10-Q

Table Of Contents

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[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 No. 000-26719

MERCANTILE BANK CORPORATION

(Exact name of registrant as specified in its charter)

Michigan	38-3360865
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

310 Leonard Street, NW, Grand Rapids, MI 49504

(Address of principal executive offices) (Zip Code)

(616) 406-3000

(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    X       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    X        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   X
Non-accelerated filer	Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes             No    X  

At November 6, 2015, there were 16,265,996 shares of common stock outstanding.

MERCANTILE BANK CORPORATION

INDEX

PART I.	Financial Information	Page No.
	Item 1.     Financial Statements
	Condensed Consolidated Balance Sheets (Unaudited) - September 30, 2015 and December 31, 2014	1
	Condensed Consolidated Statements of Income (Unaudited) - Three and Nine Months Ended September 30, 2015 and September 30, 2014	2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2015 and September 30, 2014	3
	Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - Nine Months Ended September 30, 2015 and September 30, 2014	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2015 and September 30, 2014	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
	Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations	69
	Item 3.     Quantitative and Qualitative Disclosures About Market Risk	88
	Item 4.     Controls and Procedures	91
PART II.	Other Information
	Item 1.     Legal Proceedings	92
	Item 1A. Risk Factors	92
	Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds	92
	Item 3.     Defaults Upon Senior Securities	92
	Item 4.     Mine Safety Disclosures	92
	Item 5.     Other Information	92
	Item 6.     Exhibits	93
	Signatures	94

MERCANTILE BANK CORPORATION

PART I --- FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,
	2015			2014
ASSETS
Cash and due from banks	$	43,743,000		$	43,754,000
Interest-bearing deposits		49,952,000			117,777,000
Federal funds sold		10,154,000			11,207,000
Total cash and cash equivalents		103,849,000			172,738,000
Securities available for sale		367,173,000			432,912,000
Federal Home Loan Bank stock		7,567,000			13,699,000
Loans		2,217,388,000			2,089,277,000
Allowance for loan losses		(16,119,000	)		(20,041,000	)
Loans, net		2,201,269,000			2,069,236,000
Premises and equipment, net		47,509,000			48,812,000
Bank owned life insurance		58,680,000			57,861,000
Goodwill		49,473,000			49,473,000
Core deposit intangible		13,346,000			15,624,000
Other assets		32,511,000			33,024,000
Total assets	$	2,881,377,000		$	2,893,379,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing	$	619,125,000		$	558,738,000
Interest-bearing		1,635,004,000			1,718,177,000
Total deposits		2,254,129,000			2,276,915,000
Securities sold under agreements to repurchase		158,149,000			167,569,000
Federal Home Loan Bank advances		68,000,000			54,022,000
Subordinated debentures		54,983,000			54,472,000
Accrued interest and other liabilities		17,296,000			12,263,000
Total liabilities		2,552,557,000			2,565,241,000
Shareholders' equity
Preferred stock, no par value; 1,000,000 shares authorized; none issued		0			0
Common stock, no par value; 40,000,000 shares authorized; 16,279,234 shares outstanding at September 30, 2015 and 16,976,839 shares outstanding at December 31, 2014		304,378,000			317,904,000
Retained earnings		23,673,000			10,218,000
Accumulated other comprehensive income		769,000			16,000
Total shareholders’ equity		328,820,000			328,138,000
Total liabilities and shareholders’ equity	$	2,881,377,000		$	2,893,379,000

See accompanying notes to condensed consolidated financial statements.

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MERCANTILE BANK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	Sept 30, 2015			Sept 30, 2014			Sept 30, 2015			Sept 30, 2014
Interest income
Loans, including fees	$	26,565,000		$	26,323,000		$	77,463,000		$	55,079,000
Securities, taxable		1,382,000			1,992,000			4,556,000			4,619,000
Securities, tax-exempt		512,000			553,000			1,572,000			1,110,000
Other interest-earning assets		42,000			32,000			161,000			163,000
Total interest income		28,501,000			28,900,000			83,752,000			60,971,000
Interest expense
Deposits		1,969,000			1,971,000			5,642,000			6,279,000
Short-term borrowings		39,000			34,000			116,000			83,000
Federal Home Loan Bank advances		203,000			166,000			506,000			472,000
Other borrowings		665,000			740,000			1,973,000			1,532,000
Total interest expense		2,876,000			2,911,000			8,237,000			8,366,000
Net interest income		25,625,000			25,989,000			75,515,000			52,605,000
Provision for loan losses		(500,000	)		(400,000	)		(1,500,000	)		(3,000,000	)
Net interest income after provision for loan losses		26,125,000			26,389,000			77,015,000			55,605,000
Noninterest income
Services charges on accounts		862,000			862,000			2,444,000			1,749,000
Credit and debit card income		1,005,000			782,000			3,296,000			1,629,000
Mortgage banking activities		1,073,000			569,000			2,784,000			981,000
Earnings on bank owned life insurance		272,000			299,000			820,000			880,000
Other income		1,065,000			387,000			2,648,000			1,456,000
Total noninterest income		4,277,000			2,899,000			11,992,000			6,695,000
Noninterest expense
Salaries and benefits		10,745,000			10,685,000			31,903,000			23,393,000
Occupancy		1,526,000			1,515,000			4,578,000			3,141,000
Furniture and equipment		569,000			560,000			1,788,000			1,175,000
Data processing costs		1,958,000			1,585,000			5,599,000			3,606,000
FDIC insurance costs		355,000			331,000			1,315,000			733,000
Merger-related costs		0			1,250,000			0			5,081,000
Other expense		4,540,000			4,815,000			14,101,000			8,885,000
Total noninterest expenses		19,693,000			20,741,000			59,284,000			46,014,000
Income before federal income tax expense		10,709,000			8,547,000			29,723,000			16,286,000
Federal income tax expense		3,373,000			2,600,000			9,183,000			5,248,000
Net income	$	7,336,000		$	5,947,000		$	20,540,000		$	11,038,000
Basic earnings per share	$	0.45		$	0.35		$	1.23		$	0.89
Diluted earnings per share	$	0.45		$	0.35		$	1.23		$	0.89
Cash dividends per share	$	0.15		$	0.12		$	0.43		$	2.36
Average basic shares outstanding		16,425,933			16,852,050			16,708,444			12,362,316
Average diluted shares outstanding		16,461,794			16,926,249			16,743,625			12,399,009

See accompanying notes to condensed consolidated financial statements.

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MERCANTILE BANK CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months			Three Months			Nine Months			Nine Months
	Ended			Ended			Ended			Ended
	Sept 30, 2015			Sept 30, 2014			Sept 30, 2015			Sept 30, 2014
Net income	$	7,336,000		$	5,947,000		$	20,540,000		$	11,038,000
Other comprehensive income (loss):
Unrealized holding gains (losses) on securities available for sale		1,230,000			712,000			1,395,000			4,861,000
Fair value of interest rate swap		(153,000	)		255,000			(279,000	)		128,000
		1,077,000			967,000			1,116,000			4,989,000
Tax effect of unrealized holding gains (losses) on securities available for sale		(431,000	)		(220,000	)		(461,000	)		(1,701,000	)
Tax effect of fair value of interest rate swap		53,000			(90,000	)		98,000			(44,000	)
		(378,000	)		(310,000	)		(363,000	)		(1,745,000	)
Other comprehensive income, net of tax		699,000			657,000			753,000			3,244,000
Comprehensive income	$	8,035,000		$	6,604,000		$	21,293,000		$	14,282,000

See accompanying notes to condensed consolidated financial statements. 

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MERCANTILE BANK CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF

CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

									Accumulated
									Other			Total
($in thousands)	Preferred		Common			Retained			Comprehensive			Shareholders’
	Stock		Stock			Earnings			Income			Equity
Balances, January 1, 2015	$	0	$	317,904		$	10,218		$	16		$	328,138
Employee stock purchase plan (1,610 shares)				33									33
Dividend reinvestment plan (22,248 shares)				456									456
Stock option exercises (27,375 shares)				281									281
Stock grants to directors for retainer fees (20,094 shares)				402									402
Stock-based compensation expense				525									525
Share repurchase program (765,260 shares)				(15,223	)								(15,223	)
Cash dividends ($0.43 per common share)							(7,085	)					(7,085	)
Net income for the nine months ended September 30, 2015							20,540						20,540
Change in net unrealized holding gain on securities available for sale, net of tax effect										934			934
Change in fair value of interest rate swap, net of tax effect										(181	)		(181	)
Balances, September 30, 2015	$	0	$	304,378		$	23,673		$	769		$	328,820

See accompanying notes to condensed consolidated financial statements. 

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MERCANTILE BANK CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF

CHANGES IN SHAREHOLDERS’ EQUITY (Continued)

(Unaudited)

									Accumulated
						Retained			Other			Total
($in thousands)	Preferred		Common			Earnings			Comprehensive			Shareholders’
	Stock		Stock			(Deficit)			Income (Loss)			Equity
Balances, January 1, 2014	$	0	$	162,999		$	(4,101	)	$	(5,573	)	$	153,325
Employee stock purchase plan (523 shares)				10									10
Dividend reinvestment plan (4,695 shares)				90									90
Stock option exercises (24,110 shares)				229									229
Stock grants to directors for retainer fees (7,375 shares)				155									155
Stock-based compensation expense				364									364
Cash dividends ($2.36 per common share)				(21,447	)		(989	)					(22,436	)
Common stock issued in connection with Firstbank merger (8,087,272 shares)				173,310									173,310
Stock options issued to replace existing Firstbank options at merger date				1,664									1,664
Net income for the nine months ended September 30, 2014							11,038						11,038
Change in net unrealized holding gain on securities available for sale, net of tax effect										3,160			3,160
Change in fair value of interest rate swap, net of tax effect										84			84
Balances, September 30, 2014	$	0	$	317,374		$	5,948		$	(2,329	)	$	320,993

See accompanying notes to condensed consolidated financial statements.

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MERCANTILE BANK CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months			Nine Months
	Ended			Ended
	Sept 30, 2015			Sept 30, 2014
Cash flows from operating activities
Net income	$	20,540,000		$	11,038,000
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization		8,596,000			4,734,000
Accretion of acquired loans		(4,264,000	)		(1,687,000	)
Provision for loan losses		(1,500,000	)		(3,000,000	)
Stock-based compensation expense		525,000			364,000
Stock grants to directors for retainer fee		402,000			155,000
Proceeds from sales of mortgage loans held for sale		94,608,000			41,246,000
Origination of mortgage loans held for sale		(92,260,000	)		(40,481,000	)
Net gain from sales of mortgage loans held for sale		(2,831,000	)		(935,000	)
Net gain from sales and valuation write-down of foreclosed assets		(104,000	)		(721,000	)
Net gain from sales of fixed assets		(22,000	)		0
Net gain from sales of available for sale securities		(5,000	)		0
Earnings on bank owned life insurance		(820,000	)		(880,000	)
Net change in:
Accrued interest receivable		(321,000	)		(269,000	)
Other assets		(1,731,000	)		184,000
Accrued interest and other liabilities		4,754,000			(1,261,000	)
Net cash from operating activities		25,567,000			8,487,000
Cash flows from investing activities
Cash received in merger		0			91,806,000
Loan originations and payments, net		(127,390,000	)		(70,034,000	)
Purchases of securities available for sale		(8,266,000	)		(14,379,000	)
Proceeds from maturities, calls and repayments of securities available for sale		72,277,000			46,445,000
Proceeds from sales of securities available for sale		665,000			0
Proceeds from sales of foreclosed assets		1,431,000			3,184,000
Proceeds from FHLB stock redemption		6,132,000			0
Purchases of premises and equipment		(932,000	)		(1,167,000	)
Net cash from (for) investing activities		(56,083,000	)		55,855,000
Cash flows from financing activities
Net decrease in time deposits		(118,950,000	)		(40,963,000	)
Net increase (decrease) in all other deposits		97,535,000			(35,065,000	)
Net increase (decrease) in securities sold under agreements to repurchase		(9,420,000	)		19,080,000
Proceeds from Federal Home Loan Bank advances		20,000,000			0
Maturities of Federal Home Loan Bank advances		(6,000,000	)		0
Proceeds from stock option exercises		281,000			229,000
Employee stock purchase plan		33,000			10,000
Dividend reinvestment plan		456,000			90,000
Repurchase of common stock shares		(15,223,000	)		0
Payment of cash dividends to common shareholders		(7,085,000	)		(22,436,000	)
Net cash for financing activities		(38,373,000	)		(79,055,000	)

See accompanying notes to condensed consolidated financial statements.

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MERCANTILE BANK CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

	Nine Months			Nine Months
	Ended			Ended
	Sept 30, 2015			Sept 30, 2014
Net change in cash and cash equivalents		(68,889,000	)		(14,713,000	)
Cash and cash equivalents at beginning of period		172,738,000			146,965,000
Cash and cash equivalents at end of period	$	103,849,000		$	132,252,000
Supplemental disclosures of cash flows information
Cash paid during the period for:
Interest	$	8,625,000		$	8,574,000
Federal income tax		5,700,000			1,575,000
Noncash financing and investing activities:
Transfers from loans to foreclosed assets		1,604,000			1,084,000

See accompanying notes to condensed consolidated financial statements.

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.     SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The unaudited financial statements for the nine months ended September 30, 2015 include the consolidated results of operations of Mercantile Bank Corporation and its consolidated subsidiaries. These subsidiaries include Mercantile Bank of Michigan (“our bank”) and our bank’s two subsidiaries, Mercantile Bank Real Estate Co., LLC (“our real estate company”) and Mercantile Insurance Center, Inc. (“our insurance center”). These consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and Item 303(b) of Regulation S-K and do not include all disclosures required by accounting principles generally accepted in the United States of America for a complete presentation of our financial condition and results of operations. In the opinion of management, the information reflects all adjustments (consisting only of normal recurring adjustments) which are necessary in order to make the financial statements not misleading and for a fair presentation of the results of operations for such periods. The results for the period ended September 30, 2015 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended December 31, 2014.

We have five separate business trusts that were formed to issue trust preferred securities. Subordinated debentures were issued to the trusts in return for the proceeds raised from the issuance of the trust preferred securities. The trusts are not consolidated, but instead we report the subordinated debentures issued to the trusts as a liability.

Earnings Per Share: Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings per share include the dilutive effect of additional potential common shares issuable under our stock-based compensation plans and are determined using the treasury stock method. Our unvested restricted shares, which contain non-forfeitable rights to dividends whether paid or accrued (i.e., participating securities), are included in the number of shares outstanding for both basic and diluted earnings per share calculations. In the event of a net loss, our unvested restricted shares are excluded from the calculation of both basic and diluted earnings per share.

Approximately 98,000 unvested restricted shares were included in determining both basic and diluted earnings per share for the three and nine months ended September 30, 2015. In addition, stock options for approximately 106,000 shares of common stock were included in determining diluted earnings per share for the three and nine months ended September 30, 2015. Stock options for approximately 103,000 shares of common stock were antidilutive and not included in determining diluted earnings per share for the three and nine months ended September 30, 2015.

Stock options for approximately 141,000 shares of common stock were included in determining diluted earnings per share for the three and nine months ended September 30, 2014. Stock options for approximately 175,000 shares of common stock were antidilutive and not included in determining diluted earnings per share for the three and nine months ended September 30, 2014.

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.     SIGNIFICANT ACCOUNTING POLICIES (Continued)

Securities: Debt securities classified as held to maturity are carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold prior to maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Federal Home Loan Bank stock is carried at cost.

Interest income includes amortization of purchase premiums and accretion of discounts. Premiums and discounts on securities are amortized or accreted on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Declines in the fair value of debt securities below their amortized cost that are other than temporary (“OTTI”) are reflected in earnings or other comprehensive income, as appropriate. For those debt securities whose fair value is less than their amortized cost, we consider our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and whether we expect to recover the entire amortized cost of the security based on our assessment of the issuer’s financial condition. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies, and whether downgrades by bond rating agencies have occurred. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, such as liquidity conditions in the market or changes in market interest rates, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost.

Loans: Loans that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on commercial loans and mortgage loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Consumer and credit card loans are typically charged off no later than when they are 120 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal and interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.     SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. As of September 30, 2015 and December 31, 2014, we determined that the fair value of our mortgage loans held for sale approximated the recorded cost of $2.1 million and $1.6 million, respectively. Loans held for sale are reported as part of our total loans on the balance sheet.

Mortgage loans held for sale are generally sold with servicing rights retained. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold, which is reduced by the cost allocated to the servicing right. We generally lock in the sale price to the purchaser of the loan at the same time we make a rate commitment to the borrower. These mortgage banking activities are not designated as hedges and are carried at fair value. The net gain or loss on mortgage banking derivatives is included in the gain on sale of loans. Mortgage loans serviced for others totaled approximately $603 million as of September 30, 2015.

Mortgage Banking Activities: Mortgage loan servicing rights are recognized as assets based on the allocated value of retained servicing rights on mortgage loans sold. Mortgage loan servicing rights are carried at the lower of amortized cost or fair value and are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights using groupings of the underlying mortgage loans as to interest rates. Any impairment of a grouping is reported as a valuation allowance.

Servicing fee income is recorded for fees earned for serving mortgage loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Amortization of mortgage loan servicing rights is netted against mortgage loan servicing income and recorded in mortgage banking activities in the income statement.

Troubled Debt Restructurings: A loan is accounted for as a troubled debt restructuring if we, for economic or legal reasons, grant a concession to a borrower considered to be experiencing financial difficulties that we would not otherwise consider. A troubled debt restructuring may involve the receipt of assets from the debtor in partial or full satisfaction of the loan, or a modification of terms such as a reduction of the stated interest rate or balance of the loan, a reduction of accrued interest, an extension of the maturity date or renewal of the loan at a stated interest rate lower than the current market rate for a new loan with similar risk, or some combination of these concessions. Troubled debt restructurings can be in either accrual or nonaccrual status. Nonaccrual troubled debt restructurings are included in nonperforming loans. Accruing troubled debt restructurings are generally excluded from nonperforming loans as it is considered probable that all contractual principal and interest due under the restructured terms will be collected.

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.     SIGNIFICANT ACCOUNTING POLICIES (Continued)

In accordance with current accounting guidance, loans modified as troubled debt restructurings are, by definition, considered to be impaired loans. Impairment for these loans is measured on a loan-by-loan basis similar to other impaired loans as described above under “Allowance for Loan Losses.” Certain loans modified as troubled debt restructurings may have been previously measured for impairment under a general allowance methodology (i.e., pooling), thus at the time the loan is modified as a troubled debt restructuring the allowance will be impacted by the difference between the results of these two measurement methodologies. Loans modified as troubled debt restructurings that subsequently default are factored into the determination of the allowance in the same manner as other defaulted loans.

Allowance for Loan Losses: The allowance for loan losses (“allowance”) is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when we believe the uncollectability of a loan is confirmed. Subsequent recoveries, if any, are credited to the allowance. We estimate the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in our judgment, should be charged-off.

A loan is considered to be impaired when, based on current information and events, it is probable we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. We determine the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of delay, the reasons for delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derivatives: Derivative financial instruments are recognized as assets or liabilities at fair value. The accounting for changes in the fair value of derivatives depends on the use of the derivatives and whether the derivatives qualify for hedge accounting. Used as part of our asset and liability management to help manage interest rate risk, our derivatives have generally consisted of interest rate swap agreements that qualified for hedge accounting. In February 2012, we entered into an interest rate swap agreement that qualifies for hedge accounting. The current outstanding interest rate swap is discussed in more detail in Note 9. We do not use derivatives for trading purposes.

Changes in the fair value of derivatives that are designated, for accounting purposes, as a hedge of the variability of cash flows to be received on various loans and are effective are reported in other comprehensive income. They are later reclassified into earnings in the same periods during which the hedged transaction affects earnings and are included in the line item in which the hedged cash flows are recorded. If hedge accounting does not apply, changes in the fair value of derivatives are recognized immediately in current earnings as interest income or expense.

If designated as a hedge, we formally document the relationship between derivatives as hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet. If designated as a hedge, we also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in cash flows of the hedged items. Ineffective hedge gains and losses are recognized immediately in current earnings as noninterest income or expense. We discontinue hedge accounting when we determine the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative is settled or terminates, or treatment of the derivative as a hedge is no longer appropriate or intended.

Goodwill and Core Deposit Intangible: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. A more frequent assessment is performed should events or changes in circumstances indicate the carrying value of the goodwill may not be recoverable. We may elect to perform a qualitative assessment for the annual impairment test. If the qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we elect not to perform a qualitative assessment, then we would be required to perform a quantitative test for goodwill impairment. The quantitative test is a two-step process consisting of comparing the carrying value of the reporting unit to an estimate of its fair value. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is impaired and is written down to its estimated fair value.

The core deposit intangible that arose from the Firstbank Corporation acquisition was initially measured at fair value and is being amortized into noninterest expense over a ten-year period using the sum-of-the-years-digits methodology.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Adoption of New Accounting Standards: In January of 2014, the FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. 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. The ASU also requires additional related interim and annual disclosures. The guidance in this ASU is effective for annual and interim periods beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our financial position or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP, including those that previously followed industry-specific guidance such as the real estate, construction and software industries. The revenue standard’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: i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. This ASU is effective for annual and interim periods beginning after December 15, 2016 with three transition methods available – full retrospective, retrospective and cumulative effect approach. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of Effective Date, which delays the implementation of this guidance by one year. Adoption of this ASU is not expected to have a material effect on our financial position or results of operations.

In June 2014, the FASB issued ASU 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. This ASU requires two accounting changes. First, repurchase-to-maturity transactions will be accounted for as secured borrowing transactions on the balance sheet, rather than sales. Second, for repurchase financing arrangements, the ASU requires separate accounting for a transfer of a financial asset executed contemporaneously with (or in contemplation of) a repurchase agreement with the same counterparty, which also will generally result in secured borrowing accounting for the repurchase agreement. The ASU also introduces new disclosures to increase transparency about the types of collateral pledged for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings. The ASU also requires a transferor to disclose information about transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the transferee. The accounting changes and disclosure for certain transactions accounted for as a sale are effective for the first interim or annual period beginning after December 15, 2014. The disclosure for transactions accounted for as secured borrowings is required for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. The required disclosures under the ASU are included in Note 6. Adoption of this ASU did not have a material effect on our financial position or results of operations.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

In August 2014, the FASB issued ASU 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure. This ASU requires that certain government-guaranteed mortgage loans, including those guaranteed by the Federal Housing Administration, be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure on the loans that meet these criteria, a separate receivable should be recorded based on the amount of the loan balance expected to be recovered from the guarantor. The amendments are effective for annual periods, and interim periods within those years, beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our financial position or results of operations.

2.     SECURITIES

The amortized cost and fair value of available for sale securities and the related pre-tax gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
September 30, 2015
U.S. Government agency debt obligations	$	159,411,000	$	1,939,000	$	(1,957,000	)	$	159,393,000
Mortgage-backed securities		72,211,000		904,000		(151,000	)		72,964,000
Municipal general obligation bonds		122,724,000		1,118,000		(234,000	)		123,608,000
Municipal revenue bonds		9,163,000		88,000		(1,000	)		9,250,000
Other investments		1,947,000		11,000		0			1,958,000
	$	365,456,000	$	4,060,000	$	(2,343,000	)	$	367,173,000
December 31, 2014
U.S. Government agency debt obligations	$	194,894,000	$	1,612,000	$	(3,038,000	)	$	193,468,000
Mortgage-backed securities		92,656,000		1,123,000		(218,000	)		93,561,000
Municipal general obligation bonds		132,347,000		1,042,000		(307,000	)		133,082,000
Municipal revenue bonds		10,769,000		117,000		(13,000	)		10,873,000
Other investments		1,925,000		3,000		0			1,928,000
	$	432,591,000	$	3,897,000	$	(3,576,000	)	$	432,912,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2.     SECURITIES (Continued)

Securities with unrealized losses at September 30, 2015 and December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
September 30, 2015
U.S. Government agency debt obligations	$	0	$	0	$	70,896,000	$	1,957,000	$	70,896,000	$	1,957,000
Mortgage-backed securities		6,831,000		37,000		19,943,000		114,000		26,774,000		151,000
Municipal general obligation bonds		10,994,000		90,000		5,064,000		144,000		16,058,000		234,000
Municipal revenue bonds		0		0		807,000		1,000		807,000		1,000
Other investments		0		0		0		0		0		0
	$	17,825,000	$	127,000	$	96,710,000	$	2,216,000	$	114,535,000	$	2,343,000

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
December 31, 2014
U.S. Government agency debt obligations	$	81,891,000	$	202,000	$	74,120,000	$	2,836,000	$	156,011,000	$	3,038,000
Mortgage-backed securities		49,940,000		218,000		0		0		49,940,000		218,000
Municipal general obligation bonds		54,104,000		307,000		0		0		54,104,000		307,000
Municipal revenue bonds		4,644,000		13,000		0		0		4,644,000		13,000
Other investments		0		0		0		0		0		0
	$	190,579,000	$	740,000	$	74,120,000	$	2,836,000	$	264,699,000	$	3,576,000

We evaluate securities for other-than-temporary impairment at least on a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability we have to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2.     SECURITIES (Continued)

For those debt securities whose fair value is less than their amortized cost basis, we also consider our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and if we do not expect to recover the entire amortized cost basis of the security. In analyzing an issuer’s financial condition, we may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition.

At September 30, 2015, 161 debt securities with fair values totaling $114.5 million have unrealized losses aggregating $2.3 million. After we considered whether the securities were issued by the federal government or its agencies and whether downgrades by bond rating agencies had occurred, we determined that unrealized losses were due to changing interest rate environments. As we do not intend to sell our debt securities before recovery of their cost basis and we believe it is more likely than not that we will not be required to sell our debt securities before recovery of the cost basis, no unrealized losses are deemed to be other-than-temporary.

The amortized cost and fair value of debt securities at September 30, 2015, by maturity, are shown in the following table. The contractual maturity is utilized for U.S. Government agency debt obligations and municipal bonds. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. Weighted average yields are also reflected, with yields for municipal securities shown at their tax equivalent yield.

	Weighted
	Average			Amortized		Fair
	Yield			Cost		Value
Due in 2015		2.12	%	$	8,409,000	$	8,471,000
Due in 2016 through 2020		1.42			150,774,000		151,190,000
Due in 2021 through 2025		3.09			57,813,000		58,359,000
Due in 2026 and beyond		3.56			74,302,000		74,231,000
Mortgage-backed securities		1.69			72,211,000		72,964,000
Other investments		2.53			1,947,000		1,958,000
		2.21	%	$	365,456,000	$	367,173,000

Securities issued by the State of Michigan and all its political subdivisions had a combined amortized cost of $106.0 million and $113.1 million at September 30, 2015 and December 31, 2014, respectively, with estimated market values of $106.9 million and $113.9 million, respectively. Securities issued by all other states and their political subdivisions had a combined amortized cost of $25.9 million and $30.0 million at September 30, 2015 and December 31, 2014, respectively, with estimated market values of $26.0 million and $30.0 million, respectively. Total securities of any other specific issuer, other than the U.S. Government and its agencies and the State of Michigan and all its political subdivisions, did not exceed 10% of shareholders’ equity.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2.     SECURITIES (Continued)

The carrying value of U.S. Government agency debt obligations and mortgage-backed securities that are pledged to secure repurchase agreements was $158.1 million and $167.6 million at September 30, 2015, and December 31, 2014, respectively. Investments in Federal Home Loan Bank stock are restricted and may only be resold or redeemed by the issuer.

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans originated for investment are stated at their principal amount outstanding adjusted for partial charge-offs, the allowance, and net deferred loan fees and costs. Interest income on loans is accrued over the term of the loans primarily using the simple interest method based on the principal balance outstanding. Interest is not accrued on loans where collectability is uncertain. Accrued interest is presented separately in the consolidated balance sheet. Loan origination fees and certain direct costs incurred to extend credit are deferred and amortized over the term of the loan or loan commitment period as an adjustment to the related loan yield.

Acquired loans are those purchased in the Firstbank merger. These loans were recorded at estimated fair value at the Merger Date with no carryover of the related allowance. The acquired loans were segregated between those considered to be performing (“acquired non-impaired loans”) and those with evidence of credit deterioration (“acquired impaired loans”). Acquired loans are considered impaired if there is evidence of credit deterioration and if it is probable, at acquisition, all contractually required payments will not be collected. Acquired loans restructured after acquisition are not considered or reported as troubled debt restructurings if the loans evidenced credit deterioration as of the Merger Date and are accounted for in pools.

The fair value estimates for acquired loans are based on expected prepayments and the amount and timing of discounted expected principal, interest and other cash flows. Credit discounts representing the principal losses expected over the life of the loan are also a component of the initial fair value. In determining the Merger Date fair value of acquired impaired loans, and in subsequent accounting, we have generally aggregated acquired commercial and consumer loans into pools of loans with common risk characteristics.

The difference between the fair value of an acquired non-impaired loan and contractual amounts due at the Merger Date is accreted into income over the estimated life of the loan. Contractually required payments represent the total undiscounted amount of all uncollected principal and interest payments. Acquired non-impaired loans are placed on nonaccrual status and reported as nonperforming or past due using the same criteria applied to the originated loan portfolio.

The excess of an acquired impaired loan’s undiscounted contractually required payments over the amount of its undiscounted cash flows expected to be collected is referred to as the non-accretable difference. The non-accretable difference, which is neither accreted into income nor recorded on the consolidated balance sheet, reflects estimated future credit losses and uncollectible contractual interest expected to be incurred over the life of the acquired impaired loan. The excess cash flows expected to be collected over the carrying amount of the acquired loan is referred to as the accretable yield.

(Continued)

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(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

This amount is accreted into interest income over the remaining life of the acquired loans or pools using the level yield method. The accretable yield is affected by changes in interest rate indices for variable rate loans, changes in prepayment speed assumptions and changes in expected principal and interest payments over the estimated lives of the acquired impaired loans.

We evaluate quarterly the remaining contractual required payments receivable and estimate cash flows expected to be collected over the lives of the impaired loans. Contractually required payments receivable may increase or decrease for a variety of reasons, for example, when the contractual terms of the loan agreement are modified, when interest rates on variable rate loans change, or when principal and/or interest payments are received. Cash flows expected to be collected on acquired impaired loans are estimated by incorporating several key assumptions similar to the initial estimate of fair value. These key assumptions include probability of default, loss given default, and the amount of actual prepayments after the Merger Date. Prepayments affect the estimated lives of loans and could change the amount of interest income, and possibly principal, expected to be collected. In re-forecasting future estimated cash flows, credit loss expectations are adjusted as necessary. The adjustments are based, in part, on actual loss severities recognized for each loan type, as well as changes in the probability of default. For periods in which estimated cash flows are not re-forecasted, the prior reporting period’s estimated cash flows are adjusted to reflect the actual cash received and credit events that transpired during the current reporting period.

Increases in expected cash flows of acquired impaired loans subsequent to the Merger Date are recognized prospectively through adjustments of the yield on the loans or pools over their remaining lives, while decreases in expected cash flows are recognized as impairment through a provision for loan losses and an increase in the allowance.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Our total loans at September 30, 2015 were $2.22 billion compared to $2.09 billion at December 31, 2014, an increase of $128 million, or 6.1%. The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at September 30, 2015 and December 31, 2014, and the percentage change in loans from the end of 2014 to the end of the third quarter of 2015, are as follows:

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Originated loans
Commercial:
Commercial and industrial	$	522,346,000		34.4	%	$	384,570,000		30.8	%		35.8	%
Vacant land, land development, and residential construction		30,958,000		2.0			29,826,000		2.4			3.8
Real estate – owner occupied		306,539,000		20.2			291,758,000		23.4			5.1
Real estate – non-owner occupied		505,715,000		33.3			410,977,000		33.0			23.1
Real estate – multi-family and residential rental		36,762,000		2.4			36,058,000		2.9			2.0
Total commercial		1,402,320,000		92.3			1,153,189,000		92.5			21.6
Retail:
Home equity and other		65,671,000		4.3			50,059,000		4.0			31.2
1-4 family mortgages		51,719,000		3.4			42,868,000		3.5			20.6
Total retail		117,390,000		7.7			92,927,000		7.5			26.3
Total originated loans	$	1,519,710,000		100.0	%	$	1,246,116,000		100.0	%		22.0	%

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued) 

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Acquired loans
Commercial:
Commercial and industrial	$	120,772,000		17.3	%	$	166,037,000		19.7			(27.3%	)
Vacant land, land development, and residential construction		16,776,000		2.4			22,148,000		2.6			(24.3	)
Real estate – owner occupied		120,477,000		17.3			138,630,000		16.4			(13.1	)
Real estate – non-owner occupied		130,512,000		18.7			148,597,000		17.6			(12.2	)
Real estate – multi-family and residential rental		86,763,000		12.4			86,702,000		10.3			0.1
Total commercial		475,300,000		68.1			562,114,000		66.6			(15.4	)
Retail:
Home equity and other		81,094,000		11.6			109,219,000		13.0			(25.8	)
1-4 family mortgages		141,284,000		20.3			171,828,000		20.4			(17.8	)
Total retail		222,378,000		31.9			281,047,000		33.4			(20.9	)
Total acquired loans	$	697,678,000		100.0	%	$	843,161,000		100.0	%		(17.3%	)

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Total loans
Commercial:
Commercial and industrial	$	643,118,000		29.0	%	$	550,607,000		26.4	%		16.8	%
Vacant land, land development, and residential construction		47,734,000		2.2			51,974,000		2.5			(8.2	)
Real estate – owner occupied		427,016,000		19.3			430,388,000		20.5			(0.8	)
Real estate – non-owner occupied		636,227,000		28.6			559,574,000		26.8			13.7
Real estate – multi-family and residential rental		123,525,000		5.6			122,760,000		5.9			0.6
Total commercial		1,877,620,000		84.7			1,715,303,000		82.1			9.5
Retail:
Home equity and other		146,765,000		6.6			159,278,000		7.6			(7.9	)
1-4 family mortgages		193,003,000		8.7			214,696,000		10.3			(10.1	)
Total retail		339,768,000		15.3			373,974,000		17.9			(9.1	)
Total loans	$	2,217,388,000		100.0	%	$	2,089,277,000		100.0	%		6.1	%

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The total outstanding balance and carrying value of acquired impaired loans was $25.9 million and $14.1 million, respectively, as of September 30, 2015. Changes in the accretable yield for acquired impaired loans for the three and nine months ended September 30, 2015 were as follows:

Balance at June 30, 2015	$	5,115,000
Additions		16,000
Accretion income		(653,000	)
Net reclassification from nonaccretable to accretable		1,520,000
Reductions (1)		(548,000	)
Ending balance	$	5,450,000
Balance at December 31, 2014	$	4,998,000
Additions		16,000
Accretion income		(1,980,000	)
Net reclassification from nonaccretable to accretable		3,166,000
Reductions (1)		(750,000	)
Ending balance	$	5,450,000

(1) Reductions primarily reflect the result of exit events, including loan payoffs and charge-offs.

Nonperforming originated loans as of September 30, 2015 and December 31, 2014 were as follows:

	September 30,		December 31,
	2015		2014
Loans past due 90 days or more still accruing interest	$	0	$	0
Nonaccrual loans		2,590,000		26,048,000
Total nonperforming originated loans	$	2,590,000	$	26,048,000

Nonperforming acquired loans as of September 30, 2015 and December 31, 2014 were as follows:

	September 30,		December 31,
	2015		2014
Loans past due 90 days or more still accruing interest	$	43,000	$	26,000
Nonaccrual loans		5,581,000		3,358,000
Total nonperforming acquired loans	$	5,624,000	$	3,384,000

(Continued)

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(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The recorded principal balance of nonperforming loans was as follows:

	September 30,		December 31,
	2015		2014
Commercial:
Commercial and industrial	$	671,000	$	6,478,000
Vacant land, land development, and residential construction		170,000		209,000
Real estate – owner occupied		2,262,000		18,062,000
Real estate – non-owner occupied		79,000		378,000
Real estate – multi-family and residential rental		2,465,000		106,000
Total commercial		5,647,000		25,233,000
Retail:
Home equity and other		749,000		800,000
1-4 family mortgages		1,818,000		3,399,000
Total retail		2,567,000		4,199,000
Total nonperforming loans	$	8,214,000	$	29,432,000

Acquired impaired loans are not reported as nonperforming loans based on acquired impaired loan accounting. Acquired non-impaired loans are placed on nonaccrual status and reported as nonperforming or past due using the same criteria applied to the originated loan portfolio.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

An age analysis of past due loans is as follows as of September 30, 2015:

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Originated loans
Commercial:
Commercial and industrial	$	28,000	$	0	$	0	$	28,000	$	522,318,000	$	522,346,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		30,958,000		30,958,000		0
Real estate – owner occupied		0		0		13,000		13,000		306,526,000		306,539,000		0
Real estate – non-owner occupied		0		0		0		0		505,715,000		505,715,000		0
Real estate – multi-family and residential rental		0		0		0		0		36,762,000		36,762,000		0
Total commercial		28,000		0		13,000		41,000		1,402,279,000		1,402,320,000		0
Retail:
Home equity and other		33,000		21,000		4,000		58,000		65,613,000		65,671,000		0
1-4 family mortgages		115,000		67,000		296,000		478,000		51,241,000		51,719,000		0
Total retail		148,000		88,000		300,000		536,000		116,854,000		117,390,000		0
Total past due loans	$	176,000	$	88,000	$	313,000	$	577,000	$	1,519,133,000	$	1,519,710,000	$	0

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Acquired loans
Commercial:
Commercial and industrial	$	385,000	$	0	$	574,000	$	959,000	$	119,813,000	$	120,772,000	$	0
Vacant land, land development, and residential construction		257,000		0		0		257,000		16,519,000		16,776,000		0
Real estate – owner occupied		1,078,000		93,000		802,000		1,973,000		118,504,000		120,477,000		0
Real estate – non-owner occupied		0		0		80,000		80,000		130,432,000		130,512,000		0
Real estate – multi-family and residential rental		173,000		0		2,447,000		2,620,000		84,143,000		86,763,000		0
Total commercial		1,893,000		93,000		3,903,000		5,889,000		469,411,000		475,300,000		0
Retail:
Home equity and other		340,000		68,000		135,000		543,000		80,551,000		81,094,000		0
1-4 family mortgages		548,000		323,000		494,000		1,365,000		139,919,000		141,284,000		0
Total retail		888,000		391,000		629,000		1,908,000		220,470,000		222,378,000		0
Total past due loans	$	2,781,000	$	484,000	$	4,532,000	$	7,797,000	$	689,881,000	$	697,678,000	$	0

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

An age analysis of past due loans is as follows as of December 31, 2014:

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Originated loans
Commercial:
Commercial and industrial	$	0	$	0	$	0	$	0	$	384,570,000	$	384,570,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		29,826,000		29,826,000		0
Real estate – owner occupied		0		0		120,000		120,000		291,638,000		291,758,000		0
Real estate – non-owner occupied		0		0		116,000		116,000		410,861,000		410,977,000		0
Real estate – multi-family and residential rental		0		0		0		0		36,058,000		36,058,000		0
Total commercial		0		0		236,000		236,000		1,152,953,000		1,153,189,000		0
Retail:
Home equity and other		38,000		3,000		0		41,000		50,018,000		50,059,000		0
1-4 family mortgages		0		0		366,000		366,000		42,502,000		42,868,000		0
Total retail		38,000		3,000		366,000		407,000		92,520,000		92,927,000		0
Total past due loans	$	38,000	$	3,000	$	602,000	$	643,000	$	1,245,473,000	$	1,246,116,000	$	0

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Acquired Loans
Commercial:
Commercial and industrial	$	29,000	$	32,000	$	76,000	$	137,000	$	165,900,000	$	166,037,000	$	0
Vacant land, land development, and residential construction		0		38,000		0		38,000		22,110,000		22,148,000		0
Real estate – owner occupied		51,000		425,000		1,625,000		2,101,000		136,529,000		138,630,000		0
Real estate – non-owner occupied		68,000		598,000		395,000		1,061,000		147,536,000		148,597,000		0
Real estate – multi-family and residential rental		37,000		0		105,000		142,000		86,560,000		86,702,000		0
Total commercial		185,000		1,093,000		2,201,000		3,479,000		558,635,000		562,114,000		0
Retail:
Home equity and other		445,000		419,000		155,000		1,019,000		108,200,000		109,219,000		26,000
1-4 family mortgages		1,087,000		408,000		750,000		2,245,000		169,583,000		171,828,000		0
Total retail		1,532,000		827,000		905,000		3,264,000		277,783,000		281,047,000		26,000
Total past due loans	$	1,717,000	$	1,920,000	$	3,106,000	$	6,743,000	$	836,418,000	$	843,161,000	$	26,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired originated loans as of September 30, 2015, and average originated impaired loans for the three and nine months ended September 30, 2015, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,893,000	$	1,893,000		$	1,908,000	$	1,729,000
Vacant land, land development and residential construction		0		0			0		101,000
Real estate – owner occupied		302,000		103,000			113,000		1,032,000
Real estate – non-owner occupied		5,733,000		5,733,000			5,747,000		3,204,000
Real estate – multi-family and residential rental		0		0			151,000		232,000
Total commercial		7,928,000		7,729,000			7,919,000		6,298,000
Retail:
Home equity and other		214,000		190,000			189,000		190,000
1-4 family mortgages		1,399,000		735,000			716,000		631,000
Total retail		1,613,000		925,000			905,000		821,000
Total with no related allowance recorded	$	9,541,000	$	8,654,000		$	8,824,000	$	7,119,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	470,000	$	413,000	$	271,000	$	436,000	$	2,816,000
Vacant land, land development and residential construction		2,275,000		1,920,000		308,000		2,052,000		2,026,000
Real estate – owner occupied		6,377,000		1,824,000		494,000		1,959,000		8,778,000
Real estate – non-owner occupied		4,897,000		4,897,000		194,000		4,926,000		10,371,000
Real estate – multi-family and residential rental		1,052,000		1,052,000		390,000		1,179,000		1,266,000
Total commercial		15,071,000		10,106,000		1,657,000		10,552,000		25,257,000
Retail:
Home equity and other		195,000		157,000		121,000		160,000		143,000
1-4 family mortgages		165,000		130,000		49,000		131,000		641,000
Total retail		360,000		287,000		170,000		291,000		784,000
Total with an allowance recorded	$	15,431,000	$	10,393,000	$	1,827,000	$	10,843,000	$	26,041,000
Total impaired loans:
Commercial	$	22,999,000	$	17,835,000	$	1,657,000	$	18,471,000	$	31,555,000
Retail		1,973,000		1,212,000		170,000		1,196,000		1,605,000
Total impaired loans	$	24,972,000	$	19,047,000	$	1,827,000	$	19,667,000	$	33,160,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired acquired loans as of September 30, 2015, and average impaired acquired loans for the three and nine months ended September 30, 2015, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,697,000	$	1,661,000		$	1,596,000	$	1,432,000
Vacant land, land development and residential construction		0		0			0		0
Real estate – owner occupied		1,593,000		1,391,000			910,000		535,000
Real estate – non-owner occupied		768,000		768,000			656,000		487,000
Real estate – multi-family and residential rental		2,680,000		2,637,000			2,885,000		1,799,000
Total commercial		6,738,000		6,457,000			6,047,000		4,253,000
Retail:
Home equity and other		449,000		322,000			342,000		423,000
1-4 family mortgages		1,030,000		953,000			816,000		855,000
Total retail		1,479,000		1,275,000			1,158,000		1,278,000
Total with no related allowance recorded	$	8,217,000	$	7,732,000		$	7,205,000	$	5,531,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	66,000	$	66,000	$	5,000	$	73,000	$	65,000
Vacant land, land development and residential construction		0		0		0		0		0
Real estate – owner occupied		51,000		51,000		4,000		568,000		1,016,000
Real estate – non-owner occupied		0		0		0		0		0
Real estate – multi-family and residential rental		25,000		25,000		0		26,000		20,000
Total commercial		142,000		142,000		9,000		667,000		1,101,000
Retail:
Home equity and other		0		0		0		0		0
1-4 family mortgages		176,000		176,000		6,000		229,000		185,000
Total retail		176,000		176,000		6,000		229,000		185,000
Total with an allowance recorded	$	318,000	$	318,000	$	15,000	$	896,000	$	1,286,000
Total impaired loans:
Commercial	$	6,880,000	$	6,599,000	$	9,000	$	6,714,000	$	5,354,000
Retail		1,655,000		1,451,000		6,000		1,387,000		1,463,000
Total impaired loans	$	8,535,000	$	8,050,000	$	15,000	$	8,101,000	$	6,817,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired originated loans as of December 31, 2014, and average impaired originated loans for the three and nine months ended September 30, 2014, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,170,000	$	1,164,000		$	691,000	$	525,000
Vacant land, land development and residential construction		540,000		209,000			111,000		232,000
Real estate – owner occupied		3,609,000		1,901,000			9,227,000		4,981,000
Real estate – non-owner occupied		1,210,000		1,210,000			576,000		911,000
Real estate – multi-family and residential rental		375,000		317,000			0		0
Total commercial		6,904,000		4,801,000			10,605,000		6,649,000
Retail:
Home equity and other		207,000		191,000			642,000		598,000
1-4 family mortgages		1,144,000		560,000			553,000		591,000
Total retail		1,351,000		751,000			1,195,000		1,189,000
Total with no related allowance recorded	$	8,255,000	$	5,552,000		$	11,800,000	$	7,838,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	5,299,000	$	5,226,000	$	1,578,000	$	3,087,000	$	2,142,000
Vacant land, land development and residential construction		2,000,000		2,000,000		151,000		3,049,000		3,536,000
Real estate – owner occupied		15,745,000		15,674,000		2,200,000		2,238,000		1,869,000
Real estate – non-owner occupied		16,033,000		15,949,000		4,779,000		17,377,000		18,819,000
Real estate – multi-family and residential rental		1,371,000		1,371,000		666,000		1,679,000		1,783,000
Total commercial		40,448,000		40,220,000		9,374,000		27,430,000		28,149,000
Retail:
Home equity and other		115,000		84,000		84,000		88,000		139,000
1-4 family mortgages		2,194,000		2,000,000		694,000		2,093,000		2,144,000
Total retail		2,309,000		2,084,000		778,000		2,181,000		2,283,000
Total with an allowance recorded	$	42,757,000	$	42,304,000	$	10,152,000	$	29,611,000	$	30,432,000
Total impaired loans:
Commercial	$	47,352,000	$	45,021,000	$	9,374,000	$	38,035,000	$	34,798,000
Retail		3,660,000		2,835,000		778,000		3,376,000		3,472,000
Total impaired loans	$	51,012,000	$	47,856,000	$	10,152,000	$	41,411,000	$	38,270,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired acquired loans as of December 31, 2014, and average impaired acquired loans for the three and nine months ended September 30, 2014, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,586,000	$	1,579,000		$	0	$	0
Vacant land, land development and residential construction		0		0			0		0
Real estate – owner occupied		113,000		113,000			0		0
Real estate – non-owner occupied		326,000		326,000			0		0
Real estate – multi-family and residential rental		487,000		487,000			0		0
Total commercial		2,512,000		2,505,000			0		0
Retail:
Home equity and other		641,000		639,000			0		0
1-4 family mortgages		866,000		866,000			0		0
Total retail		1,507,000		1,505,000			0		0
Total with no related allowance recorded	$	4,019,000	$	4,010,000		$	0	$	0

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	0	$	0	$	0	$	0	$	0
Vacant land, land development and residential construction		0		0		0		0		0
Real estate – owner occupied		1,516,000		1,502,000		605,000		0		0
Real estate – non-owner occupied		0		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0		0
Total commercial		1,516,000		1,502,000		605,000		0		0
Retail:
Home equity and other		0		0		0		0		0
1-4 family mortgages		0		0		0		0		0
Total retail		0		0		0		0		0
Total with an allowance recorded	$	1,516,000	$	1,502,000	$	605,000	$	0	$	0
Total impaired loans:
Commercial	$	4,028,000	$	4,007,000	$	605,000	$	0	$	0
Retail		1,507,000		1,505,000		0		0		0
Total impaired loans	$	5,535,000	$	5,512,000	$	605,000	$	0	$	0

Impaired loans for which no allocation of the allowance for loan losses has been made generally reflect situations whereby the loans have been charged-down to estimated collateral value. Interest income recognized on accruing troubled debt restructurings totaled $0.3 million and $0.6 million during the third quarter of 2015 and 2014, respectively, while interest income recognized on accruing troubled debt restructurings totaled $1.0 million and $1.3 million during the first nine months of 2015 and 2014, respectively. No interest income was recognized on nonaccrual loans during the third quarter and first nine months of 2015 or during the respective 2014 periods.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Credit Quality Indicators. We utilize a comprehensive grading system for our commercial loans. All commercial loans are graded on a ten grade rating system. The rating system utilizes standardized grade paradigms that analyze several critical factors such as cash flow, operating performance, financial condition, collateral, industry condition and management. All commercial loans are graded at inception and reviewed and, if appropriate, re-graded at various intervals thereafter. The risk assessment for retail loans is primarily based on the type of collateral and payment activity.

