10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 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 ☑ 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 ☑ 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 ☑      

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 ☑

As of August 10, 2015, there were 22,750,173 shares of the Company’s Common Stock outstanding.

Part I Financial Information

Item 1. Financial Statements

MBT FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS

	June 30, 2015
Dollars in thousands	(Unaudited)			December 31, 2014
ASSETS
Cash and Cash Equivalents
Cash and due from banks
Non-interest bearing	$	14,398		$	15,957
Interest bearing		9,175			36,165
Total cash and cash equivalents		23,573			52,122
Securities - Held to Maturity		35,277			32,613
Securities - Available for Sale		503,703			473,176
Federal Home Loan Bank stock - at cost		4,148			7,537
Loans held for sale		1,602			548
Loans		623,570			610,332
Allowance for Loan Losses		(13,079	)		(13,208	)
Loans - Net		610,491			597,124
Accrued interest receivable and other assets		28,189			29,465
Other Real Estate Owned		4,233			5,615
Bank Owned Life Insurance		52,373			51,825
Premises and Equipment - Net		28,515			28,632
Total assets	$	1,292,104		$	1,278,657
LIABILITIES
Deposits:
Non-interest bearing	$	238,164		$	218,221
Interest-bearing		883,116			893,590
Total deposits		1,121,280			1,111,811
Repurchase agreements		15,000			15,000
Interest payable and other liabilities		16,960			17,310
Total liabilities		1,153,240			1,144,121
STOCKHOLDERS' EQUITY
Common stock (no par value; 50,000,000 shares authorized, 22,741,898 and 22,718,077 shares issued and outstanding)		23,270			23,037
Retained earnings		119,194			114,132
Unearned compensation		(30	)		-
Accumulated other comprehensive loss		(3,570	)		(2,633	)
Total stockholders' equity		138,864			134,536
Total liabilities and stockholders' equity	$	1,292,104		$	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 June 30,						Six Months Ended June 30,
Dollars in thousands, except per share data	2015			2014			2015			2014
Interest Income
Interest and fees on loans	$	7,154		$	7,021		$	14,586		$	14,100
Interest on investment securities-
Tax-exempt		273			297			548			604
Taxable		2,436			2,200			4,864			4,318
Interest on balances due from banks		14			22			40			54
Total interest income		9,877			9,540			20,038			19,076
Interest Expense
Interest on deposits		619			801			1,264			1,656
Interest on borrowed funds		177			187			351			373
Total interest expense		796			988			1,615			2,029
Net Interest Income		9,081			8,552			18,423			17,047
Provision For (Recovery Of) Loan Losses		-			100			(800	)		200
Net Interest Income After
Provision For Loan Losses		9,081			8,452			19,223			16,847
Other Income
Income from wealth management services		1,191			1,168			2,413			2,302
Service charges and other fees		1,030			968			1,924			1,900
Debit card income		591			542			1,155			1,031
Net gain on sales of securities available for sale		22			219			258			276
Net loss on sales of Other Real Estate Owned		(21	)		(342	)		(284	)		(330	)
Origination fees on mortgage loans sold		137			88			266			150
Bank owned life insurance income		362			351			633			705
Rent income on Other Real Estate Owned		103			130			137			265
Other		390			460			928			949
Total other income		3,805			3,584			7,430			7,248
Other Expenses
Salaries and employee benefits		5,750			5,804			11,624			11,532
Occupancy expense		606			670			1,426			1,414
Equipment expense		790			662			1,524			1,279
Marketing expense		308			212			554			415
Professional fees		550			521			1,126			939
Other Real Estate Owned expenses		179			361			305			700
FDIC Deposit Insurance Assessment		429			620			843			1,260
Bonding and other insurance expense		227			255			457			519
Telephone expense		109			104			204			247
Other		782			582			1,486			1,185
Total other expenses		9,730			9,791			19,549			19,490
Income Before Income Taxes		3,156			2,245			7,104			4,605
Income Tax Expense		871			558			2,042			1,151
Net Income	$	2,285		$	1,687		$	5,062		$	3,454
Other Comprehensive Income (Loss) - Net of Tax
Unrealized gains (losses) on securities		(3,760	)		3,443			(819	)		7,002
Reclassification adjustment for losses included in net income		(15	)		(144	)		(171	)		(182	)
Postretirement benefit liability		26			27			53			(266	)
Total Other Comprehensive Income (Loss) - Net of Tax		(3,749	)		3,326			(937	)		6,554
Comprehensive Income (Loss)	$	(1,464	)	$	5,013		$	4,125		$	10,008
Basic Earnings Per Common Share	$	0.10		$	0.08		$	0.22		$	0.16
Diluted Earnings Per Common Share	$	0.10		$	0.08		$	0.22		$	0.16
Common Stock Dividends Declared Per Share	$	-		$	-		$	-		$	-

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

-3-

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 (8,301 shares)		-		-		-			-			-
Restricted stock awards (6,000 shares)		35		-		(35	)		-			-
Other stock issued (9,520 shares)		53		-		-			-			53
Equity Compensation		145		-		5			-			150
Net income		-		5,062		-			-			5,062
Other comprehensive loss - net of tax		-		-		-			(937	)		(937	)
Balance - June 30, 2015	$	23,270	$	119,194	$	(30	)	$	(3,570	)	$	138,864

									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 (7,287 shares)		1			-		-			-			1
Restricted stock awards (6,000 shares)		29			-		(29	)		-			-
Other stock issued (2,071,362 shares)		8,814			-		-			-			8,814
Stock Offering Expense		(754	)		-		-			-			(754	)
Equity Compensation		98			-		19			-			117
Net income		-			3,454		-			-			3,454
Other comprehensive income - net of tax		-			-		-			6,554			6,554
Balance - June 30, 2014	$	22,859		$	110,271	$	(17	)	$	(4,319	)	$	128,794

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

-4-

MBT FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

	Six Months Ended June 30,
Dollars in thousands	2015			2014
Cash Flows from Operating Activities
Net Income	$	5,062		$	3,454
Adjustments to reconcile net income to net cash from operating activities
Provision for (recovery of) loan losses		(800	)		200
Depreciation		792			827
Decrease in net deferred federal income tax asset		1,711			1,102
Net amortization of investment premium and discount		651			483
Writedowns of Other Real Estate Owned		369			163
Net increase (decrease) in interest payable and other liabilities		(270	)		489
Net increase in interest receivable and other assets		(324	)		(741	)
Equity based compensation expense		150			118
Net gain on sale/settlement of securities		(258	)		(276	)
Increase in cash surrender value of life insurance		(548	)		(621	)
Net cash provided by operating activities	$	6,535		$	5,198
Cash Flows from Investing Activities
Proceeds from maturities and redemptions of investment securities held to maturity	$	6,005		$	6,058
Proceeds from maturities and redemptions of investment securities available for sale		84,584			10,407
Proceeds from sales of investment securities available for sale		16,672			55,998
Net increase in loans		(13,715	)		(5,300	)
Proceeds from sales of other real estate owned		1,412			3,696
Proceeds from sales of other assets		75			25
Purchase of investment securities held to maturity		(8,707	)		(4,590	)
Purchase of investment securities available for sale		(130,248	)		(97,323	)
Purchase of bank premises and equipment		(684	)		(1,382	)
Net cash used for investing activities	$	(44,606	)	$	(32,411	)
Cash Flows from Financing Activities
Net increase (decrease) in deposits	$	9,469		$	(19,929	)
Repayment of Federal Home Loan Bank borrowings		-			(12,000	)
Proceeds from issuance of common stock		53			8,060
Net cash provided by (used for) financing activities	$	9,522		$	(23,869	)
Net Decrease in Cash and Cash Equivalents	$	(28,549	)	$	(51,082	)
Cash and Cash Equivalents at Beginning of Period		52,122			77,798
Cash and Cash Equivalents at End of Period	$	23,573		$	26,716
Supplemental Cash Flow Information
Cash paid for interest	$	1,629		$	2,046
Cash paid for federal income taxes	$	331		$	49
Supplemental Schedule of Non Cash Investing Activities
Transfer of loans to other real estate owned	$	40		$	2,305
Transfer of loans to other assets	$	54		$	42

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.

-6-

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.

2. EARNINGS PER SHARE

The calculations of earnings per common share are as follows:

	For the three months ended June 30,				For the six months ended June 30,
	2015		2014		2015		2014
Basic
Net income	$	2,285,000	$	1,687,000	$	5,062,000	$	3,454,000
Average common shares outstanding		22,733,739		22,205,086		22,727,825		21,515,737
Earnings per common share - basic	$	0.10	$	0.08	$	0.22	$	0.16
Diluted
Net income	$	2,285,000	$	1,687,000	$	5,062,000	$	3,454,000
Average common shares outstanding		22,733,739		22,205,086		22,727,825		21,515,737
Equity compensation		197,805		293,150		190,172		289,428
Average common shares outstanding - diluted		22,931,544		22,498,236		22,917,997		21,805,165
Earnings per common share - diluted	$	0.10	$	0.08	$	0.22	$	0.16

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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		5,500		15.83
Expired		89,500		23.40
Options Outstanding, June 30, 2015		110,400	$	15.74
Options Exercisable, June 30, 2015		110,400	$	15.74

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.

On May 28, 2015, 55,500 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 and amended by shareholders on May 7, 2015. The SOSARs have a term of ten years and vest in three equal annual installments beginning on December 31, 2015. The fair value of $2.44 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 55.57%, a risk free interest rate of 1.90% and dividend yield of 3.00%. The fair value of the Company’s common stock was $5.79 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		128,000		5.31
Exercised		22,666		2.36
Forfeited		11,502		5.46
Expired		-		-
SOSARs Outstanding, June 30, 2015		651,271	$	3.93
SOSARs Exercisable, June 30, 2015		422,224	$	3.46

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 June 30, 2015 was $5.74. The value of the exercisable SOSARs that are in-the-money as of June 30, 2015 was $1,144,000, and exercise of those SOSARs on that date would have resulted in the issuance of 199,380 shares of common stock.

-8-

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 and amended by shareholders on May 7, 2015. 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 June 30, 2015 none of the RSUs were vested.

Restricted Stock Awards – On May 28, 2015, 6,000 restricted shares were awarded to certain non-executive members of the board of directors in accordance with the MBT 2008 Stock Incentive Plan that was approved by shareholders on May 1, 2008 and amended by shareholders on May 7, 2015. The restricted shares vest on December 31, 2015. The expense for the restricted stock is based on the grant date value of $5.79 and is recognized over the vesting period. The unrecognized cost related to the non-vested restricted stock awards was $30,000 as of June 30, 2015.

The total expense for equity based compensation was $94,000 in the second quarter of 2015 and $79,000 in the second quarter of 2014. The total expense for equity based compensation was $177,000 in the first six months of 2015 and $146,000 in the first six months of 2014.

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):

	June 30,		December 31,
	2015		2014
Residential real estate loans	$	217,538	$	223,701
Commercial and Construction real estate loans		263,168		262,395
Agriculture and agricultural real estate loans		18,976		16,700
Commercial and industrial loans		83,625		62,761
Loans to individuals for household, family, and other personal expenditures		40,263		44,775
Total loans, gross	$	623,570	$	610,332
Less: Allowance for loan losses		13,079		13,208
Net Loans	$	610,491	$	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, other real estate owned, and other repossessed assets. 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.

-9-

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

	June 30,			December 31,
	2015			2014
Nonaccrual loans	$	11,135		$	13,040
Loans 90 days past due and accruing		-			10
Restructured loans		22,812			22,896
Total nonperforming loans	$	33,947		$	35,946
Other real estate owned		4,233			5,615
Other assets		4			18
Nonperforming investment securities		-			-
Total nonperforming assets	$	38,184		$	41,579
Nonperforming assets to total assets		2.95	%		3.25	%
Allowance for loan losses to nonperforming loans		38.53	%		36.74	%

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.

-10-

Activity in the allowance for loan losses during the three and six months ended June 30, 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 June 30, 2015
Beginning Balance	$	255		$	1,380		$	5,678		$	810		$	3,073		$	1,995		$	13,191
Charge-offs		(75	)		(58	)		(120	)		-			(57	)		(97	)		(407	)
Recoveries		3			97			21			12			133			29			295
Provision		242			62			(142	)		(199	)		(79	)		116			-
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Allowance for loan losses: For the six months ended June 30, 2015
Beginning Balance	$	216		$	1,361		$	6,179		$	803		$	3,226		$	1,423		$	13,208
Charge-offs		(75	)		(164	)		(120	)		-			(253	)		(117	)		(729	)
Recoveries		10			171			182			621			356			60			1,400
Provision		274			113			(804	)		(801	)		(259	)		677			(800	)
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	$	80		$	473		$	913		$	478		$	630		$	208		$	2,782
Ending balance collectively evaluated for impairment		345			1,008			4,524			145			2,440			1,835			10,297
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Loans as of June 30, 2015
Ending balance individually evaluated for impairment	$	892		$	1,276		$	16,827		$	1,819		$	12,117		$	514		$	33,445
Ending balance collectively evaluated for impairment		18,084			82,349			233,178			11,344			205,421			39,749			590,125
Ending balance	$	18,976		$	83,625		$	250,005		$	13,163		$	217,538		$	40,263		$	623,570

-11-

Activity in the allowance for loan losses during the three and six months ended June 30, 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 June 30, 2014
Beginning Balance	$	205	$	1,780		$	7,460		$	1,430		$	4,478		$	805		$	16,158
Charge-offs		-		(440	)		(1,103	)		-			(79	)		(40	)		(1,662	)
Recoveries		5		56			211			20			73			40			405
Provision		4		(108	)		967			(303	)		(192	)		(268	)		100
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Allowance for loan losses: For the six months ended June 30, 2014
Beginning Balance	$	171	$	1,989		$	7,030		$	1,397		$	4,606		$	1,016		$	16,209
Charge-offs		-		(626	)		(1,211	)		(210	)		(211	)		(78	)		(2,336	)
Recoveries		5		89			276			254			238			66			928
Provision		38		(164	)		1,440			(294	)		(353	)		(467	)		200
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Allowance for loan losses as of June 30, 2014
Ending balance individually evaluated for impairment	$	36	$	511		$	2,234		$	900		$	1,713		$	243		$	5,637
Ending balance collectively evaluated for impairment		178		777			5,301			247			2,567			294			9,364
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Loans as of June 30, 2014
Ending balance individually evaluated for impairment	$	947	$	1,870		$	27,281		$	3,221		$	14,438		$	556		$	48,313
Ending balance collectively evaluated for impairment		16,260		61,093			238,694			11,628			208,011			14,585			550,271
Ending balance	$	17,207	$	62,963		$	265,975		$	14,849		$	222,449		$	15,141		$	598,584

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.

