is reduced by adjusting the provision for loan losses. The Company recognizes the inherent imprecision in estimates of losses due to various uncertainties and variability related to the factors used, and therefore a reasonable range around the estimate of losses is derived and used to ascertain whether the allowance is too high or too low. If different assumptions or conditions were to prevail and it is determined that the allowance is not adequate to absorb the new estimate of probable losses, an additional provision for loan losses would be made, which amount may be material to the consolidated financial statements. Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line method over estimated useful lives. Maintenance and repairs are charged to current operations while improvements are capitalized. Disposition gains and losses are reflected in current operations. Purchased software costs are included in other assets and expensed over periods ranging from 3-5 years. Real Estate held for Sale Real estate held for sale is initially measured at the lower of the carrying amount or fair value less costs to sell. A loss is recognized for any initial adjustment of the of the asset’s carrying amount to its fair value less cost to sell in the period the held for sale criteria are met. The fair value less costs to sell will be assessed each reporting period. Subsequent changes in the asset’s fair value less cost to sell would be reported as an adjustment to its carrying amount, except that the adjusted carrying amount will not exceed the carrying amount of the asset at the time it was initially classified as held for sale. Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management using updated appraisals and other information and the assets are carried at the lower of carrying amount or fair value less cost to sell. Generally, appraisals are updated every 24 months for all individually significant properties or when current events indicate that a property may have suffered a material decrease in value. Revenue and expenses from operations and gains and losses on disposals are included in Non-interest expense captioned “Foreclosed Assets-Write-down and operating expenses”. Income Taxes Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates to the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Under ASC 740, the effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Management evaluates the Company’s tax circumstance and filings under the most current and relevant accounting rules and believes the Company has incurred no liability for uncertain beneficial tax positions (or any related penalties and interest) for the periods open to normal jurisdictional examinations (2013 through 2015). Earnings Per Common Share Earnings per common share are calculated based on the weighted average outstanding shares during the year. Earnings per common share assuming dilution are calculated based on the weighted average outstanding shares during the year plus common stock equivalents at year end. Stock Compensation Plans The Company accounts for stock compensation plans under the guidance of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their grant-date fair values. No options were granted during 2016 or 2015. See Note 12 for discussion of issuance of shares of restricted stock. Use of Estimates In preparing consolidated financial statements in conformity with U.S. generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, and the valuation of foreclosed real estate, deferred tax assets and investment securities. Business Segments The Company reports its activities as a single business segment. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 was effective for annual reporting periods, and interim periods within that period, beginning after December 15, 2016. ASU No. 2015-14 issued in August 2015 deferred the effective date of this Update to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The adoption of this ASU is not expected to have a material effect on the Company’s current financial position or results of operations; however, it may impact the reporting of future financial statement disclosures. In April 2015, the FASB issued ASU No. 2015-03 Interest-Imputation of Interest (Subtopic 835-30), which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The amendments will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company does not expect these amendments to have a material effect on its financial statements. In August 2015, the FASB issued ASU No. 2015-15 Interest-Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting . In January 2016, ASU No. 2016-01 Financial Instruments--Overall (Subtopic 825-10) was issued by the FASB. The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of these amendments on its financial statements. In March 2016, ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting” was issued by the FASB. This ASU includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. Some of the key provisions of this new ASU include: (1) companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement, and APIC pools will be eliminated. The guidance also eliminates the requirement that excess tax benefits be realized before companies can recognize them. In addition, the guidance requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity; (2) increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. The new guidance will also require an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on its statement of cash flows (current guidance did not specify how these cash flows should be classified); and (3) permit companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as required today, or recognized when they occur. ASU No. 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016. The Company does not expect these amendments to have a material effect on its financial statements. In June 2016, ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” was issued by the FASB. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

2. Formal Written Agreement

2. Formal Written Agreement	12 Months Ended
	Dec. 31, 2016
Formal Written Agreement
Formal Written Agreement	On October 13, 2010, the Company and Bank entered into a written agreement (“Written Agreement”) with the Federal Reserve Bank of Richmond (the “Reserve Bank”). Under the terms of the Written Agreement, the Bank has agreed to develop and submit to the Reserve Bank for approval within the time periods specified therein written plans or programs to: · strengthen board oversight of the management and operations of the Bank; · strengthen credit risk management and administration; · provide for the effective grading of the Bank’s loan portfolio; · summarize the findings of its review of the adequacy of the staffing of its loan review function; · improve the Bank’s position with respect to loans, relationships, or other assets in excess of $500,000 that currently are, or in the future become past due more than 90 days, on the Bank’s problem loan list, or adversely classified in any report of examination of the Bank; · review and revise the Bank’s methodology for determining the allowance for loan and lease losses (“ALLL”) and maintain an adequate ALLL; · maintain sufficient capital at the Company and the Bank; · establish a revised written contingency funding plan; · establish a revised written strategic and capital plan; · establish a revised investment policy; · improve the Bank’s earnings and overall condition; · revise the Bank’s information technology program; · establish a disaster recovery and business continuity program; and, · establish a committee to monitor compliance with all aspects of the written agreement. Further, both the Company and the Bank have agreed to refrain from declaring or paying dividends without prior regulatory approval. The Company has agreed that it will not take any other form of payment representing a reduction in Bank’s capital or make any distributions of interest, principal or other sums on subordinated debentures or trust preferred securities without prior regulatory approval. The Company also has agreed not to incur, increase or guarantee any debt or not to purchase or redeem any shares of its stock without prior regulatory approval.

3. Investment Securities Availa

3. Investment Securities Available-For-Sale	12 Months Ended
	Dec. 31, 2016
Investment Securities Available-for-sale
Investment Securities Available-For-Sale	The amortized cost and market value of securities available-for-sale are as follows: 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value State and political subdivisions $ 13,013 $ 41 $ 603 $ 12,451 Mortgage backed securities 75,384 93 1,189 74,288 SBA Pools 8,533 6 205 8,334 $ 96,930 $ 140 $ 1,997 $ 95,073 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value State and political subdivisions $ 6,834 $ 124 $ — $ 6,958 Mortgage backed securities 62,911 160 478 62,593 SBA Pools 10,494 9 194 10,309 $ 80,239 $ 293 $ 672 $ 79,860 The following tables presents the age of gross unrealized losses and fair value by investment category: December 31, 2016 Less Than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses State and political subdivisions $ 9,191 $ 603 $ — $ — $ 9,191 $ 603 Mortgage-backed securities 66,878 1,189 — — 66,878 1,189 SBA Pools 7,587 205 — — 7,587 205 Total $ 83,656 $ 1,997 $ — $ — $ 83,656 $ 1,997 The total number of investment securities in a loss position at December 31, 2016 was 108. December 31, 2015 Less Than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses State and political subdivisions $ — $ — $ — $ — $ — $ — Mortgage-backed securities 45,790 363 4,589 115 50,379 478 SBA Pools 157 3 9,110 191 9,267 194 Total $ 45,947 $ 366 $ 13,699 $ 306 $ 59,646 $ 672 The total number of investment securities in a loss position at December 31, 2015 was 34. The Company assesses securities for Other than Temporary Impairment (“OTTI”) quarterly by reviewing credit ratings, financial and regulatory reports as well as other pertinent financial indicators published. As of December 31, 2016 and 2015, the Company's assessment revealed no impairment other than that deemed temporary. Investment securities available-for-sale with a book value (amortized cost) of $33,238 and $31,422 at December 31, 2016 and 2015 respectively, and a market value of $32,698 and $31,355 at December 31, 2016 and 2015, respectively, were pledged as collateral on public deposits, FHLB advances, secured correspondent credit lines and for other purposes as required or permitted by law. The amortized cost and estimated fair value of securities available-for-sale at December 31, 2016 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Fair Value Due in one year or less $ 555 $ 562 Due after one year through five years 2,255 2,273 Due after five years through ten years 3 3 Due after ten years 18,733 17,947 21,546 20,785 Mortgage-backed securities 75,384 74,288 $ 96,930 $ 95,073 For the years ended December 31, 2016 and 2015, proceeds from sales of securities were $21,164 and $1,025 respectively. Gross realized gains and losses on investment securities available for sale were as follows: 2016 2015 Realized gains from sales and calls of securities $ 65 $ 16 Realized losses 18 — Net gains $ 47 $ 16

4. Other Investments

4. Other Investments	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Other Investments	Federal Home Loan Bank (FHLB) stock, Federal Reserve Bank (FRB) stock, Pacific Coast Bankers’ Bank and Community Bankers’ Bank stock with a carrying value of $4,395 and $4,350 at December 31, 2016 and 2015, respectively are stated at cost and included as “ Other Investments” on the Company’s Balance Sheets. These investments are considered to be restricted as the Company is required by these entities to hold these investments, and the only market for this stock is the issuing agency. Also included in “Other Investments” are Certificates of Deposit purchased from other FDIC - insured institutions. The balances of these CDs were $2,242 and $2,242 at December 31, 2016 and 2015, respectively.