Credit quality indicators were as follows as of September 30, 2015:

Originated loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	363,211,000	$	17,906,000	$	211,563,000	$	378,741,000	$	18,842,000
Grades 5 – 7		158,699,000		11,132,000		92,583,000		121,241,000		16,868,000
Grades 8 – 9		436,000		1,920,000		2,393,000		5,733,000		1,052,000
Total commercial	$	522,346,000	$	30,958,000	$	306,539,000	$	505,715,000	$	36,762,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	65,671,000	$	51,719,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Acquired loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	67,167,000	$	4,918,000	$	46,693,000	$	70,884,000	$	46,299,000
Grades 5 – 7		50,573,000		11,028,000		68,194,000		57,262,000		37,162,000
Grades 8 – 9		3,032,000		830,000		5,590,000		2,366,000		3,302,000
Total commercial	$	120,772,000	$	16,776,000	$	120,477,000	$	130,512,000	$	86,763,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	81,094,000	$	141,284,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Credit quality indicators were as follows as of December 31, 2014:

Originated loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-OwnerOccupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	266,631,000	$	11,242,000	$	190,656,000	$	285,035,000	$	12,394,000
Grades 5 – 7		109,639,000		16,375,000		83,123,000		113,982,000		22,282,000
Grades 8 – 9		8,300,000		2,209,000		17,979,000		11,960,000		1,382,000
Total commercial	$	384,570,000	$	29,826,000	$	291,758,000	$	410,977,000	$	36,058,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	50,059,000	$	42,868,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Acquired loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	72,411,000	$	5,875,000	$	39,496,000	$	65,886,000	$	35,858,000
Grades 5 – 7		90,320,000		14,472,000		92,212,000		78,103,000		49,781,000
Grades 8 – 9		3,306,000		1,801,000		6,922,000		4,608,000		1,063,000
Total commercial	$	166,037,000	$	22,148,000	$	138,630,000	$	148,597,000	$	86,702,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	109,219,000	$	171,828,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

All commercial loans are graded using the following criteria:

Grade 1.	Excellent credit rating that contain very little, if any, risk of loss.
Grade 2.	Strong sources of repayment and have low repayment risk.
Grade 3.	Good sources of repayment and have limited repayment risk.
Grade 4.	Adequate sources of repayment and acceptable repayment risk; however, characteristics are present that render the credit more vulnerable to a negative event.
Grade 5.	Marginally acceptable sources of repayment and exhibit defined weaknesses and negative characteristics.
Grade 6.	Well defined weaknesses which may include negative current cash flow, high leverage, or operating losses. Generally, if the credit does not stabilize or if further deterioration is observed in the near term, the loan will likely be downgraded and placed on the Watch List (i.e., list of lending relationships that receive increased scrutiny and review by the Board of Directors and senior management).
Grade 7.	Defined weaknesses or negative trends that merit close monitoring through Watch List status.
Grade 8.	Inadequately protected by current sound net worth, paying capacity of the obligor, or pledged collateral, resulting in a distinct possibility of loss requiring close monitoring through Watch List status.
Grade 9.	Vital weaknesses exist where collection of principal is highly questionable.
Grade 10.	Considered uncollectable and of such little value that continuance as an asset is not warranted.

The primary risk elements with respect to commercial loans are the financial condition of the borrower, the sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers and employ a disciplined and formalized review of the existence of collateral and its value. The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditor’s rights in order to preserve our collateral position.

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity in the allowance for loan losses and the recorded investments in originated loans as of and during the three and nine months ended September 30, 2015 are as follows:

	Commercial			Retail
	Loans			Loans			Unallocated			Total
Allowance for loan losses:
Balance at June 30, 2015	$	13,992,000		$	1,714,000		$	34,000		$	15,740,000
Provision for loan losses		9,000			(13,000	)		(89,000	)		(93,000	)
Charge-offs		0			(46,000	)		0			(46,000	)
Recoveries		200,000			36,000			0			236,000
Ending balance	$	14,201,000		$	1,691,000		$	(55,000	)	$	15,837,000
Allowance for loan losses:
Balance at December 31, 2014	$	17,736,000		$	1,487,000		$	76,000		$	19,299,000
Provision for loan losses		(1,641,000	)		578,000			(131,000	)		(1,194,000	)
Charge-offs		(4,276,000	)		(563,000	)		0			(4,839,000	)
Recoveries		2,382,000			189,000			0			2,571,000
Ending balance	$	14,201,000		$	1,691,000		$	(55,000	)	$	15,837,000
Ending balance: individually evaluated for impairment	$	1,657,000		$	170,000		$	0		$	1,827,000
Ending balance: collectively evaluated for impairment	$	12,544,000		$	1,521,000		$	(55,000	)	$	14,010,000
Total loans:
Ending balance	$	1,402,320,000		$	117,390,000					$	1,519,710,000
Ending balance: individually evaluated for impairment	$	17,835,000		$	1,212,000					$	19,047,000
Ending balance: collectively evaluated for impairment	$	1,384,485,000		$	116,178,000					$	1,500,663,000

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity in the allowance for loan losses for acquired loans during the three and nine months ended September 30, 2015 is as follows:

	Commercial			Retail
	Loans			Loans			Unallocated		Total
Allowance for loan losses:
Balance at June 30, 2015	$	561,000		$	260,000		$	0	$	821,000
Provision for loan losses		(389,000	)		(18,000	)		0		(407,000	)
Charge-offs		(87,000	)		(49,000	)		0		(136,000	)
Recoveries		0			4,000			0		4,000
Ending balance	$	85,000		$	197,000		$	0	$	282,000
Allowance for loan losses:
Balance at December 31, 2014	$	681,000		$	61,000		$	0	$	742,000
Provision for loan losses		(479,000	)		173,000			0		(306,000	)
Charge-offs		(118,000	)		(56,000	)		0		(174,000	)
Recoveries		1,000			19,000			0		20,000
Ending balance	$	85,000		$	197,000		$	0	$	282,000

In accordance with acquisition accounting rules, acquired loans were recorded at fair value at the Merger Date and the prior allowance was eliminated.

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity in the allowance for loan losses and the recorded investments in originated loans as of and during the three and nine months ended September 30, 2014 are as follows:

	Commercial			Retail
	Loans			Loans			Unallocated			Total
Allowance for loan losses:
Balance at June 30, 2014	$	19,107,000		$	1,774,000		$	(25,000	)	$	20,856,000
Provision for loan losses		(473,000	)		63,000			10,000			(400,000	)
Charge-offs		(24,000	)		(321,000	)		0			(345,000	)
Recoveries		102,000			161,000			0			263,000
Ending balance	$	18,712,000		$	1,677,000		$	(15,000	)	$	20,374,000
Allowance for loan losses:
Balance at December 31, 2013	$	20,455,000		$	2,358,000		$	8,000		$	22,821,000
Provision for loan losses		(2,251,000	)		(726,000	)		(23,000	)		(3,000,000	)
Charge-offs		(708,000	)		(328,000	)		0			(1,036,000	)
Recoveries		1,216,000			373,000			0			1,589,000
Ending balance	$	18,712,000		$	1,677,000		$	(15,000	)	$	20,374,000
Ending balance: individually evaluated for impairment	$	10,485,000		$	879,000		$	0		$	11,364,000
Ending balance: collectively evaluated for impairment	$	8,227,000		$	798,000		$	(15,000	)	$	9,010,000
Total loans:
Ending balance	$	1,103,802,000		$	82,911,000					$	1,186,713,000
Ending balance: individually evaluated for impairment	$	48,870,000		$	3,346,000					$	52,216,000
Ending balance: collectively evaluated for impairment	$	1,054,932,000		$	79,565,000					$	1,134,497,000

No allowance was established for acquired loans as of September 30, 2014.

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Loans modified as troubled debt restructurings during the three months ended September 30, 2015 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		0	$	0	$	0
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		1		237,000		237,000
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		1		237,000		237,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		1	$	237,000	$	237,000

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Loans modified as troubled debt restructurings during the nine months ended September 30, 2015 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		9	$	1,876,000	$	1,901,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		9		1,876,000		1,901,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		9	$	1,876,000	$	1,901,000
Acquired loans
Commercial:
Commercial and industrial		2	$	286,000	$	286,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		3		66,000		66,000
Real estate – non-owner occupied		4		655,000		655,000
Real estate – multi-family and residential rental		2		202,000		202,000
Total acquired commercial		11		1,209,000		1,209,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		11	$	1,209,000	$	1,209,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Loans modified as troubled debt restructurings during the three months ended September 30, 2014 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		2	$	5,994,000	$	6,094,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		2		16,787,000		16,787,000
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		4		22,781,000		22,881,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		4	$	22,781,000	$	22,881,000
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		0	$	0	$	0

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Loans modified as troubled debt restructurings during the nine months ended September 30, 2014 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		2	$	5,994,000	$	6,094,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		3		17,783,000		17,783,000
Real estate – non-owner occupied		1		146,000		146,000
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		6		23,923,000		24,023,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		6	$	23,923,000	$	24,023,000
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		0	$	0	$	0

(Continued)

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MERCANTILE BANK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the nine months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following acquired loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		1		18,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		1		18,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		1	$	18,000

The following acquired loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the nine months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		1		18,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		1		18,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		1	$	18,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended September 30, 2014 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the nine months ended September 30, 2014 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity for originated loans categorized as troubled debt restructurings during the three months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	2,442,000		$	2,632,000		$	2,218,000		$	11,082,000		$	491,000
Charge-Offs		0			0			0			0			0
Payments		(56,000	)		(272,000	)		(291,000	)		(324,000	)		(7,000	)
Transfers to ORE		0			0			0			0			0
Net Additions/Deletions		(302,000	)		0			0			0			0
Ending Balance	$	2,084,000		$	2,360,000		$	1,927,000		$	10,758,000		$	484,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	270,000
Charge-Offs		0		0
Payments		0		(3,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	267,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity for acquired loans categorized as troubled debt restructurings during the three months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,521,000		$	0	$	1,350,000		$	361,000		$	580,000
Charge-Offs		0			0		0			0			(42,000	)
Payments		(324,000	)		0		(77,000	)		(5,000	)		(274,000	)
Transfers to ORE		0			0		0			0			0
Net Additions/Deletions		0			0		0			236,000			0
Ending Balance	$	1,197,000		$	0	$	1,273,000		$	592,000		$	264,000

	Retail			Retail
	Home Equity			1-4 Family
	and Other			Mortgages
Retail Loan Portfolio:
Beginning Balance	$	152,000		$	177,000
Charge-Offs		0			0
Payments		(5,000	)		(1,000	)
Transfers to ORE		0			0
Net Additions/Deletions		0			0
Ending Balance	$	147,000		$	176,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity for originated loans categorized as troubled debt restructurings during the nine months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	7,026,000		$	2,680,000		$	17,160,000		$	17,439,000		$	505,000
Charge-Offs		0			0			(4,198,000	)		0			0
Payments		(6,591,000	)		(320,000	)		(11,035,000	)		(6,681,000	)		(21,000	)
Transfers to ORE		0			0			0			0			0
Net Additions/Deletions		1,649,000			0			0			0			0
Ending Balance	$	2,084,000		$	2,360,000		$	1,927,000		$	10,758,000		$	484,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	1,967,000
Charge-Offs		0		(148,000	)
Payments		0		(1,552,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	267,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity for acquired loans categorized as troubled debt restructurings during the nine months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,439,000		$	0	$	1,569,000		$	64,000		$	381,000
Charge-Offs		0			0		0			0			(42,000	)
Payments		(597,000	)		0		(296,000	)		(6,000	)		(329,000	)
Transfers to ORE		0			0		0			0			0
Net Additions/Deletions		355,000			0		0			534,000			254,000
Ending Balance	$	1,197,000		$	0	$	1,273,000		$	592,000		$	264,000

	Retail			Retail
	Home Equity			1-4 Family
	and Other			Mortgages
Retail Loan Portfolio:
Beginning Balance	$	26,000		$	178,000
Charge-Offs		0			0
Payments		(32,000	)		(2,000	)
Transfers to ORE		0			0
Net Additions/Deletions		153,000			0
Ending Balance	$	147,000		$	176,000

(Continued)

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(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity for originated loans categorized as troubled debt restructurings during the three months ended September 30, 2014 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,176,000		$	3,786,000		$	2,711,000		$	18,664,000		$	719,000
Charge-Offs		0			0			0			0			0
Payments		(205,000	)		(287,000	)		(91,000	)		(655,000	)		(130,000	)
Transfers to ORE		(21,000	)		0			0			0			0
Net Additions/Deletions		6,315,000			0			16,748,000			0			0
Ending Balance	$	7,265,000		$	3,499,000		$	19,368,000		$	18,009,000		$	589,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	2,077,000
Charge-Offs		0		0
Payments		0		(51,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	2,026,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Activity for originated loans categorized as troubled debt restructurings during the nine months ended September 30, 2014 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,656,000		$	4,501,000		$	1,816,000		$	22,311,000		$	2,620,000
Charge-Offs		(67,000	)		0			(11,000	)		0			(420,000	)
Payments		(632,000	)		(3,901,000	)		(181,000	)		(4,621,000	)		(1,611,000	)
Transfers to ORE		(21,000	)		0			0			0			0
Net Additions/Deletions		6,329,000			2,899,000			17,744,000			319,000			0
Ending Balance	$	7,265,000		$	3,499,000		$	19,368,000		$	18,009,000		$	589,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	2,191,000
Charge-Offs		0		0
Payments		0		(165,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	2,026,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

The allowance related to originated loans categorized as troubled debt restructurings was as follows: 

	September 30,		December 31,
	2015		2014
Commercial:
Commercial and industrial	$	132,000	$	16,000
Vacant land, land development, and residential construction		234,000		151,000
Real estate – owner occupied		114,000		182,000
Real estate – non-owner occupied		194,000		4,778,000
Real estate – multi-family and residential rental		390,000		666,000
Total commercial		1,064,000		5,793,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total related allowance	$	1,064,000	$	5,793,000

In general, our policy dictates that a renewal or modification of an 8- or 9-rated commercial loan meets the criteria of a troubled debt restructuring, although we review and consider all renewed and modified loans as part of our troubled debt restructuring assessment procedures. Loan relationships rated 8 contain significant financial weaknesses, resulting in a distinct possibility of loss, while relationships rated 9 reflect vital financial weaknesses, resulting in a highly questionable ability on our part to collect principal; we believe borrowers warranting such ratings would have difficulty obtaining financing from other market participants. Thus, due to the lack of comparable market rates for loans with similar risk characteristics, we believe 8- or 9-rated loans renewed or modified were done so at below market rates. Loans that are identified as troubled debt restructurings are considered impaired and are individually evaluated for impairment when assessing these credits in our allowance for loan losses calculation.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4.     PREMISES AND EQUIPMENT, NET

Premises and equipment are comprised of the following:

	September 30,		December 31,
	2015		2014
Land and improvements	$	16,598,000	$	16,579,000
Buildings		39,349,000		38,761,000
Furniture and equipment		16,928,000		16,622,000
		72,875,000		71,962,000
Less: accumulated depreciation		25,366,000		23,150,000
Premises and equipment, net	$	47,509,000	$	48,812,000

Depreciation expense totaled $0.7 million during the third quarter of 2015 and 2014. Depreciation expense totaled $2.3 million during the first nine months of 2015, compared to $1.5 million during the first nine months of 2014.

5.     DEPOSITS

Our total deposits at September 30, 2015 totaled $2.25 billion, a decrease of $22.8 million, or 1.0%, from December 31, 2014. The components of our outstanding balances at September 30, 2015 and December 31, 2014, and percentage change in deposits from the end of 2014 to the end of the third quarter of 2015, are as follows:

	September 30, 2015					December 30, 2014					Percent Increase
	Balance		%			Balance		%			(Decrease)
Noninterest-bearing checking	$	619,125,000		27.5	%	$	558,738,000		24.5	%		10.8	%
Interest-bearing checking		389,978,000		17.3			413,382,000		18.2			(5.7	)
Money market		283,707,000		12.6			235,587,000		10.3			20.4
Savings		342,902,000		15.2			330,459,000		14.5			3.8
Time, under $100,000		162,729,000		7.2			181,026,000		8.0			(10.1	)
Time, $100,000 and over		333,226,000		14.8			382,120,000		16.8			(12.8	)
		2,131,667,000		94.6			2,101,312,000		92.3			1.4
Out-of-area time, under $100,000		298,000		<0.1			2,422,000		0.1			(87.7	)
Out-of-area time, $100,000 and over		122,164,000		5.4			173,181,000		7.6			(29.5	)
		122,462,000		5.4			175,603,000		7.7			(30.2	)
Total deposits	$	2,254,129,000		100.0	%	$	2,276,915,000		100.0	%		(1.0%	)

(Continued) 

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(Unaudited)

6.     SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase (“repurchase agreements”) are offered principally to certain large deposit customers. Information relating to our repurchase agreements follows:

	Nine Months Ended September 30, 2015			Twelve Months Ended December 31, 2014
Outstanding balance at end of period	$	158,149,000		$	167,569,000
Average interest rate at end of period		0.11	%		0.11	%
Average daily balance during the period	$	145,867,000		$	105,474,000
Average interest rate during the period		0.11	%		0.12	%
Maximum daily balance during the period	$	168,211,000		$	178,042,000

Repurchase agreements generally have maturities of one business day. Repurchase agreements are treated as financings and the obligations to repurchase securities sold are reflected as liabilities. Securities involved with the agreements are recorded as assets of our bank and are held in safekeeping by a correspondent bank. Repurchase agreements are secured by securities with an aggregate market value equal to the aggregate outstanding balance.

7.     FEDERAL HOME LOAN BANK OF INDIANAPOLIS ADVANCES

Federal Home Loan Bank of Indianapolis (“FHLBI”) advances totaled $68.0 million at September 30, 2015, and mature at varying dates from December 2016 through August 2022, with fixed rates of interest from 1.22% to 2.11% and averaging 1.49%. FHLBI advances totaled $54.0 million at December 31, 2014, and were expected to mature at varying dates ranging from January 2015 through September 2017, with fixed rates of interest from 0.62% to 1.51% and averaging 1.26%.

Each advance is payable at its maturity date and is subject to a prepayment fee if paid prior to the maturity date. The advances are collateralized by residential mortgage loans, first mortgage liens on multi-family residential property loans, first mortgage liens on commercial real estate property loans, and substantially all other assets of our bank, under a blanket lien arrangement. Our borrowing line of credit as of September 30, 2015 totaled about $442 million, with availability based on collateral approximating $374 million.

Maturities of currently outstanding FHLBI advances are as follows:

2015	$	0
2016		3,000,000
2017		45,000,000
2018		0
Thereafter		20,000,000

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

8.     COMMITMENTS AND OFF-BALANCE SHEET RISK

Our bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Loan commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Standby letters of credit are conditional commitments issued by our bank to guarantee the performance of a customer to a third party. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized, if any, in the balance sheet. Our bank’s maximum exposure to loan loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. Our bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Collateral, such as accounts receivable, securities, inventory, and property and equipment, is generally obtained based on our credit assessment of the borrower. If required, estimated loss exposure resulting from these instruments is expensed and is generally recorded as a liability. There was no reserve or liability balance for these instruments as of September 30, 2015 and December 31, 2014.

A summary of the contractual amounts of our financial instruments with off-balance sheet risk at September 30, 2015 and December 31, 2014 follows:

	September 30,		December 31,
	2015		2014
Commercial unused lines of credit	$	488,744,000	$	554,856,000
Unused lines of credit secured by 1 – 4 family residential properties		61,534,000		60,983,000
Credit card unused lines of credit		14,100,000		11,649,000
Other consumer unused lines of credit		9,265,000		8,673,000
Commitments to make loans		238,884,000		110,126,000
Standby letters of credit		35,562,000		35,461,000
	$	848,089,000	$	781,748,000

(Continued)

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(Unaudited)

8.     COMMITMENTS AND OFF-BALANCE SHEET RISK (Continued)

Certain of our commercial loan customers have entered into interest rate swap agreements directly with our correspondent banks. To assist our commercial loan customers in these transactions, and to encourage our correspondent banks to enter into the interest rate swap transactions with minimal credit underwriting analyses on their part, we have entered into risk participation agreements with the correspondent banks whereby we agree to make payments to the correspondent banks owed by our commercial loan customers under the interest rate swap agreement in the event that our commercial loan customers do not make the payments. We are not a party to the interest rate swap agreements under these arrangements. As of September 30, 2015, the total notional amount of the underlying interest rate swap agreements was $14.8 million, with a net fair value from our commercial loan customers’ perspective of negative $2.6 million. These risk participation agreements are considered financial guarantees in accordance with applicable accounting guidance and are therefore recorded as liabilities at fair value, generally equal to the fees collected at the time of their execution. These liabilities are accreted into income during the term of the interest rate swap agreements, generally ranging from four to fifteen years.

9.     HEDGING ACTIVITIES

Our interest rate risk policy includes guidelines for measuring and monitoring interest rate risk. Within these guidelines, parameters have been established for maximum fluctuations in net interest income. Possible fluctuations are measured and monitored using net interest income simulation. Our policy provides for the use of certain derivative instruments and hedging activities to aid in managing interest rate risk to within the policy parameters. To help mitigate the negative impact to our net interest income in an increasing interest rate environment resulting from our cost of funds likely increasing at a higher rate than the yield on our assets, we may periodically enter into derivative financial instruments.

In February 2012, we entered into an interest rate swap agreement with a correspondent bank to hedge the floating rate on our subordinated debentures, which became effective in January 2013 and matures in January 2018. Our $32.0 million of subordinated debentures have a rate equal to the 90-Day Libor Rate plus a fixed spread of 218 basis points, and are subject to repricing quarterly. The interest rate swap agreement provides for us to pay our correspondent bank a fixed rate, while our correspondent bank will pay us the 90-Day Libor Rate on a $32.0 million notional amount. The quarterly re-set dates for the floating rate on the interest rate swap agreement are the same as the re-set dates for the floating rate on the subordinated debentures. The interest rate swap agreement does qualify for hedge accounting; therefore, monthly fluctuations in the present value of the interest rate swap agreement, net of tax effect, are recorded to other comprehensive income. As of September 30, 2015 and December 31, 2014, the fair value of the interest rate swap agreement was recorded as a liability in the amount of $0.5 million and $0.3 million, respectively.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

10.      FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts, estimated fair values and level within the fair value hierarchy of financial instruments were as follows as of September 30, 2015 and December 31, 2014 (dollars in thousands):

	Level in	September 30, 2015				December 31, 2014
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy	Values		Values		Values		Values
Financial assets:
Cash	Level 1	$	13,314	$	13,314	$	13,261	$	13,261
Cash equivalents	Level 2		90,535		90,535		159,477		159,477
Securities available for sale	(1)		367,173		367,173		432,912		432,912
FHLBI stock	(2)		7,567		7,567		13,699		13,699
Loans, net	Level 3		2,199,212		2,200,805		2,067,662		2,062,566
Loans held for sale	Level 2		2,057		2,057		1,574		1,574
Bank owned life insurance	Level 2		58,680		58,680		57,861		57,861
Accrued interest receivable	Level 2		8,355		8,355		8,033		8,033
Financial liabilities:
Deposits	Level 2		2,254,129		2,214,078		2,276,915		2,254,749
Repurchase agreements	Level 2		158,149		158,149		167,569		167,569
FHLBI advances	Level 2		68,000		68,883		54,022		54,720
Subordinated debentures	Level 2		54,983		55,049		54,472		54,508
Accrued interest payable	Level 2		1,554		1,554		1,942		1,942
Interest rate swap	(1)		533		533		253		253

(1) See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

(2) It is not practical to determine the fair value of FHLBI stock due to transferability restrictions.

Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable, bank owned life insurance, noninterest checking deposits, securities sold under agreements to repurchase, and variable rate loans and deposits that reprice frequently and fully. Security fair values are based on market prices or dealer quotes, and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans and deposits and for variable rate loans and deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of subordinated debentures and FHLBI advances is based on current rates for similar financing. Fair value of the interest rate swap is determined primarily utilizing market-consensus forecasted yield curves. Fair value of off-balance sheet items is estimated to be nominal.

(Continued)

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(Unaudited)

11.     FAIR VALUES

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability, or in the absence of a principal market, the most advantageous market for the asset or liability. The price of the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

We are required to use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources, or unobservable, meaning those that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. In that regard, we utilize a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that we have the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be derived from or corroborated by observable market data by correlation or other means.

Level 3: Significant unobservable inputs that reflect our own conclusions about the assumptions that market participants would use in pricing an asset or liability.

(Continued)

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(Unaudited)

11.     FAIR VALUES (Continued)

The following is a description of our valuation methodologies used to measure and disclose the fair values of our financial assets and liabilities that are recorded at fair value on a recurring or nonrecurring basis:

Securities available for sale. Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based on quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models. Level 2 securities include U.S. Government agency bonds, mortgage-backed securities issued or guaranteed by U.S. Government agencies, municipal general obligation and revenue bonds and mutual funds. Level 3 securities include bonds issued by certain relatively small municipalities located within our markets that have very limited marketability due to their size and lack of ratings from a recognized rating service. We carry these bonds at historical cost, which we believe approximates fair value, unless our periodic financial analysis or other information becomes known which necessitates a valuation allowance. There was no such valuation allowance as of September 30, 2015 or December 31, 2014. We have no Level 1 securities available for sale.

Derivatives. The interest rate swap is measured at fair value on a recurring basis. We measure fair value utilizing models that use primarily market observable inputs, such as forecasted yield curves, and accordingly, the interest rate swap agreement is classified as Level 2.

Mortgage loans held for sale. Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors, and are measured on a nonrecurring basis. Fair value is based on independent quoted market prices, where applicable, or the prices for other mortgage whole loans with similar characteristics. As of September 30, 2015 and December 31, 2014, we determined that the fair value of our mortgage loans held for sale approximated the recorded cost of $2.1 million and $1.6 million, respectively.

Loans. We do not record loans at fair value on a recurring basis. However, from time to time, we record nonrecurring fair value adjustments to collateral dependent loans to reflect partial write-downs or specific reserves that are based on the observable market price or current estimated value of the collateral. These loans are reported in the nonrecurring table below at initial recognition of impairment and on an ongoing basis until recovery or charge-off.

Foreclosed Assets. At time of foreclosure or repossession, foreclosed and repossessed assets are adjusted to fair value less costs to sell upon transfer of the loans to foreclosed and repossessed assets, establishing a new cost basis. We subsequently adjust estimated fair value of foreclosed assets on a nonrecurring basis to reflect write-downs based on revised fair value estimates.

(Continued)

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(Unaudited)

11.     FAIR VALUES (Continued)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 are as follows:

				Quoted
				Prices in
				Active		Significant
				Markets for		Other			Significant
				Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Available for sale securities
U.S. Government agency debt obligations	$	159,393,000		$	0	$	159,393,000		$	0
Mortgage-backed securities		72,964,000			0		72,964,000			0
Municipal general obligation bonds		123,608,000			0		115,119,000			8,489,000
Municipal revenue bonds		9,250,000			0		9,250,000			0
Other investments		1,958,000			0		1,958,000			0
Interest rate swap		(533,000	)		0		(533,000	)		0
Total	$	366,640,000		$	0	$	358,151,000		$	8,489,000

There were no transfers in or out of Level 1, Level 2 or Level 3 during the first nine months of 2015.

The balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 are as follows:

				Quoted
				Prices in
				Active		Significant
				Markets for		Other			Significant
				Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Available for sale securities
U.S. Government agency debt obligations	$	193,468,000		$	0	$	193,468,000		$	0
Mortgage-backed securities		93,561,000			0		93,561,000			0
Municipal general obligation bonds		133,082,000			0		122,801,000			10,281,000
Municipal revenue bonds		10,873,000			0		10,873,000			0
Other investments		1,928,000			0		1,928,000			0
Interest rate swap		(253,000	)		0		(253,000	)		0
Total	$	432,659,000		$	0	$	422,378,000		$	10,281,000

There were no transfers in or out of Level 1, Level 2 or Level 3 during 2014.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

11.     FAIR VALUES (Continued)

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The balances of assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2015 are as follows:

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans (1)	$	9,258,000	$	0	$	0	$	9,258,000
Foreclosed assets (1)		2,272,000		0		0		2,272,000
Total	$	11,530,000	$	0	$	0	$	11,530,000

The balances of assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2014 are as follows:

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans (1)	$	17,097,000	$	0	$	0	$	17,097,000
Foreclosed assets (1)		1,995,000		0		0		1,995,000
Total	$	19,092,000	$	0	$	0	$	19,092,000

⁽¹⁾ Represents carrying value and related write-downs for which adjustments are based on the estimated value of the property or other assets.

12.     REGULATORY MATTERS

We are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors, and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on our financial statements.

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12.     REGULATORY MATTERS (Continued)

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If an institution is not well capitalized, regulatory approval is required to accept brokered deposits. Subject to limited exceptions, no institution may make a capital distribution if, after making the distribution, it would be undercapitalized. If an institution is undercapitalized, it is subject to close monitoring by its principal federal regulator, its asset growth and expansion are restricted, and plans for capital restoration are required. In addition, further specific types of restrictions may be imposed on the institution at the discretion of the federal regulator. At September 30, 2015 and December 31, 2014, our bank was in the well capitalized category under the regulatory framework for prompt corrective action. There are no conditions or events since September 30, 2015 that we believe have changed our bank’s categorization.

Our actual capital levels (dollars in thousands) and the minimum levels required to be categorized as adequately and well capitalized were:

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2015
Total capital (to risk weighted assets)
Consolidated	$	341,029		13.6	%	$	200,894		8.0	%	$	NA		NA
Bank		343,288		13.7			200,989		8.0			251,236		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		324,911		12.9			150,671		6.0			NA		NA
Bank		327,169		13.0			150,742		6.0			200,989		8.0
Common equity tier 1 (to risk weighted assets)
Consolidated		275,395		11.0			113,156		4.5			NA		NA
Bank		327,169		13.0			113,057		4.5			163,304		6.5
Tier 1 capital (to average assets)
Consolidated		324,911		11.5			112,825		4.0			NA		NA
Bank		327,169		11.6			112,914		4.0			141,142		5.0

(Continued)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12.     REGULATORY MATTERS (Continued)

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2014
Total capital (to risk weighted assets)
Consolidated	$	334,793		14.4	%	$	185,553		8.0	%	$	NA		NA
Bank		332,749		14.4			185,309		8.0			231,636		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		314,752		13.6			92,777		4.0			NA		NA
Bank		312,708		13.5			92,655		4.0			138,982		6.0
Tier 1 capital (to average assets)
Consolidated		314,752		11.2			112,949		4.0			NA		NA
Bank		312,708		11.1			112,856		4.0			141,070		5.0

Our consolidated capital levels as of September 30, 2015 and December 31, 2014 include $52.9 million and $52.4 million, respectively, of trust preferred securities subject to certain limitations. Under applicable Federal Reserve guidelines, the trust preferred securities constitute a restricted core capital element. The guidelines provide that the aggregate amount of restricted core elements that may be included in our Tier 1 capital must not exceed 25% of the sum of all core capital elements, including restricted core capital elements, net of goodwill less any associated deferred tax liability. Our ability to include the trust preferred securities in Tier 1 capital in accordance with the guidelines is not affected by the provision of the Dodd-Frank Act generally restricting such treatment, because (i) the trust preferred securities were issued before May 19, 2010, and (ii) our total consolidated assets as of December 31, 2009 were less than $15.0 billion. As of September 30, 2015 and December 31, 2014, all $52.9 million and $52.4 million, respectively, of the trust preferred securities were included in our consolidated Tier 1 capital.

Our regulatory capital calculations and the minimum requirements to be categorized as well capitalized and adequately capitalized under the prompt corrective action regulations were impacted by BASEL III, which became effective January 1, 2015 and are included in the September 30, 2015 table above. The net impact on our regulatory capital ratios and our overall capital position was not material.

(Continued) 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12.     REGULATORY MATTERS (Continued)

Our and our bank’s ability to pay cash and stock dividends is subject to limitations under various laws and regulations and to prudent and sound banking practices. On January 15, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.14 per share that was paid on March 25, 2015 to shareholders of record as of March 13, 2015. On April 16, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.14 per share that was paid on June 24, 2015 to shareholders of record as of June 12, 2015. On July 16, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.15 per share that was paid on September 23, 2015 to shareholders of record as of September 11, 2015. On October 15, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.15 per share that will be paid on December 23, 2015 to shareholders of record as of December 11, 2015.

In addition, on January 30, 2015, we announced that our Board of Directors had authorized a new program to repurchase up to $20.0 million of our common stock from time to time in open market transactions at prevailing market prices or by other means in accordance with applicable regulations. We expect to fund a majority of such repurchases from cash dividends paid to us from our Bank. During the first nine months of 2015, we purchased approximately 765,000 shares of common stock at an average price of $19.89, totaling about $15.2 million, under the stock repurchase program. The purchased shares were retired effective on the acquisition date.

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

Forward Looking Statements

This report contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and our company. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “projects,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. We undertake no obligation to update, amend, or clarify forward looking-statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise.

Future Factors include, among others, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation or actions by bank regulators; changes in tax laws; changes in prices, levies, and assessments; our ability to realize the anticipated benefits of our merger with Firstbank Corporation and the anticipated savings from our cost efficiency program; the ability of the combined company to compete in the highly competitive banking and financial services industry; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in local real estate values; changes in the national and local economies; and risk factors described in our annual report on Form 10-K for the year ended December 31, 2014 or in this report. These are representative of the Future Factors that could cause a difference between an ultimate actual outcome and a forward-looking statement.

Introduction

The following discussion compares the financial condition of Mercantile Bank Corporation and its consolidated subsidiaries, including Mercantile Bank of Michigan (“our bank”) and our bank’s two subsidiaries, Mercantile Bank Real Estate Co., LLC (“our real estate company”) and Mercantile Insurance Center, Inc. (“our insurance company”), at September 30, 2015 and December 31, 2014 and the results of operations for the three months and nine months ended September 30, 2015 and September 30, 2014. This discussion should be read in conjunction with the interim consolidated financial statements and footnotes included in this report. Unless the text clearly suggests otherwise, references in this report to “us,” “we,” “our” or “the company” include Mercantile Bank Corporation and its consolidated subsidiaries referred to above.

Critical Accounting Policies 

Accounting principles generally accepted in the United States of America are complex and require us to apply significant judgment to various accounting, reporting and disclosure matters. We must use assumptions and estimates to apply these principles where actual measurements are not possible or practical. Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited financial statements included in this report. For a discussion of our significant accounting policies, see Note 1 of the Notes to our Consolidated Financial Statements included on pages F-45 through F-51 in our Form 10-K for the fiscal year ended December 31, 2014 (Commission file number 000-26719). Our allowance for loan losses policy and accounting for income taxes are highly dependent upon subjective or complex judgments, assumptions and estimates. Changes in such estimates may have a significant impact on the financial statements, and actual results may differ from those estimates. We have reviewed the application of these policies with the Audit Committee of our Board of Directors.

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Allowance for Loan Losses: The allowance for loan losses (“allowance”) is maintained at a level we believe is adequate to absorb probable incurred losses identified and inherent in the originated loan portfolio. Our evaluation of the adequacy of the allowance is an estimate based on past loan loss experience, the nature and volume of the loan portfolio, information about specific borrower situations and estimated collateral values, guidance from bank regulatory agencies, and assessments of the impact of current and anticipated economic conditions on the loan portfolio. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in our judgment, should be charged-off. Loan losses are charged against the allowance when we believe the uncollectability of a loan is likely. The balance of the allowance represents our best estimate, but significant downturns in circumstances relating to loan quality or economic conditions could result in a requirement for an increased allowance in the future. Likewise, an upturn in loan quality or improved economic conditions may result in a decline in the required allowance in the future. In either instance, unanticipated changes could have a significant impact on the allowance and operating results.

The allowance is increased through a provision charged to operating expense. Uncollectable loans are charged-off through the allowance. Recoveries of loans previously charged-off are added to the allowance. A loan is considered impaired when it is probable that contractual interest and principal payments will not be collected either for the amounts or by the dates as scheduled in the loan agreement. Impairment is evaluated in aggregate for smaller-balance loans of similar nature such as residential mortgage, consumer and credit card loans, and on an individual loan basis for other loans. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. The timing of obtaining outside appraisals varies, generally depending on the nature and complexity of the property being evaluated, general breadth of activity within the marketplace and the age of the most recent appraisal. For collateral dependent impaired loans, in most cases we obtain and use the “as is” value as indicated in the appraisal report, adjusting for any expected selling costs. In certain circumstances, we may internally update outside appraisals based on recent information impacting a particular or similar property, or due to identifiable trends (e.g., recent sales of similar properties) within our markets. The expected future cash flows exclude potential cash flows from certain guarantors. To the extent these guarantors provide repayments, a recovery would be recorded upon receipt. Loans are evaluated for impairment when payments are delayed, typically 30 days or more, or when serious deficiencies are identified within the credit relationship. Our policy for recognizing income on impaired loans is to accrue interest unless a loan is placed on nonaccrual status. We put loans into nonaccrual status when the full collection of principal and interest is not expected.

