10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C.  20549

___________________

FORM 10-Q

(Mark One)

[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September  30, 2015

[  ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________to ________

Commission File Number 0-29030

SUSSEX BANCORP

(Exact name of registrant as specified in its charter)   

New Jersey	22-3475473
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 Enterprise Drive, Suite 700,  Rockaway, NJ	07866
(Address of principal executive offices)	(Zip Code)

(844) 256-7328

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☒
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes ☐No ☒

As of November  6, 2015 therewere 4,645,387 shares of common stock, no par value, outstanding.

SUSSEX BANCORP

FORM 10-Q

INDEX

FORWARD-LOOKING STATEMENTS	i
PART I – FINANCIAL INFORMATION	1
Item 1 - Financial Statements	1
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3 - Quantitative and Qualitative Disclosures about Market Risk	35
Item 4 - Controls and Procedures	35
PART II – OTHER INFORMATION	36
Item 1 - Legal Proceedings	36
Item 1A - Risk Factors	36
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3 - Defaults Upon Senior Securities	36
Item 4 - Mine Safety Disclosures	36
Item 5 - Other Information	36
Item 6 - Exhibits	36

FORWARD-LOOKING STATEMENTS

We may, from time to time, make written or oral “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements contained in our filings with the Securities and Exchange Commission (the “SEC”), our reports to shareholders and in other communications by us. This Report on Form 10-Q contains “forward-looking statements” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated” and “potential.”  Examples of forward-looking statements include, but are not limited to, estimates with respect to our financial condition, results of operation and business that are subject to various factors which could cause actual results to differ materially from these estimates.  These factors include, but are not limited to:

§ changes in the interest rate environment that reduce margins;

§ changes in the regulatory environment;

§ the highly competitive industry and market area in which we operate;

§ general economic conditions, either nationally or regionally, resulting in, among other things, a deterioration in credit quality;

§ changes in business conditions and inflation;

§ changes in credit market conditions;

§ changes in the securities markets which affect investment management revenues;

§ increases in Federal Deposit Insurance Corporation (“FDIC”) deposit insurance premiums and assessments could adversely affect our financial condition;

§ changes in technology used in the banking business;

§ the soundness of other financial services institutions which may adversely affect our credit risk;

§ our controls and procedures may fail or be circumvented;

§ new lines of business or new products and services which may subject us to additional risks;

§ changes in key management personnel which may adversely impact our operations;

§ the effect on our operations of recent legislative and regulatory initiatives that were or may be enacted in response to the ongoing financial crisis;

§ severe weather, natural disasters, acts of war or terrorism and other external events which could significantly impact our business; and

§ other factors detailed from time to time in our filings with the SEC.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from the results discussed in these forward-looking statements.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  We do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

i

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

SUSSEX BANCORP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)	September 30, 2015		December 31, 2014
ASSETS
Cash and due from banks	$	3,104	$	2,953
Interest-bearing deposits with other banks		5,067		2,906
Cash and cash equivalents		8,171		5,859
Interest bearing time deposits with other banks		100		100
Securities available for sale, at fair value		94,702		77,976
Securities held to maturity, at amortized cost (fair value of $6,034 and $6,190 at September 30, 2015 and December 31, 2014, respectively)		5,857		6,006
Federal Home Loan Bank Stock, at cost		4,015		3,908
Loans receivable, net of unearned income		501,203		471,973
Less:  allowance for loan losses		5,641		5,641
Net loans receivable		495,562		466,332
Foreclosed real estate		3,335		4,449
Premises and equipment, net		8,773		8,650
Accrued interest receivable		1,996		1,796
Goodwill		2,820		2,820
Bank-owned life insurance		12,446		12,211
Other assets		6,242		5,808
Total Assets	$	644,019	$	595,915
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	99,316	$	70,490
Interest bearing		403,193		387,780
Total deposits		502,509		458,270
Short-term borrowings		15,300		23,500
Long-term borrowings		56,000		46,000
Accrued interest payable and other liabilities		4,177		4,029
Junior subordinated debentures		12,887		12,887
Total Liabilities		590,873		544,686
Stockholders' Equity:
Preferred stock, no par value, 1,000,000 shares authorized; none issued		-		-
Common stock, no par value, 10,000,000 shares authorized; 4,704,629 and 4,673,789 shares issued and 4,645,387 and 4,662,606 shares outstanding at September 30, 2015 and December 31, 2014, respectively		35,832		35,553
Treasury stock, at cost; 59,242 and 11,183 shares at September 30, 2015 and December 31, 2014, respectively		(592)		(59)
Retained earnings		17,793		15,566
Accumulated other comprehensive income		113		169
Total Stockholders' Equity		53,146		51,229
Total Liabilities and Stockholders' Equity	$	644,019	$	595,915
See Notes to Unaudited Consolidated Financial Statements

1

SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands except per share data)		2015		2014		2015		2014
INTEREST INCOME
Loans receivable, including fees	$	5,390	$	4,940	$	15,837	$	14,363
Securities:
Taxable		321		208		890		639
Tax-exempt		231		231		660		740
Interest bearing deposits		1		4		8		11
Total Interest Income		5,943		5,383		17,395		15,753
INTEREST EXPENSE
Deposits		448		424		1,302		1,229
Borrowings		390		363		1,150		1,072
Junior subordinated debentures		55		54		162		159
Total Interest Expense		893		841		2,614		2,460
Net Interest Income		5,050		4,542		14,781		13,293
PROVISION FOR LOAN LOSSES		1		378		506		1,231
Net Interest Income after Provision for Loan Losses		5,049		4,164		14,275		12,062
OTHER INCOME
Service fees on deposit accounts		230		255		656		784
ATM and debit card fees		198		182		573		534
Bank-owned life insurance		78		78		235		243
Insurance commissions and fees		955		741		2,846		2,410
Investment brokerage fees		40		11		103		79
Net gain on sales of securities		11		164		267		258
Net gain on sale of premises and equipment		-		-		8		-
Other		143		70		369		242
Total Other Income		1,655		1,501		5,057		4,550
OTHER EXPENSES
Salaries and employee benefits		2,919		2,631		8,488		7,490
Occupancy, net		410		375		1,330		1,225
Data processing		468		549		1,251		1,361
Furniture and equipment		221		184		645		460
Advertising and promotion		65		89		225		211
Professional fees		161		153		480		517
Director fees		105		137		418		379
FDIC assessment		120		183		368		534
Insurance		69		70		189		218
Stationary and supplies		49		64		154		171
Loan collection costs		19		53		175		299
Net expenses and write-downs related to foreclosed real estate		277		12		476		273
Other		480		359		1,156		926
Total Other Expenses		5,363		4,859		15,355		14,064
Income before Income Taxes		1,341		806		3,977		2,548
EXPENSE FOR INCOME TAXES		390		214		1,190		671
Net Income		951		592		2,787		1,877
OTHER COMPREHENSIVE INCOME:
Unrealized gains on available for sale securities arising during the period		1,024		511		174		3,864
Reclassification adjustment for net gain on securities transactions included in net income		(11)		(164)		(267)		(258)
Income tax related to items of other comprehensive income		(405)		(138)		37		(1,442)
Other comprehensive income (loss), net of income taxes		608		209		(56)		2,164
Comprehensive income	$	1,559	$	801	$	2,731	$	4,041
EARNINGS PER SHARE
Basic	$	0.21	$	0.13	$	0.61	$	0.41
Diluted	$	0.21	$	0.13	$	0.61	$	0.41
See Notes to Unaudited Consolidated Financial Statements

2

SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 2015 and 2014
(Unaudited)
							Accumulated
	Number of						Other				Total
	Shares		Common		Retained		Comprehensive		Treasury		Stockholders'
(Dollars in Thousands)	Outstanding		Stock		Earnings		Income (Loss)		Stock		Equity
Balance December 31, 2013	4,629,113	$	35,249	$	13,386	$	(2,151)	$	(59)	$	46,425
Net income	-		-		1,877		-		-		1,877
Other comprehensive income	-		-		-		2,164		-		2,164
Restricted stock granted	36,043		-		-		-		-		-
Restricted stock forfeited	(650)		-		-		-		-		-
Compensation expense related to stock option and restricted stock grants	-		230		-		-		-		230
Dividends declared on common stock			-		(280)		-		-		(280)
Balance September 30, 2014	4,664,506	$	35,479	$	14,983	$	13	$	(59)	$	50,416
Balance December 31, 2014	4,662,606	$	35,553	$	15,566	$	169	$	(59)	$	51,229
Net income	-		-		2,787		-		-		2,787
Other comprehensive loss	-		-		-		(56)		-		(56)
Treasury shares purchased	(48,059)		-		-		-		(533)		(533)
Restricted stock granted	31,841		-		-		-		-		-
Restricted stock forfeited	(1,001)		-		-		-		-		-
Compensation expense related to stock option and restricted stock grants	-		279		-		-		-		279
Dividends declared on common stock	-		-		(560)		-		-		(560)
Balance September 30, 2015	4,645,387	$	35,832	$	17,793	$	113	$	(592)	$	53,146
See Notes to Unaudited Consolidated Financial Statements

3

SUSSEX BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine Months Ended September 30,
(Dollars in thousands)	2015		2014
Cash Flows from Operating Activities
Net income	$	2,787	$	1,877
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		506		1,231
Depreciation and amortization		746		508
Net amortization of securities premiums and discounts		1,343		1,313
Net realized gain on sale of securities		(267)		(258)
Net realized gain on sale of premises and equipment		(8)		-
Net realized gain on sale of foreclosed real estate		(37)		(8)
Write-downs of and provisions for foreclosed real estate		314		110
Deferred income tax expense (benefit)		496		(919)
Earnings on bank-owned life insurance		(235)		(243)
Compensation expense for stock options and stock awards		279		230
Increase in assets:
Accrued interest receivable		(200)		(107)
Other assets		(893)		(402)
Increase in accrued interest payable and other liabilities		148		887
Net Cash Provided by Operating Activities		4,979		4,219
Cash Flows from Investing Activities
Securities available for sale:
Purchases		(45,436)		(1,160)
Sales		20,705		13,261
Maturities, calls and principal repayments		6,855		9,484
Securities held to maturity:
Purchases		(1,209)		(1,450)
Maturities, calls and principal repayments		1,339		2,383
Net increase in loans		(30,948)		(51,987)
Proceeds from the sale of foreclosed real estate		2,049		685
Purchases of bank premises and equipment		(896)		(2,232)
Proceeds from the sale of premises and equipment		35		-
Increase in Federal Home Loan Bank stock		(107)		(42)
Net Cash Used in Investing Activities		(47,613)		(31,058)
Cash Flows from Financing Activities
Net increase in deposits		44,239		24,244
(Decrease) increase in short-term borrowed funds		(8,200)		5,000
Proceeds of long-term borrowings		15,000		-
Repayment of long-term borrowings		(5,000)		-
Purchase of treasury stock		(533)		-
Dividends paid		(560)		(280)
Net Cash Provided by Financing Activities		44,946		28,964
Net Increase in Cash and Cash Equivalents		2,312		2,125
Cash and Cash Equivalents - Beginning		5,859		13,246
Cash and Cash Equivalents - Ending	$	8,171	$	15,371
Supplementary Cash Flows Information
Interest paid	$	2,592	$	2,430
Income taxes paid	$	954	$	779
Supplementary Schedule of Noncash Investing and Financing Activities
Foreclosed real estate acquired in settlement of loans	$	1,212	$	715
See Notes to Unaudited Consolidated Financial Statements

4

NOTE 1  –  SUMMARY OF SIGNIFICANT ACOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Sussex Bancorp (“we,” “us,” “our” or the “company”) and our whollyowned subsidiary Sussex Bank (the “Bank”).  The Bank’s whollyowned subsidiaries are SCB Investment Company, Inc., SCBNY Company, Inc., ClassicLake Enterprises, LLC, Wheatsworth Properties Corp., PPD Holding Company, LLC, and Tri-State Insurance Agency, Inc. (“Tri-State”), a full service insurance agency located in Sussex County, New Jersey with a satellite office located in Bergen County, New Jersey.  Tri-State’s operations are considered a separate segment for financial disclosure purposes.  All inter-company transactions and balances have been eliminated in consolidation.  The Bank operates eleven banking offices, eight located in Sussex County, New Jersey,  one located in Warren County, New Jersey,  one in Queens County, New Yorkand one in Orange County, New York.

We are subject to the supervision and regulation of the Board of Governors of the Federal Reserve System (the “FRB”).  The Bank’s deposits are insured by the Deposit Insurance Fund (“DIF”) of the FDIC up to applicable limits.  The operations of the company and the Bank are subject to the supervision and regulation of the FRB, the FDIC and the New Jersey Department of Banking and Insurance (the “Department”) and the operations of Tri-State are subject to supervision and regulation by the Department.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information.  Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for full year financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature.  Operating results for the three and ninemonth periods ended September  30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto that are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.  

New Accounting Standards

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-04, Receivables - Troubled Debt Restructurings by Creditors.  This ASU clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  For public entities, the guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014.  The adoption of this guidance did not have a material impact on our consolidated financial statements.

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. The ASU’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. For public entities, the guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In June 2014, FASB issued ASU 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, to change the accounting for repurchase-to-maturity transactions and certain linked repurchase financings.  This will result in accounting for both types of arrangements as secured borrowings on the balance sheet, rather than sales.  Additionally, the ASU introduces new disclosures to (1) increase transparency about the types of collateral pledged in secured borrowing transactions and (2) enable users to better understand transactions in which the transferor retains substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. For public entities, the disclosure for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. All other accounting and disclosure amendments in the ASU are effective for public business entities for the first interim or

5

annual period beginning after December 15, 2014. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In June 2014, FASBissued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force), to clarify that a performance target in a share-based compensation award that could be achieved after an employee completes the requisite service period should be treated as a performance condition that affects the vesting of the award.  As such, the performance target should not be reflected in estimating the grant-date fair value of the award. For all entities, the amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In April 2015, FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, to clarify whether a hosting arrangement (e.g., cloud computing, software as a service, infrastructure as a service, etc.) contains a software license, and thus, whether it is to be accounted for by the customer similarly to other internal-use software.  Specifically, the amendments revise the scope of Subtopic 350-40 to include internal-use software accessed through a hosting arrangement only if both of the following criteria are met: (1) the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty.  There is no significant penalty if the customer has the ability to take delivery of the software without incurring significant cost and the ability to use the software separately without significant loss of utility or value and (2) it is feasible for the customer to either run the software on its own hardware or contract with another party unrelated to the vendor to host the software.  If both of the above criteria are present in a hosting arrangement, then the arrangement contains a software license and the customer should account for that element in accordance with Subtopic 350-40 (i.e., generally capitalize and subsequently amortize the cost of the license).  If both of the above criteria are not present, the customer should account for the arrangement as a service contract (i.e., expense fees as incurred).  The amendments are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  The amendments are effective for all other entities for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.  Early adoption is permitted.  An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of the new revenue recognition standard by one year.  As such, it now takes effect for public entities in fiscal years beginning after December 15, 2017.  All other entities have an additional year.  However, early adoption is permitted for any entity that chooses to adopt the new standard as of the original effective date.   Public business entities will adopt the standard for annual reporting periods beginning after December 15, 2017, including interim periods within that year.  Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year.  All other entities will adopt the standard for annual reporting periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.  Early adoption is permitted as of either: (a) An annual reporting period beginning after December 15, 2016, including interim periods within that year, or (b) An annual reporting period beginning after December 15, 2016 and interim periods within annual reporting periods beginning one year after the annual period in which an entity first applies the new standard.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

6

NOTE 2 – SECURITIES

Available for Sale

The amortized cost and approximate fair value of securities available for sale as of September 30, 2015 and December 31, 2014 are summarized as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)		Cost		Gains		Losses		Value
September 30, 2015
U.S. government agencies	$	11,959	$	51	$	(48)	$	11,962
State and political subdivisions		37,889		172		(364)		37,697
Mortgage-backed securities -
U.S. government-sponsored enterprises		44,658		463		(90)		45,031
Equity securities-financial services industry and other		8		4		-		12
	$	94,514	$	690	$	(502)	$	94,702
December 31, 2014
U.S. government agencies	$	7,873	$	17	$	(32)	$	7,858
State and political subdivisions		26,432		158		(206)		26,384
Mortgage-backed securities -
U.S. government-sponsored enterprises		43,382		500		(158)		43,724
Equity securities-financial services industry and other		8		2		-		10
	$	77,695	$	677	$	(396)	$	77,976

Securities with a carrying value of approximately $33.0 million and $32.8 million at September 30, 2015 and December 31, 2014, respectively, were pledged to secure public deposits and for other purposes required or permitted by applicable laws and regulations.

The amortized cost and fair value of securities available for sale at September  30, 2015 are shown below by contractual maturity.  Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
(Dollars in thousands)	Cost		Value
Due in one year or less	$	-	$	-
Due after one year through five years		501		504
Due after five years through ten years		3,021		3,022
Due after ten years		34,367		34,171
Total bonds and obligations		37,889		37,697
U.S. government agencies		11,959		11,962
Mortgage-backed securities:
U.S. government-sponsored enterprises		44,658		45,031
Equity securities-financial services industry and other		8		12
Total available for sale securities	$	94,514	$	94,702

Gross realized gains on sales of securities available for sale were $64 thousand and $242 thousand and gross realized losses were $53 thousand and $78 thousand for the three months ended September 30, 2015 and 2014, respectively.

Gross realized gains on sales of securities were $368 thousand and $360 thousand and gross losses were $101 thousandand $102 thousand for the nine months ended September 30, 2015 and 2014, respectively.

7

Temporarily Impaired Securities

The following table shows gross unrealized losses and fair value of securities with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by category and length of time that individual available for sale securities have been in a continuous unrealized loss position at September  30, 2015 and December 31, 2014.

	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
September 30, 2015
U.S. government agencies	$	4,776	$	(18)	$	2,554	$	(30)	$	7,330	$	(48)
State and political subdivisions		21,760		(322)		1,841		(42)		23,601		(364)
Mortgage-backed securities -
U.S. government-sponsored enterprises		11,385		(90)		-		-		11,385		(90)
Total temporarily impaired securities	$	37,921	$	(430)	$	4,395	$	(72)	$	42,316	$	(502)
December 31, 2014
U.S. government agencies	$	-	$	-	$	2,905	$	(32)	$	2,905	$	(32)
State and political subdivisions		7,603		(112)		5,713		(94)		13,316		(206)
Mortgage-backed securities -
U.S. government-sponsored enterprises		15,679		(94)		3,432		(64)		19,111		(158)
Total temporarily impaired securities	$	23,282	$	(206)	$	12,050	$	(190)	$	35,332	$	(396)

For each security whose fair value is less than their amortized cost basis, a review is conducted to determine if an other-than-temporary impairment has occurred. As of September 30, 2015, we reviewed our available for sale securities portfolio for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the intent and likelihood of selling the security.  The intent and likelihood of sale of debt and equity securities are evaluated based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position. 

U.S. Government Agencies

At September  30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our U.S. government agencies securities were primarily due to changes in spreads and market conditions and not credit quality.  At September  30, 2015, there werefive securities with a fair value of $7.3 million that had an unrealized loss that amounted to $48 thousand.  As of September  30, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of the U.S. government agency securities at September 30, 2015 were deemed to be other-than-temporarily impaired (“OTTI”).

At December 31, 2014, there were two securities with a fair value of $2.9 million that had an unrealized loss that amounted to $32 thousand.

State and Political Subdivisions

At September 30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our state and political subdivisions securities were caused by changes in interest rates and spreads and were not the result of credit quality.  At September 30, 2015, there were 36securities with a fair value of $23.6 million that had an unrealized loss that amounted to $364 thousand.  These securities typically have maturity dates greater than 10 years and the fair values are more sensitive to changes in market interest rates.  As of September 30, 2015,  we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of our state and political subdivision securities at September 30, 2015 were deemed to be OTTI.  

At December 31, 2014, there were 22 securities with a fair value of $13.3 million that had an unrealized loss that amounted to $206 thousand. 

8

Mortgage-Backed Securities

At September 30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our mortgage-backed securities guaranteed by U.S. government-sponsored enterprises were primarily due to changes in spreads and market conditions and not credit quality.  At September 30, 2015, there were 7securities with a fair value of $11.4 million that had an unrealized loss that amounted to $90thousand.  As ofSeptember 30, 2015,  we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of our mortgage-backed securities at September 30, 2015 were deemed to be OTTI.  

At December 31, 2014, there were 13 securities with a fair value of $19.1 million that had an unrealized loss that amounted to $158 thousand. 

Equity Securities

Our marketable equity securities portfolio consists primarily of common stock of an entity in the insurance services industry.  At September 30, 2015, we did not have any securities in an unrealized loss position.

At December 31, 2014,  we did not have any securities in an unrealized loss position.

We continue to closely monitor the performance of the securities we own as well as the impact from any further deterioration in the economy or in the banking industry that may adversely affect these securities. We will continue to evaluate them for other-than-temporary impairment, which could result in a future non-cash charge to earnings.

Held to Maturity Securities

The amortized cost and approximate fair value of securities held to maturity as of September 30, 2015 and December 31, 2014 are summarized as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)		Cost		Gains		Losses		Value
September 30, 2015
State and political subdivisions	$	5,857	$	179	$	(2)	$	6,034
December 31, 2014
State and political subdivisions	$	6,006	$	189	$	(5)	$	6,190

The amortized cost and carrying value of securities held to maturity at September 30, 2015 are shown below by contractual maturity.  Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Amortized		Fair
(Dollars in thousands)		Cost		Value
Due in one year or less	$	1,969	$	1,969
Due after one year through five years		-		-
Due after five years through ten years		2,837		2,907
Due after ten years		1,051		1,158
Total held to maturity securities	$	5,857	$	6,034

9

Temporarily Impaired Securities

The following table shows gross unrealized losses and fair value of held to maturity securities with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by category and length of time that individual held to maturity securities have been in a continuous unrealized loss position at September 30, 2015 and December 31, 2014:

	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
September 30, 2015
State and political subdivisions	$	804	$	(2)	$	-	$	-	$	804	$	(2)
December 31, 2014
State and political subdivisions	$	-	$	-	$	811	$	(5)	$	811	$	(5)

For each security whose fair value is less than their amortized cost basis, a review is conducted to determine if an other-than-temporary impairment has occurred. As of September 30, 2015, we reviewed our held to maturity securities portfolio for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the intent and likelihood of selling the security.  The intent and likelihood of sale of debt and equity securities are evaluated based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position.

At September 30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our state and political subdivisions securities were caused by changes in interest rates and spreads and were not the result of credit quality.  At September 30, 2015,  there weretwosecurities with a fair value of $804 thousand that had an unrealized loss that amounted to $2 thousand.  These securities typically have maturity dates greater than 10years and the fair values are more sensitive to changes in market interest rates.  As ofSeptember 30, 2015,  we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of our state and political subdivision securities at September 30, 2015 were deemed to be OTTI.

At December 31, 2014, there were two securities with a fair value of $811 thousand that had an unrealized loss that amounted to $5 thousand. 

10

NOTE 3 – LOANS

The composition of net loans receivable atSeptember 30, 2015 and December 31, 2014 is as follows:

(Dollars in thousands)	September 30, 2015		December 31, 2014
Commercial and industrial	$	17,842	$	20,549
Construction		10,206		12,379
Commercial real estate		347,095		326,370
Residential real estate		125,159		111,498
Consumer and other		1,317		1,665
Total loans receivable		501,619		472,461
Unearned net loan origination fees		(416)		(488)
Allowance for loan losses		(5,641)		(5,641)
Net loans receivable	$	495,562	$	466,332

Mortgage loans serviced for others are not included in the accompanying balance sheets.  The total amount of loans serviced for the benefit of others was approximately $460 thousand and$475 thousand at September 30, 2015 and December 31, 2014, respectively. Mortgage servicing rights were immaterial at September 30, 2015 and December 31, 2014.

