American River Bancshares (AMRB) 10-Q 4 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 04, 2015
Document and Entity Information:
Entity Registrant Name	AMERICAN RIVER BANKSHARES
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Entity Central Index Key	1,108,236
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		7,343,649
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEET (Una

CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 21,638	$ 22,449
Interest-bearing deposits in banks	1,000	1,000
Investment securities:
Available-for-sale, at fair value	266,740	289,064
Held-to-maturity, at amortized cost	674	862
Loans and leases, less allowance for loan and lease losses of $4,929 at September 30, 2015 and $5,301 at December 31, 2014	289,774	258,057
Premises and equipment, net	1,435	1,518
Federal Home Loan Bank stock	3,779	3,686
Goodwill and other intangible assets	16,321	16,321
Other real estate owned	3,781	4,647
Bank owned life insurance	14,406	14,167
Accrued interest receivable and other assets	5,646	5,983
Total Assets	625,194	617,754
Deposits:
Noninterest bearing	178,038	155,698
Interest-bearing	343,331	354,995
Total deposits	521,369	510,693
Short-term borrowings	3,500	3,500
Long-term borrowings	7,500	7,500
Accrued interest payable and other liabilities	6,547	6,414
Total liabilities	538,916	$ 528,107
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value: 2,000,000 shares authorized: none Outstanding	0	$ 0
Common stock, no par value; 20,000,000 shares authorized; issued and outstanding – 7,343,649 shares at September 30, 2015 and 8,089,615 shares at December 31, 2014	49,483	57,126
Retained earnings	32,961	29,150
Accumulated other comprehensive income, net of taxes	3,834	3,371
Total shareholders' equity	86,278	89,647
Total liabilities and shareholders' euity	$ 625,194	$ 617,754

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Allowance for loan and lease losses (in dollars)	$ 4,929	$ 5,301
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	7,343,649	8,089,615
Common stock, shares outstanding	7,343,649	8,089,615

CONSOLIDATED STATEMENT OF INCOM

CONSOLIDATED STATEMENT OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest income:
Taxable	$ 3,319	$ 3,348	$ 10,140	$ 10,320
Exempt from Federal income taxes	92	7	222	10
Interest on deposits in banks	2	1	4	3
Interest and dividends on investment securities:
Taxable	1,633	1,406	4,706	4,084
Exempt from Federal income taxes	190	198	571	600
Dividends	0	6	10	12
Total interest income	5,458	4,966	15,643	15,029
Interest expense:
Interest on deposits	202	253	624	769
Interest on borrowings	38	34	108	113
Total interest expense	240	287	732	882
Net interest income	5,218	4,679	14,911	14,147
Provision for loan and lease losses	0	(200)	0	(200)
Net interest income after provision for loan and lease losses	5,218	4,879	14,911	14,347
Noninterest income:
Service charges on deposit accounts	132	129	376	434
Gain on sale of securities	33	83	251	100
Income from other real estate owned properties	87	78	248	290
Other noninterest income	238	230	707	706
Total noninterest income	490	520	1,582	1,530
Noninterest expense:
Salaries and employee benefits	2,185	2,242	6,500	6,479
Occupancy	294	295	888	898
Furniture and equipment	171	190	527	556
Federal Deposit Insurance Corporation assessments	83	94	239	288
Expenses related to other real estate owned	58	34	260	156
Other expense	641	807	2,246	2,637
Total noninterest expense	3,432	3,662	10,660	11,014
Income before provision for income taxes	2,276	1,737	5,833	4,863
Provision for income taxes	807	613	2,022	1,698
Net income	$ 1,469	$ 1,124	$ 3,811	$ 3,165
Basic earnings per share	$ 0.20	$ 0.14	$ 0.50	$ 0.39
Diluted earnings per share	0.20	0.14	0.50	0.39
Cash dividends per share	$ 0	$ 0	$ 0	$ 0

CONSOLIDATED STATEMENT OF COMPR

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 1,469	$ 1,124	$ 3,811	$ 3,165
Other comprehensive (loss) income:
Unrealized holding gains (losses) on investment securities arising during the period	769	(844)	1,023	3,472
Deferred tax (expense) benefit	(308)	338	(409)	(1,389)
Unrealized holding gains (losses) on investment securities arising during the period, net of tax	461	(506)	614	2,083
Reclassification adjustment for realized gains included in net income	(33)	(83)	(251)	(100)
Tax effect	13	33	100	40
Realized gains, net of tax	(20)	(50)	(151)	(60)
Total other comprehensive income (loss)	441	(556)	463	2,023
Comprehensive income	$ 1,910	$ 568	$ 4,274	$ 5,188

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income	Total
Begining Balance, Amount at Dec. 31, 2013	$ 61,108	$ 24,789	$ 1,123	$ 87,020
Begining Balance, Shares at Dec. 31, 2013	8,489,247
Net income		4,361		4,361
Net change in unrealized gains on available-for-sale investment securities			2,248	2,248
Net restricted stock awarded and related compensation expense, Amount	$ 147			147
Net restricted stock awarded and related compensation expense, Shares	24,830
Stock option compensation expense, Amount	$ 19			19
Retirement of common stock, Amount	$ (4,148)			(4,148)
Retirement of common stock, Shares	(424,462)
Ending Balance, Amount at Dec. 31, 2014	$ 57,126	29,150	3,371	89,647
Ending Balance, Shares at Dec. 31, 2014	8,089,615
Net income		3,811		3,811
Net change in unrealized gains on available-for-sale investment securities			463	463
Net restricted stock awarded and related compensation expense, Amount	$ 175			175
Net restricted stock awarded and related compensation expense, Shares	45,023
Stock option compensation expense, Amount	$ 25			25
Retirement of common stock, Amount	$ (7,843)			(7,843)
Retirement of common stock, Shares	(790,989)
Ending Balance, Amount at Sep. 30, 2015	$ 49,483	$ 32,961	$ 3,834	$ 86,278
Ending Balance, Shares at Sep. 30, 2015	7,343,649

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 3,811	$ 3,165
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses	0	(200)
Decrease in deferred loan origination fees, net	(48)	(53)
Depreciation and amortization	324	339
Gain on sale and call of investment securities	(251)	(100)
Amortization of investment security premiums and discounts, net	2,470	3,562
Increase in cash surrender values of life insurance policies	(239)	(202)
Stock based compensation expense	200	119
Loss (gain) on sale and write-down of other real estate owned	68	(195)
Decrease in accrued interest receivable and other assets	27	257
Increase (decrease) in accrued interest payable and other liabilities	133	(11)
Net cash provided by operating activities	6,495	6,681
Cash flows from investing activities:
Proceeds from the sale of available-for-sale investment securities	23,764	11,228
Proceeds from matured available-for-sale investment securities	175	105
Proceeds from called available-for-sale investment securities	0	270
Purchases of available-for-sale investment securities	(41,254)	(45,752)
Proceeds from principal repayments for available-for-sale investment securities	38,193	29,877
Proceeds from principal repayments for held-to-maturity investment securities	188	251
Purchases of bank owned life insurance	0	(1,350)
Net increase in interest-bearing deposits in banks	0	0
Net (increase) decrease in loans	(31,669)	4,150
Proceeds from sale of other real estate	924	1,834
Capitalized additions to other real estate	(126)	(54)
Net increase in FHLB stock	(93)	(438)
Purchases of equipment	(241)	(370)
Net cash used in investing activities	(10,139)	(189)
Cash flows from financing activities:
Net increase in demand, interest-bearing and savings deposits	12,200	31,232
Net decrease in time deposits	(1,524)	(4,527)
Net decrease increase in short-term borrowings	0	(4,500)
Net decrease in long-term borrowings	0	(500)
Cash paid to repurchase common stock	(7,843)	(4,148)
Net cash used in financing activities	2,833	17,557
(Decrease) increase in cash and cash equivalents	(811)	24,049
Cash and cash equivalents at beginning of year	22,449	17,948
Cash and cash equivalents at end of period	$ 21,638	$ 41,997

1. CONSOLIDATED FINANCIAL STATE

1. CONSOLIDATED FINANCIAL STATEMENTS	9 Months Ended
	Sep. 30, 2015
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS	In the opinion of management, the unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial position of American River Bankshares (the “Company”) at September 30, 2015 and December 31, 2014, the results of its operations and statement of comprehensive income for the three-month and nine-month periods ended September 30, 2015 and 2014, its cash flows for the nine-month periods ended September 30, 2015 and 2014 and its statement of changes in shareholders’ equity for the year ended December 31, 2014 and the nine months ended September 30, 2015 in conformity with accounting principles generally accepted in the United States of America. Certain disclosures normally presented in the notes to the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The Company believes that the disclosures are adequate to make the information not misleading. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2014 annual report on Form 10-K. The results of operations for the three-month and nine-month periods ended September 30, 2015 may not necessarily be indicative of the operating results for the full year. In preparing such financial statements, 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 revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan and lease losses, the provision for taxes, the valuation of goodwill and the estimated fair value of investment securities, impaired loans and other real estate owned. Management has determined that since all of the banking products and services offered by the Company are available in each branch office of American River Bank, all branch offices are located within the same economic environment and management does not allocate resources based on the performance of different lending or transaction activities, it is appropriate to aggregate all of the branch offices and report them as a single operating segment. No client accounts for more than ten percent (10%) of revenues for the Company or American River Bank.