-12-

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.

-13-

The portfolio segments in each credit risk grade as of June 30, 2015 are as follows (000s omitted):

Credit Quality Indicators as of June 30, 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	$	113	$	4,936	$	338	$	5,410	$	137,651	$	36,305	$	184,753
1		-		2,500		-		-		-		-		2,500
2		173		284		572		-		-		366		1,395
3		400		14,785		9,043		-		213		-		24,441
4		15,039		54,369		182,901		4,767		57,611		3,259		317,946
5		2,075		4,064		33,221		2,522		8,620		82		50,584
6		1,176		2,687		23,930		464		13,443		251		41,951
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	18,976	$	83,625	$	250,005	$	13,163	$	217,538	$	40,263	$	623,570
Performing	$	17,865	$	82,258	$	233,612	$	11,299	$	204,953	$	39,636	$	589,623
Nonperforming		1,111		1,367		16,393		1,864		12,585		627		33,947
Total	$	18,976	$	83,625	$	250,005	$	13,163	$	217,538	$	40,263	$	623,570

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

-14-

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 June 30, 2015 and December 31, 2014 (000s omitted):

June 30, 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	$	283	$	-	$	219	$	502	$	18,474	$	18,976	$	-
Commercial		77		27		91		195		83,430		83,625		-
Commercial Real Estate		3,003		1,166		914		5,083		244,922		250,005		-
Construction Real Estate		-		-		-		-		13,163		13,163		-
Residential Real Estate		1,621		355		1,005		2,981		214,557		217,538		-
Consumer and Other		33		-		7		40		40,223		40,263		-
Total	$	5,017	$	1,548	$	2,236	$	8,801	$	614,769	$	623,570	$	-

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 June 30, 2015 and December 31, 2014 (000s omitted):

	June 30, 2015		December 31, 2014
Agriculture and Agricultural Real Estate	$	218	$	80
Commercial		272		315
Commercial Real Estate		5,397		6,287
Construction Real Estate		76		409
Residential Real Estate		5,058		5,760
Consumer and Other		114		189
Total	$	11,135	$	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.

-15-

The following is a summary of impaired loans as of June 30, 2015 and 2014 (000s omitted):

June 30, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended		Average Recorded Investment for the Six Months Ended		Interest Income Recognized in the Six Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial		156		166		-		170		3		174		6
Commercial Real Estate		8,010		8,705		-		8,380		83		8,430		175
Construction Real Estate		17		199		-		211		1		247		3
Residential Real Estate		7,308		8,100		-		7,782		93		7,830		187
Consumer and Other		34		34		-		35		1		36		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		892		891		80		904		12		911		24
Commercial		1,120		1,167		473		1,199		15		1,227		28
Commercial Real Estate		8,817		10,390		913		10,843		105		10,900		207
Construction Real Estate		1,802		1,833		478		1,823		21		1,828		42
Residential Real Estate		4,809		5,214		630		4,985		45		4,988		97
Consumer and Other		480		479		208		483		5		487		11
Total:
Agriculture and Agricultural Real Estate	$	892	$	891	$	80	$	904	$	12	$	911	$	24
Commercial		1,276		1,333		473		1,369		18		1,401		34
Commercial Real Estate		16,827		19,095		913		19,223		188		19,330		382
Construction Real Estate		1,819		2,032		478		2,034		22		2,075		45
Residential Real Estate		12,117		13,314		630		12,767		138		12,818		284
Consumer and Other		514		513		208		518		6		523		12

	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 June 30, 2014		Interest Income Recognized in the Three Months Ended June 30, 2014		Average Recorded Investment for the Six Months Ended June 30, 2014		Interest Income Recognized in the Six Months Ended June 30, 2014
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	256	$	256	$	-	$	259	$	2	$	259	$	3
Commercial		363		412		-		873		17		921		26
Commercial Real Estate		8,084		8,882		-		13,717		230		14,807		388
Construction Real Estate		297		954		-		925		13		972		18
Residential Real Estate		6,424		7,200		-		7,350		84		7,426		168
Consumer and Other		3		3		-		55		1		57		2
With an allowance recorded:
Agriculture and Agricultural Real Estate		661		661		34		701		9		707		19
Commercial		1,051		1,062		554		1,162		16		1,176		31
Commercial Real Estate		10,929		12,758		1,502		14,712		163		14,749		323
Construction Real Estate		1,820		1,851		671		2,775		29		2,865		60
Residential Real Estate		5,251		5,658		672		7,801		87		7,648		158
Consumer and Other		531		529		222		503		5		507		11
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	960	$	11	$	966	$	22
Commercial		1,414		1,474		554		2,035		33		2,097		57
Commercial Real Estate		19,013		21,640		1,502		28,429		393		29,556		711
Construction Real Estate		2,117		2,805		671		3,700		42		3,837		78
Residential Real Estate		11,675		12,858		672		15,151		171		15,074		326
Consumer and Other		534		532		222		558		6		564		13

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”).

-16-

Loans that have been classified as TDRs during the three and six month periods ended June 30, 2015 and June 30, 2014 are as follows (000s omitted from dollar amounts):

	Three months ended						Six months ended
	June 30, 2015						June 30, 2015
	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		-	$	-	$	-		-	$	-	$	-
Commercial		1		66		64		1		66		64
Commercial Real Estate		2		352		304		3		684		636
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		7		581		533		7		581		533
Consumer and Other		-		-		-		-		-		-
Total		10	$	999	$	901		11	$	1,331	$	1,233

	Three months ended						Six months ended
	June 30, 2014						June 30, 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		4		295		91		4		295		91
Commercial Real Estate		2		301		140		4		1,247		1,059
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		7		579		556		10		844		779
Consumer and Other		-		-		-		-		-		-
Total		13	$	1,175	$	787		19	$	2,700	$	2,243

The Bank considers TDRs that become past due under the modified terms as defaulted. There were no loans that became TDRs during the three and six month periods ended June 30, 2015 and June 30, 2014 that subsequently defaulted during the three month periods ended June 30, 2015 and June 30, 2014, respectively.

The Company has allocated $2,650,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at June 30, 2015. In addition, there were no commitments to lend additional amounts to borrowers that are classified as troubled debt restructurings as of June 30, 2015 and June 30, 2014.

6. INVESTMENT SECURITIES

The following is a summary of the Bank’s investment securities portfolio as of June 30, 2015 and December 31, 2014 (000’s omitted):

	Held to Maturity
	June 30, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of States and Political Subdivisions	$	34,777	$	1,086	$	(290	)	$	35,573
Corporate Debt Securities		500		-		-			500
	$	35,277	$	1,086	$	(290	)	$	36,073

-17-

	Available for Sale
	June 30, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of U.S. Government Agencies	$	363,481	$	1,057	$	(3,799	)	$	360,739
Mortgage Backed Securities issued by U.S. Government Agencies		116,943		216		(1,038	)		116,121
Obligations of States and Political Subdivisions		17,467		318		(76	)		17,709
Corporate Debt Securities		6,990		11		-			7,001
Equity Securities		2,044		89		-			2,133
	$	506,925	$	1,691	$	(4,913	)	$	503,703

	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
	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

-18-

The amortized cost and estimated market values of securities by contractual maturity as of June 30, 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	$	4,383	$	4,426	$	4,756	$	4,771
After 1 year through five years		17,818		18,024		129,538		129,078
After 5 years through 10 years		10,186		10,606		236,228		234,397
After 10 years		2,890		3,017		17,416		17,203
Total		35,277		36,073		387,938		385,449
Mortgage Backed Securities		-		-		116,943		116,121
Securities with no stated maturity		-		-		2,044		2,133
Total	$	35,277	$	36,073	$	506,925	$	503,703

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 June 30, 2015 and December 31, 2014.

	June 30, 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	$	134,877	$	1,760	$	119,424	$	2,039	$	254,301	$	3,799
Mortgage Backed Securities issued by U.S. Government Agencies		62,638		433		31,842		605		94,480		1,038
Obligations of States and Political Subdivisions		14,109		241		5,230		125		19,339		366
	$	211,624	$	2,434	$	156,496	$	2,769	$	368,120	$	5,203

	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

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 June 30, 2015. As of June 30, 2015 and December 31, 2014, there were 168 and 116 securities in an unrealized loss position, respectively.

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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.

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The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2015 and December 31, 2014, and the valuation techniques used by the Company to determine those fair values.

									Total
	Carrying								Estimated
June 30, 2015	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	23,573	$	23,573	$	-	$	-	$	23,573
Securities - Held to Maturity
Obligations of States and Political Subdivisions		34,777		-		35,573		-		35,573
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		360,739		-		360,739		-		360,739
MBS issued by U.S. Government Agencies		116,121		-		116,121		-		116,121
Obligations of States and Political Subdivisions		17,709		-		17,709		-		17,709
Corporate Debt Securities		7,001		-		7,001		-		7,001
Other Securities		2,133		2,133		-		-		2,133
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		1,602		-		-		1,638		1,638
Loans, net		610,491		-		-		620,207		620,207
Accrued Interest Receivable		4,006		-		-		4,006		4,006
Financial Liabilities:
Noninterest Bearing Deposits		238,164		238,164		-		-		238,164
Interest Bearings Deposits		883,116		-		884,991		-		884,991
Repurchase Agreements		15,000		-		15,568		-		15,568
Accrued Interest Payable		123		-		-		123		123

									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		-		(21	)
Total unrealized gains included in other comprehensive income		-		362
Net purchases, sales, calls and maturities		-		(125	)
Net transfers in/out of Level 3		-		-
Balance at June 30	$	-	$	5,967

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 June 30, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	33,445	$	-	$	-	$	30,663
Other Real Estate Owned	$	4,233	$	-	$	-	$	4,233

	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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8. 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
	June 30, 2015		December 31, 2014
Commitments to extend credit:
Unused portion of commercial lines of credit	$	65,825	$	66,319
Unused portion of credit card lines of credit		3,996		3,630
Unused portion of home equity lines of credit		20,972		19,544
Standby letters of credit and financial guarantees written		3,136		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 commercial bank subsidiary, Monroe Bank & Trust (“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 $2,285,000 for the quarter ended June 30, 2015 was an increase of $598,000 or 35.4% compared to the second quarter of 2014. The increase was the result of improvement in net interest income, non interest income, non interest expense, and a lower provision for loan losses. These improvements resulted in increases in income before taxes and in federal income tax expense. This quarter marked the sixteenth consecutive quarterly profit following significant losses caused by the severe economic downturn that impacted the regional and national economies beginning in 2006.

The national economic recovery is continuing, and the recovery in southeast Michigan is strong. Local unemployment rates continued to improve, and total employment is also growing. Commercial and residential development property values continue to improve, with some values reaching or exceeding their 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 through the first half of 2015. Classified assets went down $5.4 million, or 10.4% during the second quarter of 2015, and decreased $34.8 million or 43.0% compared to a year ago. Loan recoveries decreased in the second quarter of 2015, but net charge offs for the quarter remained low at 0.07% of loans, annualized. Due to the low charge offs and improving loan quality metrics, we did not need to record a provision expense 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 2.13% to 2.09%. 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 $529,000, or 6.2% compared to the second quarter of 2014 even though the net interest margin decreased from 3.15% to 3.12% as the average earning assets increased $76.7 million. The net interest margin decreased because the yield on earnings assets decreased more than the cost of interest bearing liabilities as interest rates remain at historically low levels. The provision for loan losses decreased $100,000 compared to the second quarter of 2014 as we were able to maintain an adequate ALLL without recording a provision expense this quarter. Non-interest income for the quarter increased $221,000, primarily due to a decrease in the losses on Other Real Estate Owned. Non-interest expenses decreased $61,000, as salaries and employee benefits, occupancy, OREO expense, FDIC deposit insurance assessments, and insurance expenses decreased. These decreases were partially offset by increases in equipment and marketing expenses that were related to some product changes and enhancements. We expect non-interest expenses to remain near the current level throughout the second half of 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 regional economic recovery has increased over the last year, with local unemployment and property values steadily improving throughout 2014 and the first half of 2015. Management efforts are focused 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 4.6% during the quarter, from $40.0 million to $38.2 million, and total classified assets decreased 10.4% from $51.6 million to $46.2 million. Loan delinquencies increased from 1.3% to 1.4% during the quarter, but remain below the 1.9% total at the end of 2014 and the 2.0% total reported one year ago. Over the last twelve months, NPAs decreased $21.9 million, or 36.4%, with nonperforming loans decreasing 30.3% from $48.7 million to $33.9 million, and Other Real Estate Owned (“OREO”) decreasing 46.6% from $7.9 million to $4.2 million. Total classified assets, which include internally classified watch list loans, other real estate, and watch list investment securities, decreased $34.8 million, or 43.0%. The Company’s Allowance for Loan and Lease Losses (“ALLL”) decreased $1.9 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 2.09% of loans, down from 2.50% at June 30, 2014. The ALLL is 38.53% of nonperforming loans (“NPLs”), compared to 36.74% at year end and 30.80% at June 30, 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 2.2% as new loan activity in the first half of 2015 was strong enough to cover payments received and other reductions in the period. 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 $9.5 million, other liabilities decreased $0.4 million and capital increased $4.3 million, and as a result our total assets increased $13.4 million, or 1.1%. The Company expects minimal deposit funding growth for the remainder of the year as expected growth in local deposits will be offset by the maturity of $5.1 million in brokered certificates of deposit early in the third quarter. The composition of deposits continues to change as customers move funds from maturing interest accounts to non interest bearing demand deposit accounts due to the low interest rate environment. The expected loan growth will be funded by reductions in our cash and investments. The increase in total capital during the first half of 2015 was due to the profit of $5.1 million, reduced by the $0.9 million decrease in the accumulated other comprehensive income (AOCI). AOCI decreased mainly due to a decrease in the value of our securities available for sale. Capital increased at a higher rate than assets, causing the capital to assets ratio to increase from 10.52% at December 31, 2014 to 10.75% at June 30, 2015.