NOTE 4 – ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY OF FINANCING RECEIVABLES

The following table presents changes in the allowance for loan losses disaggregated by the class of loans receivable for the three and ninemonths ended September 30, 2015 and 2014:  

	Commercial				Commercial		Residential		Consumer
	and				Real		Real		and
(Dollars in thousands)	Industrial		Construction		Estate		Estate		Other		Unallocated		Total
Three Months Ended:
September 30, 2015
Beginning balance	$	86	$	277	$	3,613	$	898	$	86	$	792	$	5,752
Charge-offs		-		-		(119)		-		(6)		-		(125)
Recoveries		5		-		3		4		1		-		13
Provision		(8)		(57)		134		26		5		(99)		1
Ending balance	$	83	$	220	$	3,631	$	928	$	86	$	693	$	5,641
September 30, 2014
Beginning balance	$	257		354		3,750		837		13		643	$	5,854
Charge-offs		-		-		(495)		(33)		(9)		-		(537)
Recoveries		1		-		10		1		2		-		14
Provision		18		(53)		134		14		20		245		378
Ending balance	$	276	$	301	$	3,399	$	819	$	26	$	888	$	5,709
Nine Months Ended:
September 30, 2015
Beginning balance	$	231	$	383	$	3,491	$	903	$	19	$	614	$	5,641
Charge-offs		(19)		-		(542)		-		(17)		-		(578)
Recoveries		10		-		39		17		6		-		72
Provision		(139)		(163)		643		8		78		79		506
Ending balance	$	83	$	220	$	3,631	$	928	$	86	$	693	$	5,641
September 30, 2014
Beginning balance	$	222		308	$	3,399	$	941	$	16	$	535	$	5,421
Charge-offs		(1)		-		(853)		(118)		(31)		-		(1,003)
Recoveries		16		-		31		5		8		-		60
Provision		39		(7)		822		(9)		33		353		1,231
Ending balance	$	276	$	301	$	3,399	$	819	$	26	$	888	$	5,709

11

The following table presents the balance of the allowance of loan losses and loans receivable by class at September 30, 2015 and December 31, 2014 disaggregated on the basis of our impairment methodology.

	Allowance for Loan Losses						Loans Receivable
			Balance		Balance
			Related to		Related to
			Loans		Loans
			Individually		Collectively				Individually		Collectively
			Evaluated for		Evaluated for				Evaluated for		Evaluated for
(Dollars in thousands)	Balance		Impairment		Impairment		Balance		Impairment		Impairment
September 30, 2015
Commercial and industrial	$	83	$	-	$	83	$	17,842	$	20	$	17,822
Construction		220		-		220		10,206		-		10,206
Commercial real estate		3,631		117		3,514		347,095		5,194		341,901
Residential real estate		928		205		723		125,159		1,893		123,266
Consumer and other loans		86		73		13		1,317		138		1,179
Unallocated		693		-		-		-		-		-
Total	$	5,641	$	395	$	4,553	$	501,619	$	7,245	$	494,374
December 31, 2014
Commercial and industrial	$	231	$	51	$	180	$	20,549	$	94	$	20,455
Construction		383		-		383		12,379		-		12,379
Commercial real estate		3,491		136		3,355		326,370		5,105		321,265
Residential real estate		903		101		802		111,498		2,314		109,184
Consumer and other loans		19		-		19		1,665		-		1,665
Unallocated		614		-		-		-		-		-
Total	$	5,641	$	288	$	4,739	$	472,461	$	7,513	$	464,948

An age analysis of loans receivable, which were past due as of September 30, 2015 and December 31, 2014, is as follows:

													Recorded
													Investment
					Greater						Total		> 90 Days
	30-59 Days		60-89 days		Than		Total Past				Financing		and
(Dollars in thousands)	Past Due		Past Due		90 Days (a)		Due		Current		Receivables		Accruing
September 30, 2015
Commercial and industrial	$	6	$	-	$	20	$	26	$	17,816	$	17,842	$	-
Construction		-		-		-		-		10,206		10,206		-
Commercial real estate		913		1,079		4,043		6,035		341,060		347,095		-
Residential real estate		433		-		1,481		1,914		123,245		125,159		-
Consumer and other		5		-		138		143		1,174		1,317		-
Total	$	1,357	$	1,079	$	5,682	$	8,118	$	493,501	$	501,619	$	-
December 31, 2014
Commercial and industrial	$	9	$	-	$	94	$	103	$	20,446	$	20,549	$	-
Construction		1,354		-		-		1,354		11,025		12,379		-
Commercial real estate		2,395		1,209		3,936		7,540		318,830		326,370		-
Residential real estate		555		108		1,978		2,641		108,857		111,498		85
Consumer and other		5		-		1		6		1,659		1,665		-
Total	$	4,318	$	1,317	$	6,009	$	11,644	$	460,817	$	472,461	$	85
(a) includes loans greater than 90 days past due and still accruing and non-accrual loans.

12

Loans for which the accrual of interest has been discontinued at September 30, 2015 and December 31, 2014 were:

(Dollars in thousands)	September 30, 2015		December 31, 2014
Commercial and industrial	$	20	$	94
Commercial real estate		4,043		3,936
Residential real estate		1,481		1,893
Consumer and other		138		1
Total	$	5,682	$	5,924

In determining the adequacy of the allowance for loan losses, we estimate losses based on the identification of specific problem loans through our credit review process and also estimate losses inherent in other loans on an aggregate basis by loan type.  The credit review process includes the independent evaluation of the loan officer, and assigned risk ratings by the Chief Credit Officer and a third party loan review company.  Such risk ratings are assigned loss component factors that reflect our loss estimate for each group of loans.  It is management’s and the Board of Directors’ responsibility to oversee the lending process to ensure that all credit risks are properly identified, monitored, and controlled, and that loan pricing, terms and other safeguards against non-performance and default are commensurate with the level of risk undertaken and is rated as such based on a risk-rating system.  Factors considered in assigning risk ratings and loss component factors include: borrower specific information related to expected future cash flows and operating results, collateral values, financial condition and payment status; levels of and trends in portfolio charge-offs and recoveries; levels in portfolio delinquencies; effects of changes in loan concentrations and observed trends in the economy and other qualitative measurements.

Our risk-rating system is consistent with the classification system used by regulatory agencies and with industry practices. Loan classifications of Substandard, Doubtful or Loss are consistent with the regulatory definitions of classified assets.  The classification system is as follows:

· Pass: This category represents loans performing to contractual terms and conditions and the primary source of repayment is adequate to meet the obligation.  We have five categories within the Pass classification depending on strength of repayment sources, collateral values and financial condition of the borrower. 

· Special Mention:  This category represents loans performing to contractual terms and conditions; however the primary source of repayment or the borrower is exhibiting some deterioration or weaknesses in financial condition that could potentially threaten the borrowers’ future ability to repay our loan principal and interest or fees due.

· Substandard: This category represents loans that the primary source of repayment has significantly deteriorated or weakened which has or could threaten the borrowers’ ability to make scheduled payments.  The weaknesses require close supervision by management and there is a distinct possibility that we could sustain some loss if the deficiencies are not corrected.  Such weaknesses could jeopardize the timely and ultimate collection of our loan principal and interest or fees due.  Loss may not be expected or evident, however, loan repayment is inadequately supported by current financial information or pledged collateral.

· Doubtful: Loans so classified have all the inherent weaknesses of a substandard loan with the added provision that collection or liquidation in full is highly questionable and not reasonably assured.  The probability of at least partial loss is high, but extraneous factors might strengthen the asset to prevent loss. The validity of the extraneous factors must be continuously monitored. Once these factors are questionable the loan should be considered for full or partial charge-off.

· Loss: Loans so classified are considered uncollectible, and of such little value that their continuance as active assets is not warranted.  Such loans are fully charged off.

13

The following tables illustrate our corporate credit risk profile by creditworthiness category as of September 30, 2015 and December 31, 2014: 

			Special
(Dollars in thousands)	Pass		Mention		Substandard		Doubtful		Total
September 30, 2015
Commercial and industrial	$	17,800	$	22	$	20	$	-	$	17,842
Construction		10,206		-		-		-		10,206
Commercial real estate		333,463		7,670		5,962		-		347,095
Residential real estate		122,383		751		2,025		-		125,159
Consumer and other		1,179		-		138		-		1,317
	$	485,031	$	8,443	$	8,145	$	-	$	501,619
December 31, 2014
Commercial and industrial	$	20,446	$	9	$	94	$	-	$	20,549
Construction		12,379		-		-		-		12,379
Commercial real estate		312,172		8,257		5,941		-		326,370
Residential real estate		108,587		457		2,454		-		111,498
Consumer and other		1,527		138		-		-		1,665
	$	455,111	$	8,861	$	8,489	$	-	$	472,461

The following table reflects information about our impaired loans by class as of September 30, 2015 and December 31, 2014:

		September 30, 2015						December 31, 2014
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Commercial and industrial	$	20	$	20	$	-	$	-	$	-	$	-
Commercial real estate		2,715		2,715		-		3,167		3,736		-
Residential real estate		599		598		-		1,829		1,835		-
With an allowance recorded:
Commercial and industrial		-		-		-		94		94		51
Commercial real estate		2,479		2,479		117		1,938		1,938		136
Residential real estate		1,294		1,304		205		485		489		101
Consumer and other		138		138		73		-		-		-
Total:
Commercial and industrial		20		20		-		94		94		51
Commercial real estate		5,194		5,194		117		5,105		5,674		136
Residential real estate		1,893		1,902		205		2,314		2,324		101
Consumer and other		138		138		73		-		-		-
	$	7,245	$	7,254	$	395	$	7,513	$	8,092	$	288

14

The following table presents the average recorded investment and income recognized for the three and ninemonths ended September 30, 2015 and 2014:

	For the Three Months Ended September 30, 2015				For the Three Months Ended September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(Dollars in thousands)	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	20	$	-	$	-	$	-
Commercial real estate		2,119		10		4,080		4
Residential real estate		904		1		1,818		5
Total impaired loans without a related allowance		3,043		11		5,898		9
With an allowance recorded:
Commercial real estate		2,762		8		4,309		29
Residential real estate		992		3		485		-
Consumer and other		104		-		1		-
Total impaired loans with an allowance		3,858		11		4,825		30
Total impaired loans	$	6,901	$	22	$	10,723	$	39

	For the Nine Months Ended September 30, 2015				For the Nine Months Ended September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(Dollars in thousands)	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	15	$	-	$	-	$	-
Commercial real estate		2,439		24		4,999		22
Residential real estate		1,267		5		1,831		34
Total impaired loans without a related allowance		3,721		29		6,830		56
With an allowance recorded:
Commercial and industrial		24		-		15		1
Commercial real estate		2,764		25		4,339		30
Residential real estate		753		8		667		7
Consumer and other		104		-		1		-
Total impaired loans with an allowance		3,645		33		5,022		38
Total impaired loans	$	7,366	$	62	$	11,852	$	94

We recognize interest income on performing impaired loans as payments are received.  On non-performing impaired loans we do not recognize interest income as all payments are recorded as a reduction of principal on such loans.

Impaired loans 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, postponement or forgiveness of principal, forbearance or other actions intended to maximize collection.  The concessions rarely result in the forgiveness of principal or accrued interest.  In addition, we attempt to obtain additional collateral or guarantor support when modifying such loans.  Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

15

The following table presents the recorded investment in troubled debt restructured loans, based on payment performance status:

(Dollars in thousands)		Commercial Real Estate	Residential Real Estate		Total
September 30, 2015
Performing	$	1,151	$	412	$	1,563
Non-performing		1,834		223		2,057
Total	$	2,985	$	635	$	3,620
December 31, 2014
Performing	$	1,169	$	421	$	1,590
Non-performing		2,730		224		2,954
Total	$	3,899	$	645	$	4,544

Troubled debt restructured loans are considered impaired and are included in the previous impaired loans disclosures in this footnote.  As of September 30, 2015, we have not committed to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

There wereno troubled debt restructurings that occurred during the three and ninemonths ended September 30, 2015 and 2014. 

There were no troubled debt restructurings for which there was a payment default within twelve months following the date of the restructuring for the three and nine months ended September 30, 2015 and 2014.

We may obtain physical possession of residential real estate collateralizing a consumer mortgage loan via foreclosure on an in-substance repossession. As of September 30, 2015, we did not hold any foreclosed residential real estate properties asa result of obtaining physical possession. In addition, as of September 30, 2015, we had consumer loans with a carrying value of $1.3 million collateralized by residential real estate property for which formal foreclosure proceedings were in process.

NOTE 5 – EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares (unvested restricted stock grants and stock options) had been issued, as well as any adjustment to income that would result from the assumed issuance of potential common shares that may be issued by us. Potential common shares related to stock options are determined using the treasury stock method.

	Three Months Ended September 30, 2015					Three Months Ended September 30, 2014
(In thousands, except share and	Income		Shares	Per Share		Income		Shares	Per Share
per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Net earnings applicable to common stockholders	$	951	4,550,923	$	0.21	$	592	4,548,293	$	0.13
Effect of dilutive securities:
Unvested stock awards		-	35,210				-	40,492
Diluted earnings per share:
Net income applicable to common stockholders and assumed conversions	$	951	4,586,133	$	0.21	$	592	4,588,785	$	0.13

16

	Nine Months Ended September 30, 2015					Nine Months Ended September 30, 2014
(In thousands, except share and	Income		Shares	Per Share		Income		Shares	Per Share
per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Net earnings applicable to common stockholders	$	2,787	4,561,638	$	0.61	$	1,877	4,538,456	$	0.41
Effect of dilutive securities:
Unvested stock awards		-	30,062				-	36,207
Diluted earnings per share:
Net income applicable to common stockholders and assumed conversions	$	2,787	4,591,700	$	0.61	$	1,877	4,574,663	$	0.41

There were 52,023 and no shares of unvested restricted stock awards and options outstanding duringthe three monthsended September  30,  2015 and 2014, respectively, which were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.  There were 66,946 and 9,381 shares of unvested restricted stock awards and options outstanding during the nine months ended September 30, 2015 and 2014, respectively, which were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.

NOTE 6 – OTHER COMPREHENSIVE (LOSS) INCOME

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income.  Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

The components of other comprehensive income, both before tax and net of tax, are as follows:

	Three Months Ended September 30, 2015						Three Months Ended September 30, 2014
	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
(Dollars in thousands)
Other comprehensive (loss) income:
Unrealized gains on available for sale securities	$	1,024	$	410	$	614	$	511	$	204	$	307
Reclassification adjustment for net gains on securities transactions included in net income		(11)		(5)		(6)		(164)		(66)		(98)
Total other comprehensive (loss) income	$	1,013	$	405	$	608	$	347	$	138	$	209

	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
(Dollars in thousands)
Other comprehensive (loss) income:
Unrealized gains on available for sale securities	$	174	$	70	$	104	$	3,864	$	1,545	$	2,319
Reclassification adjustment for net gains on securities transactions included in net income		(267)		(107)		(160)		(258)		(103)		(155)
Total other comprehensive (loss) income	$	(93)	$	(37)	$	(56)	$	3,606	$	1,442	$	2,164

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NOTE 7 – SEGMENT INFORMATION

Our insurance agency operations are managed separately from the traditional banking and related financial services that we also offer.  The insurance agency operation provides commercial, individual, and group benefit plans and personal coverage.

	Three Months Ended September 30, 2015						Three Months Ended September 30, 2014
	Banking and						Banking and
	Financial		Insurance				Financial		Insurance
	Services		Services		Total		Services		Services		Total
(Dollars in thousands)
Net interest income from external sources	$	5,050	$	-	$	5,050	$	4,542	$	-	$	4,542
Other income from external sources		694		961		1,655		755		746		1,501
Depreciation and amortization		245		4		249		177		5		182
Income before income taxes		1,168		173		1,341		776		30		806
Income tax expense (1)		321		69		390		202		12		214
Total assets		639,563		4,456		644,019		563,612		4,421		568,033

	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Banking and						Banking and
	Financial		Insurance				Financial		Insurance
	Services		Services		Total		Services		Services		Total
(Dollars in thousands)
Net interest income from external sources	$	14,781	$	-	$	14,781	$	13,291	$	2	$	13,293
Other income from external sources		2,195		2,862		5,057		2,121		2,429		4,550
Depreciation and amortization		731		15		746		492		16		508
Income before income taxes		3,376		601		3,977		2,122		426		2,548
Income tax expense (1)		950		240		1,190		501		170		671
Total assets		639,563		4,456		644,019		563,612		4,421		568,033

(1) Insurance Services calculated at statutory tax rate of 40%

NOTE 8–  STOCK-BASED COMPENSATION

We currently have stock-based compensation plans in place for our directors, officers, employees, consultants and advisors.  Under the terms of these plans we may grant restricted shares and stock options for the purchase of our common stock.  The stock-based compensation is granted under terms determined by our Compensation Committee.Our standard stock option grants have a maximum term of 10 years, generally vest over periods ranging between one and four years, and are granted with an exercise price equal to the fair market value of the common stock on the date of grant.  Restricted stock is valued at the market value of the common stock on the date of grant and generally vests over periods oftwo toseven years.  All dividends paid on restricted stock, whether vested or unvested, are paid to the shareholder.

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Information regarding our stock option plans for the nine months endedSeptember  30, 2015 is as follows:

			Weighted
			Average	Weighted
			Exercise	Average		Aggregate
	Number of		Price per	Contractual		Intrinsic
	Shares		Share	Term		Value
Options outstanding, beginning of year	46,525	$	10.63
Options granted	15,985		10.25
Options expired	(3,817)		13.39
Options outstanding, end of quarter	58,693	$	10.35	8.1	$	126,526
Options exercisable, end of quarter	6,708	$	12.63	0.1	$	-
Option price range at end of quarter	$9.97 to $12.63
Option price of exercisable shares	$ 12.63

The following table summarizes information about stock option assumptions:

	September 30, 2015
Expected dividend yield		1.56%
Expected volatility		34.32%
Risk-free interest rate		1.37%
Expected option life		10.0 Years

During the three months ended September 30, 2015 we expensed $10 thousandin stock-based compensation under stock option awards.  There was no stock-based compensation expensed under stock option awards during the three months ended September 30, 2014.

During the nine months ended September  30, 2015 we expensed $28 thousand in stock-based compensation under stock option awards.  There was no stock-based compensation expensed under stock option awards during the nine months ended September 30, 2014.

The weighted average grant date fair value of options granted during the nine months ended September  30,  2015 was $3.56 per share. Expected future expense relating to the unvested options outstanding as of September 30, 2015 is $160 thousand over a weighted average period of 4.2 years. Upon exercise of vested options, management expects to draw on treasury stock as the source of the shares.

The summary of changes in unvested restricted stock awards for theninemonths endedSeptember  30, 2015, is as follows:

			Weighted
			Average
	Number of		Grant Date
	Shares		Fair Value
Unvested restricted stock, beginning of year	112,545	$	6.06
Granted	31,841		10.48
Vested	(50,166)		5.94
Unvested restricted stock, end of period	93,219	$	7.60

During the three months ended September 30, 2015 and 2014, we expensed$84 thousand and $74 thousand, respectively, in stock-based compensation under restricted stock awards. During the nine months ended September 30,2015 and 2014, we expensed $251 thousand and $230 thousand, respectively, in stock-based compensation under restricted stock awards.

At September  30, 2015, unrecognized compensation expense for unvested restricted stock was $506 thousand, which is expected to be recognized over an average period of 1.6years.

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NOTE 9 – GUARANTEES

We do not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit.  Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party.  Generally, all letters of credit, when issued, have expiration dates within one year.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.  Generally, we hold collateral and/or personal guarantees supporting these commitments.  As of September  30, 2015, we  had $839 thousand of outstanding letters of credit.  Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payments required under the corresponding guarantees.  The amount of the liability as of September  30, 2015, for guarantees under standby letters of credit issued is not material.

NOTE 10–  FAIR VALUE OF FINANCIAL INSTRUMENTS

Management uses its best judgment in estimating the fair value of our financial instruments; however, there are inherent weaknesses in any estimation technique.  Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts we could have realized in a sale transaction on the dates indicated.  The fair value amounts have been measured as of their respective period ends, and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates.  As such, the fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period end.

In accordance with U.S. GAAP, we use a hierarchical disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value.  The three broad levels defined by the hierarchy are as follows:

· Level I - Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

· Level II - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these asset and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.

· Level III - Assets and liabilities that have little to no pricing observability as of reported date.  These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

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The following table summarizes the fair value of our financial assets measured on a recurring basis by the above pricing observability levels as of September  30, 2015 and December 31, 2014:

			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair		for Identical		Observable		Unobservable
	Value		Assets		Inputs		Inputs
(Dollars in thousands)	Measurements		(Level I)		(Level II)		(Level III)
September 30, 2015
U.S. government agencies	$	11,962	$	-	$	11,962	$	-
State and political subdivisions		37,697		-		37,697		-
Mortgage-backed securities -
U.S. government-sponsored enterprises		45,031		-		45,031		-
Equity securities-financial services industry and other		12		12		-		-
December 31, 2014
U.S. government agencies	$	7,858	$	-	$	7,858	$	-
State and political subdivisions		26,384		-		26,384		-
Mortgage-backed securities -
U.S. government-sponsored enterprises		43,724		-		43,724		-
Equity securities-financial services industry and other		10		10		-		-

Our available for sale and held to maturity securities portfolios contain investments, which were all rated within our investment policy guidelines at time of purchase, and upon review of the entire portfolio all securities are marketable and have observable pricing inputs.

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September  30, 2015 and December 31, 2014are as follows:

			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair		for Identical		Observable		Unobservable
	Value		Assets		Inputs		Inputs
(Dollars in thousands)	Measurements		(Level I)		(Level II)		(Level III)
September 30, 2015
Impaired loans	$	1,542	$	-	$	-	$	1,542
Foreclosed real estate		868		-		-		868
December 31, 2014
Impaired loans	$	1,087	$	-	$	-	$	1,087
Foreclosed real estate		761		-		-		761

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The following table presents additional qualitative information about assets measured at fair value on a nonrecurring basis and for which Level III inputs were used to determine fair value:

	Qualitative Information about Level III Fair Value Measurements
	Fair				Range
	Value		Valuation	Unobservable	(Weighted
(Dollars in thousands)	Estimate		Techniques	Input	Average)
September 30, 2015
Impaired loans	$	1,542	Appraisal of	Appraisal	0% to -58.6%
			collateral	adjustments (1)	(-7.4%)
Foreclosed real estate		868	Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)
December 31, 2014
Impaired loans	$	1,087	Appraisal of	Appraisal	0% to -67.9%
			collateral	adjustments (1)	(-7.8%)
Foreclosed real estate		761	Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling expenses.  The range and weighted average of selling expenses and other appraisal adjustments are presented as a percentage of the appraisal.

The following information should not be interpreted as an estimate of the fair value of the entire company since a fair value calculation is only provided for a limited portion of our assets and liabilities.  Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between our disclosures and those of other companies may not be meaningful.  The following methods and assumptions were used to estimate the fair value of our financial instruments at September30, 2015 and December 31, 2014:  

Cash and Cash Equivalents (Carried at Cost): The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair value.

Deposits (Carried at Cost): Fair value for fixed-rate time certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.  We generally purchase amounts below the insured limit, limiting the amount of credit risk on these time deposits.  

Securities: The fair value of securities, available for sale (carried at fair value) and securities held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level I), or matrix pricing (Level II), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.  For certain securities which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level III).  In the absence of such evidence, management’s best estimate is used. 

Federal Home Loan Bank Stock (Carried at Cost):  The carrying amount of restricted investment in bank stock approximates fair value and considers the limited marketability of such securities.

Loans Receivable (Carried at Cost): The fair values of non-impaired loans are estimated using discounted cash flow analyses, using the market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans.  Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal.  Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

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Impaired Loans (Carried at Lower of Cost or Fair Value): Fair value of impaired loans is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds.  These assets are included in Level III fair values, based upon the lowest level of input that is significant to the fair value measurements.  The fair value of impaired loans  totaled  $1.5 million and $1.1 million at September  30, 2015 and December 31, 2014,respectively.  These balances consist of loans that were written down or required additional reserves during the periods ended September  30, 2015 and December 31, 2014, respectively.

Deposit Liabilities (Carried at Cost): The fair values disclosed for demand, savings and money market accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts).  Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. 

Borrowings (Carried at Cost): Fair values of Federal Home Loan Bank (“FHLB”) advances are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity.  These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party. 

Junior Subordinated Debentures (Carried at Cost): Fair values of junior subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity. 

Accrued Interest Receivable and Accrued Interest Payable (Carried at Cost): The carrying amounts of accrued interest receivable and payable approximate its fair value.

Off-Balance Sheet Instruments (Disclosed at Cost): Fair values for our off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. 

