FNB Bancorp 10-Q 4 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 30, 2017
Document and Entity Information:
Entity Registrant Name	FNB BANCORP/CA/
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Entity Central Index Key	1,163,199
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		7,362,497
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS (UN

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
ASSETS
Cash and due from banks	$ 21,859	$ 15,758
Interest-bearing time deposits with financial institutions	230	205
Securities available-for-sale, at fair value	362,006	360,105
Other equity securities	7,567	7,206
Loans, net of allowance for loan losses of $10,177 and $10,167 on June 30, 2017 and December 31, 2016	808,508	782,485
Bank premises, equipment, and leasehold improvements, net	9,416	9,837
Bank owned life insurance, net	16,438	16,247
Accrued interest receivable	4,945	4,942
Other real estate owned, net	1,459	1,427
Goodwill	4,580	4,580
Prepaid expenses	621	856
Other assets	16,032	15,746
Total assets	1,253,661	1,219,394
Deposits
Demand, noninterest bearing	296,249	296,273
Demand, interest bearing	129,435	121,086
Savings and money market	472,050	487,763
Time	124,604	114,384
Total deposits	1,022,338	1,019,506
Federal Home Loan Bank advances	91,000	71,000
Note Payable	4,050	4,350
Accrued expenses and other liabilities	17,546	14,224
Total liabilities	1,134,934	1,109,080
Stockholders' equity
Common stock, no par value, authorized 10,000,000 shares; issued and outstanding 7,362,497 shares at June 30, 2017 and 7,280,122 shares at December 31, 2016	85,159	84,283
Retained earnings	32,306	27,577
Accumulated other comprehensive loss, net of tax	1,262	(1,546)
Total stockholders' equity	118,727	110,314
Total liabilities and stockholders' equity	$ 1,253,661	$ 1,219,394

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets:
Allowance for loan losses	$ 10,177	$ 10,167
Common Stock, shares authorized	10,000,000	10,000,000
Common Stock, shares issued	7,362,497	7,280,122
Common Stock, shares outstanding	7,362,497	7,280,122

CONSOLIDATED STATEMENTS OF EARN

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest income:
Interest and fees on loans	$ 10,370	$ 9,563	$ 20,443	$ 19,434
Interest on taxable securities	1,267	1,001	2,477	1,979
Interest on tax-exempt securities	722	730	1,455	1,437
Interest time deposits with other financial institutions	19	22	30	31
Total interest income	12,378	11,316	24,405	22,881
Interest expense:
Interest on deposits	677	709	1,313	1,492
Interest on FHLB advances	214	1	360	9
Interest on note payable	55	56	108	113
Total interest expense	946	766	1,781	1,614
Net interest income	11,432	10,550	22,624	21,267
(Recovery of) provision for loan losses	(140)	75	(140)	150
Net interest income after provision for loan losses	11,572	10,475	22,764	21,117
Noninterest income:
Service charges	564	618	1,161	1,239
Gain on sale of available-for-sale securities	123	57	151	241
Earnings on Bank owned life insurance	89	105	191	205
Other income	236	256	519	485
Total noninterest income	1,012	1,036	2,022	2,170
Noninterest expense:
Salaries and employee benefits	4,862	4,876	9,636	9,814
Occupancy expense	707	617	1,358	1,248
Equipment expense	406	438	808	872
Professional fees	408	294	881	681
FDIC assessment	90	150	220	300
Telephone, postage and supplies	325	306	622	601
Advertising	107	183	215	300
Data processing expense	144	140	283	332
Low income housing expense	123	71	228	142
Surety insurance	89	87	173	174
Directors expense	72	72	144	144
Other real estate owned - expense (recovery), net	7	0	17	(10)
Other expense	338	415	698	838
Total noninterest expense	7,678	7,649	15,283	15,436
Earnings before provision for income tax expense	4,906	3,862	9,503	7,851
Provision for income tax expense	1,555	1,414	3,063	2,836
Net earnings	$ 3,351	$ 2,448	$ 6,440	$ 5,015
Earnings per share data:
Basic	$ 0.46	$ 0.34	$ 0.88	$ 0.70
Diluted	$ 0.44	$ 0.33	$ 0.85	$ 0.68
Weighted average shares outstanding:
Basic	7,342	7,216	7,329	7,194
Diluted	7,585	7,393	7,559	7,390

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues [Abstract]
Net earnings	$ 3,351	$ 2,448	$ 6,440	$ 5,015
Unrealized holding gain (loss) on available-for-sale securities, net of tax expense of $957 and $1,891 for the three and six months ended June 30, 2017, and net of tax expense of $2,566 and $2,535 for the three and six months ended June 30, 2016, respectively	1,446	3,692	2,896	3,648
Reclassification adjustment for gains on available-for-sale securities sold, net of tax of $52 and $63 for three and six months ended June 30, 2017, and $23 and $99 for three and six months ended June 30, 2016, respectively	(71)	(34)	(88)	(142)
Other comprehensive earnings (loss)	1,375	3,658	2,808	3,506
Total comprehensive earnings	$ 4,726	$ 6,106	$ 9,248	$ 8,521

CONSOLIDATED STATEMENTS OF COM6

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (UNAUDITED) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Other Comprehensive Earnings Parentheticals
Tax (expense) benefit on unrealized holding gain (loss) on available-for-sale securities	$ 957	$ 2,566	$ 1,891	$ 2,535
Tax on reclassification adjustment for gain on available-for-sale	$ 52	$ 23	$ 63	$ 99

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollar amounts in thousands) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flow from operating activities:
Net earnings	$ 6,440	$ 5,015
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, amortization and accretion	1,983	1,893
Gain on sale of securities available-for-sale	(151)	(241)
Stock-based compensation expense	206	158
Earnings on bank owned life insurance	(191)	(205)
(Recovery of) provision for loan losses	(140)	150
Tax benefit from stock option exercises	(265)	0
(Decrease) increase in net deferred loan fees	(136)	169
Increase in accrued interest receivable	(3)	(36)
Decrease in prepaid expense	235	214
(Increase) decrease in other assets	(21)	574
Increase (decrease) in accrued expenses and other liabilities	1,334	(459)
Net cash provided by operating activities	9,291	7,232
Cash flows from investing activities
Purchase of securities available-for-sale	(38,818)	(42,500)
Proceeds from matured/called/sold securities available-for-sale	40,373	34,114
Purchase of other equity securities	(361)	(458)
Investment, net of redemption, in other equity securities	(25)	0
Investment in other real estate owned	(32)	(221)
Net increase in loans	(25,747)	(3,043)
Purchases of bank premises, equipment, leasehold improvements	(71)	(449)
Net cash used in investing activities	(24,681)	(12,557)
Cash flows from financing activities
Net (decrease) increase in demand and savings deposits	(7,388)	31,030
Net increase (decrease) in time deposits	10,220	(6,730)
Increase (decrease) in FHLB advances	20,000	(10,000)
Principal reduction on note payable	(300)	(300)
Cash dividends paid on common stock	(1,711)	(1,406)
Proceeds from exercise of stock options	670	981
Net cash provided by financing activities	21,491	13,575
NET INCREASE IN CASH AND CASH EQUIVALENTS	6,101	8,250
Cash and cash equivalents at beginning of period	15,758	12,314
Cash and cash equivalents at end of period	21,859	20,564
Additional cash flow information:
Interest paid	1,640	1,608
Income taxes paid	3,533	3,599
Non-cash investing and financing activities:
Accrued dividends	882	686
Change in unrealized gain in available for-sale securities, net of tax	$ 2,808	$ 3,506

A. BASIS OF PRESENTATION

A. BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2017
BASIS OF PRESENTATION
BASIS OF PRESENTATION	FNB Bancorp (the “Company”) is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. The Company was incorporated under the laws of the State of California on February 28, 2001. The consolidated financial statements include the accounts of FNB Bancorp and its wholly-owned subsidiary, First National Bank of Northern California (the “Bank”). The Bank provides traditional banking services in San Mateo and San Francisco counties. All intercompany transactions and balances have been eliminated in consolidation. The financial statements include all adjustments of a normal and recurring nature, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in annual financial statements prepared in conformity with accounting principles generally accepted in the United States of America. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto for the year ended December 31, 2016. Results of operations for interim periods are not necessarily indicative of results for the full year. Certain prior year information has been reclassified to conform to current year presentation. The reclassifications had no impact on consolidated net earnings or stockholders’ equity.

B. STOCK OPTION PLANS

B. STOCK OPTION PLANS	6 Months Ended
	Jun. 30, 2017
Share-based Compensation [Abstract]
STOCK OPTION PLANS	Stock option expense is recorded based on the fair value of option contracts issued. The fair value is determined by using an option pricing model that considers the expected contract term, the risk free interest rate, the volatility of the Company’s stock price and the level of dividends the Company is expected to pay. Measurement of the cost of the stock options granted is based on the grant-date fair value of each stock option using the Black-Scholes valuation model. The cost is then amortized over each option’s requisite service period. The expected term of options granted is derived from the period of time the options are expected to be outstanding. The risk free rate is based on the yield of an equivalent maturity U.S. Treasury note. Volatility is calculated using historical price changes on a monthly basis over the option’s expected life. The amount of stock option compensation expense for options recorded in the quarters ended June 30, 2017 and 2016 was $103,000 and $70,000, respectively. The amount of compensation expense recorded for the six months ended June 30, 2017 and 2016 was $206,000 and $158,000, respectively. The intrinsic value for options exercised during the six months ended June 30, 2017 was $1,460,000. The intrinsic value of options exercisable as of June 30, 2017 was $5,176,000. The intrinsic value for options exercised during the six months ended June 30, 2016 was $908,000. The intrinsic value of options exercisable at June 30, 2016 was $2,999,000. There were no options granted during the first six months ended June 30, 2017 and 2016, respectively. The amount of total unrecognized compensation expense related to non-vested options at June 30, 2017 was $1,181,000, and the weighted average period over which it will be amortized is 3.5 years.

C. EARNINGS PER SHARE CALCULATI

C. EARNINGS PER SHARE CALCULATION	6 Months Ended
	Jun. 30, 2017
Earnings per share data:
EARNINGS PER SHARE CALCULATION	Earnings per common share (EPS) are computed based on the weighted average number of common shares outstanding during the period. Basic EPS excludes dilution and is computed by dividing net earnings available to common stockholders by the weighted average of common shares outstanding. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of potential common shares included in the quarterly diluted EPS is computed using the average market price during the three months included in the reporting period under the treasury stock method. The number of potential common shares included in year-to-date diluted EPS is a year-to-date weighted average of potential shares included in each quarterly diluted EPS computation. All common stock equivalents are anti-dilutive when a net loss occurs. A 3 for 2 stock split was completed during the second quarter of 2017 and prior per share amounts have been adjusted to reflect this 3 for 2 stock split. Earnings per share have been computed based on the following: Three months ended Six months ended June 30, June 30, (All amounts in thousands) 2017 2016 2017 2016 Net earnings $ 3,351 $ 2,448 $ 6,440 $ 5,015 Average number of shares outstanding 7,342 7,216 7,329 7,194 Effect of dilutive options 243 177 230 196 Average number of shares outstanding used to calculate diluted earnings per share 7,585 7,393 7,559 7,390 Anti-dilutive options not included ─ 108 104 81

D. SECURITIES AVAILABLE FOR SAL

D. SECURITIES AVAILABLE FOR SALE	6 Months Ended
	Jun. 30, 2017
SECURITIES AVAILABLE FOR SALE
SECURITIES AVAILABLE FOR SALE	The amortized cost and carrying values of securities available-for-sale are as follows: Amortized Unrealized Unrealized Fair (Dollar amounts in thousands) cost gains losses value June 30, 2017 U.S. Treasury securities $ 981 $ 9 $ ─ $ 990 Obligations of U.S. government agencies 50,943 122 (158) 50,907 Mortgage-backed securities 113,619 788 (1,365) 113,042 Asset-backed securities 2,108 2 ─ 2,110 Obligations of states and political subdivisions 143,049 2,905 (254) 145,700 Corporate debt 49,130 194 (67) 49,257 $ 359,830 $ 4,020 $ (1,844) $ 362,006 December 31, 2016 U.S. Treasury securities $ 977 $ 10 $ ─ $ 987 Obligations of U.S. government agencies 60,773 112 (340) 60,545 Mortgage-backed securities 85,709 397 (1,822) 84,284 Obligations of states and political subdivisions 151,988 1,458 (1,828) 151,618 Corporate debt 63,277 121 (727) 62,671 $ 362,724 $ 2,098 $ (4,717) $ 360,105 An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of June 30, 2017 and December 31, 2016, respectively, is as follows: Less than 12 Months Total 12 Months Total or Longer Total Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollar amounts in thousands) Value Losses Value Losses Value Losses June 30, 2017: Obligations of U.S. Government agencies $ 29,683 $ (158) $ ─ $ ─ $ 29,683 $ (158) Mortgage-backed securities 55,035 (1,344) 1,425 (21) 56,460 (1,365) Obligations of states and political subdivisions 17,356 (200) 3,692 (54) 21,048 (254) Corporate debt 12,678 (67) ─ ─ 12,678 (67) Total $ 114,752 $ (1,769) $ 5,117 $ (75) $ 119,869 $ (1,844) Less than 12 Months Total 12 Months Total or Longer Total Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollar amounts in thousands) Value Losses Value Losses Value Losses December 31, 2016: Obligations of U.S. Government agencies 36,828 (340) ─ ─ 36,828 (340) Mortgage-backed securities 67,990 (1,822) ─ ─ 67,990 (1,822) Obligations of states and political subdivisions 84,728 (1,828) ─ ─ 84,728 (1,828) Corporate debt 41,012 (727) ─ ─ 41,012 (727) Total $ 230,558 $ (4,717) $ ─ $ ─ $ 230,558 $ (4,717) At June 30, 2017, there were 9 securities in an unrealized loss position for greater than 12 consecutive months. At the same time, there were 94 securities in an unrealized loss position for twelve or less consecutive months. At December 31, 2016, there were no securities in an unrealized loss position for greater than 12 consecutive months, and there were 227 securities in an unrealized loss position for 12 or less consecutive months. Management periodically evaluates each security in an unrealized loss position to determine if the impairment is temporary or other-than-temporary. The unrealized losses are due solely to interest rate changes and the Company does not intend to sell nor expects it will be required to sell investment securities identified with impairments prior to the earliest of forecasted recovery or the maturity of the underlying investment security. Management has determined that no investment security was other-than-temporarily impaired at June 30, 2017. The amortized cost and carrying value of available-for-sale debt securities as of June 30, 2017 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. June 30, 2017: Amortized Fair (Dollar amounts in thousands) Cost Value Available-for-sale: Due in one year or less $ 14,804 $ 14,837 Due after one through five years 167,146 168,557 Due after five years through ten years 113,957 115,482 Due after ten years 63,923 63,130 $ 359,830 $ 362,006 For the three months ended June 30, 2017 and 2016, respectively, gross realized gains amounted to $123,000 and $57,000, on gross securities sold or called of $10,781,000 and $8,699,000, respectively. For the six months ended June 30, 2017 and June 30, 2016, respectively, gross realized gains amounted to $151,000 and $241,000, on gross securities sold or called of $41,382,000 and $34,114,000, respectively. For the three and six months ended June 30, 2017 and 2016, respectively, there were no gross realized losses. At June 30, 2017, securities with an amortized cost of $114,139,000 and fair value of $113,634,000 were pledged as collateral for public deposits and for other purposes required by law.