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

Net Interest Income - A comparison of the income statements for the three months ended June 30, 2015 and 2014 shows an increase of $529,000, or 6.2%, in Net Interest Income. Interest income on loans increased $133,000 or 1.9% even though the average yield on loans decreased from 4.71% to 4.62% as the average loans outstanding increased $22.6 million. The loan yield decreased this quarter due to the continued low interest rates while loans outstanding increased due to improving economic conditions and increased purchases of loan participations. The interest income on investments, fed funds sold, and interest bearing balances due from banks increased $204,000 even though the yield decreased from 1.99% to 1.94% because the average amount of investments, fed funds sold, and interest bearing balances due from banks increased $54.1 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 $182,000 or 22.7% even though the average deposits increased $62.8 million because the average cost of deposits decreased from 0.30% to 0.22%. The average cost of deposits decreased because maturing time deposits are either resetting at lower rates or customers are moving the funds to non interest bearing demand deposit accounts due to the low interest rate environment. The cost of borrowed funds decreased $10,000 as the average amount of borrowed funds decreased $10.2 million.

Provision for Loan Losses - The Provision for Loan Losses decreased $100,000 compared to the second quarter of 2014 as no provision expense was recorded in the second quarter of 2015. We charged off $407,000 of principal while recovering $295,000 of previously charged off loans in the second quarter of 2015, for a net charge off total of $112,000. 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 second quarter of 2015 decreased from $13.2 million at December 31, 2014 to approximately $13.1 million. This allowed us to recognize the net charge offs without recording a provision expense. The ALLL is 2.09% of loans as of June 30, 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.

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Other Income – Non interest income increased $221,000, or 6.2% compared to the second quarter of 2014. Excluding gains and losses on securities and other real estate owned activity, non-interest income increased $97,000, or 2.6%. Wealth management income increased $23,000 or 2.0% as the market value of assets managed increased due to new assets brought in and market value appreciation. Service charges and other fees on deposit accounts increased $62,000, or 6.4% as we added new features and benefits to our primary checking account product and instituted a monthly service fee. Debit card income increased $49,000, or 9.0% and origination fees on mortgage loans sold increased $49,000, or 55.7%, both due to increased activity. Gains on securities transactions decreased $197,000 due to gains in the second quarter of 2014. Income from other real estate activity improved $321,000, due to losses and write downs of the carrying values properties in the second quarter of 2014.

Other Expenses – Total non-interest expenses decreased $61,000, or 0.6% compared to the second quarter of 2014. Salaries and Employee Benefits decreased $54,000, or 0.9%, even though the officer incentive compensation accrual increased $80,000 because the decrease in the number of full time equivalent employees from 367 in the second quarter of 2014 to 350 in the second quarter of 2015 resulted in lower salaries and benefits expenses. Improving operational efficiency is one of Management’s key objectives this year, and further reductions in staffing are expected in the second half of 2015. Occupancy expense decreased $64,000, or 9.6% due to lower depreciation, utilities, and maintenance and repairs costs. Equipment expense went up $128,000, or 19.3% primarily due to higher computer expenses. Other real estate owned expense went down $182,000, or 50.4% due to a decrease in the number of properties owned. FDIC insurance assessments decreased $191,000 as the termination of our consent order in the second quarter of 2014 resulted in a decrease in the assessment rate. Other expense increased $200,000, or 34.4% due to higher ATM expenses, directors’ fees, and training and education expenses.

As a result of the above activity, the Profit Before Income Taxes in the second quarter of 2015 was $3,156,000, an increase of $911,000 compared to the pre-tax profit of $2,245,000 in the second quarter of 2014. The Company recorded a federal income tax expense of $871,000 in the second quarter of 2015, reflecting an effective tax rate of 27.6%, compared to the tax expense of $558,000 in the second quarter of 2014, which reflected an effective rate of 24.9%. 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 second quarter of 2015 was $2,285,000, an increase of 35.4% compared to the net profit of $1,687,000 in the second quarter of 2014.

Results of Operations – Six Months Ended June 30, 2015 vs. Six Months Ended June 30, 2014

Net Interest Income - A comparison of the income statements for the six months ended June 30, 2015 and 2014 shows an increase of $1,376,000, or 8.1%, in Net Interest Income. Interest income on loans increased $486,000 or 3.4% as the average yield on loans was unchanged at 4.76% and the average loans outstanding increased $20.9 million. The loan yield was unchanged this year even though market rates are lower due to the recovery of interest on a charged off loan in the first quarter of 2015. The interest income on investments, fed funds sold, and interest bearing balances due from banks increased $476,000 even though the yield decreased from 1.98% to 1.96% because the average amount of investments, fed funds sold, and interest bearing balances due from banks increased $55.3 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 $392,000 or 23.7% even though the average deposits increased $60.7 million because the average cost of deposits decreased from 0.31% to 0.23%. The cost of borrowed funds decreased $22,000 as the average amount of borrowed funds decreased $11.1 million.

-27-

Provision for Loan Losses - The Provision for Loan Losses decreased $1,000,000 compared to the first six months of 2014 as a small provision of $200,000 was recorded in 2014 and a negative provision expense of $800,000 was recorded in 2015 due to the recovery of a previously charged off loan that occurred in the first half of 2015. 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 June 30, 2015 decreased to $13.1 million from the $15.0 million required at June 30, 2014. The ALLL is 2.09% of loans as of June 30, 2015, compared to 2.50% at June 30, 2014, and in light of current economic conditions, we believe that the ALLL adequately estimates the potential losses in our loan portfolio.

Other Income – Non interest income increased $182,000, or 2.5% compared to the first six months of 2014. Excluding gains and losses on securities and other real estate owned activity, non-interest income increased $154,000, or 2.1%. Wealth management income increased $111,000 or 4.8% as the market value of assets managed increased due to new assets brought in and market value appreciation. Debit card income increased $124,000, or 12.0% and origination fees on mortgage loans sold increased $116,000, or 77.3%, both due to increased activity.

Other Expenses – Total non-interest expenses increased $59,000, or 0.3% compared to the first six months of 2014. Salaries and Employee Benefits increased $92,000, or 0.8%, as the officer incentive compensation accrual increased $160,000. This increase was mitigated by decreases in salaries and benefits expenses that were the result of the decrease in the number of full time equivalent employees from 367 in 2014 to 350 in 2015. Improving operational efficiency is one of Management’s key objectives this year, and further reductions in staffing are expected in the second half of 2015. Equipment expense went up $245,000, or 19.2% due to higher computer expenses and one-time costs related to the conversion of the system used for our bill payment service in 2015. Marketing expense increased $139,000, or 33.5% due to increased advertising and expenses related to enhancing our main checking account product. Professional fees increased $187,000, or 19.9% due to higher legal, accounting, and consulting fees. Other real estate owned expense went down $395,000, or 56.4% due to the sale of some of our high maintenance cost properties in the second half of 2014. FDIC insurance assessments decreased $417,000 as the termination of our consent order in the second quarter of 2014 resulted in a decrease in the assessment rate. Other expense increased $301,000, or 25.4% due to higher ATM expenses, directors’ fees, and training and education expenses.

As a result of the above activity, the Profit Before Income Taxes in the first half of 2015 was $7,104,000, an increase of $2,499,000 compared to the pre-tax profit of $4,605,000 in the first six months of 2014. The Company recorded a federal income tax expense of $2,042,000 in the first six months of 2015, reflecting an effective tax rate of 28.7%, compared to the tax expense of $1,151,000 in the first six months of 2014, which reflected an effective rate of 25.0%. 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 six months of 2015 was $5,062,000, an increase of 46.6% compared to the net profit of $3,454,000 in the first half of 2014.

-28-

Cash Flows

Cash flows provided by operating activities increased $1,337,000 compared to the first six months of 2014 due to the increase of $1,608,000 in net income. Cash flows used for investing activities increased by $12.2 million from $32.4 million in the first six months of 2014 to $44.6 million in the first six months of 2015 as the additional cash from operations and financing activities was invested in loans and investment securities. Loan growth used $8.4 million more cash in the first six months of 2015 than it did in the first six months of 2014 as loan portfolio growth accelerated this year due to improving economic conditions and increased use of loan participations. 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 six months 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 six months of 2015, the cash used for investment purchases was also provided by deposit growth. The amount of cash provided by financing activities in the first six months of 2015 was $9.5 million as the deposit funding increased by that amount. In the first six months of 2014, $23.9 million of cash was used for financing activities due to the decrease of $19.9 million in deposits and the repayment of $12.0 million in advances from the Federal Home Loan Bank of Indianapolis, partially offset by $8.1 million of cash provided by the issuance of nearly 2.1 million shares of common stock. In the first six months of 2015, the use of cash for investing activities exceeded the cash provided by operations and financing activities by $28.5 million, resulting in a decrease of that amount in cash and cash equivalents during the six months. In the first six months 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 $51.1 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 June 30, 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 its $25 million 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.

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 six months of 2015 the Company was in compliance with its Funds Management Policy regarding liquidity and capital.

Total stockholders’ equity of the Company was $138.9 million at June 30, 2015 and $134.5 million at December 31, 2014. Common stock increased $233,000 due to the issuance of stock under compensation programs and for our Employee Stock Purchase Plan, retained earnings increased $5.1 million due to the year to date profit, and the Accumulated Other Comprehensive Loss (AOCL) increased $0.9 million due to a decrease in the value of our securities that are classified as Available For Sale. Total equity increased $4.3 million and total assets increased $13.4 million, so the ratio of equity to assets increased from 10.52% at December 31, 2014 to 10.75% at June 30, 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 8% 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.

-29-

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 June 30, 2015:
Total Capital to Risk-Weighted Assets
Consolidated	$	145,813		18.55	%	$	78,597		10.0	%
Monroe Bank & Trust		144,165		18.35	%		78,552		10.0	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		135,855		17.29	%		62,878		8.0	%
Monroe Bank & Trust		134,216		17.09	%		62,842		8.0	%
Common Equity Tier 1 Capital to
Risk-Weighted Assets
Consolidated		135,855		17.29	%		51,088		6.5	%
Monroe Bank & Trust		134,216		17.09	%		51,059		6.5	%
Tier 1 Capital to Average Assets
Consolidated		135,855		10.56	%		64,343		5.0	%
Monroe Bank & Trust		134,216		10.43	%		64,323		5.0	%

	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. Following the termination of the Consent Order on June 30, 2014, the Bank became 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 informal agreement also required the Bank to request prior approval from its state and federal regulators before paying dividends to the Company. This informal agreement was terminated in the second quarter of 2015. However, the Company currently remains subject to a requirement to request prior approval from the Federal Reserve System in connection with any payment of dividends by it to its shareholders.

-30-

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 quarterly 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 and the IRS have recently made progress toward resolution and 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.

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.

-31-

Each quarter, the Asset and Liability Committee (ALCO), which includes the senior management of the Bank and a non executive member of the board of directors, 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 two quarters 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 quarter. 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.

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 June 30, 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 June 30, 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 June 30, 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.

-32-

Item 1A. Risk Factors

Due to an increase in cyber security events affecting the financial services industry globally, the Company has identified an additional risk factor to those risk factors disclosed by the Company in its Report on Form 10-K for the fiscal year ended December 31, 2014.

We face the risk of cyber-attack to our computer systems.

Our computer systems, software and networks have been and will continue to be vulnerable to unauthorized access, loss or destruction of data (including confidential client information), account takeovers, unavailability of service, computer viruses or other malicious code, cyber-attacks and other events. These threats may derive from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. If one or more of these events occurs, it could result in the disclosure of confidential client information, damage to our reputation with our clients and the market, additional costs to us (such as repairing systems or adding new personnel or protection technologies), regulatory penalties and financial losses, to both us and our clients and customers. Such events could also cause interruptions or malfunctions in our operations (such as the lack of availability of our online banking system), as well as the operations of our clients, customers or other third parties. Although we maintain safeguards to protect against these risks, there can be no assurance that we will not suffer losses in the future that may be material in amount.

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.

-33-

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.

10.1 MBT Financial Corp. 2008 Stock Incentive Plan, as amended effective May 28, 2015. Previously filed as Exhibit 10 to MBT Financial Corp.’s Form 8-K filed with the Commission on June 1, 2015.

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

-34-

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)
August 10, 2015		By	/s/ H. Douglas Chaffin
Date	H. Douglas Chaffin
	President
	Chief Executive Officer
August 10, 2015		By	/s/ John L. Skibski
Date		John L. Skibski
		Executive Vice President and
		Chief Financial Officer

-35-

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: August 10, 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: August 10, 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 June 30, 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

August 10, 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 June 30, 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

August 10, 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

Note 6 - Investment Securities (Details)	6 Months Ended
	Jun. 30, 2015 USD ($)	Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
Other than Temporary Impairment Losses, Investments (in Dollars)	$ 0
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	168	116

XML

Note 8 - Financial Instruments with Off-Balance Sheet Risk (Details) - Off-Balance Sheet Credit Risk Financial Insturments - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Commitments to Extend Credit - Commercial Lines of Credit [Member]
Commitments to extend credit:
Off-balance sheet credit risks	$ 65,825	$ 66,319
Commitments to Extend Credit - Credit Card Lines of Credit [Member]
Commitments to extend credit:
Off-balance sheet credit risks	3,996	3,630
Commitments to Extend Credit - Home Equity Lines of Credit [Member]
Commitments to extend credit:
Off-balance sheet credit risks	20,972	19,544
Standby Letters of Credit and Financial Guarantees [Member]
Commitments to extend credit:
Off-balance sheet credit risks	3,136	3,178
All Other Off-Balance Sheet Commitments [Member]
Commitments to extend credit:
Off-balance sheet credit risks	$ 0	$ 0

XML

Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis [Line Items]
Other Real Estate Owned	$ 4,233	$ 5,615
Fair Value, Measurements, Nonrecurring [Member]
Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	33,445	35,670
Other Real Estate Owned	4,233	5,615
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Real Estate Owned	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Real Estate Owned	0	0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	30,663	32,015
Other Real Estate Owned	$ 4,233	$ 5,615

