10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2015

Or

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 000-30973

MBT FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Michigan	38-3516922
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

102 E. Front Street

Monroe, Michigan 48161

(Address of principal executive offices)

(Zip Code)

(734) 241-3431

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ 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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

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

Large accelerated filer ¨	Accelerated Filer þ
Non-accelerated filer ¨	Smaller reporting company ¨

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

As of May 11, 2015, there were 22,731,951 shares of the Company’s Common Stock outstanding.

Part I Financial Information

Item 1. Financial Statements

MBT FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS

	March 31, 2015
Dollars in thousands	(Unaudited)			December 31, 2014
ASSETS
Cash and Cash Equivalents
Cash and due from banks
Non-interest bearing	$	11,434		$	15,957
Interest bearing		40,123			36,165
Total cash and cash equivalents		51,557			52,122
Securities - Held to Maturity		36,354			32,613
Securities - Available for Sale		493,550			473,176
Federal Home Loan Bank stock - at cost		7,537			7,537
Loans held for sale		662			548
Loans		618,723			610,332
Allowance for Loan Losses		(13,191	)		(13,208	)
Loans - Net		605,532			597,124
Accrued interest receivable and other assets		26,299			29,465
Other Real Estate Owned		4,888			5,615
Bank Owned Life Insurance		52,096			51,825
Premises and Equipment - Net		28,578			28,632
Total assets	$	1,307,053		$	1,278,657
LIABILITIES
Deposits:
Non-interest bearing	$	235,743		$	218,221
Interest-bearing		899,569			893,590
Total deposits		1,135,312			1,111,811
Repurchase agreements		15,000			15,000
Interest payable and other liabilities		16,533			17,310
Total liabilities		1,166,845			1,144,121
STOCKHOLDERS' EQUITY
Common stock (no par value; 50,000,000 shares authorized,
22,730,647 and 22,718,077 shares issued and outstanding)		23,120			23,037
Retained earnings		116,909			114,132
Accumulated other comprehensive income (loss)		179			(2,633	)
Total stockholders' equity		140,208			134,536
Total liabilities and stockholders' equity	$	1,307,053		$	1,278,657

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

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MBT FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - UNAUDITED

	Three Months Ended March 31,
Dollars in thousands, except per share data	2015			2014
Interest Income
Interest and fees on loans	$	7,432		$	7,079
Interest on investment securities-
Tax-exempt		275			307
Taxable		2,428			2,118
Interest on balances due from banks		26			32
Total interest income		10,161			9,536
Interest Expense
Interest on deposits		645			855
Interest on borrowed funds		174			186
Total interest expense		819			1,041
Net Interest Income		9,342			8,495
Provision For (Recovery Of) Loan Losses		(800	)		100
Net Interest Income After
Provision For Loan Losses		10,142			8,395
Other Income
Income from wealth management services		1,222			1,134
Service charges and other fees		894			932
Debit card income		564			489
Net gain on sales of securities available for sale		236			57
Net gain (loss) on sales of Other Real Estate Owned		(263	)		12
Origination fees on mortgage loans sold		129			62
Bank owned life insurance income		271			354
Rent income on Other Real Estate Owned		34			135
Other		538			489
Total other income		3,625			3,664
Other Expenses
Salaries and employee benefits		5,874			5,728
Occupancy expense		820			744
Equipment expense		734			617
Marketing expense		246			203
Professional fees		576			418
Other Real Estate Owned expenses		126			339
FDIC Deposit Insurance Assessment		414			640
Bonding and other insurance expense		230			264
Telephone expense		95			143
Other		704			603
Total other expenses		9,819			9,699
Income Before Income Taxes		3,948			2,360
Income Tax Expense		1,171			593
Net Income	$	2,777		$	1,767
Other Comprehensive Income (Loss) - Net of Tax
Unrealized gains (losses) on securities		2,941			3,559
Reclassification adjustment for losses
included in net income		(156	)		(38	)
Postretirement benefit liability		27			(293	)
Total Other Comprehensive Income (Loss) - Net of Tax		2,812			3,228
Comprehensive Income (Loss)	$	5,589		$	4,995
Basic Earnings Per Common Share	$	0.12		$	0.08
Diluted Earnings Per Common Share	$	0.12		$	0.08
Common Stock Dividends Declared Per Share	$	-		$	-

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

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MBT FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED

							Accumulated
							Other
	Common		Retained		Unearned		Comprehensive
Dollars in thousands	Stock		Earnings		Compensation		Income (Loss)			Total
Balance - January 1, 2015	$	23,037	$	114,132	$	-	$	(2,633	)	$	134,536
Issuance of Common Stock
SOSARs exercised (7,856 shares)		-		-		-		-			-
Other stock issued (4,714 shares)		26		-		-		-			26
Equity Compensation		57		-		-		-			57
Net income		-		2,777		-		-			2,777
Other comprehensive income - net of tax		-		-		-		2,812			2,812
Balance - March 31, 2015	$	23,120	$	116,909	$	-	$	179		$	140,208

									Accumulated
									Other
	Common			Retained		Unearned			Comprehensive
Dollars in thousands	Stock			Earnings		Compensation			Income (Loss)			Total
Balance - January 1, 2014	$	14,671		$	106,817	$	(7	)	$	(10,873	)	$	110,608
Issuance of Common Stock
SOSARs exercised (2,162 shares)		-			-		-			-			-
Restricted stock awards (6,000 shares)		29			-		(29	)		-			-
Other stock issued (652,725 shares)		2,778			-		-			-			2,778
Stock Offering Expense		(325	)		-		-			-			(325	)
Equity Compensation		46			-		5			-			51
Net income		-			1,767		-			-			1,767
Other comprehensive loss - net of tax		-			-		-			3,228			3,228
Balance - March 31, 2014	$	17,199		$	108,584	$	(31	)	$	(7,645	)	$	118,107

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

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MBT FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

	Three Months Ended March 31,
Dollars in thousands	2015			2014
Cash Flows from Operating Activities
Net Income	$	2,777		$	1,767
Adjustments to reconcile net income to net cash from operating activities
Provision for (recovery of) loan losses		(800	)		100
Depreciation		398			415
Decrease in net deferred federal income tax asset		1,155			593
Net amortization of investment premium and discount		282			255
Writedowns of Other Real Estate Owned		312			59
Net increase (decrease) in interest payable and other liabilities		(737	)		294
Net (increase) decrease in interest receivable and other assets		443			(679	)
Equity based compensation expense		58			51
Net gain on sale/settlement of securities		(236	)		(57	)
Increase in cash surrender value of life insurance		(271	)		(353	)
Net cash provided by operating activities	$	3,381		$	2,445
Cash Flows from Investing Activities
Proceeds from maturities and redemptions of investment securities held to maturity	$	686		$	3,146
Proceeds from maturities and redemptions of investment securities available for sale		47,011			4,578
Proceeds from sales of investment securities available for sale		8,430			22,376
Net (increase) decrease in loans		(7,807	)		4,803
Proceeds from sales of other real estate owned		562			1,145
Proceeds from sales of other assets		65			1
Purchase of investment securities held to maturity		(4,439	)		(4,590	)
Purchase of investment securities available for sale		(71,629	)		(46,829	)
Purchase of bank premises and equipment		(352	)		(615	)
Net cash used for investing activities	$	(27,473	)	$	(15,985	)
Cash Flows from Financing Activities
Net increase (decrease) in deposits	$	23,501		$	(13,107	)
Proceeds from issuance of common stock		26			2,453
Net cash provided by (used for) financing activities	$	23,527		$	(10,654	)
Net Decrease in Cash and Cash Equivalents	$	(565	)	$	(24,194	)
Cash and Cash Equivalents at Beginning of Period		52,122			77,798
Cash and Cash Equivalents at End of Period	$	51,557		$	53,604
Supplemental Cash Flow Information
Cash paid for interest	$	823		$	1,039
Cash paid for federal income taxes	$	15		$	-
Supplemental Schedule of Non Cash Investing Activities
Transfer of loans to other real estate owned	$	40		$	1,280
Transfer of loans to other assets	$	45		$	-

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

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MBT FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The unaudited consolidated financial statements include the accounts of MBT Financial Corp. (the “Company”) and its subsidiary, Monroe Bank & Trust (the “Bank”). The Bank includes the accounts of its wholly owned subsidiary, MB&T Financial Services, Inc. The Bank operates seventeen branches in Monroe County, Michigan, seven branches in Wayne County, Michigan, and a loan and wealth management office in Lenawee County. The Bank’s primary source of revenue is from providing loans to customers, who are predominantly small and middle-market businesses and middle-income individuals. The Company’s sole business segment is community banking.

The accounting and reporting policies of the Bank conform to practice within the banking industry and are in accordance with accounting principles generally accepted in the United States. Preparation of financial statements in conformity with generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes in the near term are the determination of the allowance for loan losses, the valuation of other real estate owned, and the fair value of investment securities.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, such information reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of Management, necessary for fair statement of results for the interim periods.

The significant accounting policies are as follows:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany transactions and balances have been eliminated.

COMPREHENSIVE INCOME

Accounting principles generally require that revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, however, such as unrealized gains and losses on securities available for sale and amounts recognized related to postretirement benefit plans (gains and losses, prior service costs, and transition assets or obligations), are reported as a direct adjustment to the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income.

BUSINESS SEGMENTS

While the Company's chief decision makers monitor the revenue streams of various products and services, operations are managed and financial performance is evaluated on a company wide basis. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable segment.

FAIR VALUE

The Company measures or monitors many of its assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities that are elected to be accounted for under The Fair Value Option as well as for certain assets and liabilities in which fair value is the primary basis of accounting. Examples of these include derivative instruments and available for sale securities. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes. Examples of these non-recurring uses of fair value include certain loans held for sale accounted for on a lower of cost or market basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value.

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When determining the fair value measurements for assets and liabilities required or permitted to be recorded at and/or marked to fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to market observable data for similar assets or liabilities. Nevertheless, certain assets and liabilities are not actively traded in observable markets and the Company must use alternative valuation techniques to derive a fair value measurement.

ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), “Revenue from Contracts with Customers (Topic 606)”. ASU 2014-09 adopts a standardized approach for revenue recognition and was a joint effort with the International Accounting Standards Board (IASB). The new revenue recognition standard is based on a core principle of recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 does not apply to financial instruments. ASU 2014-09 is effective for public entities for reporting periods beginning after December 15, 2016 (therefore, for the year ending December 31, 2017 for the Corporation). Early implementation is not allowed for public companies. Management is currently assessing the impact to the Corporation’s consolidated financial statements.

2. EARNINGS PER SHARE

The calculations of earnings per common share are as follows:

	For the three months ended March 31,
	2015		2014
Basic
Net income	$	2,777,000	$	1,767,000
Average common shares outstanding		22,721,845		20,818,727
Earnings per common share - basic	$	0.12	$	0.08
Diluted
Net income	$	2,777,000	$	1,767,000
Average common shares outstanding		22,721,845		20,818,727
Equity compensation		184,489		294,199
Average common shares outstanding - diluted		22,906,334		21,112,926
Earnings per common share - diluted	$	0.12	$	0.08

3. STOCK BASED COMPENSATION

Stock Options - The following table summarizes the options that had been granted to certain key executives in accordance with the Long-Term Incentive Compensation Plan that was approved by shareholders at the Annual Meeting of Shareholders on April 6, 2000.

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			Weighted Average
	Shares		Exercise Price
Options Outstanding, January 1, 2015		205,400	$	19.08
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		89,500		23.40
Options Outstanding, March 31, 2015		115,900	$	15.75
Options Exercisable, March 31, 2015		115,900	$	15.75

Stock Only Stock Appreciation Rights (SOSARs) - On January 21, 2015, 72,500 Stock Only Stock Appreciation Rights (SOSARs) were awarded to certain executives in accordance with the MBT 2008 Stock Incentive Plan that was approved by shareholders on May 1, 2008. The SOSARs have a term of ten years and vest in three equal annual installments beginning on December 31, 2015. The fair value of $2.85 for the SOSARs was estimated at the date of the grant, using the Black-Scholes option pricing model, with the following assumptions: expected option lives of 7 years, expected volatility of 57.07%, a risk free interest rate of 1.70% and dividend yield of 0.00%. The fair value of the Company’s common stock was $4.94 on the grant date.

SOSARs granted under the plan are structured as fixed grants with the exercise price equal to the market value of the underlying stock on the date of the grant.

The following table summarizes the SOSARs that have been granted:

			Weighted Average
	SOSARs		Base Price
SOSARs Outstanding, January 1, 2015		557,439	$	3.58
Granted		72,500		4.94
Exercised		21,166		2.31
Forfeited		7,502		3.82
Expired		-		-
SOSARs Outstanding, March 31, 2015		601,271	$	3.78
SOSARs Exercisable, March 31, 2015		427,724	$	3.51

The exercise of a SOSAR results in the issuance of a number of shares of common stock of the Company based on the appreciation of the market price of the stock over the exercise price of the SOSAR. The market value of the Company’s common stock on March 31, 2015 was $5.61. The value of the exercisable SOSARs that are in-the-money as of March 31, 2015 was $1,103,000, and exercise of those SOSARs on that date would have resulted in the issuance of 196,562 shares of common stock.

Restricted Stock Unit Awards – On January 21, 2015, 25,000 performance restricted stock units were awarded to certain key executive officers in accordance with the MBT 2008 Stock Incentive Plan that was approved by shareholders on May 1, 2008. Each Restricted Stock Unit (RSU) is equivalent to one share of MBT Financial Corp. common stock. Stock will be issued to the participants following a two year performance period that ends on December 31, 2016. Earned RSUs vest on December 31, 2017 and as of March 31, 2015 none of the RSUs were vested.

The total expense for equity based compensation was $83,000 in the first quarter of 2015 and $67,000 in the first quarter of 2014.

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4. LOANS

The Bank makes commercial, consumer, and mortgage loans primarily to customers in Monroe County, Michigan, southern and western Wayne County, Michigan, Lenawee County, Michigan, and surrounding areas. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on the automotive, manufacturing, and real estate development economic sectors.

Loans consist of the following (000s omitted):

	March 31,		December 31,
	2015		2014
Residential real estate loans	$	221,329	$	223,701
Commercial and Construction real estate loans		263,511		262,395
Agriculture and agricultural real estate loans		17,106		16,700
Commercial and industrial loans		74,071		62,761
Loans to individuals for household, family, and other personal expenditures		42,706		44,775
Total loans, gross	$	618,723	$	610,332
Less: Allowance for loan losses		13,191		13,208
	$	605,532	$	597,124

Loans are placed in a nonaccrual status when, in the opinion of Management, the collection of additional interest is doubtful. All loan relationships over $250,000 that are classified by Management as nonperforming as well as selected performing accounts and all renegotiated loans are reviewed for impairment each quarter. Allowances for loans determined to be impaired are included in the allowance for loan losses. All cash received on nonaccrual loans is applied to the principal balance. Nonperforming assets consist of nonaccrual loans, loans 90 days or more past due, restructured loans, nonaccrual investment securities, and other real estate owned. Other real estate owned includes real estate that has been acquired in full or partial satisfaction of loan obligations or upon foreclosure and real estate that the bank has purchased but no longer intends to use for bank premises.

The following table summarizes nonperforming assets (000’s omitted):

	March 31,			December 31,
	2015			2014
Nonaccrual loans	$	12,329		$	13,040
Loans 90 days past due and accruing		3			10
Restructured loans		22,788			22,896
Total nonperforming loans	$	35,120		$	35,946
Other real estate owned		4,888			5,615
Other assets		5			18
Nonperforming investment securities		-			-
Total nonperforming assets	$	40,013		$	41,579
Nonperforming assets to total assets		3.06	%		3.25	%
Allowance for loan losses to nonperforming loans		37.56	%		36.74	%

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5. ALLOWANCE FOR LOAN LOSSES

The Company separates its loan portfolio into segments to perform the calculation and analysis of the allowance for loan losses. The six segments analyzed are Agriculture and Agricultural Real Estate, Commercial, Commercial Real Estate, Construction Real Estate, Residential Real Estate, and Consumer and Other. The Agriculture and Agricultural Real Estate segment includes all loans to finance agricultural production and all loans secured by agricultural real estate. This segment does not include loans to finance agriculture that are secured by residential real estate, which are included in the Residential Real Estate segment. The Commercial segment includes loans to finance commercial and industrial businesses that are not secured by real estate. The Commercial Real Estate segment includes loans secured by non-farm, non-residential real estate. The Construction Real Estate segment includes loans to finance construction and land development. This includes residential and commercial construction and land development. The Residential Real Estate segment includes all loans, other than construction loans, that are secured by single family and multi family residential real estate properties. The Consumer and Other segment includes all loans not included in any other segment. These are primarily loans to consumers for household, family, and other personal expenditures, such as autos, boats, and recreational vehicles.

Activity in the allowance for loan losses during the three months ended March 31, 2015 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial			Commercial Real Estate			Construction Real Estate			Residential Real Estate			Consumer and Other			Total
Allowance for loan losses: For the three months ended March 31, 2015
Beginning Balance	$	216	$	1,361		$	6,179		$	803		$	3,226		$	1,423		$	13,208
Charge-offs		-		(106	)		-			-			(196	)		(20	)		(322	)
Recoveries		7		74			161			609			223			31			1,105
Provision		32		51			(662	)		(602	)		(180	)		561			(800	)
Ending balance	$	255	$	1,380		$	5,678		$	810		$	3,073		$	1,995		$	13,191
Allowance for loan losses as of March 31, 2015
Ending balance individually evaluated for impairment	$	34	$	449		$	1,296		$	671		$	580		$	212		$	3,242
Ending balance collectively evaluated for impairment		221		931			4,382			139			2,493			1,783			9,949
Ending balance	$	255	$	1,380		$	5,678		$	810		$	3,073		$	1,995		$	13,191
Loans as of March 31, 2015
Ending balance individually evaluated for impairment	$	917	$	1,255		$	18,248		$	1,969		$	11,480		$	523		$	34,392
Ending balance collectively evaluated for impairment		16,189		72,816			232,479			10,815			209,849			42,183			584,331
Ending balance	$	17,106	$	74,071		$	250,727		$	12,784		$	221,329		$	42,706		$	618,723

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Activity in the allowance for loan losses during the three months ended March 31, 2014 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial			Commercial Real Estate			Construction Real Estate			Residential Real Estate			Consumer and Other			Total
Allowance for loan losses: For the three months ended March 31, 2014
Beginning Balance	$	171	$	1,989		$	7,030		$	1,397		$	4,606		$	1,016		$	16,209
Charge-offs		-		(186	)		(108	)		(210	)		(132	)		(38	)		(674	)
Recoveries		-		33			65			234			165			26			523
Provision		34		(56	)		473			9			(161	)		(199	)		100
Ending balance	$	205	$	1,780		$	7,460		$	1,430		$	4,478		$	805		$	16,158
Allowance for loan losses as of March 31, 2014
Ending balance individually evaluated for impairment	$	46	$	920		$	2,758		$	1,150		$	1,713		$	248		$	6,835
Ending balance collectively evaluated for impairment		159		860			4,702			280			2,765			557			9,323
Ending balance	$	205	$	1,780		$	7,460		$	1,430		$	4,478		$	805		$	16,158
Loans as of March 31, 2014
Ending balance individually evaluated for impairment	$	713	$	2,304		$	35,937		$	4,013		$	15,715		$	596		$	59,278
Ending balance collectively evaluated for impairment		13,842		56,491			228,069			10,858			209,484			13,784			532,528
Ending balance	$	14,555	$	58,795		$	264,006		$	14,871		$	225,199		$	14,380		$	591,806

Each period the provision for loan losses in the income statement results from the combination of an estimate by Management of loan losses that occurred during the current period and the ongoing adjustment of prior estimates of losses occurring in prior periods.

The provision for loan losses increases the allowance for loan losses, a valuation account which appears on the consolidated balance sheets. As the specific customer and amount of a loan loss is confirmed by gathering additional information, taking collateral in full or partial settlement of the loan, bankruptcy of the borrower, etc., the loan is charged off, reducing the allowance for loan losses. If, subsequent to a charge off, the Bank is able to collect additional amounts from the customer or sell collateral worth more than earlier estimated, a recovery is recorded.