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The fair values of our financial instruments at September  30, 2015 and December 31, 2014, were as follows:

					Quoted Prices in		Significant
					Active Markets		Other		Significant
	September 30, 2015				for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
(Dollars in thousands)	Amount		Value		(Level I)		(Level II)		(Level III)
Financial assets:
Cash and cash equivalents	$	8,171	$	8,171	$	8,171	$	-	$	-
Time deposits with other banks		100		100		-		100		-
Securities available for sale		94,702		94,702		12		94,690		-
Securities held to maturity		5,857		6,034		-		6,034		-
Federal Home Loan Bank stock		4,015		4,015		-		4,015		-
Loans receivable, net of allowance		495,562		493,836		-		-		493,836
Accrued interest receivable		1,996		1,996		-		1,996		-
Financial liabilities:
Non-maturity deposits		380,080		380,080		-		380,080		-
Time deposits		122,429		122,789		-		122,789		-
Short-term borrowings		15,300		15,300		15,300		-		-
Long-term borrowings		56,000		57,453		-		57,453		-
Junior subordinated debentures		12,887		9,179		-		9,179		-
Accrued interest payable		265		265		-		265		-

					Quoted Prices in		Significant
					Active Markets		Other		Significant
	December 31, 2014				for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
(Dollars in thousands)	Amount		Value		(Level I)		(Level II)		(Level III)
Financial assets:
Cash and cash equivalents	$	5,859	$	5,859	$	5,859	$	-	$	-
Time deposits with other banks		100		100		-		100		-
Securities available for sale		77,976		77,976		10		77,966		-
Securities held to maturity		6,006		6,190		-		6,190		-
Federal Home Loan Bank stock		3,908		3,908		-		3,908		-
Loans receivable, net of allowance		466,332		462,984		-		-		462,984
Accrued interest receivable		1,796		1,796		-		1,796		-
Financial liabilities:
Non-maturity deposits		351,653		351,653		-		351,653		-
Time deposits		106,617		107,011		-		107,011		-
Short-term borrowings		23,500		23,500		23,500		-		-
Long-term borrowings		46,000		47,766		-		47,766		-
Junior subordinated debentures		12,887		9,361		-		9,361		-
Accrued interest payable		243		243		-		243		-

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Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT STRATEGY

We are a community-oriented financial institution serving northern New Jersey, northeastern Pennsylvania, New York City, New York and Orange County, New York.  While offering traditional community bank loan and deposit products and services, we obtain non-interest income through our insurance brokerage operations and the sale of non-deposit products. 

We continue to focus on strengthening our core operating performance by improving our net interest income and margin by closely monitoring our yield on earning assets and adjusting the rates offered on deposit products.  We have beenfocused on building for the future and strengthening our core operating results within our risk management framework. 

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements are prepared in accordance with U.S. GAAP and practices within the banking industry.  Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in our consolidated financial statements and accompanying notes.  These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates, assumptions, and judgments.  Actual results could differ from those estimates.

Critical accounting estimates are necessary in the application of certain accounting policies and procedures, and are particularly susceptible to significant change. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions.  There have been no material changes to our critical accounting policies during the nine months ended September 30, 2015.  For additional information on our critical accounting policies, please refer to Note 1 of the consolidated financial statements included in our 2014 Annual Report on Form 10-K.

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COMPARISION OF OPERATING RESULTS FOR THREE MONTHS ENDED SEPTEMBER  30, 2015 AND 2014

Overview – For the quarter ended September  30,  2015, we reported net income of $951 thousand, or $0.21 per basic and diluted share as compared to net income of $592 thousand, or $0.13 per basic and diluted share, for the same period last year.  This increase equates to a 61.5% increase in net income per diluted common share for the quarter ended September 30, 2015, as compared to the same period last year. The improvement for the third quarter of 2015 was driven by loan and deposit growth, an increase in pre-tax income generated from our insurance subsidiary and a decline in credit quality costs (provision for loan losses, loan collection costs and expenses and write-downs related to foreclosed real estate). 

Comparative Average Balances and Average Interest Rates – The following table presents, on a fully tax equivalent basis, a summary of our interest-earning assets and their average yields, and interest-bearing liabilities and their average costs for the three month periods ended September  30, 2015 and 2014:

	Three Months Ended September 30,
(Dollars in thousands)	2015					2014
		Average			Average		Average			Average
Earning Assets:		Balance		Interest	Rate (2)		Balance		Interest	Rate (2)
Securities:
Tax exempt (3)	$	34,371	$	347	4.01%	$	31,047	$	347	4.43%
Taxable		69,546		321	1.83%		55,260		208	1.49%
Total securities		103,917		668	2.55%		86,307		555	2.55%
Total loans receivable (1) (4)		487,545		5,390	4.39%		436,395		4,940	4.49%
Other interest-earning assets		6,236		1	0.06%		10,249		4	0.15%
Total earning assets		597,698	$	6,059	4.02%	$	532,951	$	5,499	4.09%
Non-interest earning assets		37,918					36,948
Allowance for loan losses		(5,677)					(5,748)
Total Assets	$	629,939					564,151
Sources of Funds:
Interest bearing deposits:
NOW	$	129,487	$	57	0.17%	$	120,200	$	49	0.16%
Money market		18,504		10	0.21%		9,371		4	0.17%
Savings		138,020		70	0.20%		144,274		75	0.21%
Time		120,397		311	1.02%		108,241		296	1.08%
Total interest bearing deposits		406,408		448	0.44%		382,086		424	0.44%
Borrowed funds		62,586		390	2.47%		46,378		363	3.11%
Junior subordinated debentures		12,887		55	1.69%		12,887		54	1.66%
Total interest bearing liabilities		481,881	$	893	0.74%	$	441,351	$	841	0.76%
Non-interest bearing liabilities:
Demand deposits		91,454					67,910
Other liabilities		3,934					4,512
Total non-interest bearing liabilities		95,388					72,422
Stockholders' equity		52,670					50,378
Total Liabilities and Stockholders' Equity	$	629,939				$	564,151
Net Interest Income and Margin(5)				5,166	3.43%				4,658	3.47%
Tax-equivalent basis adjustment				(116)					(116)
Net Interest Income			$	5,050				$	4,542
(1) Includes loan fee income.
(2) Average rates on securities are calculated on amortized costs.
(3) Full tax equivalent basis, using a 39% effective tax rate and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance.
(4) Loans outstanding include non-accrual loans.
(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets.

Net Interest Income – Net interest income is the difference between interest and fees on loans and other interest-earning assets and interest paid on interest-bearing liabilities.  Net interest income is directly affected by changes in volume and mix of interest-earning assets and interest-bearing liabilities that support those assets, as well as changing interest rates when differences exist in repricing dates of assets and liabilities.

26

Net interest income on a fully tax equivalent basis increased $508 thousand, or 10.9%, to $5.2 million for the third quarter of 2015, as compared to $4.7 million for the same period in 2014.  The increase in net interest income was largely due to a $64.7 million, or 12.1%, increase in average interest earning assets, principally loans receivable, which increased $51.2 million, or 11.7%.  The improvement in net interest income was partly offset by a decline in the net interest margin of 4 basis points to 3.43% for the third quarter of 2015 as compared to the same period in 2014. The decline in the net interest margin was mostly attributed to a 10 basis point decrease in the average rate on loans. 

Interest Income –Our total interest income, on a fully tax equivalent basis, increased $560 thousand, or 10.2%, to $6.1million for the quarter ended September 30, 2015, as compared to the same period last year.  The increase was due to higher average earning assets, which increased $64.7 million for the quarter ended September 30, 2015, as compared to the same period in 2014. 

Our total interest income earned on loans receivable increased $450 thousand, or 9.1%, to $5.4 million for the third quarter of 2015, as compared to the same period in 2014.  The increase was driven by an increase in average balance of loans receivable of $51.2 million, or 11.7%, for the three months ended September 30, 2015, as compared to the same period last year.  The increase in interest income earned on loans receivable was partially offset by a 10 basis point decline in the average yield to 4.39% for the quarter ended September 30, 2015, as compared to the same period in 2014. 

Our total interest income earned on securities, on a fully tax equivalent basis, increased $113 thousand, to $668 thousand for the quarter ended September 30, 2015 from $555 thousand for the same period in 2014.  This  increase was largely due to anincrease in the average balance of securities of $17.6 million, or 20.4%, for the quarter ended September 30, 2015, as compared to the same period last year. 

Other interest-earning assets include federal funds sold and interest bearing deposits in other banks. Our interest earned on total other interest-earning assets decreased $3 thousand for the thirdquarter of 2015, as compared to the same period in 2014, due to a  9 basis point decline in the average yield to 0.06%, as compared to 0.15% in the same period in 2014.  The average balances in other interest-earning assets decreased $4.0 million to $6.2 million in the thirdquarter of 2015 from $10.2 million during the third quarter a year earlier. 

Interest Expense – Our interest expense for the three months ended September 30, 2015 increased $52 thousand, or 6.2%, to $893 thousand from $841 thousand for the same period in 2014.  The increase was principally due to higher average balances in interest-bearing liabilities, which increased $40.5 million, or 9.2%, to $481.9 million for the thirdquarter of 2015 from $441.4 million for the same period in 2014.

Our interest expense on deposits increased $24 thousand, or 5.7%, for the quarter ended September 30, 2015, as compared to the same period last year.  The increase was largely attributed to the increase inthe average balance of total interest bearing deposits, which increased $24.3 millionduring the thirdquarter of 2015, as compared to the same period in 2014.

Our interest expense on borrowed funds increased $27 thousand, or 7.4%, for the quarter ended September 30, 2015, as compared to the same period last year.  The increase was largely attributed to the average balance of borrowed funds increasing  $16.2 million during the third quarter of 2015, as compared to the same period in 2014.

Provision for Loan Losses – Provision for loan losses decreased $377 thousand, or 99.7%, to $1 thousand for the third quarter of 2015, as compared to $378 thousand for the same period in 2014.The decrease in the provision for loan losses for the quarter ended September 30, 2015 was largely attributed to the resolution of problem loans.  The provision for loan losses reflects management’s judgment concerning the risks inherent in our existing loan portfolio and the size of the allowance necessary to absorb the risks, as well as the activity in the allowance during the periods.  Management reviews the adequacy of its allowance on an ongoing basis and will provide additional provisions, as management may deem necessary. 

Non-Interest Income – Our non-interest income increased$154 thousand, or 10.3%, to $1.7 million for the third quarter of 2015, as compared to the same period last year.  For the third quarter of 2015, insurance commissions and fees and other income increased $214 thousand and $73 thousand, respectively, as compared to the same period in 2014.  The increases were partia1ly offset by a decline in gain on securities transactions and service fees on deposit accounts of $153 thousand and $25 thousand, respectively, for the third quarter of 2015, as compared to the same period in 2014.

Non-Interest Expense – Our non-interest expenses increased$504 thousand, or 10.4%, to $5.4 million for the third quarter of 2015, as compared to the same period last year.  The increase for the third quarter of 2015, as compared to the same period in 2014, was largely due to increases in salaries and employee benefits of $288 thousand, expenses and write-downs related to foreclosed real estate of $265 thousand, furniture and equipment expenses of $121 thousand and other expenses of $121 thousand, which were partially offset by decreases in loan collection costs of $81 thousand, FDIC fees of $63 thousand and occupancy, net of $49 thousand. 

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The increases for the quarter ended September 30, 2015, as compared to the same period in 2014, in salaries and employee benefits expense were due in part to an increase in personnel to support our growth initiative in new markets, including the opening of our Astoria branch in the first quarter of 2015, additional staffing for business development and a temporary increase in staffing costs related to the development of a digital banking division.  The increases for the third quarter 2015 as compared to 2014 in furniture and equipment expenses were mostly related to costs associated with our new core application system, which was implemented in the third quarter of 2014.The increases for the third quarter 2015, as compared to 2014, in foreclosed real estate expenses are mostly due to additional costs incurred as part of our continued efforts to resolve our problem assets.  The increase for the third quarter 2015 as compared to 2014 in other expenses is mostly due to payments made as part of settlements of disputes with third parties.  The decrease in FDIC feesis a result of the improvement in our financial and credit qualityperformance.  The decrease of loan collection costs during the third quarter 2015 as compared to 2014 is a result of our improved overall credit quality and reduction of problem loans.  

Income Taxes –  Our income tax expense, which includes both federal and state tax expenses, was $390 thousand for the three months ended September 30, 2015, compared to $214 thousand for the three months ended September 30, 2014.  Our effective tax rate was 29.1% and 26.6% for the quarter ended September 30, 2015 and 2014, respectively.  The increased effective tax rate was the result of a smaller percentage of our pre-tax income resulting from tax exempt sources.

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COMPARISION OF OPERATING RESULTS FOR NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

Overview-  For the nine monthsended September 30, 2015, we reported net income of $2.8 million, or $0.61 per basic and diluted share, as compared to net income of $1.9 million, or $0.41 per basic and diluted share, for the same period last year.  The increase in net income for the nine months ended September 30, 2015 was largely due to increases in net interest income of $1.5 million, non-interest income of $507 thousand, and a decline in the provision for loan losses of $725 thousand, which were partially offset by an increase in non-interest expenses of $1.3 million and income tax expense of $519 thousand. Tri-State Insurance Agency, Inc. pre-tax income increased $175 thousand, or 41.5% to $601 thousand for the nine months ended September 30, 2015 as compared to the same period in 2014.

Comparative Average Balances and Average Interest Rates - The following table presents, on a fully tax equivalent basis, a summary of our interest-earning assets and their average yields, and interest-bearing liabilities and their average costs for the nine month periods ended September 30, 2015 and 2014:

	Nine Months Ended September 30,
(Dollars in thousands)	2015					2014
	Average				Average	Average				Average
Earning Assets:	Balance			Interest (1)	Rate (2)	Balance		Interest (1)		Rate (2)
Securities:
Tax exempt (3)	$	33,050	$	990	4.00%	$	32,837	$	1,114	4.54%
Taxable		63,765		890	1.87%		61,796		639	1.38%
Total securities		96,815		1,880	2.60%		94,633		1,753	2.48%
Total loans receivable (4)		478,151		15,837	4.43%		420,009		14,363	4.57%
Other interest-earning assets		7,396		8	0.14%		7,697		11	0.19%
Total earning assets		582,362	$	17,725	4.07%		522,339	$	16,127	4.13%
Non-interest earning assets		37,958					36,749
Allowance for loan losses		(5,719)					(5,684)
Total Assets	$	614,601				$	553,404
Sources of Funds:
Interest bearing deposits:
NOW	$	128,686	$	162	0.17%	$	116,992	$	131	0.15%
Money market		16,332		23	0.19%		11,018		12	0.15%
Savings		139,828		212	0.20%		145,093		224	0.21%
Time		117,025		905	1.03%		105,136		862	1.10%
Total interest bearing deposits		401,871		1,302	0.43%		378,239		1,229	0.43%
Borrowed funds		61,179		1,150	2.51%		47,282		1,072	3.03%
Junior subordinated debentures		12,887		162	1.68%		12,887		159	1.65%
Total interest bearing liabilities		475,937	$	2,614	0.73%		438,408	$	2,460	0.75%
Non-interest bearing liabilities:
Demand deposits		82,391					62,934
Other liabilities		3,926					3,149
Total non-interest bearing liabilities		86,317					66,083
Stockholders' equity		52,347					48,913
Total Liabilities and Stockholders' Equity	$	614,601				$	553,404
Net Interest Income and Margin(5)			$	15,111	3.47%			$	13,667	3.50%
Tax-equivalent basis adjustment				(330)					(374)
Net Interest Income			$	14,781				$	13,293
(1) Includes loan fee income.
(2) Average rates on securities are calculated on amortized costs.
(3) Full tax equivalent basis, using a 39% effective tax rate and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance.
(4) Loans outstanding include non-accrual loans.
(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets.

Net Interest Income –Net interest income, on a fully tax equivalent basis, increased $1.4 million, or 10.6%, to $15.1 million for the first nine months of 2015 as compared to $13.7 million for the same period in 2014.  The increase in net interest income was largely due to a $60.0 million, or 11.5%, increase in average interest earning assets, principally loans receivable, which increased $58.1 million, or 13.8%. The improvement in net interest income was partly offset by a decline in the net interest margin of 3 basis points to 3.47% for the nine months ended September 30, 2015 as

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compared to the same period in 2014. The decline in the net interest margin was mostly attributed to a 14 basis point decrease in the average rate on loans.

Interest Income –Our total interest income, on a fully tax equivalent basis, increased $1.6 million, or 9.9%, to $17.7 million for the nine months ended September 30, 2015, as compared to the same period last year.  The increase was due to higher average earning assets, which increased $60.0 million for the nine months ended September 30, 2015, as compared to the same period in 2014. 

Our total interest income earned on loans receivable increased $1.5 million, or 10.3%, to $15.8 million for the first nine months of 2015, as compared to the same period in 2014.  The increase was driven by an increase in average balance of loans receivable of $58.1 million, or 13.8%, for the nine months ended September 30, 2015, as compared to the same period last year.  The increase in interest income earned on loans receivable was partially offset by a 14 basis point decline in the average yield to 4.43% for the nine months ended September 30, 2015, as compared to the same period in 2014. 

Our total interest income earned on securities, on a fully tax equivalent basis, increased $127 thousand to $1.9 million for the nine months ended September 30, 2015 from $1.8 million for the same period in 2014.  This increase was largely due to a 12 basis point increase in the average yield to 2.60% for the nine months ended September 30, 2015, as compared to the same period last year. 

Other interest-earning assets include federal funds sold and interest bearing deposits in other banks. Our interest earned on total other interest-earning assets decreased $3 thousand, or27.3%, for the first nine months of 2015, as compared to the same period in 2014.  The decrease was due to both a decrease in the average balances in other interest-earning assets of  $301 thousand to $7.4 million in the first nine months of 2015 from $7.7million during the first nine months a year earlier and a  5 basis point decline in the average yield to 0.14% for the nine months ended September 30, 2015, as compared to the same period in 2014.

Interest Expense –Our interest expense for the ninemonths ended September 30, 2015 increased $154 thousand, or 6.3%, to $2.6 million from $2.5 million for the same period in 2014.  The increase was principally due to higher average balances in interest-bearing liabilities, which increased $37.5 million, or 8.6%, to $475.9 million for the first nine months of 2015 from $438.4 million for the same period in 2014.

Our interest expense on deposits increased $73 thousand, or 5.9%, for the nine months ended September 30, 2015, as compared to the same period last year.  The increase was largely attributed to the increase in the average balance of total interest bearing deposits, which increased $23.6  million during the first nine months of 2015, as compared to the same period in 2014.

Our interest expense on borrowed funds increased $78 thousand, or 7.3%, for thenine months ended September 30, 2015, as compared to the same period last year.  The increase was largely attributed to the average balance of borrowed funds increasing  $13.9 million during the first nine months of 2015, as compared to the same period in 2014.

Provision for Loan Losses – Provision for loan losses decreased $725 thousand, or 58.9%, to $506 thousand for the first nine months of 2015, as compared to $1.2 million for the same period in 2014.The decrease in the provision for loan losses for the nine months ended September 30, 2015 was largely attributed to the resolution of problem loans.  The provision for loan losses reflects management’s judgment concerning the risks inherent in our existing loan portfolio and the size of the allowance necessary to absorb the risks, as well as the activity in the allowance during the periods.  Management reviews the adequacy of its allowance on an ongoing basis and will provide additional provisions, as management may deem necessary. 

Non-Interest Income – We reported an increase in non-interest income of$507 thousand, or 11.1%, to $5.1 million for the first nine months of 2015 as compared to the same period last year.  The increase in non-interest income was largely due to increases in insurance commissions and fees and other income of $436 thousand and $127 thousand, respectively, which were partially offset by a decrease in service fees on deposit accounts of $128 thousand for the first nine months of 2015, as compared to the same period in 2014.

Non-Interest Expense – Our non-interest expenses increased$1.3 million, or 9.2%, to $15.4 million for the first nine months of 2015 as compared to the same period last year.  The increase for the first nine months of 2015, as compared to the same period in 2014, was largely due to increases in salaries and employee benefits of $998 thousand, furniture and equipment expenses of $269 thousand, other expenses of $230 thousand and expenses and write-downs related to foreclosed real estate of $203 thousand, which were partially offset by decreases in FDIC fees of $166 thousand, loan collection costs of $124 thousand and data processing of $110 thousand.

The increases for the nine months ended September 30, 2015, as compared to the same period in 2014, in salaries and employee benefits expense were due in part to an increase in personnel to support our growth initiative in new markets, including the opening of our Astoria branch in the first quarter of 2015, additional staffing for business development

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and a temporary increase in staffing costs related to the development of a digital banking division.  The increases for thenine months ended September 30, 2015, as compared to the same period in 2014, in furniture and equipment expenses were mostly related to costs associated with our new core application system, which was implemented in the third quarter of 2014.The increases for the nine month period for 2015, as compared to 2014, in foreclosed real estate expenses are mostly due to additional costs incurred as part of our continued efforts to resolve our problem assets.  The increase for the nine month period for 2015, as compared to 2014, in other expenses is mostly due to payments made as part of settlements of disputes with third parties.  The decrease of loan collections costs was mostly due to the improvement in credit quality.  The decrease in FDIC fees is a result of the improvement in our financial and credit quality performance.  The decrease of loan collection costs during the nine month period for 2015 as compared to 2014 is a result of our improved overall credit quality and reduction of problem loans.

Income Taxes –  Our income tax expense, which includes both federal and state tax expenses, was $1.2 million for the nine months ended September 30, 2015, compared to $671 thousand for the nine months ended September 30, 2014.  Our effective tax rate was 29.9% and 26.3% for the nine months ended September 30, 2015 and 2014, respectively. The increased effective tax rate was the result of a smaller percentage of our pre-tax income resulting from tax exempt sources.

COMPARISION OF FINANCIAL CONDITION AT SEPTEMBER 30, 2015 TO DECEMBER 31, 2014

Total Assets – At September 30, 2015, our total assets were $644.0 million, an increase of $48.1 million, or 8.1%, as compared to total assets of $595.9 million at December 31, 2014.  The increase in total assets was largely driven by growth in loan receivable of $29.2 million, or 6.3% and the securities portfolio of $16.6 million, or 19.7%. 

Cash and Cash Equivalents – Our cash and cash equivalents increased by $2.3 million to $8.2 million at September 30, 2015, or 1.3% of total assets, from $5.9 million, or 1.0%,of total assets, at December 31, 2014.

Securities Portfolio – At September 30, 2015, the securities portfolio, which includes available for sale and held to maturity securities, was $100.6 million, compared to $84.0 million at December 31, 2014. Available for sale securities were $94.7 million at September 30, 2015, compared to $78.0 million at December 31, 2014. The available for sale securities are held primarily for liquidity, interest rate risk management and profitability. Accordingly, our investment policy is to invest in securities with low credit risk, such as U.S. government agency obligations, state and political obligations and mortgage-backed securities. Held to maturity securities were $5.9 million at September 30, 2015 and $6.0 million at December 31, 2014.

Net unrealized gains in the available for sale securities portfolio were $188 thousand atSeptember 30, 2015.Net unrealized gains in the available for sale securities portfolio were $281 thousand at December 31, 2014.

We conduct a regular assessment of our investment securities to determine whether any securities are OTTI.  Further detail of the composition of the securities portfolio and discussion of the results of the most recent OTTI assessment are in Note 2 –  Securities to our unaudited consolidated financial statements.

The unrealized losses in our securities portfolio are mostly driven by changes in spreads and market interest rates.  All of our debt and equity securities in an unrealized loss position have been evaluated for other-than-temporary impairment as of September  30, 2015 and we do not consider any security OTTI.  We evaluated the prospects of the issuers in relation to the severity and the duration of the unrealized losses.  In addition, we do not intend to sell, and it is more likely than not that we will not have to sell, any of our securities before recovery of their cost basis. 

Other investments totaled $4.0 million atSeptember 30, 2015, as compared to $3.9 million at December 31, 2014,  which consisted primarily of FHLB stock. We also held $100 thousand in time deposits with other financial institutions at September 30, 2015 and December 31, 2014. 

Loans – The loan portfolio comprises our largest class of earning assets.Total loans receivable, net of unearned income, increased $29.2 million, or 6.2%, to $501.2 million at September 30, 2015, as compared to $472.0 million at December 31, 2014.  During the first nine months of 2015, the Company had $102.7 million in commercial loan production, which was largely offset by $27.4 million in commercial loan prepayments, an increase in commercial line of credit pay downs and the sale of $18.3 million in commercial loan participations to mitigate concentration risk. During the third quarter of 2015, total loans receivable, net of unearned income, increased $22.1 million, or 18.5% annualized, to $501.2 million at September 30, 2015, as compared to $479.1 million at June 30, 2015.

