Paragon Commercial Inactive 10-Q10 Aug 162016 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2016	Aug. 05, 2016
Document And Entity Information
Entity Registrant Name	Paragon Commercial CORP
Entity Central Index Key	1,414,374
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		5,451,336
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Cash and due from banks:
Interest-earning	$ 73,448	$ 30,993
Noninterest-earning	26,667	24,537
Investment securities - available-for-sale, at fair value	186,323	168,896
Federal Home Loan Bank stock, at cost	8,613	8,061
Loans - net of unearned income and deferred fees	1,105,344	1,016,156
Allowance for loan losses	(7,986)	(7,641)
Net loans	1,097,358	1,008,515
Accrued interest receivable	4,092	3,795
Bank premises and equipment, net	16,124	16,433
Bank owned life insurance	28,723	28,274
Other real estate	5,183	5,453
Deferred tax assets	3,264	4,118
Other assets	4,538	6,836
Total assets	1,454,333	1,305,911
Deposits:
Noninterest-bearing demand	179,070	158,974
Interest-bearing checking and money market	654,954	504,092
Time deposits	266,177	319,781
Total deposits	1,100,201	982,847
Repurchase agreements and federal funds purchased	22,690	30,580
Federal Home Loan Bank advances	175,000	165,000
Other borrowings	0	4,800
Subordinated debentures	18,558	18,558
Other liabilities	6,175	6,468
Total liabilities	1,322,624	1,208,253
Stockholders' equity:
Common stock, $0.008 par value; 20,000,000 shares authorized; 5,449,866 and 4,581,334 issued and outstanding as of June 30, 2016 and December 31, 2015	43	37
Additional paid-in-capital	79,845	53,147
Accumulated other comprehensive income	148	(886)
Retained earnings	51,673	45,360
Total stockholders' equity	131,709	97,658
Total liabilities and stockholders' equity	$ 1,454,333	$ 1,305,911

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Stockholders' equity:
Common stock, par value (in dollars per share)	$ .008	$ .008
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	5,449,866	4,581,334
Common stock, shares outstanding (in shares)	5,449,866	4,581,334

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest income:
Loans and fees on loans	$ 11,840	$ 10,899	$ 23,030	$ 20,966
Investment securities and FHLB stock	1,369	1,072	2,588	2,299
Federal funds and other	63	40	121	66
Total Interest income	13,272	12,011	25,739	23,331
Interest expense:
Interest-bearing checking and money market	836	645	1,693	1,260
Time deposits	556	846	1,123	1,810
Borrowings and repurchase agreements	579	307	1,071	596
Total interest expense	1,971	1,798	3,887	3,666
Net interest income	11,301	10,213	21,852	19,665
Provision for loan losses	0	179	0	750
Net interest income after provision for loan losses	11,301	10,034	21,852	18,915
Non-interest income:
Increase in cash surrender value of bank owned life insurance	226	206	449	407
Net gain on sale of securities	0	0	85	423
Service charges and fees	56	54	114	105
Mortgage origination fees and gains on sale of loans	33	75	65	112
Net loss on sale or impairment of foreclosed assets	(45)	(126)	(257)	(463)
Other fees and income	111	115	191	224
Total non-interest income	381	324	647	808
Non-interest expense:
Salaries and employee benefits	3,742	3,117	7,609	6,336
Furniture, equipment and software costs	502	451	994	901
Occupancy	342	488	686	837
Data processing	279	299	575	579
Director related fees and expenses	219	211	471	417
Professional fees	182	318	419	455
FDIC and other supervisory assessments	217	252	412	479
Advertising and public relations	234	176	422	546
Unreimbursed loan costs and foreclosure related expenses	142	298	211	469
Other	629	790	1,289	1,261
Total non-interest expense	6,488	6,400	13,088	12,280
Income before income taxes	5,194	3,958	9,411	7,443
Income tax expense	1,719	1,308	3,098	2,485
Net income	$ 3,475	$ 2,650	$ 6,313	$ 4,958
Net income per common share
Basic	$ 0.76	$ 0.59	$ 1.38	$ 1.1
Diluted	$ 0.75	$ 0.59	$ 1.37	$ 1.1

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Consolidated Statements Of Comprehensive Income
Net income	$ 3,475	$ 2,650	$ 6,313	$ 4,958
Securities available for sale:
Unrealized gains (losses)	2,920	(2,606)	3,914	(1,242)
Reclassification of gains recognized in net income	0	0	(85)	(423)
Other comprehensive income (loss)	2,920	(2,606)	3,829	(1,665)
Deferred tax expense (benefit)	1,116	(998)	1,462	(637)
Other comprehensive income (loss), net of tax	1,804	(1,608)	2,367	(1,028)
Cash flow hedges:
Unrealized losses	(575)	(79)	(2,136)	(1,270)
Other comprehensive loss	(217)	(30)	(803)	(486)
Deferred tax benefit	(217)	(30)	(803)	(486)
Other comprehensive loss, net of tax	(358)	(49)	(1,333)	(784)
Total other comprehensive income (loss), net of tax	1,446	(1,657)	1,034	(1,812)
Total comprehensive income	$ 4,921	$ 993	$ 7,347	$ 3,146

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
Beginning Balance, Shares at Dec. 31, 2014	4,530,000
Beginning Balance, Amount at Dec. 31, 2014	$ 36	$ 52,358	$ 1,142	$ 34,126	$ 87,662
Net income				4,958	4,958
Unrealized gain on securities, net of tax expense			(1,028)		(1,028)
Unrealized loss on cash flow hedges, net of tax benefit			(784)		(784)
Restricted stock expense recognized		172			172
Issuance of stock for public offering, Amount					0
Issuance of restricted stock awards, Shares	14,156
Issuance of restricted stock awards, Amount	$ 0				0
Issuance of stock for employee stock purchase plan, Shares	8,985
Issuance of stock for employee stock purchase plan, Amount		164			164
Ending Balance, Shares at Jun. 30, 2015	4,553,141
Ending Balance, Amount at Jun. 30, 2015	$ 36	52,694	(670)	39,084	91,144
Beginning Balance, Shares at Dec. 31, 2015	4,581,334
Beginning Balance, Amount at Dec. 31, 2015	$ 37	53,147	(886)	45,360	97,658
Net income				6,313	6,313
Unrealized gain on securities, net of tax expense			2,367		2,367
Unrealized loss on cash flow hedges, net of tax benefit			(1,333)		(1,333)
Restricted stock expense recognized		205			205
Issuance of stock for public offering, Shares	845,588
Issuance of stock for public offering, Amount	$ 6	26,388			(26,394)
Issuance of restricted stock awards, Shares	19,145
Issuance of restricted stock awards, Amount	$ 0				0
Issuance of stock for employee stock purchase plan, Shares	3,799
Issuance of stock for employee stock purchase plan, Amount	$ 0	105			105
Ending Balance, Shares at Jun. 30, 2016	5,449,866
Ending Balance, Amount at Jun. 30, 2016	$ 43	$ 79,845	$ 148	$ 51,673	$ 131,709

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 6,313	$ 4,958
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	711	688
Provision for loan losses	0	750
Net loss on sale or impairment of foreclosed assets	257	463
Increase in cash surrender value of life insurance	(449)	(406)
Accretion of premiums/discounts on securities, net	567	414
Net gain on sale of securities	(85)	(423)
Loss on sale of property and equipment	0	1
Deferred tax expense	196	522
Restricted stock expense	205	172
Changes in assets and liabilities:
Accrued interest receivable and other assets	(135)	(238)
Accrued interest payable and other liabilities	(293)	640
Net cash provided by operating activities	7,287	7,541
Cash flows from investing activities:
Net decrease in Federal Home Loan Bank stock	(552)	(1,693)
Purchase of securities available for sale	(39,434)	(23,081)
Proceeds from maturities and paydowns of securities available for sale	9,639	8,272
Proceeds from sales of securities available for sale	15,714	28,779
Net increase in loans	(88,843)	(126,390)
Proceeds from sale of foreclosed real estate	13	4,221
Additions to bank premises and equipment	(402)	(229)
Other investing activites, net	0	(72)
Net cash used in investing activities	(103,865)	(110,193)
Cash flows from financing activities:
Net increase in demand and money market deposit accounts	170,958	157,705
Net decrease in time deposits	(53,604)	(16,510)
Net decrease in repurchase agreements	(7,890)	(936)
Net increase in FHLB and other borrowings	5,200	3,783
Net proceeds from sale of common stock	26,394	0
Issuance of common stock for employee stock purchase plan	105	164
Net cash provided by financing activities	141,163	144,206
Net change in cash and cash equivalents	44,585	41,554
Cash and cash equivalents at beginning of year	55,530	36,395
Cash and cash equivalents at end of year	$ 100,115	$ 77,949

1. ORGANIZATION AND OPERATIONS

1. ORGANIZATION AND OPERATIONS	6 Months Ended
1. ORGANIZATION AND OPERATIONS	Jun. 30, 2016
Organization And Operations
ORGANIZATION AND OPERATIONS	On April 2, 2001, Paragon Commercial Corporation (the Company) was incorporated for the purpose of serving as a holding company for Paragon Commercial Bank (the Bank). The Company currently has no operations and conducts no business on its own other than owning the Bank and two statutory business trusts, Paragon Commercial Capital Trust I and II. The Bank was incorporated on May 4, 1999 and began banking operations on May 10, 1999. The Bank is engaged in general commercial banking in Wake and Mecklenburg Counties, NC, operating under the banking laws of North Carolina and the rules and regulations of the Federal Deposit Insurance Corporation and the North Carolina Commissioner of Banks. The Bank undergoes periodic examinations by those regulatory authorities. In addition, the Company undergoes periodic examinations by the Federal Reserve. The Company formed Paragon Commercial Capital Trust I (Trust I) during 2004 in order to facilitate the issuance of trust preferred securities. Trust I is a statutory business trust formed under the laws of the state of Delaware, of which all common securities are owned by the Company. The Company formed Paragon Commercial Capital Trust II (Trust II) during 2006 to serve the same purpose. The junior subordinated debentures issued by the Company to the trusts are classified as debt and the Companys equity interest in the trusts are included in other assets. The trust preferred securities presently qualify as Tier 1 regulatory capital and are reported in Federal Reserve regulatory reports as minority interests in unconsolidated subsidiaries. The junior subordinated debentures do not qualify as Tier 1 regulatory capital. In June 2016, the Company completed its initial public offering in which it issued and sold 845,588 shares of common stock at a public offering price of $34.00 per share. The Company received net proceeds of $26.4 million after deducting underwriting discounts and commissions of approximately $1.7 million and other offering expenses of approximately $615,000. In addition to its headquarters and operations center in Raleigh, North Carolina, the Bank has locations in Charlotte and Cary, North Carolina.

2. BASIS OF PRESENTATION

2. BASIS OF PRESENTATION	6 Months Ended
2. BASIS OF PRESENTATION	Jun. 30, 2016
Basis Of Presentation
BASIS OF PRESENTATION	The accompanying unaudited consolidated financial statements include the accounts and transactions of Paragon Commercial Corporation and Paragon Commercial Bank. All significant intercompany transactions and balances are eliminated in consolidation. Paragon Commercial Capital Trusts I and II are not consolidated subsidiaries of the Company. The consolidated financial information included herein as of and for the three and six month periods ended June 30, 2016 and 2015 is unaudited. Accordingly, it does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. However, such information reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the financial condition and results of operations for the interim periods. The December 31, 2015 consolidated balance sheet was derived from the Companys December 31, 2015 audited consolidated financial statements as of and for the periods ended December 31, 2015. These unaudited interim consolidated financial statements as of and for the three and six month periods ended June 30, 2016 and 2015 should be read in conjunction with the audited consolidated financial statements as of and for the periods ended December 31, 2015. The accounting policies followed by the Company and other relevant information is contained in the notes to the audited consolidated financial statements as of and for the periods ended December 31, 2015. Earnings Per Common Share Basic and diluted net income per common share have been computed by dividing net income for each period by the weighted average number of shares of common stock outstanding during each period. Diluted net income per common share reflects the potential dilution that could occur if outstanding stock options were exercised. Basic and diluted net income per common share have been computed based upon net income as presented in the accompanying unaudited consolidated statements of income divided by the weighted average number of common shares outstanding or assumed to be outstanding as summarized below: Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Shares used in the computation of earnings per share: Weighted average number of shares outstanding - basic 4,581,193 4,500,695 4,563,349 4,492,912 Dilutive effect of restricted shares 43,133 32,877 44,184 35,641 Weighted average number of shares outstanding - diluted 4,624,326 4,533,572 4,607,533 4,528,553 Weighted average anti-dilutive stock options and unvested restricted shares excluded from the computation of diluted earnings per share are as follows: Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Anti-dilutive stock options 80,500 91,000 80,500 91,000 Unvested restricted shares 45,338 45,986 45,338 45,986 Comprehensive Income The Company reports as comprehensive income all changes in stockholders' equity during the year from sources other than stockholders. Other comprehensive income refers to all components (revenues, expenses, gains, and losses) of comprehensive income that are excluded from net income. The Companys only two components of other comprehensive income are unrealized gains and losses on investment securities available-for-sale, net of income taxes and unrealized gains and losses on cash flow hedges, net of income taxes. Information concerning the Companys accumulated other comprehensive income for the six month ended June 30, 2016 and for the year ended December 31, 2015, respectively is as follows: June 30, December 31, 2016 2015 (In thousands) Unrealized gains on securities available-for-sale $ 5,207 $ 1,378 Deferred tax expense (1,992 ) (530 ) Other comprehensive income, net of tax 3,215 848 Unrealized losses on cash flow hedges (4,915 ) (2,779 ) Deferred tax benefit 1,848 1,045 Other comprehensive loss, net of tax (3,067 ) (1,734 ) Total other comprehensive income (loss) $ 148 $ (886 ) The accumulated balances related to each component of other comprehensive income (loss) are as follows: Unpaid Unrealized Unrealized Gains and Gains and Losses on Losses on Available-for Cash Flow (in thousands Sale Securities Hedges Total Balance as of December 31, 2015 $ 848 $ (1,734 ) $ (886 ) Other comprehensive income (loss) before reclassification 2,452 (1,333 ) 1,119 Amounts reclassified from accumulated other comprehensive income (85 ) - (85 ) Net current-period other comprehensive income (loss) 2,367 (1,333 ) 1,034 Balance as of June 30, 2016 $ 3,215 $ (3,067 ) $ 148 Balance as of December 31, 2014 $ 1,645 $ (503 ) $ 1,142 Other comprehensive loss before reclassification (605 ) (784 ) (1,389 ) Amounts reclassified from accumulated other comprehensive income (423 ) - (423 ) Net current-period other comprehensive loss (1,028 ) (784 ) (1,812 ) Balance as of June 30, 2015 $ 617 $ (1,287 ) $ (670 ) Recent Accounting Pronouncements In February 2015, the Financial Accounting Standards Board (FASB) issued guidance which amends the consolidation requirements and significantly changes the consolidation analysis required under U.S. generally accepted accounting principles (GAAP). Although the amendments are expected to result in the deconsolidation of many entities, the Company will need to reevaluate all its previous consolidation conclusions. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted (including during an interim period), provided that the guidance is applied as of the beginning of the annual period containing the adoption date. The Company does not expect these amendments to have a material effect on its financial statements. In April 2015, the FASB issued guidance that will require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This update affects disclosures related to debt issuance costs but does not affect existing recognition and measurement guidance for these items. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements. In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a full retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements In August 2015, the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a full retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements. In August 2015, the FASB issued amendments to the Interest topic of the Accounting Standards Codification (the ASC) to clarify the SEC staffs position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. The amendments were effective upon issuance. The Company does not expect these amendments to have a material effect on its financial statements. In January 2016, the FASB amended the Financial Instruments topic of the ASC to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company will apply the guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values will be applied prospectively to equity investments that exist as of the date of adoption of the amendments. The Company does not expect these amendments to have a material effect on its financial statements. In February 2016, the FASB amended the Leases topic of the Accounting Standards Codification to revise certain aspects of recognition, measurement, presentation, and disclosure of leasing transactions. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect that implementation of the new standard will have on its financial statements. In March 2016, the FASB amended the Derivatives and Hedging topic of the Accounting Standards Codification to clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amendments will be effective for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company will apply the guidance prospectively to each period presented. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The amendments will be effective for the Company for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not expect these amendments to have a material effect on its financial statements. In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The amendments will be effective for the Company for reporting periods beginning after December 15, 2019. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations, and cash flows. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Companys financial position, results of operations or cash flows. Reclassifications Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation. The reclassifications had no effect on total assets, net income or stockholders' equity as previously reported.

