American River Bancshares (AMRB) 10-Q 9 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 08, 2016
Document and Entity Information:
Entity Registrant Name	AMERICAN RIVER BANKSHARES
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Entity Central Index Key	1,108,236
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		6,656,594
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEET (Una

CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 22,671	$ 23,727
Interest-bearing deposits in banks	999	750
Investment securities:
Available-for-sale, at fair value	254,483	273,819
Held-to-maturity, at amortized cost	540	623
Loans and leases, less allowance for loan and lease losses of $5,132 at June 30, 2016 and $4,975 at December 31, 2015	305,088	289,102
Premises and equipment, net	1,305	1,407
Federal Home Loan Bank stock	3,779	3,779
Goodwill and other intangible assets	16,321	16,321
Other real estate owned	896	3,551
Bank owned life insurance	14,643	14,483
Accrued interest receivable and other assets	5,086	7,078
Total Assets	625,811	634,640
Deposits:
Noninterest bearing	195,903	190,548
Interest-bearing	330,030	340,142
Total deposits	525,933	530,690
Short-term borrowings	5,000	3,500
Long-term borrowings	6,000	7,500
Accrued interest payable and other liabilities	5,312	6,875
Total liabilities	542,245	548,565
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value; 20,000,000 shares authorized; none Outstanding	0	0
Common stock, no par value; 20,000,000 shares authorized; issued and outstanding – 6,655,980 shares at June 30, 2016 and 7,343,649 shares at December 31, 2015	42,311	49,554
Retained earnings	37,094	34,418
Accumulated other comprehensive income, net of taxes	4,161	2,103
Total shareholders' equity	83,566	86,075
Total liabilities and shareholders' euity	$ 625,811	$ 634,640

CONSOLIDATED BALANCE SHEET (Un3

CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowance for loan and lease losses (in dollars)		$ 4,975
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	20,000,000	20,000,000
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	6,655,980	7,343,649
Common stock, shares outstanding	6,655,980	7,343,649

CONSOLIDATED STATEMENT OF INCOM

CONSOLIDATED STATEMENT OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest and fees on loans and leases:
Taxable	$ 3,445	$ 3,339	$ 6,807	$ 6,719
Exempt from Federal income taxes	173	85	345	123
Interest on deposits in banks	2	1	3	2
Interest and dividends on investment securities:
Taxable	1,441	1,657	2,993	3,073
Exempt from Federal income taxes	162	191	346	381
Dividends	6	10	11	10
Total interest income	5,229	5,283	10,505	10,185
Interest expense:
Interest on deposits	182	208	366	422
Interest on borrowings	39	36	89	70
Total interest expense	221	244	455	492
Net interest income	5,008	5,039	10,050	9,693
Provision for loan and lease losses	0	0	0	0
Net interest income after provision for loan and lease losses	5,008	5,039	10,050	9,693
Noninterest income:
Service charges on deposit accounts	127	127	256	244
(Loss) gain on sale, call, or impairment of securities	(1)	51	281	218
Rental income from OREO properties	0	90	106	161
Other noninterest income	237	239	474	469
Total noninterest income	363	507	1,117	1,092
Noninterest expense:
Salaries and employee benefits	2,101	2,045	4,261	4,315
Occupancy	292	301	590	594
Furniture and equipment	163	179	328	356
Federal Deposit Insurance Corporation assessments	76	76	156	156
Expenses related to other real estate owned	20	55	360	202
Other expense	763	759	1,511	1,605
Total noninterest expense	3,415	3,415	7,206	7,228
Income before provision for income taxes	1,956	2,131	3,961	3,557
Provision for income taxes	652	745	1,285	1,215
Net income	$ 1,304	$ 1,386	$ 2,676	$ 2,342
Basic earnings per share	$ 0.19	$ 0.18	$ 0.39	$ 0.30
Diluted earnings per share	0.19	0.18	0.39	0.30
Cash dividends per share	$ 0	$ 0	$ 0	$ 0

CONSOLIDATED STATEMENT OF COMPR

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 1,304	$ 1,386	$ 2,676	$ 2,342
Other comprehensive income:
Increase (decrease) in net unrealized gains on investment securities	810	(1,847)	3,712	254
Deferred tax (expense) benefit	(324)	739	(1,485)	(102)
Increase (decrease) in net unrealized gains on investment securities, net of tax	486	(1,108)	2,227	152
Reclassification adjustment for realized gains included in net income	1	(51)	(281)	(218)
Tax effect	0	20	112	87
Realized losses (gains), net of tax	1	(31)	(169)	(131)
Total other comprehensive gain (loss) income	487	(1,139)	2,058	21
Comprehensive income	$ 1,791	$ 247	$ 4,734	$ 2,363

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income	Total
Begining Balance, Amount at Dec. 31, 2014	$ 57,126	$ 29,150	$ 3,371	$ 89,647
Begining Balance, Shares at Dec. 31, 2014	8,089,615
Net income		$ 2,342		2,342
Other comprehensive income, net of tax:
Net change in unrealized gains on available-for-sale investment securities			$ 21	21
Net restricted stock award activity and related compensation expense, Amount	$ 111			111
Net restricted stock award activity and related compensation expense, Shares	45,023
Stock option compensation expense, Amount	$ 15			15
Retirement of common stock, Amount	$ (3,945)			$ (3,945)
Retirement of common stock, Shares	(404,481)
Ending Balance, Amount at Jun. 30, 2015	$ 7,730,157
Ending Balance, Shares at Jun. 30, 2015	53,307	31,492	3,392	88,191
Begining Balance, Amount at Dec. 31, 2015	$ 49,554	$ 34,418	$ 2,103	$ 86,075
Begining Balance, Shares at Dec. 31, 2015	7,343,649
Net income		2,676		2,676
Other comprehensive income, net of tax:
Net change in unrealized gains on available-for-sale investment securities			2,058	2,058
Net restricted stock award activity and related compensation expense, Amount	$ 147			147
Net restricted stock award activity and related compensation expense, Shares	28,728
Stock option compensation expense, Amount	$ 24			24
Retirement of common stock, Amount	$ (7,414)			(7,414)
Retirement of common stock, Shares	(716,897)
Ending Balance, Amount at Jun. 30, 2016	$ 42,311	$ 37,094	$ 4,161	$ 83,566
Ending Balance, Shares at Jun. 30, 2016	6,655,980

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 2,676	$ 2,342
Adjustments to reconcile net income to net cash provided by operating activities:
Increase (decrease) in deferred loan origination fees, net	26	(29)
Depreciation and amortization	220	212
Gain on sale and call of investment securities	(281)	(218)
Amortization of investment security premiums and discounts, net	1,422	1,798
Increase in cash surrender values of life insurance policies	(160)	(159)
Stock based compensation expense	167	126
Loss/gain on sale/write-down of other real estate owned	259	68
Decrease in accrued interest receivable and other assets	621	162
Decrease in accrued interest payable and other liabilities	(1,563)	(698)
Net cash provided by operating activities	3,387	3,503
Cash flows from investing activities:
Proceeds from the sale of available-for-sale investment securities	8,287	15,383
Proceeds from matured available-for-sale investment securities	600	0
Purchases of available-for-sale investment securities	(8,875)	(28,393)
Proceeds from principal repayments for available-for-sale investment securities	21,612	24,317
Proceeds from principal repayments for held-to-maturity investment securities	83	122
Net increase in interest-bearing deposits in banks	(249)	0
Net increase in loans	(14,326)	(17,267)
Proceeds from sale of other real estate	710	924
Capitalized additions to other real estate	0	(126)
Net increase in FHLB stock	0	(93)
Purchases of equipment	(118)	(155)
Net cash provided by investing activities	7,724	(5,288)
Cash flows from financing activities:
Net (decrease) increase in demand, interest-bearing and savings deposits	(2,785)	1,343
Net decrease in time deposits	(1,972)	(53)
Net decrease in short term borrowings	1,500	0
Net increase in long-term borrowings	(1,500)	0
Proceeds from stock option exercise	4	0
Cash paid to repurchase common stock	(7,414)	(3,945)
Net cash used in financing activities	(12,167)	(2,655)
Decrease in cash and cash equivalents	(1,056)	(4,440)
Cash and cash equivalents at beginning of year	23,727	22,449
Cash and cash equivalents at end of period	$ 22,671	$ 18,009