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The following table summarizes the composition of our gross loan portfolio by type:

(Dollars in thousands)	September 30, 2015		December 31, 2014
Commercial and industrial loans	$	17,842	$	20,549
Construction		10,206		12,379
Commercial real estate		347,095		326,370
Residential real estate		125,159		111,498
Consumer and other		1,317		1,665
Total gross loans	$	501,619	$	472,461

Loan and Asset Quality – The ratio of NPAs, which include non-accrual loans, loans 90 days past due and still accruing, troubled debt restructured loans currently performing in accordance with renegotiated terms and foreclosed real estate, to total assets improved to 1.64% at September 30, 2015 from 2.02% at December 31, 2014.  NPAs decreased $1.5 million, or 12.2%, to $10.6 million at September 30, 2015, as compared to $12.0 million at December 31, 2014.  Non-accrual loans decreased $242 thousand, or 4.1%, to $5.7 million at September 30, 2015, as compared to $5.9 million at December 31, 2014.  The top five non-accrual loan relationships total $3.4 million, which equates to 59.9% of total non-accrual loans and 32.1% of total NPAs at September 30, 2015.  The remaining non-accrual loans at September 30, 2015 have an average loan balance of $91 thousand.  Loans past due 30 to 89 days decreased $3.2 million, or 56.8%, to $2.4 million at September 30, 2015, as compared to $5.6 million at December 31, 2014.

We continue to actively market our foreclosed real estate properties, which decreased $1.1 million to $3.3 million at September 30, 2015, as compared to $4.4 million at December 31, 2014.  The decrease was primarily due to the sale of $2.0 million in foreclosed real estate properties and write-downs of $314 thousand during 2015, which were partially offset by $1.2 million in new foreclosed real estate properties.  At September 30, 2015, the Company’s foreclosed real estate properties had an average carrying value of approximately $278 thousand per property. 

The allowance for loan losses remained flat at $5.6 million, or 1.13% of total loans, at September 30, 2015, compared to $5.6 million, or 1.20% of total loans, at December 31, 2014. The Company recorded $506 thousand in provision for loan losses, which was offset by $506 thousand in net charge-offs for the nine months ended September 30, 2015. The allowance for loan losses as a percentage of non-accrual loans increased to 99.3% at September 30, 2015 from 95.2% at December 31, 2014.

Management continues to monitor our asset quality and believes that the NPAs are adequately collateralized and anticipated material losses have been adequately reserved for in the allowance for loan losses.  However, given the uncertainty of the current real estate market, additional provisions for losses may be deemed necessary in future periods.  The following table provides information regarding risk elements in the loan portfolio at each of the periods presented:

(Dollars in thousands)	September 30, 2015		December 31, 2014
Non-accrual loans	$	5,682	$	5,924
Non-accrual loans to total loans		1.13%		1.26%
Non-performing assets	$	10,579	$	12,048
Non-performing assets to total assets		1.64%		2.02%
Allowance for loan losses as a % of non-accrual loans		99.28%		95.22%
Allowance for loan losses to total loans		1.13%		1.20%

A loan is considered impaired, in accordance with the impairment accounting guidance, when based on current information and events, it is probable that we will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Total impaired loans at September 30, 2015were $7.2 million and at December 31, 2014 were $7.5 million.  Impaired loans measured at fair value on a non-recurring basis increased to $1.5 million onSeptember 30, 2015from $1.1 million at December 31, 2014.   These balances consist of loans that were written down or required additional reserves during the periods ended September 30, 2015 and December 31, 2014, respectively.  Impaired loans 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.  Not all impaired loans and restructured loans are on non-accrual, and therefore not all are considered non-performing loans.  Restructured loans still accruing totaled $1.6 million at September 30, 2015 and December 31, 2014.

We also continue to monitor our portfolio for potential problem loans. Potential problem loans are defined as loans which cause management to have serious concerns as to the ability of such borrowers to comply with the present loan repayment terms and which may cause the loan to be placed on non-accrual status. As of September 30, 2015,  we had

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fiveloan relationships totaling $1.7 million that we deemed potential problem loans. Management is actively monitoring these loans.

Further detail of the credit quality of the loan portfolio is included in Note 4 –  Allowance for Loan Losses and Credit Quality of Financing Receivables to our unaudited consolidated financial statements.

Allowance for Loan Losses – The allowance for loan losses consists of general, allocated and unallocated 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, collateral value or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers non-impaired loans and is based on historical charge-off experience and expected losses derived from our internal risk rating process.  The unallocated component covers the potential for other adjustments that 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 in the historical loss or risk rating data. 

Management regularly assesses the appropriateness and adequacy of the loan loss reserve in relation to credit exposure associated with individual borrowers, overall trends in the loan portfolio and other relevant factors, and believes the reserve is reasonable and adequate for each of the periods presented.

At September 30, 2015, the total allowance for loan losses remained flat at $5.6 million, or 1.13% of total loans, as compared to $5.6 million, or 1.20% of total loans, at December 31, 2014. The components of this increase were a provision for loan losses of $506 thousand, which was offset by $506 thousand in net charge-offs for the nine months ended September 30, 2015.  The provision also reflects the continued weakness in current real estate values in our market area and reduced cash flows to support the repayment of loans. 

The table below presents information regarding our provision and allowance for loan losses for the nine months ended September 30, 2015 and 2014:

(Dollars in thousands)	September 30, 2015		September 30, 2014
Balance, beginning of period	$	5,641	$	5,421
Provision		506		1,231
Charge-offs		(578)		(1,003)
Recoveries		72		60
Balance, end of period	$	5,641	$	5,709

The table below presents details concerning the allocation of the allowance for loan losses to the various categories for each of the periods presented.  The allocation is made for analytical purposes and it is not necessarily indicative of the categories in which future credit losses may occur.  The total allowance is available to absorb losses from any category of loans.

	September 30, 2015			December 31, 2014
			Percentage of			Percentage of
			Loans In Each			Loans In Each
			Category To			Category To
(Dollars in thousands)	Amount		Gross Loans		Amount	Gross Loans
Commercial and industrial	$	83	3.6%	$	231	4.3%
Construction		220	2.0%		383	2.6%
Commercial real estate		3,631	69.2%		3,491	69.1%
Residential real estate		928	24.9%		903	23.6%
Consumer and other loans		86	0.3%		19	0.4%
Unallocated		693	0.0%		614	-
Total	$	5,641	100.0%	$	5,641	100.0%

Bank-Owned Life Insurance (“BOLI”)  –  Our BOLI carrying value amounted to $12.4 million atSeptember 30, 2015 and $12.2 million at December 31, 2014.

Goodwill and Other Intangibles – Goodwill represents the excess of the purchase price over the fair market value of net assets acquired.  At September 30, 2015 and December 31, 2014, we had recorded goodwill totaling $2.8 million, primarily as a result of the acquisition of Tri-State in 2001.  In accordance with U.S. GAAP, goodwill is not amortized, but evaluated at least annually for impairment.  Any impairment of goodwill results in a charge to income.  We

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periodically assess whether events and changes in circumstances indicate that the carrying amounts of goodwill and intangible assets may be impaired.  The estimated fair value of the reporting segment exceeded its book value; therefore, no write-down of goodwill was required.  The goodwill related to the insurance agency is not deductible for tax purposes.

Deposits – Our total deposits increased $44.2 million, or 9.7%, to $502.5 million at September 30, 2015, from $458.3 million at December 31, 2014.  The increase in deposits was due to increases in both non-interest bearing deposits of $28.8 million, or 40.9%, and interest bearing deposits of $15.4 million, or 4.0%, for September 30, 2015, as compared to December 31, 2014.  Included in the aforementioned increase is $21.9 million in new deposits with a cost of under 0.50% attributed to our newest branch in Astoria, New York, which opened in mid-March of 2015.  During the third quarter of 2015, total deposits increased $14.8 million, or 12.0% annualized, to $502.5 million at September 30, 2015, as compared to $487.7 million at June 30, 2015 and was largely attributed to growth in non-interest bearing deposits.

Borrowings – Borrowings consist of short-term and long-term advances from the FHLB.  The advances are secured under terms of a blanket collateral agreement by a pledge of qualifying mortgage loans.  We had $71.3 million and$69.5 million in borrowings, at a weighted average interest rate of 2.20% atSeptember 30, 2015 and 2.13% at December 31, 2014.  The long-term borrowings at September 30, 2015 consisted of $45.0 million of fixed rate advances and $11.0 million of advances with quarterly convertible options that allow the FHLB to change the note rate to a then current market rate.

Junior Subordinated Debentures – On June 28, 2007, Sussex Capital Trust II (the “Trust”), a Delaware statutory business trust and our non-consolidated wholly owned subsidiary, issued $12.5 million of variable rate capital trust pass-through securities to investors.  The Trust purchased $12.9 million of variable rate junior subordinated deferrable interest debentures from us.  The debentures are the sole asset of the Trust.  The terms of the junior subordinated debentures are the same as the terms of the capital securities.  We have also fully and unconditionally guaranteed the obligations of the Trust under the capital securities.  The interest rate is based on the three-month LIBOR plus 144 basis points and adjusts quarterly.  The rate at September 30, 2015, was 1.78%.  The capital securities are currently redeemable by us at par in whole or in part.  The capital securities must be redeemed upon final maturity of the subordinated debentures on September 15, 2037.  The proceeds of these trust preferred securities, which have been contributed to the Bank, are included in the Bank’s capital ratio calculations and treated as Tier I capital.

In accordance with FASB ASC 810, Consolidations, our wholly owned subsidiary, the Trust, is not included in our consolidated financial statements.

Equity–Stockholders’ equity, inclusive of accumulated other comprehensive income, net of income taxes, was $53.1 million at September 30, 2015, an increase of $1.9 million when compared to December 31, 2014.  The increase was largely due to net income for the nine months ended September 30, 2015. 

LIQUIDITY AND CAPITAL RESOURCES

A fundamental component of our business strategy is to manage liquidity to ensure the availability of sufficient resources to meet all financial obligations and to finance prospective business opportunities. Liquidity management is critical to our stability. Our liquidity position over any given period of time is a product of our operating, financing and investing activities. The extent of such activities is often shaped by such external factors as competition for deposits and loan demand.

Traditionally, financing for our loans and investments is derived primarily from deposits, along with interest and principal payments on loans and investments.  At September 30, 2015, total deposits amounted to $502.5 million, an increase of $44.2 million, or 9.7%, from December 31, 2014. At September 30, 2015 and December 31, 2014, advances from FHLB and subordinated debentures totaled $84.2 million and $82.4 million, respectively, and represented 13.1% and 13.8% of total assets, respectively. 

Loan production continued to be our principal investing activity. Total loans receivable, net of unearned income, at September 30, 2015, amounted to $501.2million, an increase of $29.2 million, or 6.2%, compared to December 31, 2014.

Our most liquid assets are cash and due from banks and federal funds sold.  At September 30, 2015, the total of such assets amounted to $8.2 million, or 1.3%, of total assets, compared to $5.9 million, or 1.0%, of total assets at December 31, 2014. Another significant liquidity source is our available for sale securities portfolio.  At September 30, 2015, available for sale securities amounted to $94.7 million, compared to $78.0 million at December 31, 2014.

In addition to the aforementioned sources of liquidity, we have available various other sources of liquidity, including federal funds purchased from other banks and the FRB discount window.  The Bank also has the capacity to borrow an

34

additional $71.1 millionthrough its membership in the FHLB and $10.0 million at Atlantic Community Bankers Bank at September 30, 2015.  Management believes that our sources of funds are sufficient to meet our present funding requirements.

The Bank’s regulators have implemented risk based guidelines that require banks to maintain Tier I capital as a percentage of risk-adjusted assets of 4.0% and Tier II capital as a percentage of risk-adjusted assets of 8.0% at a minimum.  At September 30, 2015, the Bank’s Tier I,  Tier II and Common Equity Tier I capital ratios were 12.39%, 13.52% and 12.39%, respectively.  In addition to the risk-based guidelines, the Bank’s regulators require that banks which meet the regulators’ highest performance and operational standards maintain a minimum leverage ratio (Tier I capital as a percentage of tangible assets) of 4.0%.  As of September 30, 2015, the Bank had a leverage ratio of 9.82%.  The Bank’s risk based and leverage ratios are in excess of those required to be considered “well-capitalized” under FDIC regulations.

The FRB also imposes similar capital requirements on bank holding companies with consolidated assets of $500 million or more. Under FRB reporting requirements, a bank holding company that reaches $500 million or more in total consolidated assets as of June 30 of the preceding year must begin reporting its consolidated capital beginning in March of the following year.  The Bank began reporting its consolidated capital in March 2013.

We have no investment or financial relationship with any unconsolidated entities that are reasonably likely to have a material effect on liquidity or the availability of capital resources, except for the trust preferred securities of the Trust.  We are not aware of any known trends or any known demands, commitments, events or uncertainties, which would result in any material increase or decrease in liquidity.  Management believes that any amounts actually drawn upon can be funded in the normal course of operations.

Off-Balance Sheet Arrangements – Our consolidated financial statements do not reflect off-balance sheet arrangements that are made in the normal course of business.  These off-balance sheet arrangements consist of unfunded loans and letters of credit made under the same standards as on-balance sheet instruments.  These unused commitments, at September 30, 2015,  totaled $116.2 millionand consisted of $61.8 million in commitments to grant commercial real estate, construction and land development loans, $21.3 million in home equity lines of credit, $32.2 million in other unused commitments and $839 thousand in letters of credit.  These instruments have fixed maturity dates, and because many of them will expire without being drawn upon, they do not generally present any significant liquidity risk to us.  Management believes that any amounts actually drawn upon can be funded in the normal course of operations.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is (i) recorded, processed, summarized and reported as and when required and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely discussion regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation that occurred during our last fiscal quarter that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

35

PART II – OTHER INFORMATION

Item 1 - Legal Proceedings

We are not involved in any legal proceedings other than routine legal proceedings occurring in the ordinary course of business.  Management believes that such proceedings are, in the aggregate, immaterial to our financial condition and results of operations.

Item 1A - Risk Factors

For a summary of risk factors relevant to our operations, see Part 1, Item 1A, “Risk Factors” in our 2014 Annual Report on Form 10-K.  There are no material changes in the risk factors relevant to our operations.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to any purchase of shares of our common stock made by or on behalf of us or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, during the three months ended September  30, 2015:

					Maximum
				Total Number	Number of
				of Shares	Shares that
				Purchased as	May Yet Be
	Total Number			Part of Publicly	Purchased
	of Shares		Average Price	Announced	Under the
Period	Purchased		Paid per Share	Program	Program(1)
July 1, 2015 through July 31, 2015	-		-	-	185,073
August 1, 2015 through August 31, 2015	-		-	-	185,073
September 1, 2015 through September 30, 2015	-		-	-	185,073
Total	0	$	-	0

(1) On February 25, 2015, the Board of Directors authorized a stock repurchase program, under which we may repurchase up to 233,000 shares.  The stock repurchase program expires on February 26, 2016, unless completed sooner or otherwise extended.

There were no sales by us of unregistered securities during the three months ended September 30, 2015.

Item 3 - Defaults Upon Senior Securities

Not applicable.

Item 4 - Mine Safety Disclosures

Not applicable.

Item 5 - Other Information

Not applicable.

Item 6 - Exhibits

The exhibits required to be filed as part of this Quarterly Report on Form 10-Q are listed in the Exhibit Index attached hereto and are incorporated herein by reference.

36

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

Date: November 12, 2015		SUSSEX BANCORP
	By:	/s/ Steven M. Fusco
		Steven M. Fusco
		Chief Financial Officer and Senior Executive Vice President
		(Principal Financial and Accounting Officer)

37

EXHIBIT INDEX

Exhibit Number	Description
*
3.1	Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Quarterly Report on 10-Q filed with the SEC on August 15, 2011).
3.2	Amended and Restated By-laws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on June 3, 2014).
4.1	Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registration Statement on Form S-1 filed with the SEC on June 3, 2013).
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
32.1*	Section 1350 Certifications of the Chief Executive Officer and Chief Financial Officer.
101	Financial statements from the Quarterly Report on Form 10-Q of Sussex Bancorp for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income and Comprehensive Income; (iii) the Consolidated Statements of Stockholders’ Equity; (iv) the Consolidated Statements of Cash Flows and (v) Notes to Unaudited Consolidated Financial Statements.

_______________________________

*  Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

38

EX-31.1

Exhibit 31.1

I, Anthony Labozzetta, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sussex Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November  12, 2015	By:	/s/ Anthony Labozzetta
		Anthony Labozzetta
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Steven M. Fusco, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Sussex Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November  12, 2015	By:	/s/ Steven M. Fusco
		Steven M. Fusco
		Chief Financial Officer and Senior Executive Vice President
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Statement Furnished PURSUANT TO SECTION 906 of the

SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Sussex Bancorp (the “Company”) for the quarter ended September 30, 2015 (the “Report”), I, Anthony Labozzetta, President and Chief Executive Officer, and I, Steven M. Fusco, Chief Financial Officer and Senior Executive Vice President, each certify as follows:

A) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m or 78o(d)), and

B) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Pursuant to Securities and Exchange Commission Release 33-8238, dated June 5, 2003, this certification is being furnished and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any registration statement of the Company filed under the Securities Act of 1933, as amended, except to the extent that the Company specifically incorporates it by reference. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: November 12, 2015	By: /s/ Anthony Labozzetta           .
	Anthony Labozzetta
	President and Chief Executive Officer
	(Principal Executive Officer)

By: /s/ Steven M. Fusco                .

Steven M. Fusco

Chief Financial Officer and

Senior Executive Vice President

(Principal Financial and Accounting Officer)

XML

Allowance For Loan Losses And Credit Quality Of Financing Receivables (Loans Which The Accrual Of Interest Has Been Discontinued) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	$ 5,682	$ 5,924
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	20	94
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	4,043	3,936
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	1,481	1,893
Consumer And Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total	$ 138	$ 1

XML

Fair Value Of Financial Instruments (Qualitative Information About Level 3 Fair Value Measurements) (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2015	Dec. 31, 2014
Impaired Loans [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Fair Value Estimate		$ 1,542	$ 1,087
Impaired Loans [Member] | Significant Unobservable Inputs (Level III) [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Fair Value Estimate		$ 1,542	$ 1,087
Valuation Techniques		Appraisal of collateral	Appraisal of collateral
Unobservable Input	[1]	Appraisal adjustments	Appraisal adjustments
Impaired Loans [Member] | Minimum [Member] | Significant Unobservable Inputs (Level III) [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Range (Weighted Average)		0.00%	0.00%
Impaired Loans [Member] | Maximum [Member] | Significant Unobservable Inputs (Level III) [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Range (Weighted Average)		(58.60%)	(67.90%)
Impaired Loans [Member] | Weighted Average [Member] | Significant Unobservable Inputs (Level III) [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Range (Weighted Average)		(7.40%)	(7.80%)
Foreclosed Real Estate [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Fair Value Estimate		$ 868	$ 761
Foreclosed Real Estate [Member] | Significant Unobservable Inputs (Level III) [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Fair Value Estimate		$ 868	$ 761
Valuation Techniques		Appraisal of collateral	Appraisal of collateral
Unobservable Input	[1]	Selling expenses	Selling expenses
Range (Weighted Average)		(7.00%)	(7.00%)
Foreclosed Real Estate [Member] | Weighted Average [Member] | Significant Unobservable Inputs (Level III) [Member]
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Range (Weighted Average)		(7.00%)	(7.00%)

[1] Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling expenses. The range and weighted average of selling expenses and other appraisal adjustments are presented as a percentage of the appraisal.

XML

Stock-Based Compensation (Summary Of Stock Option Assumptions) (Details)	9 Months Ended
	Sep. 30, 2015
Stock Incentive Plans [Abstract]
Expected dividend yield	1.56%
Expected volatility	34.32%
Risk-free interest rate	1.37%
Expected option life	10 years

XML

Fair Value Of Financial Instruments (Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 94,702	$ 77,976
Securities held to maturity	6,034	6,190
Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	8,171	5,859
Time deposits with other banks	100	100
Securities available for sale	94,702	77,976
Securities held to maturity	5,857	6,006
Federal Home Loan Bank stock	4,015	3,908
Loans receivable, net of allowance	495,562	466,332
Accrued interest receivable	1,996	1,796
Non-maturity deposits	380,080	351,653
Time deposits	122,429	106,617
Short-term borrowings	15,300	23,500
Long-term borrowings	56,000	46,000
Junior subordinated debentures	12,887	12,887
Accrued interest payable	265	243
Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	8,171	5,859
Time deposits with other banks	100	100
Securities available for sale	94,702	77,976
Securities held to maturity	6,034	6,190
Federal Home Loan Bank stock	4,015	3,908
Loans receivable, net of allowance	493,836	462,984
Accrued interest receivable	1,996	1,796
Non-maturity deposits	380,080	351,653
Time deposits	122,789	107,011
Short-term borrowings	15,300	23,500
Long-term borrowings	57,453	47,766
Junior subordinated debentures	9,179	9,361
Accrued interest payable	265	243
Quoted Prices In Active Markets For Identical Assets (Level I) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	8,171	5,859
Securities available for sale	12	10
Short-term borrowings	15,300	23,500
Significant Other Observable Inputs (Level II) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Time deposits with other banks	100	100
Securities available for sale	94,690	77,966
Securities held to maturity	6,034	6,190
Federal Home Loan Bank stock	4,015	3,908
Accrued interest receivable	1,996	1,796
Non-maturity deposits	380,080	351,653
Time deposits	122,789	107,011
Long-term borrowings	57,453	47,766
Junior subordinated debentures	9,179	9,361
Accrued interest payable	265	243
Significant Unobservable Inputs (Level III) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans receivable, net of allowance	$ 493,836	$ 462,984

XML

Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option grants, maximum term, in years			10 years
Weighted average grant date fair value of options granted per share			$ 3.56
Stock options expected future expense	$ 160		$ 160
Restricted stock awards expense	84	$ 74	251	$ 230
Unrecognized compensation expense for non-vested restricted stock	506		506
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 10	$ 0	$ 28
Unrecognized compensation expense, period for recognition			4 years 2 months 12 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, period for recognition			1 year 7 months 6 days
Minimum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, years			1 year
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, years			2 years
Maximum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, years			4 years
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, years			7 years

XML

Securities (Temporarily Impaired Gross Unrealized Losses And Fair Value Of Held-To-Maturity Securities) (Details) - State And Political Subdivisions [Member] - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Held-to-maturity Securities [Line Items]
Less Than Twelve Months, Fair Value	$ 804
Less Than Twelve Months, Gross Unrealized Losses	(2)
Twelve Months or More, Fair Value		$ 811
Twelve Months or More, Gross Unrealized Losses		(5)
Total, Fair Value	804	811
Total, Gross Unrealized Losses	$ (2)	$ (5)

XML

Fair Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Of Financial Instruments [Abstract]

Summary Of Financial Assets Measured On A Recurring Basis

			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair		for Identical		Observable		Unobservable
	Value		Assets		Inputs		Inputs
(Dollars in thousands)	Measurements		(Level I)		(Level II)		(Level III)
September 30, 2015
U.S. government agencies	$	11,962	$	-	$	11,962	$	-
State and political subdivisions		37,697		-		37,697		-
Mortgage-backed securities -
U.S. government-sponsored enterprises		45,031		-		45,031		-
Equity securities-financial services industry and other		12		12		-		-
December 31, 2014
U.S. government agencies	$	7,858	$	-	$	7,858	$	-
State and political subdivisions		26,384		-		26,384		-
Mortgage-backed securities -
U.S. government-sponsored enterprises		43,724		-		43,724		-
Equity securities-financial services industry and other		10		10		-		-

Summary Of Financial Assets Measured On A Nonrecurring Basis

			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair		for Identical		Observable		Unobservable
	Value		Assets		Inputs		Inputs
(Dollars in thousands)	Measurements		(Level I)		(Level II)		(Level III)
September 30, 2015
Impaired loans	$	1,542	$	-	$	-	$	1,542
Foreclosed real estate		868		-		-		868
December 31, 2014
Impaired loans	$	1,087	$	-	$	-	$	1,087
Foreclosed real estate		761		-		-		761

Qualitative Information About Level 3 Fair Value Measurements

	Qualitative Information about Level III Fair Value Measurements
	Fair				Range
	Value		Valuation	Unobservable	(Weighted
(Dollars in thousands)	Estimate		Techniques	Input	Average)
September 30, 2015
Impaired loans	$	1,542	Appraisal of	Appraisal	0% to -58.6%
			collateral	adjustments (1)	(-7.4%)
Foreclosed real estate		868	Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)
December 31, 2014
Impaired loans	$	1,087	Appraisal of	Appraisal	0% to -67.9%
			collateral	adjustments (1)	(-7.8%)
Foreclosed real estate		761	Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling expenses.  The range and weighted average of selling expenses and other appraisal adjustments are presented as a percentage of the appraisal.