Income Tax Accounting: Current income tax assets and liabilities are established for the amount of taxes payable or refundable for the current year. In the preparation of income tax returns, tax positions are taken based on interpretation of federal and state income tax laws for which the outcome may be uncertain. We periodically review and evaluate the status of our tax positions and make adjustments as necessary. Deferred income tax assets and liabilities are also established for the future tax consequences of events that have been recognized in our financial statements or tax returns. A deferred income tax asset or liability is recognized for the estimated future tax effects attributable to temporary differences that can be carried forward (used) in future years. The valuation of our net deferred income tax asset is considered critical as it requires us to make estimates based on provisions of the enacted tax laws. The assessment of the realizability of the net deferred income tax asset involves the use of estimates, assumptions, interpretations and judgments concerning accounting pronouncements, federal and state tax codes and the extent of future taxable income. There can be no assurance that future events, such as court decisions, positions of federal and state tax authorities, and the extent of future taxable income will not differ from our current assessment, the impact of which could be significant to the consolidated results of operations and reported earnings.

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Accounting guidance requires that we assess whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, we consider both positive and negative evidence and analyze changes in near-term market conditions as well as other factors which may impact future operating results. Significant weight is given to evidence that can be objectively verified. During 2011, we returned to pre-tax profitability for four consecutive quarters. Additionally, we experienced lower provision expense, continued declines in nonperforming assets and problem asset administration costs, a higher net interest margin, a further strengthening of our regulatory capital ratios and additional reductions in wholesale funding. This positive evidence allowed us to conclude that, as of December 31, 2011, it was more likely than not that we returned to sustainable profitability in amounts sufficient to allow for realization of our deferred tax assets in future years. Consequently, we reversed the valuation allowance that we had previously determined necessary to carry against our entire net deferred tax asset starting on December 31, 2009.

Securities and Other Financial Instruments: Securities available for sale consist of bonds and notes which might be sold prior to maturity due to changes in interest rate, prepayment risks, yield and availability of alternative investments, liquidity needs or other factors. Securities classified as available for sale are reported at their fair value. Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other than temporary losses, management considers: (1) the length of time and extent that fair value has been less than carrying value; (2) the financial condition and near term prospects of the issuer; and (3) the Company’s ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. Fair values for securities available for sale are obtained from outside sources and applied to individual securities within the portfolio. The difference between the amortized cost and the current fair value of securities is recorded as a valuation adjustment and reported in other comprehensive income.

Mortgage Servicing Rights: Mortgage servicing rights are recognized as assets based on the allocated fair value of retained servicing rights on loans sold. Servicing rights are carried at the lower of amortized cost or fair value and are expensed in proportion to, and over the period of, estimated net servicing income. We utilize a discounted cash flow model to determine the value of our servicing rights. The valuation model utilizes mortgage prepayment speeds, the remaining life of the mortgage pool, delinquency rates, our cost to service loans, and other factors to determine the cash flow that we will receive from serving each grouping of loans. These cash flows are then discounted based on current interest rate assumptions to arrive at the fair value of the right to service those loans. Impairment is evaluated quarterly based on the fair value of the servicing rights, using groupings of the underlying loans classified by interest rates. Any impairment of a grouping is reported as a valuation allowance.

Goodwill: Generally accepted accounting principles require us to determine the fair value of all of the assets and liabilities of an acquired entity, and record their fair value on the date of acquisition. We employ a variety of means in determination of the fair value, including the use of discounted cash flow analysis, market comparisons, and projected future revenue streams. For certain items that we believe we have the appropriate expertise to determine the fair value, we may choose to use our own calculation of the value. In other cases, where the value is not easily determined, we consult with outside parties to determine the fair value of the asset or liability. Once valuations have been adjusted, the net difference between the price paid for the acquired company and the value of its balance sheet is recorded as goodwill.

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Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. A more frequent assessment is performed should events or changes in circumstances indicate the carrying value of the goodwill may not be recoverable. We may elect to perform a qualitative assessment for the annual impairment test. If the qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we elect not to perform a qualitative assessment, then we would be required to perform a quantitative test for goodwill impairment. The quantitative test is a two-step process consisting of comparing the carrying value of the reporting unit to an estimate of its fair value. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is impaired and is written down to its estimated fair value.

Subsequent Event

On October 28, 2015, we announced a cost efficiency program that will include the closing of five branches during the first quarter of 2016 and staff reductions. The branches to be closed are Ashley, St. Louis (MI), Gull Road in Kalamazoo, Higgins Lake and M-30 in West Branch. We are making these changes in the interest of operational efficiency. The affected branches are low traffic and deposit facilities, and we expect to fully serve the affected customers through our remaining branch network and extensive offering of electronic services. As a result of the cost efficiency program, we expect to record a total pre-tax charge of approximately $0.9 million, which will occur primarily during the fourth quarter of 2015. This charge will consist of approximately $0.76 million in severance payments and $0.17 million in lease termination costs, a leasehold improvement write-off and disposition of furniture. Projected savings as a result of the cost efficiency program are anticipated to be approximately $2.7 million per year on a pre-tax basis.

Financial Overview

We reported net income of $7.3 million for the third quarter of 2015, and net income of $20.5 million for the first nine months of 2015. On a diluted earnings per share basis, we earned $0.45 per share during the third quarter and $1.23 per share during the first nine months of 2015. Given the merger with Firstbank Corporation (“Firstbank”) that was effective on June 1, 2014, comparisons between the third quarter and first nine months of 2015 with the respective periods in 2014 are difficult to make; however, we believe, for the reasons detailed in the paragraphs below, that our 2015 results reflect the successful integration of the two banking organizations and the leveraging of the strengths that each organization provided to the newly combined company.

The overall quality of our loan portfolio remains strong, with nonperforming loans equaling only 0.37% of total loans as of September 30, 2015. The strength of our loan portfolio, combined with recoveries of prior loan charge-offs and the eliminations of and reductions in specific reserves, have produced a positive impact on our allowance calculations and allowed us to make no or negative provisions in eleven consecutive quarters and in fourteen out of the last fifteen quarters. We recorded a negative provision expense of $0.5 million during the third quarter of 2015, and negative $1.5 million during the first nine months of 2015. Gross loan charge-offs equaled $0.2 million during the third quarter of 2015, and totaled $5.0 million for the first nine months of the year. A vast majority of the gross loan charge-offs during 2015 was associated with a large commercial loan relationship that was resolved during the second quarter. Recoveries of prior period loan charge-offs equaled $0.2 million during the third quarter of 2015, and totaled $2.6 million for the first nine months of the year. Net loan charge-offs, as a percent of average total loans, equaled an annualized negative 0.01% and 0.15% during the third quarter and first nine months of 2015, respectively. We have recorded a net loan recovery during nine out of the last fourteen quarters. We continue our collection efforts on charged-off loans, and expect to record recoveries in future periods; however, given the nature of these efforts, it is not practical to forecast the dollar amount and timing of the recoveries.

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New term loan originations totaled approximately $145 million during the third quarter of 2015, bringing the year-to-date total to about $365 million. We also experienced net increases in commercial lines of credit during those time periods, in large part reflecting lines that are part of new commercial lending relationships established during recent quarterly periods. Net loan growth equaled $45.6 million and $128 million during the third quarter and first nine months of 2015, respectively, reflecting the impact of scheduled monthly payments as well as expected and unexpected commercial loan payoffs. The new loan pipeline remains strong, and at September 30, 2015, we had almost $100 million in unfunded loan commitments on commercial construction and development loans that are in the construction phase. We believe our loan portfolio is well diversified, with commercial and industrial loans equaling 29%, commercial real estate non-owner occupied loans comprising 29%, commercial real estate owner occupied loans comprising 19% and residential mortgage and consumer loans aggregating 15% of total loans at September 30, 2015. As a percent of total commercial loans, commercial and industrial loans and commercial real estate owner occupied loans combined equaled 57% at September 30, 2015.

Our funding structure is also well diversified. As of September 30, 2015, noninterest-bearing checking accounts comprised 25% of total funds, interest-bearing checking and sweep accounts combined for 22%, savings deposits and money market accounts aggregated to 25% and local time deposits accounted for 20%. Wholesale funds, comprised of brokered deposits and Federal Home Loan Bank of Indianapolis (“FHLBI”) advances, represented approximately 8% of total funds.

Financial Condition

Our total assets decreased $12.0 million during the first nine months of 2015, and totaled $2.88 billion as of September 30, 2015. Total loans increased $128 million, while securities available for sale declined $65.7 million and cash and cash equivalents decreased $68.9 million. Total deposits decreased $22.8 million, while securities sold under agreements to repurchase (“sweep accounts”) were down $9.4 million during the first nine months of 2015. For the fourth quarter of 2015 and into 2016, we expect further net loan growth to continue to be primarily funded by cash flow from our securities portfolio and other interest-earning assets, with total deposits remaining relatively stable.

Commercial loans increased $162 million during the first nine months of 2015, and at September 30, 2015 totaled $1.88 billion, or 84.7% of the loan portfolio. As of December 31, 2014, the commercial loan portfolio comprised 82.1% of total loans. The increase in commercial loans during the first nine months of 2015 primarily reflects new commercial term loans to existing and new borrowers. Commercial and industrial loans were up $92.5 million, non-owner occupied commercial real estate (“CRE”) loans increased $76.7 million, owner occupied CRE loans decreased $3.4 million, multi-family and residential rental loans increased $0.8 million and vacant land, land development and residential construction loans were down $4.2 million. As a percent of total commercial loans, commercial and industrial loans and commercial real estate owner occupied loans combined equaled 57.0% as of September 30, 2015, compared to 57.2% at December 31, 2014.

We significantly enhanced our commercial loan sales efforts over the past few years. We are very pleased with the approximately $1.03 billion in new commercial term loan fundings since the beginning of 2012, including about $365 million during the first nine months of 2015. As of September 30, 2015, availability on existing construction and development loans totaled almost $100 million, with most of those funds expected to be drawn over the next twelve months. In addition, our current pipeline reports indicate continued strong commercial loan funding opportunities in future periods, including approximately $239 million in new lending commitments, a majority of which we expect to be accepted and funded over the next 12 to 18 months. Our commercial lenders also report substantial additional opportunities they are currently discussing with existing and potentially new borrowers.

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We continue to experience commercial loan principal paydowns and payoffs. While a portion of the principal paydowns and payoffs received have been welcomed, such as on stressed loan relationships, we have also experienced instances where well-performing relationships have been refinanced at other financial institutions or non-bank entities, and other situations where the borrower has sold the underlying asset. In many of those instances where the loans were refinanced elsewhere, we believed the terms and conditions of the new lending arrangements were too aggressive, generally reflecting the very competitive banking environment in our markets. We remain committed to prudent underwriting standards that provide for an appropriate yield and risk relationship. In addition, we continue to receive accelerated principal paydowns from certain borrowers who have elevated deposit balances generally resulting from profitable operations and an apparent unwillingness to expand their businesses and/or replace equipment primarily due to economic- and tax-related uncertainties. Usage of existing commercial lines of credit has remained relatively steady.

One-to-four family mortgage loans and other consumer loans declined a combined $34.2 million during the first nine months of 2015, and at September 30, 2015, totaled $340 million, or 15.3% of total loans. One-to-four family mortgage loans and other consumer loans combined equated to 17.9% of total loans as of December 31, 2014.

The following table summarizes our loan portfolio over the past twelve months:

	9/30/15		6/30/15		3/31/15		12/31/14		9/30/14
Commercial:
Commercial & Industrial	$	643,118,000	$	622,073,000	$	587,675,000	$	550,607,000	$	541,805,000
Land Development & Construction		47,734,000		47,622,000		56,050,000		51,974,000		52,218,000
Owner Occupied Commercial RE		427,016,000		422,354,000		431,995,000		430,388,000		412,470,000
Non-Owner Occupied Commercial RE		636,227,000		603,724,000		566,152,000		559,574,000		584,422,000
Multi-Family & Residential Rental		123,525,000		124,658,000		117,477,000		122,760,000		95,649,000
Total Commercial		1,877,620,000		1,820,431,000		1,759,349,000		1,715,303,000		1,686,564,000
Retail:
1-4 Family Mortgages		193,003,000		201,907,000		208,425,000		214,696,000		217,751,000
Home Equity & Other Consumer Loans		146,765,000		149,494,000		152,986,000		159,278,000		163,950,000
		339,768,000		351,401,000		361,411,000		373,974,000		381,701,000
Total	$	2,217,388,000	$	2,171,832,000	$	2,120,760,000	$	2,089,277,000	$	2,068,265,000

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Our credit policies establish guidelines to manage credit risk and asset quality. These guidelines include loan review and early identification of problem loans to provide effective loan portfolio administration. The credit policies and procedures are meant to minimize the risk and uncertainties inherent in lending. In following these policies and procedures, we must rely on estimates, appraisals and evaluations of loans and the possibility that changes in these could occur quickly because of changing economic conditions. Identified problem loans, which exhibit characteristics (financial or otherwise) that could cause the loans to become nonperforming or require restructuring in the future, are included on an internal watch list. Senior management and the Board of Directors review this list regularly. Market value estimates of collateral on impaired loans, as well as on foreclosed and repossessed assets, are reviewed periodically; however, we have a process in place to monitor whether value estimates at each quarter-end are reflective of current market conditions. Our credit policies establish criteria for obtaining appraisals and determining internal value estimates. We may also adjust outside and internal valuations based on identifiable trends within our markets, such as recent sales of similar properties or assets, listing prices and offers received. In addition, we may discount certain appraised and internal value estimates to address distressed market conditions.

Nonperforming assets, comprised of nonaccrual loans, loans past due 90 days or more and accruing interest and foreclosed properties, totaled $10.5 million (0.4% of total assets) as of September 30, 2015, compared to $31.4 million (1.1% of total assets) as of December 31, 2014. One commercial loan relationship, which was placed on nonaccrual during the fourth quarter of 2014, accounted for approximately 70% of total nonperforming assets as of year-end 2014. This relationship was resolved during the second quarter.

The following tables provide a breakdown of nonperforming assets by collateral type:

NONPERFORMING LOANS
	9/30/15		6/30/15		3/31/15		12/31/14		9/30/14
Residential Real Estate:
Land Development	$	25,000	$	27,000	$	54,000	$	84,000	$	107,000
Construction		0		0		0		0		0
Owner Occupied / Rental		2,588,000		2,384,000		2,578,000		4,229,000		4,350,000
		2,613,000		2,411,000		2,632,000		4,313,000		4,457,000
Commercial Real Estate:
Land Development		170,000		184,000		197,000		209,000		222,000
Construction		0		0		0		0		0
Owner Occupied		2,602,000		2,587,000		17,495,000		18,089,000		733,000
Non-Owner Occupied		2,539,000		2,677,000		360,000		378,000		330,000
		5,311,000		5,448,000		18,052,000		18,676,000		1,285,000
Non-Real Estate:
Commercial Assets		271,000		212,000		5,565,000		6,401,000		296,000
Consumer Assets		19,000		32,000		18,000		42,000		33,000
		290,000		244,000		5,583,000		6,443,000		329,000
Total	$	8,214,000	$	8,103,000	$	26,267,000	$	29,432,000	$	6,071,000

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OTHER REAL ESTATE OWNED & REPOSSESSED ASSETS
	9/30/15		6/30/15		3/31/15		12/31/14		9/30/14
Residential Real Estate:
Land Development	$	353,000	$	353,000	$	329,000	$	329,000	$	329,000
Construction		0		0		0		0		0
Owner Occupied / Rental		1,126,000		932,000		646,000		722,000		902,000
		1,479,000		1,285,000		975,000		1,051,000		1,231,000
Commercial Real Estate:
Land Development		0		0		0		0		0
Construction		0		0		0		0		0
Owner Occupied		139,000		139,000		139,000		247,000		173,000
Non-Owner Occupied		654,000		609,000		550,000		697,000		1,255,000
		793,000		748,000		689,000		944,000		1,428,000
Non-Real Estate:
Commercial Assets		0		0		0		0		0
Consumer Assets		0		0		0		0		0
		0		0		0		0		0
Total	$	2,272,000	$	2,033,000	$	1,664,000	$	1,995,000	$	2,659,000

The following tables provide a reconciliation of nonperforming assets:

NONPERFORMING LOANS RECONCILIATION
	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
	2015			2015			2015			2014			2014
Beginning balance	$	8,103,000		$	26,267,000		$	29,432,000		$	6,071,000		$	5,741,000
Additions, net of transfers to ORE		743,000			2,486,000			414,000			24,513,000			1,194,000
Returns to performing status		0			0			(5,000	)		(779,000	)		0
Principal payments		(567,000	)		(16,414,000	)		(3,203,000	)		(228,000	)		(864,000	)
Loan charge-offs		(65,000	)		(4,236,000	)		(371,000	)		(145,000	)		0
Total	$	8,214,000		$	8,103,000		$	26,267,000		$	29,432,000		$	6,071,000

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OTHER REAL ESTATE OWNED & REPOSSESSED ASSETS RECONCILIATION
	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
	2015			2015			2015			2014			2014
Beginning balance	$	2,033,000		$	1,664,000		$	1,995,000		$	2,659,000		$	2,878,000
Additions		581,000			652,000			277,000			380,000			851,000
Sale proceeds		(319,000	)		(220,000	)		(538,000	)		(982,000	)		(910,000	)
Valuation write-downs		(23,000	)		(63,000	)		(70,000	)		(62,000	)		(160,000	)
Total	$	2,272,000		$	2,033,000		$	1,664,000		$	1,995,000		$	2,659,000

Gross loan charge-offs equaled $0.2 million during the third quarter of 2015, and totaled $5.0 million for the first nine months of 2015. A vast majority of the gross loan charge-offs was recorded during the second quarter and was associated with the aforementioned large commercial loan relationship that was resolved during that quarter. Recoveries of prior period charge-offs equaled $0.2 million during the third quarter, and totaled $2.6 million for the first nine months of 2015. Net loan charge-offs, as a percent of average total loans, equaled an annualized negative 0.01% and 0.15% during the third quarter and year-to-date 2015, respectively. We have recorded a net loan recovery during nine out of the last fourteen quarters. We continue our collection efforts on charged-off loans, and expect to record recoveries in future periods; however, given the nature of these efforts, it is not practical to forecast the dollar amount and timing of the recoveries.

In each accounting period, we adjust the allowance to the amount we believe is necessary to maintain the allowance at an adequate level. Through the loan review and credit departments, we establish portions of the allowance based on specifically identifiable problem loans. The evaluation of the allowance is further based on, but not limited to, consideration of the internally prepared Allowance Analysis, loan loss migration analysis, composition of the loan portfolio, third party analysis of the loan administration processes and portfolio, and general economic conditions.

The Allowance Analysis applies reserve allocation factors to non-impaired outstanding loan balances, the result of which is combined with specific reserves to calculate an overall allowance dollar amount. For non-impaired commercial loans, reserve allocation factors are based on the loan ratings as determined by our standardized grade paradigms and by loan purpose. Our commercial loan portfolio is segregated into five classes: 1) commercial and industrial loans; 2) vacant land, land development and residential construction loans; 3) owner occupied real estate loans; 4) non-owner occupied real estate loans; and 5) multi-family and residential rental property loans. The reserve allocation factors are primarily based on the historical trends of net loan charge-offs through a migration analysis whereby net loan losses are tracked via assigned grades over various time periods, with adjustments made for environmental factors reflecting the current status of, or recent changes in, items such as: lending policies and procedures; economic conditions; nature and volume of the loan portfolio; experience, ability and depth of management and lending staff; volume and severity of past due, nonaccrual and adversely classified loans; effectiveness of the loan review program; value of underlying collateral; loan concentrations; and other external factors such as competition and regulatory environment. Adjustments for specific lending relationships, particularly impaired loans, are made on a case-by-case basis. Non-impaired retail loan reserve allocations are determined in a similar fashion as those for non-impaired commercial loans, except that retail loans are segmented by type of credit and not a grading system. We regularly review the Allowance Analysis and make needed adjustments based upon identifiable trends and experience.

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A migration analysis is completed quarterly to assist us in determining appropriate reserve allocation factors for non-impaired commercial loans. Our migration analysis takes into account various time periods, with most weight placed on a twenty-quarter time frame as of September 30, 2015. We believe the twenty-quarter period represents an appropriate range of economic conditions, and that it provides for an appropriate basis in determining reserve allocation factors given current economic conditions and the general consensus of economic conditions in the near future. Over the past few years, leading up to and including December 31, 2014, we had placed most weight on a twelve-quarter look back period.

Although the migration analysis provides a historical accounting of our net loan losses, it is not able to fully account for environmental factors that will also very likely impact the collectability of our commercial loans as of any quarter-end date. Therefore, we incorporate the environmental factors as adjustments to the historical data. Environmental factors include both internal and external items. We believe the most significant internal environmental factor is our credit culture and the relative aggressiveness in assigning and revising commercial loan risk ratings, with the most significant external environmental factor being the assessment of the current economic environment and the resulting implications on our commercial loan portfolio.

The primary risk elements with respect to commercial loans are the financial condition of the borrower, the sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers, and we have a disciplined and formalized review of the existence of collateral and its value. The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditor’s rights in order to preserve our collateral position.

Our allowance totaled $16.1 million as of September 30, 2015, with $15.8 million established for originated loans and $0.3 million for acquired loans. The allowance for originated loans equaled 1.0% of total originated loans outstanding as of September 30, 2015, compared to $19.3 million, or 1.5% of total originated loans outstanding at December 31, 2014. The allowance for acquired loans equaled $0.7 million as of December 31, 2014. The allowance equaled 196.2% of nonperforming loans as of September 30, 2015, compared to 68.1% as of December 31, 2014. The increase in this ratio during the first nine months of 2015 reflects a decline in total nonperforming loans.

As of September 30, 2015, the allowance for originated loans was comprised of $13.9 million in general reserves relating to non-impaired loans, $0.8 million in specific reserve allocations relating to nonaccrual loans, and $1.1 million in specific reserves on other loans, primarily accruing loans designated as troubled debt restructurings. Troubled debt restructurings totaled $21.5 million at September 30, 2015, consisting of $2.8 million that are on nonaccrual status and $18.7 million that are on accrual status. The latter, while considered and accounted for as impaired loans in accordance with accounting guidelines, is not included in our nonperforming loan totals. The aforementioned large nonaccrual commercial loan relationship that was resolved during the second quarter of 2015 was categorized as a nonperforming troubled debt restructuring at March 31, 2015 and December 31, 2014, and as a performing troubled debt restructuring as of September 30, 2014. Impaired loans with an aggregate carrying value of $1.8 million as of September 30, 2015 had been subject to previous partial charge-offs aggregating $4.9 million. Those partial charge-offs were recorded as follows: $4.3 million during the first nine months of 2015, less than $0.1 million in both 2013 and 2012, $0.4 million in 2011, and $0.2 million in 2010. As of September 30, 2015, there were no specific reserves allocated to impaired loans that had been subject to a previous partial charge-off.

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The following table provides a breakdown of our originated and acquired loans categorized as troubled debt restructurings:

	9/30/15		6/30/15		3/31/15		12/31/14		9/30/14
Performing	$	18,743,000	$	20,031,000	$	23,350,000	$	24,001,000	$	47,385,000
Nonperforming		2,786,000		3,245,000		23,272,000		26,433,000		3,371,000
Total	$	21,529,000	$	23,276,000	$	46,622,000	$	50,434,000	$	50,756,000

Although we believe the allowance is adequate to absorb loan losses in our originated loan portfolio as they arise, there can be no assurance that we will not sustain loan losses in any given period that could be substantial in relation to, or greater than, the size of the allowance.

Securities available for sale decreased $65.7 million during the first nine months of 2015, totaling $367 million as of September 30, 2015. Purchases during the first nine months of 2015, generally consisting of municipal bonds, totaled $8.3 million. Proceeds from matured and called U.S. Government agency bonds and municipal bonds during the first nine months of 2015 totaled $34.8 million and $17.9 million, respectively, with another $19.6 million from principal paydowns on mortgage-backed securities. In addition, proceeds from the sales of municipal bonds totaled $0.7 million. At September 30, 2015, the portfolio was primarily comprised of U.S. Government agency bonds (43%), municipal bonds (36%) and U.S. Government agency issued or guaranteed mortgage-backed securities (20%). All of our securities are currently designated as available for sale, and are therefore stated at fair value. The fair value of securities designated as available for sale at September 30, 2015 totaled $367 million, including a net unrealized gain of $1.7 million. We maintain the securities portfolio at levels to provide adequate pledging and secondary liquidity for our daily operations. In addition, the securities portfolio serves a primary interest rate risk management function. We expect future purchases during the remainder of 2015 and into 2016 to be generally limited to the occasional acquisition of municipal bonds, as a majority of the cash flow from maturities and calls on U.S. Government agency and municipal bonds and from paydowns on mortgage-backed securities is expected to be used to fund anticipated loan growth.

FHLB of Indianapolis (“FHLBI”) stock totaled $7.6 million as of September 30, 2015, compared to $13.7 million as of December 31, 2014. The $6.1 million decline reflects the impact of an involuntary excess stock repurchase program by the FHLBI during the second quarter. Our investment in FHLBI stock is necessary to engage in their advance and other financing programs. We have regularly received quarterly cash dividends, and we expect a cash dividend will continue to be paid in future quarterly periods.

Market values on our U.S. Government agency bonds, mortgage-backed securities issued or guaranteed by U.S. Government agencies and municipal bonds are generally determined on a monthly basis with the assistance of a third party vendor. Evaluated pricing models that vary by type of security and incorporate available market data are utilized. Standard inputs include issuer and type of security, benchmark yields, reported trades, broker/dealer quotes and issuer spreads. The market value of certain non-rated securities issued by relatively small municipalities generally located within our markets is estimated at carrying value. We believe our valuation methodology provides for a reasonable estimation of market value, and that it is consistent with the requirements of accounting guidelines.

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Federal funds sold, consisting of excess funds sold overnight to a correspondent bank, along with investments in interest-earning deposits at correspondent and other banks, are used to manage daily liquidity needs and interest rate sensitivity. During the first nine months of 2015, the average balance of these funds equaled $80.2 million, or 3.0% of average earning assets. We expect the level of these funds to average approximately 1% to 2% of average earning assets in future quarters, as we use approximately one half of the average amount during the first nine months of 2015 to fund anticipated future net loan growth.

Net premises and equipment equaled $47.5 million at September 30, 2015, a decrease of $1.3 million during the first nine months of 2015. Purchases during the first nine months of 2015 totaled $1.0 million, while depreciation expense aggregated to $2.3 million. Foreclosed and repossessed assets equaled $2.3 million as of September 30, 2015, a slight increase from the $2.0 million at December 31, 2014. Sale proceeds during the first nine months of 2015 totaled $1.1 million, while transfers in from the loan portfolio totaled $1.5 million. Valuation write-downs totaled $0.2 million. While we expect further transfers from loans to foreclosed and repossessed assets in future periods reflecting our collection efforts on some impaired lending relationships, we believe the overall strong quality of our loan portfolio will limit any overall increase in, and average balance of, this particular nonperforming asset category in future periods.

Total deposits decreased $22.8 million during the first nine months of 2015, totaling $2.25 billion at September 30, 2015. Out-of-area deposits decreased $53.1 million during the first nine months of 2015, and as a percent of total deposits, equaled 5.4% as of September 30, 2015, compared to 7.7% as of December 31, 2014.

Noninterest-bearing checking accounts increased $60.4 million during the first nine months of 2015, generally due to deposit account openings as part of recently established commercial lending relationships and transfers from business-related interest-bearing checking accounts to new noninterest-bearing checking accounts. Interest-bearing checking accounts decreased $23.4 million, money market deposit accounts grew $48.1 million and savings deposits increased $12.4 million during the first nine months of 2015. Local time deposits declined $67.2 million, generally reflecting a combination of transfers to non-time deposits at maturity and the non-renewal of certain public unit time deposits at maturity. The former is a continuation of a trend over the past several years due to the very low interest rate environment, and we expect this trend to continue at least until short term interest rates start to increase, while the latter reflects withdrawals by certain public entities who have taken a portion of their maturing funds to other financial institutions who are paying higher rates of interest.

Sweep accounts decreased $9.4 million during the first nine months of 2015, totaling $158 million as of September 30, 2015. The decrease was expected, as we generally see a decline during the first part of the year as businesses use funds to make tax and bonus payments. Also as expected, the balance of our sweep account program was on an increasing trend during the third quarter, and we would further expect the increasing trend to continue through the remainder of 2015. Our sweep account program entails transferring collected funds from certain business noninterest-bearing checking accounts and savings deposits into over-night interest-bearing repurchase agreements. Such sweep accounts are not deposit accounts and are not afforded federal deposit insurance, and are accounted for as secured borrowings.

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FHLBI advances increased $14.0 million during the first nine months of 2015, reflecting $20.0 million in new advances obtained during the third quarter and $6.0 million in maturities during the first quarter that were not replaced at that time. As of September 30, 2015, FHLBI advances totaled $68.0 million. The FHLBI advances are generally collateralized by a blanket lien on our residential mortgage loan portfolio. Our borrowing line of credit as of September 30, 2015 totaled about $442 million, with availability approximating $374 million.

Liquidity

Liquidity is measured by our ability to raise funds through deposits, borrowed funds, and capital, or cash flow from the repayment of loans and securities. These funds are used to fund loans, meet deposit withdrawals, maintain reserve requirements and operate our company. Liquidity is primarily achieved through local and out-of-area deposits and liquid assets such as securities available for sale, matured and called securities, federal funds sold and interest-bearing balances. Asset and liability management is the process of managing our balance sheet to achieve a mix of earning assets and liabilities that maximizes profitability, while providing adequate liquidity.

To assist in providing needed funds, we have obtained monies from wholesale funding sources. Wholesale funds, primarily comprised of deposits from customers outside of our market areas and advances from the FHLBI, totaled $190 million, or 7.7% of combined deposits and borrowed funds, as of September 30, 2015, compared to $230 million, or 9.2% of combined deposits and borrowed funds, as of December 31, 2014.

Sweep accounts decreased $9.4 million during the first nine months of 2015, totaling $158 million as of September 30, 2015. The decrease was expected, as we generally see a decline during the first part of the year as businesses use funds to make tax and bonus payments. Also as expected, the balance of our sweep account program was on an increasing trend during the third quarter, and we would further expect the increasing trend to continue through the remainder of 2015. Our sweep account program entails transferring collected funds from certain business noninterest-bearing checking accounts and savings deposits into over-night interest-bearing repurchase agreements. Such sweep accounts are not deposit accounts and are not afforded federal deposit insurance, and are accounted for as secured borrowings. Information regarding our repurchase agreements as of September 30, 2015 and during the first nine months of 2015 is as follows:

Outstanding balance at September 30, 2015	$	158,149,000
Weighted average interest rate at September 30, 2015		0.11	%
Maximum daily balance nine months ended September 30, 2015	$	168,211,000
Average daily balance for nine months ended September 30, 2015	$	145,867,000
Weighted average interest rate for nine months ended September 30, 2015		0.11	%

As a member of FHLBI, we have access to FHLBI advance borrowing programs. FHLBI advances increased $14.0 million during the first nine months of 2015, and as of September 30 2015, totaled $68.0 million. Based on available collateral at September 30, 2015, we could borrow an additional $374 million.

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We also have the ability to borrow up to $58.0 million on a daily basis through correspondent banks using established unsecured federal funds purchased lines of credit. We did not access these lines of credit during first nine months of 2015; in fact, we have not accessed the lines of credit since January of 2010. In contrast, federal funds sold averaged $10.8 million and interest-earning deposit balances with the Federal Reserve Bank of Chicago averaged $66.9 million during the first nine months of 2015. We also have a line of credit through the Discount Window of the Federal Reserve Bank of Chicago. Using certain municipal bonds as collateral, we could have borrowed up to $18.2 million as of September 30, 2015. We did not utilize this line of credit during the first nine months of 2015 or at any time during the previous six fiscal years, and do not plan to access this line of credit in future periods.

The following table reflects, as of September 30, 2015, significant fixed and determinable contractual obligations to third parties by payment date, excluding accrued interest:

	One Year		One to		Three to		Over
	or Less		Three Years		Five Years		Five Years		Total
Deposits without a stated maturity	$	1,635,712,000	$	0	$	0	$	0	$	1,635,712,000
Certificates of deposit		320,896,000		226,816,000		70,705,000		0		618,417,000
Short-term borrowings		158,149,000		0		0		0		158,149,000
Federal Home Loan Bank advances		0		48,000,000		10,000,000		10,000,000		68,000,000
Subordinated debentures		0		0		0		54,983,000		54,983,000
Other borrowed money		3,787,000		0		0		0		3,787,000
Property leases		381,000		758,000		317,000		62,000		1,518,000

In addition to normal loan funding and deposit flow, we must maintain liquidity to meet the demands of certain unfunded loan commitments and standby letters of credit. As of September 30, 2015, we had a total of $813 million in unfunded loan commitments and $35.6 million in unfunded standby letters of credit. Of the total unfunded loan commitments, $574 million were commitments available as lines of credit to be drawn at any time as customers’ cash needs vary, and $239 million were for loan commitments generally expected to close and become funded within the next twelve months. We regularly monitor fluctuations in loan balances and commitment levels, and include such data in our overall liquidity management.

We monitor our liquidity position and funding strategies on an ongoing basis, but recognize that unexpected events, changes in economic or market conditions, a reduction in earnings performance, declining capital levels or situations beyond our control could cause liquidity challenges. While we believe it is unlikely that a funding crisis of any significant degree is likely to materialize, we have developed a comprehensive contingency funding plan that provides a framework for meeting liquidity disruptions.

Capital Resources

Shareholders’ equity was $329 million at September 30, 2015, compared to $328 million at December 31, 2014. The $0.7 million increase during the first nine months of 2015 primarily reflects the combined positive impact of net income totaling $20.5 million and the negative impact of cash dividends on common shares totaling $7.1 million and our share repurchase program aggregating $15.2 million.

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We and our bank are subject to regulatory capital requirements administered by state and federal banking agencies. Failure to meet the various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements. The Federal Reserve Board and the Federal Deposit Insurance Corporation approved final rules, commonly referred to as “BASEL III,” implementing the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks. Under the final rules, which became effective January 1, 2015, minimum requirements have increased for both the quantity and quality of capital held by us and our bank. The final rules include a new common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, raise the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0%, require a minimum ratio of Total Capital to risk-weighted assets of 8.0% and require a minimum Tier 1 leverage ratio of 4.0%. A new capital conservation buffer, comprised of common equity Tier 1 capital, is also established above the regulatory minimum capital requirements. This capital conservation buffer will be phased-in beginning January 1, 2016 at 0.625% of risk-weighted assets and increase each subsequent year by an additional 0.625% until reaching its final level of 2.5% on January 1, 2019. Strict eligibility criteria for regulatory capital instruments were also implemented under the final rules. The final rules also revised the definition and calculation of Tier 1 capital, Total Capital and risk-weighted assets.

As of September 30, 2015, our bank’s total risk-based capital ratio was 13.7%, with our bank’s total regulatory capital equaling $343 million, or approximately $92 million in excess of the 10.0% minimum which is among the requirements to be categorized as “well capitalized.” Our and our bank’s capital ratios as of September 30, 2015 and December 31, 2014 are disclosed in Note 12 of the Notes to Condensed Consolidated Financial Statements.

Results of Operations

We recorded net income of $7.3 million for the third quarter of 2015 ($0.45 per basic and diluted share), compared to net income of $5.9 million ($0.35 per basic and diluted share) recorded during the third quarter of 2014. We recorded net income of $20.5 million ($1.23 per basic and diluted share) for the first nine months of 2015, compared to net income of $11.0 million ($0.89 per basic and diluted share) recorded during the first nine months of 2014. The results for the third quarter of 2015 and the first nine months of 2015 reflect the full realization of projected cost savings as disclosed at the time the merger with Firstbank was announced; the projected cost savings were $5.5 million annually, or approximately $1.4 million quarterly. The results for the third quarter and the first nine months of 2014 were impacted by the merger with Firstbank, which was consummated on June 1, 2014; operating results for the first nine months of 2014 include four months of operations as a combined organization. After-tax merger-related costs totaled $0.9 million, or $0.05 per diluted share, during the third quarter of 2014 and $3.6 million, or $0.29 per diluted share, during the first nine months of 2014. Excluding merger-related costs, adjusted net income in the third quarter of 2014 was $6.8 million and adjusted earnings per diluted share was $0.40.

The improved earnings performance in the third quarter of 2015 compared to the prior-year third quarter primarily resulted from increased noninterest income and decreased overhead costs, which more than offset a slightly lower level of net interest income. The decreased net interest income reflects a slight decrease in the net interest margin, which more than offset higher average earning assets. The increased noninterest income was mainly attributable to higher levels of mortgage banking income, credit and debit card income, and other income, while the decreased noninterest expense was mainly due to lower merger-related costs. The improved earnings performance in the first nine months of 2015 compared to the respective 2014 period primarily resulted from increased net interest income, which more than offset higher overhead costs. The increased net interest income primarily resulted from the higher level of average earning assets associated with the completion of the merger; an increased net interest margin, resulting from a decreased cost of funds, also contributed to the higher level of net interest income.

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The decreased cost of funds in large part reflects the absorption of Firstbank’s lower-costing deposit base; the full benefit of the lower-costing deposit base was realized during the 2015 period, while the 2014 period received partial benefit in light of the effective date of the merger. The increased noninterest expense was mainly attributable to higher costs necessary to operate the combined company.

Interest income during the third quarter of 2015 was $28.5 million, a decrease of $0.4 million, or 1.4%, from the $28.9 million earned during the third quarter of 2014. The decline in interest income resulted from a decreased yield on average earning assets, which more than offset a slight increase in average earning assets. The yield on average earning assets was 4.30% during the third quarter of 2015, compared to 4.39% during the third quarter of 2014. The decreased yield on average earning assets primarily resulted from a decreased yield on loans, which more than offset the impact of a change in earning asset mix. The yield on loans generally declined over the past five quarters, consistent with the industry and primarily due to the ongoing low interest rate environment and competitive pressures; however, the negative impact of the lower loan yield on the yield on average earning assets was largely offset by assets shifting out of the lower-yielding securities portfolio and into the higher-yielding loan portfolio, capitalizing on an opportunity growing out of the 2014 merger with Firstbank. Average loans represented about 83 percent of average earning assets during the third quarter of 2015, up from approximately 79 percent during the third quarter of 2014. Compared to the second quarter of 2015, the yield on total earning assets increased seven basis points during the third quarter, despite the continuing low interest rate environment and competitive pressures on loan yields, due to the collection of prepayment fees on certain commercial loans. Accretion of acquired loans amounted to $1.4 million during the third quarter of 2015, compared to $1.2 million during the third quarter of 2014.

Interest income during the first nine months of 2015 was $83.8 million, an increase of $22.8 million, or 37.4%, from the $61.0 million earned during the first nine months of 2014. The increase in interest income in the 2015 period compared to the respective 2014 period is attributable to an increase in earning assets, which more than offset a decreased yield on average earning assets. Average earning assets equaled $2.64 billion during the first nine months of 2015, up $745 million, or 39.3%, from the level of $1.90 billion during the first nine months of 2014. Average earning assets include Firstbank’s assets from the date of acquisition. The yield on average earning assets was 4.26% during the first nine months of 2015, compared to 4.32% during the first nine months of 2014. The lower yield on average earning assets primarily resulted from decreased yields on securities and loans, which more than offset the impact of a change in earning asset mix. The decline in the yield on securities mainly reflects the boarding of Firstbank’s lower-yielding portfolio, while the decreased yield on loans reflects the ongoing low interest rate environment and competitive pressures. Low-yielding average overnight funds represented 3.0% and higher-yielding average loans represented 81.6% of average earning assets during the first nine months of 2015, compared to 4.7% and 79.4%, respectively, during the first nine months of 2014. Accretion of acquired loans totaled $4.3 million during the first nine months of 2015, compared to $1.7 million during the first nine months of 2014.

Interest expense during the third quarter of 2015 was $2.9 million, a slight decrease from the interest expense incurred during the prior-year third quarter. The positive impact of a lower volume of average interest-bearing liabilities on interest expense was substantially offset by an expected increase in the weighted average cost of interest-bearing liabilities. The increase in the weighted average cost of interest-bearing liabilities from 0.58% in the third quarter of 2014 to 0.60% in the current-year third quarter primarily reflects higher costs of certificates of deposit and FHLBI advances; these higher costs were expected in light of purchase accounting amortization entries, which were associated with fair value measurements recorded on the merger date, ending in July of 2015 for certificates of deposit and June of 2015 for FHLBI advances. Reductions in interest expense on certificates of deposit related to purchase accounting entries totaling $0.2 million and $0.6 million were recorded in the third quarter of 2015 and 2014, respectively.

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No reduction in interest expense on FHLBI advances related to purchase accounting entries was recorded in the third quarter of 2015, compared to a reduction of less than $0.1 million in the third quarter of 2014.

Interest expense during the first nine months of 2015 was $8.3 million, a decrease of $0.1 million, or 1.5%, from the $8.4 million expensed during the first nine months of 2014. The positive impact of a lower weighted average cost of interest-bearing liabilities on interest expense was substantially offset by a higher volume of average interest-bearing liabilities. The decline in the weighted average cost of interest-bearing liabilities from 0.76% during the first nine months of 2014 to 0.57% in the respective 2015 period primarily reflects the absorption of Firstbank’s lower-costing interest-bearing liability base, maturing fixed-rate certificates of deposit being renewed at lower rates, replaced by lower-costing funds, or allowed to runoff during 2014 and the first nine months of 2015, and the lowering of interest rates on certain deposit account categories during the first nine months of 2015. Interest-bearing liabilities averaged $1.94 billion during the first nine months of 2015, compared to $1.47 billion during the respective 2014 period; average interest-bearing liabilities include Firstbank’s interest-bearing liabilities from the date of acquisition. The weighted average cost of interest-bearing liabilities, equaling 0.56%, 0.54%, and 0.60% during the first, second, and third quarters of 2015, respectively, remained relatively stable during the first nine months of 2015.

Net interest income during the third quarter of 2015 was $25.6 million, a decrease of $0.4 million, or 1.4%, from the $26.0 million earned during the third quarter of 2014. The decrease in net interest income was due to a lower net interest margin, which more than offset an increase in earning assets. The net interest margin declined from 3.95% in the third quarter of 2014 to 3.87% in the current-year third quarter due to a decreased yield on average earning assets. The cost of funds was 0.43% in the third quarter of 2015, compared to 0.44% in the prior-year third quarter. Net interest income during the first nine months of 2015 was $75.5 million, an increase of $22.9 million, or 43.6%, from the $52.6 million earned during the first nine months of 2014. The increase in net interest income was primarily due to an increase in earning assets; an increase in the net interest margin from 3.73% during the first nine months of 2014 to 3.84% during the respective 2015 period also contributed to the higher level of net interest income. The higher net interest margin reflects the reduction in the cost of funds, which decreased from 0.59% during the first nine months of 2014 to 0.42% in the respective 2015 period, in large part due to the absorption of Firstbank’s lower-costing interest-bearing liability base. The net interest margin remained relatively stable during the first nine months of 2015, reflecting the ongoing strategy of funding a large portion of net loan growth with monies from the lower-yielding securities portfolio. As noted previously, purchase accounting entries related to certificates of deposit and FHLBI advances, which resulted in decreased interest expense, will not occur in future periods. The resulting increase in interest expense will negatively impact the net interest margin by approximately eight to ten basis points in future periods. We expect to partially mitigate this negative impact by continuing to reallocate the earning asset mix by investing cash flows from lower-yielding securities into higher-yielding loans.