To serve as a basis for making this provision, the Bank maintains an extensive credit risk monitoring process that considers several factors including: current economic conditions affecting the Bank’s customers, the payment performance of individual loans and pools of homogeneous loans, portfolio seasoning, changes in collateral values, and detailed reviews of specific loan relationships.

The Company utilizes an internal loan grading system to assign a risk grade to all commercial loans, all renegotiated loans, and each commercial credit relationship. Grades 1 through 4 are considered “pass” credits and grades 5 and 6 are considered “watch” credits and are subject to greater scrutiny. Loans with grades 7, 8, and 9 and considered “doubtful” or “loss” and have generally been charged off. A description of the general characteristics of each grade is as follows:

• Grade 1 – Excellent – Loans secured by marketable collateral, with adequate margin, or supported by strong financial statements, including substantial levels of tangible net worth. Probability of serious financial deterioration is unlikely. Possess a sound repayment source and a secondary source. This classification will also include individual loans backed by liquid personal assets, established history and unquestionable character. High liquidity, minimum risk, strong ratios, and low handling costs are common to these loans.

-11-

• Grade 2 – Above Average – Loans that exhibit less than average risk and clearly demonstrate debt service coverage that is consistently above average as well as a strong capital base. These loans may have some deficiency or vulnerability, but with offsetting features and are considered to be fully collectable.

• Grade 3 – Satisfactory – Loans that have an acceptable amount of risk but may exhibit vulnerability to deterioration if adverse circumstances are encountered. These loans should demonstrate adequate debt service coverage and adequate levels of capital support but warrant periodic monitoring to ensure that weaknesses do not materialize or advance.

• Grade 4 – Pass – Loans that are considered “pass credits” and typically demonstrate adequate debt service coverage. The level of risk is considered acceptable but these loans warrant ongoing monitoring to ensure that adverse trends or other credit deficiencies have not materialized or advanced. The level of risk is considered acceptable so long as the loan is given adequate and ongoing management supervision.

• Grade 5 – Watch – Loans that possess some credit deficiency or potential weakness that deserves close attention. The primary source of loan repayment is sufficient but may be considered inadequate by the Bank’s standards.

• Grade 6 – Substandard – Loans that exhibit one or more of the following characteristics: (1) a defined credit weakness, financial deterioration is underway, and uncertainty about the likelihood that the loan will be paid from the primary source of repayment; (2) inadequately protected by the current net worth and paying capacity of the obligor; (3) reliance on secondary source of repayment such as collateral liquidation or guarantees; (4) distinct possibility the Bank will sustain loss if deficiencies are not corrected; (5) unusual courses of action are needed to maintain a high probability of repayment; (6) insufficient cash flow to repay principal but continuing to pay interest; (7) the Bank is subordinated or unsecured due to flaws in documentation; (8) loans are restructured or are on nonaccrual status due to concessions to the borrower when compared to normal loan terms; (9) the Bank is contemplating foreclosure or legal action due to the apparent deterioration in the loan; or (10) there is deterioration in the market conditions and the borrower is highly vulnerable to these conditions.

• Grade 7 – Doubtful – Loans that exhibit one or more of the following characteristics: (1) loans with all the weaknesses of Substandard loans and collection or liquidation is not probable to result in payment in full; (2) the primary source of repayment is gone and there is considerable doubt as to the quality of the secondary source of repayment; or (3) the possibility of loss is high, but certain important pending factors may strengthen the loan and loss classification is deferred.

• Grades 8 & 9 - Loss – Loans are considered uncollectible and of such little value that continuing to carry them on the Bank’s financial statements is not feasible.

The assessment of compensating factors may result in a rating plus or minus one grade from those listed above. These factors include, but are not limited to collateral, guarantors, environmental conditions, history, plan/projection reasonableness, quality of information, and payment delinquency.

-12-

The portfolio segments in each credit risk grade as of March 31, 2015 are as follows (000s omitted):

Credit Quality Indicators as of March 31, 2015

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	116	$	5,842	$	355	$	5,180	$	138,983	$	38,777	$	189,253
1		-		2,793		-		-		-		365		3,158
2		13		282		742		-		-		-		1,037
3		403		12,667		9,072		-		218		-		22,360
4		13,441		45,114		179,271		4,439		60,390		3,154		305,809
5		2,101		4,297		32,558		2,585		8,802		95		50,438
6		1,032		3,076		28,729		580		12,936		315		46,668
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723
Performing	$	16,109	$	72,655	$	233,018	$	10,750	$	209,062	$	42,009	$	583,603
Nonperforming		997		1,416		17,709		2,034		12,267		697		35,120
Total	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723

The portfolio segments in each credit risk grade as of December 31, 2014 are as follows (000s omitted):

Credit Quality Indicators as of December 31, 2014

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	122	$	2,700	$	-	$	5,402	$	138,355	$	40,371	$	186,950
1		-		3,060		-		-		-		369		3,429
2		330		287		830		-		132		-		1,579
3		491		7,084		9,923		-		464		-		17,962
4		13,458		41,441		176,685		4,357		58,902		3,260		298,103
5		1,261		4,903		34,385		2,471		10,112		199		53,331
6		1,038		3,286		27,646		696		15,736		576		48,978
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	16,700	$	62,761	$	249,469	$	12,926	$	223,701	$	44,775	$	610,332
Performing	$	15,702	$	61,287	$	231,461	$	10,740	$	211,143	$	44,053	$	574,386
Nonperforming		998		1,474		18,008		2,186		12,558		722		35,946
Total	$	16,700	$	62,761	$	249,469	$	12,926	$	223,701	$	44,775	$	610,332

Loans are considered past due when contractually required payment of interest or principal has not been received. The amount classified as past due is the entire principal balance outstanding of the loan, not just the amount of payments that are past due. The following is a summary of past due loans as of March 31, 2015 and December 31, 2014 (000s omitted):

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March 31, 2015	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90  Days Past Due  and Accruing
Agriculture and Agricultural Real Estate	$	-	$	-	$	80	$	80	$	17,026	$	17,106	$	-
Commercial		52		133		72		257		73,814		74,071		3
Commercial Real Estate		2,117		143		1,727		3,987		246,740		250,727		-
Construction Real Estate		110		-		2		112		12,672		12,784		-
Residential Real Estate		2,553		292		740		3,585		217,744		221,329		-
Consumer and Other		163		11		32		206		42,500		42,706		-
Total	$	4,995	$	579	$	2,653	$	8,227	$	610,496	$	618,723	$	3

December 31, 2014	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90  Days Past Due  and Accruing
Agriculture and Agricultural Real Estate	$	449	$	-	$	80	$	529	$	16,171	$	16,700	$	-
Commercial		142		44		60		246		62,515		62,761		10
Commercial Real Estate		2,127		1,118		2,287		5,532		243,937		249,469		-
Construction Real Estate		334		-		-		334		12,592		12,926		-
Residential Real Estate		2,946		741		777		4,464		219,237		223,701		-
Consumer and Other		124		15		61		200		44,575		44,775		-
Total	$	6,122	$	1,918	$	3,265	$	11,305	$	599,027	$	610,332	$	10

Loans are placed on non-accrual status when, in the opinion of Management, the collection of additional interest is doubtful. Loans are automatically placed on non-accrual status upon becoming ninety days past due, however, loans may be placed on non-accrual status regardless of whether or not they are past due. All cash received on non-accrual loans is applied to the principal balance. Loans are considered for return to accrual status on an individual basis when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The following is a summary of non-accrual loans as of March 31, 2015 and December 31, 2014 (000s omitted):

	March 31, 2015		December 31, 2014
Agriculture and Agricultural Real Estate	$	80	$	80
Commercial		322		315
Commercial Real Estate		6,460		6,287
Construction Real Estate		186		409
Residential Real Estate		5,108		5,760
Consumer and Other		173		189
Total	$	12,329	$	13,040

For loans deemed to be impaired due to an expectation that all contractual payments will probably not be received, impairment is measured by comparing the Bank’s recorded investment in the loan to the present value of expected cash flows discounted at the loan’s effective interest rate, the fair value of the collateral, or the loan’s observable market price.

-14-

The following is a summary of impaired loans as of March 31, 2015 and 2014 (000s omitted):

March 31, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the  Three Months  Ended		Interest Income Recognized in the  Three Months  Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	255	$	255	$	-	$	255	$	3
Commercial		346		392		-		413		5
Commercial Real Estate		7,976		8,603		-		8,365		76
Construction Real Estate		152		337		-		339		3
Residential Real Estate		6,610		7,412		-		7,035		85
Consumer and Other		35		35		-		37		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		662		662		34		662		9
Commercial		909		923		449		936		11
Commercial Real Estate		10,272		12,264		1,296		11,903		124
Construction Real Estate		1,817		1,846		671		1,833		21
Residential Real Estate		4,870		5,278		580		5,055		57
Consumer and Other		488		488		212		491		5
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	917	$	12
Commercial		1,255		1,315		449		1,349		16
Commercial Real Estate		18,248		20,867		1,296		20,268		200
Construction Real Estate		1,969		2,183		671		2,172		24
Residential Real Estate		11,480		12,690		580		12,090		142
Consumer and Other		523		523		212		528		6
	Recorded Investment as of December 31, 2014		Unpaid  Principal  Balance as of  December 31,  2014		Related  Allowance as  of December 31, 2014		Average  Recorded Investment for the Three Months Ended March 31, 2014		Interest Income Recognized in the Three Months Ended March 31, 2014
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	256	$	256	$	-	$	-	$	-
Commercial		363		412		-		1,025		13
Commercial Real Estate		8,084		8,882		-		18,098		194
Construction Real Estate		297		954		-		1,257		2
Residential Real Estate		6,424		7,200		-		8,339		87
Consumer and Other		3		3		-		33		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		661		661		34		712		9
Commercial		1,051		1,062		554		1,425		18
Commercial Real Estate		10,929		12,758		1,502		20,446		212
Construction Real Estate		1,820		1,851		671		3,177		33
Residential Real Estate		5,251		5,658		672		8,038		79
Consumer and Other		531		529		222		565		6
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	712	$	9
Commercial		1,414		1,474		554		2,450		31
Commercial Real Estate		19,013		21,640		1,502		38,544		406
Construction Real Estate		2,117		2,805		671		4,434		35
Residential Real Estate		11,675		12,858		672		16,377		166
Consumer and Other		534		532		222		598		7

-15-

The Bank may agree to modify the terms of a loan in order to improve the Bank’s ability to collect amounts due. These modifications may include reduction of the interest rate, extension of the loan term, or in some cases, reduction of the principal balance. Modifications that are performed due to the debtor’s financial difficulties are considered Troubled Debt Restructurings (“TDRs”).

Loans that have been classified as TDRs during the three month periods ended March 31, 2015 and March 31, 2014 are as follows (000s omitted from dollar amounts):

	Three months ended						Three months ended
	March 31, 2015						March 31, 2014
	Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance		Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance
Agriculture and Agricultural Real Estate		-	$	-	$	-		1	$	314	$	314
Commercial		-		-		-		-		-		-
Commercial Real Estate		1		332		332		2		946		931
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		-		-		-		3		265		230
Consumer and Other		-		-		-		-		-		-
Total		1	$	332	$	332		6	$	1,525	$	1,475

The Bank considers TDRs that become past due under the modified terms as defaulted. There were no loans that became TDRs during the three month periods ended March 31, 2015 and March 31, 2014 that subsequently defaulted during the three month periods ended March 31, 2015 and March 31, 2014, respectively.

The Company has allocated $2,775,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at March 31, 2015. In addition, there are no commitments to lend additional amounts to borrowers that are classified as troubled debt restructurings as of March 31, 2015 and March 31, 2014.

6. INVESTMENT SECURITIES

The following is a summary of the Bank’s investment securities portfolio as of March 31, 2015 and December 31, 2014 (000’s omitted):

	Held to Maturity
	March 31, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of States and Political Subdivisions	$	35,854	$	1,443	$	(48	)	$	37,249
Corporate Debt Securities		500		-		-			500
	$	36,354	$	1,443	$	(48	)	$	37,749

-16-

	Held to Maturity
	December 31, 2014
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of States and Political Subdivisions	$	32,113	$	1,287	$	(69	)	$	33,331
Corporate Debt Securities		500		-		-			500
	$	32,613	$	1,287	$	(69	)	$	33,831

	Available for Sale
	March 31, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of U.S. Government Agencies	$	351,130	$	2,940	$	(1,056	)	$	353,014
Mortgage Backed Securities issued by U.S. Government Agencies		115,189		600		(476	)		115,313
Obligations of States and Political Subdivisions		20,707		410		(54	)		21,063
Corporate Debt Securities		1,982		19		-			2,001
Equity Securities		2,044		115		-			2,159
	$	491,052	$	4,084	$	(1,586	)	$	493,550

	Available for Sale
	December 31, 2014
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of U.S. Government Agencies	$	343,703	$	1,372	$	(3,027	)	$	342,048
Mortgage Backed Securities issued by U.S. Government Agencies		105,890		406		(890	)		105,406
Obligations of States and Political Subdivisions		19,286		377		(82	)		19,581
Corporate Debt Securities		3,975		27		-			4,002
Equity Securities		2,044		95		-			2,139
	$	474,898	$	2,277	$	(3,999	)	$	473,176

The amortized cost and estimated market values of securities by contractual maturity as of March 31, 2015 are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

-17-

	Held to Maturity				Available for Sale
			Estimated				Estimated
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
Contractual maturity in
1 year or less	$	6,148	$	6,161	$	5,784	$	5,806
After 1 year through five years		15,863		16,149		138,807		138,995
After 5 years through 10 years		11,478		12,142		216,248		218,213
After 10 years		2,865		3,297		12,980		13,064
Total		36,354		37,749		373,819		376,078
Mortgage Backed Securities		-		-		115,189		115,313
Securities with no stated maturity		-		-		2,044		2,159
Total	$	36,354	$	37,749	$	491,052	$	493,550

The investment securities portfolio is evaluated for impairment throughout the year. Impairment is recorded against individual securities, unless the decrease in fair value is attributable to interest rates or the lack of an active market, and Management determines that the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before a recovery of their amortized costs bases, which may be maturity. The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses (in thousands), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2015 and December 31, 2014.

March 31, 2015
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	34,555	$	154	$	129,052	$	902	$	163,607	$	1,056
Mortgage Backed Securities issued by U.S. Government Agencies		16,150		30		34,520		446		50,670		476
Obligations of States and Political Subdivisions		5,742		23		5,755		79		11,497		102
	$	56,447	$	207	$	169,327	$	1,427	$	225,774	$	1,634

December 31, 2014
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	47,695	$	144	$	159,650	$	2,883	$	207,345	$	3,027
Mortgage Backed Securities issued by U.S. Government Agencies		32,756		175		40,556		715		73,312		890
Obligations of States and Political Subdivisions		9,341		52		4,276		99		13,617		151
	$	89,792	$	371	$	204,482	$	3,697	$	294,274	$	4,068

-18-

The amount of investment securities issued by government agencies, states, and political subdivisions with unrealized losses and the amount of unrealized losses on those investment securities are primarily the result of market interest rates and not the result of the credit quality of the issuers of the securities. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other than temporarily impaired at March 31, 2015. As of March 31, 2015 and December 31, 2014, there were 88 and 116 securities in an unrealized loss position, respectively.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value, as defined in ASC Topic 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for market activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value is used on a recurring basis for Available for Sale Securities. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes. Examples of these non-recurring uses of fair value include certain loans held for sale accounted for on a lower of cost or market basis. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value.

The Company applied the following fair value hierarchy:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. The Company’s mutual fund investments where quoted prices are available in an active market generally are classified within Level 1 of the fair value hierarchy.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. The Company’s borrowed funds and investments in U.S. government agency securities, government sponsored mortgage backed securities, corporate debt securities, and obligations of states and political subdivisions are generally classified in Level 2 of the fair value hierarchy. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Private equity investments and trust preferred collateralized debt obligations are classified within Level 3 of the fair value hierarchy. Fair values are initially valued based on transaction price and are adjusted to reflect exit values.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014, and the valuation techniques used by the Company to determine those fair values.

-19-

									Total
	Carrying								Estimated
March 31, 2015	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	51,557	$	51,557	$	-	$	-	$	51,557
Securities - Held to Maturity
Obligations of States and Political Subdivisions		35,854		-		37,249		-		37,249
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		353,014		-		353,014		-		353,014
MBS issued by U.S. Government Agencies		115,313		-		115,313		-		115,313
Obligations of States and Political Subdivisions		21,063		-		21,063		-		21,063
Corporate Debt Securities		2,001		-		2,001		-		2,001
Other Securities		2,159		2,159		-		-		2,159
Federal Home Loan Bank Stock		7,537		-		7,537		-		7,537
Loans Held for Sale		662		-		-		700		700
Loans, net		605,532		-		-		616,027		616,027
Accrued Interest Receivable		4,336		-		-		4,336		4,336
Financial Liabilities:
Noninterest Bearing Deposits		235,743		235,743		-		-		235,743
Interest Bearings Deposits		899,569		-		901,519		-		901,519
Repurchase Agreements		15,000		-		15,709		-		15,709
Accrued Interest Payable		133		-		-		133		133

									Total
	Carrying								Estimated
December 31, 2014	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	52,122	$	52,122	$	-	$	-	$	52,122
Securities - Held to Maturity
Obligations of States and Political Subdivisions		32,113		-		33,331		-		33,331
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		342,048		-		342,048		-		342,048
MBS issued by U.S. Government Agencies		105,406		-		105,406		-		105,406
Obligations of States and Political Subdivisions		19,581		-		19,581		-		19,581
Corporate Debt Securities		4,002		-		4,002		-		4,002
Other Securities		2,139		2,139		-		-		2,139
Federal Home Loan Bank Stock		7,537		-		7,537		-		7,537
Loans Held for Sale		548		-		-		560		560
Loans, net		597,124		-		-		608,109		608,109
Accrued Interest Receivable		3,943		-		-		3,943		3,943
Financial Liabilities:
Noninterest Bearing Deposits		218,221		218,221		-		-		218,221
Interest Bearings Deposits		893,590		-		895,522		-		895,522
Repurchase Agreements		15,000		-		15,828		-		15,828
Accrued Interest Payable		137		-		-		137		137

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In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset.

The changes in Level 3 assets measured at fair value on a recurring basis were (000’s omitted):

Investment Securities - Available for Sale	2015		2014
Balance at January 1	$	-	$	5,751
Total realized and unrealized losses included in income		-		(4	)
Total unrealized gains included in other comprehensive income		-		(33	)
Net purchases, sales, calls and maturities		-		-
Net transfers in/out of Level 3		-		-
Balance at March 31	$	-	$	5,714

The Company did not have any sales or purchases of Level 3 available for sale securities during the period. The Company sold all of its Level 3 Available for Sale securities in the second and third quarters of 2014.

Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 assets. As a result, the unrealized gains and losses for these assets presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs.

The Company also has assets that under certain conditions are subject to measurement at fair value on a nonrecurring basis. These assets include loans and Other Real Estate Owned. The Company estimated the fair values of these assets using Level 3 inputs, specifically discounted cash flow projections.

Assets measured at fair value on a nonrecurring basis are as follows (000’s omitted):

	Balance at March 31, 2015		Quoted Prices in Active Markets for  Identical Assets  (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	34,392	$	-	$	-	$	31,150
Other Real Estate Owned	$	4,888	$	-	$	-	$	4,888

	Balance at December 31,  2014		Quoted Prices in Active Markets for  Identical Assets  (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	35,670	$	-	$	-	$	32,015
Other Real Estate Owned	$	5,615	$	-	$	-	$	5,615

Impaired loans categorized as Level 3 assets consist of non-homogenous loans that are considered impaired. The Company estimates the fair value of the loans based on the present value of expected future cash flows using management’s best estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated realizable values of available collateral (typically based on outside appraisals). Other Real Estate Owned (OREO) consists of property received in full or partial satisfaction of a receivable. The Company utilizes independent appraisals to estimate the fair value of OREO properties.