5. Loans and Allowance for Loan

5. Loans and Allowance for Loan Losses	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Loans and Allowance for Loan Losses	The composition of net loans is as follows: 2016 2015 Real Estate Secured: Residential 1-4 family $ 186,695 $ 194,287 Multifamily 22,630 23,895 Construction and Land Loans 15,978 19,163 Commercial, Owner Occupied 72,383 73,031 Commercial, Non-owner occupied 28,818 38,025 Second mortgages 6,934 8,169 Equity lines of credit 13,395 6,000 Farmland 12,194 11,283 359,027 373,853 Secured (other) and unsecured: Personal 17,745 20,775 Commercial 29,977 35,144 Agricultural 3,490 2,959 51,212 58,878 Overdrafts 142 139 410,381 432,870 Less: Allowance for loan losses 4,829 5,654 Net deferred fees 714 787 5,543 6,441 Loans, net $ 404,838 $ 426,429 Loans are considered delinquent when payments have not been made according to the terms of the contract. The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Credit card loans and other personal loans are typically charged off no later than 180 days past due. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. The following is a summary of residential real estate currently in the process of foreclosure as well as foreclosed residential real estate as of December 31, 2016. Number Balance Residential real estate in the process of foreclosure 8 $ 817 Foreclosed residential real estate 6 $ 340 The following table is an analysis of past due loans as of December 31, 2016: 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment > 90 Days and Accruing Real Estate Secured Residential 1-4 family $ 841 $ 242 $ 1,000 $ 2,083 $ 184,612 $ 186,695 $ — Equity lines of credit — 30 10 40 13,355 13,395 — Multifamily — — — — 22,630 22,630 — Farmland — 47 564 611 11,583 12,194 — Construction, Land Development, Other Land Loans 39 — — 39 15,939 15,978 — Commercial Real Estate- Owner Occupied 14 — 3,868 3,882 68,501 72,383 2,210 Commercial Real Estate- Non Owner Occupied — — — — 28,818 28,818 — Second Mortgages 160 1 18 179 6,755 6,934 — Non Real Estate Secured Personal 118 23 12 153 17,734 17,887 — Commercial 142 54 462 658 29,319 29,977 — Agricultural — 7 — 7 3,483 3,490 — Total $ 1,314 $ 404 $ 5,934 $ 7,652 $ 402,729 $ 410,381 $ 2,210 The following is a summary of non-accrual loans at December 31, 2016: Amount Real Estate Secured Residential 1-4 Family $ 1,275 Multifamily — Construction and Land Loans — Commercial-Owner Occupied 1,658 Commercial- Non Owner Occupied — Second Mortgages 18 Equity Lines of Credit 10 Farmland 564 Secured (other) and Unsecured Personal 12 Commercial 462 Agricultural — Total $ 3,999 The following table is an analysis of past due loans as of December 31, 2015: 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment > 90 Days and Accruing Real Estate Secured Residential 1-4 family $ 4,193 $ 1,580 $ 2,545 $ 8,318 $ 185,969 $ 194,287 $ — Equity lines of credit 24 — 17 41 5,959 6,000 — Multifamily — — — — 23,895 23,895 — Farmland 56 7 303 366 10,917 11,283 — Construction, Land Development, Other Land Loans 49 61 37 147 19,016 19,163 — Commercial Real Estate- Owner Occupied 514 485 5,014 6,013 67,018 73,031 — Commercial Real Estate- Non Owner Occupied — — — — 38,025 38,025 — Second Mortgages 88 37 5 130 8,039 8,169 — Non Real Estate Secured Personal 264 141 163 568 20,346 20,914 — Commercial 590 217 366 1,173 33,971 35,144 — Agricultural 45 — — 45 2,914 2,959 — Total $ 5,823 $ 2,528 $ 8,450 $ 16,801 $ 416,069 $ 432,870 $ — The following is a summary of non-accrual loans at December 31, 2015: Amount Real Estate Secured Residential 1-4 Family $ 2,675 Multifamily — Construction and Land Loans 71 Commercial-Owner Occupied 5,856 Commercial- Non Owner Occupied — Second Mortgages 5 Equity Lines of Credit 17 Farmland 303 Secured (other) and Unsecured Personal 163 Commercial 366 Agricultural — Total $ 9,456 The following tables represent a summary of credit quality indicators of the Bank’s loan portfolio at December 31, 2016 and December 31, 2015. The grades are assigned and or modified by the Company’s credit review and credit analysis departments based on the creditworthiness of the borrower and the overall strength of the loan. Credit Risk Profile by Internally Assigned Grade –December 31, 2016 Grade (1) Residential 1-4 Family Multifamily Farmland Construction, Land Loans Commercial Real Estate- Owner Occupied Commercial Real Estate Non-Owner Occupied Quality $ 32,054 $ — $ 19 $ 1,941 $ 3,686 $ 387 Satisfactory 106,154 18,335 7,823 5,969 36,806 15,198 Acceptable 41,369 1,410 3,474 5,961 22,767 5,119 Special Mention 3,399 1,896 — — 4,435 4,221 Substandard 3,719 989 878 2,107 4,689 3,893 Doubtful — — — — — — Total $ 186,695 $ 22,630 $ 12,194 $ 15,978 $ 72,383 $ 28,818 Credit Risk Profile by Internally Assigned Grade –December 31, 2015 Grade (1) Residential 1-4 Family Multifamily Farmland Construction, Land Loans Commercial Real Estate- Owner Occupied Commercial Real Estate Non-Owner Occupied Quality $ 25,939 $ — $ 25 $ 3,036 $ 2,870 $ 1,481 Satisfactory 109,993 20,271 6,323 7,406 38,926 19,979 Acceptable 46,639 1,811 3,922 6,420 21,671 12,157 Special Mention 3,133 792 195 397 2,552 2,523 Substandard 8,583 1,021 818 1,904 7,012 1,885 Doubtful — — — — — — Total $ 194,287 $ 23,895 $ 11,283 $ 19,163 $ 73,031 $ 38,025 (1) Quality Conformity in all respects with Bank policy, guidelines, underwriting standards, and Federal and State regulations (no exceptions of any kind). Documented historical cash flow that meets or exceeds required minimum Bank guidelines, or that can be supplemented with verifiable cash flow from other sources. Adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor. For existing loans, all of the requirements above apply plus all payments have been made as agreed, current financial information on all borrowers and guarantors has been obtained and analyzed, and overall business operating trends are either stable or improving. Satisfactory- General conformity to the Bank's policy requirements, product guidelines and underwriting standards. Any exceptions that are identified during the underwriting and approval process have been adequately mitigated by other factors. Documented historical cash flow that meets or exceeds required minimum Bank guidelines, or that can be supplemented with verifiable cash flow from other sources. Adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor. For existing loans, all of the requirements outlined above will apply, plus all payments have been made as agreed, current financial information on all borrowers and guarantors has been obtained and analyzed, and overall business operating trends are stable with any declines considered minor and temporary. Acceptable- Additional exceptions to the Bank's policy requirements, product guidelines or underwriting standards that present a higher degree of risk to the Bank. Although the combination and/or severity of identified exceptions is greater, all exceptions have been properly mitigated by other factors. Unproved, insufficient or marginal primary sources of repayment that appear sufficient to service the debt at this time. Repayment weaknesses may be due to minor operational issues, financial trends, or reliance on projected (not historical) performance. Marginal or unproven secondary sources to liquidate the debt, including combinations of liquidation of collateral and liquidation value to the net worth of the borrower or guarantor. For existing loans, payments have generally been made as agreed with only minor and isolated delinquencies. Special Mention Loans with underwriting guideline tolerances and/or exceptions with no identifiable mitigating factors. Extending loans that are currently performing satisfactorily but with potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Bank's position at some future date. Potential weaknesses are the result of deviations from prudent lending practices. Loans where adverse economic conditions that develop subsequent to the loan origination do not jeopardize liquidation of the debt, but do substantially increase the level of risk, may also warrant this rating. Substandard- The weaknesses may include, but are not limited to: · High debt to worth ratios and / or declining or negative earnings trends · Declining or inadequate liquidity · Improper loan structure or questionable repayment sources · Lack of well-defined secondary repayment source · Unfavorable competitive comparisons Such loans are no longer considered to be adequately protected due to the borrower's declining net worth, lack of earnings capacity, declining collateral margins and/or unperfected collateral positions. A possibility of loss of a portion of the loan balance cannot be ruled out. The repayment ability of the borrower is marginal or weak and the loan may have exhibited excessive overdue status or extensions and/or renewals. Doubtful However, these loans are not yet rated as loss because certain events may occur which would salvage the debt. Among these events are: · Injection of capital · Alternative financing · Liquidation of assets or the pledging of additional collateral The following tables provide a summary of loans whose risk profile is based on payment activity. Credit Risk Profile based on payment activity – December 31, 2016 Consumer - Non Real Estate Equity Line of Credit /Second Mortgages Commercial - Non Real Estate Agricultural - Non Real Estate Performing $ 17,875 $ 20,301 $ 29,515 $ 3,490 Nonperforming (>90 days past due) 12 28 462 — Total $ 17,887 $ 20,329 $ 29,977 $ 3,490 Credit Risk Profile based on payment activity – December 31, 2015 Consumer - Non Real Estate Equity Line of Credit /Second Mortgages Commercial - Non Real Estate Agricultural - Non Real Estate Performing $ 20,751 $ 14,147 $ 34,778 $ 2,959 Nonperforming (>90 days past due) 163 22 366 — Total $ 20,914 $ 14,169 $ 35,144 $ 2,959 The following tables reflect the Bank’s impaired loans at December 31, 2016 and December 31, 2015: December 31, 2016 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no Related Allowance Real Estate Secured Residential 1-4 family $ 4,848 $ 4,848 $ — $ 5,963 $ 200 Equity lines of credit 25 25 — 38 1 Multifamily 989 989 — 1,005 1 Farmland 685 685 — 750 24 Construction, Land Development, Other Land Loans 1,741 1,741 — 1,643 114 Commercial Real Estate- Owner Occupied 5,802 5,802 — 5,685 390 Commercial Real Estate- Non Owner Occupied 1,883 1,883 — 941 39 Second Mortgages 186 186 — 292 8 Non Real Estate Secured Personal 14 14 — 41 1 Commercial 43 43 — 179 3 Agricultural — — — — — Total $ 16,216 $ 16,216 $ — $ 16,537 $ 781 December 31, 2016 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With an Allowance Recorded Real Estate Secured Residential 1-4 family $ 460 $ 460 $ 36 $ 1,153 $ 14 Equity lines of credit — — — — — Multifamily — — — — — Farmland 192 192 16 96 11 Construction, Land Development, Other Land Loans 366 366 20 406 22 Commercial Real Estate- Owner Occupied 1,139 2,139 558 1,629 Commercial Real Estate- Non Owner Occupied 2,009 2,009 314 1,947 41 Second Mortgages 18 18 9 18 — Non Real Estate Secured Personal 51 51 29 82 3 Commercial 634 634 365 652 16 Agricultural — — — — — Total $ 4,869 $ 5,869 $ 1,347 $ 5,983 $ 107 December 31, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no Related Allowance Real Estate Secured Residential 1-4 family $ 7,078 $ 7,078 $ — $ 7,533 $ 247 Equity lines of credit 51 51 — 38 2 Multifamily 1,021 1,021 — 1,137 60 Farmland 816 816 — 829 38 Construction, Land Development, Other Land Loans 1,547 1,547 — 1,643 92 Commercial Real Estate- Owner Occupied 5,569 5,569 — 7,379 132 Commercial Real Estate- Non Owner Occupied — — — — — Second Mortgages 398 398 — 508 14 Non Real Estate Secured Personal 68 68 — 61 4 Commercial 315 315 — 338 13 Agricultural — — — — — Total $ 16,863 $ 16,863 $ — $ 19,466 $ 602 December 31, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With an Allowance Recorded Real Estate Secured Residential 1-4 family $ 1,846 $ 1,846 $ 249 $ 2,497 $ 93 Equity lines of credit — — — — — Multifamily — — — — — Farmland — — — — — Construction, Land Development, Other Land Loans 446 446 32 406 25 Commercial Real Estate- Owner Occupied 2,119 2,119 799 1,761 9 Commercial Real Estate- Non Owner Occupied 1,885 1,885 290 1,901 56 Second Mortgages 18 18 10 9 1 Non Real Estate Secured Personal 114 114 45 184 4 Commercial 670 670 512 736 28 Agricultural — — 4 — Total $ 7,098 $ 7,098 $ 1,937 $ 7,498 $ 216 A loan is considered impaired and an allowance for loan losses is established on loans for which it is probable that the full collection of principal and interest is in doubt. Once a loan is identified as individually impaired, management measures impairment using one of several methods, including collateral value based on recent appraisal and /or tax assessment value, liquidation value and/or discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At December 31, 2016 and 2015, all of the total impaired loans were evaluated based on the fair value of the collateral. On a quarterly basis, the ALLL methodology begins with the determination of individually impaired loans. All loans that are rated “7” (Doubtful) are assessed as impaired based on the expectation that the full collection of principal and interest is in doubt. All loans that are rated “6” (Substandard) or are expected to be downgraded to “6”, require additional analysis to determine whether they may be impaired. All loans that are rated “5” (Special Mention) are presumed not to be impaired. However, “5” rated loans with the following characteristics warrant further analysis before completing an assessment of impairment: • A loan is 60 days or more delinquent on scheduled principal or interest; • A loan is presently in an unapproved over advanced position; • A loan is newly modified; or, • A loan is expected to be modified. The Company’s credit administration personnel and senior financial officers are responsible for tracking, coding, and monitoring loans that become troubled debt restructurings. Concessions are made to existing borrowers in the form of modified interest rates and / or payment terms. The loans are segregated for regulatory and external reporting. Each specific troubled debt restructuring is reviewed to determine if the accrual of interest should be discontinued and also reviewed for impairment. The Company’s senior credit administration officer performs this analysis on a quarterly basis in addition to determining any other loans that are impaired within the loan portfolio. The Company had a total of $12,660 and $10,064 of loans categorized as troubled debt restructurings as of December 31, 2016 and 2015, respectively. Interest is accrued on troubled debt restructurings if the loan is otherwise not impaired and the full collection of principal and interest under the modified terms is still deemed probable. In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance calculation. Additionally, specific reserves may be established on restructured loans evaluated individually. The following is a summary of troubled debt restructurings occurring during the twelve months ended December 31, 2016. Troubled Debt Restructurings Interest only Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Oustanding Recorded Investment Residential 1-4 family 1 $ 180 $ 180 Equity lines of credit Multifamily Farmland 1 57 57 Construction, Land Development, Commercial Real Estate- Owner Occupied 4 4,288 4,288 Commercial Real Estate- Non Owner Occupied Second Mortgages 1 64 64 Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 7 $ 4,589 $ 4,589 Troubled Debt Restructurings Below Market Rate Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 848 $ 848 Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied 1 1,516 1,516 Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 2 $ 2,364 $ 2,364 Troubled Debt Restructurings Loan term extension Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 2 $ 452 $452 Equity lines of credit Multifamily 1 999 999 Farmland 2 193 193 Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 5 $ 1,643 $1,643 Troubled Debt Restructurings All Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstaniding Recorded Investment Total Restructurings 14 $ 8,596 $8,596 Troubled Debt Restructurings that subsequently defaulted during the twelve months ended December 31, 2016 Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 175 $ 175 Equity lines of credit Multifamily Farmland 2 $ 193 $ 193 Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 3 $ 368 $ 368 The following is a summary of troubled debt restructurings occurring during the twelve months ended December 31, 2015. Troubled Debt Restructurings Interest only Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Oustanding Recorded Investment Residential 1-4 family 1 $ 188 $ 188 Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied 2 2,203 2,203 Commercial Real Estate- Non Owner Occupied Second Mortgages 1 68 68 Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 4 $ 2,459 $ 2,459 Troubled Debt Restructurings Below Market Rate Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 863 $ 863 Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied 1 1,547 1,547 Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 2 $ 2,410 $ 2,410 Troubled Debt Restructurings Loan term extension Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 131 $131 Equity lines of credit Multifamily Farmland Construction, Land Development, 1 35 35 Commercial Real Estate- Owner Occupied 1 847 847 Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 3 $ 1,013 $1,013 Troubled Debt Restructurings All Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstaniding Recorded Investment Total Restructurings 9 $ 5,882 $5,882 Troubled Debt Restructurings that subsequently defaulted during the twelve months ended December 31, 2015 Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total The following tables present the balance in the allowance for loan losses and the recorded investment in loans by loan category and is segregated by impairment evaluation method as of December 31, 2016 and December 31, 2015. Twelve months ended December 31, 2016 Residential Multifamily Construction and Land Loans Commercial Owner Occupied Commercial Non-Owner Occupied Second Mortgages Equity Line of Credit Farmland Personal and Overdrafts Commercial and Agricultural Unallocated Total Allowance for Credit Losses: Beginning Balance December 31, 2015 654 — 37 1,012 748 43 20 7 704 886 1,543 5,654 Provision for Credit Losses (66 ) — (2 ) 1,564 (310 ) (24 ) 14 11 947 (323 ) (285 ) 1,526 Charge-offs 249 — 28 1,245 4 9 2 1,044 165 — 2,746 Recoveries (32 ) — (14 ) (8 ) (7 ) — (2 ) — (195 ) (137 ) — (395 ) Net Charge-offs 217 — 14 1,237 (7 ) 4 7 2 849 28 — 2,351 Ending Balance 371 — 21 1,339 445 15 27 16 802 535 1,258 4,829 Ending Balance: Individually evaluated for impairment 36 — 20 558 314 9 — 16 29 365 1,347 Ending Balance: Collectively Evaluated for Impairment 335 — 1 781 131 6 27 — 773 170 1,258 3,842 Loans: Ending Balance: Individually Evaluated for Impairment 5,308 989 2,107 6,941 3,892 204 25 877 65 677 — 21,085 Ending Balance: Collectively Evaluated for Impairment 181,387 21,641 13,871 65,442 24,926 6,730 13,370 11,317 17,822 32,790 — 389,296 Ending Balance: December 31, 2016 $ 186,695 $ 22,630 $ 15,978 $ 72,383 $ 28,818 $ 6,934 $ 13,395 $ 12,194 $ 17,887 $ 33,467 — $ 410,381 Twelve months ended December 31, 2015 Residential Multifamily Construction and Land Loans Commercial Owner Occupied Commercial Non-Owner Occupied Second Mortgages Equity Line of Credit Farmland Personal and Overdrafts Commercial and Agricultural Unallocated Total Allowance for Credit Losses: Beginning Balance December 31, 2014 $ 995 $ 20 $ 87 $ 409 $ 1,063 $ 67 $ 74 $ 12 $ 665 $ 982 $ 1,103 $ 5,477 Provision for Credit Losses 16 (20 ) (79 ) 634 (309 ) (21 ) (95 ) (8 ) 759 152 440 1,469 Charge-offs 360 — 12 407 12 3 — — 796 257 — 1,847 Recoveries (3 ) — (41 ) (376 ) (6 ) — (41 ) (3 ) (76 ) (9 ) — (555 ) Net Charge-offs 357 — (29 ) 31 6 3 (41 ) (3 ) 720 248 — 1,292 Ending Balance 654 — 37 1,012 748 43 20 7 704 886 1,543 5,654 Ending Balance: Individually evaluated for impairment 249 — 32 799 290 10 — — 45 512 1,937 Ending Balance: Collectively Evaluated for Impairment 405 — 5 213 458 33 20 7 659 374 1,543 3,717 Loans: Ending Balance: Individually Evaluated for Impairment 8,924 1,021 1,993 7,688 1,885 416 51 816 182 985 — 23,961 Ending Balance: Collectively Evaluated for Impairment 185,363 22,874 17,170 65,343 36,140 7,753 5,949 10,467 20,732 37,118 — 408,909 Ending Balance: December 31, 2015 $ 194,287 $ 23,895 $ 19,163 $ 73,031 $ 38,025 $ 8,169 $ 6,000 $ 11,283 $ 20,914 $ 38,103 — $ 432,870 Overview of Loan Review and ALLL Processes The loan review function performs various tasks that are utilized to discover weaknesses within the loan portfolio. These include annual reviews on loan relationships that are greater than $500. The relationship review includes a discussion on the collateral, repayment history, guarantor(s) financial position, and debt service coverage on an individual and global level. These reviews are based primarily upon federal tax returns for cash flow determination, internally prepared interim statements and personal financial statements. Debt service coverage (DSC) is calculated on each individual customer, or guarantor, as well as the aggregate or global DSC. The DSC is discounted to determine a “stressed” DSC. Collateral evaluation includes an inspection of the collateral file to determine if the Bank is indeed properly securitized. Collateral is discounted, when appropriate, to determine a “stressed” loan to value ratio (LTV). In addition to annual loan relationship reviews, quarterly reviews on all loan relationships over $100 that are graded Substandard, Doubtful and Loss are also completed. This quarterly review process is comprised of a shortened version of the full relationship review. These quarterly reviews include a discussion on personal credit management, DSC and LTV. In addition to these quarterly reviews of all non-pass watch list relationships, a semi-annual review is conducted on all Special Mention loan relationships that are on the watch list. These reviews are prepared in the same manner as the quarterly non-pass relationship reviews. The appropriateness of the risk rating of each relationship is assessed, with changes to the risk rating being made by the Senior Credit Review Officer, when deemed appropriate. Other measures taken to determine potential problem relationships include the monthly preparation of the watch list. During that process, past due loan reports are reviewed, as well as any other information that might be presented by loan officers, regarding a particular loan relationship that is exhibiting stress. To be considered as a watch list relationship, distinct characteristics must be exhibited. These include, but are not limited to late payments greater than 60 days, a low DSC calculation, bankruptcy filings, casualty losses, or other issues that would cause a perceived increase in the risk of loss to the Bank. The final segment of the loan review process involves special reviews. These reviews target specific segments of the loan portfolio, i.e. credit cards, equity lines, consumer loans, construction loans, and other specific segments of the loan portfolio that management wishes to have reviewed. However, currently, the primary emphasis of the loan review function is loan relationship review work, and watch list management. The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. In reviewing risk, management has determined there to be several different risk categories within the loan portfolio. The allowance for loan losses consists of amounts applicable to: (i) the commercial loan portfolio; (ii) the commercial real estate loan portfolio; (iii) the construction loan portfolio; (iv) the consumer loan portfolio; and, (v) the residential loan portfolio. The commercial real estate (“CRE”) loan segment is further disaggregated into two classes. Non-owner occupied CRE loans, which include loans secured by non-owner occupied nonfarm nonresidential properties, generally have a greater risk profile than all other CRE loans, which include multifamily structures and owner-occupied commercial structures. The construction loan segment is further disaggregated into two classes. One-to-four family residential construction loans are generally made to individuals for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Commercial construction loans are generally made to developers or investors for the purpose of acquiring, developing and constructing residential or commercial structures. Construction lending is generally considered to involve a higher degree of credit risk than long-term permanent financing. The following describes the Company’s basic methodology for computing its ALLL for the twelve months ending December 31, 2016 and 2015. On a quarterly basis, the ALLL methodology begins with the identification of loans subject to ASC 310. All loans that are rated “7” (Doubtful) are assessed as impaired based on the expectation that the full collection of principal and interest is in doubt. All loans that are rated “6” (Substandard) or are expected to be downgraded to “6”, require additional analysis to determine whether they may be impaired under ASC 310. All loans that are rated “5” (Special Mention) are presumed not to be impaired. However, “5” rated loans, together with any troubled debt restructured loans, may warrant further analysis before completing an assessment of impairment. For ASC 310 loans that are individually evaluated and found to be impaired (primarily those designated as Substandard and Doubtful), the associated ALLL will be based upon one of the three impairment measurement methods specified within ASC 310: (1) Present value of expected future cash flows discounted at the loan’s effective interest rate; (2) Loan’s observable market price; or, (3) Fair value of the collateral. To determine the amount of loan loss exposure for the impaired ASC 310 loans, the value of collateral for secured loans is evaluated to determine the current value and potential exposure. The collateral value is adjusted for its age and condition, and, for real estate, adjusted for condition, location, and age of the most current appraisal. If the adjusted value of the collateral is less than the current principal balance, the difference is designated as direct exposure for loan loss calculations. The total balance of unsecured loans is considered as direct exposure. ASC 450 Loan Loss For all other loans, including individual loans determined not to be impaired under ASC 310, the associated ALLL is calculated in accordance with ASC 450 that provides for estimated credit losses likely to be realized on groups of loans with similar risk characteristics. The Bank uses standard call report categories to segregate loans into groups with similar risk characteristics. Estimated credit losses reflect significant factors that affect the collectability of the portfolio as of the evaluation date. Key factors that influence risk within the Bank’s loan portfolio are divided into three major categories: (1) Historical Loss Factor: To calculate the anticipated loan loss in each call report category for ASC 450 loans, the Bank begins with the net loss in each category for each of the last twelve quarters. The Bank uses a rolling twelve quarter weighted historical loss average where the most recent quarters are weighted heavier than the earlier quarters so that the calculation reflects current risk trends within the portfolio. The weighting used by the Bank is similar to the Rule of 78’s with the net losses of the most recent quarter weighted at 12/78ths and those in the first quarter in the twelve quarter period weighted at 1/78 th . (2) External economic factors: Economic conditions have a significant impact on the Bank’s loan portfolio because deteriorating conditions can adversely impact both collateral values and the customer’s ability to service debt. Management has selected the following external factors as indicators of economic conditions: a. National GDP Growth Rate b. Local Unemployment Rates c. The Prime Rate The values for external factors are updated on a quarterly basis based on current economic data. (3) Internal process factors: Internal factors that influence loss rates as a result of risk management and control practices include the following: d. Past-Due Loans e. Non-Accrual Loans f. CRE Concentrations g. Loan Volume Level h. Level and Trend of Classified Loans The values for internal factors are updated on a quarterly basis based on current portfolio metrics. Once the quarterly ALLL is computed, the calculations are reviewed by the Company’s credit administration committee which is comprised of the CEO, CFO, and Senior Lending Officers, including Credit Review personnel. The Company’s controller also performs a detailed review of the computations, estimates, etc. included in the ALLL calculation. The ALLL is then reviewed and approved by the Board of Directors. Loans Held for Sale The Company’s mortgage division, Highlands Home Mortgage, originates certain single family, residential first mortgage loans for sale on a presold basis. Loan sale activity is summarized below. This division began operations in the second quarter of 2016. Loans are typically sold to one of the various investors within 20 days of closing. Management believes the carrying amounts approximate the fair values of loans held for sale. T

6. Premises and Equipment _ Rea

6. Premises and Equipment / Real Estate held for Sale	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Premises and Equipment / Real Estate held for Sale	Premises and equipment are comprised of the following: 2016 2015 Land $ 7,471 $ 9,150 Bank Premises 13,681 14,299 Equipment 15,314 15,258 36,466 38,707 Less: accumulated depreciation 18,770 18,133 Construction in progress 118 38 $ 17,814 $ 20,612 Depreciation expense was $967 and $933 for 2016 and 2015, respectively. The Company also has $1,680 of Real Estate held for sale. This consists of four vacant lots that were originally purchased for future branch expansion and/or bank operations and one property that was used for various back office departments. The Company is now actively marketing these five properties.

7. Bank Owned Life Insurance

7. Bank Owned Life Insurance	12 Months Ended
	Dec. 31, 2016
Investments, All Other Investments [Abstract]
Bank Owned Life Insurance	The Company maintains insurance on the lives of certain key directors and officers. As beneficiary, the Company receives the cash surrender value if the policy is terminated, and upon death of the insured, receives all benefits payable. The current value of the policies at December 31, 2016 and 2015 was $14,314 and $14,585, respectively.

8. Income Taxes

8. Income Taxes	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Income Taxes	The components of the net deferred tax asset are as follows: 2016 2015 Deferred tax assets: Allowance for loan loss $ 1,642 $ 1,922 Previous years AMT 802 802 Loss on other equity investments 51 51 NOL carry-forwards (20 year carry-forward period) 10,286 9,627 Net unrealized loss on securities available-for-sale 632 129 13,413 12,531 Deferred tax liability: Depreciation (424 ) (405 ) Net unrealized gain on securities available for sale — — (424 ) (405 ) Deferred Tax Asset Valuation Allowance — — Net deferred tax assets: $ 12,989 $ 12,126 The components of income tax expense related to continuing operations are as follows: 2016 2015 Federal: Current $ (657 ) $ (438 ) Deferred 297 (767 ) Total $ (360 ) $ (1,205 ) The Company’s income tax expense differs from the expected tax expense at the statutory federal rate of 34% as follows: 2016 2015 Statutory rate applied to earnings before income taxes $ (118 ) $ 45 Tax exempt interest (113 ) (123 ) Life insurance proceeds (30 ) — Deferred tax valuation allowance reversal — (1,000 ) Other, net (99 ) (127 ) Total $ (360 ) $ (1,205 ) Income tax benefits in 2016 totaled $360 compared to $1,205 in 2015. In the second quarter of 2015, the Company reversed the remaining balance of the valuation allowance that was established against the deferred tax assets (“DTA”) during the fourth quarter of 2011. The valuation allowance was established during 2011 due to uncertainty at the time regarding the ability to generate sufficient future taxable income to fully realize the benefit of the net DTA. Subsequent to 2011, earnings performance and asset quality have improved resulting in greater expected realization of the DTA. In addition, the Company raised $16,123 in net proceeds of new capital in 2014 which allowed the Company to payoff two high rate debt instruments (the Company’s Community Bankers Bank note and Trust Preferred Securities) improving future earnings potential. As a result of these factors, the Company reversed $1,000 of the DTA in the second quarter of 2014, and due to the continued improvements in asset quality and earnings performance the remaining $1,000 of the DTA valuation allowance was reversed in the second quarter of 2015. In assessing the realizability of DTA, management considers whether it is more likely than not that some portion or all of the DTA will not be realized. The Company evaluates the carrying amount of its DTA on a quarterly basis in accordance with the guidance provided in FASB ASC Topic 740 (“ASC 740”), in particular, applying the criteria set forth therein to determine whether it is more likely than not (i.e., a likelihood of more than 50%) that some portion, or all, of the DTA will not be realized within its life cycle, based on the weight of available evidence. In most cases, the realization of the DTA is dependent upon the Company generating a sufficient level of taxable income in future periods, which can be difficult to predict. If the Company’s forecast of taxable income within the carry forward periods available under applicable law is not sufficient to cover the amount of net deferred assets, such assets may be impaired. Management considers the reversal of deferred tax liabilities (including the impact of available carry-back and carry-forward periods), projected future taxable income and tax-planning strategies in making this assessment. Management, in conjunction with the board of directors, will continue to evaluate the carrying value of the Company’s DTA on a quarterly basis, in accordance with ASC 740, and will determine any need for a valuation allowance based upon circumstances and expectations then in existence.

