SB Financial (SBFG) 10-Q 15 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 12, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	SB FINANCIAL GROUP, INC.
Entity Central Index Key	767,405
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,891,671

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 29,945	$ 20,459
Securities available for sale, at fair value	92,472	89,789
Other securities - FRB and FHLB Stock	3,748	3,748
Total investment securities	96,220	93,537
Loans held for sale	8,441	7,516
Loans, net of unearned income	604,776	557,659
Allowance for loan losses	(7,450)	(6,990)
Net loans	597,326	550,669
Premises and equipment, net	18,806	19,010
Cash surrender value of life insurance	13,581	13,437
Goodwill & other intangibles	16,429	16,435
Foreclosed assets held for sale, net	157	286
Mortgage servicing rights	6,494	7,152
Accrued interest receivable	1,397	1,260
Other assets	4,367	3,310
Total assets	793,163	733,071
Deposits
Non interest bearing demand	110,899	113,113
Interest bearing demand	129,658	126,443
Savings	84,975	83,447
Money market	134,365	104,412
Time deposits	188,403	159,038
Total deposits	648,300	586,453
Advances from Federal Home Loan Bank	23,000	35,000
Repurchase agreements	17,797	12,406
Trust preferred securities	10,310	10,310
Accrued interest payable	384	264
Other liabilities	8,422	7,397
Total liabilities	708,213	651,830
Commitments & Contingent Liabilities
Stockholders' Equity
Preferred stock, Series A	13,983	13,983
Common stock	12,569	12,569
Additional paid-in capital	15,367	15,438
Retained earnings	42,925	40,059
Accumulated other comprehensive income	1,552	650
Treasury stock, at cost	(1,446)	(1,458)
Total equity	84,950	81,241
Total liabilities and equity	$ 793,163	$ 733,071

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Loans
Taxable	$ 6,648	$ 5,835	$ 12,908	$ 11,454
Nontaxable	24	9	33	15
Securities
Taxable	392	395	794	767
Nontaxable	149	175	305	352
Total interest income	7,213	6,414	14,040	12,588
Interest expense
Deposits	647	500	1,192	995
Repurchase Agreements & Other	4	4	9	9
Federal Home Loan Bank advances	77	94	183	186
Trust preferred securities	62	53	121	104
Total interest expense	790	651	1,505	1,294
Net interest income	6,423	5,763	12,535	11,294
Provision for loan losses		500	250	850
Net interest income after provision for loan losses	6,423	5,263	12,285	10,444
Noninterest income
Wealth Management Fees	643	656	1,276	1,325
Customer service fees	680	702	1,360	1,334
Gain on sale of mtg. loans & OMSR's	2,284	1,771	3,667	3,205
Mortgage loan servicing fees, net	(273)	521	(719)	545
Gain on sale of non-mortgage loans	151	321	600	575
Data service fees	233	306	510	623
Net gain on sale of securities	92		203
Gain/(loss) on sale/disposal of assets	186	(1)	208	(20)
Other income	311	167	641	452
Total non-interest income	4,307	4,443	7,746	8,039
Noninterest expense
Salaries and employee benefits	4,314	3,935	8,093	7,412
Net occupancy expense	524	480	1,089	983
Equipment expense	639	524	1,234	1,089
Data processing fees	339	247	644	510
Professional fees	326	426	642	866
Marketing expense	199	142	370	291
Telephone and communication	102	98	201	188
Postage and delivery expense	162	201	359	435
State, local and other taxes	171	128	270	257
Employee expense	128	138	246	291
Intangible amortization expense	3	55	6	109
Other expenses	500	444	1,148	1,031
Total non-interest expense	7,407	6,818	14,302	13,462
Income before income tax expense	3,323	2,888	5,729	5,021
Income tax expense	1,058	897	1,809	1,534
Net income	2,265	1,991	3,920	3,487
Preferred Stock Dividends	244	244	488	469
Net income available to common shareholders	$ 2,021	$ 1,747	$ 3,432	$ 3,018
Basic earnings per common share	$ 0.41	$ 0.36	$ 0.70	$ 0.62
Diluted earnings per common share	0.35	0.31	0.61	0.54
Dividends per common share	$ 0.06	$ 0.05	$ 0.115	$ 0.095
Average common shares outstanding (in thousands):
Basic:	4,893	4,884	4,894	4,882
Diluted:	6,390	6,382	6,396	6,381

Condensed Consolidated Stateme4

Condensed 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
Statements of Comprehensive Income [Abstract]
Net income	$ 2,265	$ 1,991	$ 3,920	$ 3,487
Available-for-sale investment securities:
Gross unrealized holding gain (loss) arising in the period	480	(779)	1,570	(255)
Related tax (expense)/benefit	(163)	265	(534)	87
Less: Reclassification for gain realized in income	(92)		(203)
Related tax expense	31		69
Net effect on other comprehensive income	256	(514)	902	(168)
Total comprehensive income	$ 2,521	$ 1,477	$ 4,822	$ 3,319

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Stock
Beginning Balance at Dec. 31, 2014	$ 75,683	$ 13,983	$ 12,569	$ 15,461	$ 34,379	$ 918	$ (1,627)
Net Income	3,487				3,487
Other Comprehensive Income	(168)					(168)
Dividends on Common Stock	(467)				(467)
Dividends on preferred stock	(469)				(469)
Issuance of Restricted Stock and Stock Options	18			(78)			96
Stock Repurchase	(2)						(2)
Share based compensation expense	41			41
Ending Balance at Jun. 30, 2015	78,123	13,983	12,569	15,424	36,930	750	(1,533)
Beginning Balance at Dec. 31, 2015	81,241	13,983	12,569	15,438	40,059	650	(1,458)
Net Income	3,920				3,920
Other Comprehensive Income	902					902
Dividends on Common Stock	(566)				(566)
Dividends on preferred stock	(488)				(488)
Issuance of Restricted Stock and Stock Options	24			(151)			175
Stock Repurchase	(163)						(163)
Share based compensation expense	80			80
Ending Balance at Jun. 30, 2016	$ 84,950	$ 13,983	$ 12,569	$ 15,367	$ 42,925	$ 1,552	$ (1,446)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Statement of Stockholders' Equity [Abstract]
Dividend common stock, per share amount	$ 0.055	$ 0.045
Dividend preferred stock, per share amount	$ 0.1625	$ 0.15

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating Activities
Net Income	$ 3,920	$ 3,487
Items providing/(using) cash
Depreciation and amortization	696	547
Provision for loan losses	250	850
Expense of share-based compensation plan	80	41
Amortization of premiums and discounts on securities	461	499
Amortization of intangible assets	6	109
Amortization of originated mortgage servicing rights	482	501
Recapture of originated mortgage servicing rights impairment		(269)
Impairment of mortgage servicing rights	1,236	80
Proceeds from sale of loans held for sale	148,995	150,977
Originations of loans held for sale	(142,612)	(146,906)
Gain from sale of loans	(4,267)	(3,780)
(Gain)/loss on sale of assets	(181)	20
Changes in
Interest receivable	(137)	(160)
Other assets	(5,870)	(7,804)
Interest payable and other liabilities	1,145	2,066
Net cash provided by operating activities	4,204	258
Investing Activities
Purchases of available-for-sale securities	(11,322)	(25,456)
Proceeds from maturities of available-for-sale securities	7,145	11,155
Proceeds from sales of available-for-sale-securities	2,400
Net change in loans	(47,150)	(6,709)
Purchase of premises and equipment and software	(497)	(3,411)
Proceeds from sales or disposal of premises and equipment	5	36
Proceeds from sale of foreclosed assets	656	110
Net cash used in investing activities	(48,763)	(24,275)
Financing Activities
Net increase in demand deposits, money market, interest checking and savings accounts	32,482	15,123
Net increase (decrease) in certificates of deposit	29,365	(3,103)
Net increase in securities sold under agreements to repurchase	5,391	2,429
Repayment of Federal Home Loan Bank advances	(14,000)
Proceeds from Federal Home Loan Bank advances	2,000	4,000
Net proceeds from share based compensation plans	24	18
Repurchase of common stock	(163)	(2)
Dividends on common stock	(566)	(467)
Dividends on preferred stock	(488)	(469)
Net cash provided by financing activities	54,045	17,529
Increase in Cash and Cash Equivalents	9,486	(6,488)
Cash and Cash Equivalents, Beginning of Year	20,459	28,197
Cash and Cash Equivalents, End of Period	29,945	21,709
Supplemental Cash Flows Information
Interest paid	1,385	1,269
Income taxes paid	2,309	1,060
Transfer of loans to foreclosed assets	$ 243	$ 27

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Basis of Presentation [Abstract]
BASIS OF PRESENTATION	NOTE 1 – BASIS OF PRESENTATION SB Financial Group, Inc., an Ohio corporation (the “Company”) is a bank holding company whose principal activity is the ownership and management of its wholly-owned subsidiaries, The State Bank and Trust Company (“State Bank”), RFCBC, Inc. (“RFCBC”), Rurbanc Data Services, Inc. dba RDSI Banking Systems (“RDSI”), and Rurban Statutory Trust II (“RST II”). In addition, State Bank owns all of the outstanding stock of Rurban Mortgage Company (“RMC”) and State Bank Insurance, LLC (“SBI”). The consolidated financial statements include the accounts of the Company, State Bank, RFCBC, RDSI, RMC, and SBI. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present the financial position, results of operations and cash flows of the Company. Those adjustments consist only of normal recurring adjustments. Results of operations for the six months ended June 30, 2016, are not necessarily indicative of results for the complete year. The condensed consolidated balance sheet of the Company as of December 31, 2015 has been derived from the audited consolidated balance sheet of the Company as of that date. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The following paragraphs summarize the impact of new accounting pronouncements: Accounting Standards Update (ASU) No. 2016-13: Financial Instruments – Credit Losses (Topic 326) This ASU replaces the current GAAP incurred impairment methodology regarding credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this update affect an entity to varying degrees depending on the credit quality of the assets held by the entity, their duration, and how the entity applies current GAAP. The amendments in this ASU are effective for reporting periods beginning after December 15, 2019, and management will need further study to determine the impact on the Company’s consolidated financial statements. ASU No. 2016-09: Stock Compensation (Topic 718) This ASU affects all entities that issue share-based payment awards to their employees. The update is intended to simplify the accounting for these transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and management will need further study to determine the impact on the Company’s consolidated financial statements. ASU No. 2016-06: Derivatives and Hedging (Topic 815) This ASU clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this Update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and management does not believe this ASU will have a material impact on the Company’s consolidated financial statements. ASU No. 2016-05: Derivatives and Hedging (Topic 815) This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedging accounting criteria continue to be met. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and management does not believe this ASU will have a material impact on the Company’s consolidated financial statements. ASU No. 2016-02: Leases (Topic 842) This ASU is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU are effective for reporting periods beginning after December 15, 2019, and management will need further study to determine the impact on the Company’s consolidated financial statements. ASU No. 2016-01: Financial Instruments – Recognition and measurement of financial assets and financial liabilities (Subtopic 825-10) This ASU makes targeted improvements to generally accepted accounting principles. Specifically, the amendments require equity securities with readily determinable fair values be classified into different categories and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments in this ASU are effective for reporting periods beginning after December 15, 2017, and management does not believe this ASU will have a material impact on the Company’s consolidated financial statements. ASU No. 2015-16: Business Combinations (Topic 805) This ASU requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Further, an entity must present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings that would have been recorded previously if the provisional amounts had been recorded as of the acquisition date. The amendments in this ASU are in effect, and they did not have a material impact on the Company’s consolidated financial statements. ASU No. 2015-15: Interest – Imputation of Interest (Subtopic 835-30) This ASU requires entities to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability. The amendments in this ASU are in effect, and they did not have a material impact on the Company’s consolidated financial statements. ASU No. 2015-14: Revenue from Contracts with Customers (Subtopic 606) This ASU defers by one year the effective date of the guidance in ASU 2014-09. The amendments in this ASU are now effective for reporting periods beginning after December 15, 2017, and management still does not believe this ASU will have a material impact on the Company’s consolidated financial statements.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 2 – EARNINGS PER SHARE Earnings per share (EPS) have been computed based on the weighted average number of common shares outstanding during the periods presented. For the period ended June 30, 2016, share-based awards totaling 33,924 common shares were not considered in computing diluted EPS as they were anti-dilutive. For the period ended June 30, 2015, share-based awards totaling 50,424 common shares were not considered in computing diluted EPS as they were anti-dilutive. Included in the diluted EPS for June 30, 2016 are the impact of the full conversion of the Company’s depository shares issued in December of 2014. Based upon the current conversion ratio, the 1,500,000 outstanding depository shares are convertible into an aggregate of 1,453,435 common shares. The average number of common shares used in the computation of basic and diluted earnings per share were: Three Months Ended June 30, ($ in thousands - except per share data) 2016 2015 Distributed earnings allocated to common shares $ 296 $ 246 Undistributed earnings allocated to common shares 1,723 1,499 Net earnings allocated to common shares 2,019 1,745 Net earnings allocated to participating securities 2 2 Dividends on convertible preferred shares 244 244 Net Income allocated to common shares and participating securities $ 2,265 $ 1,991 Weighted average shares outstanding for basic earnings per share 4,893 4,884 Dilutive effect of stock compensation 45 47 Dilutive effect of convertible shares 1,452 1,451 Weighted average shares outstanding for diluted earnings per share 6,390 6,382 Basic earnings per common share $ 0.41 $ 0.36 Diluted earnings per common share $ 0.35 $ 0.31 Six Months Ended June 30, ($ in thousands - except per share data) 2016 2015 Distributed earnings allocated to common shares $ 566 $ 467 Undistributed earnings allocated to common shares 2,861 2,548 Net earnings allocated to common shares 3,427 3,015 Net earnings allocated to participating securities 5 3 Dividends on convertible preferred shares 488 469 Net Income allocated to common shares and participating securities $ 3,920 $ 3,487 Weighted average shares outstanding for basic earnings per share 4,894 4,882 Dilutive effect of stock compensation 50 48 Dilutive effect of convertible shares 1,452 1,451 Weighted average shares outstanding for diluted earnings per share 6,396 6,381 Basic earnings per common share $ 0.70 $ 0.62 Diluted earnings per common share $ 0.61 $ 0.54