2. STOCK-BASED COMPENSATION

2. STOCK-BASED COMPENSATION	9 Months Ended
	Sep. 30, 2015
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	Equity Plans On March 17, 2010, the Board of Directors adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan was approved by the Company’s shareholders on May 20, 2010. In 2000, the Board of Directors adopted and the Company’s shareholders approved a stock option plan (the “2000 Plan”), under which 176,321 options remain outstanding at September 30, 2015. At September 30, 2015, under the 2010 Plan, there were 76,461 stock options and 57,516 restricted shares outstanding and the total number of authorized shares that remain available for issuance was 1,395,985. The 2010 Plan provides for the following types of stock-based awards: incentive stock options; nonqualified stock options; stock appreciation rights; restricted stock; restricted performance stock; unrestricted Company stock; and performance units. Awards under the 2000 Plan were either incentive stock options or nonqualified stock options. Under the 2010 Plan, the awards may be granted to employees and directors under incentive and nonqualified option agreements, restricted stock agreements, and other awards agreements. The 2010 Plan and the 2000 Plan (collectively the “Plans”) require that the option price may not be less than the fair market value of the stock at the date the option is awarded. The option awards under the Plans expire on dates determined by the Board of Directors, but not later than ten years from the date of award. The vesting period is generally five years; however, the vesting period can be modified at the discretion of the Company’s Board of Directors. Outstanding option awards under the Plans are exercisable until their expiration, however, no new options will be awarded under the 2000 Plan. New shares are issued upon exercise of an option. The award date fair value of awards is determined by the market price of the Company’s common stock on the date of award and is recognized ratably as compensation expense or director expense over the vesting periods. The shares of common stock awarded pursuant to such agreements vest in increments over one to five years from the date of award. The shares awarded to employees and directors under the restricted stock agreements vest on the applicable vesting dates only to the extent the recipient of the shares is then an employee or a director of the Company or one of its subsidiaries, and each recipient will forfeit all of the shares that have not vested on the date his or her employment or service is terminated. Equity Compensation For the three-month periods ended September 30, 2015 and 2014, the compensation cost recognized for equity compensation was $73,000 and $48,000, respectively. The recognized tax benefit for equity compensation expense was $25,000 and $17,000, respectively, for the three-month periods ended September 30, 2015 and 2014. For the nine-month periods ended September 30, 2015 and 2014, the compensation cost recognized for equity compensation was $200,000 and $119,000, respectively. The recognized tax benefit for equity compensation expense was $70,000 and $42,000, respectively, for the nine-month periods ended September 30, 2015 and 2014. At September 30, 2015, the total compensation cost related to nonvested stock option awards not yet recorded was $149,000. This amount will be recognized over the next 4.75 years and the weighted average period of recognizing these costs is expected to be 2.25 years. At September 30, 2015, the total compensation cost related to restricted stock awards not yet recorded was $424,000. This amount will be recognized over the next 4.75 years and the weighted average period of recognizing these costs is expected to be 1.89 years. Equity Plans Activity Stock Options There were no stock options awarded during the three-month period ended September 30, 2015. There were 26,427 stock options awarded during the nine-month period ended September 30, 2015 at a weighted average exercise price of $9.56. There were no stock options awarded during the three-month period ended September 30, 2014. There were 32,705 stock options awarded during the nine-month period ended September 30, 2014 at a weighted average exercise price of $8.85. The weighted average award date fair value of options awarded for the nine-month period ended September 30, 2015 was $3.24. The weighted average award date fair value of options awarded for the nine-month period ended September 30, 2014 was $2.44. A summary of option activity under the Plans as of September 30, 2015 and changes during the period then ended is presented below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding at January 1, 2015 271,700 $ 16.27 3.1 years $ 82 Awarded 26,427 9.56 — — Exercised — — — — Cancelled 45,345 18.17 — — Outstanding at September 30, 2015 252,782 $ 15.23 3.9 years $ 120 Vested at September 30, 2015 193,246 $ 17.16 2.4 years $ 80 Non-vested at September 30, 2015 59,536 $ 8.96 8.9 years $ 40 Restricted Stock There were no shares of restricted stock awarded during the three-month period ended September 30, 2015 and 45,023 shares of restricted stock awarded during the nine-month period ended September 30, 2015. There were no shares of restricted stock awarded during the three-month period ended September 30, 2014 and 24,830 shares of restricted stock awarded during the nine-month period ended September 30, 2014. Of the restricted shares awarded in 2015, 12,552 restricted shares will vest one year from the date of the award, 11,939 vest over five years at 20% per year from the date of the award, and 20,532 are performance based awards that must meet minimum performance criteria before they begin to vest. If the performance metrics are not met, up to 100% of the award may be forfeited and if the performance metrics are exceeded, the awards may be increased by up to 150% of the original award. Of the restricted shares awarded in 2014, 13,560 restricted shares vested one year from the date of the award and 11,270 shares vest over five years at 20% per year from the date of the award. Award date fair value is determined by the market price of the Company’s common stock on the date of award ($9.41 on March 18, 2015, $9.56 on May 22, 2015 and $8.85 on May 22, 2014). There were 3,274 restricted share awards that were fully vested during the three-month period ended September 30, 2015 and 20,345 restricted share awards that were fully vested during the nine-month period ended September 30, 2015. There were 3,272 restricted share awards that were fully vested during the three-month period ended September 30, 2014 and 15,982 restricted share awards that were fully vested during the nine-month period ended September 30, 2014. There were no restricted share awards forfeited during the three-month and nine-month periods ended September 30, 2015 and 2014. The intrinsic value of nonvested restricted shares at September 30, 2015 was $553,000. Restricted Stock Shares Weighted Average Award Date Fair Value Nonvested at January 1, 2015 32,838 $ 8.31 Awarded 45,023 9.49 Less: Vested 20,345 8.36 Less: Cancelled — — Nonvested at September 30, 2015 57,516 $ 9.21 Other Equity Awards There were no stock appreciation rights; unrestricted Company stock; or performance units awarded during the three-month or nine-month month periods ended September 30, 2015 or 2014. The intrinsic value used for stock options and restricted stock was derived from the market price of the Company’s common stock of $9.62 as of September 30, 2015.

3. COMMITMENTS AND CONTINGENCIE

3. COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2015
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	In the normal course of business there are outstanding various commitments to extend credit which are not reflected in the financial statements, including loan commitments of approximately $29,150,000 and standby letters of credit of approximately $363,000 at September 30, 2015 and loan commitments of approximately $32,639,000 and standby letters of credit of approximately $356,000 at December 31, 2014. Such commitments relate primarily to real estate construction loans, revolving lines of credit and other commercial loans. However, all such commitments will not necessarily culminate in actual extensions of credit by the Company during 2015 as some of these are expected to expire without being fully drawn upon. Standby letters of credit are commitments issued to guarantee the performance or financial obligation of a client to a third party. These guarantees are issued primarily relating to purchases of inventory, insurance programs, performance obligations to government agencies, or as security for real estate rents by commercial clients and are typically short-term in nature. Credit risk is similar to that involved in extending loan commitments to clients and accordingly, evaluation and collateral requirements similar to those for loan commitments are used. The majority of all such commitments are collateralized. The fair value of the liability related to these standby letters of credit, which represents the fees received for issuing the guarantees, was not significant September 30, 2015 or December 31, 2014.

4. EARNINGS PER SHARE COMPUTATI

4. EARNINGS PER SHARE COMPUTATION	9 Months Ended
	Sep. 30, 2015
EARNINGS PER SHARE COMPUTATION
EARNINGS PER SHARE COMPUTATION	Basic earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period (7,481,529 and 7,653,109 shares for the three-month and nine-month periods ended September 30, 2015, and 8,063,589 and 8,154,947 for the three-month and nine-month periods ended September 30, 2014). Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options or restricted stock, result in the issuance of common stock. Diluted earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period plus the dilutive effect of stock based awards. There were 19,930 and 14,878, respectively, dilutive shares for the three-month and nine-month periods ended September 30, 2015 and 11,934 and 11,835, respectively, dilutive shares for the three-month and nine-month periods ended September 30, 2014. For the three-month periods ended September 30, 2015 and 2014, there were 192,106 and 211,024 stock options, respectively, that were excluded from the calculation as they were considered antidilutive. For the nine-month periods ended September 30, 2015 and 2014, there were 192,106 and 211,024 stock options, respectively, that were excluded from the calculation as they were considered antidilutive. Earnings per share is retroactively adjusted for stock dividends and stock splits, if applicable, for all periods presented.

5. INVESTMENT SECURITIES

5. INVESTMENT SECURITIES	9 Months Ended
	Sep. 30, 2015
INVESTMENTS SECURITIES (Tables)
INVESTMENT SECURITIES	The amortized cost and estimated fair values of investment securities at September 30, 2015 and December 31, 2014 consisted of the following (dollars in thousands): Available-for-Sale September 30, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 234,938 $ 5,058 $ (175 ) $ 239,821 Obligations of states and political subdivisions 23,858 1,406 — 25,264 Corporate bonds 1,503 68 — 1,571 Equity securities: Corporate stock 51 33 — 84 $ 260,350 $ 6,565 $ (175 ) $ 266,740 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 257,002 $ 4,715 $ (602 ) $ 261,115 Obligations of states and political subdivisions 24,886 1,423 (20 ) 26,289 Corporate bonds 1,504 79 — 1,583 Equity securities: Corporate stock 54 23 — 77 $ 283,446 $ 6,240 $ (622 ) $ 289,064 Net unrealized gains on available-for-sale investment securities totaling $6,390,000 were recorded, net of $2,565,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at September 30, 2015. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the three-month period ended September 30, 2015 totaled $8,381,000 and $33,000, respectively, and for the nine-month period ended September 30, 2015 totaled $23,764,000 and $251,000, respectively. There were no transfers of available-for-sale investment securities for the three-month and nine-month periods ended September 30, 2015. Net unrealized gains on available-for-sale investment securities totaling $5,618,000 were recorded, net of $2,247,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2014. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the three-month period ended September 30, 2014 totaled $8,656,000 and $83,000, respectively, and for the nine-month period ended September 30, 2014 totaled $11,288,000 and $100,000, respectively. There were no transfers of available-for-sale investment securities for the three-month and nine-month periods ended September 30, 2014. Held-to-Maturity September 30, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 674 $ 52 $ — $ 726 December 31, 2014 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 862 $ 60 $ — $ 922 There were no sales or transfers of held-to-maturity investment securities for the periods ended September 30, 2015 and September 30, 2014. Investment securities with unrealized losses at September 30, 2015 and December 31, 2014 are summarized and classified according to the duration of the loss period as follows (dollars in thousands): September 30, 2015 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 21,090 $ (164 ) 2,268 (11 ) $ 23,358 $ (175 ) $ 21,090 $ (164 ) $ 2,268 $ (11 ) $ 23,358 $ (175 ) December 31, 2014 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 57,145 $ (503 ) $ 10,006 $ (99 ) $ 67,151 $ (602 ) Obligations of states and political subdivisions — — 649 (20 ) 649 (20 ) $ 57,145 $ (503 ) $ 10,655 $ (119 ) $ 67,800 $ (622 ) There were no held-to-maturity investment securities with unrealized losses as of September 30, 2015 or December 31, 2014. At September 30, 2015, the Company held 217 securities of which 13 were in a loss position for less than twelve months and one was in a loss position for twelve months or more. Of the 13 securities in a loss position for less than twelve months and the single security that was in a loss position for greater than twelve months, all were U.S. Government Agencies and Sponsored Agencies securities. At December 31, 2014, the Company held 223 securities of which 25 were in a loss position for less than twelve months and six were in a loss position for twelve months or more. Of the 25 securities in a loss position for less than twelve months, 22 were U.S. Government Agencies and Sponsored Agencies securities and three were obligations of states or political subdivisions. The six securities that were in a loss position for greater than twelve months consisted of five U.S. Government Agencies and Sponsored Agencies securities and one obligation of states or political subdivisions. The unrealized loss on the Company’s U.S. Government Agencies and Sponsored Agencies securities is primarily driven by interest rates. Because the decline in market value is attributable to a change in interest rates and not credit quality and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be until maturity, management does not consider these investments to be other-than-temporarily impaired. The amortized cost and estimated fair values of investment securities at September 30, 2015 by contractual maturity are shown below (dollars in thousands). Available-for-Sale Held-to-Maturity Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Within one year $ — $ — After one year through five years 4,386 4,541 After five years through ten years 15,173 16,157 After ten years 5,802 6,137 25,361 26,835 Investment securities not due at a single maturity date: Mortgage-backed securities 234,938 239,821 $ 674 $ 726 Corporate stock 51 84 — — $ 260,350 $ 266,740 $ 674 $ 726 Expected maturities may differ from contractual maturities because the issuers of some of the securities have the right to call or prepay obligations with or without call or prepayment penalties.