9. Deposits

9. Deposits	12 Months Ended
	Dec. 31, 2016
Banking and Thrift [Abstract]
Deposits	The composition of deposits is as follows: 2016 2015 Non-interest bearing demand $ 134,488 $ 129,634 Interest bearing demand 124,143 119,787 Savings deposits 90,686 89,776 Time deposits, in amounts of $100,000 or more 43,743 49,242 Other time deposits 96,809 106,473 Total deposits $ 489,869 $ 494,912 The scheduled maturities of time deposits at December 31, 2016 are as follows: 2017 $ 66,373 2018 24,618 2019 14,388 2020 11,606 2021 8,854 Thereafter 14,713 $ 140,552 Time deposits greater than $250 totaled $6,308 and $8,874 at December 31, 2016 and December 31, 2015, respectively.

10. Short-Term Borrowings

10. Short-Term Borrowings	12 Months Ended
	Dec. 31, 2016
Debt Disclosure [Abstract]
Short-Term Borrowings	Short-term borrowings totaling $27,552 at December 31, 2016, as shown on the balance sheet, consist primarily of three Federal Home Loan Bank advances that are secured by a lien on a specific class of residential and commercial mortgage loans of the Bank. The FHLB has the option to convert two of these advances which total $20,000 to a three month LIBOR-based floating rate advance. These two notes have interest rates that range from 3.84% to 4.34% at December 31, 2016. The average rate paid on these two borrowings was 3.97% during 2015 and 2016. The third advance has a fixed rate of 2.43% and matures on August 29, 2017. Also included in other short-term borrowings are the contractual principal payments due over the next 12 months on an FHLB advance granted through the FHLB’s Affordable Housing Program. The contractual payments due on the FHLB Affordable Housing program loan total $52 and the advance has a zero interest rate.

11. Long-Term Debt

11. Long-Term Debt	12 Months Ended
	Dec. 31, 2016
Debt Disclosure [Abstract]
Long-Term Debt	At December 31, Highlands Bankshares, Inc. and its Subsidiary had the following long-term debt agreements: 2016 2015 Note payable FHLB dated 08/23/05 for $750 with an annual interest rate of 0%, due 08/24/2020. The note requires monthly principal payments and was granted as part of the FHLB’s Affordable Housing Program. $ 146 $ 198 Note payable FHLB dated 08/29/12 for $12,500 with an annual interest rate of 3.53%, due 08/29/19. The note requires quarterly interest payments. 12,500 12,500 Note payable FHLB dated 08/29/12 for $12,500 with an annual interest rate of 3.70%, due 08/29/19. The note requires quarterly interest payments. 12,500 12,500 Note payable FHLB dated 08/29/12 for $5,000 with an annual interest rate of 2.73%, due 08/29/18. The note requires quarterly interest payments 5,000 5,000 Note payable FHLB dated 08/29/12 for $5,000 with an annual interest rate of 3.74%, due 08/29/19. The note requires quarterly interest payments. 5,000 5,000 Note payable FHLB dated 08/29/12 for $7,500 with an annual interest rate of 2.43%, due 08/29/17. The note requires quarterly interest payments. Included in Short Term Borrowings 7,500 Note payable FHLB dated 08/29/12 for $5,000 with an annual interest rate of 2.86%, due 08/29/18. The note requires quarterly interest payments. 5,000 5,000 Total $ 40,146 $ 47,698 A specific class of commercial and residential mortgage loans, with a balance of $145,793 at December 31, 2016 were pledged to the FHLB as collateral for the above advances and to secure additional available lines of credit. Contractual principal maturities of long-term debt at December 31, 2016 are as follows: 2017 $- 2018 10,053 2019 30,053 2020 40 $ 40,146

12. Stock Issuances _ Awards

12. Stock Issuances / Awards	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Stock Issuances / Awards	On April 16, 2014, management and board of directors of Highlands Bankshares, Inc. announced the completion of a $16,525 private placement capital raise. Purchasers in the private placement included outside investors, as well as certain directors and executive officers of the Company. The Company sold 2,673,249 newly issued shares of the Company’s common stock at $3.50 per share, and 2,048,179 shares of Series-A convertible perpetual preferred stock at $3.50 per share. The private placement was disclosed on Form 8-K on April 16, 2014. The Company immediately paid off a Holding Company Loan in the amount of $3,440 to Community Bankers Bank on April 16, 2014 with the funds received from the capital raise. The Company also paid off the remaining $3,150 of its trust preferred securities including accrued interest. The payoff totaling $4,802 was completed on July 15, 2014. The Company down-streamed to the subsidiary Bank in June 2014 $7,500 of funds received from the capital raise. During the third quarter of 2014, the Company also conducted a rights offering to its existing shareholders other than directors and executive officers. The Company raised a total of $556 as a result of the offering. The Company immediately down-streamed $400 of the $556 to the Bank in September of 2014. In October 2014, one of the private placement purchasers, TNH Financial Fund, LP, purchased another $183 of common and preferred stock which allowed them to maintain the same ownership percentage that was held immediately prior to the rights offering. Net proceeds received from the private placement issues and rights offering totaled $16,123. In January of 2016, the Company’s CEO, Timothy K. Schools purchased 235,294 shares of the Company’s common stock at a price of $4.25 per share in a private placement as disclosed on Form 4 on January 12, 2016. In February 2016, two of the private placement purchasers participating in the capital raise in 2014, MFP Partners LP and Deerhill Pond Investment Partners, LP, each purchased another 12,744 shares of common stock at $4.25 per share which allowed them to maintain the same ownership percentage that was held immediately prior to Mr. Schools’ purchase. The company down-streamed $1,150 to the Bank. Effective September 6, 2016, the Company and Timothy K. Schools, the Company’s President and Chief Executive Officer, executed an amendment to Mr. Schools’ employment agreement. The amendment provides for the grant of 86,667 restricted shares of the Company’s common stock. The Restricted Shares will vest 50% on the first anniversary of the Award Date and 50% on the second anniversary of the Award Date. The restricted shares will be expensed over the 2 year vesting period based on the grant date fair value of the shares.

13. Stock and Earnings Per Shar

13. Stock and Earnings Per Share	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Stock and Earnings Per Share	Earnings per common share is computed using the weighted average outstanding shares for the years ended December 31. Outstanding stock options (Note 15) impact on earnings per share is determined using the treasury stock method. For 2015, the impact of conversions of outstanding stock options was anti-dilutive. During 2014, the Company issued a total of 2,092,287 shares of Series A preferred stock (See Note 12). These preferred shares are non-voting mandatorily convertible non-cumulative preferred shares which are entitled to receive dividends equal to dividends paid on the Company’s common shares. The Series A preferred shares will rank pari passu with the common stock with respect to all terms (other than voting), including, the payment of dividends or distributions, and payments and rights upon liquidation and dissolution. The restricted stock awards issued by the Company to Mr. Schools are also included in the diluted shares total. The following is a reconciliation of the numerators and the denominators of the basic and diluted earnings per common share computation: 2016 2015 Income available to common stockholders $ 12 $ 1,337 Weighted average shares outstanding 8,107 7,851 Shares outstanding including assumed conversion 10,285 9,943 Basic earnings per common share $ 0.00 $ 0.17 Fully diluted earnings per share (including convertible preferred shares oustanding) $ 0.00 $ 0.13

14. Profit Sharing and Retireme

14. Profit Sharing and Retirement Savings Plan	12 Months Ended
	Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]
Profit Sharing and Retirement Savings Plan	The Bank has a 401(k) savings plan available to substantially all employees meeting minimum eligibility requirements. Prior to July 1, 2016, the Bank made a discretionary 1.5% profit sharing contribution to all employees exclusive of employee contributions and employer matching. Effective July 1, 2016 this discretionary 1.5% contribution was replaced with a performance based program tied to certain profitability goals, etc. being achieved. Employees may elect to make voluntary contributions to the plan up to the maximum allowed by law. The Bank also matches 100% of the employee’s initial 1% contribution and 50% of the next 5%. The cost of Bank contributions under the savings plan was $216 and $303 in 2016 and 2015, respectively.

15. Stock Option Plan and Equit

15. Stock Option Plan and Equity Compensation Plan	12 Months Ended
	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Option Plan and Equity Compensation Plan	The Company sponsors an equity compensation plan, adopted by the Board of Directors in 2006, which provides for the granting of nonqualified stock options, stock appreciation rights, stock awards and stock units. Under the plan, the Company may grant options, restricted shares, etc. to its directors, officers and employees for up to 200,000 shares of common stock. The Company granted 86,667 shares of restricted stock to Timothy Schools in September 2016. The Company did not grant any equity compensation in 2015. A summary of the status of the Company’s stock option plan and restricted stock outstanding is presented below: 2016 2015 Restricted Stock Outstanding Stock Options Price per Share Number of Shares Weighted Average Exercise Price Number of Shares Options outstanding at January 1 — — $ 15.00 55,600 Granted — — — — Exercised — — — — Expired — — 15.00 (55,600 ) Options outstanding and exercisable at December 31 $ — — $ — — Restricted Stock Awards Granted $ 5.10 86,667 — —

16. Off-Balance Sheet Activitie

16. Off-Balance Sheet Activities	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Off-Balance Sheet Activities	The Bank is party to various financial instruments with off-balance sheet risk arising in the normal course of business to meet the financing needs of their customers. Those financial instruments include commitments to extend credit and commercial letters of credit of approximately $373 and $292, unfunded commitments under lines of credit of $34,469 and $40,024, and commitments to grant new loans of $10,334 and $5,614 for the years ended December 31, 2016 and 2015, respectively. These instruments contain various elements of credit and interest rate risk in excess of the amount recognized in the statements of financial condition. The Bank's exposure to credit loss, in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit, is the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations that they do for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer. Unfunded commitments under lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. Essentially all letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds collateral supporting those commitments if deemed necessary.

17. Commitments and Contingenci

17. Commitments and Contingencies	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Commitments and Contingencies	The Bank has made arrangements with and has available from corresponding banks certain lines of credit to fund any necessary cash requirements. The Bank has $67,698 of Federal Home Loan Bank advances outstanding against its corresponding line of credit as of December 31, 2016. A specific class of commercial and residential mortgage loans, with a balance of $145,794 at December 31, 2016 were pledged to the FHLB as collateral. At December 31, 2016, the Bank had approximately $56,000 of available credit at the FHLB and approximately $5,000 of lines of available credit granted from one of its correspondent banks. On December 23, 2015, James M. Brock and Jean W. Brock (together, “Brock”) filed a complaint in the Circuit Court of Grayson County, Virginia, alleging that the Bank acted negligently when it foreclosed on property adjacent to the Brock’s property and allegedly failed to remediate the foreclosed property, allegedly causing damage to Brock’s property. Brock seeks damages of $200,000 plus prejudgment interest, attorneys’ fees, and costs. The Bank denies any wrongdoing in this matter and intends to vigorously defend itself. No trial date has yet been set. The Company is unable to estimate the likelihood of an unfavorable outcome or the amount or range of potential loss.

18. Fair Value Disclosures

18. Fair Value Disclosures	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Fair Value Disclosures	The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Fair Value Hierarchy Under ASC Topic 820 on Fair Value Measurements and Disclosures, the Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: · Level 1 - Valuation is based upon quoted prices for identical instruments traded in active markets. · Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. · Level 3 - Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. A description of valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon third party models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the company’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Recurring --Investment Securities Available for Sale Securities classified as available for sale are reported at fair value utilizing Level 2. For Level 2 securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the bond’s terms and conditions, among other things. The following summarizes the Company’s available for sale securities portfolio measured at fair value on a recurring basis as of December 31, 2016 and December 31, 2015, segregated by the level of the valuation inputs within the fair value hierarchy. 2016 Level 1 Level 2 Level 3 Total Fair Value Available for Sale Securities State and Political Subdivisions $ — $ 12,451 $ — $ 12,451 Mortgage Backed Securities — 74,288 — 74,288 SBA Pools — 8,334 — 8,334 Total AFS Securities $ — $ 95,073 $ — $ 95,073 2015 Level 1 Level 2 Level 3 Total Fair Value Available for Sale Securities State and Political Subdivisions $ — $ 6,958 $ — $ 6,958 Mortgage Backed Securities — 62,593 — 62,593 SBA Pools — 10,309 — 10,309 Total AFS Securities $ — $ 79,860 $ — $ 79,860 Non Recurring - Loans The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment using one of several methods, including collateral value, recent appraisal value and /or tax assessed value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At December 31, 2016 and December 31, 2015, all of the total impaired loans were evaluated based on the fair value of the collateral. The Company frequently obtains appraisals prepared by external professional appraisers and applies discounts ranging from 8% to 40% depending on type of property, condition, location, etc.; therefore, the Company records impaired loans in Level 3. The Company also in certain instances prepares internally generated valuations from on-site inspections, third-party valuation models or other information. Non Recurring –Other Real Estate Owned / Repossessions / Real estate held for sale Other Real Estate Owned and repossessions are adjusted to fair value upon transfer of the loans to Other Real Estate Owned and repossessions. Subsequently, foreclosed assets and repossessions are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices or recent appraised values of the collateral which the Company considers as nonrecurring Level 2. When the current appraised value is not available and /or further discounted below the most recent appraised value less selling costs due to such things as absorption rates and market conditions, the Company records the foreclosed assets within Level 3 of the fair value hierarchy. Real estate held for sale is adjusted to fair value upon transfer from fixed assets or when no longer being used for banking purposes. The following table summarizes the Company’s assets at fair value on a non - recurring basis as of December 31, 2016 and December 31, 2015 segregated by the level of the valuation inputs within the fair value hierarchy. The tables disclose the recorded investment of impaired loans requiring a specific allowance. December 31, 2016 Level 1 Level 2 Level 3 Total Fair Value Impaired Loans $ — $ — $ 4,869 $ 4,869 Repossessions/OREO, net $ — $ — $ 2,768 $ 2,768 Real Estate Held for sale $ — $ — $ 1,680 $ 1,680 December 31, 2015 Level 1 Level 2 Level 3 Total Fair Value Impaired Loans $ — $ — $ 7,098 $ 7,098 Repossessions/OREO, net $ — $ — $ 5,724 $ 5,724 The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company uses Level 3 inputs to determine fair value (dollars in thousands): Quantitative Information about Level 3 Fair Value Measurements Valuation Unobservable Range December 31, 2016 2015 Techniques Input (2) (Weighted Average) OREO, net $ 2,768 $ 5,724 Appraisal of collateral (1) Appraisal adjustments 0% to 45% (13%) Liquidation expenses 0% to 10% (9%) Real Estate held for sale $ 1,680 $ — Appraisal of collateral (1) Appraisal adjustments 0% to 50% (40%) Liquidation expenses 0% to 10% (8%) Impaired loans $ 4,869 $ 7,098 Fair value of collateral –real estate (1), (3) Appraisal adjustments 0% to 10% (9%) Fair value of collateral –equipment, inventory, other (1), (3) Appraisal adjustments 25% to 50% (33%) Liquidation expenses 0% to 10% (9%) Valuation adjustments and liquidation cost adjustments represent unobservable inputs for OREO and impaired loans. The ranges of discounts applied are based on age of independent appraisals, type and condition of collateral, current market conditions, and experience with the local market. (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable. (2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. (3) Includes qualitative adjustments by management. General The Company has no liabilities carried at fair value or measured at fair value on a non-recurring basis. Fair Value of Financial Instruments Fair value is 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. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Cash and Cash Equivalents The carrying amount reported in the balance sheets for cash, short-term investments and federal funds sold approximates fair value. Securities Available for Sale Fair values are determined in the manner as described above. Other Investments Other investments include Federal Home Loan Bank stock, Federal Reserve Bank stock, Community Bankers Bank stock and Pacific Coast Bankers Bank stock. The carrying value of those securities approximates fair value based on the redemption provisions of those Banks. Also included in other investments are certificates of deposit purchased from other FDIC banks in which the carrying amount approximates fair value. Loans The fair value of loans represent estimates at which the loans of the Bank could be exchanged on the open market, based upon the current lending rate for similar types of lending arrangements discounted over the remaining life of the loans. Deposits The fair value of deposits represent estimates at which the deposit liabilities of the Bank could be exchanged on the open market, based upon the current deposit rates for similar types of deposit arrangements discounted over the remaining life of the deposits. Other Short-Term Borrowings Fair values of other short-term borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Estimated maturity dates are also included in the calculation of fair value for these borrowings. Long-term Debt and Capital Securities Rates currently available to the Company for debt with similar terms and remaining maturities or established call prices are used to estimate fair value of existing debt. Off-Balance Sheet Instruments The amount of off-balance sheet commitments to extend credit, standby letters of credit, and financial guarantees, is considered equal to fair value. Because of the uncertainty involved in attempting to assess the likelihood and timing of commitments being drawn upon, coupled with the lack of an established market and the wide diversity of fee structures, the Company does not believe it is meaningful to provide an estimate of fair value that differs from the given value of the commitment The carrying amounts and fair values of the Company's financial instruments at December 31, 2016 and December 31, 2015 were as follows: December 31, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 50,385 $ 50,385 $ 46,891 $ 46,891 Securities available for sale 95,073 95,073 79,860 79,860 Other investments 6,637 6,637 6,592 6,592 Loans, net 404,838 406,851 426,429 419,907 Deposits (489,869 ) (422,730 ) (494,912 ) (472,197 ) Other short-term borrowings (27,552 ) (27,958 ) (20,052 ) (21,970 ) Long-term debt (40,146 ) (41,825 ) (47,698 ) (50,313 )

19. Related Party Transactions

19. Related Party Transactions	12 Months Ended
	Dec. 31, 2016
Related Party Transactions [Abstract]
Related Party Transactions	In the normal course of business, the Bank has made loans to its directors and officers and their affiliates. All loans and commitments made to such officers and directors and to companies in which they are officers or have significant ownership interest have been made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons, and did not, in the opinion of management, involve more than normal credit risk or present other unfavorable features. The activity in such loans is as follows: 2016 2015 Balance, beginning $ 7,723 $ 7,774 Additions 1,354 2,326 Reductions (4,374 ) (2,377 ) Balance, ending $ 4,703 $ 7,723 Unused commitments $ 675 $ 667 Deposits from related parties held by the Bank at December 31, 2016 and 2015 were $3,784 and $4,035 respectively.