1. CONSOLIDATED FINANCIAL STATE

1. CONSOLIDATED FINANCIAL STATEMENTS	6 Months Ended
	Jun. 30, 2016
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 June 30, 2016 and December 31, 2015, the results of its operations and statement of comprehensive income for the three-month and six-month periods ended June 30, 2016 and 2015, its cash flows for the six-month periods ended June 30, 2016 and 2015 and its statement of changes in shareholders’ equity for the six months ended June 30, 2016 and 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 annual report on Form 10-K for the year ended December 31, 2015. The results of operations for the three-month and six-month periods ended June 30, 2016 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	6 Months Ended
	Jun. 30, 2016
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 119,237 options remain outstanding at June 30, 2016. At June 30, 2016, under the 2010 Plan, there were 76,461 stock options and 68,025 restricted shares outstanding and the total number of authorized shares that remain available for issuance was 1,377,766. 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 June 30, 2016 and 2015, the compensation cost recognized for equity compensation was $85,000 and $71,000, respectively. The recognized tax benefit for equity compensation expense was $30,000 and $25,000, respectively, for the three-month periods ended June 30, 2016 and 2015. For the six-month periods ended June 30, 2016 and 2015, the compensation cost recognized for equity compensation was $167,000 and $126,000, respectively. The recognized tax benefit for equity compensation expense was $59,000 and $45,000, respectively, for the six-month periods ended June 30, 2016 and 2015. At June 30, 2016, the total compensation cost related to nonvested stock option awards not yet recorded was $119,000. This amount will be recognized over the next 4.0 years and the weighted average period of recognizing these costs is expected to be 2.1 years. At June 30, 2016, the total compensation cost related to restricted stock awards not yet recorded was $520,000. This amount will be recognized over the next 5.0 years and the weighted average period of recognizing these costs is expected to be 1.8 years. Equity Plans Activity Stock Options There were no stock options awarded during the three-month and six-month periods ended June 30, 2016. There were 26,427 stock options awarded during the three-month and six-month periods ended June 30, 2015 at an average exercise price of $9.56. The weighted average award date fair value of options awarded for the three-month and six-month periods ended June 30, 2015 was $3.24. A summary of option activity under the Plans as of June 30, 2016 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, 2016 248,411 $ 15.19 3.7 years $ 232 Awarded — — — — Exercised 500 8.50 — — Expired, forfeited or cancelled 52,213 23.09 — — Outstanding at June 30, 2016 195,698 $ 13.09 4.1 years $ 190 Vested at June 30, 2016 151,454 $ 14.28 2.8 years $ 136 Non-vested at June 30, 2016 44,244 $ 9.05 8.2 years $ 54 Restricted Stock There were 11,923 and 29,756 shares of restricted stock awarded during the three-month and six-month periods ended June 30, 2016, respectively. There were 24,491 and 45,023 shares of restricted stock awarded during the three-month and six-month periods ended June 30, 2015, respectively. Restricted Stock Shares Weighted Average Award Date Fair Value Nonvested at January 1, 2016 57,516 $ 9.21 Awarded 29,756 10.26 Less: Vested 18,219 9.30 Less: Expired, forfeited or cancelled 1,028 9.23 Nonvested at June 30, 2016 68,025 $ 9.65 Other Equity Awards There were no stock appreciation rights; restricted performance stock; unrestricted Company stock; or performance units awarded during the three-month or six-month month periods ended June 30, 2016 or 2015 or outstanding at June 30, 2016 or December 31, 2015. The intrinsic value used for stock options and restricted stock awards was derived from the market price of the Company’s common stock of $10.26 as of June 30, 2016.

3. COMMITMENTS AND CONTINGENCIE

3. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2016
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 $25,804,000 and standby letters of credit of approximately $238,000 at June 30, 2016 and loan commitments of approximately $26,730,000 and standby letters of credit of approximately $238,000 at December 31, 2015. 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 2016 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 at June 30, 2016 or December 31, 2015.

4. EARNINGS PER SHARE COMPUTATI

4. EARNINGS PER SHARE COMPUTATION	6 Months Ended
	Jun. 30, 2016
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 (6,717,456 and 6,906,620 shares for the three-month and six-month periods ended June 30, 2016, and (7,659,883 and 7,740,320 shares for the three-month and six-month periods ended June 30, 2015). 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 28,643 and 26,815, respectively, dilutive shares for the three-month and six-month periods ended June 30, 2016 and 14,828 and 13,999, respectively, dilutive shares for the three-month and six-month periods ended June 30, 2015. For the three-month periods ended June 30, 2016 and 2015, there were 105,844 and 214,066 stock options, respectively, that were excluded from the calculation as they were considered antidilutive. For the six-month periods ended June 30, 2016 and 2015, there were 138,549 and 214,066 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	6 Months Ended
	Jun. 30, 2016
INVESTMENTS SECURITIES (Tables)
INVESTMENT SECURITIES	The amortized cost and estimated fair values of Available-for-Sale and Held-to-Maturity investment securities at June 30, 2016 and December 31, 2015 consisted of the following (dollars in thousands): Available-for-Sale June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 223,053 $ 5,769 $ (100 ) $ 228,722 Obligations of states and political subdivisions 22,945 1,204 (6 ) 24,143 Corporate bonds 1,501 36 — 1,537 Equity securities: Corporate stock 49 32 — 81 $ 247,548 $ 7,041 $ (106 ) $ 254,483 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 244,056 $ 3,059 $ (930 ) $ 246,185 Obligations of states and political subdivisions 24,706 1,307 — 26,013 Corporate bonds 1,502 49 — 1,551 Equity securities: Corporate stock 51 19 — 70 $ 270,315 $ 4,434 $ (930 ) $ 273,819 Net unrealized gains on available-for-sale investment securities totaling $6,935,000 were recorded, net of $2,774,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at June 30, 2016. There were no sales or calls of available-for-sale investment securities for the three-month period ended June 30, 2016, however, there was an impairment loss of one security resulting in the write-down of the remaining balance of $1,000, and for the six-month period ended June 30, 2016 proceeds and gross realized gains from the sale, call, and impairment of available-for-sale investment securities totaled $8,287,000 and $281,000, respectively. There were no transfers of available-for-sale investment securities for the three-month and six-month periods ended June 30, 2016. Net unrealized gains on available-for-sale investment securities totaling $3,504,000 were recorded, net of $1,401,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2015. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the three-month period ended June 30, 2015 totaled $5,473,000 and $51,000, respectively, and for the six-month period ended June 30, 2015 totaled $15,383,000 and $218,000, respectively. There were no transfers of available-for-sale investment securities for the three-month and six-month periods ended June 30, 2015. Held-to-Maturity June 30, 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 540 $ 44 $ — $ 584 December 31, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 623 $ 46 $ — $ 669 There were no sales or transfers of held-to-maturity investment securities for the periods ended June 30, 2016 and June 30, 2015. Investment securities with unrealized losses at June 30, 2016 and December 31, 2015 are summarized and classified according to the duration of the loss period as follows (dollars in thousands): June 30, 2016 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 $ 2,058 $ (18 ) 9,822 (82 ) $ 11,880 $ (100 ) Obligations of states and political subdivisions 1,433 (6 ) — — 1,433 (6 ) $ 3,491 $ (24 ) $ 9,822 $ (82 ) $ 13,313 $ (106 ) December 31, 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: US Government Agencies and Sponsored Agencies $ 93,265 $ (813 ) $ 5,251 $ (117 ) $ 98,516 $ (930 )) Obligations of states and political subdivisions — — — — — — $ 93,265 $ (813 ) $ 5,251 $ (117 ) $ 98,516 $ (930 ) There were no held-to-maturity investment securities with unrealized losses as of June 30, 2016 or December 31, 2015. At June 30, 2016, the Company held 213 securities of which four were in a loss position for less than twelve months and six were in a loss position for twelve months or more. Of the four securities in a loss position for less than twelve months, two were U.S. Government Agencies and Sponsored Agencies securities and two were obligations of states or political subdivisions and of the six securities that were in a loss position for greater than twelve months, all six were U.S. Government Agencies and Sponsored Agencies securities. At December 31, 2015, the Company held 223 securities of which 45 were in a loss position for less than twelve months and three were in a loss position for twelve months or more. Of the 45 securities in a loss position for less than twelve months, all were US Government Agencies and Sponsored Agencies securities and of the three securities that were in a loss position for greater than twelve months, all were US Government Agencies and Sponsored Agencies. The unrealized loss on the Company’s investment 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 June 30, 2016 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 $ 2,430 $ 2,479 After one year through five years 3,697 3,806 After five years through ten years 11,662 12,563 After ten years 6,657 6,832 24,446 25,680 Investment securities not due at a single maturity date: US Government Agencies and Sponsored Agencies 223,053 228,722 $ 540 $ 584 Corporate stock 49 81 — — $ 247,548 $ 254,483 $ 540 $ 584 Expected maturities will differ from contractual maturities because the issuers of the securities may 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	6 Months Ended
	Jun. 30, 2016
IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED
IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED	At June 30, 2016 and December 31, 2015, the recorded investment in nonperforming loans and leases was approximately $1,055,000 and $1,643,000, 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 June 30, 2016, the recorded investment in loans and leases that were considered to be impaired totaled $20,832,000, which includes $1,029,000 in nonaccrual loans and leases and $19,803,000 in performing loans and leases. Of the total impaired loans of $20,832,000, loans totaling $11,980,000 were deemed to require no specific reserve and loans totaling $8,852,000 were deemed to require a related valuation allowance of $904,000. At December 31, 2015, the recorded investment in loans and leases that were considered to be impaired totaled $21,365,000 and had a related valuation allowance of $899,000. At June 30, 2016 and December 31, 2015, the balance in other real estate owned (“OREO”) was $896,000 and $3,551,000, respectively. At June 30, 2016, the Company did not own any residential OREO properties nor was there any residential properties in the process of foreclosure. During the first quarter of 2016, the Company sold a single commercial property in El Dorado County for a gain of $117,000. Also, during the first quarter the Company obtained an updated appraisal on existing commercial land in Sacramento County, which resulted in a charge to expense of $376,000. The Company did not add any properties to OREO during the first quarter of 2016. During the second quarter of 2016, the Company did not add any properties to OREO or sell any OREO property. The June 30, 2016 OREO balance of $896,000 consists of two properties, one of which is commercial real estate in the amount of $243,000 and the other is commercial land in the amount of $653,000. Nonperforming assets at June 30, 2016 and December 31, 2015 are summarized as follows: (dollars in thousands) June 30, 2016 December 31, 2015 Nonaccrual loans and leases that are current to terms (less than 30 days past due) $ 643 $ 379 Nonaccrual loans and leases that are past due 412 1,264 Loans and leases past due 90 days and accruing interest — — Other assets 878 878 Other real estate owned 896 3,551 Total nonperforming assets $ 2,829 $ 6,072 Nonperforming loans and leases to total loans and leases 0.34 % 0.56 % Total nonperforming assets to total assets 0.45 % 0.96 % Impaired loans and leases as of and for the periods ended June 30, 2016 and December 31, 2015 are summarized as follows: (dollars in thousands) As of June 30, 2016 As of December 31, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial $ — $ — $ — $ — $ — $ — Real estate-commercial 11,643 12,276 — 12,269 12,902 — Real estate-residential 337 424 — 338 338 — Subtotal $ 11,980 $ 12,700 $ — $ 12,607 $ 13,240 $ — With an allowance recorded: Commercial $ 91 $ 91 $ 11 $ 121 $ 121 $ 25 Real estate-commercial 6,013 6,107 675 5,597 5,693 598 Real estate-multi-family 485 485 4 488 488 5 Real estate-residential 1,838 1,838 151 2,114 2,201 204 Agriculture 364 364 37 370 370 38 Consumer 61 61 26 68 68 29 Subtotal $ 8,852 $ 8,946 $ 904 $ 8,758 $ 8,941 $ 899 Total: Commercial $ 91 $ 91 $ 11 $ 121 $ 121 $ 25 Real estate-commercial 17,656 18,383 675 17,866 18,595 598 Real estate-multi-family 485 485 4 488 488 5 Real estate-residential 2,175 2,262 151 2,452 2,539 204 Agriculture 364 364 37 370 370 38 Consumer 61 61 26 68 68 29 $ 20,832 $ 21,646 $ 904 $ 21,365 $ 22,181 $ 899 15 The following table presents the average balance related to impaired loans and leases for the periods indicated (dollars in thousands): Average Recorded Investments for the three months ended Average Recorded Investments for the six months ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Commercial $ 80 $ 757 $ 100 $ 794 Real estate-commercial 16,878 19,796 17,021 19,383 Real estate-multi-family 491 492 495 494 Real estate-residential 2,216 2,840 2,236 2,848 Agriculture 373 377 378 378 Consumer 76 132 77 115 Total $ 20,114 $ 24,394 $ 20,307 $ 24,012 The following table presents the interest income recognized on impaired loans and leases for the periods indicated (dollars in thousands): Interest Income Recognized for the three months ended Interest Income Recognized for the six months ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Commercial $ 2 $ 3 $ 3 $ 5 Real estate-commercial 259 216 444 472 Real estate-multi-family 2 7 10 12 Real estate-construction — — — — Real estate-residential 31 32 52 63 Agriculture 5 5 10 8 Consumer — — — 1 Total $ 299 $ 263 $ 519 $ 561