6. IMPAIRED AND NONPERFORMING L

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED	9 Months Ended
	Sep. 30, 2015
IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED
IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED	At September 30, 2015 and December 31, 2014, the recorded investment in nonperforming loans and leases was approximately $1,932,000 and $1,653,000, respectively. Nonperforming loans and leases include all such loans and leases that are either placed on nonaccrual status or are 90 days past due as to principal or interest but still accrue interest because such loans are well-secured and in the process of collection. The Company considers a loan to be impaired when, based on current information and events, it is probable that it will be unable to collect all amounts due (principal and interest) according to the contractual terms of the original loan agreement. At September 30, 2015, the recorded investment in loans and leases that were considered to be impaired totaled $23,110,000, which includes $1,725,000 in nonaccrual loans and leases and $21,385,000 in performing loans and leases. Of the total impaired loans of $23,110,000, loans totaling $13,178,000 were deemed to require no specific reserve and loans totaling $9,932,000 were deemed to require a related valuation allowance of $966,000. At December 31, 2014, the recorded investment in loans and leases that were considered to be impaired totaled $25,120,000 and had a related valuation allowance of $1,603,000. At September 30, 2015 and December 31, 2014, the recorded investment in other real estate owned (“OREO”) was $3,781,000 and $4,647,000, respectively. At September 30, 2015, the Company did not own any residential OREO properties and there were $338,000 of residential properties in the process of foreclosure. During the first quarter of 2015, the Company sold two adjoining parcels of land in Sacramento County that did not result in a gain or loss at the time of sale; however, prior to sale, the book value of this property was adjusted by $76,000 with a charge to expense during the first quarter of 2015. The Company did not add any properties to OREO during the first quarter of 2015. During the second quarter of 2015, the Company did not foreclose on any property and an OREO property in Amador County consisting of unimproved land was sold. No gain or loss was recorded as a result of the sale. During the third quarter of 2015, the Company did not foreclose on any property or sell any OREO property. The Company periodically obtains property valuations to determine whether the recorded book value is considered fair value. During the third quarter of 2015, this valuation process did not result in the Company adjusting any book values. The September 30, 2015 OREO balance of $3,781,000 consisted of four properties including two commercial real estate properties in the total amount of $2,522,000 and two commercial unimproved land properties totaling $1,259,000. Nonperforming loans and leases and OREO at September 30, 2015 and December 31, 2014 are summarized as follows: (in thousands) September 30, December 31, 2015 2014 Nonaccrual loans and leases that are current to terms (less than 30 days past due) $ 123 $ 13 Nonaccrual loans and leases that are past due 1,685 1,640 Loans and leases past due 90 days and accruing interest 124 — Other assets 878 878 Other real estate owned 3,781 4,647 Total nonperforming assets $ 6,591 $ 7,178 Nonperforming loans and leases to total loans and leases 0.66 % 0.63 % Total nonperforming assets to total assets 1.05 % 1.16 % Impaired loans and leases as of and for the periods ended September 30, 2015 and December 31, 2014 are summarized as follows: (in thousands) As of September 30, 2015 As of December 31, 2014 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial $ — $ — $ — $ — $ — $ — Real estate-commercial 12,840 13,473 — 10,684 11,398 — Real estate-residential 338 338 — 338 425 — Consumer — — — 37 37 — Subtotal $ 13,178 $ 13,811 $ — $ 11,059 $ 11,860 $ — With an allowance recorded: Commercial $ 131 $ 131 $ 32 $ 769 $ 769 $ 344 Real estate-commercial 6,739 6,837 647 9,773 9,857 949 Real estate-multi-family 490 490 6 496 496 38 Real estate-residential 2,129 2,215 213 2,524 2,637 237 Agriculture 373 373 39 381 381 13 Consumer 70 70 29 118 118 22 Subtotal $ 9,932 $ 10,116 $ 966 $ 14,061 $ 14,258 $ 1,603 Total: Commercial $ 131 $ 131 $ 32 $ 769 $ 769 $ 344 Real estate-commercial 19,579 20,310 647 20,457 21,255 949 Real estate-multi-family 490 490 6 496 496 38 Real estate-residential 2,467 2,553 213 2,862 3,062 237 Agriculture 373 373 39 381 381 13 Consumer 70 70 29 155 155 22 $ 23,110 $ 23,927 $ 966 $ 25,120 $ 26,118 $ 1,603 The following table presents the average balance related to impaired loans and leases for the periods indicated (in thousands): Average Recorded Investments for the three months ended Average Recorded Investments for the nine months ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Commercial $ 125 $ 1,455 $ 145 $ 1,053 Real estate-commercial 19,336 19,735 19,750 20,581 Real estate-multi-family 491 1,643 493 1,638 Real estate-construction — 237 — 218 Real estate-residential 2,473 2,910 2,511 2,901 Agriculture 375 194 377 388 Consumer 91 163 77 162 Total $ 22,890 $ 26,337 $ 23,352 $ 26,941 The following table presents the interest income recognized on impaired loans and leases for the periods indicated (in thousands): Interest Income Recognized for the three months ended Interest Income Recognized for the nine months ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Commercial $ 2 $ 5 $ 7 $ 14 Real estate-commercial 259 259 728 826 Real estate-multi-family 8 19 21 57 Real estate-construction — 3 — 9 Real estate-residential 14 30 69 97 Agriculture 5 3 13 14 Consumer — 1 — 3 Total $ 288 $ 320 $ 838 $ 1,020

7. TROUBLED DEBT RESTRUCTURINGS

7. TROUBLED DEBT RESTRUCTURINGS	9 Months Ended
	Sep. 30, 2015
TROUBLED DEBT RESTRUCTURINGS
TROUBLED DEBT RESTRUCTURINGS	At September 30, 2015, there were 15 loans and leases that were considered to be troubled debt restructurings. Of these loans and leases, 11 are currently performing (less than ninety days past due) totaling $9,093,000 and four are considered nonperforming (and included in the $1,932,000 discussed in Note 6), totaling $1,226,000. Of the four TDRs considered nonperforming, two are current to the modified terms. At September 30, 2015 and December 31, 2014, there were no unfunded commitments on those loans considered troubled debt restructures. See also “Impaired Loans and Leases” in “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Company has allocated $262,000 and $829,000, respectively, as specific reserves for loans whose terms have been modified as troubled debt restructurings as of September 30, 2015 and December 31, 2014. During the nine-month period ended September 30, 2015, the terms of six loans were modified as troubled debt restructurings. Three of these loans were renewals of previously reported loans and three were new TDRs. The modifications of the terms of these loans consisted of extensions of the maturity date and/or interest rates lower than the original loan rate. There were no loans modified as troubled debt restructurings during the three months ended September 30, 2015. The following table presents loans by class modified as troubled debt restructurings during the nine months ended September 30, 2015 (dollars in thousands): Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Commercial 1 $ 47 $ 47 Real estate - commercial 2 1,645 1,645 Real estate - residential 2 416 416 Consumer 1 23 23 Total 6 $ 2,131 $ 2,131 The troubled debt restructurings described above increased the allowance for loan and lease losses by $151,000 and resulted in no charge-offs during the nine months ended September 30, 2015. The following table presents loans by class modified as troubled debt restructurings during the three months ended September 30, 2014 (dollars in thousands): Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Real estate - commercial 3 $ 890 $ 890 Consumer 1 7 7 Total 4 $ 897 $ 897 The following table presents loans by class modified as troubled debt restructurings during the nine months ended September 30, 2014 (dollars in thousands): Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Real estate - commercial 8 $ 5,925 $ 5,925 Consumer 2 52 52 Total 10 $ 5,977 $ 5,977 The troubled debt restructurings described above increased the allowance for loan and lease losses by $93,000 and resulted in no charge-offs during the three months ended September 30, 2014 and increased the allowance for loan and lease losses by $246,000 and resulted in no charge-offs during the nine months ended September 30, 2014. There were no payment defaults on troubled debt restructurings within twelve months following the modification for the three-month and nine-month periods ended September 30, 2015 or September 30, 2014.

8. ALLOWANCE FOR LOAN AND LEASE

8. ALLOWANCE FOR LOAN AND LEASE LOSSES	9 Months Ended
	Sep. 30, 2015
Schedule of Troubled Debt Restructurings on Financing Receivables (Tables)
ALLOWANCE FOR LOAN AND LEASE LOSSES	The Company’s loan and lease portfolio allocated by management’s internal risk ratings as of September 30, 2015 and December 31, 2014 are summarized below: September 30, 2015 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 30,106 $ 175,756 $ 21,482 $ 4,490 $ 12,642 Watch 1,227 13,202 496 6,445 2,122 Special mention — 13,605 — 323 729 Substandard 2,936 1,782 — — 814 Doubtful — — — — — Total $ 34,269 $ 204,345 $ 21,978 $ 11,258 $ 16,307 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 837 $ 1,986 $ 2,411 $ 249,710 Watch — — 772 24,264 Special mention 372 229 15,258 Substandard — — 178 5,710 Doubtful — — — — Total $ 837 $ 2,358 $ 3,590 $ 294,942 December 31, 2014 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 20,179 $ 163,091 $ 13,663 $ 3,327 $ 9,364 Watch 1,280 13,724 504 4,372 2,504 Special mention 101 13,583 — 329 603 Substandard 3,626 3,473 — — 838 Doubtful or loss — — — — — Total $ 25,186 $ 193,871 $ 14,167 $ 8,028 $ 13,309 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 1,286 $ 2,501 $ 3,424 $ 216,835 Watch — — 1,041 23,425 Special mention — 381 268 15,265 Substandard — — 183 8,120 Doubtful — — — — Total $ 1,286 $ 2,882 $ 4,916 $ 263,645 The allocation of the Company’s allowance for loan and lease losses and by portfolio segment and by impairment methodology are summarized below: September 30, 2015 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2015 $ 1,430 $ 2,317 $ 130 $ 583 $ 399 $ 2 $ 62 $ 124 $ 254 $ 5,301 Provision for loan losses 38 (58 ) 27 160 (133 ) — 14 (24 ) (24 ) — Loans charged off (609 ) — — — — (1 ) — (6 ) — (616 ) Recoveries 88 41 — — 113 — — 2 — 244 Ending balance, September 30, 2015 $ 947 $ 2,300 $ 157 $ 743 $ 379 $ 1 $ 76 $ 96 $ 230 $ 4,929 Ending balance: Individually evaluated for impairment $ 32 $ 647 $ 6 $ — $ 213 $ — $ 39 $ 29 $ — $ 966 Ending balance: Collectively evaluated for impairment $ 915 $ 1,653 $ 151 $ 743 $ 166 $ 1 $ 37 $ 67 $ 230 $ 3,963 Loans Ending balance $ 34,269 $ 204,345 $ 21,978 $ 11,258 $ 16,307 $ 837 $ 2,358 $ 3,590 $ — $ 294,942 Ending balance: Individually evaluated for impairment $ 131 $ 19,579 $ 490 $ — $ 2,467 $ — $ 373 $ 70 $ — $ 23,110 Ending balance: Collectively evaluated for impairment $ 34,138 $ 184,766 $ 21,488 $ 11,258 $ 13,840 $ 837 $ 1,985 $ 3,520 $ — $ 271,832 Allowance for Loan and Lease Losses Beginning balance, June 30, 2015 $ 1,652 $ 1,968 $ 107 $ 807 $ 385 $ 1 $ 50 $ 122 $ 267 $ 5,359 Provision for loan losses (161 ) 331 50 (64 ) (119 ) — 26 (26 ) (37 ) — Loans charged off (609 ) — — — — — — — — (609 ) Recoveries 65 1 — — 113 — — — — 179 Ending balance, September 30, 2015 $ 947 $ 2,300 $ 157 $ 743 $ 379 $ 1 $ 76 $ 96 $ 230 $ 4,929 December 31, 2014 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Ending balance: Individually evaluated for impairment $ 344 $ 949 $ 38 $ — $ 237 $ — $ 13 $ 22 $ — $ 1,603 Ending balance: Collectively evaluated for impairment $ 1,086 $ 1,368 $ 92 $ 583 $ 162 $ 2 $ 49 $ 102 $ 254 $ 3,698 Loans Ending balance $ 25,186 $ 193,871 $ 14,167 $ 8,028 $ 13,309 $ 1,286 $ 2,882 $ 4,916 $ — $ 263,645 Ending balance: Individually evaluated for impairment $ 769 $ 20,457 $ 496 $ — $ 2,862 $ — $ 381 $ 155 $ — $ 25,120 Ending balance: Collectively evaluated for impairment $ 24,417 $ 173,414 $ 13,671 $ 8,028 $ 10,447 $ 1,286 $ 2,501 $ 4,761 $ — $ 238,525 September 30, 2014 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2014 $ 885 $ 2,401 $ 242 $ 542 $ 825 $ 4 $ 80 $ 161 $ 206 $ 5,346 Provision for loan losses 317 (175 ) 26 22 (396 ) (5 ) (16 ) (103 ) 130 (200 ) Loans charged off — — — — — — — (74 ) — (74 ) Recoveries 176 40 — 2 17 3 — 150 — 388 Ending balance, September 30, 2014 $ 1,378 $ 2,266 $ 268 $ 566 $ 446 $ 2 $ 64 $ 134 $ 336 $ 5,460 Allowance for Loan and Lease Losses Beginning balance, June 30, 2014 $ 1,391 $ 2,149 $ 262 $ 441 $ 708 $ 2 $ 69 $ 131 $ 309 $ 5,462 Provision for loan losses (48 ) 116 6 125 (274 ) — (5 ) (147 ) 27 (200 ) Loans charged off — — — — — — — — — — Recoveries 35 1 — — 12 — — 150 — 198 Ending balance, September 30, 2014 $ 1,378 $ 2,266 $ 268 $ 566 $ 446 $ 2 $ 64 $ 134 $ 336 $ 5,460 The Company’s aging analysis of the loan and lease portfolio at September 30, 2015 and December 31, 2014 are summarized below: September 30, 2015 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ 30 $ 30 $ 34,239 $ 34,269 — $ 30 Real estate: Commercial 360 — 1,316 1,676 202,669 204,345 — 1,316 Multi-family — — — — 21,978 21,978 — — Construction — — — — 11,258 11,258 — — Residential — — — — 16,307 16,307 — — Other: Leases — — — — 837 837 — — Agriculture — — — — 2,358 2,358 — — Consumer 123 — 463 586 3,004 3,590 124 462 Total $ 483 $ — $ 1,809 $ 2,292 $ 292,650 $ 294,942 $ 124 $ 1,808 December 31, 2014 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ 513 $ — $ 666 $ 1,179 $ 24,007 $ 25,186 — $ 666 Real estate: Commercial 507 — 507 1,014 192,857 193,871 — 507 Multi-family — — — — 14,167 14,167 — — Construction — — — — 8,028 8,028 — — Residential — — 338 338 12,971 13,309 — 338 Other: Leases — — — — 1,286 1,286 — — Agriculture — — — — 2,882 2,882 — — Consumer 135 — — 135 4,781 4,916 — 142 Total $ 1,155 $ — $ 1,511 $ 2,666 $ 260,979 $ 263,645 $ — $ 1,653