Securities

Securities	6 Months Ended
	Jun. 30, 2016
Securities [Abstract]
SECURITIES	NOTE 3 – SECURITIES The amortized cost and appropriate fair values, together with gross unrealized gains and losses, of securities at June 30, 2016 and December 31, 2015 were as follows: Gross Gross ($ in thousands) Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-Sale Securities: June 30, 2016 U.S. Treasury and Government agencies $ 11,600 $ 137 $ - $ 11,737 Mortgage-backed securities 63,237 1,131 (19 ) 64,349 State and political subdivisions 15,260 1,103 - 16,363 Equity securities 23 - - 23 $ 90,120 $ 2,371 $ (19 ) $ 92,472 Gross Gross ($ in thousands) Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-Sale Securities: December 31, 2015: U.S. Treasury and Government agencies $ 10,804 $ 101 $ - $ 10,905 Mortgage-backed securities 61,459 311 (427 ) 61,343 State and political subdivisions 16,519 999 - 17,518 Equity securities 23 - - 23 $ 88,805 $ 1,411 $ (427 ) $ 89,789 The amortized cost and fair value of securities available for sale at June 30, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Available for Sale Amortized Fair ($ in thousands) Cost Value Within one year $ 438 $ 450 Due after one year through five years 4,960 5,230 Due after five years through ten years 6,583 6,938 Due after ten years 14,879 15,482 26,860 28,100 Mortgage-backed securities & equity securities 63,260 64,372 Totals $ 90,120 $ 92,472 The fair value of securities pledged as collateral, to secure public deposits and for other purposes, was $75.6 million at June 30, 2016 and $42.6 million at December 31, 2015. The fair value of securities delivered for repurchase agreements were $20.7 million at June 30, 2016 and $15.8 million at December 31, 2015. For the six months ended June 30, 2016, there were gross gains of $0.20 million resulting from sales of available-for-sale securities, which was a reclassification from accumulated other comprehensive income (OCI) and was included in the net gain on sale of securities. The related $0.07 million in tax expense was a reclassification from OCI and was included in the income tax expense line item in the income statement. There were no realized gains and losses from sales of available-for-sale securities for the six months ended June 30, 2015. Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments was $1.8 million at June 30, 2016, and $37.2 million at December 31, 2015, which was approximately 2 and 34 percent, respectively, of the Company’s available-for-sale investment portfolio at such dates. Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified. Securities with unrealized losses, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2016 and December 31, 2015 are as follows: ($ in thousands) Less than 12 Months 12 Months or Longer Total June 30, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Securities: Mortgage-backed securities - $ - $ 1,792 $ (19 ) $ 1,792 $ (19 ) $ - $ - $ 1,792 $ (19 ) $ 1,792 $ (19 ) ($ in thousands) Less than 12 Months 12 Months or Longer Total December 31, 2015 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Securities: Mortgage-backed securities 30,184 (253 ) 7,061 (174 ) 37,245 (427 ) $ 30,184 $ (253 ) $ 7,061 $ (174 ) $ 37,245 $ (427 ) The total potential unrealized loss as of June 30, 2016 in the securities portfolio was $0.02 million, which was down from the $0.43 million unrealized loss at December 31, 2015. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concern warrants such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent of the Company to not sell the investment and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost. Management has determined there is no other-than-temporary-impairment on these securities.

