First Northern Community Bancorp (FNRN) 10-Q 5 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	FIRST NORTHERN COMMUNITY BANCORP
Entity Central Index Key	1,114,927
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,256,219
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 225,749,000	$ 216,192,000
Certificate of deposits	11,937,000	12,860,000
Investment securities - available-for-sale	156,213,000	151,226,000
Loans, net of allowance for loan losses of $9,106 at June 30, 2015 and $8,583 at December 31, 2014	570,540,000	537,979,000
Loans held-for-sale	486,000	491,000
Stock in Federal Home Loan Bank and other equity securities, at cost	3,934,000	3,934,000
Premises and equipment, net	7,096,000	7,278,000
Other real estate owned	407,000	736,000
Interest receivable and other assets	25,752,000	27,188,000
Total Assets	1,002,114,000	957,884,000
Liabilities:
Demand deposits	299,435,000	287,717,000
Interest-bearing transaction deposits	242,181,000	219,396,000
Savings and MMDA's	273,569,000	263,766,000
Time, under $250,000	63,300,000	65,570,000
Time, $250,000 and over	19,882,000	20,603,000
Total deposits	898,367,000	857,052,000
Interest payable and other liabilities	8,555,000	8,781,000
Total Liabilities	906,922,000	865,833,000
Stockholders' Equity:
Preferred stock, no par value; $1,000 per share liquidation preference, 22,847 shares authorized;12,847 shares issued and outstanding at June 30, 2015 and December 31, 2014	12,847,000	12,847,000
Common stock, no par value; 16,000,000 shares authorized;10,256,219 shares issued and outstanding at June 30, 2015 and 10,207,043 shares issued and outstanding at December 31, 2014	70,221,000	70,015,000
Additional paid-in capital	977,000	977,000
Retained earnings	11,357,000	8,146,000
Accumulated other comprehensive (loss) income, net	(210,000)	66,000
Total Stockholders' Equity	95,192,000	92,051,000
Total Liabilities and Stockholders' Equity	$ 1,002,114,000	$ 957,884,000

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets
Loans, allowance for loan losses	$ 9,106	$ 8,583
Stockholder's Equity:
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, per share liquidation preference (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares authorized (in shares)	22,847	22,847
Preferred stock, shares issued (in shares)	12,847	12,847
Preferred stock, shares outstanding (in shares)	12,847	12,847
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	16,000,000	16,000,000
Common stock, shares issued (in shares)	10,256,219	10,207,043
Common stock, shares outstanding (in shares)	10,256,219	10,207,043

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest and dividend income:
Loans	$ 7,078	$ 6,664	$ 13,800	$ 13,078
Due from banks interest bearing accounts	164	154	320	279
Investment securities
Taxable	694	717	1,435	1,491
Non-taxable	66	98	130	197
Other earning assets	222	61	298	128
Total interest and dividend income	8,224	7,694	15,983	15,173
Interest expense:
Deposits	293	336	586	661
Total interest expense	293	336	586	661
Net interest income	7,931	7,358	15,397	14,512
Provision for loan losses	0	600	350	1,200
Net interest income after provision for loan losses	7,931	6,758	15,047	13,312
Non-Interest income:
Service charges on deposit accounts	494	537	1,013	1,090
Gains on sales of loans held-for-sale	292	143	425	277
Investment and brokerage services income	151	164	295	321
Mortgage brokerage income	18	6	23	6
Loan servicing income	198	104	311	221
Fiduciary activities income	129	137	257	336
Debit card income	528	493	1,004	886
Other income	212	244	425	439
Total non-interest income	2,022	1,828	3,753	3,576
Non-Interest expenses:
Salaries and employee benefits	4,415	3,765	8,504	7,525
Occupancy and equipment	699	730	1,406	1,458
Data processing	436	464	847	831
Stationery and supplies	111	92	200	174
Advertising	92	67	172	173
Directors' fees	75	69	137	122
Other real estate owned expense	22	38	24	41
Gains on sales of other real estate owned	0	0	(161)	0
Impairment on other interest earning asset	0	50	0	50
Other expense	1,373	1,365	2,656	2,579
Total non-interest expenses	7,223	6,640	13,785	12,953
Income before provision for income taxes	2,730	1,946	5,015	3,935
Provision for income taxes	960	607	1,728	1,232
Net income	1,770	1,339	3,287	2,703
Preferred stock dividends	(32)	(32)	(64)	(64)
Net income available to common shareholders	$ 1,738	$ 1,307	$ 3,223	$ 2,639
Basic earnings per common share (in dollars per share)	$ 0.17	$ 0.13	$ 0.32	$ 0.26
Diluted earnings per common share (in dollars per share)	$ 0.17	$ 0.13	$ 0.32	$ 0.26

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract]
Net income	$ 1,770	$ 1,339	$ 3,287	$ 2,703
Unrealized holding (losses) gains on securities:
Unrealized holding gains (losses) arising during the period, net of tax effect of $(411) and $508 for the three-month periods ended June 30, 2015 and June 30, 2014, respectively, and $(161) and $852 for the six-month periods ended June 30, 2015 and June 30, 2014, respectively	(618)	761	(243)	1,277
Directors' and officer's retirements plan equity adjustments, net of tax effect of $0 for the three-month periods ended June 30, 2015 and June 30, 2014, and $(22) and $0 for the six-month periods ended June 30, 2015 and June 30, 2014, respectively	0	0	(33)	0
Other comprehensive (loss) income	(618)	761	(276)	1,277
Comprehensive income	$ 1,152	$ 2,100	$ 3,011	$ 3,980

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Unrealized holding (losses) gains on securities:
Unrealized holding gains (losses) arising during the period, tax	$ (411)	$ 508	$ (161)	$ 852
Directors' and officer's retirement plan equity adjustments, tax	$ 0	$ 0	$ (22)	$ 0

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Dec. 31, 2013					$ (1,073)
Net income						$ 2,703
Other comprehensive loss					1,277	1,277
Balance at Jun. 30, 2014					204
Balance at Mar. 31, 2014					(557)
Net income						1,339
Other comprehensive loss					761	761
Balance at Jun. 30, 2014					204
Balance at Dec. 31, 2014	$ 12,847	$ 70,015	$ 977	$ 8,146	66	92,051
Balance (in shares) at Dec. 31, 2014	12,847	10,207,043
Net income				3,287		3,287
Other comprehensive loss					(276)	(276)
Stock dividend adjustment		$ 6		(6)		0
Stock dividend adjustment (in shares)		682
Dividend on preferred stock				(64)		(64)
Cash in lieu of fractional shares				(6)		(6)
Cash in lieu of fractional shares (in shares)		(128)
Stock-based compensation and related tax benefit		$ 116				116
Common shares issued related to restricted stock grants						0
Common shares issued related to restricted stock grants (in shares)		28,901
Stock options exercised		$ 84				84
Stock options exercised (in shares)		19,721
Balance at Jun. 30, 2015	$ 12,847	$ 70,221	977	11,357	(210)	95,192
Balance (in shares) at Jun. 30, 2015	12,847	10,256,219
Balance at Mar. 31, 2015					408
Net income						1,770
Other comprehensive loss					(618)	(618)
Balance at Jun. 30, 2015	$ 12,847	$ 70,221	$ 977	$ 11,357	$ (210)	$ 95,192
Balance (in shares) at Jun. 30, 2015	12,847	10,256,219

CONDENSED CONSOLIDATED STATEME8

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows From Operating Activities
Net income	$ 3,287	$ 2,703
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	333	334
Accretion and amortization of investment securities premiums and discounts, net	1,002	1,080
Decrease (increase) in deferred loan origination costs, net	122	(24)
Provision for loan losses	350	1,200
Stock based compensation	116	93
Impairment on other interest earning assets	0	50
Gains on sales of other real estate owned	(161)	0
Gains on sales of loans held-for-sale	(425)	(277)
Proceeds from sales of loans held-for-sale	23,509	12,564
Originations of loans held-for-sale	(23,079)	(12,208)
Changes in assets and liabilities:
Decrease in interest receivable and other assets	1,619	590
Net decrease in interest payable and other liabilities	(281)	(1,550)
Net cash provided by operating activities	6,392	4,555
Cash Flows From Investing Activities
Proceeds from call or maturities of available-for-sale securities	4,540	8,000
Principal repayments on available-for-sale securities	12,682	10,636
Purchase of available-for-sale securities	(23,615)	(6,298)
Net decrease in certificate of deposits	923	435
Net increase in loans	(33,440)	(16,911)
Net increase in stock in Federal Home Loan Bank and other equity securities, at cost	0	(267)
Proceeds from sale of other real estate owned	897	0
Purchases of premises and equipment, net	(151)	(272)
Net cash (used in) investing activities	(38,164)	(4,677)
Cash Flows From Financing Activities
Net increase in deposits	41,315	30,711
Cash dividends paid in lieu of fractional shares	(6)	(5)
Stock options exercised	84	0
Cash dividends paid on preferred stock	(64)	(64)
Net cash provided by financing activities	41,329	30,642
Net increase in Cash and Cash Equivalents	9,557	30,520
Cash and Cash Equivalents, beginning of period	216,192	165,447
Cash and Cash Equivalents, end of period	225,749	195,967
Cash paid during the period for:
Interest	578	657
Income taxes	1,310	752
Supplemental disclosures of non-cash investing and financing activities:
Stock dividend distributed	3,103	2,065
Transfer of loans held-for-investment to other real estate owned	407	462
Directors' & Officer's Retirement Plan Equity Adj, net of tax	(33)	0
Unrealized holding (losses) gains on available for sale securities, net of taxes	$ (243)	$ 1,277

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2015
BASIS OF PRESENTATION [Abstract]
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of First Northern Community Bancorp (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Articles 9 and 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for any interim period are not necessarily indicative of results expected for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission. The preparation of financial statements in conformity with GAAP also requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. All material intercompany balances and transactions have been eliminated in consolidation. Recently Issued Accounting Pronouncements: In January 2014, FASB issued ASU 2014-01, Investments – Equity Method and Joint Ventures In January 2014, FASB issued ASU 2014-04, Receivables – Troubled Debt Restructurings by Creditors In January 2014, FASB issued ASU 2014-05, Service Concession Arrangements In August 2014, FASB issued ASU 2014-14, Receivables- Troubled Debt Restructuring by Creditors: Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure · The loan has a government guarantee that is not separable from the loan before foreclosure. · At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim. · At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The amendments are effective for a public business entity for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The adoption of this update did not have a significant impact on the Company’s consolidated financial statements. In August 2014, FASB issued ASU 2014-15, Presentation of Financial Statements- Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In June 2015, FASB issued ASU 2015-10, Technical Corrections and Improvements Reclassifications Certain reclassifications have been made to prior period balances in order to conform to the current year presentation. There was no impact to the net income, earnings per share, or stockholders’ equity as a result of reclassifications.