E. LOANS

E. LOANS	6 Months Ended
	Jun. 30, 2017
LOANS
LOANS	Loans are summarized at June 30, 2017 and December 31, 2016 as follows: Total FNB Balance Bancorp June 30, (Dollar amounts in thousands) Originated PNCI PCI 2017 Commercial real estate $ 369,657 $ 65,404 $ 1,225 $ 436,286 Real estate construction 46,325 − − 46,325 Real estate multi-family 90,733 13,640 − 104,373 Real estate 1 to 4 family 150,546 16,064 − 166,610 Commercial & industrial 54,102 3,115 − 57,217 Consumer 8,884 − − 8,884 Gross loans 720,247 98,223 1,225 819,695 Net deferred loan fees (1,010) − − (1,010) Allowance for loan losses (10,177) − − (10,177) Net loans $ 709,060 $ 98,223 $ 1,225 $ 808,508 Note: PNCI means Purchased, Not Credit Impaired. PCI means Purchased, Credit Impaired. These designations are assigned to the purchased loans on their date of purchase. Once the loan designation has been made, each loan will retain its designation for the life of the loan. Total FNB Balance Bancorp December 31, (Dollar amounts in thousands) Originated PNCI PCI 2016 Commercial real estate $ 351,261 $ 68,736 $ 1,225 $ 421,222 Real estate construction 43,683 − − 43,683 Real estate multi-family 90,763 15,200 − 105,963 Real estate 1 to 4 family 153,843 16,680 − 170,523 Commercial & industrial 40,140 8,734 − 48,874 Consumer loans 3,533 − − 3,533 Gross loans 683,223 109,350 1,225 793,798 Net deferred loan fees (1,146) − − (1,146) Allowance for loan losses (10,167) − − (10,167) Net loans $ 671,910 $ 109,350 $ 1,225 $ 782,485 Note: PNCI means Purchased, Not Credit Impaired. PCI means Purchased, Credit Impaired. These designations are assigned to the purchased loans on their date of purchase. Once the loan designation has been made, each loan will retain its designation for the life of the loan. Loan Classifications: Real Estate – Multi-Family Our multi-family commercial real estate loans are secured by multi-family properties located primarily in San Mateo and San Francisco counties. These loans are made to investors where our primary source of repayment is from cash flows generated by the properties, through rent collections. The borrowers’ promissory notes are secured with recorded liens on the underlying properties. The borrowers would normally also be required to personally guarantee repayment of the loans. The Bank uses conservative underwriting standards in reviewing applications for credit. Generally, our borrowers have multiple sources of income, so if cash flow generated from the property declines, at least in the short term, the borrowers can normally cover these short term cash flow deficiencies from their available cash reserves. Risk of loss to the Bank is increased when there are cash flow decreases sufficiently large and for such a prolonged period of time that loan payments can no longer be made by the borrowers. Commercial Real Estate Loans Commercial real estate loans consist of loans secured by non-farm, non-residential properties, including, but not limited to industrial, hotel, assisted care, retail, office and mixed use buildings. Our commercial real estate loans are made primarily to investors or small businesses where our primary source of repayment is from cash flows generated by the properties, either through rent collection or business profits. The borrower’s promissory notes are secured with recorded liens on the underlying property. The borrowers would normally also be required to personally guarantee repayment of the loan. The Bank uses conservative underwriting standards in reviewing applications for credit. Generally, our borrowers have multiple sources of income, so if cash flow generated from the property declines, at least in the short term, the borrowers can normally cover these short term cash flow deficiencies from their available cash reserves. Risk of loss to the Bank is increased when there are cash flow decreases sufficiently large and for such a prolonged period of time that loan payments can no longer be made by the borrowers. Real Estate Construction Loans Our real estate construction loans are generally made to borrowers who are rehabilitating a building, converting a building use from one type of use to another, or developing land and building residential or commercial structures for sale or lease. The borrower’s promissory notes are secured with recorded liens on the underlying property. The borrowers would normally also be required to personally guarantee repayment of the loan. The Bank uses conservative underwriting standards in reviewing applications for credit. Generally, our borrowers have sufficient resources to make the required construction loan payments during the construction and absorption or lease-up period. After construction is complete, the loans are normally paid off from proceeds from the sale of the building or through a refinance to a commercial real estate loan. Risk of loss to the Bank is increased when there are material construction cost overruns, significant delays in the time to complete the project and/or there has been a material drop in the value of the projects in the marketplace since the inception of the loan. Real Estate-1 to 4 Family Loans Our residential real estate loans are generally made to borrowers who are buying or refinancing their primary personal residence or a rental property of 1-4 single family residential units. The Bank uses conservative underwriting standards in reviewing applications for credit. Risk of loss to the Bank is increased when borrowers lose their primary source of income and/or property values decline significantly. Commercial and Industrial Loans Our commercial and industrial loans are generally made to small businesses to provide them with at least some of the working capital necessary to fund their daily business operations. These loans are generally either unsecured or secured by fixed assets, accounts receivable and/or inventory. The borrowers would normally also be required to personally guarantee repayment of the loan. The Bank uses conservative underwriting standards in reviewing applications for credit. Risk of loss to the Bank is increased when our small business customers experience a significant business downturn, incur significant financial losses, or file for relief from creditors through bankruptcy proceedings. Consumer Loans Our consumer and installment loans generally consist of personal loans, credit card loans, automobile loans or other loans secured by personal property. The Bank uses conservative underwriting standards in reviewing applications for credit. Risk of loss to the Bank is increased when borrowers lose their primary source of income, or file for relief from creditors through bankruptcy proceedings. Recorded Investment in Loans at June 30, 2017 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Loans: Ending balance $ 436,286 $ 46,325 $ 104,373 $ 166,610 $ 57,217 $ 8,884 $ 819,695 Ending balance: Individually evaluated for impairment $ 9,136 $ 1,223 $ 870 $ 2,832 $ 929 $ ─ $ 14,990 Ending balance: Collectively evaluated for impairment $ 427,150 $ 45,102 $ 103,503 $ 163,778 $ 56,288 $ 8,884 $ 804,705 Recorded Investment in Loans at December 31, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction family 4 family & industrial Consumer Total Loans: Ending balance $ 421,222 $ 43,683 $ 105,963 $ 170,523 $ 48,874 $ 3,533 $ 793,798 Ending balance: Individually evaluated for impairment $ 10,023 $ 843 $ − $ 3,530 $ 1,065 $ − $ 15,461 Ending balance: Collectively evaluated for impairment $ 411,199 $ 42,840 $ 105,963 $ 166,993 $ 47,809 $ 3,533 $ 778,337 Recorded Investment in Loans at June 30, 2016 (Dollar amounts in thousands) Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial Real Estate Construction Family 4 Family & industrial Consumer Total Loans: Ending balance $ 398,290 $ 29,251 $ 82,637 $ 174,084 $ 51,366 $ 1,311 $ 736,939 Ending balance: Individually evaluated for impairment $ 10,392 $ 2,097 $ ─ $ 4,832 $ 1,571 $ ─ $ 18,892 Ending balance: Collectively evaluated for impairment $ 387,898 $ 27,154 $ 82,637 $ 169,252 $ 49,795 $ 1,311 $ 718,047 The following table provides information pertaining to impaired loans originated and PNCI loans for the three months ended June 30, 2017 and 2016, respectively. Impaired Loans Three months ended Three months ended June 30, 2017 June 30, 2016 (All amounts in thousands) Average Recorded Investment Income Recognized Average Recorded Investment Income Recognized With no related allowance recorded: Commercial real estate $ 6,467 $ 25 $ 8,806 $ 171 Real estate construction 829 13 2,126 26 Real estate multi-family 1,748 12 ─ ─ Residential- 1 to 4 family ─ ─ 1,065 16 Commerical 119 2 521 7 Total 9,163 52 12,518 220 With an allowance recorded: Commercial real estate $ 1,480 $ 21 $ 1,679 $ 25 Real estate construction 800 24 ─ ─ Residential - 1 to 4 family 2,822 ─ 3,772 31 Commercial and industrial 835 ─ 1,187 ─ Total 5,937 45 6,638 56 Total: Commercial real estate $ 7,947 $ 46 $ 10,485 $ 196 Real estate contstruction 1,629 37 2,126 26 Real estate multi-family 1,748 12 - - Residential - 1 to 4 family 2,823 ─ 4,837 47 Commercial and industrial 954 2 1,708 7 Grand total 15,101 97 19,156 276 The following tables provide information pertaining to impaired loans originated and PNCI loans as of and for the six months ended June 30, 2017, the year ended December 31, 2016, and the six months ended June 30, 2017. Impaired Loans As of and for the six months ended June 30, 2017 Unpaid Average Recorded Principal Related Recorded Income (Dollar amounts in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial real estate $ 7,666 $ 8,789 $ ─ $ 7,695 $ 57 Real estate construction 823 1,017 ─ 833 22 Real estate multi-family 870 870 ─ 874 12 Residential - 1 to 4 family ─ ─ ─ 776 21 Commercial and industrial 118 118 ─ 119 4 Total 9,477 10,794 ─ 10,297 116 With an allowance recorded Commercial real estate $ 1,470 $ 1,470 $ 27 $ 1,489 $ 41 Real estate construction 400 400 39 400 24 Residential - 1 to 4 family 2,832 2,832 418 2,835 28 Commercial and industrial 811 811 79 857 ─ Total 5,513 5,513 563 5,581 93 Total Commercial real estate $ 9,136 $ 10,259 $ 27 $ 9,184 $ 98 Real estate construction 1,223 1,417 39 1,233 46 Real estate multi-family 870 870 ─ 874 12 Residential - 1 to 4 family 2,832 2,832 418 3,611 49 Commercial and industrial 929 929 79 976 4 Grand total $ 14,990 $ 16,307 $ 563 $ 15,878 $ 209 Impaired Loans As of and for the year ended December 31, 2016 Unpaid Average Recorded Principal Related Recorded Income (Dollar amounts in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial real estate $ 8,516 $ 9,026 $ ─ $ 9,730 $ 716 Real estate construction 843 843 ─ 857 53 Residential- 1 to 4 family 678 678 ─ 685 ─ Commercial and industrial 120 120 ─ 322 25 Total 10,157 10,667 ─ 11,594 794 With an allowance recorded Commercial real estate $ 1,507 $ 1,507 $ 50 $ 1,528 $ 89 Residential- 1 to 4 family 2,852 2,852 442 3,202 157 Commercial and industrial 945 945 96 1,240 1 Total 5,304 5,304 588 5,970 247 Total Commercial real estate $ 10,023 $ 10,533 $ 50 $ 11,258 $ 805 Real estate construction 843 843 ─ 857 53 Residential- 1 to 4 family 3,530 3,530 442 3,887 157 Commercial and industrial 1,065 1,065 96 1,562 26 Grand total $ 15,461 $ 15,971 $ 588 $ 17,564 $ 1,041 Impaired Loans As of and for the six months ended June 30, 2016 Unpaid Average Recorded Principal Related Recorded Income (Dollar amounts in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial real estate $ 8,725 $ 9,770 $ ─ $ 8,722 $ 398 Real estate construction 2,097 2,280 ─ 2,126 71 Residential- 1 to 4 family 1,063 1,063 ─ 1,067 31 Commercial and industrial 517 517 ─ 521 14 Total 12,402 13,630 ─ 12,436 514 With an allowance recorded Commercial real estate $ 1,667 $ 1,667 $ 74 $ 1,679 $ 46 Residential- 1 to 4 family 3,769 3,793 471 3,772 69 Commercial and industrial 1,054 1,265 107 1,123 2 Total 6,490 6,725 652 6,574 117 Total Commercial real estate $ 10,392 $ 11,437 $ 74 $ 10,401 $ 444 Real estate construction 2,097 2,280 ─ 2,126 71 Residential- 1 to 4 family 4,832 4,856 471 4,839 100 Commercial and industrial 1,571 1,782 107 1,644 16 Grand total $ 18,892 $ 20,355 $ 652 $ 19,010 $ 631 Nonaccrual loans totaled $7,363,000 and $6,647,000 as of June 30, 2017 and December 31, 2016. Impaired loans not on nonaccrual are loans that have been restructured and are performing under modified loan agreements, and where principal and interest is determined to be collectible. Nonaccrual loans are loans where principal and interest have not been determined to be fully collectible. Loans on Nonaccrual Status as of June 30, December 31, (Dollar amounts in thousands) 2017 2016 Commercial real estate $ 5,620 $ 5,553 Real estate construction 400 ─ Real estate 1 to 4 family 532 149 Commercial and industrial 811 945 Total $ 7,363 $ 6,647 Interest income on impaired loans of $98,000, $209,000 and $1,041,000 was recognized for cash payments received during the three and six months ended June 30, 2017 and the year ended December 31, 2016, respectively. Interest income on impaired loans recognized for cash payments received for the three and six months ended June 30, 2016 was $274,000 and $631,000. The amount of interest on impaired loans not collected for the three and six months ended June 30, 2017 was $203,000 and $408,000 and for the three and six months ended June 30, 2016 was $143,000 and $275,000, respectively. The cumulative amount of unpaid interest on impaired loans was $991,000 and $3,973,000 at June 30, 2017 and December 31, 2016. The cumulative amount of unpaid interest on impaired loans as of June 30, 2016 was $3,680,000. Troubled Debt Restructurings Total troubled debt restructured loans outstanding at (dollars in thousands) June 30, 2017 December 31, 2016 Non- Non- Accrual accrual Total Accrual accrual Total status status modifications status status modifications Commercial real estate $ 4,506 $ 4,982 $ 9,488 $ 4,466 $ 4,494 $ 8,960 Real estate 1 to 4 family 2,301 462 2,763 3,381 - 3,381 Commercial & industrial - 811 811 120 902 1,022 Total $ 6,807 $ 6,255 $ 13,062 $ 7,967 $ 5,396 $ 13,363 Modification Categories The Company offers a variety of modifications to borrowers. The modification categories offered can generally be described in the following categories. Rate Modification – A modification in which the interest rate is changed. Term modification – A modification in which the maturity date, timing of payments, or frequency of payments is changed. Interest Only Modification – A modification in which the loan is converted to interest only payments for a period of time. Payment Modification – A modification in which the dollar amount of the payment is changed, other than an interest only modification described above. There were no commitments for additional funding of troubled debt restructured loans as of June 30, 2017. There were no payment defaults during the three and six month periods ended June 30, 2017 and 2016 that were related to receivables modified as TDRs in the last twelve months. There were no TDRs entered into during the three and six months ended June 30, 2017 and 2016. Allowance for Credit Losses For the Three Months Ended June 30, 2017 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,643 $ 627 $ 246 $ 1,824 $ 654 $ 150 $ 10,144 Charge-offs ─ ─ ─ ─ ─ ─ ─ Recoveries 2 ─ ─ 149 22 ─ 173 Provision 258 (89) 116 (437) (47) 59 (140) Ending balance $ 6,903 538 362 1,536 $ 629 $ 209 $ 10,177 Ending balance individually evaluated for impairment $ 27 $ 39 $ ─ $ 418 $ 79 $ ─ $ 563 Ending balance: collectively evaluated for impairment $ 6,876 $ 499 $ 362 $ 1,118 $ 550 $ 209 $ 9,614 Allowance for Credit Losses For the Six Months Ended June 30, 2017 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,392 $ 617 $ 389 $ 2,082 $ 650 $ 37 $ 10,167 Charge-offs ─ ─ ─ ─ (39) (1) (40) Recoveries 4 ─ ─ 157 29 ─ 190 Provision 507 (79) (27) (703) (11) 173 (140) Ending balance $ 6,903 $ 538 $ 362 $ 1,536 $ 629 $ 209 $ 10,177 Ending balance: individually evaluated for impairment $ 27 $ 39 $ ─ $ 418 $ 79 $ ─ $ 563 Ending balance: collectively evaluated for impairment $ 6,876 $ 499 $ 362 $ 1,118 $ 550 $ 209 $ 9,614 Allowance for Credit Losses For the Twelve Months Ended December 31, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,059 $ 589 $ 243 $ 2,176 $ 853 $ 50 $ 9,970 Charge-offs ─ ─ ─ (36) (164) (18) (218) Recoveries 8 ─ ─ 53 204 ─ 265 Provision 325 28 146 (111) (243) 5 150 Ending balance $ 6,392 617 $ 389 $ 2,082 $ 650 $ 37 $ 10,167 Ending balance: individually evaluated for impairment $ 50 $ ─ $ ─ $ 442 $ 96 $ ─ $ 588 Ending balance: collectively evaluated for impairment $ 6,342 $ 617 $ 389 $ 1,640 $ 554 $ 37 $ 9,579 Allowance for Credit Losses For the Three Months Ended June 30, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,113 $ 587 $ 211 $ 2,149 $ 841 $ 42 $ 9,943 Charge-offs ─ ─ ─ (12) ─ (5) (17) Recoveries 2 ─ ─ 7 28 ─ 37 Provision 91 (183) 124 117 (70) (4) 75 Ending balance $ 6,206 $ 404 $ 335 $ 2,261 $ 799 $ 33 $ 10,038 Ending balance: individually evaluated for impairment $ 74 $ ─ $ ─ $ 471 $ 107 $ ─ $ 652 Ending balance: collectively evaluated for impairment $ 6,132 $ 404 $ 335 $ 1,790 $ 692 $ 33 $ 9,386 Allowance for Credit Losses For the Six Months Ended June 30, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,059 $ 589 $ 243 $ 2,176 $ 853 $ 50 $ 9,970 Charge-offs ─ ─ ─ (12) (164) (11) (187) Recoveries 4 ─ ─ 19 82 ─ 105 Provision 143 (185) 92 78 28 (6) 150 Ending balance $ 6,206 $ 404 $ 335 $ 2,261 $ 799 $ 33 $ 10,038 Ending balance: individually evaluated for impairment $ 74 $ ─ $ ─ $ 471 $ 107 $ ─ $ 652 Ending balance: collectively evaluated for impairment $ 6,132 $ 404 $ 335 $ 1,790 $ 692 $ 33 $ 9,386 Age Analysis of Past Due Loans As of June 30, 2017 30-59 60-89 Days Days Over Total (Dollar amounts in thousands) Past Past 90 Past Total Originated Due Due Days Due Current Loans Commercial real estate $ ─ $ ─ $ ─ $ ─ $ 369,657 $ 369,657 Real estate construction ─ ─ 400 400 45,925 46,325 Real estate multi family ─ 870 ─ 870 89,863 90,733 Real estate-1 to 4 family 168 ─ 532 700 149,846 150,546 Commercial and industrial ─ ─ 811 811 53,291 54,102 Consumer ─ ─ ─ ─ 8,884 8,884 Total $ 168 $ 870 $ 1,743 $ 2,781 $ 717,466 $ 720,247 Purchased Not credit impaired Commercial real estate $ ─ $ 497 $ 4,395 $ 4,892 $ 60,512 $ 65,404 Real estate multi-family ─ ─ ─ ─ 13,640 13,640 Real estate-1 to 4 family ─ ─ ─ ─ 16,064 16,064 Commercial and industrial ─ ─ ─ ─ 3,115 3,115 Total $ 0 $ 497 $ 4,395 $ 4,892 $ 93,331 $ 98,223 Purchased Credit impaired Commercial real estate $ ─ $ ─ $ 1,225 $ 1,225 $ ─ $ 1,225 Age Analysis of Past Due Loans As of December 31, 2016 30-59 60-89 Days Days Over Total (Dollar amounts in thousands) Past Past 90 Past Total Originated Due Due Days Due Current Loans Commercial real estate $ 835 $ 2 $ ─ $ 837 $ 350,424 $ 351,261 Real estate construction 645 ─ ─ 645 43,038 43,683 Real estate multi family ─ ─ ─ ─ 90,763 90,763 Real estate 1 to 4 family 1,365 61 74 1,500 152,343 153,843 Commercial & industrial 241 ─ 945 1,186 38,954 40,140 Consumer ─ ─ ─ ─ 3,533 3,533 Total $ 3,086 $ 63 $ 1,019 $ 4,168 $ 679,055 $ 683,223 Purchased Not credit impaired Commercial real estate $ 1,869 $ 1,909 $ 550 4,328 $ 64,408 $ 68,736 Real estate multi-family ─ ─ ─ ─ 15,200 15,200 Real estate 1 to 4 family ─ ─ 75 75 16,605 16,680 Commercial & industrial 285 ─ ─ 285 8,449 8,734 Total $ 2,154 $ 1,909 $ 625 $ 4,688 $ 104,662 $ 109,350 Purchased Credit impaired Commercial real estate $ ─ $ ─ $ ─ $ ─ $ 1,225 $ 1,225 At June 30, 2017 and December 31, 2016, there were no loans that were 90 days of more past due where interest was still accruing. The over 90 days column includes nonaccrual loans that were over 90 days, but does not include loans that were in nonaccrual status for reasons other than being past due. Risk rating system Loans to borrowers graded as pass or pooled loans represent loans to borrowers of acceptable or better credit quality. They demonstrate sound financial positions, repayment capacity and credit history. They have an identifiable and stable source of repayment. Special mention loans have potential weaknesses that deserve management’s attention. If left uncorrected these potential weaknesses may result in a deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. These assets are “not adversely classified” and do not expose the Bank to sufficient risk to warrant adverse classification. Substandard loans are inadequately protected by current sound net worth, paying capacity of the borrower, or pledged collateral. Loans are normally classified as Substandard when there are unsatisfactory characteristics causing more than acceptable levels of risk. A substandard loan normally has one or more well-defined weaknesses that could jeopardize the repayment of the debt. For example, a) cash flow deficiency, which may jeopardize future payments; b) sale of non-collateral assets has become primary source of repayment; c) the borrower is bankrupt; or d) for any other reason, future repayment is dependent on court action. Doubtful loans represent credits with weakness inherent in the Substandard classification and where collection or liquidation in full is highly questionable. To be classified Doubtful, there must be specific pending factors which prevent the Loan Review Officer from determining the amount of loss contained in the credit. When the amount of loss can be reasonably estimated, that amount is classified as Loss and the remainder is classified as Substandard. Credit Quality Indicators As of June 30, 2017 (Dollar amounts in thousands) Special Sub- Total Originated Pass mention standard Doubtful loans Commercial real estate $ 367,254 $ ─ $ 2,403 $ ─ $ 369,657 Real estate construction 45,102 ─ 1,223 ─ 46,325 Real estate multi-family 90,733 ─ ─ ─ 90,733 Real estate-1 to 4 family 150,014 ─ 532 ─ 150,546 Commercial and industrial 53,781 ─ 321 ─ 54,102 Consumer loans 8,884 ─ ─ ─ 8,884 Totals $ 715,768 $ ─ $ 4,479 $ ─ $ 720,247 Purchased Not credit impaired Commercial real estate $ 57,106 $ 882 $ 7,416 $ ─ $ 65,404 Real estate construction ─ ─ ─ ─ - Real estate multi-family 13,640 ─ ─ ─ 13,640 Real estate-1 to 4 family 16,064 ─ ─ ─ 16,064 Commercial and industrial 3,115 ─ ─ ─ 3,115 Total $ 89,925 $ 882 $ 7,416 $ ─ $ 98,223 Credit impaired Commercial real estate $ 1,225 Total $ 1,225 Credit Quality Indicators As of December 31, 2016 (Dollar amounts in thousands) Special Sub- Total Originated Pass mention standard Doubtful loans Commercial real estate $ 348,785 $ 902 $ 1,574 $ ─ $ 351,261 Real estate construction 42,840 ─ 843 ─ 43,683 Real estate multi-family 90,763 ─ ─ ─ 90,763 Real estate 1 to 4 family 153,769 ─ 74 ─ 153,843 Commercial & industrial 39,752 ─ 384 4 40,140 Consumer loans 3,533 ─ ─ ─ 3,533 Totals $ 679,442 $ 902 $ 2,875 $ 4 $ 683,223 Purchased Not credit impaired Commercial real estate $ 61,705 $ ─ $ 7,031 $ ─ $ 68,736 Real estate multi-family 15,200 ─ ─ ─ 15,200 Real estate 1 to 4 family 16,605 ─ 75 ─ 16,680 Commercial & industrial 8,644 ─ 90 ─ 8,734 Total $ 102,154 $ ─ $ 7,196 $ ─ $ 109,350 Purchased Credit impaired Commercial real estate $ 1,225 Total $ 1,225