3. INVESTMENT SECURITIES

3. INVESTMENT SECURITIES	6 Months Ended
3. INVESTMENT SECURITIES	Jun. 30, 2016
Investments, Debt and Equity Securities [Abstract]
INVESTMENT SECURITIES	The following is a summary of the securities portfolio by major classification at June 30, 2016 and December 31, 2015. Gross Gross Estimated Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value June 30, 2016 Available-for-sale: U.S. Agency obligations $ 18,454 $ 567 $ - $ 19,021 Collateralized mortgage obligations 49,277 910 - 50,187 Mortgage-backed securities 49,290 869 - 50,159 Municipal bonds 61,419 2,948 - 64,367 Other 2,676 9 96 2,589 $ 181,116 $ 5,303 $ 96 $ 186,323 December 31, 2015 Available-for-sale: U.S. Agency obligations $ 19,778 $ 196 $ 73 $ 19,901 Collateralized mortgage obligations 60,826 321 206 60,941 Mortgage-backed securities 31,074 326 90 31,310 Municipal bonds 53,163 1,346 75 54,434 Other 2,677 10 377 2,310 $ 167,518 $ 2,199 $ 821 $ 168,896 The fair values of securities available-for-sale at June 30, 2016 by contractual maturity are shown below. Actual expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. After One After Five No Stated Within Within Within After Maturity (In thousands) 1 Year Five Years Ten Years Ten Years Date Total U.S. Agency obligations $ - $ - $ - $ 19,021 $ - $ 19,021 Collateralized mortgage obligations - - - 50,187 - 50,187 Mortgage-backed securities - - 14,229 35,930 - 50,159 Municipal bonds - 1,829 5,801 56,737 - 64,367 Other - - - 500 2,089 2,589 $ - $ 1,829 $ 20,030 $ 162,375 $ 2,089 $ 186,323 The following tables show gross unrealized losses and fair values of investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015. Less Than 12 Months 12 Months or Greater Total (In thousands) Unrealized Unrealized Unrealized June 30, 2016 Fair Value Losses Fair Value Losses Fair Value Losses Securities available-for-sale: U.S. Agency obligations $ - $ - $ - $ - $ - $ - Collateralized mortgage obligations - - - - - - Mortgage-backed securities - - - - - - Municipal bonds - - - - - - Other - - 894 96 894 96 Total temporarily impaired securities $ - $ - $ 894 $ 96 $ 894 $ 96 Less Than 12 Months 12 Months or Greater Total (In thousands) Unrealized Unrealized Unrealized December 31, 2015 Fair Value Losses Fair Value Losses Fair Value Losses Securities available-for-sale: U.S. Agency obligations $ 3,007 $ - $ 3,178 $ 73 $ 6,185 $ 73 Collateralized mortgage obligations 26,086 159 2,983 47 29,069 206 Mortgage-backed securities 18,575 90 - - 18,575 90 Municipal bonds 3,896 6 7,990 69 11,886 75 Other 1,774 377 - - 1,774 377 Total temporarily impaired securities $ 53,338 $ 632 $ 14,151 $ 189 $ 67,489 $ 821 The table below summarizes the number of investment securities in an unrealized loss position: June 30, December 31, Available-for-sale: 2016 2015 U.S. Agency obligations - 3 Collateralized mortgage obligations - 7 Mortgage-backed securities - 6 Municipal bonds - 22 Other 1 1 1 39 The unrealized losses primarily relate to debt securities that have incurred fair value reductions due to higher market interest rates since the securities were purchased. The unrealized losses are not likely to reverse unless and until market interest rates decline to the levels that existed when the securities were purchased. Since none of the unrealized losses on the debt securities in 2016 or 2015 relate to the marketability of the securities or the issuers ability to honor redemption obligations and since management has the intent to hold these securities until maturity and believes it is more likely than not that the Company will not have to sell any such securities before a recovery of cost given the current liquidity position, none of those debt securities are deemed to be other than temporarily impaired. The following table summarizes securities gains for the periods presented: Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Gross gains on sales of securities available for sale $ - $ - $ 136 $ 427 Gross losses on sales of securities available for sale - - (51 ) (4 ) Total securities gains $ - $ - $ 85 $ 423 Securities with a fair value of $52.8 million and $78.4 million were pledged as of June 30, 2016 and December 31, 2015, respectively, to secure repurchase agreements, lines of credit and other borrowings.