20. Restrictions on Cash

20. Restrictions on Cash	12 Months Ended
	Dec. 31, 2016
Cash and Cash Equivalents [Abstract]
Restrictions on Cash	The Federal Reserve Bank requires the Bank to maintain reserve balances. The total of those reserve balances including available vault cash at December 31, 2016 and 2015 was $4,346 and $3,892 respectively.

21. Minimum Regulatory Capital

21. Minimum Regulatory Capital Requirements	12 Months Ended
	Dec. 31, 2016
Trust preferred securities prepayment by underlying bank
Minimum Regulatory Capital Requirements	10% Common Equity Tier 1 Capital to Risk Weighted Assets 45,694 11.78 % 25,215 => 6.5% Tier 1 Capital (to Risk-Weighted Assets) 45,694 11.78 % 31,034 => 8% Tier 1 Capital (to Adjusted Total Assets -Leverage 45,694 7.59 % 30,111 =>5% As of December 31, 2015: Total Risk-Based Capital (to Risk-Weighted Assets) $ 49,588 12,55 % $ 39,506 => 10% Common Equity Tier 1 Capital to Risk Weighted Assets 44,573 11.28 % 25,679 => 6.5% Tier 1 Capital (to Risk-Weighted Assets) 44,573 11.28 % 31,605 => 8% Tier 1 Capital (to Adjusted Total Assets -Leverage 44,573 7.33 % 30,422 =>5%" id="sjs-B4">Regulators of the Company and its subsidiary, Highlands Union Bank (the “Bank”), have implemented risk-based capital guidelines which require compliance with certain minimum capital ratios as a percent of assets and other certain off-balance sheet items that are adjusted for predefined credit risk factors. Effective January 1, 2015 (with some changes transitioned into full effectiveness over two to four years), the Bank became subject to new capital requirements adopted by the Federal Reserve. These new requirements create a new required ratio for common equity Tier 1 ("CETI") capital, increase the Tier 1 capital ratio, change the risk weight of certain assets for purposes of the risk-based capital ratios, create an additional capital conservation buffer over the required capital ratios and change what qualifies as capital for purposes of meeting these various capital requirements. Beginning in 2016, failure to maintain the required capital conservation buffer will limit the ability of the Bank to pay dividends, repurchase shares or pay discretionary bonuses. The Company is exempt from consolidated capital requirements as those requirements do not apply to certain small bank holding companies with assets under $1 billion. Under the new capital regulations, the minimum capital ratios are: (1) CETI capital ratio of 4.5% of risk-weighted assets (new); (2) a Tier 1 capital ratio of 6.0% of risk-weighted assets (increased from 4.0%): (3) a total capital ratio of 8.0% of risk-weighted assets (unchanged); and (4) a leverage ratio of 4.0% (unchanged). CETI generally consists of common stock and retained earnings, subject to applicable regulatory adjustments and deductions. There are a number of changes in what constitutes regulatory capital, some of which are subject to transition periods. These changes include the phasing-out of certain instruments as qualifying capital. The Bank does not use any of these instruments. Under the new requirements for total capital, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of CETI will be deducted from capital. The Bank has elected to permanently opt-out of the inclusion of accumulated other comprehensive income in our capital calculations, as permitted by the regulations. This opt-out will reduce the impact of market volatility on our regulatory capital levels. The new requirements also include changes in the risk-weights of assets to better reflect credit risk and other risk exposures. These include a 150% risk weight (increased from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and for non-residential mortgage loans that are 90 days past due or otherwise in non-accrual status; a 20% (increased from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable; a 250% risk weight (increased from 100%) for mortgage servicing and deferred tax assets that are not deducted from capital; and increased risk weights (0% to 600%) for equity exposures. In addition to the minimum CETI, Tier 1 and total capital ratios, the Bank will have to maintain a capital conservation buffer consisting of additional CETI capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. This new capital conservation buffer requirement will be phased in beginning in January 2016 at 0.625% of risk-weighted assets and increasing each year until fully implemented in January 2019. The Federal Reserve’s prompt corrective action standards also changed effective January 1, 2015. Under the new standards, in order to be considered well-capitalized, the Bank must have a CETI ratio of 6.5% (new), a Tier 1 ratio of 8.0% (increased from 6.0%), a total risk-based capital ratio of 10.0% (unchanged) and a leverage ratio of 5.0% (unchanged). As of December 31, 2016, the Bank meets all these new requirements, including the full capital conservation buffer. The Bank’s actual and required capital amounts and ratios are as follows: Actual To Be Well Capitalized under Prompt Corrective Action Provisions Amount Ratio Amount Ratio As of December 31, 2016: Total Risk-Based Capital (to Risk-Weighted Assets) $ 50,523 13.02 % $ 38,792 => 10% Common Equity Tier 1 Capital to Risk Weighted Assets 45,694 11.78 % 25,215 => 6.5% Tier 1 Capital (to Risk-Weighted Assets) 45,694 11.78 % 31,034 => 8% Tier 1 Capital (to Adjusted Total Assets -Leverage 45,694 7.59 % 30,111 =>5% As of December 31, 2015: Total Risk-Based Capital (to Risk-Weighted Assets) $ 49,588 12,55 % $ 39,506 => 10% Common Equity Tier 1 Capital to Risk Weighted Assets 44,573 11.28 % 25,679 => 6.5% Tier 1 Capital (to Risk-Weighted Assets) 44,573 11.28 % 31,605 => 8% Tier 1 Capital (to Adjusted Total Assets -Leverage 44,573 7.33 % 30,422 =>5%

22. Restrictions on Dividends

22. Restrictions on Dividends	12 Months Ended
	Dec. 31, 2016
Equity [Abstract]
Restrictions on Dividends	The Parent Company’s principal asset is its investment in the Bank, its wholly-owned consolidated subsidiary. The primary source of income for the Parent Company historically has been dividends from the Bank. Regulatory agencies limit the amount of funds that may be transferred from the Bank to the Parent Company in the form of dividends, loans or advances. Under applicable laws and without prior regulatory approval, the total dividend payments of the Bank in any calendar year are restricted to the net profits of that year, as defined, combined with the retained net profits for the two preceding years. The Company and Bank currently are prohibited from paying dividends unless regulatory approval is obtained. (See Note 2 Formal Written Agreement).

23. Other Operating Income and

23. Other Operating Income and Expenses	12 Months Ended
	Dec. 31, 2016
Other Income and Expenses [Abstract]
Other Operating Income and Expenses	Other operating income and expenses that exceed 1% of the total of interest income and other income presented separately consist of the following: 2016 2015 BOLI income $ 396 $ 401 Other Contracted Services $ 763 $ 775 Bank Franchise Taxes $ 423 $ 367 FDIC Insurance Costs $ 693 $ 863 Software Licensing / Maintenance $ 932 $ 736 Postage and Freight $ 247 $ 282 Legal $ 431 $ 378 Other Loan Expense $ 167 $ 330 Other Losses $ 124 $ 450 Advertising $ 286 $ 260 Audit $ 253 $ 180

24. Condensed Parent Company Fi

24. Condensed Parent Company Financial Statements	12 Months Ended
	Dec. 31, 2016
Condensed Financial Information of Parent Company Only Disclosure [Abstract]
Condensed Parent Company Financial Statements	The condensed financial statements below relate to Highlands Bankshares, Inc., as of December 31, 2016 and 2015 and for the years then ended. Equity in undistributed earnings of subsidiary includes the change in unrealized gains or losses on securities, net of tax. CONDENSED BALANCE SHEETS 2016 2015 ASSETS Cash $ 224 $ 14 Other investments 102 102 Equity in subsidiary 53,412 53,444 Other assets 20 — Total Assets $ 53,758 $ 53,560 STOCKHOLDERS’ EQUITY $ 53,758 $ 53,560 CONDENSED STATEMENTS OF INCOME 2016 2015 Interest and dividend income $ 4 $ 4 Other income — — Interest expense — — Operating expense (86 ) (95 ) (82 ) (91 ) Income tax benefit 27 31 Equity in undistributed earnings of subsidiary 67 1,397 Net income $ 12 $ 1,337 CONDENSED STATEMENTS OF CASH FLOWS 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 12 $ 1,337 Adjustments to reconcile net income to net cash Restricted stock expense 55 — Equity in undistributed earnings of subsidiary (67 ) (1,397 ) (Increase) decrease in other assets (50 ) 43 Increase (decrease) in other liabilities — — Net cash used in operating activities (50 ) (17 ) CASH FLOWS FROM INVESTING ACTIVITIES: Capital contributed to subsidiary bank (850 ) (300 ) Net cash (used in) investing (850 ) (300 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in Short Term Borrowings — — Issuance of Common Stock 1,110 — Issuance of Preferred Stock — — Redemption of capital securities — — Net cash provided by financing activities 1,110 — Net increase (decrease) in cash and cash equivalents 210 (317 ) CASH AND CASH EQUIVALENTS AT 14 331 CASH AND CASH EQUIVALENTS AT END OF $ 224 $ 14

1. Summary of Significant Acc32

1. Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2016
Summary Of Significant Accounting Policies Policies
Basis of Presentation and Consolidation	The accompanying consolidated financial statements include the accounts of Highlands Bankshares, Inc., (the “Parent Company”) and its wholly-owned subsidiary, Highlands Union Bank (the "Bank"). The statements also include Highlands Union Insurance Services, Inc., Highlands Union Financial Services, Inc., and Russell Road Properties, LLC which are wholly owned subsidiaries of the Bank. Russell Road Properties, LLC, formed in March of 2015 to hold and manage certain properties acquired by the Bank through foreclosure or deed in lieu of foreclosure. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and reporting policies of Highlands Bankshares, Inc. and its subsidiaries, (collectively the “Company”) conform to U.S. generally accepted accounting principles and to standard practices within the banking industry.
Nature of Operations	The Company operates in Abingdon, Virginia, and surrounding southwest Virginia, eastern Tennessee, and western North Carolina under the laws of the Commonwealth of Virginia. The Parent Company was organized on December 29, 1995. The Parent Company is supervised by the Federal Reserve Bank under the Bank Holding Company Act of 1956, as amended. The Bank began banking operations on April 27, 1985 under a state bank charter and provides a wide range of financial services to individuals and businesses. The Bank’s primary lending products include mortgage, consumer and commercial loans, and its primary deposit products are checking, savings, and certificates of deposit. As a state bank and a member of the Federal Reserve Bank of Richmond, the Bank is subject to regulation by the Virginia State Bureau of Financial Institutions, the Federal Deposit Insurance Corporation, and the Federal Reserve Bank. Highlands Union Insurance Services, Inc. became effective October 8, 1999 for the purpose of selling insurance through Bankers Insurance LLC. The only activity in Highlands Union Financial Services is the receipt of life insurance commissions.
Cash and Cash Equivalents	For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash and due from banks and federal funds sold, all of which mature within ninety days. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.
Securities Available-for-Sale	Securities classified as available-for-sale are those debt and equity securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company's assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities available-for-sale are carried at fair value. Unrealized gains or losses are reported as increases or decreases in other comprehensive income, net of the related deferred income tax effect. Realized gains or losses are included in earnings on the trade date and are determined on the basis of the amortized cost of specific securities sold. Premiums and discounts are recognized in interest income using the interest method over the period to maturity. On a quarterly basis the Company reviews any securities which are considered to be impaired as defined by accounting guidance. During this review, the Company determines if the impairment is deemed to be other than temporary. If it is determined that the impairment is other than temporary, i.e. impaired because of credit issues, the investment is written down by a charge in the Statement of Income.
Loans	The Company makes mortgage, commercial and consumer loans to customers. Included in mortgage lending are loans secured by real estate such as single family and multifamily dwelling units as well as commercial properties both owner occupied and held for lease to others. Commercial loans include those primarily secured by business assets or land or may be unsecured. Consumer loans include second mortgages and equity lines of credit and other personal loans which may be secured or unsecured. The Company also makes farmland loans and other agricultural type loans such as financing farming activities. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid balance. Loan origination fees, net of certain direct origination costs, are deferred and amortized to income over the estimated lives of the loans using the straight-line method which is not materially different from the interest method. The accrual of interest on a loan is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Credit card loans and other personal loans are typically charged off no later than 180 days past due. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Payments on non-accrual loans are applied to principal or applied on a cash basis. All interest accrued but not collected for loans that are placed on non-accrual or charged off status is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
Loans Held for Sale	The Company’s mortgage division, Highlands Home Mortgage, originates certain single family, residential mortgage loans for sale on a presold basis. The division began operations in the second quarter of 2016. The loans are sold to various investors on a servicing released basis using a best efforts approach. The Company does not consider either the rate lock commitment or the purchased commitment a derivative contract.
Allowance for Loan Losses	The Company monitors and maintains an allowance for loan losses to absorb an estimate of probable losses inherent in the loan portfolio. The Company maintains policies and procedures that address the systems of controls over the following areas of maintenance of the allowance: the systematic methodology used to determine the appropriate level of the allowance to provide assurance the loan loss reserve is maintained in accordance with accounting principles generally accepted in the United States of America; the accounting policies for loan charge-offs and recoveries; the assessment and measurement of impairment in the loan portfolio; and the loan grading system. The Company’s Credit Review and Analysis Department evaluates various loans individually for impairment as required by Financial Accounting Standards Board ASC 310, Receivables –Subsequent Measurement Accounting for Contingencies The amounts of estimated impairment for individually evaluated loans and groups of loans are added together for a total estimate of loan losses. This estimate of losses is compared to the allowance for loan losses of the Company as of the evaluation date and, if the estimate of losses is greater than the allowance, an additional provision to the allowance is made. If the estimate of losses is less than the allowance, the degree to which the allowance exceeds the estimate is evaluated to determine whether the allowance falls outside a range of estimates. If the estimate of losses is below the range of reasonable estimates, the allowance is reduced by adjusting the provision for loan losses. The Company recognizes the inherent imprecision in estimates of losses due to various uncertainties and variability related to the factors used, and therefore a reasonable range around the estimate of losses is derived and used to ascertain whether the allowance is too high or too low. If different assumptions or conditions were to prevail and it is determined that the allowance is not adequate to absorb the new estimate of probable losses, an additional provision for loan losses would be made, which amount may be material to the consolidated financial statements.
Premises and Equipment	Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line method over estimated useful lives. Maintenance and repairs are charged to current operations while improvements are capitalized. Disposition gains and losses are reflected in current operations. Purchased software costs are included in other assets and expensed over periods ranging from 3-5 years.
Real Estate held for Sale	Real estate held for sale is initially measured at the lower of the carrying amount or fair value less costs to sell. A loss is recognized for any initial adjustment of the of the asset’s carrying amount to its fair value less cost to sell in the period the held for sale criteria are met. The fair value less costs to sell will be assessed each reporting period. Subsequent changes in the asset’s fair value less cost to sell would be reported as an adjustment to its carrying amount, except that the adjusted carrying amount will not exceed the carrying amount of the asset at the time it was initially classified as held for sale.
Other Real Estate Owned	Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management using updated appraisals and other information and the assets are carried at the lower of carrying amount or fair value less cost to sell. Generally, appraisals are updated every 24 months for all individually significant properties or when current events indicate that a property may have suffered a material decrease in value. Revenue and expenses from operations and gains and losses on disposals are included in Non-interest expense captioned “Foreclosed Assets-Write-down and operating expenses”.
Income Taxes	Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates to the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Under ASC 740, the effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Management evaluates the Company’s tax circumstance and filings under the most current and relevant accounting rules and believes the Company has incurred no liability for uncertain beneficial tax positions (or any related penalties and interest) for the periods open to normal jurisdictional examinations (2013 through 2015).
Earnings Per Common Share	Earnings per common share are calculated based on the weighted average outstanding shares during the year. Earnings per common share assuming dilution are calculated based on the weighted average outstanding shares during the year plus common stock equivalents at year end.
Stock Compensation Plans	The Company accounts for stock compensation plans under the guidance of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their grant-date fair values. No options were granted during 2016 or 2015. See Note 12 for discussion of issuance of shares of restricted stock.
Use of Estimates	In preparing consolidated financial statements in conformity with U.S. generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, and the valuation of foreclosed real estate, deferred tax assets and investment securities.
Business Segments	The Company reports its activities as a single business segment. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment.
Recent Accounting Pronouncements	In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 was effective for annual reporting periods, and interim periods within that period, beginning after December 15, 2016. ASU No. 2015-14 issued in August 2015 deferred the effective date of this Update to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The adoption of this ASU is not expected to have a material effect on the Company’s current financial position or results of operations; however, it may impact the reporting of future financial statement disclosures. In April 2015, the FASB issued ASU No. 2015-03 Interest-Imputation of Interest (Subtopic 835-30), which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The amendments will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company does not expect these amendments to have a material effect on its financial statements. In August 2015, the FASB issued ASU No. 2015-15 Interest-Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting . In January 2016, ASU No. 2016-01 Financial Instruments--Overall (Subtopic 825-10) was issued by the FASB. The amendments address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of these amendments on its financial statements. In March 2016, ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting” was issued by the FASB. This ASU includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. Some of the key provisions of this new ASU include: (1) companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement, and APIC pools will be eliminated. The guidance also eliminates the requirement that excess tax benefits be realized before companies can recognize them. In addition, the guidance requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity; (2) increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. The new guidance will also require an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on its statement of cash flows (current guidance did not specify how these cash flows should be classified); and (3) permit companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as required today, or recognized when they occur. ASU No. 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016. The Company does not expect these amendments to have a material effect on its financial statements. In June 2016, ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments” was issued by the FASB. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

3. Investment Securities Avai33

3. Investment Securities Available-For-Sale (Tables)	12 Months Ended
	Dec. 31, 2016
Maximum amount of all loan relationships review in addition to annual loan relationship
Schedule of amortized cost and market value of securities available-for-sale	2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value State and political subdivisions $ 13,013 $ 41 $ 603 $ 12,451 Mortgage backed securities 75,384 93 1,189 74,288 SBA Pools 8,533 6 205 8,334 $ 96,930 $ 140 $ 1,997 $ 95,073 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value State and political subdivisions $ 6,834 $ 124 $ — $ 6,958 Mortgage backed securities 62,911 160 478 62,593 SBA Pools 10,494 9 194 10,309 $ 80,239 $ 293 $ 672 $ 79,860
Age of gross unrealized losses and fair value by investment category	December 31, 2016 Less Than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses State and political subdivisions $ 9,191 $ 603 $ — $ — $ 9,191 $ 603 Mortgage-backed securities 66,878 1,189 — — 66,878 1,189 SBA Pools 7,587 205 — — 7,587 205 Total $ 83,656 $ 1,997 $ — $ — $ 83,656 $ 1,997 December 31, 2015 Less Than 12 months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses State and political subdivisions $ — $ — $ — $ — $ — $ — Mortgage-backed securities 45,790 363 4,589 115 50,379 478 SBA Pools 157 3 9,110 191 9,267 194 Total $ 45,947 $ 366 $ 13,699 $ 306 $ 59,646 $ 672
Amortized cost and estimated fair value of securities available-for-sale by contractual maturity	Amortized Cost Fair Value Due in one year or less $ 555 $ 562 Due after one year through five years 2,255 2,273 Due after five years through ten years 3 3 Due after ten years 18,733 17,947 21,546 20,785 Mortgage-backed securities 75,384 74,288 $ 96,930 $ 95,073
Gross realized gains and losses on investment securities available for sale	2016 2015 Realized gains from sales and calls of securities $ 65 $ 16 Realized losses 18 — Net gains $ 47 $ 16

