10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2013

OR

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

For the transition period from                      to                     

Commission File Number: 001-15375

CITIZENS HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Mississippi	64-0666512
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

521 Main Street, Philadelphia, MS	39350
(Address of principal executive offices)	(Zip Code)

601-656-4692

(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.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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    x  No

Number of shares outstanding of each of the issuer’s classes of common stock, as of November 7, 2013:

Title	Outstanding
Common Stock, $0.20 par value	4,870,114

CITIZENS HOLDING COMPANY

INTERIM FINANCIAL STATEMENTS FOR QUARTER ENDED SEPTEMBER 30, 2013

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Statements of Condition September 30, 2013 (Unaudited) and December 31, 2012 (Audited)	1
	Consolidated Statements of Income Three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited)	2
	Consolidated Statements of Comprehensive Income (Loss) Three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows Nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited)	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings*
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds*
Item 3.	Defaults Upon Senior Securities*
Item 4.	Mine Safety Disclosures*
Item 5.	Other Information*
Item 6.	Exhibits	43
*	None or Not Applicable
SIGNATURES		44

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.

CITIZENS HOLDING COMPANY

CONSOLIDATED STATEMENTS OF CONDITION

	September 30,			December 31,
	2013			2012
	(Unaudited)			(Audited)
ASSETS
Cash and due from banks	$	19,089,862		$	21,561,288
Interest bearing deposits with other banks		721,055			16,228,747
Investment securities available for sale, at fair value		408,804,186			420,907,815
Loans, net of allowance for loan losses of $7,770,041 in 2013 and $6,954,269 in 2012		370,201,335			361,936,495
Premises and equipment, net		18,823,555			19,425,292
Other real estate owned, net		4,196,764			4,682,255
Accrued interest receivable		4,826,527			4,665,868
Cash value of life insurance		21,692,384			21,191,930
Intangible assets, net		3,149,657			3,149,657
Other assets		20,082,961			7,090,551
TOTAL ASSETS	$	871,588,286		$	880,839,898
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Deposits:
Noninterest-bearing demand	$	121,404,926		$	119,946,574
Interest-bearing NOW and money market accounts		239,068,093			228,111,275
Savings deposits		52,979,146			46,240,652
Certificates of deposit		235,239,025			248,250,837
Total deposits		648,691,190			642,549,338
Securities sold under agreement to repurchase		76,357,769			73,306,765
Federal funds purchased		13,200,000			—
Federal Home Loan Bank advances		55,500,000			68,500,000
Accrued interest payable		208,072			321,472
Deferred compensation payable		6,499,932			5,917,662
Other liabilities		2,350,870			1,375,831
Total liabilities		802,807,833			791,971,068
STOCKHOLDERS’ EQUITY
Common stock; $.20 par value, 22,500,000 shares authorized, 4,870,114 shares outstanding at September 30, 2013 and 4,861,411 shares outstanding at December 31, 2012		973,982			972,282
Additional paid-in capital		3,748,217			3,620,967
Retained earnings		81,741,743			79,928,035
Accumulated other comprehensive (loss) income, net of applicable taxes of $10,519,843 in 2013 and ($2,586,340) in 2012		(17,683,489	)		4,347,546
Total stockholders’ equity		68,780,453			88,868,830
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	871,588,286		$	880,839,898

The accompanying notes are an integral part of these financial statements.

1

CITIZENS HOLDING COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2013		2012		2013		2012
INTEREST INCOME
Loans, including fees	$	5,150,046	$	5,633,206	$	15,469,869	$	17,643,633
Investment securities		2,923,893		2,609,503		8,545,222		8,483,553
Other interest		4,781		32,641		42,195		50,322
Total interest income		8,078,720		8,275,350		24,057,286		26,177,508
INTEREST EXPENSE
Deposits		458,497		668,407		1,473,254		2,096,841
Other borrowed funds		367,229		728,659		1,769,780		2,268,067
Total interest expense		825,726		1,397,066		3,243,034		4,364,908
NET INTEREST INCOME		7,252,994		6,878,284		20,814,252		21,812,600
PROVISION FOR LOAN LOSSES		1,079,838		462,684		1,828,942		1,328,461
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		6,173,156		6,415,600		18,985,310		20,484,139
OTHER INCOME
Service charges on deposit accounts		1,028,592		966,149		2,833,391		2,711,719
Other service charges and fees		550,167		509,443		1,476,680		1,375,512
Income from security sales, net		268,733		5,972		423,388		43,725
Other income		336,035		359,001		1,059,929		956,364
Total other income		2,183,527		1,840,565		5,793,388		5,087,320
OTHER EXPENSES
Salaries and employee benefits		3,280,877		3,414,811		9,923,364		10,448,471
Occupancy expense		1,144,231		1,147,917		3,367,937		3,277,082
Other operating expense		1,425,135		1,710,148		5,263,137		5,631,591
Total other expenses		5,850,243		6,272,876		18,554,438		19,357,144
INCOME BEFORE PROVISION FOR INCOME TAXES		2,506,440		1,983,289		6,224,260		6,214,315
PROVISION FOR INCOME TAXES		496,977		354,247		1,196,607		1,170,509
NET INCOME	$	2,009,463	$	1,629,042	$	5,027,653	$	5,043,806
NET INCOME PER SHARE -Basic	$	0.41	$	0.34	$	1.03	$	1.04
-Diluted	$	0.41	$	0.33	$	1.03	$	1.04
DIVIDENDS PAID PER SHARE	$	0.22	$	0.22	$	0.66	$	0.66

The accompanying notes are an integral part of these financial statements.

2

CITIZENS HOLDING COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	For the Three Months						For the Nine Months
		Ended September 30,						Ended September 30,
		2013			2012			2013			2012
Net income	$	2,009,463		$	1,629,042		$	5,027,653		$	5,043,806
Other comprehensive (loss) income
Unrealized holding (losses) gains		(8,675,917	)		(975,371	)		(34,713,829	)		214,860
Income tax effect		3,236,117			363,813			12,948,258			(80,143	)
		(5,439,800	)		(611,558	)		(21,765,571	)		134,717
Reclassification adjustment for gains included in net income		(268,733	)		(5,972	)		(423,388	)		(43,725	)
Income tax effect		100,238			2,227			157,924			16,309
		(168,495	)		(3,745	)		(265,464	)		(27,416	)
Total other comprehensive (loss) income		(5,608,295	)		(615,303	)		(22,031,035	)		107,301
Comprehensive (loss) income	$	(3,598,832	)	$	1,013,739		$	(17,003,382	)	$	5,151,107

The accompanying notes are an integral part of these financial statements.

3

CITIZENS HOLDING COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months
	Ended September 30,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities	$	8,621,916		$	8,968,505
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and calls of securities available for sale		77,076,345			220,117,006
Purchases of investment securities available for sale		(142,276,646	)		(244,228,754	)
Proceeds from sales of investment securities		41,550,629			—
Purchases of bank premises and equipment		(264,331	)		(70,332	)
Decrease in interest bearing deposits with other banks		15,507,692			1,838,575
Purchase of Federal Home Loan Bank stock		(438,600	)		(282,700	)
Redemption of Federal Home Loan Bank stock		1,052,000			442,800
Proceeds from sale of other real estate		1,431,927			1,296,551
Net (increase) decrease in loans		(11,040,218	)		9,068,662
Net cash used by investing activities		(17,401,202	)		(11,818,192	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits		6,141,852			44,684,143
Net change in securities sold under agreement to repurchase		3,051,004			(58,862,734	)
Proceeds from exercising stock options		128,949			257,425
Decrease in Federal Home Loan Bank advances		(13,000,000	)		—
Increase in federal funds purchased		13,200,000			4,700,000
Payment of dividends		(3,213,945	)		(3,206,771	)
Net cash provided (used) by financing activities		6,307,860			(12,427,937	)
Net decrease in cash and due from banks		(2,471,426	)		(15,277,624	)
Cash and due from banks, beginning of period		21,561,288			35,407,715
Cash and due from banks, end of period	$	19,089,862		$	20,130,091

The accompanying notes are an integral part of these financial statements.

4

CITIZENS HOLDING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of and for the three and nine months ended September 30, 2013

(Unaudited)

Note 1. Basis of Presentation

These interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). However, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The interim consolidated financial statements are unaudited and reflect all adjustments and reclassifications, which, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition as of and for the interim periods presented. All adjustments and reclassifications are of a normal and recurring nature. Results for the period ended September 30, 2013, are not necessarily indicative of the results that may be expected for any other interim periods or for the year as a whole.

The interim consolidated financial statements of Citizens Holding Company include the accounts of its wholly-owned subsidiary, The Citizens Bank of Philadelphia (the “Bank” and collectively with Citizens Holding Company, the “Corporation”). All significant intercompany transactions have been eliminated in consolidation.

For further information and significant accounting policies of the Corporation, see the Notes to Consolidated Financial Statements of Citizens Holding Company included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on March 15, 2013.

Note 2. Commitments and Contingent Liabilities

In the ordinary course of business, the Corporation enters into commitments to extend credit to its customers. The unused portion of these commitments is not reflected in the accompanying financial statements. As of September 30, 2013, the Corporation had entered into loan commitments with certain customers with an aggregate unused balance of $51,190,892 compared to an aggregate unused balance of $37,703,387 at December 31, 2012. There were $2,848,530 of letters of credit outstanding at September 30, 2013 and $3,113,225 at December 31, 2012. The fair value of such contracts is not considered material because letters of credit and loan commitments often are not used in their entirety, if at all, before they expire. The balances of such letters and commitments should not be used to project actual future liquidity requirements. However, the Corporation does incorporate expectations about the level of draws under its credit-related commitments into its asset and liability management program.

The Corporation is a party to lawsuits and other claims that arise in the ordinary course of business, all of which are being vigorously contested. In the regular course of business, management evaluates estimated losses or costs related to litigation, and provisions are made for anticipated losses whenever management believes that such losses are probable and can be reasonably estimated. At the present time, management believes, based on the advice of legal counsel, that the final resolution of pending legal proceedings will not have a material impact on the Corporation’s consolidated financial condition or results of operations.

5

Note 3. Net Income per Share

Net income per share—basic has been computed based on the weighted average number of shares outstanding during each period. Net income per share—diluted has been computed based on the weighted average number of shares outstanding during each period plus the dilutive effect of outstanding stock options using the treasury stock method. Net income per share was computed as follows:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2013		2012		2013		2012
Basic weighted average shares outstanding		4,870,114		4,861,411		4,867,475		4,856,584
Dilutive effect of granted options		80		5,628		1,994		8,493
Diluted weighted average shares outstanding		4,870,194		4,867,039		4,869,469		4,865,077
Net income	$	2,009,463	$	1,629,042	$	5,027,653	$	5,043,806
Net income per share-basic	$	0.41	$	0.34	$	1.03	$	1.04
Net income per share-diluted	$	0.41	$	0.33	$	1.03	$	1.04

Note 4. Stock Option Plan

Prior to the adoption of the 2013 plan , as defined below, the Corporation utilized one stock-based compensation plan, which is the 1999 Directors’ Stock Compensation Plan (the “Directors’ Plan”). Prior to its expiration, the Corporation also had the 1999 Employees’ Long-Term Incentive Plan, or the Employees’ Plan.

The Corporation has adopted the 2013 Incentive Compensation Plan (the “2013 Plan”), which the Corporation intends to use for all future equity grants until the termination or expiration of the 2013 Plan.

6

The following table below is a summary of the stock option activity for the nine months ended September 30, 2013.

	Directors’ Plan					Employees’ Plan
				Weighted					Weighted
	Number			Average		Number			Average
	of			Exercise		of			Exercise
	Shares			Price		Shares			Price
Outstanding at December 31, 2012		111,000		$	20.97		108,000		$	20.90
Granted		—			—		—			—
Exercised		(3,000	)		16.40		(7,000	)		14.91
Expired		(4,500	)		16.40		(19,000	)		18.11
Outstanding at September 30, 2013		103,500		$	21.30		82,000		$	22.06

The intrinsic value of options granted under the Directors’ Plan at September 30, 2013, was $960 and the intrinsic value of options granted under the Employees’ Plan at September 30, 2013, was $120 for a total intrinsic value at September 30, 2013, of $1,080. No awards have been granted under the 2013 Plan.

Note 5. Income Taxes

The income tax topic of the Accounting Standards Codification (“ASC”) defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. This topic also provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties, and includes guidance concerning accounting for income tax uncertainties in interim periods. As of September 30, 2013, the Corporation had no unrecognized tax benefits related to federal and state income tax matters. Therefore, the Corporation does not anticipate any material increase or decrease in the effective tax rate during 2013 relative to any tax positions taken. It is the Corporation’s policy to recognize interest and/or penalties related to income tax matters in income tax expense.

The Corporation files a consolidated United States federal income tax return. The Corporation is currently open to audit under the statute of limitations by the Internal Revenue Service for all tax years after 2009. The Corporation’s consolidated state income tax returns are also open to audit under the statute of limitations for the same period.

7

Note 6. Loans

The composition of net loans at September 30, 2013 and December 31, 2012 is as follows:

	September 30, 2013			December 31, 2012
	(In Thousands)
Real Estate:
Land Development and Construction	$	25,779		$	12,755
Farmland		29,674			31,663
1-4 Family Mortgages		107,794			115,837
Commercial Real Estate		140,349			132,495
Total Real Estate Loans		303,596			292,750
Business Loans:
Commercial and Industrial Loans		46,813			45,564
Farm Production and Other Farm Loans		1,303			1,433
Total Business Loans		48,116			46,997
Consumer Loans:
Credit Cards		1,039			1,050
Other Consumer Loans		25,660			28,341
Total Consumer Loans		26,699			29,391
Total Gross Loans		378,411			369,138
Unearned income		(440	)		(248	)
Allowance for loan losses		(7,770	)		(6,954	)
Loans, net	$	370,201		$	361,936

Loans are considered to be past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status, when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether such loans are considered past due. When interest accruals are discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

8

Period-end, non-accrual loans, segregated by class of loans, were as follows:

	September 30, 2013		December 31, 2012
	(in thousands)
Real Estate:
Land Development and Construction	$	129	$	142
Farmland		397		1,087
1-4 Family Mortgages		1,634		2,356
Commercial Real Estate		9,284		10,175
Total Real Estate Loans		11,444		13,760
Business Loans:
Commercial and Industrial Loans		2,141		167
Farm Production and Other Farm Loans		1		3
Total Business Loans		2,142		170
Consumer Loans:
Other Consumer Loans		120		212
Total Consumer Loans		120		212
Total Non-Accrual Loans	$	13,706	$	14,142

9

An aging analysis of past due loans, segregated by class of loans, as of September 30, 2013, was as follows (in thousands):

											Accruing
			Loans								Loans
	Loans		90 or more								90 or more
	30-89 Days		Days		Total Past		Current		Total		Days
	Past Due		Past Due		Due Loans		Loans		Loans		Past Due
Real Estate:
Land Development and Construction	$	294	$	—	$	294	$	25,485	$	25,779	$	—
Farmland		592		119		711		28,963		29,674		—
1-4 Family Mortgages		4,354		631		4,985		102,809		107,794		244
Commercial Real Estate		3,529		7,920		11,449		128,900		140,349		—
Total Real Estate Loans		8,769		8,670		17,439		286,157		303,596		244
Business Loans:
Commercial and Industrial Loans		233		3		236		46,577		46,813		—
Farm Production and Other Farm Loans		1		—		1		1,302		1,303		—
Total Business Loans		234		3		237		47,879		48,116		—
Consumer Loans:
Credit Cards		39		2		41		998		1,039		2
Other Consumer Loans		1,220		58		1,278		24,382		25,660		17
Total Consumer Loans		1,259		60		1,319		25,380		26,699		19
Total Loans	$	10,262	$	8,733	$	18,995	$	359,416	$	378,411	$	263

10

An aging analysis of past due loans, segregated by class of loans, as of December 31, 2012 was as follows (in thousands):

	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or more Days Past Due
Real Estate:
Land Development and Construction	$	2,588	$	—	$	2,588	$	10,167	$	12,755	$	—
Farmland		786		589		1,375		30,288		31,663		—
1-4 Family Mortgages		8,139		623		8,762		107,075		115,837		32
Commercial Real Estate		3,033		5,013		8,046		124,449		132,495		544
Total Real Estate Loans		14,546		6,225		20,771		271,979		292,750		576
Business Loans:
Commercial and Industrial Loans		3,070		9		3,079		42,485		45,564		—
Farm Production and other Farm Loans		2		—		2		1,431		1,433		—
Total Business Loans		3,072		9		3,081		43,916		46,997		—
Consumer Loans:
Credit Cards		40		30		70		980		1,050		30
Other Consumer Loans		1,711		57		1,768		26,573		28,341		3
Total Consumer Loans		1,751		87		1,838		27,553		29,391		33
Total Loans	$	19,369	$	6,321	$	25,690	$	343,448	$	369,138	$	609

Loans are considered impaired when, based on current information and events, it is probable the Corporation will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. In determining which loans to evaluate for impairment, management looks at past due loans, bankruptcy filings and any situation that might lend itself to cause a borrower to be unable to repay the loan according to the original agreement terms. If a loan is determined to be impaired and the collateral is deemed to be insufficient to fully repay the loan, a specific reserve will be established. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans or portions thereof, are charged-off when deemed uncollectible.