F. BORROWINGS

F. BORROWINGS	6 Months Ended
	Jun. 30, 2017
BORROWINGS
BORROWINGS	Federal Funds Purchased The Bank had unsecured lines of credit for overnight borrowings totaling $30.0 million with other financial institutions as of June 30, 2017 and December 31, 2016. Federal funds purchased are generally structured to mature the following business day. The Bank is required to have a depository relationship with the financial institutions that have provided the Bank lines of credit as of June 30, 2017 and December 31, 2016. There were no advances outstanding against these lines of credit as of June 30, 2017 or December 31, 2016. Federal Reserve Bank The Bank had lines of credit totaling $42,467,000 and $54,000,000 as of June 30, 2017 and December 31, 2016, respectively. Federal Reserve Bank loans generally are generally structured to mature the following business day. There were no advances outstanding against this line of credit as of June 30, 2017 or December 31, 2016. The bank had lines of credit totaling $493,820,000 and $452,318,000 as of June 30, 2017 and December 31, 2016. Amounts outstanding consist of individual drawdown transactions that have fixed rates of interest and stated maturity dates. There are prepayment penalties that would apply if the borrowings were repaid prior to their maturity date. Federal Home Loan Bank Borrowings outstanding for the periods presented are as follows: As of June 30, 2017 As of December 31, 2016 Maturity Interest Amount Maturity Interest Amount (Dollar amounts in thousands) Date Rate Outstanding Date Rate Outstanding FHLB Overnight Advance ─ $ ─ 01/03/17 0.61% $ 10,000 FHLB Term Advance 07/14/17 1.15% 20,000 01/05/17 0.55% 7,000 FHLB Term Advance 07/17/17 1.15% 18,000 01/09/17 0.49% 7,000 FHLB Term Advance 07/18/17 0.98% 10,000 01/27/17 0.63% 11,000 FHLB Term Advance 07/28/17 1.15% 15,000 01/30/17 0.63% 6,000 FHLB Term Advance 08/28/17 1.18% 8,000 01/30/17 0.61% 10,000 FHLB Term Advance 08/30/17 1.17% 20,000 02/28/17 0.67% 20,000 Totals $ 91,000 $ 71,000 Corporate loan On March 27, 2014, FNB Bancorp received funding under a $6,000,000 term loan credit facility. This loan carries a variable rate of interest that fluctuates on a monthly basis. The interest rate is based on the 3 month LIBOR rate plus 4%. Payments of $50,000 in principal plus accrued interest are payable monthly. The maturity date on this credit facility is March 26, 2019. On the maturity date, all outstanding principal plus accrued interest shall become due and payable. FNB Bancorp has pledged its stock ownership in First National Bank of Northern California as collateral for the loan subject to the terms and conditions contained in the Loan Agreement and the Pledge and Security Agreement. FNB Bancorp retains the right to prepay this debt at any time upon not less than 7 days’ prior written notice to Lender. The proceeds from this loan were contributed to the Bank as an additional capital contribution. This capital contribution qualified as Tier 1 capital for the Bank under regulatory capital guidelines. The balance outstanding under this loan agreement was $4,050,000 as of June 30, 2017. At the maturity date of March 26, 2019, the expected remaining principal amount outstanding of $3,000,000 will become due and payable.