7. TROUBLED DEBT RESTRUCTURINGS

7. TROUBLED DEBT RESTRUCTURINGS	6 Months Ended
	Jun. 30, 2016
TROUBLED DEBT RESTRUCTURINGS
TROUBLED DEBT RESTRUCTURINGS	During the three and six-month periods ended June 30, 2016, there were no loans that were modified as troubled debt restructurings. The following table presents loans by class modified as troubled debt restructurings during the three months ended June 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 1,650 1,650 Real estate – residential 1 255 255 Consumer 1 23 23 Total 5 $ 1,975 $ 1,975 16 The following table presents loans by class modified as troubled debt restructurings during the six months ended June 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 4 2,167 2,167 Real estate – residential 1 255 255 Consumer 1 23 23 Total 7 $ 2,492 $ 2,492 The troubled debt restructurings described above increased the allowance for loan and lease losses by $170,000 and resulted in no charge-offs during the six months ended June 30, 2015. There were no payment defaults on troubled debt restructurings within 12 months following the modification for the three-month and six-month periods ended June 30, 2015 and June 30, 2016.

8. ALLOWANCE FOR LOAN AND LEASE

8. ALLOWANCE FOR LOAN AND LEASE LOSSES	6 Months Ended
	Jun. 30, 2016
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 June 30, 2016 and December 31, 2015 are summarized below: June 30, 2016 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 32,574 $ 175,479 $ 35,038 $ 3,917 $ 13,361 Watch 782 21,160 487 9,878 1,810 Special mention — 6,169 — — 385 Substandard 2,837 631 — — 804 Doubtful — — — — — Total $ 36,193 $ 203,439 $ 35,525 $ 13,795 $ 16,360 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 534 $ 1,953 $ 1,455 $ 264,311 Watch — 364 296 34,777 Special mention — — 433 6,987 Substandard — — 120 4,392 Doubtful — — — — Total $ 534 $ 2,317 $ 2,304 $ 310,467 December 31, 2015 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 32,216 $ 172,755 $ 23,001 $ 6,371 $ 10,593 Watch 1,073 17,318 493 8,162 2,099 Special mention — 8,363 — — 697 Substandard 2,906 1,155 — — 811 Doubtful or loss — — — — — Total $ 36,195 $ 199,591 $ 23,494 $ 14,533 $ 14,200 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 732 $ 2,061 $ 2,136 $ 249,865 Watch — 370 378 29,893 Special mention — — 433 9,493 Substandard — — 175 5,047 Doubtful or loss — — — — Total $ 732 $ 2,431 $ 3,122 $ 294,298 The allocation of the Company’s allowance for loan and lease losses and by portfolio segment and by impairment methodology are summarized below: June 30, 2016 (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, 2016 $ 860 $ 2,369 $ 228 $ 813 $ 319 $ 1 $ 77 $ 78 $ 230 $ 4,975 Provision for loan losses (125 ) 266 101 (88 ) (36 ) — (4 ) (90 ) (24 ) — Loans charged-off — — — — — — — — — — Recoveries 73 12 — — — — — 72 — 157 Ending balance, June 30, 2016 $ 808 $ 2,647 $ 329 $ 725 $ 283 $ 1 $ 73 $ 60 $ 206 $ 5,132 Ending balance: Individually evaluated for impairment $ 11 $ 675 $ 4 $ — $ 151 $ — $ 37 $ 26 $ — $ 904 Ending balance: Collectively evaluated for impairment $ 797 $ 1,972 $ 325 $ 725 $ 132 $ 1 $ 36 $ 34 $ 206 $ 4,228 Loans Ending balance $ 36,193 $ 203,439 $ 35,525 $ 13,795 $ 16,360 $ 534 $ 2,317 $ 2,304 $ — $ 310,467 Ending balance: Individually evaluated for impairment $ 91 $ 17,656 $ 485 $ — $ 2,175 $ — $ 364 $ 61 $ — $ 20,832 Ending balance: Collectively evaluated for impairment $ 36,102 $ 185,783 $ 35,040 $ 13,795 $ 14,185 $ 534 $ 1,953 $ 2,243 $ — $ 289,635 Allowance for Loan and Lease Losses Beginning balance, March 31, 2016 $ 813 $ 2,513 $ 270 $ 625 $ 298 $ 2 $ 77 $ 65 $ 419 $ 5,082 Provision for loan losses (44 ) 123 59 100 (15 ) (1 ) (4 ) (5 ) (213 ) — Loans charged off — — — — — — — — — — Recoveries 39 11 — — — — — — — 50 Ending balance, June 30, 2016 $ 808 $ 2,647 $ 329 $ 725 $ 283 $ 1 $ 73 $ 60 $ 206 $ 5,132 December 31, 2015 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Ending balance: Individually evaluated for impairment $ 25 $ 598 $ 5 $ — $ 204 $ — $ 38 $ 29 $ — $ 899 Ending balance: Collectively evaluated for impairment $ 835 $ 1,771 $ 223 $ 813 $ 115 $ 1 $ 39 $ 49 $ 230 $ 4,076 Loans Ending balance $ 36,195 $ 199,591 $ 23,494 $ 14,533 $ 14,200 $ 732 $ 2,431 $ 3,122 $ — $ 294,298 Ending balance: Individually evaluated for impairment $ 121 $ 17,866 $ 488 $ — $ 2,452 $ — $ 370 $ 68 $ — $ 21,365 Ending balance: Collectively evaluated for impairment $ 36,074 $ 181,725 $ 23,006 $ 14,533 $ 11,748 $ 732 $ 2,061 $ 3,054 $ — $ 272,933 June 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 199 (389 ) (23 ) 224 (14 ) — (12 ) 2 13 — Loans charged off — — — — — (1 ) — (6 ) — (7 ) Recoveries 23 40 — — — — — 2 — 65 Ending balance, June 30, 2015 $ 1,652 $ 1,968 $ 107 $ 807 $ 385 $ 1 $ 50 $ 122 $ 267 $ 5,359 Allowance for Loan and Lease Losses Beginning balance, March 31, 2015 $ 1,403 $ 2,284 $ 120 $ 680 $ 392 $ 1 $ 55 $ 132 $ 241 $ 5,308 Provision for loan losses 232 (355 ) (13 ) 127 (7 ) 1 (5 ) (6 ) 26 — Loans charged off — — — — — (1 ) — (4 ) — (5 ) Recoveries 17 39 — — — — — — — 56 Ending balance, June 30, 2015 $ 1,652 $ 1,968 $ 107 $ 807 $ 385 $ 1 $ 50 $ 122 $ 267 $ 5,359 The Company’s aging analysis of the loan and lease portfolio at June 30, 2016 and December 31, 2015 are summarized below: June 30, 2016 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Past Due Greater Than 90 Days Total Past Due Current Total Loans Past Due Greater Than 90 Days and Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 36,193 $ 36,193 — $ 22 Real estate: Commercial 982 351 — 1,333 202,106 203,439 — 631 Multi-family — — — — 35,525 35,525 — — Construction — — — — 13,795 13,795 — — Residential — — — — 16,360 16,360 — 337 Other: Leases — — — — 534 534 — — Agriculture — — — — 2,317 2,317 — — Consumer 300 36 — 336 1,968 2,304 — 65 Total $ 1,282 $ 387 $ — $ 1,669 $ 308,798 $ 310,467 $ — $ 1,055 December 31, 2015 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Past Due Greater Than 90 Days Total Past Due Current Total Loans Past Due Greater Than 90 Days and Accruing Nonaccrual Commercial: Commercial $ — $ — $ 30 $ 30 $ 36,165 $ 36,195 $ — $ 30 Real estate: Commercial — 359 499 858 198,733 199,591 — 1,155 Multi-family — — — — 23,494 23,494 — — Construction — — — — 14,533 14,533 — — Residential — — 338 338 13,862 14,200 — 338 Other: Leases — — — — 732 732 — — Agriculture — — — — 2,431 2,431 — — Consumer 367 — — 367 2,755 3,122 — 120 Total $ 367 $ 359 $ 867 $ 1,593 $ 292,705 $ 294,298 $ — $ 1,643

9. BORROWING ARRANGEMENTS

9. BORROWING ARRANGEMENTS	6 Months Ended
	Jun. 30, 2016
Borrowing Arrangements
BORROWING ARRANGEMENTS	At June 30, 2016, 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 June 30, 2016 or December 31, 2015. 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 June 30, 2016, bearing interest rates ranging from 0.75% to 1.91% and maturing between July 20, 2016 and July 12, 2019. Advances totaling $11,000,000 were outstanding from the FHLB at December 31, 2015, bearing interest rates ranging from 0.45% to 1.91% and maturing between January 19, 2016 and July 12, 2019. Remaining amounts available under the borrowing arrangement with the FHLB at June 30, 2016 and December 31, 2015 totaled $83,483,000 and $78,326,000, 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 June 30, 2016 and December 31, 2015 were $12,399,000 and $11,371,000, respectively. There were no advances outstanding under this borrowing arrangement as of June 30, 2016 and December 31, 2015.

