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 March 31, 2016

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 May 10, 2016, there were 22,915,136 shares of the Company’s Common Stock outstanding.

Part I Financial Information

Item 1. Financial Statements

MBT FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS

	March 31, 2016
Dollars in thousands	(Unaudited)			December 31, 2015
ASSETS
Cash and Cash Equivalents
Cash and due from banks
Non-interest bearing	$	11,845		$	14,996
Interest bearing		91,615			70,054
Total cash and cash equivalents		103,460			85,050
Securities - Held to Maturity		42,816			41,282
Securities - Available for Sale		470,798			496,859
Federal Home Loan Bank stock - at cost		4,148			4,148
Loans held for sale		646			1,477
Loans		617,967			617,308
Allowance for Loan Losses		(10,537	)		(10,896	)
Loans - Net		607,430			606,412
Accrued interest receivable and other assets		22,008			23,365
Other Real Estate Owned		1,587			2,383
Bank Owned Life Insurance		53,448			53,093
Premises and Equipment - Net		27,790			28,244
Total assets	$	1,334,131		$	1,342,313
LIABILITIES
Deposits:
Non-interest bearing	$	259,140		$	253,795
Interest-bearing		903,593			911,598
Total deposits		1,162,733			1,165,393
Repurchase agreements		15,000			15,000
Interest payable and other liabilities		13,974			14,579
Total liabilities		1,191,707			1,194,972
STOCKHOLDERS' EQUITY
Common stock (no par value; 50,000,000 shares authorized, 22,902,198 and 22,790,707 shares issued and outstanding)		23,561			23,492
Retained earnings		117,082			126,214
Unearned compensation		(10	)		(13	)
Accumulated other comprehensive income (loss)		1,791			(2,352	)
Total stockholders' equity		142,424			147,341
Total liabilities and stockholders' equity	$	1,334,131		$	1,342,313

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

-2-

MBT FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - UNAUDITED

	Three Months Ended March 31,
Dollars in thousands, except per share data	2016			2015
Interest Income
Interest and fees on loans	$	7,035		$	7,432
Interest on investment securities-
Tax-exempt		305			275
Taxable		2,526			2,428
Interest on balances due from banks		117			26
Total interest income		9,983			10,161
Interest Expense
Interest on deposits		517			645
Interest on borrowed funds		176			174
Total interest expense		693			819
Net Interest Income		9,290			9,342
Provision For (Recovery Of) Loan Losses		(300	)		(800	)
Net Interest Income After
Provision For Loan Losses		9,590			10,142
Other Income
Income from wealth management services		1,097			1,222
Service charges and other fees		1,008			894
Debit card income		674			564
Net gain on sales of securities available for sale		320			236
Net loss on sales of Other Real Estate Owned		(56	)		(263	)
Origination fees on mortgage loans sold		130			129
Bank owned life insurance income		355			271
Other		586			572
Total other income		4,114			3,625
Other Expenses
Salaries and employee benefits		5,618			5,874
Occupancy expense		701			820
Equipment expense		684			734
Marketing expense		259			246
Professional fees		652			576
EFT/ATM Expense		309			90
Other Real Estate Owned expenses		64			126
FDIC Deposit Insurance Assessment		169			414
Bonding and other insurance expense		122			230
Telephone expense		126			95
Other		779			614
Total other expenses		9,483			9,819
Income Before Income Taxes		4,221			3,948
Income Tax Expense		1,224			1,171
Net Income	$	2,997		$	2,777
Other Comprehensive Income - Net of Tax
Unrealized gains on securities		4,327			2,941
Reclassification adjustment for gains included in net income		(211	)		(156	)
Postretirement benefit liability		27			27
Total Other Comprehensive Income - Net of Tax		4,143			2,812
Comprehensive Income	$	7,140		$	5,589
Basic Earnings Per Common Share	$	0.13		$	0.12
Diluted Earnings Per Common Share	$	0.13		$	0.12
Common Stock Dividends Declared Per Share	$	0.53		$	-