G. FAIR VALUE MEASUREMENT

G. FAIR VALUE MEASUREMENT	6 Months Ended
	Jun. 30, 2017
FAIR VALUE MEASUREMENT TABLES
FAIR VALUE MEASUREMENT	The following table presents information about the Company’s assets and liabilities measured at fair value as of June 30, 2017 and December 31, 2016, and indicates the fair value techniques used by the Company to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Transfers between levels of the fair value hierarchy and recognized on the actual date of the event or circumstances that caused the transfer, which generally corresponds with the Company’s quarterly valuation process. During the first six months of 2017 and 2016 there were no transfers of assets or liabilities between hierarchy levels. The following tables present the recorded amounts of assets measured at fair value on a recurring basis: Fair Value Measurements at June 30, 2017, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 6/30/2017 (Level 1) (Level 2) (Level 3) U. S. Treasury securities $ 990 $ 990 $ ─ $ ─ Obligations of U.S. Government agencies 50,907 ─ 50,907 ─ Mortgage-backed securities 113,042 ─ 113,042 ─ Asset-backed securities 2,110 ─ 2,110 ─ Obligations of states and political subdivisions 145,700 ─ 145,700 ─ Corporate debt 49,257 ─ 49,257 ─ Total assets measured at fair value $ 362,006 $ 990 $ 361,016 $ ─ Fair Value Measurements at December 31, 2016, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 12/31/2016 (Level 1) (Level 2) (Level 3) U. S. Treasury securities $ 987 $ 987 $ ─ $ ─ Obligations of U.S. Government agencies 60,545 ─ 60,545 ─ Mortgage-backed securities 84,284 ─ 84,284 ─ Obligations of states and political subdivisions 151,618 ─ 151,618 ─ Corporate debt 62,671 ─ 62,671 ─ Total assets measured at fair value $ 360,105 $ 987 $ 359,118 $ ─ The following tables present the recorded amounts of assets measured at fair value on a non-recurring basis: Fair Value Measurements at June 30, 2017, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 6/30/2017 (Level 1) (Level 2) (Level 3) Impaired assets: Commercial and industrial loans $ 811 $ ─ $ ─ $ 811 Real estate 1 to 4 family loans 462 ─ ─ 462 Other real estate owned 1,459 ─ ─ 1,459 Total impaired assets measured at fair value $ 2,732 $ ─ $ ─ $ 2,732 Fair Value Measurements at December 31, 2016, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 12/31/2016 (Level 1) (Level 2) (Level 3) Impaired assets: Commercial and industrial loans $ 815 $ ─ $ ─ $ 815 Residential-1 to 4 family loans 67 ─ ─ 67 Other real estate owned 1,427 ─ ─ 1,427 Total impaired assets measured at fair value $ 2,309 $ ─ $ ─ $ 2,309 The following table provides summary information on the estimated fair value of financial instruments at June 30, 2017: Carrying Fair Fair value measurements (Dollar amounts in thousands) amount value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $21,859 $21,859 $21,859 Interest-bearing time deposits with financial institutions 230 230 $230 Securities available for sale 362,006 362,006 990 361,016 Loans 808,508 811,420 $811,420 Other equity securities 7,567 7,567 7,567 Accrued interest receivable 4,945 4,945 4,945 Financial liabilities: Deposits 1,022,338 1,022,350 897,734 124,616 Federal Home Loan Bank advances 91,000 91,000 91,000 Note payable 4,050 4,050 4,050 Accrued interest payable 261 261 261 Off-balance-sheet liabilities: Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit ─ 1,836 1,836 The carrying amount of loans includes $7,363,000 of nonaccrual loans (loans that are not accruing interest) as of June 30, 2017. The fair value of nonaccrual loans is based on the collateral values that secure the loans or the cash flows expected to be received. The following table provides summary information on the estimated fair value of financial instruments at December 31, 2016: Carrying Fair Fair value measurements (Dollar amounts in thousands) amount value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $15,758 $15,758 $15,758 Interest-bearing time deposits with financial institutions 205 205 $ 205 Securities available for sale 360,105 360,105 987 359,118 Loans 782,485 769,661 $ 769,661 Other equity securities 7,206 7,206 7,206 Accrued interest receivable 4,942 4,942 4,942 Financial liabilities: Deposits 1,019,506 1,020,088 905,122 114,966 Federal Home Loan Bank advances 71,000 71,000 71,000 Note payable 4,350 4,350 4,350 Accrued interest payable 246 246 246 Off-balance-sheet liabilities: Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit ─ 1,733 1,733 The carrying amounts of loans include $6,647,000 of nonaccrual loans (loans that are not accruing interest) as of December 31, 2016. The fair value of nonaccrual loans is based on the collateral values that secure the loans or the cash flows expected to be received. The Bank does not record loans at fair value. However, from time to time, if a loan is considered impaired, a specific allocation within the allowance for loan losses may be required. 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. 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 cash flows. Those impaired loans not requiring an allowance represent loans for which the value of the expected repayments or collateral exceed the recorded investments in such loans. Impaired loans where an allowance is established based on the fair value of collateral or when the impaired loan has been written down to fair value require classification in the fair value hierarchy. If the fair value of the collateral is based on a non-observable market price or a current appraised value, the Bank records the impaired loans as nonrecurring Level 3. When an appraised value is not available, or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Bank also records the impaired loans as nonrecurring Level 3. Other real estate owned is carried at the lower of historical cost or fair value less costs to sell. An appraisal (a Level 3 valuation) is obtained at the time the Bank acquires property through the foreclosure process. Any loan balance outstanding that exceeds the appraised value of the property is charged off against the allowance for loan loss at the time the property is acquired. Subsequent to acquisition, the Bank updates the property’s appraised value on at least an annual basis. If the value of the property has declined during the year, a loss due to valuation impairment charge is recorded along with a corresponding reduction in the book carrying value of the property. Historical costs of other real estate owned were below fair value estimates at June 30, 2017 and December 31, 2016. The Bank obtains third party appraisals on its impaired loans held-for-investment and foreclosed assets to determine fair value. When the appraisals are received, Management reviews the assumptions and methodology utilized in the appraisal, as well as the overall resulting value in conjunction with independent data sources such as recent market data and industry-wide statistics. We generally use a 6% discount for selling costs which is applied to all properties, regardless of size. Generally, the third party appraisals apply the “market approach,” which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable (that is, similar) assets, liabilities, or a group of assets and liabilities, such as a business. Adjustments are then made based on the type of property, age of appraisal, current status of property and other related factors to estimate the current value of collateral. The value of OREO is determined based on independent appraisals, similar to the process used for impaired loans, discussed above, and is generally classified as Level 3. Fair Values of Financial Instruments. The following methods and assumptions were used by the Company in estimating the fair value disclosures for financial instruments. Cash and Cash Equivalents, including interest-bearing time deposits with financial institutions. The carrying amounts reported in the balance sheet for cash and short-term instruments are a reasonable estimate of fair value, which will approximate their historical cost. Securities Available-for-Sale. Fair values for investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments. Loans Receivable. For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values and credit risk factors. For fixed rate loans, fair values are based on discounted cash flows, credit risk factors, and liquidity factors. Other equity securities . These are mostly Federal Reserve Bank stock and Federal Home Loan Bank stock, carried in Other Assets. They are not traded, and not available for sale, but rather have a stated value that does not change. Deposit liabilities. The fair values disclosed for demand deposits (e.g., interest and non-interest checking, savings, and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The fair values for fixed-rate certificates of deposit are based on discounted cash flows. Federal Home Loan Bank Advances. The fair values of Federal Home Loan Bank Advances are based on discounted cash flows. The discount rate is equal to the market rate currently offered on similar products. Notes payable. Fair value is equal to the current balance. They represent a corporate loan with a monthly variable rate, based on the 3-month LIBOR rate plus 4%. Accrued Interest Receivable and Payable. The interest receivable and payable balances approximate their fair value due to the short-term nature of their settlement dates. Undisbursed loan commitments, lines of credit, Mastercard line and standby letters of credit. The fair value of these off-balance sheet items are based on the discounted cash flows of expected future loan disbursements. The Bank has excluded non-financial assets and non-financial liabilities defined by the Codification (ASC 820-10-15-A), such as Bank premises and equipment, deferred taxes and other liabilities. In addition, the Bank has not disclosed the fair value of financial instruments specifically excluded from disclosure requirements of the Financial Instruments Topic of the Codification (ASC 825-10-50-8), such as Bank-owned life insurance policies.

H. INVESTMENT IN LOW INCOME HOU

H. INVESTMENT IN LOW INCOME HOUSING	6 Months Ended
	Jun. 30, 2017
H. Investment In Low Income Housing
INVESTMENT IN LOW INCOME HOUSING	The Bank has a cost method net investment in low income housing projects of $1,597,000 and $1,825,000 as of June 30, 2017 and December 31, 2016, respectively. These investments generated federal income tax credits of $64,000 and $128,000 for the three and six months ended June 30, 2017 and $65,000 and $130,000 for the three and six months ended June 30, 2016. These low income housing projects provide tax benefits for approximately 15 years. These investments are not expected to have any residual value at the end of the tax benefit period and the book value of these investments is reduced by each project’s net operating expense. The net operating expense was $38,000 and $76,000 for the three and six months ended June 30, 2017 and $38,000 and $76,000 for the three and six months ended June 30, 2016.

C. EARNINGS PER SHARE CALCULA16

C. EARNINGS PER SHARE CALCULATION (Tables)	6 Months Ended
	Jun. 30, 2017
Earnings per share data:
Earnings per common share (EPS) computed	Three months ended Six months ended June 30, June 30, (All amounts in thousands) 2017 2016 2017 2016 Net earnings $ 3,351 $ 2,448 $ 6,440 $ 5,015 Average number of shares outstanding 7,342 7,216 7,329 7,194 Effect of dilutive options 243 177 230 196 Average number of shares outstanding used to calculate diluted earnings per share 7,585 7,393 7,559 7,390 Anti-dilutive options not included ─ 108 104 81

D. SECURITIES AVAILABLE FOR S17

D. SECURITIES AVAILABLE FOR SALE (Tables)	6 Months Ended
	Jun. 30, 2017
SECURITIES AVAILABLE FOR SALE TABLES
Schedule of amortized cost and carrying values of securities available-for-sale	The amortized cost and carrying values of securities available-for-sale are as follows: Amortized Unrealized Unrealized Fair (Dollar amounts in thousands) cost gains losses value June 30, 2017 U.S. Treasury securities $ 981 $ 9 $ ─ $ 990 Obligations of U.S. government agencies 50,943 122 (158) 50,907 Mortgage-backed securities 113,619 788 (1,365) 113,042 Asset-backed securities 2,108 2 ─ 2,110 Obligations of states and political subdivisions 143,049 2,905 (254) 145,700 Corporate debt 49,130 194 (67) 49,257 $ 359,830 $ 4,020 $ (1,844) $ 362,006 December 31, 2016 U.S. Treasury securities $ 977 $ 10 $ ─ $ 987 Obligations of U.S. government agencies 60,773 112 (340) 60,545 Mortgage-backed securities 85,709 397 (1,822) 84,284 Obligations of states and political subdivisions 151,988 1,458 (1,828) 151,618 Corporate debt 63,277 121 (727) 62,671 $ 362,724 $ 2,098 $ (4,717) $ 360,105
Schedule analysis of gross unrealized losses of the available-for-sale investment securities	An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of June 30, 2017 and December 31, 2016, respectively, is as follows: Less than 12 Months Total 12 Months Total or Longer Total Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollar amounts in thousands) Value Losses Value Losses Value Losses June 30, 2017: Obligations of U.S. Government agencies $ 29,683 $ (158) $ ─ $ ─ $ 29,683 $ (158) Mortgage-backed securities 55,035 (1,344) 1,425 (21) 56,460 (1,365) Obligations of states and political subdivisions 17,356 (200) 3,692 (54) 21,048 (254) Corporate debt 12,678 (67) ─ ─ 12,678 (67) Total $ 114,752 $ (1,769) $ 5,117 $ (75) $ 119,869 $ (1,844) Less than 12 Months Total 12 Months Total or Longer Total Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollar amounts in thousands) Value Losses Value Losses Value Losses December 31, 2016: Obligations of U.S. Government agencies 36,828 (340) ─ ─ 36,828 (340) Mortgage-backed securities 67,990 (1,822) ─ ─ 67,990 (1,822) Obligations of states and political subdivisions 84,728 (1,828) ─ ─ 84,728 (1,828) Corporate debt 41,012 (727) ─ ─ 41,012 (727) Total $ 230,558 $ (4,717) $ ─ $ ─ $ 230,558 $ (4,717)
Schedule of amortized cost and carrying value of available-for-sale debt securities by contractual maturity	June 30, 2017: Amortized Fair (Dollar amounts in thousands) Cost Value Available-for-sale: Due in one year or less $ 14,804 $ 14,837 Due after one through five years 167,146 168,557 Due after five years through ten years 113,957 115,482 Due after ten years 63,923 63,130 $ 359,830 $ 362,006