The following table sets forth certain information relating to our consolidated average interest-earning assets and interest-bearing liabilities and reflects the average yield on assets and average cost of liabilities for the third quarter of 2015 and 2014. Such yields and costs are derived by dividing income or expense by the average daily balance of assets or liabilities, respectively, for the period presented. Tax-exempt securities interest income and yield have been computed on a tax equivalent basis using a marginal tax rate of 35%. Securities interest income was increased by $145,000 and $165,000 in the third quarter of 2015 and 2014, respectively, for this adjustment.

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	Quarters ended September 30,
	2 0 1 5								2 0 1 4
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
	(dollars in thousands)
ASSETS
Loans	$	2,201,124		$	26,565		4.79	%	$	2,075,087		$	26,323		5.03	%
Investment securities		378,286			2,039		2.16			484,345			2,710		2.24
Other interest-bearing assets		64,027			42		0.25			66,207			32		0.19
Total interest - earning assets		2,643,437			28,646		4.30			2,625,639			29,065		4.39
Allowance for loan losses		(16,655	)							(20,802	)
Other assets		249,889								257,512
Total assets	$	2,876,671							$	2,862,349
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits	$	1,653,441		$	1,969		0.47	%	$	1,757,162		$	1,971		0.45	%
Short-term borrowings		148,362			39		0.11			123,075			34		0.11
Federal Home Loan Bank advances		56,261			203		1.41			57,038			166		1.14
Other borrowings		58,641			665		4.44			65,409			740		4.43
Total interest-bearing liabilities		1,916,705			2,876		0.60			2,002,684			2,911		0.58
Noninterest-bearing deposits		620,189								532,997
Other liabilities		11,445								10,257
Shareholders’ equity		328,332								316,411
Total liabilities and shareholders’ equity	$	2,876,671							$	2,862,349
Net interest income				$	25,770							$	26,154
Net interest rate spread							3.70	%							3.81	%
Net interest spread on average assets							3.55	%							3.63	%
Net interest margin on earning assets							3.87	%							3.95	%

A negative loan loss provision expense of $0.5 million was recorded during the third quarter of 2015, compared to a negative provision expense of $0.4 million during the third quarter of 2014. A negative loan loss provision expense of $1.5 million was recorded during the first nine months of 2015, compared to a negative provision expense of $3.0 million during the first nine months of 2014. The negative provision expense reflects recoveries of previously charged-off loans, reversals of specific reserves, a reduced level of loan-rating downgrades, and ongoing loan-rating upgrades as the quality of the loan portfolio continued to improve. Continued progress in the stabilization of economic and real estate market conditions and resulting collateral valuations also positively impacted provision expense.

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Net loan recoveries of $0.1 million were recorded during the third quarter of 2015, compared to net loan charge-offs of $0.1 million during the prior-year third quarter. Net loan charge-offs of $2.4 million were recorded during the first nine months of 2015, compared to net loan recoveries of $0.6 million during the same time period in 2014. Of the $5.0 million in gross loan charge-offs recorded during the first nine months of 2015, $4.2 million was related to one commercial loan relationship that was resolved during the second quarter. The allowance for originated loans, as a percentage of total originated loans, was 1.0% as of September 30, 2015, compared to 1.7% as of September 30, 2014. Our allowance for acquired loans totaled $0.3 million as of September 30, 2015.

Noninterest income during the third quarter of 2015 was $4.3 million, an increase of $1.4 million, or 47.5%, from the $2.9 million earned during the prior-year third quarter. The increase in noninterest income primarily resulted from higher levels of mortgage banking income, credit and debit card income, and income related to acquired loans stemming from payments received on loans that had been charged off prior to the merger date. Noninterest income during the first nine months of 2015 was $12.0 million, an increase of $5.3 million, or 79.1%, from the $6.7 million earned during the same time period in 2014. Substantially all categories of fee income were higher in the first nine months of 2015 compared to the respective 2014 period as a result of the merger, most notably mortgage banking income, credit and debit card income, and service charges on accounts. The ongoing low interest rate environment and increased purchase activity in our market areas have resulted in increased mortgage banking income. Compared to the second quarter of 2015, mortgage banking income increased $0.1 million, or approximately 7%.

Noninterest expense during the third quarter of 2015 was $19.7 million, a decrease of $1.0 million, or 5.1%, from the $20.7 million expensed during the third quarter of 2014. The decrease in noninterest expense was mainly due to lower merger-related costs, which more than offset higher data processing costs. Merger-related costs of $1.3 million were incurred during the third quarter of 2014. The increase in data processing costs primarily reflects the rollout of legacy Mercantile’s advanced branch technology and increased credit and debit card usage. Core deposit intangible amortization expense totaled $0.7 million in the third quarter of 2015, compared to $0.8 million in the prior-year third quarter. Noninterest expense during the first nine months of 2015 was $59.3 million, an increase of $13.3 million, or 28.8%, from the $46.0 million expensed during the same time period in 2014. The increase in noninterest expense was mainly attributable to higher costs necessary to operate the combined company, as year-to-date 2014 results included only four months of costs operating as a combined company. During the first nine months of 2015, we recorded $0.7 million in costs related to an embezzlement committed by an employee at a branch location that was discovered through our internal audit procedures near the end of the first quarter of 2015. We do not expect to record any additional expense related to this situation; however, we expect to receive some payments from our insurance carrier in future periods, which will be recorded as reductions in noninterest expense. Core deposit intangible amortization expense totaled $2.3 million during the first nine months of 2015, compared to $1.1 million during the respective 2014 period. Merger-related costs of $5.1 million were recorded during the first nine months of 2014.

During the third quarter of 2015, we recorded income before federal income tax of $10.7 million and a federal income tax expense of $3.4 million. During the third quarter of 2014, we recorded income before federal income tax of $8.5 million and a federal income tax expense of $2.6 million. The increase in federal income tax expense resulted from the higher level of income before federal income tax and a decreased level of tax-exempt interest income on securities. Our effective tax rate was 31.5% in the third quarter of 2015, up from 30.4% in the prior-year third quarter. During the first nine months of 2015, we recorded income before federal income tax of $29.7 million and a federal income tax expense of $9.2 million. During the first nine months of 2014, we recorded income before federal income tax of $16.3 million and a federal income tax expense of $5.2 million. The increase in federal income tax expense resulted from the higher level of income before federal income tax. Our effective tax rate was 30.9% during the first nine months of 2015, down from 32.2% during the respective 2014 period.

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The elevated effective tax rate during the first nine months of 2014 primarily resulted from the recording of nondeductible merger-related expenses.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure is interest rate risk and, to a lesser extent, liquidity risk. All of our transactions are denominated in U.S. dollars with no specific foreign exchange exposure. We have only limited agricultural-related loan assets and therefore have no significant exposure to changes in commodity prices. Any impact that changes in foreign exchange rates and commodity prices would have on interest rates is assumed to be insignificant. Interest rate risk is the exposure of our financial condition to adverse movements in interest rates. We derive our income primarily from the excess of interest collected on our interest-earning assets over the interest paid on our interest-bearing liabilities. The rates of interest we earn on our assets and owe on our liabilities generally are established contractually for a period of time. Since market interest rates change over time, we are exposed to lower profitability if we cannot adapt to interest rate changes. Accepting interest rate risk can be an important source of profitability and shareholder value; however, excessive levels of interest rate risk could pose a significant threat to our earnings and capital base. Accordingly, effective risk management that maintains interest rate risk at prudent levels is essential to our safety and soundness.

Evaluating the exposure to changes in interest rates includes assessing both the adequacy of the process used to control interest rate risk and the quantitative level of exposure. Our interest rate risk management process seeks to ensure that appropriate policies, procedures, management information systems and internal control procedures are in place to maintain interest rate risk at prudent levels with consistency and continuity. In evaluating the quantitative level of interest rate risk, we assess the existing and potential future effects of changes in interest rates on our financial condition, including capital adequacy, earnings, liquidity and asset quality.

We use two interest rate risk measurement techniques. The first, which is commonly referred to as GAP analysis, measures the difference between the dollar amounts of interest sensitive assets and liabilities that will be refinanced or repriced during a given time period. A significant repricing gap could result in a negative impact to our net interest margin during periods of changing market interest rates.

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The following table depicts our GAP position as of September 30, 2015:

	Within			Three to			One to			After
	Three			Twelve			Five			Five
	Months			Months			Years			Years			Total
Assets:
Commercial loans (1)	$	405,638,000		$	249,453,000		$	933,419,000		$	245,037,000		$	1,833,547,000
Residential real estate loans		31,237,000			13,632,000			149,945,000			132,539,000			327,353,000
Consumer loans		2,416,000			1,587,000			41,349,000			11,136,000			56,488,000
Securities (2)		18,092,000			37,261,000			179,529,000			139,858,000			374,740,000
Other interest-bearing assets		59,356,000			250,000			500,000			0			60,106,000
Allowance for loan losses		0			0			0			0			(16,119,000	)
Other assets		0			0			0			0			245,262,000
Total assets		516,739,000			302,183,000			1,304,742,000			528,570,000		$	2,881,377,000
Liabilities:
Interest-bearing checking		389,978,000			0			0			0			389,978,000
Savings deposits		342,902,000			0			0			0			342,902,000
Money market accounts		283,707,000			0			0			0			283,707,000
Time deposits under $100,000		27,715,000			65,009,000			70,303,000			0			163,027,000
Time deposits $100,000 & over		64,048,000			164,124,000			227,218,000			0			455,390,000
Short-term borrowings		158,149,000			0			0			0			158,149,000
Federal Home Loan Bank advances		0			0			58,000,000			10,000,000			68,000,000
Other borrowed money		58,770,000			0			0			0			58,770,000
Noninterest-bearing checking		0			0			0			0			619,125,000
Other liabilities		0			0			0			0			13,509,000
Total liabilities		1,325,269,000			229,133,000			355,521,000			10,000,000			2,552,557,000
Shareholders' equity		0			0			0			0			328,820,000
Total liabilities & shareholders' equity		1,325,269,000			229,133,000			355,521,000			10,000,000		$	2,881,377,000
Net asset (liability) GAP	$	(808,530,000	)	$	73,050,000		$	949,221,000		$	518,570,000
Cumulative GAP	$	(808,530,000	)	$	(735,480,000	)	$	213,741,000		$	732,311,000
Percent of cumulative GAP to total assets		(28.1%	)		(25.5%	)		7.4	%		25.4	%

⁽¹⁾ Floating rate loans that are currently at interest rate floors are treated as fixed rate loans and are reflected using maturity date and not repricing frequency.

⁽²⁾ Mortgage-backed securities are categorized by average life calculations based upon prepayment trends as of September 30, 2015.

The second interest rate risk measurement we use is commonly referred to as net interest income simulation analysis. We believe that this methodology provides a more accurate measurement of interest rate risk than the GAP analysis, and therefore, it serves as our primary interest rate risk measurement technique. The simulation model assesses the direction and magnitude of variations in net interest income resulting from potential changes in market interest rates.

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Key assumptions in the model include prepayment speeds on various loan and investment assets; cash flows and maturities of interest sensitive assets and liabilities; and changes in market conditions impacting loan and deposit volume and pricing. These assumptions are inherently uncertain, subject to fluctuation and revision in a dynamic environment; therefore, the model cannot precisely estimate net interest income or exactly predict the impact of higher or lower interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude, and frequency of interest rate changes and changes in market conditions and our strategies, among other factors.

We conducted multiple simulations as of September 30, 2015, in which it was assumed that changes in market interest rates occurred ranging from up 400 basis points to down 400 basis points in equal quarterly instalments over the next twelve months. The following table reflects the suggested impact on net interest income over the next twelve months in comparison to estimated net interest income based on our balance sheet structure, including the balances and interest rates associated with our specific loans, securities, deposits and borrowed funds, as of September 30, 2015. The resulting estimates are well within our policy parameters established to manage and monitor interest rate risk.

	Dollar Change			Percent Change
	In Net			In Net
Interest Rate Scenario	Interest Income			Interest Income
Interest rates down 400 basis points	$	(7,900,000	)		(8.3%	)
Interest rates down 300 basis points		(7,000,000	)		(7.3	)
Interest rates down 200 basis points		(6,200,000	)		(6.1	)
Interest rates down 100 basis points		(3,800,000	)		(3.9	)
No change in interest rates		(100,000	)		(0.1	)
Interest rates up 100 basis points		1,300,000			1.4
Interest rates up 200 basis points		2,500,000			2.6
Interest rates up 300 basis points		3,800,000			4.0
Interest rates up 400 basis points		5,000,000			5.2

The resulting estimates have been significantly impacted by the current interest rate and economic environments, as adjustments have been made to critical model inputs with regards to traditional interest rate relationships. This is especially important as it relates to floating rate commercial loans, which comprise a sizable portion of our balance sheet.

In addition to changes in interest rates, the level of future net interest income is also dependent on a number of other variables, including: the growth, composition and absolute levels of loans, deposits, and other earning assets and interest-bearing liabilities; level of nonperforming assets; economic and competitive conditions; potential changes in lending, investing, and deposit gathering strategies; client preferences; and other factors.

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Item 4. Controls and Procedures

As of September 30, 2015, an evaluation was performed under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of September 30, 2015.

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be involved in various legal proceedings that are incidental to our business. In our opinion, we are not a party to any current legal proceedings that are material to our financial condition, either individually or in the aggregate.

Item 1A. Risk Factors.

There have been no material changes in our risk factors from those previously disclosed in our annual report on Form 10-K for the year ended December 31, 2014, and incorporated therein by reference.

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

We made no unregistered sales of equity securities during the quarter ended September 30, 2015.

Issuer Purchases of Equity Securities

As previously reported, on January 30, 2015, our Board of Directors authorized a new program to repurchase up to $20.0 million of our common stock from time to time in open market transactions at prevailing market prices or by other means in accordance with applicable regulations. During the third quarter of 2015, we repurchased shares of common stock as follows:

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number of Shares or Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs
July 1 – 31		60,300	$	20.05		60,300	$	9,682,700
August 1 – 31		194,600		20.35		194,600		5,723,000
September 1 – 30		47,300		19.98		47,300		4,777,000
Total		302,200	$	20.23		302,200	$	4,777,000

The purchased shares were retired effective on the acquisition date.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

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Item 6. Exhibits

Exhibit No.	EXHIBIT DESCRIPTION
2.1	Agreement and Plan of Merger dated August 14, 2013, incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed August 15, 2013
2.2	First Amendment to Merger Agreement dated February 20, 2014, incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed February 21, 2014
3.1	Our Articles of Incorporation are incorporated by reference to Exhibit 3.1 of our Form 10-Q for the quarter ended June 30, 2009
3.2	Our Amended and Restated Bylaws dated as of January 16, 2003 are incorporated by reference to Exhibit 3.2 of our Registration Statement on Form S-3 (Commission File No. 333-103376) that became effective on February 21, 2003
31	Rule 13a-14(a) Certifications
32.1	Section 1350 Chief Executive Officer Certification
32.2	Section 1350 Chief Financial Officer Certification
101	The following financial information from Mercantile’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Changes in Shareholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 6, 2015.

MERCANTILE BANK CORPORATION
By:	/s/ Michael H. Price
Michael H. Price
Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer)
By:	/s/ Charles E. Christmas
Charles E. Christmas
Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	EXHIBIT DESCRIPTION
2.1	Agreement and Plan of Merger dated August 14, 2013, incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed August 15, 2013
2.2	First Amendment to Merger Agreement dated February 20, 2014, incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed February 21, 2014
3.1	Our Articles of Incorporation are incorporated by reference to Exhibit 3.1 of our Form 10-Q for the quarter ended June 30, 2009
3.2	Our Amended and Restated Bylaws dated as of January 16, 2003 are incorporated by reference to Exhibit 3.2 of our Registration Statement on Form S-3 (Commission File No. 333-103376) that became effective on February 21, 2003
31	Rule 13a-14(a) Certifications
32.1	Section 1350 Chief Executive Officer Certification
32.2	Section 1350 Chief Financial Officer Certification
101	The following financial information from Mercantile’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Changes in Shareholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements

EX-31

EXHIBIT 31

RULE 13a-14(a) CERTIFICATIONS

I, Michael H. Price, Chairman of the Board, President and Chief Executive Officer of Mercantile Bank Corporation, certify that:

1.     I have reviewed this report on Form 10-Q of Mercantile Bank Corporation (the "registrant");

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 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 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 6, 2015	/s/ Michael H. Price
	Michael H. Price
	Chairman of the Board, President and Chief Executive Officer

I, Charles E. Christmas, Senior Vice President, Chief Financial Officer and Treasurer of Mercantile Bank Corporation, certify that:

1.     I have reviewed this report on Form 10-Q of Mercantile Bank Corporation (the "registrant");

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 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 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 6, 2015	/s/ Charles E. Christmas
	Charles E. Christmas.
	Senior Vice President, Chief Financial Officer and Treasurer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the quarterly report on Form 10-Q for the quarter ended September 30, 2015 (the "Form 10-Q") of Mercantile Bank Corporation (the "Issuer").

I, Michael H. Price, Chairman of the Board, President and Chief Executive Officer of the Issuer, certify that to my knowledge:

(i)            the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)          the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Dated: November 6, 2015

/s/ Michael H. Price

Michael H. Price

Chairman of the Board, President and Chief Executive Officer  

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, and accompanies the quarterly report on Form 10-Q for the quarter ended September 30, 2015 (the "Form 10-Q") of Mercantile Bank Corporation (the "Issuer").

I, Charles E. Christmas, Senior Vice President, Chief Financial Officer and Treasurer of the Issuer, certify that to my knowledge:

(i)            the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)           the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Dated: November 6, 2015

/s/ Charles E. Christmas

Charles E. Christmas

Senior Vice President, Chief Financial Officer and Treasurer

XML

Note 3 - Loans and Allowance for Loan Losses (Details) - Acquired Impaired Loans Accretable Yield - USD ($)		3 Months Ended	9 Months Ended
		Sep. 30, 2015	Sep. 30, 2015
Acquired Impaired Loans Accretable Yield [Abstract]
Beginning balance		$ 5,115,000	$ 4,998,000
Ending balance		5,450,000	5,450,000
Additions		16,000	16,000
Accretion income		(653,000)	(1,980,000)
Net reclassification from nonaccretable to accretable		1,520,000	3,166,000
Reductions	[1]	$ (548,000)	$ (750,000)

[1] Reductions primarily reflect the result of exit events, including loan payoffs and charge-offs.

XML

Note 6 - Securities Sold Under Agreements to Repurchase (Details)	9 Months Ended
	Sep. 30, 2015
Maximum [Member]
Note 6 - Securities Sold Under Agreements to Repurchase (Details) [Line Items]
Repurchase Agreement Counterparty, Weighted Average Maturity of Agreements	1 day

XML

Note 3 - Loans and Allowance for Loan Losses (Details) - Activity for Troubled Debt Restructurings - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Commercial Loan Portfolio:
Beginning Balance	$ 2,442,000	$ 1,176,000	$ 7,026,000	$ 1,656,000
Ending Balance	2,084,000	7,265,000	2,084,000	7,265,000
Charge-Offs	0	0	0	(67,000)
Payments	(56,000)	(205,000)	(6,591,000)	(632,000)
Transfers to ORE	0	(21,000)	0	(21,000)
Net Additions/Deletions	(302,000)	6,315,000	1,649,000	6,329,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	2,632,000	3,786,000	2,680,000	4,501,000
Ending Balance	2,360,000	3,499,000	2,360,000	3,499,000
Charge-Offs	0	0	0	0
Payments	(272,000)	(287,000)	(320,000)	(3,901,000)
Transfers to ORE	0	0	0	0
Net Additions/Deletions	0	0	0	2,899,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	2,218,000	2,711,000	17,160,000	1,816,000
Ending Balance	1,927,000	19,368,000	1,927,000	19,368,000
Charge-Offs	0	0	(4,198,000)	(11,000)
Payments	(291,000)	(91,000)	(11,035,000)	(181,000)
Transfers to ORE	0	0	0	0
Net Additions/Deletions	0	16,748,000	0	17,744,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	11,082,000	18,664,000	17,439,000	22,311,000
Ending Balance	10,758,000	18,009,000	10,758,000	18,009,000
Charge-Offs	0	0	0	0
Payments	(324,000)	(655,000)	(6,681,000)	(4,621,000)
Transfers to ORE	0	0	0	0
Net Additions/Deletions	0	0	0	319,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	491,000	719,000	505,000	2,620,000
Ending Balance	484,000	589,000	484,000	589,000
Charge-Offs	0	0	0	(420,000)
Payments	(7,000)	(130,000)	(21,000)	(1,611,000)
Transfers to ORE	0	0	0	0
Net Additions/Deletions	0	0	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Commercial Loan Portfolio:
Beginning Balance	1,521,000		1,439,000
Ending Balance	1,197,000		1,197,000
Charge-Offs	0		0
Payments	(324,000)		(597,000)
Transfers to ORE	0		0
Net Additions/Deletions	0		355,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	0		0
Ending Balance	0		0
Charge-Offs	0		0
Payments	0		0
Transfers to ORE	0		0
Net Additions/Deletions	0		0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	1,350,000		1,569,000
Ending Balance	1,273,000		1,273,000
Charge-Offs	0		0
Payments	(77,000)		(296,000)
Transfers to ORE	0		0
Net Additions/Deletions	0		0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	361,000		64,000
Ending Balance	592,000		592,000
Charge-Offs	0		0
Payments	(5,000)		(6,000)
Transfers to ORE	0		0
Net Additions/Deletions	236,000		534,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Commercial Loan Portfolio:
Beginning Balance	580,000		381,000
Ending Balance	264,000		264,000
Charge-Offs	(42,000)		(42,000)
Payments	(274,000)		(329,000)
Transfers to ORE	0		0
Net Additions/Deletions	0		254,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Commercial Loan Portfolio:
Beginning Balance	0	0	0	0
Ending Balance	0	0	0	0
Charge-Offs	0	0	0	0
Payments	0	0	0	0
Transfers to ORE	0	0	0	0
Net Additions/Deletions	0	0	0	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Commercial Loan Portfolio:
Beginning Balance	270,000	2,077,000	1,967,000	2,191,000
Ending Balance	267,000	2,026,000	267,000	2,026,000
Charge-Offs	0	0	(148,000)	0
Payments	(3,000)	(51,000)	(1,552,000)	(165,000)
Transfers to ORE	0	0	0	0
Net Additions/Deletions	0	$ 0	0	$ 0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Commercial Loan Portfolio:
Beginning Balance	152,000		26,000
Ending Balance	147,000		147,000
Charge-Offs	0		0
Payments	(5,000)		(32,000)
Transfers to ORE	0		0
Net Additions/Deletions	0		153,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Commercial Loan Portfolio:
Beginning Balance	177,000		178,000
Ending Balance	176,000		176,000
Charge-Offs	0		0
Payments	(1,000)		(2,000)
Transfers to ORE	0		0
Net Additions/Deletions	$ 0		$ 0

XML

Note 6 - Securities Sold Under Agreements to Repurchase (Details) - Securities Sold Under Agreement to Repurchase - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Securities Sold Under Agreement to Repurchase [Abstract]
Outstanding balance at end of period	$ 158,149,000	$ 167,569,000
Average interest rate at end of period	0.11%	0.11%
Average daily balance during the period	$ 145,867,000	$ 105,474,000
Average interest rate during the period	0.11%	0.12%
Maximum daily balance during the period	$ 168,211,000	$ 178,042,000

XML

Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)
Originated Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	4	9	6
Loans modified, pre-modification recorded principal balance	$ 0	$ 22,781,000	$ 1,876,000	$ 23,923,000
Loans modified, post-modification recorded principal balance	$ 0	$ 22,881,000	$ 1,901,000	$ 24,023,000
Acquired Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	1	0	11	0
Loans modified, pre-modification recorded principal balance	$ 237,000	$ 0	$ 1,209,000	$ 0
Loans modified, post-modification recorded principal balance	$ 237,000	$ 0	$ 1,209,000	$ 0
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	4	9	6
Loans modified, pre-modification recorded principal balance	$ 0	$ 22,781,000	$ 1,876,000	$ 23,923,000
Loans modified, post-modification recorded principal balance	$ 0	$ 22,881,000	$ 1,901,000	$ 24,023,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	2	9	2
Loans modified, pre-modification recorded principal balance	$ 0	$ 5,994,000	$ 1,876,000	$ 5,994,000
Loans modified, post-modification recorded principal balance	$ 0	$ 6,094,000	$ 1,901,000	$ 6,094,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	2	0	3
Loans modified, pre-modification recorded principal balance	$ 0	$ 16,787,000	$ 0	$ 17,783,000
Loans modified, post-modification recorded principal balance	$ 0	$ 16,787,000	$ 0	$ 17,783,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	1
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 146,000
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 146,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	1	0	11	0
Loans modified, pre-modification recorded principal balance	$ 237,000	$ 0	$ 1,209,000	$ 0
Loans modified, post-modification recorded principal balance	$ 237,000	$ 0	$ 1,209,000	$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	2	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 286,000	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 286,000	$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	3	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 66,000	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 66,000	$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	1	0	4	0
Loans modified, pre-modification recorded principal balance	$ 237,000	$ 0	$ 655,000	$ 0
Loans modified, post-modification recorded principal balance	$ 237,000	$ 0	$ 655,000	$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	2	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 202,000	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 202,000	$ 0
Retail Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Modifications [Line Items]
Loans modified, number of contracts	0	0	0	0
Loans modified, pre-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0
Loans modified, post-modification recorded principal balance	$ 0	$ 0	$ 0	$ 0

XML

Note 2 - Securities (Details)		9 Months Ended
		Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Note 2 - Securities (Details) [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value		$ 114,535,000	$ 264,699,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss		2,343,000	3,576,000
Available-for-sale Debt Securities, Amortized Cost Basis		365,456,000
Available-for-sale Securities	[1]	$ 367,173,000	432,912,000
Debt Securities [Member]
Note 2 - Securities (Details) [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions		161
State of Michigan and all its Political Subdivisions [Member]
Note 2 - Securities (Details) [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis		$ 106,000,000	113,100,000
Available-for-sale Securities		106,900,000	113,900,000
All Other States and Their Political Subdivisions [Member]
Note 2 - Securities (Details) [Line Items]
Available-for-sale Debt Securities, Amortized Cost Basis		25,900,000	30,000,000
Available-for-sale Securities		$ 26,000,000	30,000,000
Securities Other Than U.S. Government Agencies and the State of Michigan and Political Subdivisions [Member] | Stockholders' Equity, Total [Member] | Securities Issued Concentration Risk [Member]
Note 2 - Securities (Details) [Line Items]
Concentration Risk, Percentage		10.00%
U.S. Government Agency Debt Obligations and Mortgage-Backed Securities [Member]
Note 2 - Securities (Details) [Line Items]
Available-for-sale Securities, Restricted		$ 158,100,000	$ 167,600,000

[1] See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

XML

Note 7 - Federal Home Loan Bank of Indianapolis Advances (Details) - Maturities of Currently Outstanding FHLB Advances	Sep. 30, 2015 USD ($)
Maturities of Currently Outstanding FHLB Advances [Abstract]
2015	$ 0
2016	3,000,000
2017	45,000,000
2018	0
Thereafter	$ 20,000,000

XML

Note 5 - Deposits (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Summary of Deposits and Percentage Change in Deposits [Table Text Block]

	September 30, 2015					December 30, 2014					Percent Increase
	Balance		%			Balance		%			(Decrease)
Noninterest-bearing checking	$	619,125,000		27.5	%	$	558,738,000		24.5	%		10.8	%
Interest-bearing checking		389,978,000		17.3			413,382,000		18.2			(5.7	)
Money market		283,707,000		12.6			235,587,000		10.3			20.4
Savings		342,902,000		15.2			330,459,000		14.5			3.8
Time, under $100,000		162,729,000		7.2			181,026,000		8.0			(10.1	)
Time, $100,000 and over		333,226,000		14.8			382,120,000		16.8			(12.8	)
		2,131,667,000		94.6			2,101,312,000		92.3			1.4
Out-of-area time, under $100,000		298,000		<0.1			2,422,000		0.1			(87.7	)
Out-of-area time, $100,000 and over		122,164,000		5.4			173,181,000		7.6			(29.5	)
		122,462,000		5.4			175,603,000		7.7			(30.2	)
Total deposits	$	2,254,129,000		100.0	%	$	2,276,915,000		100.0	%		(1.0%	)

XML

Note 4 - Premises and Equipment, Net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Property, Plant and Equipment [Abstract]
Depreciation	$ 0.7	$ 0.7	$ 2.3	$ 1.5

XML

Note 3 - Loans and Allowance for Loan Losses (Details) - Impaired Loans - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Originated Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	$ 9,541,000		$ 9,541,000		$ 8,255,000
Recorded principal balance, with no related allowance	8,654,000		8,654,000		5,552,000
Average recorded principal balance, with no related allowance	8,824,000	$ 11,800,000	7,119,000	$ 7,838,000
Unpaid contractual principal balance, with a related allowance	15,431,000		15,431,000		42,757,000
Recorded principal balance, with a related allowance	10,393,000		10,393,000		42,304,000
Related allowance	1,827,000		1,827,000		10,152,000
Average recorded principal balance, with a related allowance	10,843,000	29,611,000	26,041,000	30,432,000
Upaid contractual principal balance	24,972,000		24,972,000		51,012,000
Recorded principal balance	19,047,000		19,047,000		47,856,000
Average recorded principal balance	19,667,000	41,411,000	33,160,000	38,270,000
Acquired Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	8,217,000		8,217,000		4,019,000
Recorded principal balance, with no related allowance	7,732,000		7,732,000		4,010,000
Average recorded principal balance, with no related allowance	7,205,000	0	5,531,000	0
Unpaid contractual principal balance, with a related allowance	318,000		318,000		1,516,000
Recorded principal balance, with a related allowance	318,000		318,000		1,502,000
Related allowance	15,000		15,000		605,000
Average recorded principal balance, with a related allowance	896,000	0	1,286,000	0
Upaid contractual principal balance	8,535,000		8,535,000		5,535,000
Recorded principal balance	8,050,000		8,050,000		5,512,000
Average recorded principal balance	8,101,000	0	6,817,000	0
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	7,928,000		7,928,000		6,904,000
Recorded principal balance, with no related allowance	7,729,000		7,729,000		4,801,000
Average recorded principal balance, with no related allowance	7,919,000	10,605,000	6,298,000	6,649,000
Unpaid contractual principal balance, with a related allowance	15,071,000		15,071,000		40,448,000
Recorded principal balance, with a related allowance	10,106,000		10,106,000		40,220,000
Related allowance	1,657,000		1,657,000		9,374,000
Average recorded principal balance, with a related allowance	10,552,000	27,430,000	25,257,000	28,149,000
Upaid contractual principal balance	22,999,000		22,999,000		47,352,000
Recorded principal balance	17,835,000		17,835,000		45,021,000
Average recorded principal balance	18,471,000	38,035,000	31,555,000	34,798,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	1,893,000		1,893,000		1,170,000
Recorded principal balance, with no related allowance	1,893,000		1,893,000		1,164,000
Average recorded principal balance, with no related allowance	1,908,000	691,000	1,729,000	525,000
Unpaid contractual principal balance, with a related allowance	470,000		470,000		5,299,000
Recorded principal balance, with a related allowance	413,000		413,000		5,226,000
Related allowance	271,000		271,000		1,578,000
Average recorded principal balance, with a related allowance	436,000	3,087,000	2,816,000	2,142,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	0		0		540,000
Recorded principal balance, with no related allowance	0		0		209,000
Average recorded principal balance, with no related allowance	0	111,000	101,000	232,000
Unpaid contractual principal balance, with a related allowance	2,275,000		2,275,000		2,000,000
Recorded principal balance, with a related allowance	1,920,000		1,920,000		2,000,000
Related allowance	308,000		308,000		151,000
Average recorded principal balance, with a related allowance	2,052,000	3,049,000	2,026,000	3,536,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	302,000		302,000		3,609,000
Recorded principal balance, with no related allowance	103,000		103,000		1,901,000
Average recorded principal balance, with no related allowance	113,000	9,227,000	1,032,000	4,981,000
Unpaid contractual principal balance, with a related allowance	6,377,000		6,377,000		15,745,000
Recorded principal balance, with a related allowance	1,824,000		1,824,000		15,674,000
Related allowance	494,000		494,000		2,200,000
Average recorded principal balance, with a related allowance	1,959,000	2,238,000	8,778,000	1,869,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	5,733,000		5,733,000		1,210,000
Recorded principal balance, with no related allowance	5,733,000		5,733,000		1,210,000
Average recorded principal balance, with no related allowance	5,747,000	576,000	3,204,000	911,000
Unpaid contractual principal balance, with a related allowance	4,897,000		4,897,000		16,033,000
Recorded principal balance, with a related allowance	4,897,000		4,897,000		15,949,000
Related allowance	194,000		194,000		4,779,000
Average recorded principal balance, with a related allowance	4,926,000	17,377,000	10,371,000	18,819,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	0		0		375,000
Recorded principal balance, with no related allowance	0		0		317,000
Average recorded principal balance, with no related allowance	151,000	0	232,000	0
Unpaid contractual principal balance, with a related allowance	1,052,000		1,052,000		1,371,000
Recorded principal balance, with a related allowance	1,052,000		1,052,000		1,371,000
Related allowance	390,000		390,000		666,000
Average recorded principal balance, with a related allowance	1,179,000	1,679,000	1,266,000	1,783,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	6,738,000		6,738,000		2,512,000
Recorded principal balance, with no related allowance	6,457,000		6,457,000		2,505,000
Average recorded principal balance, with no related allowance	6,047,000	0	4,253,000	0
Unpaid contractual principal balance, with a related allowance	142,000		142,000		1,516,000
Recorded principal balance, with a related allowance	142,000		142,000		1,502,000
Related allowance	9,000		9,000		605,000
Average recorded principal balance, with a related allowance	667,000	0	1,101,000	0
Upaid contractual principal balance	6,880,000		6,880,000		4,028,000
Recorded principal balance	6,599,000		6,599,000		4,007,000
Average recorded principal balance	6,714,000	0	5,354,000	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	1,697,000		1,697,000		1,586,000
Recorded principal balance, with no related allowance	1,661,000		1,661,000		1,579,000
Average recorded principal balance, with no related allowance	1,596,000	0	1,432,000	0
Unpaid contractual principal balance, with a related allowance	66,000		66,000		0
Recorded principal balance, with a related allowance	66,000		66,000		0
Related allowance	5,000		5,000		0
Average recorded principal balance, with a related allowance	73,000	0	65,000	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	0		0		0
Recorded principal balance, with no related allowance	0		0		0
Average recorded principal balance, with no related allowance	0	0	0	0
Unpaid contractual principal balance, with a related allowance	0		0		0
Recorded principal balance, with a related allowance	0		0		0
Related allowance	0		0		0
Average recorded principal balance, with a related allowance	0	0	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	1,593,000		1,593,000		113,000
Recorded principal balance, with no related allowance	1,391,000		1,391,000		113,000
Average recorded principal balance, with no related allowance	910,000	0	535,000	0
Unpaid contractual principal balance, with a related allowance	51,000		51,000		1,516,000
Recorded principal balance, with a related allowance	51,000		51,000		1,502,000
Related allowance	4,000		4,000		605,000
Average recorded principal balance, with a related allowance	568,000	0	1,016,000	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	768,000		768,000		326,000
Recorded principal balance, with no related allowance	768,000		768,000		326,000
Average recorded principal balance, with no related allowance	656,000	0	487,000	0
Unpaid contractual principal balance, with a related allowance	0		0		0
Recorded principal balance, with a related allowance	0		0		0
Related allowance	0		0		0
Average recorded principal balance, with a related allowance	0	0	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	2,680,000		2,680,000		487,000
Recorded principal balance, with no related allowance	2,637,000		2,637,000		487,000
Average recorded principal balance, with no related allowance	2,885,000	0	1,799,000	0
Unpaid contractual principal balance, with a related allowance	25,000		25,000		0
Recorded principal balance, with a related allowance	25,000		25,000		0
Related allowance	0		0		0
Average recorded principal balance, with a related allowance	26,000	0	20,000	0
Retail Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	1,613,000		1,613,000		1,351,000
Recorded principal balance, with no related allowance	925,000		925,000		751,000
Average recorded principal balance, with no related allowance	905,000	1,195,000	821,000	1,189,000
Unpaid contractual principal balance, with a related allowance	360,000		360,000		2,309,000
Recorded principal balance, with a related allowance	287,000		287,000		2,084,000
Related allowance	170,000		170,000		778,000
Average recorded principal balance, with a related allowance	291,000	2,181,000	784,000	2,283,000
Upaid contractual principal balance	1,973,000		1,973,000		3,660,000
Recorded principal balance	1,212,000		1,212,000		2,835,000
Average recorded principal balance	1,196,000	3,376,000	1,605,000	3,472,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	214,000		214,000		207,000
Recorded principal balance, with no related allowance	190,000		190,000		191,000
Average recorded principal balance, with no related allowance	189,000	642,000	190,000	598,000
Unpaid contractual principal balance, with a related allowance	195,000		195,000		115,000
Recorded principal balance, with a related allowance	157,000		157,000		84,000
Related allowance	121,000		121,000		84,000
Average recorded principal balance, with a related allowance	160,000	88,000	143,000	139,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	1,399,000		1,399,000		1,144,000
Recorded principal balance, with no related allowance	735,000		735,000		560,000
Average recorded principal balance, with no related allowance	716,000	553,000	631,000	591,000
Unpaid contractual principal balance, with a related allowance	165,000		165,000		2,194,000
Recorded principal balance, with a related allowance	130,000		130,000		2,000,000
Related allowance	49,000		49,000		694,000
Average recorded principal balance, with a related allowance	131,000	2,093,000	641,000	2,144,000
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	1,479,000		1,479,000		1,507,000
Recorded principal balance, with no related allowance	1,275,000		1,275,000		1,505,000
Average recorded principal balance, with no related allowance	1,158,000	0	1,278,000	0
Unpaid contractual principal balance, with a related allowance	176,000		176,000		0
Recorded principal balance, with a related allowance	176,000		176,000		0
Related allowance	6,000		6,000		0
Average recorded principal balance, with a related allowance	229,000	0	185,000	0
Upaid contractual principal balance	1,655,000		1,655,000		1,507,000
Recorded principal balance	1,451,000		1,451,000		1,505,000
Average recorded principal balance	1,387,000	0	1,463,000	0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	449,000		449,000		641,000
Recorded principal balance, with no related allowance	322,000		322,000		639,000
Average recorded principal balance, with no related allowance	342,000	0	423,000	0
Unpaid contractual principal balance, with a related allowance	0		0		0
Recorded principal balance, with a related allowance	0		0		0
Related allowance	0		0		0
Average recorded principal balance, with a related allowance	0	0	0	0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Impaired [Line Items]
Unpaid contractual principal balance, with no related allowance	1,030,000		1,030,000		866,000
Recorded principal balance, with no related allowance	953,000		953,000		866,000
Average recorded principal balance, with no related allowance	816,000	0	855,000	0
Unpaid contractual principal balance, with a related allowance	176,000		176,000		0
Recorded principal balance, with a related allowance	176,000		176,000		0
Related allowance	6,000		6,000		$ 0
Average recorded principal balance, with a related allowance	$ 229,000	$ 0	$ 185,000	$ 0

XML

Note 3 - Loans and Allowance for Loan Losses (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Receivables [Abstract]
Loans and Leases Receivable, Net of Deferred Income	$ 2,217,388,000		$ 2,217,388,000		$ 2,089,277,000
Loans and Leases Receivable, Period Increase (Decrease)			$ 128,000,000
Loans and Leases Receivable, Percentage, Period Increase (Decrease)			6.10%
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Outstanding Balance	25,900,000		$ 25,900,000
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	14,100,000		14,100,000
Impaired Financing Receivable, Interest Income, Accrual Method	300,000	$ 600,000	1,000,000	$ 1,300,000
Loans and Leases Receivable, Nonaccrual Loans, Interest Income Recognized	$ 0	$ 0	$ 0	$ 0
Minimum Number of Days Past Due at Period End for Loans Modified as Troubled Debt Restructurings			30 days

XML

Note 5 - Deposits (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Disclosure Text Block [Abstract]
Deposits	$ 2,254,129,000	$ 2,276,915,000
Increase (Decrease) in Deposits	$ (22,800,000)
Percentage of Increase in Aggregate Deposits	(1.00%)

XML

Note 10 - Fair Values of Financial Instruments (Details) - Fair Value Hierarchy of Financial Instruments - USD ($)		Sep. 30, 2015	Dec. 31, 2014
Financial assets:
Securities available for sale	[1]	$ 367,173,000	$ 432,912,000
FHLBI stock	[2]	7,567,000	13,699,000
FHLBI stock	[2]	7,567,000	13,699,000
Bank owned life insurance		58,680,000	57,861,000
Financial liabilities:
Deposits		2,254,129,000	2,276,915,000
Repurchase agreements		158,149,000	167,569,000
Accrued interest payable		17,296,000	12,263,000
Interest Rate Swap [Member]
Financial liabilities:
Interest rate swap	[1]	533,000	253,000
Interest rate swap	[1]	533,000	253,000
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Cash		13,314,000	13,261,000
Cash		13,314,000	13,261,000
Fair Value, Inputs, Level 2 [Member]
Financial assets:
Cash equivalents		90,535,000	159,477,000
Cash equivalents		90,535,000	159,477,000
Loans held for sale		2,057,000	1,574,000
Loans held for sale		2,057,000	1,574,000
Bank owned life insurance		58,680,000	57,861,000
Bank owned life insurance		58,680,000	57,861,000
Accrued interest receivable		8,355,000	8,033,000
Accrued interest receivable		8,355,000	8,033,000
Financial liabilities:
Deposits		2,254,129,000	2,276,915,000
Deposits		2,214,078,000	2,254,749,000
Repurchase agreements		158,149,000	167,569,000
Repurchase agreements		158,149,000	167,569,000
FHLBI advances		68,000,000	54,022,000
FHLBI advances		68,883,000	54,720,000
Subordinated debentures		54,983,000	54,472,000
Subordinated debentures		55,049,000	54,508,000
Accrued interest payable		1,554,000	1,942,000
Accrued interest payable		1,554,000	1,942,000
Fair Value, Inputs, Level 3 [Member]
Financial assets:
Loans, net		2,199,212,000	2,067,662,000
Loans, net		$ 2,200,805,000	$ 2,062,566,000

[1] See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

[2] It is not practical to determine the fair value of FHLBI stock due to transferability restrictions.