11

Impaired loans as of September 30, 2013 and December 31, 2012, by class of loans, are as follows (in thousands):

September 30, 2013	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	129	$	14	$	115	$	129	$	114	$	140
Farmland		397		215		182		397		49		418
1-4 Family Mortgages		1,634		1,246		388		1,634		64		1,733
Commercial Real Estate		9,284		946		8,338		9,284		961		9,087
Total Real Estate Loans		11,444		2,421		9,023		11,444		1,188		11,378
Business Loans:
Commercial and Industrial Loans		2,141		18		2,123		2,141		651		2,160
Farm Production and Other Farm Loans		1		1		—		1		—		2
Total Business Loans		2,142		19		2,123		2,142		651		2,162
Consumer Loans:
Other Consumer Loans		120		120		—		120		—		160
Total Consumer Loans		120		120		—		120		—		160
Total Loans	$	13,706	$	2,560	$	11,146	$	13,706	$	1,839	$	13,700

12

December 31, 2012	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	142	$	18	$	124	$	142	$	117	$	638
Farmland		1,087		947		140		1,087		24		864
1-4 Family Mortgages		2,356		1,740		616		2,356		186		2,211
Commercial Real Estate		10,175		5,954		4,221		10,175		711		8,496
Total Real Estate Loans		13,760		8,659		5,101		13,760		1,038		12,209
Business Loans:
Commercial and Industrial Loans		167		76		91		167		55		226
Farm Production and other Farm Loans		3		3		—		3		—		12
Total Business Loans		170		79		91		170		55		238
Consumer Loans:
Other Consumer Loans		212		212		—		212		—		323
Total Consumer Loans		212		212		—		212		—		323
Total Loans	$	14,142	$	8,950	$	5,192	$	14,142	$	1,093	$	12,770

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The following table presents troubled debt restructurings segregated by class (in thousands, except for number of loans):

September 30, 2013	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		4	$	6,850	$	5,186
Total		4	$	6,850	$	5,186
December 31, 2012	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		4	$	6,850	$	5,602
Total		4	$	6,850	$	5,602

Changes in the Corporation’s troubled debt restructurings are set forth in the table below (in thousands, except for number of loans):

	Number of Loans		Recorded Investment
Totals at January 1, 2013		4	$	5,602
Reductions due to:
Principal paydowns				(416	)
Total at September 30, 2013		4	$	5,186

The allocated allowance for loan losses attributable to restructured loans was $174 thousand at September 30, 2013 and $43 thousand at December 31, 2012. The Corporation had no remaining availability under commitments to lend additional funds on these troubled debt restructuring as of September 30, 2013.

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The Corporation utilizes a risk grading matrix to assign a risk grade to each of its loans when originated and is updated as factors related to the strength of the loan changes. Loans are graded on a scale of 1 to 9. A description of the general characteristics of the 9 risk grades is as follows.

Grade 1. MINIMAL RISK—These loans are without loss exposure to the Corporation. This classification is reserved for only the best, well secured loans to borrowers with significant capital strength, low leverage, stable earnings and growth and other readily available financing alternatives. This type of loan would also include loans secured by a program of the government.

Grade 2. MODEST RISK—These loans include borrowers with solid credit quality and moderate risk of loss. These loans may be fully secured by certificates of deposit with another reputable financial institution, or secured by readily marketable securities with acceptable margins.

Grade 3. AVERAGE RISK—This is the rating assigned to the majoprity of the loans held by the Corporation. This includes loans with average loss exposure and average overall quality. These loans should liquidate through possessing adequate collateral and adequate earnings of the borrower. In addition, these loans are properly documented and are in accordance with all aspects of the current loan policy.

Grade 4. ACCEPTABLE RISK—Borrower generates sufficient cash flow to fund debt service but most working asset and capital expansion needs are provided from external sources. Profitability and key balance sheet ratios are usually close to peers but one or more may be higher than peers.

Grade 5. MANAGEMENT ATTENTION—Borrower has significant weaknesses resulting from performance trends or management concerns. The financial condition of the borrower has taken a negative turn and may be temporarily strained. Cash flow is weak but cash reserves remain adequate to meet debt service. Management weakness is evident.

Grade 6. OTHER LOANS ESPECIALLY MENTIONED (OLEM)—Loans in this category are fundamentally sound but possess some weaknesses. OLEM loans have potential weaknesses which may, if not checked or corrected, weaken the asset or inadequately protect the bank’s credit position at some future date. These loans have an identifiable weakness in credit, collateral, or repayment ability but there is no expectation of loss.

Grade 7. SUBSTANDARD ASSETS—Assets classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness based upon objective evidence. Assets classified as substandard are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. The possibility that liquidation would not be timely requires a substandard classification even if there is little likelihood of total loss.

Grade 8. DOUBTFUL—A loan classified as doubtful has all the weaknesses of a substandard classification and the added characteristic that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable or

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improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. A doubtful classification could reflect the fact that the primary source of repayment is gone and serious doubt exists as to the quality of a secondary source of repayment.

Grade 9. LOSS—Loans classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may occur in the future. Also included in this classification is the defined loss portion of loans rated substandard assets and doubtful assets.

These internally assigned grades are updated on a continual basis throughout the course of the year and represent management’s most updated judgment regarding grades at September 30, 2013.

The following table details the amount of gross loans by loan grade and class as of September 30, 2013 (in thousands):

Grades	Satisfactory 1, 2, 3, 4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	23,698	$	209	$	1,872	$	—	$	—	$	25,779
Farmland		25,433		2,512		1,679		50		—		29,674
1-4 Family Mortgages		89,300		5,204		13,290		—		—		107,794
Commercial Real Estate		118,988		5,999		15,362		—		—		140,349
Total Real Estate Loans		257,419		13,924		32,203		50		—		303,596
Business Loans:
Commercial and Industrial Loans		43,788		475		2,527		23		—		46,813
Farm Production and Other Farm Loans		1,290		10		3		—		—		1,303
Total Business Loans		45,078		485		2,530		23		—		48,116
Consumer Loans:
Credit Cards		1,037		—		2		—		—		1,039
Other Consumer Loans		24,755		206		656		43		—		25,660
Total Consumer Loans		25,792		206		658		43		—		26,699
Total Loans	$	328,289	$	14,615	$	35,391	$	116	$	—	$	378,411

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The following table details the amount of gross loans by loan grade and class as of December 31, 2012 (in thousands):

Grades	Satisfactory 1, 2, 3,4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	10,596	$	1,890	$	269	$	—	$	—	$	12,755
Farmland		27,069		2,701		1,893		—		—		31,663
1-4 Family Mortgages		97,630		6,177		12,030		—		—		115,837
Commercial Real Estate		108,914		6,728		16,853		—		—		132,495
Total Real Estate Loans		244,209		17,496		31,045		—		—		292,750
Business Loans:
Commercial and Industrial Loans		41,449		3,486		601		28		—		45,564
Farm Production and other Farm Loans		1,358		26		49		—		—		1,433
Total Business Loans		42,807		3,512		650		28		—		46,997
Consumer Loans:
Credit Cards		1,020		—		30		—		—		1,050
Other Consumer Loans		26,995		287		1,029		28		2		28,341
Total Consumer Loans		28,015		287		1,059		28		2		29,391
Total Loans	$	315,031	$	21,295	$	32,754	$	56	$	2	$	369,138

The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses within the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio.

The allowance on the majority of the loan portfolio is calculated using a historical chargeoff percentage applied to the current loan balances by loan segment. This historical period is the average of the previous 5 years with the most current years weighted to show the effect of the most recent chargeoff activity. This percentage is also adjusted for economic factors such as local unemployment and general business conditions, both local and nationwide.

The group of loans that are considered to be impaired are individually evaluated for possible loss and a specific reserve is established to cover any loss contingency. Loans that are determined to be a loss with no benefit of remaining in the portfolio are charged off to the allowance. These specific reserves are reviewed periodically for continued impairment and adequacy of the specific reserve and adjusted when necessary.

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The following table details activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2013:

September 30, 2013	Real Estate		Business Loans		Consumer			Total
Beginning Balance, January 1, 2013	$	4,629,559	$	1,554,698	$	770,012		$	6,954,269
Provision for possible loan losses		923,965		1,023,825		(118,848	)		1,828,942
Chargeoffs		696,475		375,498		104,553			1,176,526
Recoveries		81,516		21,515		60,325			163,356
Net Chargeoffs		614,959		353,983		44,228			1,013,170
Ending Balance	$	4,938,565	$	2,224,540	$	606,936		$	7,770,041
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,188,691	$	650,727	$	—		$	1,839,418
Loans collectively evaluated for impairment		3,749,874		1,573,813		606,936			5,930,623
Ending Balance, September 30, 2013	$	4,938,565	$	2,224,540	$	606,936		$	7,770,041

The following table details activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2012:

September 30, 2012	Real Estate		Business Loans		Consumer		Total
Beginning Balance, January 1, 2012	$	4,176,475	$	1,672,467	$	832,470	$	6,681,412
Provision for possible loan losses		1,204,314		15,456		108,691		1,328,461
Chargeoffs		511,610		55,260		200,144		767,014
Recoveries		49,440		50,332		106,801		206,573
Net Chargeoffs		462,170		4,928		93,343		560,441
Ending Balance, September 30, 2012	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,686,862	$	57,325	$	—	$	1,744,187
Loans collectively evaluated for impairment		3,231,757		1,625,670		847,818		5,705,245
Ending Balance, September 30, 2012	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432

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The Corporation’s recorded investment in loans as of September 30, 2013 and December 31, 2012 related to each balance in the allowance for possible loan losses by portfolio segment and disaggregated on the basis of the Corporation’s impairment methodology was as follows (in thousands):

September 30, 2013	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	11,444	$	2,142	$	120	$	13,706
Loans collectively evaluated for general impairment		292,152		45,974		26,579		364,705
	$	303,596	$	48,116	$	26,699	$	378,411
December 31, 2012	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	13,760	$	170	$	212	$	14,142
Loans collectively evaluated for general impairment		278,990		46,827		29,179		354,996
	$	292,750	$	46,997	$	29,391	$	369,138

Note 7. Recent Accounting Pronouncements

In February 2013, Financial Accounting Standards Board (“FASB”) issued an update to ASC 220, “Comprehensive Income,” (“ASC 220”) that requires a reporting entity to disclose information about reclassification adjustments from accumulated other comprehensive income in their financial statements on the face of the financial statement that presents comprehensive income or as a separate disclosure in the footnotes of the financial statements. This update to ASC 220 is effective prospectively for interim and annual reporting periods beginning after December 15, 2012, with early adoption permitted. The adoption of the update will impact disclosures only and has not had a material impact on the financial position or results of operations of the Corporation.

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Note 8. Fair Value of Financial Instruments

The fair value topic of the ASC establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. This topic clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. This topic also requires disclosure about how fair value was determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities;
Level 2	Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or
Level 3	Unobservable inputs, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2013:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Securities available for sale
Obligations of U. S.
Government Agencies	$	—	$	288,469,835	$	—	$	288,469,835
Mortgage-backed securities		—		18,203,673		—		18,203,673
State, county and municipal obligations		—		99,454,813		—		99,454,813
Other investments		—		—		2,675,865		2,675,865
Total	$	—	$	406,128,321	$	2,675,865	$	408,804,186

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The following table presents assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2012:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Securities available for sale
Obligations of U. S.
Government Agencies	$	—	$	269,110,901	$	—	$	269,110,901
Mortgage-backed securities		—		38,421,301		—		38,421,301
State, county and municipal obligations		—		110,569,360		—		110,569,360
Other investments		—		—		2,806,253		2,806,253
Total	$	—	$	418,101,562	$	2,806,253	$	420,907,815

The following table reports the activity for 2013 in assets measured at fair value on a recurring basis using significant unobservable inputs.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Structured Financial Product
Balance at January 1, 2013	$	2,806,253
Unrealized losses included in other comprehensive income		(130,388	)
Balance at September 30, 2013	$	2,675,865

The Corporation recorded no gains or losses in earnings for the period that were attributable to the change in unrealized gains or losses relating to assets still held at the reporting date.

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For assets measured at fair value on a nonrecurring basis during 2013 that were still held in the balance sheet at September 30, 2013, the following table provides the hierarchy level and the fair value of the related assets:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Impaired loans	$	—	$	—	$	9,306,326	$	9,306,326
Other real estate owned		—		—		552,567		552,567
Total	$	—	$	—	$	9,858,893	$	9,858,893

For assets measured at fair value on a nonrecurring basis during 2012 that were still held in the balance sheet at December 31, 2012, the following table provides the hierarchy level and the fair value of the related assets:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Impaired loans	$	—	$	—	$	4,099,031	$	4,099,031
Other real estate owned		—		—		2,469,110		2,469,110
Total	$	—	$	—	$	6,568,141	$	6,568,141

Impaired loans with a carrying value of $11,145,743 and $5,192,258 had an allocated allowance for loan losses of $1,839,418 and $1,093,227 at September 30, 2013 and December 31, 2012, respectively. The allocated allowance is based on the carrying value of the impaired loan and the fair value of the underlying collateral less estimated costs to sell.

Other real estate owned (“OREO”) acquired during the nine-month period ended September 30, 2013, and recorded at fair value, less costs to sell, was $946,436, of which $393,869 was acquired and sold during this period. There have been no writedowns during the period on OREO previously acquired and still held. OREO acquired during 2012 and recorded at fair value, less costs to sell, was $1,697,450. Additional writedowns during 2012 on OREO acquired in previous years was $309,797 on 5 properties valued at $1,081,457.

The financial instruments topic of the ASC requires disclosure of financial instruments’ fair values, as well as the methodology and significant assumptions used in estimating fair values. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the

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assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. The financial instruments topic of the ASC excludes certain financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Corporation and may not be indicative of amounts that might ultimately be realized upon disposition or settlement of those assets and liabilities.

The following represents the carrying value and estimated fair value of the Corporation’s financial instruments at September 30, 2013, and December 31, 2012:

			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant		Total
	Carrying		Identical		Observable		Unobservable		Fair
September 30, 2013	Value		Assets		Inputs		Inputs		Value
			(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and due from banks	$	19,089,862	$	19,089,862	$	—	$	—	$	19,089,862
Interest bearing deposits with banks		721,055		721,055		—		—		721,055
Securities available-for-sale		408,804,186		—		406,128,321		2,675,865		408,804,186
Net loans		370,201,335		—		—		372,098,722		372,098,722
Financial liabilities
Deposits	$	648,691,190	$	413,452,165	$	—	$	235,416,092	$	648,868,257
Federal Home Loan Bank advances		55,500,000		—		—		56,641,317		56,641,317
Securities Sold under Agreement to Repurchase		76,357,769		76,357,769		—		—		76,357,769

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			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant		Total
	Carrying		Identical		Observable		Unobservable		Fair
December 31, 2012	Value		Assets		Inputs		Inputs		Value
			(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and due from banks	$	21,561,288	$	21,561,288	$	—	$	—	$	21,561,288
Interest bearing deposits with banks		16,228,747		16,228,747		—		—		16,228,747
Securities available-for-sale		420,907,815		—		418,101,562		2,806,253		420,907,815
Net loans		361,936,495		—		—		362,114,991		362,114,991
Financial liabilities
Deposits	$	642,549,338	$	394,298,501	$	—	$	248,464,899	$	642,763,400
Federal Home Loan Bank advances		68,500,000		—		—		70,844,530		70,844,530
Securities Sold under Agreement to Repurchase		73,306,765		73,306,765		—		—		73,306,765

The fair value estimates, methods and assumptions used by the Corporation in estimating its fair value disclosures for financial statements were as follows:

Cash and Due from Banks and Interest Bearing Deposits with Banks

The carrying amounts reported in the balance sheet for these instruments approximate fair value because of their immediate and shorter-term maturities, which are considered to be three months or less when purchased.

Securities Available-for-Sale

Fair values for investment securities are based on quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments (Level 2). When neither quoted prices nor comparable instruments are available, unobservable inputs are needed to form an expected future cash flow analysis to establish fair values (Level 3).

The Corporation owns certain beneficial interests in one collateralized debt obligation secured by community bank trust preferred securities. These interests do not trade in a liquid market, and therefore, market quotes are not a reliable indicator of their ultimate realizability. The Corporation utilizes a discounted cash flow model using inputs of (1) market yields of trust-preferred securities as the discount rate and (2) expected cash flows which are estimated using assumptions related to defaults, deferrals and prepayments to determine the fair values of these beneficial interests. Many of the factors that adjust the timing and extent of cash flows are based on judgment and not directly observable in the markets. Therefore, these fair values are classified as Level 3 valuations for accounting and disclosure purposes. Since observable transactions in

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these securities are extremely rare, the Corporation uses assumptions that a market participant would use in valuing these instruments. These assumptions primarily include cash flow estimates and market discount rates. The cash flow estimates are sensitive to the assumptions related to the ability of the issuers to pay the underlying trust preferred securities according to their terms. The market discount rates depend on transactions, which are rare given the lack of interest of investors in these types of beneficial interests.

Net Loans

For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values for other loans (i.e., commercial real estate and rental property mortgage loans, commercial and industrial loans, financial institution loans, and agricultural loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

Deposits

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

Federal Home Loan Bank (FHLB) Borrowings

The fair value of FHLB advances is based on a discounted cash flow analysis.

Securities Sold Under Agreement to Repurchase

Due to the short term nature of these instruments, which is generally three months or less, the carrying amount is equal to the fair value.

Off-Balance Sheet Instruments

The fair value of commitments to extend credit and letters of credit are estimated using fees currently charged to enter into similar agreements. The fees associated with these financial instruments are not material.

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CITIZENS HOLDING COMPANY

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD LOOKING STATEMENTS

In addition to historical information, this Quarterly Report contains statements that constitute forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are based on management’s beliefs, plans, expectations and assumptions and on information currently available to management. The words “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate” and similar expressions used in this Quarterly Report that do not relate to historical facts are intended to identify forward-looking statements. These statements appear in a number of places in this Quarterly Report, including, but not limited to, statements found in Item 1, “Notes to Consolidated Financial Statements” and in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Corporation notes that a variety of factors could cause the actual results or experience to differ materially from the anticipated results or other expectations described or implied by such forward-looking statements. The risks and uncertainties that may affect the operation, performance, development and results of the Corporation’s business include, but are not limited to, the following: (a) the risk of adverse changes in business conditions in the banking industry generally and in the specific markets in which the Corporation operates; (b) changes in the legislative and regulatory environment that negatively impact the Corporation through increased operating expenses; (c) increased competition from other financial institutions; (d) the impact of technological advances; (e) expectations about the movement of interest rates, including actions that may be taken by the Federal Reserve Board in response to changing economic conditions; (f) changes in asset quality and loan demand; (g) expectations about overall economic strength and the performance of the economies in the Corporation’s market area; and (h) other risks detailed from time to time in the Corporation’s filings with the Securities and Exchange Commission. The Corporation does not undertake any obligation to update or revise any forward-looking statements subsequent to the date on which they are made.