E. LOANS (Tables)

E. LOANS (Tables)	6 Months Ended
	Jun. 30, 2017
LOANS TABLES
Schedule Of Loans Outstanding	Loans are summarized at June 30, 2017 and December 31, 2016 as follows: Total FNB Balance Bancorp June 30, (Dollar amounts in thousands) Originated PNCI PCI 2017 Commercial real estate $ 369,657 $ 65,404 $ 1,225 $ 436,286 Real estate construction 46,325 − − 46,325 Real estate multi-family 90,733 13,640 − 104,373 Real estate 1 to 4 family 150,546 16,064 − 166,610 Commercial & industrial 54,102 3,115 − 57,217 Consumer 8,884 − − 8,884 Gross loans 720,247 98,223 1,225 819,695 Net deferred loan fees (1,010) − − (1,010) Allowance for loan losses (10,177) − − (10,177) Net loans $ 709,060 $ 98,223 $ 1,225 $ 808,508 Note: PNCI means Purchased, Not Credit Impaired. PCI means Purchased, Credit Impaired. These designations are assigned to the purchased loans on their date of purchase. Once the loan designation has been made, each loan will retain its designation for the life of the loan. Total FNB Balance Bancorp December 31, (Dollar amounts in thousands) Originated PNCI PCI 2016 Commercial real estate $ 351,261 $ 68,736 $ 1,225 $ 421,222 Real estate construction 43,683 − − 43,683 Real estate multi-family 90,763 15,200 − 105,963 Real estate 1 to 4 family 153,843 16,680 − 170,523 Commercial & industrial 40,140 8,734 − 48,874 Consumer loans 3,533 − − 3,533 Gross loans 683,223 109,350 1,225 793,798 Net deferred loan fees (1,146) − − (1,146) Allowance for loan losses (10,167) − − (10,167) Net loans $ 671,910 $ 109,350 $ 1,225 $ 782,485 Note: PNCI means Purchased, Not Credit Impaired. PCI means Purchased, Credit Impaired. These designations are assigned to the purchased loans on their date of purchase. Once the loan designation has been made, each loan will retain its designation for the life of the loan.
Schedule of Recorded Investment in Loans	Recorded Investment in Loans at June 30, 2017 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Loans: Ending balance $ 436,286 $ 46,325 $ 104,373 $ 166,610 $ 57,217 $ 8,884 $ 819,695 Ending balance: Individually evaluated for impairment $ 9,136 $ 1,223 $ 870 $ 2,832 $ 929 $ ─ $ 14,990 Ending balance: Collectively evaluated for impairment $ 427,150 $ 45,102 $ 103,503 $ 163,778 $ 56,288 $ 8,884 $ 804,705 Recorded Investment in Loans at December 31, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction family 4 family & industrial Consumer Total Loans: Ending balance $ 421,222 $ 43,683 $ 105,963 $ 170,523 $ 48,874 $ 3,533 $ 793,798 Ending balance: Individually evaluated for impairment $ 10,023 $ 843 $ − $ 3,530 $ 1,065 $ − $ 15,461 Ending balance: Collectively evaluated for impairment $ 411,199 $ 42,840 $ 105,963 $ 166,993 $ 47,809 $ 3,533 $ 778,337 Recorded Investment in Loans at June 30, 2016 (Dollar amounts in thousands) Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial Real Estate Construction Family 4 Family & industrial Consumer Total Loans: Ending balance $ 398,290 $ 29,251 $ 82,637 $ 174,084 $ 51,366 $ 1,311 $ 736,939 Ending balance: Individually evaluated for impairment $ 10,392 $ 2,097 $ ─ $ 4,832 $ 1,571 $ ─ $ 18,892 Ending balance: Collectively evaluated for impairment $ 387,898 $ 27,154 $ 82,637 $ 169,252 $ 49,795 $ 1,311 $ 718,047
Schedule of Impaired Loans Allowance	The following table provides information pertaining to impaired loans originated and PNCI loans for the three months ended June 30, 2017 and 2016, respectively. Impaired Loans Three months ended Three months ended June 30, 2017 June 30, 2016 (All amounts in thousands) Average Recorded Investment Income Recognized Average Recorded Investment Income Recognized With no related allowance recorded: Commercial real estate $ 6,467 $ 25 $ 8,806 $ 171 Real estate construction 829 13 2,126 26 Real estate multi-family 1,748 12 ─ ─ Residential- 1 to 4 family ─ ─ 1,065 16 Commerical 119 2 521 7 Total 9,163 52 12,518 220 With an allowance recorded: Commercial real estate $ 1,480 $ 21 $ 1,679 $ 25 Real estate construction 800 24 ─ ─ Residential - 1 to 4 family 2,822 ─ 3,772 31 Commercial and industrial 835 ─ 1,187 ─ Total 5,937 45 6,638 56 Total: Commercial real estate $ 7,947 $ 46 $ 10,485 $ 196 Real estate contstruction 1,629 37 2,126 26 Real estate multi-family 1,748 12 - - Residential - 1 to 4 family 2,823 ─ 4,837 47 Commercial and industrial 954 2 1,708 7 Grand total 15,101 97 19,156 276 The following tables provide information pertaining to impaired loans originated and PNCI loans as of and for the six months ended June 30, 2017, the year ended December 31, 2016, and the six months ended June 30, 2017. Impaired Loans As of and for the six months ended June 30, 2017 Unpaid Average Recorded Principal Related Recorded Income (Dollar amounts in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial real estate $ 7,666 $ 8,789 $ ─ $ 7,695 $ 57 Real estate construction 823 1,017 ─ 833 22 Real estate multi-family 870 870 ─ 874 12 Residential - 1 to 4 family ─ ─ ─ 776 21 Commercial and industrial 118 118 ─ 119 4 Total 9,477 10,794 ─ 10,297 116 With an allowance recorded Commercial real estate $ 1,470 $ 1,470 $ 27 $ 1,489 $ 41 Real estate construction 400 400 39 400 24 Residential - 1 to 4 family 2,832 2,832 418 2,835 28 Commercial and industrial 811 811 79 857 ─ Total 5,513 5,513 563 5,581 93 Total Commercial real estate $ 9,136 $ 10,259 $ 27 $ 9,184 $ 98 Real estate construction 1,223 1,417 39 1,233 46 Real estate multi-family 870 870 ─ 874 12 Residential - 1 to 4 family 2,832 2,832 418 3,611 49 Commercial and industrial 929 929 79 976 4 Grand total $ 14,990 $ 16,307 $ 563 $ 15,878 $ 209 Impaired Loans As of and for the year ended December 31, 2016 Unpaid Average Recorded Principal Related Recorded Income (Dollar amounts in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial real estate $ 8,516 $ 9,026 $ ─ $ 9,730 $ 716 Real estate construction 843 843 ─ 857 53 Residential- 1 to 4 family 678 678 ─ 685 ─ Commercial and industrial 120 120 ─ 322 25 Total 10,157 10,667 ─ 11,594 794 With an allowance recorded Commercial real estate $ 1,507 $ 1,507 $ 50 $ 1,528 $ 89 Residential- 1 to 4 family 2,852 2,852 442 3,202 157 Commercial and industrial 945 945 96 1,240 1 Total 5,304 5,304 588 5,970 247 Total Commercial real estate $ 10,023 $ 10,533 $ 50 $ 11,258 $ 805 Real estate construction 843 843 ─ 857 53 Residential- 1 to 4 family 3,530 3,530 442 3,887 157 Commercial and industrial 1,065 1,065 96 1,562 26 Grand total $ 15,461 $ 15,971 $ 588 $ 17,564 $ 1,041 Impaired Loans As of and for the six months ended June 30, 2016 Unpaid Average Recorded Principal Related Recorded Income (Dollar amounts in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded Commercial real estate $ 8,725 $ 9,770 $ ─ $ 8,722 $ 398 Real estate construction 2,097 2,280 ─ 2,126 71 Residential- 1 to 4 family 1,063 1,063 ─ 1,067 31 Commercial and industrial 517 517 ─ 521 14 Total 12,402 13,630 ─ 12,436 514 With an allowance recorded Commercial real estate $ 1,667 $ 1,667 $ 74 $ 1,679 $ 46 Residential- 1 to 4 family 3,769 3,793 471 3,772 69 Commercial and industrial 1,054 1,265 107 1,123 2 Total 6,490 6,725 652 6,574 117 Total Commercial real estate $ 10,392 $ 11,437 $ 74 $ 10,401 $ 444 Real estate construction 2,097 2,280 ─ 2,126 71 Residential- 1 to 4 family 4,832 4,856 471 4,839 100 Commercial and industrial 1,571 1,782 107 1,644 16 Grand total $ 18,892 $ 20,355 $ 652 $ 19,010 $ 631
Schedule of Loans On Nonaccrual Status	Loans on Nonaccrual Status as of June 30, December 31, (Dollar amounts in thousands) 2017 2016 Commercial real estate $ 5,620 $ 5,553 Real estate construction 400 ─ Real estate 1 to 4 family 532 149 Commercial and industrial 811 945 Total $ 7,363 $ 6,647
Troubled Debt Restructurings	Total troubled debt restructured loans outstanding at (dollars in thousands) June 30, 2017 December 31, 2016 Non- Non- Accrual accrual Total Accrual accrual Total status status modifications status status modifications Commercial real estate $ 4,506 $ 4,982 $ 9,488 $ 4,466 $ 4,494 $ 8,960 Real estate 1 to 4 family 2,301 462 2,763 3,381 - 3,381 Commercial & industrial - 811 811 120 902 1,022 Total $ 6,807 $ 6,255 $ 13,062 $ 7,967 $ 5,396 $ 13,363
Schedule of Allowance for Credit Losses	Allowance for Credit Losses For the Three Months Ended June 30, 2017 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,643 $ 627 $ 246 $ 1,824 $ 654 $ 150 $ 10,144 Charge-offs ─ ─ ─ ─ ─ ─ ─ Recoveries 2 ─ ─ 149 22 ─ 173 Provision 258 (89) 116 (437) (47) 59 (140) Ending balance $ 6,903 538 362 1,536 $ 629 $ 209 $ 10,177 Ending balance individually evaluated for impairment $ 27 $ 39 $ ─ $ 418 $ 79 $ ─ $ 563 Ending balance: collectively evaluated for impairment $ 6,876 $ 499 $ 362 $ 1,118 $ 550 $ 209 $ 9,614 Allowance for Credit Losses For the Six Months Ended June 30, 2017 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,392 $ 617 $ 389 $ 2,082 $ 650 $ 37 $ 10,167 Charge-offs ─ ─ ─ ─ (39) (1) (40) Recoveries 4 ─ ─ 157 29 ─ 190 Provision 507 (79) (27) (703) (11) 173 (140) Ending balance $ 6,903 $ 538 $ 362 $ 1,536 $ 629 $ 209 $ 10,177 Ending balance: individually evaluated for impairment $ 27 $ 39 $ ─ $ 418 $ 79 $ ─ $ 563 Ending balance: collectively evaluated for impairment $ 6,876 $ 499 $ 362 $ 1,118 $ 550 $ 209 $ 9,614 Allowance for Credit Losses For the Twelve Months Ended December 31, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,059 $ 589 $ 243 $ 2,176 $ 853 $ 50 $ 9,970 Charge-offs ─ ─ ─ (36) (164) (18) (218) Recoveries 8 ─ ─ 53 204 ─ 265 Provision 325 28 146 (111) (243) 5 150 Ending balance $ 6,392 617 $ 389 $ 2,082 $ 650 $ 37 $ 10,167 Ending balance: individually evaluated for impairment $ 50 $ ─ $ ─ $ 442 $ 96 $ ─ $ 588 Ending balance: collectively evaluated for impairment $ 6,342 $ 617 $ 389 $ 1,640 $ 554 $ 37 $ 9,579 Allowance for Credit Losses For the Three Months Ended June 30, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,113 $ 587 $ 211 $ 2,149 $ 841 $ 42 $ 9,943 Charge-offs ─ ─ ─ (12) ─ (5) (17) Recoveries 2 ─ ─ 7 28 ─ 37 Provision 91 (183) 124 117 (70) (4) 75 Ending balance $ 6,206 $ 404 $ 335 $ 2,261 $ 799 $ 33 $ 10,038 Ending balance: individually evaluated for impairment $ 74 $ ─ $ ─ $ 471 $ 107 $ ─ $ 652 Ending balance: collectively evaluated for impairment $ 6,132 $ 404 $ 335 $ 1,790 $ 692 $ 33 $ 9,386 Allowance for Credit Losses For the Six Months Ended June 30, 2016 Real Real Estate Estate Commercial Real Estate Multi 1 to Commercial (Dollar amounts in thousands) Real Estate Construction Family 4 Family & industrial Consumer Total Allowance for credit losses Beginning balance $ 6,059 $ 589 $ 243 $ 2,176 $ 853 $ 50 $ 9,970 Charge-offs ─ ─ ─ (12) (164) (11) (187) Recoveries 4 ─ ─ 19 82 ─ 105 Provision 143 (185) 92 78 28 (6) 150 Ending balance $ 6,206 $ 404 $ 335 $ 2,261 $ 799 $ 33 $ 10,038 Ending balance: individually evaluated for impairment $ 74 $ ─ $ ─ $ 471 $ 107 $ ─ $ 652 Ending balance: collectively evaluated for impairment $ 6,132 $ 404 $ 335 $ 1,790 $ 692 $ 33 $ 9,386
Schedule Age Analysis Of Past Due Loans	Age Analysis of Past Due Loans As of June 30, 2017 30-59 60-89 Days Days Over Total (Dollar amounts in thousands) Past Past 90 Past Total Originated Due Due Days Due Current Loans Commercial real estate $ ─ $ ─ $ ─ $ ─ $ 369,657 $ 369,657 Real estate construction ─ ─ 400 400 45,925 46,325 Real estate multi family ─ 870 ─ 870 89,863 90,733 Real estate-1 to 4 family 168 ─ 532 700 149,846 150,546 Commercial and industrial ─ ─ 811 811 53,291 54,102 Consumer ─ ─ ─ ─ 8,884 8,884 Total $ 168 $ 870 $ 1,743 $ 2,781 $ 717,466 $ 720,247 Purchased Not credit impaired Commercial real estate $ ─ $ 497 $ 4,395 $ 4,892 $ 60,512 $ 65,404 Real estate multi-family ─ ─ ─ ─ 13,640 13,640 Real estate-1 to 4 family ─ ─ ─ ─ 16,064 16,064 Commercial and industrial ─ ─ ─ ─ 3,115 3,115 Total $ 0 $ 497 $ 4,395 $ 4,892 $ 93,331 $ 98,223 Purchased Credit impaired Commercial real estate $ ─ $ ─ $ 1,225 $ 1,225 $ ─ $ 1,225 Age Analysis of Past Due Loans As of December 31, 2016 30-59 60-89 Days Days Over Total (Dollar amounts in thousands) Past Past 90 Past Total Originated Due Due Days Due Current Loans Commercial real estate $ 835 $ 2 $ ─ $ 837 $ 350,424 $ 351,261 Real estate construction 645 ─ ─ 645 43,038 43,683 Real estate multi family ─ ─ ─ ─ 90,763 90,763 Real estate 1 to 4 family 1,365 61 74 1,500 152,343 153,843 Commercial & industrial 241 ─ 945 1,186 38,954 40,140 Consumer ─ ─ ─ ─ 3,533 3,533 Total $ 3,086 $ 63 $ 1,019 $ 4,168 $ 679,055 $ 683,223 Purchased Not credit impaired Commercial real estate $ 1,869 $ 1,909 $ 550 4,328 $ 64,408 $ 68,736 Real estate multi-family ─ ─ ─ ─ 15,200 15,200 Real estate 1 to 4 family ─ ─ 75 75 16,605 16,680 Commercial & industrial 285 ─ ─ 285 8,449 8,734 Total $ 2,154 $ 1,909 $ 625 $ 4,688 $ 104,662 $ 109,350 Purchased Credit impaired Commercial real estate $ ─ $ ─ $ ─ $ ─ $ 1,225 $ 1,225
Schedule Credit Quality Indicators	Credit Quality Indicators As of June 30, 2017 (Dollar amounts in thousands) Special Sub- Total Originated Pass mention standard Doubtful loans Commercial real estate $ 367,254 $ ─ $ 2,403 $ ─ $ 369,657 Real estate construction 45,102 ─ 1,223 ─ 46,325 Real estate multi-family 90,733 ─ ─ ─ 90,733 Real estate-1 to 4 family 150,014 ─ 532 ─ 150,546 Commercial and industrial 53,781 ─ 321 ─ 54,102 Consumer loans 8,884 ─ ─ ─ 8,884 Totals $ 715,768 $ ─ $ 4,479 $ ─ $ 720,247 Purchased Not credit impaired Commercial real estate $ 57,106 $ 882 $ 7,416 $ ─ $ 65,404 Real estate construction ─ ─ ─ ─ - Real estate multi-family 13,640 ─ ─ ─ 13,640 Real estate-1 to 4 family 16,064 ─ ─ ─ 16,064 Commercial and industrial 3,115 ─ ─ ─ 3,115 Total $ 89,925 $ 882 $ 7,416 $ ─ $ 98,223 Credit impaired Commercial real estate $ 1,225 Total $ 1,225 Credit Quality Indicators As of December 31, 2016 (Dollar amounts in thousands) Special Sub- Total Originated Pass mention standard Doubtful loans Commercial real estate $ 348,785 $ 902 $ 1,574 $ ─ $ 351,261 Real estate construction 42,840 ─ 843 ─ 43,683 Real estate multi-family 90,763 ─ ─ ─ 90,763 Real estate 1 to 4 family 153,769 ─ 74 ─ 153,843 Commercial & industrial 39,752 ─ 384 4 40,140 Consumer loans 3,533 ─ ─ ─ 3,533 Totals $ 679,442 $ 902 $ 2,875 $ 4 $ 683,223 Purchased Not credit impaired Commercial real estate $ 61,705 $ ─ $ 7,031 $ ─ $ 68,736 Real estate multi-family 15,200 ─ ─ ─ 15,200 Real estate 1 to 4 family 16,605 ─ 75 ─ 16,680 Commercial & industrial 8,644 ─ 90 ─ 8,734 Total $ 102,154 $ ─ $ 7,196 $ ─ $ 109,350 Purchased Credit impaired Commercial real estate $ 1,225 Total $ 1,225