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9. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of condition.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for its other lending activities.

Financial instruments whose contractual amounts represent off-balance sheet credit risk were as follows (000s omitted):

	Contractual Amount
	March 31,		December 31,
	2015		2014
Commitments to extend credit:
Unused portion of commercial lines of credit	$	62,024	$	66,319
Unused portion of credit card lines of credit		3,894		3,630
Unused portion of home equity lines of credit		20,088		19,544
Standby letters of credit and financial guarantees written		3,163		3,178
All other off-balance sheet commitments		-		-

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Most commercial lines of credit are secured by real estate mortgages or other collateral, and generally have fixed expiration dates or other termination clauses. Since the lines of credit may expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements. Credit card lines of credit have various established expiration dates, but are fundable on demand. Home equity lines of credit are secured by real estate mortgages, a majority of which have ten year expiration dates, but are fundable on demand. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of the collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on Management’s credit evaluation of the counterparty.

Standby letters of credit written are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements and other business transactions.

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

Introduction

MBT Financial Corp. (the “Company”) is a bank holding company with one subsidiary, Monroe Bank & Trust (“the Bank”). The Bank is a commercial bank with a wholly owned subsidiary, MB&T Financial Services. MB&T Financial Services is an insurance agency which sells insurance policies to the Bank. The Bank operates 17 branch offices in Monroe County, Michigan and 7 branch offices in Wayne County, Michigan, and a loan and wealth management office in Lenawee County, Michigan. The Bank’s primary source of income is interest income on its loans and investments and its primary expense is interest expense on its deposits and borrowings. The discussion and analysis should be read in conjunction with the accompanying consolidated statements and footnotes.

Executive Overview

The Bank is operated as a community bank, primarily providing loan, deposit, and wealth management products and services to the people, businesses, and communities in its market area. In addition to our commitment to our mission of serving the needs of our local communities, we are focused on improving asset quality, increasing net interest income, and improving non-interest income and expenses.

The net profit of $2,777,000 for the quarter ended March 31, 2015 was an increase of $1,010,000 or 57.2% compared to the first quarter of 2014. The increase was the result of improved net interest income and a lower provision for loan losses. These improvements exceeded the decrease in non-interest income, and the increases in non-interest expense and federal income tax expense. This quarter marked the fifteenth consecutive quarterly profit following significant losses caused by the severe economic downturn that impacted the regional and national economies beginning in 2006, and the pre-tax profit of $3,948,000 was the largest quarterly pre-tax profit since the third quarter of 2007.

The national economic recovery is continuing, and the pace of the recovery in southeast Michigan is improving. Local unemployment rates improved significantly since 2011. Commercial and residential development property values are improving, but remain below pre-recession levels. Our total classified assets, which include internal watch list loans, other real estate owned, and non-performing and watch list investment securities, improved significantly during 2014 and this trend of improvement is continuing into 2015. Classified assets went down $3.1 million, or 5.6% during the first quarter of 2015, and decreased $36.8 million or 41.7% compared to a year ago. Loan recoveries exceeded charge offs by $783,000 in the first quarter of 2015, requiring us to record a negative provision expense of $800,000 in order to maintain an appropriate Allowance for Loan and Lease Losses (ALLL). The loan portfolio held for investment increased slightly during the quarter, and the ALLL as a percent of loans decreased from 2.16% to 2.13%. We will continue to assess the adequacy of our ALLL each quarter, and adjust it as necessary by debiting or crediting the provision expense.

Net Interest Income increased $847,000, or 10.0% compared to the first quarter of 2014 as the average earning assets increased $75.6 million and the net interest margin increased from 3.18% to 3.27%. The increase in the net interest margin was due to the collection of a large loan fee and interest income on the payoff of a non-accrual loan that had been partially charged off. The provision for loan losses decreased $900,000 compared to the first quarter of 2014 as we recovered $1,105,000 of previously charged off principal while only charging off $322,000 in this quarter. Non-interest income for the quarter decreased $39,000, primarily due to an increase in losses on Other Real Estate Owned. Non-interest expenses increased $120,000, as salaries and employee benefits, occupancy, equipment, and professional fees expenses increased. These increases were mitigated by a decrease in FDIC insurance costs that was due to a reduction in our assessment rate, and a decrease in other real estate expenses that was due to a reduction in foreclosed properties. We expect non-interest expenses to remain near the current level throughout 2015.

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Critical Accounting Policies

The Company’s Allowance for Loan Losses, Fair Value of Investment Securities, and Other Real Estate Owned are “critical accounting estimates” because they are estimates that are based on assumptions that are highly uncertain, and if different assumptions were used or if any of the assumptions used were to change, there could be a material impact on the presentation of the Company’s financial condition. These assumptions include, but are not limited to, collateral values, the effect of economic conditions on the financial condition of the borrowers, the Company, and the issuers of investment securities, market interest rates, and projected earnings for the Company.

To determine the Allowance for Loan Losses, the Company estimates losses on all loans that are not classified as non accrual or renegotiated by applying historical loss rates, adjusted for current conditions, to those loans. In addition, all non accrual loan relationships over $250,000 that are classified by Management as nonperforming as well as selected performing accounts and all renegotiated loans are individually tested for impairment. Any amount of monetary impairment is included in the Allowance for Loan Losses.

To determine the fair value of investment securities, the Company utilizes quoted prices in active markets for identical assets, quoted prices for similar assets in active markets, or discounted cash flow calculations for investments where there is little, if any, market activity for the asset.

To determine the fair value of Other Real Estate Owned, the Company utilizes independent appraisals to estimate the fair value of the property.

Financial Condition

The pace of the economic recovery has increased over the last year, with local unemployment and property values steadily improving throughout 2014 and into 2015. Management is focusing our efforts on improving asset quality, increasing net interest income, and improving non-interest income and expenses.

With respect to asset quality, our nonperforming assets (“NPAs”) decreased 3.8% during the quarter, from $41.6 million to $40.0 million, and total classified assets decreased 5.6% from $54.6 million to $51.6 million. Loan delinquencies decreased from 1.9% to 1.3% during the quarter, which is significantly better than the 2.7% total reported one year ago. Over the last twelve months, NPAs decreased $28.4 million, or 41.5%, with nonperforming loans decreasing 36.6% from $55.4 million to $35.1 million, and Other Real Estate Owned (“OREO”) decreasing 50.0% from $9.8 million to $4.9 million. Total classified assets, which include internally classified watch list loans, other real estate, and our portfolio of pooled trust preferred collateralized debt obligation securities, decreased $36.8 million, or 41.7%. The Company’s Allowance for Loan and Lease Losses (“ALLL”) decreased $3.0 million over the last four quarters in spite of growth in the loan portfolio because of the improvement in the quality of the assets in the loan portfolio and a decrease in the historical loss rates. The ALLL is now 2.13% of loans, down from 2.73% at March 31, 2014. The ALLL is 37.56% of nonperforming loans (“NPLs”), compared to 36.74% at year end and 29.17% at March 31, 2014. In light of current economic conditions, we believe that this level of ALLL adequately estimates the potential losses in the loan portfolio.

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Since December 31, 2014, total loans held for investment increased 1.4% as new loan activity in the first quarter of 2015 was strong enough to cover payments received and other reductions in the quarter. Our pipeline of loans in process remains steady, and we expect new loan production to continue to exceed run off, resulting in an increase in loans outstanding, in the next few quarters.

Since December 31, 2014, deposits increased $23.5 million, or 2.1% due to normal seasonal fluctuations in local deposit activity. Along with the increase in deposit funding, capital increased $5.7 million, and as a result our total assets increased $28.4 million, or 2.2%. The Company expects deposit funding to gradually decrease later in the year due to the normal seasonal fluctuations. The expected loan growth and deposit reduction will be funded by reductions in our cash and investments. The increase in total capital during the first quarter of 2015 was due to the profit of $2.8 million and an increase of $2.8 million in the accumulated other comprehensive income (AOCI). AOCI increased mainly due to an increase in the value of our securities available for sale. The increase in capital caused the capital to assets ratio to increase from 10.52% at December 31, 2014 to 10.73% at March 31, 2015.

Results of Operations – First Quarter 2015 vs. First Quarter 2014

Net Interest Income - A comparison of the income statements for the three months ended March 31, 2015 and 2014 shows an increase of $847,000, or 10.0%, in Net Interest Income. Interest income on loans increased $353,000 or 5.0% as the average loans outstanding increased $19.1 million and the average yield on loans increased from 4.81% to 4.89%. The loan yield improved this quarter due to the collection of $421,000 of interest and fees on the payoff of a non-accrual loan. The interest income on investments, fed funds sold, and interest bearing balances due from banks increased $272,000 even though the yield decreased from 1.98% to 1.97% because the average amount of investments, fed funds sold, and interest bearing balances due from banks increased $56.5 million. The Company continues to maintain a very high liquidity position by keeping a large amount of funds in low yielding short term investments and deposits in the Federal Reserve Bank. The interest expense on deposits decreased $210,000 or 24.6% even though the average deposits increased $58.6 million because the average cost of deposits decreased from 0.33% to 0.23%. The cost of borrowed funds decreased $12,000 as the average amount of borrowed funds decreased $12.0 million.

Provision for Loan Losses - The Provision for Loan Losses decreased from an expense of $100,000 in the first quarter of 2014 to a credit of $800,000 in the first quarter of 2015. We recovered $1,105,000 of previously charged off principal in the first quarter of 2015, while only charging off $322,000. This net recovery of $783,000 compared to net charge offs of $151,000 in the first quarter of 2014. Each quarter, the Company conducts a review and analysis of its ALLL to determine its adequacy. This analysis involves specific allocations for impaired credits and a general allocation for losses expected based on historical experience adjusted for current conditions. Due to an improvement in portfolio risk indicators and a decrease in the historical loss percentages, the amount of ALLL required at the end of the first quarter of 2015 remained unchanged from December 31, 2014 at approximately $13.2 million. This required us to record the negative provision expense of $800,000. The ALLL is 2.13% of loans as of March 31, 2015, and, in light of current economic conditions, we believe that at this level the ALLL adequately estimates the potential losses in our loan portfolio.

Other Income – Non interest income decreased $39,000, or 1.1% compared to the first quarter of 2014. Excluding gains and losses on securities and other real estate owned activity, non-interest income increased $57,000, or 1.6%. Wealth management income increased $88,000 or 7.8% as the market value of assets managed increased due to new assets brought in and market value appreciation. Debit card income increased $75,000, or 15.3% and origination fees on mortgage loans sold increased $67,000, or 108.1%, both due to increased activity. Gains on securities transactions increased $179,000 due to the par call of a security owned at a discount in the first quarter of 2015. Income from other real estate activity decreased $275,000, primarily due to the write down of the carrying value of a commercial property in the first quarter of 2015. Rental income from other real estate properties decreased $101,000, or 74.8% due to a decrease in the number properties owned.

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Other Expenses – Total non-interest expenses increased $120,000, or 1.2% compared to the first quarter of 2014. Salaries and Employee Benefits increased $146,000, or 2.5%, due to increases in salaries and wages, stock based compensation, and the accrual for the officers’ incentive program. Occupancy expense increased $76,000, or 10.2% as maintenance and repairs costs were higher due to higher snow removal expenses in 2015. Equipment expense went up $117,000, or 19.0% mainly due to one-time costs related to the conversion of the system used for our bill payment service. Professional fees increased $158,000, or 37.8% due to higher legal and consulting fees in the first quarter of 2015. FDIC insurance assessments decreased $226,000 as the termination of our consent order in the second quarter of 2014 resulted in a decrease in the assessment rate.

As a result of the above activity, the Profit Before Income Taxes in the first quarter of 2015 was $3,948,000, an increase of $1,588,000 compared to the pre-tax profit of $2,360,000 in the first quarter of 2014. The Company recorded a federal income tax expense of $1,171,000 in the first quarter of 2015, reflecting an effective tax rate of 29.7%, compared to the tax expense of $593,000 in the first quarter of 2014, which reflected an effective rate of 25.1%. The increase in the effective tax rate was the result of the decrease in the percentage of operating income that was from municipal investments and bank owned life insurance. The Net profit for the first quarter of 2015 was $2,777,000, an increase of 57.2% compared to the net profit of $1,767,000 in the first quarter of 2014.

Cash Flows

Cash flows provided by operating activities increased $936,000 compared to the first quarter of 2014 due to the increase of $1,010,000 in net income. Cash flows used for investing activities increased by $11.5 million from $16.0 million in the first quarter of 2014 to $27.5 million in the first quarter of 2015 as the additional cash from operations and financing activities was invested in loans. Loan growth used $12.6 million more cash in the first quarter of 2015 than it did in the first quarter of 2014 as the portfolio was still decreasing last year. The amount of cash used to purchase investment securities exceeded the cash provided by investment sales, redemptions, and maturities in both periods. In the first quarter of 2014, the cash used for investment purchases was the result of the Company’s effort to improve its interest income by investing its excess cash. In the first quarter of 2015, the cash used for investment purchases was provided by deposit growth. The amount of cash provided by financing activities in the first quarter of 2015 was $23.5 million as the deposit funding increased by that amount. In the first quarter of 2014, $10.7 million of cash was used for financing activities due to the decrease of $13.1 million in deposits. In the first quarter of 2015, the use of cash for investing activities exceeded the cash provided by operations and financing activities by $565,000, resulting in a decrease of that amount in cash and cash equivalents during the quarter. In the first quarter of 2014, the use of cash for investing and financing activities exceeded the small amount provided by operations, and the amount of cash and cash equivalents decreased by $24.2 million during the period.

Liquidity and Capital

The Company believes it has sufficient liquidity to fund its lending activity and allow for fluctuations in deposit levels. Internal sources of liquidity include the maturities of loans and securities in the ordinary course of business as well as our available for sale securities portfolio. External sources of liquidity include a line of credit with the Federal Home Loan Bank of Indianapolis, the Federal funds line that has been established with our correspondent bank, and Repurchase Agreements with money center banks that allow us to pledge securities as collateral for borrowings. As of March 31, 2015, the Bank was not utilizing any of its authorized limit of $255 million with the Federal Home Loan Bank of Indianapolis, or its $20 million overdraft line of credit with the Federal Home Loan Bank of Indianapolis, or of its $25 million of federal funds line with a correspondent bank. The Company periodically draws on its overdraft and fed funds lines to ensure that funding will be available if needed.

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The Company’s Funds Management Policy includes guidelines for desired amounts of liquidity and capital. The Funds Management Policy also includes contingency plans for liquidity and capital that specify actions to take if liquidity and capital ratios fall below the levels contained in the policy. Throughout the first quarter of 2015 the Company was in compliance with its Funds Management Policy regarding liquidity and capital.

Total stockholders’ equity of the Company was $140.2 million at March 31, 2015 and $134.5 million at December 31, 2014. Common stock increased $83,000 due to the issuance of stock under compensation programs and for our Employee Stock Purchase Plan, retained earnings increased $2.8 million due to the year to date profit, and the Accumulated Other Comprehensive Income (AOCI) increased $2.8 million due to improvement in the value of our securities that are classified as Available For Sale. Total equity increased $5.7 million and total assets increased $28.4 million, so the ratio of equity to assets increased from 10.52% at December 31, 2014 to 10.73% at March 31, 2015.

Federal bank regulatory agencies have set capital adequacy standards for Total Risk Based Capital, Tier 1 Risk Based Capital, and Leverage Capital. These standards require banks to maintain Leverage and Tier 1 ratios of at least 4% and a Total Capital ratio of at least 8% to be adequately capitalized. The regulatory agencies consider a bank to be well capitalized if its Total Risk Based Capital is at least 10% of Risk Weighted Assets, Tier 1 Capital is at least 6% of Risk Weighted Assets, and the Leverage Capital Ratio is at least 5%. The Basel III capital requirements that are being phased in beginning in the first quarter of 2015 increased the well capitalized requirement for the Tier 1 Capital as a percent of Risk Weighted Assets from 6% to 8%. Basel III also implemented the new Common Equity Tier 1 Capital to Risk Weighted Assets ratio, with a minimum of 6.5% required to be considered well capitalized.

The following table summarizes the capital ratios of the Company and the Bank:

	Actual					Minimum to Qualify as Well Capitalized
	Amount		Ratio			Amount		Ratio
As of March 31, 2015:
Total Capital to Risk-Weighted Assets
Consolidated	$	142,692		18.58	%	$	76,807		10.0	%
Monroe Bank & Trust		140,979		18.37	%		76,764		10.0	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		132,939		17.31	%		61,446		8.0	%
Monroe Bank & Trust		131,235		17.10	%		61,411		8.0	%
Common Equity Tier 1 Capital to
Risk-Weighted Assets
Consolidated		132,939		17.31	%		49,925		6.5	%
Monroe Bank & Trust		131,235		17.10	%		49,896		6.5	%
Tier 1 Capital to Average Assets
Consolidated		132,939		10.33	%		64,326		5.0	%
Monroe Bank & Trust		131,235		10.20	%		64,307		5.0	%

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	Actual					Minimum to Qualify as Well Capitalized
	Amount		Ratio			Amount		Ratio
As of December 31, 2014:
Total Capital to Risk-Weighted Assets
Consolidated	$	129,032		17.22	%	$	74,917		10.0	%
Monroe Bank & Trust		127,400		17.01	%		74,895		10.0	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		119,573		15.96	%		44,950		6.0	%
Monroe Bank & Trust		117,944		15.75	%		44,937		6.0	%
Tier 1 Capital to Average Assets
Consolidated		119,573		9.68	%		61,731		5.0	%
Monroe Bank & Trust		117,944		9.55	%		61,721		5.0	%

The Bank had entered into a Consent Order with its state and federal regulators on July 12, 2010. Since the termination of the Consent Order on June 30, 2014, the Bank continues to be subject to certain informal regulatory requirements and restrictions, including, among other things, requirements to maintain a Tier 1 leverage ratio of at least 9%, continue to reduce classified and delinquent assets, continually monitor its progress, and submit quarterly progress reports to the regulators. The Bank must also request prior approval from its state and federal regulators before paying dividends.

Market risk for the Bank, as is typical for most banks, consists mainly of interest rate risk and market price risk. The Bank’s earnings and the economic value of its equity are exposed to interest rate risk and market price risk, and monitoring this risk is the responsibility of the Asset/Liability Management Committee (ALCO) of the Bank. The Bank’s market risk is monitored monthly and it has not changed significantly since year-end 2014.

Internal Revenue Service Audit

Since the fourth quarter of 2010, the Internal Revenue Service (IRS) has been conducting an audit of our tax returns for the 2004, 2005, 2007, 2008, 2009, and 2010 tax years. The Company recorded a tax liability in the second quarter of 2012 to reflect the amount of a settlement offer that the Company proposed to the IRS in an attempt to resolve the audit. Based on current knowledge, the Company believes that the accrued tax liability is adequate to absorb the effect relating to the ultimate resolution of the uncertain tax positions challenged by the IRS.

Although the timing of the resolution and/or closure of the audit remains highly uncertain, the Company believes it is reasonably possible that the IRS will conclude this audit within the current year. Management will re-evaluate the estimated potential federal income tax payable noted above each quarter based on current, relevant facts.

Forward-Looking Statements

Certain statements contained herein are not based on historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond the Company's control), may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of these terms. Actual results could differ materially from those set forth in forward-looking statements, due to a variety of factors, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset/liability management, changes in the financial and securities markets, including changes with respect to the market value of our financial assets, the availability of and costs associated with sources of liquidity, and the ability of the Company to resolve or dispose of problem loans.

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The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Bank faces market risk to the extent that the fair values of its financial instruments are affected by changes in interest rates. The Bank does not face market risk due to changes in foreign currency exchange rates, commodity prices, or equity prices. The asset and liability management process of the Bank seeks to monitor and manage the amount of interest rate risk. This is accomplished by analyzing the differences in repricing opportunities for assets and liabilities, by simulating operating results under varying interest rate scenarios, and by estimating the change in the net present value of the Bank’s assets and liabilities due to interest rate changes.