XML

Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)
Originated Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Acquired Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	1		1
Recorded principal balance	$ 18,000		$ 18,000
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	1		1
Recorded principal balance	$ 18,000		$ 18,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0		0
Recorded principal balance	$ 0		$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0		0
Recorded principal balance	$ 0		$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	1		1
Recorded principal balance	$ 18,000		$ 18,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0		0
Recorded principal balance	$ 0		$ 0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0		0
Recorded principal balance	$ 0		$ 0
Retail Portfolio Segment [Member] | Originated Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0	0	0	0
Recorded principal balance	$ 0	$ 0	$ 0	$ 0
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0		0
Recorded principal balance	$ 0		$ 0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0		0
Recorded principal balance	$ 0		$ 0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Loans Modified as Troubled Debt Restructurings within the Previous Twelve Months That Became Over 30 Days Past Due [Line Items]
Number of contracts	0		0
Recorded principal balance	$ 0		$ 0

XML

Note 1 - Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1.     SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The unaudited financial statements for the nine months ended September 30, 2015 include the consolidated results of operations of Mercantile Bank Corporation and its consolidated subsidiaries. These subsidiaries include Mercantile Bank of Michigan (“our bank”) and our bank’s two subsidiaries, Mercantile Bank Real Estate Co., LLC (“our real estate company”) and Mercantile Insurance Center, Inc. (“our insurance center”). These consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and Item 303(b) of Regulation S-K and do not include all disclosures required by accounting principles generally accepted in the United States of America for a complete presentation of our financial condition and results of operations. In the opinion of management, the information reflects all adjustments (consisting only of normal recurring adjustments) which are necessary in order to make the financial statements not misleading and for a fair presentation of the results of operations for such periods. The results for the period ended September 30, 2015 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended December 31, 2014.

We have five separate business trusts that were formed to issue trust preferred securities. Subordinated debentures were issued to the trusts in return for the proceeds raised from the issuance of the trust preferred securities. The trusts are not consolidated, but instead we report the subordinated debentures issued to the trusts as a liability.

Earnings Per Share: Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings per share include the dilutive effect of additional potential common shares issuable under our stock-based compensation plans and are determined using the treasury stock method. Our unvested restricted shares, which contain non-forfeitable rights to dividends whether paid or accrued (i.e., participating securities), are included in the number of shares outstanding for both basic and diluted earnings per share calculations. In the event of a net loss, our unvested restricted shares are excluded from the calculation of both basic and diluted earnings per share.

Approximately 98,000 unvested restricted shares were included in determining both basic and diluted earnings per share for the three and nine months ended September 30, 2015. In addition, stock options for approximately 106,000 shares of common stock were included in determining diluted earnings per share for the three and nine months ended September 30, 2015. Stock options for approximately 103,000 shares of common stock were antidilutive and not included in determining diluted earnings per share for the three and nine months ended September 30, 2015.

Stock options for approximately 141,000 shares of common stock were included in determining diluted earnings per share for the three and nine months ended September 30, 2014. Stock options for approximately 175,000 shares of common stock were antidilutive and not included in determining diluted earnings per share for the three and nine months ended September 30, 2014.

Securities: Debt securities classified as held to maturity are carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold prior to maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Federal Home Loan Bank stock is carried at cost.

Interest income includes amortization of purchase premiums and accretion of discounts. Premiums and discounts on securities are amortized or accreted on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Declines in the fair value of debt securities below their amortized cost that are other than temporary (“OTTI”) are reflected in earnings or other comprehensive income, as appropriate. For those debt securities whose fair value is less than their amortized cost, we consider our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and whether we expect to recover the entire amortized cost of the security based on our assessment of the issuer’s financial condition. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies, and whether downgrades by bond rating agencies have occurred. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, such as liquidity conditions in the market or changes in market interest rates, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost.

Loans: Loans that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on commercial loans and mortgage loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Consumer and credit card loans are typically charged off no later than when they are 120 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal and interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. As of September 30, 2015 and December 31, 2014, we determined that the fair value of our mortgage loans held for sale approximated the recorded cost of $2.1 million and $1.6 million, respectively. Loans held for sale are reported as part of our total loans on the balance sheet.

Mortgage loans held for sale are generally sold with servicing rights retained. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold, which is reduced by the cost allocated to the servicing right. We generally lock in the sale price to the purchaser of the loan at the same time we make a rate commitment to the borrower. These mortgage banking activities are not designated as hedges and are carried at fair value. The net gain or loss on mortgage banking derivatives is included in the gain on sale of loans. Mortgage loans serviced for others totaled approximately $603 million as of September 30, 2015.

Mortgage Banking Activities: Mortgage loan servicing rights are recognized as assets based on the allocated value of retained servicing rights on mortgage loans sold. Mortgage loan servicing rights are carried at the lower of amortized cost or fair value and are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights using groupings of the underlying mortgage loans as to interest rates. Any impairment of a grouping is reported as a valuation allowance.

Servicing fee income is recorded for fees earned for serving mortgage loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Amortization of mortgage loan servicing rights is netted against mortgage loan servicing income and recorded in mortgage banking activities in the income statement.

Troubled Debt Restructurings: A loan is accounted for as a troubled debt restructuring if we, for economic or legal reasons, grant a concession to a borrower considered to be experiencing financial difficulties that we would not otherwise consider. A troubled debt restructuring may involve the receipt of assets from the debtor in partial or full satisfaction of the loan, or a modification of terms such as a reduction of the stated interest rate or balance of the loan, a reduction of accrued interest, an extension of the maturity date or renewal of the loan at a stated interest rate lower than the current market rate for a new loan with similar risk, or some combination of these concessions. Troubled debt restructurings can be in either accrual or nonaccrual status. Nonaccrual troubled debt restructurings are included in nonperforming loans. Accruing troubled debt restructurings are generally excluded from nonperforming loans as it is considered probable that all contractual principal and interest due under the restructured terms will be collected.

In accordance with current accounting guidance, loans modified as troubled debt restructurings are, by definition, considered to be impaired loans. Impairment for these loans is measured on a loan-by-loan basis similar to other impaired loans as described above under “Allowance for Loan Losses.” Certain loans modified as troubled debt restructurings may have been previously measured for impairment under a general allowance methodology (i.e., pooling), thus at the time the loan is modified as a troubled debt restructuring the allowance will be impacted by the difference between the results of these two measurement methodologies. Loans modified as troubled debt restructurings that subsequently default are factored into the determination of the allowance in the same manner as other defaulted loans.

Allowance for Loan Losses: The allowance for loan losses (“allowance”) is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when we believe the uncollectability of a loan is confirmed. Subsequent recoveries, if any, are credited to the allowance. We estimate the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in our judgment, should be charged-off.

A loan is considered to be impaired when, based on current information and events, it is probable we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. We determine the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of delay, the reasons for delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.

Derivatives: Derivative financial instruments are recognized as assets or liabilities at fair value. The accounting for changes in the fair value of derivatives depends on the use of the derivatives and whether the derivatives qualify for hedge accounting. Used as part of our asset and liability management to help manage interest rate risk, our derivatives have generally consisted of interest rate swap agreements that qualified for hedge accounting. In February 2012, we entered into an interest rate swap agreement that qualifies for hedge accounting. The current outstanding interest rate swap is discussed in more detail in Note 9. We do not use derivatives for trading purposes.

Changes in the fair value of derivatives that are designated, for accounting purposes, as a hedge of the variability of cash flows to be received on various loans and are effective are reported in other comprehensive income. They are later reclassified into earnings in the same periods during which the hedged transaction affects earnings and are included in the line item in which the hedged cash flows are recorded. If hedge accounting does not apply, changes in the fair value of derivatives are recognized immediately in current earnings as interest income or expense.

If designated as a hedge, we formally document the relationship between derivatives as hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet. If designated as a hedge, we also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in cash flows of the hedged items. Ineffective hedge gains and losses are recognized immediately in current earnings as noninterest income or expense. We discontinue hedge accounting when we determine the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative is settled or terminates, or treatment of the derivative as a hedge is no longer appropriate or intended.

Goodwill and Core Deposit Intangible: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. A more frequent assessment is performed should events or changes in circumstances indicate the carrying value of the goodwill may not be recoverable. We may elect to perform a qualitative assessment for the annual impairment test. If the qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we elect not to perform a qualitative assessment, then we would be required to perform a quantitative test for goodwill impairment. The quantitative test is a two-step process consisting of comparing the carrying value of the reporting unit to an estimate of its fair value. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is impaired and is written down to its estimated fair value.

The core deposit intangible that arose from the Firstbank Corporation acquisition was initially measured at fair value and is being amortized into noninterest expense over a ten-year period using the sum-of-the-years-digits methodology.

Adoption of New Accounting Standards: In January of 2014, the FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. 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. The ASU also requires additional related interim and annual disclosures. The guidance in this ASU is effective for annual and interim periods beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our financial position or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP, including those that previously followed industry-specific guidance such as the real estate, construction and software industries. The revenue standard’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: i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. This ASU is effective for annual and interim periods beginning after December 15, 2016 with three transition methods available – full retrospective, retrospective and cumulative effect approach. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of Effective Date, which delays the implementation of this guidance by one year. Adoption of this ASU is not expected to have a material effect on our financial position or results of operations.

In June 2014, the FASB issued ASU 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. This ASU requires two accounting changes. First, repurchase-to-maturity transactions will be accounted for as secured borrowing transactions on the balance sheet, rather than sales. Second, for repurchase financing arrangements, the ASU requires separate accounting for a transfer of a financial asset executed contemporaneously with (or in contemplation of) a repurchase agreement with the same counterparty, which also will generally result in secured borrowing accounting for the repurchase agreement. The ASU also introduces new disclosures to increase transparency about the types of collateral pledged for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings. The ASU also requires a transferor to disclose information about transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the transferee. The accounting changes and disclosure for certain transactions accounted for as a sale are effective for the first interim or annual period beginning after December 15, 2014. The disclosure for transactions accounted for as secured borrowings is required for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. The required disclosures under the ASU are included in Note 6. Adoption of this ASU did not have a material effect on our financial position or results of operations.

In August 2014, the FASB issued ASU 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure. This ASU requires that certain government-guaranteed mortgage loans, including those guaranteed by the Federal Housing Administration, be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure on the loans that meet these criteria, a separate receivable should be recorded based on the amount of the loan balance expected to be recovered from the guarantor. The amendments are effective for annual periods, and interim periods within those years, beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our financial position or results of operations.

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Note 11 - Fair Values (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Note 11 - Fair Values (Details) [Line Items]
Loans Receivable Held-for-sale, Net, Not Part of Disposal Group, Mortgage	$ 2,100,000	$ 1,600,000
Available-for-sale Securities [Member]
Note 11 - Fair Values (Details) [Line Items]
Valuation Allowances and Reserves, Balance	$ 0	$ 0

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Note 3 - Loans and Allowance for Loan Losses (Details) - Loans by Credit Quality Indicators - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 2,217,388,000	$ 2,089,277,000
Originated Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,519,710,000	1,246,116,000	$ 1,186,713,000
Acquired Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	697,678,000	843,161,000
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,877,620,000	1,715,303,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	643,118,000	550,607,000
Commercial Portfolio Segment [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	47,734,000	51,974,000
Commercial Portfolio Segment [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	427,016,000	430,388,000
Commercial Portfolio Segment [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	636,227,000	559,574,000
Commercial Portfolio Segment [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	123,525,000	122,760,000
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,402,320,000	1,153,189,000	$ 1,103,802,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	522,346,000	384,570,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	363,211,000	266,631,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	158,699,000	109,639,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	436,000	8,300,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	30,958,000	29,826,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	17,906,000	11,242,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	11,132,000	16,375,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,920,000	2,209,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	306,539,000	291,758,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	211,563,000	190,656,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	92,583,000	83,123,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	2,393,000	17,979,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	505,715,000	410,977,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	378,741,000	285,035,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	121,241,000	113,982,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	5,733,000	11,960,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	36,762,000	36,058,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	18,842,000	12,394,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	16,868,000	22,282,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,052,000	1,382,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	475,300,000	562,114,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	120,772,000	166,037,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	67,167,000	72,411,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	50,573,000	90,320,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,032,000	3,306,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	16,776,000	22,148,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	4,918,000	5,875,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	11,028,000	14,472,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	830,000	1,801,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	120,477,000	138,630,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	46,693,000	39,496,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	68,194,000	92,212,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	5,590,000	6,922,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	130,512,000	148,597,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	70,884,000	65,886,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	57,262,000	78,103,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	2,366,000	4,608,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	86,763,000	86,702,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Grade 1 - 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	46,299,000	35,858,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Grade 5 - 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	37,162,000	49,781,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Grade 8 - 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 3,302,000	$ 1,063,000

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Note 10 - Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

	Level in	September 30, 2015				December 31, 2014
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy	Values		Values		Values		Values
Financial assets:
Cash	Level 1	$	13,314	$	13,314	$	13,261	$	13,261
Cash equivalents	Level 2		90,535		90,535		159,477		159,477
Securities available for sale	(1)		367,173		367,173		432,912		432,912
FHLBI stock	(2)		7,567		7,567		13,699		13,699
Loans, net	Level 3		2,199,212		2,200,805		2,067,662		2,062,566
Loans held for sale	Level 2		2,057		2,057		1,574		1,574
Bank owned life insurance	Level 2		58,680		58,680		57,861		57,861
Accrued interest receivable	Level 2		8,355		8,355		8,033		8,033
Financial liabilities:
Deposits	Level 2		2,254,129		2,214,078		2,276,915		2,254,749
Repurchase agreements	Level 2		158,149		158,149		167,569		167,569
FHLBI advances	Level 2		68,000		68,883		54,022		54,720
Subordinated debentures	Level 2		54,983		55,049		54,472		54,508
Accrued interest payable	Level 2		1,554		1,554		1,942		1,942
Interest rate swap	(1)		533		533		253		253

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Note 8 - Commitments and Off-balance Sheet Risk (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block Supplement [Abstract]

Summary of Contractual Amounts of Financial Instruments with Off-balance Sheet Risk [Table Text Block]

	September 30,		December 31,
	2015		2014
Commercial unused lines of credit	$	488,744,000	$	554,856,000
Unused lines of credit secured by 1 – 4 family residential properties		61,534,000		60,983,000
Credit card unused lines of credit		14,100,000		11,649,000
Other consumer unused lines of credit		9,265,000		8,673,000
Commitments to make loans		238,884,000		110,126,000
Standby letters of credit		35,562,000		35,461,000
	$	848,089,000	$	781,748,000

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Note 7 - Federal Home Loan Bank of Indianapolis Advances (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Note 7 - Federal Home Loan Bank of Indianapolis Advances (Details) [Line Items]
Long-term Federal Home Loan Bank Advances (in Dollars)	$ 68,000,000	$ 54,022,000
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)	442,000,000
Line of Credit Facility, Remaining Borrowing Capacity (in Dollars)	374,000,000
Federal Home Loan Bank of Indianapolis [Member]
Note 7 - Federal Home Loan Bank of Indianapolis Advances (Details) [Line Items]
Long-term Federal Home Loan Bank Advances (in Dollars)	$ 68,000,000	$ 54,000,000
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate, Range from	1.22%	0.62%
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate, Range to	2.11%	1.51%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Weighted Average Interest Rate	1.49%	1.26%

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Note 3 - Loans and Allowance for Loan Losses (Details) - Retail Credit Risk by Collateral Type - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 2,217,388,000	$ 2,089,277,000
Originated Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,519,710,000	1,246,116,000	$ 1,186,713,000
Acquired Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	697,678,000	843,161,000
Retail Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	339,768,000	373,974,000
Retail Portfolio Segment [Member] | Home Equity and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	146,765,000	159,278,000
Retail Portfolio Segment [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	193,003,000	214,696,000
Retail Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	117,390,000	92,927,000	$ 82,911,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	65,671,000	50,059,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	51,719,000	42,868,000
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	222,378,000	281,047,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	81,094,000	109,219,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 141,284,000	$ 171,828,000

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Note 11 - Fair Values (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

				Quoted
				Prices in
				Active		Significant
				Markets for		Other			Significant
				Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Available for sale securities
U.S. Government agency debt obligations	$	159,393,000		$	0	$	159,393,000		$	0
Mortgage-backed securities		72,964,000			0		72,964,000			0
Municipal general obligation bonds		123,608,000			0		115,119,000			8,489,000
Municipal revenue bonds		9,250,000			0		9,250,000			0
Other investments		1,958,000			0		1,958,000			0
Interest rate swap		(533,000	)		0		(533,000	)		0
Total	$	366,640,000		$	0	$	358,151,000		$	8,489,000

				Quoted
				Prices in
				Active		Significant
				Markets for		Other			Significant
				Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Available for sale securities
U.S. Government agency debt obligations	$	193,468,000		$	0	$	193,468,000		$	0
Mortgage-backed securities		93,561,000			0		93,561,000			0
Municipal general obligation bonds		133,082,000			0		122,801,000			10,281,000
Municipal revenue bonds		10,873,000			0		10,873,000			0
Other investments		1,928,000			0		1,928,000			0
Interest rate swap		(253,000	)		0		(253,000	)		0
Total	$	432,659,000		$	0	$	422,378,000		$	10,281,000

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans (1)	$	9,258,000	$	0	$	0	$	9,258,000
Foreclosed assets (1)		2,272,000		0		0		2,272,000
Total	$	11,530,000	$	0	$	0	$	11,530,000

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans (1)	$	17,097,000	$	0	$	0	$	17,097,000
Foreclosed assets (1)		1,995,000		0		0		1,995,000
Total	$	19,092,000	$	0	$	0	$	19,092,000

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Note 12 - Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2015
Total capital (to risk weighted assets)
Consolidated	$	341,029		13.6	%	$	200,894		8.0	%	$	NA		NA
Bank		343,288		13.7			200,989		8.0			251,236		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		324,911		12.9			150,671		6.0			NA		NA
Bank		327,169		13.0			150,742		6.0			200,989		8.0
Common equity tier 1 (to risk weighted assets)
Consolidated		275,395		11.0			113,156		4.5			NA		NA
Bank		327,169		13.0			113,057		4.5			163,304		6.5
Tier 1 capital (to average assets)
Consolidated		324,911		11.5			112,825		4.0			NA		NA
Bank		327,169		11.6			112,914		4.0			141,142		5.0

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2014
Total capital (to risk weighted assets)
Consolidated	$	334,793		14.4	%	$	185,553		8.0	%	$	NA		NA
Bank		332,749		14.4			185,309		8.0			231,636		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		314,752		13.6			92,777		4.0			NA		NA
Bank		312,708		13.5			92,655		4.0			138,982		6.0
Tier 1 capital (to average assets)
Consolidated		314,752		11.2			112,949		4.0			NA		NA
Bank		312,708		11.1			112,856		4.0			141,070		5.0

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities
Net income	$ 20,540,000	$ 11,038,000
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization	8,596,000	4,734,000
Accretion of acquired loans	(4,264,000)	(1,687,000)
Provision for loan losses	(1,500,000)	(3,000,000)
Stock-based compensation expense	525,000	364,000
Stock grants to directors for retainer fee	402,000	155,000
Proceeds from sales of mortgage loans held for sale	94,608,000	41,246,000
Origination of mortgage loans held for sale	(92,260,000)	(40,481,000)
Net gain from sales of mortgage loans held for sale	(2,831,000)	(935,000)
Net gain from sales and valuation write-down of foreclosed assets	(104,000)	(721,000)
Net gain from sales of fixed assets	(22,000)	0
Net gain from sales of available for sale securities	(5,000)	0
Earnings on bank owned life insurance	(820,000)	(880,000)
Net change in:
Accrued interest receivable	(321,000)	(269,000)
Other assets	(1,731,000)	184,000
Accrued interest and other liabilities	4,754,000	(1,261,000)
Net cash from operating activities	25,567,000	8,487,000
Cash flows from investing activities
Cash received in merger	0	91,806,000
Loan originations and payments, net	(127,390,000)	(70,034,000)
Purchases of securities available for sale	(8,266,000)	(14,379,000)
Proceeds from maturities, calls and repayments of securities available for sale	72,277,000	46,445,000
Proceeds from sales of securities available for sale	665,000	0
Proceeds from sales of foreclosed assets	1,431,000	3,184,000
Proceeds from FHLB stock redemption	6,132,000	0
Purchases of premises and equipment	(932,000)	(1,167,000)
Net cash from (for) investing activities	(56,083,000)	55,855,000
Cash flows from financing activities
Net decrease in time deposits	(118,950,000)	(40,963,000)
Net increase (decrease) in all other deposits	97,535,000	(35,065,000)
Net increase (decrease) in securities sold under agreements to repurchase	(9,420,000)	19,080,000
Proceeds from Federal Home Loan Bank advances	20,000,000	0
Maturities of Federal Home Loan Bank advances	(6,000,000)	0
Proceeds from stock option exercises	281,000	229,000
Employee stock purchase plan	33,000	10,000
Dividend reinvestment plan	456,000	90,000
Repurchase of common stock shares	(15,223,000)	0
Payment of cash dividends to common shareholders	(7,085,000)	(22,436,000)
Net cash for financing activities	(38,373,000)	(79,055,000)
Net change in cash and cash equivalents	(68,889,000)	(14,713,000)
Cash and cash equivalents at beginning of period	172,738,000	146,965,000
Cash and cash equivalents at end of period	103,849,000	132,252,000
Cash paid during the period for:
Interest	8,625,000	8,574,000
Federal income tax	5,700,000	1,575,000
Noncash financing and investing activities:
Transfers from loans to foreclosed assets	$ 1,604,000	$ 1,084,000

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Note 1 - Significant Accounting Policies (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($) shares	Sep. 30, 2014 shares	Sep. 30, 2015 USD ($) shares	Sep. 30, 2014 shares	Dec. 31, 2014 USD ($)
Note 1 - Significant Accounting Policies (Details) [Line Items]
Number of Second-Tier Subsidiaries			2
Number of Unconsolidated Business Trusts Formed to Issue Trust Preferred Securities	5		5
Interest Income on Commercial and Mortgage Loans, Discontinued Period			90 days
Maximum Delinquency Period for Consumer and Credit Card Loans to be Charged-off			120 days
Loans Receivable Held-for-sale, Net, Not Part of Disposal Group, Mortgage (in Dollars) | $	$ 2.1		$ 2.1		$ 1.6
Mortgage Loans [Member]
Note 1 - Significant Accounting Policies (Details) [Line Items]
Servicing Asset (in Dollars) | $	$ 603.0		$ 603.0
Restricted Stock [Member]
Note 1 - Significant Accounting Policies (Details) [Line Items]
Incremental Common Shares Attributable to Participating Nonvested Shares with Non-forfeitable Dividend Rights	98,000		98,000
Employee Stock Option [Member]
Note 1 - Significant Accounting Policies (Details) [Line Items]
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	106,000	141,000	106,000	141,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	103,000	175,000	103,000	175,000
Core Deposits [Member]
Note 1 - Significant Accounting Policies (Details) [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			10 years

XML

Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Nonperforming Financial Instruments [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	$ 8,214,000	$ 29,432,000
Originated Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Originated Loan [Member] | Nonperforming Financial Instruments [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Nonaccrual loans	2,590,000	26,048,000
Nonperforming loans	2,590,000	26,048,000
Acquired Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	26,000
Acquired Loan [Member] | Nonperforming Financial Instruments [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	43,000	26,000
Nonaccrual loans	5,581,000	3,358,000
Nonperforming loans	5,624,000	3,384,000
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	5,647,000	25,233,000
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Commercial and Industrial [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	671,000	6,478,000
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	170,000	209,000
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Real Estate Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	2,262,000	18,062,000
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Real Estate Non Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	79,000	378,000
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	2,465,000	106,000
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Retail Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	2,567,000	4,199,000
Retail Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Home Equity and Other [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	749,000	800,000
Retail Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | 1-4 Family Mortgages [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Nonperforming loans	1,818,000	3,399,000
Retail Portfolio Segment [Member] | Originated Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	0
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	26,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	0	26,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Nonperforming Loans [Line Items]
Loans past due 90 days or more still accruing interest	$ 0	$ 0

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Note 5 - Deposits (Details) - Summary of Deposits - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Summary of Deposits [Abstract]
Noninterest-bearing checking (in Dollars)	$ 619,125,000	$ 558,738,000
Noninterest-bearing checking	27.50%	24.50%
Noninterest-bearing checking	10.80%
Interest-bearing checking (in Dollars)	$ 389,978,000	$ 413,382,000
Interest-bearing checking	17.30%	18.20%
Interest-bearing checking	(5.70%)
Money market (in Dollars)	$ 283,707,000	$ 235,587,000
Money market	12.60%	10.30%
Money market	20.40%
Savings (in Dollars)	$ 342,902,000	$ 330,459,000
Savings	15.20%	14.50%
Savings	3.80%
Time, under $100,000 (in Dollars)	$ 162,729,000	$ 181,026,000
Time, under $100,000	7.20%	8.00%
Time, under $100,000	(10.10%)
Time, $100,000 and over (in Dollars)	$ 333,226,000	$ 382,120,000
Time, $100,000 and over	14.80%	16.80%
Time, $100,000 and over	(12.80%)
(in Dollars)	$ 2,131,667,000	$ 2,101,312,000
	94.60%	92.30%
	1.40%
Out-of-area time, under $100,000 (in Dollars)	$ 298,000	$ 2,422,000
Out-of-area time, under $100,000	0.10%	0.10%
Out-of-area time, under $100,000	(87.70%)
Out-of-area time, $100,000 and over (in Dollars)	$ 122,164,000	$ 173,181,000
Out-of-area time, $100,000 and over	5.40%	7.60%
Out-of-area time, $100,000 and over	(29.50%)
(in Dollars)	$ 122,462,000	$ 175,603,000
	5.40%	7.70%
	(30.20%)
Total deposits (in Dollars)	$ 2,254,129,000	$ 2,276,915,000
Total deposits	100.00%	100.00%
Total deposits	(1.00%)

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)		Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks		$ 43,743,000	$ 43,754,000
Interest-bearing deposits		49,952,000	117,777,000
Federal funds sold		10,154,000	11,207,000
Total cash and cash equivalents		103,849,000	172,738,000
Securities available for sale	[1]	367,173,000	432,912,000
Federal Home Loan Bank stock	[2]	7,567,000	13,699,000
Loans		2,217,388,000	2,089,277,000
Allowance for loan losses		(16,119,000)	(20,041,000)
Loans, net		2,201,269,000	2,069,236,000
Premises and equipment, net		47,509,000	48,812,000
Bank owned life insurance		58,680,000	57,861,000
Goodwill		49,473,000	49,473,000
Core deposit intangible		13,346,000	15,624,000
Other assets		32,511,000	33,024,000
Total assets		2,881,377,000	2,893,379,000
Deposits
Noninterest-bearing		619,125,000	558,738,000
Interest-bearing		1,635,004,000	1,718,177,000
Total deposits		2,254,129,000	2,276,915,000
Securities sold under agreements to repurchase		158,149,000	167,569,000
Federal Home Loan Bank advances		68,000,000	54,022,000
Subordinated debentures		54,983,000	54,472,000
Accrued interest and other liabilities		17,296,000	12,263,000
Total liabilities		2,552,557,000	2,565,241,000
Shareholders' equity
Preferred stock, no par value; 1,000,000 shares authorized; none issued		0	0
Common stock, no par value; 40,000,000 shares authorized; 16,279,234 shares outstanding at September 30, 2015 and 16,976,839 shares outstanding at December 31, 2014		304,378,000	317,904,000
Retained earnings		23,673,000	10,218,000
Accumulated other comprehensive income		769,000	16,000
Total shareholders’ equity		328,820,000	328,138,000
Total liabilities and shareholders’ equity		$ 2,881,377,000	$ 2,893,379,000

[1] See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

[2] It is not practical to determine the fair value of FHLBI stock due to transferability restrictions.

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Note 3 - Loans and Allowance for Loan Losses (Details) - Activity in Allowance for Loan Losses and the Recorded Investments in Loans - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Provision for loan losses	$ (500,000)	$ (400,000)	$ (1,500,000)	$ (3,000,000)
Loans	2,217,388,000		2,217,388,000		$ 2,089,277,000
Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans	1,519,710,000		1,519,710,000
Loans: individually evaluated for impairment	19,047,000		19,047,000
Loans: collectively evaluated for impairment	1,500,663,000		1,500,663,000
Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	15,740,000	20,856,000	19,299,000	22,821,000
Allowance for loan losses	15,837,000	20,374,000	15,837,000	20,374,000
Allowance for loan losses: individually evaluated for impairment	1,827,000	11,364,000	1,827,000	11,364,000
Allowance for loan losses: collectively evaluated for impairment	14,010,000	9,010,000	14,010,000	9,010,000
Provision for loan losses	(93,000)	(400,000)	(1,194,000)	(3,000,000)
Charge-offs	(46,000)	(345,000)	(4,839,000)	(1,036,000)
Recoveries	236,000	263,000	2,571,000	1,589,000
Loans	1,519,710,000	1,186,713,000	1,519,710,000	1,186,713,000	1,246,116,000
Loans: individually evaluated for impairment		52,216,000		52,216,000
Loans: collectively evaluated for impairment		1,134,497,000		1,134,497,000
Acquired Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	821,000		742,000
Allowance for loan losses	282,000		282,000
Provision for loan losses	(407,000)		(306,000)
Charge-offs	(136,000)		(174,000)
Recoveries	4,000		20,000
Loans	697,678,000		697,678,000		843,161,000
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans	1,877,620,000		1,877,620,000		1,715,303,000
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans	1,402,320,000		1,402,320,000
Loans: individually evaluated for impairment	17,835,000		17,835,000
Loans: collectively evaluated for impairment	1,384,485,000		1,384,485,000
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	13,992,000	19,107,000	17,736,000	20,455,000
Allowance for loan losses	14,201,000	18,712,000	14,201,000	18,712,000
Allowance for loan losses: individually evaluated for impairment	1,657,000	10,485,000	1,657,000	10,485,000
Allowance for loan losses: collectively evaluated for impairment	12,544,000	8,227,000	12,544,000	8,227,000
Provision for loan losses	9,000	(473,000)	(1,641,000)	(2,251,000)
Charge-offs	0	(24,000)	(4,276,000)	(708,000)
Recoveries	200,000	102,000	2,382,000	1,216,000
Loans	1,402,320,000	1,103,802,000	1,402,320,000	1,103,802,000	1,153,189,000
Loans: individually evaluated for impairment		48,870,000		48,870,000
Loans: collectively evaluated for impairment		1,054,932,000		1,054,932,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	561,000		681,000
Allowance for loan losses	85,000		85,000
Provision for loan losses	(389,000)		(479,000)
Charge-offs	(87,000)		(118,000)
Recoveries	0		1,000
Loans	475,300,000		475,300,000		562,114,000
Retail Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans	339,768,000		339,768,000		373,974,000
Retail Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans	117,390,000		117,390,000
Loans: individually evaluated for impairment	1,212,000		1,212,000
Loans: collectively evaluated for impairment	116,178,000		116,178,000
Retail Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	1,714,000	1,774,000	1,487,000	2,358,000
Allowance for loan losses	1,691,000	1,677,000	1,691,000	1,677,000
Allowance for loan losses: individually evaluated for impairment	170,000	879,000	170,000	879,000
Allowance for loan losses: collectively evaluated for impairment	1,521,000	798,000	1,521,000	798,000
Provision for loan losses	(13,000)	63,000	578,000	(726,000)
Charge-offs	(46,000)	(321,000)	(563,000)	(328,000)
Recoveries	36,000	161,000	189,000	373,000
Loans	117,390,000	82,911,000	117,390,000	82,911,000	92,927,000
Loans: individually evaluated for impairment		3,346,000		3,346,000
Loans: collectively evaluated for impairment		79,565,000		79,565,000
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	260,000		61,000
Allowance for loan losses	197,000		197,000
Provision for loan losses	(18,000)		173,000
Charge-offs	(49,000)		(56,000)
Recoveries	4,000		19,000
Loans	222,378,000		222,378,000		$ 281,047,000
Unallocated Financing Receivables [Member] | Originated Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	34,000	(25,000)	76,000	8,000
Allowance for loan losses	(55,000)	(15,000)	(55,000)	(15,000)
Allowance for loan losses: individually evaluated for impairment	0	0	0	0
Allowance for loan losses: collectively evaluated for impairment	(55,000)	(15,000)	(55,000)	(15,000)
Provision for loan losses	(89,000)	10,000	(131,000)	(23,000)
Charge-offs	0	0	0	0
Recoveries	0	$ 0	0	$ 0
Unallocated Financing Receivables [Member] | Acquired Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses	0		0
Allowance for loan losses	0		0
Provision for loan losses	0		0
Charge-offs	0		0
Recoveries	$ 0		$ 0

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Condensed Consolidated Statements of Changes in Shareholders' Equity [Unaudited] - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balances, at Dec. 31, 2013	$ 0	$ 162,999,000	$ (4,101,000)	$ (5,573,000)	$ 153,325,000
Employee stock purchase plan		10,000			10,000
Dividend reinvestment plan		90,000			90,000
Stock option exercises		229,000			229,000
Stock grants to directors for retainer fees		155,000			155,000
Stock-based compensation expense		364,000			364,000
Cash dividends		(21,447,000)	(989,000)		(22,436,000)
Common stock issued in connection with Firstbank merger (8,087,272 shares)		173,310,000			173,310,000
Stock options issued to replace existing Firstbank options at merger date		1,664,000			1,664,000
Net income			11,038,000		11,038,000
Change in net unrealized gain on securities available for sale, net of tax effect				3,160,000	3,160,000
Change in fair value of interest rate swap, net of tax effect				84,000	84,000
Balances, at Sep. 30, 2014	0	317,374,000	5,948,000	(2,329,000)	320,993,000
Balances, at Dec. 31, 2014	0	317,904,000	10,218,000	16,000	328,138,000
Employee stock purchase plan		33,000			33,000
Dividend reinvestment plan		456,000			456,000
Stock option exercises		281,000			281,000
Stock grants to directors for retainer fees		402,000			402,000
Stock-based compensation expense		525,000			525,000
Share repurchase program (765,260 shares)		(15,223,000)			(15,223,000)
Cash dividends			(7,085,000)		(7,085,000)
Net income			20,540,000		20,540,000
Change in net unrealized gain on securities available for sale, net of tax effect				934,000	934,000
Change in fair value of interest rate swap, net of tax effect				(181,000)	(181,000)
Balances, at Sep. 30, 2015	$ 0	$ 304,378,000	$ 23,673,000	$ 769,000	$ 328,820,000

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Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	$ 848,089,000	$ 781,748,000
Loan Origination Commitments [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	238,884,000	110,126,000
Standby Letters of Credit [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	35,562,000	35,461,000
Commercial Portfolio Segment [Member] | Unused lines of Credit [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	488,744,000	554,856,000
1-4 Family Mortgages [Member] | Unused lines of Credit [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	61,534,000	60,983,000
Consumer Portfolio Segment [Member] | Unused lines of Credit [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	14,100,000	11,649,000
Consumer Other Financing Receivable 1 [Member] | Unused lines of Credit [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) - Exposure to Credit Losses [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	$ 9,265,000	$ 8,673,000

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Note 2 - Securities (Details) - Securities in a Continuous Loss Position - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Note 2 - Securities (Details) - Securities in a Continuous Loss Position [Line Items]
Securities available for sale, continuous unrealized loss position, less than 12 months	$ 17,825,000	$ 190,579,000
Securities available for sale, continuous unrealized loss position, less than 12 months, unrealized loss	127,000	740,000
Securities available for sale, continuous unrealized loss position, 12 months or more	96,710,000	74,120,000
Securities available for sale, continuous unrealized loss position, 12 months or more, unrealized loss	2,216,000	2,836,000
Securities available for sale, continuous unrealized loss position	114,535,000	264,699,000
Securities available for sale, continuous unrealized loss position, unrealized loss	2,343,000	3,576,000
US Government Agencies Debt Securities [Member]
Note 2 - Securities (Details) - Securities in a Continuous Loss Position [Line Items]
Securities available for sale, continuous unrealized loss position, less than 12 months	0	81,891,000
Securities available for sale, continuous unrealized loss position, less than 12 months, unrealized loss	0	202,000
Securities available for sale, continuous unrealized loss position, 12 months or more	70,896,000	74,120,000
Securities available for sale, continuous unrealized loss position, 12 months or more, unrealized loss	1,957,000	2,836,000
Securities available for sale, continuous unrealized loss position	70,896,000	156,011,000
Securities available for sale, continuous unrealized loss position, unrealized loss	1,957,000	3,038,000
Collateralized Mortgage Backed Securities [Member]
Note 2 - Securities (Details) - Securities in a Continuous Loss Position [Line Items]
Securities available for sale, continuous unrealized loss position, less than 12 months	6,831,000	49,940,000
Securities available for sale, continuous unrealized loss position, less than 12 months, unrealized loss	37,000	218,000
Securities available for sale, continuous unrealized loss position, 12 months or more	19,943,000	0
Securities available for sale, continuous unrealized loss position, 12 months or more, unrealized loss	114,000	0
Securities available for sale, continuous unrealized loss position	26,774,000	49,940,000
Securities available for sale, continuous unrealized loss position, unrealized loss	151,000	218,000
Municipal General Obligation Bonds [Member]
Note 2 - Securities (Details) - Securities in a Continuous Loss Position [Line Items]
Securities available for sale, continuous unrealized loss position, less than 12 months	10,994,000	54,104,000
Securities available for sale, continuous unrealized loss position, less than 12 months, unrealized loss	90,000	307,000
Securities available for sale, continuous unrealized loss position, 12 months or more	5,064,000	0
Securities available for sale, continuous unrealized loss position, 12 months or more, unrealized loss	144,000	0
Securities available for sale, continuous unrealized loss position	16,058,000	54,104,000
Securities available for sale, continuous unrealized loss position, unrealized loss	234,000	307,000
Municipal Revenue Bonds [Member]
Note 2 - Securities (Details) - Securities in a Continuous Loss Position [Line Items]
Securities available for sale, continuous unrealized loss position, less than 12 months	0	4,644,000
Securities available for sale, continuous unrealized loss position, less than 12 months, unrealized loss	0	13,000
Securities available for sale, continuous unrealized loss position, 12 months or more	807,000	0
Securities available for sale, continuous unrealized loss position, 12 months or more, unrealized loss	1,000	0
Securities available for sale, continuous unrealized loss position	807,000	4,644,000
Securities available for sale, continuous unrealized loss position, unrealized loss	1,000	13,000
Other Debt Obligations [Member]
Note 2 - Securities (Details) - Securities in a Continuous Loss Position [Line Items]
Securities available for sale, continuous unrealized loss position, less than 12 months	0	0
Securities available for sale, continuous unrealized loss position, less than 12 months, unrealized loss	0	0
Securities available for sale, continuous unrealized loss position, 12 months or more	0	0
Securities available for sale, continuous unrealized loss position, 12 months or more, unrealized loss	0	0
Securities available for sale, continuous unrealized loss position	0	0
Securities available for sale, continuous unrealized loss position, unrealized loss	$ 0	$ 0

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Note 12 - Regulatory Matters (Details) - USD ($) $ / shares in Units, $ in Millions									3 Months Ended		9 Months Ended
	Dec. 23, 2015	Oct. 15, 2015	Sep. 23, 2015	Jul. 16, 2015	Jun. 24, 2015	Apr. 16, 2015	Mar. 25, 2015	Jan. 15, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Jan. 30, 2015	Dec. 31, 2014	Dec. 31, 2009
Note 12 - Regulatory Matters (Details) [Line Items]
Trust Preferred Securities Included in Tier One Capital (in Dollars)									$ 52.9		$ 52.9			$ 52.4
Maximum Restricted Core Element Allowed in Tier One Capital, Percent											25.00%
Maximum Level of Consolidated Aggregate Assets Allowing for Inclusion of Trust Preferred Securities in Tier One Capital (in Dollars)															$ 15,000.0
Preferred Securities of Subsidiary Trust (in Dollars)									$ 52.9		$ 52.9			$ 52.4
Common Stock, Dividends, Per Share, Cash Paid			$ 0.15		$ 0.14		$ 0.14		$ 0.15	$ 0.12	$ 0.43	$ 2.36
Common Stock, Dividends, Per Share, Declared				$ 0.15		$ 0.14		$ 0.14
Stock Repurchase Program, Authorized Amount (in Dollars)													$ 20.0
Scenario, Forecast [Member]
Note 12 - Regulatory Matters (Details) [Line Items]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.15
Repurchased Stock [Member]
Note 12 - Regulatory Matters (Details) [Line Items]
Stock Repurchased During Period, Shares (in Shares)											765,000
Share Price									$ 19.89		$ 19.89
Stock Repurchased During Period, Value (in Dollars)											$ 15.2
Subsequent Event [Member]
Note 12 - Regulatory Matters (Details) [Line Items]
Common Stock, Dividends, Per Share, Declared		$ 0.15

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Note 2 - Securities (Tables)

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities [Table Text Block]

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
September 30, 2015
U.S. Government agency debt obligations	$	159,411,000	$	1,939,000	$	(1,957,000	)	$	159,393,000
Mortgage-backed securities		72,211,000		904,000		(151,000	)		72,964,000
Municipal general obligation bonds		122,724,000		1,118,000		(234,000	)		123,608,000
Municipal revenue bonds		9,163,000		88,000		(1,000	)		9,250,000
Other investments		1,947,000		11,000		0			1,958,000
	$	365,456,000	$	4,060,000	$	(2,343,000	)	$	367,173,000
December 31, 2014
U.S. Government agency debt obligations	$	194,894,000	$	1,612,000	$	(3,038,000	)	$	193,468,000
Mortgage-backed securities		92,656,000		1,123,000		(218,000	)		93,561,000
Municipal general obligation bonds		132,347,000		1,042,000		(307,000	)		133,082,000
Municipal revenue bonds		10,769,000		117,000		(13,000	)		10,873,000
Other investments		1,925,000		3,000		0			1,928,000
	$	432,591,000	$	3,897,000	$	(3,576,000	)	$	432,912,000

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block]

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
September 30, 2015
U.S. Government agency debt obligations	$	0	$	0	$	70,896,000	$	1,957,000	$	70,896,000	$	1,957,000
Mortgage-backed securities		6,831,000		37,000		19,943,000		114,000		26,774,000		151,000
Municipal general obligation bonds		10,994,000		90,000		5,064,000		144,000		16,058,000		234,000
Municipal revenue bonds		0		0		807,000		1,000		807,000		1,000
Other investments		0		0		0		0		0		0
	$	17,825,000	$	127,000	$	96,710,000	$	2,216,000	$	114,535,000	$	2,343,000

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
December 31, 2014
U.S. Government agency debt obligations	$	81,891,000	$	202,000	$	74,120,000	$	2,836,000	$	156,011,000	$	3,038,000
Mortgage-backed securities		49,940,000		218,000		0		0		49,940,000		218,000
Municipal general obligation bonds		54,104,000		307,000		0		0		54,104,000		307,000
Municipal revenue bonds		4,644,000		13,000		0		0		4,644,000		13,000
Other investments		0		0		0		0		0		0
	$	190,579,000	$	740,000	$	74,120,000	$	2,836,000	$	264,699,000	$	3,576,000

Investments Classified by Contractual Maturity Date [Table Text Block]

	Weighted
	Average			Amortized		Fair
	Yield			Cost		Value
Due in 2015		2.12	%	$	8,409,000	$	8,471,000
Due in 2016 through 2020		1.42			150,774,000		151,190,000
Due in 2021 through 2025		3.09			57,813,000		58,359,000
Due in 2026 and beyond		3.56			74,302,000		74,231,000
Mortgage-backed securities		1.69			72,211,000		72,964,000
Other investments		2.53			1,947,000		1,958,000
		2.21	%	$	365,456,000	$	367,173,000

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Note 2 - Securities (Details) - Debt Securities by Maturity	Sep. 30, 2015 USD ($)
Note 2 - Securities (Details) - Debt Securities by Maturity [Line Items]
Due in 2015	2.12%
Due in 2015	$ 8,409,000
Due in 2015	$ 8,471,000
Due in 2016 through 2020	1.42%
Due in 2016 through 2020	$ 150,774,000
Due in 2016 through 2020	$ 151,190,000
Due in 2021 through 2025	3.09%
Due in 2021 through 2025	$ 57,813,000
Due in 2021 through 2025	$ 58,359,000
Due in 2026 and beyond	3.56%
Due in 2026 and beyond	$ 74,302,000
Due in 2026 and beyond	$ 74,231,000
	2.21%
	$ 365,456,000
	$ 367,173,000
Collateralized Mortgage Backed Securities [Member]
Note 2 - Securities (Details) - Debt Securities by Maturity [Line Items]
No single maturity, weighted average yield	1.69%
No single maturity, amortized cost	$ 72,211,000
No single maturity, fair value	$ 72,964,000
Other Debt Obligations [Member]
Note 2 - Securities (Details) - Debt Securities by Maturity [Line Items]
No single maturity, weighted average yield	2.53%
No single maturity, amortized cost	$ 1,947,000
No single maturity, fair value	$ 1,958,000

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Note 4 - Premises and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	September 30,		December 31,
	2015		2014
Land and improvements	$	16,598,000	$	16,579,000
Buildings		39,349,000		38,761,000
Furniture and equipment		16,928,000		16,622,000
		72,875,000		71,962,000
Less: accumulated depreciation		25,366,000		23,150,000
Premises and equipment, net	$	47,509,000	$	48,812,000

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Condensed Consolidated Statements of Changes in Shareholders' Equity [Unaudited] (Parentheticals) - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash dividends per common share (in Dollars per share)	$ 0.43	$ 2.36
Common Stock [Member]
Employee stock purchase plan, shares	1,610	523
Dividend reinvestment plan, shares	22,248	4,695
Stock option exercises, shares	27,375	24,110
Stock grants to directors for retainer fees	20,094	7,375
Share repurchase program	765,260
Cash dividends per common share (in Dollars per share)	$ 0.43	$ 2.36
Common stock issued in connection with Firstbank merger		8,087,272

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Preferred stock, par value (in Dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in Dollars per share)	$ 0	$ 0
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares outstanding	16,279,234	16,976,839

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Note 9 - Hedging Activities

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

9.     HEDGING ACTIVITIES

Our interest rate risk policy includes guidelines for measuring and monitoring interest rate risk. Within these guidelines, parameters have been established for maximum fluctuations in net interest income. Possible fluctuations are measured and monitored using net interest income simulation. Our policy provides for the use of certain derivative instruments and hedging activities to aid in managing interest rate risk to within the policy parameters. To help mitigate the negative impact to our net interest income in an increasing interest rate environment resulting from our cost of funds likely increasing at a higher rate than the yield on our assets, we may periodically enter into derivative financial instruments.