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

Dollars in thousands	Common Stock			Retained Earnings			Unearned Compensation			Accumulated Other Comprehensive Income (Loss)			Total
Balance - January 1, 2016	$	23,492		$	126,214		$	(13	)	$	(2,352	)	$	147,341
Issuance of Common Stock
SOSARs exercised (95,856 shares)		73			-			-			-			73
Other stock issued (15,635 shares)		124			-			-			-			124
Equity Compensation		(128	)		-			3			-			(125	)
Dividends declared ($0.53 per share)		-			(12,129	)		-			.			(12,129	)
Net income		-			2,997			-			-			2,997
Other comprehensive income - net of tax		-			-			-			4,143			4,143
Balance - March 31, 2016	$	23,561		$	117,082		$	(10	)	$	1,791		$	142,424

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

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

-4-

MBT FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

	Three Months Ended March 31,
Dollars in thousands	2016			2015
Cash Flows from Operating Activities
Net Income	$	2,997		$	2,777
Adjustments to reconcile net income to net cash from operating activities
Recovery of loan losses		(300	)		(800	)
Depreciation		395			398
Decrease in net deferred taxes		1,224			1,155
Net amortization of investment premium and discount		290			282
Writedowns of Other Real Estate Owned		68			312
Net decrease in interest payable and other liabilities		(565	)		(737	)
Net (increase) decrease in interest receivable and other assets		(1,764	)		443
Equity based compensation expense		(52	)		58
Net gain on sale/settlement of securities		(320	)		(236	)
Increase in cash surrender value of life insurance		(355	)		(271	)
Net cash provided by operating activities	$	1,618		$	3,381
Cash Flows from Investing Activities
Proceeds from maturities and redemptions of investment securities held to maturity	$	1,793		$	686
Proceeds from maturities and redemptions of investment securities available for sale		57,157			47,011
Proceeds from sales of investment securities available for sale		-			8,430
Net (increase) decrease in loans		63			(7,807	)
Proceeds from sales of other real estate owned		770			562
Proceeds from sales of other assets		149			65
Purchase of investment securities held to maturity		(3,350	)		(4,439	)
Purchase of investment securities available for sale		(24,807	)		(71,629	)
Purchase of bank premises and equipment		(318	)		(352	)
Net cash provided by (used for) investing activities	$	31,457		$	(27,473	)
Cash Flows from Financing Activities
Net increase (decrease) in deposits	$	(2,660	)	$	23,501
Proceeds from issuance of common stock		124			26
Dividends paid		(12,129	)		-
Net cash provided by (used for) financing activities	$	(14,665	)	$	23,527
Net Increase (Decrease) in Cash and Cash Equivalents	$	18,410		$	(565	)
Cash and Cash Equivalents at Beginning of Period		85,050			52,122
Cash and Cash Equivalents at End of Period	$	103,460		$	51,557
Supplemental Cash Flow Information
Cash paid for interest	$	687		$	823
Cash paid for federal income taxes	$	-		$	15
Supplemental Schedule of Non Cash Investing Activities
Transfer of loans to other real estate owned	$	29		$	40
Transfer of loans to other assets	$	21		$	45

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

-5-

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 fourteen branches in Monroe County, Michigan, six branches in Wayne County, Michigan, and one loan and wealth management office in each Wayne County and 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.

-6-

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.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments in ASU 2016-01 supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. The amendments allow equity investments that do not have readily determinable fair values to be re-measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. The amendments improve financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material effect on the Company’s financial position or results of operations.

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, “Leases”, which will supersede the current lease requirements in ASC 840. The ASU requires lessees to recognize a right of use asset and related lease liability for all leases, with a limited exception for short-term leases.  Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the statement of operations.  Currently, leases are classified as either capital or operating, with only capital leases recognized on the balance sheet.  The reporting of lease related expenses in the statements of operations and cash flows will be generally consistent with the current guidance. The new lease footnote guidance will be effective for the Company’s year ending December 31, 2019 and will be applied using a modified retrospective transition method to the beginning of the earliest period presented.  The effect of applying the new lease guidance on the financial statements as not yet been determined, however the new lease standard is not expected to have a significant effect on the Company’s financial statements.