9. BORROWING ARRANGEMENTS

9. BORROWING ARRANGEMENTS	9 Months Ended
	Sep. 30, 2015
Borrowing Arrangements
BORROWING ARRANGEMENTS	At September 30, 2015, the Company had $17,000,000 of unsecured short-term borrowing arrangements with two of its correspondent banks. There were no advances under the borrowing arrangements as of September 30, 2015 or December 31, 2014. The Company has a line of credit available with the Federal Home Loan Bank of San Francisco (the “FHLB”) which is secured by pledged mortgage loans and investment securities. Borrowings may include overnight advances as well as loans with terms of up to thirty years. Advances (both short-term and long-term) totaling $11,000,000 were outstanding from the FHLB at September 30, 2015, bearing interest rates ranging from 0.45% to 1.91% and maturing between March 16, 2016 and July 12, 2019. Advances totaling $11,000,000 were outstanding from the FHLB at December 31, 2014, bearing interest rates ranging from 0.24% to 1.91% and maturing between March 19, 2016 and July 12, 2019. Remaining amounts available under the borrowing arrangement with the FHLB at September 30, 2015 and December 31, 2014 totaled $76,807,000 and $67,228,000, respectively. In addition, the Company has a secured borrowing agreement with the Federal Reserve Bank of San Francisco. The borrowing can be secured by pledging selected loans and investment securities. Borrowings generally are short-term including overnight advances as well as loans with terms up to ninety days. Amounts available under this borrowing arrangement at September 30, 2015 and December 31, 2014 were $16,122,000 and $17,335,000, respectively. There were no advances outstanding under this borrowing arrangement as of September 30, 2015 and December 31, 2014.

10. INCOME TAXES

10. INCOME TAXES	9 Months Ended
	Sep. 30, 2015
INCOME TAXES
INCOME TAXES	The Company files its income taxes on a consolidated basis with its subsidiaries. The allocation of income tax expense (benefit) represents each entity’s proportionate share of the consolidated provision for (benefit from) income taxes. The Company accounts for income taxes using the balance sheet method, under which deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the reported amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. On the consolidated balance sheet, net deferred tax assets are included in accrued interest receivable and other assets. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above, if applicable, is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if applicable, as a component of interest expense in the consolidated statement of income. There have been no unrecognized tax benefits or accrued interest and penalties for the three-month and nine-month periods ended September 30, 2015 and 2014. The combined federal and state effective tax rate for the quarter ended September 30, 2015 was 35.5%, compared to 35.3% for the third quarter of 2014. For the nine months ended September 30, 2015, the combined federal and state effective tax rate was 34.7% compared to 34.9% for the nine months ended September 30, 2014. The higher combined federal and state effective tax rate in the third quarter of 2015 compared to the third quarter of 2014 resulted from higher pretax income in 2015. Pretax income was $539,000 (31.0%) higher in the third quarter of 2015 compared to the third quarter of 2014 increasing from $1,737,000 to $2,276,000. The decrease in the combined federal and state effective tax rate in the nine months of 2015 compared to the nine months of 2014 resulted from an increase in tax benefits related to tax exempt loan interest, offset by higher pretax income in 2015. Interest on tax exempt loans increased from $10,000 in 2014 to $222,000 in 2015. Pretax income was $970,000 (20.0%) higher in the first nine months of 2015 compared to the first nine months of 2014 increasing from $4,863,000 to $5,833,000.

11. FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTS	9 Months Ended
	Sep. 30, 2015
Assets and liabilities measured at fair value on a recurring and non-recurring basis are presented in the following table
FAIR VALUE MEASUREMENTS	The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of September 30, 2015 and December 31, 2014. They indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, including situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Estimated fair values are disclosed for financial instruments for which it is practicable to estimate fair value. These estimates are made at a specific point in time based on relevant market data and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The carrying amounts and estimated fair values of the Company’s financial instruments are as follows (dollars in thousands): Carrying Fair Value Measurements Using: September 30, 2015 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 21,638 $ 21,638 $ 21,638 Interest-bearing deposits in banks 1,000 $ 1,003 1,003 Available-for-sale securities 266,740 38 266,702 266,740 Held-to-maturity securities 674 726 726 FHLB stock 3,779 N/A N/A N/A N/A Net loans and leases: 289,774 $ 294,638 294,638 Accrued interest receivable 1,844 1,000 844 1,844 Financial liabilities: Deposits: Noninterest-bearing $ 178,038 $ 178,038 $ 178,038 Savings 60,174 60,174 60,174 Money market 133,249 133,249 133,249 NOW accounts 63,745 63,745 63,745 Time, $100,000 or more 65,630 66,127 66,127 Other time 20,533 20,721 20,721 Short-term borrowings 3,500 3,500 3,500 Long-term borrowings 7,500 7,563 7,563 Accrued interest payable 63 2 61 63 Carrying Fair Value Measurements Using: December 31, 2014 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 22,449 $ 22,449 $ — $ — $ 22,449 Interest-bearing deposits in banks 1,000 — 1,002 — 1,002 Available-for-sale securities 289,064 28 289,036 — 289,064 Held-to-maturity securities 862 — 922 — 922 FHLB stock 3,686 N/A N/A N/A N/A Net loans and leases: 258,057 — — 261,421 261,421 Accrued interest receivable 1,858 — 1,150 708 1,858 Financial liabilities: Deposits: Noninterest-bearing $ 155,698 $ 155,698 $ — $ — $ 155,698 Savings 58,820 58,820 — — 58,820 Money market 147,625 147,625 — — 147,625 NOW accounts 60,862 60,862 — — 60,862 Time, $100,000 or more 65,569 — 66,203 — 66,203 Other time 22,119 — 22,282 — 22,282 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 7,500 — 7,567 — 7,567 Accrued interest payable 59 — 59 — 59 Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the fair values presented. The following methods and assumptions were used by the Company to estimate the fair values of its financial instruments at September 30, 2015 and December 31, 2014: Cash and due from banks Interest-bearing deposits in banks Investment securities FHLB stock Loans and leases Deposits Short-term and long-term borrowings Accrued interest receivable and payable Off-balance sheet instruments Assets and liabilities measured at fair value on a recurring and non-recurring basis along with any related gain or loss recognized in the income statement due to fair value changes are presented in the following table: Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) September 30, 2015 Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 239,821 $ 239,821 Obligations of states and political subdivisions 25,264 25,264 Corporate Debt securities 1,571 1,571 Corporate stock 84 $ 38 46 Total recurring $ 266,740 $ 38 $ 266,702 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial $ 34 $ — $ — $ 34 $ — Real estate: Commercial 4,436 — — 4,436 165 Multi-family — — — — — Construction — — — — — Residential — — — — — Other: Agriculture — — — — — Consumer — — — — — Other real estate owned 3,781 — — 3,781 (76 ) Total nonrecurring $ 8,251 $ — $ — $ 8,251 $ 89 Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 (Losses) December 31, 2014 Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 261,115 $ — $ 261,115 $ — $ — Corporate Debt securities 1,583 — 1,583 — — Obligations of states and political subdivisions 26,289 — 26,289 — — Corporate Debt securities 77 28 49 — — Total recurring $ 289,064 $ 28 $ 289,036 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial Real estate: $ 666 $ — $ — $ 666 $ 14 Commercial 286 — — 286 — Other real estate owned 4,404 — — 4,404 (216 ) Total nonrecurring $ 5,356 $ — $ — $ 5,356 $ (202 ) There were no significant transfers between Levels 1 and 2 during the three-month and nine-month periods ended September 30, 2015 or the twelve months ended December 31, 2014. The following methods were used to estimate the fair value of each class of financial instrument above: Available-for-sale securities – Impaired loans Other real estate owned

2. STOCK BASED COMPENSATION (Ta

2. STOCK BASED COMPENSATION (Tables)	9 Months Ended
	Sep. 30, 2015
STOCK BASED COMPENSATION. (Tables)
Schedule of Share-based Compensation, Stock Options, Activity	Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ($000) Outstanding at January 1, 2015 271,700 $ 16.27 3.1 years $ 82 Awarded 26,427 9.56 — — Exercised — — — — Cancelled 45,345 18.17 — — Outstanding at September 30, 2015 252,782 $ 15.23 3.9 years $ 120 Vested at September 30, 2015 193,246 $ 17.16 2.4 years $ 80 Non-vested at September 30, 2015 59,536 $ 8.96 8.9 years $ 40
Schedule of Nonvested Share Activity	Restricted Stock Shares Weighted Average Award Date Fair Value Nonvested at January 1, 2015 32,838 $ 8.31 Awarded 45,023 9.49 Less: Vested 20,345 8.36 Less: Cancelled — — Nonvested at September 30, 2015 57,516 $ 9.21