10. INCOME TAXES

10. INCOME TAXES	6 Months Ended
	Jun. 30, 2016
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 six-month periods ended June 30, 2016 and 2015. Federal and state income taxes for the quarter ended June 30, 2016 decreased $93,000 (12.5%) from $745,000 in the second quarter of 2015 to $652,000 in the second quarter of 2016 and increased $70,000 (5.8%) from $1,215,000 in the six months ended June 30, 2015 to $1,285,000 for the six months ended June 30, 2016. The combined federal and state effective tax rate for the quarter ended June 30, 2016 was 33.3%, compared to 35.0% for the second quarter of 2015. For the six months ended June 30, 2016, the combined federal and state effective tax rate was 32.4% compared to 34.2% for the six months ended June 30, 2015. The lower effective tax rate for both periods in 2016 compared to 2015 resulted from an increase in tax exempt loan interest. Tax exempt loan interest was $173,000 in the second quarter of 2016 compared to $85,000 in the second quarter of 2015 and tax exempt loan interest was $345,000 in the first six months of 2016 compared to $123,000 in the first six months of 2015.

11. FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2016
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 June 30, 2016 and December 31, 2015. 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, and include 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: June 30, 2016 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 22,671 $ 22,671 $ 22,671 Interest-bearing deposits in banks 999 $ 999 999 Available-for-sale securities 254,483 36 254,447 254,483 Held-to-maturity securities 540 584 584 FHLB stock 3,779 N/A N/A N/A N/A Net loans and leases: 305,088 $ 310,957 310,957 Accrued interest receivable 1,728 954 774 1,728 Financial liabilities: Deposits: Noninterest-bearing $ 195,903 $ 195,903 $ 195,903 Savings 59,686 59,686 59,686 Money market 127,864 127,864 127,864 NOW accounts 59,686 59,686 59,686 Time Deposits 82,599 $ 83,034 83,034 Short-term borrowings 5,000 5,000 5,000 Long-term borrowings 6,000 6,049 6,049 Accrued interest payable 40 1 39 40 Carrying Fair Value Measurements Using: December 31, 2015 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 23,727 $ 23,727 $ — $ — $ 23,727 Interest-bearing deposits in banks 750 — 752 — 752 Available-for-sale securities 273,819 24 273,795 — 273,819 Held-to-maturity securities 623 — 669 — 669 FHLB stock 3,779 N/A N/A N/A N/A Net loans and leases: 289,102 — — 292,444 292,444 Accrued interest receivable 1,885 — 1,077 808 1,885 Financial liabilities: Deposits: Noninterest-bearing $ 190,548 $ 190,548 $ — $ — $ 190,548 Savings 59,061 59,061 — — 59,061 Money market 135,186 135,186 — — 135,186 NOW accounts 61,324 61,324 — — 61,324 Time Deposits 84,571 — 85,165 — 85,165 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 7,500 — 7,502 — 7,502 Accrued interest payable 60 — 60 — 60 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 June 30, 2016 and December 31, 2015: 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) June 30, 2016 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Agencies $ 228,722 $ — $ 228,722 $ — $ — Obligations of states and political subdivisions 24,143 — 24,143 — — Corporate bonds 1,537 — 1,537 — — Corporate stock 81 36 45 — — Total recurring $ 254,483 $ 36 $ 254,447 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 3,848 $ — $ — $ 3,848 $ — Residential 337 — — 337 — Other real estate owned Commercial 243 — — 243 — Land 653 — — 653 (376 ) Total nonrecurring $ 5,081 $ — $ — $ 5,081 $ (376 ) Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) December 31, 2015 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Agencies $ 246,185 $ — $ 246,185 $ — $ — Corporate Debt securities 1,551 — 1,551 Obligations of states and political subdivisions 26,013 — 26,013 — — Corporate stock 70 24 46 — — Total recurring $ 273,819 $ 24 $ 273,795 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 3,900 $ — $ — $ 3,900 $ (334 ) Other real estate owned Commercial 2,522 — — 2,522 — Land 1,029 — — 1,029 — Total nonrecurring $ 7,451 $ — $ — $ 7,451 $ (334 ) There were no significant transfers between Levels 1 and 2 during the three-month and six-month periods ended June 30, 2016 or the twelve months ended December 31, 2015. 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

12. RECENTLY ISSUED ACCOUNTING

12. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Jun. 30, 2016
Recently Issued Accounting Pronouncements
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	In January 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” In February 2016, the FASB issued ASU No. 2016-02, “Leases.” . In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.”

2. STOCK-BASED COMPENSATION (Ta

2. STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2016
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, 2016 248,411 $ 15.19 3.7 years $ 232 Awarded — — — — Exercised 500 8.50 — — Expired, forfeited or cancelled 52,213 23.09 — — Outstanding at June 30, 2016 195,698 $ 13.09 4.1 years $ 190 Vested at June 30, 2016 151,454 $ 14.28 2.8 years $ 136 Non-vested at June 30, 2016 44,244 $ 9.05 8.2 years $ 54
Schedule of Nonvested Share Activity	Restricted Stock Shares Weighted Average Award Date Fair Value Nonvested at January 1, 2016 57,516 $ 9.21 Awarded 29,756 10.26 Less: Vested 18,219 9.30 Less: Expired, forfeited or cancelled 1,028 9.23 Nonvested at June 30, 2016 68,025 $ 9.65

5. INVESTMENT SECURITIES (Table

5. INVESTMENT SECURITIES (Tables)	6 Months Ended
	Jun. 30, 2016
INVESTMENTS SECURITIES (Tables)
Available-for-sale Securities	June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 223,053 $ 5,769 $ (100 ) $ 228,722 Obligations of states and political subdivisions 22,945 1,204 (6 ) 24,143 Corporate bonds 1,501 36 — 1,537 Equity securities: Corporate stock 49 32 — 81 $ 247,548 $ 7,041 $ (106 ) $ 254,483 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 244,056 $ 3,059 $ (930 ) $ 246,185 Obligations of states and political subdivisions 24,706 1,307 — 26,013 Corporate bonds 1,502 49 — 1,551 Equity securities: Corporate stock 51 19 — 70 $ 270,315 $ 4,434 $ (930 ) $ 273,819
Held-to-maturity Securities	June 30, 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 540 $ 44 $ — $ 584 December 31, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 623 $ 46 $ — $ 669
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	June 30, 2016 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 $ 2,058 $ (18 ) 9,822 (82 ) $ 11,880 $ (100 ) Obligations of states and political subdivisions 1,433 (6 ) — — 1,433 (6 ) $ 3,491 $ (24 ) $ 9,822 $ (82 ) $ 13,313 $ (106 ) December 31, 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: US Government Agencies and Sponsored Agencies $ 93,265 $ (813 ) $ 5,251 $ (117 ) $ 98,516 $ (930 )) Obligations of states and political subdivisions — — — — — — $ 93,265 $ (813 ) $ 5,251 $ (117 ) $ 98,516 $ (930 )
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 $ 2,430 $ 2,479 After one year through five years 3,697 3,806 After five years through ten years 11,662 12,563 After ten years 6,657 6,832 24,446 25,680 Investment securities not due at a single maturity date: US Government Agencies and Sponsored Agencies 223,053 228,722 $ 540 $ 584 Corporate stock 49 81 — — $ 247,548 $ 254,483 $ 540 $ 584

6. IMPAIRED AND NONPERFORMING22

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED (Tables)	6 Months Ended
	Jun. 30, 2016
Impaired And Nonperforming Loans And Leases And Other Real Estate Owned Tables
Schedule of Nonperforming loans and leases and other assets and OREO	(dollars in thousands) June 30, 2016 December 31, 2015 Nonaccrual loans and leases that are current to terms (less than 30 days past due) $ 643 $ 379 Nonaccrual loans and leases that are past due 412 1,264 Loans and leases past due 90 days and accruing interest — — Other assets 878 878 Other real estate owned 896 3,551 Total nonperforming assets $ 2,829 $ 6,072 Nonperforming loans and leases to total loans and leases 0.34 % 0.56 % Total nonperforming assets to total assets 0.45 % 0.96 %
Schedule of Impaired Financing Receivables	(dollars in thousands) As of June 30, 2016 As of December 31, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial $ — $ — $ — $ — $ — $ — Real estate-commercial 11,643 12,276 — 12,269 12,902 — Real estate-residential 337 424 — 338 338 — Subtotal $ 11,980 $ 12,700 $ — $ 12,607 $ 13,240 $ — With an allowance recorded: Commercial $ 91 $ 91 $ 11 $ 121 $ 121 $ 25 Real estate-commercial 6,013 6,107 675 5,597 5,693 598 Real estate-multi-family 485 485 4 488 488 5 Real estate-residential 1,838 1,838 151 2,114 2,201 204 Agriculture 364 364 37 370 370 38 Consumer 61 61 26 68 68 29 Subtotal $ 8,852 $ 8,946 $ 904 $ 8,758 $ 8,941 $ 899 Total: Commercial $ 91 $ 91 $ 11 $ 121 $ 121 $ 25 Real estate-commercial 17,656 18,383 675 17,866 18,595 598 Real estate-multi-family 485 485 4 488 488 5 Real estate-residential 2,175 2,262 151 2,452 2,539 204 Agriculture 364 364 37 370 370 38 Consumer 61 61 26 68 68 29 $ 20,832 $ 21,646 $ 904 $ 21,365 $ 22,181 $ 899
Schedule of Average Balance Recorded to Imapired Loans and Leases	Average Recorded Investments for the three months ended Average Recorded Investments for the six months ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Commercial $ 80 $ 757 $ 100 $ 794 Real estate-commercial 16,878 19,796 17,021 19,383 Real estate-multi-family 491 492 495 494 Real estate-residential 2,216 2,840 2,236 2,848 Agriculture 373 377 378 378 Consumer 76 132 77 115 Total $ 20,114 $ 24,394 $ 20,307 $ 24,012
Schedule of interest income recognized on impaired loans and leases	Interest Income Recognized for the three months ended Interest Income Recognized for the six months ended June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015 Commercial $ 2 $ 3 $ 3 $ 5 Real estate-commercial 259 216 444 472 Real estate-multi-family 2 7 10 12 Real estate-construction — — — — Real estate-residential 31 32 52 63 Agriculture 5 5 10 8 Consumer — — — 1 Total $ 299 $ 263 $ 519 $ 561