-7-

2. EARNINGS PER SHARE

The calculations of earnings per common share are as follows:

	For the three months ended March 31,
	2016		2015
Basic
Net income	$	2,997,000	$	2,777,000
Average common shares outstanding		22,854,556		22,721,845
Earnings per common share - basic	$	0.13	$	0.12
Diluted
Net income	$	2,997,000	$	2,777,000
Average common shares outstanding		22,854,556		22,721,845
Equity compensation		160,401		184,489
Average common shares outstanding - diluted		23,014,957		22,906,334
Earnings per common share - diluted	$	0.13	$	0.12

3. STOCK BASED COMPENSATION

Stock Only Stock Appreciation Rights (SOSARs) - On February 25, 2016, 106,000 Stock Only Stock Appreciation Rights (SOSARs) were awarded to certain 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. The SOSARs have a term of ten years and vest in three equal annual installments beginning on December 31, 2016. The fair value of $3.08 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 41.21%, a risk free interest rate of 1.47% and dividend yield of 1.50%. The fair value of the Company’s common stock was $8.26 on the grant date.

SOSARs granted under the plan are structured as fixed grants with the base 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, 2016		609,275		$	4.02
Granted		106,000			8.26
Exercised		(174,227	)		2.60
Forfeited		-			-
Expired		-			-
SOSARs Outstanding, March 31, 2016		541,048		$	5.31
SOSARs Exercisable, March 31, 2016		316,829		$	4.36

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 base price of the SOSAR. The market value of the Company’s common stock on March 31, 2016 was $8.05. The value of the exercisable SOSARs that are in-the-money as of March 31, 2016 was $1,200,000, and exercise of those SOSARs on that date would have resulted in the issuance of 149,118 shares of common stock. The plan allows participants to elect to withhold shares from the exercise of SOSARs to cover their tax liability. This may affect the number of shares issued and the value of the common stock account on the balance sheet and the statement of changes in equity.

-8-

Restricted Stock Unit Awards – On February 25, 2016, 35,000 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, 2017 if the defined performance targets are achieved. Earned RSUs vest on December 15, 2018 and as of March 31, 2016 none of the RSUs were vested.

Restricted Stock Awards – On February 25, 2016, 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, 2016. The expense for the restricted stock is based on the grant date value of $8.26 and is recognized over the vesting period. The unrecognized cost related to the non-vested restricted stock awards was $50,000 as of March 31, 2016.

The total expense for equity based compensation was $114,000 in the first quarter of 2016 and $83,000 in the first quarter of 2015.

4. LOANS

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

Loans consist of the following (000s omitted):

	March 31, 2016		December 31, 2015
Residential real estate loans	$	218,305	$	213,989
Commercial and Construction real estate loans		259,149		259,139
Agriculture and agricultural real estate loans		19,344		19,243
Commercial and industrial loans		82,881		84,438
Loans to individuals for household, family, and other personal expenditures		38,288		40,499
Total loans, gross	$	617,967	$	617,308
Less: Allowance for loan losses		10,537		10,896
Net Loans	$	607,430	$	606,412

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 (000s omitted):

	March 31, 2016			December 31, 2015
Nonaccrual loans	$	8,079		$	8,633
Loans 90 days past due and accruing		17			4
Restructured loans		17,828			18,910
Total nonperforming loans	$	25,924		$	27,547
Other real estate owned		1,587			2,383
Other assets		21			-
Total nonperforming assets	$	27,532		$	29,930
Nonperforming assets to total assets		2.06	%		2.23	%
Allowance for loan losses to nonperforming loans		40.65	%		39.55	%

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 months ended March 31, 2016 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial			Commercial Real Estate			Construction Real Estate		Residential Real Estate			Consumer and Other			Total
Allowance for loan losses: For the three months ended March 31, 2016
Beginning Balance	$	389	$	2,279		$	4,350		$	420	$	2,235		$	1,223		$	10,896
Charge-offs		-		-			(56	)		-		(91	)		(62	)		(209	)
Recoveries		-		33			23			13		58			23			150
Provision		98		(715	)		701			42		(282	)		(144	)		(300	)
Ending balance	$	487	$	1,597		$	5,018		$	475	$	1,920		$	1,040		$	10,537
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment	$	241	$	525		$	763		$	269	$	387		$	209		$	2,394
Ending balance collectively evaluated for impairment		246		1,072			4,255			206		1,533			831			8,143
Ending balance	$	487	$	1,597		$	5,018		$	475	$	1,920		$	1,040		$	10,537
Loans as of March 31, 2016
Ending balance individually evaluated for impairment	$	695	$	895		$	11,898		$	1,796	$	7,510		$	450		$	23,244
Ending balance collectively evaluated for impairment		18,649		81,986			230,917			14,538		210,795			37,838			594,723
Ending balance	$	19,344	$	82,881		$	242,815		$	16,334	$	218,305		$	38,288		$	617,967

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

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

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.