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Management’s discussion and analysis is intended to provide greater insight into the results of operations and the financial condition of Citizens Holding Company and its wholly owned subsidiary, The Citizens Bank of Philadelphia (the “Bank,” and collectively with Citizens Holding Company, the “Corporation”). The following discussion should be read in conjunction with the consolidated financial statements and notes appearing elsewhere in this Quarterly Report.

LIQUIDITY

The Corporation has an asset and liability management program that assists management in maintaining net interest margins during times of both rising and falling interest rates and in maintaining sufficient liquidity. A measurement of liquidity is the ratio of net deposits and short-term liabilities divided by the sum of net cash, short-term investments and marketable assets. This measurement for liquidity of the Corporation at September 30, 2013, was 38.71% and at December 31, 2012, was 44.74%. Liquidity decreased due to a decrease in short term marketable assets and an increase in core deposits at September 30, 2013. Despite this decrease, management believes it maintains adequate liquidity for the Corporation’s current needs.

The Corporation’s primary source of liquidity is customer deposits, which were $648,691,190 at September 30, 2013, and $642,549,338 at December 31, 2012. Other sources of liquidity include investment securities, the Corporation’s line of credit with the Federal Home Loan Bank (“FHLB”) and federal funds lines with correspondent banks. The Corporation had $408,804,186 invested in investment securities at September 30, 2013, and $420,907,815 at December 31, 2012. The Corporation also had $721,055 in interest bearing deposits at other banks at September 30, 2013 and $16,228,747 at December 31, 2012. The decrease in interest bearing deposits was the result of funds being invested in higher yielding securities. The Corporation had secured and unsecured federal funds lines with correspondent banks in the amount of $50,000,000 at September 30, 2013 and $37,500,000 at December 31, 2012. In addition, the Corporation has the ability to draw on its line of credit with the FHLB. At September 30, 2013, the Corporation had unused and available $85,462,731 of its line of credit with the FHLB and at December 31, 2012, the Corporation had unused and available $96,139,520 of its line of credit with the FHLB. The decrease in the amount available under the Corporation’s line of credit with the FHLB from the end of 2012 to September 30, 2013, was the result of a reduction in the amount of loans eligible for the collateral pool partially offset by a reduction in the amount of advances outstanding. The Corporation had $13,200,000 in federal funds purchased as of September 30, 2013 and $0 at December 31, 2012. The Corporation usually purchases funds from correspondent banks on a temporary basis to meet short term funding needs.

When the Corporation has more funds than it needs for its reserve requirements or short-term liquidity needs, the Corporation increases its investment portfolio, increases the balances in interest bearing due from accounts or sells federal funds. It is management’s policy to maintain an adequate portion of its portfolio of assets and liabilities on a short-term basis to insure rate flexibility and to meet loan funding and liquidity needs. When deposits decline or do not grow sufficiently to fund loan demand, management will seek funding either through federal funds purchased or advances from the FHLB.

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CAPITAL RESOURCES

The total stockholders’ equity was $68,780,453 at September 30, 2013, as compared to $88,868,830 at December 31, 2012. The reason for the decrease in stockholders’ equity was the decrease in the accumulated other comprehensive income brought about by the investment securities market value adjustment. The market value decrease was due to general market conditions, specifically the increase in medium term interest rates, which caused a decrease in the market price of the investment portfolio. This decrease was partially offset by the increase in the amount of earnings in excess of dividends paid.

Cash dividends in the amount of $3,213,945, or $0.66 per share, have been paid as of the end of the quarter ended September 30, 2013.

Quantitative measures established by federal regulations to ensure capital adequacy require the Corporation to maintain minimum amounts and ratios of Total and Tier 1 capital (primarily common stock and retained earnings, less goodwill) to risk weighted assets, and of Tier 1 capital to average assets. Management believes that as of September 30, 2013, the Corporation meets all capital adequacy requirements to which it is subject.

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Actions Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2013
Total Capital     (to Risk-Weighted Assets)	$	89,635,598		17.78	%	$	40,340,511		>8.00	%	$	50,425,639		>10.00	%
Tier 1 Capital     (to Risk-Weighted Assets)		83,314,284		16.52	%		20,170,256		>4.00	%		30,255,384		>6.00	%
Tier 1 Capital     ( to Average Assets)		83,314,284		9.61	%		34,662,939		>4.00	%		43,328,673		>5.00	%

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RESULTS OF OPERATIONS

The following table sets forth for the periods indicated, certain items in the consolidated statements of income of the Corporation and the related changes between those periods:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2013		2012		2013		2012
Interest Income, including fees	$	8,078,720	$	8,275,350	$	24,057,286	$	26,177,508
Interest Expense		825,726		1,397,066		3,243,034		4,364,908
Net Interest Income		7,252,994		6,878,284		20,814,252		21,812,600
Provision for Loan Losses		1,079,838		462,684		1,828,942		1,328,461
Net Interest Income after
Provision for Loan Losses		6,173,156		6,415,600		18,985,310		20,484,139
Other Income		2,183,527		1,840,565		5,793,388		5,087,320
Other Expense		5,850,243		6,272,876		18,554,438		19,357,144
Income Before Provision For
Income Taxes		2,506,440		1,983,289		6,224,260		6,214,315
Provision for Income Taxes		496,977		354,247		1,196,607		1,170,509
Net Income	$	2,009,463	$	1,629,042	$	5,027,653	$	5,043,806
Net Income Per share—Basic	$	0.41	$	0.34	$	1.03	$	1.04
Net Income Per Share-Diluted	$	0.41	$	0.33	$	1.03	$	1.04

See Note 3 to the Corporation’s Consolidated Financial Statements for an explanation regarding the Corporation’s calculation of Net Income Per Share—basic and—diluted.

Annualized return on average equity (“ROE”) was 10.79% for the three months ended September 30, 2013, and 7.38% for the corresponding period in 2012. For the nine months ended September 30, 2013, ROE was 8.11% compared to 7.62% for the nine months ended September 30, 2012. In both instances, the increase in ROE was caused by an increase in non-interest income.

The book value per share decreased to $14.12 at September 30, 2013, compared to $18.28 at December 31, 2012. The decrease in book value per share reflects the decrease in other comprehensive income due to the decrease in fair value of the Corporation’s investment securities offset by the amount of earnings in excess of dividends. Average assets for the nine months ended September 30, 2013, were $883,456,674 compared to $842,455,950 for the year ended December 31, 2012.

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NET INTEREST INCOME / NET INTEREST MARGIN

One component of the Corporation’s earnings is net interest income, which is the difference between the interest and fees earned on loans and investments and the interest paid for deposits and borrowed funds. The net interest margin is net interest income expressed as a percentage of average earning assets.

The annualized net interest margin was 3.72% for the third quarter of 2013 compared to 3.74% for the corresponding period of 2012. For the nine months ended September 30, 2013, annualized net interest margin was 3.57% compared to 4.00% for the nine months ended September 30, 2012. The decrease in net interest margin from 2012 to 2013 is the result of a decrease in yields on earning assets exceeding the decrease in rates paid on deposits and borrowed funds, offset partially by an increase in average earning assets, as detailed below. Earning assets averaged $783,719,225 for the three months ended September 30, 2013. This represents an increase of $4,689,757, or 0.6%, over average earning assets of $779,029,468 for the three-month period ended September 30, 2012. Earning assets averaged $800,955,100 for the nine months ended September 30, 2013. This represents an increase of $30,712,120, or 4.0% over average earning assets of $770,242,980 for the nine months ended September 30, 2012. The increase in average earning assets for the three and nine months ended September 30, 2013, is the result of an increase in investment securities offset partially by a decrease in loans due to the declining loan demand due to current local, national and international economic conditions.

Interest bearing deposits averaged $526,832,671 for the three months ended September 30, 2013. This represents an increase of $17,866,269, or 3.5%, from the average of interest bearing deposits of $508,966,402 for the three-month period ended September 30, 2012. This was due, in large part, to an increase in interest-bearing NOW and money market accounts partially offset by a decrease in certificates of deposit.

Other borrowed funds averaged $139,036,476 for the three months ended September 30, 2013. This represents an increase of $6,999,635, or 5.3%, over the other borrowed funds of $132,036,841 for the three-month period ended September 30, 2012. This increase in other borrowed funds was due to a $24,885,631 increase in the securities sold under agreement to repurchase, a $79,202 decrease in the Agribusiness Enterprise Loan Liability, a $6,856,250 increase in Federal Funds Purchased and a decrease in the FHLB advances of $24,663,044 for the three-month period ended September 30, 2013, when compared to the three-month period ended September 30, 2012.

Interest bearing deposits averaged $533,677,940 for the nine months ended September 30, 2013. This represents an increase of $54,851,064, or 11.5%, from the average of interest bearing deposits of $478,826,876 for the nine-month period ended September 30, 2012. This was due, in large part, to an increase in interest-bearing NOW, savings and money market accounts partially offset by a decrease in certificates of deposit.

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Other borrowed funds averaged $140,849,791 for the nine months ended September 30, 2013. This represents a decrease of $18,856,778, or 11.8%, over the other borrowed funds of $159,706,569 for the nine-month period ended September 30, 2012. This decrease in other borrowed funds was due to a $8,059,137 decrease in the securities sold under agreement to repurchase, a $52,130 decrease in the Agribusiness Enterprise Loan Liability, a $1,741,120 increase in Federal Funds Purchased and a decrease in the FHLB advances of $12,486,631 for the nine-month period ended September 30, 2013, when compared to the nine-month period ended September 30, 2012.

Net interest income was $7,252,994 for the three-month period ended September 30, 2013, an increase of $374,710 from $6,878,284 for the three-month period ended September 30, 2012, primarily due to an increase in volume partially offset by a decrease in rate. The changes in volume in earning assets and in deposits and in borrowed funds are discussed above. As to changes in rate in the three-month period ended September 30, 2013, the yield on earning assets decreased more than the rates paid on deposits and borrowed funds decreased from the same period in 2012. The yield on all interest bearing assets decreased 34 basis points to 4.13% in the third quarter of 2013 from 4.47% for the same period in 2012. At the same time, the rate paid on all interest bearing liabilities for the third quarter of 2013 decreased by 37 basis points to 0.50% from 0.87% in the same period of 2012. As longer term interest bearing assets and liabilities mature and reprice, management believes that the yields on interest bearing assets and rates on interest bearing liabilities will both increase.

Net interest income was $20,814,252 for the nine months ended September 30, 2013, a decrease of $998,348 from the $21,812,600 for the nine months ended September 30, 2012, primarily due to changes in both rate and volume. The changes in volume in earning assets and in deposits and in borrowed funds are discussed above. As to changes in rate in the nine-month period ended September 30, 2013, the yield on earning assets decreased more than the rates paid on deposits and borrowed funds as compared to the changes in rates and yields in the same period of 2012. The yield on all interest bearing assets decreased 66 basis points to 4.10% in the first nine months of 2013 from 4.76% for the same period in 2012. At the same time, the rate paid on all interest bearing liabilities for the first nine months of 2013 decreased 27 basis points to 0.64% from 0.91% in the same period in 2012. As longer term interest bearing assets and liabilities mature and reprice, management believes that the yields on interest bearing assets and rates on interest bearing liabilities will both increase.

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The following table shows the interest and fees and corresponding yields for loans only.

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2013			2012			2013			2012
Interest and Fees	$	5,150,046		$	5,633,206		$	15,469,869		$	17,643,633
Average Gross Loans		371,001,070			378,253,471			368,966,505			385,259,136
Annualized Yield		5.55	%		5.96	%		5.59	%		6.11	%

The decrease in interest rates in the three-month period ended September 30, 2013, reflects the decrease in all loan interest rates for both new and refinanced loans in the period.

CREDIT LOSS EXPERIENCE

As a natural corollary to the Corporation’s lending activities, some loan losses are to be expected. The risk of loss varies with the type of loan being made and the overall creditworthiness of the borrower over the term of the loan. The degree of perceived risk is taken into account in establishing the structure of, and interest rates and security for, specific loans and for various types of loans. The Corporation attempts to minimize its credit risk exposure by use of thorough loan application and approval procedures.

The Corporation maintains a program of systematic review of its existing loans. Loans are graded for their overall quality. Those loans, which management determines require further monitoring and supervision, are segregated and reviewed on a regular basis. Significant problem loans are reviewed monthly by the Corporation’s Board of Directors.

The Corporation charges off that portion of any loan that management has determined to be a loss. A loan is generally considered by management to represent a loss in whole or in part when exposure beyond the collateral value is apparent, servicing of the unsecured portion has been discontinued or collection is not anticipated based on the borrower’s financial condition. The general economic conditions in the borrower’s industry influence this determination. The principal amount of any loan that is declared a loss is charged against the Corporation’s allowance for loan losses.

The Corporation’s allowance for loan losses is designed to provide for loan losses that can be reasonably anticipated. The allowance for loan losses is established through charges to operating expenses in the form of provisions for loan losses. Actual loan losses or recoveries are charged or credited to the allowance for loan losses. Management determines the amount of the allowance. Among the factors considered in determining the allowance for loan losses are the current financial condition of the Corporation’s borrowers and the value of security, if any, for their loans. Estimates of future economic conditions and their impact on various industries and individual borrowers are also taken into consideration, as are the Corporation’s historical loan loss experience and reports of banking regulatory authorities. As these estimates, factors and evaluations are primarily judgmental, no assurance can be given as to whether the Corporation will sustain loan losses in excess or below its allowance or that subsequent evaluation of the loan portfolio may not require material increases or decreases in such allowance.

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The following table summarizes the Corporation’s allowance for loan losses for the dates indicated:

	Quarter Ended September 30, 2013			Year Ended December 31, 2012			Amount of Increase (Decrease)			Percent of Increase (Decrease)
BALANCES:
Gross Loans	$	378,410,900		$	369,138,109		$	9,272,791			2.51	%
Allowance for Loan Losses		7,770,041			6,954,269			815,772			11.73	%
Nonaccrual Loans		13,705,877			14,141,887			(436,010	)		-3.08	%
Ratios:
Allowance for loan losses to gross loans		2.05	%		1.88	%
Net loans charged off to allowance for loan losses		13.04	%		18.30	%

The provision for loan losses for the three months ended September 30, 2013, was $1,079,838, an increase of $617,154 from the $462,684 provision for the same period in 2012. The provision for loan losses was $1,828,942 for the nine-month period ended September 30, 2013, compared to a provision of $1,328,461 for the nine months ended September 30, 2012. The change in our loan loss provisions for the three- and nine-month periods is a result of a decrease in loan losses recorded for the respective periods and management’s assessment of inherent loss in the loan portfolio, including the impact caused by current local, national and international economic conditions. The Corporation’s model used to calculate the provision is based on the percentage of historical charge-offs applied to the current loan balances by loan segment and specific reserves applied to certain impaired loans. Nonaccrual loans decreased during this period due to payments received in excess of the amount of new loans being added to the list.

For the three months ended September 30, 2013, net loan losses charged to the allowance for loan losses totaled $112,840, a decrease of $111,129 from the $223,969 charged off in the same period in 2012. For the nine months ended September 30, 2013, net loan losses charged to the allowance for loan losses totaled $1,013,170, an increase of $452,729 from the $560,441 charged off in the same period in 2012. This increase was due to an overall increase in the number of charge offs in 2013 when compared to the same period in 2012 and not the result of any one loan segment.

Management reviews quarterly with the Board of Directors the adequacy of the allowance for loan losses. The loan loss provision is adjusted when specific items reflect a need for such an adjustment. Management believes that there were no material loan losses during the first nine months of 2013 that have not been charged off. Management also believes that the Corporation’s allowance will be adequate to absorb probable losses inherent in the Corporation’s loan portfolio. However, in light of overall economic conditions in the Corporation’s geographic area, the nation and internationally, as a whole, it is possible that additional provisions for loan loss may be required.

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OTHER INCOME

Other income includes service charges on deposit accounts, wire transfer fees, safe deposit box rentals and other revenue not derived from interest on earning assets. Other income for the three months ended September 30, 2013 was $2,183,527, an increase of $342,962, or 18.6%, from the same period in 2012. Service charges on deposit accounts increased by $62,443, or 6.5%, to $1,028,592 in the three months ended September 30, 2013, compared to $966,149 for the same period in 2012. Other service charges and fees increased by $40,724, or 8.0%, in the three months ended September 30, 2013, compared to the same period in 2012. The increase in fee income was the result of an increase in demand for these services and not a direct result of fee changes.

Other income for the nine months ended September 30, 2013 was $5,793,388, an increase of $706,068, or 13.9%, from the same period in 2012. Service charges on deposit accounts increased by $121,672, or 4.5%, to $2,833,391 in the nine months ended September 30, 2013, compared to $2,711,719 for the same period in 2012. Other service charges and fees increased by $101,168, or 7.4%, in the nine months ended September 30, 2013, compared to the same period in 2012. The increase in fee income was the result of an increase in the demand for these services and a small increase in certain fees.