5. Loans and Allowance for Lo34

5. Loans and Allowance for Loan Losses (Tables)	12 Months Ended
	Dec. 31, 2016
Non Real Estate Secured [Member] [Default Label]
Composition of net loans	2016 2015 Real Estate Secured: Residential 1-4 family $ 186,695 $ 194,287 Multifamily 22,630 23,895 Construction and Land Loans 15,978 19,163 Commercial, Owner Occupied 72,383 73,031 Commercial, Non-owner occupied 28,818 38,025 Second mortgages 6,934 8,169 Equity lines of credit 13,395 6,000 Farmland 12,194 11,283 359,027 373,853 Secured (other) and unsecured: Personal 17,745 20,775 Commercial 29,977 35,144 Agricultural 3,490 2,959 51,212 58,878 Overdrafts 142 139 410,381 432,870 Less: Allowance for loan losses 4,829 5,654 Net deferred fees 714 787 5,543 6,441 Loans, net $ 404,838 $ 426,429
Residential real estate current	Number Balance Residential real estate in the process of foreclosure 8 $ 817 Foreclosed residential real estate 6 $ 340
Analysis of past due loans	The following table is an analysis of past due loans as of December 31, 2016: 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment > 90 Days and Accruing Real Estate Secured Residential 1-4 family $ 841 $ 242 $ 1,000 $ 2,083 $ 184,612 $ 186,695 $ — Equity lines of credit — 30 10 40 13,355 13,395 — Multifamily — — — — 22,630 22,630 — Farmland — 47 564 611 11,583 12,194 — Construction, Land Development, Other Land Loans 39 — — 39 15,939 15,978 — Commercial Real Estate- Owner Occupied 14 — 3,868 3,882 68,501 72,383 2,210 Commercial Real Estate- Non Owner Occupied — — — — 28,818 28,818 — Second Mortgages 160 1 18 179 6,755 6,934 — Non Real Estate Secured Personal 118 23 12 153 17,734 17,887 — Commercial 142 54 462 658 29,319 29,977 — Agricultural — 7 — 7 3,483 3,490 — Total $ 1,314 $ 404 $ 5,934 $ 7,652 $ 402,729 $ 410,381 $ 2,210 The following table is an analysis of past due loans as of December 31, 2015: 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment > 90 Days and Accruing Real Estate Secured Residential 1-4 family $ 4,193 $ 1,580 $ 2,545 $ 8,318 $ 185,969 $ 194,287 $ — Equity lines of credit 24 — 17 41 5,959 6,000 — Multifamily — — — — 23,895 23,895 — Farmland 56 7 303 366 10,917 11,283 — Construction, Land Development, Other Land Loans 49 61 37 147 19,016 19,163 — Commercial Real Estate- Owner Occupied 514 485 5,014 6,013 67,018 73,031 — Commercial Real Estate- Non Owner Occupied — — — — 38,025 38,025 — Second Mortgages 88 37 5 130 8,039 8,169 — Non Real Estate Secured Personal 264 141 163 568 20,346 20,914 — Commercial 590 217 366 1,173 33,971 35,144 — Agricultural 45 — — 45 2,914 2,959 — Total $ 5,823 $ 2,528 $ 8,450 $ 16,801 $ 416,069 $ 432,870 $ —
Schedule of non-accrual loans	The following is a summary of non-accrual loans at December 31, 2016: Amount Real Estate Secured Residential 1-4 Family $ 1,275 Multifamily — Construction and Land Loans — Commercial-Owner Occupied 1,658 Commercial- Non Owner Occupied — Second Mortgages 18 Equity Lines of Credit 10 Farmland 564 Secured (other) and Unsecured Personal 12 Commercial 462 Agricultural — Total $ 3,999 The following is a summary of non-accrual loans at December 31, 2015: Amount Real Estate Secured Residential 1-4 Family $ 2,675 Multifamily — Construction and Land Loans 71 Commercial-Owner Occupied 5,856 Commercial- Non Owner Occupied — Second Mortgages 5 Equity Lines of Credit 17 Farmland 303 Secured (other) and Unsecured Personal 163 Commercial 366 Agricultural — Total $ 9,456
Credit Risk Profile by Internally Assigned Grade	Credit Risk Profile by Internally Assigned Grade –December 31, 2016 Grade (1) Residential 1-4 Family Multifamily Farmland Construction, Land Loans Commercial Real Estate- Owner Occupied Commercial Real Estate Non-Owner Occupied Quality $ 32,054 $ — $ 19 $ 1,941 $ 3,686 $ 387 Satisfactory 106,154 18,335 7,823 5,969 36,806 15,198 Acceptable 41,369 1,410 3,474 5,961 22,767 5,119 Special Mention 3,399 1,896 — — 4,435 4,221 Substandard 3,719 989 878 2,107 4,689 3,893 Doubtful — — — — — — Total $ 186,695 $ 22,630 $ 12,194 $ 15,978 $ 72,383 $ 28,818 Credit Risk Profile by Internally Assigned Grade –December 31, 2015 Grade (1) Residential 1-4 Family Multifamily Farmland Construction, Land Loans Commercial Real Estate- Owner Occupied Commercial Real Estate Non-Owner Occupied Quality $ 25,939 $ — $ 25 $ 3,036 $ 2,870 $ 1,481 Satisfactory 109,993 20,271 6,323 7,406 38,926 19,979 Acceptable 46,639 1,811 3,922 6,420 21,671 12,157 Special Mention 3,133 792 195 397 2,552 2,523 Substandard 8,583 1,021 818 1,904 7,012 1,885 Doubtful — — — — — — Total $ 194,287 $ 23,895 $ 11,283 $ 19,163 $ 73,031 $ 38,025
Credit Risk Profile based on payment activity	Credit Risk Profile based on payment activity – December 31, 2016 Consumer - Non Real Estate Equity Line of Credit /Second Mortgages Commercial - Non Real Estate Agricultural - Non Real Estate Performing $ 17,875 $ 20,301 $ 29,515 $ 3,490 Nonperforming (>90 days past due) 12 28 462 — Total $ 17,887 $ 20,329 $ 29,977 $ 3,490 Credit Risk Profile based on payment activity – December 31, 2015 Consumer - Non Real Estate Equity Line of Credit /Second Mortgages Commercial - Non Real Estate Agricultural - Non Real Estate Performing $ 20,751 $ 14,147 $ 34,778 $ 2,959 Nonperforming (>90 days past due) 163 22 366 — Total $ 20,914 $ 14,169 $ 35,144 $ 2,959
Impaired loans	The following tables reflect the Bank’s impaired loans at December 31, 2016 and December 31, 2015: December 31, 2016 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no Related Allowance Real Estate Secured Residential 1-4 family $ 4,848 $ 4,848 $ — $ 5,963 $ 200 Equity lines of credit 25 25 — 38 1 Multifamily 989 989 — 1,005 1 Farmland 685 685 — 750 24 Construction, Land Development, Other Land Loans 1,741 1,741 — 1,643 114 Commercial Real Estate- Owner Occupied 5,802 5,802 — 5,685 390 Commercial Real Estate- Non Owner Occupied 1,883 1,883 — 941 39 Second Mortgages 186 186 — 292 8 Non Real Estate Secured Personal 14 14 — 41 1 Commercial 43 43 — 179 3 Agricultural — — — — — Total $ 16,216 $ 16,216 $ — $ 16,537 $ 781 December 31, 2016 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With an Allowance Recorded Real Estate Secured Residential 1-4 family $ 460 $ 460 $ 36 $ 1,153 $ 14 Equity lines of credit — — — — — Multifamily — — — — — Farmland 192 192 16 96 11 Construction, Land Development, Other Land Loans 366 366 20 406 22 Commercial Real Estate- Owner Occupied 1,139 2,139 558 1,629 Commercial Real Estate- Non Owner Occupied 2,009 2,009 314 1,947 41 Second Mortgages 18 18 9 18 — Non Real Estate Secured Personal 51 51 29 82 3 Commercial 634 634 365 652 16 Agricultural — — — — — Total $ 4,869 $ 5,869 $ 1,347 $ 5,983 $ 107 December 31, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no Related Allowance Real Estate Secured Residential 1-4 family $ 7,078 $ 7,078 $ — $ 7,533 $ 247 Equity lines of credit 51 51 — 38 2 Multifamily 1,021 1,021 — 1,137 60 Farmland 816 816 — 829 38 Construction, Land Development, Other Land Loans 1,547 1,547 — 1,643 92 Commercial Real Estate- Owner Occupied 5,569 5,569 — 7,379 132 Commercial Real Estate- Non Owner Occupied — — — — — Second Mortgages 398 398 — 508 14 Non Real Estate Secured Personal 68 68 — 61 4 Commercial 315 315 — 338 13 Agricultural — — — — — Total $ 16,863 $ 16,863 $ — $ 19,466 $ 602 December 31, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With an Allowance Recorded Real Estate Secured Residential 1-4 family $ 1,846 $ 1,846 $ 249 $ 2,497 $ 93 Equity lines of credit — — — — — Multifamily — — — — — Farmland — — — — — Construction, Land Development, Other Land Loans 446 446 32 406 25 Commercial Real Estate- Owner Occupied 2,119 2,119 799 1,761 9 Commercial Real Estate- Non Owner Occupied 1,885 1,885 290 1,901 56 Second Mortgages 18 18 10 9 1 Non Real Estate Secured Personal 114 114 45 184 4 Commercial 670 670 512 736 28 Agricultural — — 4 — Total $ 7,098 $ 7,098 $ 1,937 $ 7,498 $ 216
Troubled debt restructurings	The following is a summary of troubled debt restructurings occurring during the twelve months ended December 31, 2016. Troubled Debt Restructurings Interest only Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Oustanding Recorded Investment Residential 1-4 family 1 $ 180 $ 180 Equity lines of credit Multifamily Farmland 1 57 57 Construction, Land Development, Commercial Real Estate- Owner Occupied 4 4,288 4,288 Commercial Real Estate- Non Owner Occupied Second Mortgages 1 64 64 Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 7 $ 4,589 $ 4,589 Troubled Debt Restructurings Below Market Rate Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 848 $ 848 Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied 1 1,516 1,516 Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 2 $ 2,364 $ 2,364 Troubled Debt Restructurings Loan term extension Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 2 $ 452 $452 Equity lines of credit Multifamily 1 999 999 Farmland 2 193 193 Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 5 $ 1,643 $1,643 Troubled Debt Restructurings All Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstaniding Recorded Investment Total Restructurings 14 $ 8,596 $8,596 Troubled Debt Restructurings that subsequently defaulted during the twelve months ended December 31, 2016 Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 175 $ 175 Equity lines of credit Multifamily Farmland 2 $ 193 $ 193 Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 3 $ 368 $ 368 The following is a summary of troubled debt restructurings occurring during the twelve months ended December 31, 2015. Troubled Debt Restructurings Interest only Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Oustanding Recorded Investment Residential 1-4 family 1 $ 188 $ 188 Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied 2 2,203 2,203 Commercial Real Estate- Non Owner Occupied Second Mortgages 1 68 68 Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 4 $ 2,459 $ 2,459 Troubled Debt Restructurings Below Market Rate Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 863 $ 863 Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied 1 1,547 1,547 Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 2 $ 2,410 $ 2,410 Troubled Debt Restructurings Loan term extension Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family 1 $ 131 $131 Equity lines of credit Multifamily Farmland Construction, Land Development, 1 35 35 Commercial Real Estate- Owner Occupied 1 847 847 Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total 3 $ 1,013 $1,013 Troubled Debt Restructurings All Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstaniding Recorded Investment Total Restructurings 9 $ 5,882 $5,882 Troubled Debt Restructurings that subsequently defaulted during the twelve months ended December 31, 2015 Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Residential 1-4 family Equity lines of credit Multifamily Farmland Construction, Land Development, Commercial Real Estate- Owner Occupied Commercial Real Estate- Non Owner Occupied Second Mortgages Non Real Estate Secured Personal / Consumer Business Commercial Agricultural Total
Allowance for loan losses and the recorded investment in loans by loan category	Twelve months ended December 31, 2016 Residential Multifamily Construction and Land Loans Commercial Owner Occupied Commercial Non-Owner Occupied Second Mortgages Equity Line of Credit Farmland Personal and Overdrafts Commercial and Agricultural Unallocated Total Allowance for Credit Losses: Beginning Balance December 31, 2015 654 — 37 1,012 748 43 20 7 704 886 1,543 5,654 Provision for Credit Losses (66 ) — (2 ) 1,564 (310 ) (24 ) 14 11 947 (323 ) (285 ) 1,526 Charge-offs 249 — 28 1,245 4 9 2 1,044 165 — 2,746 Recoveries (32 ) — (14 ) (8 ) (7 ) — (2 ) — (195 ) (137 ) — (395 ) Net Charge-offs 217 — 14 1,237 (7 ) 4 7 2 849 28 — 2,351 Ending Balance 371 — 21 1,339 445 15 27 16 802 535 1,258 4,829 Ending Balance: Individually evaluated for impairment 36 — 20 558 314 9 — 16 29 365 1,347 Ending Balance: Collectively Evaluated for Impairment 335 — 1 781 131 6 27 — 773 170 1,258 3,842 Loans: Ending Balance: Individually Evaluated for Impairment 5,308 989 2,107 6,941 3,892 204 25 877 65 677 — 21,085 Ending Balance: Collectively Evaluated for Impairment 181,387 21,641 13,871 65,442 24,926 6,730 13,370 11,317 17,822 32,790 — 389,296 Ending Balance: December 31, 2016 $ 186,695 $ 22,630 $ 15,978 $ 72,383 $ 28,818 $ 6,934 $ 13,395 $ 12,194 $ 17,887 $ 33,467 — $ 410,381 Twelve months ended December 31, 2015 Residential Multifamily Construction and Land Loans Commercial Owner Occupied Commercial Non-Owner Occupied Second Mortgages Equity Line of Credit Farmland Personal and Overdrafts Commercial and Agricultural Unallocated Total Allowance for Credit Losses: Beginning Balance December 31, 2014 $ 995 $ 20 $ 87 $ 409 $ 1,063 $ 67 $ 74 $ 12 $ 665 $ 982 $ 1,103 $ 5,477 Provision for Credit Losses 16 (20 ) (79 ) 634 (309 ) (21 ) (95 ) (8 ) 759 152 440 1,469 Charge-offs 360 — 12 407 12 3 — — 796 257 — 1,847 Recoveries (3 ) — (41 ) (376 ) (6 ) — (41 ) (3 ) (76 ) (9 ) — (555 ) Net Charge-offs 357 — (29 ) 31 6 3 (41 ) (3 ) 720 248 — 1,292 Ending Balance 654 — 37 1,012 748 43 20 7 704 886 1,543 5,654 Ending Balance: Individually evaluated for impairment 249 — 32 799 290 10 — — 45 512 1,937 Ending Balance: Collectively Evaluated for Impairment 405 — 5 213 458 33 20 7 659 374 1,543 3,717 Loans: Ending Balance: Individually Evaluated for Impairment 8,924 1,021 1,993 7,688 1,885 416 51 816 182 985 — 23,961 Ending Balance: Collectively Evaluated for Impairment 185,363 22,874 17,170 65,343 36,140 7,753 5,949 10,467 20,732 37,118 — 408,909 Ending Balance: December 31, 2015 $ 194,287 $ 23,895 $ 19,163 $ 73,031 $ 38,025 $ 8,169 $ 6,000 $ 11,283 $ 20,914 $ 38,103 — $ 432,870
Loans held for sale	Twelve months ended December 31 2016 2015 Loans held for sale at end of period $ 1,255 $ — Proceeds from sales of mortgage loans originated for sale 15,714 — Gain on sales of mortgage loans originated for sale $ 525 —

6. Premises and Equipment _ R35

6. Premises and Equipment / Real Estate held for Sale (Tables)	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Summary of premises and equipment	2016 2015 Land $ 7,471 $ 9,150 Bank Premises 13,681 14,299 Equipment 15,314 15,258 36,466 38,707 Less: accumulated depreciation 18,770 18,133 Construction in progress 118 38 $ 17,814 $ 20,612

8. Income Taxes (Tables)

8. Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2016
Loans: [Abstract]
Components of the net deferred tax asset	2016 2015 Deferred tax assets: Allowance for loan loss $ 1,642 $ 1,922 Previous years AMT 802 802 Loss on other equity investments 51 51 NOL carry-forwards (20 year carry-forward period) 10,286 9,627 Net unrealized loss on securities available-for-sale 632 129 13,413 12,531 Deferred tax liability: Depreciation (424 ) (405 ) Net unrealized gain on securities available for sale — — (424 ) (405 ) Deferred Tax Asset Valuation Allowance — — Net deferred tax assets: $ 12,989 $ 12,126
Components of income tax expense	2016 2015 Federal: Current $ (657 ) $ (438 ) Deferred 297 (767 ) Total $ (360 ) $ (1,205 )
Income tax reconciliation	2016 2015 Statutory rate applied to earnings before income taxes $ (118 ) $ 45 Tax exempt interest (113 ) (123 ) Life insurance proceeds (30 ) — Deferred tax valuation allowance reversal — (1,000 ) Other, net (99 ) (127 ) Total $ (360 ) $ (1,205 )

9. Deposits (Tables)

9. Deposits (Tables)	12 Months Ended
	Dec. 31, 2016
Banking and Thrift [Abstract]
Composition of deposits	2016 2015 Non-interest bearing demand $ 134,488 $ 129,634 Interest bearing demand 124,143 119,787 Savings deposits 90,686 89,776 Time deposits, in amounts of $100,000 or more 43,743 49,242 Other time deposits 96,809 106,473 Total deposits $ 489,869 $ 494,912
Scheduled maturities of time deposits	2017 $ 66,373 2018 24,618 2019 14,388 2020 11,606 2021 8,854 Thereafter 14,713 $ 140,552

11. Long-Term Debt (Tables)

11. Long-Term Debt (Tables)	12 Months Ended
	Dec. 31, 2016
Debt Disclosure [Abstract]
Schedule of long-term debt	2016 2015 Note payable FHLB dated 08/23/05 for $750 with an annual interest rate of 0%, due 08/24/2020. The note requires monthly principal payments and was granted as part of the FHLB’s Affordable Housing Program. $ 146 $ 198 Note payable FHLB dated 08/29/12 for $12,500 with an annual interest rate of 3.53%, due 08/29/19. The note requires quarterly interest payments. 12,500 12,500 Note payable FHLB dated 08/29/12 for $12,500 with an annual interest rate of 3.70%, due 08/29/19. The note requires quarterly interest payments. 12,500 12,500 Note payable FHLB dated 08/29/12 for $5,000 with an annual interest rate of 2.73%, due 08/29/18. The note requires quarterly interest payments 5,000 5,000 Note payable FHLB dated 08/29/12 for $5,000 with an annual interest rate of 3.74%, due 08/29/19. The note requires quarterly interest payments. 5,000 5,000 Note payable FHLB dated 08/29/12 for $7,500 with an annual interest rate of 2.43%, due 08/29/17. The note requires quarterly interest payments. Included in Short Term Borrowings 7,500 Note payable FHLB dated 08/29/12 for $5,000 with an annual interest rate of 2.86%, due 08/29/18. The note requires quarterly interest payments. 5,000 5,000 Total $ 40,146 $ 47,698
Contractual maturities of long-term debt	2017 $ - 2018 10,053 2019 30,053 2020 40 $ 40,146