Loans and Allowance for Loan Lo

Loans and Allowance for Loan Losses	6 Months Ended
	Jun. 30, 2016
Loans and Allowance for Loan Losses [Abstract]
LOANS AND ALLOWANCE FOR LOAN LOSSES	NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoffs, are reported at their outstanding principal balances adjusted for any charge-offs, the allowance for loan losses, any deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. Generally, all loan classes are placed on non-accrual status not later than 90 days past due, unless the loan is well-secured and in the process of collection. All interest accrued, but not collected, for loans that are placed on non-accrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance when management believes the non-collectability of a loan balance is probable. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as new information becomes available. The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected on the historical loss or risk rating data. A loan is considered impaired when, based on current information and events, it is probable that State Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration each of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial, agricultural, and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. When State Bank moves a loan to non-accrual status, total unpaid interest accrued to date is reversed from income. Subsequent payments are applied to the outstanding principal balance with the interest portion of the payment recorded on the balance sheet as a contra-loan. Interest received on impaired loans may be realized once all contractual principal amounts are received or when a borrower establishes a history of six consecutive timely principal and interest payments. It is at the discretion of management to determine when a loan is placed back on accrual status upon receipt of six consecutive timely payments. Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, State Bank does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower. Categories of loans at June 30, 2016 and December 31, 2015 include: Total Loans Non-Accrual Loans ($ in thousands) June December June December Commercial & Industrial $ 100,442 $ 86,542 158 188 Commercial RE & Construction 261,923 242,208 5,309 5,670 Agricultural & Farmland 52,375 43,835 - 7 Residential Real Estate 135,506 130,806 1,088 749 Consumer & Other 54,321 54,224 138 32 Total Loans $ 604,567 $ 557,615 $ 6,693 $ 6,646 Unearned Income $ 209 $ 44 Total Loans, net of unearned income $ 604,776 $ 557,659 Allowance for loan losses $ (7,450 ) $ (6,990 ) The following tables present the activity in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2016, December 31, 2015 and June 30, 2015. Commercial Commercial RE Agricultural Residential Consumer & Industrial & Construction & Farmland Real Estate & Other Total ALLOWANCE FOR LOAN AND LEASE LOSSES For the Three Months Ended - June 30, 2016 Beginning balance $ 925 $ 4,120 $ 188 $ 1,342 $ 630 $ 7,205 Charge Offs - - - - (2 ) $ (2 ) Recoveries 212 6 1 - 28 247 Provision - - - - - - Ending Balance $ 1,137 $ 4,126 $ 189 $ 1,342 $ 656 $ 7,450 For the Six Months Ended - June 30, 2016 Beginning balance $ 914 $ 3,886 $ 204 $ 1,312 $ 674 $ 6,990 Charge Offs (92 ) - - - (4 ) $ (96 ) Recoveries 247 6 1 - 52 306 Provision 68 234 (16 ) 30 (66 ) 250 Ending Balance $ 1,137 $ 4,126 $ 189 $ 1,342 $ 656 $ 7,450 Loans Receivable at June 30, 2016 Allowance: Ending balance: individually evaluated for impairment $ - $ 1,758 $ - $ 151 $ 19 $ 1,928 Ending balance: collectively evaluated for impairment $ 1,137 $ 2,368 $ 189 $ 1,191 $ 637 $ 5,522 Loans: Ending balance: Individually evaluated for impairment $ - $ 5,387 $ - $ 1,891 $ 351 $ 7,629 Ending balance: collectively evaluated for impairment $ 100,442 $ 256,536 $ 52,375 $ 133,615 $ 53,970 $ 596,938 Commercial Commercial RE Agricultural Residential Consumer ($'s in thousands) & Industrial & Construction & Farmland Real Estate & Other Total Loans Receivable at December 31, 2015 Allowance: Ending balance: individually evaluated for impairment $ - $ 1,759 $ - $ 167 $ 37 $ 1,963 Ending balance: collectively evaluated for impairment $ 914 $ 2,127 $ 204 $ 1,145 $ 637 $ 5,027 Loans: Ending balance: individually evaluated for impairment $ 126 $ 5,754 $ - $ 1,713 $ 464 $ 8,057 Ending balance: collectively evaluated for impairment $ 86,416 $ 236,454 $ 43,835 $ 129,093 $ 53,760 $ 549,558 Commercial Commercial RE Agricultural Residential Consumer ($'s in thousands) & Industrial & onstruction & Farmland Real Estate & Other Total ALLOWANCE FOR LOAN AND LEASE LOSSES For the Three Months Ended - June 30, 2015 Beginning balance $ 1,574 $ 2,892 $ 212 $ 1,318 $ 834 $ 6,830 Charge Offs (300 ) - - (48 ) (2 ) $ (350 ) Recoveries 15 3 1 3 4 26 Provision 199 171 48 137 (55 ) 500 Ending Balance $ 1,488 $ 3,066 $ 261 $ 1,410 $ 781 $ 7,006 For the Six Months Ended - June 30, 2015 Beginning balance $ 1,630 $ 2,857 $ 208 $ 1,308 $ 768 $ 6,771 Charge Offs (309 ) (250 ) - (61 ) (32 ) $ (652 ) Recoveries 21 3 2 5 6 37 Provision 146 456 51 158 39 850 Ending Balance $ 1,488 $ 3,066 $ 261 $ 1,410 $ 781 $ 7,006 The risk characteristics of each loan portfolio segment are as follows: Commercial and Agricultural Commercial and agricultural loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee. Short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Commercial Real Estate including Construction Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The characteristics of properties securing the Company’s commercial real estate portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. In general, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate versus non-owner-occupied loans. Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews and financial analysis of the developers and property owners. Construction loans are generally based on estimates of costs and value associated with the completed project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. Residential and Consumer Residential and consumer loans consist of two segments – residential mortgage loans and personal loans. Residential mortgage loans are secured by 1-4 family residences and are generally owner-occupied, and the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer personal loans are secured by consumer personal assets, such as automobiles or recreational vehicles. Some consumer personal loans are unsecured, such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that these loans are of smaller individual amounts and spread over a large number of borrowers. The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of June 30, 2016 and December 31, 2015. June 30, 2016 Commercial Commercial RE Agricultural Residential Consumer ($ in thousands) & Industrial & Construction & Farmland Real Estate & Other Total 1-2 $ 227 $ 47 $ 43 $ 36 $ 7 $ 360 3 28,569 84,220 7,943 114,564 51,063 286,359 4 71,141 166,128 44,389 18,833 2,984 303,475 Total Pass (1 - 4) 99,937 250,395 52,375 133,433 54,054 590,194 Special Mention (5) - 4,457 - 574 63 5,094 Substandard (6) 145 1,741 - 411 66 2,363 Doubtful (7) 360 5,330 - 1,088 138 6,916 Loss (8) - - - - - - Total Loans $ 100,442 $ 261,923 $ 52,375 $ 135,506 $ 54,321 $ 604,567 December 31, 2015 Commercial Commercial RE Agricultural Residential Consumer ($ in thousands) & Industrial & Construction & Farmland Real Estate & Other Total 1-2 $ 709 $ 767 $ 47 $ - $ 15 $ 1,538 3 23,362 79,915 8,195 118,463 50,745 280,680 4 61,799 149,473 35,593 10,418 3,223 260,506 Total Pass (1 - 4) 85,870 230,155 43,835 128,881 53,983 542,724 Special Mention (5) 330 5,260 - 756 70 6,416 Substandard (6) 110 1,072 - 420 139 1,741 Doubtful (7) 232 5,721 - 749 32 6,734 Loss (8) - - - - - - Total Loans $ 86,542 $ 242,208 $ 43,835 $ 130,806 $ 54,224 $ 557,615 The Company evaluates the loan risk grading system definitions and allowance for loan loss methodology on an ongoing basis. Credit Risk Profile The Company categorizes 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 classifying the loans as to credit risk. This analysis includes loans with an outstanding balance greater than $100 thousand and non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings: Pass (grades 1 – 4): Special Mention (5): Substandard (6): Doubtful (7): Loss (8): The following tables present the Company’s loan portfolio aging analysis as of June 30, 2016 and December 31, 2015. ($ in thousands) 30-59 Days 60-89 Days Greater Than Total Past Total Loans June 30, 2016 Past Due Past Due 90 Days Due Current Receivable Commercial & Industrial $ 148 $ - $ 54 $ 202 $ 100,240 $ 100,442 Commercial RE & Construction - 935 5,008 5,943 255,980 261,923 Agricultural & Farmland - - - - 52,375 52,375 Residential Real Estate 89 - 187 276 135,230 135,506 Consumer & Other 37 - 124 161 54,160 54,321 Total Loans $ 274 $ 935 $ 5,373 $ 6,582 $ 597,985 $ 604,567 ($ in thousands) 30-59 Days 60-89 Days Greater Than Total Past Total Loans December 31, 2015 Past Due Past Due 90 Days Due Current Receivable Commercial & Industrial $ - $ 60 $ 188 $ 248 $ 86,294 $ 86,542 Commercial RE & Construction 99 - 5,280 5,379 236,829 242,208 Agricultural & Farmland - - - - 43,835 43,835 Residential Real Estate 98 198 156 452 130,354 130,806 Consumer & Other 64 - 2 66 54,158 54,224 Total Loans $ 261 $ 258 $ 5,626 $ 6,145 $ 551,470 $ 557,615 All loans past due 90 days are systematically placed on nonaccrual status. A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable State Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. The following tables present impaired loan information as of and for the three and six months ended June 30, 2016 and 2015, and for the twelve months ended December 31, 2015: Six Months Ended June 30, 2016 Recorded Unpaid Principal Related Average Recorded Interest Income ($'s in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial & Industrial $ - $ - $ - $ - $ - Commercial RE & Construction 744 744 - 766 11 Agricultural & Farmland - - - - - Residential Real Estate 997 1,040 - 1,199 34 Consumer & Other 81 81 - 96 4 All Impaired Loans < $100,000 438 438 - 438 - With a specific allowance recorded: Commercial & Industrial - - - - - Commercial RE & Construction 4,643 4,893 1,758 4,924 - Agricultural & Farmland - - - - - Residential Real Estate 894 895 151 962 19 Consumer & Other 270 270 19 274 9 Totals: Commercial & Industrial $ - $ - $ - $ - $ - Commercial RE & Construction $ 5,387 $ 5,637 $ 1,758 $ 5,690 $ 11 Agricultural & Farmland $ - $ - $ - $ - $ - Residential Real Estate $ 1,891 $ 1,935 $ 151 $ 2,161 $ 53 Consumer & Other $ 351 $ 351 $ 19 $ 370 $ 13 All Impaired Loans < $100,000 $ 438 $ 438 $ - $ 438 $ - Three Months Ended June 30, 2016 Average Recorded Interest Income ($'s in thousands) Investment Recognized With no related allowance recorded: Commercial & Industrial $ - $ - Commercial RE & Construction 761 6 Agricultural & Farmland - - Residential Real Estate 1,195 16 Consumer & Other 94 2 All Impaired Loans < $100,000 438 - With a specific allowance recorded: Commercial & Industrial - - Commercial RE & Construction 4,924 - Agricultural & Farmland - - Residential Real Estate 958 10 Consumer & Other 272 4 Totals: Commercial & Industrial $ - $ - Commercial RE & Construction $ 5,685 $ 6 Agricultural & Farmland $ - $ - Residential Real Estate $ 2,153 $ 26 Consumer & Other $ 366 $ 6 All Impaired Loans < $100,000 $ 438 $ - Twelve Months Ended December 31, 2015 Recorded Unpaid Principal Related Average Recorded Interest Income ($'s in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial & Industrial $ 126 $ 1,214 $ - $ 1,388 $ - Commercial RE & Construction 1,110 1,110 - 1,206 27 Agricultural & Farmland - - - - - Residential Real Estate 657 657 - 862 52 Consumer & Other 90 90 - 107 9 All Impaired Loans < $100,000 131 131 - 131 - With a specific allowance recorded: Commercial & Industrial - - - - - Commercial RE & Construction 4,644 4,893 1,759 5,006 90 Agricultural & Farmland - - - - - Residential Real Estate 1,056 1,013 167 1,084 45 Consumer & Other 374 374 37 385 22 Totals: Commercial & Industrial $ 126 $ 1,214 $ - $ 1,388 $ - Commercial RE & Construction $ 5,754 $ 6,003 $ 1,759 $ 6,212 $ 117 Agricultural & Farmland $ - $ - $ - $ - $ - Residential Real Estate $ 1,713 $ 1,670 $ 167 $ 1,946 $ 97 Consumer & Other $ 464 $ 464 $ 37 $ 492 $ 31 All Impaired Loans < $100,000 $ 131 $ 131 $ - $ 131 $ - Six Months Ended Three Months Ended Average Recorded Interest Income Average Recorded Interest Income June 30, 2015 Investment Recognized Investment Recognized With no related allowance recorded: Commercial & Industrial $ 316 $ - $ 316 $ - Commercial RE & Construction 1,089 19 1,077 6 Agricultural & Farmland - - - - Residential Real Estate 767 26 764 13 Consumer & Other 112 4 110 3 All Impaired Loans < $100,000 334 - 334 - With a specific allowance recorded: Commercial & Industrial 1,152 - 1,152 - Commercial RE & Construction 1,448 1 1,447 - Agricultural & Farmland - - - - Residential Real Estate 1,050 22 1,046 12 Consumer & Other 391 12 388 5 Totals: Commercial & Industrial $ 1,468 $ - $ 1,468 $ - Commercial RE & Construction $ 2,537 $ 20 $ 2,524 $ 6 Agricultural & Farmland $ - $ - $ - $ - Residential Real Estate $ 1,817 $ 48 $ 1,810 $ 25 Consumer & Other $ 503 $ 16 $ 498 $ 8 All Impaired Loans < $100,000 $ 334 $ - $ 334 $ - Impaired loans less than $100,000 are included in groups of homogenous loans. These loans are evaluated based on delinquency status. Interest income recognized on a cash basis does not materially differ from interest income recognized on an accrual basis. Troubled Debt Restructured (TDR) Loans TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the concessions provided are not available to the borrower through either normal channels or other sources. However, not all loan modifications are TDRs. TDR Concession Types The Company’s standards relating to loan modifications consider, among other factors, minimum verified income requirements, cash flow analysis, and collateral valuations. Each potential loan modification is reviewed individually and the terms of the loan are modified to meet a borrower’s specific circumstances at a point in time. All loan modifications, including those classified as TDRs, are reviewed and approved. The types of concessions provided to borrowers include: ● Interest rate reduction: A reduction of the stated interest rate to a nonmarket rate for the remaining original life of the loan. The Company also may grant interest rate concessions for a limited timeframe on a case by case basis. ● Amortization or maturity date change: A change in the amortization or maturity date beyond what the collateral supports, including a concession that does any of the following: (1) Lengthens the amortization period of the amortized principal beyond market terms. This concession reduces the minimum monthly payment and increases the amount of the balloon payment at the end of the term of the loan. Principal is generally not forgiven. (2) Reduces the amount of loan principal to be amortized. This concession also reduces the minimum monthly payment and increases the amount of the balloon payment at the end of the term of the loan. Principal is generally not forgiven. (3) Extends the maturity date or dates of the debt beyond what the collateral supports. This concession generally applies to loans without a balloon payment at the end of the term of the loan. In addition, there may be instances where renewing loans potentially require non-market terms and would then be reclassified as TDRs. ● Other: A concession that is not categorized as one of the concessions described above. These concessions include, but are not limited to: principal forgiveness, collateral concessions, covenant concessions, and reduction of accrued interest. Principal forgiveness may result from any TDR modification of any concession type. The following presents the activity of TDRs during the three and six months ended June 30, 2016 and 2015. Three Months ended June 30, 2016 ($ in thousands) Number of Loans Pre-Modification Recorded Balance Post Modification Recorded Balance Residential Real Estate - $ - $ - Commercial - - - Consumer & Other - - - Total Modifications - $ - $ - Interest Total Only Term Combination Modification Residential Real Estate $ - $ - $ - $ - Commercial - - - - Consumer & Other - - - - Total Modifications $ - $ - $ - $ - There was no increase in the allowance for loan losses due to TDR's in the three month period ended June 30, 2016. Six Months ended June 30, 2016 ($ in thousands) Number of Loans Pre-Modification Post Modification Residential Real Estate - $ - $ - Commercial - - - Consumer & Other 1 221 221 Total Modifications 1 $ 221 $ 221 Interest Total Only Term Combination Modification Residential Real Estate $ - $ - $ - $ - Commercial - - - - Consumer & Other - 221 - 221 Total Modifications $ - $ 221 $ - $ 221 There was no increase in the allowance for loan losses due to TDR's in the three month period ended June 30, 2016. Three Months ended June 30, 2015 ($ in thousands) Number of Loans Pre-Modification Recorded Balance Post Modification Recorded Balance Residential Real Estate - $ - $ - Commercial - - - Consumer & Other - - - Total Modifications - $ - $ - Interest Total Only Term Combination Modification Residential Real Estate $ - $ - $ - $ - Consumer & Other - - - - Total Modifications $ - $ - $ - $ - There was no increase in the allowance for loan losses due to TDR's in the three month period ended June 30, 2015. Six Months ended June 30, 2015 ($ in thousands) Number of Loans Pre-Modification Post Modification Residential Real Estate 1 $ 24 $ 24 Consumer & Other - - - Total Modifications 1 $ 24 $ 24 Interest Total Only Term Combination Modification Residential Real Estate $ - $ 24 $ - $ 24 Consumer & Other - - - - Total Modifications $ - $ 24 $ - $ 24 There was no increase in the allowance for loan losses due to TDR's in the six month period ended June 30, 2015. TDR's modified in 2016 that have subsequently defaulted Number of Recorded ($ in thousands) Contracts Balance Consumer & Other 1 $ 221 1 221 There were no TDR's modified during 2015 that have subsequently defaulted.

Derivative Financial Instrument

Derivative Financial Instruments and Repurchase Agreements	6 Months Ended
	Jun. 30, 2016
Derivative Financial Instruments and Repurchase Agreements [Abstract]
DERIVATIVE FINANCIAL INSTRUMENTS AND REPURCHASE AGREEMENTS	NOTE 5 – DERIVATIVE FINANCIAL INSTRUMENTS AND REPURCHASE AGREEMENTS Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposures to a wide variety of business and operational risks primarily through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to certain variable-rate assets. Non-designated Hedges The Company does not use derivatives for trading or speculative purposes. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously offset by interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. As of June 30, 2016 and December 31, 2015, the notional amount of customer-facing swaps was approximately $30.1 million and $17.6 million, respectively. The same amounts were offset with third party counterparties, as described above. The Company has minimum collateral posting thresholds with its derivative counterparties. As of June 30, 2016 and December 31, 2015, the Company had posted cash as collateral in the amount of $1.6 million and $0.7 million, respectively. The table below presents the fair value of the Company’s derivative financial instruments, as well as their classification on the Balance Sheet, as of June 30, 2016 and December 31, 2015. Asset Derivatives Liability Derivatives June 30, 2016 June 30, 2016 ($ in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments: Interest rate contracts Other Assets $ 1,524 Other Liabilities $ 1,524 Asset Derivatives Liability Derivatives December 31, 2015 December 31, 2015 ($ in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments: Interest rate contracts Other Assets $ 490 Other Liabilities $ 490 The Company’s derivative financial instruments had no net effect on the Income Statements for the three and six months ended June 30, 2016 and 2015. Securities Sold Under Repurchase Agreements State Bank has retail repurchase agreements to facilitate cash management transactions with commercial customers. These obligations are secured by agency and mortgage-backed securities and such collateral is held by the Federal Home Loan Bank. The agreements mature within one month. These repurchase agreements are secured by agency securities and mortgage-backed securities with corresponding liabilities of $5.7 million and of $14.9 million. These securities have various maturity dates beyond 2017.