XML

Note 5 - Allowance for Loan Losses (Details) - Activity in the Allowance for Loan Losses - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	$ 13,191	$ 16,158	$ 13,208	$ 16,209
Ending balance	13,079	15,001	13,079	15,001
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	2,782	5,637	2,782	5,637
Ending balance collectively evaluated for impairment	10,297	9,364	10,297	9,364
Loans as of June 30, 2015
Ending balance individually evaluated for impairment - loans	33,445	48,313	33,445	48,313
Ending balance collectively evaluated for impairment - loans	590,125	550,271	590,125	550,271
Ending balance - loans	623,570	598,584	623,570	598,584	$ 610,332
Charge-offs	(407)	(1,662)	(729)	(2,336)
Recoveries	295	405	1,400	928
Provision		100	(800)	200
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	255	205	216	171
Ending balance	425	214	425	214
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	80	36	80	36
Ending balance collectively evaluated for impairment	345	178	345	178
Loans as of June 30, 2015
Ending balance individually evaluated for impairment - loans	892	947	892	947
Ending balance collectively evaluated for impairment - loans	18,084	16,260	18,084	16,260
Ending balance - loans	18,976	17,207	18,976	17,207	16,700
Charge-offs	(75)		(75)
Recoveries	3	5	10	5
Provision	242	4	274	38
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	1,380	1,780	1,361	1,989
Ending balance	1,481	1,288	1,481	1,288
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	473	511	473	511
Ending balance collectively evaluated for impairment	1,008	777	1,008	777
Loans as of June 30, 2015
Ending balance individually evaluated for impairment - loans	1,276	1,870	1,276	1,870
Ending balance collectively evaluated for impairment - loans	82,349	61,093	82,349	61,093
Ending balance - loans	83,625	62,963	83,625	62,963	62,761
Charge-offs	(58)	(440)	(164)	(626)
Recoveries	97	56	171	89
Provision	62	(108)	113	(164)
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	5,678	7,460	6,179	7,030
Ending balance	5,437	7,535	5,437	7,535
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	913	2,234	913	2,234
Ending balance collectively evaluated for impairment	4,524	5,301	4,524	5,301
Loans as of June 30, 2015
Ending balance individually evaluated for impairment - loans	16,827	27,281	16,827	27,281
Ending balance collectively evaluated for impairment - loans	233,178	238,694	233,178	238,694
Ending balance - loans	250,005	265,975	250,005	265,975	249,469
Charge-offs	(120)	(1,103)	(120)	(1,211)
Recoveries	21	211	182	276
Provision	(142)	967	(804)	1,440
Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	810	1,430	803	1,397
Ending balance	623	1,147	623	1,147
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	478	900	478	900
Ending balance collectively evaluated for impairment	145	247	145	247
Loans as of June 30, 2015
Ending balance individually evaluated for impairment - loans	1,819	3,221	1,819	3,221
Ending balance collectively evaluated for impairment - loans	11,344	11,628	11,344	11,628
Ending balance - loans	13,163	14,849	13,163	14,849	12,926
Charge-offs	0			(210)
Recoveries	12	20	621	254
Provision	(199)	(303)	(801)	(294)
Residential Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	3,073	4,478	3,226	4,606
Ending balance	3,070	4,280	3,070	4,280
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	630	1,713	630	1,713
Ending balance collectively evaluated for impairment	2,440	2,567	2,440	2,567
Loans as of June 30, 2015
Ending balance individually evaluated for impairment - loans	12,117	14,438	12,117	14,438
Ending balance collectively evaluated for impairment - loans	205,421	208,011	205,421	208,011
Ending balance - loans	217,538	222,449	217,538	222,449	223,701
Charge-offs	(57)	(79)	(253)	(211)
Recoveries	133	73	356	238
Provision	(79)	(192)	(259)	(353)
Consumer and Other Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	1,995	805	1,423	1,016
Ending balance	2,043	537	2,043	537
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	208	243	208	243
Ending balance collectively evaluated for impairment	1,835	294	1,835	294
Loans as of June 30, 2015
Ending balance individually evaluated for impairment - loans	514	556	514	556
Ending balance collectively evaluated for impairment - loans	39,749	14,585	39,749	14,585
Ending balance - loans	40,263	15,141	40,263	15,141	$ 44,775
Charge-offs	(97)	(40)	(117)	(78)
Recoveries	29	40	60	66
Provision	$ 116	$ (268)	$ 677	$ (467)

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Note 2 - Earnings Per Share (Details) - Calculations of Earnings Per Common Share - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic
Net income (in Dollars)	$ 2,285,000	$ 1,687,000	$ 5,062,000	$ 3,454,000
Average common shares outstanding	22,733,739	22,205,086	22,727,825	21,515,737
Earnings per common share - basic (in Dollars per share)	$ 0.10	$ 0.08	$ 0.22	$ 0.16
Diluted
Net income (in Dollars)	$ 2,285,000	$ 1,687,000	$ 5,062,000	$ 3,454,000
Average common shares outstanding	22,733,739	22,205,086	22,727,825	21,515,737
Equity compensation	197,805	293,150	190,172	289,428
Average common shares outstanding - diluted	22,931,544	22,498,236	22,917,997	21,805,165
Earnings per common share - diluted (in Dollars per share)	$ 0.10	$ 0.08	$ 0.22	$ 0.16

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Note 6 - Investment Securities (Details) - Amortized Cost and Estimated Market Values of Securities - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Contractual maturity in
1 year or less	$ 4,383
1 year or less	4,426
1 year or less	4,756
1 year or less	4,771
After 1 year through five years	17,818
After 1 year through five years	18,024
After 1 year through five years	129,538
After 1 year through five years	129,078
After 5 years through 10 years	10,186
After 5 years through 10 years	10,606
After 5 years through 10 years	236,228
After 5 years through 10 years	234,397
After 10 years	2,890
After 10 years	3,017
After 10 years	17,416
After 10 years	17,203
Total	35,277
Total	36,073
Total	387,938
Total	385,449
Mortgage Backed Securities	0
Mortgage Backed Securities	0
Mortgage Backed Securities	116,943
Mortgage Backed Securities	116,121
Securities with no stated maturity	0
Securities with no stated maturity	0
Securities with no stated maturity	2,044
Securities with no stated maturity	2,133
Total	35,277	$ 32,613
Total	36,073	$ 33,831
Total	506,925
Total	$ 503,703

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Note 5 - Allowance for Loan Losses (Details) - Impaired Loans - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance					$ 256
Unpaid principal balance-without allowance					256
Average recorded investment-without allowance		$ 259		$ 259
Interest income recognized without allowance		2		3
With an allowance recorded:
Recorded investment-with allowance	$ 892		$ 892		661
Unpaid principal balance-with allowance	891		891		661
Related allowance-with allowance	80		80		34
Average recorded investment-with allowance	904	701	911	707
Interest income recognized with allowance	12	9	24	19
Total:
Recorded investment	892		892		917
Unpaid principal balance	891		891		917
Related allowance	80		80		34
Average recorded investment	904	960	911	966
Interest income recognized	12	11	24	22
Commercial Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	156		156		363
Unpaid principal balance-without allowance	166		166		412
Average recorded investment-without allowance	170	873	174	921
Interest income recognized without allowance	3	17	6	26
With an allowance recorded:
Recorded investment-with allowance	1,120		1,120		1,051
Unpaid principal balance-with allowance	1,167		1,167		1,062
Related allowance-with allowance	473		473		554
Average recorded investment-with allowance	1,199	1,162	1,227	1,176
Interest income recognized with allowance	15	16	28	31
Total:
Recorded investment	1,276		1,276		1,414
Unpaid principal balance	1,333		1,333		1,474
Related allowance	473		473		554
Average recorded investment	1,369	2,035	1,401	2,097
Interest income recognized	18	33	34	57
Commercial Real Estate Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	8,010		8,010		8,084
Unpaid principal balance-without allowance	8,705		8,705		8,882
Average recorded investment-without allowance	8,380	13,717	8,430	14,807
Interest income recognized without allowance	83	230	175	388
With an allowance recorded:
Recorded investment-with allowance	8,817		8,817		10,929
Unpaid principal balance-with allowance	10,390		10,390		12,758
Related allowance-with allowance	913		913		1,502
Average recorded investment-with allowance	10,843	14,712	10,900	14,749
Interest income recognized with allowance	105	163	207	323
Total:
Recorded investment	16,827		16,827		19,013
Unpaid principal balance	19,095		19,095		21,640
Related allowance	913		913		1,502
Average recorded investment	19,223	28,429	19,330	29,556
Interest income recognized	188	393	382	711
Construction Real Estate Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	17		17		297
Unpaid principal balance-without allowance	199		199		954
Average recorded investment-without allowance	211	925	247	972
Interest income recognized without allowance	1	13	3	18
With an allowance recorded:
Recorded investment-with allowance	1,802		1,802		1,820
Unpaid principal balance-with allowance	1,833		1,833		1,851
Related allowance-with allowance	478		478		671
Average recorded investment-with allowance	1,823	2,775	1,828	2,865
Interest income recognized with allowance	21	29	42	60
Total:
Recorded investment	1,819		1,819		2,117
Unpaid principal balance	2,032		2,032		2,805
Related allowance	478		478		671
Average recorded investment	2,034	3,700	2,075	3,837
Interest income recognized	22	42	45	78
Residential Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	7,308		7,308		6,424
Unpaid principal balance-without allowance	8,100		8,100		7,200
Average recorded investment-without allowance	7,782	7,350	7,830	7,426
Interest income recognized without allowance	93	84	187	168
With an allowance recorded:
Recorded investment-with allowance	4,809		4,809		5,251
Unpaid principal balance-with allowance	5,214		5,214		5,658
Related allowance-with allowance	630		630		672
Average recorded investment-with allowance	4,985	7,801	4,988	7,648
Interest income recognized with allowance	45	87	97	158
Total:
Recorded investment	12,117		12,117		11,675
Unpaid principal balance	13,314		13,314		12,858
Related allowance	630		630		672
Average recorded investment	12,767	15,151	12,818	15,074
Interest income recognized	138	171	284	326
Consumer and Other Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	34		34		3
Unpaid principal balance-without allowance	34		34		3
Average recorded investment-without allowance	35	55	36	57
Interest income recognized without allowance	1	1	1	2
With an allowance recorded:
Recorded investment-with allowance	480		480		531
Unpaid principal balance-with allowance	479		479		529
Related allowance-with allowance	208		208		222
Average recorded investment-with allowance	483	503	487	507
Interest income recognized with allowance	5	5	11	11
Total:
Recorded investment	514		514		534
Unpaid principal balance	513		513		532
Related allowance	208		208		$ 222
Average recorded investment	518	558	523	564
Interest income recognized	$ 6	$ 6	$ 12	$ 13

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Note 8 - Financial Instruments with Off-Balance Sheet Risk (Details)	6 Months Ended
	Jun. 30, 2015
Home Equity Line of Credit [Member]
Note 8 - Financial Instruments with Off-Balance Sheet Risk (Details) [Line Items]
Line of Credit Facility, Expiration Period	10 years

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Note 2 - Earnings Per Share

6 Months Ended

Jun. 30, 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 June 30,				For the six months ended June 30,
	2015		2014		2015		2014
Basic
Net income	$	2,285,000	$	1,687,000	$	5,062,000	$	3,454,000
Average common shares outstanding		22,733,739		22,205,086		22,727,825		21,515,737
Earnings per common share - basic	$	0.10	$	0.08	$	0.22	$	0.16
Diluted
Net income	$	2,285,000	$	1,687,000	$	5,062,000	$	3,454,000
Average common shares outstanding		22,733,739		22,205,086		22,727,825		21,515,737
Equity compensation		197,805		293,150		190,172		289,428
Average common shares outstanding - diluted		22,931,544		22,498,236		22,917,997		21,805,165
Earnings per common share - diluted	$	0.10	$	0.08	$	0.22	$	0.16

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Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 months, aggregate fair value	$ 211,624	$ 89,792
Less than 12 months, gross unrealized losses	2,434	371
12 months or longer, aggregate fair value	156,496	204,482
12 months or longer, gross unrealized losses	2,769	3,697
Total, aggregate fair value	368,120	294,274
Total, gross unrealized losses	5,203	4,068
US Treasury and Government [Member]
Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 months, aggregate fair value	134,877	47,695
Less than 12 months, gross unrealized losses	1,760	144
12 months or longer, aggregate fair value	119,424	159,650
12 months or longer, gross unrealized losses	2,039	2,883
Total, aggregate fair value	254,301	207,345
Total, gross unrealized losses	3,799	3,027
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 months, aggregate fair value	62,638	32,756
Less than 12 months, gross unrealized losses	433	175
12 months or longer, aggregate fair value	31,842	40,556
12 months or longer, gross unrealized losses	605	715
Total, aggregate fair value	94,480	73,312
Total, gross unrealized losses	1,038	890
US States and Political Subdivisions Debt Securities [Member]
Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 months, aggregate fair value	14,109	9,341
Less than 12 months, gross unrealized losses	241	52
12 months or longer, aggregate fair value	5,230	4,276
12 months or longer, gross unrealized losses	125	99
Total, aggregate fair value	19,339	13,617
Total, gross unrealized losses	$ 366	$ 151

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Note 4 - Loans (Details)	6 Months Ended
	Jun. 30, 2015 USD ($)
Disclosure Text Block Supplement [Abstract]
Impairment Review, Minimum Amount Threshold	$ 250,000

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Note 3 - Stock Based Compensation (Details) - SOSARs Activity - Jun. 30, 2015 - Stock Appreciation Rights (SARs) [Member] - $ / shares	Total
Note 3 - Stock Based Compensation (Details) - SOSARs Activity [Line Items]
SOSARs Outstanding, January 1, 2015	557,439
SOSARs Outstanding, January 1, 2015	$ 3.58
Granted	128,000
Granted	$ 5.31
Exercised	22,666
Exercised	$ 2.36
Forfeited	11,502
Forfeited	$ 5.46
Expired	0
Expired	$ 0
SOSARs Outstanding, June 30, 2015	651,271
SOSARs Outstanding, June 30, 2015	$ 3.93
SOSARs Exercisable, June 30, 2015	422,224
SOSARs Exercisable, June 30, 2015	$ 3.46