F. BORROWINGS (Tables)

F. BORROWINGS (Tables)	6 Months Ended
	Jun. 30, 2017
F. Borrowings Tables
FHLB outstanding	As of June 30, 2017 As of December 31, 2016 Maturity Interest Amount Maturity Interest Amount (Dollar amounts in thousands) Date Rate Outstanding Date Rate Outstanding FHLB Overnight Advance ─ $ ─ 01/03/17 0.61% $ 10,000 FHLB Term Advance 07/14/17 1.15% 20,000 01/05/17 0.55% 7,000 FHLB Term Advance 07/17/17 1.15% 18,000 01/09/17 0.49% 7,000 FHLB Term Advance 07/18/17 0.98% 10,000 01/27/17 0.63% 11,000 FHLB Term Advance 07/28/17 1.15% 15,000 01/30/17 0.63% 6,000 FHLB Term Advance 08/28/17 1.18% 8,000 01/30/17 0.61% 10,000 FHLB Term Advance 08/30/17 1.17% 20,000 02/28/17 0.67% 20,000 Totals $ 91,000 $ 71,000

G. FAIR VALUE MEASUREMENT (Tabl

G. FAIR VALUE MEASUREMENT (Tables)	6 Months Ended
	Jun. 30, 2017
FAIR VALUE MEASUREMENT TABLES {1}
Schedule of assets measured at fair value on a recurring basis	Fair Value Measurements at June 30, 2017, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 6/30/2017 (Level 1) (Level 2) (Level 3) U. S. Treasury securities $ 990 $ 990 $ ─ $ ─ Obligations of U.S. Government agencies 50,907 ─ 50,907 ─ Mortgage-backed securities 113,042 ─ 113,042 ─ Asset-backed securities 2,110 ─ 2,110 ─ Obligations of states and political subdivisions 145,700 ─ 145,700 ─ Corporate debt 49,257 ─ 49,257 ─ Total assets measured at fair value $ 362,006 $ 990 $ 361,016 $ ─ Fair Value Measurements at December 31, 2016, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 12/31/2016 (Level 1) (Level 2) (Level 3) U. S. Treasury securities $ 987 $ 987 $ ─ $ ─ Obligations of U.S. Government agencies 60,545 ─ 60,545 ─ Mortgage-backed securities 84,284 ─ 84,284 ─ Obligations of states and political subdivisions 151,618 ─ 151,618 ─ Corporate debt 62,671 ─ 62,671 ─ Total assets measured at fair value $ 360,105 $ 987 $ 359,118 $ ─
Schedule of assets measured at fair value on a non-recurring basis	Fair Value Measurements at June 30, 2017, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 6/30/2017 (Level 1) (Level 2) (Level 3) Impaired assets: Commercial and industrial loans $ 811 $ ─ $ ─ $ 811 Real estate 1 to 4 family loans 462 ─ ─ 462 Other real estate owned 1,459 ─ ─ 1,459 Total impaired assets measured at fair value $ 2,732 $ ─ $ ─ $ 2,732 Fair Value Measurements at December 31, 2016, Using Quoted Prices in Active Markets Other Significant for Identical Observable Unobservable (Dollar amounts in thousands) Fair Value Assets Inputs Inputs Description 12/31/2016 (Level 1) (Level 2) (Level 3) Impaired assets: Commercial and industrial loans $ 815 $ ─ $ ─ $ 815 Residential-1 to 4 family loans 67 ─ ─ 67 Other real estate owned 1,427 ─ ─ 1,427 Total impaired assets measured at fair value $ 2,309 $ ─ $ ─ $ 2,309
Schedule of estimated fair value of financial instruments	The following table provides summary information on the estimated fair value of financial instruments at June 30, 2017: Carrying Fair Fair value measurements (Dollar amounts in thousands) amount value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $21,859 $21,859 $21,859 Interest-bearing time deposits with financial institutions 230 230 $230 Securities available for sale 362,006 362,006 990 361,016 Loans 808,508 811,420 $811,420 Other equity securities 7,567 7,567 7,567 Accrued interest receivable 4,945 4,945 4,945 Financial liabilities: Deposits 1,022,338 1,022,350 897,734 124,616 Federal Home Loan Bank advances 91,000 91,000 91,000 Note payable 4,050 4,050 4,050 Accrued interest payable 261 261 261 Off-balance-sheet liabilities: Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit ─ 1,836 1,836 The following table provides summary information on the estimated fair value of financial instruments at December 31, 2016: Carrying Fair Fair value measurements (Dollar amounts in thousands) amount value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $15,758 $15,758 $15,758 Interest-bearing time deposits with financial institutions 205 205 $ 205 Securities available for sale 360,105 360,105 987 359,118 Loans 782,485 769,661 $ 769,661 Other equity securities 7,206 7,206 7,206 Accrued interest receivable 4,942 4,942 4,942 Financial liabilities: Deposits 1,019,506 1,020,088 905,122 114,966 Federal Home Loan Bank advances 71,000 71,000 71,000 Note payable 4,350 4,350 4,350 Accrued interest payable 246 246 246 Off-balance-sheet liabilities: Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit ─ 1,733 1,733

B. STOCK OPTION PLANS (Detail N

B. STOCK OPTION PLANS (Detail Narratives) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation [Abstract]
Compensation expense for options	$ 103	$ 70	$ 206	$ 158
Intrinsic Value Options Exercised			1,460	908
Intrinsic Value Options Exercisable	5,176	$ 2,999	5,176	$ 2,999
Unrecognized Compensation Expense Nonvested Options	$ 1,181		$ 1,181
Non-vested options weighted average period			3 years 6 months

C. EARNINGS PER SHARE CALCULA22

C. EARNINGS PER SHARE CALCULATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings per share data:
Net earnings	$ 3,351	$ 2,448	$ 6,440	$ 5,015
Average number of shares outstanding	7,342	7,216	7,329	7,194
Effect of dilutive options	$ 243	$ 177	$ 230	$ 196
Average number of shares outstanding used to calculate diluted earnings per share	7,585	7,393	7,559	7,390
Anti-dilutive options not included	0	108	104	81

D. SECURITIES AVAILABLE FOR S23

D. SECURITIES AVAILABLE FOR SALE, Amortized cost and fair values (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Available for sale securities, Amortized Cost	$ 359,830	$ 362,724
Available for sale securities, Unrealized Gains	4,020	2,098
Available for sale securities, Unrealized Losses	(1,844)	(4,717)
Available for sale securities, Fair Value	362,006	360,105
U.S. Treasury securities
Available for sale securities, Amortized Cost	981	977
Available for sale securities, Unrealized Gains	9	10
Available for sale securities, Unrealized Losses	0	0
Available for sale securities, Fair Value	990	987
Obligations of U.S. government agencies
Available for sale securities, Amortized Cost	50,943	60,773
Available for sale securities, Unrealized Gains	122	112
Available for sale securities, Unrealized Losses	(158)	(340)
Available for sale securities, Fair Value	50,907	60,545
Mortgage-backed securities
Available for sale securities, Amortized Cost	113,619	85,709
Available for sale securities, Unrealized Gains	788	397
Available for sale securities, Unrealized Losses	(1,365)	(1,822)
Available for sale securities, Fair Value	113,042	84,284
Asset-backed securities
Available for sale securities, Amortized Cost	2,108
Available for sale securities, Unrealized Gains	2
Available for sale securities, Unrealized Losses	0
Available for sale securities, Fair Value	2,110
Obligations of states and political subdivisions
Available for sale securities, Amortized Cost	143,049	151,988
Available for sale securities, Unrealized Gains	2,905	1,458
Available for sale securities, Unrealized Losses	(254)	(1,828)
Available for sale securities, Fair Value	145,700	151,618
Corporate debt
Available for sale securities, Amortized Cost	49,130	63,277
Available for sale securities, Unrealized Gains	194	121
Available for sale securities, Unrealized Losses	(67)	(727)
Available for sale securities, Fair Value	$ 49,257	$ 62,671

D. SECURITIES AVAILABLE FOR S24

D. SECURITIES AVAILABLE FOR SALE, Analysis of gross unrealized losses (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Less than 12 months, Total Fair Value	$ 114,752	$ 230,558
Less than 12 months, Unrealized Loss	(1,769)	(4,717)
12 months or more, Total Fair Value	5,117	0
12 months or more, Unrealized Loss	(75)	0
Total Fair Value	119,869	230,558
Total Unrealized Loss	(1,844)	(4,717)
Obligations of U.S. government agencies
Less than 12 months, Total Fair Value	29,683	36,828
Less than 12 months, Unrealized Loss	(158)	(340)
12 months or more, Total Fair Value	0	0
12 months or more, Unrealized Loss	0	0
Total Fair Value	29,683	36,828
Total Unrealized Loss	(158)	(340)
Mortgage-backed securities
Less than 12 months, Total Fair Value	55,035	67,990
Less than 12 months, Unrealized Loss	(1,344)	(1,822)
12 months or more, Total Fair Value	1,425	0
12 months or more, Unrealized Loss	(21)	0
Total Fair Value	56,460	67,990
Total Unrealized Loss	(1,365)	(1,822)
Obligations of states and political subdivisions
Less than 12 months, Total Fair Value	17,356	84,728
Less than 12 months, Unrealized Loss	(200)	(1,828)
12 months or more, Total Fair Value	3,692	0
12 months or more, Unrealized Loss	(54)	0
Total Fair Value	21,048	84,728
Total Unrealized Loss	(254)	(1,828)
Corporate debt
Less than 12 months, Total Fair Value	12,678	41,012
Less than 12 months, Unrealized Loss	(67)	(727)
12 months or more, Total Fair Value	0	0
12 months or more, Unrealized Loss	0	0
Total Fair Value	12,678	41,012
Total Unrealized Loss	$ (67)	$ (727)

D. SECURITIES AVAILABLE FOR S25

D. SECURITIES AVAILABLE FOR SALE, Amortized Cost and Carrying Value (Details) $ in Thousands	Jun. 30, 2017USD ($)
SECURITIES AVAILABLE FOR SALE - Summary of Investments Amortized Cost and Carrying Value
Due in one year or less, Amortized Cost	$ 14,804
Due after one through five years, Amortized Cost	167,146
Due after five through ten years, Amortized Cost	113,957
Due after ten years, Amortized Cost	63,923
Equity securities, Amortized Cost	359,830
Due in one year or less, Fair Value	14,837
Due after one through five years, Fair Value	168,557
Due after five through ten years, Fair Value	115,482
Due after ten years, Fair Value	63,130
Equity securities, Fair Value	$ 362,006

D. SECURITIES AVAILABLE FOR S26

D. SECURITIES AVAILABLE FOR SALE (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
D. Securities Available For Sale Details Narrative
Gross realized gains	$ 123	$ 57	$ 151	$ 241
Sell of securities	10,781	8,699	41,382	341,140
Gross realized losses	0	$ 0	0	$ 0
Amortized cost	114,139		114,139
Fair value of pledged as collateral for public deposits	$ 113,634		$ 113,634

E. LOANS, Summary of Loan as fo

E. LOANS, Summary of Loan as follows (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Gross loans	$ 819,695	$ 793,798
Net deferred loan fees	(1,010)	(1,146)
Allowance for loan losses	(10,177)	(10,167)
Net loans	808,508	782,485
Commercial real estate
Gross loans	436,286	421,222
Real estate construction
Gross loans	46,325	43,683
Real Estate Multi family
Gross loans	104,373	105,963
Real Estate 1 to 4 family
Gross loans	166,610	170,523
Commercial and industrial
Gross loans	57,217	48,874
Consumer
Gross loans	8,884	3,533
FNB Bancorp Originated
Gross loans	720,247	683,223
Net deferred loan fees	(1,010)	(1,146)
Allowance for loan losses	(10,177)	(10,167)
Net loans	709,060	671,910
FNB Bancorp Originated | Commercial real estate
Gross loans	369,657	351,261
FNB Bancorp Originated | Real estate construction
Gross loans	46,325	43,683
FNB Bancorp Originated | Real Estate Multi family
Gross loans	90,733	90,763
FNB Bancorp Originated | Real Estate 1 to 4 family
Gross loans	150,546	153,843
FNB Bancorp Originated | Commercial and industrial
Gross loans	54,102	40,140
FNB Bancorp Originated | Consumer
Gross loans	8,884	3,533
PNCI
Gross loans	98,223	109,350
Net deferred loan fees	0	0
Allowance for loan losses	0	0
Net loans	98,223	109,350
PNCI | Commercial real estate
Gross loans	65,404	68,736
PNCI | Real estate construction
Gross loans	0	0
PNCI | Real Estate Multi family
Gross loans	13,640	15,200
PNCI | Real Estate 1 to 4 family
Gross loans	16,064	16,680
PNCI | Commercial and industrial
Gross loans	3,115	8,734
PNCI | Consumer
Gross loans	0	0
PCI
Gross loans	1,225	1,225
Net deferred loan fees	0	0
Allowance for loan losses	0	0
Net loans	1,225	1,225
PCI | Commercial real estate
Gross loans	1,225	1,225
PCI | Real estate construction
Gross loans	0	0
PCI | Real Estate Multi family
Gross loans	0	0
PCI | Real Estate 1 to 4 family
Gross loans	0	0
PCI | Commercial and industrial
Gross loans	0	0
PCI | Consumer
Gross loans	$ 0	$ 0