The following is a detail of the other major income classifications that are included in Other Income on the income statement:

	Three months				Nine months
	ended September 30,				ended September 30,
Other Income	2013		2012		2013		2012
BOLI Insurance	$	120,000	$	120,000	$	360,000	$	360,000
Mortgage Loan Origination Income		53,471		124,302		284,308		341,314
Other Income		162,564		114,699		415,621		255,050
Total Other Income	$	336,035	$	359,001	$	1,059,929	$	956,364

OTHER EXPENSES

Other expenses include salaries and employee benefits, occupancy and equipment, and other operating expenses. Aggregate non-interest expenses for the three-month period ended September 30, 2013 and 2012 were $5,850,243 and $6,272,876, respectively, a decrease of $422,633, or 6.7%, from 2012 to 2013. Salaries and benefits decreased to $3,280,877 for the three months ended September 30, 2013, from $3,414,811 for the same period in 2012. This represents a decrease of $133,934, or 3.9%. This decrease was the result of decreases in the cost of employee benefits paid by the Corporation and a reduction in the number of employees. Occupancy expense decreased by $3,686, or 0.3%, to $1,144,231 for the three months ended September 30, 2013, when compared to the same period of 2012. This decrease is due in part to a decrease in office and equipment rental. Other operating expenses decreased by $285,013 from 2013 to 2012. This decrease is due mainly to lower regulatory and related costs. A detail of the major expense classifications is set forth below.

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Total non-interest expenses for the nine-month period ended September 30, 2013 and 2012 were $18,554,438 and $19,357,144, respectively, a decrease of $802,706, or 4.1%, from 2012 to 2013. Salaries and benefits decreased to $9,923,364 for the nine months ended September 30, 2013, from $10,448,471 for the same period in 2012. This represents a decrease of $525,107, or 5.0%. This decrease was the result of a reduction in the number of employees and a reduction in employee benefits. Occupancy expense increased $90,855, or 2.8%, to $3,367,937 in the nine months ended September 30, 2013 when compared to the same period in 2012. This increase is due in part to an increase in office and equipment rental, property taxes and service costs. Other operating expenses decreased by $368,454 from 2012 to 2013. This decrease is due mainly to lower regulatory and related costs. A detail of the major expense classifications is set forth below.

The following is a detail of the major expense classifications that make up the other operating expense line item in the income statement:

	Three months					Nine months
	ended September 30,					ended September 30,
Other Operating Expense	2013			2012		2013		2012
Intangible Amortization	$	—		$	—	$	—	$	76,955
Advertising		167,778			147,144		465,134		480,798
Office Supplies		122,793			114,656		357,155		323,364
Legal and Audit Fees		112,936			120,751		317,071		347,530
Telephone expense		114,494			110,353		355,016		322,019
Postage and Freight		100,382			98,489		322,533		328,522
Loan Collection Expense		104,508			81,878		414,740		311,376
Other Losses		68,889			4,104		247,407		33,502
Regulatory and related expense		(123,460	)		320,416		218,638		948,832
Debit Card/ATM expense		170,542			210,180		524,200		607,764
Travel and Convention		39,157			35,968		153,764		141,179
Other expenses		547,116			466,209		1,887,479		1,709,750
Total Other Expense	$	1,425,135		$	1,710,148	$	5,263,137	$	5,631,591

The Corporation’s efficiency ratio for the three months ended September 30, 2013, was 62.88% compared to the 71.53% for the same period in 2012. For the nine months ended September 30, 2013 and 2012, the Corporation’s efficiency ratio was 68.49% and 70.16%, respectively. The efficiency ratio is the ratio of non-interest expenses divided by the sum of net interest income (on a fully tax equivalent basis) and non-interest income.

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BALANCE SHEET ANALYSIS

	September 30, 2013		December 31, 2012		Amount of Increase (Decrease)			Percent of Increase (Decrease)
Cash and Due From Banks	$	19,089,862	$	21,561,288	$	(2,471,426	)		-11.46	%
Interest Bearing deposits with Other Banks		721,055		16,228,747		(15,507,692	)		-95.56	%
Investment Securities		408,804,186		420,907,815		(12,103,629	)		-2.88	%
Loans, net		370,201,335		361,936,495		8,264,840			2.28	%
Total Assets		871,588,286		880,839,898		(9,251,612	)		-1.05	%
Total Deposits		648,691,190		642,549,338		6,141,852			0.96	%
Total Stockholders’ Equity		68,780,453		88,868,830		(20,088,377	)		-22.60	%

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash, balances at correspondent banks and items in process of collection. The balance at September 30, 2013 was $19,089,862, a decrease of $2,471,426 from the balance of $21,561,288 at December 31, 2012, due to a decrease in the balances at correspondent banks due to an increase in the amount of the month ending cash letter.

PREMISES AND EQUIPMENT

During the period ended September 30, 2013, premises and equipment decreased by $601,737, or 3.1%, to $18,823,555 when compared to $19,425,292 at December 31, 2012. The decrease was due to the amount of depreciation exceeding the addition of property and equipment in the normal course of business.

INVESTMENT SECURITIES

The investment securities portfolio primarily consists of United States agency debentures, mortgage-backed securities and obligations of states, counties and municipal. Investments at September 30, 2013, decreased $12,103,629, or 2.9%, to $408,804,186 from $420,907,815 at December 31, 2012. This decrease is due to changes in the market value of the securities portfolio offset by purchases of investment securities.

LOANS

The loan balance increased by $8,264,840 during the nine months ended September 30, 2013, to $370,201,335 from $361,936,495 at December 31, 2012. Loan demand, especially in business loan and consumer loan categories, remained weak and competition for available loans was great during the first nine months of 2013. No material changes were made to the loan products offered by the Corporation during this period.

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DEPOSITS

The following table shows the balance and percentage change in the various deposits:

	September 30, 2013		December 31, 2012		Amount of Increase (Decrease)			Percent of Increase (Decrease)
Noninterest-Bearing Deposits	$	121,404,926	$	119,946,574	$	1,458,352			1.22	%
Interest-Bearing Deposits		239,068,093		228,111,275		10,956,818			4.80	%
Savings Deposits		52,979,146		46,240,652		6,738,494			14.57	%
Certificates of Deposit		235,239,025		248,250,837		(13,011,812	)		-5.24	%
Total Deposits	$	648,691,190	$	642,549,338	$	6,141,852			0.96	%

Interest-bearing deposits, noninterest-bearing deposits and savings increased while certificates of deposit decreased during the nine months ended September 30, 2013. Management continually monitors the interest rates on loan and deposit products to ensure that the Corporation is in line with the rates dictated by the market and our asset and liability management. These rate adjustments impact deposit balances.

OFF-BALANCE SHEET ARRANGEMENTS

Refer to Note 2 to the consolidated financial statements included in this quarterly report for a discussion of the nature and extent of the Corporation’s off-balance sheet arrangements, which consist of commitments to fund loans and letters of credit.

CONTRACTUAL OBLIGATIONS

There have been no material changes outside of the ordinary course of the Corporation’s business to the contractual obligations set forth in Note 12 to the Corporation’s financial statements contained in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The following discussion outlines specific risks that could affect the Corporation’s ability to compete, change the Corporation’s risk profile or eventually impact the Corporation’s financial results. The risks the Corporation faces generally are similar to those experienced, to varying degrees, by all financial services companies.

The Corporation’s strategies and its management’s ability to react to changing competitive and economic environments have historically enabled the Corporation to compete effectively and manage risks to acceptable levels. The Corporation has outlined potential risk factors below that it presently believe could be important; however, other risks may prove to be important in the future. New risks may emerge at any time and the Corporation cannot predict with certainty all potential developments that could affect the Corporation’s financial performance. The following discussion highlights potential risks, which could intensify over time or shift dynamically in a way that might change the Corporation’s risk profile.

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Competition Risks

The market in which the Corporation competes is saturated with community banks seeking to provide a service-oriented banking experience to individuals and businesses compared with what the Corporation believes is the more rigid and less friendly environment found in large banks. This requires the Corporation to offer most, if not all, of the products and conveniences that are offered by the larger banks with a service differentiation. In doing so, it is imperative that the Corporation identify the lines of business that the Corporation can excel in, prudently utilize the Corporation’s available capital to acquire the people and platforms required thereof, and execute on the strategy.

Credit Risks

Like all lenders, the Corporation faces the risk that the Corporation’s customers may not repay their loans and that the realizable value of collateral may be insufficient to avoid a loss of principal. In the Corporation’s business, some level of credit loss is unavoidable and overall levels of credit loss can vary over time. The Corporation’s ability to manage credit risks depends primarily upon the Corporation’s ability to assess the creditworthiness of customers and the value of collateral, including real estate. The Corporation controls credit risk by diversifying the Corporation’s loan portfolio and managing its composition, and by recording and managing an allowance for expected loan losses in accordance with applicable accounting rules. At the end of September 30, 2013, the Corporation had approximately $7.8 million of available reserves to cover such losses. The models and approaches the Corporation uses to originate and manage loans are regularly updated to take into account changes in the competitive environment, in real estate prices and other collateral values, and in the economy, among other things based on the Corporation’s experience originating loans and servicing loan portfolios.

Financing, Funding and Liquidity Risks

One of the most important aspects of management’s efforts to sustain long-term profitability for the Corporation is the management of interest rate risk. Management’s goal is to maximize net interest income within acceptable levels of interest-rate risk and liquidity.

The Corporation’s assets and liabilities are principally financial in nature and the resulting earnings thereon are subject to significant variability due to the timing and extent to which the Corporation can reprice the yields on interest-earning assets and the costs of interest bearing liabilities as a result of changes in market interest rates. Interest rates in the financial markets affect the Corporation’s decisions on pricing its assets and liabilities which impacts net interest income, an important cash flow stream for the Corporation. As a result, a substantial part of the Corporation’s risk-management activities are devoted to managing interest-rate risk. Currently, the Corporation does not have any significant risks related to foreign exchange, commodities or equity risk exposures.

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Interest Rate and Yield Curve Risks

A significant portion of the Corporation’s business involves borrowing and lending money. Accordingly, changes in interest rates directly impact the Corporation’s revenues and expenses, and potentially could compress the Corporation’s net interest margin. The Corporation actively manages its balance sheet to control the risks of a reduction in net interest margin brought about by ordinary fluctuations in rates.

Like all financial services companies, the Corporation faces the risks of abnormalities in the yield curve. The yield curve simply shows the interest rates applicable to short and long term debt. The curve is steep when short-term rates are much lower than long-term rates: it is flat when short-term rates are equal, or nearly equal, to long-term rates: and it is inverted when short-term rates exceed long-term rates. Historically, the yield curve is positively sloped. A flat or inverted yield curve tends to decrease net interest margin, as funding costs increase relative to the yield on assets. Currently, the yield curve is positively sloped.

Regulatory and Legal Risks

The Corporation operates in a heavily regulated industry and therefore is subject to many banking, deposit, and consumer lending regulations in addition to the rules applicable to all companies publicly traded in the U.S. securities markets. Failure to comply with applicable regulations could result in financial, structural, and operational penalties. In addition, efforts to comply with applicable regulations may increase the Corporation’s costs and, or limit the Corporation’s ability to pursue certain business opportunities. Federal and state regulations significantly limit the types of activities in which the Corporation, as a financial institution, may engage. In addition, the Corporation is subject to a wide array of other regulations that govern other aspects of how the Corporation conducts business, such as in the areas of employment and intellectual property. Federal and state legislative and regulatory authorities occasionally consider changing these regulations or adopting new ones. Such actions could limit the amount of interest or fees the Corporation can charge, could restrict the Corporation’s ability to collect loans or realize on collateral or could materially affect us in other ways. Additional federal and state consumer protection regulations also could expand the privacy protections afforded to customers of financial institutions, restricting the Corporation’s ability to share or receive customer information and increasing the Corporation’s costs. In addition, changes in accounting rules can significantly affect how the Corporation records and reports assets, liabilities, revenues, expenses and earnings.

The Corporation also faces litigation risks from customers (individually or in class actions) and from federal or state regulators. Litigation is an unavoidable part of doing business, and the Corporation manages those risks through internal controls, personnel training, insurance, litigation management, the Corporation’s compliance and ethics processes and other means. However, the commencement, outcome and magnitude of litigation cannot be predicted or controlled with certainty.

39

Accounting Estimate Risks

The preparation of the Corporation’s consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make significant estimates that affect the financial statements. The Corporation’s most critical estimate is the level of the allowance for credit losses. However, other estimates occasionally become highly significant, especially in volatile situations such as litigation and other loss contingency matters. Estimates are made at specific points in time; as actual events unfold, estimates are adjusted accordingly. Due to the inherent nature of these estimates, it is possible that, at some time in the future, the Corporation may significantly increase the allowance for credit losses or sustain credit losses that are significantly higher than the provided allowance, or the Corporation may make some other adjustment that will differ materially from the estimates that the Corporation makes today.

Expense Control

Expenses and other costs directly affect the Corporation’s earnings. The Corporation’s ability to successfully manage expenses is important to its long-term profitability. Many factors can influence the amount of the Corporation’s expenses, as well as how quickly they grow. As the Corporation’s businesses change or expand, additional expenses can arise from asset purchases, structural reorganization evolving business strategies, and changing regulations, among other things. The Corporation manages expense growth and risk through a variety of means, including actual versus budget management, imposition of expense authorization, and procurement coordination and processes.

ITEM 4. CONTROLS AND PROCEDURES.

The management of the Corporation, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to the Corporation’s management as appropriate to allow timely decision regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer have concluded that such disclosure controls and procedures were effective as of September 30, 2013 (the end of the period covered by this Quarterly Report on Form 10-Q).

There were no changes to the Corporation’s internal control over financial reporting that occurred in the three months ended September 30, 2013, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

40

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS.

The Corporation is supplementing the risk factors that appear in Part I, Item 1A., “Risk Factors,” of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012, to include the following:

Changes in interest rates could make it difficult to maintain our current interest income spread and could result in reduced earnings.

Our earnings are largely derived from net interest income, which is interest income and fees earned on loans and investments, less interest paid on deposits and other borrowings. Interest rates are highly sensitive to many factors that are beyond the control of our management, such as general economic conditions and the policies of various governmental and regulatory authorities. An unanticipated rapid decrease or increase in interest rates could have an adverse effect on the spreads between the interest rates earned on assets and the rates of interest paid on liabilities, and therefore on the level of net interest income. Further, substantially higher interest rates generally reduce loan demand and may result in slower loan growth than previously experienced. Due to concerns regarding the federal debt ceiling, one credit rating agency has downgraded the credit rating of the federal government, and others may as well, which could result in increased interest rates generally. For the reasons set forth above, an increase in interest rates generally as a result of such a credit rating downgrade could adversely affect our net interest income levels, thereby resulting in reduced earnings, and reduce loan demand.

Recently adopted changes to capital requirements for bank holding companies and depository institutions may negatively impact the Corporation’s results of operations.

In July 2013, the Federal Reserve Board and the FDIC approved final rules that substantially amend the regulatory risk-based capital rules applicable to the Corporation. The final rules implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act.

Under these recently adopted rules, the leverage and risk-based capital ratios of bank holding companies may not be lower than the leverage and risk-based capital ratios for insured depository institutions. The final rules implementing the Basel III regulatory capital reforms will become effective as to the Corporation on January 1, 2015 and include new minimum risk-based capital and leverage ratios. Moreover, these rules refine the definition of what constitutes “capital” for purposes of calculating those ratios. The new minimum capital level requirements applicable to bank holding companies and banks subject to the rules are: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 risk-based capital ratio of 6% (increased from 4%); (iii) a total risk-based capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The rules also establish a “capital conservation buffer” of 2.5% (to be phased in over three years) above the new regulatory minimum capital ratios, and result in the following minimum ratios once the capital conservation buffer is fully phased in: (i) a common equity Tier 1 risk-based capital ratio of 7.0%, (ii) a Tier 1 risk-based capital ratio of 8.5%, and (iii) a total risk-based capital ratio of 10.5%. The capital conservation buffer requirement is to be

41

phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase each year until fully implemented in January 2019. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital levels fall below the buffer amounts. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.

The application of these more stringent capital requirements to the Corporation could, among other things, result in lower returns on invested capital, require the raising of additional capital, and result in regulatory actions if the Corporation was to be unable to comply with such requirements. Furthermore, the imposition of liquidity requirements in connection with the implementation of the final rules regarding Basel III could result in the Corporation having to lengthen the term of their funding, restructure their business models and/or increase their holdings of liquid assets. Implementation of changes to asset risk weightings for risk-based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy and could limit the Corporation’s ability to make distributions, including paying dividends or buying back shares.

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ITEM 6. EXHIBITS.

Exhibits
31(a)	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
31(b)	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
32(a)	Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350.
32(b)	Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350.
101	The following financial information from Citizens Holding Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2013, filed with the SEC on November 12, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Condition as of September 30, 2013 (Unaudited) and December 31, 2012; (ii) the Consolidated Statements of Income for the three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited); (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited); (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited); and (v) Notes to Consolidated Financial Statements, tagged as blocks of text (Unaudited).

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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.

CITIZENS HOLDING COMPANY

BY:	/s/ Greg L. McKee
	Greg L. McKee
	President and Chief Executive Officer
	(Principal Executive Officer)
BY:	/s/ Robert T. Smith Robert T. Smith
	Treasurer and Chief Financial Officer
	(Principal Financial Officer and Chief Accounting Officer)
	DATE: November 7, 2013

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EXHIBIT INDEX

Exhibit Number	Description of Exhibit
31(a)	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
31(b)	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32(a)	Certification of the Chief Executive Officer pursuant to 18 U.S.C. §1350.
32(b)	Certification of the Chief Financial Officer pursuant to 18 U.S.C. §1350.
101	The following financial information from Citizens Holding Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2013, filed with the SEC on November 12, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Condition as of September 30, 2013 (Unaudited) and December 31, 2012; (ii) the Consolidated Statements of Income for the three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited); (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited); (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited); and (v) Notes to Consolidated Financial Statements, tagged as blocks of text (Unaudited).