-11-

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 10 through 45 are considered “pass” credits and grades 50 through 65 are considered “watch” credits and are subject to greater scrutiny. Loans with grades 70 through 95 and considered “doubtful” or “loss” and have generally been charged off. A description of the general characteristics of each grade is as follows:

• Grades 10 and 15 – 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.

• Grades 20 and 25 – 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.

• Grades 30 and 35 – 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.

• Grades 40 and 45 – 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.

• Grades 50 and 55 – 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.

• Grades 60 and 65 – 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.

-12-

• Grades 70 and 75 – 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 80-95 - Loss – Loans are considered uncollectible and of such little value that continuing to carry them on the Bank’s financial statements is not feasible.

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

The portfolio segments in each credit risk grade as of March 31, 2016 are as follows (000s omitted):

Credit Quality Indicators as of March 31, 2016

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	$	137	$	1,368	$	256	$	6,734	$	134,608	$	30,495	$	173,598
10		-		5,656		-		-		59		-		5,715
20		306		340		512		-		-		365		1,523
30		614		13,020		8,175		-		367		-		22,176
40		13,076		55,403		184,484		5,579		68,456		7,247		334,245
45		2,106		2,139		7,402		1,454		3,852		-		16,953
50		1,326		3,491		22,343		2,206		3,137		16		32,519
55		179		240		3,961		-		90		-		4,470
60		1,600		1,224		15,682		361		7,736		165		26,768
70		-		-		-		-		-		-		-
80		-		-		-		-		-		-		-
90		-		-		-		-		-		-		-
Total	$	19,344	$	82,881	$	242,815	$	16,334	$	218,305	$	38,288	$	617,967
Performing	$	18,650	$	81,844	$	229,496	$	14,447	$	209,924	$	37,682	$	592,043
Nonperforming		694		1,037		13,319		1,887		8,381		606		25,924
Total	$	19,344	$	82,881	$	242,815	$	16,334	$	218,305	$	38,288	$	617,967

-13-

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

Credit Quality Indicators as of December 31, 2015

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	102	$	2,173	$	310	$	6,789	$	136,049	$	32,461	$	177,884
10		-		2,717		-		-		60		-		2,777
20		306		359		533		-		-		366		1,564
30		432		17,024		7,620		-		373		-		25,449
40		14,413		55,204		184,504		6,548		62,347		7,453		330,469
45		840		1,094		6,506		74		2,957		-		11,471
50		1,340		3,428		23,678		2,163		3,948		18		34,575
55		929		-		3,700		-		-		-		4,629
60		881		2,439		16,369		345		8,255		201		28,490
70		-		-		-		-		-		-		-
80		-		-		-		-		-		-		-
90		-		-		-		-		-		-		-
Total	$	19,243	$	84,438	$	243,220	$	15,919	$	213,989	$	40,499	$	617,308
Performing	$	18,362	$	83,372	$	228,624	$	14,104	$	205,430	$	39,869	$	589,761
Nonperforming		881		1,066		14,596		1,815		8,559		630		27,547
Total	$	19,243	$	84,438	$	243,220	$	15,919	$	213,989	$	40,499	$	617,308

Loans are considered past due when contractually required payment of interest or principal has not been received. The amount classified as past due is the entire principal balance outstanding of the loan, not just the amount of payments that are past due. The following is a summary of past due loans as of March 31, 2016 and December 31, 2015 (000s omitted):

March 31, 2016	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	$	134	$	-	$	141	$	275	$	19,069	$	19,344	$	-
Commercial		44		58		60		162		82,719		82,881		17
Commercial Real Estate		1,320		108		2,129		3,557		239,258		242,815		-
Construction Real Estate		-		-		-		-		16,334		16,334		-
Residential Real Estate		1,487		327		465		2,279		216,026		218,305		-
Consumer and Other		14		27		41		82		38,206		38,288		-
Total	$	2,999	$	520	$	2,836	$	6,355	$	611,612	$	617,967	$	17