5. INVESTMENTS SECURITIES (Tabl

5. INVESTMENTS SECURITIES (Tables)	9 Months Ended
	Sep. 30, 2015
INVESTMENTS SECURITIES (Tables)
Available-for-sale Securities	September 30, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 234,938 $ 5,058 $ (175 ) $ 239,821 Obligations of states and political subdivisions 23,858 1,406 — 25,264 Corporate bonds 1,503 68 — 1,571 Equity securities: Corporate stock 51 33 — 84 $ 260,350 $ 6,565 $ (175 ) $ 266,740 December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 257,002 $ 4,715 $ (602 ) $ 261,115 Obligations of states and political subdivisions 24,886 1,423 (20 ) 26,289 Corporate bonds 1,504 79 — 1,583 Equity securities: Corporate stock 54 23 — 77 $ 283,446 $ 6,240 $ (622 ) $ 289,064
Held-to-maturity Securities	September 30, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 674 $ 52 $ — $ 726 December 31, 2014 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 862 $ 60 $ — $ 922
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	September 30, 2015 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 21,090 $ (164 ) 2,268 (11 ) $ 23,358 $ (175 ) $ 21,090 $ (164 ) $ 2,268 $ (11 ) $ 23,358 $ (175 ) December 31, 2014 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 57,145 $ (503 ) $ 10,006 $ (99 ) $ 67,151 $ (602 ) Obligations of states and political subdivisions — — 649 (20 ) 649 (20 ) $ 57,145 $ (503 ) $ 10,655 $ (119 ) $ 67,800 $ (622 )
Available-for-sale Securities, Debt Maturities, Basis of Allocation	Available-for-Sale Held-to-Maturity Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Within one year $ — $ — After one year through five years 4,386 4,541 After five years through ten years 15,173 16,157 After ten years 5,802 6,137 25,361 26,835 Investment securities not due at a single maturity date: Mortgage-backed securities 234,938 239,821 $ 674 $ 726 Corporate stock 51 84 — — $ 260,350 $ 266,740 $ 674 $ 726

6. IMPAIRED AND NONPERFORMING21

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED (Tables)	9 Months Ended
	Sep. 30, 2015
Impaired And Nonperforming Loans And Leases And Other Real Estate Owned Tables
Schedule of Nonperforming loans and leases and other assets and OREO	(in thousands) September 30, December 31, 2015 2014 Nonaccrual loans and leases that are current to terms (less than 30 days past due) $ 123 $ 13 Nonaccrual loans and leases that are past due 1,685 1,640 Loans and leases past due 90 days and accruing interest 124 — Other assets 878 878 Other real estate owned 3,781 4,647 Total nonperforming assets $ 6,591 $ 7,178 Nonperforming loans and leases to total loans and leases 0.66 % 0.63 % Total nonperforming assets to total assets 1.05 % 1.16 %
Schedule of Impaired Financing Receivables	(in thousands) As of September 30, 2015 As of December 31, 2014 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial $ — $ — $ — $ — $ — $ — Real estate-commercial 12,840 13,473 — 10,684 11,398 — Real estate-residential 338 338 — 338 425 — Consumer — — — 37 37 — Subtotal $ 13,178 $ 13,811 $ — $ 11,059 $ 11,860 $ — With an allowance recorded: Commercial $ 131 $ 131 $ 32 $ 769 $ 769 $ 344 Real estate-commercial 6,739 6,837 647 9,773 9,857 949 Real estate-multi-family 490 490 6 496 496 38 Real estate-residential 2,129 2,215 213 2,524 2,637 237 Agriculture 373 373 39 381 381 13 Consumer 70 70 29 118 118 22 Subtotal $ 9,932 $ 10,116 $ 966 $ 14,061 $ 14,258 $ 1,603 Total: Commercial $ 131 $ 131 $ 32 $ 769 $ 769 $ 344 Real estate-commercial 19,579 20,310 647 20,457 21,255 949 Real estate-multi-family 490 490 6 496 496 38 Real estate-residential 2,467 2,553 213 2,862 3,062 237 Agriculture 373 373 39 381 381 13 Consumer 70 70 29 155 155 22 $ 23,110 $ 23,927 $ 966 $ 25,120 $ 26,118 $ 1,603
Schedule of Average Balance Recorded to Imapired Loans and Leases	Average Recorded Investments for the three months ended Average Recorded Investments for the nine months ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Commercial $ 125 $ 1,455 $ 145 $ 1,053 Real estate-commercial 19,336 19,735 19,750 20,581 Real estate-multi-family 491 1,643 493 1,638 Real estate-construction — 237 — 218 Real estate-residential 2,473 2,910 2,511 2,901 Agriculture 375 194 377 388 Consumer 91 163 77 162 Total $ 22,890 $ 26,337 $ 23,352 $ 26,941
Schedule of interest income recognized on impaired loans and leases	Interest Income Recognized for the three months ended Interest Income Recognized for the nine months ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Commercial $ 2 $ 5 $ 7 $ 14 Real estate-commercial 259 259 728 826 Real estate-multi-family 8 19 21 57 Real estate-construction — 3 — 9 Real estate-residential 14 30 69 97 Agriculture 5 3 13 14 Consumer — 1 — 3 Total $ 288 $ 320 $ 838 $ 1,020

7. TROUBLED DEBT RESTRUCTURING

7. TROUBLED DEBT RESTRUCTURINGS (Tables)	9 Months Ended
	Sep. 30, 2015
Troubled Debt Restructurings Tables
TROUBLED DEBT RESTRUCTURINGS	The following table presents loans by class modified as troubled debt restructurings during the nine months ended September 30, 2015 (dollars in thousands): Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Commercial 1 $ 47 $ 47 Real estate - commercial 2 1,645 1,645 Real estate - residential 2 416 416 Consumer 1 23 23 Total 6 $ 2,131 $ 2,131 The following table presents loans by class modified as troubled debt restructurings during the three months ended September 30, 2014 (dollars in thousands): Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Real estate - commercial 3 $ 890 $ 890 Consumer 1 7 7 Total 4 $ 897 $ 897 The following table presents loans by class modified as troubled debt restructurings during the nine months ended September 30, 2014 (dollars in thousands): Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Real estate - commercial 8 $ 5,925 $ 5,925 Consumer 2 52 52 Total 10 $ 5,977 $ 5,977

8. ALLOWANCE FOR LOAN AND LEA23

8. ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables)	9 Months Ended
	Sep. 30, 2015
Allowance For Loan And Lease Losses Tables
Schedule Of Recorded Investment Evaluated Based On Internal Risk Ratings	September 30, 2015 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 30,106 $ 175,756 $ 21,482 $ 4,490 $ 12,642 Watch 1,227 13,202 496 6,445 2,122 Special mention — 13,605 — 323 729 Substandard 2,936 1,782 — — 814 Doubtful — — — — — Total $ 34,269 $ 204,345 $ 21,978 $ 11,258 $ 16,307 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 837 $ 1,986 $ 2,411 $ 249,710 Watch — — 772 24,264 Special mention 372 229 15,258 Substandard — — 178 5,710 Doubtful — — — — Total $ 837 $ 2,358 $ 3,590 $ 294,942 December 31, 2014 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 20,179 $ 163,091 $ 13,663 $ 3,327 $ 9,364 Watch 1,280 13,724 504 4,372 2,504 Special mention 101 13,583 — 329 603 Substandard 3,626 3,473 — — 838 Doubtful or loss — — — — — Total $ 25,186 $ 193,871 $ 14,167 $ 8,028 $ 13,309 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 1,286 $ 2,501 $ 3,424 $ 216,835 Watch — — 1,041 23,425 Special mention — 381 268 15,265 Substandard — — 183 8,120 Doubtful — — — — Total $ 1,286 $ 2,882 $ 4,916 $ 263,645
Summary Of Analysis Of Allowance For Loan Losses	September 30, 2015 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2015 $ 1,430 $ 2,317 $ 130 $ 583 $ 399 $ 2 $ 62 $ 124 $ 254 $ 5,301 Provision for loan losses 38 (58 ) 27 160 (133 ) — 14 (24 ) (24 ) — Loans charged off (609 ) — — — — (1 ) — (6 ) — (616 ) Recoveries 88 41 — — 113 — — 2 — 244 Ending balance, September 30, 2015 $ 947 $ 2,300 $ 157 $ 743 $ 379 $ 1 $ 76 $ 96 $ 230 $ 4,929 Ending balance: Individually evaluated for impairment $ 32 $ 647 $ 6 $ — $ 213 $ — $ 39 $ 29 $ — $ 966 Ending balance: Collectively evaluated for impairment $ 915 $ 1,653 $ 151 $ 743 $ 166 $ 1 $ 37 $ 67 $ 230 $ 3,963 Loans Ending balance $ 34,269 $ 204,345 $ 21,978 $ 11,258 $ 16,307 $ 837 $ 2,358 $ 3,590 $ — $ 294,942 Ending balance: Individually evaluated for impairment $ 131 $ 19,579 $ 490 $ — $ 2,467 $ — $ 373 $ 70 $ — $ 23,110 Ending balance: Collectively evaluated for impairment $ 34,138 $ 184,766 $ 21,488 $ 11,258 $ 13,840 $ 837 $ 1,985 $ 3,520 $ — $ 271,832 Allowance for Loan and Lease Losses Beginning balance, June 30, 2015 $ 1,652 $ 1,968 $ 107 $ 807 $ 385 $ 1 $ 50 $ 122 $ 267 $ 5,359 Provision for loan losses (161 ) 331 50 (64 ) (119 ) — 26 (26 ) (37 ) — Loans charged off (609 ) — — — — — — — — (609 ) Recoveries 65 1 — — 113 — — — — 179 Ending balance, September 30, 2015 $ 947 $ 2,300 $ 157 $ 743 $ 379 $ 1 $ 76 $ 96 $ 230 $ 4,929 December 31, 2014 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Ending balance: Individually evaluated for impairment $ 344 $ 949 $ 38 $ — $ 237 $ — $ 13 $ 22 $ — $ 1,603 Ending balance: Collectively evaluated for impairment $ 1,086 $ 1,368 $ 92 $ 583 $ 162 $ 2 $ 49 $ 102 $ 254 $ 3,698 Loans Ending balance $ 25,186 $ 193,871 $ 14,167 $ 8,028 $ 13,309 $ 1,286 $ 2,882 $ 4,916 $ — $ 263,645 Ending balance: Individually evaluated for impairment $ 769 $ 20,457 $ 496 $ — $ 2,862 $ — $ 381 $ 155 $ — $ 25,120 Ending balance: Collectively evaluated for impairment $ 24,417 $ 173,414 $ 13,671 $ 8,028 $ 10,447 $ 1,286 $ 2,501 $ 4,761 $ — $ 238,525 September 30, 2014 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance, January 1, 2014 $ 885 $ 2,401 $ 242 $ 542 $ 825 $ 4 $ 80 $ 161 $ 206 $ 5,346 Provision for loan losses 317 (175 ) 26 22 (396 ) (5 ) (16 ) (103 ) 130 (200 ) Loans charged off — — — — — — — (74 ) — (74 ) Recoveries 176 40 — 2 17 3 — 150 — 388 Ending balance, September 30, 2014 $ 1,378 $ 2,266 $ 268 $ 566 $ 446 $ 2 $ 64 $ 134 $ 336 $ 5,460 Allowance for Loan and Lease Losses Beginning balance, June 30, 2014 $ 1,391 $ 2,149 $ 262 $ 441 $ 708 $ 2 $ 69 $ 131 $ 309 $ 5,462 Provision for loan losses (48 ) 116 6 125 (274 ) — (5 ) (147 ) 27 (200 ) Loans charged off — — — — — — — — — — Recoveries 35 1 — — 12 — — 150 — 198 Ending balance, September 30, 2014 $ 1,378 $ 2,266 $ 268 $ 566 $ 446 $ 2 $ 64 $ 134 $ 336 $ 5,460
Summary Of Activity In Allowance For Loan Losses By Loan Class	September 30, 2015 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ 30 $ 30 $ 34,239 $ 34,269 — $ 30 Real estate: Commercial 360 — 1,316 1,676 202,669 204,345 — 1,316 Multi-family — — — — 21,978 21,978 — — Construction — — — — 11,258 11,258 — — Residential — — — — 16,307 16,307 — — Other: Leases — — — — 837 837 — — Agriculture — — — — 2,358 2,358 — — Consumer 123 — 463 586 3,004 3,590 124 462 Total $ 483 $ — $ 1,809 $ 2,292 $ 292,650 $ 294,942 $ 124 $ 1,808 December 31, 2014 Past Due (dollars in thousands) Past Due Greater Than 30-59 Days 60-89 Days Greater Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ 513 $ — $ 666 $ 1,179 $ 24,007 $ 25,186 — $ 666 Real estate: Commercial 507 — 507 1,014 192,857 193,871 — 507 Multi-family — — — — 14,167 14,167 — — Construction — — — — 8,028 8,028 — — Residential — — 338 338 12,971 13,309 — 338 Other: Leases — — — — 1,286 1,286 — — Agriculture — — — — 2,882 2,882 — — Consumer 135 — — 135 4,781 4,916 — 142 Total $ 1,155 $ — $ 1,511 $ 2,666 $ 260,979 $ 263,645 $ — $ 1,653