Fair Value of Assets and Liabil

Fair Value of Assets and Liabilities	6 Months Ended
	Jun. 30, 2016
Fair Value of Assets and Liabilities [Abstract]
FAIR VALUE OF ASSETS AND LIABILITIES	NOTE 6 – FAIR VALUE OF ASSETS AND LIABILITIES Fair value is 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. A fair value measurement must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis, recognized in the accompanying balance sheets, as well as the general classifications of such assets pursuant to the valuation hierarchy. Available-for-Sale Securities The fair values of available-for-sale securities are determined by various valuation methodologies. Level 1 securities include money market mutual funds. Level 1 inputs include quoted prices in an active market. Level 2 securities include U.S. treasury and government agencies, mortgage-backed securities, obligations of political and state subdivisions and equity securities. Level 2 inputs do not include quoted prices for individual securities in active markets; however, they do include inputs that are either directly or indirectly observable for the individual security being valued. Such observable inputs include interest rates and yield curves at commonly quoted intervals, volatilities, prepayment speeds, credit risks and default rates. Also included are inputs derived principally from or corroborated by observable market data by correlation or other means. Interest Rate Contracts The fair values of interest rate contracts are based upon the estimated amount the Company would receive or pay to terminate the contracts or agreements, taking into account underlying interest rates, creditworthiness of underlying customers for credit derivatives and, when appropriate, the creditworthiness of the counterparties. The following table presents the fair value measurements of assets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2016 and December 31, 2015. ($ in thousands) Available-for-Sale Securities: Fair Values (Level 1) (Level 2) (Level 3) U.S. Treasury and Government Agencies $ 11,737 $ - $ 11,737 $ - Mortgage-backed securities 64,349 - 64,349 - State and political subdivisions 16,363 - 16,363 - Equity securities 23 - 23 - Interest rate contracts - assets 1,524 - 1,524 - Interest rate contracts - liabilities (1,524 ) - (1,524 ) - Fair Value Measurements Using: ($ in thousands) Available-for-Sale Securities: Fair Values (Level 1) (Level 2) (Level 3) U.S. Treasury and Government Agencies $ 10,905 $ - $ 10,905 $ - Mortgage-backed securities 61,343 - 61,343 - State and political subdivisions 17,518 - 17,518 - Equity securities 23 23 Interest rate contracts - assets 490 490 Interest rate contracts - liabilities (490 ) (490 ) Level 1 – Quoted Prices in Active Markets for Identical Assets Level 2 – Significant Other Observable Inputs Level 3 – Significant Unobservable Inputs The following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. Collateral-dependent Impaired Loans, NET of ALLL Loans for which it is probable the Company will not collect all principal and interest due according to contractual terms are measured for impairment. The estimated fair value of collateral-dependent impaired loans is based on the appraised value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy. This method requires obtaining an independent appraisal of the collateral, which is reviewed for accuracy and consistency by Credit Administration. These appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by applying a discount factor to the value based on the Company’s loan review policy. All impaired loans held by the Company were collateral dependent at June 30, 2016 and December 31, 2015. Mortgage Servicing Rights Mortgage servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models associated with the servicing rights and discounting the cash flows using discount market rates, prepayment speeds and default rates. The servicing portfolio has been valued using all relevant positive and negative cash flows including servicing fees; miscellaneous income and float; marginal costs of servicing; the cost of carry of advances; and foreclosure losses; and applying certain prevailing assumptions used in the marketplace. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy. These mortgage servicing rights are tested for impairment on a quarterly basis. Unobservable (Level 3) Inputs The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements. ($ in thousands) Description Fair Values at 6/30/2016 (Level 1) (Level 2) (Level 3) Impaired loans $ 180 $ - $ - $ 180 Mortgage Servicing Rights 6,575 - - 6,575 ($ in thousands) Description Fair Values at 12/31/2015 (Level 1) (Level 2) (Level 3) Impaired loans $ 3,011 $ - $ - $ 3,011 Mortgage Servicing Rights 2,585 - - 2,585 Level 1 - Quoted Prices in Active Markets for Identical Assets Level 2 - Significant Other Observable Inputs Level 3 - Significant Unobservable Inputs ($'s in thousands) Fair Value at 6/30/2016 Valuation Technique Unobservable Inputs Range (Weighted Average) Collateral-dependent impaired loans $ 180 Market comparable Comparability adjustments (%) Not available Mortgage servicing rights 6,575 Discounted cash flow Discount Rate 9.16 % Constant prepayment rate 14.63 % P&I earnings credit 0.45 % T&I earnings credit 1.22 % Inflation for cost of servicing 1.50 % ($'s in thousands) Fair Value at Valuation Technique Unobservable Inputs Range (Weighted Collateral-dependent impaired loans $ 3,011 Market comparable properties Comparability adjustments (%) Not available Mortgage servicing rights 2,585 Discounted cash flow Discount Rate 9.75 % Constant prepayment rate 8.90 % P&I earnings credit 0.42 % T&I earnings credit 1.54 % Inflation for cost of servicing 1.50 % There were no changes in the inputs or methodologies used to determine fair value at June 30, 2016 as compared to December 31, 2015. The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value. Cash and Due From Banks, Federal Reserve and Federal Home Loan Bank Stock and Accrued Interest Receivable and Payable The carrying amount approximates the fair value. Loans Held for Sale The fair value of loans held for sale is based upon quoted market prices, where available, or is determined by discounting estimated cash flows using interest rates approximating the Company’s current origination rates for similar loans and adjusted to reflect the inherent credit risk. Loans The estimated fair value for loans receivable is based on estimates of the rate State Bank would charge for similar loans at June 30, 2016 and December 31, 2015, applied for the time period until the loans are assumed to re-price or be paid. Mortgage Servicing Rights Mortgage servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models associated with the servicing rights and discounting the cash flows using discount market rates, prepayment speeds and default rates. The servicing portfolio has been valued using all relevant positive and negative cash flows including servicing fees, miscellaneous income and float; marginal costs of servicing; the cost of carry of advances; and foreclosure losses; and applying certain prevailing assumptions used in the marketplace. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy. These mortgage servicing rights are tested for impairment on a quarterly basis. Deposits, FHLB advances & Repurchase agreements Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits. The carrying amount approximates the fair value. The estimated fair value for fixed-maturity time deposits, as well as borrowings, is based on estimates of the rate State Bank could pay on similar instruments with similar terms and maturities at June 30, 2016 and December 31, 2015. Loan Commitments The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. The estimated fair values for other financial instruments and off-balance-sheet loan commitments approximate cost at June 30, 2016 and December 31, 2015 and are not considered significant to this presentation. Trust Preferred Securities The fair value for Trust Preferred Securities is estimated by discounting the cash flows using an appropriate discount rate. The following table presents estimated fair values of the Company’s other financial instruments carried at other than fair value. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments, and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate. June 30, Fair Value Measurements Using Amount (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 29,945 $ 29,945 $ - $ - Loans held for sale 8,441 - 8,673 - Loans, net of allowance for loan losses 597,326 - - 599,125 Federal Reserve and FHLB Bank stock 3,748 - 3,748 - Accrued interest receivable 1,397 - 1,397 - Mortgage Servicing Rights 6,494 - - 6,575 Financial liabilities Deposits $ 648,300 $ 110,899 $ 540,442 $ - Short-term borrowings 17,797 - 17,797 - FHLB Advances 23,000 - 23,205 - Trust preferred securities 10,310 - 7,190 - Accrued interest payable 384 - 384 - December 31, 2015 Carrying Fair Value Measurements Using Amount (Level 1) (Level 2) (Level 3) Financial assets Cash and due from banks $ 20,459 $ 20,459 $ - $ - Loans held for sale 7,516 - 7,779 - Loans, net of allowance for loan losses 550,669 - - 548,154 Federal Reserve and FHLB Bank stock, at cost 3,748 - 3,748 - Accrued interest receivable 1,260 - 1,260 - Mortgage Servicing Rights 7,152 - - 7,760 Financial liabilities Deposits $ 586,453 $ 113,113 $ 475,468 $ - Short-term borrowings 12,406 - 12,406 - FHLB advances 35,000 - 34,870 - Trust preferred securities 10,310 - 7,165 - Accrued interest payable 264 - 264 -

General Litigation

General Litigation	6 Months Ended
	Jun. 30, 2016
General Litigation [Abstract]
GENERAL LITIGATION	NOTE 7 – GENERAL LITIGATION The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. Additionally, the Company is subject to periodic examinations by various regulatory agencies. It is the opinion of management that the disposition or ultimate resolution of such claims, lawsuits and examinations will not have a material adverse effect on the consolidated financial position, results of operations and cash flow of the Company.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Summary of earnings per share	Three Months Ended June 30, ($ in thousands - except per share data) 2016 2015 Distributed earnings allocated to common shares $ 296 $ 246 Undistributed earnings allocated to common shares 1,723 1,499 Net earnings allocated to common shares 2,019 1,745 Net earnings allocated to participating securities 2 2 Dividends on convertible preferred shares 244 244 Net Income allocated to common shares and participating securities $ 2,265 $ 1,991 Weighted average shares outstanding for basic earnings per share 4,893 4,884 Dilutive effect of stock compensation 45 47 Dilutive effect of convertible shares 1,452 1,451 Weighted average shares outstanding for diluted earnings per share 6,390 6,382 Basic earnings per common share $ 0.41 $ 0.36 Diluted earnings per common share $ 0.35 $ 0.31 Six Months Ended June 30, ($ in thousands - except per share data) 2016 2015 Distributed earnings allocated to common shares $ 566 $ 467 Undistributed earnings allocated to common shares 2,861 2,548 Net earnings allocated to common shares 3,427 3,015 Net earnings allocated to participating securities 5 3 Dividends on convertible preferred shares 488 469 Net Income allocated to common shares and participating securities $ 3,920 $ 3,487 Weighted average shares outstanding for basic earnings per share 4,894 4,882 Dilutive effect of stock compensation 50 48 Dilutive effect of convertible shares 1,452 1,451 Weighted average shares outstanding for diluted earnings per share 6,396 6,381 Basic earnings per common share $ 0.70 $ 0.62 Diluted earnings per common share $ 0.61 $ 0.54

Securities (Tables)

Securities (Tables)	6 Months Ended
	Jun. 30, 2016
Securities [Abstract]
Summary of amortized cost and fair values with gross unrealized gains and losses of available-for-sale securities	Gross Gross ($ in thousands) Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-Sale Securities: June 30, 2016 U.S. Treasury and Government agencies $ 11,600 $ 137 $ - $ 11,737 Mortgage-backed securities 63,237 1,131 (19 ) 64,349 State and political subdivisions 15,260 1,103 - 16,363 Equity securities 23 - - 23 $ 90,120 $ 2,371 $ (19 ) $ 92,472 Gross Gross ($ in thousands) Amortized Unrealized Unrealized Cost Gains Losses Fair Value Available-for-Sale Securities: December 31, 2015: U.S. Treasury and Government agencies $ 10,804 $ 101 $ - $ 10,905 Mortgage-backed securities 61,459 311 (427 ) 61,343 State and political subdivisions 16,519 999 - 17,518 Equity securities 23 - - 23 $ 88,805 $ 1,411 $ (427 ) $ 89,789
Summary of amortized cost and fair value of securities available for sale by contractual maturity	Available for Sale Amortized Fair ($ in thousands) Cost Value Within one year $ 438 $ 450 Due after one year through five years 4,960 5,230 Due after five years through ten years 6,583 6,938 Due after ten years 14,879 15,482 26,860 28,100 Mortgage-backed securities & equity securities 63,260 64,372 Totals $ 90,120 $ 92,472
Summary of securities with unrealized losses	($ in thousands) Less than 12 Months 12 Months or Longer Total June 30, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Securities: Mortgage-backed securities - $ - $ 1,792 $ (19 ) $ 1,792 $ (19 ) $ - $ - $ 1,792 $ (19 ) $ 1,792 $ (19 ) ($ in thousands) Less than 12 Months 12 Months or Longer Total December 31, 2015 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-Sale Securities: Mortgage-backed securities 30,184 (253 ) 7,061 (174 ) 37,245 (427 ) $ 30,184 $ (253 ) $ 7,061 $ (174 ) $ 37,245 $ (427 )