LOANS

LOANS	6 Months Ended
	Jun. 30, 2015
LOANS [Abstract]
LOANS	2. LOANS The composition of the Company’s loan portfolio, by loan class, is as follows: ($ in thousands) June 30, 2015 December 31, 2014 Commercial $ 125,789 $ 120,751 Commercial Real Estate 284,084 256,955 Agriculture 68,199 61,144 Residential Mortgage 44,888 50,511 Residential Construction 9,367 5,963 Consumer 46,114 49,911 578,441 545,235 Allowance for loan losses (9,106 ) (8,583 ) Net deferred origination fees and costs 1,205 1,327 Loans, net $ 570,540 $ 537,979 The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through review processes that include analysis of credit requests and ongoing examination of outstanding loans and delinquencies, with particular attention to portfolio dynamics and loan mix. The Company strives to identify loans experiencing difficulty early enough to correct the problems, to record charge-offs promptly based on realistic assessments of collectability and current collateral values and to maintain an adequate allowance for loan losses at all times. Asset quality reviews of loans and other non-performing assets are administered using credit risk rating standards and criteria similar to those employed by state and federal banking regulatory agencies. Commercial loans, whether secured or unsecured, generally are made to support the short-term operations and other needs of small businesses. These loans are generally secured by the receivables, equipment, and real property of the business and are susceptible to the related risks described above. Problem commercial loans are generally identified by periodic review of financial information that may include financial statements, tax returns, and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower’s income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate means. Commercial real estate loans generally fall into two categories, owner-occupied and non-owner occupied. Loans secured by owner-occupied real estate are primarily susceptible to changes in the market conditions of the related business. This may be driven by, among other things, industry changes, geographic business changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles. These same risks apply to commercial loans whether secured by equipment, receivables or other personal property or unsecured. Losses on loans secured by owner-occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral. When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default. Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often, these shifts are a result of changes in general economic or market conditions or overbuilding and resulting over-supply of space. Losses are dependent on the value of underlying collateral at the time of default. Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, sales invoices, or other appropriate means. Agricultural loans, whether secured or unsecured, generally are made to producers and processors of crops and livestock. Repayment is primarily from the sale of an agricultural product or payments for services. Agricultural loans are generally secured by inventory, receivables, equipment, and real property. Agricultural loans are susceptible to changes in market demand for specific commodities. This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles, as well as adverse weather conditions, including drought conditions such as those affecting California. Problem agricultural loans are generally identified by periodic review of financial information that may include financial statements, tax returns, crop budgets, payment history, and crop inspections. Based on this information, the Company may decide to take any of several courses of action including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower’s income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Residential mortgage loans, which are secured by real estate, are primarily susceptible to four risks: non-payment due to diminished or lost income; over-extension of credit; a lack of borrower’s cash flow to sustain payments; and shortfalls in collateral value. In general, non-payment is usually due to loss of employment and follows general economic trends in the economy, particularly the upward movement in the unemployment rate, loss of collateral value, and demand shifts. Residential construction loans, whether owner-occupied or non-owner occupied residential development loans, are not only susceptible to the related risks described above but the added risks of construction, including cost over-runs, mismanagement of the project, or lack of demand and market changes experienced at time of completion. Losses are primarily related to underlying collateral value and changes therein as described above. Problem construction loans are generally identified by periodic review of financial information that may include financial statements, tax returns and payment history of the borrower. Based on this information the Company may decide to take any of several courses of action including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors, or repossession or foreclosure of the underlying collateral. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate means. Consumer loans, whether unsecured or secured are primarily susceptible to four risks: non-payment due to diminished or lost income; over-extension of credit; a lack of borrower’s cash flow to sustain payments; and shortfall in the collateral value. In general, non-payment is usually due to loss of employment and will follow general economic trends in the economy, particularly upward movements in the unemployment rate, loss of collateral value, and demand shifts. As of June 30, 2015, approximately 49% in principal amount of the Company’s loans were secured by commercial real estate, consisting primarily of loans secured by commercial properties and construction and land development loans. Approximately 8% in principal amount of the Company’s loans were residential mortgage loans. Approximately 1% in principal amount of the Company’s loans were residential construction loans. Approximately 12% in principal amount of the Company’s loans were for agriculture and 22% in principal amount of the Company’s loans were for general commercial uses including professional, retail and small businesses. Approximately 8% in principal amount of the Company’s loans were consumer loans. Once a loan becomes delinquent and repayment becomes questionable, a Company collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral or a principal payment. If this is not forthcoming and payment in full is unlikely, the Company will consider the loan to be collateral dependent and will estimate its probable loss, using a recent valuation as appropriate to the underlying collateral less estimated costs of sale, and charge-off the loan down to the estimated net realizable amount. Depending on the length of time until final collection, the Company may periodically revalue the underlying collateral and take additional charge-offs as warranted. Revaluations may occur as often as every 3-12 months depending on the underlying collateral and volatility of values. Final charge-offs or recoveries are taken when collateral is liquidated and actual loss is known. Unpaid balances on loans after or during collection and liquidation may also be pursued through legal action and attachment of wages or judgment liens on the borrower's other assets. At June 30, 2015 and December 31, 2014, all loans were pledged under a blanket collateral lien to secure actual and potential borrowings from the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank. Non-accrual and Past Due Loans The Company’s non-accrual loans by loan class, as of June 30, 2015 and December 31, 2014 were as follows: ($ in thousands) June 30, 2015 December 31, 2014 Commercial $ 1,814 $ 2,151 Commercial Real Estate 908 672 Agriculture — — Residential Mortgage 1,008 1,691 Residential Construction 61 71 Consumer 602 652 $ 4,393 $ 5,237 Non-accrual loans amounted to $4,393,000 at June 30, 2015 and were comprised of five commercial loans totaling $1,814,000, six commercial real estate loans totaling $908,000, three residential mortgage loans totaling $1,008,000, one residential construction loan totaling $61,000 and four consumer loans totaling $602,000. Non-accrual loans amounted to $5,237,000 at December 31, 2014 and were comprised of six residential mortgage loans totaling $1,691,000, two residential construction loans totaling $71,000, five commercial real estate loans totaling $672,000, seven commercial loans totaling $2,151,000, and five consumer loans totaling $652,000. It is generally the Company’s policy to charge-off the portion of any non-accrual loan that the Company does not expect to collect by writing the loan down to the estimated net realizable value of the underlying collateral. An age analysis of past due loans, segregated by loan class, as of June 30, 2015 and December 31, 2014 is as follows: ($ in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or more Past Due Total Past Due Current Total Loans June 30, 2015 Commercial $ — $ — $ — $ — $ 125,789 $ 125,789 Commercial Real Estate 138 535 239 912 283,172 284,084 Agriculture — — — — 68,199 68,199 Residential Mortgage 125 — 1,008 1,133 43,755 44,888 Residential Construction — — — — 9,367 9,367 Consumer 1 174 428 603 45,511 46,114 Total $ 264 $ 709 $ 1,675 $ 2,648 $ 575,793 $ 578,441 December 31, 2014 Commercial $ — $ — $ 82 $ 82 $ 120,669 $ 120,751 Commercial Real Estate — — 239 239 256,716 256,955 Agriculture — — — — 61,144 61,144 Residential Mortgage 1,172 — 457 1,629 48,882 50,511 Residential Construction — — — — 5,963 5,963 Consumer 2 1 472 475 49,436 49,911 Total $ 1,174 $ 1 $ 1,250 $ 2,425 $ 542,810 $ 545,235 The Company had no loans that were 90 days or more past due and still accruing at June 30, 2015 and December 31, 2014. Included in the aging loan category labeled “current” are non-accrual loans that were not delinquent with respect to contractual principal and interest payments as of June 30, 2015 and December 31, 2014. These loans are categorized as non-accrual loans and are not accruing interest as of June 30, 2015 and December 31, 2014. Non-accrual loans outstanding at June 30, 2015 and December 31, 2014 are disclosed in the table above. Impaired Loans A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. Loans considered for impairment include non-accrual loans, troubled debt restructurings and loans with a risk rating of 6 (substandard) or worse. Once identified, impaired loans are measured individually for impairment using one of three methods: present value of expected cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; and the fair value of collateral if the loan is collateral dependent. In general, any portion of the recorded investment in a collateral dependent loan in excess of the fair value of the collateral that can be identified as uncollectible, and is, therefore, deemed a confirmed loss, is promptly charged-off against the allowance for loan losses. Impaired loans, segregated by loan class, as of June 30, 2015 and December 31, 2014 were as follows: ($ in thousands) Unpaid Contractual Principal Balance Recorded Investment with no Allowance Recorded Investment with Allowance Total Recorded Investment Related Allowance June 30, 2015 Commercial $ 2,820 $ 2,022 $ 700 $ 2,722 $ 36 Commercial Real Estate 1,221 908 299 1,207 43 Agriculture — — — — — Residential Mortgage 4,048 1,008 2,807 3,815 628 Residential Construction 999 61 811 872 107 Consumer 1,642 673 700 1,373 17 Total $ 10,730 $ 4,672 $ 5,317 $ 9,989 $ 831 December 31, 2014 Commercial $ 2,803 $ 2,147 $ 531 $ 2,678 $ 39 Commercial Real Estate 990 672 304 976 45 Agriculture — — — — — Residential Mortgage 5,666 1,691 2,956 4,647 646 Residential Construction 1,065 71 826 897 107 Consumer 1,506 780 726 1,506 23 Total $ 12,030 $ 5,361 $ 5,343 $ 10,704 $ 860 ($ in thousands) Three Months Ended June 30, 2015 Three Months Ended June 30, 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial $ 2,650 $ 12 $ 3,875 $ 7 Commercial Real Estate 1,084 4 3,406 24 Agriculture — — 515 — Residential Mortgage 4,205 27 5,357 42 Residential Construction 879 9 925 12 Consumer 1,428 9 1,494 20 Total $ 10,246 $ 61 $ 15,572 $ 105 The average recorded investment in impaired loans and the amount of interest income recognized on impaired loans during the six-month periods ended June 30, 2015 and June 30, 2014 was as follows: ($ in thousands) Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial $ 2,659 $ 20 $ 4,207 $ 15 Commercial Real Estate 1,048 8 3,404 43 Agriculture — — 655 — Residential Mortgage 4,352 58 5,484 74 Residential Construction 885 18 937 22 Consumer 1,454 19 1,286 34 Total $ 10,398 $ 123 $ 15,973 $ 188 None of the interest on impaired loans was recognized using a cash basis of accounting for the three-month and six-month periods ended June 30, 2015 and June 30, 2014. Troubled Debt Restructurings The Company’s loan portfolio includes certain loans that have been modified in a Troubled Debt Restructuring (“TDR”), which are loans on which concessions in terms have been granted because of the borrowers’ financial difficulties and, as a result, the Company receives less than the current market based compensation for the loan. These concessions may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are placed on non-accrual status at the time of restructure and may only be returned to accruing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. When a loan is modified, it is measured based upon the present value of future cash flows discounted at the contractual interest rate of the original loan agreement, or the fair value of collateral less selling costs if the loan is collateral dependent. If the value of the modified loan is less than the recorded investment in the loan, impairment is recognized through a specific allowance or a charge-off of the loan. The Company had $6,272,000 and $6,712,000 in TDR loans as of June 30, 2015 and December 31, 2014, respectively. Specific reserves for TDR loans totaled $831,000 and $860,000 as of June 30, 2015 and December 31, 2014, respectively. TDR loans performing in compliance with modified terms totaled $5,596,000 and $5,467,000 as of June 30, 2015 and December 31, 2014, respectively. There were no commitments to advance more funds on existing TDR loans as of June 30, 2015. Loans modified as TDRs during the three-month periods ended June 30, 2015 and June 30, 2014, were as follows: ($ in thousands) Three Months Ended June 30, 2015 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 419 419 Total 1 $ 419 $ 419 ($ in thousands) Three Months Ended June 30, 2014 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 49 49 Total 1 $ 49 $ 49 Loans modified as TDRs during the six-month periods ended June 30, 2015 and June 30, 2014 were as follows: ($ in thousands) Six Months Ended June 30, 2015 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 $ 419 $ 419 Consumer 1 109 109 Total 2 $ 528 $ 528 ($ in thousands) Six Months Ended June 30, 2014 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 $ 49 $ 49 Consumer 2 498 498 Total 3 $ 547 $ 547 The loan modifications generally involved reductions in the interest rate, payment extensions, forgiveness of principal, and forbearance. There were no loans modified as a TDR within the previous 12 months and for which there was a payment default during the three-month and six-month periods ended June 30, 2015 and June 30, 2014. Credit Quality Indicators All loans are rated using the credit risk ratings and criteria adopted by the Company. Risk ratings are adjusted as future circumstances warrant. All credits risk-rated 1, 2, 3 or 4 equate to a Pass as indicated by Federal and State regulatory agencies; a 5 equates to a Special Mention; a 6 equates to Substandard; a 7 equates to Doubtful; and an 8 equates to a Loss. For the definitions of each risk rating, see Note 4 to our condensed consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. The following table presents the risk ratings by loan class as of June 30, 2015 and December 31, 2014: ($ in thousands) Pass Special Mention Substandard Doubtful Loss Total June 30, 2015 Commercial $ 117,650 $ 4,592 $ 3,547 $ — $ — $ 125,789 Commercial Real Estate 263,046 16,865 4,173 — — 284,084 Agriculture 68,199 — — — — 68,199 Residential Mortgage 43,291 384 1,213 — — 44,888 Residential Construction 8,805 462 100 — — 9,367 Consumer 43,882 361 1,871 — — 46,114 Total $ 544,873 $ 22,664 $ 10,904 $ — $ — $ 578,441 December 31, 2014 Commercial $ 112,751 $ 3,255 $ 4,745 $ — $ — $ 120,751 Commercial Real Estate 240,808 10,607 5,540 — — 256,955 Agriculture 61,144 — — — — 61,144 Residential Mortgage 46,043 997 3,471 — — 50,511 Residential Construction 5,386 467 110 — — 5,963 Consumer 46,234 944 2,733 — — 49,911 Total $ 512,366 $ 16,270 $ 16,599 $ — $ — $ 545,235 Allowance for Loan Losses The following table details activity in the allowance for loan losses by loan class for the three-month and six-month periods ended June 30, 2015. Three-month period ended June 30, 2015 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of March 31, 2015 $ 3,325 $ 2,485 $ 646 $ 1,047 $ 195 $ 826 $ 370 $ 8,894 Provision for loan losses (141 ) 399 206 (297 ) (107 ) (173 ) 113 — Charge-offs — — — (132 ) — (18 ) — (150 ) Recoveries 75 4 — 215 56 12 — 362 Net recoveries 75 4 — 83 56 (6 ) — 212 Balance as of June 30, 2015 $ 3,259 $ 2,888 $ 852 $ 833 $ 144 $ 647 $ 483 $ 9,106 Six-month period ended June 30, 2015 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of December 31, 2014 $ 3,581 $ 1,825 $ 580 $ 1,181 $ 161 $ 886 $ 369 $ 8,583 Provision for loan losses (409 ) 1,059 272 (431 ) (74 ) (181 ) 114 350 Charge-offs — — — (132 ) — (85 ) — (217 ) Recoveries 87 4 — 215 57 27 — 390 Net recoveries 87 4 — 83 57 (58 ) — 173 Balance as of June 30, 2015 $ 3,259 $ 2,888 $ 852 $ 833 $ 144 $ 647 $ 483 $ 9,106 The following table details the allowance for loan losses allocated to loans individually and collectively evaluated for impairment by loan class as of June 30, 2015. ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Period-end amount allocated to: Loans individually evaluated for impairment $ 36 $ 43 $ — $ 628 $ 107 $ 17 $ — $ 831 Loans collectively evaluated for impairment 3,223 2,845 852 205 37 630 483 8,275 Ending Balance $ 3,259 $ 2,888 $ 852 $ 833 $ 144 $ 647 $ 483 $ 9,106 The following table details activity in the allowance for loan losses by loan class for the three-month and six-month periods ended June 30, 2014. Three-month period ended June 30, 2014 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of March 31, 2014 $ 3,282 $ 2,150 $ 439 $ 1,173 $ 258 $ 967 $ 377 $ 8,646 Provision for loan losses 1,191 (390 ) — (47 ) (64 ) 49 (139 ) 600 Charge-offs (1,024 ) (69 ) — — — (26 ) — (1,119 ) Recoveries 22 — — — 2 23 — 47 Net charge-offs (1,002 ) (69 ) — — 2 (3 ) — (1,072 ) Balance as of June 30, 2014 $ 3,471 $ 1,691 $ 439 $ 1,126 $ 196 $ 1,013 $ 238 $ 8,174 Six-month period ended June 30, 2014 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of December 31, 2013 $ 3,199 $ 2,290 $ 557 $ 1,216 $ 441 $ 1,023 $ 627 $ 9,353 Provision for loan losses 2,323 (530 ) (118 ) (90 ) (248 ) 252 (389 ) 1,200 Charge-offs (2,085 ) (69 ) — — — (328 ) — (2,482 ) Recoveries 34 — — — 3 66 — 103 Net charge-offs (2,051 ) (69 ) — — 3 (262 ) — (2,379 ) Balance as of June 30, 2014 $ 3,471 $ 1,691 $ 439 $ 1,126 $ 196 $ 1,013 $ 238 $ 8,174 The following table details the allowance for loan losses allocated to loans individually and collectively evaluated for impairment by loan class as of June 30, 2014. ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Period-end amount allocated to: Loans individually evaluated for impairment $ 37 $ 55 $ — $ 652 $ 124 $ 25 $ — $ 893 Loans collectively evaluated for impairment 3,434 1,636 439 474 72 988 238 7,281 Ending Balance $ 3,471 $ 1,691 $ 439 $ 1,126 $ 196 $ 1,013 $ 238 $ 8,174 Year ended December 31, 2014 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of December 31, 2013 $ 3,199 $ 2,290 $ 557 $ 1,216 $ 441 $ 1,023 $ 627 $ 9,353 Provision for (reversal of) loan losses 2,612 (396 ) 23 36 (366 ) 149 (258 ) 1,800 Charge-offs (2,288 ) (69 ) — (71 ) — (393 ) — (2,821 ) Recoveries 58 — — — 86 107 — 251 Net charge-offs (2,230 ) (69 ) — (71 ) 86 (286 ) — (2,570 ) Ending Balance 3,581 1,825 580 1,181 161 886 369 8,583 Period-end amount allocated to: Loans individually evaluated for impairment 39 45 — 646 107 23 — 860 Loans collectively evaluated for impairment 3,542 1,780 580 535 54 863 369 7,723 Balance as of December 31, 2014 $ 3,581 $ 1,825 $ 580 $ 1,181 $ 161 $ 886 $ 369 $ 8,583 The Company’s investment in loans as of June 30, 2015, June 30, 2014, and December 31, 2014 related to each balance in the allowance for loan losses by loan class and disaggregated on the basis of the Company’s impairment methodology was as follows: ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Total June 30, 2015 Loans individually evaluated for impairment $ 2,722 $ 1,207 $ — $ 3,815 $ 872 $ 1,373 $ 9,989 Loans collectively evaluated for impairment 123,067 282,877 68,199 41,073 8,495 44,741 568,452 Ending Balance $ 125,789 $ 284,084 $ 68,199 $ 44,888 $ 9,367 $ 46,114 $ 578,441 June 30, 2014 Loans individually evaluated for impairment $ 3,248 $ 3,119 $ — $ 5,321 $ 920 $ 1,315 $ 13,923 Loans collectively evaluated for impairment 116,342 244,801 50,374 46,270 6,973 50,389 515,149 Ending Balance $ 119,590 $ 247,920 $ 50,374 $ 51,591 $ 7,893 $ 51,704 $ 529,072 December 31, 2014 Loans individually evaluated for impairment $ 2,678 $ 976 $ — $ 4,647 $ 897 $ 1,506 $ 10,704 Loans collectively evaluated for impairment 118,073 255,979 61,144 45,864 5,066 48,405 534,531 Ending Balance $ 120,751 $ 256,955 $ 61,144 $ 50,511 $ 5,963 $ 49,911 $ 545,235