Each month, the Asset and Liability Committee (ALCO), which includes the senior management of the Bank, estimates the effect of interest rate changes on the projected net interest income of the Bank. The sensitivity of the Bank’s net interest income to changes in interest rates is measured by using a computer based simulation model to estimate the impact on earnings of both gradual and sudden increases of 100, 200, 300, and 400 basis points and decreases of 100 and 200 basis points in the interest rates. The net interest income projections are compared to a base case projection, which assumes no changes in interest rates.

The Bank’s ALCO has established limits in the acceptable amount of interest rate risk, as measured by the change in the Bank’s projected net interest income, in its policy. Throughout the first three months of 2015, the Bank’s interest rate risk has remained within its policy limits.

The ALCO also monitors interest rate risk by estimating the effect of changes in interest rates on the economic value of the Bank’s equity each month. The economic value of the Bank’s equity is first determined by subtracting the fair value of the Bank’s liabilities from the fair value of the Bank’s assets. The Bank estimates the interest rate risk by calculating the effect of market interest rate changes on that economic value of its equity. For this analysis, the Bank assumes immediate parallel shifts of plus 100, 200, 300, and 400 basis points and minus 100 and 200 basis points in interest rates. The discount rates used to determine the present values of the loans and deposits, as well as the prepayment rates for the loans, are based on Management’s expectations of the effect of the rate changes on the market for loans and deposits. In addition, each quarter, the Bank conducts additional analyses that utilize other rate scenarios, such as larger shifts in rates and changes in the shape of the yield curve, to assess the Bank’s exposure to interest rate risk in stress scenarios.

The Bank’s interest rate risk, as measured by the net interest income and economic value of equity simulations, has not changed significantly from December 31, 2014.

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Item 4. Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of March 31, 2015, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2015, in alerting them in a timely manner to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings.

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended March 31, 2015, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II Other Information

Item 1. Legal Proceedings

MBT Financial Corp. and its subsidiaries are not a party to, nor is any of their property the subject of any material legal proceedings other than ordinary routine litigation incidental to their respective businesses, nor are any such proceedings known to be contemplated by governmental authorities.

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed by the Company in its Report on Form 10-K for the fiscal year ended December 31, 2014.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

No matters to be reported.

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Item 6. Exhibits

3.1 Articles of Incorporation of MBT Financial Corp. Previously filed as Exhibit 3.1 to MBT Financial Corp.’s Form 10-Q for its quarter ended June 30, 2011.

3.2 Amended and Restated Bylaws of MBT Financial Corp. Previously filed as Exhibit 3.2 to MBT Financial Corp.’s Form 10-Q for its quarter ended March 31, 2008.

31.1 Certification by Chief Executive Officer required by Securities and Exchange Commission Rule 13a-14.

31.2 Certification by Chief Financial Officer required by Securities and Exchange Commission Rule 13a-14.

32.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

-31-

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.

	MBT Financial Corp.
	(Registrant)
May 11, 2015	By	/s/ H. Douglas Chaffin
Date	H. Douglas Chaffin
	President &
	Chief Executive Officer
May 11, 2015	By	/s/ John L. Skibski
Date	John L. Skibski
	Executive Vice President and
	Chief Financial Officer

-32-

Exhibit Index

Exhibit Number	Description of Exhibits
31.1	Certification by Chief Executive Officer required by Securities and Exchange Commission Rule 13a-14.
31.2	Certification by Chief Financial Officer required by Securities and Exchange Commission Rule 13a-14.
32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, H. Douglas Chaffin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MBT Financial Corp.;

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:  May 11, 2015	/s/ H. Douglas Chaffin
	H. Douglas Chaffin
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, John L. Skibski, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MBT Financial Corp.;

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:  May 11, 2015	/s/ John L. Skibski
	John L. Skibski
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MBT Financial Corp. (the "Company") on Form 10-Q for the period ending March 31, 2015 as filed with the Securities and Exchange Commission (the "Report"), I, H. Douglas Chaffin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)         The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ H. Douglas Chaffin

H. Douglas Chaffin

Chief Executive Officer

May 11, 2015

A signed original of this written statement required by Section 906 has been provided to MBT Financial Corp. and will be retained by MBT Financial Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MBT Financial Corp. (the "Company") on Form 10-Q for the period ending March 31, 2015 as filed with the Securities and Exchange Commission (the "Report"), I, John L. Skibski, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)         The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ John L. Skibski

John L. Skibski

Chief Financial Officer

May 11, 2015

A signed original of this written statement required by Section 906 has been provided to MBT Financial Corp. and will be retained by MBT Financial Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

INVESTMENT SECURITIES (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Investment Holdings [Line Items]
Less than 12 months, Aggregate Fair Value	$ 56,447	$ 89,792
Less than 12 months, Gross Unrealized Losses	207	371
12 months or longer, Aggregate Fair Value	169,327	204,482
12 months or longer, Gross Unrealized Losses	1,427	3,697
Aggregate Fair Value, Total	225,774	294,274
Gross Unrealized Losses, Total	1,634	4,068
Obligations of U.S. Government Agencies [Member]
Investment Holdings [Line Items]
Less than 12 months, Aggregate Fair Value	34,555	47,695
Less than 12 months, Gross Unrealized Losses	154	144
12 months or longer, Aggregate Fair Value	129,052	159,650
12 months or longer, Gross Unrealized Losses	902	2,883
Aggregate Fair Value, Total	163,607	207,345
Gross Unrealized Losses, Total	1,056	3,027
Mortgage Backed Securities issued by U.S. Government Agencies [Member]
Investment Holdings [Line Items]
Less than 12 months, Aggregate Fair Value	16,150	32,756
Less than 12 months, Gross Unrealized Losses	30	175
12 months or longer, Aggregate Fair Value	34,520	40,556
12 months or longer, Gross Unrealized Losses	446	715
Aggregate Fair Value, Total	50,670	73,312
Gross Unrealized Losses, Total	476	890
Obligations of States and Political Subdivisions [Member]
Investment Holdings [Line Items]
Less than 12 months, Aggregate Fair Value	5,742	9,341
Less than 12 months, Gross Unrealized Losses	23	52
12 months or longer, Aggregate Fair Value	5,755	4,276
12 months or longer, Gross Unrealized Losses	79	99
Aggregate Fair Value, Total	11,497	13,617
Gross Unrealized Losses, Total	$ 102	$ 151

XML

ALLOWANCE FOR LOAN LOSSES (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Non accrual loans	$ 12,329	$ 13,040
Agriculture and Agricultural Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Non accrual loans	80	80
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Non accrual loans	322	315
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Non accrual loans	6,460	6,287
Construction Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Non accrual loans	186	409
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Non accrual loans	5,108	5,760
Consumer and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Non accrual loans	$ 173	$ 189

XML

STOCK BASED COMPENSATION (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, January 1,2015 Shares	557,439
Granted, Shares	72,500
Exercised, Shares	21,166
Forfeited, Shares	7,502
Expired, Shares	0
Options Outstanding, March 31,2015 Shares	601,271
Options Exercisable, March 31,2015 Shares	427,724
Options Outstanding, January 1,2015 Weighted Average Exercise Price	$ 3.58
Granted, Weighted Average Exercise Price	$ 4.94
Exercised, Weighted Average Exercise Price	$ 2.31
Forfeited, Weighted Average Exercise Price	$ 3.82
Expired, Weighted Average Exercise Price	$ 0
Options Outstanding, March 31,2015 Weighted Average Exercise Price	$ 3.78
Options Exercisable, March 31,2015 Weighted Average Exercise Price	$ 3.51
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, January 1,2015 Shares	205,400
Granted, Shares	0
Exercised, Shares	0
Forfeited, Shares	0
Expired, Shares	89,500
Options Outstanding, March 31,2015 Shares	115,900
Options Exercisable, March 31,2015 Shares	115,900
Options Outstanding, January 1,2015 Weighted Average Exercise Price	$ 19.08
Granted, Weighted Average Exercise Price	$ 0
Exercised, Weighted Average Exercise Price	$ 0
Forfeited, Weighted Average Exercise Price	$ 0
Expired, Weighted Average Exercise Price	$ 23.4
Options Outstanding, March 31,2015 Weighted Average Exercise Price	$ 15.75
Options Exercisable, March 31,2015 Weighted Average Exercise Price	$ 15.75

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Impaired loans [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 34,392	$ 35,670
Other Real Estate Owned [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	4,888	5,615
Fair Value, Inputs, Level 1 [Member] | Impaired loans [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	0	0
Fair Value, Inputs, Level 1 [Member] | Other Real Estate Owned [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	0	0
Fair Value, Inputs, Level 2 [Member] | Impaired loans [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	0	0
Fair Value, Inputs, Level 2 [Member] | Other Real Estate Owned [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	0	0
Fair Value, Inputs, Level 3 [Member] | Impaired loans [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	31,150	32,015
Fair Value, Inputs, Level 3 [Member] | Other Real Estate Owned [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Nonrecurring	$ 4,888	$ 5,615

XML

INVESTMENT SECURITIES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Investment Holdings [Line Items]
Held to Maturity, Amortized Cost	$ 36,354	$ 32,613
Held to Maturity, Gross Unrealized Gains	1,443	1,287
Held to Maturity, Gross Unrealized Losses	(48)	(69)
Securities - Held to Maturity Estimated Market Value	37,749	33,831
Available for Sale, Amortized Cost	491,052	474,898
Available for Sale, Gross Unrealized Gains	4,084	2,277
Available for Sale, Gross Unrealized Losses	(1,586)	(3,999)
Available For Sale, Estimated Market Value	493,550	473,176
Equity Securities [Member]
Investment Holdings [Line Items]
Available for Sale, Amortized Cost	2,044	2,044
Available for Sale, Gross Unrealized Gains	115	95
Available for Sale, Gross Unrealized Losses	0	0
Available For Sale, Estimated Market Value	2,159	2,139
Obligations of U.S. Government Agencies [Member]
Investment Holdings [Line Items]
Available for Sale, Amortized Cost	351,130	343,703
Available for Sale, Gross Unrealized Gains	2,940	1,372
Available for Sale, Gross Unrealized Losses	(1,056)	(3,027)
Available For Sale, Estimated Market Value	353,014	342,048
Mortgage Backed Securities issued by U.S. Government Agencies [Member]
Investment Holdings [Line Items]
Available for Sale, Amortized Cost	115,189	105,890
Available for Sale, Gross Unrealized Gains	600	406
Available for Sale, Gross Unrealized Losses	(476)	(890)
Available For Sale, Estimated Market Value	115,313	105,406
Obligations of States and Political Subdivisions [Member]
Investment Holdings [Line Items]
Held to Maturity, Amortized Cost	35,854	32,113
Held to Maturity, Gross Unrealized Gains	1,443	1,287
Held to Maturity, Gross Unrealized Losses	(48)	(69)
Securities - Held to Maturity Estimated Market Value	37,249	33,331
Available for Sale, Amortized Cost	20,707	19,286
Available for Sale, Gross Unrealized Gains	410	377
Available for Sale, Gross Unrealized Losses	(54)	(82)
Available For Sale, Estimated Market Value	21,063	19,581
Corporate Debt Securities [Member]
Investment Holdings [Line Items]
Held to Maturity, Amortized Cost	500	500
Held to Maturity, Gross Unrealized Gains	0	0
Held to Maturity, Gross Unrealized Losses	0	0
Securities - Held to Maturity Estimated Market Value	500	500
Available for Sale, Amortized Cost	1,982	3,975
Available for Sale, Gross Unrealized Gains	19	27
Available for Sale, Gross Unrealized Losses	0	0
Available For Sale, Estimated Market Value	$ 2,001	$ 4,002

XML

EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

2. EARNINGS PER SHARE

The calculations of earnings per common share are as follows:

	For the three months ended March 31,
	2015		2014
Basic
Net income	$	2,777,000	$	1,767,000
Average common shares outstanding		22,721,845		20,818,727
Earnings per common share - basic	$	0.12	$	0.08
Diluted
Net income	$	2,777,000	$	1,767,000
Average common shares outstanding		22,721,845		20,818,727
Equity compensation		184,489		294,199
Average common shares outstanding - diluted		22,906,334		21,112,926
Earnings per common share - diluted	$	0.12	$	0.08

XML

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Commitments to extend credit:
All other off-balance sheet commitments	$ 0	$ 0
Standby Letters of Credit [Member]
Commitments to extend credit:
Standby letters of credit and financial guarantees written	3,163	3,178
Commercial Line Of Credit [Member]
Commitments to extend credit:
Unused portion	62,024	66,319
Credit Card Line Of Credit [Member]
Commitments to extend credit:
Unused portion	3,894	3,630
Home Equity Lines Of Credit [Member]
Commitments to extend credit:
Unused portion	$ 20,088	$ 19,544

XML

LOANS (Details Textual) (USD $)	Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Related Parties	$ 250,000

XML

LOANS (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans	$ 12,329	$ 13,040
Loans 90 days past due and accruing	3	10
Total nonperforming loans	618,723	610,332	591,806
Other real estate owned	4,888	5,615
Other assets	26,299	29,465
Total assets	1,307,053	1,278,657
Nonperforming Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total nonperforming loans	35,120	35,946
Nonperforming Assets [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned	4,888	5,615
Other assets	5	18
Nonperforming investment securities	0	0
Total assets	40,013	41,579
Nonperforming assets to total assets	3.06%	3.25%
Allowance for loan losses to nonperforming loans	37.56%	36.74%
Nonperforming Assets [Member] | Nonperforming Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual loans	12,329	13,040
Loans 90 days past due and accruing	3	10
Restructured loans	22,788	22,896
Total nonperforming loans	$ 35,120	$ 35,946

XML

ALLOWANCE FOR LOAN LOSSES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Allowance for loan losses:
Beginning Balance	$ 13,208	$ 16,209
Charge-offs	(322)	(674)
Recoveries	1,105	523
Provision	(800)	100
Ending balance	13,191	16,158
Ending balance individually evaluated for impairment	3,242	6,835
Ending balance collectively evaluated for impairment	9,949	9,323
Ending balance	13,191	16,158
Loans:
Ending balance individually evaluated for impairment	34,392	59,278
Ending balance collectively evaluated for impairment	584,331	532,528
Ending balance	618,723	591,806	610,332
Agriculture and Agricultural Real Estate [Member]
Allowance for loan losses:
Beginning Balance	216	171
Charge-offs	0	0
Recoveries	7	0
Provision	32	34
Ending balance	255	205
Ending balance individually evaluated for impairment	34	46
Ending balance collectively evaluated for impairment	221	159
Ending balance	255	205
Loans:
Ending balance individually evaluated for impairment	917	713
Ending balance collectively evaluated for impairment	16,189	13,842
Ending balance	17,106	14,555	16,700
Commercial [Member]
Allowance for loan losses:
Beginning Balance	1,361	1,989
Charge-offs	(106)	(186)
Recoveries	74	33
Provision	51	(56)
Ending balance	1,380	1,780
Ending balance individually evaluated for impairment	449	920
Ending balance collectively evaluated for impairment	931	860
Ending balance	1,380	1,780
Loans:
Ending balance individually evaluated for impairment	1,255	2,304
Ending balance collectively evaluated for impairment	72,816	56,491
Ending balance	74,071	58,795	62,761
Commercial Real Estate [Member]
Allowance for loan losses:
Beginning Balance	6,179	7,030
Charge-offs	0	(108)
Recoveries	161	65
Provision	(662)	473
Ending balance	5,678	7,460
Ending balance individually evaluated for impairment	1,296	2,758
Ending balance collectively evaluated for impairment	4,382	4,702
Ending balance	5,678	7,460
Loans:
Ending balance individually evaluated for impairment	18,248	35,937
Ending balance collectively evaluated for impairment	232,479	228,069
Ending balance	250,727	264,006	249,469
Construction Real Estate [Member]
Allowance for loan losses:
Beginning Balance	803	1,397
Charge-offs	0	(210)
Recoveries	609	234
Provision	(602)	9
Ending balance	810	1,430
Ending balance individually evaluated for impairment	671	1,150
Ending balance collectively evaluated for impairment	139	280
Ending balance	810	1,430
Loans:
Ending balance individually evaluated for impairment	1,969	4,013
Ending balance collectively evaluated for impairment	10,815	10,858
Ending balance	12,784	14,871	12,926
Residential Real Estate [Member]
Allowance for loan losses:
Beginning Balance	3,226	4,606
Charge-offs	(196)	(132)
Recoveries	223	165
Provision	(180)	(161)
Ending balance	3,073	4,478
Ending balance individually evaluated for impairment	580	1,713
Ending balance collectively evaluated for impairment	2,493	2,765
Ending balance	3,073	4,478
Loans:
Ending balance individually evaluated for impairment	11,480	15,715
Ending balance collectively evaluated for impairment	209,849	209,484
Ending balance	221,329	225,199	223,701
Consumer and Other [Member]
Allowance for loan losses:
Beginning Balance	1,423	1,016
Charge-offs	(20)	(38)
Recoveries	31	26
Provision	561	(199)
Ending balance	1,995	805
Ending balance individually evaluated for impairment	212	248
Ending balance collectively evaluated for impairment	1,783	557
Ending balance	1,995	805
Loans:
Ending balance individually evaluated for impairment	523	596
Ending balance collectively evaluated for impairment	42,183	13,784
Ending balance	$ 42,706	$ 14,380	$ 44,775

XML

ALLOWANCE FOR LOAN LOSSES (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	$ 618,723	$ 610,332	$ 591,806
Performing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	583,603	574,386
Nonperforming [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	35,120	35,946
Not Rated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	189,253	186,950
Risk Grade Rating 1 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	3,158	3,429
Risk Grade Rating 2 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	1,037	1,579
Risk Grade Rating 3 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	22,360	17,962
Risk Grade Rating 4 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	305,809	298,103
Risk Grade Rating 5 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	50,438	53,331
Risk Grade Rating 6 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	46,668	48,978
Risk Grade Rating 7 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	17,106	16,700	14,555
Agriculture and Agricultural Real Estate [Member] | Performing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	16,109	15,702
Agriculture and Agricultural Real Estate [Member] | Nonperforming [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	997	998
Agriculture and Agricultural Real Estate [Member] | Not Rated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	116	122
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 2 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	13	330
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	403	491
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	13,441	13,458
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	2,101	1,261
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	1,032	1,038
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	74,071	62,761	58,795
Commercial [Member] | Performing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	72,655	61,287
Commercial [Member] | Nonperforming [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	1,416	1,474
Commercial [Member] | Not Rated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	5,842	2,700
Commercial [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	2,793	3,060
Commercial [Member] | Risk Grade Rating 2 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	282	287
Commercial [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	12,667	7,084
Commercial [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	45,114	41,441
Commercial [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	4,297	4,903
Commercial [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	3,076	3,286
Commercial [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Commercial [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Commercial [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	250,727	249,469	264,006
Commercial Real Estate [Member] | Performing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	233,018	231,461
Commercial Real Estate [Member] | Nonperforming [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	17,709	18,008
Commercial Real Estate [Member] | Not Rated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	355	0
Commercial Real Estate [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Commercial Real Estate [Member] | Risk Grade Rating 2 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	742	830
Commercial Real Estate [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	9,072	9,923
Commercial Real Estate [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	179,271	176,685
Commercial Real Estate [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	32,558	34,385
Commercial Real Estate [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	28,729	27,646
Commercial Real Estate [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Commercial Real Estate [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Commercial Real Estate [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Construction Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	12,784	12,926	14,871
Construction Real Estate [Member] | Performing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	10,750	10,740
Construction Real Estate [Member] | Nonperforming [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	2,034	2,186
Construction Real Estate [Member] | Not Rated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	5,180	5,402
Construction Real Estate [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Construction Real Estate [Member] | Risk Grade Rating 2 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Construction Real Estate [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Construction Real Estate [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	4,439	4,357
Construction Real Estate [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	2,585	2,471
Construction Real Estate [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	580	696
Construction Real Estate [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Construction Real Estate [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Construction Real Estate [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	221,329	223,701	225,199
Residential Real Estate [Member] | Performing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	209,062	211,143
Residential Real Estate [Member] | Nonperforming [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	12,267	12,558
Residential Real Estate [Member] | Not Rated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	138,983	138,355
Residential Real Estate [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Residential Real Estate [Member] | Risk Grade Rating 2 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	132
Residential Real Estate [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	218	464
Residential Real Estate [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	60,390	58,902
Residential Real Estate [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	8,802	10,112
Residential Real Estate [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	12,936	15,736
Residential Real Estate [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Residential Real Estate [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Residential Real Estate [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Consumer and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	42,706	44,775	14,380
Consumer and Other [Member] | Performing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	42,009	44,053
Consumer and Other [Member] | Nonperforming [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	697	722
Consumer and Other [Member] | Not Rated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	38,777	40,371
Consumer and Other [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	365	369
Consumer and Other [Member] | Risk Grade Rating 2 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Consumer and Other [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Consumer and Other [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	3,154	3,260
Consumer and Other [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	95	199
Consumer and Other [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	315	576
Consumer and Other [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Consumer and Other [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	0	0
Consumer and Other [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans, gross	$ 0	$ 0

XML

BASIS OF PRESENTATION AND ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The unaudited consolidated financial statements include the accounts of MBT Financial Corp. (the “Company”) and its subsidiary, Monroe Bank & Trust (the “Bank”). The Bank includes the accounts of its wholly owned subsidiary, MB&T Financial Services, Inc. The Bank operates seventeen branches in Monroe County, Michigan, seven branches in Wayne County, Michigan, and a loan and wealth management office in Lenawee County. The Bank’s primary source of revenue is from providing loans to customers, who are predominantly small and middle-market businesses and middle-income individuals. The Company’s sole business segment is community banking.