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Note 7 - Fair Value of Financial Instruments (Details) - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
Financial Assets:
Cash and due from banks, carrying value	$ 23,573	$ 52,122	$ 26,716	$ 77,798
Cash and due from banks, fair value	23,573	52,122
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	35,277	32,613
Securities - Held to Maturity, fair value	36,073	33,831
Securities - Available for Sale
Securities - Available for sale, carrying value	503,703	473,176
Securities - Available for sale, fair value	503,703	473,176
Federal Home Loan Bank Stock, carrying value	4,148	7,537
Federal Home Loan Bank Stock, fair value	4,148	7,537
Loans Held for Sale, carrying value	1,602	548
Loans Held for Sale, fair value	1,638	560
Loans, net, carrying value	610,491	597,124
Loans, net, fair value	620,207	608,109
Accrued Interest Receivable, carrying value	4,006	3,943
Accrued Interest Receivable, fair value	4,006	3,943
Financial Liabilities:
Noninterest Bearing Deposits, carrying value	238,164	218,221
Noninterest Bearing Deposits, fair value	238,164	218,221
Interest Bearings Deposits, carrying value	883,116	893,590
Interest Bearings Deposits, fair value	884,991	895,522
Repurchase Agreements, carrying value	15,000	15,000
Repurchase Agreements, fair value	15,568	15,828
Accrued Interest Payable, carrying value	123	137
Accrued Interest Payable, fair value	123	137
US States and Political Subdivisions Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	34,777	32,113
Securities - Held to Maturity, fair value	35,573	33,331
Securities - Available for Sale
Securities - Available for sale, carrying value	17,709	19,581
Securities - Available for sale, fair value	17,709	19,581
Corporate Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	500	500
Securities - Held to Maturity, fair value	500	500
Securities - Available for Sale
Securities - Available for sale, carrying value	7,001	4,002
Securities - Available for sale, fair value	7,001	4,002
US Treasury and Government [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	360,739	342,048
Securities - Available for sale, fair value	360,739	342,048
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	116,121	105,406
Securities - Available for sale, fair value	116,121	105,406
Equity Securities [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	2,133	2,139
Securities - Available for sale, fair value	2,133	2,139
Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Cash and due from banks, fair value	23,573	52,122
Securities - Available for Sale
Federal Home Loan Bank Stock, fair value	0	0
Loans Held for Sale, fair value	0	0
Loans, net, fair value	0	0
Accrued Interest Receivable, fair value	0	0
Financial Liabilities:
Noninterest Bearing Deposits, fair value	238,164	218,221
Interest Bearings Deposits, fair value	0	0
Repurchase Agreements, fair value	0	0
Accrued Interest Payable, fair value	0	0
Fair Value, Inputs, Level 1 [Member] | US States and Political Subdivisions Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	0	0
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	0	0
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 1 [Member] | US Treasury and Government [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 1 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	2,133	2,139
Securities - Available for sale, fair value	2,133	2,139
Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Cash and due from banks, fair value	0	0
Securities - Available for Sale
Federal Home Loan Bank Stock, fair value	4,148	7,537
Loans Held for Sale, fair value	0	0
Loans, net, fair value	0	0
Accrued Interest Receivable, fair value	0	0
Financial Liabilities:
Noninterest Bearing Deposits, fair value	0	0
Interest Bearings Deposits, fair value	884,991	895,522
Repurchase Agreements, fair value	15,568	15,828
Accrued Interest Payable, fair value	0	0
Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	35,573	33,331
Securities - Available for Sale
Securities - Available for sale, carrying value	17,709	19,581
Securities - Available for sale, fair value	17,709	19,581
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	500	500
Securities - Available for Sale
Securities - Available for sale, carrying value	7,001	4,002
Securities - Available for sale, fair value	7,001	4,002
Fair Value, Inputs, Level 2 [Member] | US Treasury and Government [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	360,739	342,048
Securities - Available for sale, fair value	360,739	342,048
Fair Value, Inputs, Level 2 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	116,121	105,406
Securities - Available for sale, fair value	116,121	105,406
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Cash and due from banks, fair value	0	0
Securities - Available for Sale
Federal Home Loan Bank Stock, fair value	0	0
Loans Held for Sale, fair value	1,638	560
Loans, net, fair value	620,207	608,109
Accrued Interest Receivable, fair value	4,006	3,943
Financial Liabilities:
Noninterest Bearing Deposits, fair value	0	0
Interest Bearings Deposits, fair value	0	0
Repurchase Agreements, fair value	0	0
Accrued Interest Payable, fair value	123	137
Fair Value, Inputs, Level 3 [Member] | US States and Political Subdivisions Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	0	0
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	0	0
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | US Treasury and Government [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	0	0
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	0	0
Securities - Available for sale, fair value	$ 0	$ 0

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Note 4 - Loans (Details) - Loans Receviable Outstanding - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	$ 623,570		$ 610,332	$ 598,584
Less: Allowance for loan losses	13,079	$ 13,191	13,208	15,001	$ 16,158	$ 16,209
Net Loans	610,491		597,124
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	217,538		223,701	222,449
Less: Allowance for loan losses	3,070	3,073	3,226	4,280	4,478	4,606
Commercial and Construction Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	263,168		262,395
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	18,976		16,700	17,207
Less: Allowance for loan losses	425	255	216	214	205	171
Commercial and Industrial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	83,625		62,761
Consumer and Other Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	40,263		44,775	15,141
Less: Allowance for loan losses	$ 2,043	$ 1,995	$ 1,423	$ 537	$ 805	$ 1,016

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Note 4 - Loans (Details) - Nonperforming Assets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Note 4 - Loans (Details) - Nonperforming Assets [Line Items]
Nonaccrual loans	$ 11,135	$ 13,040
Loans 90 days past due and accruing	0	10
Total nonperforming loans	623,570	610,332	$ 598,584
Other real estate owned	4,233	5,615
Other assets	28,189	29,465
Total nonperforming assets	1,292,104	1,278,657
Nonperforming Financial Instruments [Member]
Note 4 - Loans (Details) - Nonperforming Assets [Line Items]
Nonaccrual loans	11,135	13,040
Loans 90 days past due and accruing		10
Restructured loans	22,812	22,896
Total nonperforming loans	33,947	35,946
Other real estate owned	4,233	5,615
Other assets	4	18
Nonperforming investment securities	0	0
Total nonperforming assets	$ 38,184	$ 41,579
Nonperforming assets to total assets	2.95%	3.25%
Allowance for loan losses to nonperforming loans	38.53%	36.74%

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Note 1 - Basis of Presentation and Accounting Policies

6 Months Ended

Jun. 30, 2015

Disclosure Text Block [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.

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Note 5 - Allowance for Loan Losses (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)
Note 5 - Allowance for Loan Losses (Details) [Line Items]
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Loans and Leases Receivable, Impaired, Commitment to Lend (in Dollars)	$ 0	$ 0	$ 0	$ 0
Troubled Debt Restructuring [Member]
Note 5 - Allowance for Loan Losses (Details) [Line Items]
Financing Receivable, Allowance for Credit Losses (in Dollars)	$ 2,650,000		$ 2,650,000

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Note 6 - Investment Securities (Details) - Held to Maturity Securities - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Held-to-maturity Securities [Line Items]
Held to maturity, amortized cost	$ 35,277	$ 32,613
Held to maturity, gross unrealized gains	1,086	1,287
Held to maturity, gross unrealized losses	(290)	(69)
Held to maturity, estimated market value	36,073	33,831
US States and Political Subdivisions Debt Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held to maturity, amortized cost	34,777	32,113
Held to maturity, gross unrealized gains	1,086	1,287
Held to maturity, gross unrealized losses	(290)	(69)
Held to maturity, estimated market value	35,573	33,331
Corporate Debt Securities [Member]
Schedule of Held-to-maturity Securities [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
Held to maturity, estimated market value	$ 500	$ 500

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Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Cash and due from banks
Non-interest bearing	$ 14,398	$ 15,957
Interest bearing	9,175	36,165
Total cash and cash equivalents	23,573	52,122
Securities - Held to Maturity	35,277	32,613
Securities - Available for Sale	503,703	473,176
Federal Home Loan Bank stock - at cost	4,148	7,537
Loans held for sale	1,602	548
Loans	623,570	610,332
Allowance for Loan Losses	(13,079)	(13,208)
Loans - Net	610,491	597,124
Accrued interest receivable and other assets	28,189	29,465
Other Real Estate Owned	4,233	5,615
Bank Owned Life Insurance	52,373	51,825
Premises and Equipment - Net	28,515	28,632
Total assets	1,292,104	1,278,657
Deposits:
Non-interest bearing	238,164	218,221
Interest-bearing	883,116	893,590
Total deposits	1,121,280	1,111,811
Repurchase agreements	15,000	15,000
Interest payable and other liabilities	16,960	17,310
Total liabilities	1,153,240	1,144,121
STOCKHOLDERS' EQUITY
Common stock (no par value; 50,000,000 shares authorized, 22,741,898 and 22,718,077 shares issued and outstanding)	23,270	23,037
Retained earnings	119,194	114,132
Unearned compensation	(30)
Accumulated other comprehensive loss	(3,570)	(2,633)
Total stockholders' equity	138,864	134,536
Total liabilities and stockholders' equity	$ 1,292,104	$ 1,278,657

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Note 7 - Fair Value of Financial Instruments (Details) - Change in Level 3 Assets at Fair Value - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Change in Level 3 Assets at Fair Value [Abstract]
Balance at January 1	$ 0	$ 5,751
Total realized and unrealized losses included in income	0	(21)
Total unrealized gains included in other comprehensive income	0	362
Net purchases, sales, calls and maturities	0	(125)
Net transfers in/out of Level 3	0	0
Balance at June 30	$ 0	$ 5,967

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Restricted stock awards, shares issued	6,000	6,000
Other stock, shares issued	9,520	2,071,362
Stock Appreciation Rights (SARs) [Member]
SOSARs shares exercised	8,301	7,287

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Note 5 - Allowance for Loan Losses (Details) - Past Due Loans - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 8,801	$ 11,305
Current past due	614,769	599,027
Total loans, gross	623,570	610,332	$ 598,584
Recorded investment >90 days past due and accruing	0	10
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	5,017	6,122
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,548	1,918
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,236	3,265
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	502	529
Current past due	18,474	16,171
Total loans, gross	18,976	16,700	17,207
Recorded investment >90 days past due and accruing	0	0
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	283	449
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	219	80
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	195	246
Current past due	83,430	62,515
Total loans, gross	83,625	62,761	62,963
Recorded investment >90 days past due and accruing	0	10
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	77	142
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	27	44
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	91	60
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	5,083	5,532
Current past due	244,922	243,937
Total loans, gross	250,005	249,469	265,975
Recorded investment >90 days past due and accruing	0	0
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	3,003	2,127
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,166	1,118
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	914	2,287
Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	334
Current past due	13,163	12,592
Total loans, gross	13,163	12,926	14,849
Recorded investment >90 days past due and accruing	0	0
Construction Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	334
Construction Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Construction Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,981	4,464
Current past due	214,557	219,237
Total loans, gross	217,538	223,701	222,449
Recorded investment >90 days past due and accruing	0	0
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,621	2,946
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	355	741
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,005	777
Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	40	200
Current past due	40,223	44,575
Total loans, gross	40,263	44,775	$ 15,141
Recorded investment >90 days past due and accruing	0	0
Consumer and Other Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	33	124
Consumer and Other Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	15
Consumer and Other Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 7	$ 61

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Note 7 - Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

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

									Total
	Carrying								Estimated
June 30, 2015	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	23,573	$	23,573	$	-	$	-	$	23,573
Securities - Held to Maturity
Obligations of States and Political Subdivisions		34,777		-		35,573		-		35,573
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		360,739		-		360,739		-		360,739
MBS issued by U.S. Government Agencies		116,121		-		116,121		-		116,121
Obligations of States and Political Subdivisions		17,709		-		17,709		-		17,709
Corporate Debt Securities		7,001		-		7,001		-		7,001
Other Securities		2,133		2,133		-		-		2,133
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		1,602		-		-		1,638		1,638
Loans, net		610,491		-		-		620,207		620,207
Accrued Interest Receivable		4,006		-		-		4,006		4,006
Financial Liabilities:
Noninterest Bearing Deposits		238,164		238,164		-		-		238,164
Interest Bearings Deposits		883,116		-		884,991		-		884,991
Repurchase Agreements		15,000		-		15,568		-		15,568
Accrued Interest Payable		123		-		-		123		123

									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]

Investment Securities - Available for Sale	2015		2014
Balance at January 1	$	-	$	5,751
Total realized and unrealized losses included in income		-		(21	)
Total unrealized gains included in other comprehensive income		-		362
Net purchases, sales, calls and maturities		-		(125	)
Net transfers in/out of Level 3		-		-
Balance at June 30	$	-	$	5,967

Fair Value Measurements, Nonrecurring [Table Text Block]

	Balance at June 30, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	33,445	$	-	$	-	$	30,663
Other Real Estate Owned	$	4,233	$	-	$	-	$	4,233

	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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Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	$ 11,135	$ 13,040
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	218	80
Commercial Portfolio Segment [Member]
Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	272	315
Commercial Real Estate Portfolio Segment [Member]
Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	5,397	6,287
Construction Real Estate Portfolio Segment [Member]
Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	76	409
Residential Portfolio Segment [Member]
Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	5,058	5,760
Consumer and Other Portfolio Segment [Member]
Note 5 - Allowance for Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	$ 114	$ 189

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Note 1 - Basis of Presentation and Accounting Policies (Details) - Jun. 30, 2015	Total
Note 1 - Basis of Presentation and Accounting Policies (Details) [Line Items]
Number of Reportable Segments	1
Monroe County, Michigan [Member]
Note 1 - Basis of Presentation and Accounting Policies (Details) [Line Items]
Number of Stores	17
Wayne County, Michigan [Member]
Note 1 - Basis of Presentation and Accounting Policies (Details) [Line Items]
Number of Stores	7

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows from Operating Activities
Net Income	$ 5,062,000	$ 3,454,000
Adjustments to reconcile net income to net cash from operating activities
Provision for (recovery of) loan losses	(800,000)	200,000
Depreciation	792,000	827,000
Decrease in net deferred federal income tax asset	1,711,000	1,102,000
Net amortization of investment premium and discount	651,000	483,000
Writedowns of Other Real Estate Owned	369,000	163,000
Net increase (decrease) in interest payable and other liabilities	(270,000)	489,000
Net increase in interest receivable and other assets	(324,000)	(741,000)
Equity based compensation expense	150,000	118,000
Net gain on sale/settlement of securities	(258,000)	(276,000)
Increase in cash surrender value of life insurance	(548,000)	(621,000)
Net cash provided by operating activities	6,535,000	5,198,000
Cash Flows from Investing Activities
Proceeds from maturities and redemptions of investment securities held to maturity	6,005,000	6,058,000
Proceeds from maturities and redemptions of investment securities available for sale	84,584,000	10,407,000
Proceeds from sales of investment securities available for sale	16,672,000	55,998,000
Net increase in loans	(13,715,000)	(5,300,000)
Proceeds from sales of other real estate owned	1,412,000	3,696,000
Proceeds from sales of other assets	75,000	25,000
Purchase of investment securities held to maturity	(8,707,000)	(4,590,000)
Purchase of investment securities available for sale	(130,248,000)	(97,323,000)
Purchase of bank premises and equipment	(684,000)	(1,382,000)
Net cash used for investing activities	(44,606,000)	(32,411,000)
Cash Flows from Financing Activities
Net increase (decrease) in deposits	9,469,000	(19,929,000)
Repayment of Federal Home Loan Bank borrowings		(12,000,000)
Proceeds from issuance of common stock	53,000	8,060,000
Net cash provided by (used for) financing activities	9,522,000	(23,869,000)
Net Decrease in Cash and Cash Equivalents	(28,549,000)	(51,082,000)
Cash and Cash Equivalents at Beginning of Period	52,122,000	77,798,000
Cash and Cash Equivalents at End of Period	23,573,000	26,716,000
Supplemental Cash Flow Information
Cash paid for interest	1,629,000	2,046,000
Cash paid for federal income taxes	331,000	49,000
Supplemental Schedule of Non Cash Investing Activities
Transfer of loans to other real estate owned	40,000	2,305,000
Transfer of loans to other assets	$ 54,000	$ 42,000