Loans and Allowance for Loan 17

Loans and Allowance for Loan Losses (Tables)	6 Months Ended
	Jun. 30, 2016
Loans and Allowance for Loan Losses [Abstract]
Summary of categories of loans	Total Loans Non-Accrual Loans ($ in thousands) June December June December Commercial & Industrial $ 100,442 $ 86,542 158 188 Commercial RE & Construction 261,923 242,208 5,309 5,670 Agricultural & Farmland 52,375 43,835 - 7 Residential Real Estate 135,506 130,806 1,088 749 Consumer & Other 54,321 54,224 138 32 Total Loans $ 604,567 $ 557,615 $ 6,693 $ 6,646 Unearned Income $ 209 $ 44 Total Loans, net of unearned income $ 604,776 $ 557,659 Allowance for loan losses $ (7,450 ) $ (6,990 )
Summary of allowance for loan losses and recorded investment in loans based on portfolio segment and impairment method	Commercial Commercial RE Agricultural Residential Consumer & Industrial & Construction & Farmland Real Estate & Other Total ALLOWANCE FOR LOAN AND LEASE LOSSES For the Three Months Ended - June 30, 2016 Beginning balance $ 925 $ 4,120 $ 188 $ 1,342 $ 630 $ 7,205 Charge Offs - - - - (2 ) $ (2 ) Recoveries 212 6 1 - 28 247 Provision - - - - - - Ending Balance $ 1,137 $ 4,126 $ 189 $ 1,342 $ 656 $ 7,450 For the Six Months Ended - June 30, 2016 Beginning balance $ 914 $ 3,886 $ 204 $ 1,312 $ 674 $ 6,990 Charge Offs (92 ) - - - (4 ) $ (96 ) Recoveries 247 6 1 - 52 306 Provision 68 234 (16 ) 30 (66 ) 250 Ending Balance $ 1,137 $ 4,126 $ 189 $ 1,342 $ 656 $ 7,450 Loans Receivable at June 30, 2016 Allowance: Ending balance: individually evaluated for impairment $ - $ 1,758 $ - $ 151 $ 19 $ 1,928 Ending balance: collectively evaluated for impairment $ 1,137 $ 2,368 $ 189 $ 1,191 $ 637 $ 5,522 Loans: Ending balance: Individually evaluated for impairment $ - $ 5,387 $ - $ 1,891 $ 351 $ 7,629 Ending balance: collectively evaluated for impairment $ 100,442 $ 256,536 $ 52,375 $ 133,615 $ 53,970 $ 596,938 Commercial Commercial RE Agricultural Residential Consumer ($'s in thousands) & Industrial & Construction & Farmland Real Estate & Other Total Loans Receivable at December 31, 2015 Allowance: Ending balance: individually evaluated for impairment $ - $ 1,759 $ - $ 167 $ 37 $ 1,963 Ending balance: collectively evaluated for impairment $ 914 $ 2,127 $ 204 $ 1,145 $ 637 $ 5,027 Loans: Ending balance: individually evaluated for impairment $ 126 $ 5,754 $ - $ 1,713 $ 464 $ 8,057 Ending balance: collectively evaluated for impairment $ 86,416 $ 236,454 $ 43,835 $ 129,093 $ 53,760 $ 549,558 Commercial Commercial RE Agricultural Residential Consumer ($'s in thousands) & Industrial & onstruction & Farmland Real Estate & Other Total ALLOWANCE FOR LOAN AND LEASE LOSSES For the Three Months Ended - June 30, 2015 Beginning balance $ 1,574 $ 2,892 $ 212 $ 1,318 $ 834 $ 6,830 Charge Offs (300 ) - - (48 ) (2 ) $ (350 ) Recoveries 15 3 1 3 4 26 Provision 199 171 48 137 (55 ) 500 Ending Balance $ 1,488 $ 3,066 $ 261 $ 1,410 $ 781 $ 7,006 For the Six Months Ended - June 30, 2015 Beginning balance $ 1,630 $ 2,857 $ 208 $ 1,308 $ 768 $ 6,771 Charge Offs (309 ) (250 ) - (61 ) (32 ) $ (652 ) Recoveries 21 3 2 5 6 37 Provision 146 456 51 158 39 850 Ending Balance $ 1,488 $ 3,066 $ 261 $ 1,410 $ 781 $ 7,006
Summary of credit risk profile of the Company's loan portfolio based on rating category	June 30, 2016 Commercial Commercial RE Agricultural Residential Consumer ($ in thousands) & Industrial & Construction & Farmland Real Estate & Other Total 1-2 $ 227 $ 47 $ 43 $ 36 $ 7 $ 360 3 28,569 84,220 7,943 114,564 51,063 286,359 4 71,141 166,128 44,389 18,833 2,984 303,475 Total Pass (1 - 4) 99,937 250,395 52,375 133,433 54,054 590,194 Special Mention (5) - 4,457 - 574 63 5,094 Substandard (6) 145 1,741 - 411 66 2,363 Doubtful (7) 360 5,330 - 1,088 138 6,916 Loss (8) - - - - - - Total Loans $ 100,442 $ 261,923 $ 52,375 $ 135,506 $ 54,321 $ 604,567 December 31, 2015 Commercial Commercial RE Agricultural Residential Consumer ($ in thousands) & Industrial & Construction & Farmland Real Estate & Other Total 1-2 $ 709 $ 767 $ 47 $ - $ 15 $ 1,538 3 23,362 79,915 8,195 118,463 50,745 280,680 4 61,799 149,473 35,593 10,418 3,223 260,506 Total Pass (1 - 4) 85,870 230,155 43,835 128,881 53,983 542,724 Special Mention (5) 330 5,260 - 756 70 6,416 Substandard (6) 110 1,072 - 420 139 1,741 Doubtful (7) 232 5,721 - 749 32 6,734 Loss (8) - - - - - - Total Loans $ 86,542 $ 242,208 $ 43,835 $ 130,806 $ 54,224 $ 557,615
Summary of loan portfolio aging analysis	($ in thousands) 30-59 Days 60-89 Days Greater Than Total Past Total Loans June 30, 2016 Past Due Past Due 90 Days Due Current Receivable Commercial & Industrial $ 148 $ - $ 54 $ 202 $ 100,240 $ 100,442 Commercial RE & Construction - 935 5,008 5,943 255,980 261,923 Agricultural & Farmland - - - - 52,375 52,375 Residential Real Estate 89 - 187 276 135,230 135,506 Consumer & Other 37 - 124 161 54,160 54,321 Total Loans $ 274 $ 935 $ 5,373 $ 6,582 $ 597,985 $ 604,567 ($ in thousands) 30-59 Days 60-89 Days Greater Than Total Past Total Loans December 31, 2015 Past Due Past Due 90 Days Due Current Receivable Commercial & Industrial $ - $ 60 $ 188 $ 248 $ 86,294 $ 86,542 Commercial RE & Construction 99 - 5,280 5,379 236,829 242,208 Agricultural & Farmland - - - - 43,835 43,835 Residential Real Estate 98 198 156 452 130,354 130,806 Consumer & Other 64 - 2 66 54,158 54,224 Total Loans $ 261 $ 258 $ 5,626 $ 6,145 $ 551,470 $ 557,615
Summary of impaired loan activity	Six Months Ended June 30, 2016 Recorded Unpaid Principal Related Average Recorded Interest Income ($'s in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial & Industrial $ - $ - $ - $ - $ - Commercial RE & Construction 744 744 - 766 11 Agricultural & Farmland - - - - - Residential Real Estate 997 1,040 - 1,199 34 Consumer & Other 81 81 - 96 4 All Impaired Loans < $100,000 438 438 - 438 - With a specific allowance recorded: Commercial & Industrial - - - - - Commercial RE & Construction 4,643 4,893 1,758 4,924 - Agricultural & Farmland - - - - - Residential Real Estate 894 895 151 962 19 Consumer & Other 270 270 19 274 9 Totals: Commercial & Industrial $ - $ - $ - $ - $ - Commercial RE & Construction $ 5,387 $ 5,637 $ 1,758 $ 5,690 $ 11 Agricultural & Farmland $ - $ - $ - $ - $ - Residential Real Estate $ 1,891 $ 1,935 $ 151 $ 2,161 $ 53 Consumer & Other $ 351 $ 351 $ 19 $ 370 $ 13 All Impaired Loans < $100,000 $ 438 $ 438 $ - $ 438 $ - Three Months Ended June 30, 2016 Average Recorded Interest Income ($'s in thousands) Investment Recognized With no related allowance recorded: Commercial & Industrial $ - $ - Commercial RE & Construction 761 6 Agricultural & Farmland - - Residential Real Estate 1,195 16 Consumer & Other 94 2 All Impaired Loans < $100,000 438 - With a specific allowance recorded: Commercial & Industrial - - Commercial RE & Construction 4,924 - Agricultural & Farmland - - Residential Real Estate 958 10 Consumer & Other 272 4 Totals: Commercial & Industrial $ - $ - Commercial RE & Construction $ 5,685 $ 6 Agricultural & Farmland $ - $ - Residential Real Estate $ 2,153 $ 26 Consumer & Other $ 366 $ 6 All Impaired Loans < $100,000 $ 438 $ - Twelve Months Ended December 31, 2015 Recorded Unpaid Principal Related Average Recorded Interest Income ($'s in thousands) Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial & Industrial $ 126 $ 1,214 $ - $ 1,388 $ - Commercial RE & Construction 1,110 1,110 - 1,206 27 Agricultural & Farmland - - - - - Residential Real Estate 657 657 - 862 52 Consumer & Other 90 90 - 107 9 All Impaired Loans < $100,000 131 131 - 131 - With a specific allowance recorded: Commercial & Industrial - - - - - Commercial RE & Construction 4,644 4,893 1,759 5,006 90 Agricultural & Farmland - - - - - Residential Real Estate 1,056 1,013 167 1,084 45 Consumer & Other 374 374 37 385 22 Totals: Commercial & Industrial $ 126 $ 1,214 $ - $ 1,388 $ - Commercial RE & Construction $ 5,754 $ 6,003 $ 1,759 $ 6,212 $ 117 Agricultural & Farmland $ - $ - $ - $ - $ - Residential Real Estate $ 1,713 $ 1,670 $ 167 $ 1,946 $ 97 Consumer & Other $ 464 $ 464 $ 37 $ 492 $ 31 All Impaired Loans < $100,000 $ 131 $ 131 $ - $ 131 $ - Six Months Ended Three Months Ended Average Recorded Interest Income Average Recorded Interest Income June 30, 2015 Investment Recognized Investment Recognized With no related allowance recorded: Commercial & Industrial $ 316 $ - $ 316 $ - Commercial RE & Construction 1,089 19 1,077 6 Agricultural & Farmland - - - - Residential Real Estate 767 26 764 13 Consumer & Other 112 4 110 3 All Impaired Loans < $100,000 334 - 334 - With a specific allowance recorded: Commercial & Industrial 1,152 - 1,152 - Commercial RE & Construction 1,448 1 1,447 - Agricultural & Farmland - - - - Residential Real Estate 1,050 22 1,046 12 Consumer & Other 391 12 388 5 Totals: Commercial & Industrial $ 1,468 $ - $ 1,468 $ - Commercial RE & Construction $ 2,537 $ 20 $ 2,524 $ 6 Agricultural & Farmland $ - $ - $ - $ - Residential Real Estate $ 1,817 $ 48 $ 1,810 $ 25 Consumer & Other $ 503 $ 16 $ 498 $ 8 All Impaired Loans < $100,000 $ 334 $ - $ 334 $ -
Summary of newly restructured loans by type of modification	Three Months ended June 30, 2016 ($ in thousands) Number of Loans Pre-Modification Recorded Balance Post Modification Recorded Balance Residential Real Estate - $ - $ - Commercial - - - Consumer & Other - - - Total Modifications - $ - $ - Interest Total Only Term Combination Modification Residential Real Estate $ - $ - $ - $ - Commercial - - - - Consumer & Other - - - - Total Modifications $ - $ - $ - $ - Six Months ended June 30, 2016 ($ in thousands) Number of Loans Pre-Modification Post Modification Residential Real Estate - $ - $ - Commercial - - - Consumer & Other 1 221 221 Total Modifications 1 $ 221 $ 221 Interest Total Only Term Combination Modification Residential Real Estate $ - $ - $ - $ - Commercial - - - - Consumer & Other - 221 - 221 Total Modifications $ - $ 221 $ - $ 221 Three Months ended June 30, 2015 ($ in thousands) Number of Loans Pre-Modification Recorded Balance Post Modification Recorded Balance Residential Real Estate - $ - $ - Commercial - - - Consumer & Other - - - Total Modifications - $ - $ - Interest Total Only Term Combination Modification Residential Real Estate $ - $ - $ - $ - Consumer & Other - - - - Total Modifications $ - $ - $ - $ - Six Months ended June 30, 2015 ($ in thousands) Number of Loans Pre-Modification Post Modification Residential Real Estate 1 $ 24 $ 24 Consumer & Other - - - Total Modifications 1 $ 24 $ 24 Interest Total Only Term Combination Modification Residential Real Estate $ - $ 24 $ - $ 24 Consumer & Other - - - - Total Modifications $ - $ 24 $ - $ 24
Summary of troubled debt restructurings modified subsequently defaulted	Number of Recorded ($ in thousands) Contracts Balance Consumer & Other 1 $ 221 1 221