4. LOANS AND ALLOWANCE FOR LOAN

4. LOANS AND ALLOWANCE FOR LOAN LOSSES	6 Months Ended
4. LOANS AND ALLOWANCE FOR LOAN LOSSES	Jun. 30, 2016
Receivables [Abstract]
3. LOANS AND ALLOWANCE FOR LOAN LOSSES	Following is a summary of loans at June 30, 2016 and December 31, 2015: June 30, December 31, (In thousands) 2016 2015 Construction and land development $ 63,819 $ 64,702 Commercial real estate: Non-farm, non-residential 341,477 307,722 Owner occupied 158,612 147,017 Multifamily, nonresidential and junior liens 93,945 79,170 Total commercial real estate 594,034 533,909 Consumer real estate: Home equity lines 85,883 78,943 Secured by 1-4 family residential, secured by first deeds of trust 186,054 167,053 Secured by 1-4 family residential, secured by second deeds of trust 3,656 3,711 Total consumer real estate 275,593 249,707 Commercial and industrial loans (except those secured by real estate) 157,640 153,669 Consumer and other 13,672 13,539 Total loans 1,104,758 1,015,526 Deferred loan (fees) costs 586 630 Allowance for loan losses (7,986 ) (7,641 ) Net loans $ 1,097,358 $ 1,008,515 Loans are primarily made in the Research Triangle and Charlotte areas of North Carolina. Real estate loans can be affected by the condition of the local real estate market. Commercial and installment loans can be affected by the local economic conditions. Changes in the allowance for loan losses for the three and six months ended June 30, 2016 and 2015 were as follows: Commercial & Industrial Construction Consumer Loans Not and Land Commercial Real Secured By Consumer Total (In thousands) Development Real Estate Estate Real Estate & Other Loans Three months ended June 30, 2016 Beginning balance $ 523 $ 3,072 $ 1,972 $ 1,790 $ 574 $ 7,931 Provision for loan losses (125 ) 187 (88 ) 492 (466 ) - Loans charged off - - - - (1 ) (1 ) Recoveries 8 19 3 25 1 56 Net (chargeoffs) recoveries 8 19 3 25 - 55 Ending balance $ 406 $ 3,278 $ 1,887 $ 2,307 $ 108 $ 7,986 Six months ended June 30, 2016 Beginning balance $ 509 $ 3,156 $ 2,046 $ 1,786 $ 144 $ 7,641 Provision for loan losses (340 ) 66 (165 ) 485 (46 ) - Loans charged off - - - - (1 ) (1 ) Recoveries 237 56 6 36 11 346 Net (chargeoffs) recoveries 237 56 6 36 10 345 Ending balance $ 406 $ 3,278 $ 1,887 $ 2,307 $ 108 $ 7,986 Three months ended June 30, 2015 Beginning balance $ 696 $ 2,003 $ 2,191 $ 2,602 $ 60 $ 7,552 Provision for loan losses 93 257 46 (214 ) (3 ) 179 Loans charged off - (276 ) - - - (276 ) Recoveries 12 102 - - - 114 Net (chargeoffs) recoveries 12 (174 ) - - - (162 ) Ending balance $ 801 $ 2,086 $ 2,237 $ 2,388 $ 57 $ 7,569 Six months ended June 30, 2015 Beginning balance $ 960 $ 2,510 $ 1,594 $ 1,662 $ 143 $ 6,869 Provision for loan losses (212 ) (321 ) 643 726 (86 ) 750 Loans charged off - (276 ) - - - (276 ) Recoveries 53 173 - - - 226 Net (chargeoffs) recoveries 53 (103 ) - - - (50 ) Ending balance $ 801 $ 2,086 $ 2,237 $ 2,388 $ 57 $ 7,569 The balance in the allowance for loan losses and the recorded investment in loans by portfolio segment are based on the impairment method as of June 30, 2016 and December 31, 2015 and were as follows: Commercial & Industrial Construction Consumer Loans Not and Land Commercial Real Secured By Consumer Total (in thousands) Development Real Estate Estate Real Estate & Other Loans June 30, 2016 Allowance for Loan Losses: Individually evaluated for impairment $ 3 $ 10 $ 110 $ 1,120 $ - $ 1,243 Collectively evaluated for impairment 403 3,268 1,777 1,187 108 6,743 Total ending allowance $ 406 $ 3,278 $ 1,887 $ 2,307 $ 108 $ 7,986 Loans: Individually evaluated for impairment $ 132 $ 881 $ 403 $ 2,989 $ - $ 4,405 Collectively evaluated for impairment 63,687 593,153 275,190 154,651 13,672 1,100,353 Total ending loans $ 63,819 $ 594,034 $ 275,593 $ 157,640 $ 13,672 $ 1,104,758 (in thousands) December 31, 2015 Allowance for Loan Losses: Individually evaluated for impairment $ 4 $ 72 $ 115 $ 297 $ 21 $ 509 Collectively evaluated for impairment 505 3,084 1,931 1,489 123 7,132 Total ending allowance $ 509 $ 3,156 $ 2,046 $ 1,786 $ 144 $ 7,641 Loans: Individually evaluated for impairment $ 238 $ 2,619 $ 411 $ 602 $ 21 $ 3,891 Collectively evaluated for impairment 64,464 531,290 249,296 153,067 13,518 1,011,635 Total ending loans $ 64,702 $ 533,909 $ 249,707 $ 153,669 $ 13,539 $ 1,015,526 Loans are charged down or off as soon as the Company determines that the full principal balance due under any loan becomes uncollectible. The amount of the charge is determined as follows: If unsecured, the loan must be charged off in full. If secured, the outstanding principal balance of the loan should be charged down to the net realizable value of the collateral. Loans are considered uncollectible when: No regularly scheduled payment has been made within four months unless fully secured and in the process of collection. The collateral value is insufficient to cover the outstanding indebtedness and it is unlikely the borrower will have the ability to pay the debt in a timely manner. The loan is unsecured, the borrower files for bankruptcy protection and there is no other (guarantor, etc.) support from an entity outside of the bankruptcy proceedings. Impaired loans totaled $4.4 million and $3.9 million at June 30, 2016 and December 31, 2015, respectively. Included in the $4.4 million at March 31, 2016 is $2.2 million of loans classified as troubled debt restructurings (TDRs). Included in the $3.9 million at December 31, 2015 is $2.8 million of loans classified as TDRs. A modification of a loans terms constitutes a TDR if the creditor grants a concession to the borrower for economic or legal reasons related to the borrowers financial difficulties that it would not otherwise consider. All TDRs are considered impaired. The following table provides information on performing and nonperforming TDRs as of June 30, 2016 and December 31, 2015: June 30, December 31, (In thousands) 2016 2015 Performing TDRs: Commercial real estate $ 546 $ 2,220 Consumer real estate 341 346 Commercial and industrial loans 638 47 Total performing TDRs 1,525 2,613 Nonperforming TDRs: Construction and land development 132 104 Consumer real estate 62 65 Commercial and industrial loans 517 - Consumer and other - 21 Total nonperformingTDRs 711 190 Total TDRs $ 2,236 $ 2,803 During 2016, there were five new loans totaling $1.3 million identified as TDRs. There were no loans considered as TDRs in 2015 that subsequently defaulted in 2016. Of the five new loans identified as a TDR, three were to the same borrower in the amount of $1.1 million within the commercial and industrial (C&I) portfolio. The designation for TDR to this same borrower was given due to Bank extending the maturity date of the three loans during a forbearance agreement; the market would not support terms for this type of loan and was classified as a TDR. Another loan in the amount of $130,000 that is a real estate construction and land development loan was coded a TDR due to renewal of interest only terms; these are not terms that would be provided in the market hence the TDR designation. The last loan was for $37,000 is a C&I loan and was coded a TDR due to change in interest rate and repayment terms that would not be provided in the market. In order to quantify the value of any impairment, the Company evaluates loans individually. At June 30, 2016, the Company had $4.4 million of impaired loans. The detail of loans evaluated for impairment as of June 30, 2016 is presented below: Unpaid Contractual (in thousands Recorded Principal Allocated June 30, 2016 Investment Balance Allowance Loans without a specific valuation allowance: Construction and land development $ 129 $ 166 $ - Commercial real estate 547 543 - Commercial and industrial loans 640 640 Loans with a specific valuation allowance: Construction and land development 3 29 3 Commercial real estate 334 331 10 Consumer real estate 403 430 110 Commercial and industrial loans 2,349 2,374 1,120 Total $ 4,405 $ 4,513 $ 1,243 At December 31, 2015, the Company had $3.9 million of impaired loans. The detail of loans evaluated for impairment as of December 31, 2015 is presented below: (in thousands Recorded Unpaid Contractual Principal Allocated December 31, 2015 Investment Balance Allowance Loans without a specific valuation allowance: Construction and land development $ 235 $ 397 $ - Commercial real estate 2,220 2,319 - Loans with a specific valuation allowance: Construction and land development 4 29 4 Commercial real estate 399 480 72 Consumer real estate 410 474 115 Commercial and industrial loans (except those secured by real estate) 602 895 297 Consumer and other 21 26 21 Total $ 3,891 $ 4,620 $ 509 The average recorded investment balance of impaired loans for the three- and six-month periods ending June 30, 2016 and 2015 are as follows: Three months ended June 30, 2016 2015 Average Interest Average Interest Balance Income Balance Income Construction and land development $ 133 $ - $ 305 $ 1 Commercial real estate 1,113 13 5,737 40 Consumer real estate 404 4 826 7 Commercial and industrial loans 2,671 17 634 11 Consumer and other 13 - 24 - Total securities gains $ 4,334 $ 34 $ 7,526 $ 59 Six months ended June 30, 2016 2015 Average Interest Average Interest Balance Income Balance Income Construction and land development $ 182 $ - $ 322 $ 1 Commercial real estate 1,633 37 6,694 92 Consumer real estate 406 9 735 13 Commercial and industrial loans 1,618 47 667 22 Consumer and other 17 - 24 - Total securities gains $ 3,856 $ 93 $ 8,442 $ 128 When the Company cannot reasonably expect full and timely repayment of its loan, the loan is placed on nonaccrual status. The Company will continue to track the contractual interest for purposes of customer reporting and any potential litigation or later collection of the loan but accrual of interest for the Companys financial statement purposes is to be discontinued. Subsequent payments of interest can be recognized as income on a cash basis provided that full collection of principal is expected. Otherwise, all payments received are to be applied to principal only. At the time of nonaccrual, past due or accrued interest is reversed from income. Loans over 90 days past due will automatically be placed on nonaccrual status. Loans that are less delinquent may also be placed on nonaccrual status if full collection of principal and interest is unlikely. The following table presents the recorded investment in nonaccrual loans by portfolio segment as of June 30, 2016 and December 31, 2015: Nonaccrual June 30, December 31, (in thousands) 2016 2015 Construction and land development $ 132 $ 238 Consumer real estate 62 65 Commercial and industrial loans 1,026 189 Consumer and other - 21 Total $ 1,220 $ 513 There were no loans 90 days or more past due and accruing interest at June 30, 2016 or December 31, 2015. The following table presents the aging of the recorded investment in past due loans as of June 30, 2016 and December 31, 2015 by portfolio segment: Greater 30 - 59 60 - 89 than 90 Days Days Days Total (in thousands) Past Past Past Non- Past Total June 30, 2016 Due Due Due Accrual Due Current Loans Construction and land development $ - $ - $ - $ 132 $ 132 $ 63,687 $ 63,819 Commercial real estate - - - - - 594,034 594,034 Consumer real estate - - - 62 62 275,531 275,593 Commercial and industrial loans 346 - - 1,026 1,372 156,268 157,640 Consumer and other - - - - - 13,672 13,672 Total $ 346 $ - $ - $ 1,220 $ 1,566 $ 1,103,192 $ 1,104,758 Greater 30 - 59 60 - 89 than 90 Days Days Days Total (in thousands) Past Past Past Non- Past Total December 31, 2015 Due Due Due Accrual Due Current Loans Construction and land development $ - $ - $ - $ 238 $ 238 $ 64,464 $ 64,702 Commercial real estate - - - - - 533,909 533,909 Consumer real estate - - - 65 65 249,642 249,707 Commercial and industrial loans - - - 189 189 153,480 153,669 Consumer and other - - - 21 21 13,518 13,539 Total $ - $ - $ - $ 513 $ 513 $ 1,015,013 $ 1,015,526 Credit Quality Indicators The Company utilizes a nine point grading system in order to evaluate the level of inherent risk in the loan portfolio as part of its allowance for loan losses methodology. Loans collectively evaluated for impairment are grouped by loan type and, in the case of commercial and construction loans, by risk rating. Each loan type is assigned an allowance factor based on risk grade, historical loss experience, economic conditions, overall portfolio quality including delinquency rates and commercial real estate loan concentrations (as applicable). As risk grades increase, additional reserves are applied stated in basis points in order to account for the added inherent risk. The Company categorizes all business and commercial purpose loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by setting the risk grade at the inception of a loan through the approval process. A certain percentage of loan dollars is reviewed each year by a third party loan review function. The risk rating process is inherently subjective and based upon managements evaluation of the specific facts and circumstances for individual borrowers. As such, the assigned risk ratings are subject to change based upon changes in borrower status and changes in the external environment affecting the borrower. The Company uses the following definitions for risk ratings: Risk Grade 1 Minimal Risk Grade 2 Modest Risk Grade 3 Average · Risk Grade 4 Acceptable - Risk Grade 5 - Acceptable with Care Risk Grade 6 - Special Mention or Critical - - Repayment performance has not been demonstrated to prudent standards; - Repayment performance is inconsistent and highly sensitive to business and operating cycle swings; - Fatal documentation errors and; - Performing as agreed without documented capacity or collateral protection. Risk Grade 7 Substandard - Risk Grade 8 Doubtful - - Injection of capital; - Alternative financing; - Liquidation of assets or the pledging of additional collateral The ability of the borrower to service the debt is extremely weak, overdue status is constant, the debt has been placed on nonaccrual status and no definite repayment schedule exists. Doubtful is a temporary grade where a loss is expected but is presently not quantified with any degree of accuracy. Once the loss position is determined, the amount is charged off. There were no loans rated as doubtful as of June 30, 2016 or December 31, 2015. Risk Grade 9 Loss - Loans classified Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value but rather that it is not practical or desirable to defer writing off the worthless loan even though partial recovery may be affected in the future. Probable loss portions of doubtful assets should be charged against the allowance for loan losses. Loans may reside in this classification for administrative purposes for a period not to exceed the earlier of thirty days or calendar quarter-end. There were no loans rated as loss as of June 30, 2016 or December 31, 2015. As of June 30, 2016 and December 31, 2015 and based on the most recent analysis performed, the risk category of unimpaired loans by class of loans is as follows: Risk Grade (in thousands) 1 2 3 4 5 6 7 Total June 30, 2016 Construction and land development $ - $ 200 $ 758 $ 14,284 $ 48,229 $ 216 $ - $ 63,687 Commercial real estate - 579 206,150 277,137 105,483 3,804 - 593,153 Consumer real estate 52 18,865 122,583 95,458 36,936 1,296 - 275,190 Commercial and industrial loans 2,150 2,145 26,253 96,721 26,737 645 - 154,651 Consumer and other 1,159 499 885 7,816 3,137 176 - 13,672 Total $ 3,361 $ 22,288 $ 356,629 $ 491,416 $ 220,522 $ 6,137 $ - $ 1,100,353 Risk Grade (in thousands) 1 2 3 4 5 6 7 Total December 31, 2015 Construction and land development $ 26 $ 200 $ 2,545 $ 14,318 $ 47,133 $ 242 $ - $ 64,464 Commercial real estate - 619 195,935 243,771 87,492 3,473 - 531,290 Consumer real estate 53 10,933 111,123 92,127 34,346 714 - 249,296 Commercial and industrial loans 2,168 1,909 24,675 96,900 26,802 612 - 153,066 Consumer and other 980 1,069 960 8,392 1,936 182 - 13,519 Total $ 3,227 $ 14,730 $ 335,238 $ 455,508 $ 197,709 $ 5,223 $ - $ 1,011,635

5. OFF-BALANCE SHEET RISK

5. OFF-BALANCE SHEET RISK	6 Months Ended
5. OFF-BALANCE SHEET RISK	Jun. 30, 2016
Off-balance Sheet Risk
OFF-BALANCE SHEET RISK	The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customers creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, upon extension of credit is based on managements credit evaluation of the borrower. Collateral obtained varies but may include real estate, stocks, bonds, and certificates of deposit. A summary of the contract amounts of the Companys exposure to off-balance sheet credit risk as of June 30, 2016 and December 31, 2015 is as follows: June 30, December 31, (In thousands) 2016 2015 Financial instruments whose contract amounts represent credit risk: Undisbursed lines of credit $ 190,741 $ 163,572 Standby letters of credit 4,203 3,188 Total $ 194,944 $ 166,760

6. DERIVATIVES AND FINANCIAL IN

6. DERIVATIVES AND FINANCIAL INSTRUMENTS	6 Months Ended
6. DERIVATIVES AND FINANCIAL INSTRUMENTS	Jun. 30, 2016
Derivatives And Financial Instruments
DERIVATIVES AND FINANCIAL INSTRUMENTS	To mitigate exposure to variability in expected future cash flows resulting from changes in interest rates, in May 2013 the Company entered into two forward swap arrangements (the Swaps) whereby the Company would pay fixed rates on two short-term borrowings at some point in the future for a determined period of time. For both agreements, the Company would renew advances with the Federal Home Loan Bank (FHLB) for 3-month terms as a primary funding source and pay the prevailing 3-month rate. The first swap, a 2-5 Swap, was a $20 million agreement whereby 2 years from the May 2013 execution date, the Company would begin to swap out the 3-month FHLB advance pricing at that date for a fixed rate of 1.964% for a period of 5 years. The second swap, a 3-5 Swap, was similar in terms except that it was a $30 million agreement whereby 3 years from the May 2013 execution date, the Company would begin to swap out the 3-month FHLB advance pricing at that date for a fixed rate of 2.464% for a period of 5 years. The Company designated the forward-starting interest rate swaps (the hedging instruments) as cash flow hedges of the risk of changes attributable to the benchmark 3-Month LIBOR interest rate risk for the forecasted issuances of FHLB advances arising from a rollover strategy. The Company intended to sequentially issue a series of 3-month fixed rate debt as part of a planned roll-over of short-term debt for the next seven to eight years. In September 2014, as a result of continued increasing fixed rate exposure, the Company determined that an additional strategy was needed and, as a result, exited from the Swaps for a deferred gain of $372,000. In their place, the Company purchased three interest rate caps with a strike price of 3-month LIBOR at 0.50% and a five-year term. The instruments hedged were $100 million of FHLB borrowings maturing quarterly on the same reset dates. The Company executed three separate agreements between $30 million and $35 million maturing between August 2019 and October 2019. The following table reflects the cash flow hedges included in the consolidated balance sheets as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 Notational Fair Notational Fair (In thousands) Amount Value Amount Value Included in other assets: Cap 1 - maturing August 2019 $ 35,000 $ 487 $ 35,000 $ 1,334 Cap 2 - maturing September 2019 35,000 500 35,000 1,360 Cap 3 - maturing October 2019 30,000 447 30,000 1,216 $ 100,000 $ 1,434 $ 100,000 $ 3,910 Remaining amortization of the premium on the interest rate caps is as follows: (In thousands) 2016 (remaining quarters) $ 572 2017 1,779 2018 2,247 2019 1,751 $ 6,349 The Company recorded $198,000 and $15,000 for the three-month periods ended June 30, 2016 and 2015, respectively, in amortization associated with the interest rate caps. The Company recorded $341,000 and $18,000 for the six-month periods ended June 30, 2016 and 2015, respectively, in amortization associated with the interest rate caps. Those expenses are reflected in the consolidated statements of income as a component of borrowings and repurchase agreements interest expense. Remaining amortization of the gain associated with the exit of the swaps is as follows: (In thousands) 2016 (remaining quarters) $ 37 2017 74 2018 75 Thereafter 147 $ 333 The Company realized $12,000 and $20,000 in gains on the Swaps during the three- and six-month periods ended June 30, 2016, respectively, shown as a reduction of borrowings and repurchase agreements interest expense. These were the first returns from the swaps. The Company anticipates little to no ineffectiveness in this hedging relationship as long as the terms are matched at each forecasted debt issuance. The Company notes that the actual interest cost incurred at each rollover will be a function of market rates at that time. However the Company is only hedging the benchmark interest rate risk in each rollover. The Company does not use derivatives for trading or speculative purposes.