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Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares shares in Thousands	Jun. 30, 2015	Dec. 31, 2014
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	22,741,898	22,718,077
Common stock, shares outstanding	22,741,898	22,718,077
Common stock, par value (in Dollars per share)	$ 0	$ 0

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Note 2 - Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

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

	For the three months ended June 30,				For the six months ended June 30,
	2015		2014		2015		2014
Basic
Net income	$	2,285,000	$	1,687,000	$	5,062,000	$	3,454,000
Average common shares outstanding		22,733,739		22,205,086		22,727,825		21,515,737
Earnings per common share - basic	$	0.10	$	0.08	$	0.22	$	0.16
Diluted
Net income	$	2,285,000	$	1,687,000	$	5,062,000	$	3,454,000
Average common shares outstanding		22,733,739		22,205,086		22,727,825		21,515,737
Equity compensation		197,805		293,150		190,172		289,428
Average common shares outstanding - diluted		22,931,544		22,498,236		22,917,997		21,805,165
Earnings per common share - diluted	$	0.10	$	0.08	$	0.22	$	0.16

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 10, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	MBT FINANCIAL CORP
Trading Symbol	mbtf
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		22,750,173
Amendment Flag	false
Entity Central Index Key	0001118237
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

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Note 3 - Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

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

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

			Weighted Average
	Shares		Exercise Price
Options Outstanding, January 1, 2015		205,400	$	19.08
Granted		-		-
Exercised		-		-
Forfeited		5,500		15.83
Expired		89,500		23.40
Options Outstanding, June 30, 2015		110,400	$	15.74
Options Exercisable, June 30, 2015		110,400	$	15.74

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

			Weighted Average
	SOSARs		Base Price
SOSARs Outstanding, January 1, 2015		557,439	$	3.58
Granted		128,000		5.31
Exercised		22,666		2.36
Forfeited		11,502		5.46
Expired		-		-
SOSARs Outstanding, June 30, 2015		651,271	$	3.93
SOSARs Exercisable, June 30, 2015		422,224	$	3.46

XML

Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest Income
Interest and fees on loans	$ 7,154,000	$ 7,021,000	$ 14,586,000	$ 14,100,000
Interest on investment securities-
Tax-exempt	273,000	297,000	548,000	604,000
Taxable	2,436,000	2,200,000	4,864,000	4,318,000
Interest on balances due from banks	14,000	22,000	40,000	54,000
Total interest income	9,877,000	9,540,000	20,038,000	19,076,000
Interest Expense
Interest on deposits	619,000	801,000	1,264,000	1,656,000
Interest on borrowed funds	177,000	187,000	351,000	373,000
Total interest expense	796,000	988,000	1,615,000	2,029,000
Net Interest Income	9,081,000	8,552,000	18,423,000	17,047,000
Provision For (Recovery Of) Loan Losses		100,000	(800,000)	200,000
Net Interest Income After
Provision For Loan Losses	9,081,000	8,452,000	19,223,000	16,847,000
Other Income
Income from wealth management services	1,191,000	1,168,000	2,413,000	2,302,000
Service charges and other fees	1,030,000	968,000	1,924,000	1,900,000
Debit card income	591,000	542,000	1,155,000	1,031,000
Net gain on sales of securities available for sale	22,000	219,000	258,000	276,000
Net loss on sales of Other Real Estate Owned	(21,000)	(342,000)	(284,000)	(330,000)
Origination fees on mortgage loans sold	137,000	88,000	266,000	150,000
Bank owned life insurance income	362,000	351,000	633,000	705,000
Rent income on Other Real Estate Owned	103,000	130,000	137,000	265,000
Other	390,000	460,000	928,000	949,000
Total other income	3,805,000	3,584,000	7,430,000	7,248,000
Other Expenses
Salaries and employee benefits	5,750,000	5,804,000	11,624,000	11,532,000
Occupancy expense	606,000	670,000	1,426,000	1,414,000
Equipment expense	790,000	662,000	1,524,000	1,279,000
Marketing expense	308,000	212,000	554,000	415,000
Professional fees	550,000	521,000	1,126,000	939,000
Other Real Estate Owned expenses	179,000	361,000	305,000	700,000
FDIC Deposit Insurance Assessment	429,000	620,000	843,000	1,260,000
Bonding and other insurance expense	227,000	255,000	457,000	519,000
Telephone expense	109,000	104,000	204,000	247,000
Other	782,000	582,000	1,486,000	1,185,000
Total other expenses	9,730,000	9,791,000	19,549,000	19,490,000
Income Before Income Taxes	3,156,000	2,245,000	7,104,000	4,605,000
Income Tax Expense	871,000	558,000	2,042,000	1,151,000
Net Income	2,285,000	1,687,000	5,062,000	3,454,000
Other Comprehensive Income (Loss) - Net of Tax
Unrealized gains (losses) on securities	(3,760,000)	3,443,000	(819,000)	7,002,000
Reclassification adjustment for losses included in net income	(15,000)	(144,000)	(171,000)	(182,000)
Postretirement benefit liability	26,000	27,000	53,000	(266,000)
Total Other Comprehensive Income (Loss) - Net of Tax	(3,749,000)	3,326,000	(937,000)	6,554,000
Comprehensive Income (Loss)	$ (1,464,000)	$ 5,013,000	$ 4,125,000	$ 10,008,000
Basic Earnings Per Common Share (in Dollars per share)	$ 0.10	$ 0.08	$ 0.22	$ 0.16
Diluted Earnings Per Common Share (in Dollars per share)	0.10	0.08	0.22	0.16
Common Stock Dividends Declared Per Share (in Dollars per share)	$ 0	$ 0	$ 0	$ 0

XML

Note 5 - Allowance for Loan Losses

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Financing Receivables [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 and six months ended June 30, 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 June 30, 2015
Beginning Balance	$	255		$	1,380		$	5,678		$	810		$	3,073		$	1,995		$	13,191
Charge-offs		(75	)		(58	)		(120	)		-			(57	)		(97	)		(407	)
Recoveries		3			97			21			12			133			29			295
Provision		242			62			(142	)		(199	)		(79	)		116			-
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Allowance for loan losses: For the six months ended June 30, 2015
Beginning Balance	$	216		$	1,361		$	6,179		$	803		$	3,226		$	1,423		$	13,208
Charge-offs		(75	)		(164	)		(120	)		-			(253	)		(117	)		(729	)
Recoveries		10			171			182			621			356			60			1,400
Provision		274			113			(804	)		(801	)		(259	)		677			(800	)
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	$	80		$	473		$	913		$	478		$	630		$	208		$	2,782
Ending balance collectively evaluated for impairment		345			1,008			4,524			145			2,440			1,835			10,297
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Loans as of June 30, 2015
Ending balance individually evaluated for impairment	$	892		$	1,276		$	16,827		$	1,819		$	12,117		$	514		$	33,445
Ending balance collectively evaluated for impairment		18,084			82,349			233,178			11,344			205,421			39,749			590,125
Ending balance	$	18,976		$	83,625		$	250,005		$	13,163		$	217,538		$	40,263		$	623,570

Activity in the allowance for loan losses during the three and six months ended June 30, 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 June 30, 2014
Beginning Balance	$	205	$	1,780		$	7,460		$	1,430		$	4,478		$	805		$	16,158
Charge-offs		-		(440	)		(1,103	)		-			(79	)		(40	)		(1,662	)
Recoveries		5		56			211			20			73			40			405
Provision		4		(108	)		967			(303	)		(192	)		(268	)		100
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Allowance for loan losses: For the six months ended June 30, 2014
Beginning Balance	$	171	$	1,989		$	7,030		$	1,397		$	4,606		$	1,016		$	16,209
Charge-offs		-		(626	)		(1,211	)		(210	)		(211	)		(78	)		(2,336	)
Recoveries		5		89			276			254			238			66			928
Provision		38		(164	)		1,440			(294	)		(353	)		(467	)		200
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Allowance for loan losses as of June 30, 2014
Ending balance individually evaluated for impairment	$	36	$	511		$	2,234		$	900		$	1,713		$	243		$	5,637
Ending balance collectively evaluated for impairment		178		777			5,301			247			2,567			294			9,364
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Loans as of June 30, 2014
Ending balance individually evaluated for impairment	$	947	$	1,870		$	27,281		$	3,221		$	14,438		$	556		$	48,313
Ending balance collectively evaluated for impairment		16,260		61,093			238,694			11,628			208,011			14,585			550,271
Ending balance	$	17,207	$	62,963		$	265,975		$	14,849		$	222,449		$	15,141		$	598,584

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 June 30, 2015 are as follows (000s omitted):

Credit Quality Indicators as of June 30, 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	$	113	$	4,936	$	338	$	5,410	$	137,651	$	36,305	$	184,753
1		-		2,500		-		-		-		-		2,500
2		173		284		572		-		-		366		1,395
3		400		14,785		9,043		-		213		-		24,441
4		15,039		54,369		182,901		4,767		57,611		3,259		317,946
5		2,075		4,064		33,221		2,522		8,620		82		50,584
6		1,176		2,687		23,930		464		13,443		251		41,951
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	18,976	$	83,625	$	250,005	$	13,163	$	217,538	$	40,263	$	623,570
Performing	$	17,865	$	82,258	$	233,612	$	11,299	$	204,953	$	39,636	$	589,623
Nonperforming		1,111		1,367		16,393		1,864		12,585		627		33,947
Total	$	18,976	$	83,625	$	250,005	$	13,163	$	217,538	$	40,263	$	623,570

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 June 30, 2015 and December 31, 2014 (000s omitted):

June 30, 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	$	283	$	-	$	219	$	502	$	18,474	$	18,976	$	-
Commercial		77		27		91		195		83,430		83,625		-
Commercial Real Estate		3,003		1,166		914		5,083		244,922		250,005		-
Construction Real Estate		-		-		-		-		13,163		13,163		-
Residential Real Estate		1,621		355		1,005		2,981		214,557		217,538		-
Consumer and Other		33		-		7		40		40,223		40,263		-
Total	$	5,017	$	1,548	$	2,236	$	8,801	$	614,769	$	623,570	$	-

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 June 30, 2015 and December 31, 2014 (000s omitted):

	June 30, 2015		December 31, 2014
Agriculture and Agricultural Real Estate	$	218	$	80
Commercial		272		315
Commercial Real Estate		5,397		6,287
Construction Real Estate		76		409
Residential Real Estate		5,058		5,760
Consumer and Other		114		189
Total	$	11,135	$	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 June 30, 2015 and 2014 (000s omitted):

June 30, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended		Average Recorded Investment for the Six Months Ended		Interest Income Recognized in the Six Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial		156		166		-		170		3		174		6
Commercial Real Estate		8,010		8,705		-		8,380		83		8,430		175
Construction Real Estate		17		199		-		211		1		247		3
Residential Real Estate		7,308		8,100		-		7,782		93		7,830		187
Consumer and Other		34		34		-		35		1		36		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		892		891		80		904		12		911		24
Commercial		1,120		1,167		473		1,199		15		1,227		28
Commercial Real Estate		8,817		10,390		913		10,843		105		10,900		207
Construction Real Estate		1,802		1,833		478		1,823		21		1,828		42
Residential Real Estate		4,809		5,214		630		4,985		45		4,988		97
Consumer and Other		480		479		208		483		5		487		11
Total:
Agriculture and Agricultural Real Estate	$	892	$	891	$	80	$	904	$	12	$	911	$	24
Commercial		1,276		1,333		473		1,369		18		1,401		34
Commercial Real Estate		16,827		19,095		913		19,223		188		19,330		382
Construction Real Estate		1,819		2,032		478		2,034		22		2,075		45
Residential Real Estate		12,117		13,314		630		12,767		138		12,818		284
Consumer and Other		514		513		208		518		6		523		12

	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 June 30, 2014		Interest Income Recognized in the Three Months Ended June 30, 2014		Average Recorded Investment for the Six Months Ended June 30, 2014		Interest Income Recognized in the Six Months Ended June 30, 2014
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	256	$	256	$	-	$	259	$	2	$	259	$	3
Commercial		363		412		-		873		17		921		26
Commercial Real Estate		8,084		8,882		-		13,717		230		14,807		388
Construction Real Estate		297		954		-		925		13		972		18
Residential Real Estate		6,424		7,200		-		7,350		84		7,426		168
Consumer and Other		3		3		-		55		1		57		2
With an allowance recorded:
Agriculture and Agricultural Real Estate		661		661		34		701		9		707		19
Commercial		1,051		1,062		554		1,162		16		1,176		31
Commercial Real Estate		10,929		12,758		1,502		14,712		163		14,749		323
Construction Real Estate		1,820		1,851		671		2,775		29		2,865		60
Residential Real Estate		5,251		5,658		672		7,801		87		7,648		158
Consumer and Other		531		529		222		503		5		507		11
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	960	$	11	$	966	$	22
Commercial		1,414		1,474		554		2,035		33		2,097		57
Commercial Real Estate		19,013		21,640		1,502		28,429		393		29,556		711
Construction Real Estate		2,117		2,805		671		3,700		42		3,837		78
Residential Real Estate		11,675		12,858		672		15,151		171		15,074		326
Consumer and Other		534		532		222		558		6		564		13

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 and six month periods ended June 30, 2015 and June 30, 2014 are as follows (000s omitted from dollar amounts):

	Three months ended						Six months ended
	June 30, 2015						June 30, 2015
	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		-	$	-	$	-		-	$	-	$	-
Commercial		1		66		64		1		66		64
Commercial Real Estate		2		352		304		3		684		636
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		7		581		533		7		581		533
Consumer and Other		-		-		-		-		-		-
Total		10	$	999	$	901		11	$	1,331	$	1,233

	Three months ended						Six months ended
	June 30, 2014						June 30, 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		4		295		91		4		295		91
Commercial Real Estate		2		301		140		4		1,247		1,059
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		7		579		556		10		844		779
Consumer and Other		-		-		-		-		-		-
Total		13	$	1,175	$	787		19	$	2,700	$	2,243

The Bank considers TDRs that become past due under the modified terms as defaulted. There were no loans that became TDRs during the three and six month periods ended June 30, 2015 and June 30, 2014 that subsequently defaulted during the three month periods ended June 30, 2015 and June 30, 2014, respectively.