In February 2012, we entered into an interest rate swap agreement with a correspondent bank to hedge the floating rate on our subordinated debentures, which became effective in January 2013 and matures in January 2018. Our $32.0 million of subordinated debentures have a rate equal to the 90-Day Libor Rate plus a fixed spread of 218 basis points, and are subject to repricing quarterly. The interest rate swap agreement provides for us to pay our correspondent bank a fixed rate, while our correspondent bank will pay us the 90-Day Libor Rate on a $32.0 million notional amount. The quarterly re-set dates for the floating rate on the interest rate swap agreement are the same as the re-set dates for the floating rate on the subordinated debentures. The interest rate swap agreement does qualify for hedge accounting; therefore, monthly fluctuations in the present value of the interest rate swap agreement, net of tax effect, are recorded to other comprehensive income. As of September 30, 2015 and December 31, 2014, the fair value of the interest rate swap agreement was recorded as a liability in the amount of $0.5 million and $0.3 million, respectively.

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 06, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	MERCANTILE BANK CORPORATION
Trading Symbol	mbwm
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		16,265,996
Amendment Flag	false
Entity Central Index Key	0001042729
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Note 10 - Fair Values of Financial Instruments

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

10.      FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts, estimated fair values and level within the fair value hierarchy of financial instruments were as follows as of September 30, 2015 and December 31, 2014 (dollars in thousands):

	Level in	September 30, 2015				December 31, 2014
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy	Values		Values		Values		Values
Financial assets:
Cash	Level 1	$	13,314	$	13,314	$	13,261	$	13,261
Cash equivalents	Level 2		90,535		90,535		159,477		159,477
Securities available for sale	(1)		367,173		367,173		432,912		432,912
FHLBI stock	(2)		7,567		7,567		13,699		13,699
Loans, net	Level 3		2,199,212		2,200,805		2,067,662		2,062,566
Loans held for sale	Level 2		2,057		2,057		1,574		1,574
Bank owned life insurance	Level 2		58,680		58,680		57,861		57,861
Accrued interest receivable	Level 2		8,355		8,355		8,033		8,033
Financial liabilities:
Deposits	Level 2		2,254,129		2,214,078		2,276,915		2,254,749
Repurchase agreements	Level 2		158,149		158,149		167,569		167,569
FHLBI advances	Level 2		68,000		68,883		54,022		54,720
Subordinated debentures	Level 2		54,983		55,049		54,472		54,508
Accrued interest payable	Level 2		1,554		1,554		1,942		1,942
Interest rate swap	(1)		533		533		253		253

(1) See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

(2) It is not practical to determine the fair value of FHLBI stock due to transferability restrictions.

Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable, bank owned life insurance, noninterest checking deposits, securities sold under agreements to repurchase, and variable rate loans and deposits that reprice frequently and fully. Security fair values are based on market prices or dealer quotes, and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans and deposits and for variable rate loans and deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of subordinated debentures and FHLBI advances is based on current rates for similar financing. Fair value of the interest rate swap is determined primarily utilizing market-consensus forecasted yield curves. Fair value of off-balance sheet items is estimated to be nominal.

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Condensed Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest income
Loans, including fees	$ 26,565,000	$ 26,323,000	$ 77,463,000	$ 55,079,000
Securities, taxable	1,382,000	1,992,000	4,556,000	4,619,000
Securities, tax-exempt	512,000	553,000	1,572,000	1,110,000
Other interest-earning assets	42,000	32,000	161,000	163,000
Total interest income	28,501,000	28,900,000	83,752,000	60,971,000
Interest expense
Deposits	1,969,000	1,971,000	5,642,000	6,279,000
Short-term borrowings	39,000	34,000	116,000	83,000
Federal Home Loan Bank advances	203,000	166,000	506,000	472,000
Other borrowings	665,000	740,000	1,973,000	1,532,000
Total interest expense	2,876,000	2,911,000	8,237,000	8,366,000
Net interest income	25,625,000	25,989,000	75,515,000	52,605,000
Provision for loan losses	(500,000)	(400,000)	(1,500,000)	(3,000,000)
Net interest income after provision for loan losses	26,125,000	26,389,000	77,015,000	55,605,000
Noninterest income
Services charges on accounts	862,000	862,000	2,444,000	1,749,000
Credit and debit card income	1,005,000	782,000	3,296,000	1,629,000
Mortgage banking activities	1,073,000	569,000	2,784,000	981,000
Earnings on bank owned life insurance	272,000	299,000	820,000	880,000
Other income	1,065,000	387,000	2,648,000	1,456,000
Total noninterest income	4,277,000	2,899,000	11,992,000	6,695,000
Noninterest expense
Salaries and benefits	10,745,000	10,685,000	31,903,000	23,393,000
Occupancy	1,526,000	1,515,000	4,578,000	3,141,000
Furniture and equipment	569,000	560,000	1,788,000	1,175,000
Data processing costs	1,958,000	1,585,000	5,599,000	3,606,000
FDIC insurance costs	355,000	331,000	1,315,000	733,000
Merger-related costs	0	1,250,000	0	5,081,000
Other expense	4,540,000	4,815,000	14,101,000	8,885,000
Total noninterest expenses	19,693,000	20,741,000	59,284,000	46,014,000
Income before federal income tax expense	10,709,000	8,547,000	29,723,000	16,286,000
Federal income tax expense	3,373,000	2,600,000	9,183,000	5,248,000
Net income	$ 7,336,000	$ 5,947,000	$ 20,540,000	$ 11,038,000
Basic earnings per share (in Dollars per share)	$ 0.45	$ 0.35	$ 1.23	$ 0.89
Diluted earnings per share (in Dollars per share)	0.45	0.35	1.23	0.89
Cash dividends per share (in Dollars per share)	$ 0.15	$ 0.12	$ 0.43	$ 2.36
Average basic shares outstanding (in Shares)	16,425,933	16,852,050	16,708,444	12,362,316
Average diluted shares outstanding (in Shares)	16,461,794	16,926,249	16,743,625	12,399,009

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Note 4 - Premises and Equipment, Net

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

4.     PREMISES AND EQUIPMENT, NET

Premises and equipment are comprised of the following:

	September 30,		December 31,
	2015		2014
Land and improvements	$	16,598,000	$	16,579,000
Buildings		39,349,000		38,761,000
Furniture and equipment		16,928,000		16,622,000
		72,875,000		71,962,000
Less: accumulated depreciation		25,366,000		23,150,000
Premises and equipment, net	$	47,509,000	$	48,812,000

Depreciation expense totaled $0.7 million during the third quarter of 2015 and 2014. Depreciation expense totaled $2.3 million during the first nine months of 2015, compared to $1.5 million during the first nine months of 2014.

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Note 3 - Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3.     LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans originated for investment are stated at their principal amount outstanding adjusted for partial charge-offs, the allowance, and net deferred loan fees and costs. Interest income on loans is accrued over the term of the loans primarily using the simple interest method based on the principal balance outstanding. Interest is not accrued on loans where collectability is uncertain. Accrued interest is presented separately in the consolidated balance sheet. Loan origination fees and certain direct costs incurred to extend credit are deferred and amortized over the term of the loan or loan commitment period as an adjustment to the related loan yield.

Acquired loans are those purchased in the Firstbank merger. These loans were recorded at estimated fair value at the Merger Date with no carryover of the related allowance. The acquired loans were segregated between those considered to be performing (“acquired non-impaired loans”) and those with evidence of credit deterioration (“acquired impaired loans”). Acquired loans are considered impaired if there is evidence of credit deterioration and if it is probable, at acquisition, all contractually required payments will not be collected. Acquired loans restructured after acquisition are not considered or reported as troubled debt restructurings if the loans evidenced credit deterioration as of the Merger Date and are accounted for in pools.

The fair value estimates for acquired loans are based on expected prepayments and the amount and timing of discounted expected principal, interest and other cash flows. Credit discounts representing the principal losses expected over the life of the loan are also a component of the initial fair value. In determining the Merger Date fair value of acquired impaired loans, and in subsequent accounting, we have generally aggregated acquired commercial and consumer loans into pools of loans with common risk characteristics.

The difference between the fair value of an acquired non-impaired loan and contractual amounts due at the Merger Date is accreted into income over the estimated life of the loan. Contractually required payments represent the total undiscounted amount of all uncollected principal and interest payments. Acquired non-impaired loans are placed on nonaccrual status and reported as nonperforming or past due using the same criteria applied to the originated loan portfolio.

The excess of an acquired impaired loan’s undiscounted contractually required payments over the amount of its undiscounted cash flows expected to be collected is referred to as the non-accretable difference. The non-accretable difference, which is neither accreted into income nor recorded on the consolidated balance sheet, reflects estimated future credit losses and uncollectible contractual interest expected to be incurred over the life of the acquired impaired loan. The excess cash flows expected to be collected over the carrying amount of the acquired loan is referred to as the accretable yield.

This amount is accreted into interest income over the remaining life of the acquired loans or pools using the level yield method. The accretable yield is affected by changes in interest rate indices for variable rate loans, changes in prepayment speed assumptions and changes in expected principal and interest payments over the estimated lives of the acquired impaired loans.

We evaluate quarterly the remaining contractual required payments receivable and estimate cash flows expected to be collected over the lives of the impaired loans. Contractually required payments receivable may increase or decrease for a variety of reasons, for example, when the contractual terms of the loan agreement are modified, when interest rates on variable rate loans change, or when principal and/or interest payments are received. Cash flows expected to be collected on acquired impaired loans are estimated by incorporating several key assumptions similar to the initial estimate of fair value. These key assumptions include probability of default, loss given default, and the amount of actual prepayments after the Merger Date. Prepayments affect the estimated lives of loans and could change the amount of interest income, and possibly principal, expected to be collected. In re-forecasting future estimated cash flows, credit loss expectations are adjusted as necessary. The adjustments are based, in part, on actual loss severities recognized for each loan type, as well as changes in the probability of default. For periods in which estimated cash flows are not re-forecasted, the prior reporting period’s estimated cash flows are adjusted to reflect the actual cash received and credit events that transpired during the current reporting period.

Increases in expected cash flows of acquired impaired loans subsequent to the Merger Date are recognized prospectively through adjustments of the yield on the loans or pools over their remaining lives, while decreases in expected cash flows are recognized as impairment through a provision for loan losses and an increase in the allowance.

Our total loans at September 30, 2015 were $2.22 billion compared to $2.09 billion at December 31, 2014, an increase of $128 million, or 6.1%. The components of our loan portfolio disaggregated by class of loan within the loan portfolio segments at September 30, 2015 and December 31, 2014, and the percentage change in loans from the end of 2014 to the end of the third quarter of 2015, are as follows:

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Originated loans
Commercial:
Commercial and industrial	$	522,346,000		34.4	%	$	384,570,000		30.8	%		35.8	%
Vacant land, land development, and residential construction		30,958,000		2.0			29,826,000		2.4			3.8
Real estate – owner occupied		306,539,000		20.2			291,758,000		23.4			5.1
Real estate – non-owner occupied		505,715,000		33.3			410,977,000		33.0			23.1
Real estate – multi-family and residential rental		36,762,000		2.4			36,058,000		2.9			2.0
Total commercial		1,402,320,000		92.3			1,153,189,000		92.5			21.6
Retail:
Home equity and other		65,671,000		4.3			50,059,000		4.0			31.2
1-4 family mortgages		51,719,000		3.4			42,868,000		3.5			20.6
Total retail		117,390,000		7.7			92,927,000		7.5			26.3
Total originated loans	$	1,519,710,000		100.0	%	$	1,246,116,000		100.0	%		22.0	%

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Acquired loans
Commercial:
Commercial and industrial	$	120,772,000		17.3	%	$	166,037,000		19.7			(27.3%	)
Vacant land, land development, and residential construction		16,776,000		2.4			22,148,000		2.6			(24.3	)
Real estate – owner occupied		120,477,000		17.3			138,630,000		16.4			(13.1	)
Real estate – non-owner occupied		130,512,000		18.7			148,597,000		17.6			(12.2	)
Real estate – multi-family and residential rental		86,763,000		12.4			86,702,000		10.3			0.1
Total commercial		475,300,000		68.1			562,114,000		66.6			(15.4	)
Retail:
Home equity and other		81,094,000		11.6			109,219,000		13.0			(25.8	)
1-4 family mortgages		141,284,000		20.3			171,828,000		20.4			(17.8	)
Total retail		222,378,000		31.9			281,047,000		33.4			(20.9	)
Total acquired loans	$	697,678,000		100.0	%	$	843,161,000		100.0	%		(17.3%	)

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Total loans
Commercial:
Commercial and industrial	$	643,118,000		29.0	%	$	550,607,000		26.4	%		16.8	%
Vacant land, land development, and residential construction		47,734,000		2.2			51,974,000		2.5			(8.2	)
Real estate – owner occupied		427,016,000		19.3			430,388,000		20.5			(0.8	)
Real estate – non-owner occupied		636,227,000		28.6			559,574,000		26.8			13.7
Real estate – multi-family and residential rental		123,525,000		5.6			122,760,000		5.9			0.6
Total commercial		1,877,620,000		84.7			1,715,303,000		82.1			9.5
Retail:
Home equity and other		146,765,000		6.6			159,278,000		7.6			(7.9	)
1-4 family mortgages		193,003,000		8.7			214,696,000		10.3			(10.1	)
Total retail		339,768,000		15.3			373,974,000		17.9			(9.1	)
Total loans	$	2,217,388,000		100.0	%	$	2,089,277,000		100.0	%		6.1	%

The total outstanding balance and carrying value of acquired impaired loans was $25.9 million and $14.1 million, respectively, as of September 30, 2015. Changes in the accretable yield for acquired impaired loans for the three and nine months ended September 30, 2015 were as follows:

Balance at June 30, 2015	$	5,115,000
Additions		16,000
Accretion income		(653,000	)
Net reclassification from nonaccretable to accretable		1,520,000
Reductions (1)		(548,000	)
Ending balance	$	5,450,000
Balance at December 31, 2014	$	4,998,000
Additions		16,000
Accretion income		(1,980,000	)
Net reclassification from nonaccretable to accretable		3,166,000
Reductions (1)		(750,000	)
Ending balance	$	5,450,000

(1) Reductions primarily reflect the result of exit events, including loan payoffs and charge-offs.

Nonperforming originated loans as of September 30, 2015 and December 31, 2014 were as follows:

	September 30,		December 31,
	2015		2014
Loans past due 90 days or more still accruing interest	$	0	$	0
Nonaccrual loans		2,590,000		26,048,000
Total nonperforming originated loans	$	2,590,000	$	26,048,000

Nonperforming acquired loans as of September 30, 2015 and December 31, 2014 were as follows:

	September 30,		December 31,
	2015		2014
Loans past due 90 days or more still accruing interest	$	43,000	$	26,000
Nonaccrual loans		5,581,000		3,358,000
Total nonperforming acquired loans	$	5,624,000	$	3,384,000

The recorded principal balance of nonperforming loans was as follows:

	September 30,		December 31,
	2015		2014
Commercial:
Commercial and industrial	$	671,000	$	6,478,000
Vacant land, land development, and residential construction		170,000		209,000
Real estate – owner occupied		2,262,000		18,062,000
Real estate – non-owner occupied		79,000		378,000
Real estate – multi-family and residential rental		2,465,000		106,000
Total commercial		5,647,000		25,233,000
Retail:
Home equity and other		749,000		800,000
1-4 family mortgages		1,818,000		3,399,000
Total retail		2,567,000		4,199,000
Total nonperforming loans	$	8,214,000	$	29,432,000

Acquired impaired loans are not reported as nonperforming loans based on acquired impaired loan accounting. Acquired non-impaired loans are placed on nonaccrual status and reported as nonperforming or past due using the same criteria applied to the originated loan portfolio.

An age analysis of past due loans is as follows as of September 30, 2015:

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Originated loans
Commercial:
Commercial and industrial	$	28,000	$	0	$	0	$	28,000	$	522,318,000	$	522,346,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		30,958,000		30,958,000		0
Real estate – owner occupied		0		0		13,000		13,000		306,526,000		306,539,000		0
Real estate – non-owner occupied		0		0		0		0		505,715,000		505,715,000		0
Real estate – multi-family and residential rental		0		0		0		0		36,762,000		36,762,000		0
Total commercial		28,000		0		13,000		41,000		1,402,279,000		1,402,320,000		0
Retail:
Home equity and other		33,000		21,000		4,000		58,000		65,613,000		65,671,000		0
1-4 family mortgages		115,000		67,000		296,000		478,000		51,241,000		51,719,000		0
Total retail		148,000		88,000		300,000		536,000		116,854,000		117,390,000		0
Total past due loans	$	176,000	$	88,000	$	313,000	$	577,000	$	1,519,133,000	$	1,519,710,000	$	0

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Acquired loans
Commercial:
Commercial and industrial	$	385,000	$	0	$	574,000	$	959,000	$	119,813,000	$	120,772,000	$	0
Vacant land, land development, and residential construction		257,000		0		0		257,000		16,519,000		16,776,000		0
Real estate – owner occupied		1,078,000		93,000		802,000		1,973,000		118,504,000		120,477,000		0
Real estate – non-owner occupied		0		0		80,000		80,000		130,432,000		130,512,000		0
Real estate – multi-family and residential rental		173,000		0		2,447,000		2,620,000		84,143,000		86,763,000		0
Total commercial		1,893,000		93,000		3,903,000		5,889,000		469,411,000		475,300,000		0
Retail:
Home equity and other		340,000		68,000		135,000		543,000		80,551,000		81,094,000		0
1-4 family mortgages		548,000		323,000		494,000		1,365,000		139,919,000		141,284,000		0
Total retail		888,000		391,000		629,000		1,908,000		220,470,000		222,378,000		0
Total past due loans	$	2,781,000	$	484,000	$	4,532,000	$	7,797,000	$	689,881,000	$	697,678,000	$	0

An age analysis of past due loans is as follows as of December 31, 2014:

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Originated loans
Commercial:
Commercial and industrial	$	0	$	0	$	0	$	0	$	384,570,000	$	384,570,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		29,826,000		29,826,000		0
Real estate – owner occupied		0		0		120,000		120,000		291,638,000		291,758,000		0
Real estate – non-owner occupied		0		0		116,000		116,000		410,861,000		410,977,000		0
Real estate – multi-family and residential rental		0		0		0		0		36,058,000		36,058,000		0
Total commercial		0		0		236,000		236,000		1,152,953,000		1,153,189,000		0
Retail:
Home equity and other		38,000		3,000		0		41,000		50,018,000		50,059,000		0
1-4 family mortgages		0		0		366,000		366,000		42,502,000		42,868,000		0
Total retail		38,000		3,000		366,000		407,000		92,520,000		92,927,000		0
Total past due loans	$	38,000	$	3,000	$	602,000	$	643,000	$	1,245,473,000	$	1,246,116,000	$	0

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Acquired Loans
Commercial:
Commercial and industrial	$	29,000	$	32,000	$	76,000	$	137,000	$	165,900,000	$	166,037,000	$	0
Vacant land, land development, and residential construction		0		38,000		0		38,000		22,110,000		22,148,000		0
Real estate – owner occupied		51,000		425,000		1,625,000		2,101,000		136,529,000		138,630,000		0
Real estate – non-owner occupied		68,000		598,000		395,000		1,061,000		147,536,000		148,597,000		0
Real estate – multi-family and residential rental		37,000		0		105,000		142,000		86,560,000		86,702,000		0
Total commercial		185,000		1,093,000		2,201,000		3,479,000		558,635,000		562,114,000		0
Retail:
Home equity and other		445,000		419,000		155,000		1,019,000		108,200,000		109,219,000		26,000
1-4 family mortgages		1,087,000		408,000		750,000		2,245,000		169,583,000		171,828,000		0
Total retail		1,532,000		827,000		905,000		3,264,000		277,783,000		281,047,000		26,000
Total past due loans	$	1,717,000	$	1,920,000	$	3,106,000	$	6,743,000	$	836,418,000	$	843,161,000	$	26,000

Impaired originated loans as of September 30, 2015, and average originated impaired loans for the three and nine months ended September 30, 2015, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,893,000	$	1,893,000		$	1,908,000	$	1,729,000
Vacant land, land development and residential construction		0		0			0		101,000
Real estate – owner occupied		302,000		103,000			113,000		1,032,000
Real estate – non-owner occupied		5,733,000		5,733,000			5,747,000		3,204,000
Real estate – multi-family and residential rental		0		0			151,000		232,000
Total commercial		7,928,000		7,729,000			7,919,000		6,298,000
Retail:
Home equity and other		214,000		190,000			189,000		190,000
1-4 family mortgages		1,399,000		735,000			716,000		631,000
Total retail		1,613,000		925,000			905,000		821,000
Total with no related allowance recorded	$	9,541,000	$	8,654,000		$	8,824,000	$	7,119,000

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	470,000	$	413,000	$	271,000	$	436,000	$	2,816,000
Vacant land, land development and residential construction		2,275,000		1,920,000		308,000		2,052,000		2,026,000
Real estate – owner occupied		6,377,000		1,824,000		494,000		1,959,000		8,778,000
Real estate – non-owner occupied		4,897,000		4,897,000		194,000		4,926,000		10,371,000
Real estate – multi-family and residential rental		1,052,000		1,052,000		390,000		1,179,000		1,266,000
Total commercial		15,071,000		10,106,000		1,657,000		10,552,000		25,257,000
Retail:
Home equity and other		195,000		157,000		121,000		160,000		143,000
1-4 family mortgages		165,000		130,000		49,000		131,000		641,000
Total retail		360,000		287,000		170,000		291,000		784,000
Total with an allowance recorded	$	15,431,000	$	10,393,000	$	1,827,000	$	10,843,000	$	26,041,000
Total impaired loans:
Commercial	$	22,999,000	$	17,835,000	$	1,657,000	$	18,471,000	$	31,555,000
Retail		1,973,000		1,212,000		170,000		1,196,000		1,605,000
Total impaired loans	$	24,972,000	$	19,047,000	$	1,827,000	$	19,667,000	$	33,160,000

Impaired acquired loans as of September 30, 2015, and average impaired acquired loans for the three and nine months ended September 30, 2015, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,697,000	$	1,661,000		$	1,596,000	$	1,432,000
Vacant land, land development and residential construction		0		0			0		0
Real estate – owner occupied		1,593,000		1,391,000			910,000		535,000
Real estate – non-owner occupied		768,000		768,000			656,000		487,000
Real estate – multi-family and residential rental		2,680,000		2,637,000			2,885,000		1,799,000
Total commercial		6,738,000		6,457,000			6,047,000		4,253,000
Retail:
Home equity and other		449,000		322,000			342,000		423,000
1-4 family mortgages		1,030,000		953,000			816,000		855,000
Total retail		1,479,000		1,275,000			1,158,000		1,278,000
Total with no related allowance recorded	$	8,217,000	$	7,732,000		$	7,205,000	$	5,531,000

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	66,000	$	66,000	$	5,000	$	73,000	$	65,000
Vacant land, land development and residential construction		0		0		0		0		0
Real estate – owner occupied		51,000		51,000		4,000		568,000		1,016,000
Real estate – non-owner occupied		0		0		0		0		0
Real estate – multi-family and residential rental		25,000		25,000		0		26,000		20,000
Total commercial		142,000		142,000		9,000		667,000		1,101,000
Retail:
Home equity and other		0		0		0		0		0
1-4 family mortgages		176,000		176,000		6,000		229,000		185,000
Total retail		176,000		176,000		6,000		229,000		185,000
Total with an allowance recorded	$	318,000	$	318,000	$	15,000	$	896,000	$	1,286,000
Total impaired loans:
Commercial	$	6,880,000	$	6,599,000	$	9,000	$	6,714,000	$	5,354,000
Retail		1,655,000		1,451,000		6,000		1,387,000		1,463,000
Total impaired loans	$	8,535,000	$	8,050,000	$	15,000	$	8,101,000	$	6,817,000

Impaired originated loans as of December 31, 2014, and average impaired originated loans for the three and nine months ended September 30, 2014, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,170,000	$	1,164,000		$	691,000	$	525,000
Vacant land, land development and residential construction		540,000		209,000			111,000		232,000
Real estate – owner occupied		3,609,000		1,901,000			9,227,000		4,981,000
Real estate – non-owner occupied		1,210,000		1,210,000			576,000		911,000
Real estate – multi-family and residential rental		375,000		317,000			0		0
Total commercial		6,904,000		4,801,000			10,605,000		6,649,000
Retail:
Home equity and other		207,000		191,000			642,000		598,000
1-4 family mortgages		1,144,000		560,000			553,000		591,000
Total retail		1,351,000		751,000			1,195,000		1,189,000
Total with no related allowance recorded	$	8,255,000	$	5,552,000		$	11,800,000	$	7,838,000

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	5,299,000	$	5,226,000	$	1,578,000	$	3,087,000	$	2,142,000
Vacant land, land development and residential construction		2,000,000		2,000,000		151,000		3,049,000		3,536,000
Real estate – owner occupied		15,745,000		15,674,000		2,200,000		2,238,000		1,869,000
Real estate – non-owner occupied		16,033,000		15,949,000		4,779,000		17,377,000		18,819,000
Real estate – multi-family and residential rental		1,371,000		1,371,000		666,000		1,679,000		1,783,000
Total commercial		40,448,000		40,220,000		9,374,000		27,430,000		28,149,000
Retail:
Home equity and other		115,000		84,000		84,000		88,000		139,000
1-4 family mortgages		2,194,000		2,000,000		694,000		2,093,000		2,144,000
Total retail		2,309,000		2,084,000		778,000		2,181,000		2,283,000
Total with an allowance recorded	$	42,757,000	$	42,304,000	$	10,152,000	$	29,611,000	$	30,432,000
Total impaired loans:
Commercial	$	47,352,000	$	45,021,000	$	9,374,000	$	38,035,000	$	34,798,000
Retail		3,660,000		2,835,000		778,000		3,376,000		3,472,000
Total impaired loans	$	51,012,000	$	47,856,000	$	10,152,000	$	41,411,000	$	38,270,000

Impaired acquired loans as of December 31, 2014, and average impaired acquired loans for the three and nine months ended September 30, 2014, were as follows:

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,586,000	$	1,579,000		$	0	$	0
Vacant land, land development and residential construction		0		0			0		0
Real estate – owner occupied		113,000		113,000			0		0
Real estate – non-owner occupied		326,000		326,000			0		0
Real estate – multi-family and residential rental		487,000		487,000			0		0
Total commercial		2,512,000		2,505,000			0		0
Retail:
Home equity and other		641,000		639,000			0		0
1-4 family mortgages		866,000		866,000			0		0
Total retail		1,507,000		1,505,000			0		0
Total with no related allowance recorded	$	4,019,000	$	4,010,000		$	0	$	0

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	0	$	0	$	0	$	0	$	0
Vacant land, land development and residential construction		0		0		0		0		0
Real estate – owner occupied		1,516,000		1,502,000		605,000		0		0
Real estate – non-owner occupied		0		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0		0
Total commercial		1,516,000		1,502,000		605,000		0		0
Retail:
Home equity and other		0		0		0		0		0
1-4 family mortgages		0		0		0		0		0
Total retail		0		0		0		0		0
Total with an allowance recorded	$	1,516,000	$	1,502,000	$	605,000	$	0	$	0
Total impaired loans:
Commercial	$	4,028,000	$	4,007,000	$	605,000	$	0	$	0
Retail		1,507,000		1,505,000		0		0		0
Total impaired loans	$	5,535,000	$	5,512,000	$	605,000	$	0	$	0

Impaired loans for which no allocation of the allowance for loan losses has been made generally reflect situations whereby the loans have been charged-down to estimated collateral value. Interest income recognized on accruing troubled debt restructurings totaled $0.3 million and $0.6 million during the third quarter of 2015 and 2014, respectively, while interest income recognized on accruing troubled debt restructurings totaled $1.0 million and $1.3 million during the first nine months of 2015 and 2014, respectively. No interest income was recognized on nonaccrual loans during the third quarter and first nine months of 2015 or during the respective 2014 periods.

Credit Quality Indicators. We utilize a comprehensive grading system for our commercial loans. All commercial loans are graded on a ten grade rating system. The rating system utilizes standardized grade paradigms that analyze several critical factors such as cash flow, operating performance, financial condition, collateral, industry condition and management. All commercial loans are graded at inception and reviewed and, if appropriate, re-graded at various intervals thereafter. The risk assessment for retail loans is primarily based on the type of collateral and payment activity.

Credit quality indicators were as follows as of September 30, 2015:

Originated loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	363,211,000	$	17,906,000	$	211,563,000	$	378,741,000	$	18,842,000
Grades 5 – 7		158,699,000		11,132,000		92,583,000		121,241,000		16,868,000
Grades 8 – 9		436,000		1,920,000		2,393,000		5,733,000		1,052,000
Total commercial	$	522,346,000	$	30,958,000	$	306,539,000	$	505,715,000	$	36,762,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	65,671,000	$	51,719,000

Acquired loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	67,167,000	$	4,918,000	$	46,693,000	$	70,884,000	$	46,299,000
Grades 5 – 7		50,573,000		11,028,000		68,194,000		57,262,000		37,162,000
Grades 8 – 9		3,032,000		830,000		5,590,000		2,366,000		3,302,000
Total commercial	$	120,772,000	$	16,776,000	$	120,477,000	$	130,512,000	$	86,763,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	81,094,000	$	141,284,000

Credit quality indicators were as follows as of December 31, 2014:

Originated loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-OwnerOccupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	266,631,000	$	11,242,000	$	190,656,000	$	285,035,000	$	12,394,000
Grades 5 – 7		109,639,000		16,375,000		83,123,000		113,982,000		22,282,000
Grades 8 – 9		8,300,000		2,209,000		17,979,000		11,960,000		1,382,000
Total commercial	$	384,570,000	$	29,826,000	$	291,758,000	$	410,977,000	$	36,058,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	50,059,000	$	42,868,000

Acquired loans

Commercial credit exposure – credit risk profiled by internal credit risk grades:

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	72,411,000	$	5,875,000	$	39,496,000	$	65,886,000	$	35,858,000
Grades 5 – 7		90,320,000		14,472,000		92,212,000		78,103,000		49,781,000
Grades 8 – 9		3,306,000		1,801,000		6,922,000		4,608,000		1,063,000
Total commercial	$	166,037,000	$	22,148,000	$	138,630,000	$	148,597,000	$	86,702,000

Retail credit exposure – credit risk profiled by collateral type:

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	109,219,000	$	171,828,000

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

All commercial loans are graded using the following criteria:

Grade 1.	Excellent credit rating that contain very little, if any, risk of loss.
Grade 2.	Strong sources of repayment and have low repayment risk.
Grade 3.	Good sources of repayment and have limited repayment risk.
Grade 4.	Adequate sources of repayment and acceptable repayment risk; however, characteristics are present that render the credit more vulnerable to a negative event.
Grade 5.	Marginally acceptable sources of repayment and exhibit defined weaknesses and negative characteristics.
Grade 6.	Well defined weaknesses which may include negative current cash flow, high leverage, or operating losses. Generally, if the credit does not stabilize or if further deterioration is observed in the near term, the loan will likely be downgraded and placed on the Watch List (i.e., list of lending relationships that receive increased scrutiny and review by the Board of Directors and senior management).
Grade 7.	Defined weaknesses or negative trends that merit close monitoring through Watch List status.
Grade 8.	Inadequately protected by current sound net worth, paying capacity of the obligor, or pledged collateral, resulting in a distinct possibility of loss requiring close monitoring through Watch List status.
Grade 9.	Vital weaknesses exist where collection of principal is highly questionable.
Grade 10.	Considered uncollectable and of such little value that continuance as an asset is not warranted.

The primary risk elements with respect to commercial loans are the financial condition of the borrower, the sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers and employ a disciplined and formalized review of the existence of collateral and its value. The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditor’s rights in order to preserve our collateral position.

Activity in the allowance for loan losses and the recorded investments in originated loans as of and during the three and nine months ended September 30, 2015 are as follows:

	Commercial			Retail
	Loans			Loans			Unallocated			Total
Allowance for loan losses:
Balance at June 30, 2015	$	13,992,000		$	1,714,000		$	34,000		$	15,740,000
Provision for loan losses		9,000			(13,000	)		(89,000	)		(93,000	)
Charge-offs		0			(46,000	)		0			(46,000	)
Recoveries		200,000			36,000			0			236,000
Ending balance	$	14,201,000		$	1,691,000		$	(55,000	)	$	15,837,000
Allowance for loan losses:
Balance at December 31, 2014	$	17,736,000		$	1,487,000		$	76,000		$	19,299,000
Provision for loan losses		(1,641,000	)		578,000			(131,000	)		(1,194,000	)
Charge-offs		(4,276,000	)		(563,000	)		0			(4,839,000	)
Recoveries		2,382,000			189,000			0			2,571,000
Ending balance	$	14,201,000		$	1,691,000		$	(55,000	)	$	15,837,000
Ending balance: individually evaluated for impairment	$	1,657,000		$	170,000		$	0		$	1,827,000
Ending balance: collectively evaluated for impairment	$	12,544,000		$	1,521,000		$	(55,000	)	$	14,010,000
Total loans:
Ending balance	$	1,402,320,000		$	117,390,000					$	1,519,710,000
Ending balance: individually evaluated for impairment	$	17,835,000		$	1,212,000					$	19,047,000
Ending balance: collectively evaluated for impairment	$	1,384,485,000		$	116,178,000					$	1,500,663,000

Activity in the allowance for loan losses for acquired loans during the three and nine months ended September 30, 2015 is as follows:

	Commercial			Retail
	Loans			Loans			Unallocated		Total
Allowance for loan losses:
Balance at June 30, 2015	$	561,000		$	260,000		$	0	$	821,000
Provision for loan losses		(389,000	)		(18,000	)		0		(407,000	)
Charge-offs		(87,000	)		(49,000	)		0		(136,000	)
Recoveries		0			4,000			0		4,000
Ending balance	$	85,000		$	197,000		$	0	$	282,000
Allowance for loan losses:
Balance at December 31, 2014	$	681,000		$	61,000		$	0	$	742,000
Provision for loan losses		(479,000	)		173,000			0		(306,000	)
Charge-offs		(118,000	)		(56,000	)		0		(174,000	)
Recoveries		1,000			19,000			0		20,000
Ending balance	$	85,000		$	197,000		$	0	$	282,000

In accordance with acquisition accounting rules, acquired loans were recorded at fair value at the Merger Date and the prior allowance was eliminated.

Activity in the allowance for loan losses and the recorded investments in originated loans as of and during the three and nine months ended September 30, 2014 are as follows:

	Commercial			Retail
	Loans			Loans			Unallocated			Total
Allowance for loan losses:
Balance at June 30, 2014	$	19,107,000		$	1,774,000		$	(25,000	)	$	20,856,000
Provision for loan losses		(473,000	)		63,000			10,000			(400,000	)
Charge-offs		(24,000	)		(321,000	)		0			(345,000	)
Recoveries		102,000			161,000			0			263,000
Ending balance	$	18,712,000		$	1,677,000		$	(15,000	)	$	20,374,000
Allowance for loan losses:
Balance at December 31, 2013	$	20,455,000		$	2,358,000		$	8,000		$	22,821,000
Provision for loan losses		(2,251,000	)		(726,000	)		(23,000	)		(3,000,000	)
Charge-offs		(708,000	)		(328,000	)		0			(1,036,000	)
Recoveries		1,216,000			373,000			0			1,589,000
Ending balance	$	18,712,000		$	1,677,000		$	(15,000	)	$	20,374,000
Ending balance: individually evaluated for impairment	$	10,485,000		$	879,000		$	0		$	11,364,000
Ending balance: collectively evaluated for impairment	$	8,227,000		$	798,000		$	(15,000	)	$	9,010,000
Total loans:
Ending balance	$	1,103,802,000		$	82,911,000					$	1,186,713,000
Ending balance: individually evaluated for impairment	$	48,870,000		$	3,346,000					$	52,216,000
Ending balance: collectively evaluated for impairment	$	1,054,932,000		$	79,565,000					$	1,134,497,000

No allowance was established for acquired loans as of September 30, 2014.

Loans modified as troubled debt restructurings during the three months ended September 30, 2015 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		0	$	0	$	0
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		1		237,000		237,000
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		1		237,000		237,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		1	$	237,000	$	237,000

Loans modified as troubled debt restructurings during the nine months ended September 30, 2015 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		9	$	1,876,000	$	1,901,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		9		1,876,000		1,901,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		9	$	1,876,000	$	1,901,000
Acquired loans
Commercial:
Commercial and industrial		2	$	286,000	$	286,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		3		66,000		66,000
Real estate – non-owner occupied		4		655,000		655,000
Real estate – multi-family and residential rental		2		202,000		202,000
Total acquired commercial		11		1,209,000		1,209,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		11	$	1,209,000	$	1,209,000

Loans modified as troubled debt restructurings during the three months ended September 30, 2014 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		2	$	5,994,000	$	6,094,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		2		16,787,000		16,787,000
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		4		22,781,000		22,881,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		4	$	22,781,000	$	22,881,000
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		0	$	0	$	0

Loans modified as troubled debt restructurings during the nine months ended September 30, 2014 were as follows:

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		2	$	5,994,000	$	6,094,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		3		17,783,000		17,783,000
Real estate – non-owner occupied		1		146,000		146,000
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		6		23,923,000		24,023,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		6	$	23,923,000	$	24,023,000
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		0	$	0	$	0

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the nine months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

The following acquired loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		1		18,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		1		18,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		1	$	18,000

The following acquired loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the nine months ended September 30, 2015 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		1		18,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		1		18,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		1	$	18,000

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the three months ended September 30, 2014 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

The following originated loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due within the nine months ended September 30, 2014 (amounts as of period end):

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

Activity for originated loans categorized as troubled debt restructurings during the three months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	2,442,000		$	2,632,000		$	2,218,000		$	11,082,000		$	491,000
Charge-Offs		0			0			0			0			0
Payments		(56,000	)		(272,000	)		(291,000	)		(324,000	)		(7,000	)
Transfers to ORE		0			0			0			0			0
Net Additions/Deletions		(302,000	)		0			0			0			0
Ending Balance	$	2,084,000		$	2,360,000		$	1,927,000		$	10,758,000		$	484,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	270,000
Charge-Offs		0		0
Payments		0		(3,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	267,000

Activity for acquired loans categorized as troubled debt restructurings during the three months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,521,000		$	0	$	1,350,000		$	361,000		$	580,000
Charge-Offs		0			0		0			0			(42,000	)
Payments		(324,000	)		0		(77,000	)		(5,000	)		(274,000	)
Transfers to ORE		0			0		0			0			0
Net Additions/Deletions		0			0		0			236,000			0
Ending Balance	$	1,197,000		$	0	$	1,273,000		$	592,000		$	264,000

	Retail			Retail
	Home Equity			1-4 Family
	and Other			Mortgages
Retail Loan Portfolio:
Beginning Balance	$	152,000		$	177,000
Charge-Offs		0			0
Payments		(5,000	)		(1,000	)
Transfers to ORE		0			0
Net Additions/Deletions		0			0
Ending Balance	$	147,000		$	176,000

Activity for originated loans categorized as troubled debt restructurings during the nine months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	7,026,000		$	2,680,000		$	17,160,000		$	17,439,000		$	505,000
Charge-Offs		0			0			(4,198,000	)		0			0
Payments		(6,591,000	)		(320,000	)		(11,035,000	)		(6,681,000	)		(21,000	)
Transfers to ORE		0			0			0			0			0
Net Additions/Deletions		1,649,000			0			0			0			0
Ending Balance	$	2,084,000		$	2,360,000		$	1,927,000		$	10,758,000		$	484,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	1,967,000
Charge-Offs		0		(148,000	)
Payments		0		(1,552,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	267,000

Activity for acquired loans categorized as troubled debt restructurings during the nine months ended September 30, 2015 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,439,000		$	0	$	1,569,000		$	64,000		$	381,000
Charge-Offs		0			0		0			0			(42,000	)
Payments		(597,000	)		0		(296,000	)		(6,000	)		(329,000	)
Transfers to ORE		0			0		0			0			0
Net Additions/Deletions		355,000			0		0			534,000			254,000
Ending Balance	$	1,197,000		$	0	$	1,273,000		$	592,000		$	264,000

	Retail			Retail
	Home Equity			1-4 Family
	and Other			Mortgages
Retail Loan Portfolio:
Beginning Balance	$	26,000		$	178,000
Charge-Offs		0			0
Payments		(32,000	)		(2,000	)
Transfers to ORE		0			0
Net Additions/Deletions		153,000			0
Ending Balance	$	147,000		$	176,000

Activity for originated loans categorized as troubled debt restructurings during the three months ended September 30, 2014 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,176,000		$	3,786,000		$	2,711,000		$	18,664,000		$	719,000
Charge-Offs		0			0			0			0			0
Payments		(205,000	)		(287,000	)		(91,000	)		(655,000	)		(130,000	)
Transfers to ORE		(21,000	)		0			0			0			0
Net Additions/Deletions		6,315,000			0			16,748,000			0			0
Ending Balance	$	7,265,000		$	3,499,000		$	19,368,000		$	18,009,000		$	589,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	2,077,000
Charge-Offs		0		0
Payments		0		(51,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	2,026,000

Activity for originated loans categorized as troubled debt restructurings during the nine months ended September 30, 2014 is as follows:

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,656,000		$	4,501,000		$	1,816,000		$	22,311,000		$	2,620,000
Charge-Offs		(67,000	)		0			(11,000	)		0			(420,000	)
Payments		(632,000	)		(3,901,000	)		(181,000	)		(4,621,000	)		(1,611,000	)
Transfers to ORE		(21,000	)		0			0			0			0
Net Additions/Deletions		6,329,000			2,899,000			17,744,000			319,000			0
Ending Balance	$	7,265,000		$	3,499,000		$	19,368,000		$	18,009,000		$	589,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	2,191,000
Charge-Offs		0		0
Payments		0		(165,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	2,026,000

The allowance related to originated loans categorized as troubled debt restructurings was as follows: 

	September 30,		December 31,
	2015		2014
Commercial:
Commercial and industrial	$	132,000	$	16,000
Vacant land, land development, and residential construction		234,000		151,000
Real estate – owner occupied		114,000		182,000
Real estate – non-owner occupied		194,000		4,778,000
Real estate – multi-family and residential rental		390,000		666,000
Total commercial		1,064,000		5,793,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total related allowance	$	1,064,000	$	5,793,000

In general, our policy dictates that a renewal or modification of an 8- or 9-rated commercial loan meets the criteria of a troubled debt restructuring, although we review and consider all renewed and modified loans as part of our troubled debt restructuring assessment procedures. Loan relationships rated 8 contain significant financial weaknesses, resulting in a distinct possibility of loss, while relationships rated 9 reflect vital financial weaknesses, resulting in a highly questionable ability on our part to collect principal; we believe borrowers warranting such ratings would have difficulty obtaining financing from other market participants. Thus, due to the lack of comparable market rates for loans with similar risk characteristics, we believe 8- or 9-rated loans renewed or modified were done so at below market rates. Loans that are identified as troubled debt restructurings are considered impaired and are individually evaluated for impairment when assessing these credits in our allowance for loan losses calculation.