13. Stock and Earnings Per Sh39

13. Stock and Earnings Per Share (Tables)	12 Months Ended
	Dec. 31, 2016
Past due days
Reconciliation of numerators and denominators of basic and diluted earnings per common share computation	2016 2015 Income available to common stockholders $ 12 $ 1,337 Weighted average shares outstanding 8,107 7,851 Shares outstanding including assumed conversion 10,285 9,943 Basic earnings per common share $ 0.00 $ 0.17 Fully diluted earnings per share (including convertible preferred shares oustanding) $ 0.00 $ 0.13

15. Stock Option Plan and Equ40

15. Stock Option Plan and Equity Compensation Plan (Tables)	12 Months Ended
	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of options outstanding	2016 2015 Restricted Stock Outstanding Stock Options Price per Share Number of Shares Weighted Average Exercise Price Number of Shares Options outstanding at January 1 — — $ 15.00 55,600 Granted — — — — Exercised — — — — Expired — — 15.00 (55,600 ) Options outstanding and exercisable at December 31 $ — — $ — — Restricted Stock Awards Granted $ 5.10 86,667 — —

18. Fair Value Disclosures (Tab

18. Fair Value Disclosures (Tables)	12 Months Ended
	Dec. 31, 2016
Liabilities Less Deposits
Available for sale securities portfolio measured at fair value on a recurring basis	2016 Level 1 Level 2 Level 3 Total Fair Value Available for Sale Securities State and Political Subdivisions $ — $ 12,451 $ — $ 12,451 Mortgage Backed Securities — 74,288 — 74,288 SBA Pools — 8,334 — 8,334 Total AFS Securities $ — $ 95,073 $ — $ 95,073 2015 Level 1 Level 2 Level 3 Total Fair Value Available for Sale Securities State and Political Subdivisions $ — $ 6,958 $ — $ 6,958 Mortgage Backed Securities — 62,593 — 62,593 SBA Pools — 10,309 — 10,309 Total AFS Securities $ — $ 79,860 $ — $ 79,860
Summary of foreclosed and repossessed assets at fair value on a non-recurring basis	December 31, 2016 Level 1 Level 2 Level 3 Total Fair Value Impaired Loans $ — $ — $ 4,869 $ 4,869 Repossessions/OREO, net $ — $ — $ 2,768 $ 2,768 Real Estate Held for sale $ — $ — $ 1,680 $ 1,680 December 31, 2015 Level 1 Level 2 Level 3 Total Fair Value Impaired Loans $ — $ — $ 7,098 $ 7,098 Repossessions/OREO, net $ — $ — $ 5,724 $ 5,724
Assets at fair value on a non - recurring basis segregated by the level of the valuation inputs within the fair value hierarchy	Quantitative Information about Level 3 Fair Value Measurements Valuation Unobservable Range December 31, 2016 2015 Techniques Input (2) (Weighted Average) OREO, net $ 2,768 $ 5,724 Appraisal of collateral (1) Appraisal adjustments 0% to 45% (13%) Liquidation expenses 0% to 10% (9%) Real Estate held for sale $ 1,680 $ — Appraisal of collateral (1) Appraisal adjustments 0% to 50% (40%) Liquidation expenses 0% to 10% (8%) Impaired loans $ 4,869 $ 7,098 Fair value of collateral –real estate (1), (3) Appraisal adjustments 0% to 10% (9%) Fair value of collateral –equipment, inventory, other (1), (3) Appraisal adjustments 25% to 50% (33%) Liquidation expenses 0% to 10% (9%)
Carrying amounts and fair values of financial instruments	December 31, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 50,385 $ 50,385 $ 46,891 $ 46,891 Securities available for sale 95,073 95,073 79,860 79,860 Other investments 6,637 6,637 6,592 6,592 Loans, net 404,838 406,851 426,429 419,907 Deposits (489,869 ) (422,730 ) (494,912 ) (472,197 ) Other short-term borrowings (27,552 ) (27,958 ) (20,052 ) (21,970 ) Long-term debt (40,146 ) (41,825 ) (47,698 ) (50,313 )

19. Related Party Transactions

19. Related Party Transactions (Tables)	12 Months Ended
	Dec. 31, 2016
Related Party Transactions [Abstract]
Sumarry of related party loans	2016 2015 Balance, beginning $ 7,723 $ 7,774 Additions 1,354 2,326 Reductions (4,374 ) (2,377 ) Balance, ending $ 4,703 $ 7,723 Unused commitments $ 675 $ 667

21. Minimum Regulatory Capita43

21. Minimum Regulatory Capital Requirements (Tables)	12 Months Ended
	Dec. 31, 2016
Farmland, real estate secured impaired loans, fair value disclosure
Schedule of Capital Ratios as Required by Regulators	Actual To Be Well Capitalized under Prompt Corrective Action Provisions Amount Ratio Amount Ratio As of December 31, 2016: Total Risk-Based Capital (to Risk-Weighted Assets) $ 50,523 13.02 % $ 38,792 => 10% Common Equity Tier 1 Capital to Risk Weighted Assets 45,694 11.78 % 25,215 => 6.5% Tier 1 Capital (to Risk-Weighted Assets) 45,694 11.78 % 31,034 => 8% Tier 1 Capital (to Adjusted Total Assets -Leverage 45,694 7.59 % 30,111 =>5% As of December 31, 2015: Total Risk-Based Capital (to Risk-Weighted Assets) $ 49,588 12,55 % $ 39,506 => 10% Common Equity Tier 1 Capital to Risk Weighted Assets 44,573 11.28 % 25,679 => 6.5% Tier 1 Capital (to Risk-Weighted Assets) 44,573 11.28 % 31,605 => 8% Tier 1 Capital (to Adjusted Total Assets -Leverage 44,573 7.33 % 30,422 =>5%

23. Other Operating Income an44

23. Other Operating Income and Expenses (Tables)	12 Months Ended
	Dec. 31, 2016
Other Income and Expenses [Abstract]
Schedule of Other Operating Cost and Expense	2016 2015 BOLI income $ 396 $ 401 Other Contracted Services $ 763 $ 775 Bank Franchise Taxes $ 423 $ 367 FDIC Insurance Costs $ 693 $ 863 Software Licensing / Maintenance $ 932 $ 736 Postage and Freight $ 247 $ 282 Legal $ 431 $ 378 Other Loan Expense $ 167 $ 330 Other Losses $ 124 $ 450 Advertising $ 286 $ 260 Audit $ 253 $ 180

24. Condensed Parent Company 45

24. Condensed Parent Company Financial Statements (Tables)	12 Months Ended
	Dec. 31, 2016
Condensed Financial Information of Parent Company Only Disclosure [Abstract]
Condensed Balance Sheet	CONDENSED BALANCE SHEETS 2016 2015 ASSETS Cash $ 224 $ 14 Other investments 102 102 Equity in subsidiary 53,412 53,444 Other assets 20 — Total Assets $ 53,758 $ 53,560 STOCKHOLDERS’ EQUITY $ 53,758 $ 53,560
Condensed Income Statement	CONDENSED STATEMENTS OF INCOME 2016 2015 Interest and dividend income $ 4 $ 4 Other income — — Interest expense — — Operating expense (86 ) (95 ) (82 ) (91 ) Income tax benefit 27 31 Equity in undistributed earnings of subsidiary 67 1,397 Net income $ 12 $ 1,337
Condensed Cash Flow Statement	CONDENSED STATEMENTS OF CASH FLOWS 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 12 $ 1,337 Adjustments to reconcile net income to net cash Restricted stock expense 55 — Equity in undistributed earnings of subsidiary (67 ) (1,397 ) (Increase) decrease in other assets (50 ) 43 Increase (decrease) in other liabilities — — Net cash used in operating activities (50 ) (17 ) CASH FLOWS FROM INVESTING ACTIVITIES: Capital contributed to subsidiary bank (850 ) (300 ) Net cash (used in) investing (850 ) (300 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase (decrease) in Short Term Borrowings — — Issuance of Common Stock 1,110 — Issuance of Preferred Stock — — Redemption of capital securities — — Net cash provided by financing activities 1,110 — Net increase (decrease) in cash and cash equivalents 210 (317 ) CASH AND CASH EQUIVALENTS AT 14 331 CASH AND CASH EQUIVALENTS AT END OF $ 224 $ 14

1. Summary of Significant Acc46

1. Summary of Significant Accounting Policies (Details Narrative)	12 Months Ended
	Dec. 31, 2016
Loans [Abstract]
Delinquent period for discontinuance of accrual of interest on loan	90 days
Period for credit card and other personal loans to be charged off past due, maximum	180 days

2. Formal Written Agreement (De

2. Formal Written Agreement (Details Narrative) $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)
Loan and other assets amount requiring improvement
Loan and other assets amount requiring improvement	$ 500,000
Past due days	90 days

3. Investment Securities Avai48

3. Investment Securities Available-For-Sale (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 96,930	$ 80,239
Gross Unrealized Gains	140	293
Gross Unrealized Losses	1,997	672
Total AFS Securities	95,073	79,860
Age of gross unrealized losses and fair value by investment category [Abstract]
Less Than 12 months, Fair Value	83,656	45,947
Less Than 12 months, Unrealized Losses	1,997	366
12 Months or More, Fair value	0	13,699
12 Months or More, Unrealized Losses	0	306
Fair Value	83,656	59,646
Unrealized Losses	1,997	672
Fiscal Year Maturity - Amortized Cost [Abstract]
Amortized cost - due in one year or less	555
Amortized cost - due after one year through five years	2,255
Amortized cost - due after five years through ten years	3
Amortized cost - due after ten years	18,733
Amortized cost - sub-total	21,546
Mortgage-backed securities	75,384
Amortized cost - grand total	96,930
Fiscal Year Maturity - Fair Value [Abstract]
Fair value - due in one year or less	562
Fair value - due after one year through five years	2,273
Fair value - due after five years through ten years	3
Fair value - after ten years	17,947
Fair value - sub total	20,785
Mortgage-backed securities	74,288
Fair value - grand total	95,073
Gross realized gains and losses on investment securities available for sale
Realized gains from sales and calls of securities	65	16
Realized losses	18	0
Net gains (losses)	47	16
State and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	13,013	6,834
Gross Unrealized Gains	41	124
Gross Unrealized Losses	603	0
Total AFS Securities	12,451	6,958
Age of gross unrealized losses and fair value by investment category [Abstract]
Less Than 12 months, Fair Value	9,191	0
Less Than 12 months, Unrealized Losses	603	0
12 Months or More, Fair value	0	0
12 Months or More, Unrealized Losses	0	0
Fair Value	9,191	0
Unrealized Losses	603	0
Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	75,384	62,911
Gross Unrealized Gains	93	160
Gross Unrealized Losses	1,189	478
Total AFS Securities	74,288	62,593
Age of gross unrealized losses and fair value by investment category [Abstract]
Less Than 12 months, Fair Value	66,878	45,790
Less Than 12 months, Unrealized Losses	1,189	363
12 Months or More, Fair value	0	4,589
12 Months or More, Unrealized Losses	0	115
Fair Value	66,878	50,379
Unrealized Losses	1,189	478
SBA Pools [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	8,533	10,494
Gross Unrealized Gains	6	9
Gross Unrealized Losses	205	194
Total AFS Securities	8,334	10,309
Age of gross unrealized losses and fair value by investment category [Abstract]
Less Than 12 months, Fair Value	7,587	157
Less Than 12 months, Unrealized Losses	205	3
12 Months or More, Fair value	0	9,110
12 Months or More, Unrealized Losses	0	191
Fair Value	7,587	9,267
Unrealized Losses	$ 205	$ 194

3. Investment Securities Avai49

3. Investment Securities Available-For-Sale (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Investment Securities Available-for-sale Details Narrative
Number of investment securities in a loss	108	34
Investment securities available-for-sale	$ 33,238	$ 31,422
Investment securities market value	32,698	31,355
Proceeds from sales of securities	$ 21,164	$ 1,025

4. Other Investments (Details N

4. Other Investments (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Other Investments [Abstract]
Federal Home Loan Bank Stock and Federal Reserve Bank Stock	$ 4,395	$ 4,350
Certificates of Deposits	$ 2,242	$ 2,242

5. Loans and Allowance for Lo51

5. Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	$ 410,381	$ 432,870
Allowance for loan losses	4,829	5,654
Net deferred fees	714	787
Total allowances and net deferred fees	5,543	6,441
Loans, net	404,838	426,429
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	1,314	5,823
60 to 89 Days Past Due	404	2,528
Greater Than 90 Days	5,934	8,450
Total Past Due	7,652	16,801
Current	402,729	416,069
Total Financing Receivables	410,381	432,870
Recorded Investment > 90 Days and Accruing	2,210	0
Non-accrual loans	3,999	9,456
Overdrafts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	142	139
Analysis of past due loans [Abstract]
Total Financing Receivables	142	139
Real Estate Secured [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	359,027	373,853
Analysis of past due loans [Abstract]
Total Financing Receivables	359,027	373,853
Real Estate Secured [Member] | Residential 1-4 family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	186,695	194,287
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	841	4,193
60 to 89 Days Past Due	242	1,580
Greater Than 90 Days	1,000	2,545
Total Past Due	2,083	8,318
Current	184,612	185,969
Total Financing Receivables	186,695	194,287
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	1,275	2,675
Real Estate Secured [Member] | Multi Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	22,630	23,895
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	0	0
60 to 89 Days Past Due	0	0
Greater Than 90 Days	0	0
Total Past Due	0	0
Current	22,630	23,895
Total Financing Receivables	22,630	23,895
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	0	0
Real Estate Secured [Member] | Construction and Land Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	15,978	19,163
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	39	49
60 to 89 Days Past Due	0	61
Greater Than 90 Days	0	37
Total Past Due	39	147
Current	15,939	19,016
Total Financing Receivables	15,978	19,163
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	0	71
Real Estate Secured [Member] | Commercial, Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	72,383	73,031
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	14	514
60 to 89 Days Past Due	0	485
Greater Than 90 Days	3,868	5,014
Total Past Due	3,882	6,013
Current	68,501	67,018
Total Financing Receivables	72,383	73,031
Recorded Investment > 90 Days and Accruing	2,210	0
Non-accrual loans	1,658	5,856
Real Estate Secured [Member] | Commercial, Non owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	28,818	38,025
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	0	0
60 to 89 Days Past Due	0	0
Greater Than 90 Days	0	0
Total Past Due	0	0
Current	28,818	38,025
Total Financing Receivables	28,818	38,025
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	0	0
Real Estate Secured [Member] | Second Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	6,934	8,169
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	160	88
60 to 89 Days Past Due	1	37
Greater Than 90 Days	18	5
Total Past Due	179	130
Current	6,755	8,039
Total Financing Receivables	6,934	8,169
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	18	5
Real Estate Secured [Member] | Equity Line of Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	13,395	6,000
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	0	24
60 to 89 Days Past Due	30	0
Greater Than 90 Days	10	17
Total Past Due	40	41
Current	13,355	5,959
Total Financing Receivables	13,395	6,000
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	10	17
Real Estate Secured [Member] | Farmland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	12,194	11,283
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	0	56
60 to 89 Days Past Due	47	7
Greater Than 90 Days	564	303
Total Past Due	611	366
Current	11,583	10,917
Total Financing Receivables	12,194	11,283
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	564	303
Secured (Other) and Unsecured [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	51,212	58,878
Analysis of past due loans [Abstract]
Total Financing Receivables	51,212	58,878
Secured (Other) and Unsecured [Member] | Personal Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	17,887	20,914
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	118	264
60 to 89 Days Past Due	23	141
Greater Than 90 Days	12	163
Total Past Due	153	568
Current	17,734	20,346
Total Financing Receivables	17,887	20,914
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	12	163
Secured (Other) and Unsecured [Member] | Commercial Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	29,977	35,144
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	142	590
60 to 89 Days Past Due	54	217
Greater Than 90 Days	462	366
Total Past Due	658	1,173
Current	29,319	33,971
Total Financing Receivables	29,977	35,144
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	462	366
Secured (Other) and Unsecured [Member] | Agricultural [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, gross	3,490	2,959
Analysis of past due loans [Abstract]
30 to 59 Days Past Due	0	45
60 to 89 Days Past Due	7	0
Greater Than 90 Days	0	0
Total Past Due	7	45
Current	3,483	2,914
Total Financing Receivables	3,490	2,959
Recorded Investment > 90 Days and Accruing	0	0
Non-accrual loans	$ 0	$ 0

5. Loans and Allowance for Lo52

5. Loans and Allowance for Loan Losses, Foreclosed (Details) $ in Thousands	Dec. 31, 2016USD ($)contract
Residential real estate in the process of foreclosure [Member]
Number | contract	8
Value of Property | $	$ 817
Foreclosed residential real estate [Member]
Number | contract	6
Value of Property | $	$ 340

5. Loans and Allowance for Lo53

5. Loans and Allowance for Loan Losses, Credit Risk Profile (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Multi Family [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 18,335
Multi Family [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,410
Multi Family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	989
Construction and Land Loans [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	5,969
Construction and Land Loans [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	5,961
Construction and Land Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0
Commercial, Owner Occupied [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	36,806
Commercial, Owner Occupied [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	22,767
Residential 1-4 family [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	186,695	$ 194,287
Residential 1-4 family [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		109,993
Residential 1-4 family [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		46,639
Residential 1-4 family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		3,133
Residential 1-4 family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		8,583
Residential 1-4 family [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Residential 1-4 family [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		25,939
Residential 1-4 family [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	32,054
Residential 1-4 family [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	106,154
Residential 1-4 family [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	41,369
Residential 1-4 family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,399
Residential 1-4 family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,719
Multi Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	22,630	23,895
Multi Family [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		20,271
Multi Family [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		1,811
Multi Family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		792
Multi Family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		1,021
Multi Family [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Multi Family [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		0
Multi Family [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0
Multi Family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,896
Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	12,194	11,283
Farmland [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		6,323
Farmland [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		3,922
Farmland [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		195
Farmland [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	878	818
Farmland [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Farmland [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		25
Farmland [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	19
Farmland [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	7,823
Farmland [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,474
Farmland [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0
Construction and Land Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	15,978	19,163
Construction and Land Loans [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		7,406
Construction and Land Loans [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		6,420
Construction and Land Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		397
Construction and Land Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	2,107	1,904
Construction and Land Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Construction and Land Loans [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		3,036
Construction and Land Loans [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,941
Commercial, Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	72,383	73,031
Commercial, Owner Occupied [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		38,926
Commercial, Owner Occupied [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		21,671
Commercial, Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		2,552
Commercial, Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	4,689	7,012
Commercial, Owner Occupied [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Commercial, Owner Occupied [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		2,870
Commercial, Owner Occupied [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,686
Commercial, Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	4,435
Commercial, Non owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	28,818	38,025
Commercial, Non owner Occupied [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		19,979
Commercial, Non owner Occupied [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		12,157
Commercial, Non owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		2,523
Commercial, Non owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,893	1,885
Commercial, Non owner Occupied [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Commercial, Non owner Occupied [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans		1,481
Commercial, Non owner Occupied [Member] | Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	387
Commercial, Non owner Occupied [Member] | Satisfactory [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	15,198
Commercial, Non owner Occupied [Member] | Acceptable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	5,119
Commercial, Non owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	4,221
Consumer Non Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	17,887	20,914
Consumer Non Real Estate [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	17,875	20,751
Consumer Non Real Estate [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	12	163
Second Mortgages Non Real Estate Secured [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	20,329	14,169
Second Mortgages Non Real Estate Secured [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	20,301	14,147
Second Mortgages Non Real Estate Secured [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	28	22
Commercial Non Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	29,977	35,144
Commercial Non Real Estate [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	29,515	34,778
Commercial Non Real Estate [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	462	366
Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,490	2,959
Agricultural [Member] | Performing Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,490	2,959
Agricultural [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 0	$ 0