45

EX-31.A

EXHIBIT 31(a)

Certification of Chief Executive Officer

Pursuant to Rule 13a-14(a)/15d-14(a)

I, Greg L. McKee, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Citizens Holding Company;

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

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

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

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

(b) Designed such internal control over financial reporting, or caused such internal

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

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

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

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

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

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

Date: November 7, 2013

/s/ Greg L. McKee

Greg L. McKee

President and Chief Executive Officer

EX-31.B

EXHIBIT 31(b)

Certification of Chief Financial Officer

Pursuant to Rule 13a-14(a)/15d-14(a)

I, Robert T. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Citizens Holding Company;

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

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

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

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

(b) Designed such internal control over financial reporting, or caused such internal

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

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

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

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

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

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

Date: November 7, 2013

/s/ Robert T. Smith

Robert T. Smith

Treasurer and Chief Financial Officer

EX-32.A

EXHIBIT 32(a)

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. § 1350

In connection with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, of Citizens Holding Company (the “Company”), as filed with the Securities Exchange Commission on the date hereof (the “Quarterly Report”), I, Greg L. McKee, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2013	/s/ Greg L. McKee
	Greg L. McKee
	President and Chief Executive Officer

EX-32.B

EXHIBIT 32(b)

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. § 1350

In connection with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, of Citizens Holding Company (the “Company”), as filed with the Securities Exchange Commission on the date hereof (the “Quarterly Report”), I, Robert T. Smith, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2013	/s/ Robert T. Smith
	Robert T. Smith
	Treasurer and Chief Financial Officer

XML

Loans (Tables)

9 Months Ended

Sep. 30, 2013

Composition of Net Loans

The composition of net loans at September 30, 2013 and December 31, 2012 is as follows:

	September 30, 2013			December 31, 2012
	(In Thousands)
Real Estate:
Land Development and Construction	$	25,779		$	12,755
Farmland		29,674			31,663
1-4 Family Mortgages		107,794			115,837
Commercial Real Estate		140,349			132,495
Total Real Estate Loans		303,596			292,750
Business Loans:
Commercial and Industrial Loans		46,813			45,564
Farm Production and Other Farm Loans		1,303			1,433
Total Business Loans		48,116			46,997
Consumer Loans:
Credit Cards		1,039			1,050
Other Consumer Loans		25,660			28,341
Total Consumer Loans		26,699			29,391
Total Gross Loans		378,411			369,138
Unearned income		(440	)		(248	)
Allowance for loan losses		(7,770	)		(6,954	)
Loans, net	$	370,201		$	361,936

Period-End Non-Accrual Loans, Segregated by Class of Loans

Period-end, non-accrual loans, segregated by class of loans, were as follows:

	September 30, 2013		December 31, 2012
	(in thousands)
Real Estate:
Land Development and Construction	$	129	$	142
Farmland		397		1,087
1-4 Family Mortgages		1,634		2,356
Commercial Real Estate		9,284		10,175
Total Real Estate Loans		11,444		13,760
Business Loans:
Commercial and Industrial Loans		2,141		167
Farm Production and Other Farm Loans		1		3
Total Business Loans		2,142		170
Consumer Loans:
Other Consumer Loans		120		212
Total Consumer Loans		120		212
Total Non-Accrual Loans	$	13,706	$	14,142

Age Analysis of Past Due Loans, Segregated by Class of Loans

An aging analysis of past due loans, segregated by class of loans, as of September 30, 2013, was as follows (in thousands):

											Accruing
			Loans								Loans
	Loans		90 or more								90 or more
	30-89 Days		Days		Total Past		Current		Total		Days
	Past Due		Past Due		Due Loans		Loans		Loans		Past Due
Real Estate:
Land Development and Construction	$	294	$	—	$	294	$	25,485	$	25,779	$	—
Farmland		592		119		711		28,963		29,674		—
1-4 Family Mortgages		4,354		631		4,985		102,809		107,794		244
Commercial Real Estate		3,529		7,920		11,449		128,900		140,349		—
Total Real Estate Loans		8,769		8,670		17,439		286,157		303,596		244
Business Loans:
Commercial and Industrial Loans		233		3		236		46,577		46,813		—
Farm Production and Other Farm Loans		1		—		1		1,302		1,303		—
Total Business Loans		234		3		237		47,879		48,116		—
Consumer Loans:
Credit Cards		39		2		41		998		1,039		2
Other Consumer Loans		1,220		58		1,278		24,382		25,660		17
Total Consumer Loans		1,259		60		1,319		25,380		26,699		19
Total Loans	$	10,262	$	8,733	$	18,995	$	359,416	$	378,411	$	263

An aging analysis of past due loans, segregated by class of loans, as of December 31, 2012 was as follows (in thousands):

	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or more Days Past Due
Real Estate:
Land Development and Construction	$	2,588	$	—	$	2,588	$	10,167	$	12,755	$	—
Farmland		786		589		1,375		30,288		31,663		—
1-4 Family Mortgages		8,139		623		8,762		107,075		115,837		32
Commercial Real Estate		3,033		5,013		8,046		124,449		132,495		544
Total Real Estate Loans		14,546		6,225		20,771		271,979		292,750		576
Business Loans:
Commercial and Industrial Loans		3,070		9		3,079		42,485		45,564		—
Farm Production and other Farm Loans		2		—		2		1,431		1,433		—
Total Business Loans		3,072		9		3,081		43,916		46,997		—
Consumer Loans:
Credit Cards		40		30		70		980		1,050		30
Other Consumer Loans		1,711		57		1,768		26,573		28,341		3
Total Consumer Loans		1,751		87		1,838		27,553		29,391		33
Total Loans	$	19,369	$	6,321	$	25,690	$	343,448	$	369,138	$	609

Impaired Loans, by Class of Loans

Impaired loans as of September 30, 2013 and December 31, 2012, by class of loans, are as follows (in thousands):

September 30, 2013	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	129	$	14	$	115	$	129	$	114	$	140
Farmland		397		215		182		397		49		418
1-4 Family Mortgages		1,634		1,246		388		1,634		64		1,733
Commercial Real Estate		9,284		946		8,338		9,284		961		9,087
Total Real Estate Loans		11,444		2,421		9,023		11,444		1,188		11,378
Business Loans:
Commercial and Industrial Loans		2,141		18		2,123		2,141		651		2,160
Farm Production and Other Farm Loans		1		1		—		1		—		2
Total Business Loans		2,142		19		2,123		2,142		651		2,162
Consumer Loans:
Other Consumer Loans		120		120		—		120		—		160
Total Consumer Loans		120		120		—		120		—		160
Total Loans	$	13,706	$	2,560	$	11,146	$	13,706	$	1,839	$	13,700

December 31, 2012	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	142	$	18	$	124	$	142	$	117	$	638
Farmland		1,087		947		140		1,087		24		864
1-4 Family Mortgages		2,356		1,740		616		2,356		186		2,211
Commercial Real Estate		10,175		5,954		4,221		10,175		711		8,496
Total Real Estate Loans		13,760		8,659		5,101		13,760		1,038		12,209
Business Loans:
Commercial and Industrial Loans		167		76		91		167		55		226
Farm Production and other Farm Loans		3		3		—		3		—		12
Total Business Loans		170		79		91		170		55		238
Consumer Loans:
Other Consumer Loans		212		212		—		212		—		323
Total Consumer Loans		212		212		—		212		—		323
Total Loans	$	14,142	$	8,950	$	5,192	$	14,142	$	1,093	$	12,770

Troubled Debt Restructurings Segregated by Class

The following table presents troubled debt restructurings segregated by class (in thousands, except for number of loans):

September 30, 2013	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		4	$	6,850	$	5,186
Total		4	$	6,850	$	5,186
December 31, 2012	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		4	$	6,850	$	5,602
Total		4	$	6,850	$	5,602

Changes in Troubled Debt Restructurings

Changes in the Corporation’s troubled debt restructurings are set forth in the table below (in thousands, except for number of loans):

	Number of Loans		Recorded Investment
Totals at January 1, 2013		4	$	5,602
Reductions due to:
Principal paydowns				(416	)
Total at September 30, 2013		4	$	5,186

Detailed Amount of Gross Loans by Loan Grade and Class

The following table details the amount of gross loans by loan grade and class as of September 30, 2013 (in thousands):

Grades	Satisfactory 1, 2, 3, 4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	23,698	$	209	$	1,872	$	—	$	—	$	25,779
Farmland		25,433		2,512		1,679		50		—		29,674
1-4 Family Mortgages		89,300		5,204		13,290		—		—		107,794
Commercial Real Estate		118,988		5,999		15,362		—		—		140,349
Total Real Estate Loans		257,419		13,924		32,203		50		—		303,596
Business Loans:
Commercial and Industrial Loans		43,788		475		2,527		23		—		46,813
Farm Production and Other Farm Loans		1,290		10		3		—		—		1,303
Total Business Loans		45,078		485		2,530		23		—		48,116
Consumer Loans:
Credit Cards		1,037		—		2		—		—		1,039
Other Consumer Loans		24,755		206		656		43		—		25,660
Total Consumer Loans		25,792		206		658		43		—		26,699
Total Loans	$	328,289	$	14,615	$	35,391	$	116	$	—	$	378,411

The following table details the amount of gross loans by loan grade and class as of December 31, 2012 (in thousands):

Grades	Satisfactory 1, 2, 3,4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	10,596	$	1,890	$	269	$	—	$	—	$	12,755
Farmland		27,069		2,701		1,893		—		—		31,663
1-4 Family Mortgages		97,630		6,177		12,030		—		—		115,837
Commercial Real Estate		108,914		6,728		16,853		—		—		132,495
Total Real Estate Loans		244,209		17,496		31,045		—		—		292,750
Business Loans:
Commercial and Industrial Loans		41,449		3,486		601		28		—		45,564
Farm Production and other Farm Loans		1,358		26		49		—		—		1,433
Total Business Loans		42,807		3,512		650		28		—		46,997
Consumer Loans:
Credit Cards		1,020		—		30		—		—		1,050
Other Consumer Loans		26,995		287		1,029		28		2		28,341
Total Consumer Loans		28,015		287		1,059		28		2		29,391
Total Loans	$	315,031	$	21,295	$	32,754	$	56	$	2	$	369,138

Detailed Activity in Allowance for Possible Loan Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2013:

September 30, 2013	Real Estate		Business Loans		Consumer			Total
Beginning Balance, January 1, 2013	$	4,629,559	$	1,554,698	$	770,012		$	6,954,269
Provision for possible loan losses		923,965		1,023,825		(118,848	)		1,828,942
Chargeoffs		696,475		375,498		104,553			1,176,526
Recoveries		81,516		21,515		60,325			163,356
Net Chargeoffs		614,959		353,983		44,228			1,013,170
Ending Balance	$	4,938,565	$	2,224,540	$	606,936		$	7,770,041
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,188,691	$	650,727	$	—		$	1,839,418
Loans collectively evaluated for impairment		3,749,874		1,573,813		606,936			5,930,623
Ending Balance, September 30, 2013	$	4,938,565	$	2,224,540	$	606,936		$	7,770,041

The following table details activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2012:

September 30, 2012	Real Estate		Business Loans		Consumer		Total
Beginning Balance, January 1, 2012	$	4,176,475	$	1,672,467	$	832,470	$	6,681,412
Provision for possible loan losses		1,204,314		15,456		108,691		1,328,461
Chargeoffs		511,610		55,260		200,144		767,014
Recoveries		49,440		50,332		106,801		206,573
Net Chargeoffs		462,170		4,928		93,343		560,441
Ending Balance, September 30, 2012	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,686,862	$	57,325	$	—	$	1,744,187
Loans collectively evaluated for impairment		3,231,757		1,625,670		847,818		5,705,245
Ending Balance, September 30, 2012	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432

Recorded Investment in Loans Related to Balance in Allowance for Possible Loan Losses by Portfolio Segment

The Corporation’s recorded investment in loans as of September 30, 2013 and December 31, 2012 related to each balance in the allowance for possible loan losses by portfolio segment and disaggregated on the basis of the Corporation’s impairment methodology was as follows (in thousands):

September 30, 2013	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	11,444	$	2,142	$	120	$	13,706
Loans collectively evaluated for general impairment		292,152		45,974		26,579		364,705
	$	303,596	$	48,116	$	26,699	$	378,411
December 31, 2012	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	13,760	$	170	$	212	$	14,142
Loans collectively evaluated for general impairment		278,990		46,827		29,179		354,996
	$	292,750	$	46,997	$	29,391	$	369,138

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Consolidated Statements of Income (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
INTEREST INCOME
Loans, including fees	$ 5,150,046	$ 5,633,206	$ 15,469,869	$ 17,643,633
Investment securities	2,923,893	2,609,503	8,545,222	8,483,553
Other interest	4,781	32,641	42,195	50,322
Total interest income	8,078,720	8,275,350	24,057,286	26,177,508
INTEREST EXPENSE
Deposits	458,497	668,407	1,473,254	2,096,841
Other borrowed funds	367,229	728,659	1,769,780	2,268,067
Total interest expense	825,726	1,397,066	3,243,034	4,364,908
NET INTEREST INCOME	7,252,994	6,878,284	20,814,252	21,812,600
PROVISION FOR LOAN LOSSES	1,079,838	462,684	1,828,942	1,328,461
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	6,173,156	6,415,600	18,985,310	20,484,139
OTHER INCOME
Service charges on deposit accounts	1,028,592	966,149	2,833,391	2,711,719
Other service charges and fees	550,167	509,443	1,476,680	1,375,512
Income from security sales, net	268,733	5,972	423,388	43,725
Other income	336,035	359,001	1,059,929	956,364
Total other income	2,183,527	1,840,565	5,793,388	5,087,320
OTHER EXPENSES
Salaries and employee benefits	3,280,877	3,414,811	9,923,364	10,448,471
Occupancy expense	1,144,231	1,147,917	3,367,937	3,277,082
Other operating expense	1,425,135	1,710,148	5,263,137	5,631,591
Total other expenses	5,850,243	6,272,876	18,554,438	19,357,144
INCOME BEFORE PROVISION FOR INCOME TAXES	2,506,440	1,983,289	6,224,260	6,214,315
PROVISION FOR INCOME TAXES	496,977	354,247	1,196,607	1,170,509
NET INCOME	$ 2,009,463	$ 1,629,042	$ 5,027,653	$ 5,043,806
NET INCOME PER SHARE
-Basic	$ 0.41	$ 0.34	$ 1.03	$ 1.04
-Diluted	$ 0.41	$ 0.33	$ 1.03	$ 1.04
DIVIDENDS PAID PER SHARE	$ 0.22	$ 0.22	$ 0.66	$ 0.66

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Stock Option Plan

9 Months Ended

Sep. 30, 2013

Stock Option Plan

Note 4. Stock Option Plan

Prior to the adoption of the 2013 plan , as defined below, the Corporation utilized one stock-based compensation plan, which is the 1999 Directors’ Stock Compensation Plan (the “Directors’ Plan”). Prior to its expiration, the Corporation also had the 1999 Employees’ Long-Term Incentive Plan, or the Employees’ Plan.

The Corporation has adopted the 2013 Incentive Compensation Plan (the “2013 Plan”), which the Corporation intends to use for all future equity grants until the termination or expiration of the 2013 Plan.

The following table below is a summary of the stock option activity for the nine months ended September 30, 2013.

	Directors’ Plan					Employees’ Plan
				Weighted					Weighted
	Number			Average		Number			Average
	of			Exercise		of			Exercise
	Shares			Price		Shares			Price
Outstanding at December 31, 2012		111,000		$	20.97		108,000		$	20.90
Granted		—			—		—			—
Exercised		(3,000	)		16.40		(7,000	)		14.91
Expired		(4,500	)		16.40		(19,000	)		18.11
Outstanding at September 30, 2013		103,500		$	21.30		82,000		$	22.06

The intrinsic value of options granted under the Directors’ Plan at September 30, 2013, was $960 and the intrinsic value of options granted under the Employees’ Plan at September 30, 2013, was $120 for a total intrinsic value at September 30, 2013, of $1,080. No awards have been granted under the 2013 Plan.