E. LOANS, Recorded Investment i

E. LOANS, Recorded Investment in Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Commercial Real estate
Ending balance	$ 436,286	$ 421,222	$ 398,290
Ending balance: individually evaluated for impairment	9,136	10,023	10,392
Ending balance: collectively evaluated for impairment	427,150	411,199	387,898
Real Estate Construction
Ending balance	46,325	43,683	29,251
Ending balance: individually evaluated for impairment	1,223	843	2,097
Ending balance: collectively evaluated for impairment	45,102	42,840	27,154
Real Estate Multi family
Ending balance	104,373	105,963	82,637
Ending balance: individually evaluated for impairment	870	0	0
Ending balance: collectively evaluated for impairment	103,503	105,963	82,637
Real Estate 1 to 4 family
Ending balance	166,610	170,523	174,084
Ending balance: individually evaluated for impairment	2,832	3,530	4,832
Ending balance: collectively evaluated for impairment	163,778	166,993	169,252
Commercial and industrial
Ending balance	57,217	48,874	51,366
Ending balance: individually evaluated for impairment	929	1,065	1,571
Ending balance: collectively evaluated for impairment	56,288	47,809	49,795
Consumer
Ending balance	8,884	3,533	1,311
Ending balance: individually evaluated for impairment	0	0	0
Ending balance: collectively evaluated for impairment	8,884	3,533	1,311
Total
Ending balance	819,695	793,798	736,939
Ending balance: individually evaluated for impairment	14,990	15,461	18,892
Ending balance: collectively evaluated for impairment	$ 804,705	$ 778,337	$ 718,047

E. LOANS, Impaired Loans Allowa

E. LOANS, Impaired Loans Allowance (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
With no related allowance, Recorded Investment	$ 9,477	$ 12,402	$ 9,477	$ 12,402	$ 10,157
With no related allowance, Unpaid Principal Balance	10,794	13,630	10,794	13,630	10,667
With no related allowance recorded, Related Allowance			0	0	0
With no related allowance, Average Recorded Investment	9,163	12,518	10,297	12,436	11,594
With no related allowance, Income Recognized	52	220	116	514	794
With an allowance recorded, Recorded Investment	5,513	6,490	5,513	6,490	5,304
With an allowance recorded, Unpaid Principal Balance	5,513	6,725	5,513	6,725	5,304
With an allowance recorded, Related Allowance	563	652	563	652	588
With an allowance recorded, Average Impaired Balance			5,581	6,574	5,970
With an allowance recorded, Income Recognized		56	93	117	247
Recorded Investment	14,990	18,892	14,990	18,892	15,461
Unpaid Principal Balance	16,307	20,355	16,307	20,355	15,971
Related Allowance	563	652	563	652	588
Average Recorded Investment	15,101	19,156	15,878	19,010	17,564
Income Recognized	98	274	209	631	1,041
Commercial real estate
With no related allowance, Recorded Investment	7,666	8,725	7,666	8,725	8,516
With no related allowance, Unpaid Principal Balance	8,789	9,770	8,789	9,770	9,026
With no related allowance recorded, Related Allowance			0	0	0
With no related allowance, Average Recorded Investment	6,467	8,806	7,695	8,722	9,730
With no related allowance, Income Recognized	25	171	57	398	716
With an allowance recorded, Recorded Investment	1,470	1,667	1,470	1,667	1,507
With an allowance recorded, Unpaid Principal Balance	1,470	1,667	1,470	1,667	1,507
With an allowance recorded, Related Allowance	27	74	27	74	50
With an allowance recorded, Average Impaired Balance			1,489	1,679	1,528
With an allowance recorded, Income Recognized		25	41	46	89
Recorded Investment	9,136	10,392	9,136	10,392	10,023
Unpaid Principal Balance	10,259	11,437	10,259	11,437	10,533
Related Allowance	27	74	27	74	50
Average Recorded Investment	7,947	10,485	9,184	10,401	11,258
Income Recognized	46	196	98	444	805
Commercial real estate construction
With no related allowance, Recorded Investment	823	2,097	823	2,097	843
With no related allowance, Unpaid Principal Balance	1,017	2,280	1,017	2,280	843
With no related allowance recorded, Related Allowance			0	0	0
With no related allowance, Average Recorded Investment	829	2,126	833	2,126	857
With no related allowance, Income Recognized	13	26	22	71	0
With an allowance recorded, Recorded Investment	400		400
With an allowance recorded, Unpaid Principal Balance	400		400
With an allowance recorded, Related Allowance	39		39
With an allowance recorded, Average Impaired Balance			400
With an allowance recorded, Income Recognized		0	24
Recorded Investment	1,223	2,097	1,223	2,097	843
Unpaid Principal Balance	1,417	2,280	1,417	2,280	843
Related Allowance	39	0	39	0	0
Average Recorded Investment	1,629	2,126	1,233	2,126	857
Income Recognized	37	26	46	71	53
Real Estate Multi family
With no related allowance, Recorded Investment	870		870
With no related allowance, Unpaid Principal Balance	870		870
With no related allowance recorded, Related Allowance			0
With no related allowance, Average Recorded Investment	1,748	0	874
With no related allowance, Income Recognized	12	0	12
Recorded Investment	870		870
Unpaid Principal Balance	870		870
Related Allowance	0		0
Average Recorded Investment	1,748	0	874
Income Recognized	12	0	12
Real Estate 1 to 4 family
With no related allowance, Recorded Investment	0	1,063	0	1,063	678
With no related allowance, Unpaid Principal Balance	0	1,063	0	1,063	678
With no related allowance recorded, Related Allowance			0	0	0
With no related allowance, Average Recorded Investment	0	1,065	776	1,067	685
With no related allowance, Income Recognized	0	16	21	31	0
With an allowance recorded, Recorded Investment	2,832	3,769	2,832	3,769	2,852
With an allowance recorded, Unpaid Principal Balance	2,832	3,793	2,832	3,793	2,852
With an allowance recorded, Related Allowance	418	471	418	471	442
With an allowance recorded, Average Impaired Balance			2,835	3,772	3,202
With an allowance recorded, Income Recognized		31	28	69	157
Recorded Investment	2,832	4,832	2,832	4,832	3,530
Unpaid Principal Balance	2,832	4,856	2,832	4,856	3,530
Related Allowance	418	471	418	471	442
Average Recorded Investment	2,823	4,837	3,611	4,839	3,887
Income Recognized	0	47	49	100	157
Commercial and industrial
With no related allowance, Recorded Investment	118	517	118	517	120
With no related allowance, Unpaid Principal Balance	118	517	118	517	120
With no related allowance recorded, Related Allowance			0	0	0
With no related allowance, Average Recorded Investment	119	521	119	521	322
With no related allowance, Income Recognized	2	7	4	14	25
With an allowance recorded, Recorded Investment	811	1,054	811	1,054	945
With an allowance recorded, Unpaid Principal Balance	811	1,265	811	1,265	945
With an allowance recorded, Related Allowance	79	107	79	107	96
With an allowance recorded, Average Impaired Balance			857	1,123	1,240
With an allowance recorded, Income Recognized		0	0	2	1
Recorded Investment	929	1,571	929	1,571	1,065
Unpaid Principal Balance	929	1,782	929	1,782	1,065
Related Allowance	79	107	79	107	96
Average Recorded Investment	954	1,708	976	1,644	1,562
Income Recognized	$ 2	$ 7	$ 4	$ 16	$ 26

E. LOANS, Nonaccrual (Details)

E. LOANS, Nonaccrual (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Loans, Nonaccrual Status	$ 7,363	$ 6,647
Commercial real estate
Loans, Nonaccrual Status	5,620	5,553
Real Estate Construction
Loans, Nonaccrual Status	400
Real Estate 1 to 4 family
Loans, Nonaccrual Status	532	149
Commercial and industrial
Loans, Nonaccrual Status	$ 811	$ 945

E. LOANS, Troubled Debt Restruc

E. LOANS, Troubled Debt Restructurings (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Troubled debt restructured loans outstanding, accrual status	$ 6,807	$ 7,947
Troubled debt restructured loans outstanding, nonaccrual status	6,255	5,396
Total modifications	13,062	13,363
Commercial real estate
Troubled debt restructured loans outstanding, accrual status	4,506	4,446
Troubled debt restructured loans outstanding, nonaccrual status	4,982	4,494
Total modifications	9,488	8,960
Real Estate 1 to 4 family
Troubled debt restructured loans outstanding, accrual status	2,301	3,381
Troubled debt restructured loans outstanding, nonaccrual status	462	0
Total modifications	2,763	3,381
Commercial and industrial
Troubled debt restructured loans outstanding, accrual status	0	120
Troubled debt restructured loans outstanding, nonaccrual status	811	902
Total modifications	$ 811	$ 1,022

E. LOANS, Allowance for Credit

E. LOANS, Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Commercial Real estate
Allowance for credit losses
Beginning balance	$ 6,643	$ 6,113	$ 6,392	$ 6,059	$ 6,059
Charge-offs	0	0	0	0	0
Recoveries	2	2	4	4	8
Provision for (recovery of) loan losses	258	91	507	143	325
Ending balance	6,903	6,206	6,903	6,206	6,392
Ending balance: individually evaluated for impairment	27	74	27	74	50
Ending balance: collectively evaluated for impairment	6,876	6,132	6,876	6,132	6,342
Real Estate Construction
Allowance for credit losses
Beginning balance	627	587	617	589	589
Charge-offs	0	0	0	0	0
Recoveries	0	0	0	0	0
Provision for (recovery of) loan losses	(89)	(183)	(79)	(185)	28
Ending balance	538	404	538	404	617
Ending balance: individually evaluated for impairment	39	0	39	0	0
Ending balance: collectively evaluated for impairment	499	404	499	404	617
Real Estate Multi family
Allowance for credit losses
Beginning balance	246	211	389	243	243
Charge-offs	0	0	0	0	0
Recoveries	0	0	0	0	0
Provision for (recovery of) loan losses	116	124	(27)	92	146
Ending balance	362	335	362	335	389
Ending balance: individually evaluated for impairment	0	0	0	0	0
Ending balance: collectively evaluated for impairment	362	335	362	335	389
Real Estate 1 to 4 family
Allowance for credit losses
Beginning balance	1,824	2,149	2,082	2,176	2,176
Charge-offs	0	(12)	0	(12)	(36)
Recoveries	149	7	157	19	53
Provision for (recovery of) loan losses	(437)	117	(703)	78	(111)
Ending balance	1,536	2,261	1,536	2,261	2,082
Ending balance: individually evaluated for impairment	418	471	418	471	442
Ending balance: collectively evaluated for impairment	1,118	1,790	1,118	1,790	1,640
Commercial and industrial
Allowance for credit losses
Beginning balance	654	841	650	853	853
Charge-offs	0	0	(39)	(164)	(164)
Recoveries	22	28	29	82	204
Provision for (recovery of) loan losses	(47)	(70)	(11)	28	(243)
Ending balance	629	799	629	799	650
Ending balance: individually evaluated for impairment	79	107	79	107	96
Ending balance: collectively evaluated for impairment	550	692	550	692	554
Consumer
Allowance for credit losses
Beginning balance	150	42	37	50	50
Charge-offs	0	(5)	(1)	(11)	(18)
Recoveries	0	0	0	0	0
Provision for (recovery of) loan losses	59	(4)	173	(6)	5
Ending balance	209	33	209	33	37
Ending balance: individually evaluated for impairment	0	0	0	0	0
Ending balance: collectively evaluated for impairment	209	33	209	33	37
Total
Allowance for credit losses
Beginning balance	10,144	9,943	10,167	9,970	9,970
Charge-offs	0	(17)	(40)	(187)	(218)
Recoveries	173	37	190	105	265
Provision for (recovery of) loan losses	(140)	75	(140)	150	150
Ending balance	10,177	10,038	10,177	10,038	10,167
Ending balance: individually evaluated for impairment	563	652	563	652	588
Ending balance: collectively evaluated for impairment	$ 9,614	$ 9,386	$ 9,614	$ 9,386	$ 9,579