Estimated Fair Values Of Financial Instruments

					Quoted Prices in		Significant
					Active Markets		Other		Significant
	September 30, 2015				for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
(Dollars in thousands)	Amount		Value		(Level I)		(Level II)		(Level III)
Financial assets:
Cash and cash equivalents	$	8,171	$	8,171	$	8,171	$	-	$	-
Time deposits with other banks		100		100		-		100		-
Securities available for sale		94,702		94,702		12		94,690		-
Securities held to maturity		5,857		6,034		-		6,034		-
Federal Home Loan Bank stock		4,015		4,015		-		4,015		-
Loans receivable, net of allowance		495,562		493,836		-		-		493,836
Accrued interest receivable		1,996		1,996		-		1,996		-
Financial liabilities:
Non-maturity deposits		380,080		380,080		-		380,080		-
Time deposits		122,429		122,789		-		122,789		-
Short-term borrowings		15,300		15,300		15,300		-		-
Long-term borrowings		56,000		57,453		-		57,453		-
Junior subordinated debentures		12,887		9,179		-		9,179		-
Accrued interest payable		265		265		-		265		-

					Quoted Prices in		Significant
					Active Markets		Other		Significant
	December 31, 2014				for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
(Dollars in thousands)	Amount		Value		(Level I)		(Level II)		(Level III)
Financial assets:
Cash and cash equivalents	$	5,859	$	5,859	$	5,859	$	-	$	-
Time deposits with other banks		100		100		-		100		-
Securities available for sale		77,976		77,976		10		77,966		-
Securities held to maturity		6,006		6,190		-		6,190		-
Federal Home Loan Bank stock		3,908		3,908		-		3,908		-
Loans receivable, net of allowance		466,332		462,984		-		-		462,984
Accrued interest receivable		1,796		1,796		-		1,796		-
Financial liabilities:
Non-maturity deposits		351,653		351,653		-		351,653		-
Time deposits		106,617		107,011		-		107,011		-
Short-term borrowings		23,500		23,500		23,500		-		-
Long-term borrowings		46,000		47,766		-		47,766		-
Junior subordinated debentures		12,887		9,361		-		9,361		-
Accrued interest payable		243		243		-		243		-

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Guarantees (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Guarantees [Abstract]
Letter of credit, expiration term	1 year
Undrawn standby letters of credit outstanding	$ 839

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (Troubled Debt Restructured On Recorded Investment) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Modifications [Line Items]
Total	$ 3,620	$ 4,544
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Total	2,985	3,899
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Total	635	645
Performing [Member]
Financing Receivable, Modifications [Line Items]
Total	1,563	1,590
Performing [Member] | Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Total	1,151	1,169
Performing [Member] | Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Total	412	421
Non-performing [Member]
Financing Receivable, Modifications [Line Items]
Total	2,057	2,954
Non-performing [Member] | Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Total	1,834	2,730
Non-performing [Member] | Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Total	$ 223	$ 224

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (Allowances Of Loan Losses And Loans Receivable By Class Disaggregated) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, Allowance for Loan Losses	$ 5,641	$ 5,752	$ 5,641	$ 5,709	$ 5,854	$ 5,421
Allowance for Loan Losses, Balance Related to Loans Individually Evaluated for Impairment	395		288
Allowance for Loan Losses, Balance Related to Loans Collectively Evaluated for Impairment	4,553		4,739
Balance, Loans Receivable	501,619		472,461
Loans Receivable, Individually Evaluated for Impairment	7,245		7,513
Loans Receivable, Collectively Evaluated for Impairment	494,374		464,948
Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, Allowance for Loan Losses	$ 83	86	231	276	257	222
Allowance for Loan Losses, Balance Related to Loans Individually Evaluated for Impairment			51
Allowance for Loan Losses, Balance Related to Loans Collectively Evaluated for Impairment	$ 83		180
Balance, Loans Receivable	17,842		20,549
Loans Receivable, Individually Evaluated for Impairment	20		94
Loans Receivable, Collectively Evaluated for Impairment	17,822		20,455
Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, Allowance for Loan Losses	$ 220	277	$ 383	301	354	308
Allowance for Loan Losses, Balance Related to Loans Individually Evaluated for Impairment
Allowance for Loan Losses, Balance Related to Loans Collectively Evaluated for Impairment	$ 220		$ 383
Balance, Loans Receivable	$ 10,206		$ 12,379
Loans Receivable, Individually Evaluated for Impairment
Loans Receivable, Collectively Evaluated for Impairment	$ 10,206		$ 12,379
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, Allowance for Loan Losses	3,631	3,613	3,491	3,399	3,750	3,399
Allowance for Loan Losses, Balance Related to Loans Individually Evaluated for Impairment	117		136
Allowance for Loan Losses, Balance Related to Loans Collectively Evaluated for Impairment	3,514		3,355
Balance, Loans Receivable	347,095		326,370
Loans Receivable, Individually Evaluated for Impairment	5,194		5,105
Loans Receivable, Collectively Evaluated for Impairment	341,901		321,265
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, Allowance for Loan Losses	928	898	903	819	837	941
Allowance for Loan Losses, Balance Related to Loans Individually Evaluated for Impairment	205		101
Allowance for Loan Losses, Balance Related to Loans Collectively Evaluated for Impairment	723		802
Balance, Loans Receivable	125,159		111,498
Loans Receivable, Individually Evaluated for Impairment	1,893		2,314
Loans Receivable, Collectively Evaluated for Impairment	123,266		109,184
Consumer And Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, Allowance for Loan Losses	86	86	$ 19	26	13	16
Allowance for Loan Losses, Balance Related to Loans Individually Evaluated for Impairment	73
Allowance for Loan Losses, Balance Related to Loans Collectively Evaluated for Impairment	13		$ 19
Balance, Loans Receivable	1,317		$ 1,665
Loans Receivable, Individually Evaluated for Impairment	138
Loans Receivable, Collectively Evaluated for Impairment	1,179		$ 1,665
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, Allowance for Loan Losses	$ 693	$ 792	$ 614	$ 888	$ 643	$ 535
Allowance for Loan Losses, Balance Related to Loans Individually Evaluated for Impairment
Allowance for Loan Losses, Balance Related to Loans Collectively Evaluated for Impairment
Balance, Loans Receivable
Loans Receivable, Individually Evaluated for Impairment
Loans Receivable, Collectively Evaluated for Impairment

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Fair Value Of Financial Instruments (Summary Of Financial Assets Measured On A Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 94,702	$ 77,976
Quoted Prices In Active Markets For Identical Assets (Level I) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	12	10
Significant Other Observable Inputs (Level II) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	94,690	77,966
U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	11,962	7,858
U.S. Government Agencies [Member] | Significant Other Observable Inputs (Level II) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 11,962	$ 7,858
U.S. Government Agencies [Member] | Significant Unobservable Inputs (Level III) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale
State And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 37,697	$ 26,384
State And Political Subdivisions [Member] | Significant Other Observable Inputs (Level II) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 37,697	$ 26,384
State And Political Subdivisions [Member] | Significant Unobservable Inputs (Level III) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale
Mortgage Backed U.S. Government-Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 45,031	$ 43,724
Mortgage Backed U.S. Government-Sponsored Enterprises [Member] | Significant Other Observable Inputs (Level II) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 45,031	$ 43,724
Mortgage Backed U.S. Government-Sponsored Enterprises [Member] | Significant Unobservable Inputs (Level III) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale
Equity Securities-Financial Services Industry And Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 12	$ 10
Equity Securities-Financial Services Industry And Other [Member] | Quoted Prices In Active Markets For Identical Assets (Level I) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 12	$ 10
Equity Securities-Financial Services Industry And Other [Member] | Significant Unobservable Inputs (Level III) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale

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Stock-Based Compensation (Summary Of Information Regarding Stock Option Plans) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding, beginning of year | shares	46,525
Number of Shares, Options granted | shares	15,985
Number of Shares, Options expired | shares	(3,817)
Number of Shares, Outstanding, end of period | shares	58,693
Number of Shares, Exercisable, end of period | shares	6,708
Weighted Average Exercise Price per Share, Outstanding, beginning of year	$ 10.63
Weighted Average Exercise Price per Share, Options granted	10.25
Weighted Average Exercise Price per Share, Options expired	13.39
Weighted Average Exercise Price per Share, Outstanding, end of period	10.35
Weighted Average Exercise Price per Share, Exercisable, end of period	$ 12.63
Weighted Average Contractual Term, Outstanding, end of period	8 years 1 month 6 days
Weighted Average Contractual Term, Exercisable, end of period	1 month 6 days
Aggregate Intrinsic Value, Outstanding, end of period | $	$ 126,526
Aggregate Intrinsic Value, Exercisable, end of period | $
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option price range at end of quarter	$ 9.97
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option price range at end of quarter	12.63
Option price of exercisable shares	$ 12.63

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Loans

9 Months Ended

Sep. 30, 2015

Loans [Abstract]

Loans

NOTE 3 – LOANS

The composition of net loans receivable at September 30, 2015 and December 31, 2014 is as follows:

(Dollars in thousands)	September 30, 2015		December 31, 2014
Commercial and industrial	$	17,842	$	20,549
Construction		10,206		12,379
Commercial real estate		347,095		326,370
Residential real estate		125,159		111,498
Consumer and other		1,317		1,665
Total loans receivable		501,619		472,461
Unearned net loan origination fees		(416)		(488)
Allowance for loan losses		(5,641)		(5,641)
Net loans receivable	$	495,562	$	466,332

Mortgage loans serviced for others are not included in the accompanying balance sheets.  The total amount of loans serviced for the benefit of others was approximately $460 thousand and$475 thousand at September 30, 2015 and December 31, 2014, respectively. Mortgage servicing rights were immaterial at September 30, 2015 and December 31, 2014.

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Net earnings applicable to common stockholders (Numerator)	$ 951	$ 592	$ 2,787	$ 1,877
Net income applicable to common stockholders and assumed conversions (Numerator)	$ 951	$ 592	$ 2,787	$ 1,877
Basic, Shares (Denominator)	4,550,923	4,548,293	4,561,638	4,538,456
Unvested stock awards, Shares (Denominator)	35,210	40,492	30,062	36,207
Diluted, Shares (Denominator)	4,586,133	4,588,785	4,591,700	4,574,663
Basic, Per Share Amount	$ 0.21	$ 0.13	$ 0.61	$ 0.41
Diluted, Per Share Amount	$ 0.21	$ 0.13	$ 0.61	$ 0.41
Shares of common stock outstanding not included in the computation of diluted EPS	52,023		66,946	9,381

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Securities (Amortized Cost And Fair Value Of Securities By Contractual Maturity Of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Due in one year or less, Amortized Cost
Due after one year through five years, Amortized Cost	$ 501
Due after five years through ten years, Amortized Cost	3,021
Due after ten years, Amortized Cost	34,367
Total bonds and obligations, Amortized Cost	$ 37,889
Due in one year or less, Fair Value
Due after one year through five years, Fair Value	$ 504
Due after five years through ten years, Fair Value	3,022
Due after ten years, Fair Value	34,171
Total bonds and obligations, Fair Value	37,697
Amortized Cost	94,514	$ 77,695
Fair Value	94,702	77,976
U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	11,959	7,873
Fair Value	11,962	7,858
Mortgage Backed U.S. Government-Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	44,658	43,382
Fair Value	45,031	43,724
Equity Securities-Financial Services Industry And Other [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	8	8
Fair Value	$ 12	$ 10

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Securities (Amortized Cost And Approximate Fair Value Of Securities Available For Sale) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 94,514	$ 77,695
Gross Unrealized Gains	690	677
Gross Unrealized Losses	(502)	(396)
Fair Value	94,702	77,976
U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	11,959	7,873
Gross Unrealized Gains	51	17
Gross Unrealized Losses	(48)	(32)
Fair Value	11,962	7,858
State And Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	37,889	26,432
Gross Unrealized Gains	172	158
Gross Unrealized Losses	(364)	(206)
Fair Value	37,697	26,384
Mortgage Backed U.S. Government-Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	44,658	43,382
Gross Unrealized Gains	463	500
Gross Unrealized Losses	(90)	(158)
Fair Value	45,031	43,724
Equity Securities-Financial Services Industry And Other [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	8	8
Gross Unrealized Gains	4	2
Fair Value	$ 12	$ 10

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Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Other Comprehensive (Loss) Income [Abstract]
Unrealized gains on available for sale securities, Before Tax	$ 1,024	$ 511	$ 174	$ 3,864
Reclassification adjustment for net gains on securities transactions included in net income, Before Tax	(11)	(164)	(267)	(258)
Total other comprehensive (loss) income, Before Tax	1,013	347	(93)	3,606
Unrealized gains on available for sale securities, Tax Effect	410	204	70	1,545
Reclassification adjustment for net gains on securities transactions included in net income, Tax Effect	(5)	(66)	(107)	(103)
Total other comprehensive (loss) income, Tax Effect	405	138	(37)	1,442
Unrealized gains on available for sale securities, Net of Tax	614	307	104	2,319
Reclassification adjustment for net gains on securities transactions included in net income, Net of Tax	(6)	(98)	(160)	(155)
Other comprehensive income, (loss), net of income taxes	$ 608	$ 209	$ (56)	$ 2,164

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Securities (Temporarily Impaired Gross Unrealized Losses And Fair Value Of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Less Than Twelve Months, Fair Value	$ 37,921	$ 23,282
Less Than Twelve Months, Gross Unrealized Losses	(430)	(206)
Twelve Months or More, Fair Value	4,395	12,050
Twelve Months or More, Gross Unrealized Losses	(72)	(190)
Total, Fair Value	42,316	35,332
Total, Gross Unrealized Losses	(502)	(396)
U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than Twelve Months, Fair Value	4,776
Less Than Twelve Months, Gross Unrealized Losses	(18)
Twelve Months or More, Fair Value	2,554	2,905
Twelve Months or More, Gross Unrealized Losses	(30)	(32)
Total, Fair Value	7,330	2,905
Total, Gross Unrealized Losses	(48)	(32)
State And Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than Twelve Months, Fair Value	21,760	7,603
Less Than Twelve Months, Gross Unrealized Losses	(322)	(112)
Twelve Months or More, Fair Value	1,841	5,713
Twelve Months or More, Gross Unrealized Losses	(42)	(94)
Total, Fair Value	23,601	13,316
Total, Gross Unrealized Losses	(364)	(206)
Mortgage Backed U.S. Government-Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than Twelve Months, Fair Value	11,385	15,679
Less Than Twelve Months, Gross Unrealized Losses	(90)	(94)
Twelve Months or More, Fair Value		3,432
Twelve Months or More, Gross Unrealized Losses		(64)
Total, Fair Value	11,385	19,111
Total, Gross Unrealized Losses	$ (90)	$ (158)

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Securities (Amortized Cost And Approximate Fair Value Of Securities Held-To-Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 5,857
Securities held to maturity, fair value	6,034	$ 6,190
State And Political Subdivisions [Member]
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	5,857	6,006
Gross Unrealized Gains	179	189
Gross Unrealized Losses	(2)	(5)
Securities held to maturity, fair value	$ 6,034	$ 6,190

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Securities

9 Months Ended

Sep. 30, 2015

Securities [Abstract]

Securities

NOTE 2 – SECURITIES

Available for Sale

The amortized cost and approximate fair value of securities available for sale as of September 30, 2015 and December 31, 2014 are summarized as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)		Cost		Gains		Losses		Value
September 30, 2015
U.S. government agencies	$	11,959	$	51	$	(48)	$	11,962
State and political subdivisions		37,889		172		(364)		37,697
Mortgage-backed securities -
U.S. government-sponsored enterprises		44,658		463		(90)		45,031
Equity securities-financial services industry and other		8		4		-		12
	$	94,514	$	690	$	(502)	$	94,702
December 31, 2014
U.S. government agencies	$	7,873	$	17	$	(32)	$	7,858
State and political subdivisions		26,432		158		(206)		26,384
Mortgage-backed securities -
U.S. government-sponsored enterprises		43,382		500		(158)		43,724
Equity securities-financial services industry and other		8		2		-		10
	$	77,695	$	677	$	(396)	$	77,976

Securities with a carrying value of approximately $33.0 million and $32.8 million at September 30, 2015 and December 31, 2014, respectively, were pledged to secure public deposits and for other purposes required or permitted by applicable laws and regulations.

The amortized cost and fair value of securities available for sale at September  30, 2015 are shown below by contractual maturity.  Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
(Dollars in thousands)	Cost		Value
Due in one year or less	$	-	$	-
Due after one year through five years		501		504
Due after five years through ten years		3,021		3,022
Due after ten years		34,367		34,171
Total bonds and obligations		37,889		37,697
U.S. government agencies		11,959		11,962
Mortgage-backed securities:
U.S. government-sponsored enterprises		44,658		45,031
Equity securities-financial services industry and other		8		12
Total available for sale securities	$	94,514	$	94,702

Gross realized gains on sales of securities available for sale were $64 thousand and $242 thousand and gross realized losses were $53 thousand and $78 thousand for the three months ended September 30, 2015 and 2014, respectively.

Gross realized gains on sales of securities were $368 thousand and $360 thousand and gross losses were $101 thousandand $102 thousand for the nine months ended September 30, 2015 and 2014, respectively.

Temporarily Impaired Securities

The following table shows gross unrealized losses and fair value of securities with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by category and length of time that individual available for sale securities have been in a continuous unrealized loss position at September  30, 2015 and December 31, 2014.

	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
September 30, 2015
U.S. government agencies	$	4,776	$	(18)	$	2,554	$	(30)	$	7,330	$	(48)
State and political subdivisions		21,760		(322)		1,841		(42)		23,601		(364)
Mortgage-backed securities -
U.S. government-sponsored enterprises		11,385		(90)		-		-		11,385		(90)
Total temporarily impaired securities	$	37,921	$	(430)	$	4,395	$	(72)	$	42,316	$	(502)
December 31, 2014
U.S. government agencies	$	-	$	-	$	2,905	$	(32)	$	2,905	$	(32)
State and political subdivisions		7,603		(112)		5,713		(94)		13,316		(206)
Mortgage-backed securities -
U.S. government-sponsored enterprises		15,679		(94)		3,432		(64)		19,111		(158)
Total temporarily impaired securities	$	23,282	$	(206)	$	12,050	$	(190)	$	35,332	$	(396)

For each security whose fair value is less than their amortized cost basis, a review is conducted to determine if an other-than-temporary impairment has occurred. As of September 30, 2015, we reviewed our available for sale securities portfolio for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the intent and likelihood of selling the security.  The intent and likelihood of sale of debt and equity securities are evaluated based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position. 

U.S. Government Agencies

At September  30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our U.S. government agencies securities were primarily due to changes in spreads and market conditions and not credit quality.  At September 30, 2015, there were five securities with a fair value of $7.3 million that had an unrealized loss that amounted to $48 thousand.  As of September 30, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of the U.S. government agency securities at September 30, 2015 were deemed to be other-than-temporarily impaired (“OTTI”).

At December 31, 2014, there were two securities with a fair value of $2.9 million that had an unrealized loss that amounted to $32 thousand.

State and Political Subdivisions

At September 30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our state and political subdivisions securities were caused by changes in interest rates and spreads and were not the result of credit quality.  At September 30, 2015, there were 36 securities with a fair value of $23.6 million that had an unrealized loss that amounted to $364 thousand.  These securities typically have maturity dates greater than 10 years and the fair values are more sensitive to changes in market interest rates.  As of September 30, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of our state and political subdivision securities at September 30, 2015 were deemed to be OTTI.  

At December 31, 2014, there were 22 securities with a fair value of $13.3 million that had an unrealized loss that amounted to $206 thousand. 

Mortgage-Backed Securities

At September 30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our mortgage-backed securities guaranteed by U.S. government-sponsored enterprises were primarily due to changes in spreads and market conditions and not credit quality.  At September 30, 2015, there were 7 securities with a fair value of $11.4 million that had an unrealized loss that amounted to $90 thousand.  As ofSeptember 30, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of our mortgage-backed securities at September 30, 2015 were deemed to be OTTI.  

At December 31, 2014, there were 13 securities with a fair value of $19.1 million that had an unrealized loss that amounted to $158 thousand. 

Equity Securities

Our marketable equity securities portfolio consists primarily of common stock of an entity in the insurance services industry.  At September 30, 2015, we did not have any securities in an unrealized loss position. 

At December 31, 2014, we did not have any securities in an unrealized loss position.

We continue to closely monitor the performance of the securities we own as well as the impact from any further deterioration in the economy or in the banking industry that may adversely affect these securities. We will continue to evaluate them for other-than-temporary impairment, which could result in a future non-cash charge to earnings.

Held to Maturity Securities

The amortized cost and approximate fair value of securities held to maturity as of September 30, 2015 and December 31, 2014 are summarized as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)		Cost		Gains		Losses		Value
September 30, 2015
State and political subdivisions	$	5,857	$	179	$	(2)	$	6,034
December 31, 2014
State and political subdivisions	$	6,006	$	189	$	(5)	$	6,190

The amortized cost and carrying value of securities held to maturity at September 30, 2015 are shown below by contractual maturity.  Actual maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Amortized		Fair
(Dollars in thousands)		Cost		Value
Due in one year or less	$	1,969	$	1,969
Due after one year through five years		-		-
Due after five years through ten years		2,837		2,907
Due after ten years		1,051		1,158
Total held to maturity securities	$	5,857	$	6,034

Temporarily Impaired Securities

The following table shows gross unrealized losses and fair value of held to maturity securities with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by category and length of time that individual held to maturity securities have been in a continuous unrealized loss position at September 30, 2015 and December 31, 2014:

	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
September 30, 2015
State and political subdivisions	$	804	$	(2)	$	-	$	-	$	804	$	(2)
December 31, 2014
State and political subdivisions	$	-	$	-	$	811	$	(5)	$	811	$	(5)

For each security whose fair value is less than their amortized cost basis, a review is conducted to determine if an other-than-temporary impairment has occurred. As of September 30, 2015, we reviewed our held to maturity securities portfolio for indications of impairment. This review includes analyzing the length of time and the extent to which the fair value has been lower than the cost, the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer and the intent and likelihood of selling the security.  The intent and likelihood of sale of debt and equity securities are evaluated based upon our investment strategy for the particular type of security and our cash flow needs, liquidity position, capital adequacy and interest rate risk position.

At September 30, 2015 and December 31, 2014, the decline in fair value and the unrealized losses for our state and political subdivisions securities were caused by changes in interest rates and spreads and were not the result of credit quality.  At September 30, 2015,  there were two securities with a fair value of $804 thousand that had an unrealized loss that amounted to $2 thousand.  These securities typically have maturity dates greater than 10 years and the fair values are more sensitive to changes in market interest rates.  As ofSeptember 30, 2015, we did not intend to sell and it was not more-likely-than-not that we would be required to sell any of these securities before recovery of their amortized cost basis.  Therefore, none of our state and political subdivision securities at September 30, 2015 were deemed to be OTTI.

At December 31, 2014, there were two securities with a fair value of $811 thousand that had an unrealized loss that amounted to $5 thousand. 