7. TROUBLED DEBT RESTRUCTURIN23

7. TROUBLED DEBT RESTRUCTURINGS (Tables)	6 Months Ended
	Jun. 30, 2016
Troubled Debt Restructurings Tables
TROUBLED DEBT RESTRUCTURINGS	Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Commercial 1 $ 47 $ 47 Real estate – commercial 2 1,650 1,650 Real estate – residential 1 255 255 Consumer 1 23 23 Total 5 $ 1,975 $ 1,975 Pre- Post- Modification Modification Outstanding Outstanding Number Recorded Recorded of Loans Investment Investment Troubled debt restructurings: Commercial 1 $ 47 $ 47 Real estate – commercial 4 2,167 2,167 Real estate – residential 1 255 255 Consumer 1 23 23 Total 7 $ 2,492 $ 2,492

8. ALLOWANCE FOR LOAN AND LEA24

8. ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables)	6 Months Ended
	Jun. 30, 2016
Allowance For Loan And Lease Losses Tables
Schedule Of Recorded Investment Evaluated Based On Internal Risk Ratings	June 30, 2016 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 32,574 $ 175,479 $ 35,038 $ 3,917 $ 13,361 Watch 782 21,160 487 9,878 1,810 Special mention — 6,169 — — 385 Substandard 2,837 631 — — 804 Doubtful — — — — — Total $ 36,193 $ 203,439 $ 35,525 $ 13,795 $ 16,360 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 534 $ 1,953 $ 1,455 $ 264,311 Watch — 364 296 34,777 Special mention — — 433 6,987 Substandard — — 120 4,392 Doubtful — — — — Total $ 534 $ 2,317 $ 2,304 $ 310,467 December 31, 2015 Credit Risk Profile by Internally Assigned Grade (dollars in thousands) Real Estate Commercial Commercial Multi-family Construction Residential Grade: Pass $ 32,216 $ 172,755 $ 23,001 $ 6,371 $ 10,593 Watch 1,073 17,318 493 8,162 2,099 Special mention — 8,363 — — 697 Substandard 2,906 1,155 — — 811 Doubtful or loss — — — — — Total $ 36,195 $ 199,591 $ 23,494 $ 14,533 $ 14,200 Credit Risk Profile by Internally Assigned Grade Other Credit Exposure Leases Agriculture Consumer Total Grade: Pass $ 732 $ 2,061 $ 2,136 $ 249,865 Watch — 370 378 29,893 Special mention — — 433 9,493 Substandard — — 175 5,047 Doubtful or loss — — — — Total $ 732 $ 2,431 $ 3,122 $ 294,298
Summary Of Analysis Of Allowance For Loan Losses	June 30, 2016 (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, 2016 $ 860 $ 2,369 $ 228 $ 813 $ 319 $ 1 $ 77 $ 78 $ 230 $ 4,975 Provision for loan losses (125 ) 266 101 (88 ) (36 ) — (4 ) (90 ) (24 ) — Loans charged-off — — — — — — — — — — Recoveries 73 12 — — — — — 72 — 157 Ending balance, June 30, 2016 $ 808 $ 2,647 $ 329 $ 725 $ 283 $ 1 $ 73 $ 60 $ 206 $ 5,132 Ending balance: Individually evaluated for impairment $ 11 $ 675 $ 4 $ — $ 151 $ — $ 37 $ 26 $ — $ 904 Ending balance: Collectively evaluated for impairment $ 797 $ 1,972 $ 325 $ 725 $ 132 $ 1 $ 36 $ 34 $ 206 $ 4,228 Loans Ending balance $ 36,193 $ 203,439 $ 35,525 $ 13,795 $ 16,360 $ 534 $ 2,317 $ 2,304 $ — $ 310,467 Ending balance: Individually evaluated for impairment $ 91 $ 17,656 $ 485 $ — $ 2,175 $ — $ 364 $ 61 $ — $ 20,832 Ending balance: Collectively evaluated for impairment $ 36,102 $ 185,783 $ 35,040 $ 13,795 $ 14,185 $ 534 $ 1,953 $ 2,243 $ — $ 289,635 Allowance for Loan and Lease Losses Beginning balance, March 31, 2016 $ 813 $ 2,513 $ 270 $ 625 $ 298 $ 2 $ 77 $ 65 $ 419 $ 5,082 Provision for loan losses (44 ) 123 59 100 (15 ) (1 ) (4 ) (5 ) (213 ) — Loans charged off — — — — — — — — — — Recoveries 39 11 — — — — — — — 50 Ending balance, June 30, 2016 $ 808 $ 2,647 $ 329 $ 725 $ 283 $ 1 $ 73 $ 60 $ 206 $ 5,132 December 31, 2015 (dollars in thousands) Real Estate Other Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Unallocated Total Ending balance: Individually evaluated for impairment $ 25 $ 598 $ 5 $ — $ 204 $ — $ 38 $ 29 $ — $ 899 Ending balance: Collectively evaluated for impairment $ 835 $ 1,771 $ 223 $ 813 $ 115 $ 1 $ 39 $ 49 $ 230 $ 4,076 Loans Ending balance $ 36,195 $ 199,591 $ 23,494 $ 14,533 $ 14,200 $ 732 $ 2,431 $ 3,122 $ — $ 294,298 Ending balance: Individually evaluated for impairment $ 121 $ 17,866 $ 488 $ — $ 2,452 $ — $ 370 $ 68 $ — $ 21,365 Ending balance: Collectively evaluated for impairment $ 36,074 $ 181,725 $ 23,006 $ 14,533 $ 11,748 $ 732 $ 2,061 $ 3,054 $ — $ 272,933 June 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 199 (389 ) (23 ) 224 (14 ) — (12 ) 2 13 — Loans charged off — — — — — (1 ) — (6 ) — (7 ) Recoveries 23 40 — — — — — 2 — 65 Ending balance, June 30, 2015 $ 1,652 $ 1,968 $ 107 $ 807 $ 385 $ 1 $ 50 $ 122 $ 267 $ 5,359 Allowance for Loan and Lease Losses Beginning balance, March 31, 2015 $ 1,403 $ 2,284 $ 120 $ 680 $ 392 $ 1 $ 55 $ 132 $ 241 $ 5,308 Provision for loan losses 232 (355 ) (13 ) 127 (7 ) 1 (5 ) (6 ) 26 — Loans charged off — — — — — (1 ) — (4 ) — (5 ) Recoveries 17 39 — — — — — — — 56 Ending balance, June 30, 2015 $ 1,652 $ 1,968 $ 107 $ 807 $ 385 $ 1 $ 50 $ 122 $ 267 $ 5,359
Summary Of Activity In Allowance For Loan Losses By Loan Class	June 30, 2016 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Past Due Greater Than 90 Days Total Past Due Current Total Loans Past Due Greater Than 90 Days and Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 36,193 $ 36,193 — $ 22 Real estate: Commercial 982 351 — 1,333 202,106 203,439 — 631 Multi-family — — — — 35,525 35,525 — — Construction — — — — 13,795 13,795 — — Residential — — — — 16,360 16,360 — 337 Other: Leases — — — — 534 534 — — Agriculture — — — — 2,317 2,317 — — Consumer 300 36 — 336 1,968 2,304 — 65 Total $ 1,282 $ 387 $ — $ 1,669 $ 308,798 $ 310,467 $ — $ 1,055 December 31, 2015 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Past Due Greater Than 90 Days Total Past Due Current Total Loans Past Due Greater Than 90 Days and Accruing Nonaccrual Commercial: Commercial $ — $ — $ 30 $ 30 $ 36,165 $ 36,195 $ — $ 30 Real estate: Commercial — 359 499 858 198,733 199,591 — 1,155 Multi-family — — — — 23,494 23,494 — — Construction — — — — 14,533 14,533 — — Residential — — 338 338 13,862 14,200 — 338 Other: Leases — — — — 732 732 — — Agriculture — — — — 2,431 2,431 — — Consumer 367 — — 367 2,755 3,122 — 120 Total $ 367 $ 359 $ 867 $ 1,593 $ 292,705 $ 294,298 $ — $ 1,643