MORTGAGE OPERATIONS

MORTGAGE OPERATIONS	6 Months Ended
	Jun. 30, 2015
MORTGAGE OPERATIONS [Abstract]
MORTGAGE OPERATIONS	3. MORTGAGE OPERATIONS Transfers and servicing of financial assets and extinguishments of liabilities are accounted for and reported based on consistent application of a financial-components approach that focuses on control. Transfers of financial assets that are sales are distinguished from transfers that are secured borrowings. Retained interests (mortgage servicing rights) in loans sold are measured by allocating the previous carrying amount of the transferred assets between the loans sold and retained interests, if any, based on their relative fair value at the date of transfer. Fair values are estimated using discounted cash flows based on a current market interest rate. The Company recognizes a gain and a related asset for the fair value of the rights to service loans for others when loans are sold. The Company sold substantially its entire portfolio of conforming long-term residential mortgage loans originated during the six months ended June 30, 2015 for cash proceeds equal to the fair value of the loans. The recorded value of mortgage servicing rights is included in other assets on the condensed consolidated balance sheets, and is amortized in proportion to, and over the period of, estimated net servicing revenues. The Company assesses capitalized mortgage servicing rights for impairment based upon the fair value of those rights at each reporting date. For purposes of measuring impairment, the rights are stratified based upon the product type, term and interest rates. Fair value is determined by discounting estimated net future cash flows from mortgage servicing activities using discount rates that approximate current market rates and estimated prepayment rates, among other assumptions. The amount of impairment recognized, if any, is the amount by which the capitalized mortgage servicing rights for a stratum exceeds their fair value. Impairment, if any, is recognized through a valuation allowance for each individual stratum. Changes in the carrying amount of mortgage servicing rights are reported in earnings under other non-interest income on the condensed consolidated statements of income. Key assumptions used in measuring the fair value of mortgage servicing rights as of June 30, 2015 and December 31, 2014 were as follows: June 30, 2015 December 31, 2014 Constant prepayment rate 12.19 % 12.12 % Discount rate 10.06 % 10.06 % Weighted average life (years) 6.17 6.25 At June 30, 2015 and December 31, 2014, the Company’s mortgage loans held-for-sale were $486,000 and $491,000, respectively. At June 30, 2015, and December 31, 2014, the Company serviced real estate mortgage loans for others totaling $237,906,000 and $238,974,000, respectively. The following table summarizes the Company’s mortgage servicing rights assets as of June 30, 2015 and December 31, 2014. Mortgage servicing rights are included in Interest Receivable and Other Assets on the condensed consolidated balance sheets: (in thousands) December 31, 2014 Additions Reductions June 30, 2015 Mortgage servicing rights $ 1,862 $ 199 $ (187 ) $ 1,874 Valuation allowance — — — — Mortgage servicing rights, net of valuation allowance $ 1,862 $ 199 $ (187 ) $ 1,874 At June 30, 2015 and December 31, 2014, the estimated fair value of the Company’s mortgage servicing rights asset was $2,001,000 and $2,068,000, respectively. The Company received contractually specified servicing fees of $149,000 and $152,000 for the three- month periods ended June 30, 2015 and June 30, 2014, respectively. The Company received contractually specified servicing fees of $300,000 and $305,000 for the six-month periods ended June 30, 2015 and June 30, 2014, respectively. Contractually specified servicing fees are included in non-interest income on the condensed consolidated statements of income, net of the amortization of the mortgage servicing rights asset.

OUTSTANDING SHARES AND EARNINGS

OUTSTANDING SHARES AND EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2015
OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]
OUTSTANDING SHARES AND EARNINGS PER SHARE	4. OUTSTANDING SHARES AND EARNINGS PER SHARE On January 22, 2015, the Board of Directors of the Company declared a 4% stock dividend payable as of March 31, 2015. All income per share amounts have been adjusted to give retroactive effect to stock dividends. Earnings Per Share (EPS) Basic EPS includes no dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the respective period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average number of shares outstanding plus dilutive shares for the quarter. Diluted shares include all common stock equivalents (“in-the-money” stock options, unvested restricted stock, stock units, warrants and rights, convertible bonds and preferred stock), which reflects the potential dilution of securities that could share in the earnings of the Company. The following table presents a reconciliation of basic and diluted EPS for the three-month and six-month periods ended June 30, 2015 and 2014. Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Basic earnings per share: Net income $ 1,770 $ 1,339 $ 3,287 $ 2,703 Preferred stock dividend $ (32 ) $ (32 ) $ (64 ) $ (64 ) Net income available to common stockholders $ 1,738 $ 1,307 $ 3,223 $ 2,639 Weighted average common shares outstanding 10,170,640 10,119,433 10,152,942 10,112,748 Basic EPS $ 0.17 $ 0.13 $ 0.32 $ 0.26 Diluted earnings per share: Net income $ 1,770 $ 1,339 $ 3,287 $ 2,703 Preferred stock dividend $ (32 ) $ (32 ) $ (64 ) $ (64 ) Net income available to common stockholders $ 1,738 $ 1,307 $ 3,223 $ 2,639 Weighted average common shares outstanding 10,170,640 10,119,433 10,152,942 10,112,748 Effect of dilutive shares 50,319 47,108 55,927 49,979 Adjusted weighted average common shares outstanding 10,220,959 10,166,541 10,208,869 10,162,727 Diluted EPS $ 0.17 $ 0.13 $ 0.32 $ 0.26 Stock options which were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 164,321 shares and 253,865 shares for the three-month periods ended June 30, 2015 and 2014, respectively. Stock options which were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 173,826 shares and 253,865 shares for the six-month periods ended June 30, 2015 and 2014, respectively. There were no non-vested shares of restricted stock not included in the computation of diluted earnings per share because they would have an anti-dilutive effect for the three-month periods ended June 30, 2015 and 2014. Non-vested shares of restricted stock that were not included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to zero shares and 12,871 shares for the six-month periods ended June 30, 2015 and 2014, respectively.

STOCK PLANS

STOCK PLANS	6 Months Ended
	Jun. 30, 2015
STOCK PLANS [Abstract]
STOCK PLANS	5. On January 22, 2015, the Board of Directors of the Company declared a 4% stock dividend payable as of March 31, 2015. All stock options and restricted stock outstanding have been adjusted to give retroactive effect to stock dividends. The following table presents the activity related to stock options for the three months ended June 30, 2015. Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Options outstanding at Beginning of Period 247,809 $ 12.02 Granted — — Expired (7,734 ) $ 21.32 Cancelled / Forfeited (11,382 ) $ 16.28 Exercised — — Options outstanding at End of Period 228,693 $ 11.49 $ 205,654 4.69 Exercisable (vested) at End of Period 157,044 $ 13.56 $ 156,511 2.76 The following table presents the activity related to stock options for the six months ended June 30, 2015. Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Options outstanding at Beginning of Period 313,483 $ 11.54 Granted 41,047 $ 7.60 Expired (94,609 ) $ 10.93 Cancelled / Forfeited (11,382 ) $ 16.28 Exercised (19,846 ) $ 4.23 Options outstanding at End of Period 228,693 $ 11.49 $ 205,654 4.69 Exercisable (vested) at End of Period 157,044 $ 13.56 $ 156,511 2.76 The weighted average grant date fair value per share of options granted during the six-month period ended June 30, 2015 was $2.67 per share. As of June 30, 2015, there was $166,000 of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of approximately 3.00 years. There was $32,000 of recognized compensation cost related to stock options granted for the six months ended June 30, 2015. A summary of the weighted average assumptions used in valuing stock options during the three months and six months ended June 30, 2015 is presented below. Three Months Ended Six Months Ended June 30, 2015* June 30, 2015 Risk Free Interest Rate — 1.61 % Expected Dividend Yield — 0.00 % Expected Life in Years — 5 Expected Price Volatility — 37.38 % * There were no stock options granted during the three-month period ended June 30, 2015. The following table presents the activity related to non-vested restricted stock for the three months ended June 30, 2015. Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Non-vested Restricted stock outstanding at Beginning of Period 85,579 $ 6.54 Granted — — Cancelled / Forfeited — — Exercised/Released/Vested — — Non-vested restricted stock outstanding at End of Period 85,579 $ 6.54 $654,679 8.49 The following table presents the activity related to non-vested restricted stock for the six months ended June 30, 2015. Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Non-vested Restricted stock outstanding at Beginning of Period 73,827 $ 5.64 Granted 30,056 $ 7.59 Cancelled / Forfeited — — Exercised/Released/Vested (18,304 ) $ 4.66 Non-vested restricted stock outstanding at End of Period 85,579 $ 6.54 $654,679 8.49 The weighted average fair value of restricted stock granted during the six-month period ended June 30, 2015 was $7.59 per share. The Company has an Employee Stock Purchase Plan (“ESPP”). Under the ESPP, the Company is authorized to issue shares of common stock to eligible employees. There are 322,385 (adjusted for the 2015 stock dividend) shares authorized under the 2006 Amended ESPP. The 2006 Amended ESPP will expire on March 15, 2016. In May 2015, the Company’s shareholders approved the 2016 ESPP, which will become effective on March 16, 2016. There are 250,000 shares authorized under the 2016 ESPP, which include authorized but unissued shares under the 2006 Amended ESPP. The 2016 ESPP will expire on March 16, 2026. The ESPP is implemented by participation periods of not more than twenty-seven months each. The Board of Directors determines the commencement date and duration of each participation period. The Board of Directors approved the current participation period of November 24, 2014 to November 23, 2015. An eligible employee is one who has been continually employed for at least 90 days prior to commencement of a participation period. Under the terms of the ESPP, employees can choose to have up to 10 percent of their compensation withheld to purchase the Company’s common stock each participation period. The purchase price of the stock is 85 percent of the lower of the fair value on the last trading day before the date of participation or the fair value on the last trading day during the participation period. As of June 30, 2015, there was $10,000 of unrecognized compensation cost related to ESPP issuances. This cost is expected to be recognized over a weighted average period of approximately 0.50 years. There was $13,000 of recognized compensation cost related to ESPP issuances for the six-month period ended June 30, 2015. The weighted average fair value at issuance date during the six-month period ended June 30, 2015 was $1.67. A summary of the weighted average assumptions used in valuing ESPP issuances during the three months and six months ended June 30, 2015 is presented below. Three Months Ended Six Months Ended June 30, 2015 June 30, 2015 Risk Free Interest Rate 0.14 % 0.14 % Expected Dividend Yield 0.00 % 0.00 % Expected Life in Years 1.00 1.00 Expected Price Volatility 15.10 % 15.10 %

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT	6 Months Ended
	Jun. 30, 2015
FAIR VALUE MEASUREMENT [Abstract]
FAIR VALUE MEASUREMENT	6. The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale and trading securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a non-recurring basis, such as loans held-for-sale, loans held-for-investment and certain other assets. These non-recurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally corresponds with the Company’s quarterly valuation process. Fair Value Hierarchy The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1 Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable or can be corroborated by observable market data. Level 3 Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, and similar techniques and include management judgment and estimation which may be significant. Following is a description of valuation methodologies used for assets and liabilities recorded at fair value. Investment Securities Available-for-Sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, if available. If quoted market prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions, and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets where valuations include significant unobservable assumptions. Loans Held-for-Sale Loans held-for-sale are carried at the lower of cost or fair value. The fair value of loans held-for-sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Company classifies loans subjected to non-recurring fair value adjustments as Level 2. At June 30, 2015 there were no loans held-for-sale that required a write-down. Impaired Loans The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, the Company measures impairment. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Inputs include external appraised values, management assumptions regarding market trends or other relevant factors, selling and commission costs ranging from 6% to 7%, and amount and timing of cash flows based upon current discount rates. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. At June 30, 2015, certain impaired loans were considered collateral dependent and were evaluated based on the fair value of the underlying collateral securing the loan. Impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When a loan is evaluated based on the fair value of the underlying collateral securing the loan, the Company records the impaired loan as non-recurring Level 3. Other Real Estate Owned Other real estate assets (“OREO”) acquired through, or in lieu of, foreclosure are held-for-sale and are initially recorded at the lower of cost or fair value, less selling costs. Any write-downs to fair value at the time of transfer to OREO are charged to the allowance for loan losses. Appraisals or evaluations are then done periodically thereafter charging any additional write-downs or valuation allowances to the appropriate expense accounts. Values are derived from appraisals of underlying collateral and discounted cash flow analysis. OREO is classified within Level 3 of the hierarchy. Loan Servicing Rights Loan servicing rights are subject to impairment testing. The Company utilizes a third party service provider to calculate the fair value of the Company’s loan servicing rights. Loan servicing rights are measured at fair value as of the date of sale. The Company uses quoted market prices when available. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the loan servicing rights, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. The model used to calculate the fair value of the Company’s loan servicing rights is periodically validated by an independent external model validation group. The model assumptions and the loan servicing rights fair value estimates are also compared to observable trades of similar portfolios as well as to loan servicing rights broker valuations and industry surveys, as available. If the valuation model reflects a value less than the carrying value, loan servicing rights are adjusted to fair value through a valuation allowance as determined by the model. As such, the Company classifies loan servicing rights subjected to non-recurring fair value adjustments as Level 3. Assets Recorded at Fair Value on a Recurring Basis The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2015: (in thousands) June 30, 2015 Total Level 1 Level 2 Level 3 Securities of U.S. government agencies and corporations $ 29,686 $ — $ 29,686 $ — Obligations of states and political subdivisions 22,031 — 22,031 — Collateralized mortgage obligations 12,693 — 12,693 — Mortgage-backed securities 91,803 — 91,803 — Total investments at fair value $ 156,213 $ — $ 156,213 $ — There were no transfers of assets measured at fair value on a recurring basis between Level 1 and Level 2 of the fair value hierarchy. The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014: (in thousands) December 31, 2014 Total Level 1 Level 2 Level 3 Securities of U.S. government agencies and corporations $ 28,429 $ — $ 28,429 $ — Obligations of states and political subdivisions 20,763 — 20,763 — Collateralized mortgage obligations 12,553 — 12,553 Mortgage-backed securities 89,481 — 89,481 — Total investments at fair value $ 151,226 $ — $ 151,226 $ — Assets Recorded at Fair Value on a Non-Recurring Basis Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of June 30, 2015: June 30, 2015 Total Level 1 Level 2 Level 3 Other real estate owned $ 407 — — $ 407 Total assets at fair value $ 407 $ — $ — $ 407 Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of December 31, 2014: (in thousands) December 31, 2014 Total Level 1 Level 2 Level 3 Impaired loans $ 568 $ — $ — $ 568 Other real estate owned 736 — — 736 Total assets at fair value $ 1,304 $ — $ — $ 1,304 There were no liabilities measured at fair value on a recurring or non-recurring basis at June 30, 2015 and December 31, 2014. Key methods and assumptions used in measuring the fair value of impaired loans and other real estate owned as of June 30, 2015 and December 31, 2014 were as follows: Method Assumption Inputs Impaired loans Collateral, market, income, enterprise, liquidation and discounted Cash Flows External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 7%. Other real estate owned Collateral External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 11%.

PREFERRED STOCK

PREFERRED STOCK	6 Months Ended
	Jun. 30, 2015
PREFERRED STOCK [Abstract]
PREFERRED STOCK	7. PREFERRED STOCK On September 15, 2011, the Company issued to the U.S. Treasury under the United States Department of Treasury Small Business Lending Fund (SBLF) 22,847 shares of the Company’s Non-Cumulative Perpetual Preferred Stock, Series A (SBLF Shares), having a liquidation preference per share equal to $1,000, for an aggregate purchase price of $22,847,000. On September 15, 2011, the Company redeemed from the U.S. Treasury, using the partial proceeds from the issuance of the SBLF Shares, all 17,390 outstanding shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A, liquidation amount $1,000 per share, for a redemption price of $17,390,000, plus accrued but unpaid dividends at the date of redemption. On February 8, 2013, the Company redeemed $10,000,000 of the $22,847,000 in preferred stock it issued to the U.S. Treasury under the SBLF program.