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Note 3 - Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2015

Note 3 - Loans and Allowance for Loan Losses (Tables) [Line Items]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Originated loans
Commercial:
Commercial and industrial	$	522,346,000		34.4	%	$	384,570,000		30.8	%		35.8	%
Vacant land, land development, and residential construction		30,958,000		2.0			29,826,000		2.4			3.8
Real estate – owner occupied		306,539,000		20.2			291,758,000		23.4			5.1
Real estate – non-owner occupied		505,715,000		33.3			410,977,000		33.0			23.1
Real estate – multi-family and residential rental		36,762,000		2.4			36,058,000		2.9			2.0
Total commercial		1,402,320,000		92.3			1,153,189,000		92.5			21.6
Retail:
Home equity and other		65,671,000		4.3			50,059,000		4.0			31.2
1-4 family mortgages		51,719,000		3.4			42,868,000		3.5			20.6
Total retail		117,390,000		7.7			92,927,000		7.5			26.3
Total originated loans	$	1,519,710,000		100.0	%	$	1,246,116,000		100.0	%		22.0	%

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Acquired loans
Commercial:
Commercial and industrial	$	120,772,000		17.3	%	$	166,037,000		19.7			(27.3%	)
Vacant land, land development, and residential construction		16,776,000		2.4			22,148,000		2.6			(24.3	)
Real estate – owner occupied		120,477,000		17.3			138,630,000		16.4			(13.1	)
Real estate – non-owner occupied		130,512,000		18.7			148,597,000		17.6			(12.2	)
Real estate – multi-family and residential rental		86,763,000		12.4			86,702,000		10.3			0.1
Total commercial		475,300,000		68.1			562,114,000		66.6			(15.4	)
Retail:
Home equity and other		81,094,000		11.6			109,219,000		13.0			(25.8	)
1-4 family mortgages		141,284,000		20.3			171,828,000		20.4			(17.8	)
Total retail		222,378,000		31.9			281,047,000		33.4			(20.9	)
Total acquired loans	$	697,678,000		100.0	%	$	843,161,000		100.0	%		(17.3%	)

											Percent
	September 30, 2015					December 31, 2014					Increase
	Balance		%			Balance		%			(Decrease)
Total loans
Commercial:
Commercial and industrial	$	643,118,000		29.0	%	$	550,607,000		26.4	%		16.8	%
Vacant land, land development, and residential construction		47,734,000		2.2			51,974,000		2.5			(8.2	)
Real estate – owner occupied		427,016,000		19.3			430,388,000		20.5			(0.8	)
Real estate – non-owner occupied		636,227,000		28.6			559,574,000		26.8			13.7
Real estate – multi-family and residential rental		123,525,000		5.6			122,760,000		5.9			0.6
Total commercial		1,877,620,000		84.7			1,715,303,000		82.1			9.5
Retail:
Home equity and other		146,765,000		6.6			159,278,000		7.6			(7.9	)
1-4 family mortgages		193,003,000		8.7			214,696,000		10.3			(10.1	)
Total retail		339,768,000		15.3			373,974,000		17.9			(9.1	)
Total loans	$	2,217,388,000		100.0	%	$	2,089,277,000		100.0	%		6.1	%

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Accretable Yield Movement [Table Text Block]

Balance at June 30, 2015	$	5,115,000
Additions		16,000
Accretion income		(653,000	)
Net reclassification from nonaccretable to accretable		1,520,000
Reductions (1)		(548,000	)
Ending balance	$	5,450,000
Balance at December 31, 2014	$	4,998,000
Additions		16,000
Accretion income		(1,980,000	)
Net reclassification from nonaccretable to accretable		3,166,000
Reductions (1)		(750,000	)
Ending balance	$	5,450,000

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

	September 30,		December 31,
	2015		2014
Loans past due 90 days or more still accruing interest	$	0	$	0
Nonaccrual loans		2,590,000		26,048,000
Total nonperforming originated loans	$	2,590,000	$	26,048,000

	September 30,		December 31,
	2015		2014
Loans past due 90 days or more still accruing interest	$	43,000	$	26,000
Nonaccrual loans		5,581,000		3,358,000
Total nonperforming acquired loans	$	5,624,000	$	3,384,000

	September 30,		December 31,
	2015		2014
Commercial:
Commercial and industrial	$	671,000	$	6,478,000
Vacant land, land development, and residential construction		170,000		209,000
Real estate – owner occupied		2,262,000		18,062,000
Real estate – non-owner occupied		79,000		378,000
Real estate – multi-family and residential rental		2,465,000		106,000
Total commercial		5,647,000		25,233,000
Retail:
Home equity and other		749,000		800,000
1-4 family mortgages		1,818,000		3,399,000
Total retail		2,567,000		4,199,000
Total nonperforming loans	$	8,214,000	$	29,432,000

Past Due Financing Receivables [Table Text Block]

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Originated loans
Commercial:
Commercial and industrial	$	28,000	$	0	$	0	$	28,000	$	522,318,000	$	522,346,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		30,958,000		30,958,000		0
Real estate – owner occupied		0		0		13,000		13,000		306,526,000		306,539,000		0
Real estate – non-owner occupied		0		0		0		0		505,715,000		505,715,000		0
Real estate – multi-family and residential rental		0		0		0		0		36,762,000		36,762,000		0
Total commercial		28,000		0		13,000		41,000		1,402,279,000		1,402,320,000		0
Retail:
Home equity and other		33,000		21,000		4,000		58,000		65,613,000		65,671,000		0
1-4 family mortgages		115,000		67,000		296,000		478,000		51,241,000		51,719,000		0
Total retail		148,000		88,000		300,000		536,000		116,854,000		117,390,000		0
Total past due loans	$	176,000	$	88,000	$	313,000	$	577,000	$	1,519,133,000	$	1,519,710,000	$	0

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Acquired loans
Commercial:
Commercial and industrial	$	385,000	$	0	$	574,000	$	959,000	$	119,813,000	$	120,772,000	$	0
Vacant land, land development, and residential construction		257,000		0		0		257,000		16,519,000		16,776,000		0
Real estate – owner occupied		1,078,000		93,000		802,000		1,973,000		118,504,000		120,477,000		0
Real estate – non-owner occupied		0		0		80,000		80,000		130,432,000		130,512,000		0
Real estate – multi-family and residential rental		173,000		0		2,447,000		2,620,000		84,143,000		86,763,000		0
Total commercial		1,893,000		93,000		3,903,000		5,889,000		469,411,000		475,300,000		0
Retail:
Home equity and other		340,000		68,000		135,000		543,000		80,551,000		81,094,000		0
1-4 family mortgages		548,000		323,000		494,000		1,365,000		139,919,000		141,284,000		0
Total retail		888,000		391,000		629,000		1,908,000		220,470,000		222,378,000		0
Total past due loans	$	2,781,000	$	484,000	$	4,532,000	$	7,797,000	$	689,881,000	$	697,678,000	$	0

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Originated loans
Commercial:
Commercial and industrial	$	0	$	0	$	0	$	0	$	384,570,000	$	384,570,000	$	0
Vacant land, land development, and residential construction		0		0		0		0		29,826,000		29,826,000		0
Real estate – owner occupied		0		0		120,000		120,000		291,638,000		291,758,000		0
Real estate – non-owner occupied		0		0		116,000		116,000		410,861,000		410,977,000		0
Real estate – multi-family and residential rental		0		0		0		0		36,058,000		36,058,000		0
Total commercial		0		0		236,000		236,000		1,152,953,000		1,153,189,000		0
Retail:
Home equity and other		38,000		3,000		0		41,000		50,018,000		50,059,000		0
1-4 family mortgages		0		0		366,000		366,000		42,502,000		42,868,000		0
Total retail		38,000		3,000		366,000		407,000		92,520,000		92,927,000		0
Total past due loans	$	38,000	$	3,000	$	602,000	$	643,000	$	1,245,473,000	$	1,246,116,000	$	0

	30 – 59		60 – 89		Greater Than 89								Recorded Balance > 89
	Days		Days		Days		Total				Total		Days and
	Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing
Acquired Loans
Commercial:
Commercial and industrial	$	29,000	$	32,000	$	76,000	$	137,000	$	165,900,000	$	166,037,000	$	0
Vacant land, land development, and residential construction		0		38,000		0		38,000		22,110,000		22,148,000		0
Real estate – owner occupied		51,000		425,000		1,625,000		2,101,000		136,529,000		138,630,000		0
Real estate – non-owner occupied		68,000		598,000		395,000		1,061,000		147,536,000		148,597,000		0
Real estate – multi-family and residential rental		37,000		0		105,000		142,000		86,560,000		86,702,000		0
Total commercial		185,000		1,093,000		2,201,000		3,479,000		558,635,000		562,114,000		0
Retail:
Home equity and other		445,000		419,000		155,000		1,019,000		108,200,000		109,219,000		26,000
1-4 family mortgages		1,087,000		408,000		750,000		2,245,000		169,583,000		171,828,000		0
Total retail		1,532,000		827,000		905,000		3,264,000		277,783,000		281,047,000		26,000
Total past due loans	$	1,717,000	$	1,920,000	$	3,106,000	$	6,743,000	$	836,418,000	$	843,161,000	$	26,000

Impaired Financing Receivables [Table Text Block]

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,893,000	$	1,893,000		$	1,908,000	$	1,729,000
Vacant land, land development and residential construction		0		0			0		101,000
Real estate – owner occupied		302,000		103,000			113,000		1,032,000
Real estate – non-owner occupied		5,733,000		5,733,000			5,747,000		3,204,000
Real estate – multi-family and residential rental		0		0			151,000		232,000
Total commercial		7,928,000		7,729,000			7,919,000		6,298,000
Retail:
Home equity and other		214,000		190,000			189,000		190,000
1-4 family mortgages		1,399,000		735,000			716,000		631,000
Total retail		1,613,000		925,000			905,000		821,000
Total with no related allowance recorded	$	9,541,000	$	8,654,000		$	8,824,000	$	7,119,000

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	470,000	$	413,000	$	271,000	$	436,000	$	2,816,000
Vacant land, land development and residential construction		2,275,000		1,920,000		308,000		2,052,000		2,026,000
Real estate – owner occupied		6,377,000		1,824,000		494,000		1,959,000		8,778,000
Real estate – non-owner occupied		4,897,000		4,897,000		194,000		4,926,000		10,371,000
Real estate – multi-family and residential rental		1,052,000		1,052,000		390,000		1,179,000		1,266,000
Total commercial		15,071,000		10,106,000		1,657,000		10,552,000		25,257,000
Retail:
Home equity and other		195,000		157,000		121,000		160,000		143,000
1-4 family mortgages		165,000		130,000		49,000		131,000		641,000
Total retail		360,000		287,000		170,000		291,000		784,000
Total with an allowance recorded	$	15,431,000	$	10,393,000	$	1,827,000	$	10,843,000	$	26,041,000
Total impaired loans:
Commercial	$	22,999,000	$	17,835,000	$	1,657,000	$	18,471,000	$	31,555,000
Retail		1,973,000		1,212,000		170,000		1,196,000		1,605,000
Total impaired loans	$	24,972,000	$	19,047,000	$	1,827,000	$	19,667,000	$	33,160,000

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,697,000	$	1,661,000		$	1,596,000	$	1,432,000
Vacant land, land development and residential construction		0		0			0		0
Real estate – owner occupied		1,593,000		1,391,000			910,000		535,000
Real estate – non-owner occupied		768,000		768,000			656,000		487,000
Real estate – multi-family and residential rental		2,680,000		2,637,000			2,885,000		1,799,000
Total commercial		6,738,000		6,457,000			6,047,000		4,253,000
Retail:
Home equity and other		449,000		322,000			342,000		423,000
1-4 family mortgages		1,030,000		953,000			816,000		855,000
Total retail		1,479,000		1,275,000			1,158,000		1,278,000
Total with no related allowance recorded	$	8,217,000	$	7,732,000		$	7,205,000	$	5,531,000

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	66,000	$	66,000	$	5,000	$	73,000	$	65,000
Vacant land, land development and residential construction		0		0		0		0		0
Real estate – owner occupied		51,000		51,000		4,000		568,000		1,016,000
Real estate – non-owner occupied		0		0		0		0		0
Real estate – multi-family and residential rental		25,000		25,000		0		26,000		20,000
Total commercial		142,000		142,000		9,000		667,000		1,101,000
Retail:
Home equity and other		0		0		0		0		0
1-4 family mortgages		176,000		176,000		6,000		229,000		185,000
Total retail		176,000		176,000		6,000		229,000		185,000
Total with an allowance recorded	$	318,000	$	318,000	$	15,000	$	896,000	$	1,286,000
Total impaired loans:
Commercial	$	6,880,000	$	6,599,000	$	9,000	$	6,714,000	$	5,354,000
Retail		1,655,000		1,451,000		6,000		1,387,000		1,463,000
Total impaired loans	$	8,535,000	$	8,050,000	$	15,000	$	8,101,000	$	6,817,000

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,170,000	$	1,164,000		$	691,000	$	525,000
Vacant land, land development and residential construction		540,000		209,000			111,000		232,000
Real estate – owner occupied		3,609,000		1,901,000			9,227,000		4,981,000
Real estate – non-owner occupied		1,210,000		1,210,000			576,000		911,000
Real estate – multi-family and residential rental		375,000		317,000			0		0
Total commercial		6,904,000		4,801,000			10,605,000		6,649,000
Retail:
Home equity and other		207,000		191,000			642,000		598,000
1-4 family mortgages		1,144,000		560,000			553,000		591,000
Total retail		1,351,000		751,000			1,195,000		1,189,000
Total with no related allowance recorded	$	8,255,000	$	5,552,000		$	11,800,000	$	7,838,000

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	5,299,000	$	5,226,000	$	1,578,000	$	3,087,000	$	2,142,000
Vacant land, land development and residential construction		2,000,000		2,000,000		151,000		3,049,000		3,536,000
Real estate – owner occupied		15,745,000		15,674,000		2,200,000		2,238,000		1,869,000
Real estate – non-owner occupied		16,033,000		15,949,000		4,779,000		17,377,000		18,819,000
Real estate – multi-family and residential rental		1,371,000		1,371,000		666,000		1,679,000		1,783,000
Total commercial		40,448,000		40,220,000		9,374,000		27,430,000		28,149,000
Retail:
Home equity and other		115,000		84,000		84,000		88,000		139,000
1-4 family mortgages		2,194,000		2,000,000		694,000		2,093,000		2,144,000
Total retail		2,309,000		2,084,000		778,000		2,181,000		2,283,000
Total with an allowance recorded	$	42,757,000	$	42,304,000	$	10,152,000	$	29,611,000	$	30,432,000
Total impaired loans:
Commercial	$	47,352,000	$	45,021,000	$	9,374,000	$	38,035,000	$	34,798,000
Retail		3,660,000		2,835,000		778,000		3,376,000		3,472,000
Total impaired loans	$	51,012,000	$	47,856,000	$	10,152,000	$	41,411,000	$	38,270,000

						Third Quarter		Year-To-Date
	Unpaid					Average		Average
	Contractual		Recorded			Recorded		Recorded
	Principal		Principal		Related	Principal		Principal
	Balance		Balance		Allowance	Balance		Balance
With no related allowance recorded
Commercial:
Commercial and industrial	$	1,586,000	$	1,579,000		$	0	$	0
Vacant land, land development and residential construction		0		0			0		0
Real estate – owner occupied		113,000		113,000			0		0
Real estate – non-owner occupied		326,000		326,000			0		0
Real estate – multi-family and residential rental		487,000		487,000			0		0
Total commercial		2,512,000		2,505,000			0		0
Retail:
Home equity and other		641,000		639,000			0		0
1-4 family mortgages		866,000		866,000			0		0
Total retail		1,507,000		1,505,000			0		0
Total with no related allowance recorded	$	4,019,000	$	4,010,000		$	0	$	0

							Third Quarter		Year-To-Date
	Unpaid						Average		Average
	Contractual		Recorded				Recorded		Recorded
	Principal		Principal		Related		Principal		Principal
	Balance		Balance		Allowance		Balance		Balance
With an allowance recorded
Commercial:
Commercial and industrial	$	0	$	0	$	0	$	0	$	0
Vacant land, land development and residential construction		0		0		0		0		0
Real estate – owner occupied		1,516,000		1,502,000		605,000		0		0
Real estate – non-owner occupied		0		0		0		0		0
Real estate – multi-family and residential rental		0		0		0		0		0
Total commercial		1,516,000		1,502,000		605,000		0		0
Retail:
Home equity and other		0		0		0		0		0
1-4 family mortgages		0		0		0		0		0
Total retail		0		0		0		0		0
Total with an allowance recorded	$	1,516,000	$	1,502,000	$	605,000	$	0	$	0
Total impaired loans:
Commercial	$	4,028,000	$	4,007,000	$	605,000	$	0	$	0
Retail		1,507,000		1,505,000		0		0		0
Total impaired loans	$	5,535,000	$	5,512,000	$	605,000	$	0	$	0

Financing Receivable Credit Quality Indicators [Table Text Block]

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	363,211,000	$	17,906,000	$	211,563,000	$	378,741,000	$	18,842,000
Grades 5 – 7		158,699,000		11,132,000		92,583,000		121,241,000		16,868,000
Grades 8 – 9		436,000		1,920,000		2,393,000		5,733,000		1,052,000
Total commercial	$	522,346,000	$	30,958,000	$	306,539,000	$	505,715,000	$	36,762,000

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	67,167,000	$	4,918,000	$	46,693,000	$	70,884,000	$	46,299,000
Grades 5 – 7		50,573,000		11,028,000		68,194,000		57,262,000		37,162,000
Grades 8 – 9		3,032,000		830,000		5,590,000		2,366,000		3,302,000
Total commercial	$	120,772,000	$	16,776,000	$	120,477,000	$	130,512,000	$	86,763,000

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-OwnerOccupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	266,631,000	$	11,242,000	$	190,656,000	$	285,035,000	$	12,394,000
Grades 5 – 7		109,639,000		16,375,000		83,123,000		113,982,000		22,282,000
Grades 8 – 9		8,300,000		2,209,000		17,979,000		11,960,000		1,382,000
Total commercial	$	384,570,000	$	29,826,000	$	291,758,000	$	410,977,000	$	36,058,000

	Commercial and Industrial		Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Commercial Real Estate - Multi-Family and Residential Rental
Internal credit risk grade groupings:
Grades 1 – 4	$	72,411,000	$	5,875,000	$	39,496,000	$	65,886,000	$	35,858,000
Grades 5 – 7		90,320,000		14,472,000		92,212,000		78,103,000		49,781,000
Grades 8 – 9		3,306,000		1,801,000		6,922,000		4,608,000		1,063,000
Total commercial	$	166,037,000	$	22,148,000	$	138,630,000	$	148,597,000	$	86,702,000

Allowance for Credit Losses on Financing Receivables [Table Text Block]

	Commercial			Retail
	Loans			Loans			Unallocated			Total
Allowance for loan losses:
Balance at June 30, 2015	$	13,992,000		$	1,714,000		$	34,000		$	15,740,000
Provision for loan losses		9,000			(13,000	)		(89,000	)		(93,000	)
Charge-offs		0			(46,000	)		0			(46,000	)
Recoveries		200,000			36,000			0			236,000
Ending balance	$	14,201,000		$	1,691,000		$	(55,000	)	$	15,837,000
Allowance for loan losses:
Balance at December 31, 2014	$	17,736,000		$	1,487,000		$	76,000		$	19,299,000
Provision for loan losses		(1,641,000	)		578,000			(131,000	)		(1,194,000	)
Charge-offs		(4,276,000	)		(563,000	)		0			(4,839,000	)
Recoveries		2,382,000			189,000			0			2,571,000
Ending balance	$	14,201,000		$	1,691,000		$	(55,000	)	$	15,837,000
Ending balance: individually evaluated for impairment	$	1,657,000		$	170,000		$	0		$	1,827,000
Ending balance: collectively evaluated for impairment	$	12,544,000		$	1,521,000		$	(55,000	)	$	14,010,000
Total loans:
Ending balance	$	1,402,320,000		$	117,390,000					$	1,519,710,000
Ending balance: individually evaluated for impairment	$	17,835,000		$	1,212,000					$	19,047,000
Ending balance: collectively evaluated for impairment	$	1,384,485,000		$	116,178,000					$	1,500,663,000

	Commercial			Retail
	Loans			Loans			Unallocated		Total
Allowance for loan losses:
Balance at June 30, 2015	$	561,000		$	260,000		$	0	$	821,000
Provision for loan losses		(389,000	)		(18,000	)		0		(407,000	)
Charge-offs		(87,000	)		(49,000	)		0		(136,000	)
Recoveries		0			4,000			0		4,000
Ending balance	$	85,000		$	197,000		$	0	$	282,000
Allowance for loan losses:
Balance at December 31, 2014	$	681,000		$	61,000		$	0	$	742,000
Provision for loan losses		(479,000	)		173,000			0		(306,000	)
Charge-offs		(118,000	)		(56,000	)		0		(174,000	)
Recoveries		1,000			19,000			0		20,000
Ending balance	$	85,000		$	197,000		$	0	$	282,000

	Commercial			Retail
	Loans			Loans			Unallocated			Total
Allowance for loan losses:
Balance at June 30, 2014	$	19,107,000		$	1,774,000		$	(25,000	)	$	20,856,000
Provision for loan losses		(473,000	)		63,000			10,000			(400,000	)
Charge-offs		(24,000	)		(321,000	)		0			(345,000	)
Recoveries		102,000			161,000			0			263,000
Ending balance	$	18,712,000		$	1,677,000		$	(15,000	)	$	20,374,000
Allowance for loan losses:
Balance at December 31, 2013	$	20,455,000		$	2,358,000		$	8,000		$	22,821,000
Provision for loan losses		(2,251,000	)		(726,000	)		(23,000	)		(3,000,000	)
Charge-offs		(708,000	)		(328,000	)		0			(1,036,000	)
Recoveries		1,216,000			373,000			0			1,589,000
Ending balance	$	18,712,000		$	1,677,000		$	(15,000	)	$	20,374,000
Ending balance: individually evaluated for impairment	$	10,485,000		$	879,000		$	0		$	11,364,000
Ending balance: collectively evaluated for impairment	$	8,227,000		$	798,000		$	(15,000	)	$	9,010,000
Total loans:
Ending balance	$	1,103,802,000		$	82,911,000					$	1,186,713,000
Ending balance: individually evaluated for impairment	$	48,870,000		$	3,346,000					$	52,216,000
Ending balance: collectively evaluated for impairment	$	1,054,932,000		$	79,565,000					$	1,134,497,000

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		0	$	0	$	0
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		1		237,000		237,000
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		1		237,000		237,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		1	$	237,000	$	237,000

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		9	$	1,876,000	$	1,901,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		9		1,876,000		1,901,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		9	$	1,876,000	$	1,901,000
Acquired loans
Commercial:
Commercial and industrial		2	$	286,000	$	286,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		3		66,000		66,000
Real estate – non-owner occupied		4		655,000		655,000
Real estate – multi-family and residential rental		2		202,000		202,000
Total acquired commercial		11		1,209,000		1,209,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		11	$	1,209,000	$	1,209,000

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		2	$	5,994,000	$	6,094,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		2		16,787,000		16,787,000
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		4		22,781,000		22,881,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		4	$	22,781,000	$	22,881,000
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		0	$	0	$	0

			Pre-		Post-
			Modification		Modification
			Recorded		Recorded
	Number of		Principal		Principal
	Contracts		Balance		Balance
Originated loans
Commercial:
Commercial and industrial		2	$	5,994,000	$	6,094,000
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		3		17,783,000		17,783,000
Real estate – non-owner occupied		1		146,000		146,000
Real estate – multi-family and residential rental		0		0		0
Total originated commercial		6		23,923,000		24,023,000
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total originated retail		0		0		0
Total originated loans		6	$	23,923,000	$	24,023,000
Acquired loans
Commercial:
Commercial and industrial		0	$	0	$	0
Vacant land, land development and residential construction		0		0		0
Real estate – owner occupied		0		0		0
Real estate – non-owner occupied		0		0		0
Real estate – multi-family and residential rental		0		0		0
Total acquired commercial		0		0		0
Retail:
Home equity and other		0		0		0
1-4 family mortgages		0		0		0
Total acquired retail		0		0		0
Total acquired loans		0	$	0	$	0

Troubled Debt Restructurings on Financing Receivables WithIn Previous Twelve Months that Became Over Thirty Days Past Due [Table Text Block]

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		1		18,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		1		18,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		1	$	18,000

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		1		18,000
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		1		18,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		1	$	18,000

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

			Recorded
	Number of		Principal
	Contracts		Balance
Commercial:
Commercial and industrial		0	$	0
Vacant land, land development and residential construction		0		0
Real estate – owner occupied		0		0
Real estate – non-owner occupied		0		0
Real estate – multi-family and residential rental		0		0
Total commercial		0		0
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total		0	$	0

Trouble Debt Restructuring Activity [Table Text Block]

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	2,442,000		$	2,632,000		$	2,218,000		$	11,082,000		$	491,000
Charge-Offs		0			0			0			0			0
Payments		(56,000	)		(272,000	)		(291,000	)		(324,000	)		(7,000	)
Transfers to ORE		0			0			0			0			0
Net Additions/Deletions		(302,000	)		0			0			0			0
Ending Balance	$	2,084,000		$	2,360,000		$	1,927,000		$	10,758,000		$	484,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	270,000
Charge-Offs		0		0
Payments		0		(3,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	267,000

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,521,000		$	0	$	1,350,000		$	361,000		$	580,000
Charge-Offs		0			0		0			0			(42,000	)
Payments		(324,000	)		0		(77,000	)		(5,000	)		(274,000	)
Transfers to ORE		0			0		0			0			0
Net Additions/Deletions		0			0		0			236,000			0
Ending Balance	$	1,197,000		$	0	$	1,273,000		$	592,000		$	264,000

	Retail			Retail
	Home Equity			1-4 Family
	and Other			Mortgages
Retail Loan Portfolio:
Beginning Balance	$	152,000		$	177,000
Charge-Offs		0			0
Payments		(5,000	)		(1,000	)
Transfers to ORE		0			0
Net Additions/Deletions		0			0
Ending Balance	$	147,000		$	176,000

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	7,026,000		$	2,680,000		$	17,160,000		$	17,439,000		$	505,000
Charge-Offs		0			0			(4,198,000	)		0			0
Payments		(6,591,000	)		(320,000	)		(11,035,000	)		(6,681,000	)		(21,000	)
Transfers to ORE		0			0			0			0			0
Net Additions/Deletions		1,649,000			0			0			0			0
Ending Balance	$	2,084,000		$	2,360,000		$	1,927,000		$	10,758,000		$	484,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	1,967,000
Charge-Offs		0		(148,000	)
Payments		0		(1,552,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	267,000

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction		Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,439,000		$	0	$	1,569,000		$	64,000		$	381,000
Charge-Offs		0			0		0			0			(42,000	)
Payments		(597,000	)		0		(296,000	)		(6,000	)		(329,000	)
Transfers to ORE		0			0		0			0			0
Net Additions/Deletions		355,000			0		0			534,000			254,000
Ending Balance	$	1,197,000		$	0	$	1,273,000		$	592,000		$	264,000

	Retail			Retail
	Home Equity			1-4 Family
	and Other			Mortgages
Retail Loan Portfolio:
Beginning Balance	$	26,000		$	178,000
Charge-Offs		0			0
Payments		(32,000	)		(2,000	)
Transfers to ORE		0			0
Net Additions/Deletions		153,000			0
Ending Balance	$	147,000		$	176,000

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,176,000		$	3,786,000		$	2,711,000		$	18,664,000		$	719,000
Charge-Offs		0			0			0			0			0
Payments		(205,000	)		(287,000	)		(91,000	)		(655,000	)		(130,000	)
Transfers to ORE		(21,000	)		0			0			0			0
Net Additions/Deletions		6,315,000			0			16,748,000			0			0
Ending Balance	$	7,265,000		$	3,499,000		$	19,368,000		$	18,009,000		$	589,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	2,077,000
Charge-Offs		0		0
Payments		0		(51,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	2,026,000

	Commercial and Industrial			Commercial Vacant Land, Land Development, and Residential Construction			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Commercial Real Estate - Multi-Family and Residential Rental
Commercial Loan Portfolio:
Beginning Balance	$	1,656,000		$	4,501,000		$	1,816,000		$	22,311,000		$	2,620,000
Charge-Offs		(67,000	)		0			(11,000	)		0			(420,000	)
Payments		(632,000	)		(3,901,000	)		(181,000	)		(4,621,000	)		(1,611,000	)
Transfers to ORE		(21,000	)		0			0			0			0
Net Additions/Deletions		6,329,000			2,899,000			17,744,000			319,000			0
Ending Balance	$	7,265,000		$	3,499,000		$	19,368,000		$	18,009,000		$	589,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Retail Loan Portfolio:
Beginning Balance	$	0	$	2,191,000
Charge-Offs		0		0
Payments		0		(165,000	)
Transfers to ORE		0		0
Net Additions/Deletions		0		0
Ending Balance	$	0	$	2,026,000

Allowance Related to Loans Categorized as Troubled Debt Restructurings [Table Text Block]

	September 30,		December 31,
	2015		2014
Commercial:
Commercial and industrial	$	132,000	$	16,000
Vacant land, land development, and residential construction		234,000		151,000
Real estate – owner occupied		114,000		182,000
Real estate – non-owner occupied		194,000		4,778,000
Real estate – multi-family and residential rental		390,000		666,000
Total commercial		1,064,000		5,793,000
Retail:
Home equity and other		0		0
1-4 family mortgages		0		0
Total retail		0		0
Total related allowance	$	1,064,000	$	5,793,000

Retail Portfolio Segment [Member]

Note 3 - Loans and Allowance for Loan Losses (Tables) [Line Items]

Financing Receivable Credit Quality Indicators [Table Text Block]

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	65,671,000	$	51,719,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	81,094,000	$	141,284,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	50,059,000	$	42,868,000

	Retail		Retail
	Home Equity		1-4 Family
	and Other		Mortgages
Total retail	$	109,219,000	$	171,828,000

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Note 11 - Fair Values

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Fair Value, Measurement Inputs, Disclosure [Text Block]

11.     FAIR VALUES

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability, or in the absence of a principal market, the most advantageous market for the asset or liability. The price of the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

We are required to use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources, or unobservable, meaning those that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. In that regard, we utilize a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that we have the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be derived from or corroborated by observable market data by correlation or other means.

Level 3: Significant unobservable inputs that reflect our own conclusions about the assumptions that market participants would use in pricing an asset or liability.

The following is a description of our valuation methodologies used to measure and disclose the fair values of our financial assets and liabilities that are recorded at fair value on a recurring or nonrecurring basis:

Securities available for sale. Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based on quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models. Level 2 securities include U.S. Government agency bonds, mortgage-backed securities issued or guaranteed by U.S. Government agencies, municipal general obligation and revenue bonds and mutual funds. Level 3 securities include bonds issued by certain relatively small municipalities located within our markets that have very limited marketability due to their size and lack of ratings from a recognized rating service. We carry these bonds at historical cost, which we believe approximates fair value, unless our periodic financial analysis or other information becomes known which necessitates a valuation allowance. There was no such valuation allowance as of September 30, 2015 or December 31, 2014. We have no Level 1 securities available for sale.

Derivatives. The interest rate swap is measured at fair value on a recurring basis. We measure fair value utilizing models that use primarily market observable inputs, such as forecasted yield curves, and accordingly, the interest rate swap agreement is classified as Level 2.

Mortgage loans held for sale. Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors, and are measured on a nonrecurring basis. Fair value is based on independent quoted market prices, where applicable, or the prices for other mortgage whole loans with similar characteristics. As of September 30, 2015 and December 31, 2014, we determined that the fair value of our mortgage loans held for sale approximated the recorded cost of $2.1 million and $1.6 million, respectively.

Loans. We do not record loans at fair value on a recurring basis. However, from time to time, we record nonrecurring fair value adjustments to collateral dependent loans to reflect partial write-downs or specific reserves that are based on the observable market price or current estimated value of the collateral. These loans are reported in the nonrecurring table below at initial recognition of impairment and on an ongoing basis until recovery or charge-off.

Foreclosed Assets. At time of foreclosure or repossession, foreclosed and repossessed assets are adjusted to fair value less costs to sell upon transfer of the loans to foreclosed and repossessed assets, establishing a new cost basis. We subsequently adjust estimated fair value of foreclosed assets on a nonrecurring basis to reflect write-downs based on revised fair value estimates.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 are as follows:

				Quoted
				Prices in
				Active		Significant
				Markets for		Other			Significant
				Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Available for sale securities
U.S. Government agency debt obligations	$	159,393,000		$	0	$	159,393,000		$	0
Mortgage-backed securities		72,964,000			0		72,964,000			0
Municipal general obligation bonds		123,608,000			0		115,119,000			8,489,000
Municipal revenue bonds		9,250,000			0		9,250,000			0
Other investments		1,958,000			0		1,958,000			0
Interest rate swap		(533,000	)		0		(533,000	)		0
Total	$	366,640,000		$	0	$	358,151,000		$	8,489,000

There were no transfers in or out of Level 1, Level 2 or Level 3 during the first nine months of 2015.

The balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 are as follows:

				Quoted
				Prices in
				Active		Significant
				Markets for		Other			Significant
				Identical		Observable			Unobservable
				Assets		Inputs			Inputs
	Total			(Level 1)		(Level 2)			(Level 3)
Available for sale securities
U.S. Government agency debt obligations	$	193,468,000		$	0	$	193,468,000		$	0
Mortgage-backed securities		93,561,000			0		93,561,000			0
Municipal general obligation bonds		133,082,000			0		122,801,000			10,281,000
Municipal revenue bonds		10,873,000			0		10,873,000			0
Other investments		1,928,000			0		1,928,000			0
Interest rate swap		(253,000	)		0		(253,000	)		0
Total	$	432,659,000		$	0	$	422,378,000		$	10,281,000

There were no transfers in or out of Level 1, Level 2 or Level 3 during 2014.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The balances of assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2015 are as follows:

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans (1)	$	9,258,000	$	0	$	0	$	9,258,000
Foreclosed assets (1)		2,272,000		0		0		2,272,000
Total	$	11,530,000	$	0	$	0	$	11,530,000

The balances of assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2014 are as follows:

			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans (1)	$	17,097,000	$	0	$	0	$	17,097,000
Foreclosed assets (1)		1,995,000		0		0		1,995,000
Total	$	19,092,000	$	0	$	0	$	19,092,000

⁽¹⁾ Represents carrying value and related write-downs for which adjustments are based on the estimated value of the property or other assets.

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Note 7 - Federal Home Loan Bank of Indianapolis Advances

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Federal Home Loan Bank Advances, Disclosure [Text Block]

7.     FEDERAL HOME LOAN BANK OF INDIANAPOLIS ADVANCES

Federal Home Loan Bank of Indianapolis (“FHLBI”) advances totaled $68.0 million at September 30, 2015, and mature at varying dates from December 2016 through August 2022, with fixed rates of interest from 1.22% to 2.11% and averaging 1.49%. FHLBI advances totaled $54.0 million at December 31, 2014, and were expected to mature at varying dates ranging from January 2015 through September 2017, with fixed rates of interest from 0.62% to 1.51% and averaging 1.26%.

Each advance is payable at its maturity date and is subject to a prepayment fee if paid prior to the maturity date. The advances are collateralized by residential mortgage loans, first mortgage liens on multi-family residential property loans, first mortgage liens on commercial real estate property loans, and substantially all other assets of our bank, under a blanket lien arrangement. Our borrowing line of credit as of September 30, 2015 totaled about $442 million, with availability based on collateral approximating $374 million.

Maturities of currently outstanding FHLBI advances are as follows:

2015	$	0
2016		3,000,000
2017		45,000,000
2018		0
Thereafter		20,000,000

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Note 9 - Hedging Activities (Details) - USD ($)	1 Months Ended
	Feb. 29, 2012	Sep. 30, 2015	Dec. 31, 2014
Note 9 - Hedging Activities (Details) [Line Items]
Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust	$ 32,000,000	$ 54,983,000	$ 54,472,000
Fair Value of Interest Rate Swap Agreement Liability		$ 500,000	$ 300,000
London Interbank Offered Rate (LIBOR) [Member] | Junior Subordinated Debt [Member]
Note 9 - Hedging Activities (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.18%
Derivative, Notional Amount	$ 32,000,000

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Note 5 - Deposits

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Deposit Liabilities Disclosures [Text Block]

5.     DEPOSITS

Our total deposits at September 30, 2015 totaled $2.25 billion, a decrease of $22.8 million, or 1.0%, from December 31, 2014. The components of our outstanding balances at September 30, 2015 and December 31, 2014, and percentage change in deposits from the end of 2014 to the end of the third quarter of 2015, are as follows:

	September 30, 2015					December 30, 2014					Percent Increase
	Balance		%			Balance		%			(Decrease)
Noninterest-bearing checking	$	619,125,000		27.5	%	$	558,738,000		24.5	%		10.8	%
Interest-bearing checking		389,978,000		17.3			413,382,000		18.2			(5.7	)
Money market		283,707,000		12.6			235,587,000		10.3			20.4
Savings		342,902,000		15.2			330,459,000		14.5			3.8
Time, under $100,000		162,729,000		7.2			181,026,000		8.0			(10.1	)
Time, $100,000 and over		333,226,000		14.8			382,120,000		16.8			(12.8	)
		2,131,667,000		94.6			2,101,312,000		92.3			1.4
Out-of-area time, under $100,000		298,000		<0.1			2,422,000		0.1			(87.7	)
Out-of-area time, $100,000 and over		122,164,000		5.4			173,181,000		7.6			(29.5	)
		122,462,000		5.4			175,603,000		7.7			(30.2	)
Total deposits	$	2,254,129,000		100.0	%	$	2,276,915,000		100.0	%		(1.0%	)

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Note 6 - Securities Sold Under Agreements to Repurchase

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

6.     SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase (“repurchase agreements”) are offered principally to certain large deposit customers. Information relating to our repurchase agreements follows:

	Nine Months Ended September 30, 2015			Twelve Months Ended December 31, 2014
Outstanding balance at end of period	$	158,149,000		$	167,569,000
Average interest rate at end of period		0.11	%		0.11	%
Average daily balance during the period	$	145,867,000		$	105,474,000
Average interest rate during the period		0.11	%		0.12	%
Maximum daily balance during the period	$	168,211,000		$	178,042,000

Repurchase agreements generally have maturities of one business day. Repurchase agreements are treated as financings and the obligations to repurchase securities sold are reflected as liabilities. Securities involved with the agreements are recorded as assets of our bank and are held in safekeeping by a correspondent bank. Repurchase agreements are secured by securities with an aggregate market value equal to the aggregate outstanding balance.

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Note 8 - Commitments and Off-balance Sheet Risk

9 Months Ended

Sep. 30, 2015

Disclosure Text Block Supplement [Abstract]

Commitments Contingencies and Guarantees [Text Block]

8.     COMMITMENTS AND OFF-BALANCE SHEET RISK

Our bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Loan commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Standby letters of credit are conditional commitments issued by our bank to guarantee the performance of a customer to a third party. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized, if any, in the balance sheet. Our bank’s maximum exposure to loan loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. Our bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Collateral, such as accounts receivable, securities, inventory, and property and equipment, is generally obtained based on our credit assessment of the borrower. If required, estimated loss exposure resulting from these instruments is expensed and is generally recorded as a liability. There was no reserve or liability balance for these instruments as of September 30, 2015 and December 31, 2014.