The accounting and reporting policies of the Bank conform to practice within the banking industry and are in accordance with accounting principles generally accepted in the United States. Preparation of financial statements in conformity with generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes in the near term are the determination of the allowance for loan losses, the valuation of other real estate owned, and the fair value of investment securities.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, such information reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of Management, necessary for fair statement of results for the interim periods.

The significant accounting policies are as follows:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany transactions and balances have been eliminated.

COMPREHENSIVE INCOME

Accounting principles generally require that revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, however, such as unrealized gains and losses on securities available for sale and amounts recognized related to postretirement benefit plans (gains and losses, prior service costs, and transition assets or obligations), are reported as a direct adjustment to the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income.

BUSINESS SEGMENTS

While the Company's chief decision makers monitor the revenue streams of various products and services, operations are managed and financial performance is evaluated on a company wide basis. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable segment.

FAIR VALUE

The Company measures or monitors many of its assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities that are elected to be accounted for under The Fair Value Option as well as for certain assets and liabilities in which fair value is the primary basis of accounting. Examples of these include derivative instruments and available for sale securities. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes. Examples of these non-recurring uses of fair value include certain loans held for sale accounted for on a lower of cost or market basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value.

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at and/or marked to fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to market observable data for similar assets or liabilities. Nevertheless, certain assets and liabilities are not actively traded in observable markets and the Company must use alternative valuation techniques to derive a fair value measurement.

ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), “Revenue from Contracts with Customers (Topic 606)”. ASU 2014-09 adopts a standardized approach for revenue recognition and was a joint effort with the International Accounting Standards Board (IASB). The new revenue recognition standard is based on a core principle of recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 does not apply to financial instruments. ASU 2014-09 is effective for public entities for reporting periods beginning after December 15, 2016 (therefore, for the year ending December 31, 2017 for the Corporation). Early implementation is not allowed for public companies. Management is currently assessing the impact to the Corporation’s consolidated financial statements.

XML

ALLOWANCE FOR LOAN LOSSES (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
30-59 Days Past Due	$ 4,995	$ 6,122
60-89 Days Past Due	579	1,918
>90 Days Past Due	2,653	3,265
Total Past Due	8,227	11,305
Current	610,496	599,027
Total nonperforming loans	618,723	610,332	591,806
Recorded Investment >90 Days Past Due and Accruing	3	10
Agriculture and Agricultural Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
30-59 Days Past Due	0	449
60-89 Days Past Due	0	0
>90 Days Past Due	80	80
Total Past Due	80	529
Current	17,026	16,171
Total nonperforming loans	17,106	16,700	14,555
Recorded Investment >90 Days Past Due and Accruing	0	0
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
30-59 Days Past Due	52	142
60-89 Days Past Due	133	44
>90 Days Past Due	72	60
Total Past Due	257	246
Current	73,814	62,515
Total nonperforming loans	74,071	62,761	58,795
Recorded Investment >90 Days Past Due and Accruing	3	10
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
30-59 Days Past Due	2,117	2,127
60-89 Days Past Due	143	1,118
>90 Days Past Due	1,727	2,287
Total Past Due	3,987	5,532
Current	246,740	243,937
Total nonperforming loans	250,727	249,469	264,006
Recorded Investment >90 Days Past Due and Accruing	0	0
Construction Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
30-59 Days Past Due	110	334
60-89 Days Past Due	0	0
>90 Days Past Due	2	0
Total Past Due	112	334
Current	12,672	12,592
Total nonperforming loans	12,784	12,926	14,871
Recorded Investment >90 Days Past Due and Accruing	0	0
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
30-59 Days Past Due	2,553	2,946
60-89 Days Past Due	292	741
>90 Days Past Due	740	777
Total Past Due	3,585	4,464
Current	217,744	219,237
Total nonperforming loans	221,329	223,701	225,199
Recorded Investment >90 Days Past Due and Accruing	0	0
Consumer and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
30-59 Days Past Due	163	124
60-89 Days Past Due	11	15
>90 Days Past Due	32	61
Total Past Due	206	200
Current	42,500	44,575
Total nonperforming loans	42,706	44,775	14,380
Recorded Investment >90 Days Past Due and Accruing	$ 0	$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Financial Assets:
Cash and Due from Banks Carrying Value	$ 51,557	$ 52,122	$ 53,604	$ 77,798
Securities - Held to Maturity Carrying Value	36,354	32,613
Securities - Available for Sale Carrying Value	493,550	473,176
Federal Home Loan Bank Stock Carrying Value	7,537	7,537
Loans Held for Sale Carrying value	662	548
Loans, net Carrying Value	605,532	597,124
Accrued Interest Receivable Carrying Value	4,336	3,943
Cash and due from banks Estimated Fair Value	51,557	52,122
Securities - Held to Maturity Estimated Fair Value	37,749	33,831
Securities - Available for Sale Estimated Fair Value	493,550	473,176
Federal Home Loan Bank Stock Estimated Fair Value	7,537	7,537
Loans Held for Sale Estimated Fair Value	700	560
Loans, net Estimated Fair Value	616,027	608,109
Accrued Interest Receivable Estimated Fair Value	4,336	3,943
Financial Liabilities:
Noninterest Bearing Deposits Carrying Value	235,743	218,221
Interest Bearings Deposits Carrying Value	899,569	893,590
Repurchase Agreements Carrying Value	15,000	15,000
Accrued Interest Payable Carrying Value	133	137
Noninterest Bearing Deposits Estimated Fair Value	235,743	218,221
Interest Bearings Deposits Estimated Fair Value	901,519	895,522
Repurchase Agreements Estimated Fair Value	15,709	15,828
Accrued Interest Payable Estimated Fair Value	133	137
Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Cash and due from banks Estimated Fair Value	51,557	52,122
Federal Home Loan Bank Stock Estimated Fair Value	0	0
Loans Held for Sale Estimated Fair Value	0	0
Loans, net Estimated Fair Value	0	0
Accrued Interest Receivable Estimated Fair Value	0	0
Financial Liabilities:
Noninterest Bearing Deposits Estimated Fair Value	235,743	218,221
Interest Bearings Deposits Estimated Fair Value	0	0
Repurchase Agreements Estimated Fair Value	0	0
Accrued Interest Payable Estimated Fair Value	0	0
Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Cash and due from banks Estimated Fair Value	0	0
Federal Home Loan Bank Stock Estimated Fair Value	7,537	7,537
Loans Held for Sale Estimated Fair Value	0	0
Loans, net Estimated Fair Value	0	0
Accrued Interest Receivable Estimated Fair Value	0	0
Financial Liabilities:
Noninterest Bearing Deposits Estimated Fair Value	0	0
Interest Bearings Deposits Estimated Fair Value	901,519	895,522
Repurchase Agreements Estimated Fair Value	15,709	15,828
Accrued Interest Payable Estimated Fair Value	0	0
Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Cash and due from banks Estimated Fair Value	0	0
Federal Home Loan Bank Stock Estimated Fair Value	0	0
Loans Held for Sale Estimated Fair Value	700	560
Loans, net Estimated Fair Value	616,027	608,109
Accrued Interest Receivable Estimated Fair Value	4,336	3,943
Financial Liabilities:
Noninterest Bearing Deposits Estimated Fair Value	0	0
Interest Bearings Deposits Estimated Fair Value	0	0
Repurchase Agreements Estimated Fair Value	0	0
Accrued Interest Payable Estimated Fair Value	133	137
Obligations Of States and Political Subdivisions [Member]
Financial Assets:
Securities - Held to Maturity Carrying Value	35,854	32,113
Securities - Available for Sale Carrying Value	21,063	19,581
Securities - Held to Maturity Estimated Fair Value	37,249	33,331
Securities - Available for Sale Estimated Fair Value	21,063	19,581
Obligations Of States and Political Subdivisions [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Held to Maturity Estimated Fair Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Obligations Of States and Political Subdivisions [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	21,063	19,581
Securities - Held to Maturity Estimated Fair Value	37,249	33,331
Securities - Available for Sale Estimated Fair Value	21,063	19,581
Obligations Of States and Political Subdivisions [Member] | Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Held to Maturity Estimated Fair Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Corporate Debt Securities [Member]
Financial Assets:
Securities - Held to Maturity Carrying Value	500	500
Securities - Available for Sale Carrying Value	2,001	4,002
Securities - Held to Maturity Estimated Fair Value	500	500
Securities - Available for Sale Estimated Fair Value	2,001	4,002
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Held to Maturity Estimated Fair Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	2,001	4,002
Securities - Held to Maturity Estimated Fair Value	500	500
Securities - Available for Sale Estimated Fair Value	2,001	4,002
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Held to Maturity Estimated Fair Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Other Securities [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	2,159	2,139
Securities - Available for Sale Estimated Fair Value	2,159	2,139
Other Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	2,159	2,139
Securities - Available for Sale Estimated Fair Value	2,159	2,139
Other Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Other Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Obligations Of U.S. Government Agencies [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	353,014	342,048
Securities - Available for Sale Estimated Fair Value	353,014	342,048
Obligations Of U.S. Government Agencies [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Obligations Of U.S. Government Agencies [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	353,014	342,048
Securities - Available for Sale Estimated Fair Value	353,014	342,048
Obligations Of U.S. Government Agencies [Member] | Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Mortgage Backed Securities Issued By U.S. Government Agencies [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	115,313	105,406
Securities - Available for Sale Estimated Fair Value	115,313	105,406
Mortgage Backed Securities Issued By U.S. Government Agencies [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Available for Sale Estimated Fair Value	0	0
Mortgage Backed Securities Issued By U.S. Government Agencies [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	115,313	105,406
Securities - Available for Sale Estimated Fair Value	115,313	105,406
Mortgage Backed Securities Issued By U.S. Government Agencies [Member] | Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Securities - Available for Sale Carrying Value	0	0
Securities - Available for Sale Estimated Fair Value	$ 0	$ 0

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Cash and due from banks
Non-interest bearing	$ 11,434	$ 15,957
Interest bearing	40,123	36,165
Total cash and cash equivalents	51,557	52,122
Securities - Held to Maturity	36,354	32,613
Securities - Available for Sale	493,550	473,176
Federal Home Loan Bank stock - at cost	7,537	7,537
Loans held for sale	662	548
Loans	618,723	610,332
Allowance for Loan Losses	(13,191)	(13,208)
Loans - Net	605,532	597,124
Accrued interest receivable and other assets	26,299	29,465
Other Real Estate Owned	4,888	5,615
Bank Owned Life Insurance	52,096	51,825
Premises and Equipment - Net	28,578	28,632
Total assets	1,307,053	1,278,657
Deposits:
Non-interest bearing	235,743	218,221
Interest-bearing	899,569	893,590
Total deposits	1,135,312	1,111,811
Repurchase agreements	15,000	15,000
Interest payable and other liabilities	16,533	17,310
Total liabilities	1,166,845	1,144,121
STOCKHOLDERS' EQUITY
Common stock (no par value; 50,000,000 shares authorized, 22,730,647 and 22,718,077 shares issued and outstanding)	23,120	23,037
Retained earnings	116,909	114,132
Accumulated other comprehensive income (loss)	179	(2,633)
Total stockholders' equity	140,208	134,536
Total liabilities and stockholders' equity	$ 1,307,053	$ 1,278,657

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY [Parenthetical]	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Issuance of Common Stock
Restricted stock awards (In shares)		6,000
Other stock issued (In Shares)	4,714	652,725
Stock Appreciation Rights (SARs) [Member]
Issuance of Common Stock
SOSARs exercised, (in shares)	7,856	2,162

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ALLOWANCE FOR LOAN LOSSES (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Contracts	Mar. 31, 2014 Contracts
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of Contracts	1	6
Pre-Modification Recorded Principal Balance	$ 332	$ 1,525
Post-Modification Recorded Principal Balance	332	1,475
Agriculture and Agricultural Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of Contracts	0	1
Pre-Modification Recorded Principal Balance	0	314
Post-Modification Recorded Principal Balance	0	314
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of Contracts	0	0
Pre-Modification Recorded Principal Balance	0	0
Post-Modification Recorded Principal Balance	0	0
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of Contracts	1	2
Pre-Modification Recorded Principal Balance	332	946
Post-Modification Recorded Principal Balance	332	931
Construction Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of Contracts	0	0
Pre-Modification Recorded Principal Balance	0	0
Post-Modification Recorded Principal Balance	0	0
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of Contracts	0	3
Pre-Modification Recorded Principal Balance	0	265
Post-Modification Recorded Principal Balance	0	230
Consumer and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of Contracts	0	0
Pre-Modification Recorded Principal Balance	0	0
Post-Modification Recorded Principal Balance	$ 0	$ 0

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

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

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014, and the valuation techniques used by the Company to determine those fair values.

									Total
	Carrying								Estimated
March 31, 2015	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	51,557	$	51,557	$	-	$	-	$	51,557
Securities - Held to Maturity
Obligations of States and Political Subdivisions		35,854		-		37,249		-		37,249
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		353,014		-		353,014		-		353,014
MBS issued by U.S. Government Agencies		115,313		-		115,313		-		115,313
Obligations of States and Political Subdivisions		21,063		-		21,063		-		21,063
Corporate Debt Securities		2,001		-		2,001		-		2,001
Other Securities		2,159		2,159		-		-		2,159
Federal Home Loan Bank Stock		7,537		-		7,537		-		7,537
Loans Held for Sale		662		-		-		700		700
Loans, net		605,532		-		-		616,027		616,027
Accrued Interest Receivable		4,336		-		-		4,336		4,336
Financial Liabilities:
Noninterest Bearing Deposits		235,743		235,743		-		-		235,743
Interest Bearings Deposits		899,569		-		901,519		-		901,519
Repurchase Agreements		15,000		-		15,709		-		15,709
Accrued Interest Payable		133		-		-		133		133

									Total
	Carrying								Estimated
December 31, 2014	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	52,122	$	52,122	$	-	$	-	$	52,122
Securities - Held to Maturity
Obligations of States and Political Subdivisions		32,113		-		33,331		-		33,331
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		342,048		-		342,048		-		342,048
MBS issued by U.S. Government Agencies		105,406		-		105,406		-		105,406
Obligations of States and Political Subdivisions		19,581		-		19,581		-		19,581
Corporate Debt Securities		4,002		-		4,002		-		4,002
Other Securities		2,139		2,139		-		-		2,139
Federal Home Loan Bank Stock		7,537		-		7,537		-		7,537
Loans Held for Sale		548		-		-		560		560
Loans, net		597,124		-		-		608,109		608,109
Accrued Interest Receivable		3,943		-		-		3,943		3,943
Financial Liabilities:
Noninterest Bearing Deposits		218,221		218,221		-		-		218,221
Interest Bearings Deposits		893,590		-		895,522		-		895,522
Repurchase Agreements		15,000		-		15,828		-		15,828
Accrued Interest Payable		137		-		-		137		137

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The changes in Level 3 assets measured at fair value on a recurring basis were (000’s omitted):

Investment Securities - Available for Sale	2015		2014
Balance at January 1	$	-	$	5,751
Total realized and unrealized losses included in income		-		(4)
Total unrealized gains included in other comprehensive income		-		(33)
Net purchases, sales, calls and maturities		-		-
Net transfers in/out of Level 3		-		-
Balance at March 31	$	-	$	5,714

Fair Value Assets Measured On Nonrecurring Basis [Table Text Block]

Assets measured at fair value on a nonrecurring basis are as follows (000’s omitted):

	Balance at March 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	34,392	$	-	$	-	$	31,150
Other Real Estate Owned	$	4,888	$	-	$	-	$	4,888

	Balance at December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	35,670	$	-	$	-	$	32,015
Other Real Estate Owned	$	5,615	$	-	$	-	$	5,615

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ALLOWANCE FOR LOAN LOSSES (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Minimum Aggregate Credit Exposure To Assign Grade	$ 2,775,000

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Basic
Net income	$ 2,777	$ 1,767
Average common shares outstanding (in shares)	22,721,845	20,818,727
Earnings per common share - basic (in dollars per share)	$ 0.12	$ 0.08
Diluted
Net income	$ 2,777	$ 1,767
Average common shares outstanding (in shares)	22,721,845	20,818,727
Equity compensation (in shares)	184,489	294,199
Average common shares outstanding - diluted (in shares)	22,906,334	21,112,926
Earnings per common share - diluted (in dollars per share)	$ 0.12	$ 0.08

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities
Net Income	$ 2,777	$ 1,767
Adjustments to reconcile net income to net cash from operating activities
Provision for (recovery of) loan losses	(800)	100
Depreciation	398	415
Decrease in net deferred federal income tax asset	1,155	593
Net amortization of investment premium and discount	282	255
Writedowns of Other Real Estate Owned	312	59
Net increase (decrease) in interest payable and other liabilities	(737)	294
Net (increase) decrease in interest receivable and other assets	443	(679)
Equity based compensation expense	58	51
Net gain on sale/settlement of securities	(236)	(57)
Increase in cash surrender value of life insurance	(271)	(353)
Net cash provided by operating activities	3,381	2,445
Cash Flows from Investing Activities
Proceeds from maturities and redemptions of investment securities held to maturity	686	3,146
Proceeds from maturities and redemptions of investment securities available for sale	47,011	4,578
Proceeds from sales of investment securities available for sale	8,430	22,376
Net (increase) decrease in loans	(7,807)	4,803
Proceeds from sales of other real estate owned	562	1,145
Proceeds from sales of other assets	65	1
Purchase of investment securities held to maturity	(4,439)	(4,590)
Purchase of investment securities available for sale	(71,629)	(46,829)
Purchase of bank premises and equipment	(352)	(615)
Net cash used for investing activities	(27,473)	(15,985)
Cash Flows from Financing Activities
Net increase (decrease) in deposits	23,501	(13,107)
Proceeds from issuance of common stock	26	2,453
Net cash provided by (used for) financing activities	23,527	(10,654)
Net Decrease in Cash and Cash Equivalents	(565)	(24,194)
Cash and Cash Equivalents at Beginning of Period	52,122	77,798
Cash and Cash Equivalents at End of Period	51,557	53,604
Supplemental Cash Flow Information
Cash paid for interest	823	1,039
Cash paid for federal income taxes	15	0
Supplemental Schedule of Non Cash Investing Activities
Transfer of loans to other real estate owned	40	1,280
Transfer of loans to other assets	$ 45	$ 0

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CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Mar. 31, 2015	Dec. 31, 2014
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	22,730,647	22,718,077
Common stock, shares outstanding	22,730,647	22,718,077

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The calculations of earnings per common share are as follows:

	For the three months ended March 31,
	2015		2014
Basic
Net income	$	2,777,000	$	1,767,000
Average common shares outstanding		22,721,845		20,818,727
Earnings per common share - basic	$	0.12	$	0.08
Diluted
Net income	$	2,777,000	$	1,767,000
Average common shares outstanding		22,721,845		20,818,727
Equity compensation		184,489		294,199
Average common shares outstanding - diluted		22,906,334		21,112,926
Earnings per common share - diluted	$	0.12	$	0.08

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Document And Entity Information	3 Months Ended
	Mar. 31, 2015	May 11, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Entity Registrant Name	MBT FINANCIAL CORP
Entity Central Index Key	0001118237
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	MBTF
Entity Common Stock, Shares Outstanding		22,731,951

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STOCK BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity [Table Text Block]

The following table summarizes the options that had been granted to certain key executives in accordance with the Long-Term Incentive Compensation Plan that was approved by shareholders at the Annual Meeting of Shareholders on April 6, 2000.