The Company has allocated $2,650,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at June 30, 2015. In addition, there were no commitments to lend additional amounts to borrowers that are classified as troubled debt restructurings as of June 30, 2015 and June 30, 2014.

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Note 4 - Loans

6 Months Ended

Jun. 30, 2015

Disclosure Text Block Supplement [Abstract]

Loans, Notes, Trade and Other Receivables, Excluding Allowance for Credit Losses [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):

	June 30,		December 31,
	2015		2014
Residential real estate loans	$	217,538	$	223,701
Commercial and Construction real estate loans		263,168		262,395
Agriculture and agricultural real estate loans		18,976		16,700
Commercial and industrial loans		83,625		62,761
Loans to individuals for household, family, and other personal expenditures		40,263		44,775
Total loans, gross	$	623,570	$	610,332
Less: Allowance for loan losses		13,079		13,208
Net Loans	$	610,491	$	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, other real estate owned, and other repossessed assets. 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):

	June 30,			December 31,
	2015			2014
Nonaccrual loans	$	11,135		$	13,040
Loans 90 days past due and accruing		-			10
Restructured loans		22,812			22,896
Total nonperforming loans	$	33,947		$	35,946
Other real estate owned		4,233			5,615
Other assets		4			18
Nonperforming investment securities		-			-
Total nonperforming assets	$	38,184		$	41,579
Nonperforming assets to total assets		2.95	%		3.25	%
Allowance for loan losses to nonperforming loans		38.53	%		36.74	%

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Note 8 - Financial Instruments with Off-Balance Sheet Risk (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Off Balance Sheet Risks Disclosure [Abstract]

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

	Contractual Amount
	June 30, 2015		December 31, 2014
Commitments to extend credit:
Unused portion of commercial lines of credit	$	65,825	$	66,319
Unused portion of credit card lines of credit		3,996		3,630
Unused portion of home equity lines of credit		20,972		19,544
Standby letters of credit and financial guarantees written		3,136		3,178
All other off-balance sheet commitments		-		-

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Note 4 - Loans (Tables)

6 Months Ended

Jun. 30, 2015

Disclosure Text Block Supplement [Abstract]

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

	June 30,		December 31,
	2015		2014
Residential real estate loans	$	217,538	$	223,701
Commercial and Construction real estate loans		263,168		262,395
Agriculture and agricultural real estate loans		18,976		16,700
Commercial and industrial loans		83,625		62,761
Loans to individuals for household, family, and other personal expenditures		40,263		44,775
Total loans, gross	$	623,570	$	610,332
Less: Allowance for loan losses		13,079		13,208
Net Loans	$	610,491	$	597,124

Schedule of Nonperforming Assets [Table Text Block]

	June 30,			December 31,
	2015			2014
Nonaccrual loans	$	11,135		$	13,040
Loans 90 days past due and accruing		-			10
Restructured loans		22,812			22,896
Total nonperforming loans	$	33,947		$	35,946
Other real estate owned		4,233			5,615
Other assets		4			18
Nonperforming investment securities		-			-
Total nonperforming assets	$	38,184		$	41,579
Nonperforming assets to total assets		2.95	%		3.25	%
Allowance for loan losses to nonperforming loans		38.53	%		36.74	%

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Note 8 - Financial Instruments with Off-Balance Sheet Risk

6 Months Ended

Jun. 30, 2015

Fair Value Off Balance Sheet Risks Disclosure [Abstract]

Fair Value Off Balance Sheet Risks Disclosure [Text Block]

8. 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
	June 30, 2015		December 31, 2014
Commitments to extend credit:
Unused portion of commercial lines of credit	$	65,825	$	66,319
Unused portion of credit card lines of credit		3,996		3,630
Unused portion of home equity lines of credit		20,972		19,544
Standby letters of credit and financial guarantees written		3,136		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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Note 6 - Investment Securities

6 Months Ended

Jun. 30, 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 June 30, 2015 and December 31, 2014 (000’s omitted):

	Held to Maturity
	June 30, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of States and Political Subdivisions	$	34,777	$	1,086	$	(290	)	$	35,573
Corporate Debt Securities		500		-		-			500
	$	35,277	$	1,086	$	(290	)	$	36,073

	Available for Sale
	June 30, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of U.S. Government Agencies	$	363,481	$	1,057	$	(3,799	)	$	360,739
Mortgage Backed Securities issued by U.S. Government Agencies		116,943		216		(1,038	)		116,121
Obligations of States and Political Subdivisions		17,467		318		(76	)		17,709
Corporate Debt Securities		6,990		11		-			7,001
Equity Securities		2,044		89		-			2,133
	$	506,925	$	1,691	$	(4,913	)	$	503,703

	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
	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 June 30, 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	$	4,383	$	4,426	$	4,756	$	4,771
After 1 year through five years		17,818		18,024		129,538		129,078
After 5 years through 10 years		10,186		10,606		236,228		234,397
After 10 years		2,890		3,017		17,416		17,203
Total		35,277		36,073		387,938		385,449
Mortgage Backed Securities		-		-		116,943		116,121
Securities with no stated maturity		-		-		2,044		2,133
Total	$	35,277	$	36,073	$	506,925	$	503,703

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 June 30, 2015 and December 31, 2014.

	June 30, 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	$	134,877	$	1,760	$	119,424	$	2,039	$	254,301	$	3,799
Mortgage Backed Securities issued by U.S. Government Agencies		62,638		433		31,842		605		94,480		1,038
Obligations of States and Political Subdivisions		14,109		241		5,230		125		19,339		366
	$	211,624	$	2,434	$	156,496	$	2,769	$	368,120	$	5,203

	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

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 June 30, 2015. As of June 30, 2015 and December 31, 2014, there were 168 and 116 securities in an unrealized loss position, respectively.

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Note 7 - Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 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 June 30, 2015 and December 31, 2014, and the valuation techniques used by the Company to determine those fair values.

									Total
	Carrying								Estimated
June 30, 2015	Value		Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and due from banks	$	23,573	$	23,573	$	-	$	-	$	23,573
Securities - Held to Maturity
Obligations of States and Political Subdivisions		34,777		-		35,573		-		35,573
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		360,739		-		360,739		-		360,739
MBS issued by U.S. Government Agencies		116,121		-		116,121		-		116,121
Obligations of States and Political Subdivisions		17,709		-		17,709		-		17,709
Corporate Debt Securities		7,001		-		7,001		-		7,001
Other Securities		2,133		2,133		-		-		2,133
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		1,602		-		-		1,638		1,638
Loans, net		610,491		-		-		620,207		620,207
Accrued Interest Receivable		4,006		-		-		4,006		4,006
Financial Liabilities:
Noninterest Bearing Deposits		238,164		238,164		-		-		238,164
Interest Bearings Deposits		883,116		-		884,991		-		884,991
Repurchase Agreements		15,000		-		15,568		-		15,568
Accrued Interest Payable		123		-		-		123		123

									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		-		(21	)
Total unrealized gains included in other comprehensive income		-		362
Net purchases, sales, calls and maturities		-		(125	)
Net transfers in/out of Level 3		-		-
Balance at June 30	$	-	$	5,967

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 June 30, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	33,445	$	-	$	-	$	30,663
Other Real Estate Owned	$	4,233	$	-	$	-	$	4,233

	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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Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 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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Note 5 - Allowance for Loan Losses (Details) - Credit Risk by Internally Assigned Grade - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	$ 623,570	$ 610,332	$ 598,584
Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	589,623	574,386
Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	33,947	35,946
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	18,976	16,700	17,207
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	17,865	15,702
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,111	998
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	83,625	62,761	62,963
Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	82,258	61,287
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,367	1,474
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	250,005	249,469	265,975
Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	233,612	231,461
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	16,393	18,008
Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	13,163	12,926	14,849
Construction Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	11,299	10,740
Construction Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,864	2,186
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	217,538	223,701	222,449
Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	204,953	211,143
Residential Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	12,585	12,558
Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	40,263	44,775	$ 15,141
Consumer and Other Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	39,636	44,053
Consumer and Other Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	627	722
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	184,753	186,950
Not Rated [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	113	122
Not Rated [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	4,936	2,700
Not Rated [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	338	0
Not Rated [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	5,410	5,402
Not Rated [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	137,651	138,355
Not Rated [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	36,305	40,371
Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,500	3,429
Risk Grade Rating 1 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 1 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,500	3,060
Risk Grade Rating 1 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 1 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 1 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 1 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross		369
Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,395	1,579
Risk Rating Grade 2 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	173	330
Risk Rating Grade 2 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	284	287
Risk Rating Grade 2 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	572	830
Risk Rating Grade 2 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Rating Grade 2 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	132
Risk Rating Grade 2 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	366	0
Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	24,441	17,962
Risk Grade Rating 3 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	400	491
Risk Grade Rating 3 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	14,785	7,084
Risk Grade Rating 3 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	9,043	9,923
Risk Grade Rating 3 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 3 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	213	464
Risk Grade Rating 3 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	317,946	298,103
Risk Grade Rating 4 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	15,039	13,458
Risk Grade Rating 4 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	54,369	41,441
Risk Grade Rating 4 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	182,901	176,685
Risk Grade Rating 4 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	4,767	4,357
Risk Grade Rating 4 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	57,611	58,902
Risk Grade Rating 4 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	3,259	3,260
Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	50,584	53,331
Risk Grade Rating 5 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,075	1,261
Risk Grade Rating 5 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	4,064	4,903
Risk Grade Rating 5 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	33,221	34,385
Risk Grade Rating 5 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,522	2,471
Risk Grade Rating 5 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	8,620	10,112
Risk Grade Rating 5 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	82	199
Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	41,951	48,978
Risk Grade Rating 6 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,176	1,038
Risk Grade Rating 6 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,687	3,286
Risk Grade Rating 6 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	23,930	27,646
Risk Grade Rating 6 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	464	696
Risk Grade Rating 6 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	13,443	15,736
Risk Grade Rating 6 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	251	576
Risk Grade Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 7 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 7 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 7 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 7 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 7 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 7 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 8 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member] | Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member] | Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member] | Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Risk Grade Rating 9 [Member] | Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	$ 0	$ 0

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Note 6 - Investment Securities (Tables)

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Held-to-maturity Securities [Table Text Block]

	Held to Maturity
	June 30, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of States and Political Subdivisions	$	34,777	$	1,086	$	(290	)	$	35,573
Corporate Debt Securities		500		-		-			500
	$	35,277	$	1,086	$	(290	)	$	36,073

	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 Securities [Table Text Block]

	Available for Sale
	June 30, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
Obligations of U.S. Government Agencies	$	363,481	$	1,057	$	(3,799	)	$	360,739
Mortgage Backed Securities issued by U.S. Government Agencies		116,943		216		(1,038	)		116,121
Obligations of States and Political Subdivisions		17,467		318		(76	)		17,709
Corporate Debt Securities		6,990		11		-			7,001
Equity Securities		2,044		89		-			2,133
	$	506,925	$	1,691	$	(4,913	)	$	503,703

	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]

	Held to Maturity				Available for Sale
			Estimated				Estimated
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
Contractual maturity in
1 year or less	$	4,383	$	4,426	$	4,756	$	4,771
After 1 year through five years		17,818		18,024		129,538		129,078
After 5 years through 10 years		10,186		10,606		236,228		234,397
After 10 years		2,890		3,017		17,416		17,203
Total		35,277		36,073		387,938		385,449
Mortgage Backed Securities		-		-		116,943		116,121
Securities with no stated maturity		-		-		2,044		2,133
Total	$	35,277	$	36,073	$	506,925	$	503,703

Schedule of Unrealized Loss on Investments [Table Text Block]

	June 30, 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	$	134,877	$	1,760	$	119,424	$	2,039	$	254,301	$	3,799
Mortgage Backed Securities issued by U.S. Government Agencies		62,638		433		31,842		605		94,480		1,038
Obligations of States and Political Subdivisions		14,109		241		5,230		125		19,339		366
	$	211,624	$	2,434	$	156,496	$	2,769	$	368,120	$	5,203

	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

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Note 3 - Stock Based Compensation (Details) - USD ($)			3 Months Ended		6 Months Ended
	May. 28, 2015	Jan. 21, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Note 3 - Stock Based Compensation (Details) [Line Items]
Share Price	$ 5.79	$ 4.94	$ 5.74		$ 5.74
Allocated Share-based Compensation Expense			$ 94,000	$ 79,000	$ 177,000	$ 146,000
Stock Appreciation Rights (SARs) [Member]
Note 3 - Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted					128,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value			$ 1,144,000		$ 1,144,000
Shares, Issued			199,380		199,380
Stock Appreciation Rights (SARs) [Member] | Stock Incentive Plan 2008 [Member] | Executive Officer [Member]
Note 3 - Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted	55,500	72,500
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 2.44	$ 2.85
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	7 years	7 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	55.57%	57.07%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.90%	1.70%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	3.00%	0.00%
Restricted Stock [Member] | Stock Incentive Plan 2008 [Member] | Executive Officer [Member]
Note 3 - Stock Based Compensation (Details) [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross		25,000
Restricted Stock [Member] | Stock Incentive Plan 2008 [Member] | Director [Member]
Note 3 - Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	6,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value	$ 5.79
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 30,000		$ 30,000