7. FAIR VALUE OF FINANCIAL INST

7. FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
7. FAIR VALUE OF FINANCIAL INSTRUMENTS	Jun. 30, 2016
Fair Value Of Financial Instruments
FAIR VALUE OF FINANCIAL INSTRUMENTS	Fair value is a market-based measurement and is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. In general, the transaction price will equal the exit price and, therefore, represent the fair value of the asset or liability at initial recognition. In determining whether a transaction price represents the fair value of the asset or liability at initial recognition, each reporting entity is required to consider factors specific to the transaction and the asset or liability, the principal or most advantageous market for the asset or liability, and market participants with whom the entity would transact in the market. Outlined below is the application of the fair value hierarchy applied to the Companys financial assets that are carried at fair value. Level 1 Level 2 Level 3 The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Fair Value on a Recurring Basis The Company measures certain assets at fair value on a recurring basis, as described below. Investment Securities Available-for-Sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the securitys credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include U.S. agencies, mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. Derivative Assets and Liabilities Derivative instruments held or issued by the Company for risk management purposes are traded in over-the-counter markets where quoted market prices are not readily available. For those derivatives, the Company measures fair value using models that use primarily market observable inputs, such as yield curves and option volatilities, and include the value associated with counterparty credit risk. The Company classifies derivative instruments held or issued for risk management purposes as Level 2. As of June 30, 2016 and December 31, 2015, the Companys derivative instruments consist solely of interest rate caps. Below is a table that presents information about assets measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015: Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable (In thousands) Total Identical Assets Inputs Inputs Description Fair Value (Level 1) (Level 2) (Level 3) June 30, 2016 Securities available-for-sale: U.S. Agency obligations $ 19,021 $ - $ 19,021 $ - Collateralized mortgage obligations 50,187 - 50,187 - Mortgage-backed securities 50,159 - 50,159 - Municipal bonds 64,367 - 64,367 Other 2,589 2,089 - 500 186,323 2,089 183,734 500 Interest rate caps 1,434 - 1,434 - Total assets at fair value $ 187,757 $ 2,089 $ 185,168 $ 500 December 31, 2015 Securities available-for-sale: U.S. Agency obligations $ 19,901 $ - $ 19,901 $ - Collateralized mortgage obligations 60,941 - 60,941 - Mortgage-backed securities 31,310 - 31,310 - Municipal bonds 54,434 - 54,434 Other 2,310 1,810 - 500 168,896 1,810 166,586 500 Interest rate caps 3,910 - 3,910 - Total assets at fair value $ 172,806 $ 1,810 $ 170,496 $ 500 The table below summarizes the Companys activity in investment securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2016. Level 3 Investment (In thousands) Securities Balance at December 31, 2015 $ 500 Purchases - Balance at June 30, 2016 $ 500 Fair Value on a Nonrecurring Basis The Company measures certain assets at fair value on a nonrecurring basis, as described below. Impaired Loans The Company does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures the impairment. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. Impaired loans require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the impaired loan as nonrecurring Level 2. When current 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 Company records the impaired loan as nonrecurring Level 3. Impaired loans totaled $4.4 million and $3.9 million at June 30, 2016 and December 31, 2015, respectively. Other Real Estate Owned Other real estate owned, which includes foreclosed assets, is adjusted to fair value upon transfer of loans and premises to other real estate. Subsequently, other real estate owned is carried at the lower of carrying value or fair value. At the date of transfer, losses are charged to the allowance for credit losses. Subsequent write-downs are charged to expense in the period they are incurred. Below is a table that presents information about assets measured at fair value on a nonrecurring basis at June 30, 2016 and December 31, 2015: Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable (In thousands) Total Identical Assets Inputs Inputs June 30, 2016 Fair Value (Level 1) (Level 2) (Level 3) Impaired loans $ 3,162 $ - $ - $ 3,162 Other real estate owned 5,183 - - 5,183 Total $ 8,345 $ - $ - $ 8,345 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable (In thousands) Total Identical Assets Inputs Inputs December 31, 2015 Fair Value (Level 1) (Level 2) (Level 3) Impaired loans $ 3,382 $ - $ - $ 3,382 Other real estate owned 5,453 - - 5,453 Total $ 8,835 $ - $ - $ 8,835 For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of June 30, 2016 and December 31, 2015, the significant unobservable inputs used in the fair value measurements were as follows: June 30, 2016 and December 31, 2015 Valuation Significant Significant Technique Observable Inputs unobservable Inputs Impaired loans Appraisal value Appraisals and/or sales of Appraisals discounted 5% to 10% for comparable properties sales commissions and other holding costs Other real estate owned Appraisal value/ Appraisals and/or sales of Appraisals discounted 5% to 10% for Comparison sale/ comparable properties sales commissions and other holding costs Other estimates The Company provides certain disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. Accordingly, certain financial instruments and all nonfinancial instruments are excluded from disclosure. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Cash and Due from Banks The carrying amounts for cash and due from banks approximate fair value because of the short maturities of those instruments. Federal Home Loan Bank Stock The carrying value of Federal Home Loan Bank stock approximates fair value based on the redemption provisions of such Federal Home Loan Bank stock. Bank-owned life insurance The carrying value of bank-owned life insurance approximates fair value because this investment is carried at cash surrender value, as determined by the insurer. Loans The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Deposits The fair value of demand deposits is the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting expected cash flows using the rates currently offered for instruments of similar remaining maturities. Accrued Interest The carrying amount is a reasonable estimate of fair value. Short-Term Borrowings and Long-Term Debt The fair values are based on discounting expected cash flows using the current interest rates for debt with the same or similar remaining maturities and collateral requirements. Financial Instruments with Off-Balance Sheet Risk With regard to financial instruments with off-balance sheet risk, it is not practicable to estimate the fair value of future financing commitments. The following table presents the estimated fair values and carrying amounts of the Companys financial instruments, none of which are held for trading purposes, at June 30, 2016 and December 31, 2015: June 30, 2016 Carrying Fair Value (In thousands) Amount Total Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 100,115 $ 100,115 $ 100,115 $ - $ - Investment securities available-for- sale 186,323 186,323 2,089 183,734 500 Loans, net 1,097,358 1,101,914 - 1,098,752 3,162 Accrued interest receivable 4,092 4,092 4,092 - - Federal Home Loan Bank stock 8,613 8,613 - - 8,613 Bank-owned life insurance 28,723 28,723 - 28,723 - Interest rate caps 1,434 1,434 - 1,434 - Financial liabilities: Non-maturing deposits 834,024 834,024 - 834,024 - Time deposits 266,177 266,530 - 266,530 - Accrued interest payable 336 336 336 - - Repurchase agreements and federal funds purchased 22,690 22,690 - 22,690 - FHLB Advances and other borrowings 175,000 175,014 - 175,014 - Subordinated debt 18,558 14,397 - 14,397 - December 31, 2015 Carrying Fair Value (In thousands) Amount Total Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 55,530 $ 55,530 $ 55,530 $ - $ - Investment securities available-for- sale 168,896 168,896 1,810 166,586 500 Loans, net 1,008,515 1,013,415 - 1,010,033 3,382 Accrued interest receivable 3,795 3,795 3,795 - - Federal Home Loan Bank stock 8,061 8,061 - - 8,061 Bank-owned life insurance 28,274 28,274 - 28,274 - Interest rate caps 3,910 3,910 - 3,910 - Financial liabilities: Non-maturing deposits 663,066 663,066 - 663,066 - Time deposits 319,781 320,246 - 320,246 - Accrued interest payable 356 356 356 - - Repurchase agreements and federal funds purchased 30,580 30,580 - 30,580 - FHLB Advances and other borrowings 169,800 169,800 - 169,800 - Subordinated debt 18,558 15,591 - 15,591 -

8. SUPPLEMENTAL CASH FLOW DISCL

8. SUPPLEMENTAL CASH FLOW DISCLOSURE	6 Months Ended
8. SUPPLEMENTAL CASH FLOW DISCLOSURE	Jun. 30, 2016
Supplemental Cash Flow Disclosure
SUPPLEMENTAL CASH FLOW DISCLOSURE	For the six-months ended June 30, (In thousands) 2016 2015 Supplemental Disclosures of Cash Flow Information: Interest paid $ 3,907 $ 3,741 Income taxes paid $ 2,635 $ 1,700 Supplemental Schedule of Noncash Investing and Financing Activites: Change in fair value of securities available-for-sale, net of taxes $ 2,367 $ (1,028 ) Change in fair value of cash flow hedges, net of taxes $ (1,333 ) $ (784 ) Transfer from loans to foreclosed real estate $ - $ 3,300

9. ISSUANCE OF COMMON STOCK

9. ISSUANCE OF COMMON STOCK	6 Months Ended
9. ISSUANCE OF COMMON STOCK	Jun. 30, 2016
Issuance Of Common Stock
ISSUANCE OF COMMON STOCK	During the second quarter of 2016, the Company issued 19,145 shares of common stock to certain employees under its long-term stock-based incentive compensation plan. In addition, during the second quarter of 2016, the Company issued 3,799 shares to employees under its employee stock purchase plan. On June 21, 2016, the Company sold a total of 845,588 shares of common stock in our initial public offering at an initial public offering price of $34.00 per share. The Company received net proceeds as a result of the offering of $26.4 million.

10. SUBSEQUENT EVENTS

10. SUBSEQUENT EVENTS	6 Months Ended
10. SUBSEQUENT EVENTS	Jun. 30, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Nonrecognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events occurring through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure.

2. BASIS OF PRESENTATION (Polic

2. BASIS OF PRESENTATION (Policies)	6 Months Ended
2. BASIS OF PRESENTATION (Policies)	Jun. 30, 2016
Basis Of Presentation Policies
Earnings Per Common Share	Basic and diluted net income per common share have been computed by dividing net income for each period by the weighted average number of shares of common stock outstanding during each period. Diluted net income per common share reflects the potential dilution that could occur if outstanding stock options were exercised. Basic and diluted net income per common share have been computed based upon net income as presented in the accompanying unaudited consolidated statements of income divided by the weighted average number of common shares outstanding or assumed to be outstanding as summarized below: Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Shares used in the computation of earnings per share: Weighted average number of shares outstanding - basic 4,581,193 4,500,695 4,563,349 4,492,912 Dilutive effect of restricted shares 43,133 32,877 44,184 35,641 Weighted average number of shares outstanding - diluted 4,624,326 4,533,572 4,607,533 4,528,553 Weighted average anti-dilutive stock options and unvested restricted shares excluded from the computation of diluted earnings per share are as follows: Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Anti-dilutive stock options 80,500 91,000 80,500 91,000 Unvested restricted shares 45,338 45,986 45,338 45,986
Comprehensive Income	The Company reports as comprehensive income all changes in stockholders' equity during the year from sources other than stockholders. Other comprehensive income refers to all components (revenues, expenses, gains, and losses) of comprehensive income that are excluded from net income. The Companys only two components of other comprehensive income are unrealized gains and losses on investment securities available-for-sale, net of income taxes and unrealized gains and losses on cash flow hedges, net of income taxes. Information concerning the Companys accumulated other comprehensive income for the six month ended June 30, 2016 and for the year ended December 31, 2015, respectively is as follows: June 30, December 31, 2016 2015 (In thousands) Unrealized gains on securities available-for-sale $ 5,207 $ 1,378 Deferred tax expense (1,992 ) (530 ) Other comprehensive income, net of tax 3,215 848 Unrealized losses on cash flow hedges (4,915 ) (2,779 ) Deferred tax benefit 1,848 1,045 Other comprehensive loss, net of tax (3,067 ) (1,734 ) Total other comprehensive income (loss) $ 148 $ (886 ) The accumulated balances related to each component of other comprehensive income (loss) are as follows: Unpaid Unrealized Unrealized Gains and Gains and Losses on Losses on Available-for Cash Flow (in thousands Sale Securities Hedges Total Balance as of December 31, 2015 $ 848 $ (1,734 ) $ (886 ) Other comprehensive income (loss) before reclassification 2,452 (1,333 ) 1,119 Amounts reclassified from accumulated other comprehensive income (85 ) - (85 ) Net current-period other comprehensive income (loss) 2,367 (1,333 ) 1,034 Balance as of June 30, 2016 $ 3,215 $ (3,067 ) $ 148 Balance as of December 31, 2014 $ 1,645 $ (503 ) $ 1,142 Other comprehensive loss before reclassification (605 ) (784 ) (1,389 ) Amounts reclassified from accumulated other comprehensive income (423 ) - (423 ) Net current-period other comprehensive loss (1,028 ) (784 ) (1,812 ) Balance as of June 30, 2015 $ 617 $ (1,287 ) $ (670 )
Recent Accounting Pronouncements	In February 2015, the Financial Accounting Standards Board (FASB) issued guidance which amends the consolidation requirements and significantly changes the consolidation analysis required under U.S. generally accepted accounting principles (GAAP). Although the amendments are expected to result in the deconsolidation of many entities, the Company will need to reevaluate all its previous consolidation conclusions. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted (including during an interim period), provided that the guidance is applied as of the beginning of the annual period containing the adoption date. The Company does not expect these amendments to have a material effect on its financial statements. In April 2015, the FASB issued guidance that will require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This update affects disclosures related to debt issuance costs but does not affect existing recognition and measurement guidance for these items. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements. In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a full retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements In August 2015, the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for reporting periods beginning after December 15, 2017. The Company will apply the guidance using a full retrospective approach. The Company does not expect these amendments to have a material effect on its financial statements. In August 2015, the FASB issued amendments to the Interest topic of the Accounting Standards Codification (the ASC) to clarify the SEC staffs position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. The amendments were effective upon issuance. The Company does not expect these amendments to have a material effect on its financial statements. In January 2016, the FASB amended the Financial Instruments topic of the ASC to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company will apply the guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values will be applied prospectively to equity investments that exist as of the date of adoption of the amendments. The Company does not expect these amendments to have a material effect on its financial statements. In February 2016, the FASB amended the Leases topic of the Accounting Standards Codification to revise certain aspects of recognition, measurement, presentation, and disclosure of leasing transactions. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect that implementation of the new standard will have on its financial statements. In March 2016, the FASB amended the Derivatives and Hedging topic of the Accounting Standards Codification to clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amendments will be effective for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company will apply the guidance prospectively to each period presented. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The amendments will be effective for the Company for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not expect these amendments to have a material effect on its financial statements. In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The amendments will be effective for the Company for reporting periods beginning after December 15, 2019. The Company is currently evaluating the effect that implementation of the new standard will have on its financial position, results of operations, and cash flows. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Companys financial position, results of operations or cash flows.
Reclassifications	Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation. The reclassifications had no effect on total assets, net income or stockholders' equity as previously reported.