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Securities (Amortized Cost And Fair Value Of Securities By Contractual Maturity Of Held-To-Maturity Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Securities [Abstract]
Due in one year or less, Amortized Cost	$ 1,969
Due after one year through five years, Amortized Cost
Due after five years through ten years, Amortized Cost	$ 2,837
Due after ten years, Amortized Cost	1,051
Amortized Cost	5,857
Due in one year or less, Fair Value	$ 1,969
Due after one year through five years, Fair Value
Due after five years through ten years, Fair Value	$ 2,907
Due after ten years, Fair Value	1,158
Total held to maturity securities, Fair Value	$ 6,034	$ 6,190

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (Credit Risk Profile By Creditworthiness) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	$ 501,619	$ 472,461
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	17,842	20,549
Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	10,206	12,379
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	347,095	326,370
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	125,159	111,498
Consumer And Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	1,317	1,665
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	485,031	455,111
Pass [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	17,800	20,446
Pass [Member] | Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	10,206	12,379
Pass [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	333,463	312,172
Pass [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	122,383	108,587
Pass [Member] | Consumer And Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	1,179	1,527
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	8,443	8,861
Special Mention [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	22	9
Special Mention [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	7,670	8,257
Special Mention [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	751	457
Special Mention [Member] | Consumer And Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable		138
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	8,145	8,489
Substandard [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	20	94
Substandard [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	5,962	5,941
Substandard [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	2,025	$ 2,454
Substandard [Member] | Consumer And Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans receivable	$ 138

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Fair Value Of Financial Instruments (Summary Of Financial Assets Measured On A Nonrecurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets	$ 1,542	$ 1,087
Impaired Loans [Member] | Significant Unobservable Inputs (Level III) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets	1,542	1,087
Foreclosed Real Estate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets	868	761
Foreclosed Real Estate [Member] | Significant Unobservable Inputs (Level III) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets	$ 868	$ 761

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 3,104	$ 2,953
Interest-bearing deposits with other banks	5,067	2,906
Cash and cash equivalents	8,171	5,859
Interest bearing time deposits with other banks	100	100
Securities available for sale, at fair value	94,702	77,976
Securities held to maturity, at amortized cost (fair value of $6,034 and $6,190 at September 30, 2015 and December 31, 2014, respectively)	5,857	6,006
Federal Home Loan Bank Stock, at cost	4,015	3,908
Loans receivable, net of unearned income	501,203	471,973
Less: allowance for loan losses	5,641	5,641
Net loans receivable	495,562	466,332
Foreclosed real estate	3,335	4,449
Premises and equipment, net	8,773	8,650
Accrued interest receivable	1,996	1,796
Goodwill	2,820	2,820
Bank-owned life insurance	12,446	12,211
Other assets	6,242	5,808
Total Assets	644,019	595,915
Deposits:
Non-interest bearing	99,316	70,490
Interest bearing	403,193	387,780
Total deposits	502,509	458,270
Short-term borrowings	15,300	23,500
Long-term borrowings	56,000	46,000
Accrued interest payable and other liabilities	4,177	4,029
Junior subordinated debentures	12,887	12,887
Total Liabilities	$ 590,873	$ 544,686
Stockholders' Equity:
Preferred stock, no par value, 1,000,000 shares authorized; none issued
Common stock, no par value, 10,000,000 shares authorized; 4,704,629 and 4,673,789 shares issued and 4,645,387 and 4,662,606 shares outstanding at September 30, 2015 and December 31, 2014, respectively	$ 35,832	$ 35,553
Treasury stock, at cost; 59,242 and 11,183 shares at September 30, 2015 and December 31, 2014, respectively	(592)	(59)
Retained earnings	17,793	15,566
Accumulated other comprehensive income	113	169
Total Stockholders' Equity	53,146	51,229
Total Liabilities and Stockholders' Equity	$ 644,019	$ 595,915

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Segment Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Segment Reporting Information [Line Items]
Net interest income from external sources		$ 5,050	$ 4,542	$ 14,781	$ 13,293
Other income from external sources		1,655	1,501	5,057	4,550
Depreciation and amortization		249	182	746	508
Income before income taxes		1,341	806	3,977	2,548
Income tax expense	[1]	390	214	1,190	671
Total assets		644,019	568,033	644,019	568,033	$ 595,915
Banking And Financial Services [Member]
Segment Reporting Information [Line Items]
Net interest income from external sources		5,050	4,542	14,781	13,291
Other income from external sources		694	755	2,195	2,121
Depreciation and amortization		245	177	731	492
Income before income taxes		1,168	776	3,376	2,122
Income tax expense	[1]	321	202	950	501
Total assets		639,563	563,612	639,563	563,612
Insurance Services [Member]
Segment Reporting Information [Line Items]
Net interest income from external sources					2
Other income from external sources		961	746	2,862	2,429
Depreciation and amortization		4	5	15	16
Income before income taxes		173	30	601	426
Income tax expense	[1]	69	12	240	170
Total assets		$ 4,456	$ 4,421	$ 4,456	$ 4,421
Statutory tax rate		40.00%	40.00%	40.00%	40.00%

[1] Insurance Services calculated at statutory tax rate of 40%

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash Flows from Operating Activities
Net income	$ 2,787	$ 1,877
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	506	1,231
Depreciation and amortization	746	508
Net amortization of securities premiums and discounts	1,343	1,313
Net realized gain on sale of securities	(267)	(258)
Net realized gain on sale of premises and equipment	(8)
Net realized gain on sale of foreclosed real estate	(37)	(8)
Write-downs of and provisions for foreclosed real estate	314	110
Deferred income tax expense (benefit)	496	(919)
Earnings on bank-owned life insurance	(235)	(243)
Compensation expense for stock options and stock awards	279	230
Increase in assets:
Accrued interest receivable	(200)	(107)
Other assets	(893)	(402)
Increase in accrued interest payable and other liabilities	148	887
Net Cash Provided by Operating Activities	4,979	4,219
Securities available for sale:
Purchases	(45,436)	(1,160)
Sales	20,705	13,261
Maturities, calls and principal repayments	6,855	9,484
Securities held to maturity:
Purchases	(1,209)	(1,450)
Maturities, calls and principal repayments	1,339	2,383
Net increase in loans	(30,948)	(51,987)
Proceeds from the sale of foreclosed real estate	2,049	685
Purchases of bank premises and equipment	(896)	(2,232)
Proceeds from the sale of premises and equipment	35
Increase in Federal Home Loan Bank stock	(107)	(42)
Net Cash Used in Investing Activities	(47,613)	(31,058)
Cash Flows from Financing Activities
Net increase in deposits	44,239	24,244
(Decrease) increase in short-term borrowed funds	(8,200)	5,000
Proceeds of long-term borrowings	15,000
Repayment of long-term borrowings	(5,000)
Purchase of treasury stock	(533)
Dividends paid	(560)	(280)
Net Cash Provided by Financing Activities	44,946	28,964
Net Increase in Cash and Cash Equivalents	2,312	2,125
Cash and Cash Equivalents - Beginning	5,859	13,246
Cash and Cash Equivalents - Ending	8,171	15,371
Supplementary Cash Flows Information
Interest paid	2,592	2,430
Income taxes paid	954	779
Supplementary Schedule of Noncash Investing and Financing Activities
Foreclosed real estate acquired in settlement of loans	$ 1,212	$ 715

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($) loan	Sep. 30, 2014 loan	Sep. 30, 2015 USD ($) loan	Sep. 30, 2014 loan
Allowance For Loan Losses And Credit Quality Of Financing Receivables [Abstract]
Number of loans modified by troubled debt restructuring	0	0	0	0
Number of loans with subsequent default	0	0	0	0
Carrying value of foreclosed residential real estate properties | $	$ 0		$ 0
Carrying value of collateralized consumer loans | $	$ 1,300		$ 1,300

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Other Comprehensive (Loss) Income (Tables)

9 Months Ended

Sep. 30, 2015

Other Comprehensive (Loss) Income [Abstract]

Components Of Other Comprehensive Income And Related Tax Effects

	Three Months Ended September 30, 2015						Three Months Ended September 30, 2014
	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
(Dollars in thousands)
Other comprehensive (loss) income:
Unrealized gains on available for sale securities	$	1,024	$	410	$	614	$	511	$	204	$	307
Reclassification adjustment for net gains on securities transactions included in net income		(11)		(5)		(6)		(164)		(66)		(98)
Total other comprehensive (loss) income	$	1,013	$	405	$	608	$	347	$	138	$	209

	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
(Dollars in thousands)
Other comprehensive (loss) income:
Unrealized gains on available for sale securities	$	174	$	70	$	104	$	3,864	$	1,545	$	2,319
Reclassification adjustment for net gains on securities transactions included in net income		(267)		(107)		(160)		(258)		(103)		(155)
Total other comprehensive (loss) income	$	(93)	$	(37)	$	(56)	$	3,606	$	1,442	$	2,164

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (Changes In The Allowance For Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 5,752	$ 5,854	$ 5,641	$ 5,421
Charge-offs	(125)	(537)	(578)	(1,003)
Recoveries	13	14	72	60
Provision	1	378	506	1,231
Ending balance	5,641	5,709	5,641	5,709
Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	86	257	231	222
Charge-offs			(19)	(1)
Recoveries	5	1	10	16
Provision	(8)	18	(139)	39
Ending balance	83	276	83	276
Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	277	354	383	308
Provision	(57)	(53)	(163)	(7)
Ending balance	220	301	220	301
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	3,613	3,750	3,491	3,399
Charge-offs	(119)	(495)	(542)	(853)
Recoveries	3	10	39	31
Provision	134	134	643	822
Ending balance	3,631	3,399	3,631	3,399
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	898	837	903	941
Charge-offs		(33)		(118)
Recoveries	4	1	17	5
Provision	26	14	8	(9)
Ending balance	928	819	928	819
Consumer And Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	86	13	19	16
Charge-offs	(6)	(9)	(17)	(31)
Recoveries	1	2	6	8
Provision	5	20	78	33
Ending balance	86	26	86	26
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	792	643	614	535
Provision	(99)	245	79	353
Ending balance	$ 693	$ 888	$ 693	$ 888

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Stock-Based Compensation [Abstract]

Summary Of Information Regarding Stock Option Plans

			Weighted
			Average	Weighted
			Exercise	Average		Aggregate
	Number of		Price per	Contractual		Intrinsic
	Shares		Share	Term		Value
Options outstanding, beginning of year	46,525	$	10.63
Options granted	15,985		10.25
Options expired	(3,817)		13.39
Options outstanding, end of quarter	58,693	$	10.35	8.1	$	126,526
Options exercisable, end of quarter	6,708	$	12.63	0.1	$	-
Option price range at end of quarter	$9.97 to $12.63
Option price of exercisable shares	$ 12.63

Summary Of Stock Option Assumptions

	September 30, 2015
Expected dividend yield		1.56%
Expected volatility		34.32%
Risk-free interest rate		1.37%
Expected option life		10.0 Years

Summary Of Information Regarding Restricted Stock Activity

			Weighted
			Average
	Number of		Grant Date
	Shares		Fair Value
Unvested restricted stock, beginning of year	112,545	$	6.06
Granted	31,841		10.48
Vested	(50,166)		5.94
Unvested restricted stock, end of period	93,219	$	7.60

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Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

NOTE 1 – SUMMARY OF SIGNIFICANT ACOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Sussex Bancorp (“we,” “us,” “our” or the “company”) and our wholly owned subsidiary Sussex Bank (the “Bank”).  The Bank’s wholly owned subsidiaries are SCB Investment Company, Inc., SCBNY Company, Inc., ClassicLake Enterprises, LLC, Wheatsworth Properties Corp., PPD Holding Company, LLC, and Tri-State Insurance Agency, Inc. (“Tri-State”), a full service insurance agency located in Sussex County, New Jersey with a satellite office located in Bergen County, New Jersey.  Tri-State’s operations are considered a separate segment for financial disclosure purposes.  All inter-company transactions and balances have been eliminated in consolidation.  The Bank operates eleven banking offices, eight located in Sussex County, New Jersey, one located in Warren County, New Jersey, one in Queens County, New York and one in Orange County, New York.

We are subject to the supervision and regulation of the Board of Governors of the Federal Reserve System (the “FRB”).  The Bank’s deposits are insured by the Deposit Insurance Fund (“DIF”) of the FDIC up to applicable limits.  The operations of the company and the Bank are subject to the supervision and regulation of the FRB, the FDIC and the New Jersey Department of Banking and Insurance (the “Department”) and the operations of Tri-State are subject to supervision and regulation by the Department.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information.  Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for full year financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature.  Operating results for the three and nine month periods ended September  30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto that are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

New Accounting Standards

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-04, Receivables - Troubled Debt Restructurings by Creditors.  This ASU clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  For public entities, the guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014.  The adoption of this guidance did not have a material impact on our consolidated financial statements.

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. The ASU’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. For public entities, the guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In June 2014, FASB issued ASU 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, to change the accounting for repurchase-to-maturity transactions and certain linked repurchase financings.  This will result in accounting for both types of arrangements as secured borrowings on the balance sheet, rather than sales.  Additionally, the ASU introduces new disclosures to (1) increase transparency about the types of collateral pledged in secured borrowing transactions and (2) enable users to better understand transactions in which the transferor retains substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. For public entities, the disclosure for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. All other accounting and disclosure amendments in the ASU are effective for public business entities for the first interim or annual period beginning after December 15, 2014. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In June 2014, FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force), to clarify that a performance target in a share-based compensation award that could be achieved after an employee completes the requisite service period should be treated as a performance condition that affects the vesting of the award.  As such, the performance target should not be reflected in estimating the grant-date fair value of the award. For all entities, the amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In April 2015, FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, to clarify whether a hosting arrangement (e.g., cloud computing, software as a service, infrastructure as a service, etc.) contains a software license, and thus, whether it is to be accounted for by the customer similarly to other internal-use software.  Specifically, the amendments revise the scope of Subtopic 350-40 to include internal-use software accessed through a hosting arrangement only if both of the following criteria are met: (1) the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty.  There is no significant penalty if the customer has the ability to take delivery of the software without incurring significant cost and the ability to use the software separately without significant loss of utility or value and (2) it is feasible for the customer to either run the software on its own hardware or contract with another party unrelated to the vendor to host the software.  If both of the above criteria are present in a hosting arrangement, then the arrangement contains a software license and the customer should account for that element in accordance with Subtopic 350-40 (i.e., generally capitalize and subsequently amortize the cost of the license).  If both of the above criteria are not present, the customer should account for the arrangement as a service contract (i.e., expense fees as incurred).  The amendments are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  The amendments are effective for all other entities for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.  Early adoption is permitted.  An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of the new revenue recognition standard by one year.  As such, it now takes effect for public entities in fiscal years beginning after December 15, 2017.  All other entities have an additional year.  However, early adoption is permitted for any entity that chooses to adopt the new standard as of the original effective date.   Public business entities will adopt the standard for annual reporting periods beginning after December 15, 2017, including interim periods within that year.  Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year.  All other entities will adopt the standard for annual reporting periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.  Early adoption is permitted as of either: (a) An annual reporting period beginning after December 15, 2016, including interim periods within that year, or (b) An annual reporting period beginning after December 15, 2016 and interim periods within annual reporting periods beginning one year after the annual period in which an entity first applies the new standard.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Consolidated Balance Sheets [Abstract]
Securities held to maturity, fair value	$ 6,034	$ 6,190
Preferred stock, par value
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	4,704,629	4,673,789
Common stock, shares outstanding	4,645,387	4,662,606
Treasury stock, shares	59,242	11,183

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Summary Of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2015

Summary Of Significant Accounting Policies [Abstract]

Basis Of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Sussex Bancorp (“we,” “us,” “our” or the “company”) and our wholly owned subsidiary Sussex Bank (the “Bank”).  The Bank’s wholly owned subsidiaries are SCB Investment Company, Inc., SCBNY Company, Inc., ClassicLake Enterprises, LLC, Wheatsworth Properties Corp., PPD Holding Company, LLC, and Tri-State Insurance Agency, Inc. (“Tri-State”), a full service insurance agency located in Sussex County, New Jersey with a satellite office located in Bergen County, New Jersey.  Tri-State’s operations are considered a separate segment for financial disclosure purposes.  All inter-company transactions and balances have been eliminated in consolidation.  The Bank operates eleven banking offices, eight located in Sussex County, New Jersey, one located in Warren County, New Jersey, one in Queens County, New York and one in Orange County, New York.

We are subject to the supervision and regulation of the Board of Governors of the Federal Reserve System (the “FRB”).  The Bank’s deposits are insured by the Deposit Insurance Fund (“DIF”) of the FDIC up to applicable limits.  The operations of the company and the Bank are subject to the supervision and regulation of the FRB, the FDIC and the New Jersey Department of Banking and Insurance (the “Department”) and the operations of Tri-State are subject to supervision and regulation by the Department.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information.  Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for full year financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature.  Operating results for the three and nine month periods ended September  30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto that are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

New Accounting Standards

New Accounting Standards

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-04, Receivables - Troubled Debt Restructurings by Creditors.  This ASU clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  For public entities, the guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014.  The adoption of this guidance did not have a material impact on our consolidated financial statements.

In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers. The ASU’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. For public entities, the guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In June 2014, FASB issued ASU 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, to change the accounting for repurchase-to-maturity transactions and certain linked repurchase financings.  This will result in accounting for both types of arrangements as secured borrowings on the balance sheet, rather than sales.  Additionally, the ASU introduces new disclosures to (1) increase transparency about the types of collateral pledged in secured borrowing transactions and (2) enable users to better understand transactions in which the transferor retains substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. For public entities, the disclosure for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. All other accounting and disclosure amendments in the ASU are effective for public business entities for the first interim or annual period beginning after December 15, 2014. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In June 2014, FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force), to clarify that a performance target in a share-based compensation award that could be achieved after an employee completes the requisite service period should be treated as a performance condition that affects the vesting of the award.  As such, the performance target should not be reflected in estimating the grant-date fair value of the award. For all entities, the amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In April 2015, FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, to clarify whether a hosting arrangement (e.g., cloud computing, software as a service, infrastructure as a service, etc.) contains a software license, and thus, whether it is to be accounted for by the customer similarly to other internal-use software.  Specifically, the amendments revise the scope of Subtopic 350-40 to include internal-use software accessed through a hosting arrangement only if both of the following criteria are met: (1) the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty.  There is no significant penalty if the customer has the ability to take delivery of the software without incurring significant cost and the ability to use the software separately without significant loss of utility or value and (2) it is feasible for the customer to either run the software on its own hardware or contract with another party unrelated to the vendor to host the software.  If both of the above criteria are present in a hosting arrangement, then the arrangement contains a software license and the customer should account for that element in accordance with Subtopic 350-40 (i.e., generally capitalize and subsequently amortize the cost of the license).  If both of the above criteria are not present, the customer should account for the arrangement as a service contract (i.e., expense fees as incurred).  The amendments are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  The amendments are effective for all other entities for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016.  Early adoption is permitted.  An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of the new revenue recognition standard by one year.  As such, it now takes effect for public entities in fiscal years beginning after December 15, 2017.  All other entities have an additional year.  However, early adoption is permitted for any entity that chooses to adopt the new standard as of the original effective date.   Public business entities will adopt the standard for annual reporting periods beginning after December 15, 2017, including interim periods within that year.  Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year.  All other entities will adopt the standard for annual reporting periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.  Early adoption is permitted as of either: (a) An annual reporting period beginning after December 15, 2016, including interim periods within that year, or (b) An annual reporting period beginning after December 15, 2016 and interim periods within annual reporting periods beginning one year after the annual period in which an entity first applies the new standard.  We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 06, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2015
Entity Registrant Name	SUSSEX BANCORP
Entity Central Index Key	0001028954
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	sbbx
Entity Common Stock, Shares Outstanding		4,645,387

XML

Securities (Tables)

9 Months Ended

Sep. 30, 2015

Securities [Abstract]

Amortized Cost And Approximate Fair Value Of Securities Available For Sale

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)		Cost		Gains		Losses		Value
September 30, 2015
U.S. government agencies	$	11,959	$	51	$	(48)	$	11,962
State and political subdivisions		37,889		172		(364)		37,697
Mortgage-backed securities -
U.S. government-sponsored enterprises		44,658		463		(90)		45,031
Equity securities-financial services industry and other		8		4		-		12
	$	94,514	$	690	$	(502)	$	94,702
December 31, 2014
U.S. government agencies	$	7,873	$	17	$	(32)	$	7,858
State and political subdivisions		26,432		158		(206)		26,384
Mortgage-backed securities -
U.S. government-sponsored enterprises		43,382		500		(158)		43,724
Equity securities-financial services industry and other		8		2		-		10
	$	77,695	$	677	$	(396)	$	77,976

Amortized Cost And Fair Value Of Securities By Contractual Maturity Of Available-For-Sale Securities

	Amortized		Fair
(Dollars in thousands)	Cost		Value
Due in one year or less	$	-	$	-
Due after one year through five years		501		504
Due after five years through ten years		3,021		3,022
Due after ten years		34,367		34,171
Total bonds and obligations		37,889		37,697
U.S. government agencies		11,959		11,962
Mortgage-backed securities:
U.S. government-sponsored enterprises		44,658		45,031
Equity securities-financial services industry and other		8		12
Total available for sale securities	$	94,514	$	94,702

Temporarily Impaired Gross Unrealized Losses And Fair Value Of Available-For-Sale Securities

	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
September 30, 2015
U.S. government agencies	$	4,776	$	(18)	$	2,554	$	(30)	$	7,330	$	(48)
State and political subdivisions		21,760		(322)		1,841		(42)		23,601		(364)
Mortgage-backed securities -
U.S. government-sponsored enterprises		11,385		(90)		-		-		11,385		(90)
Total temporarily impaired securities	$	37,921	$	(430)	$	4,395	$	(72)	$	42,316	$	(502)
December 31, 2014
U.S. government agencies	$	-	$	-	$	2,905	$	(32)	$	2,905	$	(32)
State and political subdivisions		7,603		(112)		5,713		(94)		13,316		(206)
Mortgage-backed securities -
U.S. government-sponsored enterprises		15,679		(94)		3,432		(64)		19,111		(158)
Total temporarily impaired securities	$	23,282	$	(206)	$	12,050	$	(190)	$	35,332	$	(396)

Amortized Cost And Approximate Fair Value Of Securities Held-To-Maturity

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)		Cost		Gains		Losses		Value
September 30, 2015
State and political subdivisions	$	5,857	$	179	$	(2)	$	6,034
December 31, 2014
State and political subdivisions	$	6,006	$	189	$	(5)	$	6,190

Amortized Cost And Fair Value Of Securities By Contractual Maturity Of Held-To-Maturity Securities

		Amortized		Fair
(Dollars in thousands)		Cost		Value
Due in one year or less	$	1,969	$	1,969
Due after one year through five years		-		-
Due after five years through ten years		2,837		2,907
Due after ten years		1,051		1,158
Total held to maturity securities	$	5,857	$	6,034

Temporarily Impaired Gross Unrealized Losses And Fair Value Of Held-To-Maturity Securities

	Less Than 12 Months				12 Months or More				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
September 30, 2015
State and political subdivisions	$	804	$	(2)	$	-	$	-	$	804	$	(2)
December 31, 2014
State and political subdivisions	$	-	$	-	$	811	$	(5)	$	811	$	(5)

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Consolidated Statements Of Income And Comprehensive Income - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
INTEREST INCOME
Loans receivable, including fees		$ 5,390	$ 4,940	$ 15,837	$ 14,363
Securities:
Taxable		321	208	890	639
Tax-exempt		231	231	660	740
Interest bearing deposits		1	4	8	11
Total Interest Income		5,943	5,383	17,395	15,753
INTEREST EXPENSE
Deposits		448	424	1,302	1,229
Borrowings		390	363	1,150	1,072
Junior subordinated debentures		55	54	162	159
Total Interest Expense		893	841	2,614	2,460
Net Interest Income		5,050	4,542	14,781	13,293
PROVISION FOR LOAN LOSSES		1	378	506	1,231
Net Interest Income after Provision for Loan Losses		5,049	4,164	14,275	12,062
OTHER INCOME
Service fees on deposit accounts		230	255	656	784
ATM and debit card fees		198	182	573	534
Bank-owned life insurance		78	78	235	243
Insurance commissions and fees		955	741	2,846	2,410
Investment brokerage fees		40	11	103	79
Net gain on sales of securities		11	164	267	258
Net gain on sale of premises and equipment				8
Other		143	70	369	242
Total Other Income		1,655	1,501	5,057	4,550
OTHER EXPENSES
Salaries and employee benefits		2,919	2,631	8,488	7,490
Occupancy, net		410	375	1,330	1,225
Data processing		468	549	1,251	1,361
Furniture and equipment		221	184	645	460
Advertising and promotion		65	89	225	211
Professional fees		161	153	480	517
Director fees		105	137	418	379
FDIC assessment		120	183	368	534
Insurance		69	70	189	218
Stationary and supplies		49	64	154	171
Loan collection costs		19	53	175	299
Net expenses and write-downs related to foreclosed real estate		277	12	476	273
Other		480	359	1,156	926
Total Other Expenses		5,363	4,859	15,355	14,064
Income before Income Taxes		1,341	806	3,977	2,548
EXPENSE FOR INCOME TAXES	[1]	390	214	1,190	671
Net Income		951	592	2,787	1,877
OTHER COMPREHENSIVE INCOME:
Unrealized gains on available for sale securities arising during the period		1,024	511	174	3,864
Reclassification adjustment for net gain on securities transactions included in net income		(11)	(164)	(267)	(258)
Income tax related to items of other comprehensive income		(405)	(138)	37	(1,442)
Other comprehensive income, (loss), net of income taxes		608	209	(56)	2,164
Comprehensive income		$ 1,559	$ 801	$ 2,731	$ 4,041
EARNINGS PER SHARE
Basic		$ 0.21	$ 0.13	$ 0.61	$ 0.41
Diluted		$ 0.21	$ 0.13	$ 0.61	$ 0.41

[1] Insurance Services calculated at statutory tax rate of 40%

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Other Comprehensive (Loss) Income

9 Months Ended

Sep. 30, 2015

Other Comprehensive (Loss) Income [Abstract]

Other Comprehensive (Loss) Income

NOTE 6 – OTHER COMPREHENSIVE  (LOSS) INCOME

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income.  Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

The components of other comprehensive income, both before tax and net of tax, are as follows:

	Three Months Ended September 30, 2015						Three Months Ended September 30, 2014
	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
(Dollars in thousands)
Other comprehensive (loss) income:
Unrealized gains on available for sale securities	$	1,024	$	410	$	614	$	511	$	204	$	307
Reclassification adjustment for net gains on securities transactions included in net income		(11)		(5)		(6)		(164)		(66)		(98)
Total other comprehensive (loss) income	$	1,013	$	405	$	608	$	347	$	138	$	209

	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
(Dollars in thousands)
Other comprehensive (loss) income:
Unrealized gains on available for sale securities	$	174	$	70	$	104	$	3,864	$	1,545	$	2,319
Reclassification adjustment for net gains on securities transactions included in net income		(267)		(107)		(160)		(258)		(103)		(155)
Total other comprehensive (loss) income	$	(93)	$	(37)	$	(56)	$	3,606	$	1,442	$	2,164

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Earnings Per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 5 – EARNINGS PER SHARE

Basic earnings per share are calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares (unvested restricted stock grants and stock options) had been issued, as well as any adjustment to income that would result from the assumed issuance of potential common shares that may be issued by us. Potential common shares related to stock options are determined using the treasury stock method.