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Note 6 - Investment Securities (Details) - Available for Sale Securities - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	$ 506,925	$ 474,898
Available for sale securities, gross unrealized gains	1,691	2,277
Available for sale securities, gross unrealized losses	(4,913)	(3,999)
Available for sale securities, estimated market value	503,703	473,176
US Treasury and Government [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	363,481	343,703
Available for sale securities, gross unrealized gains	1,057	1,372
Available for sale securities, gross unrealized losses	(3,799)	(3,027)
Available for sale securities, estimated market value	360,739	342,048
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	116,943	105,890
Available for sale securities, gross unrealized gains	216	406
Available for sale securities, gross unrealized losses	(1,038)	(890)
Available for sale securities, estimated market value	116,121	105,406
US States and Political Subdivisions Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	17,467	19,286
Available for sale securities, gross unrealized gains	318	377
Available for sale securities, gross unrealized losses	(76)	(82)
Available for sale securities, estimated market value	17,709	19,581
Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	6,990	3,975
Available for sale securities, gross unrealized gains	11	27
Available for sale securities, gross unrealized losses	0	0
Available for sale securities, estimated market value	7,001	4,002
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	2,044	2,044
Available for sale securities, gross unrealized gains	89	95
Available for sale securities, gross unrealized losses	0	0
Available for sale securities, estimated market value	$ 2,133	$ 2,139

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Retained Earnings [Member]	Deferred Compensation, Share-based Payments [Member]	AOCI Attributable to Parent [Member]	Total
Balance at at Dec. 31, 2013	$ 14,671,000	$ 106,817,000	$ (7,000)	$ (10,873,000)	$ 110,608,000
Balance at at Jun. 30, 2014	22,859,000	110,271,000	(17,000)	(4,319,000)	128,794,000
Issuance of Common Stock
SOSARs exercised	1,000	0	0	0	1,000
Restricted stock awards	29,000	0	(29,000)	0	0
Other stock issued	8,814,000	0	0	0	8,814,000
Stock Offering Expense	(754,000)	0	0	0	(754,000)
Equity Compensation	98,000	0	19,000	0	117,000
Net income	0	3,454,000	0	0	3,454,000
Other comprehensive	0	0	0	6,554,000	6,554,000
Balance at at Dec. 31, 2014	23,037,000	114,132,000		(2,633,000)	134,536,000
Balance at at Jun. 30, 2015	23,270,000	119,194,000	(30,000)	(3,570,000)	138,864,000
Issuance of Common Stock
SOSARs exercised	0	0	0	0	0
Restricted stock awards	35,000		(35,000)
Other stock issued	53,000	0	0	0	53,000
Equity Compensation	145,000	0	5,000	0	150,000
Net income	0	5,062,000	0	0	5,062,000
Other comprehensive	$ 0	$ 0	$ 0	$ (937,000)	$ (937,000)

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Note 3 - Stock Based Compensation

6 Months Ended

Jun. 30, 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		5,500		15.83
Expired		89,500		23.40
Options Outstanding, June 30, 2015		110,400	$	15.74
Options Exercisable, June 30, 2015		110,400	$	15.74

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.

On May 28, 2015, 55,500 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 and amended by shareholders on May 7, 2015. The SOSARs have a term of ten years and vest in three equal annual installments beginning on December 31, 2015. The fair value of $2.44 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 55.57%, a risk free interest rate of 1.90% and dividend yield of 3.00%. The fair value of the Company’s common stock was $5.79 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		128,000		5.31
Exercised		22,666		2.36
Forfeited		11,502		5.46
Expired		-		-
SOSARs Outstanding, June 30, 2015		651,271	$	3.93
SOSARs Exercisable, June 30, 2015		422,224	$	3.46

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 June 30, 2015 was $5.74. The value of the exercisable SOSARs that are in-the-money as of June 30, 2015 was $1,144,000, and exercise of those SOSARs on that date would have resulted in the issuance of 199,380 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 and amended by shareholders on May 7, 2015. 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 June 30, 2015 none of the RSUs were vested.

Restricted Stock Awards – On May 28, 2015, 6,000 restricted shares were awarded to certain non-executive members of the board of directors in accordance with the MBT 2008 Stock Incentive Plan that was approved by shareholders on May 1, 2008 and amended by shareholders on May 7, 2015. The restricted shares vest on December 31, 2015. The expense for the restricted stock is based on the grant date value of $5.79 and is recognized over the vesting period. The unrecognized cost related to the non-vested restricted stock awards was $30,000 as of June 30, 2015.

The total expense for equity based compensation was $94,000 in the second quarter of 2015 and $79,000 in the second quarter of 2014. The total expense for equity based compensation was $177,000 in the first six months of 2015 and $146,000 in the first six months of 2014.

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Note 3 - Stock Based Compensation (Details) - Stock Option Activity - Jun. 30, 2015 - Stock Compensation Plan [Member] - $ / shares	Total
Note 3 - Stock Based Compensation (Details) - Stock Option Activity [Line Items]
Options Outstanding, January 1, 2015	205,400
Options Outstanding, January 1, 2015	$ 19.08
Granted	0
Granted	$ 0
Exercised	0
Exercised	$ 0
Forfeited	5,500
Forfeited	$ 15.83
Expired	89,500
Expired	$ 23.40
Options Outstanding, June 30, 2015	110,400
Options Outstanding, June 30, 2015	$ 15.74
Options Exercisable, June 30, 2015	110,400
Options Exercisable, June 30, 2015	$ 15.74

XML

Note 5 - Allowance for Loan Losses (Details) - Troubled Debt Restructurings $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)
Financing Receivable, Modifications [Line Items]
Number of contracts	10	13	11	19
Pre-modification recorded principal balance	$ 999	$ 1,175	$ 1,331	$ 2,700
Post-modification recorded principal balance	$ 901	$ 787	$ 1,233	$ 2,243
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts				1
Pre-modification recorded principal balance				$ 314
Post-modification recorded principal balance				$ 314
Commercial Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts	1	4	1	4
Pre-modification recorded principal balance	$ 66	$ 295	$ 66	$ 295
Post-modification recorded principal balance	$ 64	$ 91	$ 64	$ 91
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts	2	2	3	4
Pre-modification recorded principal balance	$ 352	$ 301	$ 684	$ 1,247
Post-modification recorded principal balance	$ 304	$ 140	$ 636	$ 1,059
Residential Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts	7	7	7	10
Pre-modification recorded principal balance	$ 581	$ 579	$ 581	$ 844
Post-modification recorded principal balance	$ 533	$ 556	$ 533	$ 779

XML

Note 5 - Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

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

	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 June 30, 2015
Beginning Balance	$	255		$	1,380		$	5,678		$	810		$	3,073		$	1,995		$	13,191
Charge-offs		(75	)		(58	)		(120	)		-			(57	)		(97	)		(407	)
Recoveries		3			97			21			12			133			29			295
Provision		242			62			(142	)		(199	)		(79	)		116			-
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Allowance for loan losses: For the six months ended June 30, 2015
Beginning Balance	$	216		$	1,361		$	6,179		$	803		$	3,226		$	1,423		$	13,208
Charge-offs		(75	)		(164	)		(120	)		-			(253	)		(117	)		(729	)
Recoveries		10			171			182			621			356			60			1,400
Provision		274			113			(804	)		(801	)		(259	)		677			(800	)
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Allowance for loan losses as of June 30, 2015
Ending balance individually evaluated for impairment	$	80		$	473		$	913		$	478		$	630		$	208		$	2,782
Ending balance collectively evaluated for impairment		345			1,008			4,524			145			2,440			1,835			10,297
Ending balance	$	425		$	1,481		$	5,437		$	623		$	3,070		$	2,043		$	13,079
Loans as of June 30, 2015
Ending balance individually evaluated for impairment	$	892		$	1,276		$	16,827		$	1,819		$	12,117		$	514		$	33,445
Ending balance collectively evaluated for impairment		18,084			82,349			233,178			11,344			205,421			39,749			590,125
Ending balance	$	18,976		$	83,625		$	250,005		$	13,163		$	217,538		$	40,263		$	623,570

	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 June 30, 2014
Beginning Balance	$	205	$	1,780		$	7,460		$	1,430		$	4,478		$	805		$	16,158
Charge-offs		-		(440	)		(1,103	)		-			(79	)		(40	)		(1,662	)
Recoveries		5		56			211			20			73			40			405
Provision		4		(108	)		967			(303	)		(192	)		(268	)		100
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Allowance for loan losses: For the six months ended June 30, 2014
Beginning Balance	$	171	$	1,989		$	7,030		$	1,397		$	4,606		$	1,016		$	16,209
Charge-offs		-		(626	)		(1,211	)		(210	)		(211	)		(78	)		(2,336	)
Recoveries		5		89			276			254			238			66			928
Provision		38		(164	)		1,440			(294	)		(353	)		(467	)		200
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Allowance for loan losses as of June 30, 2014
Ending balance individually evaluated for impairment	$	36	$	511		$	2,234		$	900		$	1,713		$	243		$	5,637
Ending balance collectively evaluated for impairment		178		777			5,301			247			2,567			294			9,364
Ending balance	$	214	$	1,288		$	7,535		$	1,147		$	4,280		$	537		$	15,001
Loans as of June 30, 2014
Ending balance individually evaluated for impairment	$	947	$	1,870		$	27,281		$	3,221		$	14,438		$	556		$	48,313
Ending balance collectively evaluated for impairment		16,260		61,093			238,694			11,628			208,011			14,585			550,271
Ending balance	$	17,207	$	62,963		$	265,975		$	14,849		$	222,449		$	15,141		$	598,584

Financing Receivable Credit Quality Indicators [Table Text Block]

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	113	$	4,936	$	338	$	5,410	$	137,651	$	36,305	$	184,753
1		-		2,500		-		-		-		-		2,500
2		173		284		572		-		-		366		1,395
3		400		14,785		9,043		-		213		-		24,441
4		15,039		54,369		182,901		4,767		57,611		3,259		317,946
5		2,075		4,064		33,221		2,522		8,620		82		50,584
6		1,176		2,687		23,930		464		13,443		251		41,951
7		-		-		-		-		-		-		-
8		-		-		-		-		-		-		-
9		-		-		-		-		-		-		-
Total	$	18,976	$	83,625	$	250,005	$	13,163	$	217,538	$	40,263	$	623,570
Performing	$	17,865	$	82,258	$	233,612	$	11,299	$	204,953	$	39,636	$	589,623
Nonperforming		1,111		1,367		16,393		1,864		12,585		627		33,947
Total	$	18,976	$	83,625	$	250,005	$	13,163	$	217,538	$	40,263	$	623,570

	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]

June 30, 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	$	283	$	-	$	219	$	502	$	18,474	$	18,976	$	-
Commercial		77		27		91		195		83,430		83,625		-
Commercial Real Estate		3,003		1,166		914		5,083		244,922		250,005		-
Construction Real Estate		-		-		-		-		13,163		13,163		-
Residential Real Estate		1,621		355		1,005		2,981		214,557		217,538		-
Consumer and Other		33		-		7		40		40,223		40,263		-
Total	$	5,017	$	1,548	$	2,236	$	8,801	$	614,769	$	623,570	$	-

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]

	June 30, 2015		December 31, 2014
Agriculture and Agricultural Real Estate	$	218	$	80
Commercial		272		315
Commercial Real Estate		5,397		6,287
Construction Real Estate		76		409
Residential Real Estate		5,058		5,760
Consumer and Other		114		189
Total	$	11,135	$	13,040

Impaired Financing Receivables [Table Text Block]

June 30, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended		Average Recorded Investment for the Six Months Ended		Interest Income Recognized in the Six Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial		156		166		-		170		3		174		6
Commercial Real Estate		8,010		8,705		-		8,380		83		8,430		175
Construction Real Estate		17		199		-		211		1		247		3
Residential Real Estate		7,308		8,100		-		7,782		93		7,830		187
Consumer and Other		34		34		-		35		1		36		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		892		891		80		904		12		911		24
Commercial		1,120		1,167		473		1,199		15		1,227		28
Commercial Real Estate		8,817		10,390		913		10,843		105		10,900		207
Construction Real Estate		1,802		1,833		478		1,823		21		1,828		42
Residential Real Estate		4,809		5,214		630		4,985		45		4,988		97
Consumer and Other		480		479		208		483		5		487		11
Total:
Agriculture and Agricultural Real Estate	$	892	$	891	$	80	$	904	$	12	$	911	$	24
Commercial		1,276		1,333		473		1,369		18		1,401		34
Commercial Real Estate		16,827		19,095		913		19,223		188		19,330		382
Construction Real Estate		1,819		2,032		478		2,034		22		2,075		45
Residential Real Estate		12,117		13,314		630		12,767		138		12,818		284
Consumer and Other		514		513		208		518		6		523		12

	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 June 30, 2014		Interest Income Recognized in the Three Months Ended June 30, 2014		Average Recorded Investment for the Six Months Ended June 30, 2014		Interest Income Recognized in the Six Months Ended June 30, 2014
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	256	$	256	$	-	$	259	$	2	$	259	$	3
Commercial		363		412		-		873		17		921		26
Commercial Real Estate		8,084		8,882		-		13,717		230		14,807		388
Construction Real Estate		297		954		-		925		13		972		18
Residential Real Estate		6,424		7,200		-		7,350		84		7,426		168
Consumer and Other		3		3		-		55		1		57		2
With an allowance recorded:
Agriculture and Agricultural Real Estate		661		661		34		701		9		707		19
Commercial		1,051		1,062		554		1,162		16		1,176		31
Commercial Real Estate		10,929		12,758		1,502		14,712		163		14,749		323
Construction Real Estate		1,820		1,851		671		2,775		29		2,865		60
Residential Real Estate		5,251		5,658		672		7,801		87		7,648		158
Consumer and Other		531		529		222		503		5		507		11
Total:
Agriculture and Agricultural Real Estate	$	917	$	917	$	34	$	960	$	11	$	966	$	22
Commercial		1,414		1,474		554		2,035		33		2,097		57
Commercial Real Estate		19,013		21,640		1,502		28,429		393		29,556		711
Construction Real Estate		2,117		2,805		671		3,700		42		3,837		78
Residential Real Estate		11,675		12,858		672		15,151		171		15,074		326
Consumer and Other		534		532		222		558		6		564		13

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Three months ended						Six months ended
	June 30, 2015						June 30, 2015
	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		-	$	-	$	-		-	$	-	$	-
Commercial		1		66		64		1		66		64
Commercial Real Estate		2		352		304		3		684		636
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		7		581		533		7		581		533
Consumer and Other		-		-		-		-		-		-
Total		10	$	999	$	901		11	$	1,331	$	1,233

	Three months ended						Six months ended
	June 30, 2014						June 30, 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		4		295		91		4		295		91
Commercial Real Estate		2		301		140		4		1,247		1,059
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		7		579		556		10		844		779
Consumer and Other		-		-		-		-		-		-
Total		13	$	1,175	$	787		19	$	2,700	$	2,243