11. FAIR VALUE MEASUREMENTS (Ta

11. FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2016
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: June 30, 2016 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 22,671 $ 22,671 $ 22,671 Interest-bearing deposits in banks 999 $ 999 999 Available-for-sale securities 254,483 36 254,447 254,483 Held-to-maturity securities 540 584 584 FHLB stock 3,779 N/A N/A N/A N/A Net loans and leases: 305,088 $ 310,957 310,957 Accrued interest receivable 1,728 954 774 1,728 Financial liabilities: Deposits: Noninterest-bearing $ 195,903 $ 195,903 $ 195,903 Savings 59,686 59,686 59,686 Money market 127,864 127,864 127,864 NOW accounts 59,686 59,686 59,686 Time Deposits 82,599 $ 83,034 83,034 Short-term borrowings 5,000 5,000 5,000 Long-term borrowings 6,000 6,049 6,049 Accrued interest payable 40 1 39 40 Carrying Fair Value Measurements Using: December 31, 2015 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 23,727 $ 23,727 $ — $ — $ 23,727 Interest-bearing deposits in banks 750 — 752 — 752 Available-for-sale securities 273,819 24 273,795 — 273,819 Held-to-maturity securities 623 — 669 — 669 FHLB stock 3,779 N/A N/A N/A N/A Net loans and leases: 289,102 — — 292,444 292,444 Accrued interest receivable 1,885 — 1,077 808 1,885 Financial liabilities: Deposits: Noninterest-bearing $ 190,548 $ 190,548 $ — $ — $ 190,548 Savings 59,061 59,061 — — 59,061 Money market 135,186 135,186 — — 135,186 NOW accounts 61,324 61,324 — — 61,324 Time Deposits 84,571 — 85,165 — 85,165 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 7,500 — 7,502 — 7,502 Accrued interest payable 60 — 60 — 60
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) June 30, 2016 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Agencies $ 228,722 $ — $ 228,722 $ — $ — Obligations of states and political subdivisions 24,143 — 24,143 — — Corporate bonds 1,537 — 1,537 — — Corporate stock 81 36 45 — — Total recurring $ 254,483 $ 36 $ 254,447 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 3,848 $ — $ — $ 3,848 $ — Residential 337 — — 337 — Other real estate owned Commercial 243 — — 243 — Land 653 — — 653 (376 ) Total nonrecurring $ 5,081 $ — $ — $ 5,081 $ (376 ) Description Fair Value Measurements Using Total Gains (dollars in thousands) Fair Value Level 1 Level 2 Level 3 (Losses) December 31, 2015 Assets and liabilities measured on a recurring basis: Available-for-sale securities: US Government Agencies and Sponsored Agencies $ 246,185 $ — $ 246,185 $ — $ — Corporate Debt securities 1,551 — 1,551 Obligations of states and political subdivisions 26,013 — 26,013 — — Corporate stock 70 24 46 — — Total recurring $ 273,819 $ 24 $ 273,795 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 3,900 $ — $ — $ 3,900 $ (334 ) Other real estate owned Commercial 2,522 — — 2,522 — Land 1,029 — — 1,029 — Total nonrecurring $ 7,451 $ — $ — $ 7,451 $ (334 )

2. STOCK-BASED COMPENSATION - O

2. STOCK-BASED COMPENSATION - Option activity (Details) - Options Shares $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)$ / sharesshares
Outstanding | shares	248,411
Granted | shares	0
Exercised | shares	500
Expired, forfeited or cancelled | shares	52,213
Outstanding | shares	195,698
Number of options vested | shares	151,454
Nonvested, Shares | shares	44,244
Weighted average exercise price, outstanding beginning | $ / shares	$ 15.19
Granted | $ / shares	0
Exercised | $ / shares	8.50
Expired, forfeited or cancelled | $ / shares	23.09
Weighted average exercise price, outstanding ending | $ / shares	1,309
Weighted average exercise price of vested stock options (in dollars per share) | $ / shares	14.28
Weighted average exercise price of nonvested stock options (in dollars per share) | $ / shares	$ 9.05
Weighted years to maturity outstanding beginning	3 years 8 months 12 days
Granted	0 years
Exercised	0 years
Expired, forfeited or cancelled	0 years
Weighted years to maturity outstanding Ending	4 years 1 month 6 days
Weighted average remaining contractual term in years, vested	2 years 9 months 18 days
Weighted average remaining contractual term in years, non-vested	8 years 2 months 12 days
Aggregate Intrinsic Value, options outstanding, beginning | $	$ 232
Aggregate Intrinsic Value, options outstanding, ending | $	190
Aggregate Intrinsic Value, options vested | $	136
Aggregate Intrinsic Value, options non-vested | $	$ 54

2. STOCK-BASED COMPENSATION - R

2. STOCK-BASED COMPENSATION - Restricted Stock (Details) - Restricted stock	6 Months Ended
	Jun. 30, 2016$ / sharesshares
Restricted Stock Nonvested beginning balance | shares	57,516
Awarded | shares	29,756
Less: Vested | shares	18,219
Less: Expired, forfeited or cancelled | shares	1,028
Restricted Stock Nonvested ending balance | shares	68,025
Weighted Average Grant Date Fair Value Nonvested beginning balance | $ / shares	$ 9.21
Awarded | $ / shares	10.26
Less: Vested | $ / shares	9.30
Less: Expired, forfeited or cancelled | $ / shares	9.23
Weighted Average Grant Date Fair Value Nonvested ending balance | $ / shares	$ 9.65

2. STOCK-BASED COMPENSATION - E

2. STOCK-BASED COMPENSATION - Equity Plans and Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Share based compensation			$ 167	$ 126
Tax benefit of equity compensation expense	$ 30	$ 25	59	$ 45
Compensation cost related to nonvested stock option awards not yet recorded	119		119
Compensation cost related to restricted stock awards not yet recorded	$ 520		$ 520
Period for recognition	4 years
Weighted average costs is expected period	2 years 1 month 6 days
Intrinsic value used for stock options and restricted stock	$ 10.26		$ 10.26
2000 Plan
Stock options outstanding under Equity Incentive Plan	119,237		119,237
2010 Plan
Stock options outstanding under Equity Incentive Plan	76,461		76,461
Options Shares
Stock options outstanding under Equity Incentive Plan	195,698		195,698		248,411
Restricted stock
Stock options outstanding under Equity Incentive Plan	68,025		68,025
Authorized shares that remain available for issuance under the 2010 Plan		1,377,766		1,377,766

3. COMMITMENTS AND CONTINGENC29

3. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Commitments
Loan commitments
Commitments	25,804	26,730
Standby letters of credit
Commitments	$ 238	$ 238

4. EARNINGS PER SHARE COMPUTA30

4. EARNINGS PER SHARE COMPUTATION (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share Computation Details Narrative
Weighted average common shares outstanding	6,717,456	7,659,883	6,906,620	7,740,320
Dilutive effect of stock based awards	28,643	14,828	26,815	13,999
Antidilutive stock option excluded from earnings per share	105,844	214,066	138,549	214,066

5. INVESTMENT SECURITIES - Amor

5. INVESTMENT SECURITIES - Amortized Cost, Unrealized Gains, Unrealized Losses And Estimated Fair Values (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Available for sale securities, Amortized Cost	$ 247,548	$ 270,315
Available for sale securities, Unrealized Gains	7,041	4,434
Available for sale securities, Unrealized Losses	(106)	(930)
Available for sale securities, Estimated Fair Value	254,483	273,819
Held-to-Maturity Debt securities Estimated Fair Value	584	689
US Government Agencies and Sponsored Agencies
Available for sale securities, Amortized Cost	223,053	244,056
Available for sale securities, Unrealized Gains	5,769	3,059
Available for sale securities, Unrealized Losses	(100)	(930)
Available for sale securities, Estimated Fair Value	228,722	246,185
Held-to-Maturity Debt securities Amortized Cost		623
Held-to-Maturity Debt securities Gross Unrealized Gains		46
Held-to-Maturity Debt securities Gross Unrealized Losses		0
Held-to-Maturity Debt securities Estimated Fair Value		669
Obligations of states and political subdivisions
Available for sale securities, Amortized Cost	22,945	24,706
Available for sale securities, Unrealized Gains	1,204	1,307
Available for sale securities, Unrealized Losses	(6)	0
Available for sale securities, Estimated Fair Value	24,143	26,013
Corporate Bonds
Available for sale securities, Amortized Cost	1,501	1,502
Available for sale securities, Unrealized Gains	36	49
Available for sale securities, Unrealized Losses	0	0
Available for sale securities, Estimated Fair Value	1,537	1,551
Equity Securities - Corporate Stock
Available for sale securities, Amortized Cost	49	51
Available for sale securities, Unrealized Gains	32	19
Available for sale securities, Unrealized Losses	0	0
Available for sale securities, Estimated Fair Value	$ 81	$ 70

5. INVESTMENT SECURITIES - Inve

5. INVESTMENT SECURITIES - Investment securities with unrealized losses (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2015USD ($)
Less than 12 months, Estimated Fair Value	$ 93,265
Less than 12 months, Unrealized Loss	(813)
12 months or more, Estimated Fair Value	5,251
12 months or more, Unrealized Loss	(117)
Total Estimated Fair Value	98,516
Total Unrealized Loss	(930)
US Government Agencies and Sponsored Agencies
Less than 12 months, Estimated Fair Value	93,265
Less than 12 months, Unrealized Loss	(813)
12 months or more, Estimated Fair Value	5,251
12 months or more, Unrealized Loss	(117)
Total Estimated Fair Value	98,516
Total Unrealized Loss	(930)
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	0
12 months or more, Unrealized Loss	0
Total Estimated Fair Value	0
Total Unrealized Loss	$ 0

5. INVESTMENT SECURITIES - Am33

5. INVESTMENT SECURITIES - Amortized cost and estimated fair values (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Held-to-Maturity Estimated Fair Value	$ 584	$ 689
US Government Agencies and Sponsored Agencies
Held-to-Maturity Amortized Cost		623
Held-to-Maturity Estimated Fair Value		$ 669

6. IMPAIRED AND NONPERFORMING34

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Nonaccrual loans (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Total nonperforming assets	$ 2,829	$ 6,072
Nonperforming loans and leases to total loans and leases	0.34%	0.56%
Total nonperforming assets to total assets	0.45%	0.96%
Nonaccrual loans and leases that are current to terms (less than 30 days past due)
Total nonperforming assets	$ 643	$ 379
Nonaccrual loans and leases that are past due
Total nonperforming assets	412	1,264
Loans and leases past due 90 days and accruing interest
Total nonperforming assets	0	0
Other assets
Total nonperforming assets	878	878
Other real estate owned
Total nonperforming assets	$ 896	$ 3,551