11. FAIR VALUE MEASUREMENTS (Ta

11. FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
	Sep. 30, 2015
Assets and liabilities measured at fair value on a recurring and non-recurring basis are presented in the following table
Schedule of Assets and Associated Liabilities Accounted for as Secured Borrowings	Carrying Fair Value Measurements Using: September 30, 2015 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 21,638 $ 21,638 $ 21,638 Interest-bearing deposits in banks 1,000 $ 1,003 1,003 Available-for-sale securities 266,740 38 266,702 266,740 Held-to-maturity securities 674 726 726 FHLB stock 3,779 N/A N/A N/A N/A Net loans and leases: 289,774 $ 294,638 294,638 Accrued interest receivable 1,844 1,000 844 1,844 Financial liabilities: Deposits: Noninterest-bearing $ 178,038 $ 178,038 $ 178,038 Savings 60,174 60,174 60,174 Money market 133,249 133,249 133,249 NOW accounts 63,745 63,745 63,745 Time, $100,000 or more 65,630 66,127 66,127 Other time 20,533 20,721 20,721 Short-term borrowings 3,500 3,500 3,500 Long-term borrowings 7,500 7,563 7,563 Accrued interest payable 63 2 61 63 Carrying Fair Value Measurements Using: December 31, 2014 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 22,449 $ 22,449 $ — $ — $ 22,449 Interest-bearing deposits in banks 1,000 — 1,002 — 1,002 Available-for-sale securities 289,064 28 289,036 — 289,064 Held-to-maturity securities 862 — 922 — 922 FHLB stock 3,686 N/A N/A N/A N/A Net loans and leases: 258,057 — — 261,421 261,421 Accrued interest receivable 1,858 — 1,150 708 1,858 Financial liabilities: Deposits: Noninterest-bearing $ 155,698 $ 155,698 $ — $ — $ 155,698 Savings 58,820 58,820 — — 58,820 Money market 147,625 147,625 — — 147,625 NOW accounts 60,862 60,862 — — 60,862 Time, $100,000 or more 65,569 — 66,203 — 66,203 Other time 22,119 — 22,282 — 22,282 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 7,500 — 7,567 — 7,567 Accrued interest payable 59 — 59 — 59
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques	Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) September 30, 2015 Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 239,821 $ 239,821 Obligations of states and political subdivisions 25,264 25,264 Corporate Debt securities 1,571 1,571 Corporate stock 84 $ 38 46 Total recurring $ 266,740 $ 38 $ 266,702 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial $ 34 $ — $ — $ 34 $ — Real estate: Commercial 4,436 — — 4,436 165 Multi-family — — — — — Construction — — — — — Residential — — — — — Other: Agriculture — — — — — Consumer — — — — — Other real estate owned 3,781 — — 3,781 (76 ) Total nonrecurring $ 8,251 $ — $ — $ 8,251 $ 89 Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 (Losses) December 31, 2014 Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 261,115 $ — $ 261,115 $ — $ — Corporate Debt securities 1,583 — 1,583 — — Obligations of states and political subdivisions 26,289 — 26,289 — — Corporate Debt securities 77 28 49 — — Total recurring $ 289,064 $ 28 $ 289,036 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial Real estate: $ 666 $ — $ — $ 666 $ 14 Commercial 286 — — 286 — Other real estate owned 4,404 — — 4,404 (216 ) Total nonrecurring $ 5,356 $ — $ — $ 5,356 $ (202 )

2. STOCK-BASED COMPENSATION - O

2. STOCK-BASED COMPENSATION - Option activity (Details) - Options Shares $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Outstanding | shares	271,700
Awarded | shares	26,427
Exercised | shares	0
Cancelled | shares	45,345
Outstanding | shares	252,782
Number of options vested | shares	193,246
Nonvested, Shares | shares	59,536
Weighted average exercise price, outstanding beginning	$ 16.27
Awarded	9.56
Exercised	0
Cancelled	18.17
Weighted average exercise price, outstanding ending	15.23
Weighted average exercise price of vested stock options (in dollars per share)	17.16
Weighted average exercise price of nonvested stock options (in dollars per share)	$ 8.96
Weighted years to maturity outstanding beginning	3 years 1 month 6 days
Weighted years to maturity outstanding Ending	3 years 10 months 24 days
Weighted average remaining contractual term in years, vested	2 years 4 months 24 days
Weighted average remaining contractual term in years, non-vested	8 years 10 months 24 days
Aggregate Intrinsic Value, options outstanding, beginning | $	$ 82
Aggregate Intrinsic Value, options outstanding, ending | $	120
Aggregate Intrinsic Value, options vested | $	80
Aggregate Intrinsic Value, options non-vested | $	$ 40

2. STOCK-BASED COMPENSATION - R

2. STOCK-BASED COMPENSATION - Restricted Stock (Details) - Restricted stock	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Restricted Stock Nonvested beginning balance | shares	32,838
Awarded | shares	45,023
Less: Vested | shares	20,345
Less: Cancelled | shares	0
Restricted Stock Nonvested ending balance | shares	57,516
Weighted Average Grant Date Fair Value Nonvested beginning balance	$ 8.31
Awarded	9.49
Less: Vested	8.36
Less: Cancelled	0
Weighted Average Grant Date Fair Value Nonvested ending balance	$ 9.21

2. STOCK-BASED COMPENSATION - E

2. STOCK-BASED COMPENSATION - Equity Plans and Compensation (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Share based compensation	$ 73	$ 48	$ 200	$ 119
Tax benefit of equity compensation expense	25	$ 17	70	$ 42
Compensation cost related to nonvested stock option awards not yet recorded	149		149
Compensation cost related to restricted stock awards not yet recorded	$ 424		$ 424
2000 Plan
Stock options outstanding under Equity Incentive Plan	176,321		176,321
2010 Plan
Stock options outstanding under Equity Incentive Plan	76,641		76,641
Authorized shares that remain available for issuance under the 2010 Plan	1,395,985		1,395,985
Options Shares
Stock options outstanding under Equity Incentive Plan	252,782		252,782		271,700
Period for recognition			4 years 9 months
Weighted average costs is expected period			2 years 3 months
Restricted stock
Period for recognition			4 years 9 months
Weighted average costs is expected period			1 year 10 months 20 days

3. COMMITMENTS AND CONTINGENC28

3. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Commitments
Loan commitments
Commitments	$ 29,150	$ 32,639
Standby letters of credit
Commitments	$ 363	$ 356

4. EARNINGS PER SHARE COMPUTA29

4. EARNINGS PER SHARE COMPUTATION (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share Computation Details Narrative
Weighted average common shares outstanding	7,481,529	8,063,589	7,653,109	8,154,947
Dilutive effect of stock based awards	19,930	11,934	14,878	11,835
Antidilutive stock option excluded from earnings per share	192,106	211,024	192,106	211,024

5. INVESTMENT SECURITIES - Amor

5. INVESTMENT SECURITIES - Amortized Cost, Unrealized Gains, Unrealized Losses And Estimated Fair Values (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Available for sale securities, Amortized Cost	$ 260,350	$ 283,446
Available for sale securities, Unrealized Gains	6,565	6,240
Available for sale securities, Unrealized Losses	(175)	(622)
Available for sale securities, Estimated Fair Value	266,740	289,064
Held-to-Maturity Debt securities Amortized Cost	674
Held-to-Maturity Debt securities Estimated Fair Value	726	922
US Government Agencies and Sponsored Agencies
Available for sale securities, Amortized Cost	234,938	257,002
Available for sale securities, Unrealized Gains	5,058	4,715
Available for sale securities, Unrealized Losses	(175)	(602)
Available for sale securities, Estimated Fair Value	239,821	261,115
Held-to-Maturity Debt securities Amortized Cost	674	862
Held-to-Maturity Debt securities Gross Unrealized Gains	52	60
Held-to-Maturity Debt securities Gross Unrealized Losses	0	0
Held-to-Maturity Debt securities Estimated Fair Value	726	922
Obligations of states and political subdivisions
Available for sale securities, Amortized Cost	23,858	24,886
Available for sale securities, Unrealized Gains	1,406	1,423
Available for sale securities, Unrealized Losses	0	(20)
Available for sale securities, Estimated Fair Value	25,264	26,289
Corporate Bonds
Available for sale securities, Amortized Cost	1,503	1,504
Available for sale securities, Unrealized Gains	68	79
Available for sale securities, Unrealized Losses	0	0
Available for sale securities, Estimated Fair Value	1,571	1,583
Equity Securities - Corporate Stock
Available for sale securities, Amortized Cost	51	54
Available for sale securities, Unrealized Gains	33	23
Available for sale securities, Unrealized Losses	0	0
Available for sale securities, Estimated Fair Value	84	$ 77
Held-to-Maturity Debt securities Amortized Cost	0
Held-to-Maturity Debt securities Estimated Fair Value	$ 0

5. INVESTMENT SECURITIES - Inve

5. INVESTMENT SECURITIES - Investment securities with unrealized losses (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Less than 12 months, Estimated Fair Value	$ 21,090	$ 57,145
Less than 12 months, Unrealized Loss	(164)	(503)
12 months or more, Estimated Fair Value	2,268	10,655
12 months or more, Unrealized Loss	(11)	(119)
Total Estimated Fair Value	23,358	67,800
Total Unrealized Loss	(175)	(622)
US Government Agencies and Sponsored Agencies
Less than 12 months, Estimated Fair Value	21,090	57,145
Less than 12 months, Unrealized Loss	(164)	(503)
12 months or more, Estimated Fair Value	2,268	10,006
12 months or more, Unrealized Loss	(11)	(99)
Total Estimated Fair Value	23,358	67,151
Total Unrealized Loss	$ (175)	(602)
Obligations of states and political subdivisions
Less than 12 months, Estimated Fair Value		0
Less than 12 months, Unrealized Loss		0
12 months or more, Estimated Fair Value		649
12 months or more, Unrealized Loss		(20)
Total Estimated Fair Value		649
Total Unrealized Loss		$ (20)