2. BASIS OF PRESENTATION (Table

2. BASIS OF PRESENTATION (Tables)	6 Months Ended
2. BASIS OF PRESENTATION (Tables)	Jun. 30, 2016
Basis Of Presentation Tables
Shares used in the computation of earnings per share	Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Shares used in the computation of earnings per share: Weighted average number of shares outstanding - basic 4,581,193 4,500,695 4,563,349 4,492,912 Dilutive effect of restricted shares 43,133 32,877 44,184 35,641 Weighted average number of shares outstanding - diluted 4,624,326 4,533,572 4,607,533 4,528,553
Anti-dilutive shares	Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Anti-dilutive stock options 80,500 91,000 80,500 91,000 Unvested restricted shares 45,338 45,986 45,338 45,986
Accumulated other comprehensive income	June 30, December 31, 2016 2015 (In thousands) Unrealized gains on securities available-for-sale $ 5,207 $ 1,378 Deferred tax expense (1,992 ) (530 ) Other comprehensive income, net of tax 3,215 848 Unrealized losses on cash flow hedges (4,915 ) (2,779 ) Deferred tax benefit 1,848 1,045 Other comprehensive loss, net of tax (3,067 ) (1,734 ) Total other comprehensive income (loss) $ 148 $ (886 )
Balances related to each component of other comprehensive income (loss)	Unpaid Unrealized Unrealized Gains and Gains and Losses on Losses on Available-for Cash Flow (in thousands Sale Securities Hedges Total Balance as of December 31, 2015 $ 848 $ (1,734 ) $ (886 ) Other comprehensive income (loss) before reclassification 2,452 (1,333 ) 1,119 Amounts reclassified from accumulated other comprehensive income (85 ) - (85 ) Net current-period other comprehensive income (loss) 2,367 (1,333 ) 1,034 Balance as of June 30, 2016 $ 3,215 $ (3,067 ) $ 148 Balance as of December 31, 2014 $ 1,645 $ (503 ) $ 1,142 Other comprehensive loss before reclassification (605 ) (784 ) (1,389 ) Amounts reclassified from accumulated other comprehensive income (423 ) - (423 ) Net current-period other comprehensive loss (1,028 ) (784 ) (1,812 ) Balance as of June 30, 2015 $ 617 $ (1,287 ) $ (670 )

3. INVESTMENT SECURITIES (Table

3. INVESTMENT SECURITIES (Tables)	6 Months Ended
3. INVESTMENT SECURITIES (Tables)	Jun. 30, 2016
Investment Securities Tables
Summary of available-for-sale securities	Gross Gross Estimated Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value June 30, 2016 Available-for-sale: U.S. Agency obligations $ 18,454 $ 567 $ - $ 19,021 Collateralized mortgage obligations 49,277 910 - 50,187 Mortgage-backed securities 49,290 869 - 50,159 Municipal bonds 61,419 2,948 - 64,367 Other 2,676 9 96 2,589 $ 181,116 $ 5,303 $ 96 $ 186,323 December 31, 2015 Available-for-sale: U.S. Agency obligations $ 19,778 $ 196 $ 73 $ 19,901 Collateralized mortgage obligations 60,826 321 206 60,941 Mortgage-backed securities 31,074 326 90 31,310 Municipal bonds 53,163 1,346 75 54,434 Other 2,677 10 377 2,310 $ 167,518 $ 2,199 $ 821 $ 168,896
Fair value of investment securities available for sale by contractual maturity	After One After Five No Stated Within Within Within After Maturity (In thousands) 1 Year Five Years Ten Years Ten Years Date Total U.S. Agency obligations $ - $ - $ - $ 19,021 $ - $ 19,021 Collateralized mortgage obligations - - - 50,187 - 50,187 Mortgage-backed securities - - 14,229 35,930 - 50,159 Municipal bonds - 1,829 5,801 56,737 - 64,367 Other - - - 500 2,089 2,589 $ - $ 1,829 $ 20,030 $ 162,375 $ 2,089 $ 186,323
Current fair value and associated unrealized losses on investments in securities with unrealized losses	Less Than 12 Months 12 Months or Greater Total (In thousands) Unrealized Unrealized Unrealized June 30, 2016 Fair Value Losses Fair Value Losses Fair Value Losses Securities available-for-sale: U.S. Agency obligations $ - $ - $ - $ - $ - $ - Collateralized mortgage obligations - - - - - - Mortgage-backed securities - - - - - - Municipal bonds - - - - - - Other - - 894 96 894 96 Total temporarily impaired securities $ - $ - $ 894 $ 96 $ 894 $ 96 Less Than 12 Months 12 Months or Greater Total (In thousands) Unrealized Unrealized Unrealized December 31, 2015 Fair Value Losses Fair Value Losses Fair Value Losses Securities available-for-sale: U.S. Agency obligations $ 3,007 $ - $ 3,178 $ 73 $ 6,185 $ 73 Collateralized mortgage obligations 26,086 159 2,983 47 29,069 206 Mortgage-backed securities 18,575 90 - - 18,575 90 Municipal bonds 3,896 6 7,990 69 11,886 75 Other 1,774 377 - - 1,774 377 Total temporarily impaired securities $ 53,338 $ 632 $ 14,151 $ 189 $ 67,489 $ 821
Investment securities in an unrealized loss position	June 30, December 31, Available-for-sale: 2016 2015 U.S. Agency obligations - 3 Collateralized mortgage obligations - 7 Mortgage-backed securities - 6 Municipal bonds - 22 Other 1 1 1 39
Securities gains for the periods	Three months Six months ended June 30, ended June 30, 2016 2015 2016 2015 Gross gains on sales of securities available for sale $ - $ - $ 136 $ 427 Gross losses on sales of securities available for sale - - (51 ) (4 ) Total securities gains $ - $ - $ 85 $ 423

4. LOANS AND ALLOWANCE FOR LO21

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)	6 Months Ended
4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)	Jun. 30, 2016
Loans And Allowance For Loan Losses Tables
Summary of loans	June 30, December 31, (In thousands) 2016 2015 Construction and land development $ 63,819 $ 64,702 Commercial real estate: Non-farm, non-residential 341,477 307,722 Owner occupied 158,612 147,017 Multifamily, nonresidential and junior liens 93,945 79,170 Total commercial real estate 594,034 533,909 Consumer real estate: Home equity lines 85,883 78,943 Secured by 1-4 family residential, secured by first deeds of trust 186,054 167,053 Secured by 1-4 family residential, secured by second deeds of trust 3,656 3,711 Total consumer real estate 275,593 249,707 Commercial and industrial loans (except those secured by real estate) 157,640 153,669 Consumer and other 13,672 13,539 Total loans 1,104,758 1,015,526 Deferred loan (fees) costs 586 630 Allowance for loan losses (7,986 ) (7,641 ) Net loans $ 1,097,358 $ 1,008,515
Changes in the allowance for loan losses	Commercial & Industrial Construction Consumer Loans Not and Land Commercial Real Secured By Consumer Total (In thousands) Development Real Estate Estate Real Estate & Other Loans Three months ended June 30, 2016 Beginning balance $ 523 $ 3,072 $ 1,972 $ 1,790 $ 574 $ 7,931 Provision for loan losses (125 ) 187 (88 ) 492 (466 ) - Loans charged off - - - - (1 ) (1 ) Recoveries 8 19 3 25 1 56 Net (chargeoffs) recoveries 8 19 3 25 - 55 Ending balance $ 406 $ 3,278 $ 1,887 $ 2,307 $ 108 $ 7,986 Six months ended June 30, 2016 Beginning balance $ 509 $ 3,156 $ 2,046 $ 1,786 $ 144 $ 7,641 Provision for loan losses (340 ) 66 (165 ) 485 (46 ) - Loans charged off - - - - (1 ) (1 ) Recoveries 237 56 6 36 11 346 Net (chargeoffs) recoveries 237 56 6 36 10 345 Ending balance $ 406 $ 3,278 $ 1,887 $ 2,307 $ 108 $ 7,986 Three months ended June 30, 2015 Beginning balance $ 696 $ 2,003 $ 2,191 $ 2,602 $ 60 $ 7,552 Provision for loan losses 93 257 46 (214 ) (3 ) 179 Loans charged off - (276 ) - - - (276 ) Recoveries 12 102 - - - 114 Net (chargeoffs) recoveries 12 (174 ) - - - (162 ) Ending balance $ 801 $ 2,086 $ 2,237 $ 2,388 $ 57 $ 7,569 Six months ended June 30, 2015 Beginning balance $ 960 $ 2,510 $ 1,594 $ 1,662 $ 143 $ 6,869 Provision for loan losses (212 ) (321 ) 643 726 (86 ) 750 Loans charged off - (276 ) - - - (276 ) Recoveries 53 173 - - - 226 Net (chargeoffs) recoveries 53 (103 ) - - - (50 ) Ending balance $ 801 $ 2,086 $ 2,237 $ 2,388 $ 57 $ 7,569
Allowance for loan losses	Commercial & Industrial Construction Consumer Loans Not and Land Commercial Real Secured By Consumer Total (in thousands) Development Real Estate Estate Real Estate & Other Loans June 30, 2016 Allowance for Loan Losses: Individually evaluated for impairment $ 3 $ 10 $ 110 $ 1,120 $ - $ 1,243 Collectively evaluated for impairment 403 3,268 1,777 1,187 108 6,743 Total ending allowance $ 406 $ 3,278 $ 1,887 $ 2,307 $ 108 $ 7,986 Loans: Individually evaluated for impairment $ 132 $ 881 $ 403 $ 2,989 $ - $ 4,405 Collectively evaluated for impairment 63,687 593,153 275,190 154,651 13,672 1,100,353 Total ending loans $ 63,819 $ 594,034 $ 275,593 $ 157,640 $ 13,672 $ 1,104,758 (in thousands) December 31, 2015 Allowance for Loan Losses: Individually evaluated for impairment $ 4 $ 72 $ 115 $ 297 $ 21 $ 509 Collectively evaluated for impairment 505 3,084 1,931 1,489 123 7,132 Total ending allowance $ 509 $ 3,156 $ 2,046 $ 1,786 $ 144 $ 7,641 Loans: Individually evaluated for impairment $ 238 $ 2,619 $ 411 $ 602 $ 21 $ 3,891 Collectively evaluated for impairment 64,464 531,290 249,296 153,067 13,518 1,011,635 Total ending loans $ 64,702 $ 533,909 $ 249,707 $ 153,669 $ 13,539 $ 1,015,526
Performing and nonperforming TDRs	June 30, December 31, (In thousands) 2016 2015 Performing TDRs: Commercial real estate $ 546 $ 2,220 Consumer real estate 341 346 Commercial and industrial loans 638 47 Total performing TDRs 1,525 2,613 Nonperforming TDRs: Construction and land development 132 104 Consumer real estate 62 65 Commercial and industrial loans 517 - Consumer and other - 21 Total nonperformingTDRs 711 190 Total TDRs $ 2,236 $ 2,803
Impaired loans	Unpaid Contractual (in thousands Recorded Principal Allocated June 30, 2016 Investment Balance Allowance Loans without a specific valuation allowance: Construction and land development $ 129 $ 166 $ - Commercial real estate 547 543 - Commercial and industrial loans 640 640 Loans with a specific valuation allowance: Construction and land development 3 29 3 Commercial real estate 334 331 10 Consumer real estate 403 430 110 Commercial and industrial loans 2,349 2,374 1,120 Total $ 4,405 $ 4,513 $ 1,243 (in thousands Recorded Unpaid Contractual Principal Allocated December 31, 2015 Investment Balance Allowance Loans without a specific valuation allowance: Construction and land development $ 235 $ 397 $ - Commercial real estate 2,220 2,319 - Loans with a specific valuation allowance: Construction and land development 4 29 4 Commercial real estate 399 480 72 Consumer real estate 410 474 115 Commercial and industrial loans (except those secured by real estate) 602 895 297 Consumer and other 21 26 21 Total $ 3,891 $ 4,620 $ 509
Average recorded investment balance of impaired loans	Three months ended June 30, 2016 2015 Average Interest Average Interest Balance Income Balance Income Construction and land development $ 133 $ - $ 305 $ 1 Commercial real estate 1,113 13 5,737 40 Consumer real estate 404 4 826 7 Commercial and industrial loans 2,671 17 634 11 Consumer and other 13 - 24 - Total securities gains $ 4,334 $ 34 $ 7,526 $ 59 Six months ended June 30, 2016 2015 Average Interest Average Interest Balance Income Balance Income Construction and land development $ 182 $ - $ 322 $ 1 Commercial real estate 1,633 37 6,694 92 Consumer real estate 406 9 735 13 Commercial and industrial loans 1,618 47 667 22 Consumer and other 17 - 24 - Total securities gains $ 3,856 $ 93 $ 8,442 $ 128
Non-accrual loans	Nonaccrual June 30, December 31, (in thousands) 2016 2015 Construction and land development $ 132 $ 238 Consumer real estate 62 65 Commercial and industrial loans 1,026 189 Consumer and other - 21 Total $ 1,220 $ 513
Age analysis of past due loans, by loan type	Greater 30 - 59 60 - 89 than 90 Days Days Days Total (in thousands) Past Past Past Non- Past Total June 30, 2016 Due Due Due Accrual Due Current Loans Construction and land development $ - $ - $ - $ 132 $ 132 $ 63,687 $ 63,819 Commercial real estate - - - - - 594,034 594,034 Consumer real estate - - - 62 62 275,531 275,593 Commercial and industrial loans 346 - - 1,026 1,372 156,268 157,640 Consumer and other - - - - - 13,672 13,672 Total $ 346 $ - $ - $ 1,220 $ 1,566 $ 1,103,192 $ 1,104,758 Greater 30 - 59 60 - 89 than 90 Days Days Days Total (in thousands) Past Past Past Non- Past Total December 31, 2015 Due Due Due Accrual Due Current Loans Construction and land development $ - $ - $ - $ 238 $ 238 $ 64,464 $ 64,702 Commercial real estate - - - - - 533,909 533,909 Consumer real estate - - - 65 65 249,642 249,707 Commercial and industrial loans - - - 189 189 153,480 153,669 Consumer and other - - - 21 21 13,518 13,539 Total $ - $ - $ - $ 513 $ 513 $ 1,015,013 $ 1,015,526
Credit risk profile of each loan type based on internally assigned risk grade	Risk Grade (in thousands) 1 2 3 4 5 6 7 Total June 30, 2016 Construction and land development $ - $ 200 $ 758 $ 14,284 $ 48,229 $ 216 $ - $ 63,687 Commercial real estate - 579 206,150 277,137 105,483 3,804 - 593,153 Consumer real estate 52 18,865 122,583 95,458 36,936 1,296 - 275,190 Commercial and industrial loans 2,150 2,145 26,253 96,721 26,737 645 - 154,651 Consumer and other 1,159 499 885 7,816 3,137 176 - 13,672 Total $ 3,361 $ 22,288 $ 356,629 $ 491,416 $ 220,522 $ 6,137 $ - $ 1,100,353 Risk Grade (in thousands) 1 2 3 4 5 6 7 Total December 31, 2015 Construction and land development $ 26 $ 200 $ 2,545 $ 14,318 $ 47,133 $ 242 $ - $ 64,464 Commercial real estate - 619 195,935 243,771 87,492 3,473 - 531,290 Consumer real estate 53 10,933 111,123 92,127 34,346 714 - 249,296 Commercial and industrial loans 2,168 1,909 24,675 96,900 26,802 612 - 153,066 Consumer and other 980 1,069 960 8,392 1,936 182 - 13,519 Total $ 3,227 $ 14,730 $ 335,238 $ 455,508 $ 197,709 $ 5,223 $ - $ 1,011,635