E. LOANS, Past due loans (Detai

E. LOANS, Past due loans (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Originated
Past Due, Total	$ 2,781	$ 4,168
Current	717,466	679,055
Total Loans	720,247	683,223
Originated | Past Due, 30 - 59 days
Past Due, Total		3,086
Originated | Past Due, 60 - 89 days
Past Due, Total		63
Originated | Past Due, More than 90 days
Past Due, Total		1,019
Originated | Commercial real estate
Past Due, Total	0	837
Current	369,657	350,424
Total Loans	369,657	351,261
Originated | Commercial real estate | Past Due, 30 - 59 days
Past Due, Total	0	835
Originated | Commercial real estate | Past Due, 60 - 89 days
Past Due, Total	0	2
Originated | Commercial real estate | Past Due, More than 90 days
Past Due, Total	0	0
Originated | Real Estate Construction
Past Due, Total	400	645
Current	45,925	43,038
Total Loans	46,325	43,683
Originated | Real Estate Construction | Past Due, 30 - 59 days
Past Due, Total	0	645
Originated | Real Estate Construction | Past Due, 60 - 89 days
Past Due, Total	0	0
Originated | Real Estate Construction | Past Due, More than 90 days
Past Due, Total	400	0
Originated | Real Estate Multi family
Past Due, Total	870	0
Current	89,863	90,763
Total Loans	90,733	90,763
Originated | Real Estate Multi family | Past Due, 30 - 59 days
Past Due, Total	0	0
Originated | Real Estate Multi family | Past Due, 60 - 89 days
Past Due, Total	870	0
Originated | Real Estate Multi family | Past Due, More than 90 days
Past Due, Total	0	0
Originated | Real Estate 1 to 4 family
Past Due, Total	700	1,500
Current	149,846	152,343
Total Loans	150,546	153,843
Originated | Real Estate 1 to 4 family | Past Due, 30 - 59 days
Past Due, Total	168	1,365
Originated | Real Estate 1 to 4 family | Past Due, 60 - 89 days
Past Due, Total	0	61
Originated | Real Estate 1 to 4 family | Past Due, More than 90 days
Past Due, Total	532	74
Originated | Commercial and industrial
Past Due, Total	811	1,186
Current	53,291	38,954
Total Loans	54,102	40,140
Originated | Commercial and industrial | Past Due, 30 - 59 days
Past Due, Total	0	241
Originated | Commercial and industrial | Past Due, 60 - 89 days
Past Due, Total	0	0
Originated | Commercial and industrial | Past Due, More than 90 days
Past Due, Total	811	945
Originated | Consumer
Past Due, Total	0	0
Current	8,884	3,533
Total Loans	8,884	3,533
Originated | Consumer | Past Due, 30 - 59 days
Past Due, Total	0	0
Originated | Consumer | Past Due, 60 - 89 days
Past Due, Total	0	0
Originated | Consumer | Past Due, More than 90 days
Past Due, Total	0	0
Purchased Not credit impaired
Past Due, Total	4,892	4,688
Current		104,662
Total Loans		109,350
Purchased Not credit impaired | Past Due, 30 - 59 days
Past Due, Total		2,154
Purchased Not credit impaired | Past Due, 60 - 89 days
Past Due, Total		1,909
Purchased Not credit impaired | Past Due, More than 90 days
Past Due, Total		625
Purchased Not credit impaired | Commercial real estate
Past Due, Total	4,892	4,328
Current		64,408
Total Loans		68,736
Purchased Not credit impaired | Commercial real estate | Past Due, 30 - 59 days
Past Due, Total	0	1,869
Purchased Not credit impaired | Commercial real estate | Past Due, 60 - 89 days
Past Due, Total	497	1,909
Purchased Not credit impaired | Commercial real estate | Past Due, More than 90 days
Past Due, Total	4,395	550
Purchased Not credit impaired | Real Estate Multi family
Past Due, Total	0	0
Current		15,200
Total Loans		15,200
Purchased Not credit impaired | Real Estate Multi family | Past Due, 30 - 59 days
Past Due, Total	0	0
Purchased Not credit impaired | Real Estate Multi family | Past Due, 60 - 89 days
Past Due, Total	0	0
Purchased Not credit impaired | Real Estate Multi family | Past Due, More than 90 days
Past Due, Total	0	0
Purchased Not credit impaired | Real Estate 1 to 4 family
Past Due, Total	0	75
Current		16,605
Total Loans		16,680
Purchased Not credit impaired | Real Estate 1 to 4 family | Past Due, 30 - 59 days
Past Due, Total	0	0
Purchased Not credit impaired | Real Estate 1 to 4 family | Past Due, 60 - 89 days
Past Due, Total	0	0
Purchased Not credit impaired | Real Estate 1 to 4 family | Past Due, More than 90 days
Past Due, Total	0	75
Purchased Not credit impaired | Commercial and industrial
Past Due, Total	0	285
Current		8,449
Total Loans		8,734
Purchased Not credit impaired | Commercial and industrial | Past Due, 30 - 59 days
Past Due, Total	0	285
Purchased Not credit impaired | Commercial and industrial | Past Due, 60 - 89 days
Past Due, Total	0	0
Purchased Not credit impaired | Commercial and industrial | Past Due, More than 90 days
Past Due, Total	0	0
Purchased Credit impaired
Past Due, Total		0
Current	0	1,225
Total Loans	1,225	1,225
Purchased Credit impaired | Past Due, 30 - 59 days
Past Due, Total		0
Purchased Credit impaired | Past Due, 60 - 89 days
Past Due, Total		0
Purchased Credit impaired | Past Due, More than 90 days
Past Due, Total		0
Purchased Credit impaired | Commercial real estate
Past Due, Total	1,225	0
Current	0	1,225
Total Loans	1,225	1,225
Purchased Credit impaired | Commercial real estate | Past Due, 30 - 59 days
Past Due, Total	0	0
Purchased Credit impaired | Commercial real estate | Past Due, 60 - 89 days
Past Due, Total	0	0
Purchased Credit impaired | Commercial real estate | Past Due, More than 90 days
Past Due, Total	$ 1,225	$ 0

E. LOANS, Credit Quality Indica

E. LOANS, Credit Quality Indicators Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Pass
Commercial real estate	$ 367,254	$ 348,785
Real estate construction	45,102	42,840
Real estate multi-family	90,733	90,763
Real estate 1 to 4 family	150,014	153,769
Commercial and industrial	53,781	39,752
Consumer loans	8,884	3,533
Totals	715,768	679,442
Commercial real estate	57,106	61,705
Real estate construction	0	0
Real estate multi-family	13,640	15,200
Real estate 1 to 4 family	16,064	16,605
Commercial and industrial	3,115	8,644
Total	89,925	102,154
Special mention
Commercial real estate	0	902
Real estate construction	0	0
Real estate multi-family	0	0
Real estate 1 to 4 family	0	0
Commercial and industrial	0	0
Consumer loans	0	0
Totals	0	902
Commercial real estate	882	0
Real estate construction	0
Real estate multi-family	0	0
Real estate 1 to 4 family	0	0
Commercial and industrial	0	0
Total	882	0
Sub Standard
Commercial real estate	2,403	1,574
Real estate construction	1,223	843
Real estate multi-family	0	0
Real estate 1 to 4 family	532	74
Commercial and industrial	321	384
Consumer loans	0	0
Totals	4,479	2,875
Commercial real estate	7,416	7,031
Real estate construction	0
Real estate multi-family	0	0
Real estate 1 to 4 family	0	75
Commercial and industrial	0	90
Total	7,416	7,121
Doubtful
Commercial real estate	0	0
Real estate construction	0	0
Real estate multi-family	0	0
Real estate 1 to 4 family	0	0
Commercial and industrial	0	4
Consumer loans	0	0
Totals	0	4
Commercial real estate	0	0
Real estate construction	0
Real estate multi-family	0	0
Real estate 1 to 4 family	0	0
Commercial and industrial	0	0
Total	0	0
Total loans
Commercial real estate	369,657	351,261
Real estate construction	46,325	43,683
Real estate multi-family	90,733	90,763
Real estate 1 to 4 family	150,546	153,843
Commercial and industrial	54,102	40,140
Consumer loans	8,884	3,533
Totals	720,247	683,223
Commercial real estate	65,404	68,736
Real estate construction	0
Real estate multi-family	13,640	15,200
Real estate 1 to 4 family	16,064	16,680
Commercial and industrial	3,115	8,734
Total	98,223	109,350
Commercial real estate	1,225	1,225
Total	$ 1,225	$ 1,225

E. LOANS, (Details Narrative)

E. LOANS, (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
E. Loans Details Narrative
Nonaccrual loans	$ 7,363		$ 7,363		$ 6,647
Interest income on impaired loans recognized	98	$ 274	209	$ 631	1,041
Interest on impaired loans not collected	203	143	$ 408	$ 275
Cumulative amount of unpaid interest on impaired loans	$ 991	$ 3,680			$ 3,973

F. BORROWINGS (Details)

F. BORROWINGS (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Amount Outstanding	$ 91,000	$ 71,000
FHLB Overnight Advance
Maturity Date		Jan. 3, 2017
Interest Rate		0.61%
Amount Outstanding		$ 10,000
FHLB Term Advance
Maturity Date	Jul. 14, 2017	Jan. 5, 2017
Interest Rate	1.15%	0.55%
Amount Outstanding	$ 20,000	$ 7,000
FHLB Term Advance
Maturity Date	Jul. 17, 2017	Jan. 9, 2017
Interest Rate	1.15%	0.49%
Amount Outstanding	$ 18,000	$ 7,000
FHLB Term Advance
Maturity Date	Jul. 18, 2017	Jan. 27, 2017
Interest Rate	0.98%	0.63%
Amount Outstanding	$ 10,000	$ 11,000
FHLB Term Advance
Maturity Date	Jul. 28, 2017	Jan. 30, 2017
Interest Rate	1.15%	0.63%
Amount Outstanding	$ 15,000	$ 6,000
FHLB Term Advance
Maturity Date	Aug. 28, 2017	Jan. 30, 2017
Interest Rate	1.18%	0.61%
Amount Outstanding	$ 8,000	$ 10,000
FHLB Term Advance
Maturity Date	Aug. 30, 2017	Feb. 28, 2017
Interest Rate	11.70%	0.67%
Amount Outstanding	$ 20,000	$ 20,000

G. FAIR VALUE MEASUREMENT, Asse

G. FAIR VALUE MEASUREMENT, Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
U. S. Treasury securities	$ 990	$ 987
Obligations of U.S. Government agencies	50,907	60,545
Mortgage-backed securities	113,042	84,284
Asset-back securities	2,110	0
Obligations of states and political subdivisions	145,700	151,618
Corporate debt	49,257	62,671
Total assets measured at fair value	362,006	360,105
Quoted Prices in Active Markets for Identical Assets (Level 1)
U. S. Treasury securities	990	987
Obligations of U.S. Government agencies	0	0
Mortgage-backed securities	0	0
Asset-back securities	0	0
Obligations of states and political subdivisions	0	0
Corporate debt	0	0
Total assets measured at fair value	990	987
Other Observable Inputs (Level 2)
U. S. Treasury securities	0	0
Obligations of U.S. Government agencies	50,907	60,545
Mortgage-backed securities	113,042	84,284
Asset-back securities	2,110	0
Obligations of states and political subdivisions	145,700	151,618
Corporate debt	49,257	62,671
Total assets measured at fair value	361,016	359,118
Significant Unobservable Inputs(Level 3)
U. S. Treasury securities	0	0
Obligations of U.S. Government agencies	0	0
Mortgage-backed securities	0	0
Asset-back securities	0	0
Obligations of states and political subdivisions	0	0
Corporate debt	0	0
Total assets measured at fair value	$ 0	$ 0

G. FAIR VALUE MEASUREMENT, Nonr

G. FAIR VALUE MEASUREMENT, Nonrecurring basis (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value
Residential- 1 to 4 family	$ 462	$ 67
Commercial and industrial loans	811	815
Other real estate owned	1,459	1,427
Total impaired assets measured at fair value	2,732	2,309
Quoted Prices in Active Markets for Identical Assets (Level 1)
Residential- 1 to 4 family	0	0
Commercial and industrial loans	0	0
Other real estate owned	0	0
Total impaired assets measured at fair value	0	0
Other Observable Inputs (Level 2)
Residential- 1 to 4 family	0	0
Commercial and industrial loans	0	0
Other real estate owned	0	0
Total impaired assets measured at fair value	0	0
Significant Unobservable Inputs(Level 3)
Residential- 1 to 4 family	462	67
Commercial and industrial loans	811	815
Other real estate owned	1,459	1,427
Total impaired assets measured at fair value	$ 2,732	$ 2,309

G. FAIR VALUE MEASUREMENT, Fina

G. FAIR VALUE MEASUREMENT, Financial instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Financial assets:
Cash and cash equivalents	$ 21,859	$ 15,758	$ 20,564	$ 12,314
Interest-bearing time deposits with financial Institutions	230	205
Other equity securities	362,006
Accrued interest receivable	4,945	4,942
Financial liabilities:
Deposits	1,022,338	1,019,506
Note payable	4,050	4,350
Carrying Amount
Financial assets:
Cash and cash equivalents	21,859	15,758
Interest-bearing time deposits with financial Institutions	230	205
Securities available for sale	362,006	360,105
Loans	808,508	782,485
Other equity securities	7,567	7,206
Accrued interest receivable	4,945	4,942
Financial liabilities:
Deposits	1,022,338	1,019,506
Federal Home Loan Bank advances	91,000	71,000
Note payable	4,050	4,200
Accrued interest payable	261	246
Off-balance-sheet liabilities:
Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit	0	0
Fair Value
Financial assets:
Cash and cash equivalents	21,859	15,758
Interest-bearing time deposits with financial Institutions	230	205
Securities available for sale	362,006	360,105
Loans	811,420	769,661
Other equity securities	7,567	7,206
Accrued interest receivable	4,945	4,942
Financial liabilities:
Deposits	1,022,350	1,020,088
Federal Home Loan Bank advances	91,000	71,000
Note payable	4,050	4,200
Accrued interest payable	261	246
Off-balance-sheet liabilities:
Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit	1,836	1,733
Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets:
Cash and cash equivalents	21,859	15,758
Interest-bearing time deposits with financial Institutions	0	0
Securities available for sale	990	987
Loans	0	0
Other equity securities	0	0
Accrued interest receivable	4,945	4,942
Financial liabilities:
Deposits	897,734	951,743
Federal Home Loan Bank advances	0	0
Note payable	0	0
Accrued interest payable	261	246
Off-balance-sheet liabilities:
Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit	0	0
Other Observable Inputs (Level 2)
Financial assets:
Cash and cash equivalents	0	0
Interest-bearing time deposits with financial Institutions	230	205
Securities available for sale	361,016	359,118
Loans	0	0
Other equity securities	0	0
Accrued interest receivable	0	0
Financial liabilities:
Deposits	124,616	68,345
Federal Home Loan Bank advances	91,000	71,000
Note payable	4,050	4,200
Accrued interest payable	0	0
Off-balance-sheet liabilities:
Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit	0	0
Significant Unobservable Inputs(Level 3)
Financial assets:
Cash and cash equivalents	0	0
Interest-bearing time deposits with financial Institutions	0	0
Securities available for sale	0	0
Loans	811,420	769,661
Other equity securities	7,567	7,206
Accrued interest receivable	0	0
Financial liabilities:
Deposits	0	0
Federal Home Loan Bank advances	0	0
Note payable	0	0
Accrued interest payable	0	0
Off-balance-sheet liabilities:
Undisbursed loan commitments, lines of credit, standby letters of credit and Mastercard lines of credit	$ 1,836	$ 1,733

G. FAIR VALUE MEASUREMENT (Deta

G. FAIR VALUE MEASUREMENT (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
FAIR VALUE MEASUREMENT TABLES
Nonaccrual loans	$ 7,363	$ 6,647

H. INVESTMENT IN LOW INCOME H41

H. INVESTMENT IN LOW INCOME HOUSING (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
H. Investment In Low Income Housing Details Narrative
Cost method net investment in low income housing projects	$ 1,597		$ 1,597		$ 1,825
Federal income tax credits due to investment	$ 64	$ 65	$ 128	$ 130