FAIR VALUES OF FINANCIAL INSTRU

FAIR VALUES OF FINANCIAL INSTRUMENTS	6 Months Ended
	Jun. 30, 2015
FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract]
FAIR VALUES OF FINANCIAL INSTRUMENTS	8. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Cash & Cash Equivalents and Certificates of Deposit The carrying amounts reported in the condensed consolidated balance sheets for cash and short-term instruments are a reasonable estimate of fair value. The carrying amount is a reasonable estimate of fair value because of the relatively short term between the origination of the instrument and its expected realization. Therefore, the Company believes the measurement of fair value of cash & cash equivalents and certificates of deposit are derived from Level 1 inputs. Stock in Federal Home Loan Bank and other equity securities, at cost The carrying amounts reported in the condensed consolidated balance sheets approximate fair value as the shares can only be redeemed by the issuing institution. The Company believes the measurement of the fair value of other equity securities is derived from Level 2 inputs. Loans Receivable For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values for other loans (e.g., commercial real estate and rental property mortgage loans, commercial and industrial loans, and agricultural loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. The allowance for loan losses is considered to be a reasonable estimate of loan discount due to credit risks. Given that there are loans with specific terms that are not readily available, the Company believes the fair value of loans receivable is derived from Level 3 inputs. Loans Held-for-Sale For loans held for sale, the fair value is based on what secondary markets are currently offering for portfolios with similar characteristics. Mortgage Servicing Rights The Company measures fair value of mortgage servicing rights using Level 2 and Level 3 inputs. Interest Receivable and Payable The carrying amount of interest receivable and payable approximates its fair value. The Company believes the measurement of the fair value of interest receivable and payable is derived from Level 2 inputs. Deposit Liabilities The Company measures fair value of deposits using Level 2 and Level 3 inputs. The fair value of deposits were derived by discounting their expected future cash flows back to their present values based on the FHLB yield curve, and their expected decay rates for non-maturing deposits. The Company is able to obtain FHLB yield curve rates as of the measurement date, and believes these inputs fall under Level 2 of the fair value hierarchy. Decay rates were developed through internal analysis, and are supported by recent years of the Bank’s transaction history. The inputs used by the Company to derive the decay rate assumptions are unobservable inputs, and therefore fall under Level 3 of the fair value hierarchy. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, 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 estimates. Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets or liabilities include deferred tax liabilities and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in many of the estimates. The estimated fair values of the Company’s financial instruments for the periods ended June 30, 2015 and December 31, 2014 are approximately as follows: June 30, 2015 December 31, 2014 Level Carrying amount Fair value Carrying amount Fair value Financial assets: Cash and cash equivalents 1 $ 225,749 $ 225,749 $ 216,192 $ 216,192 Certificates of deposit 1 11,937 11,937 12,860 12,860 Stock in FHLB and other equity securities, at cost 2 3,934 3,934 3,934 3,934 Loans receivable: Net loans 3 570,540 567,129 537,979 535,018 Loans held-for-sale 2 486 486 491 509 Interest receivable 2 2,765 2,765 2,650 2,650 Mortgage servicing rights 3 1,874 2,001 1,862 2,068 Financial liabilities: Deposits 3 898,367 873,066 857,052 837,150 Interest payable 2 78 78 70 70

INVESTMENT SECURITIES

INVESTMENT SECURITIES	6 Months Ended
	Jun. 30, 2015
INVESTMENT SECURITIES [Abstract]
INVESTMENT SECURITIES	9. The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at June 30, 2015 are summarized as follows: (in thousands) Amortized cost Unrealized gains Unrealized losses Estimated fair value Investment securities available-for-sale: Securities of U.S. government agencies and corporations $ 29,790 $ 53 $ (157 ) $ 29,686 Obligations of states and political subdivisions 21,578 487 (34 ) 22,031 Collateralized mortgage obligations 12,803 12 (122 ) 12,693 Mortgage-backed securities 91,275 817 (289 ) 91,803 Total debt securities $ 155,446 $ 1,369 $ (602 ) $ 156,213 The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 2014 are summarized as follows: (in thousands) Amortized cost Unrealized gains Unrealized losses Estimated fair value Investment securities available-for-sale: Securities of U.S. government agencies and corporations $ 28,787 $ 17 $(375)­­­ $ 28,429 Obligations of states and political subdivisions 20,236 579 (52 ) 20,763 Collateralized mortgage obligations 12,541 37 (25 ) 12,553 Mortgage-backed securities 88,491 1,144 (154 ) 89,481 Total debt securities $ 150,055 $ 1,777 $ (606 ) $ 151,226 There were no proceeds from sales of available-for-sale securities for the six-month and three-month periods ended June 30, 2015 and June 30, 2014. There were no gross realized gains from sales or calls of available-for-sale securities for the six-month and three-month periods ended June 30, 2015. There were no gross realized gains from sales or calls of available-for-sale securities for the six-month and three-month periods ended June 30, 2014. There were no gross realized losses from sales of available-for-sale securities for the six-month and three-month periods ended June 30, 2015. There was a $50,000 gross realized loss from other equity securities for the six-month and three-month periods ended June 30, 2014. The amortized cost and estimated market value of debt and other securities at June 30, 2015, by contractual and expected maturity, are shown in the following table: (in thousands) Amortized cost Estimated fair value Due in one year or less $ 3,478 $ 3,485 Due after one year through five years 135,642 136,039 Due after five years through ten years 14,392 14,642 Due after ten years 1,934 2,047 $ 155,446 $ 156,213 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities due after one year through five years included mortgage-backed securities and collateralized mortgage obligations with expected maturities totaling $102,160,000. The maturities on these securities were based on the average lives of the securities. An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of June 30, 2015, follows: Less than 12 months 12 months or more Total (in thousands) Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Securities of U.S. government agencies and corporations $ 7,992 $ (22 ) $ 12,965 $ (135 ) $ 20,957 $ (157 ) Obligations of states and political subdivisions 5,524 (34 ) — — 5,524 (34 ) Collateralized Mortgage obligations 10,968 (122 ) — — 10,968 (122 ) Mortgaged-backed securities 31,202 (163 ) 6,613 (126 ) 37,815 (289 ) Total $ 55,686 $ (341 ) $ 19,578 $ (261 ) $ 75,264 $ (602 ) No decline in value was considered “other-than-temporary” during the first six months of 2015. Forty-eight securities, all considered investment grade, which had a fair value of $55,686,000 and a total unrealized loss of $341,000, have been in an unrealized loss position for less than twelve months as of June 30, 2015. Sixteen securities, all considered investment grade, which had a fair value of $19,578,000 and a total unrealized loss of $261,000, have been in an unrealized loss position for more than twelve months as of June 30, 2015. The declines in fair value were attributable to changes in interest rates. We have evaluated the credit ratings of our investment securities and their issuer and/or insurers, and based on this evaluation have determined that no investment security in our investment portfolio is other-than-temporarily impaired. An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2014, follows: Less than 12 months 12 months or more Total Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Securities of U.S. government agencies and corporations $ 1,474 $ (4 ) $ 21,729 $ (371 ) $ 23,203 $ (375 ) Obligations of states and political subdivisions 1,927 (28 ) 1,530 (24 ) 3,457 (52 ) Collateralized Mortgage obligations 2,881 (25 ) — — 2,881 (25 ) Mortgage-backed securities 9,786 (55 ) 9,128 (99 ) 18,914 (154 ) Total $ 16,068 $ (112 ) $ 32,387 $ (494 ) $ 48,455 $ (606 ) Investment securities carried at $29,209,000 and $27,868,000 at June 30, 2015 and December 31, 2014, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	6 Months Ended
	Jun. 30, 2015
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	10. The following table details activity in accumulated other comprehensive income (loss) for the three-month period ended June 30, 2015. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of March 31, 2015 $ 1,078 $ (678 ) $ 8 $ 408 Current period other comprehensive loss (618 ) — — (618 ) Balance as of June 30, 2015 $ 460 $ (678 ) $ 8 $ (210 ) The following table details activity in accumulated other comprehensive income (loss) for the six-month period ended June 30, 2015. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of December 31, 2014 $ 703 $ (678 ) $ 41 $ 66 Current period other comprehensive loss (243 ) — (33 ) (276 ) Balance as of June 30, 2015 $ 460 $ (678 ) $ 8 $ (210 ) The following table details activity in accumulated other comprehensive income (loss) for the three-month period ended June 30, 2014. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of March 31, 2014 $ (123 ) $ (480 ) $ 46 $ (557 ) Current period other comprehensive income 761 — — 761 Balance as of June 30, 2014 $ 638 $ (480 ) $ 46 $ 204 The following table details activity in accumulated other comprehensive income (loss) for the six-month period ended June 30, 2014. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of December 31, 2013 $ (639 ) $ (480 ) $ 46 $ (1,073 ) Current period other comprehensive income 1,277 — — 1,277 Balance as of June 30, 2014 $ 638 $ (480 ) $ 46 $ 204

FINANCIAL INSTRUMENTS WITH OFF-

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK	6 Months Ended
	Jun. 30, 2015
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK [Abstract]
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK	11. The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit in the form of loans or through standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Bank’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Financial instruments, whose contract amounts represent credit risk at the indicated periods, were as follows: (in thousands) June 30, 2015 December 31, 2014 Undisbursed loan commitments $ 170,904 $ 171,019 Standby letters of credit 2,246 2,099 Commitments to sell loans 4,675 1,230 $ 177,825 $ 174,348 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank issues both financial and performance standby letters of credit. The financial standby letters of credit are primarily to guarantee payment to third parties. At June 30, 2015, there were no financial standby letters of credit outstanding. The performance standby letters of credit are typically issued to municipalities as specific performance bonds. At June 30, 2015, there was $2,246,000 issued in performance standby letters of credit. At June 30, 2015, the Bank had experienced no draws on these letters of credit, resulting in no related liability included on its balance sheet, however, should a triggering event occur, the Bank either has collateral in excess of the letter of credit or imbedded agreements of recourse from the customer. The Bank has set aside a reserve for unfunded commitments in the amount of $793,000 at June 30, 2015, which is recorded in “interest payable and other liabilities” on the Condensed Consolidated Balance Sheets. Commitments to extend credit and standby letters of credit bear similar credit risk characteristics as outstanding loans. As of June 30, 2015, the Company had no off-balance sheet derivatives requiring additional disclosure. Mortgage loans sold to investors may be sold with servicing rights retained, for which the Company makes only standard legal representations and warranties as to meeting certain underwriting and collateral documentation standards. In the past two years, the number of loans the Company has had to repurchase due to deficiencies in underwriting or loan documentation was not significant. Management believes that any liabilities that may result from such recourse provisions are not significant.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2015
BASIS OF PRESENTATION [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements of First Northern Community Bancorp (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Articles 9 and 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for any interim period are not necessarily indicative of results expected for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission. The preparation of financial statements in conformity with GAAP also requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. All material intercompany balances and transactions have been eliminated in consolidation.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements: In January 2014, FASB issued ASU 2014-01, Investments – Equity Method and Joint Ventures In January 2014, FASB issued ASU 2014-04, Receivables – Troubled Debt Restructurings by Creditors In January 2014, FASB issued ASU 2014-05, Service Concession Arrangements In August 2014, FASB issued ASU 2014-14, Receivables- Troubled Debt Restructuring by Creditors: Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure · The loan has a government guarantee that is not separable from the loan before foreclosure. · At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim. · At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The amendments are effective for a public business entity for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The adoption of this update did not have a significant impact on the Company’s consolidated financial statements. In August 2014, FASB issued ASU 2014-15, Presentation of Financial Statements- Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In April 2015, FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In June 2015, FASB issued ASU 2015-10, Technical Corrections and Improvements
Reclassifications	Reclassifications Certain reclassifications have been made to prior period balances in order to conform to the current year presentation. There was no impact to the net income, earnings per share, or stockholders’ equity as a result of reclassifications.

LOANS (Tables)