Derivative Financial Instrume18

Derivative Financial Instruments and Repurchase Agreements (Tables)	6 Months Ended
	Jun. 30, 2016
Derivative Financial Instruments and Repurchase Agreements [Abstract]
Schedule of fair values of derivative instruments on the balance sheet	Asset Derivatives Liability Derivatives June 30, 2016 June 30, 2016 ($ in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments: Interest rate contracts Other Assets $ 1,524 Other Liabilities $ 1,524 Asset Derivatives Liability Derivatives December 31, 2015 December 31, 2015 ($ in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments: Interest rate contracts Other Assets $ 490 Other Liabilities $ 490

Fair Value of Assets and Liab19

Fair Value of Assets and Liabilities (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value of Assets and Liabilities [Abstract]
Summary of fair value measurements of assets measured at fair value on a recurring basis	($ in thousands) Available-for-Sale Securities: Fair Values (Level 1) (Level 2) (Level 3) U.S. Treasury and Government Agencies $ 11,737 $ - $ 11,737 $ - Mortgage-backed securities 64,349 - 64,349 - State and political subdivisions 16,363 - 16,363 - Equity securities 23 - 23 - Interest rate contracts - assets 1,524 - 1,524 - Interest rate contracts - liabilities (1,524 ) - (1,524 ) - Fair Value Measurements Using: ($ in thousands) Available-for-Sale Securities: Fair Values (Level 1) (Level 2) (Level 3) U.S. Treasury and Government Agencies $ 10,905 $ - $ 10,905 $ - Mortgage-backed securities 61,343 - 61,343 - State and political subdivisions 17,518 - 17,518 - Equity securities 23 23 Interest rate contracts - assets 490 490 Interest rate contracts - liabilities (490 ) (490 )
Summary of fair value measurements of assets measured at fair value on a nonrecurring basis	($ in thousands) Description Fair Values at 6/30/2016 (Level 1) (Level 2) (Level 3) Impaired loans $ 180 $ - $ - $ 180 Mortgage Servicing Rights 6,737 - - 6,737 ($ in thousands) Description Fair Values at 12/31/2015 (Level 1) (Level 2) (Level 3) Impaired loans $ 3,011 $ - $ - $ 3,011 Mortgage Servicing Rights 2,585 - - 2,585
Summary of quantitative information about unobservable inputs used in recurring and nonrecurring	($'s in thousands) Fair Value at 6/30/2016 Valuation Technique Unobservable Inputs Range (Weighted Average) Collateral-dependent impaired loans $ 180 Market comparable Comparability adjustments (%) Not available Mortgage servicing rights 6,737 Discounted cash flow Discount Rate 9.16 % Constant prepayment rate 14.63 % P&I earnings credit 0.45 % T&I earnings credit 1.22 % Inflation for cost of servicing 1.50 % ($'s in thousands) Fair Value at Valuation Technique Unobservable Inputs Range (Weighted Collateral-dependent impaired loans $ 3,011 Market comparable properties Comparability adjustments (%) Not available Mortgage servicing rights 2,585 Discounted cash flow Discount Rate 9.75 % Constant prepayment rate 8.90 % P&I earnings credit 0.42 % T&I earnings credit 1.54 % Inflation for cost of servicing 1.50 %
Summary of estimated fair values of company's financial instruments	June 30, Fair Value Measurements Using Amount (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 29,945 $ 29,945 $ - $ - Loans held for sale 8,441 - 8,673 - Loans, net of allowance for loan losses 597,326 - - 599,125 Federal Reserve and FHLB Bank stock 3,748 - 3,748 - Accrued interest receivable 1,397 - 1,397 - Mortgage Servicing Rights 6,494 - - 6,575 Financial liabilities Deposits $ 648,300 $ 110,899 $ 540,442 $ - Short-term borrowings 17,797 - 17,797 - FHLB Advances 23,000 - 23,205 - Trust preferred securities 10,310 - 7,190 - Accrued interest payable 384 - 384 - December 31, 2015 Carrying Fair Value Measurements Using Amount (Level 1) (Level 2) (Level 3) Financial assets Cash and due from banks $ 20,459 $ 20,459 $ - $ - Loans held for sale 7,516 - 7,779 - Loans, net of allowance for loan losses 550,669 - - 548,154 Federal Reserve and FHLB Bank stock, at cost 3,748 - 3,748 - Accrued interest receivable 1,260 - 1,260 - Mortgage Servicing Rights 7,152 - - 7,760 Financial liabilities Deposits $ 586,453 $ 113,113 $ 475,468 $ - Short-term borrowings 12,406 - 12,406 - FHLB advances 35,000 - 34,870 - Trust preferred securities 10,310 - 7,165 - Accrued interest payable 264 - 264 -

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Distributed earnings allocated to common shares	$ 296	$ 246	$ 566	$ 467
Undistributed earnings allocated to common shares	1,723	1,499	2,861	2,548
Net earnings allocated to common shares	2,019	1,745	3,427	3,015
Net earnings allocated to participating securities	2	2	5	3
Dividends on convertible preferred shares	244	244	488	469
Net Income allocated to common shares and participating securities	$ 2,265	$ 1,991	$ 3,920	$ 3,487
Weighted average shares outstanding for basic earnings per share	4,893	4,884	4,894	4,882
Dilutive effect of stock compensation	45	47	50	48
Dilutive effect of convertible shares	1,452	1,451	1,452	1,451
Weighted average shares outstanding for diluted earnings per share	6,390	6,382	6,396	6,381
Basic earnings per common share	$ 0.41	$ 0.36	$ 0.70	$ 0.62
Diluted earnings per common share	$ 0.35	$ 0.31	$ 0.61	$ 0.54

Earnings Per Share (Details Tex

Earnings Per Share (Details Textual) - shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Earnings per share (Textual)
Common shares excluded from computation of diluted EPS	33,924	50,424
Conversion of depository shares	1,500,000
Conversion of common stock, shares	1,453,435

Securities (Details)

Securities (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Summary of amortized cost and approximate fair values of securities
Amortized Cost	$ 90,120	$ 88,805
Gross Unrealized Gains	2,371	1,411
Gross Unrealized Losses	(19)	(427)
Fair Value	92,472	89,789
U.S. Treasury and Government agencies [Member]
Summary of amortized cost and approximate fair values of securities
Amortized Cost	11,600	10,804
Gross Unrealized Gains	137	101
Gross Unrealized Losses
Fair Value	11,737	10,905
Mortgage-backed securities [Member]
Summary of amortized cost and approximate fair values of securities
Amortized Cost	63,237	61,459
Gross Unrealized Gains	1,131	311
Gross Unrealized Losses	(19)	(427)
Fair Value	64,349	61,343
State and political subdivisions [Member]
Summary of amortized cost and approximate fair values of securities
Amortized Cost	15,260	16,519
Gross Unrealized Gains	1,103	999
Gross Unrealized Losses
Fair Value	16,363	17,518
Equity securities [Member]
Summary of amortized cost and approximate fair values of securities
Amortized Cost	23	23
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	$ 23	$ 23

Securities (Details 1)

Securities (Details 1) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Summary of amortized cost and fair value of securities available for sale by contractual maturity
Available for Sale Amortized Cost, Within one year	$ 438
Available for Sale Amortized Cost, Due after one year through five years	4,960
Available for Sale Amortized Cost, Due after five years through ten years	6,583
Available for Sale Amortized Cost, Due after ten years	14,879
Available for Sale Amortized Cost	26,860
Available for Sale, Amortized Cost, Mortgage-backed securities & equity securities	63,260
Available for Sale, Amortized Cost, Totals	90,120	$ 88,805
Available for Sale Fair Value, Within one year	450
Available for Sale Fair Value, Due after one year through five years	5,230
Available for Sale Fair Value, Due after five years through ten years	6,938
Available for Sale Fair Value, Due after ten years	15,482
Available for Sale Fair Value	28,100
Available for Sale, Fair Value, Mortgage-backed securities & equity securities	64,372
Available for Sale, Fair Value, Totals	$ 92,472	$ 89,789

Securities (Details 2)

Securities (Details 2) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Schedule of securities with unrealized losses
Less than 12 Months, Fair Value		$ 30,184
Less than 12 Months, Unrealized Losses		(253)
12 Months or Longer, Fair Value	1,792	7,061
12 Months or Longer, Unrealized Losses	(19)	(174)
Total, Fair Value	1,792	37,245
Total, Unrealized Losses	(19)	(427)
Mortgage-backed securities [Member]
Schedule of securities with unrealized losses
Less than 12 Months, Fair Value		30,184
Less than 12 Months, Unrealized Losses		(253)
12 Months or Longer, Fair Value	1,792	7,061
12 Months or Longer, Unrealized Losses	(19)	(174)
Total, Fair Value	1,792	37,245
Total, Unrealized Losses	$ (19)	$ (427)

Securities (Details Textual)

Securities (Details Textual) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Securities (Textual)
Fair value of securities pledged as collateral	$ 75,600	$ 42,600
Securities delivered for repurchase agreements	20,700	15,800
Gross gains realized from sales of available-for-sale securities	200
Tax expense for net security gains	70
Total fair value of investments	$ 1,792	$ 37,245
Fair value as a percentage of available-for-sale investment portfolio	2.00%	34.00%
Unrealized loss on the securities portfolio	$ 20	$ 430

Loans and Allowance for Loan 26

Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Summary of categories of loans
Total Loans	$ 604,567	$ 557,615
Non-Accrual Loans	6,693	6,646
Unearned Income	209	44
Total Loans, net of unearned income	604,776	557,659
Allowance for loan losses	(7,450)	(6,990)
Commercial & Industrial [Member]
Summary of categories of loans
Total Loans	100,442	86,542
Non-Accrual Loans	158	188
Commercial RE & Construction [Member]
Summary of categories of loans
Total Loans	261,923	242,208
Non-Accrual Loans	5,309	5,670
Agricultural & Farmland [Member]
Summary of categories of loans
Total Loans	52,375	43,835
Non-Accrual Loans		7
Residential Real Estate [Member]
Summary of categories of loans
Total Loans	135,506	130,806
Non-Accrual Loans	1,088	749
Consumer & Other [Member]
Summary of categories of loans
Total Loans	54,321	54,224
Non-Accrual Loans	$ 138	$ 32