6. IMPAIRED AND NONPERFORMING35

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Nonperforming assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
With no related allowance recorded: Recorded Investment	$ 11,980	$ 12,607
With no related allowance recorded: Unpaid Principal Balance	12,700	13,240
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	8,852	8,758
With an allowance recorded: Unpaid Principal Balance	8,946	8,941
With an allowance recorded: Related Allowance	904	899
Recorded Investment	20,832	21,365
Unpaid Principal Balance	21,646	22,181
Related Allowance	904	899
Commercial
With no related allowance recorded: Recorded Investment	0	0
With no related allowance recorded: Unpaid Principal Balance	0	0
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	91	121
With an allowance recorded: Unpaid Principal Balance	91	121
With an allowance recorded: Related Allowance	11	25
Recorded Investment	91	121
Unpaid Principal Balance	91	121
Related Allowance	11	25
Real estate-commercial
With no related allowance recorded: Recorded Investment	11,643	12,269
With no related allowance recorded: Unpaid Principal Balance	1,276	12,902
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	6,013	5,597
With an allowance recorded: Unpaid Principal Balance	6,107	5,693
With an allowance recorded: Related Allowance	675	598
Recorded Investment	17,656	27,866
Unpaid Principal Balance	18,383	18,595
Related Allowance	675	598
Real estate-multi-family
With an allowance recorded: Recorded Investment	485	488
With an allowance recorded: Unpaid Principal Balance	485	488
With an allowance recorded: Related Allowance	4	5
Recorded Investment	485	488
Unpaid Principal Balance	485	488
Related Allowance	4	5
Real Estate Residential
With no related allowance recorded: Recorded Investment	337	338
With no related allowance recorded: Unpaid Principal Balance	424	338
With no related allowance recorded: Related Allowance	0	0
With an allowance recorded: Recorded Investment	1,838	2,114
With an allowance recorded: Unpaid Principal Balance	1,838	2,201
With an allowance recorded: Related Allowance	151	204
Recorded Investment	2,175	2,452
Unpaid Principal Balance	2,262	2,539
Related Allowance	151	204
Agriculture
With an allowance recorded: Recorded Investment	364	370
With an allowance recorded: Unpaid Principal Balance	364	370
With an allowance recorded: Related Allowance	37	38
Recorded Investment	364	370
Unpaid Principal Balance	364	370
Related Allowance	37	38
Consumer
With an allowance recorded: Recorded Investment	61	68
With an allowance recorded: Unpaid Principal Balance	61	68
With an allowance recorded: Related Allowance	26	29
Recorded Investment	61	68
Unpaid Principal Balance	61	68
Related Allowance	$ 26	$ 29

6. IMPAIRED AND NONPERFORMING36

6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED - Impaired loans and leases (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Impaired Loans and Leases	$ 20,114	$ 24,394	$ 20,307	$ 24,012
Interest income recognized on impaired loans and leases	299	263	519	561
Commercial
Impaired Loans and Leases	80	757	100	794
Interest income recognized on impaired loans and leases	2	3	3	5
Real estate-commercial
Impaired Loans and Leases	16,878	19,796	17,021	19,383
Interest income recognized on impaired loans and leases	259	216	444	472
Real estate-multi-family
Impaired Loans and Leases	491	492	495	494
Interest income recognized on impaired loans and leases	2	7	10	12
Real estate-construction
Interest income recognized on impaired loans and leases	0	0	0	0
Real Estate Residential
Impaired Loans and Leases	2,216	2,840	2,236	2,848
Interest income recognized on impaired loans and leases	31	32	52	63
Agriculture
Impaired Loans and Leases	373	377	378	378
Interest income recognized on impaired loans and leases	5	5	10	8
Consumer
Impaired Loans and Leases	76	132	77	115
Interest income recognized on impaired loans and leases	$ 0	$ 0	$ 0	$ 1

7. TROUBLED DEBT RESTRUCTURIN37

7. TROUBLED DEBT RESTRUCTURINGS (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015USD ($)Integer	Jun. 30, 2015USD ($)Integer
Number of Loans | Integer	5	7
Pre-Modification Outstanding Recorded Investment	$ 1,975	$ 2,492
Post-Modification Outstanding Recorded Investment	$ 1,975	$ 2,492
Commercial
Number of Loans | Integer	1	1
Pre-Modification Outstanding Recorded Investment	$ 47	$ 47
Post-Modification Outstanding Recorded Investment	$ 47	$ 47
Real estate-commercial
Number of Loans | Integer	2	4
Pre-Modification Outstanding Recorded Investment	$ 1,650	$ 2,167
Post-Modification Outstanding Recorded Investment	$ 1,650	$ 2,167
Real Estate Residential
Number of Loans | Integer	1	1
Pre-Modification Outstanding Recorded Investment	$ 255	$ 255
Post-Modification Outstanding Recorded Investment	$ 255	$ 255
Consumer
Number of Loans | Integer	1	1
Pre-Modification Outstanding Recorded Investment	$ 23	$ 23
Post-Modification Outstanding Recorded Investment	$ 23	$ 23

8. ALLOWANCE FOR LOAN AND LEA38

8. ALLOWANCE FOR LOAN AND LEASE LOSSES - Internal risk ratings (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Total	$ 310,467	$ 294,298
Real estate-commercial
Total	203,439	199,591
Real estate-multi-family
Total	35,525	23,494
Leases
Total	534	732
Agriculture
Total	2,317	2,431
Commercial
Total	36,193	36,195
Real estate-construction
Total	13,795	14,533
Real Estate Residential
Total	16,360	14,200
Consumer
Total	2,304	3,122
Pass
Total	264,311	249,865
Pass | Commercial
Total	32,574	32,216
Pass | Real estate-commercial
Total	175,479	172,755
Pass | Real estate-multi-family
Total	35,038	23,001
Pass | Real Estate Construction
Total	3,917	6,371
Pass | Real Estate Residential
Total	13,361	10,593
Pass | Leases
Total	534	732
Pass | Agriculture
Total	1,953	2,061
Pass | Consumer
Total	1,455	2,136
Watch
Total	34,777	29,893
Watch | Commercial
Total	782	1,073
Watch | Real estate-commercial
Total	21,160	17,318
Watch | Real estate-multi-family
Total	487	493
Watch | Real Estate Construction
Total	9,878	8,162
Watch | Real Estate Residential
Total	1,810	2,099
Watch | Leases
Total	0	0
Watch | Agriculture
Total	364	370
Watch | Consumer
Total	296	378
Special mention
Total	6,987	9,493
Special mention | Commercial
Total	0	0
Special mention | Real estate-commercial
Total	6,169	8,363
Special mention | Real estate-multi-family
Total	0	0
Special mention | Real Estate Construction
Total	0	0
Special mention | Real Estate Residential
Total	385	697
Special mention | Leases
Total	0	0
Special mention | Agriculture
Total	0	0
Special mention | Consumer
Total	433	433
Substandard
Total	4,392	5,047
Substandard | Commercial
Total	2,837	2,906
Substandard | Real estate-commercial
Total	631	1,155
Substandard | Real estate-multi-family
Total	0	0
Substandard | Real Estate Construction
Total	0	0
Substandard | Real Estate Residential
Total	804	811
Substandard | Leases
Total	0	0
Substandard | Agriculture
Total	0	0
Substandard | Consumer
Total	120	175
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 LEA39

8. ALLOWANCE FOR LOAN AND LEASE LOSSES - Allowance Roll-forward (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Allowance for Loan and Lease Losses Beginning balance	$ 5,082	$ 5,308	$ 4,975	$ 5,301
Provision for loan losses	0	0	0	0
Loans charged off	0	(5)	0	(7)
Recoveries	50	56	157	65
Allowance for Loan and Lease Losses Ending balance	5,132	5,359	5,132	5,359
Allowance related to: Loans individually evaluated for impairment	904		904		$ 899
Allowance related to: Loans collectively evaluated for impairment	4,228		4,228		4,076
Loans	310,467		310,467		294,298
Loans individually evaluated for impairment	20,832		20,832		21,365
Loans collectively evaluated for impairment	289,635		289,635		272,933
Commercial
Allowance for Loan and Lease Losses Beginning balance	813	1,403	860	1,430
Provision for loan losses	(44)	232	(125)	199
Loans charged off	0	0	0	0
Recoveries	39	17	73	23
Allowance for Loan and Lease Losses Ending balance	808	1,652	808	1,652
Allowance related to: Loans individually evaluated for impairment	11		11		25
Allowance related to: Loans collectively evaluated for impairment	797		797		835
Loans	36,193		36,193		36,195
Loans individually evaluated for impairment	91		91		121
Loans collectively evaluated for impairment	36,102		36,102		36,074
Real estate-commercial
Allowance for Loan and Lease Losses Beginning balance	2,513	2,284	2,369	2,317
Provision for loan losses	123	(355)	266	(389)
Loans charged off	0	0	0	0
Recoveries	11	39	12	40
Allowance for Loan and Lease Losses Ending balance	2,647	1,968	2,647	1,968
Allowance related to: Loans individually evaluated for impairment	675		675		598
Allowance related to: Loans collectively evaluated for impairment	1,972		1,972		1,771
Loans	203,439		203,439		199,591
Loans individually evaluated for impairment	17,656		17,656		17,866
Loans collectively evaluated for impairment	185,783		185,783		181,725
Real estate-multi-family
Allowance for Loan and Lease Losses Beginning balance	270	120	228	130
Provision for loan losses	59	(13)	101	(23)
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	329	107	329	107
Allowance related to: Loans individually evaluated for impairment	4		4		5
Allowance related to: Loans collectively evaluated for impairment	325		325		223
Loans	35,525		35,525		23,494
Loans individually evaluated for impairment	485		485		488
Loans collectively evaluated for impairment	35,040		35,040		23,006
Real estate-construction
Allowance for Loan and Lease Losses Beginning balance	625	680	813	583
Provision for loan losses	100	127	(88)	224
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	725	807	725	807
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	725		725		813
Loans	13,795		13,795		14,533
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	13,795		13,795		14,533
Real Estate Residential
Allowance for Loan and Lease Losses Beginning balance	298	392	319	399
Provision for loan losses	(15)	(7)	(36)	(14)
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	283	385	283	385
Allowance related to: Loans individually evaluated for impairment	151		151		204
Allowance related to: Loans collectively evaluated for impairment	132		132		115
Loans	16,360		16,360		14,200
Loans individually evaluated for impairment	2,175		2,175		2,452
Loans collectively evaluated for impairment	14,185		14,185		11,748
Leases
Allowance for Loan and Lease Losses Beginning balance	2	1	1	2
Provision for loan losses	(1)	1	0	0
Loans charged off	0	(1)	0	(1)
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	1	1	1	1
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	1		1		1
Loans	534		534		732
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	534		534		732
Agriculture
Allowance for Loan and Lease Losses Beginning balance	77	55	77	62
Provision for loan losses	(4)	(5)	(4)	(12)
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	73	50	73	50
Allowance related to: Loans individually evaluated for impairment	37		37		38
Allowance related to: Loans collectively evaluated for impairment	36		36		39
Loans	2,317		2,317		2,431
Loans individually evaluated for impairment	364		364		370
Loans collectively evaluated for impairment	1,953		1,953		2,061
Consumer
Allowance for Loan and Lease Losses Beginning balance	65	132	78	124
Provision for loan losses	(5)	(6)	(90)	2
Loans charged off	0	(4)	0	(6)
Recoveries	0	0	72	2
Allowance for Loan and Lease Losses Ending balance	60	122	60	122
Allowance related to: Loans individually evaluated for impairment	26		26		29
Allowance related to: Loans collectively evaluated for impairment	34		34		49
Loans	2,304		2,304		3,122
Loans individually evaluated for impairment	61		61		68
Loans collectively evaluated for impairment	2,243		2,243		3,054
Unallocated
Allowance for Loan and Lease Losses Beginning balance	419	241	230	254
Provision for loan losses	(213)	26	(24)	13
Loans charged off	0	0	0	0
Recoveries	0	0	0	0
Allowance for Loan and Lease Losses Ending balance	206	$ 267	206	$ 267
Allowance related to: Loans individually evaluated for impairment	0		0		0
Allowance related to: Loans collectively evaluated for impairment	206		206		230
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 LEA40