LOANS (Tables)	6 Months Ended
	Jun. 30, 2015
LOANS [Abstract]
Composition of loan portfolio, by loan class	The composition of the Company’s loan portfolio, by loan class, is as follows: ($ in thousands) June 30, 2015 December 31, 2014 Commercial $ 125,789 $ 120,751 Commercial Real Estate 284,084 256,955 Agriculture 68,199 61,144 Residential Mortgage 44,888 50,511 Residential Construction 9,367 5,963 Consumer 46,114 49,911 578,441 545,235 Allowance for loan losses (9,106 ) (8,583 ) Net deferred origination fees and costs 1,205 1,327 Loans, net $ 570,540 $ 537,979
Non-accrual loans by loan class	The Company’s non-accrual loans by loan class, as of June 30, 2015 and December 31, 2014 were as follows: ($ in thousands) June 30, 2015 December 31, 2014 Commercial $ 1,814 $ 2,151 Commercial Real Estate 908 672 Agriculture — — Residential Mortgage 1,008 1,691 Residential Construction 61 71 Consumer 602 652 $ 4,393 $ 5,237
Age analysis of past due loans, segregated by loan class	An age analysis of past due loans, segregated by loan class, as of June 30, 2015 and December 31, 2014 is as follows: ($ in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or more Past Due Total Past Due Current Total Loans June 30, 2015 Commercial $ — $ — $ — $ — $ 125,789 $ 125,789 Commercial Real Estate 138 535 239 912 283,172 284,084 Agriculture — — — — 68,199 68,199 Residential Mortgage 125 — 1,008 1,133 43,755 44,888 Residential Construction — — — — 9,367 9,367 Consumer 1 174 428 603 45,511 46,114 Total $ 264 $ 709 $ 1,675 $ 2,648 $ 575,793 $ 578,441 December 31, 2014 Commercial $ — $ — $ 82 $ 82 $ 120,669 $ 120,751 Commercial Real Estate — — 239 239 256,716 256,955 Agriculture — — — — 61,144 61,144 Residential Mortgage 1,172 — 457 1,629 48,882 50,511 Residential Construction — — — — 5,963 5,963 Consumer 2 1 472 475 49,436 49,911 Total $ 1,174 $ 1 $ 1,250 $ 2,425 $ 542,810 $ 545,235
Impaired loans, segregated by loan class	Impaired loans, segregated by loan class, as of June 30, 2015 and December 31, 2014 were as follows: ($ in thousands) Unpaid Contractual Principal Balance Recorded Investment with no Allowance Recorded Investment with Allowance Total Recorded Investment Related Allowance June 30, 2015 Commercial $ 2,820 $ 2,022 $ 700 $ 2,722 $ 36 Commercial Real Estate 1,221 908 299 1,207 43 Agriculture — — — — — Residential Mortgage 4,048 1,008 2,807 3,815 628 Residential Construction 999 61 811 872 107 Consumer 1,642 673 700 1,373 17 Total $ 10,730 $ 4,672 $ 5,317 $ 9,989 $ 831 December 31, 2014 Commercial $ 2,803 $ 2,147 $ 531 $ 2,678 $ 39 Commercial Real Estate 990 672 304 976 45 Agriculture — — — — — Residential Mortgage 5,666 1,691 2,956 4,647 646 Residential Construction 1,065 71 826 897 107 Consumer 1,506 780 726 1,506 23 Total $ 12,030 $ 5,361 $ 5,343 $ 10,704 $ 860
Average recorded investment and interest income on impaired loans recognized using accrual basis method of accounting	The average recorded investment in impaired loans and the amount of interest income recognized on impaired loans during the three-month periods ended June 30, 2015 and June 30, 2014 was as follows: ($ in thousands) Three Months Ended June 30, 2015 Three Months Ended June 30, 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial $ 2,650 $ 12 $ 3,875 $ 7 Commercial Real Estate 1,084 4 3,406 24 Agriculture — — 515 — Residential Mortgage 4,205 27 5,357 42 Residential Construction 879 9 925 12 Consumer 1,428 9 1,494 20 Total $ 10,246 $ 61 $ 15,572 $ 105 The average recorded investment in impaired loans and the amount of interest income recognized on impaired loans during the six-month periods ended June 30, 2015 and June 30, 2014 was as follows: ($ in thousands) Six Months Ended June 30, 2015 Six Months Ended June 30, 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial $ 2,659 $ 20 $ 4,207 $ 15 Commercial Real Estate 1,048 8 3,404 43 Agriculture — — 655 — Residential Mortgage 4,352 58 5,484 74 Residential Construction 885 18 937 22 Consumer 1,454 19 1,286 34 Total $ 10,398 $ 123 $ 15,973 $ 188
Loans modified as TDR's	Loans modified as TDRs during the three-month periods ended June 30, 2015 and June 30, 2014, were as follows: ($ in thousands) Three Months Ended June 30, 2015 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 419 419 Total 1 $ 419 $ 419 ($ in thousands) Three Months Ended June 30, 2014 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 49 49 Total 1 $ 49 $ 49 Loans modified as TDRs during the six-month periods ended June 30, 2015 and June 30, 2014 were as follows: ($ in thousands) Six Months Ended June 30, 2015 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 $ 419 $ 419 Consumer 1 109 109 Total 2 $ 528 $ 528 ($ in thousands) Six Months Ended June 30, 2014 Number of Contracts Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Commercial 1 $ 49 $ 49 Consumer 2 498 498 Total 3 $ 547 $ 547
Risk ratings by loan class	The following table presents the risk ratings by loan class as of June 30, 2015 and December 31, 2014: ($ in thousands) Pass Special Mention Substandard Doubtful Loss Total June 30, 2015 Commercial $ 117,650 $ 4,592 $ 3,547 $ — $ — $ 125,789 Commercial Real Estate 263,046 16,865 4,173 — — 284,084 Agriculture 68,199 — — — — 68,199 Residential Mortgage 43,291 384 1,213 — — 44,888 Residential Construction 8,805 462 100 — — 9,367 Consumer 43,882 361 1,871 — — 46,114 Total $ 544,873 $ 22,664 $ 10,904 $ — $ — $ 578,441 December 31, 2014 Commercial $ 112,751 $ 3,255 $ 4,745 $ — $ — $ 120,751 Commercial Real Estate 240,808 10,607 5,540 — — 256,955 Agriculture 61,144 — — — — 61,144 Residential Mortgage 46,043 997 3,471 — — 50,511 Residential Construction 5,386 467 110 — — 5,963 Consumer 46,234 944 2,733 — — 49,911 Total $ 512,366 $ 16,270 $ 16,599 $ — $ — $ 545,235
Allowance for loan losses	The following table details activity in the allowance for loan losses by loan class for the three-month and six-month periods ended June 30, 2015. Three-month period ended June 30, 2015 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of March 31, 2015 $ 3,325 $ 2,485 $ 646 $ 1,047 $ 195 $ 826 $ 370 $ 8,894 Provision for loan losses (141 ) 399 206 (297 ) (107 ) (173 ) 113 — Charge-offs — — — (132 ) — (18 ) — (150 ) Recoveries 75 4 — 215 56 12 — 362 Net recoveries 75 4 — 83 56 (6 ) — 212 Balance as of June 30, 2015 $ 3,259 $ 2,888 $ 852 $ 833 $ 144 $ 647 $ 483 $ 9,106 Six-month period ended June 30, 2015 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of December 31, 2014 $ 3,581 $ 1,825 $ 580 $ 1,181 $ 161 $ 886 $ 369 $ 8,583 Provision for loan losses (409 ) 1,059 272 (431 ) (74 ) (181 ) 114 350 Charge-offs — — — (132 ) — (85 ) — (217 ) Recoveries 87 4 — 215 57 27 — 390 Net recoveries 87 4 — 83 57 (58 ) — 173 Balance as of June 30, 2015 $ 3,259 $ 2,888 $ 852 $ 833 $ 144 $ 647 $ 483 $ 9,106 The following table details the allowance for loan losses allocated to loans individually and collectively evaluated for impairment by loan class as of June 30, 2015. ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Period-end amount allocated to: Loans individually evaluated for impairment $ 36 $ 43 $ — $ 628 $ 107 $ 17 $ — $ 831 Loans collectively evaluated for impairment 3,223 2,845 852 205 37 630 483 8,275 Ending Balance $ 3,259 $ 2,888 $ 852 $ 833 $ 144 $ 647 $ 483 $ 9,106 The following table details activity in the allowance for loan losses by loan class for the three-month and six-month periods ended June 30, 2014. Three-month period ended June 30, 2014 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of March 31, 2014 $ 3,282 $ 2,150 $ 439 $ 1,173 $ 258 $ 967 $ 377 $ 8,646 Provision for loan losses 1,191 (390 ) — (47 ) (64 ) 49 (139 ) 600 Charge-offs (1,024 ) (69 ) — — — (26 ) — (1,119 ) Recoveries 22 — — — 2 23 — 47 Net charge-offs (1,002 ) (69 ) — — 2 (3 ) — (1,072 ) Balance as of June 30, 2014 $ 3,471 $ 1,691 $ 439 $ 1,126 $ 196 $ 1,013 $ 238 $ 8,174 Six-month period ended June 30, 2014 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of December 31, 2013 $ 3,199 $ 2,290 $ 557 $ 1,216 $ 441 $ 1,023 $ 627 $ 9,353 Provision for loan losses 2,323 (530 ) (118 ) (90 ) (248 ) 252 (389 ) 1,200 Charge-offs (2,085 ) (69 ) — — — (328 ) — (2,482 ) Recoveries 34 — — — 3 66 — 103 Net charge-offs (2,051 ) (69 ) — — 3 (262 ) — (2,379 ) Balance as of June 30, 2014 $ 3,471 $ 1,691 $ 439 $ 1,126 $ 196 $ 1,013 $ 238 $ 8,174 The following table details the allowance for loan losses allocated to loans individually and collectively evaluated for impairment by loan class as of June 30, 2014. ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Period-end amount allocated to: Loans individually evaluated for impairment $ 37 $ 55 $ — $ 652 $ 124 $ 25 $ — $ 893 Loans collectively evaluated for impairment 3,434 1,636 439 474 72 988 238 7,281 Ending Balance $ 3,471 $ 1,691 $ 439 $ 1,126 $ 196 $ 1,013 $ 238 $ 8,174 Year ended December 31, 2014 ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Unallocated Total Balance as of December 31, 2013 $ 3,199 $ 2,290 $ 557 $ 1,216 $ 441 $ 1,023 $ 627 $ 9,353 Provision for (reversal of) loan losses 2,612 (396 ) 23 36 (366 ) 149 (258 ) 1,800 Charge-offs (2,288 ) (69 ) — (71 ) — (393 ) — (2,821 ) Recoveries 58 — — — 86 107 — 251 Net charge-offs (2,230 ) (69 ) — (71 ) 86 (286 ) — (2,570 ) Ending Balance 3,581 1,825 580 1,181 161 886 369 8,583 Period-end amount allocated to: Loans individually evaluated for impairment 39 45 — 646 107 23 — 860 Loans collectively evaluated for impairment 3,542 1,780 580 535 54 863 369 7,723 Balance as of December 31, 2014 $ 3,581 $ 1,825 $ 580 $ 1,181 $ 161 $ 886 $ 369 $ 8,583 The Company’s investment in loans as of June 30, 2015, June 30, 2014, and December 31, 2014 related to each balance in the allowance for loan losses by loan class and disaggregated on the basis of the Company’s impairment methodology was as follows: ($ in thousands) Commercial Commercial Real Estate Agriculture Residential Mortgage Residential Construction Consumer Total June 30, 2015 Loans individually evaluated for impairment $ 2,722 $ 1,207 $ — $ 3,815 $ 872 $ 1,373 $ 9,989 Loans collectively evaluated for impairment 123,067 282,877 68,199 41,073 8,495 44,741 568,452 Ending Balance $ 125,789 $ 284,084 $ 68,199 $ 44,888 $ 9,367 $ 46,114 $ 578,441 June 30, 2014 Loans individually evaluated for impairment $ 3,248 $ 3,119 $ — $ 5,321 $ 920 $ 1,315 $ 13,923 Loans collectively evaluated for impairment 116,342 244,801 50,374 46,270 6,973 50,389 515,149 Ending Balance $ 119,590 $ 247,920 $ 50,374 $ 51,591 $ 7,893 $ 51,704 $ 529,072 December 31, 2014 Loans individually evaluated for impairment $ 2,678 $ 976 $ — $ 4,647 $ 897 $ 1,506 $ 10,704 Loans collectively evaluated for impairment 118,073 255,979 61,144 45,864 5,066 48,405 534,531 Ending Balance $ 120,751 $ 256,955 $ 61,144 $ 50,511 $ 5,963 $ 49,911 $ 545,235

MORTGAGE OPERATIONS (Tables)

MORTGAGE OPERATIONS (Tables)	6 Months Ended
	Jun. 30, 2015
MORTGAGE OPERATIONS [Abstract]
Schedule of key assumptions used in measuring the fair value of mortgage servicing rights	Key assumptions used in measuring the fair value of mortgage servicing rights as of June 30, 2015 and December 31, 2014 were as follows: June 30, 2015 December 31, 2014 Constant prepayment rate 12.19 % 12.12 % Discount rate 10.06 % 10.06 % Weighted average life (years) 6.17 6.25
Schedule of mortgage servicing rights assets	The following table summarizes the Company’s mortgage servicing rights assets as of June 30, 2015 and December 31, 2014. Mortgage servicing rights are included in Interest Receivable and Other Assets on the condensed consolidated balance sheets: (in thousands) December 31, 2014 Additions Reductions June 30, 2015 Mortgage servicing rights $ 1,862 $ 199 $ (187 ) $ 1,874 Valuation allowance — — — — Mortgage servicing rights, net of valuation allowance $ 1,862 $ 199 $ (187 ) $ 1,874

OUTSTANDING SHARES AND EARNIN23

OUTSTANDING SHARES AND EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2015
OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]
Reconciliation of basic and diluted EPS	The following table presents a reconciliation of basic and diluted EPS for the three-month and six-month periods ended June 30, 2015 and 2014. Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Basic earnings per share: Net income $ 1,770 $ 1,339 $ 3,287 $ 2,703 Preferred stock dividend $ (32 ) $ (32 ) $ (64 ) $ (64 ) Net income available to common stockholders $ 1,738 $ 1,307 $ 3,223 $ 2,639 Weighted average common shares outstanding 10,170,640 10,119,433 10,152,942 10,112,748 Basic EPS $ 0.17 $ 0.13 $ 0.32 $ 0.26 Diluted earnings per share: Net income $ 1,770 $ 1,339 $ 3,287 $ 2,703 Preferred stock dividend $ (32 ) $ (32 ) $ (64 ) $ (64 ) Net income available to common stockholders $ 1,738 $ 1,307 $ 3,223 $ 2,639 Weighted average common shares outstanding 10,170,640 10,119,433 10,152,942 10,112,748 Effect of dilutive shares 50,319 47,108 55,927 49,979 Adjusted weighted average common shares outstanding 10,220,959 10,166,541 10,208,869 10,162,727 Diluted EPS $ 0.17 $ 0.13 $ 0.32 $ 0.26

STOCK PLANS (Tables)

STOCK PLANS (Tables)	6 Months Ended
	Jun. 30, 2015
STOCK PLANS [Abstract]
Stock option activity	The following table presents the activity related to stock options for the three months ended June 30, 2015. Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Options outstanding at Beginning of Period 247,809 $ 12.02 Granted — — Expired (7,734 ) $ 21.32 Cancelled / Forfeited (11,382 ) $ 16.28 Exercised — — Options outstanding at End of Period 228,693 $ 11.49 $ 205,654 4.69 Exercisable (vested) at End of Period 157,044 $ 13.56 $ 156,511 2.76 The following table presents the activity related to stock options for the six months ended June 30, 2015. Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Options outstanding at Beginning of Period 313,483 $ 11.54 Granted 41,047 $ 7.60 Expired (94,609 ) $ 10.93 Cancelled / Forfeited (11,382 ) $ 16.28 Exercised (19,846 ) $ 4.23 Options outstanding at End of Period 228,693 $ 11.49 $ 205,654 4.69 Exercisable (vested) at End of Period 157,044 $ 13.56 $ 156,511 2.76
Weighted average assumptions used in valuing stock options granted	A summary of the weighted average assumptions used in valuing stock options during the three months and six months ended June 30, 2015 is presented below. Three Months Ended Six Months Ended June 30, 2015* June 30, 2015 Risk Free Interest Rate — 1.61 % Expected Dividend Yield — 0.00 % Expected Life in Years — 5 Expected Price Volatility — 37.38 %
Activity related to restricted stock	The following table presents the activity related to non-vested restricted stock for the three months ended June 30, 2015. Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Non-vested Restricted stock outstanding at Beginning of Period 85,579 $ 6.54 Granted — — Cancelled / Forfeited — — Exercised/Released/Vested — — Non-vested restricted stock outstanding at End of Period 85,579 $ 6.54 $654,679 8.49 The following table presents the activity related to non-vested restricted stock for the six months ended June 30, 2015. Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (in years) Non-vested Restricted stock outstanding at Beginning of Period 73,827 $ 5.64 Granted 30,056 $ 7.59 Cancelled / Forfeited — — Exercised/Released/Vested (18,304 ) $ 4.66 Non-vested restricted stock outstanding at End of Period 85,579 $ 6.54 $654,679 8.49
Summary of weighted average assumptions used in valuing ESPP	A summary of the weighted average assumptions used in valuing ESPP issuances during the three months and six months ended June 30, 2015 is presented below. Three Months Ended Six Months Ended June 30, 2015 June 30, 2015 Risk Free Interest Rate 0.14 % 0.14 % Expected Dividend Yield 0.00 % 0.00 % Expected Life in Years 1.00 1.00 Expected Price Volatility 15.10 % 15.10 %

FAIR VALUE MEASUREMENT (Tables)

FAIR VALUE MEASUREMENT (Tables)	6 Months Ended
	Jun. 30, 2015
FAIR VALUE MEASUREMENT [Abstract]
Assets and liabilities measured at fair value on a recurring basis	The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2015: (in thousands) June 30, 2015 Total Level 1 Level 2 Level 3 Securities of U.S. government agencies and corporations $ 29,686 $ — $ 29,686 $ — Obligations of states and political subdivisions 22,031 — 22,031 — Collateralized mortgage obligations 12,693 — 12,693 — Mortgage-backed securities 91,803 — 91,803 — Total investments at fair value $ 156,213 $ — $ 156,213 $ — There were no transfers of assets measured at fair value on a recurring basis between Level 1 and Level 2 of the fair value hierarchy. The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014: (in thousands) December 31, 2014 Total Level 1 Level 2 Level 3 Securities of U.S. government agencies and corporations $ 28,429 $ — $ 28,429 $ — Obligations of states and political subdivisions 20,763 — 20,763 — Collateralized mortgage obligations 12,553 — 12,553 Mortgage-backed securities 89,481 — 89,481 — Total investments at fair value $ 151,226 $ — $ 151,226 $ —
Assets measured at fair value on a non-recurring basis	Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of June 30, 2015: June 30, 2015 Total Level 1 Level 2 Level 3 Other real estate owned $ 407 — — $ 407 Total assets at fair value $ 407 $ — $ — $ 407 Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of December 31, 2014: (in thousands) December 31, 2014 Total Level 1 Level 2 Level 3 Impaired loans $ 568 $ — $ — $ 568 Other real estate owned 736 — — 736 Total assets at fair value $ 1,304 $ — $ — $ 1,304
Methods and assumptions used in measuring fair value of assets and liabilities	Key methods and assumptions used in measuring the fair value of impaired loans and other real estate owned as of June 30, 2015 and December 31, 2014 were as follows: Method Assumption Inputs Impaired loans Collateral, market, income, enterprise, liquidation and discounted Cash Flows External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 7%. Other real estate owned Collateral External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 11%.