5. Loans and Allowance for Lo54

5. Loans and Allowance for Loan Losses, Impaired Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 30, 2015
Recorded Investment [Abstract]
With No Related Allowance	$ 16,216	$ 16,863
With Related Allowance	4,869	7,098
Unpaid Principal Balance [Abstract]
With No Related Allowance	16,216	16,863
With Related Allowance	5,869	7,098
Related Allowance	1,347	1,937
Average Recorded Investment [Abstract]
With No Related Allowance	16,537		$ 19,466
With Related Allowance	5,983		7,498
Interest Income Recognized [Abstract]
With No Related Allowance	781		602
With Related Allowance	107		$ 216
Real Estate Secured [Member] | Residential 1-4 family [Member]
Recorded Investment [Abstract]
With No Related Allowance	4,848	7,078
With Related Allowance	460	1,846
Unpaid Principal Balance [Abstract]
With No Related Allowance	4,848	7,078
With Related Allowance	460	1,846
Related Allowance	36	249
Average Recorded Investment [Abstract]
With No Related Allowance	5,963	7,533
With Related Allowance	1,153	2,497
Interest Income Recognized [Abstract]
With No Related Allowance	200	247
With Related Allowance	14	93
Real Estate Secured [Member] | Equity Line of Credit [Member]
Recorded Investment [Abstract]
With No Related Allowance	25	51
With Related Allowance	0	0
Unpaid Principal Balance [Abstract]
With No Related Allowance	25	51
With Related Allowance	0	0
Related Allowance	0	0
Average Recorded Investment [Abstract]
With No Related Allowance	38	38
With Related Allowance	0	0
Interest Income Recognized [Abstract]
With No Related Allowance	1	2
With Related Allowance	0	0
Real Estate Secured [Member] | Multi Family [Member]
Recorded Investment [Abstract]
With No Related Allowance	989	1,021
With Related Allowance	0	0
Unpaid Principal Balance [Abstract]
With No Related Allowance	989	1,021
With Related Allowance	0	0
Related Allowance	0	0
Average Recorded Investment [Abstract]
With No Related Allowance	1,005	1,137
With Related Allowance	0	0
Interest Income Recognized [Abstract]
With No Related Allowance	1	60
With Related Allowance	0	0
Real Estate Secured [Member] | Farmland [Member]
Recorded Investment [Abstract]
With No Related Allowance	685	816
With Related Allowance	192	0
Unpaid Principal Balance [Abstract]
With No Related Allowance	685	816
With Related Allowance	192	0
Related Allowance	16	0
Average Recorded Investment [Abstract]
With No Related Allowance	750	829
With Related Allowance	96	0
Interest Income Recognized [Abstract]
With No Related Allowance	24	38
With Related Allowance	11	0
Real Estate Secured [Member] | Construction and Land Loans [Member]
Recorded Investment [Abstract]
With No Related Allowance	1,741	1,547
With Related Allowance	366	446
Unpaid Principal Balance [Abstract]
With No Related Allowance	1,741	1,547
With Related Allowance	366	446
Related Allowance	20	32
Average Recorded Investment [Abstract]
With No Related Allowance	1,643	1,643
With Related Allowance	406	406
Interest Income Recognized [Abstract]
With No Related Allowance	114	92
With Related Allowance	0	25
Real Estate Secured [Member] | Commercial, Owner Occupied [Member]
Recorded Investment [Abstract]
With No Related Allowance	5,802	5,569
With Related Allowance	1,139	2,119
Unpaid Principal Balance [Abstract]
With No Related Allowance	5,802	5,569
With Related Allowance	2,139	2,119
Related Allowance	558	799
Average Recorded Investment [Abstract]
With No Related Allowance	5,685	7,379
With Related Allowance	1,629	1,761
Interest Income Recognized [Abstract]
With No Related Allowance	390	132
With Related Allowance	22	9
Real Estate Secured [Member] | Commercial, Non owner Occupied [Member]
Recorded Investment [Abstract]
With No Related Allowance	1,883	0
With Related Allowance	2,009	1,885
Unpaid Principal Balance [Abstract]
With No Related Allowance	1,883	0
With Related Allowance	2,009	1,885
Related Allowance	314	290
Average Recorded Investment [Abstract]
With No Related Allowance	941	0
With Related Allowance	1,947	1,901
Interest Income Recognized [Abstract]
With No Related Allowance	39	0
With Related Allowance	41	56
Real Estate Secured [Member] | Second Mortgage [Member]
Recorded Investment [Abstract]
With No Related Allowance	186	398
With Related Allowance	18	18
Unpaid Principal Balance [Abstract]
With No Related Allowance	186	398
With Related Allowance	18	18
Related Allowance	9	10
Average Recorded Investment [Abstract]
With No Related Allowance	292	508
With Related Allowance	18	9
Interest Income Recognized [Abstract]
With No Related Allowance	8	14
With Related Allowance	0	1
Non Real Estate Secured [Member] | Personal [Member]
Recorded Investment [Abstract]
With No Related Allowance	14	68
With Related Allowance	51	114
Unpaid Principal Balance [Abstract]
With No Related Allowance	14	68
With Related Allowance	51	114
Related Allowance	29	45
Average Recorded Investment [Abstract]
With No Related Allowance	41	61
With Related Allowance	82	184
Interest Income Recognized [Abstract]
With No Related Allowance	1	4
With Related Allowance	3	4
Non Real Estate Secured [Member] | Commercial Loan [Member]
Recorded Investment [Abstract]
With No Related Allowance	43	315
With Related Allowance	634	670
Unpaid Principal Balance [Abstract]
With No Related Allowance	43	315
With Related Allowance	634	670
Related Allowance	365	512
Average Recorded Investment [Abstract]
With No Related Allowance	179	338
With Related Allowance	652	736
Interest Income Recognized [Abstract]
With No Related Allowance	3	13
With Related Allowance	16	28
Non Real Estate Secured [Member] | Agricultural [Member]
Recorded Investment [Abstract]
With No Related Allowance	0	0
With Related Allowance	0	0
Unpaid Principal Balance [Abstract]
With No Related Allowance	0	0
With Related Allowance	0	0
Related Allowance	0	0
Average Recorded Investment [Abstract]
With No Related Allowance	0	0
With Related Allowance	0	4
Interest Income Recognized [Abstract]
With No Related Allowance	0	0
With Related Allowance	$ 0	$ 0

5. Loans and Allowance for Lo55

5. Loans and Allowance for Loan Losses, Troubled Debt Resturcturing (Details) $ in Thousands	Dec. 31, 2016USD ($)contract	Dec. 31, 2015USD ($)contract	Dec. 31, 2014USD ($)
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	14	9
Pre-Modification Outstanding Recorded Investment	$ 8,596	$ 5,882
Post-Modification Recorded Investment	$ 8,596	$ 5,882
Interest only [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	7	4
Pre-Modification Outstanding Recorded Investment	$ 4,589	$ 2,459
Post-Modification Recorded Investment	$ 4,589	$ 2,459
Interest only [Member] | Residential 1-4 family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	1	1
Pre-Modification Outstanding Recorded Investment	$ 180	$ 188
Post-Modification Recorded Investment	180	188
Interest only [Member] | Equity Line of Credit [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Interest only [Member] | Multi Family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Interest only [Member] | Farmland [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 57
Post-Modification Recorded Investment	57
Interest only [Member] | Construction and Land Loans [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Interest only [Member] | Commercial, Owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	4	2
Pre-Modification Outstanding Recorded Investment	$ 4,288	$ 2,203
Post-Modification Recorded Investment	4,288	2,203
Interest only [Member] | Commercial, Non owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Interest only [Member] | Second Mortgage [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	1	1
Pre-Modification Outstanding Recorded Investment	$ 64	$ 68
Post-Modification Recorded Investment	64	68
Interest only [Member] | Personal [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Interest only [Member] | Commercial and Industrial [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Interest only [Member] | Agricultural [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	2	2
Pre-Modification Outstanding Recorded Investment	$ 2,364	$ 2,410
Post-Modification Recorded Investment	$ 2,364	$ 2,410
Below Market Rate [Member] | Residential 1-4 family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	1	1
Pre-Modification Outstanding Recorded Investment	$ 848	$ 863
Post-Modification Recorded Investment	848	863
Below Market Rate [Member] | Equity Line of Credit [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member] | Multi Family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member] | Farmland [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member] | Construction and Land Loans [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member] | Commercial, Owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract		1
Pre-Modification Outstanding Recorded Investment		$ 1,547
Post-Modification Recorded Investment		1,547
Below Market Rate [Member] | Commercial, Non owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 1,516
Post-Modification Recorded Investment	1,516
Below Market Rate [Member] | Second Mortgage [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member] | Personal [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member] | Commercial and Industrial [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Below Market Rate [Member] | Agricultural [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Loan term extension [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	5	3
Pre-Modification Outstanding Recorded Investment	$ 1,643	$ 1,013
Post-Modification Recorded Investment	$ 1,643	$ 1,013
Loan term extension [Member] | Residential 1-4 family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	2	1
Pre-Modification Outstanding Recorded Investment	$ 452	$ 131
Post-Modification Recorded Investment	452	131
Loan term extension [Member] | Equity Line of Credit [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Loan term extension [Member] | Multi Family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 999
Post-Modification Recorded Investment	$ 999
Loan term extension [Member] | Farmland [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	2
Pre-Modification Outstanding Recorded Investment	$ 193
Post-Modification Recorded Investment	193
Loan term extension [Member] | Construction and Land Loans [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract		1
Pre-Modification Outstanding Recorded Investment		$ 35
Post-Modification Recorded Investment		$ 35
Loan term extension [Member] | Commercial, Owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract		1
Pre-Modification Outstanding Recorded Investment		$ 847
Post-Modification Recorded Investment		847
Loan term extension [Member] | Commercial, Non owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Loan term extension [Member] | Second Mortgage [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Loan term extension [Member] | Personal [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Loan term extension [Member] | Commercial and Industrial [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Loan term extension [Member] | Agricultural [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	3
Pre-Modification Outstanding Recorded Investment	$ 368
Post-Modification Recorded Investment	$ 368
Subsequently defaulted [Member] | Residential 1-4 family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	1
Pre-Modification Outstanding Recorded Investment	$ 175
Post-Modification Recorded Investment	175
Subsequently defaulted [Member] | Equity Line of Credit [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Multi Family [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Farmland [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Number of Contracts | contract	2
Pre-Modification Outstanding Recorded Investment	$ 193
Post-Modification Recorded Investment	193
Subsequently defaulted [Member] | Construction and Land Loans [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Commercial, Owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Commercial, Non owner Occupied [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Second Mortgage [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Personal [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Commercial and Industrial [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment
Subsequently defaulted [Member] | Agricultural [Member]
Troubled Debt Restructurings Interest Only [Abstract]
Pre-Modification Outstanding Recorded Investment
Post-Modification Recorded Investment

5. Loans and Allowance for Lo56

5. Loans and Allowance for Loan Losses, Alowance for Credit Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Allowance for Credit Losses [Roll Forward]
Beginning Balance	$ 5,654	$ 5,477
Provision for Credit Losses	1,526	1,469
Charge-offs	2,746	1,847
Recoveries	(395)	(555)
Net Charge-offs	2,351	1,292
Ending Balance	4,829	5,654
Ending Balance: Individually evaluated for impairment	1,347	1,937
Ending Balance: Collectively evaluated for impairment	3,842	3,717
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	21,085	23,961
Ending balance: Collectively Evaluated for Impairment	389,296	408,909
Ending Balance	410,381	432,870
Second Mortgage [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	43	67
Provision for Credit Losses	(24)	(21)
Charge-offs	4	3
Recoveries
Net Charge-offs	4	3
Ending Balance	15	43
Ending Balance: Individually evaluated for impairment	9
Ending Balance: Collectively evaluated for impairment	6
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	204
Ending balance: Collectively Evaluated for Impairment	6,730
Ending Balance	6,934	8,169
Equity Line of Credit [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	20	74
Provision for Credit Losses	14	(95)
Charge-offs	9
Recoveries	(2)	(41)
Net Charge-offs	7	(41)
Ending Balance	27	20
Ending Balance: Individually evaluated for impairment
Ending Balance: Collectively evaluated for impairment	27
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	25
Ending balance: Collectively Evaluated for Impairment	13,370
Ending Balance	13,395	6,000
Personal and Overdrafts [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	704	665
Provision for Credit Losses	947	759
Charge-offs	1,044	796
Recoveries	(195)	(76)
Net Charge-offs	849	720
Ending Balance	802	704
Ending Balance: Individually evaluated for impairment	29
Ending Balance: Collectively evaluated for impairment	773
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	65
Ending balance: Collectively Evaluated for Impairment	17,822
Ending Balance	17,887	20,914
Commercial and Agricultural Real Estate Portfolio Segment [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	886	982
Provision for Credit Losses	(323)	152
Charge-offs	165	257
Recoveries	(137)	(9)
Net Charge-offs	28	248
Ending Balance	535	886
Ending Balance: Individually evaluated for impairment	365
Ending Balance: Collectively evaluated for impairment	170
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	677
Ending balance: Collectively Evaluated for Impairment	32,790
Ending Balance	33,467	38,103
Unallocated [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	1,543	1,103
Provision for Credit Losses	(285)	440
Charge-offs
Recoveries
Net Charge-offs
Ending Balance	1,258	1,543
Ending Balance: Individually evaluated for impairment
Ending Balance: Collectively evaluated for impairment	1,258
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment
Ending balance: Collectively Evaluated for Impairment
Ending Balance
Residential 1-4 family [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	654	995
Provision for Credit Losses		16
Charge-offs		360
Recoveries		(3)
Net Charge-offs		357
Ending Balance		654
Ending Balance: Individually evaluated for impairment	36	249
Ending Balance: Collectively evaluated for impairment	335	405
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	5,308	8,924
Ending balance: Collectively Evaluated for Impairment	181,387	185,363
Ending Balance		194,287
Multi Family [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance		20
Provision for Credit Losses		(20)
Charge-offs
Recoveries
Net Charge-offs
Ending Balance
Ending Balance: Individually evaluated for impairment
Ending Balance: Collectively evaluated for impairment
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	989	1,021
Ending balance: Collectively Evaluated for Impairment	21,641	22,874
Ending Balance		23,895
Construction and Land Loans [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	37	87
Provision for Credit Losses		(79)
Charge-offs		12
Recoveries		(41)
Net Charge-offs		(29)
Ending Balance		37
Ending Balance: Individually evaluated for impairment	20	32
Ending Balance: Collectively evaluated for impairment	1	5
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	2,107	1,993
Ending balance: Collectively Evaluated for Impairment	13,871	17,170
Ending Balance		19,163
Commercial, Owner Occupied [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	1,012	409
Provision for Credit Losses		634
Charge-offs		407
Recoveries		(376)
Net Charge-offs		31
Ending Balance		1,012
Ending Balance: Individually evaluated for impairment	558	799
Ending Balance: Collectively evaluated for impairment	781	213
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	6,941	7,688
Ending balance: Collectively Evaluated for Impairment	65,442	65,343
Ending Balance		73,031
Commercial, Non owner Occupied [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	748	1,063
Provision for Credit Losses		(309)
Charge-offs		12
Recoveries		(6)
Net Charge-offs		6
Ending Balance		748
Ending Balance: Individually evaluated for impairment	314	290
Ending Balance: Collectively evaluated for impairment	131	458
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	3,892	1,885
Ending balance: Collectively Evaluated for Impairment	24,926	36,140
Ending Balance		38,025
Farmland [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	7	12
Provision for Credit Losses		(8)
Charge-offs
Recoveries		(3)
Net Charge-offs		(3)
Ending Balance		7
Ending Balance: Individually evaluated for impairment	16
Ending Balance: Collectively evaluated for impairment		7
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment	877	816
Ending balance: Collectively Evaluated for Impairment	11,317	10,467
Ending Balance		11,283
Residential 1-4 family [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	654
Provision for Credit Losses	(66)
Charge-offs	249
Recoveries	(32)
Net Charge-offs	217
Ending Balance	371	654
Loans: [Abstract]
Ending Balance	186,695
Multi Family [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance
Provision for Credit Losses
Charge-offs
Recoveries
Net Charge-offs
Ending Balance
Loans: [Abstract]
Ending Balance	22,630
Construction and Land Loans [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	37
Provision for Credit Losses	(2)
Charge-offs	28
Recoveries	(14)
Net Charge-offs	14
Ending Balance	21	37
Loans: [Abstract]
Ending Balance	15,978
Commercial, Owner Occupied [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	1,012
Provision for Credit Losses	1,564
Charge-offs	1,245
Recoveries	(8)
Net Charge-offs	1,237
Ending Balance	1,339	1,012
Loans: [Abstract]
Ending Balance	72,383
Commercial, Non owner Occupied [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	748
Provision for Credit Losses	(310)
Charge-offs
Recoveries	(7)
Net Charge-offs	(7)
Ending Balance	445	748
Loans: [Abstract]
Ending Balance	28,818
Farmland [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	7
Provision for Credit Losses	11
Charge-offs	2
Recoveries
Net Charge-offs	2
Ending Balance	16	7
Loans: [Abstract]
Ending Balance	12,194
Second Mortgage [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	43
Ending Balance		43
Ending Balance: Individually evaluated for impairment		10
Ending Balance: Collectively evaluated for impairment		33
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment		416
Ending balance: Collectively Evaluated for Impairment		7,753
Ending Balance		8,169
Equity Line of Credit [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	20
Ending Balance		20
Ending Balance: Individually evaluated for impairment
Ending Balance: Collectively evaluated for impairment		20
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment		51
Ending balance: Collectively Evaluated for Impairment		5,949
Ending Balance		6,000
Personal and Overdrafts [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	704
Ending Balance		704
Ending Balance: Individually evaluated for impairment		45
Ending Balance: Collectively evaluated for impairment		659
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment		182
Ending balance: Collectively Evaluated for Impairment		20,732
Ending Balance		20,914
Commercial and Agricultural Real Estate Portfolio Segment [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	886
Ending Balance		886
Ending Balance: Individually evaluated for impairment		512
Ending Balance: Collectively evaluated for impairment		374
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment		985
Ending balance: Collectively Evaluated for Impairment		37,118
Ending Balance		38,103
Unallocated [Member]
Allowance for Credit Losses [Roll Forward]
Beginning Balance	$ 1,543
Ending Balance		1,543
Ending Balance: Individually evaluated for impairment
Ending Balance: Collectively evaluated for impairment		1,543
Loans: [Abstract]
Ending Balance: Individually Evaluated for Impairment
Ending balance: Collectively Evaluated for Impairment
Ending Balance