	Three Months Ended September 30, 2015					Three Months Ended September 30, 2014
(In thousands, except share and	Income		Shares	Per Share		Income		Shares	Per Share
per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Net earnings applicable to common stockholders	$	951	4,550,923	$	0.21	$	592	4,548,293	$	0.13
Effect of dilutive securities:
Unvested stock awards		-	35,210				-	40,492
Diluted earnings per share:
Net income applicable to common stockholders and assumed conversions	$	951	4,586,133	$	0.21	$	592	4,588,785	$	0.13

	Nine Months Ended September 30, 2015					Nine Months Ended September 30, 2014
(In thousands, except share and	Income		Shares	Per Share		Income		Shares	Per Share
per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Net earnings applicable to common stockholders	$	2,787	4,561,638	$	0.61	$	1,877	4,538,456	$	0.41
Effect of dilutive securities:
Unvested stock awards		-	30,062				-	36,207
Diluted earnings per share:
Net income applicable to common stockholders and assumed conversions	$	2,787	4,591,700	$	0.61	$	1,877	4,574,663	$	0.41

There were 52,023 and no shares of unvested restricted stock awards and options outstanding during the three months ended September 30, 2015 and 2014, respectively, which were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.  There were 66,946 and 9,381 shares of unvested restricted stock awards and options outstanding during the nine months ended September 30, 2015 and 2014, respectively, which were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2015

Segment Information [Abstract]

Schedule Of Segment Information

	Three Months Ended September 30, 2015						Three Months Ended September 30, 2014
	Banking and						Banking and
	Financial		Insurance				Financial		Insurance
	Services		Services		Total		Services		Services		Total
(Dollars in thousands)
Net interest income from external sources	$	5,050	$	-	$	5,050	$	4,542	$	-	$	4,542
Other income from external sources		694		961		1,655		755		746		1,501
Depreciation and amortization		245		4		249		177		5		182
Income before income taxes		1,168		173		1,341		776		30		806
Income tax expense (1)		321		69		390		202		12		214
Total assets		639,563		4,456		644,019		563,612		4,421		568,033

	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Banking and						Banking and
	Financial		Insurance				Financial		Insurance
	Services		Services		Total		Services		Services		Total
(Dollars in thousands)
Net interest income from external sources	$	14,781	$	-	$	14,781	$	13,291	$	2	$	13,293
Other income from external sources		2,195		2,862		5,057		2,121		2,429		4,550
Depreciation and amortization		731		15		746		492		16		508
Income before income taxes		3,376		601		3,977		2,122		426		2,548
Income tax expense (1)		950		240		1,190		501		170		671
Total assets		639,563		4,456		644,019		563,612		4,421		568,033

(1) Insurance Services calculated at statutory tax rate of 40%

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Loans (Tables)

9 Months Ended

Sep. 30, 2015

Loans [Abstract]

Composition Of Net Loans Receivable

(Dollars in thousands)	September 30, 2015		December 31, 2014
Commercial and industrial	$	17,842	$	20,549
Construction		10,206		12,379
Commercial real estate		347,095		326,370
Residential real estate		125,159		111,498
Consumer and other		1,317		1,665
Total loans receivable		501,619		472,461
Unearned net loan origination fees		(416)		(488)
Allowance for loan losses		(5,641)		(5,641)
Net loans receivable	$	495,562	$	466,332

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Guarantees

9 Months Ended

Sep. 30, 2015

Guarantees [Abstract]

Guarantees

NOTE 9 – GUARANTEES

We do not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit.  Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party.  Generally, all letters of credit, when issued, have expiration dates within one year.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.  Generally, we hold collateral and/or personal guarantees supporting these commitments.  As of September 30, 2015, we had $839 thousand of outstanding letters of credit.  Management believes that the proceeds obtained through a liquidation of collateral and the enforcement of guarantees would be sufficient to cover the potential amount of future payments required under the corresponding guarantees.  The amount of the liability as of September 30, 2015, for guarantees under standby letters of credit issued is not material.

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Segment Information

9 Months Ended

Sep. 30, 2015

Segment Information [Abstract]

Segment Information

NOTE 7 – SEGMENT INFORMATION

Our insurance agency operations are managed separately from the traditional banking and related financial services that we also offer.  The insurance agency operation provides commercial, individual, and group benefit plans and personal coverage.

	Three Months Ended September 30, 2015						Three Months Ended September 30, 2014
	Banking and						Banking and
	Financial		Insurance				Financial		Insurance
	Services		Services		Total		Services		Services		Total
(Dollars in thousands)
Net interest income from external sources	$	5,050	$	-	$	5,050	$	4,542	$	-	$	4,542
Other income from external sources		694		961		1,655		755		746		1,501
Depreciation and amortization		245		4		249		177		5		182
Income before income taxes		1,168		173		1,341		776		30		806
Income tax expense (1)		321		69		390		202		12		214
Total assets		639,563		4,456		644,019		563,612		4,421		568,033

	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Banking and						Banking and
	Financial		Insurance				Financial		Insurance
	Services		Services		Total		Services		Services		Total
(Dollars in thousands)
Net interest income from external sources	$	14,781	$	-	$	14,781	$	13,291	$	2	$	13,293
Other income from external sources		2,195		2,862		5,057		2,121		2,429		4,550
Depreciation and amortization		731		15		746		492		16		508
Income before income taxes		3,376		601		3,977		2,122		426		2,548
Income tax expense (1)		950		240		1,190		501		170		671
Total assets		639,563		4,456		644,019		563,612		4,421		568,033

(1) Insurance Services calculated at statutory tax rate of 40%

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 8 – STOCK-BASED COMPENSATION

We currently have stock-based compensation plans in place for our directors, officers, employees, consultants and advisors.  Under the terms of these plans we may grant restricted shares and stock options for the purchase of our common stock.  The stock-based compensation is granted under terms determined by our Compensation Committee.  Our standard stock option grants have a maximum term of 10 years, generally vest over periods ranging between one and four years, and are granted with an exercise price equal to the fair market value of the common stock on the date of grant.  Restricted stock is valued at the market value of the common stock on the date of grant and generally vests over periods of two to seven years.  All dividends paid on restricted stock, whether vested or unvested, are paid to the shareholder.

Information regarding our stock option plans for the nine months ended September  30, 2015 is as follows:

			Weighted
			Average	Weighted
			Exercise	Average		Aggregate
	Number of		Price per	Contractual		Intrinsic
	Shares		Share	Term		Value
Options outstanding, beginning of year	46,525	$	10.63
Options granted	15,985		10.25
Options expired	(3,817)		13.39
Options outstanding, end of quarter	58,693	$	10.35	8.1	$	126,526
Options exercisable, end of quarter	6,708	$	12.63	0.1	$	-
Option price range at end of quarter	$9.97 to $12.63
Option price of exercisable shares	$ 12.63

The following table summarizes information about stock option assumptions:

	September 30, 2015
Expected dividend yield		1.56%
Expected volatility		34.32%
Risk-free interest rate		1.37%
Expected option life		10.0 Years

During the three months ended September 30, 2015 we expensed $10 thousandin stock-based compensation under stock option awards.  There was no stock-based compensation expensed under stock option awards during the three months ended September 30, 2014.

During the nine months ended September  30, 2015 we expensed $28 thousand in stock-based compensation under stock option awards.  There was no stock-based compensation expensed under stock option awards during the nine months ended September 30, 2014.

The weighted average grant date fair value of options granted during the nine months ended September  30,  2015 was $3.56 per share. Expected future expense relating to the unvested options outstanding as of September 30, 2015 is $160 thousand over a weighted average period of 4.2 years. Upon exercise of vested options, management expects to draw on treasury stock as the source of the shares.

The summary of changes in unvested restricted stock awards for the nine months ended September  30, 2015, is as follows:

			Weighted
			Average
	Number of		Grant Date
	Shares		Fair Value
Unvested restricted stock, beginning of year	112,545	$	6.06
Granted	31,841		10.48
Vested	(50,166)		5.94
Unvested restricted stock, end of period	93,219	$	7.60

During the three months ended September 30, 2015 and 2014, we expensed $84 thousand and $74 thousand, respectively, in stock-based compensation under restricted stock awards. During the nine months ended September 30,2015 and 2014, we expensed $251 thousand and $230 thousand, respectively, in stock-based compensation under restricted stock awards.

At September 30, 2015, unrecognized compensation expense for unvested restricted stock was $506 thousand, which is expected to be recognized over an average period of 1.6 years.

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Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2015

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

NOTE 10 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Management uses its best judgment in estimating the fair value of our financial instruments; however, there are inherent weaknesses in any estimation technique.  Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts we could have realized in a sale transaction on the dates indicated.  The fair value amounts have been measured as of their respective period ends, and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates.  As such, the fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period end.

In accordance with U.S. GAAP, we use a hierarchical disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value.  The three broad levels defined by the hierarchy are as follows:

· Level I - Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

· Level II - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these asset and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.

· Level III - Assets and liabilities that have little to no pricing observability as of reported date.  These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

The following table summarizes the fair value of our financial assets measured on a recurring basis by the above pricing observability levels as of September 30, 2015 and December 31, 2014:

			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair		for Identical		Observable		Unobservable
	Value		Assets		Inputs		Inputs
(Dollars in thousands)	Measurements		(Level I)		(Level II)		(Level III)
September 30, 2015
U.S. government agencies	$	11,962	$	-	$	11,962	$	-
State and political subdivisions		37,697		-		37,697		-
Mortgage-backed securities -
U.S. government-sponsored enterprises		45,031		-		45,031		-
Equity securities-financial services industry and other		12		12		-		-
December 31, 2014
U.S. government agencies	$	7,858	$	-	$	7,858	$	-
State and political subdivisions		26,384		-		26,384		-
Mortgage-backed securities -
U.S. government-sponsored enterprises		43,724		-		43,724		-
Equity securities-financial services industry and other		10		10		-		-

Our available for sale and held to maturity securities portfolios contain investments, which were all rated within our investment policy guidelines at time of purchase, and upon review of the entire portfolio all securities are marketable and have observable pricing inputs.

For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2015 and December 31, 2014 are as follows:

			Quoted Prices in		Significant
			Active Markets		Other		Significant
	Fair		for Identical		Observable		Unobservable
	Value		Assets		Inputs		Inputs
(Dollars in thousands)	Measurements		(Level I)		(Level II)		(Level III)
September 30, 2015
Impaired loans	$	1,542	$	-	$	-	$	1,542
Foreclosed real estate		868		-		-		868
December 31, 2014
Impaired loans	$	1,087	$	-	$	-	$	1,087
Foreclosed real estate		761		-		-		761

The following table presents additional qualitative information about assets measured at fair value on a nonrecurring basis and for which Level III inputs were used to determine fair value:

	Qualitative Information about Level III Fair Value Measurements
	Fair				Range
	Value		Valuation	Unobservable	(Weighted
(Dollars in thousands)	Estimate		Techniques	Input	Average)
September 30, 2015
Impaired loans	$	1,542	Appraisal of	Appraisal	0% to -58.6%
			collateral	adjustments (1)	(-7.4%)
Foreclosed real estate		868	Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)
December 31, 2014
Impaired loans	$	1,087	Appraisal of	Appraisal	0% to -67.9%
			collateral	adjustments (1)	(-7.8%)
Foreclosed real estate		761	Appraisal of	Selling
			collateral	expenses (1)	-7.0%(-7.0%)
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated selling expenses.  The range and weighted average of selling expenses and other appraisal adjustments are presented as a percentage of the appraisal.

The following information should not be interpreted as an estimate of the fair value of the entire company since a fair value calculation is only provided for a limited portion of our assets and liabilities.  Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between our disclosures and those of other companies may not be meaningful.  The following methods and assumptions were used to estimate the fair value of our financial instruments at September 30, 2015 and December 31, 2014:  

Cash and Cash Equivalents (Carried at Cost): The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair value.

Deposits (Carried at Cost): Fair value for fixed-rate time certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.  We generally purchase amounts below the insured limit, limiting the amount of credit risk on these time deposits.  

Securities: The fair value of securities, available for sale (carried at fair value) and securities held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level I), or matrix pricing (Level II), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.  For certain securities which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level III).  In the absence of such evidence, management’s best estimate is used. 

Federal Home Loan Bank Stock (Carried at Cost):  The carrying amount of restricted investment in bank stock approximates fair value and considers the limited marketability of such securities.

Loans Receivable (Carried at Cost): The fair values of non-impaired loans are estimated using discounted cash flow analyses, using the market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans.  Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal.  Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

Impaired Loans (Carried at Lower of Cost or Fair Value): Fair value of impaired loans is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds.  These assets are included in Level III fair values, based upon the lowest level of input that is significant to the fair value measurements.  The fair value of impaired loans totaled $1.5 million and $1.1 million at September 30, 2015 and December 31, 2014,respectively.  These balances consist of loans that were written down or required additional reserves during the periods ended September 30, 2015 and December 31, 2014, respectively.

Deposit Liabilities (Carried at Cost): The fair values disclosed for demand, savings and money market accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts).  Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. 

Borrowings (Carried at Cost): Fair values of Federal Home Loan Bank (“FHLB”) advances are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity.  These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party. 

Junior Subordinated Debentures (Carried at Cost): Fair values of junior subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity. 

Accrued Interest Receivable and Accrued Interest Payable (Carried at Cost): The carrying amounts of accrued interest receivable and payable approximate its fair value.

Off-Balance Sheet Instruments (Disclosed at Cost): Fair values for our off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. 

The fair values of our financial instruments at September 30, 2015 and December 31, 2014, were as follows:

					Quoted Prices in		Significant
					Active Markets		Other		Significant
	September 30, 2015				for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
(Dollars in thousands)	Amount		Value		(Level I)		(Level II)		(Level III)
Financial assets:
Cash and cash equivalents	$	8,171	$	8,171	$	8,171	$	-	$	-
Time deposits with other banks		100		100		-		100		-
Securities available for sale		94,702		94,702		12		94,690		-
Securities held to maturity		5,857		6,034		-		6,034		-
Federal Home Loan Bank stock		4,015		4,015		-		4,015		-
Loans receivable, net of allowance		495,562		493,836		-		-		493,836
Accrued interest receivable		1,996		1,996		-		1,996		-
Financial liabilities:
Non-maturity deposits		380,080		380,080		-		380,080		-
Time deposits		122,429		122,789		-		122,789		-
Short-term borrowings		15,300		15,300		15,300		-		-
Long-term borrowings		56,000		57,453		-		57,453		-
Junior subordinated debentures		12,887		9,179		-		9,179		-
Accrued interest payable		265		265		-		265		-

					Quoted Prices in		Significant
					Active Markets		Other		Significant
	December 31, 2014				for Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
(Dollars in thousands)	Amount		Value		(Level I)		(Level II)		(Level III)
Financial assets:
Cash and cash equivalents	$	5,859	$	5,859	$	5,859	$	-	$	-
Time deposits with other banks		100		100		-		100		-
Securities available for sale		77,976		77,976		10		77,966		-
Securities held to maturity		6,006		6,190		-		6,190		-
Federal Home Loan Bank stock		3,908		3,908		-		3,908		-
Loans receivable, net of allowance		466,332		462,984		-		-		462,984
Accrued interest receivable		1,796		1,796		-		1,796		-
Financial liabilities:
Non-maturity deposits		351,653		351,653		-		351,653		-
Time deposits		106,617		107,011		-		107,011		-
Short-term borrowings		23,500		23,500		23,500		-		-
Long-term borrowings		46,000		47,766		-		47,766		-
Junior subordinated debentures		12,887		9,361		-		9,361		-
Accrued interest payable		243		243		-		243		-

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Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	$ 501,619	$ 472,461
Unearned net loan origination fees	(416)	(488)
Allowance for loan losses	(5,641)	(5,641)
Net loans receivable	495,562	466,332
Mortgage loans serviced for the benefit of others	460	475
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	17,842	20,549
Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	10,206	12,379
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	347,095	326,370
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	125,159	111,498
Consumer And Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans receivable	$ 1,317	$ 1,665

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Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Impaired Loans [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans, fair value	$ 1,542	$ 1,087

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Calculation Methods Of Earnings Per Share

	Three Months Ended September 30, 2015					Three Months Ended September 30, 2014
(In thousands, except share and	Income		Shares	Per Share		Income		Shares	Per Share
per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Net earnings applicable to common stockholders	$	951	4,550,923	$	0.21	$	592	4,548,293	$	0.13
Effect of dilutive securities:
Unvested stock awards		-	35,210				-	40,492
Diluted earnings per share:
Net income applicable to common stockholders and assumed conversions	$	951	4,586,133	$	0.21	$	592	4,588,785	$	0.13

	Nine Months Ended September 30, 2015					Nine Months Ended September 30, 2014
(In thousands, except share and	Income		Shares	Per Share		Income		Shares	Per Share
per share data)	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Basic earnings per share:
Net earnings applicable to common stockholders	$	2,787	4,561,638	$	0.61	$	1,877	4,538,456	$	0.41
Effect of dilutive securities:
Unvested stock awards		-	30,062				-	36,207
Diluted earnings per share:
Net income applicable to common stockholders and assumed conversions	$	2,787	4,591,700	$	0.61	$	1,877	4,574,663	$	0.41

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Summary Of Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2015 site
Banking offices	11
Sussex County, New Jersey [Member]
Banking offices	8
Warren County, New Jersey [Member]
Banking offices	1
Queens County, New York [Member]
Banking offices	1
Orange County, New York [Member]
Banking offices	1

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Stock-Based Compensation (Summary Of Information Regarding Restricted Stock Activity) (Details)	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Stock-Based Compensation [Abstract]
Unvested restricted stock, beginning of year, Number of Shares | shares	112,545
Granted, Number of Shares | shares	31,841
Vested, Number of Shares | shares	(50,166)
Unvested restricted stock, end of period, Number of Shares | shares	93,219
Unvested restricted stock, beginning of year, Weighted Average Grant Date Fair Value	$ 6.06
Granted, Weighted Average Grant Date Fair Value	10.48
Vested, Weighted Average Grant Date Fair Value	5.94
Unvested restricted stock, end of period, Weighted Average Grant Date Fair Value	$ 7.60

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (Impaired Loans) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
Recorded Investment, Total	$ 7,245		$ 7,245		$ 7,513
Unpaid Principal Balance, Total	7,254		7,254		8,092
Related Allowance	395		395		288
Average Recorded Investment, With no related allowance recorded	3,043	$ 5,898	3,721	$ 6,830
Average Recorded Investment, With an allowance recorded	3,858	4,825	3,645	5,022
Average Recorded Investment, Total	6,901	10,723	7,366	11,852
Interest Income Recognized, With no related allowance recorded	11	9	29	56
Interest Income Recognized, With an allowance recorded	11	30	33	38
Interest Income Recognized, Total	22	39	62	94
Commercial And Industrial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	20		20
Recorded Investment, With an allowance recorded					94
Recorded Investment, Total	20		20		94
Unpaid Principal Balance, With no related allowance recorded	20		20
Unpaid Principal Balance, With an allowance recorded					94
Unpaid Principal Balance, Total	20		20		94
Related Allowance					51
Average Recorded Investment, With no related allowance recorded	20		15
Average Recorded Investment, With an allowance recorded			24	15
Interest Income Recognized, With an allowance recorded				1
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	2,715		2,715		3,167
Recorded Investment, With an allowance recorded	2,479		2,479		1,938
Recorded Investment, Total	5,194		5,194		5,105
Unpaid Principal Balance, With no related allowance recorded	2,715		2,715		3,736
Unpaid Principal Balance, With an allowance recorded	2,479		2,479		1,938
Unpaid Principal Balance, Total	5,194		5,194		5,674
Related Allowance	117		117		136
Average Recorded Investment, With no related allowance recorded	2,119	4,080	2,439	4,999
Average Recorded Investment, With an allowance recorded	2,762	4,309	2,764	4,339
Interest Income Recognized, With no related allowance recorded	10	4	24	22
Interest Income Recognized, With an allowance recorded	8	29	25	30
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	599		599		1,829
Recorded Investment, With an allowance recorded	1,294		1,294		485
Recorded Investment, Total	1,893		1,893		2,314
Unpaid Principal Balance, With no related allowance recorded	598		598		1,835
Unpaid Principal Balance, With an allowance recorded	1,304		1,304		489
Unpaid Principal Balance, Total	1,902		1,902		2,324
Related Allowance	205		205		$ 101
Average Recorded Investment, With no related allowance recorded	904	1,818	1,267	1,831
Average Recorded Investment, With an allowance recorded	992	485	753	667
Interest Income Recognized, With no related allowance recorded	1	5	5	34
Interest Income Recognized, With an allowance recorded	3		8	7
Consumer And Other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With an allowance recorded	138		138
Recorded Investment, Total	138		138
Unpaid Principal Balance, With an allowance recorded	138		138
Unpaid Principal Balance, Total	138		138
Related Allowance	73		73
Average Recorded Investment, With an allowance recorded	$ 104	$ 1	$ 104	$ 1

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Consolidated Statements Of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2013	$ 35,249	$ 13,386	$ (2,151)	$ (59)	$ 46,425
Balance, shares at Dec. 31, 2013	4,629,113
Net income		1,877			1,877
Other comprehensive income (loss)			2,164		2,164
Restricted stock granted	36,043
Restricted stock forfeited	(650)
Compensation expense related to stock option and restricted stock grants	$ 230				230
Dividends declared on common stock		(280)			(280)
Balance at Sep. 30, 2014	$ 35,479	14,983	13	(59)	50,416
Balance, shares at Sep. 30, 2014	4,664,506
Balance at Dec. 31, 2014	$ 35,553	15,566	169	(59)	$ 51,229
Balance, shares at Dec. 31, 2014	4,662,606				4,662,606
Net income		2,787			$ 2,787
Other comprehensive income (loss)			(56)		(56)
Treasury shares purchased				(533)	(533)
Treasury shares purchased, shares	(48,059)
Restricted stock granted	31,841
Restricted stock forfeited	(1,001)
Compensation expense related to stock option and restricted stock grants	$ 279				279
Dividends declared on common stock		(560)			(560)
Balance at Sep. 30, 2015	$ 35,832	$ 17,793	$ 113	$ (592)	$ 53,146
Balance, shares at Sep. 30, 2015	4,645,387				4,645,387

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Allowance For Loan Losses And Credit Quality Of Financing Receivables

9 Months Ended

Sep. 30, 2015

Allowance For Loan Losses And Credit Quality Of Financing Receivables [Abstract]

Allowance For Loan Losses And Credit Quality Of Financing Receivables

NOTE 4 – ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY OF FINANCING RECEIVABLES

The following table presents changes in the allowance for loan losses disaggregated by the class of loans receivable for the three and nine months ended September 30, 2015 and 2014:  

	Commercial				Commercial		Residential		Consumer
	and				Real		Real		and
(Dollars in thousands)	Industrial		Construction		Estate		Estate		Other		Unallocated		Total
Three Months Ended:
September 30, 2015
Beginning balance	$	86	$	277	$	3,613	$	898	$	86	$	792	$	5,752
Charge-offs		-		-		(119)		-		(6)		-		(125)
Recoveries		5		-		3		4		1		-		13
Provision		(8)		(57)		134		26		5		(99)		1
Ending balance	$	83	$	220	$	3,631	$	928	$	86	$	693	$	5,641
September 30, 2014
Beginning balance	$	257		354		3,750		837		13		643	$	5,854
Charge-offs		-		-		(495)		(33)		(9)		-		(537)
Recoveries		1		-		10		1		2		-		14
Provision		18		(53)		134		14		20		245		378
Ending balance	$	276	$	301	$	3,399	$	819	$	26	$	888	$	5,709
Nine Months Ended:
September 30, 2015
Beginning balance	$	231	$	383	$	3,491	$	903	$	19	$	614	$	5,641
Charge-offs		(19)		-		(542)		-		(17)		-		(578)
Recoveries		10		-		39		17		6		-		72
Provision		(139)		(163)		643		8		78		79		506
Ending balance	$	83	$	220	$	3,631	$	928	$	86	$	693	$	5,641
September 30, 2014
Beginning balance	$	222		308	$	3,399	$	941	$	16	$	535	$	5,421
Charge-offs		(1)		-		(853)		(118)		(31)		-		(1,003)
Recoveries		16		-		31		5		8		-		60
Provision		39		(7)		822		(9)		33		353		1,231
Ending balance	$	276	$	301	$	3,399	$	819	$	26	$	888	$	5,709

The following table presents the balance of the allowance of loan losses and loans receivable by class at September 30, 2015 and December 31, 2014 disaggregated on the basis of our impairment methodology.