FAIR VALUES OF FINANCIAL INST26

FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Jun. 30, 2015
FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract]
Estimated fair value of financial instruments	The estimated fair values of the Company’s financial instruments for the periods ended June 30, 2015 and December 31, 2014 are approximately as follows: June 30, 2015 December 31, 2014 Level Carrying amount Fair value Carrying amount Fair value Financial assets: Cash and cash equivalents 1 $ 225,749 $ 225,749 $ 216,192 $ 216,192 Certificates of deposit 1 11,937 11,937 12,860 12,860 Stock in FHLB and other equity securities, at cost 2 3,934 3,934 3,934 3,934 Loans receivable: Net loans 3 570,540 567,129 537,979 535,018 Loans held-for-sale 2 486 486 491 509 Interest receivable 2 2,765 2,765 2,650 2,650 Mortgage servicing rights 3 1,874 2,001 1,862 2,068 Financial liabilities: Deposits 3 898,367 873,066 857,052 837,150 Interest payable 2 78 78 70 70

INVESTMENT SECURITIES (Tables)

INVESTMENT SECURITIES (Tables)	6 Months Ended
	Jun. 30, 2015
INVESTMENT SECURITIES [Abstract]
Amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities	The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at June 30, 2015 are summarized as follows: (in thousands) Amortized cost Unrealized gains Unrealized losses Estimated fair value Investment securities available-for-sale: Securities of U.S. government agencies and corporations $ 29,790 $ 53 $ (157 ) $ 29,686 Obligations of states and political subdivisions 21,578 487 (34 ) 22,031 Collateralized mortgage obligations 12,803 12 (122 ) 12,693 Mortgage-backed securities 91,275 817 (289 ) 91,803 Total debt securities $ 155,446 $ 1,369 $ (602 ) $ 156,213 The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 2014 are summarized as follows: (in thousands) Amortized cost Unrealized gains Unrealized losses Estimated fair value Investment securities available-for-sale: Securities of U.S. government agencies and corporations $ 28,787 $ 17 $(375)­­­ $ 28,429 Obligations of states and political subdivisions 20,236 579 (52 ) 20,763 Collateralized mortgage obligations 12,541 37 (25 ) 12,553 Mortgage-backed securities 88,491 1,144 (154 ) 89,481 Total debt securities $ 150,055 $ 1,777 $ (606 ) $ 151,226
Amortized cost and estimated fair value of debt and other securities by contractual maturity	The amortized cost and estimated market value of debt and other securities at June 30, 2015, by contractual and expected maturity, are shown in the following table: (in thousands) Amortized cost Estimated fair value Due in one year or less $ 3,478 $ 3,485 Due after one year through five years 135,642 136,039 Due after five years through ten years 14,392 14,642 Due after ten years 1,934 2,047 $ 155,446 $ 156,213
Analysis of gross unrealized losses of the available-for-sale investment securities portfolio	An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of June 30, 2015, follows: Less than 12 months 12 months or more Total (in thousands) Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Securities of U.S. government agencies and corporations $ 7,992 $ (22 ) $ 12,965 $ (135 ) $ 20,957 $ (157 ) Obligations of states and political subdivisions 5,524 (34 ) — — 5,524 (34 ) Collateralized Mortgage obligations 10,968 (122 ) — — 10,968 (122 ) Mortgaged-backed securities 31,202 (163 ) 6,613 (126 ) 37,815 (289 ) Total $ 55,686 $ (341 ) $ 19,578 $ (261 ) $ 75,264 $ (602 ) An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2014, follows: Less than 12 months 12 months or more Total Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Securities of U.S. government agencies and corporations $ 1,474 $ (4 ) $ 21,729 $ (371 ) $ 23,203 $ (375 ) Obligations of states and political subdivisions 1,927 (28 ) 1,530 (24 ) 3,457 (52 ) Collateralized Mortgage obligations 2,881 (25 ) — — 2,881 (25 ) Mortgage-backed securities 9,786 (55 ) 9,128 (99 ) 18,914 (154 ) Total $ 16,068 $ (112 ) $ 32,387 $ (494 ) $ 48,455 $ (606 )

ACCUMULATED OTHER COMPREHENSI28

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	6 Months Ended
	Jun. 30, 2015
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]
Schedule of accumulated other comprehensive income (loss)	The following table details activity in accumulated other comprehensive income (loss) for the three-month period ended June 30, 2015. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of March 31, 2015 $ 1,078 $ (678 ) $ 8 $ 408 Current period other comprehensive loss (618 ) — — (618 ) Balance as of June 30, 2015 $ 460 $ (678 ) $ 8 $ (210 ) The following table details activity in accumulated other comprehensive income (loss) for the six-month period ended June 30, 2015. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of December 31, 2014 $ 703 $ (678 ) $ 41 $ 66 Current period other comprehensive loss (243 ) — (33 ) (276 ) Balance as of June 30, 2015 $ 460 $ (678 ) $ 8 $ (210 ) The following table details activity in accumulated other comprehensive income (loss) for the three-month period ended June 30, 2014. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of March 31, 2014 $ (123 ) $ (480 ) $ 46 $ (557 ) Current period other comprehensive income 761 — — 761 Balance as of June 30, 2014 $ 638 $ (480 ) $ 46 $ 204 The following table details activity in accumulated other comprehensive income (loss) for the six-month period ended June 30, 2014. ($ in thousands) Unrealized Gains on Securities Officers’ retirement plan Directors’ retirement plan Accumulated Other Comprehensive Income/(loss) Balance as of December 31, 2013 $ (639 ) $ (480 ) $ 46 $ (1,073 ) Current period other comprehensive income 1,277 — — 1,277 Balance as of June 30, 2014 $ 638 $ (480 ) $ 46 $ 204

FINANCIAL INSTRUMENTS WITH OF29

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Tables)	6 Months Ended
	Jun. 30, 2015
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK [Abstract]
Financial instruments whose contract amount represent credit risk	Financial instruments, whose contract amounts represent credit risk at the indicated periods, were as follows: (in thousands) June 30, 2015 December 31, 2014 Undisbursed loan commitments $ 170,904 $ 171,019 Standby letters of credit 2,246 2,099 Commitments to sell loans 4,675 1,230 $ 177,825 $ 174,348

LOANS (Details)

LOANS (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2015USD ($)Category	Dec. 31, 2014USD ($)	Jun. 30, 2014USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 578,441	$ 545,235	$ 529,072
Allowance for loan losses	(9,106)	(8,583)
Net deferred origination fees and costs	1,205	1,327
Loans, net	$ 570,540	537,979
Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Delinquent loans revaluation period	3 months
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Delinquent loans revaluation period	12 months
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 125,789	120,751	119,590
Loan portfolio by segment (in hundredths)	22.00%
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 284,084	256,955	247,920
Categories of loans | Category	2
Loan portfolio by segment (in hundredths)	49.00%
Agriculture [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 68,199	61,144	50,374
Loan portfolio by segment (in hundredths)	12.00%
Residential Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 44,888	50,511	51,591
Loan portfolio by segment (in hundredths)	8.00%
Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 9,367	5,963	7,893
Loan portfolio by segment (in hundredths)	1.00%
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 46,114	$ 49,911	$ 51,704
Loan portfolio by segment (in hundredths)	8.00%

LOANS, Non-accrual and Past Due

LOANS, Non-accrual and Past Due Loans (Details) $ in Thousands	Jun. 30, 2015USD ($)Loan	Dec. 31, 2014USD ($)Loan	Jun. 30, 2014USD ($)
Non-accrual and Past Due Loans [Abstract]
Non-accrual loans	$ 4,393	$ 5,237
Total Past Due	2,648	2,425
Current	575,793	542,810
Total	578,441	545,235	$ 529,072
Loans 90 days past due and still accruing	0	0
30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	264	1,174
60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	709	1
90 Days or More Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	1,675	1,250
Commercial [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual loans	$ 1,814	$ 2,151
Number of nonaccrual loans | Loan	5	7
Total Past Due	$ 0	$ 82
Current	125,789	120,669
Total	125,789	120,751	119,590
Commercial [Member] | 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Commercial [Member] | 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Commercial [Member] | 90 Days or More Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	82
Commercial Real Estate [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual loans	$ 908	$ 672
Number of nonaccrual loans | Loan	6	5
Total Past Due	$ 912	$ 239
Current	283,172	256,716
Total	284,084	256,955	247,920
Commercial Real Estate [Member] | 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	138	0
Commercial Real Estate [Member] | 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	535	0
Commercial Real Estate [Member] | 90 Days or More Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	239	239
Agriculture [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual loans	0	0
Total Past Due	0	0
Current	68,199	61,144
Total	68,199	61,144	50,374
Agriculture [Member] | 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Agriculture [Member] | 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Agriculture [Member] | 90 Days or More Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Residential Mortgage [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual loans	$ 1,008	$ 1,691
Number of nonaccrual loans | Loan	3	6
Total Past Due	$ 1,133	$ 1,629
Current	43,755	48,882
Total	44,888	50,511	51,591
Residential Mortgage [Member] | 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	125	1,172
Residential Mortgage [Member] | 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Residential Mortgage [Member] | 90 Days or More Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	1,008	457
Residential Construction [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual loans	$ 61	$ 71
Number of nonaccrual loans | Loan	1	2
Total Past Due	$ 0	$ 0
Current	9,367	5,963
Total	9,367	5,963	7,893
Residential Construction [Member] | 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Residential Construction [Member] | 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Residential Construction [Member] | 90 Days or More Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	0	0
Consumer [Member]
Non-accrual and Past Due Loans [Abstract]
Non-accrual loans	$ 602	$ 652
Number of nonaccrual loans | Loan	4	5
Total Past Due	$ 603	$ 475
Current	45,511	49,436
Total	46,114	49,911	$ 51,704
Consumer [Member] | 30-59 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	1	2
Consumer [Member] | 60-89 Days Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	174	1
Consumer [Member] | 90 Days or More Past Due [Member]
Non-accrual and Past Due Loans [Abstract]
Total Past Due	$ 428	$ 472

LOANS, Impaired Loans (Details)

LOANS, Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Impaired loans [Abstract]
Unpaid Contractual Principal Balance	$ 10,730		$ 10,730		$ 12,030
Recorded Investment with no Allowance	4,672		4,672		5,361
Recorded Investment with Allowance	5,317		5,317		5,343
Total Recorded Investment	9,989		9,989		10,704
Related Allowance	831		831		860
Interest income on impaired loans recognized using an accrual method of accounting [Abstract]
Average Recorded Investment	10,246	$ 15,572	10,398	$ 15,973
Interest Income Recognized	61	105	123	188
Commercial [Member]
Impaired loans [Abstract]
Unpaid Contractual Principal Balance	2,820		2,820		2,803
Recorded Investment with no Allowance	2,022		2,022		2,147
Recorded Investment with Allowance	700		700		531
Total Recorded Investment	2,722		2,722		2,678
Related Allowance	36		36		39
Interest income on impaired loans recognized using an accrual method of accounting [Abstract]
Average Recorded Investment	2,650	3,875	2,659	4,207
Interest Income Recognized	12	7	20	15
Commercial Real Estate [Member]
Impaired loans [Abstract]
Unpaid Contractual Principal Balance	1,221		1,221		990
Recorded Investment with no Allowance	908		908		672
Recorded Investment with Allowance	299		299		304
Total Recorded Investment	1,207		1,207		976
Related Allowance	43		43		45
Interest income on impaired loans recognized using an accrual method of accounting [Abstract]
Average Recorded Investment	1,084	3,406	1,048	3,404
Interest Income Recognized	4	24	8	43
Agriculture [Member]
Impaired loans [Abstract]
Unpaid Contractual Principal Balance	0		0		0
Recorded Investment with no Allowance	0		0		0
Recorded Investment with Allowance	0		0		0
Total Recorded Investment	0		0		0
Related Allowance	0		0		0
Interest income on impaired loans recognized using an accrual method of accounting [Abstract]
Average Recorded Investment	0	515	0	655
Interest Income Recognized	0	0	0	0
Residential Mortgage [Member]
Impaired loans [Abstract]
Unpaid Contractual Principal Balance	4,048		4,048		5,666
Recorded Investment with no Allowance	1,008		1,008		1,691
Recorded Investment with Allowance	2,807		2,807		2,956
Total Recorded Investment	3,815		3,815		4,647
Related Allowance	628		628		646
Interest income on impaired loans recognized using an accrual method of accounting [Abstract]
Average Recorded Investment	4,205	5,357	4,352	5,484
Interest Income Recognized	27	42	58	74
Residential Construction [Member]
Impaired loans [Abstract]
Unpaid Contractual Principal Balance	999		999		1,065
Recorded Investment with no Allowance	61		61		71
Recorded Investment with Allowance	811		811		826
Total Recorded Investment	872		872		897
Related Allowance	107		107		107
Interest income on impaired loans recognized using an accrual method of accounting [Abstract]
Average Recorded Investment	879	925	885	937
Interest Income Recognized	9	12	18	22
Consumer [Member]
Impaired loans [Abstract]
Unpaid Contractual Principal Balance	1,642		1,642		1,506
Recorded Investment with no Allowance	673		673		780
Recorded Investment with Allowance	700		700		726
Total Recorded Investment	1,373		1,373		1,506
Related Allowance	17		17		$ 23
Interest income on impaired loans recognized using an accrual method of accounting [Abstract]
Average Recorded Investment	1,428	1,494	1,454	1,286
Interest Income Recognized	$ 9	$ 20	$ 19	$ 34

LOANS, Troubled Debt Restructur

LOANS, Troubled Debt Restructurings (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)Loan	Jun. 30, 2014USD ($)Loan	Jun. 30, 2015USD ($)Loan	Jun. 30, 2014USD ($)Loan	Dec. 31, 2014USD ($)
Financing Receivable, Modifications [Line Items]
Number of months continuous payment for reclassification of nonaccrual loans to accruing status			6 months
TDR loans	$ 6,272,000		$ 6,272,000		$ 6,712,000
Specific reserves for TDR loans	831,000		831,000		860,000
TDR loans performing in compliance with modified terms	$ 5,596,000		$ 5,596,000		$ 5,467,000
Troubled Debt Restructurings [Abstract]
Number of Contracts | Loan	1	1	2	3
Pre-modification outstanding recorded investment	$ 419,000	$ 49,000	$ 528,000	$ 547,000
Post-modification outstanding recorded investment	$ 419,000	$ 49,000	$ 528,000	$ 547,000
Number of loans restructured and subsequent default | Loan			0	0
Commercial [Member]
Troubled Debt Restructurings [Abstract]
Number of Contracts | Loan	1	1	1	1
Pre-modification outstanding recorded investment	$ 419,000	$ 49,000	$ 419,000	$ 49,000
Post-modification outstanding recorded investment	$ 419,000	$ 49,000	$ 419,000	$ 49,000
Consumer [Member]
Troubled Debt Restructurings [Abstract]
Number of Contracts | Loan			1	2
Pre-modification outstanding recorded investment			$ 109,000	$ 498,000
Post-modification outstanding recorded investment			$ 109,000	$ 498,000