5. Loans and Allowance for Lo57

5. Loans and Allowance for Loan Losses, Loans Held For Sale (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Loans And Allowance For Loan Losses Loans Held For Sale Details
Loans held for sale	$ 1,255	$ 0
Proceeds from sales of mortgage loans originated for sale	15,714	0
Gain on sales of mortgage loans originated for sale	$ 525	$ 0

5. Loans and Allowance for Lo58

5. Loans and Allowance for Loan Losses (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Loans And Allowance For Loan Losses Details Narrative
Troubled debt restructurings	$ 12,660	$ 10,064

6. Premises and Equipment _ R59

6. Premises and Equipment / Real Estate held for Sale (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment, Net [Abstract]
Premises and equipment, gross	$ 3,666	$ 38,707
Less: accumulated depreciation	18,770	18,133
Construction in progress	118	38
Premises and equipment, net	17,814	20,612
Depreciation expense	967	933
Land [Member]
Property, Plant and Equipment, Net [Abstract]
Premises and equipment, gross	7,471	9,150
Bank Premises [Member]
Property, Plant and Equipment, Net [Abstract]
Premises and equipment, gross	13,681	14,299
Equipment [Member]
Property, Plant and Equipment, Net [Abstract]
Premises and equipment, gross	$ 15,314	$ 15,258

7. Bank Owned Life Insurance (D

7. Bank Owned Life Insurance (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Cash paid during the year for: [Abstract]
Bank Owned Life Insurance	$ 14,314	$ 14,585

8. Income Taxes (Details)

8. Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets [Abstract]
Allowance for loan loss	$ 1,642	$ 1,922
Previous Years AMT	802	802
Loss on Other Equity Investments	51	51
NOL carry-forwards (20 year carry-forward period)	10,286	9,627
Net unrealized loss on securities available-for-sale	632	129
Deferred tax assets	13,413	12,531
Deferred tax liability [Abstract]
Depreciation	(424)	(405)
Net unrealized gain on securities available for sale	0	0
Deferred tax liability	(424)	(405)
Deferred Tax Asset Valuation Allowance	0	0
Net deferred tax assets	$ 12,989	$ 12,126

8. Income Taxes (Details 1)

8. Income Taxes (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Federal [Abstract]
Current	$ (657)	$ (438)
Deferred	297	(767)
Total	$ (360)	$ (1,205)

8. Income Taxes (Details 2)

8. Income Taxes (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Loan originated from sales of other real estate owned
Federal statutory corporate income tax rate (in hundredths)	34.00%	34.00%
Reconciliation of tax expense (benefit) from the federal tax rate to the effective tax rate [Abstract]
Statutory rate applied to earnings (losses) before income taxes	$ (118)	$ 45
Reduction in taxes from:
Tax exempt interest	(113)	(123)
Life Insurance proceeds	(30)	0
Deferred Tax Valuation allowance reversal	0	(1,000)
Other, net	(99)	(127)
Income tax expense (benefit)	$ (360)	$ (1,205)

9. Deposits (Details)

9. Deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Composition of deposits [Abstract]
Non-interest bearing demand	$ 134,488	$ 129,634
Interest bearing demand	124,143	119,787
Savings deposits	90,686	89,776
Time deposits, in amounts of $100,000 or more	43,743	49,242
Other time deposits	96,809	106,473
Total Deposits	489,869	$ 494,912
Scheduled maturities of time deposits [Abstract]
2,017	66,373
2,018	24,618
2,019	14,388
2,020	11,606
2,021	8,854
Thereafter	14,713
Time deposits	$ 140,552

10. Short-Term Borrowings (Deta

10. Short-Term Borrowings (Details Narrative) $ in Thousands	Dec. 31, 2016USD ($)contract	Dec. 31, 2015
Short-term Debt [Line Items]
Short term borrowings	$ 27,552
Average interest rate	3.97%	3.97%
Federal Home Loan Bank Borrowings [Member]
Short-term Debt [Line Items]
Short term borrowings	$ 20,000
Number of Secured loans | contract	2
Federal Home Loan Bank Borrowings [Member] | Minimum [Member]
Short-term Debt [Line Items]
Interest rate	3.84%
Federal Home Loan Bank Borrowings [Member] | Maximum [Member]
Short-term Debt [Line Items]
Interest rate	4.34%

11. Long-Term Debt (Details)

11. Long-Term Debt (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016		Dec. 31, 2015
Debt Instrument [Line Items]
Long-term debt	$ 40,146		$ 47,698
Contractual principal maturities of long-term debt [Abstract]
2,017	0
2,018	10,053
2,019	30,053
2,020	40
Long-term debt	40,146		47,698
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Long-term debt	$ 146		198
Issuance date for long term date	Aug. 23, 2005
Face amount of long term debt	$ 750		$ 750
Interest rate on long term debt (in hundredths)	0.00%		0.00%
Maturity date of long term debt	Aug. 24, 2020
Contractual principal maturities of long-term debt [Abstract]
Long-term debt	$ 146		$ 198
Federal Home Loan Bank Advances, with an annual interest rate of 3.53% [Member]
Debt Instrument [Line Items]
Long-term debt	$ 12,500		12,500
Issuance date for long term date	Aug. 29, 2012
Face amount of long term debt	$ 12,500		$ 12,500
Interest rate on long term debt (in hundredths)	3.53%		3.53%
Maturity date of long term debt	Aug. 29, 2019
Contractual principal maturities of long-term debt [Abstract]
Long-term debt	$ 12,500		$ 12,500
Federal Home Loan Bank Advances, with an annual interest rate of 3.70% [Member]
Debt Instrument [Line Items]
Long-term debt	$ 12,500		12,500
Issuance date for long term date	Aug. 29, 2012
Face amount of long term debt	$ 12,500		$ 12,500
Interest rate on long term debt (in hundredths)	3.70%		3.70%
Maturity date of long term debt	Aug. 29, 2019
Contractual principal maturities of long-term debt [Abstract]
Long-term debt	$ 12,500		$ 12,500
Federal Home Loan Bank Advances, with an annual interest rate of 2.73% [Member]
Debt Instrument [Line Items]
Long-term debt	$ 5,000		5,000
Issuance date for long term date	Aug. 29, 2012
Face amount of long term debt	$ 5,000		$ 5,000
Interest rate on long term debt (in hundredths)	2.73%		2.73%
Maturity date of long term debt	Aug. 29, 2018
Contractual principal maturities of long-term debt [Abstract]
Long-term debt	$ 5,000		$ 5,000
Federal Home Loan Bank Advances, with an annual interest rate of 3.74% [Member]
Debt Instrument [Line Items]
Long-term debt	$ 5,000		5,000
Issuance date for long term date	Aug. 29, 2012
Face amount of long term debt	$ 5,000		$ 5,000
Interest rate on long term debt (in hundredths)	3.74%		3.74%
Maturity date of long term debt	Aug. 29, 2019
Contractual principal maturities of long-term debt [Abstract]
Long-term debt	$ 5,000		$ 5,000
Federal Home Loan Bank Advances, with an annual interest rate of 2.43% [Member]
Debt Instrument [Line Items]
Long-term debt		[1]	7,500
Issuance date for long term date	Aug. 29, 2012
Face amount of long term debt	$ 7,500		$ 7,500
Interest rate on long term debt (in hundredths)	2.43%		2.43%
Maturity date of long term debt	Aug. 29, 2017
Contractual principal maturities of long-term debt [Abstract]
Long-term debt		[1]	$ 7,500
Federal Home Loan Bank Advances, with an annual interest rate of 2.86% [Member]
Debt Instrument [Line Items]
Long-term debt	$ 5,000		5,000
Issuance date for long term date	Aug. 29, 2012
Face amount of long term debt	$ 5,000		$ 5,000
Interest rate on long term debt (in hundredths)	2.86%		2.86%
Maturity date of long term debt	Aug. 29, 2018
Contractual principal maturities of long-term debt [Abstract]
Long-term debt	$ 5,000		$ 5,000
[1]	Included in Short Term Borrowings

11. Long-Term Debt (Details Nar

11. Long-Term Debt (Details Narrative) $ in Thousands	Dec. 31, 2016USD ($)
Commercial and Residential Mortgage Loan [Member]
Mortgage loans	$ 145,794

13. Stock and Earnings Per Sh68

13. Stock and Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
One to Four Family Residential, real estate secured impaired loans, fair value disclosure
Income available to common stockholders	$ 12	$ 1,337
Weighted average shares outstanding	8,107	7,851
Shares outstanding including assumed conversion	10,285	9,943
Basic earnings per share	$ 0	$ 0.17
Fully diluted earnings per share (including convertible preferred shares oustanding)	$ 0	$ 0.13

14. Profit Sharing and Retire69

14. Profit Sharing and Retirement Savings Plan (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Profit Sharing And Retirement Savings Plan Details Narrative
Discretionary profit sharing contribution (in hundredths)	1.50%
Employer's matching contribution of employee's initial contribution (in hundredths)	100.00%
Employee's initial contribution (in hundredths)	1.00%
Employer's matching contributions of employee's next contribution (in hundredths)	50.00%
Employee's post initial contribution (in hundredths)	5.00%
Cost of Bank contributions under savings plan	$ 216	$ 303

15. Stock Option Plan and Equ70

15. Stock Option Plan and Equity Compensation Plan (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Weighted Average Exercise Price [Roll Forward]
Options outstanding (in dollars per share)	$ 0	$ 15
Granted (in dollars per share)	0	0
Exercised (in dollars per share)	0	0
Expired (in dollars per share)	0	15
Options outstanding and exercisable (in dollars per share)	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options outstanding (in shares)	0	55,600
Granted (in shares)	0	0
Exercised (in shares)	0	0
Expired (in shares)	0	(55,600)
Options outstanding and exercisable (in shares)	0	0
Restricted Stock Awards Granted	5.10
Restricted Stock Awards Granted	$ 86,667
Stock Options [Member] | 2006 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Authorized (in shares)	200,000

16. Off-Balance Sheet Activit71

16. Off-Balance Sheet Activities (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Expiration period for letters of credit	1 year
Letter of credit [Member]
Financial instrument off balance sheet risk exposure	$ 373	$ 292
Line of credit [Member]
Financial instrument off balance sheet risk exposure	34,469	40,024
Loans payable [Member]
Financial instrument off balance sheet risk exposure	$ 10,334	$ 5,614

17. Commitments and Contingen72

17. Commitments and Contingencies (Details Narrative) $ in Thousands	Dec. 31, 2016USD ($)
Loss Contingencies [Line Items]
Federal Home Loan Bank advances outstanding	$ 67,698
Available credit at FHLB	56,000
Secured lines of available credit	5,000
Commercial and Residential Mortgage Loan [Member]
Loss Contingencies [Line Items]
Mortgage loans	$ 145,794

18. Fair Value Disclosures (Det

18. Fair Value Disclosures (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total AFS Securities	$ 95,073	$ 79,860
Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
State and Political Subdivisions	12,451	6,958
Mortgage Backed Securities	74,288	62,593
SBA Pools	8,334	10,309
Total AFS Securities	95,073	79,860
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
State and Political Subdivisions	0	0
Mortgage Backed Securities	0	0
SBA Pools	0	0
Total AFS Securities	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
State and Political Subdivisions	12,451	6,958
Mortgage Backed Securities	74,288	62,593
SBA Pools	8,334	10,309
Total AFS Securities	95,073	79,860
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
State and Political Subdivisions	0	0
Mortgage Backed Securities	0	0
SBA Pools	0	0
Total AFS Securities	$ 0	$ 0

18. Fair Value Disclosures, Loa

18. Fair Value Disclosures, Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real Estate Held for sale	$ 1,680	$ 0
Fair Value, Measurements, Nonrecurring [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Loans	4,869	7,098
Repossessions/OREO, net	2,768	5,724
Real Estate Held for sale	1,680
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Loans	0	0
Repossessions/OREO, net	0	0
Real Estate Held for sale	0
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Loans	0	0
Repossessions/OREO, net	0	0
Real Estate Held for sale	0
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Loans	4,869	7,098
Repossessions/OREO, net	2,768	$ 5,724
Real Estate Held for sale	$ 1,680

18. Fair Value Disclosures, Off

18. Fair Value Disclosures, Off-Balance Sheet Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 95,073	$ 79,860
Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	50,385	46,891
Securities available-for-sale	95,073	79,860
Other investments	6,637	6,592
Loans, net	404,838	426,429
Deposits	(489,869)	(494,912)
Other short term borrowings	(27,552)	(20,052)
Long-term debt	(40,146)	(47,698)
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	50,385	46,891
Securities available-for-sale	95,073	79,860
Other investments	6,637	6,592
Loans, net	406,851	419,907
Deposits	(422,730)	(472,197)
Other short term borrowings	(27,958)	(21,970)
Long-term debt	$ (41,825)	$ (50,313)

19. Related Party Transaction76

19. Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Loans to related parties activity [Roll Forward]
Balance, beginning	$ 7,723	$ 7,774
Additions	1,354	2,326
Reductions	(4,374)	(2,377)
Balance, ending	4,703	7,723
Unused commitments	667	667
Deposits from related parties	$ 3,784	$ 4,035

20. Restrictions on Cash (Detai

20. Restrictions on Cash (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Restrictions On Cash Details Narrative
Restricted Cash	$ 4,346	$ 3,892

21. Minimum Regulatory Capita78

21. Minimum Regulatory Capital Requirements (Details) - Highlands Union Bank [Member] - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Actual Capital [Abstract]
Total Risk-Based Capital (to Risk-Weighted Assets)		$ 49,588
Total Risk-Based Capital (to Risk-Weighted Assets) (in hundredths)		12.55%
Common Equity Tier 1 Capital to Risk Weighted Assets		$ 44,573
Common Equity Tier 1 Capital to Risk Weighted Assets (in hundredths)		11.28%
Tier 1 Capital (to Risk-Weighted Assets)		$ 44,573
Tier 1 Capital (to Risk-Weighted Assets) (in hundredths)		11.28%
Tier 1 Capital (to Adjusted Total Assets)		$ 44,573
Tier 1 Capital (to Adjusted Total Assets) (in hundredths)		7.33%
To be Well Capitalized under the Prompt Corrective Action Provisions [Abstract]
Total Risk-Based Capital (to Risk-Weighted Assets)	$ 38,792	$ 39,506
Common Equity Tier 1 Capital to Risk Weighted Assets	25,215	25,679
Tier 1 Capital (to Risk-Weighted Assets)	31,034	31,605
Tier 1 Capital (to Adjusted Total Assets)	$ 30,111	30,422
Minimum [Member]
Actual Capital [Abstract]
Total Risk-Based Capital (to Risk-Weighted Assets)		$ 50,523
Total Risk-Based Capital (to Risk-Weighted Assets) (in hundredths)		13.02%
Common Equity Tier 1 Capital to Risk Weighted Assets		$ 45,694
Common Equity Tier 1 Capital to Risk Weighted Assets (in hundredths)		11.78%
Tier 1 Capital (to Risk-Weighted Assets)		$ 45,694
Tier 1 Capital (to Risk-Weighted Assets) (in hundredths)		11.78%
Tier 1 Capital (to Adjusted Total Assets)		$ 45,694
Tier 1 Capital (to Adjusted Total Assets) (in hundredths)		7.59%
To be Well Capitalized under the Prompt Corrective Action Provisions [Abstract]
Total Risk-Based Capital (to Risk-Weighted Assets) (in hundredths)	10.00%	10.00%
Common Equity Tier 1 Capital to Risk Weighted Assets (in hundredths)	6.50%	6.50%
Tier 1 Capital (to Risk-Weighted Assets)Tier 1 Capital (to Risk-Weighted Assets) (in hundredths)	8.00%	8.00%
Tier 1 Capital (to Adjusted Total Assets) (in hundredths)	5.00%	5.00%

22. Restrictions on Dividends (

22. Restrictions on Dividends (Details)	12 Months Ended
	Dec. 31, 2016
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract]
Number of preceding years for retained net profits for approval of dividend payment	2

23. Other Operating Income an80

23. Other Operating Income and Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Other Income and Expenses [Abstract]
BOLI income	$ 396	$ 401
Other Contracted Services	763	775
Bank Franchise Taxes	423	367
FDIC Insurance Costs	693	863
Software Licensing / Maintenance	932	736
Postage and Freight	247	282
Legal	431	378
Other Loan Expense	167	330
Other Losses	124	450
Advertising	286	260
Audit	$ 253	$ 180

24. Condensed Parent Company 81

24. Condensed Parent Company Financial Statements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
ASSETS
Other investments	$ 6,637	$ 6,592
Other assets	2,878	2,432
Total Assets	612,678	616,982
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest, taxes and other liabilities	1,353	761
Other short term borrowings	27,552	20,052
Long Term Debt	40,146	47,698
Total Liabilities	558,920	563,422
STOCKHOLDERS' EQUITY	53,758	53,560	$ 52,802
Total Liabilities and Stockholders' Equity	612,678	616,982
CONSOLIDATED STATEMENTS OF INCOME (LOSS) [Abstract]
Interest and dividend income	23,394	22,763
Interest expense	(4,175)	(4,557)
(Loss) Income Before Income Taxes	(348)	132
Income tax benefit	360	1,205
Net Income	12	1,337
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	12	1,337
Adjustments to reconcile net income to net cash used in operating activities:
Restricted stock expense	54	0
Depreciation and amortization	954	1,024
(Increase) decrease in other assets	(5)	(175)
Increase (decrease) in other liabilities	592	253
Net Cash provided by operating activities	3,963	4,984
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (used in) investing activities	3,516	(25,267)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in Short Term Borrowings	7,500	1
Issuance of common stock	1,110	0
Decrease in Long Term Debt	(7,552)	(52)
Net cash provided by financing activities	(3,985)	11,364
Net increase (decrease) in cash and cash equivalents	3,494	(8,919)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	46,891	55,810
CASH AND CASH EQUIVALENTS AT END OF YEAR	50,385	46,891
Parent Company [Member]
ASSETS
Cash	224	14
Other investments	102	102
Equity in subsidiary	53,412	53,444
Other assets	20	0
Total Assets	53,758	53,560
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	53,758	53,560
CONSOLIDATED STATEMENTS OF INCOME (LOSS) [Abstract]
Interest and dividend income	4	4
Other income	0	0
Interest expense	0	0
Operating expense	(86)	(95)
(Loss) Income Before Income Taxes	(82)	(91)
Income tax benefit	27	31
Equity in undistributed earnings of subsidiary	67	1,397
Net Income	12	1,337
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	12	1,337
Adjustments to reconcile net income to net cash used in operating activities:
Restricted stock expense	55	0
Equity in undistributed earnings of subsidiary	(67)	(1,397)
(Increase) decrease in other assets	(50)	43
Increase (decrease) in other liabilities	0	0
Net Cash provided by operating activities	(50)	(17)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital contributed to subsidiary bank	(850)	(300)
Net cash (used in) investing activities	(850)	(300)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in Short Term Borrowings	0	0
Issuance of common stock	1,110	0
Issuance of preferred stock	0	0
Redemption of capital securities	0	0
Net cash provided by financing activities	1,110	0
Net increase (decrease) in cash and cash equivalents	210	(317)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	14	331
CASH AND CASH EQUIVALENTS AT END OF YEAR	$ 224	$ 14