8. ALLOWANCE FOR LOAN AND LEASE LOSSES - Aging analysis (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Total Past Due	$ 1,669	$ 1,593
Current	308,798	292,705
Total Loans	310,467	294,298
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	1,065	1,643
30 -59 Days Past Due
Total Past Due	1,282	367
60 -89 Days Past Due
Total Past Due	387	359
Past Due Greater Than 90 Days
Total Past Due	0	867
Commercial
Total Past Due	0	30
Current	36,193	36,165
Total Loans	36,193	36,195
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	22	30
Commercial | 30 -59 Days Past Due
Total Past Due	0	0
Commercial | 60 -89 Days Past Due
Total Past Due	0	0
Commercial | Past Due Greater Than 90 Days
Total Past Due	0	30
Real estate-commercial
Total Past Due	1,333	858
Current	202,106	198,733
Total Loans	203,439	199,591
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	631	1,155
Real estate-commercial | 30 -59 Days Past Due
Total Past Due	982	0
Real estate-commercial | 60 -89 Days Past Due
Total Past Due	351	359
Real estate-commercial | Past Due Greater Than 90 Days
Total Past Due	0	499
Real estate-multi-family
Total Past Due	0	0
Current	35,525	23,494
Total Loans	35,525	23,494
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	13,795	14,533
Total Loans	13,795	14,533
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	13,630	13,862
Total Loans	16,360	14,200
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	337	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	534	732
Total Loans	534	732
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	2,317	2,431
Total Loans	2,317	2,431
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	336	367
Current	1,968	2,755
Total Loans	2,304	3,122
Past Due Greater Than 90 Days and Accruing	0	0
Nonaccrual	65	120
Consumer | 30 -59 Days Past Due
Total Past Due	300	367
Consumer | 60 -89 Days Past Due
Total Past Due	36	0
Consumer | Past Due Greater Than 90 Days
Total Past Due	$ 0	$ 0

9. BORROWING ARRANGEMENTS (Deta

9. BORROWING ARRANGEMENTS (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
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	0.75%	0.45%
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	$ 84,483	$ 78,326
Secured borrowing agreement with the Federal Reserve Bank of San Francisco	$ 12,399	$ 11,371

11. FAIR VALUE MEASUREMENTS - C

11. FAIR VALUE MEASUREMENTS - Carrying amounts and estimated fair values (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financial assets:
Cash and due from banks	$ 22,671	$ 23,727
Interest-bearing deposits in banks	999	750
Available-for-sale securities	254,483	273,819
Held-to-maturity securities	584	689
FHLB stock	3,779	3,779
Net loans and leases:	310,957	292,444
Accrued interest receivable	1,728	1,885
Deposits:
Noninterest-bearing	195,903	190,548
Savings	59,686	59,061
Money market	127,864	135,186
NOW accounts	59,686	61,324
Time Deposits	83,034	85,165
Short-term borrowings	5,000	3,500
Long-term borrowings	6,049	7,502
Accrued interest payable	40	60
Level 1
Financial assets:
Cash and due from banks	22,671	23,727
Interest-bearing deposits in banks	0	0
Available-for-sale securities	36	24
Held-to-maturity securities	0	0
FHLB stock	0	0
Net loans and leases:	0	0
Accrued interest receivable	0	0
Deposits:
Noninterest-bearing	195,903	190,548
Savings	59,686	59,061
Money market	127,864	135,186
NOW accounts	59,686	61,324
Time Deposits	0	0
Short-term borrowings	5,000	3,500
Long-term borrowings	0	0
Accrued interest payable	1	0
Level 2
Financial assets:
Cash and due from banks	0	0
Interest-bearing deposits in banks	999	752
Available-for-sale securities	254,447	273,795
Held-to-maturity securities	584	669
FHLB stock	0	0
Net loans and leases:	0	0
Accrued interest receivable	954	1,077
Deposits:
Noninterest-bearing	0	0
Savings	0	0
Money market	0	0
NOW accounts	0	0
Time Deposits	83,034	85,165
Short-term borrowings	0	0
Long-term borrowings	6,049	7,502
Accrued interest payable	39	60
Level 3
Financial assets:
Cash and due from banks	0	0
Interest-bearing deposits in banks	0	0
Available-for-sale securities	0	0
Held-to-maturity securities	0	0
FHLB stock	0	0
Net loans and leases:	310,957	292,444
Accrued interest receivable	774	808
Deposits:
Noninterest-bearing	0	0
Savings	0	0
Money market	0	0
NOW accounts	0	0
Time Deposits	0	0
Short-term borrowings	0	0
Long-term borrowings	0	0
Accrued interest payable	0	0
Carrying Amount
Financial assets:
Cash and due from banks	22,671	23,727
Interest-bearing deposits in banks	999	750
Available-for-sale securities	254,483	273,819
Held-to-maturity securities	540	623
FHLB stock	3,779	3,779
Net loans and leases:	305,088	289,102
Accrued interest receivable	1,728	1,885
Deposits:
Noninterest-bearing	195,903	190,548
Savings	59,696	59,061
Money market	127,864	135,186
NOW accounts	59,686	61,324
Time Deposits	82,599	84,571
Short-term borrowings	5,000	3,500
Long-term borrowings	6,000	7,500
Accrued interest payable	$ 40	$ 60

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	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Recurring
Impaired loans:
Total gain (losses)	$ 0	$ 0
Non Recurring
Impaired loans:
Total gain (losses)	(376)	(334)
Recurring | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	254,483	273,819
Recurring | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	36	24
Recurring | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	254,447	273,795
Recurring | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
US Government Agencies and Sponsored Agencies
Impaired loans:
Total gain (losses)	0	0
US Government Agencies and Sponsored Agencies | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	228,722	246,185
US Government Agencies and Sponsored Agencies | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
US Government Agencies and Sponsored Agencies | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	228,722	246,185
US Government Agencies and Sponsored Agencies | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Corporate Debt securities | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring		1,551
Corporate Debt securities | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring		0
Corporate Debt securities | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring		1,551
Corporate Debt securities | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring		0
Obligations of states and political subdivisions
Impaired loans:
Total gain (losses)	0	0
Obligations of states and political subdivisions | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	24,143	26,013
Obligations of states and political subdivisions | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Obligations of states and political subdivisions | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	24,143	26,013
Obligations of states and political subdivisions | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Corporate bonds
Impaired loans:
Total gain (losses)	0
Corporate bonds | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	1,537
Corporate bonds | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	0
Corporate bonds | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	1,537
Corporate bonds | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0
Corporate stock
Impaired loans:
Total gain (losses)	0	0
Corporate stock | Fair Value
Available-for-sale securities:
Asset fair value disclosure recurring	81	70
Corporate stock | Level 1
Available-for-sale securities:
Asset fair value disclosure recurring	36	24
Corporate stock | Level 2
Available-for-sale securities:
Asset fair value disclosure recurring	45	46
Corporate stock | Level 3
Available-for-sale securities:
Asset fair value disclosure recurring	0	0
Real estate-commercial
Impaired loans:
Total gain (losses)	0	(334)
Real estate-commercial | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	3,848	3,900
Real estate-commercial | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Real estate-commercial | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Real estate-commercial | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	3,848	3,900
Commercial
Impaired loans:
Total gain (losses)	0	0
Commercial | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	243	2,522
Commercial | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Commercial | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Commercial | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	243	2,522
Land
Impaired loans:
Total gain (losses)	(376)	0
Land | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	653	1,029
Land | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Land | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Land | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	653	1,029
Non Recurring | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	5,081	7,451
Non Recurring | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Non Recurring | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0	0
Non Recurring | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	5,081	$ 7,451
Real Estate Residential
Impaired loans:
Total gain (losses)	0
Real Estate Residential | Fair Value
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	337
Real Estate Residential | Level 1
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0
Real Estate Residential | Level 2
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	0
Real Estate Residential | Level 3
Impaired loans:
Assets, Fair Value Disclosure, Nonrecurring	$ 337