A summary of the contractual amounts of our financial instruments with off-balance sheet risk at September 30, 2015 and December 31, 2014 follows:

	September 30,		December 31,
	2015		2014
Commercial unused lines of credit	$	488,744,000	$	554,856,000
Unused lines of credit secured by 1 – 4 family residential properties		61,534,000		60,983,000
Credit card unused lines of credit		14,100,000		11,649,000
Other consumer unused lines of credit		9,265,000		8,673,000
Commitments to make loans		238,884,000		110,126,000
Standby letters of credit		35,562,000		35,461,000
	$	848,089,000	$	781,748,000

Certain of our commercial loan customers have entered into interest rate swap agreements directly with our correspondent banks. To assist our commercial loan customers in these transactions, and to encourage our correspondent banks to enter into the interest rate swap transactions with minimal credit underwriting analyses on their part, we have entered into risk participation agreements with the correspondent banks whereby we agree to make payments to the correspondent banks owed by our commercial loan customers under the interest rate swap agreement in the event that our commercial loan customers do not make the payments. We are not a party to the interest rate swap agreements under these arrangements. As of September 30, 2015, the total notional amount of the underlying interest rate swap agreements was $14.8 million, with a net fair value from our commercial loan customers’ perspective of negative $2.6 million. These risk participation agreements are considered financial guarantees in accordance with applicable accounting guidance and are therefore recorded as liabilities at fair value, generally equal to the fees collected at the time of their execution. These liabilities are accreted into income during the term of the interest rate swap agreements, generally ranging from four to fifteen years.

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Note 11 - Fair Values (Details) - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis - Fair Value, Measurements, Nonrecurring [Member] - USD ($)		Sep. 30, 2015	Dec. 31, 2014
Note 11 - Fair Values (Details) - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	[1]	$ 9,258,000	$ 17,097,000
Foreclosed assets	[1]	2,272,000	1,995,000
Assets and liabilities measured at fair value on a nonrecurring basis		11,530,000	19,092,000
Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Values (Details) - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	[1]	0	0
Foreclosed assets	[1]	0	0
Assets and liabilities measured at fair value on a nonrecurring basis		0	0
Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Values (Details) - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	[1]	0	0
Foreclosed assets	[1]	0	0
Assets and liabilities measured at fair value on a nonrecurring basis		0	0
Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Values (Details) - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	[1]	9,258,000	17,097,000
Foreclosed assets	[1]	2,272,000	1,995,000
Assets and liabilities measured at fair value on a nonrecurring basis		$ 11,530,000	$ 19,092,000

[1] Represents carrying value and related write-downs for which adjustments are based on the estimated value of the property or other assets.

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Note 12 - Regulatory Matters (Details) - Actual Capital Levels and Minimum Levels - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Consolidated Entities [Member]
Total capital (to risk weighted assets)
Total capital (to risk weighted assets), actual amount	$ 341,029	$ 334,793
Total capital (to risk weighted assets), actual ratio	13.60%	14.40%
Total capital (to risk weighted assets), minimum required for capital adequacy purposes amount	$ 200,894	$ 185,553
Total capital (to risk weighted assets), minimum required for capital adequacy purposes ratio	8.00%	8.00%
Total capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations amount
Total capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations, ratio
Tier 1 capital (to risk weighted assets)
Tier 1 capital (to risk weighted assets), actual amount	$ 324,911	$ 314,752
Tier 1 capital (to risk weighted assets), actual ratio	12.90%	13.60%
Tier 1 capital (to risk weighted assets), minimum required for capital adequacy purposes amount	$ 150,671	$ 92,777
Tier 1 capital (to risk weighted assets), minimum required for capital adequacy purposes ratio	6.00%	4.00%
Tier 1 capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations amount
Tier 1 capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations, ratio
Common equity tier 1 (to risk weighted assets)
Common equity tier 1 (to risk weighted assets), actual amount	$ 275,395
Common equity tier 1 (to risk weighted assets), actual ratio	11.00%
Common equity tier 1 (to risk weighted assets), minimum required for capital adequacy purposes amount	$ 113,156
Common equity tier 1 (to risk weighted assets), minimum required for capital adequacy purposes ratio	4.50%
Common equity tier 1 (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations amount
Common equity tier 1 (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations, ratio
Tier 1 capital (to average assets)
Tier 1 capital (to average assets), actual amount	$ 324,911	$ 314,752
Tier 1 capital (to average assets), actual ratio	11.50%	11.20%
Tier 1 capital (to average assets), minimum required for capital adequacy purposes amount	$ 112,825	$ 112,949
Tier 1 capital (to risk average assets), minimum required for capital adequacy purposes ratio	4.00%	4.00%
Tier 1 capital (to risk average assets), minimum required to be well capitalized under prompt corrective action regulations amount
Tier 1 capital (to risk average assets), minimum required to be well capitalized under prompt corrective action regulations, ratio
Bank [Member]
Total capital (to risk weighted assets)
Total capital (to risk weighted assets), actual amount	$ 343,288	$ 332,749
Total capital (to risk weighted assets), actual ratio	13.70%	14.40%
Total capital (to risk weighted assets), minimum required for capital adequacy purposes amount	$ 200,989	$ 185,309
Total capital (to risk weighted assets), minimum required for capital adequacy purposes ratio	8.00%	8.00%
Total capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations amount	$ 251,236	$ 231,636
Total capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations, ratio	10.00%	10.00%
Tier 1 capital (to risk weighted assets)
Tier 1 capital (to risk weighted assets), actual amount	$ 327,169	$ 312,708
Tier 1 capital (to risk weighted assets), actual ratio	13.00%	13.50%
Tier 1 capital (to risk weighted assets), minimum required for capital adequacy purposes amount	$ 150,742	$ 92,655
Tier 1 capital (to risk weighted assets), minimum required for capital adequacy purposes ratio	6.00%	4.00%
Tier 1 capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations amount	$ 200,989	$ 138,982
Tier 1 capital (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations, ratio	8.00%	6.00%
Common equity tier 1 (to risk weighted assets)
Common equity tier 1 (to risk weighted assets), actual amount	$ 327,169
Common equity tier 1 (to risk weighted assets), actual ratio	13.00%
Common equity tier 1 (to risk weighted assets), minimum required for capital adequacy purposes amount	$ 113,057
Common equity tier 1 (to risk weighted assets), minimum required for capital adequacy purposes ratio	4.50%
Common equity tier 1 (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations amount	$ 163,304
Common equity tier 1 (to risk weighted assets), minimum required to be well capitalized under prompt corrective action regulations, ratio	6.50%
Tier 1 capital (to average assets)
Tier 1 capital (to average assets), actual amount	$ 327,169	$ 312,708
Tier 1 capital (to average assets), actual ratio	11.60%	11.10%
Tier 1 capital (to average assets), minimum required for capital adequacy purposes amount	$ 112,914	$ 112,856
Tier 1 capital (to risk average assets), minimum required for capital adequacy purposes ratio	4.00%	4.00%
Tier 1 capital (to risk average assets), minimum required to be well capitalized under prompt corrective action regulations amount	$ 141,142	$ 141,070
Tier 1 capital (to risk average assets), minimum required to be well capitalized under prompt corrective action regulations, ratio	5.00%	5.00%

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Note 11 - Fair Values (Details) - Assets and Liabilities Measured at Fair Value on a Recurring Basis - USD ($)		Sep. 30, 2015	Dec. 31, 2014
Available for sale securities
Available for sale securities	[1]	$ 367,173,000	$ 432,912,000
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Derivative		(533,000)	(253,000)
Assets and liabilities measured at fair value on recurring basis		366,640,000	432,659,000
US Government Agencies Debt Securities [Member]
Available for sale securities
Available for sale securities		159,393,000	193,468,000
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		159,393,000	193,468,000
Collateralized Mortgage Backed Securities [Member]
Available for sale securities
Available for sale securities		72,964,000	93,561,000
Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		72,964,000	93,561,000
Municipal General Obligation Bonds [Member]
Available for sale securities
Available for sale securities		123,608,000	133,082,000
Municipal General Obligation Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		123,608,000	133,082,000
Municipal Revenue Bonds [Member]
Available for sale securities
Available for sale securities		9,250,000	10,873,000
Municipal Revenue Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		9,250,000	10,873,000
Other Debt Obligations [Member]
Available for sale securities
Available for sale securities		1,958,000	1,928,000
Other Debt Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		1,958,000	1,928,000
Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Derivative		0	0
Assets and liabilities measured at fair value on recurring basis		0	0
Fair Value, Inputs, Level 1 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 1 [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 1 [Member] | Municipal General Obligation Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 1 [Member] | Municipal Revenue Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 1 [Member] | Other Debt Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Derivative		(533,000)	(253,000)
Assets and liabilities measured at fair value on recurring basis		358,151,000	422,378,000
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		159,393,000	193,468,000
Fair Value, Inputs, Level 2 [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		72,964,000	93,561,000
Fair Value, Inputs, Level 2 [Member] | Municipal General Obligation Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		115,119,000	122,801,000
Fair Value, Inputs, Level 2 [Member] | Municipal Revenue Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		9,250,000	10,873,000
Fair Value, Inputs, Level 2 [Member] | Other Debt Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		1,958,000	1,928,000
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Derivative		0	0
Assets and liabilities measured at fair value on recurring basis		8,489,000	10,281,000
Fair Value, Inputs, Level 3 [Member] | US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 3 [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 3 [Member] | Municipal General Obligation Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		8,489,000	10,281,000
Fair Value, Inputs, Level 3 [Member] | Municipal Revenue Bonds [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		0	0
Fair Value, Inputs, Level 3 [Member] | Other Debt Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available for sale securities		$ 0	$ 0

[1] See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

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Note 2 - Securities (Details) - Available-for-sale Securities - USD ($)		Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, amortized cost		$ 365,456,000	$ 432,591,000
Securities available for sale, gross unrealized gains		4,060,000	3,897,000
Securities available for sale, gross unrealized losses		(2,343,000)	(3,576,000)
Securities available for sale	[1]	367,173,000	432,912,000
US Government Agencies Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, amortized cost		159,411,000	194,894,000
Securities available for sale, gross unrealized gains		1,939,000	1,612,000
Securities available for sale, gross unrealized losses		(1,957,000)	(3,038,000)
Securities available for sale		159,393,000	193,468,000
Collateralized Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, amortized cost		72,211,000	92,656,000
Securities available for sale, gross unrealized gains		904,000	1,123,000
Securities available for sale, gross unrealized losses		(151,000)	(218,000)
Securities available for sale		72,964,000	93,561,000
Municipal General Obligation Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, amortized cost		122,724,000	132,347,000
Securities available for sale, gross unrealized gains		1,118,000	1,042,000
Securities available for sale, gross unrealized losses		(234,000)	(307,000)
Securities available for sale		123,608,000	133,082,000
Municipal Revenue Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, amortized cost		9,163,000	10,769,000
Securities available for sale, gross unrealized gains		88,000	117,000
Securities available for sale, gross unrealized losses		(1,000)	(13,000)
Securities available for sale		9,250,000	10,873,000
Other Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale, amortized cost		1,947,000	1,925,000
Securities available for sale, gross unrealized gains		11,000	3,000
Securities available for sale, gross unrealized losses		0	0
Securities available for sale		$ 1,958,000	$ 1,928,000

[1] See Note 11 for a description of the fair value hierarchy as well as a disclosure of levels for classes of financial assets and liabilities.

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Note 4 - Premises and Equipment, Net (Details) - Summary of Premises and Equipment - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Premises and equipment	$ 72,875,000	$ 71,962,000
Less: accumulated depreciation	25,366,000	23,150,000
Premises and equipment, net	47,509,000	48,812,000
Land and Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment	16,598,000	16,579,000
Building [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment	39,349,000	38,761,000
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Premises and equipment	$ 16,928,000	$ 16,622,000

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation: The unaudited financial statements for the nine months ended September 30, 2015 include the consolidated results of operations of Mercantile Bank Corporation and its consolidated subsidiaries. These subsidiaries include Mercantile Bank of Michigan (“our bank”) and our bank’s two subsidiaries, Mercantile Bank Real Estate Co., LLC (“our real estate company”) and Mercantile Insurance Center, Inc. (“our insurance center”). These consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and Item 303(b) of Regulation S-K and do not include all disclosures required by accounting principles generally accepted in the United States of America for a complete presentation of our financial condition and results of operations. In the opinion of management, the information reflects all adjustments (consisting only of normal recurring adjustments) which are necessary in order to make the financial statements not misleading and for a fair presentation of the results of operations for such periods. The results for the period ended September 30, 2015 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended December 31, 2014.

We have five separate business trusts that were formed to issue trust preferred securities. Subordinated debentures were issued to the trusts in return for the proceeds raised from the issuance of the trust preferred securities. The trusts are not consolidated, but instead we report the subordinated debentures issued to the trusts as a liability.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share: Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings per share include the dilutive effect of additional potential common shares issuable under our stock-based compensation plans and are determined using the treasury stock method. Our unvested restricted shares, which contain non-forfeitable rights to dividends whether paid or accrued (i.e., participating securities), are included in the number of shares outstanding for both basic and diluted earnings per share calculations. In the event of a net loss, our unvested restricted shares are excluded from the calculation of both basic and diluted earnings per share.

Approximately 98,000 unvested restricted shares were included in determining both basic and diluted earnings per share for the three and nine months ended September 30, 2015. In addition, stock options for approximately 106,000 shares of common stock were included in determining diluted earnings per share for the three and nine months ended September 30, 2015. Stock options for approximately 103,000 shares of common stock were antidilutive and not included in determining diluted earnings per share for the three and nine months ended September 30, 2015.

Stock options for approximately 141,000 shares of common stock were included in determining diluted earnings per share for the three and nine months ended September 30, 2014. Stock options for approximately 175,000 shares of common stock were antidilutive and not included in determining diluted earnings per share for the three and nine months ended September 30, 2014.

Marketable Securities, Policy [Policy Text Block]

Securities: Debt securities classified as held to maturity are carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold prior to maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Federal Home Loan Bank stock is carried at cost.

Interest income includes amortization of purchase premiums and accretion of discounts. Premiums and discounts on securities are amortized or accreted on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Declines in the fair value of debt securities below their amortized cost that are other than temporary (“OTTI”) are reflected in earnings or other comprehensive income, as appropriate. For those debt securities whose fair value is less than their amortized cost, we consider our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and whether we expect to recover the entire amortized cost of the security based on our assessment of the issuer’s financial condition. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies, and whether downgrades by bond rating agencies have occurred. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, such as liquidity conditions in the market or changes in market interest rates, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost.

Finance, Loan and Lease Receivables, Held-for-investment, Policy [Policy Text Block]

Loans: Loans that we have the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on commercial loans and mortgage loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Consumer and credit card loans are typically charged off no later than when they are 120 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal and interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Finance, Loan and Lease Receivables, Held-for-sale, Policy [Policy Text Block]

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. As of September 30, 2015 and December 31, 2014, we determined that the fair value of our mortgage loans held for sale approximated the recorded cost of $2.1 million and $1.6 million, respectively. Loans held for sale are reported as part of our total loans on the balance sheet.

Mortgage loans held for sale are generally sold with servicing rights retained. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold, which is reduced by the cost allocated to the servicing right. We generally lock in the sale price to the purchaser of the loan at the same time we make a rate commitment to the borrower. These mortgage banking activities are not designated as hedges and are carried at fair value. The net gain or loss on mortgage banking derivatives is included in the gain on sale of loans. Mortgage loans serviced for others totaled approximately $603 million as of September 30, 2015.

Loans and Leases Receivable, Mortgage Banking Activities, Policy [Policy Text Block]

Mortgage Banking Activities: Mortgage loan servicing rights are recognized as assets based on the allocated value of retained servicing rights on mortgage loans sold. Mortgage loan servicing rights are carried at the lower of amortized cost or fair value and are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights using groupings of the underlying mortgage loans as to interest rates. Any impairment of a grouping is reported as a valuation allowance.

Servicing fee income is recorded for fees earned for serving mortgage loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Amortization of mortgage loan servicing rights is netted against mortgage loan servicing income and recorded in mortgage banking activities in the income statement.

Loans and Leases Receivable, Troubled Debt Restructuring Policy [Policy Text Block]

Troubled Debt Restructurings: A loan is accounted for as a troubled debt restructuring if we, for economic or legal reasons, grant a concession to a borrower considered to be experiencing financial difficulties that we would not otherwise consider. A troubled debt restructuring may involve the receipt of assets from the debtor in partial or full satisfaction of the loan, or a modification of terms such as a reduction of the stated interest rate or balance of the loan, a reduction of accrued interest, an extension of the maturity date or renewal of the loan at a stated interest rate lower than the current market rate for a new loan with similar risk, or some combination of these concessions. Troubled debt restructurings can be in either accrual or nonaccrual status. Nonaccrual troubled debt restructurings are included in nonperforming loans. Accruing troubled debt restructurings are generally excluded from nonperforming loans as it is considered probable that all contractual principal and interest due under the restructured terms will be collected.

In accordance with current accounting guidance, loans modified as troubled debt restructurings are, by definition, considered to be impaired loans. Impairment for these loans is measured on a loan-by-loan basis similar to other impaired loans as described above under “Allowance for Loan Losses.” Certain loans modified as troubled debt restructurings may have been previously measured for impairment under a general allowance methodology (i.e., pooling), thus at the time the loan is modified as a troubled debt restructuring the allowance will be impacted by the difference between the results of these two measurement methodologies. Loans modified as troubled debt restructurings that subsequently default are factored into the determination of the allowance in the same manner as other defaulted loans.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Loan Losses: The allowance for loan losses (“allowance”) is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when we believe the uncollectability of a loan is confirmed. Subsequent recoveries, if any, are credited to the allowance. We estimate the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in our judgment, should be charged-off.

A loan is considered to be impaired when, based on current information and events, it is probable we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. We determine the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of delay, the reasons for delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.

Derivatives, Policy [Policy Text Block]

Derivatives: Derivative financial instruments are recognized as assets or liabilities at fair value. The accounting for changes in the fair value of derivatives depends on the use of the derivatives and whether the derivatives qualify for hedge accounting. Used as part of our asset and liability management to help manage interest rate risk, our derivatives have generally consisted of interest rate swap agreements that qualified for hedge accounting. In February 2012, we entered into an interest rate swap agreement that qualifies for hedge accounting. The current outstanding interest rate swap is discussed in more detail in Note 9. We do not use derivatives for trading purposes.

Changes in the fair value of derivatives that are designated, for accounting purposes, as a hedge of the variability of cash flows to be received on various loans and are effective are reported in other comprehensive income. They are later reclassified into earnings in the same periods during which the hedged transaction affects earnings and are included in the line item in which the hedged cash flows are recorded. If hedge accounting does not apply, changes in the fair value of derivatives are recognized immediately in current earnings as interest income or expense.

If designated as a hedge, we formally document the relationship between derivatives as hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet. If designated as a hedge, we also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in cash flows of the hedged items. Ineffective hedge gains and losses are recognized immediately in current earnings as noninterest income or expense. We discontinue hedge accounting when we determine the derivative is no longer effective in offsetting changes in the cash flows of the hedged item, the derivative is settled or terminates, or treatment of the derivative as a hedge is no longer appropriate or intended.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Core Deposit Intangible: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. A more frequent assessment is performed should events or changes in circumstances indicate the carrying value of the goodwill may not be recoverable. We may elect to perform a qualitative assessment for the annual impairment test. If the qualitative assessment indicates it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if we elect not to perform a qualitative assessment, then we would be required to perform a quantitative test for goodwill impairment. The quantitative test is a two-step process consisting of comparing the carrying value of the reporting unit to an estimate of its fair value. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is impaired and is written down to its estimated fair value.

The core deposit intangible that arose from the Firstbank Corporation acquisition was initially measured at fair value and is being amortized into noninterest expense over a ten-year period using the sum-of-the-years-digits methodology.

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of New Accounting Standards: In January of 2014, the FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. 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. The ASU also requires additional related interim and annual disclosures. The guidance in this ASU is effective for annual and interim periods beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our financial position or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP, including those that previously followed industry-specific guidance such as the real estate, construction and software industries. The revenue standard’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: i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. This ASU is effective for annual and interim periods beginning after December 15, 2016 with three transition methods available – full retrospective, retrospective and cumulative effect approach. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers – Deferral of Effective Date, which delays the implementation of this guidance by one year. Adoption of this ASU is not expected to have a material effect on our financial position or results of operations.

In June 2014, the FASB issued ASU 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. This ASU requires two accounting changes. First, repurchase-to-maturity transactions will be accounted for as secured borrowing transactions on the balance sheet, rather than sales. Second, for repurchase financing arrangements, the ASU requires separate accounting for a transfer of a financial asset executed contemporaneously with (or in contemplation of) a repurchase agreement with the same counterparty, which also will generally result in secured borrowing accounting for the repurchase agreement. The ASU also introduces new disclosures to increase transparency about the types of collateral pledged for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings. The ASU also requires a transferor to disclose information about transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the transferee. The accounting changes and disclosure for certain transactions accounted for as a sale are effective for the first interim or annual period beginning after December 15, 2014. The disclosure for transactions accounted for as secured borrowings is required for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. The required disclosures under the ASU are included in Note 6. Adoption of this ASU did not have a material effect on our financial position or results of operations.

In August 2014, the FASB issued ASU 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure. This ASU requires that certain government-guaranteed mortgage loans, including those guaranteed by the Federal Housing Administration, be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure on the loans that meet these criteria, a separate receivable should be recorded based on the amount of the loan balance expected to be recovered from the guarantor. The amendments are effective for annual periods, and interim periods within those years, beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our financial position or results of operations.

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Note 6 - Securities Sold Under Agreements to Repurchase (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Repurchase Agreements [Table Text Block]

	Nine Months Ended September 30, 2015			Twelve Months Ended December 31, 2014
Outstanding balance at end of period	$	158,149,000		$	167,569,000
Average interest rate at end of period		0.11	%		0.11	%
Average daily balance during the period	$	145,867,000		$	105,474,000
Average interest rate during the period		0.11	%		0.12	%
Maximum daily balance during the period	$	168,211,000		$	178,042,000

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Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings - Originated Loan [Member] - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	$ 1,064,000	$ 5,793,000
Commercial Portfolio Segment [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	1,064,000	5,793,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	132,000	16,000
Commercial Portfolio Segment [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	234,000	151,000
Commercial Portfolio Segment [Member] | Real Estate Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	114,000	182,000
Commercial Portfolio Segment [Member] | Real Estate Non Owner Occupied Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	194,000	4,778,000
Commercial Portfolio Segment [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	390,000	666,000
Retail Portfolio Segment [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	0	0
Retail Portfolio Segment [Member] | Home Equity and Other [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	0	0
Retail Portfolio Segment [Member] | 1-4 Family Mortgages [Member]
Note 3 - Loans and Allowance for Loan Losses (Details) - Allowance Related to Troubled Debt Restructurings [Line Items]
Allowance for losses, troubled debt restructurings	$ 0	$ 0

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Note 3 - Loans and Allowance for Loan Losses (Details) - Age Analysis of Past Due Loans - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	$ 2,217,388,000	$ 2,089,277,000
Originated Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	577,000	643,000
Loans, current	1,519,133,000	1,245,473,000
Loans	1,519,710,000	1,246,116,000	$ 1,186,713,000
Loans, recorded balance > 89 days and accruing	0	0
Originated Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	176,000	38,000
Originated Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	88,000	3,000
Originated Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	313,000	602,000
Acquired Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	7,797,000	6,743,000
Loans, current	689,881,000	836,418,000
Loans	697,678,000	843,161,000
Loans, recorded balance > 89 days and accruing	0	26,000
Acquired Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	2,781,000	1,717,000
Acquired Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	484,000	1,920,000
Acquired Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	4,532,000	3,106,000
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	1,877,620,000	1,715,303,000
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	643,118,000	550,607,000
Commercial Portfolio Segment [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	47,734,000	51,974,000
Commercial Portfolio Segment [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	427,016,000	430,388,000
Commercial Portfolio Segment [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	636,227,000	559,574,000
Commercial Portfolio Segment [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	123,525,000	122,760,000
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	41,000	236,000
Loans, current	1,402,279,000	1,152,953,000
Loans	1,402,320,000	1,153,189,000	1,103,802,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	28,000	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	13,000	236,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	28,000	0
Loans, current	522,318,000	384,570,000
Loans	522,346,000	384,570,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	28,000	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Loans, current	30,958,000	29,826,000
Loans	30,958,000	29,826,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	13,000	120,000
Loans, current	306,526,000	291,638,000
Loans	306,539,000	291,758,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	13,000	120,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	116,000
Loans, current	505,715,000	410,861,000
Loans	505,715,000	410,977,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	116,000
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Loans, current	36,762,000	36,058,000
Loans	36,762,000	36,058,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	5,889,000	3,479,000
Loans, current	469,411,000	558,635,000
Loans	475,300,000	562,114,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	1,893,000	185,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	93,000	1,093,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	3,903,000	2,201,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	959,000	137,000
Loans, current	119,813,000	165,900,000
Loans	120,772,000	166,037,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	385,000	29,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	32,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	574,000	76,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	257,000	38,000
Loans, current	16,519,000	22,110,000
Loans	16,776,000	22,148,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	257,000	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	38,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	1,973,000	2,101,000
Loans, current	118,504,000	136,529,000
Loans	120,477,000	138,630,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	1,078,000	51,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	93,000	425,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	802,000	1,625,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	80,000	1,061,000
Loans, current	130,432,000	147,536,000
Loans	130,512,000	148,597,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	68,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	598,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	80,000	395,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	2,620,000	142,000
Loans, current	84,143,000	86,560,000
Loans	86,763,000	86,702,000
Loans, recorded balance > 89 days and accruing	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	173,000	37,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	0	0
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	2,447,000	105,000
Retail Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	339,768,000	373,974,000
Retail Portfolio Segment [Member] | Home Equity and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	146,765,000	159,278,000
Retail Portfolio Segment [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans	193,003,000	214,696,000
Retail Portfolio Segment [Member] | Originated Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	536,000	407,000
Loans, current	116,854,000	92,520,000
Loans	117,390,000	92,927,000	$ 82,911,000
Loans, recorded balance > 89 days and accruing	0	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	148,000	38,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	88,000	3,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	300,000	366,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	58,000	41,000
Loans, current	65,613,000	50,018,000
Loans	65,671,000	50,059,000
Loans, recorded balance > 89 days and accruing	0	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	33,000	38,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	21,000	3,000
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	4,000	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	478,000	366,000
Loans, current	51,241,000	42,502,000
Loans	51,719,000	42,868,000
Loans, recorded balance > 89 days and accruing	0	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	115,000	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	67,000	0
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	296,000	366,000
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	1,908,000	3,264,000
Loans, current	220,470,000	277,783,000
Loans	222,378,000	281,047,000
Loans, recorded balance > 89 days and accruing	0	26,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	888,000	1,532,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	391,000	827,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	629,000	905,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	543,000	1,019,000
Loans, current	80,551,000	108,200,000
Loans	81,094,000	109,219,000
Loans, recorded balance > 89 days and accruing	0	26,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	340,000	445,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	68,000	419,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	135,000	155,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	1,365,000	2,245,000
Loans, current	139,919,000	169,583,000
Loans	141,284,000	171,828,000
Loans, recorded balance > 89 days and accruing	0	0
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	548,000	1,087,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	323,000	408,000
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans, past due	$ 494,000	$ 750,000

XML

Condensed Consolidated Statements of Comprehensive Income [Unaudited] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net income	$ 7,336,000	$ 5,947,000	$ 20,540,000	$ 11,038,000
Other comprehensive income (loss):
Unrealized holding gains (losses) on securities available for sale	1,230,000	712,000	1,395,000	4,861,000
Fair value of interest rate swap	(153,000)	255,000	(279,000)	128,000
	1,077,000	967,000	1,116,000	4,989,000
Tax effect of unrealized holding gains (losses) on securities available for sale	(431,000)	(220,000)	(461,000)	(1,701,000)
Tax effect of fair value of interest rate swap	53,000	(90,000)	98,000	(44,000)
	(378,000)	(310,000)	(363,000)	(1,745,000)
Other comprehensive income, net of tax	699,000	657,000	753,000	3,244,000
Comprehensive income	$ 8,035,000	$ 6,604,000	$ 21,293,000	$ 14,282,000

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Note 2 - Securities

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

2.     SECURITIES

The amortized cost and fair value of available for sale securities and the related pre-tax gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
September 30, 2015
U.S. Government agency debt obligations	$	159,411,000	$	1,939,000	$	(1,957,000	)	$	159,393,000
Mortgage-backed securities		72,211,000		904,000		(151,000	)		72,964,000
Municipal general obligation bonds		122,724,000		1,118,000		(234,000	)		123,608,000
Municipal revenue bonds		9,163,000		88,000		(1,000	)		9,250,000
Other investments		1,947,000		11,000		0			1,958,000
	$	365,456,000	$	4,060,000	$	(2,343,000	)	$	367,173,000
December 31, 2014
U.S. Government agency debt obligations	$	194,894,000	$	1,612,000	$	(3,038,000	)	$	193,468,000
Mortgage-backed securities		92,656,000		1,123,000		(218,000	)		93,561,000
Municipal general obligation bonds		132,347,000		1,042,000		(307,000	)		133,082,000
Municipal revenue bonds		10,769,000		117,000		(13,000	)		10,873,000
Other investments		1,925,000		3,000		0			1,928,000
	$	432,591,000	$	3,897,000	$	(3,576,000	)	$	432,912,000

Securities with unrealized losses at September 30, 2015 and December 31, 2014, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are as follows:

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
September 30, 2015
U.S. Government agency debt obligations	$	0	$	0	$	70,896,000	$	1,957,000	$	70,896,000	$	1,957,000
Mortgage-backed securities		6,831,000		37,000		19,943,000		114,000		26,774,000		151,000
Municipal general obligation bonds		10,994,000		90,000		5,064,000		144,000		16,058,000		234,000
Municipal revenue bonds		0		0		807,000		1,000		807,000		1,000
Other investments		0		0		0		0		0		0
	$	17,825,000	$	127,000	$	96,710,000	$	2,216,000	$	114,535,000	$	2,343,000

	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
December 31, 2014
U.S. Government agency debt obligations	$	81,891,000	$	202,000	$	74,120,000	$	2,836,000	$	156,011,000	$	3,038,000
Mortgage-backed securities		49,940,000		218,000		0		0		49,940,000		218,000
Municipal general obligation bonds		54,104,000		307,000		0		0		54,104,000		307,000
Municipal revenue bonds		4,644,000		13,000		0		0		4,644,000		13,000
Other investments		0		0		0		0		0		0
	$	190,579,000	$	740,000	$	74,120,000	$	2,836,000	$	264,699,000	$	3,576,000

We evaluate securities for other-than-temporary impairment at least on a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability we have to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

For those debt securities whose fair value is less than their amortized cost basis, we also consider our intent to sell the security, whether it is more likely than not that we will be required to sell the security before recovery and if we do not expect to recover the entire amortized cost basis of the security. In analyzing an issuer’s financial condition, we may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition.

At September 30, 2015, 161 debt securities with fair values totaling $114.5 million have unrealized losses aggregating $2.3 million. After we considered whether the securities were issued by the federal government or its agencies and whether downgrades by bond rating agencies had occurred, we determined that unrealized losses were due to changing interest rate environments. As we do not intend to sell our debt securities before recovery of their cost basis and we believe it is more likely than not that we will not be required to sell our debt securities before recovery of the cost basis, no unrealized losses are deemed to be other-than-temporary.

The amortized cost and fair value of debt securities at September 30, 2015, by maturity, are shown in the following table. The contractual maturity is utilized for U.S. Government agency debt obligations and municipal bonds. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. Weighted average yields are also reflected, with yields for municipal securities shown at their tax equivalent yield.

	Weighted
	Average			Amortized		Fair
	Yield			Cost		Value
Due in 2015		2.12	%	$	8,409,000	$	8,471,000
Due in 2016 through 2020		1.42			150,774,000		151,190,000
Due in 2021 through 2025		3.09			57,813,000		58,359,000
Due in 2026 and beyond		3.56			74,302,000		74,231,000
Mortgage-backed securities		1.69			72,211,000		72,964,000
Other investments		2.53			1,947,000		1,958,000
		2.21	%	$	365,456,000	$	367,173,000

Securities issued by the State of Michigan and all its political subdivisions had a combined amortized cost of $106.0 million and $113.1 million at September 30, 2015 and December 31, 2014, respectively, with estimated market values of $106.9 million and $113.9 million, respectively. Securities issued by all other states and their political subdivisions had a combined amortized cost of $25.9 million and $30.0 million at September 30, 2015 and December 31, 2014, respectively, with estimated market values of $26.0 million and $30.0 million, respectively. Total securities of any other specific issuer, other than the U.S. Government and its agencies and the State of Michigan and all its political subdivisions, did not exceed 10% of shareholders’ equity.

The carrying value of U.S. Government agency debt obligations and mortgage-backed securities that are pledged to secure repurchase agreements was $158.1 million and $167.6 million at September 30, 2015, and December 31, 2014, respectively. Investments in Federal Home Loan Bank stock are restricted and may only be resold or redeemed by the issuer.

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Note 8 - Commitments and Off-balance Sheet Risk (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Note 8 - Commitments and Off-balance Sheet Risk (Details) [Line Items]
Reserve or Liability Balance for Financial Instruments with Off-balance Sheet Risk	$ 0	$ 0
Interest Rate Swap [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) [Line Items]
Derivative, Notional Amount	14,800,000
Derivative, Fair Value, Net	$ (2,600,000)
Minimum [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) [Line Items]
Fees Accreted Into Income During Interest Rate Swap Agreements, Term	4 years
Maximum [Member]
Note 8 - Commitments and Off-balance Sheet Risk (Details) [Line Items]
Fees Accreted Into Income During Interest Rate Swap Agreements, Term	15 years

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Note 7 - Federal Home Loan Bank of Indianapolis Advances (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Maturities of Currently Outstanding FHLB Advances [Table Text Block]

2015	$	0
2016		3,000,000
2017		45,000,000
2018		0
Thereafter		20,000,000

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Note 3 - Loans and Allowance for Loan Losses (Details) - Components of Loan Portfolio - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 2,217,388,000	$ 2,089,277,000
Loans, percentage of portfolio	100.00%	100.00%
Loans, percentage of change in loans	6.10%
Originated Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 1,519,710,000	$ 1,246,116,000	$ 1,186,713,000
Loans, percentage of portfolio	100.00%	100.00%
Loans, percentage of change in loans	22.00%
Acquired Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 697,678,000	$ 843,161,000
Loans, percentage of portfolio	100.00%	100.00%
Loans, percentage of change in loans	(17.30%)
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 1,877,620,000	$ 1,715,303,000
Loans, percentage of portfolio	84.70%	82.10%
Loans, percentage of change in loans	9.50%
Commercial Portfolio Segment [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 643,118,000	$ 550,607,000
Loans, percentage of portfolio	29.00%	26.40%
Loans, percentage of change in loans	16.80%
Commercial Portfolio Segment [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 47,734,000	$ 51,974,000
Loans, percentage of portfolio	2.20%	2.50%
Loans, percentage of change in loans	(8.20%)
Commercial Portfolio Segment [Member] | Real Estate Owner Occupied Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 427,016,000	$ 430,388,000
Loans, percentage of portfolio	19.30%	20.50%
Loans, percentage of change in loans	(0.80%)
Commercial Portfolio Segment [Member] | Real Estate Non Owner Occupied Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 636,227,000	$ 559,574,000
Loans, percentage of portfolio	28.60%	26.80%
Loans, percentage of change in loans	13.70%
Commercial Portfolio Segment [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 123,525,000	$ 122,760,000
Loans, percentage of portfolio	5.60%	5.90%
Loans, percentage of change in loans	0.60%
Commercial Portfolio Segment [Member] | Originated Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 1,402,320,000	$ 1,153,189,000	1,103,802,000
Loans, percentage of portfolio	92.30%	92.50%
Loans, percentage of change in loans	21.60%
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 522,346,000	$ 384,570,000
Loans, percentage of portfolio	34.40%	30.80%
Loans, percentage of change in loans	35.80%
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 30,958,000	$ 29,826,000
Loans, percentage of portfolio	2.00%	2.40%
Loans, percentage of change in loans	3.80%
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Owner Occupied Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 306,539,000	$ 291,758,000
Loans, percentage of portfolio	20.20%	23.40%
Loans, percentage of change in loans	5.10%
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 505,715,000	$ 410,977,000
Loans, percentage of portfolio	33.30%	33.00%
Loans, percentage of change in loans	23.10%
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Retail Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 36,762,000	$ 36,058,000
Loans, percentage of portfolio	2.40%	2.90%
Loans, percentage of change in loans	2.00%
Commercial Portfolio Segment [Member] | Originated Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 36,762,000	$ 36,058,000
Commercial Portfolio Segment [Member] | Acquired Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 475,300,000	$ 562,114,000
Loans, percentage of portfolio	68.10%	66.60%
Loans, percentage of change in loans	(15.40%)
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 120,772,000	$ 166,037,000
Loans, percentage of portfolio	17.30%	19.70%
Loans, percentage of change in loans	(27.30%)
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Vacant Land and Land Development and Residential Construction Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 16,776,000	$ 22,148,000
Loans, percentage of portfolio	2.40%	2.60%
Loans, percentage of change in loans	(24.30%)
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Owner Occupied Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 120,477,000	$ 138,630,000
Loans, percentage of portfolio	17.30%	16.40%
Loans, percentage of change in loans	(13.10%)
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Non Owner Occupied Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 130,512,000	$ 148,597,000
Loans, percentage of portfolio	18.70%	17.60%
Loans, percentage of change in loans	(12.20%)
Commercial Portfolio Segment [Member] | Acquired Loan [Member] | Real Estate Multi Family and Residential Rental Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 86,763,000	$ 86,702,000
Loans, percentage of portfolio	12.40%	10.30%
Loans, percentage of change in loans	0.10%
Retail Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 339,768,000	$ 373,974,000
Loans, percentage of portfolio	15.30%	17.90%
Loans, percentage of change in loans	(9.10%)
Retail Portfolio Segment [Member] | Home Equity and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 146,765,000	$ 159,278,000
Loans, percentage of portfolio	6.60%	7.60%
Loans, percentage of change in loans	(7.90%)
Retail Portfolio Segment [Member] | 1-4 Family Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 193,003,000	$ 214,696,000
Loans, percentage of portfolio	8.70%	10.30%
Loans, percentage of change in loans	(10.10%)
Retail Portfolio Segment [Member] | Originated Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 117,390,000	$ 92,927,000	$ 82,911,000
Loans, percentage of portfolio	7.70%	7.50%
Loans, percentage of change in loans	26.30%
Retail Portfolio Segment [Member] | Originated Loan [Member] | Home Equity and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 65,671,000	$ 50,059,000
Loans, percentage of portfolio	4.30%	4.00%
Loans, percentage of change in loans	31.20%
Retail Portfolio Segment [Member] | Originated Loan [Member] | 1-4 Family Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 51,719,000	$ 42,868,000
Loans, percentage of portfolio	3.40%	3.50%
Loans, percentage of change in loans	20.60%
Retail Portfolio Segment [Member] | Acquired Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 222,378,000	$ 281,047,000
Loans, percentage of portfolio	31.90%	33.40%
Loans, percentage of change in loans	(20.90%)
Retail Portfolio Segment [Member] | Acquired Loan [Member] | Home Equity and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 81,094,000	$ 109,219,000
Loans, percentage of portfolio	11.60%	13.00%
Loans, percentage of change in loans	(25.80%)
Retail Portfolio Segment [Member] | Acquired Loan [Member] | 1-4 Family Mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (in Dollars)	$ 141,284,000	$ 171,828,000
Loans, percentage of portfolio	20.30%	20.40%
Loans, percentage of change in loans	(17.80%)

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Note 12 - Regulatory Matters

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

12.     REGULATORY MATTERS

We are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors, and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on our financial statements.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If an institution is not well capitalized, regulatory approval is required to accept brokered deposits. Subject to limited exceptions, no institution may make a capital distribution if, after making the distribution, it would be undercapitalized. If an institution is undercapitalized, it is subject to close monitoring by its principal federal regulator, its asset growth and expansion are restricted, and plans for capital restoration are required. In addition, further specific types of restrictions may be imposed on the institution at the discretion of the federal regulator. At September 30, 2015 and December 31, 2014, our bank was in the well capitalized category under the regulatory framework for prompt corrective action. There are no conditions or events since September 30, 2015 that we believe have changed our bank’s categorization.

Our actual capital levels (dollars in thousands) and the minimum levels required to be categorized as adequately and well capitalized were:

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2015
Total capital (to risk weighted assets)
Consolidated	$	341,029		13.6	%	$	200,894		8.0	%	$	NA		NA
Bank		343,288		13.7			200,989		8.0			251,236		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		324,911		12.9			150,671		6.0			NA		NA
Bank		327,169		13.0			150,742		6.0			200,989		8.0
Common equity tier 1 (to risk weighted assets)
Consolidated		275,395		11.0			113,156		4.5			NA		NA
Bank		327,169		13.0			113,057		4.5			163,304		6.5
Tier 1 capital (to average assets)
Consolidated		324,911		11.5			112,825		4.0			NA		NA
Bank		327,169		11.6			112,914		4.0			141,142		5.0

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2014
Total capital (to risk weighted assets)
Consolidated	$	334,793		14.4	%	$	185,553		8.0	%	$	NA		NA
Bank		332,749		14.4			185,309		8.0			231,636		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		314,752		13.6			92,777		4.0			NA		NA
Bank		312,708		13.5			92,655		4.0			138,982		6.0
Tier 1 capital (to average assets)
Consolidated		314,752		11.2			112,949		4.0			NA		NA
Bank		312,708		11.1			112,856		4.0			141,070		5.0

Our consolidated capital levels as of September 30, 2015 and December 31, 2014 include $52.9 million and $52.4 million, respectively, of trust preferred securities subject to certain limitations. Under applicable Federal Reserve guidelines, the trust preferred securities constitute a restricted core capital element. The guidelines provide that the aggregate amount of restricted core elements that may be included in our Tier 1 capital must not exceed 25% of the sum of all core capital elements, including restricted core capital elements, net of goodwill less any associated deferred tax liability. Our ability to include the trust preferred securities in Tier 1 capital in accordance with the guidelines is not affected by the provision of the Dodd-Frank Act generally restricting such treatment, because (i) the trust preferred securities were issued before May 19, 2010, and (ii) our total consolidated assets as of December 31, 2009 were less than $15.0 billion. As of September 30, 2015 and December 31, 2014, all $52.9 million and $52.4 million, respectively, of the trust preferred securities were included in our consolidated Tier 1 capital.

Our regulatory capital calculations and the minimum requirements to be categorized as well capitalized and adequately capitalized under the prompt corrective action regulations were impacted by BASEL III, which became effective January 1, 2015 and are included in the September 30, 2015 table above. The net impact on our regulatory capital ratios and our overall capital position was not material.

Our and our bank’s ability to pay cash and stock dividends is subject to limitations under various laws and regulations and to prudent and sound banking practices. On January 15, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.14 per share that was paid on March 25, 2015 to shareholders of record as of March 13, 2015. On April 16, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.14 per share that was paid on June 24, 2015 to shareholders of record as of June 12, 2015. On July 16, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.15 per share that was paid on September 23, 2015 to shareholders of record as of September 11, 2015. On October 15, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.15 per share that will be paid on December 23, 2015 to shareholders of record as of December 11, 2015.

In addition, on January 30, 2015, we announced that our Board of Directors had authorized a new program to repurchase up to $20.0 million of our common stock from time to time in open market transactions at prevailing market prices or by other means in accordance with applicable regulations. We expect to fund a majority of such repurchases from cash dividends paid to us from our Bank. During the first nine months of 2015, we purchased approximately 765,000 shares of common stock at an average price of $19.89, totaling about $15.2 million, under the stock repurchase program. The purchased shares were retired effective on the acquisition date.