LOANS, Financing Receivables by

LOANS, Financing Receivables by Credit Quality Indicator (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Risk rating by loan class [Abstract]
Loans	$ 578,441	$ 545,235	$ 529,072
Pass [Member]
Risk rating by loan class [Abstract]
Loans	544,873	512,366
Special Mention [Member]
Risk rating by loan class [Abstract]
Loans	22,664	16,270
Substandard [Member]
Risk rating by loan class [Abstract]
Loans	10,904	16,599
Doubtful [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Loss [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Commercial [Member]
Risk rating by loan class [Abstract]
Loans	125,789	120,751	119,590
Commercial [Member] | Pass [Member]
Risk rating by loan class [Abstract]
Loans	117,650	112,751
Commercial [Member] | Special Mention [Member]
Risk rating by loan class [Abstract]
Loans	4,592	3,255
Commercial [Member] | Substandard [Member]
Risk rating by loan class [Abstract]
Loans	3,547	4,745
Commercial [Member] | Doubtful [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Commercial [Member] | Loss [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Commercial Real Estate [Member]
Risk rating by loan class [Abstract]
Loans	284,084	256,955	247,920
Commercial Real Estate [Member] | Pass [Member]
Risk rating by loan class [Abstract]
Loans	263,046	240,808
Commercial Real Estate [Member] | Special Mention [Member]
Risk rating by loan class [Abstract]
Loans	16,865	10,607
Commercial Real Estate [Member] | Substandard [Member]
Risk rating by loan class [Abstract]
Loans	4,173	5,540
Commercial Real Estate [Member] | Doubtful [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Commercial Real Estate [Member] | Loss [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Agriculture [Member]
Risk rating by loan class [Abstract]
Loans	68,199	61,144	50,374
Agriculture [Member] | Pass [Member]
Risk rating by loan class [Abstract]
Loans	68,199	61,144
Agriculture [Member] | Special Mention [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Agriculture [Member] | Substandard [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Agriculture [Member] | Doubtful [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Agriculture [Member] | Loss [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Residential Mortgage [Member]
Risk rating by loan class [Abstract]
Loans	44,888	50,511	51,591
Residential Mortgage [Member] | Pass [Member]
Risk rating by loan class [Abstract]
Loans	43,291	46,043
Residential Mortgage [Member] | Special Mention [Member]
Risk rating by loan class [Abstract]
Loans	384	997
Residential Mortgage [Member] | Substandard [Member]
Risk rating by loan class [Abstract]
Loans	1,213	3,471
Residential Mortgage [Member] | Doubtful [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Residential Mortgage [Member] | Loss [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Residential Construction [Member]
Risk rating by loan class [Abstract]
Loans	9,367	5,963	7,893
Residential Construction [Member] | Pass [Member]
Risk rating by loan class [Abstract]
Loans	8,805	5,386
Residential Construction [Member] | Special Mention [Member]
Risk rating by loan class [Abstract]
Loans	462	467
Residential Construction [Member] | Substandard [Member]
Risk rating by loan class [Abstract]
Loans	100	110
Residential Construction [Member] | Doubtful [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Residential Construction [Member] | Loss [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Consumer [Member]
Risk rating by loan class [Abstract]
Loans	46,114	49,911	$ 51,704
Consumer [Member] | Pass [Member]
Risk rating by loan class [Abstract]
Loans	43,882	46,234
Consumer [Member] | Special Mention [Member]
Risk rating by loan class [Abstract]
Loans	361	944
Consumer [Member] | Substandard [Member]
Risk rating by loan class [Abstract]
Loans	1,871	2,733
Consumer [Member] | Doubtful [Member]
Risk rating by loan class [Abstract]
Loans	0	0
Consumer [Member] | Loss [Member]
Risk rating by loan class [Abstract]
Loans	$ 0	$ 0

LOANS, Allowance for Loan Losse

LOANS, Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Allowance for credit losses [Roll Forward]
Beginning balance	$ 8,894	$ 8,646	$ 8,583	$ 9,353	$ 9,353
Provision for (reversal of) loan losses	0	600	350	1,200	1,800
Charge-offs	(150)	(1,119)	(217)	(2,482)	(2,821)
Recoveries	362	47	390	103	251
Net charge-offs	212	(1,072)	173	(2,379)	(2,570)
Ending balance	9,106	8,174	9,106	8,174	8,583
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	831	893	831	893	860
Loans collectively evaluated for impairment	8,275	7,281	8,275	7,281	7,723
Ending balance	9,106	8,174	9,106	8,174	8,583
Loans individually and collectively evaluated for impairment [Abstract]
Loans individually evaluated for impairment	9,989	13,923	9,989	13,923	10,704
Loans collectively evaluated for impairment	568,452	515,149	568,452	515,149	534,531
Ending Balance	578,441	529,072	578,441	529,072	545,235
Commercial [Member]
Allowance for credit losses [Roll Forward]
Beginning balance	3,325	3,282	3,581	3,199	3,199
Provision for (reversal of) loan losses	(141)	1,191	(409)	2,323	2,612
Charge-offs	0	(1,024)	0	(2,085)	(2,288)
Recoveries	75	22	87	34	58
Net charge-offs	75	(1,002)	87	(2,051)	(2,230)
Ending balance	3,259	3,471	3,259	3,471	3,581
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	36	37	36	37	39
Loans collectively evaluated for impairment	3,223	3,434	3,223	3,434	3,542
Ending balance	3,259	3,471	3,259	3,471	3,581
Loans individually and collectively evaluated for impairment [Abstract]
Loans individually evaluated for impairment	2,722	3,248	2,722	3,248	2,678
Loans collectively evaluated for impairment	123,067	116,342	123,067	116,342	118,073
Ending Balance	125,789	119,590	125,789	119,590	120,751
Commercial Real Estate [Member]
Allowance for credit losses [Roll Forward]
Beginning balance	2,485	2,150	1,825	2,290	2,290
Provision for (reversal of) loan losses	399	(390)	1,059	(530)	(396)
Charge-offs	0	(69)	0	(69)	(69)
Recoveries	4	0	4	0	0
Net charge-offs	4	(69)	4	(69)	(69)
Ending balance	2,888	1,691	2,888	1,691	1,825
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	43	55	43	55	45
Loans collectively evaluated for impairment	2,845	1,636	2,845	1,636	1,780
Ending balance	2,888	1,691	2,888	1,691	1,825
Loans individually and collectively evaluated for impairment [Abstract]
Loans individually evaluated for impairment	1,207	3,119	1,207	3,119	976
Loans collectively evaluated for impairment	282,877	244,801	282,877	244,801	255,979
Ending Balance	284,084	247,920	284,084	247,920	256,955
Agriculture [Member]
Allowance for credit losses [Roll Forward]
Beginning balance	646	439	580	557	557
Provision for (reversal of) loan losses	206	0	272	(118)	23
Charge-offs	0	0	0	0	0
Recoveries	0	0	0	0	0
Net charge-offs	0	0	0	0	0
Ending balance	852	439	852	439	580
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	0	0	0	0	0
Loans collectively evaluated for impairment	852	439	852	439	580
Ending balance	852	439	852	439	580
Loans individually and collectively evaluated for impairment [Abstract]
Loans individually evaluated for impairment	0	0	0	0	0
Loans collectively evaluated for impairment	68,199	50,374	68,199	50,374	61,144
Ending Balance	68,199	50,374	68,199	50,374	61,144
Residential Mortgage [Member]
Allowance for credit losses [Roll Forward]
Beginning balance	1,047	1,173	1,181	1,216	1,216
Provision for (reversal of) loan losses	(297)	(47)	(431)	(90)	36
Charge-offs	(132)	0	(132)	0	(71)
Recoveries	215	0	215	0	0
Net charge-offs	83	0	83	0	(71)
Ending balance	833	1,126	833	1,126	1,181
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	628	652	628	652	646
Loans collectively evaluated for impairment	205	474	205	474	535
Ending balance	833	1,126	833	1,126	1,181
Loans individually and collectively evaluated for impairment [Abstract]
Loans individually evaluated for impairment	3,815	5,321	3,815	5,321	4,647
Loans collectively evaluated for impairment	41,073	46,270	41,073	46,270	45,864
Ending Balance	44,888	51,591	44,888	51,591	50,511
Residential Construction [Member]
Allowance for credit losses [Roll Forward]
Beginning balance	195	258	161	441	441
Provision for (reversal of) loan losses	(107)	(64)	(74)	(248)	(366)
Charge-offs	0	0	0	0	0
Recoveries	56	2	57	3	86
Net charge-offs	56	2	57	3	86
Ending balance	144	196	144	196	161
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	107	124	107	124	107
Loans collectively evaluated for impairment	37	72	37	72	54
Ending balance	144	196	144	196	161
Loans individually and collectively evaluated for impairment [Abstract]
Loans individually evaluated for impairment	872	920	872	920	897
Loans collectively evaluated for impairment	8,495	6,973	8,495	6,973	5,066
Ending Balance	9,367	7,893	9,367	7,893	5,963
Consumer [Member]
Allowance for credit losses [Roll Forward]
Beginning balance	826	967	886	1,023	1,023
Provision for (reversal of) loan losses	(173)	49	(181)	252	149
Charge-offs	(18)	(26)	(85)	(328)	(393)
Recoveries	12	23	27	66	107
Net charge-offs	(6)	(3)	(58)	(262)	(286)
Ending balance	647	1,013	647	1,013	886
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	17	25	17	25	23
Loans collectively evaluated for impairment	630	988	630	988	863
Ending balance	647	1,013	647	1,013	886
Loans individually and collectively evaluated for impairment [Abstract]
Loans individually evaluated for impairment	1,373	1,315	1,373	1,315	1,506
Loans collectively evaluated for impairment	44,741	50,389	44,741	50,389	48,405
Ending Balance	46,114	51,704	46,114	51,704	49,911
Unallocated [Member]
Allowance for credit losses [Roll Forward]
Beginning balance	370	377	369	627	627
Provision for (reversal of) loan losses	113	(139)	114	(389)	(258)
Charge-offs	0	0	0	0	0
Recoveries	0	0	0	0	0
Net charge-offs	0	0	0	0	0
Ending balance	483	238	483	238	369
Allowance for loan loss allocations for impairments [Abstract]
Loans individually evaluated for impairment	0	0	0	0	0
Loans collectively evaluated for impairment	483	238	483	238	369
Ending balance	$ 483	$ 238	$ 483	$ 238	$ 369

MORTGAGE OPERATIONS (Details)

MORTGAGE OPERATIONS (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Key assumptions used in measuring the fair value of mortgage servicing rights [Abstract]
Constant prepayment rate (in hundredths)			12.19%		12.12%
Discount rate (in hundredths)			10.06%		10.06%
Weighted average life (years)			6 years 2 months 1 day		6 years 3 months
Mortgages held-for-sale	$ 486,000		$ 486,000		$ 491,000
Real estate mortgage loans serviced	237,906,000		237,906,000		238,974,000
Mortgage servicing rights assets [Roll Forward]
Beginning balance			1,862,000
Additions			199,000
Reductions			(187,000)
Ending balance	1,874,000		1,874,000		1,862,000
Valuation allowance [Roll Forward]
Beginning balance			0
Additions			0
Reductions			0
Ending balance	0		0		0
Mortgage servicing rights, net of valuation allowance [Roll Forward]
Beginning balance			1,862,000
Additions			199,000
Reductions			(187,000)
Ending balance	1,874,000		1,874,000
Fair value of mortgage servicing rights asset	2,001,000		2,001,000		$ 2,068,000
Contractually specified servicing fee	$ 149,000	$ 152,000	$ 300,000	$ 305,000

OUTSTANDING SHARES AND EARNIN37

OUTSTANDING SHARES AND EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	Jan. 22, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
OUTSTANDING SHARES AND EARNINGS PER SHARE [Abstract]
Stock dividend (in hundredths)	4.00%
Basic earnings per share [Abstract]
Net income		$ 1,770	$ 1,339	$ 3,287	$ 2,703
Preferred stock dividend		(32)	(32)	(64)	(64)
Net income available to common shareholders		$ 1,738	$ 1,307	$ 3,223	$ 2,639
Weighted average common shares outstanding (in shares)		10,170,640	10,119,433	10,152,942	10,112,748
Basic EPS (in dollars per share)		$ 0.17	$ 0.13	$ 0.32	$ 0.26
Diluted earnings per share [Abstract]
Net income		$ 1,770	$ 1,339	$ 3,287	$ 2,703
Preferred stock dividend		(32)	(32)	(64)	(64)
Net income available to common shareholders		$ 1,738	$ 1,307	$ 3,223	$ 2,639
Weighted average common shares outstanding (in shares)		10,170,640	10,119,433	10,152,942	10,112,748
Effect of dilutive shares (in shares)		50,319	47,108	55,927	49,979
Adjusted weighted average common shares outstanding (in shares)		10,220,959	10,166,541	10,208,869	10,162,727
Diluted EPS (in dollars per share)		$ 0.17	$ 0.13	$ 0.32	$ 0.26
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from EPS computation (in shares)		164,321	253,865	173,826	253,865
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from EPS computation (in shares)		0	0	0	12,871

STOCK PLANS (Details)

STOCK PLANS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015		Jun. 30, 2015	May. 31, 2015	Jan. 22, 2015
STOCK PLANS [Abstract]
Dividend declared as percentage of stock (in hundredths)					4.00%
2006 Amended ESPP [Member]
Employee Stock Purchase Plan (ESPP) Disclosures [Line Items]
Shares authorized under plan (in shares)	322,385		322,385
Plan expiration date			Mar. 16, 2026
Plan implemented participation period			27 months
Eligibility employment period required for plan participation			90 days
Maximum employee compensation that can be withheld to purchase common stock (in hundredths)			10.00%
Purchase price of stock in percentage for participation (in hundredths)			85.00%
Unrecognized compensation cost			$ 10,000
Weighted average fair value at issuance date (in dollars per share)			$ 1.67
Weighted average period to recognize the unrecognized compensation			6 months
2016 ESPP [Member]
Employee Stock Purchase Plan (ESPP) Disclosures [Line Items]
Shares authorized under plan (in shares)				250,000
Stock Options [Member]
Number of Shares [Roll Forward]
Options outstanding at Beginning of Period (in shares)	247,809		313,483
Granted (in shares)	0		41,047
Expired (in shares)	(7,734)		(94,609)
Cancelled / Forfeited (in shares)	(11,382)		(11,382)
Exercised (in shares)	0		(19,846)
Options outstanding at End of Period (in shares)	228,693		228,693
Exercisable (vested) at End of Period (in shares)	157,044		157,044
Weighted Average Exercise Price [Roll Forward]
Options outstanding at Beginning of Period (in dollars per share)	$ 12.02		$ 11.54
Granted (in dollars per share)	0		7.60
Expired (in dollars per share)	21.32		10.93
Cancelled / Forfeited (in dollars per share)	16.28		16.28
Exercised (in dollars per share)	0		4.23
Options outstanding at End of Period (in dollars per share)	11.49		11.49
Exercisable (vested) at End of Period (in dollars per share)	$ 13.56		$ 13.56
Additional disclosures [Abstract]
Options outstanding, Aggregate Intrinsic Value	$ 205,654		$ 205,654
Options Exercisable, Aggregate Intrinsic Value	$ 156,511		$ 156,511
Options outstanding, Weighted Average Remaining Contractual Term	4 years 8 months 8 days		4 years 8 months 8 days
Options Exercisable, Weighted Average Remaining Contractual Term	2 years 9 months 4 days		2 years 9 months 4 days
Weighted average fair value of options granted (in dollars per share)			$ 2.67
Unrecognized compensation related to non-vested stock options	$ 166,000		$ 166,000
Unrecognized compensation cost, period for recognition			3 years
Allocated share-based compensation expense			$ 32,000
Weighted average assumptions used in valuation [Abstract]
Risk Free Interest Rate (in hundredths)	0.00%	[1]	1.61%
Expected Dividend Yield (in hundredths)	0.00%	[1]	0.00%
Expected Life in Years			5 years
Expected Price Volatility (in hundredths)	0.00%	[1]	37.38%
Restricted Stock [Member]
Additional disclosures [Abstract]
Unrecognized compensation cost, period for recognition			2 years 11 months 16 days
Allocated share-based compensation expense			$ 71,000
Non-vested restricted stock awards outstanding, Number of Shares [Roll Forward]
Non-vested restricted stock outstanding at Beginning of Period (in shares)	85,579		73,827
Granted (in shares)	0		30,056
Cancelled/Forfeited (in shares)	0		0
Exercised/Released/Vested (in shares)	0		(18,304)
Non-vested restricted stock outstanding at End of Period (in shares)	85,579		85,579
Non-vested restricted stock awards outstanding, Weighted Average Grant-Date Fair Value [Roll Forward]
Non-vested restricted stock outstanding at Beginning of Period (in dollars per share)	$ 6.54		$ 5.64
Granted (in dollars per share)	0		7.59
Cancelled/Forfeited (in dollars per share)	0		0
Exercised/Released/Vested (in dollars per share)	0		4.66
Non-vested restricted stock outstanding at End of Period (in dollars per share)	$ 6.54		$ 6.54
Non-vested restricted stock awards, Additional Disclosures [Abstract]
Aggregate Intrinsic Value, End of Period	$ 654,679		$ 654,679
Weighted Average Remaining Contractual Term	8 years 5 months 26 days		8 years 5 months 26 days
Unrecognized compensation related to restricted stock	$ 366,000		$ 366,000
2006 Amended ESPP [Member]
Additional disclosures [Abstract]
Allocated share-based compensation expense			$ 13,000
Weighted average assumptions used in valuation [Abstract]
Risk Free Interest Rate (in hundredths)	0.14%		0.14%
Expected Dividend Yield (in hundredths)	0.00%		0.00%
Expected Life in Years	1 year		1 year
Expected Price Volatility (in hundredths)	15.10%		15.10%
[1]	There were no stock options granted during the three-month period ended June 30, 2015.