5. INVESTMENT SECURITIES - Am32

5. INVESTMENT SECURITIES - Amortized cost and estimated fair values (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Within one year, Amortized Cost	$ 0
After one through five years, Amortized Cost	4,386
After five through ten years, Amortized Cost	15,173
After ten years, Amortized Cost	5,802
Total Amortized Cost	25,361
Within one year, Estimated Fair Value	0
After one through five years, Estimated Fair Value	4,541
After five through ten years, Estimated Fair Value	16,157
After ten years, Estimated Fair Value	6,137
Total Estimated Fair Value	26,835
Equity securities, Amortized Cost	260,350
Equity securities, Estimated Fair Value	266,740
Held-to-Maturity Amortized Cost	674
Held-to-Maturity Estimated Fair Value	726	$ 922
US Government Agencies and Sponsored Agencies
Equity securities, Amortized Cost	234,938
Equity securities, Estimated Fair Value	239,821
Held-to-Maturity Amortized Cost	674	862
Held-to-Maturity Estimated Fair Value	726	$ 922
Equity Securities - Corporate Stock
Equity securities, Amortized Cost	51
Equity securities, Estimated Fair Value	84
Held-to-Maturity Amortized Cost	0
Held-to-Maturity Estimated Fair Value	$ 0

6. IMPAIRED AND NONPERFORMING33

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Nonaccrual loans (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Total nonperforming assets	$ 6,591	$ 7,178
Nonperforming loans and leases to total loans and leases	0.66%	0.63%
Total nonperforming assets to total assets	1.05%	1.16%
Nonaccrual loans and leases that are current to terms (less than 30 days past due)
Total nonperforming assets	$ 123	$ 13
Nonaccrual loans and leases that are past due
Total nonperforming assets	1,685	1,640
Loans and leases past due 90 days and accruing interest
Total nonperforming assets	124	0
Other assets
Total nonperforming assets	878	878
Other real estate owned
Total nonperforming assets	$ 3,781	$ 4,647

6. IMPAIRED AND NONPERFORMING34

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Nonperforming assets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
With no related allowance recorded: Recorded Investment	$ 13,178	$ 11,059
With no related allowance recorded: Unpaid Principal Balance	13,811	11,860
With an allowance recorded: Recorded Investment	9,932	14,061
With an allowance recorded: Unpaid Principal Balance	10,116	14,258
With an allowance recorded: Related Allowance	966	1,603
Recorded Investment	23,110	25,120
Unpaid Principal Balance	23,927	26,118
Related Allowance	966	1,603
Commercial
With no related allowance recorded: Recorded Investment	0	0
With no related allowance recorded: Unpaid Principal Balance	0	0
With an allowance recorded: Recorded Investment	131	769
With an allowance recorded: Unpaid Principal Balance	131	769
With an allowance recorded: Related Allowance	32	344
Recorded Investment	131	769
Unpaid Principal Balance	131	769
Related Allowance	32	344
Real estate-commercial
With no related allowance recorded: Recorded Investment	12,840	10,684
With no related allowance recorded: Unpaid Principal Balance	13,473	11,398
With an allowance recorded: Recorded Investment	6,739	9,773
With an allowance recorded: Unpaid Principal Balance	6,837	9,857
With an allowance recorded: Related Allowance	647	949
Recorded Investment	19,579	20,457
Unpaid Principal Balance	20,310	21,255
Related Allowance	647	949
Real estate-multi-family
With an allowance recorded: Recorded Investment	490	496
With an allowance recorded: Unpaid Principal Balance	490	496
With an allowance recorded: Related Allowance	6	38
Recorded Investment	490	496
Unpaid Principal Balance	490	496
Related Allowance	6	38
Real Estate Residential
With no related allowance recorded: Recorded Investment	338	338
With no related allowance recorded: Unpaid Principal Balance	338	425
With an allowance recorded: Recorded Investment	2,129	2,524
With an allowance recorded: Unpaid Principal Balance	2,215	2,637
With an allowance recorded: Related Allowance	213	237
Recorded Investment	2,467	2,862
Unpaid Principal Balance	2,467	3,062
Related Allowance	213	237
Agriculture
With an allowance recorded: Recorded Investment	373	381
With an allowance recorded: Unpaid Principal Balance	373	381
With an allowance recorded: Related Allowance	39	13
Recorded Investment	373	381
Unpaid Principal Balance	373	381
Related Allowance	39	13
Consumer
With no related allowance recorded: Recorded Investment	0	37
With no related allowance recorded: Unpaid Principal Balance	0	37
With an allowance recorded: Recorded Investment	70	118
With an allowance recorded: Unpaid Principal Balance	70	118
With an allowance recorded: Related Allowance	29	22
Recorded Investment	70	155
Unpaid Principal Balance	70	155
Related Allowance	$ 29	$ 22

6. IMPAIRED AND NONPERFORMING35

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Impaired loans and leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Impaired Loans and Leases	$ 22,890	$ 2,637	$ 23,352	$ 26,941
Interest income recognized on impaired loans and leases	288	320	838	1,020
Commercial
Impaired Loans and Leases	125	1,455	145	1,053
Interest income recognized on impaired loans and leases	2	5	7	14
Real estate-commercial
Impaired Loans and Leases	19,336	19,735	19,750	20,581
Interest income recognized on impaired loans and leases	259	259	728	826
Real estate-multi-family
Impaired Loans and Leases	491	1,643	493	1,638
Interest income recognized on impaired loans and leases	8	19	21	57
Real estate-construction
Impaired Loans and Leases	0	237	0	218
Interest income recognized on impaired loans and leases	0	3	0	9
Real Estate Residential
Impaired Loans and Leases	2,473	2,910	2,511	2,901
Interest income recognized on impaired loans and leases	14	30	69	97
Agriculture
Impaired Loans and Leases	375	194	377	388
Interest income recognized on impaired loans and leases	5	3	13	14
Consumer
Impaired Loans and Leases	91	163	77	162
Interest income recognized on impaired loans and leases	$ 0	$ 1	$ 0	$ 3

7. TROUBLED DEBT RESTRUCTURIN36

7. TROUBLED DEBT RESTRUCTURINGS (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015USD ($)Integer	Sep. 30, 2014USD ($)Integer	Sep. 30, 2015USD ($)Integer	Sep. 30, 2014USD ($)Integer	Dec. 31, 2014USD ($)
Number of loans | Integer	0	4	6	10
Premodification outstanding recorded investment		$ 897	$ 2,131	$ 5,977
Post-modification outstanding recorded investment		$ 897	2,131	$ 5,977
Modified troubled debt restructurings	$ 262		$ 262		$ 829
Commercial
Number of loans | Integer	0		1
Premodification outstanding recorded investment			$ 47
Post-modification outstanding recorded investment			$ 47
Real estate-commercial
Number of loans | Integer	0	3	2	8
Premodification outstanding recorded investment		$ 890	$ 1,645	$ 5,925
Post-modification outstanding recorded investment		$ 890	$ 1,645	$ 5,925
Real Estate Residential
Number of loans | Integer	0		2
Premodification outstanding recorded investment			$ 416
Post-modification outstanding recorded investment			$ 416
Consumer
Number of loans | Integer	0	1	1	2
Premodification outstanding recorded investment		$ 7	$ 23	$ 52
Post-modification outstanding recorded investment		$ 7	$ 23	$ 52

8. ALLOWANCE FOR LOAN AND LEA37

8. ALLOWANCE FOR LOAN AND LEASE LOSSES - Internal risk ratings (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Total	$ 294,942	$ 263,645
Real estate-commercial
Total	204,345	193,871
Real estate-multi-family
Total	21,978	14,167
Leases
Total	837	1,286
Agriculture
Total	2,358	2,882
Commercial
Total	34,269	25,186
Real estate-construction
Total	11,258	8,028
Real Estate Residential
Total	16,307	13,309
Consumer
Total	3,590	4,916
Pass
Total	249,710	216,835
Pass | Commercial
Total	30,106	20,179
Pass | Real estate-commercial
Total	175,756	163,091
Pass | Real estate-multi-family
Total	21,482	13,663
Pass | Real Estate Construction
Total	4,490	3,327
Pass | Real Estate Residential
Total	12,642	9,364
Pass | Leases
Total	837	1,286
Pass | Agriculture
Total	1,986	2,501
Pass | Consumer
Total	2,411	3,424
Watch
Total	24,264	23,425
Watch | Commercial
Total	1,227	1,280
Watch | Real estate-commercial
Total	13,202	13,724
Watch | Real estate-multi-family
Total	496	504
Watch | Real Estate Construction
Total	6,445	4,372
Watch | Real Estate Residential
Total	2,122	2,504
Watch | Leases
Total	0	0
Watch | Agriculture
Total	0	0
Watch | Consumer
Total	772	1,041
Special mention
Total	15,258	15,265
Special mention | Commercial
Total	0	101
Special mention | Real estate-commercial
Total	13,605	13,583
Special mention | Real estate-multi-family
Total	0	0
Special mention | Real Estate Construction
Total	323	329
Special mention | Real Estate Residential
Total	729	603
Special mention | Leases
Total	0	0
Special mention | Agriculture
Total	372	381
Special mention | Consumer
Total	229	268
Substandard
Total	5,710	8,120
Substandard | Commercial
Total	2,936	3,626
Substandard | Real estate-commercial
Total	1,782	3,473
Substandard | Real estate-multi-family
Total	0	0
Substandard | Real Estate Construction
Total	0	0
Substandard | Real Estate Residential
Total	814	838
Substandard | Leases
Total	0	0
Substandard | Agriculture
Total	0	0
Substandard | Consumer
Total	178	183
Doubtful or loss
Total	0	0
Doubtful or loss | Commercial
Total	0	0
Doubtful or loss | Real estate-commercial
Total	0	0
Doubtful or loss | Real estate-multi-family
Total	0	0
Doubtful or loss | Real Estate Construction
Total	0	0
Doubtful or loss | Real Estate Residential
Total	0	0
Doubtful or loss | Leases
Total	0	0
Doubtful or loss | Agriculture
Total	0	0
Doubtful or loss | Consumer
Total	$ 0	$ 0