Loans and Allowance for Loan 27

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	Dec. 31, 2015
Summary of balance of the allowance for loan losses and the recorded investment in loans
Beginning balance	$ 7,205	$ 6,830	$ 6,990	$ 6,771
Charge Offs	(2)	(350)	(96)	(652)
Recoveries	247	26	306	37
Provision		500	250	850
Ending Balance	7,450	7,006	7,450	7,006
Allowance: Ending balance: individually evaluated for impairment	1,928		1,928		$ 1,963
Allowance: Ending balance: collectively evaluated for impairment	5,522		5,522		5,027
Loans: Ending balance individually evaluated for impairment	7,629		7,629		8,057
Loans: Ending balance collectively evaluated for impairment	596,938		596,938		549,558
Commercial & Industrial [Member]
Summary of balance of the allowance for loan losses and the recorded investment in loans
Beginning balance	925	1,574	914	1,630
Charge Offs		(300)	(92)	(309)
Recoveries	212	15	247	21
Provision		199	68	146
Ending Balance	1,137	1,488	1,137	1,488
Allowance: Ending balance: individually evaluated for impairment
Allowance: Ending balance: collectively evaluated for impairment	1,137		1,137		914
Loans: Ending balance individually evaluated for impairment					126
Loans: Ending balance collectively evaluated for impairment	100,442		100,442		86,416
Commercial RE & Construction [Member]
Summary of balance of the allowance for loan losses and the recorded investment in loans
Beginning balance	4,120	2,892	3,886	2,857
Charge Offs				(250)
Recoveries	6	3	6	3
Provision		171	234	456
Ending Balance	4,126	3,066	4,126	3,066
Allowance: Ending balance: individually evaluated for impairment	1,758		1,758		1,759
Allowance: Ending balance: collectively evaluated for impairment	2,368		2,368		2,127
Loans: Ending balance individually evaluated for impairment	5,387		5,387		5,754
Loans: Ending balance collectively evaluated for impairment	256,536		256,536		236,454
Agricultural & Farmland [Member]
Summary of balance of the allowance for loan losses and the recorded investment in loans
Beginning balance	188	212	204	208
Charge Offs
Recoveries	1	1	1	2
Provision		48	(16)	51
Ending Balance	189	261	189	261
Allowance: Ending balance: individually evaluated for impairment
Allowance: Ending balance: collectively evaluated for impairment	189		189		204
Loans: Ending balance individually evaluated for impairment
Loans: Ending balance collectively evaluated for impairment	52,375		52,375		43,835
Residential Real Estate [Member]
Summary of balance of the allowance for loan losses and the recorded investment in loans
Beginning balance	1,342	1,318	1,312	1,308
Charge Offs		(48)		(61)
Recoveries		3		5
Provision		137	30	158
Ending Balance	1,342	1,410	1,342	1,410
Allowance: Ending balance: individually evaluated for impairment	151		151		167
Allowance: Ending balance: collectively evaluated for impairment	1,191		1,191		1,145
Loans: Ending balance individually evaluated for impairment	1,891		1,891		1,713
Loans: Ending balance collectively evaluated for impairment	133,615		133,615		129,093
Consumer & Other [Member]
Summary of balance of the allowance for loan losses and the recorded investment in loans
Beginning balance	630	834	674	768
Charge Offs	(2)	(2)	(4)	(32)
Recoveries	28	4	52	6
Provision		(55)	(66)	39
Ending Balance	656	$ 781	656	$ 781
Allowance: Ending balance: individually evaluated for impairment	19		19		37
Allowance: Ending balance: collectively evaluated for impairment	637		637		637
Loans: Ending balance individually evaluated for impairment	351		351		464
Loans: Ending balance collectively evaluated for impairment	$ 53,970		$ 53,970		$ 53,760

Loans and Allowance for Loan 28

Loans and Allowance for Loan Losses (Details 2) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	$ 604,567	$ 557,615
Loan Grade 1-2 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	360	1,538
Loan Grade 3 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	286,359	280,680
Loan Grade 4 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	303,475	260,506
Total Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	590,194	542,724
Special Mention [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	5,094	6,416
Substandard [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	2,363	1,741
Doubtful [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	6,916	6,734
Loss [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Commercial & Industrial [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	100,442	86,542
Commercial & Industrial [Member] | Loan Grade 1-2 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	227	709
Commercial & Industrial [Member] | Loan Grade 3 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	28,569	23,362
Commercial & Industrial [Member] | Loan Grade 4 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	71,141	61,799
Commercial & Industrial [Member] | Total Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	99,937	85,870
Commercial & Industrial [Member] | Special Mention [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans		330
Commercial & Industrial [Member] | Substandard [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	145	110
Commercial & Industrial [Member] | Doubtful [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	360	232
Commercial & Industrial [Member] | Loss [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Commercial RE & Construction [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	261,923	242,208
Commercial RE & Construction [Member] | Loan Grade 1-2 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	47	767
Commercial RE & Construction [Member] | Loan Grade 3 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	84,220	79,915
Commercial RE & Construction [Member] | Loan Grade 4 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	166,128	149,473
Commercial RE & Construction [Member] | Total Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	250,395	230,155
Commercial RE & Construction [Member] | Special Mention [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	4,457	5,260
Commercial RE & Construction [Member] | Substandard [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	1,741	1,072
Commercial RE & Construction [Member] | Doubtful [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	5,330	5,721
Commercial RE & Construction [Member] | Loss [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Agricultural & Farmland [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	52,375	43,835
Agricultural & Farmland [Member] | Loan Grade 1-2 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	43	47
Agricultural & Farmland [Member] | Loan Grade 3 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	7,943	8,195
Agricultural & Farmland [Member] | Loan Grade 4 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	44,389	35,593
Agricultural & Farmland [Member] | Total Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	52,375	43,835
Agricultural & Farmland [Member] | Special Mention [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Agricultural & Farmland [Member] | Substandard [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Agricultural & Farmland [Member] | Doubtful [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Agricultural & Farmland [Member] | Loss [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Residential Real Estate [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	135,506	130,806
Residential Real Estate [Member] | Loan Grade 1-2 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	36
Residential Real Estate [Member] | Loan Grade 3 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	114,564	118,463
Residential Real Estate [Member] | Loan Grade 4 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	18,833	10,418
Residential Real Estate [Member] | Total Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	133,433	128,881
Residential Real Estate [Member] | Special Mention [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	574	756
Residential Real Estate [Member] | Substandard [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	411	420
Residential Real Estate [Member] | Doubtful [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	1,088	749
Residential Real Estate [Member] | Loss [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans
Consumer & Other [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	54,321	54,224
Consumer & Other [Member] | Loan Grade 1-2 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	7	15
Consumer & Other [Member] | Loan Grade 3 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	51,063	50,745
Consumer & Other [Member] | Loan Grade 4 Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	2,984	3,223
Consumer & Other [Member] | Total Pass [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	54,054	53,983
Consumer & Other [Member] | Special Mention [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	63	70
Consumer & Other [Member] | Substandard [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	66	139
Consumer & Other [Member] | Doubtful [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans	138	32
Consumer & Other [Member] | Loss [Member]
Summary of credit risk profile of the Company's loan portfolio based on rating category
Total Loans

Loans and Allowance for Loan 29

Loans and Allowance for Loan Losses (Details 3) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Summary of loan portfolio aging analysis
Total Past Due	$ 6,582	$ 6,145
Current	597,985	551,470
Total Loans Receivable	604,567	557,615
30 to 59 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due	274	261
60 to 89 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due	935	258
Greater Than 90 Days [Member]
Summary of loan portfolio aging analysis
Total Past Due	5,373	5,626
Commercial & Industrial [Member]
Summary of loan portfolio aging analysis
Total Past Due	202	248
Current	100,240	86,294
Total Loans Receivable	100,442	86,542
Commercial & Industrial [Member] | 30 to 59 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due	148
Commercial & Industrial [Member] | 60 to 89 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due		60
Commercial & Industrial [Member] | Greater Than 90 Days [Member]
Summary of loan portfolio aging analysis
Total Past Due	54	188
Commercial RE & Construction [Member]
Summary of loan portfolio aging analysis
Total Past Due	5,943	5,379
Current	255,980	236,829
Total Loans Receivable	261,923	242,208
Commercial RE & Construction [Member] | 30 to 59 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due		99
Commercial RE & Construction [Member] | 60 to 89 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due	935
Commercial RE & Construction [Member] | Greater Than 90 Days [Member]
Summary of loan portfolio aging analysis
Total Past Due	5,008	5,280
Agricultural & Farmland [Member]
Summary of loan portfolio aging analysis
Total Past Due
Current	52,375	43,835
Total Loans Receivable	52,375	43,835
Agricultural & Farmland [Member] | 30 to 59 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due
Agricultural & Farmland [Member] | 60 to 89 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due
Agricultural & Farmland [Member] | Greater Than 90 Days [Member]
Summary of loan portfolio aging analysis
Total Past Due
Residential Real Estate [Member]
Summary of loan portfolio aging analysis
Total Past Due	276	452
Current	135,230	130,354
Total Loans Receivable	135,506	130,806
Residential Real Estate [Member] | 30 to 59 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due	89	98
Residential Real Estate [Member] | 60 to 89 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due		198
Residential Real Estate [Member] | Greater Than 90 Days [Member]
Summary of loan portfolio aging analysis
Total Past Due	187	156
Consumer & Other [Member]
Summary of loan portfolio aging analysis
Total Past Due	161	66
Current	54,160	54,158
Total Loans Receivable	54,321	54,224
Consumer & Other [Member] | 30 to 59 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due	37	64
Consumer & Other [Member] | 60 to 89 Days Past Due [Member]
Summary of loan portfolio aging analysis
Total Past Due
Consumer & Other [Member] | Greater Than 90 Days [Member]
Summary of loan portfolio aging analysis
Total Past Due	$ 124	$ 2