	Allowance for Loan Losses						Loans Receivable
			Balance		Balance
			Related to		Related to
			Loans		Loans
			Individually		Collectively				Individually		Collectively
			Evaluated for		Evaluated for				Evaluated for		Evaluated for
(Dollars in thousands)	Balance		Impairment		Impairment		Balance		Impairment		Impairment
September 30, 2015
Commercial and industrial	$	83	$	-	$	83	$	17,842	$	20	$	17,822
Construction		220		-		220		10,206		-		10,206
Commercial real estate		3,631		117		3,514		347,095		5,194		341,901
Residential real estate		928		205		723		125,159		1,893		123,266
Consumer and other loans		86		73		13		1,317		138		1,179
Unallocated		693		-		-		-		-		-
Total	$	5,641	$	395	$	4,553	$	501,619	$	7,245	$	494,374
December 31, 2014
Commercial and industrial	$	231	$	51	$	180	$	20,549	$	94	$	20,455
Construction		383		-		383		12,379		-		12,379
Commercial real estate		3,491		136		3,355		326,370		5,105		321,265
Residential real estate		903		101		802		111,498		2,314		109,184
Consumer and other loans		19		-		19		1,665		-		1,665
Unallocated		614		-		-		-		-		-
Total	$	5,641	$	288	$	4,739	$	472,461	$	7,513	$	464,948

An age analysis of loans receivable, which were past due as of September 30, 2015 and December 31, 2014, is as follows:

													Recorded
													Investment
					Greater						Total		> 90 Days
	30-59 Days		60-89 days		Than		Total Past				Financing		and
(Dollars in thousands)	Past Due		Past Due		90 Days (a)		Due		Current		Receivables		Accruing
September 30, 2015
Commercial and industrial	$	6	$	-	$	20	$	26	$	17,816	$	17,842	$	-
Construction		-		-		-		-		10,206		10,206		-
Commercial real estate		913		1,079		4,043		6,035		341,060		347,095		-
Residential real estate		433		-		1,481		1,914		123,245		125,159		-
Consumer and other		5		-		138		143		1,174		1,317		-
Total	$	1,357	$	1,079	$	5,682	$	8,118	$	493,501	$	501,619	$	-
December 31, 2014
Commercial and industrial	$	9	$	-	$	94	$	103	$	20,446	$	20,549	$	-
Construction		1,354		-		-		1,354		11,025		12,379		-
Commercial real estate		2,395		1,209		3,936		7,540		318,830		326,370		-
Residential real estate		555		108		1,978		2,641		108,857		111,498		85
Consumer and other		5		-		1		6		1,659		1,665		-
Total	$	4,318	$	1,317	$	6,009	$	11,644	$	460,817	$	472,461	$	85
(a) includes loans greater than 90 days past due and still accruing and non-accrual loans.

Loans for which the accrual of interest has been discontinued at September 30, 2015 and December 31, 2014 were:

(Dollars in thousands)	September 30, 2015		December 31, 2014
Commercial and industrial	$	20	$	94
Commercial real estate		4,043		3,936
Residential real estate		1,481		1,893
Consumer and other		138		1
Total	$	5,682	$	5,924

In determining the adequacy of the allowance for loan losses, we estimate losses based on the identification of specific problem loans through our credit review process and also estimate losses inherent in other loans on an aggregate basis by loan type.  The credit review process includes the independent evaluation of the loan officer, and assigned risk ratings by the Chief Credit Officer and a third party loan review company.  Such risk ratings are assigned loss component factors that reflect our loss estimate for each group of loans.  It is management’s and the Board of Directors’ responsibility to oversee the lending process to ensure that all credit risks are properly identified, monitored, and controlled, and that loan pricing, terms and other safeguards against non-performance and default are commensurate with the level of risk undertaken and is rated as such based on a risk-rating system.  Factors considered in assigning risk ratings and loss component factors include: borrower specific information related to expected future cash flows and operating results, collateral values, financial condition and payment status; levels of and trends in portfolio charge-offs and recoveries; levels in portfolio delinquencies; effects of changes in loan concentrations and observed trends in the economy and other qualitative measurements.

Our risk-rating system is consistent with the classification system used by regulatory agencies and with industry practices. Loan classifications of Substandard, Doubtful or Loss are consistent with the regulatory definitions of classified assets.  The classification system is as follows:

· Pass: This category represents loans performing to contractual terms and conditions and the primary source of repayment is adequate to meet the obligation.  We have five categories within the Pass classification depending on strength of repayment sources, collateral values and financial condition of the borrower. 

· Special Mention:  This category represents loans performing to contractual terms and conditions; however the primary source of repayment or the borrower is exhibiting some deterioration or weaknesses in financial condition that could potentially threaten the borrowers’ future ability to repay our loan principal and interest or fees due.

· Substandard: This category represents loans that the primary source of repayment has significantly deteriorated or weakened which has or could threaten the borrowers’ ability to make scheduled payments.  The weaknesses require close supervision by management and there is a distinct possibility that we could sustain some loss if the deficiencies are not corrected.  Such weaknesses could jeopardize the timely and ultimate collection of our loan principal and interest or fees due.  Loss may not be expected or evident, however, loan repayment is inadequately supported by current financial information or pledged collateral.

· Doubtful: Loans so classified have all the inherent weaknesses of a substandard loan with the added provision that collection or liquidation in full is highly questionable and not reasonably assured.  The probability of at least partial loss is high, but extraneous factors might strengthen the asset to prevent loss. The validity of the extraneous factors must be continuously monitored. Once these factors are questionable the loan should be considered for full or partial charge-off.

· Loss: Loans so classified are considered uncollectible, and of such little value that their continuance as active assets is not warranted.  Such loans are fully charged off.

The following tables illustrate our corporate credit risk profile by creditworthiness category as of September 30, 2015 and December 31, 2014: 

			Special
(Dollars in thousands)	Pass		Mention		Substandard		Doubtful		Total
September 30, 2015
Commercial and industrial	$	17,800	$	22	$	20	$	-	$	17,842
Construction		10,206		-		-		-		10,206
Commercial real estate		333,463		7,670		5,962		-		347,095
Residential real estate		122,383		751		2,025		-		125,159
Consumer and other		1,179		-		138		-		1,317
	$	485,031	$	8,443	$	8,145	$	-	$	501,619
December 31, 2014
Commercial and industrial	$	20,446	$	9	$	94	$	-	$	20,549
Construction		12,379		-		-		-		12,379
Commercial real estate		312,172		8,257		5,941		-		326,370
Residential real estate		108,587		457		2,454		-		111,498
Consumer and other		1,527		138		-		-		1,665
	$	455,111	$	8,861	$	8,489	$	-	$	472,461

The following table reflects information about our impaired loans by class as of September 30, 2015 and December 31, 2014:

		September 30, 2015						December 31, 2014
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Commercial and industrial	$	20	$	20	$	-	$	-	$	-	$	-
Commercial real estate		2,715		2,715		-		3,167		3,736		-
Residential real estate		599		598		-		1,829		1,835		-
With an allowance recorded:
Commercial and industrial		-		-		-		94		94		51
Commercial real estate		2,479		2,479		117		1,938		1,938		136
Residential real estate		1,294		1,304		205		485		489		101
Consumer and other		138		138		73		-		-		-
Total:
Commercial and industrial		20		20		-		94		94		51
Commercial real estate		5,194		5,194		117		5,105		5,674		136
Residential real estate		1,893		1,902		205		2,314		2,324		101
Consumer and other		138		138		73		-		-		-
	$	7,245	$	7,254	$	395	$	7,513	$	8,092	$	288

The following table presents the average recorded investment and income recognized for the three and nine months ended September 30, 2015 and 2014:

	For the Three Months Ended September 30, 2015				For the Three Months Ended September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(Dollars in thousands)	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	20	$	-	$	-	$	-
Commercial real estate		2,119		10		4,080		4
Residential real estate		904		1		1,818		5
Total impaired loans without a related allowance		3,043		11		5,898		9
With an allowance recorded:
Commercial real estate		2,762		8		4,309		29
Residential real estate		992		3		485		-
Consumer and other		104		-		1		-
Total impaired loans with an allowance		3,858		11		4,825		30
Total impaired loans	$	6,901	$	22	$	10,723	$	39

	For the Nine Months Ended September 30, 2015				For the Nine Months Ended September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(Dollars in thousands)	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	15	$	-	$	-	$	-
Commercial real estate		2,439		24		4,999		22
Residential real estate		1,267		5		1,831		34
Total impaired loans without a related allowance		3,721		29		6,830		56
With an allowance recorded:
Commercial and industrial		24		-		15		1
Commercial real estate		2,764		25		4,339		30
Residential real estate		753		8		667		7
Consumer and other		104		-		1		-
Total impaired loans with an allowance		3,645		33		5,022		38
Total impaired loans	$	7,366	$	62	$	11,852	$	94

We recognize interest income on performing impaired loans as payments are received.  On non-performing impaired loans we do not recognize interest income as all payments are recorded as a reduction of principal on such loans.

Impaired loans 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, postponement or forgiveness of principal, forbearance or other actions intended to maximize collection.  The concessions rarely result in the forgiveness of principal or accrued interest.  In addition, we attempt to obtain additional collateral or guarantor support when modifying such loans.  Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

The following table presents the recorded investment in troubled debt restructured loans, based on payment performance status:

(Dollars in thousands)		Commercial Real Estate	Residential Real Estate		Total
September 30, 2015
Performing	$	1,151	$	412	$	1,563
Non-performing		1,834		223		2,057
Total	$	2,985	$	635	$	3,620
December 31, 2014
Performing	$	1,169	$	421	$	1,590
Non-performing		2,730		224		2,954
Total	$	3,899	$	645	$	4,544

Troubled debt restructured loans are considered impaired and are included in the previous impaired loans disclosures in this footnote.  As of September 30, 2015, we have not committed to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

There wereno troubled debt restructurings that occurred during the three and nine months ended September 30, 2015 and 2014. 

There were no troubled debt restructurings for which there was a payment default within twelve months following the date of the restructuring for the three and nine months ended September 30, 2015 and 2014.

We may obtain physical possession of residential real estate collateralizing a consumer mortgage loan via foreclosure on an in-substance repossession. As of September 30, 2015, we did not hold any foreclosed residential real estate properties asa result of obtaining physical possession. In addition, as of September 30, 2015, we had consumer loans with a carrying value of $1.3 million collateralized by residential real estate property for which formal foreclosure proceedings were in process.

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Securities (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($) security	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) security	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($) security
Schedule Of Available-For-Sale And Held-To-Maturity [Line Items]
Available for sale securities carrying value pledged to secure public deposits	$ 33,000		$ 33,000		$ 32,800
Gains on sales of securities available for sale	64	$ 242	368	$ 360
Gross losses on sales of securities avaiable for sale	53	$ 78	101	102
Sales of available for sale securities			20,705	$ 13,261
Fair value of available-for-sale securities	42,316		42,316		35,332
Unrealized loss of available-for-sale securities	$ 502		$ 502		$ 396
State And Political Subdivisions [Member]
Schedule Of Available-For-Sale And Held-To-Maturity [Line Items]
Number of securities with unrealized losses from state and political subdivisions maturity minimum number of years			10 years
Number of securities with unrealized losses, held-to-maturity | security	2		2		2
Fair value of held-to maturity securities	$ 804		$ 804		$ 811
Unrealized loss of held-to-maturity securities	$ 2		$ 2		$ 5
U.S. Government Agencies [Member]
Schedule Of Available-For-Sale And Held-To-Maturity [Line Items]
Number of securities with unrealized losses, available-for-sale | security	5		5		2
Fair value of available-for-sale securities	$ 7,330		$ 7,330		$ 2,905
Unrealized loss of available-for-sale securities	$ 48		$ 48		$ 32
State And Political Subdivisions [Member]
Schedule Of Available-For-Sale And Held-To-Maturity [Line Items]
Number of securities with unrealized losses, available-for-sale | security	36		36		22
Fair value of available-for-sale securities	$ 23,601		$ 23,601		$ 13,316
Unrealized loss of available-for-sale securities	$ 364		$ 364		$ 206
Number of securities with unrealized losses from state and political subdivisions maturity minimum number of years			10 years
Mortgage Backed U.S. Government-Sponsored Enterprises [Member]
Schedule Of Available-For-Sale And Held-To-Maturity [Line Items]
Number of securities with unrealized losses, available-for-sale | security	7		7		13
Fair value of available-for-sale securities	$ 11,385		$ 11,385		$ 19,111
Unrealized loss of available-for-sale securities	$ 90		$ 90		$ 158
Equity Securities-Financial Services Industry And Other [Member]
Schedule Of Available-For-Sale And Held-To-Maturity [Line Items]
Number of securities with unrealized losses, available-for-sale | security	0		0		0

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (An Age Analysis Of Loans Receivable) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable 30-59 Days Past Due	$ 1,357	$ 4,318
Loans Receivable 60-89 Days Past Due	1,079	1,317
Loans Receivable Greater Than 90 Days Past Due	5,682	6,009
Total Past Due	8,118	11,644
Loans Receivable Current	493,501	460,817
Balance, Loans Receivable	501,619	472,461
Recorded Investment Greater Than 90 Days And Accruing		85
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable 30-59 Days Past Due	6	9
Loans Receivable Greater Than 90 Days Past Due	20	94
Total Past Due	26	103
Loans Receivable Current	17,816	20,446
Balance, Loans Receivable	17,842	20,549
Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable 30-59 Days Past Due		1,354
Total Past Due		1,354
Loans Receivable Current	10,206	11,025
Balance, Loans Receivable	10,206	12,379
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable 30-59 Days Past Due	913	2,395
Loans Receivable 60-89 Days Past Due	1,079	1,209
Loans Receivable Greater Than 90 Days Past Due	4,043	3,936
Total Past Due	6,035	7,540
Loans Receivable Current	341,060	318,830
Balance, Loans Receivable	347,095	326,370
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable 30-59 Days Past Due	433	555
Loans Receivable 60-89 Days Past Due		108
Loans Receivable Greater Than 90 Days Past Due	1,481	1,978
Total Past Due	1,914	2,641
Loans Receivable Current	123,245	108,857
Balance, Loans Receivable	125,159	111,498
Recorded Investment Greater Than 90 Days And Accruing		85
Consumer And Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Receivable 30-59 Days Past Due	5	5
Loans Receivable Greater Than 90 Days Past Due	138	1
Total Past Due	143	6
Loans Receivable Current	1,174	1,659
Balance, Loans Receivable	$ 1,317	$ 1,665

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Allowance For Loan Losses And Credit Quality Of Financing Receivables (Tables)

9 Months Ended

Sep. 30, 2015

Allowance For Loan Losses And Credit Quality Of Financing Receivables [Abstract]

Changes In The Allowance For Loan Losses

	Commercial				Commercial		Residential		Consumer
	and				Real		Real		and
(Dollars in thousands)	Industrial		Construction		Estate		Estate		Other		Unallocated		Total
Three Months Ended:
September 30, 2015
Beginning balance	$	86	$	277	$	3,613	$	898	$	86	$	792	$	5,752
Charge-offs		-		-		(119)		-		(6)		-		(125)
Recoveries		5		-		3		4		1		-		13
Provision		(8)		(57)		134		26		5		(99)		1
Ending balance	$	83	$	220	$	3,631	$	928	$	86	$	693	$	5,641
September 30, 2014
Beginning balance	$	257		354		3,750		837		13		643	$	5,854
Charge-offs		-		-		(495)		(33)		(9)		-		(537)
Recoveries		1		-		10		1		2		-		14
Provision		18		(53)		134		14		20		245		378
Ending balance	$	276	$	301	$	3,399	$	819	$	26	$	888	$	5,709
Nine Months Ended:
September 30, 2015
Beginning balance	$	231	$	383	$	3,491	$	903	$	19	$	614	$	5,641
Charge-offs		(19)		-		(542)		-		(17)		-		(578)
Recoveries		10		-		39		17		6		-		72
Provision		(139)		(163)		643		8		78		79		506
Ending balance	$	83	$	220	$	3,631	$	928	$	86	$	693	$	5,641
September 30, 2014
Beginning balance	$	222		308	$	3,399	$	941	$	16	$	535	$	5,421
Charge-offs		(1)		-		(853)		(118)		(31)		-		(1,003)
Recoveries		16		-		31		5		8		-		60
Provision		39		(7)		822		(9)		33		353		1,231
Ending balance	$	276	$	301	$	3,399	$	819	$	26	$	888	$	5,709

Allowances Of Loan Losses And Loans Receivable By Class Disaggregated

	Allowance for Loan Losses						Loans Receivable
			Balance		Balance
			Related to		Related to
			Loans		Loans
			Individually		Collectively				Individually		Collectively
			Evaluated for		Evaluated for				Evaluated for		Evaluated for
(Dollars in thousands)	Balance		Impairment		Impairment		Balance		Impairment		Impairment
September 30, 2015
Commercial and industrial	$	83	$	-	$	83	$	17,842	$	20	$	17,822
Construction		220		-		220		10,206		-		10,206
Commercial real estate		3,631		117		3,514		347,095		5,194		341,901
Residential real estate		928		205		723		125,159		1,893		123,266
Consumer and other loans		86		73		13		1,317		138		1,179
Unallocated		693		-		-		-		-		-
Total	$	5,641	$	395	$	4,553	$	501,619	$	7,245	$	494,374
December 31, 2014
Commercial and industrial	$	231	$	51	$	180	$	20,549	$	94	$	20,455
Construction		383		-		383		12,379		-		12,379
Commercial real estate		3,491		136		3,355		326,370		5,105		321,265
Residential real estate		903		101		802		111,498		2,314		109,184
Consumer and other loans		19		-		19		1,665		-		1,665
Unallocated		614		-		-		-		-		-
Total	$	5,641	$	288	$	4,739	$	472,461	$	7,513	$	464,948

An Age Analysis Of Loans Receivable

													Recorded
													Investment
					Greater						Total		> 90 Days
	30-59 Days		60-89 days		Than		Total Past				Financing		and
(Dollars in thousands)	Past Due		Past Due		90 Days (a)		Due		Current		Receivables		Accruing
September 30, 2015
Commercial and industrial	$	6	$	-	$	20	$	26	$	17,816	$	17,842	$	-
Construction		-		-		-		-		10,206		10,206		-
Commercial real estate		913		1,079		4,043		6,035		341,060		347,095		-
Residential real estate		433		-		1,481		1,914		123,245		125,159		-
Consumer and other		5		-		138		143		1,174		1,317		-
Total	$	1,357	$	1,079	$	5,682	$	8,118	$	493,501	$	501,619	$	-
December 31, 2014
Commercial and industrial	$	9	$	-	$	94	$	103	$	20,446	$	20,549	$	-
Construction		1,354		-		-		1,354		11,025		12,379		-
Commercial real estate		2,395		1,209		3,936		7,540		318,830		326,370		-
Residential real estate		555		108		1,978		2,641		108,857		111,498		85
Consumer and other		5		-		1		6		1,659		1,665		-
Total	$	4,318	$	1,317	$	6,009	$	11,644	$	460,817	$	472,461	$	85
(a) includes loans greater than 90 days past due and still accruing and non-accrual loans.

Loans Which The Accrual Of Interest Has Been Discontinued

(Dollars in thousands)	September 30, 2015		December 31, 2014
Commercial and industrial	$	20	$	94
Commercial real estate		4,043		3,936
Residential real estate		1,481		1,893
Consumer and other		138		1
Total	$	5,682	$	5,924

Credit Risk Profile By Creditworthiness

			Special
(Dollars in thousands)	Pass		Mention		Substandard		Doubtful		Total
September 30, 2015
Commercial and industrial	$	17,800	$	22	$	20	$	-	$	17,842
Construction		10,206		-		-		-		10,206
Commercial real estate		333,463		7,670		5,962		-		347,095
Residential real estate		122,383		751		2,025		-		125,159
Consumer and other		1,179		-		138		-		1,317
	$	485,031	$	8,443	$	8,145	$	-	$	501,619
December 31, 2014
Commercial and industrial	$	20,446	$	9	$	94	$	-	$	20,549
Construction		12,379		-		-		-		12,379
Commercial real estate		312,172		8,257		5,941		-		326,370
Residential real estate		108,587		457		2,454		-		111,498
Consumer and other		1,527		138		-		-		1,665
	$	455,111	$	8,861	$	8,489	$	-	$	472,461

Impaired Loans

		September 30, 2015						December 31, 2014
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Commercial and industrial	$	20	$	20	$	-	$	-	$	-	$	-
Commercial real estate		2,715		2,715		-		3,167		3,736		-
Residential real estate		599		598		-		1,829		1,835		-
With an allowance recorded:
Commercial and industrial		-		-		-		94		94		51
Commercial real estate		2,479		2,479		117		1,938		1,938		136
Residential real estate		1,294		1,304		205		485		489		101
Consumer and other		138		138		73		-		-		-
Total:
Commercial and industrial		20		20		-		94		94		51
Commercial real estate		5,194		5,194		117		5,105		5,674		136
Residential real estate		1,893		1,902		205		2,314		2,324		101
Consumer and other		138		138		73		-		-		-
	$	7,245	$	7,254	$	395	$	7,513	$	8,092	$	288

The following table presents the average recorded investment and income recognized for the three and nine months ended September 30, 2015 and 2014:

	For the Three Months Ended September 30, 2015				For the Three Months Ended September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(Dollars in thousands)	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	20	$	-	$	-	$	-
Commercial real estate		2,119		10		4,080		4
Residential real estate		904		1		1,818		5
Total impaired loans without a related allowance		3,043		11		5,898		9
With an allowance recorded:
Commercial real estate		2,762		8		4,309		29
Residential real estate		992		3		485		-
Consumer and other		104		-		1		-
Total impaired loans with an allowance		3,858		11		4,825		30
Total impaired loans	$	6,901	$	22	$	10,723	$	39

	For the Nine Months Ended September 30, 2015				For the Nine Months Ended September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(Dollars in thousands)	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	15	$	-	$	-	$	-
Commercial real estate		2,439		24		4,999		22
Residential real estate		1,267		5		1,831		34
Total impaired loans without a related allowance		3,721		29		6,830		56
With an allowance recorded:
Commercial and industrial		24		-		15		1
Commercial real estate		2,764		25		4,339		30
Residential real estate		753		8		667		7
Consumer and other		104		-		1		-
Total impaired loans with an allowance		3,645		33		5,022		38
Total impaired loans	$	7,366	$	62	$	11,852	$	94

Troubled Debt Restructured On Recorded Investment

(Dollars in thousands)		Commercial Real Estate	Residential Real Estate		Total
September 30, 2015
Performing	$	1,151	$	412	$	1,563
Non-performing		1,834		223		2,057
Total	$	2,985	$	635	$	3,620
December 31, 2014
Performing	$	1,169	$	421	$	1,590
Non-performing		2,730		224		2,954
Total	$	3,899	$	645	$	4,544