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Period-End Non-Accrual Loans, Segregated by Class of Loans (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	$ 13,706	$ 14,142
Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	11,444	13,760
Real Estate Loans | Land Development and Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	129	142
Real Estate Loans | Farmland
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	397	1,087
Real Estate Loans | 1-4 Family Mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	1,634	2,356
Real Estate Loans | Commercial Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	9,284	10,175
Business Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	2,142	170
Business Loans | Commercial and Industrial Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	2,141	167
Business Loans | Farm Production and Other Farm Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	1	3
Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	120	212
Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-accrual Loans	$ 120	$ 212

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Assets and Liabilities Measured at Fair Value on Recurring Basis

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2013:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Securities available for sale
Obligations of U. S.
Government Agencies	$	—	$	288,469,835	$	—	$	288,469,835
Mortgage-backed securities		—		18,203,673		—		18,203,673
State, county and municipal obligations		—		99,454,813		—		99,454,813
Other investments		—		—		2,675,865		2,675,865
Total	$	—	$	406,128,321	$	2,675,865	$	408,804,186

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2012:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Securities available for sale
Obligations of U. S.
Government Agencies	$	—	$	269,110,901	$	—	$	269,110,901
Mortgage-backed securities		—		38,421,301		—		38,421,301
State, county and municipal obligations		—		110,569,360		—		110,569,360
Other investments		—		—		2,806,253		2,806,253
Total	$	—	$	418,101,562	$	2,806,253	$	420,907,815

Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The following table reports the activity for 2013 in assets measured at fair value on a recurring basis using significant unobservable inputs.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Structured Financial Product
Balance at January 1, 2013	$	2,806,253
Unrealized losses included in other comprehensive income		(130,388	)
Balance at September 30, 2013	$	2,675,865

Asset Measured at Fair Value on Nonrecurring Basis

For assets measured at fair value on a nonrecurring basis during 2013 that were still held in the balance sheet at September 30, 2013, the following table provides the hierarchy level and the fair value of the related assets:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Impaired loans	$	—	$	—	$	9,306,326	$	9,306,326
Other real estate owned		—		—		552,567		552,567
Total	$	—	$	—	$	9,858,893	$	9,858,893

For assets measured at fair value on a nonrecurring basis during 2012 that were still held in the balance sheet at December 31, 2012, the following table provides the hierarchy level and the fair value of the related assets:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Impaired loans	$	—	$	—	$	4,099,031	$	4,099,031
Other real estate owned		—		—		2,469,110		2,469,110
Total	$	—	$	—	$	6,568,141	$	6,568,141

Carrying Value and Estimated Fair Value of Financial Instruments

The following represents the carrying value and estimated fair value of the Corporation’s financial instruments at September 30, 2013, and December 31, 2012:

			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant		Total
	Carrying		Identical		Observable		Unobservable		Fair
September 30, 2013	Value		Assets		Inputs		Inputs		Value
			(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and due from banks	$	19,089,862	$	19,089,862	$	—	$	—	$	19,089,862
Interest bearing deposits with banks		721,055		721,055		—		—		721,055
Securities available-for-sale		408,804,186		—		406,128,321		2,675,865		408,804,186
Net loans		370,201,335		—		—		372,098,722		372,098,722
Financial liabilities
Deposits	$	648,691,190	$	413,452,165	$	—	$	235,416,092	$	648,868,257
Federal Home Loan Bank advances		55,500,000		—		—		56,641,317		56,641,317
Securities Sold under Agreement to Repurchase		76,357,769		76,357,769		—		—		76,357,769

			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant		Total
	Carrying		Identical		Observable		Unobservable		Fair
December 31, 2012	Value		Assets		Inputs		Inputs		Value
			(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and due from banks	$	21,561,288	$	21,561,288	$	—	$	—	$	21,561,288
Interest bearing deposits with banks		16,228,747		16,228,747		—		—		16,228,747
Securities available-for-sale		420,907,815		—		418,101,562		2,806,253		420,907,815
Net loans		361,936,495		—		—		362,114,991		362,114,991
Financial liabilities
Deposits	$	642,549,338	$	394,298,501	$	—	$	248,464,899	$	642,763,400
Federal Home Loan Bank advances		68,500,000		—		—		70,844,530		70,844,530
Securities Sold under Agreement to Repurchase		73,306,765		73,306,765		—		—		73,306,765

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Troubled Debt Restructurings Segregated by Class (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013 Loan	Dec. 31, 2012 Loan
Financing Receivable, Modifications [Line Items]
Number of Loans	4	4
Pre-Modification Outstanding Recorded Investment	$ 6,850	$ 6,850
Post-Modification Outstanding Recorded Investment	5,186	5,602
Commercial Real Estate
Financing Receivable, Modifications [Line Items]
Number of Loans	4	4
Pre-Modification Outstanding Recorded Investment	6,850	6,850
Post-Modification Outstanding Recorded Investment	$ 5,186	$ 5,602

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Impaired Loans, by Class of Loans (Detail) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 13,706,000	$ 14,142,000
Recorded Investment With No Allowance	2,560,000	8,950,000
Recorded Investment With Allowance	11,145,743	5,192,258
Total Recorded Investment	13,706,000	14,142,000
Related Allowance	1,839,418	1,093,227
Average Recorded Investment	13,700,000	12,770,000
Real Estate Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	11,444,000	13,760,000
Recorded Investment With No Allowance	2,421,000	8,659,000
Recorded Investment With Allowance	9,023,000	5,101,000
Total Recorded Investment	11,444,000	13,760,000
Related Allowance	1,188,000	1,038,000
Average Recorded Investment	11,378,000	12,209,000
Real Estate Loans | Land Development and Construction
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	129,000	142,000
Recorded Investment With No Allowance	14,000	18,000
Recorded Investment With Allowance	115,000	124,000
Total Recorded Investment	129,000	142,000
Related Allowance	114,000	117,000
Average Recorded Investment	140,000	638,000
Real Estate Loans | Farmland
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	397,000	1,087,000
Recorded Investment With No Allowance	215,000	947,000
Recorded Investment With Allowance	182,000	140,000
Total Recorded Investment	397,000	1,087,000
Related Allowance	49,000	24,000
Average Recorded Investment	418,000	864,000
Real Estate Loans | 1-4 Family Mortgages
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,634,000	2,356,000
Recorded Investment With No Allowance	1,246,000	1,740,000
Recorded Investment With Allowance	388,000	616,000
Total Recorded Investment	1,634,000	2,356,000
Related Allowance	64,000	186,000
Average Recorded Investment	1,733,000	2,211,000
Real Estate Loans | Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	9,284,000	10,175,000
Recorded Investment With No Allowance	946,000	5,954,000
Recorded Investment With Allowance	8,338,000	4,221,000
Total Recorded Investment	9,284,000	10,175,000
Related Allowance	961,000	711,000
Average Recorded Investment	9,087,000	8,496,000
Business Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,142,000	170,000
Recorded Investment With No Allowance	19,000	79,000
Recorded Investment With Allowance	2,123,000	91,000
Total Recorded Investment	2,142,000	170,000
Related Allowance	651,000	55,000
Average Recorded Investment	2,162,000	238,000
Business Loans | Commercial and Industrial Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,141,000	167,000
Recorded Investment With No Allowance	18,000	76,000
Recorded Investment With Allowance	2,123,000	91,000
Total Recorded Investment	2,141,000	167,000
Related Allowance	651,000	55,000
Average Recorded Investment	2,160,000	226,000
Business Loans | Farm Production and Other Farm Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,000	3,000
Recorded Investment With No Allowance	1,000	3,000
Total Recorded Investment	1,000	3,000
Average Recorded Investment	2,000	12,000
Consumer Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	120,000	212,000
Recorded Investment With No Allowance	120,000	212,000
Total Recorded Investment	120,000	212,000
Average Recorded Investment	160,000	323,000
Consumer Loans | Other Consumer Loans
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	120,000	212,000
Recorded Investment With No Allowance	120,000	212,000
Total Recorded Investment	120,000	212,000
Average Recorded Investment	$ 160,000	$ 323,000

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Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at January 1, 2013	$ 2,806,253
Unrealized losses included in other comprehensive income	(130,388)
Balance at September 30, 2013	$ 2,675,865

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Detailed Activity in Allowance for Loan Losses by Portfolio Segment (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance			$ 6,954,269	$ 6,681,412
Provision for possible loan losses	1,079,838	462,684	1,828,942	1,328,461
Chargeoffs			1,176,526	767,014
Recoveries			163,356	206,573
Net Chargeoffs			1,013,170	560,441
Ending Balance	7,770,041	7,449,432	7,770,041	7,449,432
Loans individually evaluated for impairment	1,839,418	1,744,187	1,839,418	1,744,187
Loans collectively evaluated for impairment	5,930,623	5,705,245	5,930,623	5,705,245
Ending Balance	7,770,041	7,449,432	7,770,041	7,449,432
Real Estate Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance			4,629,559	4,176,475
Provision for possible loan losses			923,965	1,204,314
Chargeoffs			696,475	511,610
Recoveries			81,516	49,440
Net Chargeoffs			614,959	462,170
Ending Balance	4,938,565	4,918,619	4,938,565	4,918,619
Loans individually evaluated for impairment	1,188,691	1,686,862	1,188,691	1,686,862
Loans collectively evaluated for impairment	3,749,874	3,231,757	3,749,874	3,231,757
Ending Balance	4,938,565	4,918,619	4,938,565	4,918,619
Business Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance			1,554,698	1,672,467
Provision for possible loan losses			1,023,825	15,456
Chargeoffs			375,498	55,260
Recoveries			21,515	50,332
Net Chargeoffs			353,983	4,928
Ending Balance	2,224,540	1,682,995	2,224,540	1,682,995
Loans individually evaluated for impairment	650,727	57,325	650,727	57,325
Loans collectively evaluated for impairment	1,573,813	1,625,670	1,573,813	1,625,670
Ending Balance	2,224,540	1,682,995	2,224,540	1,682,995
Consumer Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance			770,012	832,470
Provision for possible loan losses			(118,848)	108,691
Chargeoffs			104,553	200,144
Recoveries			60,325	106,801
Net Chargeoffs			44,228	93,343
Ending Balance	606,936	847,818	606,936	847,818
Loans collectively evaluated for impairment	606,936	847,818	606,936	847,818
Ending Balance	$ 606,936	$ 847,818	$ 606,936	$ 847,818

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Age Analysis of Past Due Loans, Segregated by Class of Loans (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	$ 10,262	$ 19,369
Loans 90 or more Days Past Due	8,733	6,321
Total Past Due Loans	18,995	25,690
Current Loans	359,416	343,448
Total Gross Loans	378,411	369,138
Accruing Loans 90 or more Days Past Due	263	609
Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	8,769	14,546
Loans 90 or more Days Past Due	8,670	6,225
Total Past Due Loans	17,439	20,771
Current Loans	286,157	271,979
Total Gross Loans	303,596	292,750
Accruing Loans 90 or more Days Past Due	244	576
Real Estate Loans | Land Development and Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	294	2,588
Total Past Due Loans	294	2,588
Current Loans	25,485	10,167
Total Gross Loans	25,779	12,755
Real Estate Loans | Farmland
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	592	786
Loans 90 or more Days Past Due	119	589
Total Past Due Loans	711	1,375
Current Loans	28,963	30,288
Total Gross Loans	29,674	31,663
Real Estate Loans | 1-4 Family Mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	4,354	8,139
Loans 90 or more Days Past Due	631	623
Total Past Due Loans	4,985	8,762
Current Loans	102,809	107,075
Total Gross Loans	107,794	115,837
Accruing Loans 90 or more Days Past Due	244	32
Real Estate Loans | Commercial Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	3,529	3,033
Loans 90 or more Days Past Due	7,920	5,013
Total Past Due Loans	11,449	8,046
Current Loans	128,900	124,449
Total Gross Loans	140,349	132,495
Accruing Loans 90 or more Days Past Due		544
Business Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	234	3,072
Loans 90 or more Days Past Due	3	9
Total Past Due Loans	237	3,081
Current Loans	47,879	43,916
Total Gross Loans	48,116	46,997
Business Loans | Commercial and Industrial Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	233	3,070
Loans 90 or more Days Past Due	3	9
Total Past Due Loans	236	3,079
Current Loans	46,577	42,485
Total Gross Loans	46,813	45,564
Business Loans | Farm Production and Other Farm Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	1	2
Total Past Due Loans	1	2
Current Loans	1,302	1,431
Total Gross Loans	1,303	1,433
Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	1,259	1,751
Loans 90 or more Days Past Due	60	87
Total Past Due Loans	1,319	1,838
Current Loans	25,380	27,553
Total Gross Loans	26,699	29,391
Accruing Loans 90 or more Days Past Due	19	33
Consumer Loans | Credit Cards
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	39	40
Loans 90 or more Days Past Due	2	30
Total Past Due Loans	41	70
Current Loans	998	980
Total Gross Loans	1,039	1,050
Accruing Loans 90 or more Days Past Due	2	30
Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans 30-89 Days Past Due	1,220	1,711
Loans 90 or more Days Past Due	58	57
Total Past Due Loans	1,278	1,768
Current Loans	24,382	26,573
Total Gross Loans	25,660	28,341
Accruing Loans 90 or more Days Past Due	$ 17	$ 3

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Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating activities	$ 8,621,916	$ 8,968,505
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and calls of securities available for sale	77,076,345	220,117,006
Purchases of investment securities available for sale	(142,276,646)	(244,228,754)
Proceeds from sales of investment securities	41,550,629
Purchases of bank premises and equipment	(264,331)	(70,332)
Decrease in interest bearing deposits with other banks	15,507,692	1,838,575
Purchase of Federal Home Loan Bank stock	(438,600)	(282,700)
Redemption of Federal Home Loan Bank stock	1,052,000	442,800
Proceeds from sale of other real estate	1,431,927	1,296,551
Net (increase) decrease in loans	(11,040,218)	9,068,662
Net cash used by investing activities	(17,401,202)	(11,818,192)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits	6,141,852	44,684,143
Net change in securities sold under agreement to repurchase	3,051,004	(58,862,734)
Proceeds from exercising stock options	128,949	257,425
Decrease in Federal Home Loan Bank advances	(13,000,000)
Increase in federal funds purchased	13,200,000	4,700,000
Payment of dividends	(3,213,945)	(3,206,771)
Net cash provided (used) by financing activities	6,307,860	(12,427,937)
Net decrease in cash and due from banks	(2,471,426)	(15,277,624)
Cash and due from banks, beginning of period	21,561,288	35,407,715
Cash and due from banks, end of period	$ 19,089,862	$ 20,130,091

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Commitments and Contingent Liabilities

9 Months Ended

Sep. 30, 2013

Commitments and Contingent Liabilities

Note 2. Commitments and Contingent Liabilities

In the ordinary course of business, the Corporation enters into commitments to extend credit to its customers. The unused portion of these commitments is not reflected in the accompanying financial statements. As of September 30, 2013, the Corporation had entered into loan commitments with certain customers with an aggregate unused balance of $51,190,892 compared to an aggregate unused balance of $37,703,387 at December 31, 2012. There were $2,848,530 of letters of credit outstanding at September 30, 2013 and $3,113,225 at December 31, 2012. The fair value of such contracts is not considered material because letters of credit and loan commitments often are not used in their entirety, if at all, before they expire. The balances of such letters and commitments should not be used to project actual future liquidity requirements. However, the Corporation does incorporate expectations about the level of draws under its credit-related commitments into its asset and liability management program.

The Corporation is a party to lawsuits and other claims that arise in the ordinary course of business, all of which are being vigorously contested. In the regular course of business, management evaluates estimated losses or costs related to litigation, and provisions are made for anticipated losses whenever management believes that such losses are probable and can be reasonably estimated. At the present time, management believes, based on the advice of legal counsel, that the final resolution of pending legal proceedings will not have a material impact on the Corporation’s consolidated financial condition or results of operations.

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Taxes

Note 5. Income Taxes

The income tax topic of the Accounting Standards Codification (“ASC”) defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. This topic also provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties, and includes guidance concerning accounting for income tax uncertainties in interim periods. As of September 30, 2013, the Corporation had no unrecognized tax benefits related to federal and state income tax matters. Therefore, the Corporation does not anticipate any material increase or decrease in the effective tax rate during 2013 relative to any tax positions taken. It is the Corporation’s policy to recognize interest and/or penalties related to income tax matters in income tax expense.

The Corporation files a consolidated United States federal income tax return. The Corporation is currently open to audit under the statute of limitations by the Internal Revenue Service for all tax years after 2009. The Corporation’s consolidated state income tax returns are also open to audit under the statute of limitations for the same period.

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Net Income per Share

9 Months Ended

Sep. 30, 2013

Net Income per Share

Note 3. Net Income per Share

Net income per share—basic has been computed based on the weighted average number of shares outstanding during each period. Net income per share—diluted has been computed based on the weighted average number of shares outstanding during each period plus the dilutive effect of outstanding stock options using the treasury stock method. Net income per share was computed as follows:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2013		2012		2013		2012
Basic weighted average shares outstanding		4,870,114		4,861,411		4,867,475		4,856,584
Dilutive effect of granted options		80		5,628		1,994		8,493
Diluted weighted average shares outstanding		4,870,194		4,867,039		4,869,469		4,865,077
Net income	$	2,009,463	$	1,629,042	$	5,027,653	$	5,043,806
Net income per share-basic	$	0.41	$	0.34	$	1.03	$	1.04
Net income per share-diluted	$	0.41	$	0.33	$	1.03	$	1.04

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Changes in Troubled Debt Restructurings (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013 Loan	Dec. 31, 2012 Loan
Financing Receivable, Impaired [Line Items]
Number of Loans	4	4
Principal paydowns, Recorded Investment	$ (416)
Post-Modification Outstanding Recorded Investment	$ 5,186	$ 5,602

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Recorded Investment in Loans Related to Balance in Allowance for Possible Loan Losses by Portfolio Segment (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for specific impairment	$ 13,706	$ 14,142
Loans collectively evaluated for general impairment	364,705	354,996
Total Gross Loans	378,411	369,138
Real Estate Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for specific impairment	11,444	13,760
Loans collectively evaluated for general impairment	292,152	278,990
Total Gross Loans	303,596	292,750
Business Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for specific impairment	2,142	170
Loans collectively evaluated for general impairment	45,974	46,827
Total Gross Loans	48,116	46,997
Consumer Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans individually evaluated for specific impairment	120	212
Loans collectively evaluated for general impairment	26,579	29,179
Total Gross Loans	$ 26,699	$ 29,391

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Carrying Value and Estimated Fair Value of Financial Instruments (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Financial assets
Cash and due from banks	$ 19,089,862	$ 21,561,288
Interest bearing deposits with banks	721,055	16,228,747
Securities available-for-sale	408,804,186	420,907,815
Net loans	372,098,722	362,114,991
Financial liabilities
Deposits	648,868,257	642,763,400
Federal Home Loan Bank advances	56,641,317	70,844,530
Securities Sold under Agreement to Repurchase	76,357,769	73,306,765
Carrying Value
Financial assets
Cash and due from banks	19,089,862	21,561,288
Interest bearing deposits with banks	721,055	16,228,747
Securities available-for-sale	408,804,186	420,907,815
Net loans	370,201,335	361,936,495
Financial liabilities
Deposits	648,691,190	642,549,338
Federal Home Loan Bank advances	55,500,000	68,500,000
Securities Sold under Agreement to Repurchase	76,357,769	73,306,765
Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets
Cash and due from banks	19,089,862	21,561,288
Interest bearing deposits with banks	721,055	16,228,747
Financial liabilities
Deposits	413,452,165	394,298,501
Securities Sold under Agreement to Repurchase	76,357,769	73,306,765
Significant Other Observable Inputs (Level 2)
Financial assets
Securities available-for-sale	406,128,321	418,101,562
Significant Unobservable Inputs (Level 3)
Financial assets
Securities available-for-sale	2,675,865	2,806,253
Net loans	372,098,722	362,114,991
Financial liabilities
Deposits	235,416,092	248,464,899
Federal Home Loan Bank advances	$ 56,641,317	$ 70,844,530

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Consolidated Statements of Condition (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Loans, allowance for loan losses	$ 7,770,041	$ 6,954,269
Common stock, par value	$ 0.20	$ 0.20
Common stock, shares authorized	22,500,000	22,500,000
Common stock, shares outstanding	4,870,114	4,861,411
Accumulated other comprehensive income, applicable taxes	$ 10,519,843	$ (2,586,340)

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2013

Fair Value of Financial Instruments

Note 8. Fair Value of Financial Instruments

The fair value topic of the ASC establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. This topic clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. This topic also requires disclosure about how fair value was determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities;
Level 2	Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or
Level 3	Unobservable inputs, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2013:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Securities available for sale
Obligations of U. S.
Government Agencies	$	—	$	288,469,835	$	—	$	288,469,835
Mortgage-backed securities		—		18,203,673		—		18,203,673
State, county and municipal obligations		—		99,454,813		—		99,454,813
Other investments		—		—		2,675,865		2,675,865
Total	$	—	$	406,128,321	$	2,675,865	$	408,804,186

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2012:

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Securities available for sale
Obligations of U. S.
Government Agencies	$	—	$	269,110,901	$	—	$	269,110,901
Mortgage-backed securities		—		38,421,301		—		38,421,301
State, county and municipal obligations		—		110,569,360		—		110,569,360
Other investments		—		—		2,806,253		2,806,253
Total	$	—	$	418,101,562	$	2,806,253	$	420,907,815

The following table reports the activity for 2013 in assets measured at fair value on a recurring basis using significant unobservable inputs.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Structured Financial Product
Balance at January 1, 2013	$	2,806,253
Unrealized losses included in other comprehensive income		(130,388	)
Balance at September 30, 2013	$	2,675,865

The Corporation recorded no gains or losses in earnings for the period that were attributable to the change in unrealized gains or losses relating to assets still held at the reporting date.