			Weighted Average
	Shares		Exercise Price
Options Outstanding, January 1, 2015		205,400	$	19.08
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		89,500		23.40
Options Outstanding, March 31, 2015		115,900	$	15.75
Options Exercisable, March 31, 2015		115,900	$	15.75

Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity [Table Text Block]

The following table summarizes the SOSARs that have been granted:

			Weighted Average
	SOSARs		Base Price
SOSARs Outstanding, January 1, 2015		557,439	$	3.58
Granted		72,500		4.94
Exercised		21,166		2.31
Forfeited		7,502		3.82
Expired		-		-
SOSARs Outstanding, March 31, 2015		601,271	$	3.78
SOSARs Exercisable, March 31, 2015		427,724	$	3.51

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Interest Income
Interest and fees on loans	$ 7,432	$ 7,079
Interest on investment securities-
Tax-exempt	275	307
Taxable	2,428	2,118
Interest on balances due from banks	26	32
Total interest income	10,161	9,536
Interest Expense
Interest on deposits	645	855
Interest on borrowed funds	174	186
Total interest expense	819	1,041
Net Interest Income	9,342	8,495
Provision For (Recovery Of) Loan Losses	(800)	100
Net Interest Income After Provision For Loan Losses	10,142	8,395
Other Income
Income from wealth management services	1,222	1,134
Service charges and other fees	894	932
Debit card income	564	489
Net gain on sales of securities available for sale	236	57
Net gain (loss) on sales of Other Real Estate Owned	(263)	12
Origination fees on mortgage loans sold	129	62
Bank owned life insurance income	271	354
Rent income on Other Real Estate Owned	34	135
Other	538	489
Total other income	3,625	3,664
Other Expenses
Salaries and employee benefits	5,874	5,728
Occupancy expense	820	744
Equipment expense	734	617
Marketing expense	246	203
Professional fees	576	418
Other Real Estate Owned expenses	126	339
FDIC Deposit Insurance Assessment	414	640
Bonding and other insurance expense	230	264
Telephone expense	95	143
Other	704	603
Total other expenses	9,819	9,699
Income Before Income Taxes	3,948	2,360
Income Tax Expense	1,171	593
Net Income	2,777	1,767
Other Comprehensive Income (Loss) - Net of Tax
Unrealized gains (losses) on securities	2,941	3,559
Reclassification adjustment for losses included in net income	(156)	(38)
Postretirement benefit liability	27	(293)
Total Other Comprehensive Income (Loss) - Net of Tax	2,812	3,228
Comprehensive Income (Loss)	$ 5,589	$ 4,995
Basic Earnings Per Common Share (in dollars per share)	$ 0.12	$ 0.08
Diluted Earnings Per Common Share (in dollars per share)	$ 0.12	$ 0.08
Common Stock Dividends Declared Per Share	$ 0	$ 0

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ALLOWANCE FOR LOAN LOSSES

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Allowance For Loan Losses [Text Block]

5. ALLOWANCE FOR LOAN LOSSES

The Company separates its loan portfolio into segments to perform the calculation and analysis of the allowance for loan losses. The six segments analyzed are Agriculture and Agricultural Real Estate, Commercial, Commercial Real Estate, Construction Real Estate, Residential Real Estate, and Consumer and Other. The Agriculture and Agricultural Real Estate segment includes all loans to finance agricultural production and all loans secured by agricultural real estate. This segment does not include loans to finance agriculture that are secured by residential real estate, which are included in the Residential Real Estate segment. The Commercial segment includes loans to finance commercial and industrial businesses that are not secured by real estate. The Commercial Real Estate segment includes loans secured by non-farm, non-residential real estate. The Construction Real Estate segment includes loans to finance construction and land development. This includes residential and commercial construction and land development. The Residential Real Estate segment includes all loans, other than construction loans, that are secured by single family and multi family residential real estate properties. The Consumer and Other segment includes all loans not included in any other segment. These are primarily loans to consumers for household, family, and other personal expenditures, such as autos, boats, and recreational vehicles.

Activity in the allowance for loan losses during the three months ended March 31, 2015 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Allowance for loan losses: For the three months ended March 31, 2015
Beginning Balance	$	216	$	1,361	$	6,179	$	803	$	3,226	$	1,423	$	13,208
Charge-offs		-		(106)		-		-		(196)		(20)		(322)
Recoveries		7		74		161		609		223		31		1,105
Provision		32		51		(662)		(602)		(180)		561		(800)
Ending balance	$	255	$	1,380	$	5,678	$	810	$	3,073	$	1,995	$	13,191
Allowance for loan losses as of March 31, 2015
Ending balance individually evaluated for impairment	$	34	$	449	$	1,296	$	671	$	580	$	212	$	3,242
Ending balance collectively evaluated for impairment		221		931		4,382		139		2,493		1,783		9,949
Ending balance	$	255	$	1,380	$	5,678	$	810	$	3,073	$	1,995	$	13,191
Loans as of March 31, 2015
Ending balance individually evaluated for impairment	$	917	$	1,255	$	18,248	$	1,969	$	11,480	$	523	$	34,392
Ending balance collectively evaluated for impairment		16,189		72,816		232,479		10,815		209,849		42,183		584,331
Ending balance	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723

Activity in the allowance for loan losses during the three months ended March 31, 2014 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Allowance for loan losses: For the three months ended March 31, 2014
Beginning Balance	$	171	$	1,989	$	7,030	$	1,397	$	4,606	$	1,016	$	16,209
Charge-offs		-		(186)		(108)		(210)		(132)		(38)		(674)
Recoveries		-		33		65		234		165		26		523
Provision		34		(56)		473		9		(161)		(199)		100
Ending balance	$	205	$	1,780	$	7,460	$	1,430	$	4,478	$	805	$	16,158
Allowance for loan losses as of March 31, 2014
Ending balance individually evaluated for impairment	$	46	$	920	$	2,758	$	1,150	$	1,713	$	248	$	6,835
Ending balance collectively evaluated for impairment		159		860		4,702		280		2,765		557		9,323
Ending balance	$	205	$	1,780	$	7,460	$	1,430	$	4,478	$	805	$	16,158
Loans as of March 31, 2014
Ending balance individually evaluated for impairment	$	713	$	2,304	$	35,937	$	4,013	$	15,715	$	596	$	59,278
Ending balance collectively evaluated for impairment		13,842		56,491		228,069		10,858		209,484		13,784		532,528
Ending balance	$	14,555	$	58,795	$	264,006	$	14,871	$	225,199	$	14,380	$	591,806

Each period the provision for loan losses in the income statement results from the combination of an estimate by Management of loan losses that occurred during the current period and the ongoing adjustment of prior estimates of losses occurring in prior periods.

The provision for loan losses increases the allowance for loan losses, a valuation account which appears on the consolidated balance sheets. As the specific customer and amount of a loan loss is confirmed by gathering additional information, taking collateral in full or partial settlement of the loan, bankruptcy of the borrower, etc., the loan is charged off, reducing the allowance for loan losses. If, subsequent to a charge off, the Bank is able to collect additional amounts from the customer or sell collateral worth more than earlier estimated, a recovery is recorded.

To serve as a basis for making this provision, the Bank maintains an extensive credit risk monitoring process that considers several factors including: current economic conditions affecting the Bank’s customers, the payment performance of individual loans and pools of homogeneous loans, portfolio seasoning, changes in collateral values, and detailed reviews of specific loan relationships.

The Company utilizes an internal loan grading system to assign a risk grade to all commercial loans, all renegotiated loans, and each commercial credit relationship. Grades 1 through 4 are considered “pass” credits and grades 5 and 6 are considered “watch” credits and are subject to greater scrutiny. Loans with grades 7, 8, and 9 and considered “doubtful” or “loss” and have generally been charged off. A description of the general characteristics of each grade is as follows: 

• Grade 1 – Excellent – Loans secured by marketable collateral, with adequate margin, or supported by strong financial statements, including substantial levels of tangible net worth. Probability of serious financial deterioration is unlikely. Possess a sound repayment source and a secondary source. This classification will also include individual loans backed by liquid personal assets, established history and unquestionable character. High liquidity, minimum risk, strong ratios, and low handling costs are common to these loans.

• Grade 2 – Above Average – Loans that exhibit less than average risk and clearly demonstrate debt service coverage that is consistently above average as well as a strong capital base. These loans may have some deficiency or vulnerability, but with offsetting features and are considered to be fully collectable.

• Grade 3 – Satisfactory – Loans that have an acceptable amount of risk but may exhibit vulnerability to deterioration if adverse circumstances are encountered. These loans should demonstrate adequate debt service coverage and adequate levels of capital support but warrant periodic monitoring to ensure that weaknesses do not materialize or advance.

• Grade 4 – Pass – Loans that are considered “pass credits” and typically demonstrate adequate debt service coverage. The level of risk is considered acceptable but these loans warrant ongoing monitoring to ensure that adverse trends or other credit deficiencies have not materialized or advanced. The level of risk is considered acceptable so long as the loan is given adequate and ongoing management supervision.

• Grade 5 – Watch – Loans that possess some credit deficiency or potential weakness that deserves close attention. The primary source of loan repayment is sufficient but may be considered inadequate by the Bank’s standards.

• Grade 6 – Substandard – Loans that exhibit one or more of the following characteristics: (1) a defined credit weakness, financial deterioration is underway, and uncertainty about the likelihood that the loan will be paid from the primary source of repayment; (2) inadequately protected by the current net worth and paying capacity of the obligor; (3) reliance on secondary source of repayment such as collateral liquidation or guarantees; (4) distinct possibility the Bank will sustain loss if deficiencies are not corrected; (5) unusual courses of action are needed to maintain a high probability of repayment; (6) insufficient cash flow to repay principal but continuing to pay interest; (7) the Bank is subordinated or unsecured due to flaws in documentation; (8) loans are restructured or are on nonaccrual status due to concessions to the borrower when compared to normal loan terms; (9) the Bank is contemplating foreclosure or legal action due to the apparent deterioration in the loan; or (10) there is deterioration in the market conditions and the borrower is highly vulnerable to these conditions.

• Grade 7 – Doubtful – Loans that exhibit one or more of the following characteristics: (1) loans with all the weaknesses of Substandard loans and collection or liquidation is not probable to result in payment in full; (2) the primary source of repayment is gone and there is considerable doubt as to the quality of the secondary source of repayment; or (3) the possibility of loss is high, but certain important pending factors may strengthen the loan and loss classification is deferred.

• Grades 8 & 9 - Loss – Loans are considered uncollectible and of such little value that continuing to carry them on the Bank’s financial statements is not feasible.

The assessment of compensating factors may result in a rating plus or minus one grade from those listed above. These factors include, but are not limited to collateral, guarantors, environmental conditions, history, plan/projection reasonableness, quality of information, and payment delinquency.

The portfolio segments in each credit risk grade as of March 31, 2015 are as follows (000s omitted):

Credit Quality Indicators as of March 31, 2015

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	116	$	5,842	$	355	$	5,180	$	138,983	$	38,777	$	189,253
1		-		2,793		-		-		-		365		3,158
2		13		282		742		-		-		-		1,037
3		403		12,667		9,072		-		218		-		22,360
4		13,441		45,114		179,271		4,439		60,390		3,154		305,809
5		2,101		4,297		32,558		2,585		8,802		95		50,438
6		1,032		3,076		28,729		580		12,936		315		46,668
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723
Performing	$	16,109	$	72,655	$	233,018	$	10,750	$	209,062	$	42,009	$	583,603
Nonperforming		997		1,416		17,709		2,034		12,267		697		35,120
Total	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723

The portfolio segments in each credit risk grade as of December 31, 2014 are as follows (000s omitted):

Credit Quality Indicators as of December 31, 2014

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	122	$	2,700	$	-	$	5,402	$	138,355	$	40,371	$	186,950
1		-		3,060		-		-		-		369		3,429
2		330		287		830		-		132		-		1,579
3		491		7,084		9,923		-		464		-		17,962
4		13,458		41,441		176,685		4,357		58,902		3,260		298,103
5		1,261		4,903		34,385		2,471		10,112		199		53,331
6		1,038		3,286		27,646		696		15,736		576		48,978
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	16,700	$	62,761	$	249,469	$	12,926	$	223,701	$	44,775	$	610,332
Performing	$	15,702	$	61,287	$	231,461	$	10,740	$	211,143	$	44,053	$	574,386
Nonperforming		998		1,474		18,008		2,186		12,558		722		35,946
Total	$	16,700	$	62,761	$	249,469	$	12,926	$	223,701	$	44,775	$	610,332

Loans are considered past due when contractually required payment of interest or principal has not been received. The amount classified as past due is the entire principal balance outstanding of the loan, not just the amount of payments that are past due. The following is a summary of past due loans as of March 31, 2015 and December 31, 2014 (000s omitted):

March 31, 2015	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90 Days Past Due and Accruing
Agriculture and Agricultural Real Estate	$	-	$	-	$	80	$	80	$	17,026	$	17,106	$	-
Commercial		52		133		72		257		73,814		74,071		3
Commercial Real Estate		2,117		143		1,727		3,987		246,740		250,727		-
Construction Real Estate		110		-		2		112		12,672		12,784		-
Residential Real Estate		2,553		292		740		3,585		217,744		221,329		-
Consumer and Other		163		11		32		206		42,500		42,706		-
Total	$	4,995	$	579	$	2,653	$	8,227	$	610,496	$	618,723	$	3

December 31, 2014	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90 Days Past Due and Accruing
Agriculture and Agricultural Real Estate	$	449	$	-	$	80	$	529	$	16,171	$	16,700	$	-
Commercial		142		44		60		246		62,515		62,761		10
Commercial Real Estate		2,127		1,118		2,287		5,532		243,937		249,469		-
Construction Real Estate		334		-		-		334		12,592		12,926		-
Residential Real Estate		2,946		741		777		4,464		219,237		223,701		-
Consumer and Other		124		15		61		200		44,575		44,775		-
Total	$	6,122	$	1,918	$	3,265	$	11,305	$	599,027	$	610,332	$	10

Loans are placed on non-accrual status when, in the opinion of Management, the collection of additional interest is doubtful. Loans are automatically placed on non-accrual status upon becoming ninety days past due, however, loans may be placed on non-accrual status regardless of whether or not they are past due. All cash received on non-accrual loans is applied to the principal balance. Loans are considered for return to accrual status on an individual basis when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The following is a summary of non-accrual loans as of March 31, 2015 and December 31, 2014 (000s omitted):

	March 31, 2015		December 31, 2014
Agriculture and Agricultural Real Estate	$	80	$	80
Commercial		322		315
Commercial Real Estate		6,460		6,287
Construction Real Estate		186		409
Residential Real Estate		5,108		5,760
Consumer and Other		173		189
Total	$	12,329	$	13,040

For loans deemed to be impaired due to an expectation that all contractual payments will probably not be received, impairment is measured by comparing the Bank’s recorded investment in the loan to the present value of expected cash flows discounted at the loan’s effective interest rate, the fair value of the collateral, or the loan’s observable market price.

The following is a summary of impaired loans as of March 31, 2015 and 2014 (000s omitted):

March 31, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	255	$	255	$	-	$	255	$	3
Commercial		346		392		-		413		5
Commercial Real Estate		7,976		8,603		-		8,365		76
Construction Real Estate		152		337		-		339		3
Residential Real Estate		6,610		7,412		-		7,035		85
Consumer and Other		35		35		-		37		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		662		662		34		662		9
Commercial		909		923		449		936		11
Commercial Real Estate		10,272		12,264		1,296		11,903		124
Construction Real Estate		1,817		1,846		671		1,833		21
Residential Real Estate		4,870		5,278		580		5,055		57
Consumer and Other		488		488		212		491		5
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	917	$	12
Commercial		1,255		1,315		449		1,349		16
Commercial Real Estate		18,248		20,867		1,296		20,268		200
Construction Real Estate		1,969		2,183		671		2,172		24
Residential Real Estate		11,480		12,690		580		12,090		142
Consumer and Other		523		523		212		528		6

	Recorded Investment as of December 31, 2014		Unpaid Principal Balance as of December 31, 2014		Related Allowance as of December 31, 2014		Average Recorded Investment for the Three Months Ended March 31, 2014		Interest Income Recognized in the Three Months Ended March 31, 2014
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	256	$	256	$	-	$	-	$	-
Commercial		363		412		-		1,025		13
Commercial Real Estate		8,084		8,882		-		18,098		194
Construction Real Estate		297		954		-		1,257		2
Residential Real Estate		6,424		7,200		-		8,339		87
Consumer and Other		3		3		-		33		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		661		661		34		712		9
Commercial		1,051		1,062		554		1,425		18
Commercial Real Estate		10,929		12,758		1,502		20,446		212
Construction Real Estate		1,820		1,851		671		3,177		33
Residential Real Estate		5,251		5,658		672		8,038		79
Consumer and Other		531		529		222		565		6
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	712	$	9
Commercial		1,414		1,474		554		2,450		31
Commercial Real Estate		19,013		21,640		1,502		38,544		406
Construction Real Estate		2,117		2,805		671		4,434		35
Residential Real Estate		11,675		12,858		672		16,377		166
Consumer and Other		534		532		222		598		7

The Bank may agree to modify the terms of a loan in order to improve the Bank’s ability to collect amounts due. These modifications may include reduction of the interest rate, extension of the loan term, or in some cases, reduction of the principal balance. Modifications that are performed due to the debtor’s financial difficulties are considered Troubled Debt Restructurings (“TDRs”).

Loans that have been classified as TDRs during the three month periods ended March 31, 2015 and March 31, 2014 are as follows (000s omitted from dollar amounts):

	Three months ended						Three months ended
	March 31, 2015						March 31, 2014
	Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance		Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance
Agriculture and Agricultural Real Estate		-	$	-	$	-		1	$	314	$	314
Commercial		-		-		-		-		-		-
Commercial Real Estate		1		332		332		2		946		931
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		-		-		-		3		265		230
Consumer and Other		-		-		-		-		-		-
Total		1	$	332	$	332		6	$	1,525	$	1,475

The Bank considers TDRs that become past due under the modified terms as defaulted. There were no loans that became TDRs during the three month periods ended March 31, 2015 and March 31, 2014 that subsequently defaulted during the three month periods ended March 31, 2015 and March 31, 2014, respectively.

The Company has allocated $2,775,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at March 31, 2015. In addition, there are no commitments to lend additional amounts to borrowers that are classified as troubled debt restructurings as of March 31, 2015 and March 31, 2014.

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LOANS

3 Months Ended

Mar. 31, 2015

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Accounts, Notes, Loans and Financing Receivable Disclosure [Text Block]

4. LOANS

The Bank makes commercial, consumer, and mortgage loans primarily to customers in Monroe County, Michigan, southern and western Wayne County, Michigan, Lenawee County, Michigan, and surrounding areas. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on the automotive, manufacturing, and real estate development economic sectors.