5. OFF-BALANCE SHEET RISK (Tabl

5. OFF-BALANCE SHEET RISK (Tables)	6 Months Ended
5. OFF-BALANCE SHEET RISK (Tables)	Jun. 30, 2016
Off-balance Sheet Risk Tables
Summary of the contract amounts exposed to off-balance sheet credit risk	June 30, December 31, (In thousands) 2016 2015 Financial instruments whose contract amounts represent credit risk: Undisbursed lines of credit $ 190,741 $ 163,572 Standby letters of credit 4,203 3,188 Total $ 194,944 $ 166,760

6. DERIVATIVES AND FINANCIAL 23

6. DERIVATIVES AND FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
6. DERIVATIVES AND FINANCIAL INSTRUMENTS (Tables)	Jun. 30, 2016
Derivatives And Financial Instruments Tables
Summary of cash flow hedges	June 30, 2016 December 31, 2015 Notational Fair Notational Fair (In thousands) Amount Value Amount Value Included in other assets: Cap 1 - maturing August 2019 $ 35,000 $ 487 $ 35,000 $ 1,334 Cap 2 - maturing September 2019 35,000 500 35,000 1,360 Cap 3 - maturing October 2019 30,000 447 30,000 1,216 $ 100,000 $ 1,434 $ 100,000 $ 3,910
Amortization of the premium on the interest rate caps	(In thousands) 2016 (remaining quarters) $ 572 2017 1,779 2018 2,247 2019 1,751 $ 6,349
Remaining amortization of the gain associated with the exit of the swaps	(In thousands) 2016 (remaining quarters) $ 37 2017 74 2018 75 Thereafter 147 $ 333

7. FAIR VALUE OF FINANCIAL IN24

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	Jun. 30, 2016
Fair Value Of Financial Instruments Tables
Available for sale securities measured at fair value on a recurring basis	Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable (In thousands) Total Identical Assets Inputs Inputs Description Fair Value (Level 1) (Level 2) (Level 3) June 30, 2016 Securities available-for-sale: U.S. Agency obligations $ 19,021 $ - $ 19,021 $ - Collateralized mortgage obligations 50,187 - 50,187 - Mortgage-backed securities 50,159 - 50,159 - Municipal bonds 64,367 - 64,367 Other 2,589 2,089 - 500 186,323 2,089 183,734 500 Interest rate caps 1,434 - 1,434 - Total assets at fair value $ 187,757 $ 2,089 $ 185,168 $ 500 December 31, 2015 Securities available-for-sale: U.S. Agency obligations $ 19,901 $ - $ 19,901 $ - Collateralized mortgage obligations 60,941 - 60,941 - Mortgage-backed securities 31,310 - 31,310 - Municipal bonds 54,434 - 54,434 Other 2,310 1,810 - 500 168,896 1,810 166,586 500 Interest rate caps 3,910 - 3,910 - Total assets at fair value $ 172,806 $ 1,810 $ 170,496 $ 500
Fair value measurements of investment securities available for sale using Level 3 significant unobservable inputs	Level 3 Investment (In thousands) Securities Balance at December 31, 2015 $ 500 Purchases - Balance at June 30, 2016 $ 500
Fair value measurements for impaired loans and other real estate on a non-recurring basis	Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable (In thousands) Total Identical Assets Inputs Inputs June 30, 2016 Fair Value (Level 1) (Level 2) (Level 3) Impaired loans $ 3,162 $ - $ - $ 3,162 Other real estate owned 5,183 - - 5,183 Total $ 8,345 $ - $ - $ 8,345 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable (In thousands) Total Identical Assets Inputs Inputs December 31, 2015 Fair Value (Level 1) (Level 2) (Level 3) Impaired loans $ 3,382 $ - $ - $ 3,382 Other real estate owned 5,453 - - 5,453 Total $ 8,835 $ - $ - $ 8,835
Significant unobservable inputs used in the fair value measurements	June 30, 2016 and December 31, 2015 Valuation Significant Significant Technique Observable Inputs unobservable Inputs Impaired loans Appraisal value Appraisals and/or sales of Appraisals discounted 5% to 10% for comparable properties sales commissions and other holding costs Other real estate owned Appraisal value/ Appraisals and/or sales of Appraisals discounted 5% to 10% for Comparison sale/ comparable properties sales commissions and other holding costs Other estimates
Carrying amount fair value of the Company's financial instruments	June 30, 2016 Carrying Fair Value (In thousands) Amount Total Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 100,115 $ 100,115 $ 100,115 $ - $ - Investment securities available-for- sale 186,323 186,323 2,089 183,734 500 Loans, net 1,097,358 1,101,914 - 1,098,752 3,162 Accrued interest receivable 4,092 4,092 4,092 - - Federal Home Loan Bank stock 8,613 8,613 - - 8,613 Bank-owned life insurance 28,723 28,723 - 28,723 - Interest rate caps 1,434 1,434 - 1,434 - Financial liabilities: Non-maturing deposits 834,024 834,024 - 834,024 - Time deposits 266,177 266,530 - 266,530 - Accrued interest payable 336 336 336 - - Repurchase agreements and federal funds purchased 22,690 22,690 - 22,690 - FHLB Advances and other borrowings 175,000 175,014 - 175,014 - Subordinated debt 18,558 14,397 - 14,397 - December 31, 2015 Carrying Fair Value (In thousands) Amount Total Level 1 Level 2 Level 3 Financial assets: Cash and due from banks $ 55,530 $ 55,530 $ 55,530 $ - $ - Investment securities available-for- sale 168,896 168,896 1,810 166,586 500 Loans, net 1,008,515 1,013,415 - 1,010,033 3,382 Accrued interest receivable 3,795 3,795 3,795 - - Federal Home Loan Bank stock 8,061 8,061 - - 8,061 Bank-owned life insurance 28,274 28,274 - 28,274 - Interest rate caps 3,910 3,910 - 3,910 - Financial liabilities: Non-maturing deposits 663,066 663,066 - 663,066 - Time deposits 319,781 320,246 - 320,246 - Accrued interest payable 356 356 356 - - Repurchase agreements and federal funds purchased 30,580 30,580 - 30,580 - FHLB Advances and other borrowings 169,800 169,800 - 169,800 - Subordinated debt 18,558 15,591 - 15,591 -

8. SUPPLEMENTAL CASH FLOW DIS25

8. SUPPLEMENTAL CASH FLOW DISCLOSURE (Tables)	6 Months Ended
8. SUPPLEMENTAL CASH FLOW DISCLOSURE (Tables)	Jun. 30, 2016
Supplemental Cash Flow Disclosure Tables
Supplemental cash flow disclosure	For the six-months ended June 30, (In thousands) 2016 2015 Supplemental Disclosures of Cash Flow Information: Interest paid $ 3,907 $ 3,741 Income taxes paid $ 2,635 $ 1,700 Supplemental Schedule of Noncash Investing and Financing Activites: Change in fair value of securities available-for-sale, net of taxes $ 2,367 $ (1,028 ) Change in fair value of cash flow hedges, net of taxes $ (1,333 ) $ (784 ) Transfer from loans to foreclosed real estate $ - $ 3,300

2. BASIS OF PRESENTATION (Detai

2. BASIS OF PRESENTATION (Details) - shares	3 Months Ended		6 Months Ended
2. BASIS OF PRESENTATION (Details) - shares	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Shares used in the computation of earnings per share:
Weighted average number of shares outstanding - basic	4,581,193	4,500,695	4,563,349	4,492,912
Dilutive effect of restricted shares	43,133	32,877	44,184	35,641
Weighted average number of shares outstanding - diluted	4,624,326	4,533,572	4,607,533	4,528,553

2. BASIS OF PRESENTATION (Det27

2. BASIS OF PRESENTATION (Details 1) - shares	3 Months Ended		6 Months Ended
2. BASIS OF PRESENTATION (Details 1) - shares	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Stock Options
Anti-dilutive shares excluded from the computation of earnings per share	80,500	91,000	80,500	91,000
Unvested Restricted Shares
Anti-dilutive shares excluded from the computation of earnings per share	45,338	45,986	45,338	45,986

2. BASIS OF PRESENTATION (Det28

2. BASIS OF PRESENTATION (Details 2) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Basis Of Presentation Details 2
Unrealized gains on securities available-for-sale	$ 5,207	$ 1,378
Deferred tax expense	(1,992)	(530)
Other comprehensive income, net of tax	3,215	848
Unrealized losses on cash flow hedges	(4,915)	(2,779)
Deferred tax benefit	1,848	1,045
Other comprehensive loss, net of tax	(3,067)	(1,734)
Total other comprehensive income (loss)	$ 148	$ (886)	$ (670)	$ 1,142

2. BASIS OF PRESENTATION (Det29

2. BASIS OF PRESENTATION (Details 3) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Other comprehensive income (loss), beginning	$ (886)	$ 1,142
Other comprehensive income (loss) before reclassification	1,119	(1,389)
Amounts reclassified from accumulated other comprehensive income	(85)	(423)
Net current-period other comprehensive income (loss)	1,034	(1,812)
Other comprehensive income (loss), ending	148	(670)
Unrealized Gains and Losses on Available-for-Sale Securities
Other comprehensive income (loss), beginning	848	1,645
Other comprehensive income (loss) before reclassification	2,452	(605)
Amounts reclassified from accumulated other comprehensive income	(85)	(423)
Net current-period other comprehensive income (loss)	2,367	(1,028)
Other comprehensive income (loss), ending	3,215	617
Unrealized Gains and Losses on Cash Flow Hedges
Other comprehensive income (loss), beginning	(1,734)	(503)
Other comprehensive income (loss) before reclassification	(1,333)	(784)
Amounts reclassified from accumulated other comprehensive income	0	0
Net current-period other comprehensive income (loss)	(1,333)	(784)
Other comprehensive income (loss), ending	$ (3,067)	$ (1,287)

3. INVESTMENT SECURITIES (Detai

3. INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
3. INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investment securities available for sale
Gross Unrealized Gains	$ 0	$ 0	$ 136	$ 427
Gross Unrealized Losses	0	$ 0	(51)	$ (4)
Estimated Fair Value	186,323		186,323		$ 168,896
U.S. Agency obligations
Investment securities available for sale
Amortized Cost	18,454		18,454		19,778
Gross Unrealized Gains			567		196
Gross Unrealized Losses			0		73
Estimated Fair Value	19,021		19,021		19,901
Collateralized mortgage obligations
Investment securities available for sale
Amortized Cost	49,277		49,277		60,826
Gross Unrealized Gains			910		321
Gross Unrealized Losses			0		206
Estimated Fair Value	50,187		50,187		60,941
Mortgage-backed securities
Investment securities available for sale
Amortized Cost	49,290		49,290		31,074
Gross Unrealized Gains			869		326
Gross Unrealized Losses			0		90
Estimated Fair Value	50,159		50,159		31,310
Municipal Bonds
Investment securities available for sale
Amortized Cost	61,419		61,419		53,163
Gross Unrealized Gains			2,948		1,346
Gross Unrealized Losses			0		75
Estimated Fair Value	64,367		64,367		54,434
Other
Investment securities available for sale
Amortized Cost	2,676		2,676		2,677
Gross Unrealized Gains			9		10
Gross Unrealized Losses			96		377
Estimated Fair Value	2,589		2,589		2,310
Total
Investment securities available for sale
Amortized Cost	181,116		181,116		167,518
Gross Unrealized Gains			5,303		2,199
Gross Unrealized Losses			96		821
Estimated Fair Value	$ 186,323		$ 186,323		$ 168,896

3. INVESTMENT SECURITIES (Det31

3. INVESTMENT SECURITIES (Details 1) $ in Thousands	Jun. 30, 2016USD ($)
Estimated Fair Value
Due within one year	$ 0
Due after one within five years	1,829
Due after five within ten years	20,030
Due after ten years	162,375
No stated maturity date	2,089
Total	186,323
U.S. Agency obligations
Estimated Fair Value
Due within one year	0
Due after one within five years	0
Due after five within ten years	0
Due after ten years	19,021
No stated maturity date	0
Total	19,021
Collateralized mortgage obligations
Estimated Fair Value
Due within one year	0
Due after one within five years	0
Due after five within ten years	0
Due after ten years	50,187
No stated maturity date	0
Total	50,187
Mortgage-backed securities
Estimated Fair Value
Due within one year	0
Due after one within five years	0
Due after five within ten years	14,229
Due after ten years	35,930
No stated maturity date	0
Total	50,159
Municipal Bonds
Estimated Fair Value
Due within one year	0
Due after one within five years	1,829
Due after five within ten years	5,801
Due after ten years	56,737
No stated maturity date	0
Total	64,367
Other
Estimated Fair Value
Due within one year	0
Due after one within five years	0
Due after five within ten years	0
Due after ten years	500
No stated maturity date	2,089
Total	$ 2,589