For assets measured at fair value on a nonrecurring basis during 2013 that were still held in the balance sheet at September 30, 2013, the following table provides the hierarchy level and the fair value of the related assets:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Impaired loans	$	—	$	—	$	9,306,326	$	9,306,326
Other real estate owned		—		—		552,567		552,567
Total	$	—	$	—	$	9,858,893	$	9,858,893

For assets measured at fair value on a nonrecurring basis during 2012 that were still held in the balance sheet at December 31, 2012, the following table provides the hierarchy level and the fair value of the related assets:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Totals
Impaired loans	$	—	$	—	$	4,099,031	$	4,099,031
Other real estate owned		—		—		2,469,110		2,469,110
Total	$	—	$	—	$	6,568,141	$	6,568,141

Impaired loans with a carrying value of $11,145,743 and $5,192,258 had an allocated allowance for loan losses of $1,839,418 and $1,093,227 at September 30, 2013 and December 31, 2012, respectively. The allocated allowance is based on the carrying value of the impaired loan and the fair value of the underlying collateral less estimated costs to sell.

Other real estate owned (“OREO”) acquired during the nine-month period ended September 30, 2013, and recorded at fair value, less costs to sell, was $946,436, of which $393,869 was acquired and sold during this period. There have been no writedowns during the period on OREO previously acquired and still held. OREO acquired during 2012 and recorded at fair value, less costs to sell, was $1,697,450. Additional writedowns during 2012 on OREO acquired in previous years was $309,797 on 5 properties valued at $1,081,457.

The financial instruments topic of the ASC requires disclosure of financial instruments’ fair values, as well as the methodology and significant assumptions used in estimating fair values. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. The financial instruments topic of the ASC excludes certain financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Corporation and may not be indicative of amounts that might ultimately be realized upon disposition or settlement of those assets and liabilities.

The following represents the carrying value and estimated fair value of the Corporation’s financial instruments at September 30, 2013, and December 31, 2012:

			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant		Total
	Carrying		Identical		Observable		Unobservable		Fair
September 30, 2013	Value		Assets		Inputs		Inputs		Value
			(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and due from banks	$	19,089,862	$	19,089,862	$	—	$	—	$	19,089,862
Interest bearing deposits with banks		721,055		721,055		—		—		721,055
Securities available-for-sale		408,804,186		—		406,128,321		2,675,865		408,804,186
Net loans		370,201,335		—		—		372,098,722		372,098,722
Financial liabilities
Deposits	$	648,691,190	$	413,452,165	$	—	$	235,416,092	$	648,868,257
Federal Home Loan Bank advances		55,500,000		—		—		56,641,317		56,641,317
Securities Sold under Agreement to Repurchase		76,357,769		76,357,769		—		—		76,357,769

			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant		Total
	Carrying		Identical		Observable		Unobservable		Fair
December 31, 2012	Value		Assets		Inputs		Inputs		Value
			(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and due from banks	$	21,561,288	$	21,561,288	$	—	$	—	$	21,561,288
Interest bearing deposits with banks		16,228,747		16,228,747		—		—		16,228,747
Securities available-for-sale		420,907,815		—		418,101,562		2,806,253		420,907,815
Net loans		361,936,495		—		—		362,114,991		362,114,991
Financial liabilities
Deposits	$	642,549,338	$	394,298,501	$	—	$	248,464,899	$	642,763,400
Federal Home Loan Bank advances		68,500,000		—		—		70,844,530		70,844,530
Securities Sold under Agreement to Repurchase		73,306,765		73,306,765		—		—		73,306,765

The fair value estimates, methods and assumptions used by the Corporation in estimating its fair value disclosures for financial statements were as follows:

Cash and Due from Banks and Interest Bearing Deposits with Banks

The carrying amounts reported in the balance sheet for these instruments approximate fair value because of their immediate and shorter-term maturities, which are considered to be three months or less when purchased.

Securities Available-for-Sale

Fair values for investment securities are based on quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments (Level 2). When neither quoted prices nor comparable instruments are available, unobservable inputs are needed to form an expected future cash flow analysis to establish fair values (Level 3).

The Corporation owns certain beneficial interests in one collateralized debt obligation secured by community bank trust preferred securities. These interests do not trade in a liquid market, and therefore, market quotes are not a reliable indicator of their ultimate realizability. The Corporation utilizes a discounted cash flow model using inputs of (1) market yields of trust-preferred securities as the discount rate and (2) expected cash flows which are estimated using assumptions related to defaults, deferrals and prepayments to determine the fair values of these beneficial interests. Many of the factors that adjust the timing and extent of cash flows are based on judgment and not directly observable in the markets. Therefore, these fair values are classified as Level 3 valuations for accounting and disclosure purposes. Since observable transactions in these securities are extremely rare, the Corporation uses assumptions that a market participant would use in valuing these instruments. These assumptions primarily include cash flow estimates and market discount rates. The cash flow estimates are sensitive to the assumptions related to the ability of the issuers to pay the underlying trust preferred securities according to their terms. The market discount rates depend on transactions, which are rare given the lack of interest of investors in these types of beneficial interests.

Net Loans

For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. The fair values for other loans (i.e., commercial real estate and rental property mortgage loans, commercial and industrial loans, financial institution loans, and agricultural loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

Deposits

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

Federal Home Loan Bank (FHLB) Borrowings

The fair value of FHLB advances is based on a discounted cash flow analysis.

Securities Sold Under Agreement to Repurchase

Due to the short term nature of these instruments, which is generally three months or less, the carrying amount is equal to the fair value.

Off-Balance Sheet Instruments

The fair value of commitments to extend credit and letters of credit are estimated using fees currently charged to enter into similar agreements. The fees associated with these financial instruments are not material.

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Consolidated Statements of Comprehensive Income (Loss) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 2,009,463	$ 1,629,042	$ 5,027,653	$ 5,043,806
Other comprehensive (loss) income
Unrealized holding (losses) gains	(8,675,917)	(975,371)	(34,713,829)	214,860
Income tax effect	3,236,117	363,813	12,948,258	(80,143)
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax, Total	(5,439,800)	(611,558)	(21,765,571)	134,717
Reclassification adjustment for gains included in net income	(268,733)	(5,972)	(423,388)	(43,725)
Income tax effect	100,238	2,227	157,924	16,309
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax	(168,495)	(3,745)	(265,464)	(27,416)
Total other comprehensive (loss) income	(5,608,295)	(615,303)	(22,031,035)	107,301
Comprehensive (loss) income	$ (3,598,832)	$ 1,013,739	$ (17,003,382)	$ 5,151,107

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Consolidated Statements of Condition (USD $)	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Cash and due from banks	$ 19,089,862	$ 21,561,288
Interest bearing deposits with other banks	721,055	16,228,747
Investment securities available for sale, at fair value	408,804,186	420,907,815
Loans, net of allowance for loan losses of $7,770,041 in 2013 and $6,954,269 in 2012	370,201,335	361,936,495
Premises and equipment, net	18,823,555	19,425,292
Other real estate owned, net	4,196,764	4,682,255
Accrued interest receivable	4,826,527	4,665,868
Cash value of life insurance	21,692,384	21,191,930
Intangible assets, net	3,149,657	3,149,657
Other assets	20,082,961	7,090,551
TOTAL ASSETS	871,588,286	880,839,898
Deposits:
Noninterest-bearing demand	121,404,926	119,946,574
Interest-bearing NOW and money market accounts	239,068,093	228,111,275
Savings deposits	52,979,146	46,240,652
Certificates of deposit	235,239,025	248,250,837
Total deposits	648,691,190	642,549,338
Securities sold under agreement to repurchase	76,357,769	73,306,765
Federal funds purchased	13,200,000
Federal Home Loan Bank advances	55,500,000	68,500,000
Accrued interest payable	208,072	321,472
Deferred compensation payable	6,499,932	5,917,662
Other liabilities	2,350,870	1,375,831
Total liabilities	802,807,833	791,971,068
STOCKHOLDERS' EQUITY
Common stock; $.20 par value, 22,500,000 shares authorized, 4,870,114 shares outstanding at September 30, 2013 and 4,861,411 shares outstanding at December 31, 2012	973,982	972,282
Additional paid-in capital	3,748,217	3,620,967
Retained earnings	81,741,743	79,928,035
Accumulated other comprehensive (loss) income, net of applicable taxes of $10,519,843 in 2013 and ($2,586,340) in 2012	(17,683,489)	4,347,546
Total stockholders' equity	68,780,453	88,868,830
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 871,588,286	$ 880,839,898

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Loans - Additional Information (Detail) (Restructured Loans, USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Restructured Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ 174	$ 43

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Composition of Net Loans (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate loans	$ 303,596,000	$ 292,750,000
Business loans	48,116,000	46,997,000
Consumer loans	26,699,000	29,391,000
Total Gross Loans	378,411,000	369,138,000
Unearned income	(440,000)	(248,000)
Allowance for loan losses	(7,770,041)	(6,954,269)	(7,449,432)	(6,681,412)
Loans, net	370,201,335	361,936,495
Land Development and Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate loans	25,779,000	12,755,000
Farmland
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate loans	29,674,000	31,663,000
1-4 Family Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate loans	107,794,000	115,837,000
Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Real estate loans	140,349,000	132,495,000
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Business loans	46,813,000	45,564,000
Farm Production and Other Farm Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Business loans	1,303,000	1,433,000
Credit Cards
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer loans	1,039,000	1,050,000
Other Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Consumer loans	$ 25,660,000	$ 28,341,000

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Asset Measured at Fair Value on Nonrecurring Basis (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Other real estate owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring Basis	$ 946,436	$ 1,697,450
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring Basis	9,858,893	6,568,141
Fair Value, Measurements, Nonrecurring | Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring Basis	9,306,326	4,099,031
Fair Value, Measurements, Nonrecurring | Other real estate owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring Basis	552,567	2,469,110
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring Basis	9,858,893	6,568,141
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | Impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring Basis	9,306,326	4,099,031
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | Other real estate owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring Basis	$ 552,567	$ 2,469,110

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Fair Value of Financial Instruments - Additional Information (Detail) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012 Property
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Carrying value of an impaired loan	$ 11,145,743	$ 5,192,258
Impaired loans, allowance for loan losses	1,839,418	1,093,227
Additional write downs on OREO previously acquired	393,869	309,797
Number of real estate properties acquired		5
Real Estate Investment Property, at Cost		1,081,457
Other real estate owned
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other real estate owned	$ 946,436	$ 1,697,450

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2013

Recent Accounting Pronouncements

Note 7. Recent Accounting Pronouncements

In February 2013, Financial Accounting Standards Board (“FASB”) issued an update to ASC 220, “Comprehensive Income,” (“ASC 220”) that requires a reporting entity to disclose information about reclassification adjustments from accumulated other comprehensive income in their financial statements on the face of the financial statement that presents comprehensive income or as a separate disclosure in the footnotes of the financial statements. This update to ASC 220 is effective prospectively for interim and annual reporting periods beginning after December 15, 2012, with early adoption permitted. The adoption of the update will impact disclosures only and has not had a material impact on the financial position or results of operations of the Corporation.

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Detailed Amount of Gross Loans by Loan Grade and Class (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	$ 378,411	$ 369,138
Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	303,596	292,750
Real Estate Loans | Land Development and Construction
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	25,779	12,755
Real Estate Loans | Farmland
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	29,674	31,663
Real Estate Loans | 1-4 Family Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	107,794	115,837
Real Estate Loans | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	140,349	132,495
Business Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	48,116	46,997
Business Loans | Commercial and Industrial Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	46,813	45,564
Business Loans | Farm Production and Other Farm Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,303	1,433
Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	26,699	29,391
Consumer Loans | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,039	1,050
Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	25,660	28,341
Satisfactory 1, 2, 3, 4
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	328,289	315,031
Satisfactory 1, 2, 3, 4 | Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	257,419	244,209
Satisfactory 1, 2, 3, 4 | Real Estate Loans | Land Development and Construction
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	23,698	10,596
Satisfactory 1, 2, 3, 4 | Real Estate Loans | Farmland
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	25,433	27,069
Satisfactory 1, 2, 3, 4 | Real Estate Loans | 1-4 Family Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	89,300	97,630
Satisfactory 1, 2, 3, 4 | Real Estate Loans | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	118,988	108,914
Satisfactory 1, 2, 3, 4 | Business Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	45,078	42,807
Satisfactory 1, 2, 3, 4 | Business Loans | Commercial and Industrial Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	43,788	41,449
Satisfactory 1, 2, 3, 4 | Business Loans | Farm Production and Other Farm Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,290	1,358
Satisfactory 1, 2, 3, 4 | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	25,792	28,015
Satisfactory 1, 2, 3, 4 | Consumer Loans | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,037	1,020
Satisfactory 1, 2, 3, 4 | Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	24,755	26,995
Special Mention 5,6
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	14,615	21,295
Special Mention 5,6 | Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	13,924	17,496
Special Mention 5,6 | Real Estate Loans | Land Development and Construction
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	209	1,890
Special Mention 5,6 | Real Estate Loans | Farmland
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	2,512	2,701
Special Mention 5,6 | Real Estate Loans | 1-4 Family Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	5,204	6,177
Special Mention 5,6 | Real Estate Loans | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	5,999	6,728
Special Mention 5,6 | Business Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	485	3,512
Special Mention 5,6 | Business Loans | Commercial and Industrial Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	475	3,486
Special Mention 5,6 | Business Loans | Farm Production and Other Farm Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	10	26
Special Mention 5,6 | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	206	287
Special Mention 5,6 | Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	206	287
Substandard 7
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	35,391	32,754
Substandard 7 | Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	32,203	31,045
Substandard 7 | Real Estate Loans | Land Development and Construction
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,872	269
Substandard 7 | Real Estate Loans | Farmland
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	1,679	1,893
Substandard 7 | Real Estate Loans | 1-4 Family Mortgages
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	13,290	12,030
Substandard 7 | Real Estate Loans | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	15,362	16,853
Substandard 7 | Business Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	2,530	650
Substandard 7 | Business Loans | Commercial and Industrial Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	2,527	601
Substandard 7 | Business Loans | Farm Production and Other Farm Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	3	49
Substandard 7 | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	658	1,059
Substandard 7 | Consumer Loans | Credit Cards
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	2	30
Substandard 7 | Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	656	1,029
Doubtful 8
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	116	56
Doubtful 8 | Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	50
Doubtful 8 | Real Estate Loans | Farmland
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	50
Doubtful 8 | Business Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	23	28
Doubtful 8 | Business Loans | Commercial and Industrial Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	23	28
Doubtful 8 | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	43	28
Doubtful 8 | Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans	43	28
Loss 9
Financing Receivable, Recorded Investment [Line Items]
Total gross loans		2
Loss 9 | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans		2
Loss 9 | Consumer Loans | Other Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total gross loans		$ 2

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Stock Option Plan (Tables)

9 Months Ended

Sep. 30, 2013

Summary of Stock Option Activity

The following table below is a summary of the stock option activity for the nine months ended September 30, 2013.