FAIR VALUE MEASUREMENT (Details

FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Recurring [Member]
Assets Recorded at Fair Value on a Recurring Basis [Abstract]
Securities of U.S. government agencies and corporations	$ 29,686	$ 28,429
Obligations of states and political subdivisions	22,031	20,763
Collateralized mortgage obligations	12,693	12,553
Mortgage-backed securities	91,803	89,481
Total investments at fair value	156,213	151,226
Recurring [Member] | Level 1 [Member]
Assets Recorded at Fair Value on a Recurring Basis [Abstract]
Securities of U.S. government agencies and corporations	0	0
Obligations of states and political subdivisions	0	0
Collateralized mortgage obligations	0	0
Mortgage-backed securities	0	0
Total investments at fair value	0	0
Recurring [Member] | Level 2 [Member]
Assets Recorded at Fair Value on a Recurring Basis [Abstract]
Securities of U.S. government agencies and corporations	29,686	28,429
Obligations of states and political subdivisions	22,031	20,763
Collateralized mortgage obligations	12,693	12,553
Mortgage-backed securities	91,803	89,481
Total investments at fair value	156,213	151,226
Recurring [Member] | Level 3 [Member]
Assets Recorded at Fair Value on a Recurring Basis [Abstract]
Securities of U.S. government agencies and corporations	0	0
Obligations of states and political subdivisions	0	0
Collateralized mortgage obligations	0
Mortgage-backed securities	0	0
Total investments at fair value	0	0
Non-recurring [Member]
Assets Recorded at Fair Value on a Non-Recurring Basis [Abstract]
Impaired loans		568
Other real estate owned	407	736
Total assets at fair value	407	1,304
Non-recurring [Member] | Level 1 [Member]
Assets Recorded at Fair Value on a Non-Recurring Basis [Abstract]
Impaired loans		0
Other real estate owned	0	0
Total assets at fair value	0	0
Non-recurring [Member] | Level 2 [Member]
Assets Recorded at Fair Value on a Non-Recurring Basis [Abstract]
Impaired loans		0
Other real estate owned	0	0
Total assets at fair value	0	0
Non-recurring [Member] | Level 3 [Member]
Assets Recorded at Fair Value on a Non-Recurring Basis [Abstract]
Impaired loans		568
Other real estate owned	407	736
Total assets at fair value	$ 407	$ 1,304
Impaired Loans [Member] | Collateral, Market, Income, Enterprise, Liquidation and Discounted Cash Flows [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assumption Inputs	External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 7%.	External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 7%.
Impaired Loans [Member] | Collateral, Market, Income, Enterprise, Liquidation and Discounted Cash Flows [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value inputs, selling costs (in hundredths)	6.00%	6.00%
Impaired Loans [Member] | Collateral, Market, Income, Enterprise, Liquidation and Discounted Cash Flows [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value inputs, selling costs (in hundredths)	7.00%	7.00%
Other Real Estate Owned [Member] | Collateral [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assumption Inputs	External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 11%.	External appraised values, management assumptions regarding market trends or other relevant factors; selling costs ranging 6% to 11%.
Other Real Estate Owned [Member] | Collateral [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value inputs, selling costs (in hundredths)	6.00%	6.00%
Other Real Estate Owned [Member] | Collateral [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value inputs, selling costs (in hundredths)	11.00%	11.00%

PREFERRED STOCK (Details)

PREFERRED STOCK (Details) - USD ($)	Feb. 08, 2013	Sep. 15, 2011	Jun. 30, 2015	Dec. 31, 2014
Preferred Stock [Abstract]
Preferred stock, shares issued (in shares)			12,847	12,847
Preferred stock, liquidation preference per share (in dollars per share)			$ 1,000	$ 1,000
Preferred stock, aggregate purchase price			$ 12,847,000	$ 12,847,000
Non Cumulative Perpetual Preferred Stock, Series A [Member]
Preferred Stock [Abstract]
Preferred stock, shares issued (in shares)		22,847
Preferred stock, liquidation preference per share (in dollars per share)		$ 1,000
Preferred stock, aggregate purchase price		$ 22,847,000
Redemption of preferred stock	$ 10,000,000
Fixed Rate Cumulative Perpetual Preferred Stock [Member]
Preferred Stock [Abstract]
Redemption of preferred stock (in shares)		17,390
Preferred shares liquidation amount (in dollars per share)		$ 1,000
Redemption of preferred stock		$ 17,390,000

FAIR VALUES OF FINANCIAL INST41

FAIR VALUES OF FINANCIAL INSTRUMENTS (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Loans receivable [Abstract]
Mortgage servicing rights	$ 2,001,000	$ 2,068,000
Carrying amount [Member] | Level 1 [Member]
Financial assets [Abstract]
Cash and cash equivalents	225,749,000	216,192,000
Certificates of deposit	11,937,000	12,860,000
Carrying amount [Member] | Level 2 [Member]
Financial assets [Abstract]
Stock in FHLB and other equity securities, at cost	3,934,000	3,934,000
Loans receivable [Abstract]
Loans held-for-sale	486,000	491,000
Interest receivable	2,765,000	2,650,000
Financial liabilities [Abstract]
Interest payable	78,000	70,000
Carrying amount [Member] | Level 3 [Member]
Loans receivable [Abstract]
Net loans	570,540,000	537,979,000
Mortgage servicing rights	1,874,000	1,862,000
Financial liabilities [Abstract]
Deposits	898,367,000	857,052,000
Fair value [Member] | Level 1 [Member]
Financial assets [Abstract]
Cash and cash equivalents	225,749,000	216,192,000
Certificates of deposit	11,937,000	12,860,000
Fair value [Member] | Level 2 [Member]
Financial assets [Abstract]
Stock in FHLB and other equity securities, at cost	3,934,000	3,934,000
Loans receivable [Abstract]
Loans held-for-sale	486,000	509,000
Interest receivable	2,765,000	2,650,000
Financial liabilities [Abstract]
Interest payable	78,000	70,000
Fair value [Member] | Level 3 [Member]
Loans receivable [Abstract]
Net loans	567,129,000	535,018,000
Mortgage servicing rights	2,001,000	2,068,000
Financial liabilities [Abstract]
Deposits	$ 873,066,000	$ 837,150,000

INVESTMENT SECURITIES (Details)

INVESTMENT SECURITIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Investment securities available-for-sale [Abstract]
Amortized cost	$ 155,446,000		$ 155,446,000		$ 150,055,000
Unrealized gains	1,369,000		1,369,000		1,777,000
Unrealized losses	(602,000)		(602,000)		(606,000)
Estimated fair value	156,213,000		156,213,000		151,226,000
Proceeds from sale of available-for-sale securities	0	$ 0	0	$ 0
Gross realized gains from sales or calls of available-for-sale securities	0	0	0	0
Gross realized losses from sales or calls of available-for-sale securities	0		0
Gross realized losses from other equity securities		$ 50,000		$ 50,000
Securities of U.S. Government Agencies and Corporations [Member]
Investment securities available-for-sale [Abstract]
Amortized cost	29,790,000		29,790,000		28,787,000
Unrealized gains	53,000		53,000		17,000
Unrealized losses	(157,000)		(157,000)		(375,000)
Estimated fair value	29,686,000		29,686,000		28,429,000
Obligations of States and Political Subdivisions [Member]
Investment securities available-for-sale [Abstract]
Amortized cost	21,578,000		21,578,000		20,236,000
Unrealized gains	487,000		487,000		579,000
Unrealized losses	(34,000)		(34,000)		(52,000)
Estimated fair value	22,031,000		22,031,000		20,763,000
Collateralized Mortgage Obligations [Member]
Investment securities available-for-sale [Abstract]
Amortized cost	12,803,000		12,803,000		12,541,000
Unrealized gains	12,000		12,000		37,000
Unrealized losses	(122,000)		(122,000)		(25,000)
Estimated fair value	12,693,000		12,693,000		12,553,000
Mortgage-backed Securities [Member]
Investment securities available-for-sale [Abstract]
Amortized cost	91,275,000		91,275,000		88,491,000
Unrealized gains	817,000		817,000		1,144,000
Unrealized losses	(289,000)		(289,000)		(154,000)
Estimated fair value	$ 91,803,000		$ 91,803,000		$ 89,481,000

INVESTMENT SECURITIES, Contract

INVESTMENT SECURITIES, Contractual and Expected Maturity (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, by Contractual Maturity [Abstract]
Due in one year or less, Amortized cost	$ 3,478,000
Due after one year through five years, Amortized cost	135,642,000
Due after five years through ten years, Amortized cost	14,392,000
Due after ten years, Amortized cost	1,934,000
Amortized cost	155,446,000	$ 150,055,000
Available-for-sale Securities, Debt Maturities, Fair Value, by Contractual Maturity [Abstract]
Due in one year or less, Estimated fair value	3,485,000
Due after one year through five years, Estimated fair value	136,039,000
Due after five years through ten years, Estimated fair value	14,642,000
Due after ten years, Estimated fair value	2,047,000
Estimated fair value	156,213,000	$ 151,226,000
Mortgage backed securities and collateralized mortgage obligations with expected maturities due after one year through five years	$ 102,160,000

INVESTMENT SECURITIES, Analysis

INVESTMENT SECURITIES, Analysis of Gross Unrealized Losses (Details)	Jun. 30, 2015USD ($)Security	Dec. 31, 2014USD ($)
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair Value	$ 55,686,000	$ 16,068,000
Less than 12 months, Unrealized losses	(341,000)	(112,000)
12 months or more, Fair Value	19,578,000	32,387,000
12 Months or more, Unrealized losses	(261,000)	(494,000)
Total Fair Value	75,264,000	48,455,000
Total Unrealized losses	$ (602,000)	(606,000)
Investment securities in unrealized loss position less than 12 months | Security	48
Investment securities in unrealized loss position more than 12 months | Security	16
Investment securities pledged as collateral	$ 29,209,000	27,868,000
Securities of U.S. Government Agencies and Corporations [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair Value	7,992,000	1,474,000
Less than 12 months, Unrealized losses	(22,000)	(4,000)
12 months or more, Fair Value	12,965,000	21,729,000
12 Months or more, Unrealized losses	(135,000)	(371,000)
Total Fair Value	20,957,000	23,203,000
Total Unrealized losses	(157,000)	(375,000)
Obligations of States and Political Subdivisions [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair Value	5,524,000	1,927,000
Less than 12 months, Unrealized losses	(34,000)	(28,000)
12 months or more, Fair Value	0	1,530,000
12 Months or more, Unrealized losses	0	(24,000)
Total Fair Value	5,524,000	3,457,000
Total Unrealized losses	(34,000)	(52,000)
Collateralized Mortgage Obligations [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair Value	10,968,000	2,881,000
Less than 12 months, Unrealized losses	(122,000)	(25,000)
12 months or more, Fair Value	0	0
12 Months or more, Unrealized losses	0	0
Total Fair Value	10,968,000	2,881,000
Total Unrealized losses	(122,000)	(25,000)
Mortgage-backed Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair Value	31,202,000	9,786,000
Less than 12 months, Unrealized losses	(163,000)	(55,000)
12 months or more, Fair Value	6,613,000	9,128,000
12 Months or more, Unrealized losses	(126,000)	(99,000)
Total Fair Value	37,815,000	18,914,000
Total Unrealized losses	$ (289,000)	$ (154,000)

ACCUMULATED OTHER COMPREHENSI45

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			$ 92,051
Current period other comprehensive income/ (loss)	$ (618)	$ 761	(276)	$ 1,277
Balance	95,192		95,192
Accumulated Other Comprehensive Income/(loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	408	(557)	66	(1,073)
Current period other comprehensive income/ (loss)	(618)	761	(276)	1,277
Balance	(210)	204	(210)	204
Unrealized Gains on Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	1,078	(123)	703	(639)
Current period other comprehensive income/ (loss)	(618)	761	(243)	1,277
Balance	460	638	460	638
Officers' Retirement Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(678)	(480)	(678)	(480)
Current period other comprehensive income/ (loss)	0	0	0	0
Balance	(678)	(480)	(678)	(480)
Directors' Retirement Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	8	46	41	46
Current period other comprehensive income/ (loss)	0	0	(33)	0
Balance	$ 8	$ 46	$ 8	$ 46

FINANCIAL INSTRUMENTS WITH OF46

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	$ 177,825,000	$ 174,348,000
Undisbursed Loan Commitments [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	170,904,000	171,019,000
Standby Letters of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	2,246,000	2,099,000
Commitments to Sell Loans [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	4,675,000	$ 1,230,000
Performance Standby Letters of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	2,246,000
Financial Standby Letter of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	0
Derivative [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet credit risks	0
Reserve for Off-balance Sheet Activity [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Reserve for unfunded commitments	$ 793,000

Uncategorized Items - fnrn-2015

Label	Element	Value
Gains (Losses) on Sales of Other Real Estate	us-gaap_GainsLossesOnSalesOfOtherRealEstate	$ 0
Gains (Losses) on Sales of Other Real Estate	us-gaap_GainsLossesOnSalesOfOtherRealEstate	0
Provision for loan losses	us-gaap_ProvisionForLoanAndLeaseLosses	0
Provision for loan losses	us-gaap_ProvisionForLoanAndLeaseLosses	600
Gain (Loss) on Sales of Loans, Net	us-gaap_GainLossOnSalesOfLoansNet	143
Gain (Loss) on Sales of Loans, Net	us-gaap_GainLossOnSalesOfLoansNet	292
Impairment on other interest earning asset	us-gaap_OtherAssetImpairmentCharges	0
Impairment on other interest earning asset	us-gaap_OtherAssetImpairmentCharges	50
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	us-gaap_OtherComprehensiveIncomeLossPensionAndOtherPostretirementBenefitPlansAdjustmentNetOfTax	0
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	us-gaap_OtherComprehensiveIncomeLossPensionAndOtherPostretirementBenefitPlansAdjustmentNetOfTax	$ 0