3. INVESTMENT SECURITIES (Det32

3. INVESTMENT SECURITIES (Details 2) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Securities available-for-sale:
Less than 12 Months, Fair Value	$ 0	$ 53,338
Less than 12 Months, Unrealized Losses	0	632
12 Months or More, Fair Value	894	14,151
12 Months or More, Unrealized Losses	96	189
Total, Fair Value	894	67,489
Total, Unrealized Losses	96	821
U.S. Agency obligations
Securities available-for-sale:
Less than 12 Months, Fair Value	0	3,007
Less than 12 Months, Unrealized Losses	0	0
12 Months or More, Fair Value	0	3,178
12 Months or More, Unrealized Losses	0	73
Total, Fair Value	0	6,185
Total, Unrealized Losses	0	73
Collateralized mortgage obligations
Securities available-for-sale:
Less than 12 Months, Fair Value	0	26,086
Less than 12 Months, Unrealized Losses	0	159
12 Months or More, Fair Value	0	2,983
12 Months or More, Unrealized Losses	0	47
Total, Fair Value	0	29,069
Total, Unrealized Losses	0	206
Mortgage-backed securities
Securities available-for-sale:
Less than 12 Months, Fair Value	0	18,575
Less than 12 Months, Unrealized Losses	0	90
12 Months or More, Fair Value	0	0
12 Months or More, Unrealized Losses	0	0
Total, Fair Value	0	18,575
Total, Unrealized Losses	0	90
Municipal Bonds
Securities available-for-sale:
Less than 12 Months, Fair Value	0	3,896
Less than 12 Months, Unrealized Losses	0	6
12 Months or More, Fair Value	0	7,990
12 Months or More, Unrealized Losses	0	69
Total, Fair Value	0	11,886
Total, Unrealized Losses	0	75
Other
Securities available-for-sale:
Less than 12 Months, Fair Value	0	1,774
Less than 12 Months, Unrealized Losses	0	377
12 Months or More, Fair Value	894	0
12 Months or More, Unrealized Losses	96	0
Total, Fair Value	894	1,774
Total, Unrealized Losses	$ 96	$ 377

3. INVESTMENT SECURITIES (Det33

3. INVESTMENT SECURITIES (Details 3) - Integer	Jun. 30, 2016	Dec. 31, 2015
Number of investment securities in an unrealized loss position	1	39
U.S. Agency obligations
Number of investment securities in an unrealized loss position	0	3
Collateralized mortgage obligations
Number of investment securities in an unrealized loss position	0	7
Mortgage-backed securities
Number of investment securities in an unrealized loss position	0	6
Municipal Bonds
Number of investment securities in an unrealized loss position	0	22
Other
Number of investment securities in an unrealized loss position	1	1

3. INVESTMENT SECURITIES (Det34

3. INVESTMENT SECURITIES (Details 4) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Investment Securities Details 4
Gross gains on sales of securities available for sale	$ 0	$ 0	$ 136	$ 427
Gross losses on sales of securities available for sale	0	0	(51)	(4)
Total securities gains	$ 0	$ 0	$ 85	$ 423

3. INVESTMENT SECURITIES (Det35

3. INVESTMENT SECURITIES (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Pledged to secure repurchase agreements, lines of credit and other borrowings	$ 82,800	$ 78,400

4. LOANS AND ALLOWANCE FOR LO36

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Total loans	$ 1,104,758		$ 1,015,526
Deferred loan (fees) costs	586		630
Less allowance for loan losses	(7,986)	$ (7,931)	(7,641)	$ (7,569)	$ (7,552)	$ (6,869)
Total net loans	1,097,358		1,008,515
Commercial Real Estate
Less allowance for loan losses	(3,278)	$ (3,072)	(3,156)	$ (2,086)	$ (2,003)	$ (2,510)
Construction and land development
Total loans	63,819		64,702
Less allowance for loan losses	(406)		(509)
Non-farm, non-residential \| Commercial Real Estate
Total loans	341,477
Commercial Real Estate
Total loans	594,034		533,909
Less allowance for loan losses	(3,278)		(3,156)
Commercial Real Estate \| Owner occupied
Total loans	158,612		147,017
Commercial Real Estate \| Multifamily, nonresidential and junior liens
Total loans	93,945		79,170
Commercial Real Estate \| Non-farm, non-residential
Total loans			307,722
Consumer Real Estate
Total loans	275,593		249,707
Less allowance for loan losses	(1,887)		(2,046)
Consumer Real Estate \| Home equity lines
Total loans	85,883		78,943
Consumer Real Estate \| Secured by 1-4 family residential, secured by first deeds of trust
Total loans	186,054		167,053
Consumer Real Estate \| Secured by 1-4 family residential, secured by second deeds of trust
Total loans	3,656		3,711
Commercial and industrial loans (except those secured by real estate)
Total loans	157,640		153,669
Less allowance for loan losses	(2,307)		(1,786)
Consumer and other
Total loans	13,672		13,539
Less allowance for loan losses	$ (108)		$ (144)

4. LOANS AND ALLOWANCE FOR LO37

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Allowance for loan losses
Beginning balance	$ 7,931	$ 7,552	$ 7,641	$ 6,869
Provision for loan losses	0	179	0	750
Loans charged off	(1)	(276)	(1)	(276)
Recoveries	56	114	346	226
Net (chargeoffs) recoveries	55	(162)	345	(50)
Ending balance	7,986	7,569	7,986	7,569
Construction and land development
Allowance for loan losses
Beginning balance	523	696	509	960
Provision for loan losses	(125)	93	(340)	(212)
Loans charged off	0	0	0	0
Recoveries	8	12	237	53
Net (chargeoffs) recoveries	8	12	237	53
Ending balance	406	801	406	801
Commercial Real Estate
Allowance for loan losses
Beginning balance	3,072	2,003	3,156	2,510
Provision for loan losses	187	257	66	(321)
Loans charged off	0	(276)	0	(276)
Recoveries	19	102	56	173
Net (chargeoffs) recoveries	19	(174)	56	(103)
Ending balance	3,278	2,086	3,278	2,086
Consumer Real Estate
Allowance for loan losses
Beginning balance	1,972	2,191	2,046	1,594
Provision for loan losses	(88)	46	(165)	643
Loans charged off	0	0	0	0
Recoveries	3	0	6	0
Net (chargeoffs) recoveries	3	0	6	0
Ending balance	1,887	2,237	1,887	2,237
Commercial and industrial loans (except those secured by real estate)
Allowance for loan losses
Beginning balance	1,790	2,602	1,786	1,662
Provision for loan losses	492	(214)	485	726
Loans charged off	0	0	0	0
Recoveries	25	0	36	0
Net (chargeoffs) recoveries	25	0	36	0
Ending balance	2,307	2,388	2,307	2,388
Consumer and other
Allowance for loan losses
Beginning balance	574	60	144	143
Provision for loan losses	(466)	(3)	(46)	(86)
Loans charged off	(1)	0	(1)	0
Recoveries	1	0	11	0
Net (chargeoffs) recoveries	0	0	10	0
Ending balance	$ 108	$ 57	$ 108	$ 57

4. LOANS AND ALLOWANCE FOR LO38

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Allowance for loan losses
Individually evaluated for impairment	$ 1,243	$ 509
Collectively evaluated for impairment	6,743	7,132
Total ending allowance	7,986	7,641
Loans
Individually evaluated for impairment	4,405	3,891
Collectively evaluated for impairment	1,100,353	1,011,635
Total ending loans	1,104,758	1,015,526
Construction and land development
Allowance for loan losses
Individually evaluated for impairment	3	4
Collectively evaluated for impairment	403	505
Total ending allowance	406	509
Loans
Individually evaluated for impairment	132	238
Collectively evaluated for impairment	63,687	64,464
Total ending loans	63,819	64,702
Commercial Real Estate
Allowance for loan losses
Individually evaluated for impairment	10	72
Collectively evaluated for impairment	3,268	3,084
Total ending allowance	3,278	3,156
Loans
Individually evaluated for impairment	881	2,619
Collectively evaluated for impairment	593,153	531,290
Total ending loans	594,034	533,909
Consumer Real Estate
Allowance for loan losses
Individually evaluated for impairment	110	115
Collectively evaluated for impairment	1,777	1,931
Total ending allowance	1,887	2,046
Loans
Individually evaluated for impairment	403	411
Collectively evaluated for impairment	275,190	249,296
Total ending loans	275,593	249,707
Commercial and industrial loans (except those secured by real estate)
Allowance for loan losses
Individually evaluated for impairment	1,120	297
Collectively evaluated for impairment	1,187	1,489
Total ending allowance	2,307	1,786
Loans
Individually evaluated for impairment	2,989	602
Collectively evaluated for impairment	154,651	153,067
Total ending loans	157,640	153,669
Consumer and other
Allowance for loan losses
Individually evaluated for impairment	0	21
Collectively evaluated for impairment	108	123
Total ending allowance	108	144
Loans
Individually evaluated for impairment	0	21
Collectively evaluated for impairment	13,672	13,518
Total ending loans	$ 13,672	$ 13,539

4. LOANS AND ALLOWANCE FOR LO39

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Performing TDRs	$ 1,525	$ 2,613
Nonperforming TDRs	711	190
Total TDRs	2,236	2,803
Consumer Real Estate
Performing TDRs	341	346
Nonperforming TDRs	62	65
Commercial and industrial loans (except those secured by real estate)
Performing TDRs	638	47
Nonperforming TDRs	517	0
Consumer and other
Nonperforming TDRs	0	21
Construction and land development
Nonperforming TDRs	132	104
Commercial Real Estate
Performing TDRs	$ 546	$ 2,220

4. LOANS AND ALLOWANCE FOR LO40

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Impaired loans
Recorded Investment in Impaired Loans	$ 4,405	$ 3,891
Unpaid Contractual Principal Balance	4,513	4,620
Allocated Allowance	1,243	509
Commercial and industrial loans (except those secured by real estate)
Impaired loans
Recorded Investment With No Allowance	640
Recorded Investment With Allowance	2,349	602
Unpaid Contractual Principal Balance With No Allowance	640
Unpaid Contractual Principal Balance With Allowance	2,374	895
Allocated Allowance	1,120	297
Consumer and other
Impaired loans
Recorded Investment With Allowance		21
Unpaid Contractual Principal Balance With Allowance		26
Allocated Allowance		21
Construction and land development
Impaired loans
Recorded Investment With No Allowance	129	235
Recorded Investment With Allowance	3	4
Unpaid Contractual Principal Balance With No Allowance	166	397
Unpaid Contractual Principal Balance With Allowance	29	29
Allocated Allowance	3	4
Commercial Real Estate
Impaired loans
Recorded Investment With No Allowance	547	2,220
Recorded Investment With Allowance	334	399
Unpaid Contractual Principal Balance With No Allowance	543	2,319
Unpaid Contractual Principal Balance With Allowance	331	480
Allocated Allowance	10	72
Consumer Real Estate
Impaired loans
Recorded Investment With Allowance	403	41
Unpaid Contractual Principal Balance With Allowance	430	474
Allocated Allowance	$ 110	$ 115

4. LOANS AND ALLOWANCE FOR LO41

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Average balance	$ 4,334	$ 7,526	$ 3,856	$ 8,442
Interest income	34	59	93	128
Construction and land development
Average balance	133	305	182	322
Interest income	0	1	0	1
Commercial Real Estate
Average balance	1,113	5,737	1,633	6,694
Interest income	13	40	37	92
Consumer Real Estate
Average balance	404	826	406	735
Interest income	4	7	9	13
Commercial and industrial loans (except those secured by real estate)
Average balance	2,671	634	1,618	667
Interest income	17	11	47	22
Consumer and other
Average balance	13	24	17	24
Interest income	$ 0	$ 0	$ 0	$ 0

4. LOANS AND ALLOWANCE FOR LO42

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 6) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Non-accrual loans
Non-accrual loans	$ 1,220	$ 513
Consumer Real Estate
Non-accrual loans
Non-accrual loans	62	65
Commercial and industrial loans (except those secured by real estate)
Non-accrual loans
Non-accrual loans	1,026	189
Construction and land development
Non-accrual loans
Non-accrual loans	132	238
Consumer and other
Non-accrual loans
Non-accrual loans	$ 0	$ 21

4. LOANS AND ALLOWANCE FOR LO43

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 7) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Past due loans
Loans 30-59 Days Past Due	$ 346	$ 0
Loans 60-89 Days Past Due	0	0
Loans 90 or More Days Past Due	0	0
Non-accrual	1,220	513
Total Past Due Loans	1,566	513
Total Current Loans	1,103,192	1,015,013
Total loans	1,104,758	1,015,526
Commercial Real Estate
Past due loans
Loans 30-59 Days Past Due	0	0
Loans 60-89 Days Past Due	0	0
Loans 90 or More Days Past Due	0	0
Non-accrual	0	0
Total Past Due Loans	0	0
Total Current Loans	594,034	533,909
Total loans	594,034	533,909
Consumer Real Estate
Past due loans
Loans 30-59 Days Past Due	0	0
Loans 60-89 Days Past Due	0	0
Loans 90 or More Days Past Due	0	0
Non-accrual	62	65
Total Past Due Loans	62	65
Total Current Loans	275,531	249,642
Total loans	275,593	249,707
Commercial and industrial loans (except those secured by real estate)
Past due loans
Loans 30-59 Days Past Due	346	0
Loans 60-89 Days Past Due	0	0
Loans 90 or More Days Past Due	0	0
Non-accrual	1,026	189
Total Past Due Loans	1,372	189
Total Current Loans	156,268	153,480
Total loans	157,640	153,669
Consumer and other
Past due loans
Loans 30-59 Days Past Due	0	0
Loans 60-89 Days Past Due	0	0
Loans 90 or More Days Past Due	0	0
Non-accrual	0	21
Total Past Due Loans	0	21
Total Current Loans	13,672	13,518
Total loans	13,672	13,539
Construction and land development
Past due loans
Loans 30-59 Days Past Due		0
Loans 60-89 Days Past Due		0
Loans 90 or More Days Past Due		0
Non-accrual		238
Total Past Due Loans		238
Total Current Loans		64,464
Total loans	63,819	$ 64,702
Construction and land development
Past due loans
Loans 30-59 Days Past Due	0
Loans 60-89 Days Past Due	0
Loans 90 or More Days Past Due	0
Non-accrual	132
Total Past Due Loans	132
Total Current Loans	63,687
Total loans	$ 63,819