	Directors’ Plan					Employees’ Plan
				Weighted					Weighted
	Number			Average		Number			Average
	of			Exercise		of			Exercise
	Shares			Price		Shares			Price
Outstanding at December 31, 2012		111,000		$	20.97		108,000		$	20.90
Granted		—			—		—			—
Exercised		(3,000	)		16.40		(7,000	)		14.91
Expired		(4,500	)		16.40		(19,000	)		18.11
Outstanding at September 30, 2013		103,500		$	21.30		82,000		$	22.06

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Loans

9 Months Ended

Sep. 30, 2013

Loans

Note 6. Loans

The composition of net loans at September 30, 2013 and December 31, 2012 is as follows:

	September 30, 2013			December 31, 2012
	(In Thousands)
Real Estate:
Land Development and Construction	$	25,779		$	12,755
Farmland		29,674			31,663
1-4 Family Mortgages		107,794			115,837
Commercial Real Estate		140,349			132,495
Total Real Estate Loans		303,596			292,750
Business Loans:
Commercial and Industrial Loans		46,813			45,564
Farm Production and Other Farm Loans		1,303			1,433
Total Business Loans		48,116			46,997
Consumer Loans:
Credit Cards		1,039			1,050
Other Consumer Loans		25,660			28,341
Total Consumer Loans		26,699			29,391
Total Gross Loans		378,411			369,138
Unearned income		(440	)		(248	)
Allowance for loan losses		(7,770	)		(6,954	)
Loans, net	$	370,201		$	361,936

Loans are considered to be past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status, when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether such loans are considered past due. When interest accruals are discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Period-end, non-accrual loans, segregated by class of loans, were as follows:

	September 30, 2013		December 31, 2012
	(in thousands)
Real Estate:
Land Development and Construction	$	129	$	142
Farmland		397		1,087
1-4 Family Mortgages		1,634		2,356
Commercial Real Estate		9,284		10,175
Total Real Estate Loans		11,444		13,760
Business Loans:
Commercial and Industrial Loans		2,141		167
Farm Production and Other Farm Loans		1		3
Total Business Loans		2,142		170
Consumer Loans:
Other Consumer Loans		120		212
Total Consumer Loans		120		212
Total Non-Accrual Loans	$	13,706	$	14,142

An aging analysis of past due loans, segregated by class of loans, as of September 30, 2013, was as follows (in thousands):

											Accruing
			Loans								Loans
	Loans		90 or more								90 or more
	30-89 Days		Days		Total Past		Current		Total		Days
	Past Due		Past Due		Due Loans		Loans		Loans		Past Due
Real Estate:
Land Development and Construction	$	294	$	—	$	294	$	25,485	$	25,779	$	—
Farmland		592		119		711		28,963		29,674		—
1-4 Family Mortgages		4,354		631		4,985		102,809		107,794		244
Commercial Real Estate		3,529		7,920		11,449		128,900		140,349		—
Total Real Estate Loans		8,769		8,670		17,439		286,157		303,596		244
Business Loans:
Commercial and Industrial Loans		233		3		236		46,577		46,813		—
Farm Production and Other Farm Loans		1		—		1		1,302		1,303		—
Total Business Loans		234		3		237		47,879		48,116		—
Consumer Loans:
Credit Cards		39		2		41		998		1,039		2
Other Consumer Loans		1,220		58		1,278		24,382		25,660		17
Total Consumer Loans		1,259		60		1,319		25,380		26,699		19
Total Loans	$	10,262	$	8,733	$	18,995	$	359,416	$	378,411	$	263

An aging analysis of past due loans, segregated by class of loans, as of December 31, 2012 was as follows (in thousands):

	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or more Days Past Due
Real Estate:
Land Development and Construction	$	2,588	$	—	$	2,588	$	10,167	$	12,755	$	—
Farmland		786		589		1,375		30,288		31,663		—
1-4 Family Mortgages		8,139		623		8,762		107,075		115,837		32
Commercial Real Estate		3,033		5,013		8,046		124,449		132,495		544
Total Real Estate Loans		14,546		6,225		20,771		271,979		292,750		576
Business Loans:
Commercial and Industrial Loans		3,070		9		3,079		42,485		45,564		—
Farm Production and other Farm Loans		2		—		2		1,431		1,433		—
Total Business Loans		3,072		9		3,081		43,916		46,997		—
Consumer Loans:
Credit Cards		40		30		70		980		1,050		30
Other Consumer Loans		1,711		57		1,768		26,573		28,341		3
Total Consumer Loans		1,751		87		1,838		27,553		29,391		33
Total Loans	$	19,369	$	6,321	$	25,690	$	343,448	$	369,138	$	609

Loans are considered impaired when, based on current information and events, it is probable the Corporation will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. In determining which loans to evaluate for impairment, management looks at past due loans, bankruptcy filings and any situation that might lend itself to cause a borrower to be unable to repay the loan according to the original agreement terms. If a loan is determined to be impaired and the collateral is deemed to be insufficient to fully repay the loan, a specific reserve will be established. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans or portions thereof, are charged-off when deemed uncollectible.

Impaired loans as of September 30, 2013 and December 31, 2012, by class of loans, are as follows (in thousands):

September 30, 2013	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	129	$	14	$	115	$	129	$	114	$	140
Farmland		397		215		182		397		49		418
1-4 Family Mortgages		1,634		1,246		388		1,634		64		1,733
Commercial Real Estate		9,284		946		8,338		9,284		961		9,087
Total Real Estate Loans		11,444		2,421		9,023		11,444		1,188		11,378
Business Loans:
Commercial and Industrial Loans		2,141		18		2,123		2,141		651		2,160
Farm Production and Other Farm Loans		1		1		—		1		—		2
Total Business Loans		2,142		19		2,123		2,142		651		2,162
Consumer Loans:
Other Consumer Loans		120		120		—		120		—		160
Total Consumer Loans		120		120		—		120		—		160
Total Loans	$	13,706	$	2,560	$	11,146	$	13,706	$	1,839	$	13,700

December 31, 2012	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	142	$	18	$	124	$	142	$	117	$	638
Farmland		1,087		947		140		1,087		24		864
1-4 Family Mortgages		2,356		1,740		616		2,356		186		2,211
Commercial Real Estate		10,175		5,954		4,221		10,175		711		8,496
Total Real Estate Loans		13,760		8,659		5,101		13,760		1,038		12,209
Business Loans:
Commercial and Industrial Loans		167		76		91		167		55		226
Farm Production and other Farm Loans		3		3		—		3		—		12
Total Business Loans		170		79		91		170		55		238
Consumer Loans:
Other Consumer Loans		212		212		—		212		—		323
Total Consumer Loans		212		212		—		212		—		323
Total Loans	$	14,142	$	8,950	$	5,192	$	14,142	$	1,093	$	12,770

The following table presents troubled debt restructurings segregated by class (in thousands, except for number of loans):

September 30, 2013	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		4	$	6,850	$	5,186
Total		4	$	6,850	$	5,186
December 31, 2012	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		4	$	6,850	$	5,602
Total		4	$	6,850	$	5,602

Changes in the Corporation’s troubled debt restructurings are set forth in the table below (in thousands, except for number of loans):

	Number of Loans		Recorded Investment
Totals at January 1, 2013		4	$	5,602
Reductions due to:
Principal paydowns				(416	)
Total at September 30, 2013		4	$	5,186

The allocated allowance for loan losses attributable to restructured loans was $174 thousand at September 30, 2013 and $43 thousand at December 31, 2012. The Corporation had no remaining availability under commitments to lend additional funds on these troubled debt restructuring as of September 30, 2013.

The Corporation utilizes a risk grading matrix to assign a risk grade to each of its loans when originated and is updated as factors related to the strength of the loan changes. Loans are graded on a scale of 1 to 9. A description of the general characteristics of the 9 risk grades is as follows.

Grade 1. MINIMAL RISK—These loans are without loss exposure to the Corporation. This classification is reserved for only the best, well secured loans to borrowers with significant capital strength, low leverage, stable earnings and growth and other readily available financing alternatives. This type of loan would also include loans secured by a program of the government.

Grade 2. MODEST RISK—These loans include borrowers with solid credit quality and moderate risk of loss. These loans may be fully secured by certificates of deposit with another reputable financial institution, or secured by readily marketable securities with acceptable margins.

Grade 3. AVERAGE RISK—This is the rating assigned to the majoprity of the loans held by the Corporation. This includes loans with average loss exposure and average overall quality. These loans should liquidate through possessing adequate collateral and adequate earnings of the borrower. In addition, these loans are properly documented and are in accordance with all aspects of the current loan policy.

Grade 4. ACCEPTABLE RISK—Borrower generates sufficient cash flow to fund debt service but most working asset and capital expansion needs are provided from external sources. Profitability and key balance sheet ratios are usually close to peers but one or more may be higher than peers.

Grade 5. MANAGEMENT ATTENTION—Borrower has significant weaknesses resulting from performance trends or management concerns. The financial condition of the borrower has taken a negative turn and may be temporarily strained. Cash flow is weak but cash reserves remain adequate to meet debt service. Management weakness is evident.

Grade 6. OTHER LOANS ESPECIALLY MENTIONED (OLEM)—Loans in this category are fundamentally sound but possess some weaknesses. OLEM loans have potential weaknesses which may, if not checked or corrected, weaken the asset or inadequately protect the bank’s credit position at some future date. These loans have an identifiable weakness in credit, collateral, or repayment ability but there is no expectation of loss.

Grade 7. SUBSTANDARD ASSETS—Assets classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness based upon objective evidence. Assets classified as substandard are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. The possibility that liquidation would not be timely requires a substandard classification even if there is little likelihood of total loss.

Grade 8. DOUBTFUL—A loan classified as doubtful has all the weaknesses of a substandard classification and the added characteristic that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable or improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. A doubtful classification could reflect the fact that the primary source of repayment is gone and serious doubt exists as to the quality of a secondary source of repayment.

Grade 9. LOSS—Loans classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may occur in the future. Also included in this classification is the defined loss portion of loans rated substandard assets and doubtful assets.

These internally assigned grades are updated on a continual basis throughout the course of the year and represent management’s most updated judgment regarding grades at September 30, 2013.

The following table details the amount of gross loans by loan grade and class as of September 30, 2013 (in thousands):

Grades	Satisfactory 1, 2, 3, 4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	23,698	$	209	$	1,872	$	—	$	—	$	25,779
Farmland		25,433		2,512		1,679		50		—		29,674
1-4 Family Mortgages		89,300		5,204		13,290		—		—		107,794
Commercial Real Estate		118,988		5,999		15,362		—		—		140,349
Total Real Estate Loans		257,419		13,924		32,203		50		—		303,596
Business Loans:
Commercial and Industrial Loans		43,788		475		2,527		23		—		46,813
Farm Production and Other Farm Loans		1,290		10		3		—		—		1,303
Total Business Loans		45,078		485		2,530		23		—		48,116
Consumer Loans:
Credit Cards		1,037		—		2		—		—		1,039
Other Consumer Loans		24,755		206		656		43		—		25,660
Total Consumer Loans		25,792		206		658		43		—		26,699
Total Loans	$	328,289	$	14,615	$	35,391	$	116	$	—	$	378,411

The following table details the amount of gross loans by loan grade and class as of December 31, 2012 (in thousands):

Grades	Satisfactory 1, 2, 3,4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	10,596	$	1,890	$	269	$	—	$	—	$	12,755
Farmland		27,069		2,701		1,893		—		—		31,663
1-4 Family Mortgages		97,630		6,177		12,030		—		—		115,837
Commercial Real Estate		108,914		6,728		16,853		—		—		132,495
Total Real Estate Loans		244,209		17,496		31,045		—		—		292,750
Business Loans:
Commercial and Industrial Loans		41,449		3,486		601		28		—		45,564
Farm Production and other Farm Loans		1,358		26		49		—		—		1,433
Total Business Loans		42,807		3,512		650		28		—		46,997
Consumer Loans:
Credit Cards		1,020		—		30		—		—		1,050
Other Consumer Loans		26,995		287		1,029		28		2		28,341
Total Consumer Loans		28,015		287		1,059		28		2		29,391
Total Loans	$	315,031	$	21,295	$	32,754	$	56	$	2	$	369,138

The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses within the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio.

The allowance on the majority of the loan portfolio is calculated using a historical chargeoff percentage applied to the current loan balances by loan segment. This historical period is the average of the previous 5 years with the most current years weighted to show the effect of the most recent chargeoff activity. This percentage is also adjusted for economic factors such as local unemployment and general business conditions, both local and nationwide.

The group of loans that are considered to be impaired are individually evaluated for possible loss and a specific reserve is established to cover any loss contingency. Loans that are determined to be a loss with no benefit of remaining in the portfolio are charged off to the allowance. These specific reserves are reviewed periodically for continued impairment and adequacy of the specific reserve and adjusted when necessary.

The following table details activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2013:

September 30, 2013	Real Estate		Business Loans		Consumer			Total
Beginning Balance, January 1, 2013	$	4,629,559	$	1,554,698	$	770,012		$	6,954,269
Provision for possible loan losses		923,965		1,023,825		(118,848	)		1,828,942
Chargeoffs		696,475		375,498		104,553			1,176,526
Recoveries		81,516		21,515		60,325			163,356
Net Chargeoffs		614,959		353,983		44,228			1,013,170
Ending Balance	$	4,938,565	$	2,224,540	$	606,936		$	7,770,041
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,188,691	$	650,727	$	—		$	1,839,418
Loans collectively evaluated for impairment		3,749,874		1,573,813		606,936			5,930,623
Ending Balance, September 30, 2013	$	4,938,565	$	2,224,540	$	606,936		$	7,770,041

The following table details activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2012:

September 30, 2012	Real Estate		Business Loans		Consumer		Total
Beginning Balance, January 1, 2012	$	4,176,475	$	1,672,467	$	832,470	$	6,681,412
Provision for possible loan losses		1,204,314		15,456		108,691		1,328,461
Chargeoffs		511,610		55,260		200,144		767,014
Recoveries		49,440		50,332		106,801		206,573
Net Chargeoffs		462,170		4,928		93,343		560,441
Ending Balance, September 30, 2012	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,686,862	$	57,325	$	—	$	1,744,187
Loans collectively evaluated for impairment		3,231,757		1,625,670		847,818		5,705,245
Ending Balance, September 30, 2012	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432

The Corporation’s recorded investment in loans as of September 30, 2013 and December 31, 2012 related to each balance in the allowance for possible loan losses by portfolio segment and disaggregated on the basis of the Corporation’s impairment methodology was as follows (in thousands):

September 30, 2013	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	11,444	$	2,142	$	120	$	13,706
Loans collectively evaluated for general impairment		292,152		45,974		26,579		364,705
	$	303,596	$	48,116	$	26,699	$	378,411
December 31, 2012	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	13,760	$	170	$	212	$	14,142
Loans collectively evaluated for general impairment		278,990		46,827		29,179		354,996
	$	292,750	$	46,997	$	29,391	$	369,138

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Basis of Presentation

9 Months Ended

Sep. 30, 2013

Basis of Presentation

Note 1. Basis of Presentation

These interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). However, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The interim consolidated financial statements are unaudited and reflect all adjustments and reclassifications, which, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition as of and for the interim periods presented. All adjustments and reclassifications are of a normal and recurring nature. Results for the period ended September 30, 2013, are not necessarily indicative of the results that may be expected for any other interim periods or for the year as a whole.

The interim consolidated financial statements of Citizens Holding Company include the accounts of its wholly-owned subsidiary, The Citizens Bank of Philadelphia (the “Bank” and collectively with Citizens Holding Company, the “Corporation”). All significant intercompany transactions have been eliminated in consolidation.

For further information and significant accounting policies of the Corporation, see the Notes to Consolidated Financial Statements of Citizens Holding Company included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on March 15, 2013.

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Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 408,804,186	$ 420,907,815
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	406,128,321	418,101,562
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	2,675,865	2,806,253
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	408,804,186	420,907,815
Fair Value, Measurements, Recurring | Obligations of U. S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	288,469,835	269,110,901
Fair Value, Measurements, Recurring | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	18,203,673	38,421,301
Fair Value, Measurements, Recurring | State, county and municipal obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	99,454,813	110,569,360
Fair Value, Measurements, Recurring | Other investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	2,675,865	2,806,253
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	406,128,321	418,101,562
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Obligations of U. S. Government Agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	288,469,835	269,110,901
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	18,203,673	38,421,301
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | State, county and municipal obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	99,454,813	110,569,360
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	2,675,865	2,806,253
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Other investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 2,675,865	$ 2,806,253

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Commitments and Contingent Liabilities - Additional Information (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Commitments and Contingencies Disclosure [Line Items]
Loan Commitments	$ 51,190,892	$ 37,703,387
Letters of Credit Outstanding	$ 2,848,530	$ 3,113,225

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Net Income per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share

Net income per share was computed as follows:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2013		2012		2013		2012
Basic weighted average shares outstanding		4,870,114		4,861,411		4,867,475		4,856,584
Dilutive effect of granted options		80		5,628		1,994		8,493
Diluted weighted average shares outstanding		4,870,194		4,867,039		4,869,469		4,865,077
Net income	$	2,009,463	$	1,629,042	$	5,027,653	$	5,043,806
Net income per share-basic	$	0.41	$	0.34	$	1.03	$	1.04
Net income per share-diluted	$	0.41	$	0.33	$	1.03	$	1.04

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Stock Option Plan - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of options granted	$ 1,080
Directors Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of options granted	$ 960
Employee Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of options granted	$ 120

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Earnings Per Share (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Basic weighted average shares outstanding	4,870,114	4,861,411	4,867,475	4,856,584
Dilutive effect of granted options	80	5,628	1,994	8,493
Diluted weighted average shares outstanding	4,870,194	4,867,039	4,869,469	4,865,077
Net income	$ 2,009,463	$ 1,629,042	$ 5,027,653	$ 5,043,806
Net income per share-basic	$ 0.41	$ 0.34	$ 1.03	$ 1.04
Net income per share-diluted	$ 0.41	$ 0.33	$ 1.03	$ 1.04

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 07, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	CIZN
Entity Registrant Name	CITIZENS HOLDING CO /MS/
Entity Central Index Key	0001075706
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		4,870,114

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Summary of Stock Option Activity (Detail) (USD $)	9 Months Ended
	Sep. 30, 2013
Directors Stock Option Plan
Number of Shares
Beginning Balance	111,000
Granted
Exercised	(3,000)
Expired	(4,500)
Ending Balance	103,500
Weighted Average Exercise Price
Beginning Balance	$ 20.97
Granted
Exercised	$ 16.40
Expired	$ 16.40
Ending Balance	$ 21.30
Employee Stock Option Plan
Number of Shares
Beginning Balance	108,000
Granted
Exercised	(7,000)
Expired	(19,000)
Ending Balance	82,000
Weighted Average Exercise Price
Beginning Balance	$ 20.90
Granted
Exercised	$ 14.91
Expired	$ 18.11
Ending Balance	$ 22.06