8. ALLOWANCE FOR LOAN AND LEA38

8. ALLOWANCE FOR LOAN AND LEASE LOSSES - Allowance Roll-forward (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Allowance for Loan and Lease Losses Beginning balance	$ 5,359	$ 5,462	$ 5,301	$ 5,346
Provision for loan losses	0	(200)	0	(200)
Loans charged off	(609)	0	(616)	(74)
Recoveries	179	198	244	388
Allowance for Loan and Lease Losses Ending balance	4,929	5,460	4,929	5,460
Allowance related to: Loans individually evaluated for impairment	(966)		(966)		$ (1,603)
Allowance related to: Loans collectively evaluated for impairment	3,963		3,963		3,698
Loans	294,942		294,942		263,645
Loans individually evaluated for impairment	23,110		23,110		25,120
Loans collectively evaluated for impairment	271,832		271,832		238,525
Commercial
Allowance for Loan and Lease Losses Beginning balance	1,652	1,391	1,430	885
Provision for loan losses	(161)	(48)	38	317
Loans charged off	(609)	0	(609)	0
Recoveries	65	35	88	176
Allowance for Loan and Lease Losses Ending balance	947	1,378	947	1,378
Allowance related to: Loans individually evaluated for impairment	(32)		(32)		(344)
Allowance related to: Loans collectively evaluated for impairment	915		915		1,086
Loans	34,269		34,269		25,186
Loans individually evaluated for impairment	131		131		769
Loans collectively evaluated for impairment	34,138		34,138		24,417
Real estate-commercial
Allowance for Loan and Lease Losses Beginning balance	1,968	2,149	2,317	2,401
Provision for loan losses	331	116	(58)	(175)
Loans charged off	0	0	0	0
Recoveries	1	1	41	40
Allowance for Loan and Lease Losses Ending balance	2,300	2,266	2,300	2,266
Allowance related to: Loans individually evaluated for impairment	(647)		(647)		(949)
Allowance related to: Loans collectively evaluated for impairment	1,653		1,653		1,368
Loans	204,345		204,345		193,871
Loans individually evaluated for impairment	19,579		19,579		20,457
Loans collectively evaluated for impairment	184,766		184,766		173,414
Real estate-multi-family
Allowance for Loan and Lease Losses Beginning balance	107	262	130	242
Provision for loan losses	50	6	27	26
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	157	268	157	268
Allowance related to: Loans individually evaluated for impairment	(6)		(6)		(38)
Allowance related to: Loans collectively evaluated for impairment	151		151		92
Loans	21,978		21,978		14,167
Loans individually evaluated for impairment	490		490		496
Loans collectively evaluated for impairment	21,488		21,488		13,671
Real estate-construction
Allowance for Loan and Lease Losses Beginning balance	807	441	583	542
Provision for loan losses	(64)	125	160	22
Loans charged off	0	0	0	0
Recoveries	0	0	0	2
Allowance for Loan and Lease Losses Ending balance	743	566	743	566
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	743		743		583
Loans	11,258		11,258		8,028
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	11,258		11,258		8,028
Real Estate Residential
Allowance for Loan and Lease Losses Beginning balance	385	708	399	825
Provision for loan losses	(119)	(274)	(133)	(396)
Loans charged off	0	0	0	0
Recoveries	113	12	113	17
Allowance for Loan and Lease Losses Ending balance	379	446	379	446
Allowance related to: Loans individually evaluated for impairment	(213)		(213)		(237)
Allowance related to: Loans collectively evaluated for impairment	166		166		162
Loans	16,307		16,307		13,309
Loans individually evaluated for impairment	2,467		2,467		2,862
Loans collectively evaluated for impairment	13,840		13,840		10,447
Leases
Allowance for Loan and Lease Losses Beginning balance	1	2	2	4
Provision for loan losses	0	0	0	(5)
Loans charged off	0	0	(1)	0
Recoveries	0	0	0	3
Allowance for Loan and Lease Losses Ending balance	1	2	1	2
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	1		1		2
Loans	837		837		1,286
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	837		837		1,286
Agriculture
Allowance for Loan and Lease Losses Beginning balance	50	69	62	80
Provision for loan losses	26	(5)	14	(16)
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	76	64	76	64
Allowance related to: Loans individually evaluated for impairment	(39)		(39)		(13)
Allowance related to: Loans collectively evaluated for impairment	37		37		49
Loans	2,358		2,358		2,882
Loans individually evaluated for impairment	373		373		381
Loans collectively evaluated for impairment	1,985		1,985		2,501
Consumer
Allowance for Loan and Lease Losses Beginning balance	122	131	124	161
Provision for loan losses	(26)	(147)	(24)	(103)
Loans charged off	0	0	(6)	(74)
Recoveries	0	150	2	150
Allowance for Loan and Lease Losses Ending balance	96	134	96	134
Allowance related to: Loans individually evaluated for impairment	(29)		(29)		(22)
Allowance related to: Loans collectively evaluated for impairment	67		67		102
Loans	3,590		3,590		4,916
Loans individually evaluated for impairment	70		70		155
Loans collectively evaluated for impairment	3,520		3,520		4,761
Unallocated
Allowance for Loan and Lease Losses Beginning balance	267	309	254	206
Provision for loan losses	(37)	27	(24)	130
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	230	$ 336	230	$ 336
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	230		230		254
Loans	0		0		0
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	$ 0		$ 0		$ 0

8. ALLOWANCE FOR LOAN AND LEA39

8. ALLOWANCE FOR LOAN AND LEASE LOSSES - Aging analysis (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Total Past Due	$ 2,292	$ 2,666
Current	292,650	260,979
Total Loans	294,942	263,645
Past Due Greater Than 90 Days and Accruing	124	0
Nonaccrual	1,808	1,653
Commercial
Total Past Due	30	1,179
Current	34,239	24,007
Total Loans	34,269	25,186
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	30	666
Commercial | 30 -59 Days Past Due
Total Past Due	0	513
Commercial | 60 -89 Days Past Due
Total Past Due	0	0
Commercial | Past Due Greater Than 90 Days
Total Past Due	30	666
Real estate-commercial
Total Past Due	1,676	1,014
Current	202,669	192,857
Total Loans	204,345	193,871
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	1,316	507
Real estate-commercial | 30 -59 Days Past Due
Total Past Due	360	507
Real estate-commercial | 60 -89 Days Past Due
Total Past Due	0	0
Real estate-commercial | Past Due Greater Than 90 Days
Total Past Due	1,316	507
Real estate-multi-family
Total Past Due	0	0
Current	21,978	14,167
Total Loans	21,978	14,167
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Real estate-multi-family | 30 -59 Days Past Due
Total Past Due	0	0
Real estate-multi-family | 60 -89 Days Past Due
Total Past Due	0	0
Real estate-multi-family | Past Due Greater Than 90 Days
Total Past Due	0	0
Real estate-construction
Total Past Due	0	0
Current	11,258	8,028
Total Loans	11,258	8,028
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Real estate-construction | 30 -59 Days Past Due
Total Past Due	0	0
Real estate-construction | 60 -89 Days Past Due
Total Past Due	0	0
Real estate-construction | Past Due Greater Than 90 Days
Total Past Due	0	0
Real Estate Residential
Total Past Due	0	338
Current	16,307	12,971
Total Loans	16,307	13,309
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	338
Real Estate Residential | 30 -59 Days Past Due
Total Past Due	0	0
Real Estate Residential | 60 -89 Days Past Due
Total Past Due	0	0
Real Estate Residential | Past Due Greater Than 90 Days
Total Past Due	0	338
Leases
Total Past Due	0	0
Current	837	1,286
Total Loans	837	1,286
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Leases | 30 -59 Days Past Due
Total Past Due	0	0
Leases | 60 -89 Days Past Due
Total Past Due	0	0
Leases | Past Due Greater Than 90 Days
Total Past Due	0	0
Agriculture
Total Past Due	0	0
Current	2,358	2,882
Total Loans	2,358	2,882
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	0	0
Agriculture | 30 -59 Days Past Due
Total Past Due	0	0
Agriculture | 60 -89 Days Past Due
Total Past Due	0	0
Agriculture | Past Due Greater Than 90 Days
Total Past Due	0	0
Consumer
Total Past Due	586	135
Current	3,004	4,781
Total Loans	3,590	4,916
Past Due Greater Than 90 Days and Accruing	124	0
Nonaccrual	462	142
Consumer | 30 -59 Days Past Due
Total Past Due	123	135
Consumer | 60 -89 Days Past Due
Total Past Due	0	0
Consumer | Past Due Greater Than 90 Days
Total Past Due	$ 463	$ 0

9. BORROWING ARRANGEMENTS (Deta

9. BORROWING ARRANGEMENTS (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Borrowing Arrangements
Unsecured short-term borrowing arrangements with two of its correspondent banks	$ 17,000
FHLB advances	$ 11,000	$ 11,000
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Minimum	0.45%	0.24%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Maximum	1.91%	1.91%
Remaining amounts available under the borrowing arrangement with the FHLB	$ 76,807	$ 67,228
Secured borrowing agreement with the Federal Reserve Bank of San Francisco	$ 16,122	$ 17,335

11. FAIR VALUE MEASUREMENTS - C

11. FAIR VALUE MEASUREMENTS - Carrying amounts and estimated fair values (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financial assets:
Cash and due from banks	$ 21,638	$ 22,449
Interest-bearing deposits in banks	1,000	1,000
Available-for-sale securities	266,740	289,064
Held-to-maturity securities	726	922
FHLB stock	3,779	3,686
Net loans and leases:	294,638	261,421
Accrued interest receivable	1,844	1,858
Deposits:
Noninterest-bearing	178,038	155,698
Savings	60,174	58,820
Money market	133,249	147,625
NOW accounts	63,745	60,862
Time, $100,000 or more	66,127	66,203
Other time	20,721	22,282
Short-term borrowings	3,500	3,500
Long-term borrowings	7,563	7,567
Accrued interest payable	63	59
Level 1
Financial assets:
Cash and due from banks	21,638	22,449
Available-for-sale securities	38	28
Deposits:
Noninterest-bearing	178,038	155,698
Savings	60,174	58,820
Money market	133,249	147,625
NOW accounts	63,745	60,862
Short-term borrowings	3,500	3,500
Accrued interest payable	2
Level 2
Financial assets:
Interest-bearing deposits in banks	1,003	1,002
Available-for-sale securities	266,702	289,036
Held-to-maturity securities	726	922
Accrued interest receivable	1,000	1,150
Deposits:
Time, $100,000 or more	66,127	66,203
Other time	20,721	22,282
Long-term borrowings	7,563	7,567
Accrued interest payable	61	59
Level 3
Financial assets:
Net loans and leases:	294,638	261,421
Accrued interest receivable	844	708
Carrying Amount
Financial assets:
Cash and due from banks	21,638	22,449
Interest-bearing deposits in banks	1,000	1,000
Available-for-sale securities	266,740	289,064
Held-to-maturity securities	674	862
FHLB stock	3,779	3,686
Net loans and leases:	289,774	258,057
Accrued interest receivable	1,844	1,858
Deposits:
Noninterest-bearing	178,038	155,698
Savings	60,174	58,820
Money market	133,249	147,625
NOW accounts	63,745	60,862
Time, $100,000 or more	65,630	65,569
Other time	20,533	22,119
Short-term borrowings	3,500	3,500
Long-term borrowings	7,500	7,500
Accrued interest payable	$ 63	$ 59

11. FAIR VALUE MEASUREMENTS - A

11. FAIR VALUE MEASUREMENTS - Assets and liabilities measured at fair value on recurring and non-recurring basis (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Non Recurring
Impaired loans:
Total gain (losses)	$ 89	$ 80
US Government Agencies and Sponsored Agencies | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	239,821	261,115
US Government Agencies and Sponsored Agencies | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	239,821	261,115
Obligations of states and political subdivisions | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	25,264	26,289
Obligations of states and political subdivisions | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	25,264	26,289
Corporate bonds | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	1,571
Corporate bonds | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	1,571
Corporate stock | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	84	77
Corporate stock | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	38	28
Corporate stock | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	46	49
Commercial
Impaired loans:
Total gain (losses)		14
Commercial | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		666
Commercial | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring		666
Real estate-commercial
Impaired loans:
Total gain (losses)	165
Real estate-commercial | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	4,436	286
Real estate-commercial | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	4,436	286
Other real estate owned
Impaired loans:
Total gain (losses)	(76)	66
Other real estate owned | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	3,781	4,404
Other real estate owned | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	3,781	4,404
Corporate Debt securities | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring		1,583
Corporate Debt securities | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring		1,583
Recurring | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	266,740	289,064
Recurring | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	38	28
Recurring | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	266,702	289,036
Recurring | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0
Non Recurring | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	8,251	5,356
Non Recurring | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	$ 8,251	$ 5,356