4. LOANS AND ALLOWANCE FOR LO44

4. LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 8) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Total Loans	$ 1,100,353	$ 1,011,635
Risk Grade 1
Total Loans	3,361	3,227
Risk Grade 2
Total Loans	22,288	14,730
Risk Grade 3
Total Loans	356,629	335,238
Risk Grade 4
Total Loans	491,416	455,508
Risk Grade 5
Total Loans	220,522	197,709
Risk Grade 6
Total Loans	6,137	5,223
Risk Grade 7
Total Loans	0	0
Construction and land development
Total Loans	63,687	64,464
Construction and land development \| Risk Grade 1
Total Loans	0	26
Construction and land development \| Risk Grade 2
Total Loans	200	200
Construction and land development \| Risk Grade 3
Total Loans	758	2,545
Construction and land development \| Risk Grade 4
Total Loans	14,284	14,318
Construction and land development \| Risk Grade 5
Total Loans	48,229	47,133
Construction and land development \| Risk Grade 6
Total Loans	216	242
Construction and land development \| Risk Grade 7
Total Loans	0	0
Commercial Real Estate
Total Loans	593,153	531,290
Commercial Real Estate \| Risk Grade 1
Total Loans	0	0
Commercial Real Estate \| Risk Grade 2
Total Loans	579	619
Commercial Real Estate \| Risk Grade 3
Total Loans	206,150	195,935
Commercial Real Estate \| Risk Grade 4
Total Loans	277,137	243,771
Commercial Real Estate \| Risk Grade 5
Total Loans	105,483	87,492
Commercial Real Estate \| Risk Grade 6
Total Loans	3,804	3,473
Commercial Real Estate \| Risk Grade 7
Total Loans	0	0
Consumer Real Estate
Total Loans	275,190	249,296
Consumer Real Estate \| Risk Grade 1
Total Loans	52	53
Consumer Real Estate \| Risk Grade 2
Total Loans	18,865	10,933
Consumer Real Estate \| Risk Grade 3
Total Loans	122,583	111,123
Consumer Real Estate \| Risk Grade 4
Total Loans	95,458	92,127
Consumer Real Estate \| Risk Grade 5
Total Loans	36,936	34,346
Consumer Real Estate \| Risk Grade 6
Total Loans	1,296	714
Consumer Real Estate \| Risk Grade 7
Total Loans	0	0
Commercial and industrial loans (except those secured by real estate)
Total Loans	154,651	153,066
Commercial and industrial loans (except those secured by real estate) \| Risk Grade 1
Total Loans	2,150	2,168
Commercial and industrial loans (except those secured by real estate) \| Risk Grade 2
Total Loans	2,145	1,909
Commercial and industrial loans (except those secured by real estate) \| Risk Grade 3
Total Loans	26,253	24,675
Commercial and industrial loans (except those secured by real estate) \| Risk Grade 4
Total Loans	96,721	96,900
Commercial and industrial loans (except those secured by real estate) \| Risk Grade 5
Total Loans	26,737	26,802
Commercial and industrial loans (except those secured by real estate) \| Risk Grade 6
Total Loans	645	612
Commercial and industrial loans (except those secured by real estate) \| Risk Grade 7
Total Loans	0	0
Consumer and other
Total Loans	13,672	13,519
Consumer and other \| Risk Grade 1
Total Loans	1,159	980
Consumer and other \| Risk Grade 2
Total Loans	499	1,069
Consumer and other \| Risk Grade 3
Total Loans	885	960
Consumer and other \| Risk Grade 4
Total Loans	7,816	8,392
Consumer and other \| Risk Grade 5
Total Loans	3,137	1,936
Consumer and other \| Risk Grade 6
Total Loans	176	182
Consumer and other \| Risk Grade 7
Total Loans	$ 0	$ 0

5. OFF-BALANCE SHEET RISK (Deta

5. OFF-BALANCE SHEET RISK (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Line of credit	$ 194,944	$ 166,760
Standby Letters of Credit
Line of credit	190,741	163,572
Undisbursed Lines of Credit
Line of credit	$ 4,203	$ 3,188

6. DERIVATIVES AND FINANCIAL 46

6. DERIVATIVES AND FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Notational amount	$ 100,000	$ 100,000
Fair value	1,434	3,910
Cap 1 - maturing August 2019
Notational amount	35,000	35,000
Fair value	487	1,334
Cap 2 - maturing September 2019
Notational amount	35,000	35,000
Fair value	500	1,360
Cap 3 - maturing October 2019
Notational amount	30,000	30,000
Fair value	$ 447	$ 1,216

6. DERIVATIVES AND FINANCIAL 47

6. DERIVATIVES AND FINANCIAL INSTRUMENTS (Details 1) $ in Thousands	Jun. 30, 2016USD ($)
Derivatives And Financial Instruments Details 1
2016 (remaining quarters)	$ 572
2,017	1,779
2,018	2,247
2,019	1,751
Total	$ 6,349

6. DERIVATIVES AND FINANCIAL 48

6. DERIVATIVES AND FINANCIAL INSTRUMENTS (Details 2) $ in Thousands	Jun. 30, 2016USD ($)
Derivatives And Financial Instruments Details 2
2016 (remaining quarters)	$ 37
2,017	74
2,018	75
Thereafter	147
Total	$ 333

6. DERIVATIVES AND FINANCIAL 49

6. DERIVATIVES AND FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivatives And Financial Instruments Details Narrative
Amortization associated with the interest rate caps	$ 198	$ 15	$ 341	$ 18
Gains on swaps	$ 12		$ 20

7. FAIR VALUE OF FINANCIAL IN50

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Estimated Fair Value	$ 186,323	$ 168,896
Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	2,089	1,810
Significant Other Observable (Level 2)
Estimated Fair Value	183,734	166,586
Significant Unobservable (Level 3)
Estimated Fair Value	500	500
U.S. Agency obligations
Estimated Fair Value	19,021	19,901
U.S. Agency obligations \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	0	0
U.S. Agency obligations \| Significant Other Observable (Level 2)
Estimated Fair Value	19,021	19,901
U.S. Agency obligations \| Significant Unobservable (Level 3)
Estimated Fair Value	0	0
Collateralized mortgage obligations
Estimated Fair Value	50,187	60,941
Collateralized mortgage obligations \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	0	0
Collateralized mortgage obligations \| Significant Other Observable (Level 2)
Estimated Fair Value	50,187	60,941
Collateralized mortgage obligations \| Significant Unobservable (Level 3)
Estimated Fair Value	0	0
Mortgage-backed securities
Estimated Fair Value	50,159	31,310
Mortgage-backed securities \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	0	0
Mortgage-backed securities \| Significant Other Observable (Level 2)
Estimated Fair Value	50,159	31,310
Mortgage-backed securities \| Significant Unobservable (Level 3)
Estimated Fair Value	0	0
Municipal Bonds
Estimated Fair Value	64,367	54,434
Municipal Bonds \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	0	0
Municipal Bonds \| Significant Other Observable (Level 2)
Estimated Fair Value	64,367	54,434
Municipal Bonds \| Significant Unobservable (Level 3)
Estimated Fair Value	0	0
Other
Estimated Fair Value	2,589	2,310
Other \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	2,089	1,810
Other \| Significant Other Observable (Level 2)
Estimated Fair Value	0	0
Other \| Significant Unobservable (Level 3)
Estimated Fair Value	500	500
Interest Rate Caps
Estimated Fair Value	1,434	3,910
Interest Rate Caps \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	0	0
Interest Rate Caps \| Significant Other Observable (Level 2)
Estimated Fair Value	1,434	3,910
Interest Rate Caps \| Significant Unobservable (Level 3)
Estimated Fair Value	0	0
Total
Estimated Fair Value	187,757	172,806
Total \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Estimated Fair Value	2,089	1,810
Total \| Significant Other Observable (Level 2)
Estimated Fair Value	185,168	170,496
Total \| Significant Unobservable (Level 3)
Estimated Fair Value	$ 500	$ 500

7. FAIR VALUE OF FINANCIAL IN51

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) - Significant Unobservable (Level 3) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Investment Securities Level 3 Valuation
Balance, beginning of period	$ 500
Purchases	0
Balance, end of period	$ 500

7. FAIR VALUE OF FINANCIAL IN52

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Impaired loans	$ 3,162	$ 3,382
Other real estate	5,183	5,453
Total	$ 8,345	8,835
Impaired loans [Member]
Valuation Technique	Appraisal value
Significant Unobservable Inputs	Appraisals and/or sales of comparable properties
Significant Unobservable Inputs	Appraisals discounted 5% to 10% for sales commissions and other holding costs
Other real estate [Member]
Valuation Technique	Appraisal value/Comparison sale/Other estimates
Significant Unobservable Inputs	Appraisals and/or sales of comparable properties
Significant Unobservable Inputs	Appraisals discounted 5% to 10% for sales commissions and other holding costs
Level 1
Impaired loans	$ 0	0
Other real estate	0	0
Total	0	0
Level 2
Impaired loans	0	0
Other real estate	0	0
Total	0	0
Level 3
Impaired loans	3,162	3,382
Other real estate	5,183	5,453
Total	$ 8,345	$ 8,835

7. FAIR VALUE OF FINANCIAL IN53

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financial Assets:
Cash and due from banks	$ 100,115	$ 55,530
Investment securities available-for-sale	186,323	168,896
Loans, net	1,097,358	1,008,515
Accrued interest receivable	4,092	3,795
Federal Home Loan Bank stock	8,613	8,061
Bank owned life insurance	28,723	28,274
Interest rate caps	1,434	3,910
Financial Liabilities:
Non-maturing deposits	834,024	663,066
Time deposits	266,177	319,781
Accrued interest payable	336	356
Repurchase agreements and federal funds purchased	22,690	30,580
FHLB Advances and other borrowings	175,000	169,800
Subordinated debentures	18,558	18,558
Estimated Fair Value
Financial Assets:
Cash and due from banks	100,115	55,530
Investment securities available-for-sale	186,323	168,896
Loans, net	1,101,914	1,013,415
Accrued interest receivable	4,092	3,795
Federal Home Loan Bank stock	8,613	8,061
Bank owned life insurance	28,723	28,274
Interest rate caps	1,434	3,910
Financial Liabilities:
Non-maturing deposits	834,024	663,066
Time deposits	266,530	320,246
Accrued interest payable	336	356
Repurchase agreements and federal funds purchased	22,690	30,580
FHLB Advances and other borrowings	175,014	169,800
Subordinated debentures	14,397	15,591
Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial Assets:
Cash and due from banks	100,115	55,530
Investment securities available-for-sale	2,089	1,810
Loans, net	0	0
Accrued interest receivable	4,092	3,795
Federal Home Loan Bank stock	0	0
Bank owned life insurance	0	0
Interest rate caps	0	0
Financial Liabilities:
Non-maturing deposits	0	0
Time deposits	0	0
Accrued interest payable	336	356
Repurchase agreements and federal funds purchased	0	0
FHLB Advances and other borrowings	0	0
Subordinated debentures	0	0
Significant Other Observable (Level 2)
Financial Assets:
Cash and due from banks	0	0
Investment securities available-for-sale	183,734	166,586
Loans, net	1,098,752	1,010,033
Accrued interest receivable	0	0
Federal Home Loan Bank stock	0	0
Bank owned life insurance	28,723	28,274
Interest rate caps	1,434	3,910
Financial Liabilities:
Non-maturing deposits	834,024	663,066
Time deposits	266,530	320,246
Accrued interest payable	0	0
Repurchase agreements and federal funds purchased	22,690	30,580
FHLB Advances and other borrowings	175,014	169,800
Subordinated debentures	14,397	15,591
Significant Unobservable (Level 3)
Financial Assets:
Cash and due from banks	0	0
Investment securities available-for-sale	500	500
Loans, net	3,162	3,382
Accrued interest receivable	0	0
Federal Home Loan Bank stock	8,613	8,061
Bank owned life insurance	0	0
Interest rate caps	0	0
Financial Liabilities:
Non-maturing deposits	0	0
Time deposits	0	0
Accrued interest payable	0	0
Repurchase agreements and federal funds purchased	0	0
FHLB Advances and other borrowings	0	0
Subordinated debentures	$ 0	$ 0

8. SUPPLEMENTAL CASH FLOW DIS54

8. SUPPLEMENTAL CASH FLOW DISCLOSURE (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Supplemental Disclosures of Cash Flow Information:
Interest paid	$ 3,907	$ 3,741
Income taxes paid	2,635	1,700
Supplemental Schedule of Noncash Investing and Financing Activites:
Change in fair value of securities available-for-sale, net of taxes	2,367	(1,028)
Change in fair value of cash flow hedges, net of taxes	(1,333)	(784)
Transfer from loans to foreclosed real estate	$ 0	$ 3,300

9. ISSUANCE OF COMMON STOCK (De

9. ISSUANCE OF COMMON STOCK (Details Narrative) - shares	Jun. 30, 2016	Dec. 31, 2015
Common stock issued	5,449,866	4,581,334
Long-Term Stock Based Compensation Plan
Common stock issued	19,145
Employee Stock Purchase Plan
Common stock issued	3,799