Loans consist of the following (000s omitted):

	March 31,		December 31,
	2015		2014
Residential real estate loans	$	221,329	$	223,701
Commercial and Construction real estate loans		263,511		262,395
Agriculture and agricultural real estate loans		17,106		16,700
Commercial and industrial loans		74,071		62,761
Loans to individuals for household, family, and other personal expenditures		42,706		44,775
Total loans, gross	$	618,723	$	610,332
Less: Allowance for loan losses		13,191		13,208
	$	605,532	$	597,124

Loans are placed in a nonaccrual status when, in the opinion of Management, the collection of additional interest is doubtful. All loan relationships over $250,000 that are classified by Management as nonperforming as well as selected performing accounts and all renegotiated loans are reviewed for impairment each quarter. Allowances for loans determined to be impaired are included in the allowance for loan losses. All cash received on nonaccrual loans is applied to the principal balance. Nonperforming assets consist of nonaccrual loans, loans 90 days or more past due, restructured loans, nonaccrual investment securities, and other real estate owned. Other real estate owned includes real estate that has been acquired in full or partial satisfaction of loan obligations or upon foreclosure and real estate that the bank has purchased but no longer intends to use for bank premises.

The following table summarizes nonperforming assets (000’s omitted):

	March 31,			December 31,
	2015			2014
Nonaccrual loans	$	12,329		$	13,040
Loans 90 days past due and accruing		3			10
Restructured loans		22,788			22,896
Total nonperforming loans	$	35,120		$	35,946
Other real estate owned		4,888			5,615
Other assets		5			18
Nonperforming investment securities		-			-
Total nonperforming assets	$	40,013		$	41,579
Nonperforming assets to total assets		3.06	%		3.25	%
Allowance for loan losses to nonperforming loans		37.56	%		36.74	%

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FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Off Balance Sheet Risk [Abstract]

Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block]

Financial instruments whose contractual amounts represent off-balance sheet credit risk were as follows (000s omitted):

	Contractual Amount
	March 31,		December 31,
	2015		2014
Commitments to extend credit:
Unused portion of commercial lines of credit	$	62,024	$	66,319
Unused portion of credit card lines of credit		3,894		3,630
Unused portion of home equity lines of credit		20,088		19,544
Standby letters of credit and financial guarantees written		3,163		3,178
All other off-balance sheet commitments		-		-

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LOANS (Tables)

3 Months Ended

Mar. 31, 2015

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Schedule Of Loan Balances Outstanding By Category [Table Text Block]

Loans consist of the following (000s omitted):

	March 31,		December 31,
	2015		2014
Residential real estate loans	$	221,329	$	223,701
Commercial and Construction real estate loans		263,511		262,395
Agriculture and agricultural real estate loans		17,106		16,700
Commercial and industrial loans		74,071		62,761
Loans to individuals for household, family, and other personal expenditures		42,706		44,775
Total loans, gross	$	618,723	$	610,332
Less: Allowance for loan losses		13,191		13,208
	$	605,532	$	597,124

Schedule Of Non Performing Assets [Table Text Block]

The following table summarizes nonperforming assets (000’s omitted):

	March 31,			December 31,
	2015			2014
Nonaccrual loans	$	12,329		$	13,040
Loans 90 days past due and accruing		3			10
Restructured loans		22,788			22,896
Total nonperforming loans	$	35,120		$	35,946
Other real estate owned		4,888			5,615
Other assets		5			18
Nonperforming investment securities		-			-
Total nonperforming assets	$	40,013		$	41,579
Nonperforming assets to total assets		3.06	%		3.25	%
Allowance for loan losses to nonperforming loans		37.56	%		36.74	%

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FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

3 Months Ended

Mar. 31, 2015

Fair Value Off Balance Sheet Risk [Abstract]

Financial Instruments With Off - Balance Sheet Risk [Text Block]

9. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of condition.

The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for its other lending activities.

Financial instruments whose contractual amounts represent off-balance sheet credit risk were as follows (000s omitted):

	Contractual Amount
	March 31,		December 31,
	2015		2014
Commitments to extend credit:
Unused portion of commercial lines of credit	$	62,024	$	66,319
Unused portion of credit card lines of credit		3,894		3,630
Unused portion of home equity lines of credit		20,088		19,544
Standby letters of credit and financial guarantees written		3,163		3,178
All other off-balance sheet commitments		-		-

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Most commercial lines of credit are secured by real estate mortgages or other collateral, and generally have fixed expiration dates or other termination clauses. Since the lines of credit may expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements. Credit card lines of credit have various established expiration dates, but are fundable on demand. Home equity lines of credit are secured by real estate mortgages, a majority of which have ten year expiration dates, but are fundable on demand. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of the collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on Management’s credit evaluation of the counterparty.

Standby letters of credit written are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements and other business transactions.

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INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2015

Investments, Debt and Equity Securities [Abstract]

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

6. INVESTMENT SECURITIES 

The following is a summary of the Bank’s investment securities portfolio as of March 31, 2015 and December 31, 2014 (000’s omitted):

	Held to Maturity
	March 31, 2015
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	35,854	$	1,443	$	(48)	$	37,249
Corporate Debt Securities		500		-		-		500
	$	36,354	$	1,443	$	(48)	$	37,749

	Held to Maturity
	December 31, 2014
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	32,113	$	1,287	$	(69)	$	33,331
Corporate Debt Securities		500		-		-		500
	$	32,613	$	1,287	$	(69)	$	33,831

	Available for Sale
	March 31, 2015
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of U.S. Government Agencies	$	351,130	$	2,940	$	(1,056)	$	353,014
Mortgage Backed Securities issued by U.S. Government Agencies		115,189		600		(476)		115,313
Obligations of States and Political Subdivisions		20,707		410		(54)		21,063
Corporate Debt Securities		1,982		19		-		2,001
Equity Securities		2,044		115		-		2,159
	$	491,052	$	4,084	$	(1,586)	$	493,550

	Available for Sale
	December 31, 2014
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of U.S. Government Agencies	$	343,703	$	1,372	$	(3,027)	$	342,048
Mortgage Backed Securities issued by U.S. Government Agencies		105,890		406		(890)		105,406
Obligations of States and Political Subdivisions		19,286		377		(82)		19,581
Corporate Debt Securities		3,975		27		-		4,002
Equity Securities		2,044		95		-		2,139
	$	474,898	$	2,277	$	(3,999)	$	473,176

The amortized cost and estimated market values of securities by contractual maturity as of March 31, 2015 are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held to Maturity				Available for Sale
			Estimated				Estimated
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
Contractual maturity in
1 year or less	$	6,148	$	6,161	$	5,784	$	5,806
After 1 year through five years		15,863		16,149		138,807		138,995
After 5 years through 10 years		11,478		12,142		216,248		218,213
After 10 years		2,865		3,297		12,980		13,064
Total		36,354		37,749		373,819		376,078
Mortgage Backed Securities		-		-		115,189		115,313
Securities with no stated maturity		-		-		2,044		2,159
Total	$	36,354	$	37,749	$	491,052	$	493,550

The investment securities portfolio is evaluated for impairment throughout the year. Impairment is recorded against individual securities, unless the decrease in fair value is attributable to interest rates or the lack of an active market, and Management determines that the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before a recovery of their amortized costs bases, which may be maturity. The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses (in thousands), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2015 and December 31, 2014.

March 31, 2015
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	34,555	$	154	$	129,052	$	902	$	163,607	$	1,056
Mortgage Backed Securities issued by U.S. Government Agencies		16,150		30		34,520		446		50,670		476
Obligations of States and Political Subdivisions		5,742		23		5,755		79		11,497		102
	$	56,447	$	207	$	169,327	$	1,427	$	225,774	$	1,634

December 31, 2014
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	47695	$	144	$	159650	$	2883	$	207345	$	3027
Mortgage Backed Securities issued by U.S. Government Agencies		32,756		175		40,556		715		73,312		890
Obligations of States and Political Subdivisions		9,341		52		4,276		99		13,617		151
	$	89,792	$	371	$	204,482	$	3,697	$	294,274	$	4,068

The amount of investment securities issued by government agencies, states, and political subdivisions with unrealized losses and the amount of unrealized losses on those investment securities are primarily the result of market interest rates and not the result of the credit quality of the issuers of the securities. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other than temporarily impaired at March 31, 2015. As of March 31, 2015 and December 31, 2014, there were 88 and 116 securities in an unrealized loss position, respectively.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value, as defined in ASC Topic 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for market activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

The Company utilizes fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value is used on a recurring basis for Available for Sale Securities. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes. Examples of these non-recurring uses of fair value include certain loans held for sale accounted for on a lower of cost or market basis. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value.

The Company applied the following fair value hierarchy:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. The Company’s mutual fund investments where quoted prices are available in an active market generally are classified within Level 1 of the fair value hierarchy.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. The Company’s borrowed funds and investments in U.S. government agency securities, government sponsored mortgage backed securities, corporate debt securities, and obligations of states and political subdivisions are generally classified in Level 2 of the fair value hierarchy. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Private equity investments and trust preferred collateralized debt obligations are classified within Level 3 of the fair value hierarchy. Fair values are initially valued based on transaction price and are adjusted to reflect exit values.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2015 and December 31, 2014, and the valuation techniques used by the Company to determine those fair values.

									Total
	Carrying								Estimated
March 31, 2015	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	51,557	$	51,557	$	-	$	-	$	51,557
Securities - Held to Maturity
Obligations of States and Political Subdivisions		35,854		-		37,249		-		37,249
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		353,014		-		353,014		-		353,014
MBS issued by U.S. Government Agencies		115,313		-		115,313		-		115,313
Obligations of States and Political Subdivisions		21,063		-		21,063		-		21,063
Corporate Debt Securities		2,001		-		2,001		-		2,001
Other Securities		2,159		2,159		-		-		2,159
Federal Home Loan Bank Stock		7,537		-		7,537		-		7,537
Loans Held for Sale		662		-		-		700		700
Loans, net		605,532		-		-		616,027		616,027
Accrued Interest Receivable		4,336		-		-		4,336		4,336
Financial Liabilities:
Noninterest Bearing Deposits		235,743		235,743		-		-		235,743
Interest Bearings Deposits		899,569		-		901,519		-		901,519
Repurchase Agreements		15,000		-		15,709		-		15,709
Accrued Interest Payable		133		-		-		133		133

									Total
	Carrying								Estimated
December 31, 2014	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	52,122	$	52,122	$	-	$	-	$	52,122
Securities - Held to Maturity
Obligations of States and Political Subdivisions		32,113		-		33,331		-		33,331
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		342,048		-		342,048		-		342,048
MBS issued by U.S. Government Agencies		105,406		-		105,406		-		105,406
Obligations of States and Political Subdivisions		19,581		-		19,581		-		19,581
Corporate Debt Securities		4,002		-		4,002		-		4,002
Other Securities		2,139		2,139		-		-		2,139
Federal Home Loan Bank Stock		7,537		-		7,537		-		7,537
Loans Held for Sale		548		-		-		560		560
Loans, net		597,124		-		-		608,109		608,109
Accrued Interest Receivable		3,943		-		-		3,943		3,943
Financial Liabilities:
Noninterest Bearing Deposits		218,221		218,221		-		-		218,221
Interest Bearings Deposits		893,590		-		895,522		-		895,522
Repurchase Agreements		15,000		-		15,828		-		15,828
Accrued Interest Payable		137		-		-		137		137

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset.

The changes in Level 3 assets measured at fair value on a recurring basis were (000’s omitted):

Investment Securities - Available for Sale	2015		2014
Balance at January 1	$	-	$	5,751
Total realized and unrealized losses included in income		-		(4)
Total unrealized gains included in other comprehensive income		-		(33)
Net purchases, sales, calls and maturities		-		-
Net transfers in/out of Level 3		-		-
Balance at March 31	$	-	$	5,714

The Company did not have any sales or purchases of Level 3 available for sale securities during the period.  The Company sold all of its Level 3 Available for Sale securities in the second and third quarters of 2014.

Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 assets. As a result, the unrealized gains and losses for these assets presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs.

The Company also has assets that under certain conditions are subject to measurement at fair value on a nonrecurring basis. These assets include loans and Other Real Estate Owned. The Company estimated the fair values of these assets using Level 3 inputs, specifically discounted cash flow projections.

Assets measured at fair value on a nonrecurring basis are as follows (000’s omitted):

	Balance at March 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	34,392	$	-	$	-	$	31,150
Other Real Estate Owned	$	4,888	$	-	$	-	$	4,888

	Balance at December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	35,670	$	-	$	-	$	32,015
Other Real Estate Owned	$	5,615	$	-	$	-	$	5,615

Impaired loans categorized as Level 3 assets consist of non-homogenous loans that are considered impaired. The Company estimates the fair value of the loans based on the present value of expected future cash flows using management’s best estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated realizable values of available collateral (typically based on outside appraisals). Other Real Estate Owned (OREO) consists of property received in full or partial satisfaction of a receivable. The Company utilizes independent appraisals to estimate the fair value of OREO properties.

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BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany transactions and balances have been eliminated.

Comprehensive Income Policy [Policy Text Block]

COMPREHENSIVE INCOME

Accounting principles generally require that revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, however, such as unrealized gains and losses on securities available for sale and amounts recognized related to postretirement benefit plans (gains and losses, prior service costs, and transition assets or obligations), are reported as a direct adjustment to the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income.

Segment Reporting, Policy [Policy Text Block]

BUSINESS SEGMENTS

While the Company's chief decision makers monitor the revenue streams of various products and services, operations are managed and financial performance is evaluated on a company wide basis. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable segment.

Fair Value Measurement Policy [Policy Text Block]

FAIR VALUE

The Company measures or monitors many of its assets and liabilities on a fair value basis. Fair value is used on a recurring basis for assets and liabilities that are elected to be accounted for under The Fair Value Option as well as for certain assets and liabilities in which fair value is the primary basis of accounting. Examples of these include derivative instruments and available for sale securities. Additionally, fair value is used on a non-recurring basis to evaluate assets or liabilities for impairment or for disclosure purposes. Examples of these non-recurring uses of fair value include certain loans held for sale accounted for on a lower of cost or market basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value.

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at and/or marked to fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to market observable data for similar assets or liabilities. Nevertheless, certain assets and liabilities are not actively traded in observable markets and the Company must use alternative valuation techniques to derive a fair value measurement.

New Accounting Pronouncements Policy [Policy Text Block]

ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09 (ASU 2014-09), “Revenue from Contracts with Customers (Topic 606)”. ASU 2014-09 adopts a standardized approach for revenue recognition and was a joint effort with the International Accounting Standards Board (IASB). The new revenue recognition standard is based on a core principle of recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 does not apply to financial instruments. ASU 2014-09 is effective for public entities for reporting periods beginning after December 15, 2016 (therefore, for the year ending December 31, 2017 for the Corporation). Early implementation is not allowed for public companies. Management is currently assessing the impact to the Corporation’s consolidated financial statements.

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ALLOWANCE FOR LOAN LOSSES (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Agriculture and Agricultural Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no related allowance recorded, Recorded Investment	$ 255		$ 256
With no related allowance recorded, Unpaid Principal Balance	255		256
With no related allowance recorded, Related Allowance	0		0
With no related allowance recorded, Average Recorded Investment	255	0
With no related allowance recorded, Interest Income Recognized	3	0
With an allowance recorded, Recorded Investment	662		661
With an allowance recorded, Unpaid Principal Balance	662		661
With an allowance recorded, Related Allowance	34		34
With an allowance recorded, Average Recorded Investment	662	712
With an allowance recorded, Interest Income Recognized	9	9
Total, Recorded Investment	917		917
Total, Unpaid Principal Balance	917		917
Total, Related Allowance	34		34
Total, Average Recorded Investment	917	712
Total, Interest Income Recognized	12	9
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no related allowance recorded, Recorded Investment	346		363
With no related allowance recorded, Unpaid Principal Balance	392		412
With no related allowance recorded, Related Allowance	0		0
With no related allowance recorded, Average Recorded Investment	413	1,025
With no related allowance recorded, Interest Income Recognized	5	13
With an allowance recorded, Recorded Investment	909		1,051
With an allowance recorded, Unpaid Principal Balance	923		1,062
With an allowance recorded, Related Allowance	449		554
With an allowance recorded, Average Recorded Investment	936	1,425
With an allowance recorded, Interest Income Recognized	11	18
Total, Recorded Investment	1,255		1,414
Total, Unpaid Principal Balance	1,315		1,474
Total, Related Allowance	449		554
Total, Average Recorded Investment	1,349	2,450
Total, Interest Income Recognized	16	31
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no related allowance recorded, Recorded Investment	7,976		8,084
With no related allowance recorded, Unpaid Principal Balance	8,603		8,882
With no related allowance recorded, Related Allowance	0		0
With no related allowance recorded, Average Recorded Investment	8,365	18,098
With no related allowance recorded, Interest Income Recognized	76	194
With an allowance recorded, Recorded Investment	10,272		10,929
With an allowance recorded, Unpaid Principal Balance	12,264		12,758
With an allowance recorded, Related Allowance	1,296		1,502
With an allowance recorded, Average Recorded Investment	11,903	20,446
With an allowance recorded, Interest Income Recognized	124	212
Total, Recorded Investment	18,248		19,013
Total, Unpaid Principal Balance	20,867		21,640
Total, Related Allowance	1,296		1,502
Total, Average Recorded Investment	20,268	38,544
Total, Interest Income Recognized	200	406
Construction Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no related allowance recorded, Recorded Investment	152		297
With no related allowance recorded, Unpaid Principal Balance	337		954
With no related allowance recorded, Related Allowance	0		0
With no related allowance recorded, Average Recorded Investment	339	1,257
With no related allowance recorded, Interest Income Recognized	3	2
With an allowance recorded, Recorded Investment	1,817		1,820
With an allowance recorded, Unpaid Principal Balance	1,846		1,851
With an allowance recorded, Related Allowance	671		671
With an allowance recorded, Average Recorded Investment	1,833	3,177
With an allowance recorded, Interest Income Recognized	21	33
Total, Recorded Investment	1,969		2,117
Total, Unpaid Principal Balance	2,183		2,805
Total, Related Allowance	671		671
Total, Average Recorded Investment	2,172	4,434
Total, Interest Income Recognized	24	35
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no related allowance recorded, Recorded Investment	6,610		6,424
With no related allowance recorded, Unpaid Principal Balance	7,412		7,200
With no related allowance recorded, Related Allowance	0		0
With no related allowance recorded, Average Recorded Investment	7,035	8,339
With no related allowance recorded, Interest Income Recognized	85	87
With an allowance recorded, Recorded Investment	4,870		5,251
With an allowance recorded, Unpaid Principal Balance	5,278		5,658
With an allowance recorded, Related Allowance	580		672
With an allowance recorded, Average Recorded Investment	5,055	8,038
With an allowance recorded, Interest Income Recognized	57	79
Total, Recorded Investment	11,480		11,675
Total, Unpaid Principal Balance	12,690		12,858
Total, Related Allowance	580		672
Total, Average Recorded Investment	12,090	16,377
Total, Interest Income Recognized	142	166
Consumer and Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
With no related allowance recorded, Recorded Investment	35		3
With no related allowance recorded, Unpaid Principal Balance	35		3
With no related allowance recorded, Related Allowance	0		0
With no related allowance recorded, Average Recorded Investment	37	33
With no related allowance recorded, Interest Income Recognized	1	1
With an allowance recorded, Recorded Investment	488		531
With an allowance recorded, Unpaid Principal Balance	488		529
With an allowance recorded, Related Allowance	212		222
With an allowance recorded, Average Recorded Investment	491	565
With an allowance recorded, Interest Income Recognized	5	6
Total, Recorded Investment	523		534
Total, Unpaid Principal Balance	523		532
Total, Related Allowance	212		222
Total, Average Recorded Investment	528	598
Total, Interest Income Recognized	$ 6	$ 7

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INVESTMENT SECURITIES (Tables)

3 Months Ended

Mar. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Schedule Of Investment Securities Portfolio [Table Text Block]

The following is a summary of the Bank’s investment securities portfolio as of March 31, 2015 and December 31, 2014 (000’s omitted):

	Held to Maturity
	March 31, 2015
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	35,854	$	1,443	$	(48)	$	37,249
Corporate Debt Securities		500		-		-		500
	$	36,354	$	1,443	$	(48)	$	37,749

	Held to Maturity
	December 31, 2014
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	32,113	$	1,287	$	(69)	$	33,331
Corporate Debt Securities		500		-		-		500
	$	32,613	$	1,287	$	(69)	$	33,831

	Available for Sale
	March 31, 2015
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of U.S. Government Agencies	$	351,130	$	2,940	$	(1,056)	$	353,014
Mortgage Backed Securities issued by U.S. Government Agencies		115,189		600		(476)		115,313
Obligations of States and Political Subdivisions		20,707		410		(54)		21,063
Corporate Debt Securities		1,982		19		-		2,001
Equity Securities		2,044		115		-		2,159
	$	491,052	$	4,084	$	(1,586)	$	493,550

	Available for Sale
	December 31, 2014
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Obligations of U.S. Government Agencies	$	343,703	$	1,372	$	(3,027)	$	342,048
Mortgage Backed Securities issued by U.S. Government Agencies		105,890		406		(890)		105,406
Obligations of States and Political Subdivisions		19,286		377		(82)		19,581
Corporate Debt Securities		3,975		27		-		4,002
Equity Securities		2,044		95		-		2,139
	$	474,898	$	2,277	$	(3,999)	$	473,176

Expected Maturities Of Amortized Cost and Estimated Market Value [Table Text Block]

The amortized cost and estimated market values of securities by contractual maturity as of March 31, 2015 are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held to Maturity				Available for Sale
			Estimated				Estimated
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
Contractual maturity in
1 year or less	$	6,148	$	6,161	$	5,784	$	5,806
After 1 year through five years		15,863		16,149		138,807		138,995
After 5 years through 10 years		11,478		12,142		216,248		218,213
After 10 years		2,865		3,297		12,980		13,064
Total		36,354		37,749		373,819		376,078
Mortgage Backed Securities		-		-		115,189		115,313
Securities with no stated maturity		-		-		2,044		2,159
Total	$	36,354	$	37,749	$	491,052	$	493,550

Schedule Of Gross Unrealized Losses and Fair Value Of Investments With Unrealized Losses [Table Text Block]

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses (in thousands), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2015 and December 31, 2014.