Loans and Allowance for Loan 30

Loans and Allowance for Loan Losses (Details 4) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Commercial & Industrial [Member]
Summary of Impaired loan activity
With no related allowance recorded, Recorded Investment					$ 126
With no related allowance recorded, Unpaid Principal Balance					1,214
With no related allowance recorded, Average Recorded Investment		$ 316		$ 316	1,388
With no related allowance recorded, Interest Income Recognized
With a specific allowance recorded, Recorded Investment
With a specific allowance recorded, Unpaid Principal Balance
With a specific allowance recorded, Related Allowance
With a specific allowance recorded, Average Recorded Investment		1,552		1,552
With a specific allowance recorded, Interest Income Recognized
Total Recorded Investment					126
Total Unpaid Principal Balance					1,214
Total Related Allowance
Total Average Recorded Investment		1,468		1,468	1,388
Total Interest Income Recognized
Commercial RE & Construction [Member]
Summary of Impaired loan activity
With no related allowance recorded, Recorded Investment	744		744		1,110
With no related allowance recorded, Unpaid Principal Balance	744		744		1,110
With no related allowance recorded, Average Recorded Investment	761	1,077	766	1,089	1,206
With no related allowance recorded, Interest Income Recognized	6	6	11	19	27
With a specific allowance recorded, Recorded Investment	4,643		4,643		4,644
With a specific allowance recorded, Unpaid Principal Balance	4,893		4,893		4,893
With a specific allowance recorded, Related Allowance	1,758		1,758		1,759
With a specific allowance recorded, Average Recorded Investment	4,924	1,447	4,924	1,448	5,006
With a specific allowance recorded, Interest Income Recognized				1	90
Total Recorded Investment	5,387		5,387		5,754
Total Unpaid Principal Balance	5,637		5,637		6,003
Total Related Allowance	1,758		1,758		1,759
Total Average Recorded Investment	5,685	2,524	5,690	2,537	6,212
Total Interest Income Recognized	6	6	11	20	117
Agricultural & Farmland [Member]
Summary of Impaired loan activity
With no related allowance recorded, Recorded Investment
With no related allowance recorded, Unpaid Principal Balance
With no related allowance recorded, Average Recorded Investment
With no related allowance recorded, Interest Income Recognized
With a specific allowance recorded, Recorded Investment
With a specific allowance recorded, Unpaid Principal Balance
With a specific allowance recorded, Related Allowance
With a specific allowance recorded, Average Recorded Investment
With a specific allowance recorded, Interest Income Recognized
Total Recorded Investment
Total Unpaid Principal Balance
Total Related Allowance
Total Average Recorded Investment
Total Interest Income Recognized
Residential Real Estate [Member]
Summary of Impaired loan activity
With no related allowance recorded, Recorded Investment	997		997		657
With no related allowance recorded, Unpaid Principal Balance	1,040		1,040		657
With no related allowance recorded, Average Recorded Investment	1,195	764	1,199	767	862
With no related allowance recorded, Interest Income Recognized	16	13	34	26	52
With a specific allowance recorded, Recorded Investment	894		894		1,056
With a specific allowance recorded, Unpaid Principal Balance	895		895		1,013
With a specific allowance recorded, Related Allowance	151		151		167
With a specific allowance recorded, Average Recorded Investment	958	1,046	962	1,050	1,084
With a specific allowance recorded, Interest Income Recognized	10	12	19	22	45
Total Recorded Investment	1,891		1,891		1,713
Total Unpaid Principal Balance	1,935		1,935		1,670
Total Related Allowance	151		151		167
Total Average Recorded Investment	2,153	1,810	2,161	1,817	1,946
Total Interest Income Recognized	26	25	53	48	97
Consumer & Other [Member]
Summary of Impaired loan activity
With no related allowance recorded, Recorded Investment	81		81		90
With no related allowance recorded, Unpaid Principal Balance	81		81		90
With no related allowance recorded, Average Recorded Investment	94	110	96	112	107
With no related allowance recorded, Interest Income Recognized	2	3	4	4	9
With a specific allowance recorded, Recorded Investment	270		270		374
With a specific allowance recorded, Unpaid Principal Balance	270		270		374
With a specific allowance recorded, Related Allowance	19		19		37
With a specific allowance recorded, Average Recorded Investment	272	388	274	391	385
With a specific allowance recorded, Interest Income Recognized	4	5	9	12	22
Total Recorded Investment	351		351		464
Total Unpaid Principal Balance	351		351		464
Total Related Allowance	19		19		37
Total Average Recorded Investment	366	498	370	503	492
Total Interest Income Recognized	6	8	13	16	31
All Impaired Loans less than $100,000 [Member]
Summary of Impaired loan activity
With no related allowance recorded, Recorded Investment	438		438		131
With no related allowance recorded, Unpaid Principal Balance	438		438		131
With no related allowance recorded, Average Recorded Investment	438	334	438	334	131
With no related allowance recorded, Interest Income Recognized
Total Recorded Investment	438		438		131
Total Unpaid Principal Balance	438		438		131
Total Related Allowance
Total Average Recorded Investment	438	$ 334	438	334	131
Total Interest Income Recognized

Loans and Allowance for Loan 31

Loans and Allowance for Loan Losses (Details 5) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016USD ($)Loan	Jun. 30, 2015USD ($)Loan	Jun. 30, 2016USD ($)Loan	Jun. 30, 2015USD ($)Loan
Summary of newly restructured loans by type of modification
Number of Loans | Loan			1	1
Pre-Modification Recorded Balance			$ 221	$ 24
Post-Modification Recorded Balance			221	24
Interest Only
Term			221	24
Combination
Total Modification			$ 221	$ 24
Residential Real Estate [Member]
Summary of newly restructured loans by type of modification
Number of Loans | Loan				1
Pre-Modification Recorded Balance				$ 24
Post-Modification Recorded Balance				24
Interest Only
Term				24
Combination
Total Modification				$ 24
Commercial [Member]
Summary of newly restructured loans by type of modification
Number of Loans | Loan
Pre-Modification Recorded Balance
Post-Modification Recorded Balance
Interest Only
Term
Combination
Total Modification
Consumer & Other [Member]
Summary of newly restructured loans by type of modification
Number of Loans | Loan			1
Pre-Modification Recorded Balance			$ 221
Post-Modification Recorded Balance			221
Interest Only
Term			221
Combination
Total Modification			$ 221

Loans and Allowance for Loan 32

Loans and Allowance for Loan Losses (Details 6) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)Contract	Jun. 30, 2015USD ($)
Financing Receivable, Impaired [Line Items]
Number of Contracts | Contract			1
Recorded Balance | $			$ 221	$ 24
Consumer & Other [Member]
Financing Receivable, Impaired [Line Items]
Number of Contracts | Contract			1
Recorded Balance | $			$ 221

Loans and Allowance for Loan 33

Loans and Allowance for Loan Losses (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Loans and Allowance for Loan Losses (Textual)
Principal amount outstanding of loans held-in-portfolio	$ 100
Impaired loans which included in groups of homogenous loans	Impaired loans less than $100,000 are included in groups of homogenous loans.

Derivative Financial Instrume34

Derivative Financial Instruments and Repurchase Agreements (Details) - Derivatives not designated as hedging instruments [Member] - Interest rate contracts [Member] - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Other Assets [Member]
Fair value of the Company's derivative financial instruments, as well as their classification on the balance sheet
Asset Derivatives	$ 1,524	$ 490
Other Liabilities [Member]
Fair value of the Company's derivative financial instruments, as well as their classification on the balance sheet
Liability Derivatives	$ 1,524	$ 490

Derivative Financial Instrume35

Derivative Financial Instruments and Repurchase Agreements (Details Textual) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Derivative Financial Instruments (Textual)
Notional amount of customer-facing swaps	$ 30.1	$ 17.6
Cash as collateral	1.6	$ 0.7
Repurchase agreements securities	5.7
Mortgage-backed securities	$ 14.9

Fair Value of Assets and Liab36

Fair Value of Assets and Liabilities (Details) - Available-For-Sale Securities [Member] - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
U.S. Treasury and Government Agencies [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	$ 11,737	$ 10,905
Mortgage-backed securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	64,349	61,343
State and political subdivisions [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	16,363	17,518
Equity securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	23	23
Interest rate contracts - assets [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	1,524	490
Interest rate contracts - liabilities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	(1,524)	(490)
Level 1 [Member] | U.S. Treasury and Government Agencies [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 1 [Member] | Mortgage-backed securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 1 [Member] | State and political subdivisions [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 1 [Member] | Equity securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 1 [Member] | Interest rate contracts - assets [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 1 [Member] | Interest rate contracts - liabilities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 2 [Member] | U.S. Treasury and Government Agencies [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	11,737	10,905
Level 2 [Member] | Mortgage-backed securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	64,349	61,343
Level 2 [Member] | State and political subdivisions [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	16,363	17,518
Level 2 [Member] | Equity securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	23	23
Level 2 [Member] | Interest rate contracts - assets [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	1,524	490
Level 2 [Member] | Interest rate contracts - liabilities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring	(1,524)	(490)
Level 3 [Member] | U.S. Treasury and Government Agencies [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 3 [Member] | Mortgage-backed securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 3 [Member] | State and political subdivisions [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 3 [Member] | Equity securities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 3 [Member] | Interest rate contracts - assets [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring
Level 3 [Member] | Interest rate contracts - liabilities [Member]
Summary of fair value measurements of assets measured at fair value on a recurring basis
Assets, Fair value, Recurring

Fair Value of Assets and Liab37

Fair Value of Assets and Liabilities (Details 1) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Impaired Loans [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring	$ 180	$ 3,011
Impaired Loans [Member] | Level 1 [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring
Impaired Loans [Member] | Level 2 [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring
Impaired Loans [Member] | Level 3 [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring	180	3,011
Mortgage Servicing Rights [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring	6,575	2,585
Mortgage Servicing Rights [Member] | Level 1 [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring
Mortgage Servicing Rights [Member] | Level 2 [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring
Mortgage Servicing Rights [Member] | Level 3 [Member]
Summary of fair value measurements of assets measured at fair value on a non-recurring basis
Assets, Fair value, Nonrecurring	$ 6,575	$ 2,585

Fair Value of Assets and Liab38

Fair Value of Assets and Liabilities (Details 2) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Collateral-dependent impaired loans [Member] | Comparability adjustments (%) [Member]
Quantitative information about unobservable inputs used in recurring and nonrecurring fair value measurements
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	$ 180	$ 3,011
Fair Value Measurements, Valuation Technique	Market comparable properties	Market comparable properties
Fair Value Measurements, Unobservable Inputs	Comparability adjustments (%)	Comparability adjustments (%)
Mortgage servicing rights [Member] | Discount Rate [Member]
Quantitative information about unobservable inputs used in recurring and nonrecurring fair value measurements
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	$ 6,575	$ 2,585
Fair Value Measurements, Valuation Technique	Discounted cash flow	Discounted cash flow
Fair Value Measurements, Unobservable Inputs	Discount Rate	Discount Rate
Fair Value Measurements, Range (Weighted Average)	9.16%	9.75%
Mortgage servicing rights [Member] | Constant prepayment rate [Member]
Quantitative information about unobservable inputs used in recurring and nonrecurring fair value measurements
Fair Value Measurements, Unobservable Inputs	Constant prepayment rate	Constant prepayment rate
Fair Value Measurements, Range (Weighted Average)	14.63%	8.90%
Mortgage servicing rights [Member] | P&I earnings credit [Member]
Quantitative information about unobservable inputs used in recurring and nonrecurring fair value measurements
Fair Value Measurements, Unobservable Inputs	P&I earnings credit	P&I earnings credit
Fair Value Measurements, Range (Weighted Average)	0.45%	0.42%
Mortgage servicing rights [Member] | T&I earnings credit [Member]
Quantitative information about unobservable inputs used in recurring and nonrecurring fair value measurements
Fair Value Measurements, Unobservable Inputs	T&I earnings credit	T&I earnings credit
Fair Value Measurements, Range (Weighted Average)	1.22%	1.54%
Mortgage servicing rights [Member] | Inflation for cost of servicing [Member]
Quantitative information about unobservable inputs used in recurring and nonrecurring fair value measurements
Fair Value Measurements, Unobservable Inputs	Inflation for cost of servicing	Inflation for cost of servicing
Fair Value Measurements, Range (Weighted Average)	1.50%	1.50%

Fair Value of Assets and Liab39

Fair Value of Assets and Liabilities (Details 3) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Financial assets
Cash and cash equivalents	$ 29,945	$ 20,459	$ 21,709	$ 28,197
Loans held for sale	8,441	7,516
Loans, net of allowance for loan losses	597,326	550,669
Federal Reserve and FHLB Bank stock	3,748	3,748
Accrued interest receivable	1,397	1,260
Mortgage Servicing Rights	6,494	7,152
Financial liabilities
Deposits	648,300	586,453
Short-term borrowings	17,797	12,406
FHLB Advances	23,000	35,000
Trust preferred securities	10,310	10,310
Accrued interest payable	384	264
Level 1 [Member]
Financial assets
Cash and cash equivalents	29,945	20,459
Loans held for sale
Loans, net of allowance for loan losses
Federal Reserve and FHLB Bank stock
Accrued interest receivable
Mortgage Servicing Rights
Financial liabilities
Deposits	110,899	113,113
Short-term borrowings
FHLB Advances
Trust preferred securities
Accrued interest payable
Level 2 [Member]
Financial assets
Cash and cash equivalents
Loans held for sale	8,673	7,779
Loans, net of allowance for loan losses
Federal Reserve and FHLB Bank stock	3,748	3,748
Accrued interest receivable	1,397	1,260
Mortgage Servicing Rights
Financial liabilities
Deposits	540,442	475,468
Short-term borrowings	17,797	12,406
FHLB Advances	23,205	34,870
Trust preferred securities	7,190	7,165
Accrued interest payable	384	264
Level 3 [Member]
Financial assets
Cash and cash equivalents
Loans held for sale
Loans, net of allowance for loan losses	599,125	548,154
Federal Reserve and FHLB Bank stock
Accrued interest receivable
Mortgage Servicing Rights	6,575	7,760
Financial liabilities
Deposits
Short-term borrowings
FHLB Advances
Trust preferred securities
Accrued interest payable