March 31, 2015
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	34,555	$	154	$	129,052	$	902	$	163,607	$	1,056
Mortgage Backed Securities issued by U.S. Government Agencies		16,150		30		34,520		446		50,670		476
Obligations of States and Political Subdivisions		5,742		23		5,755		79		11,497		102
	$	56,447	$	207	$	169,327	$	1,427	$	225,774	$	1,634

December 31, 2014
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	47695	$	144	$	159650	$	2883	$	207345	$	3027
Mortgage Backed Securities issued by U.S. Government Agencies		32,756		175		40,556		715		73,312		890
Obligations of States and Political Subdivisions		9,341		52		4,276		99		13,617		151
	$	89,792	$	371	$	204,482	$	3,697	$	294,274	$	4,068

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STOCK BASED COMPENSATION (Details Textual) (USD $)	3 Months Ended		1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jan. 21, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock or Unit Expense	$ 83,000	$ 67,000
Share Price	$ 5.61
Fair Value Common Stock	$ 4.94
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1	$ 1,103,000
Shares, Issued	196,562
Executive Officer [Member] | Stock Incentive Plan 2008 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	72,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 2.85
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	7 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	57.07%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.70%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Executive Officer [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross			25,000

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at January 1	$ 0	$ 5,751
Total realized and unrealized losses included in income	0	(4)
Total unrealized gains included in other comprehensive income	0	(33)
Net purchases, sales, calls and maturities	0	0
Net transfers in/out of Level 3	0	0
Balance at March 31	$ 0	$ 5,714

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Common Stock [Member]	Retained Earnings [Member]	Unearned Compensation [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 31, 2013	$ 110,608	$ 14,671	$ 106,817	$ (7)	$ (10,873)
Issuance of Common Stock
SOSARs exercised	0	0	0	0	0
Restricted stock awards	0	29	0	(29)	0
Other stock issued	2,778	2,778	0	0	0
Stock Offering Expense	(325)	(325)	0	0	0
Equity Compensation	51	46	0	5	0
Net income	1,767	0	1,767	0	0
Other comprehensive loss - net of tax	3,228	0	0	0	3,228
Balance at Mar. 31, 2014	118,107	17,199	108,584	(31)	(7,645)
Balance at Dec. 31, 2014	134,536	23,037	114,132	0	(2,633)
Issuance of Common Stock
SOSARs exercised	0	0	0	0	0
Other stock issued	26	26	0	0	0
Equity Compensation	57	57	0	0	0
Net income	2,777	0	2,777	0	0
Other comprehensive loss - net of tax	2,812	0	0	0	2,812
Balance at Mar. 31, 2015	$ 140,208	$ 23,120	$ 116,909	$ 0	$ 179

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STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

3. STOCK BASED COMPENSATION

Stock Options - The following table summarizes the options that had been granted to certain key executives in accordance with the Long-Term Incentive Compensation Plan that was approved by shareholders at the Annual Meeting of Shareholders on April 6, 2000.

			Weighted Average
	Shares		Exercise Price
Options Outstanding, January 1, 2015		205,400	$	19.08
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		89,500		23.40
Options Outstanding, March 31, 2015		115,900	$	15.75
Options Exercisable, March 31, 2015		115,900	$	15.75

Stock Only Stock Appreciation Rights (SOSARs) - On January 21, 2015, 72,500 Stock Only Stock Appreciation Rights (SOSARs) were awarded to certain executives in accordance with the MBT 2008 Stock Incentive Plan that was approved by shareholders on May 1, 2008. The SOSARs have a term of ten years and vest in three equal annual installments beginning on December 31, 2015. The fair value of $2.85 for the SOSARs was estimated at the date of the grant, using the Black-Scholes option pricing model, with the following assumptions: expected option lives of 7 years, expected volatility of 57.07%, a risk free interest rate of 1.70% and dividend yield of 0.00%. The fair value of the Company’s common stock was $4.94 on the grant date. 

SOSARs granted under the plan are structured as fixed grants with the exercise price equal to the market value of the underlying stock on the date of the grant.

The following table summarizes the SOSARs that have been granted:

			Weighted Average
	SOSARs		Base Price
SOSARs Outstanding, January 1, 2015		557,439	$	3.58
Granted		72,500		4.94
Exercised		21,166		2.31
Forfeited		7,502		3.82
Expired		-		-
SOSARs Outstanding, March 31, 2015		601,271	$	3.78
SOSARs Exercisable, March 31, 2015		427,724	$	3.51

The exercise of a SOSAR results in the issuance of a number of shares of common stock of the Company based on the appreciation of the market price of the stock over the exercise price of the SOSAR. The market value of the Company’s common stock on March 31, 2015 was $5.61. The value of the exercisable SOSARs that are in-the-money as of March 31, 2015 was $1,103,000, and exercise of those SOSARs on that date would have resulted in the issuance of 196,562 shares of common stock.

Restricted Stock Unit Awards – On January 21, 2015, 25,000 performance restricted stock units were awarded to certain key executive officers in accordance with the MBT 2008 Stock Incentive Plan that was approved by shareholders on May 1, 2008. Each Restricted Stock Unit (RSU) is equivalent to one share of MBT Financial Corp. common stock. Stock will be issued to the participants following a two year performance period that ends on December 31, 2016. Earned RSUs vest on December 31, 2017 and as of March 31, 2015 none of the RSUs were vested.

The total expense for equity based compensation was $83,000 in the first quarter of 2015 and $67,000 in the first quarter of 2014.

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LOANS (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	$ 618,723	$ 610,332	$ 591,806
Less: Allowance for loan losses	13,191	13,208	16,158	16,209
Loans - Net	605,532	597,124
Residential real estate loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	221,329	223,701
Commercial and Construction real estate loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	263,511	262,395
Agriculture and agricultural real estate loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	17,106	16,700
Commercial and industrial loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	74,071	62,761
Loans to individuals for household, family, and other personal expenditures [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	$ 42,706	$ 44,775

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INVESTMENT SECURITIES (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Investment Holdings [Line Items]
Available for Sale Amortized Cost 1 year or less	$ 5,784
Available for Sale Amortized Cost After 1 year through five years	138,807
Available for Sale Amortized Cost After 5 years through 10 years	216,248
Available for Sale Amortized Cost After 10 years	12,980
Total	373,819
Available for Sale Securities with no stated maturity Amortized Cost	2,044
Available-for-sale Securities, Debt Maturities, Remainder of Fiscal Year, Amortized Cost Basis	491,052
Available-for-sale Securities, Debt Maturities, Next Rolling 1 year or less, Fair Value	5,806
Available-for-sale Securities, Debt Maturities, Rolling Year One Through Five, Fair Value	138,995
Available-for-sale Securities, Debt Maturities, Rolling Year Five Through Ten, Fair Value	218,213
Available-for-sale Securities, Debt Maturities, Rolling after Year Ten, Fair Value	13,064
Available For Sale Securities Debt Maturities Total	376,078
Available For Sale Securities Debt Maturities Mortgage Backed Securities Fair Value	115,313
Available-for-sale Securities, Debt Maturities, Securities with no stated maturity, Fair Value	2,159
Available-for-sale Securities, Debt Maturities, Remainder of Fiscal Year, Fair Value	493,550
Held To Maturity Securities Debt Maturities Next Rolling Twelve Months Amortized Cost	6,148
Held To Maturity Securities Debt Maturities Next Rolling Year One Through Five Amortized Cost	15,863
Held To Maturity Securities Debt Maturities Next Rolling Year Five Through Ten Amortized Cost	11,478
Held To Maturity Securities Debt Maturities Next Rolling Year After Ten Years Amortized Cost	2,865
Held To Maturity Debt Maturities Amortized Cost Total	36,354
Held To Maturity Securities Mortgage Backed Securities Amortized Cost	0
Held To Maturity Securities Debt Maturities, Securities with no stated maturity Amortized Cost	0
Held To Maturity Securities Amortized Cost Total	36,354	32,613
Held-to-maturity Securities, Debt Maturities, Next Rolling 1 year or less, Fair Value	6,161
Held-to-maturity Securities, Debt Maturities, Rolling Year One Through Five, Fair Value	16,149
Held-to-maturity Securities, Debt Maturities, Rolling Year Five Through Ten, Fair Value	12,142
Held-to-maturity Securities, Debt Maturities, Rolling after Ten Years, Fair Value	3,297
Held To Maturity Debt Maturities Total	37,749
Held-to-maturity Securities, Debt Maturities, Securities with no stated maturity, Fair Value	0
Held-to-maturity Securities, Debt Maturities, Fair Value	37,749	33,831
Mortage Backed Securities [Member]
Investment Holdings [Line Items]
Total	115,189
Held-to-maturity Securities, Debt Maturities, Fair Value	$ 0

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ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

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

Activity in the allowance for loan losses during the three months ended March 31, 2015 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Allowance for loan losses: For the three months ended March 31, 2015
Beginning Balance	$	216	$	1,361	$	6,179	$	803	$	3,226	$	1,423	$	13,208
Charge-offs		-		(106)		-		-		(196)		(20)		(322)
Recoveries		7		74		161		609		223		31		1,105
Provision		32		51		(662)		(602)		(180)		561		(800)
Ending balance	$	255	$	1,380	$	5,678	$	810	$	3,073	$	1,995	$	13,191
Allowance for loan losses as of March 31, 2015
Ending balance individually evaluated for impairment	$	34	$	449	$	1,296	$	671	$	580	$	212	$	3,242
Ending balance collectively evaluated for impairment		221		931		4,382		139		2,493		1,783		9,949
Ending balance	$	255	$	1,380	$	5,678	$	810	$	3,073	$	1,995	$	13,191
Loans as of March 31, 2015
Ending balance individually evaluated for impairment	$	917	$	1,255	$	18,248	$	1,969	$	11,480	$	523	$	34,392
Ending balance collectively evaluated for impairment		16,189		72,816		232,479		10,815		209,849		42,183		584,331
Ending balance	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723

Activity in the allowance for loan losses during the three months ended March 31, 2014 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Allowance for loan losses: For the three months ended March 31, 2014
Beginning Balance	$	171	$	1,989	$	7,030	$	1,397	$	4,606	$	1,016	$	16,209
Charge-offs		-		(186)		(108)		(210)		(132)		(38)		(674)
Recoveries		-		33		65		234		165		26		523
Provision		34		(56)		473		9		(161)		(199)		100
Ending balance	$	205	$	1,780	$	7,460	$	1,430	$	4,478	$	805	$	16,158
Allowance for loan losses as of March 31, 2014
Ending balance individually evaluated for impairment	$	46	$	920	$	2,758	$	1,150	$	1,713	$	248	$	6,835
Ending balance collectively evaluated for impairment		159		860		4,702		280		2,765		557		9,323
Ending balance	$	205	$	1,780	$	7,460	$	1,430	$	4,478	$	805	$	16,158
Loans as of March 31, 2014
Ending balance individually evaluated for impairment	$	713	$	2,304	$	35,937	$	4,013	$	15,715	$	596	$	59,278
Ending balance collectively evaluated for impairment		13,842		56,491		228,069		10,858		209,484		13,784		532,528
Ending balance	$	14,555	$	58,795	$	264,006	$	14,871	$	225,199	$	14,380	$	591,806

Financing Receivable Credit Quality Indicators [Table Text Block]

The portfolio segments in each credit risk grade as of March 31, 2015 are as follows (000s omitted):

Credit Quality Indicators as of March 31, 2015

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	116	$	5,842	$	355	$	5,180	$	138,983	$	38,777	$	189,253
1		-		2,793		-		-		-		365		3,158
2		13		282		742		-		-		-		1,037
3		403		12,667		9,072		-		218		-		22,360
4		13,441		45,114		179,271		4,439		60,390		3,154		305,809
5		2,101		4,297		32,558		2,585		8,802		95		50,438
6		1,032		3,076		28,729		580		12,936		315		46,668
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723
Performing	$	16,109	$	72,655	$	233,018	$	10,750	$	209,062	$	42,009	$	583,603
Nonperforming		997		1,416		17,709		2,034		12,267		697		35,120
Total	$	17,106	$	74,071	$	250,727	$	12,784	$	221,329	$	42,706	$	618,723

The portfolio segments in each credit risk grade as of December 31, 2014 are as follows (000s omitted):

Credit Quality Indicators as of December 31, 2014

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	122	$	2,700	$	-	$	5,402	$	138,355	$	40,371	$	186,950
1		-		3,060		-		-		-		369		3,429
2		330		287		830		-		132		-		1,579
3		491		7,084		9,923		-		464		-		17,962
4		13,458		41,441		176,685		4,357		58,902		3,260		298,103
5		1,261		4,903		34,385		2,471		10,112		199		53,331
6		1,038		3,286		27,646		696		15,736		576		48,978
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	16,700	$	62,761	$	249,469	$	12,926	$	223,701	$	44,775	$	610,332
Performing	$	15,702	$	61,287	$	231,461	$	10,740	$	211,143	$	44,053	$	574,386
Nonperforming		998		1,474		18,008		2,186		12,558		722		35,946
Total	$	16,700	$	62,761	$	249,469	$	12,926	$	223,701	$	44,775	$	610,332

Past Due Financing Receivables [Table Text Block]

The following is a summary of past due loans as of March 31, 2015 and December 31, 2014 (000s omitted):

March 31, 2015	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90 Days Past Due and Accruing
Agriculture and Agricultural Real Estate	$	-	$	-	$	80	$	80	$	17,026	$	17,106	$	-
Commercial		52		133		72		257		73,814		74,071		3
Commercial Real Estate		2,117		143		1,727		3,987		246,740		250,727		-
Construction Real Estate		110		-		2		112		12,672		12,784		-
Residential Real Estate		2,553		292		740		3,585		217,744		221,329		-
Consumer and Other		163		11		32		206		42,500		42,706		-
Total	$	4,995	$	579	$	2,653	$	8,227	$	610,496	$	618,723	$	3

December 31, 2014	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90 Days Past Due and Accruing
Agriculture and Agricultural Real Estate	$	449	$	-	$	80	$	529	$	16,171	$	16,700	$	-
Commercial		142		44		60		246		62,515		62,761		10
Commercial Real Estate		2,127		1,118		2,287		5,532		243,937		249,469		-
Construction Real Estate		334		-		-		334		12,592		12,926		-
Residential Real Estate		2,946		741		777		4,464		219,237		223,701		-
Consumer and Other		124		15		61		200		44,575		44,775		-
Total	$	6,122	$	1,918	$	3,265	$	11,305	$	599,027	$	610,332	$	10

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

The following is a summary of non-accrual loans as of March 31, 2015 and December 31, 2014 (000s omitted):

	March 31, 2015		December 31, 2014
Agriculture and Agricultural Real Estate	$	80	$	80
Commercial		322		315
Commercial Real Estate		6,460		6,287
Construction Real Estate		186		409
Residential Real Estate		5,108		5,760
Consumer and Other		173		189
Total	$	12,329	$	13,040

Impaired Financing Receivables [Table Text Block]

The following is a summary of impaired loans as of March 31, 2015 and 2014 (000s omitted):

March 31, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	255	$	255	$	-	$	255	$	3
Commercial		346		392		-		413		5
Commercial Real Estate		7,976		8,603		-		8,365		76
Construction Real Estate		152		337		-		339		3
Residential Real Estate		6,610		7,412		-		7,035		85
Consumer and Other		35		35		-		37		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		662		662		34		662		9
Commercial		909		923		449		936		11
Commercial Real Estate		10,272		12,264		1,296		11,903		124
Construction Real Estate		1,817		1,846		671		1,833		21
Residential Real Estate		4,870		5,278		580		5,055		57
Consumer and Other		488		488		212		491		5
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	917	$	12
Commercial		1,255		1,315		449		1,349		16
Commercial Real Estate		18,248		20,867		1,296		20,268		200
Construction Real Estate		1,969		2,183		671		2,172		24
Residential Real Estate		11,480		12,690		580		12,090		142
Consumer and Other		523		523		212		528		6

	Recorded Investment as of December 31, 2014		Unpaid Principal Balance as of December 31, 2014		Related Allowance as of December 31, 2014		Average Recorded Investment for the Three Months Ended March 31, 2014		Interest Income Recognized in the Three Months Ended March 31, 2014
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	256	$	256	$	-	$	-	$	-
Commercial		363		412		-		1,025		13
Commercial Real Estate		8,084		8,882		-		18,098		194
Construction Real Estate		297		954		-		1,257		2
Residential Real Estate		6,424		7,200		-		8,339		87
Consumer and Other		3		3		-		33		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		661		661		34		712		9
Commercial		1,051		1,062		554		1,425		18
Commercial Real Estate		10,929		12,758		1,502		20,446		212
Construction Real Estate		1,820		1,851		671		3,177		33
Residential Real Estate		5,251		5,658		672		8,038		79
Consumer and Other		531		529		222		565		6
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	712	$	9
Commercial		1,414		1,474		554		2,450		31
Commercial Real Estate		19,013		21,640		1,502		38,544		406
Construction Real Estate		2,117		2,805		671		4,434		35
Residential Real Estate		11,675		12,858		672		16,377		166
Consumer and Other		534		532		222		598		7

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

Loans that have been classified as TDRs during the three month periods ended March 31, 2015 and March 31, 2014 are as follows (000s omitted from dollar amounts):

	Three months ended						Three months ended
	March 31, 2015						March 31, 2014
	Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance		Number of Contracts		Pre- Modification Recorded Principal Balance		Post- Modification Recorded Principal Balance
Agriculture and Agricultural Real Estate		-	$	-	$	-		1	$	314	$	314
Commercial		-		-		-		-		-		-
Commercial Real Estate		1		332		332		2		946		931
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		-		-		-		3		265		230
Consumer and Other		-		-		-		-		-		-
Total		1	$	332	$	332		6	$	1,525	$	1,475