December 31, 2015	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90 Days Past Due and Accruing
Agriculture and Agricultural Real Estate	$	136	$	213	$	44	$	393	$	18,850	$	19,243	$	-
Commercial		10		75		76		161		84,277		84,438		4
Commercial Real Estate		2,194		230		2,123		4,547		238,673		243,220		-
Construction Real Estate		-		-		-		-		15,919		15,919		-
Residential Real Estate		2,252		227		464		2,943		211,046		213,989		-
Consumer and Other		130		81		52		263		40,236		40,499		-
Total	$	4,722	$	826	$	2,759	$	8,307	$	609,001	$	617,308	$	4

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

The following is a summary of non-accrual loans as of March 31, 2016 and December 31, 2015 (000s omitted):

	March 31, 2016		December 31, 2015
Agriculture and Agricultural Real Estate	$	444	$	565
Commercial		167		148
Commercial Real Estate		4,611		4,823
Construction Real Estate		130		46
Residential Real Estate		2,572		2,915
Consumer and Other		155		136
Total	$	8,079	$	8,633

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

The following is a summary of impaired loans as of March 31, 2016 and 2015 (000s omitted):

March 31, 2016	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	-	$	-
Commercial		156		206		-		163		3
Commercial Real Estate		6,679		7,206		-		7,017		66
Construction Real Estate		195		227		-		214		3
Residential Real Estate		4,238		4,484		-		4,447		55
Consumer and Other		16		16		-		17		-
With an allowance recorded:
Agriculture and Agricultural Real Estate		695		702		241		825		4
Commercial		739		758		525		789		8
Commercial Real Estate		5,219		5,496		763		5,410		53
Construction Real Estate		1,601		1,600		269		1,605		18
Residential Real Estate		3,272		3,400		387		3,392		34
Consumer and Other		434		434		209		438		5
Total:
Agriculture and Agricultural Real Estate	$	695	$	702	$	241	$	825	$	4
Commercial		895		964		525		952		11
Commercial Real Estate		11,898		12,702		763		12,427		119
Construction Real Estate		1,796		1,827		269		1,819		21
Residential Real Estate		7,510		7,884		387		7,839		89
Consumer and Other		450		450		209		455		5

-15-

	Recorded Investment as of December 31, 2015		Unpaid Principal Balance as of December 31, 2015		Related Allowance as of December 31, 2015		Average Recorded Investment for the Three Months Ended March 31, 2015		Interest Income Recognized in the Three Months Ended March 31, 2015
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	255	$	3
Commercial		63		113		-		413		5
Commercial Real Estate		7,701		8,107		-		8,365		76
Construction Real Estate		200		233		-		339		3
Residential Real Estate		4,137		4,359		-		7,035		85
Consumer and Other		26		26		-		37		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		882		885		240		662		9
Commercial		895		916		672		936		11
Commercial Real Estate		5,697		6,183		634		11,903		124
Construction Real Estate		1,609		1,609		277		1,833		21
Residential Real Estate		3,206		3,310		506		5,055		57
Consumer and Other		470		468		223		491		5
Total:
Agriculture and Agricultural Real Estate	$	882	$	885	$	240	$	917	$	12
Commercial		958		1,029		672		1,349		16
Commercial Real Estate		13,398		14,290		634		20,268		200
Construction Real Estate		1,809		1,842		277		2,172		24
Residential Real Estate		7,343		7,669		506		12,090		142
Consumer and Other		496		494		223		528		6

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

Loans that have been classified as TDRs during the three month period ended March 31, 2016 and March 31, 2015 are as follows (000s omitted from dollar amounts):

	Three months ended March 31, 2016						Three months ended March 31, 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		-		-		-		-		-		-
Commercial Real Estate		-		-		-		1		332		332
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		1		200		199		-		-		-
Consumer and Other		-		-		-		-		-		-
Total		1	$	200	$	199		1	$	332	$	332

The Bank considers TDRs that become past due under the modified terms as defaulted. There were no loans that became TDRs during the three month periods ended March 31, 2016 and March 31, 2015 that subsequently defaulted during the three month periods ended March 31, 2016 and March 31, 2015, respectively.

-16-

The Company has allocated $2,250,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at March 31, 2016. In addition, there were no commitments to lend additional amounts to borrowers that are classified as troubled debt restructurings as of March 31, 2016 and March 31, 2015.

6. INVESTMENT SECURITIES

The following is a summary of the Bank’s investment securities portfolio as of March 31, 2016 and December 31, 2015 (000s omitted):

	Held to Maturity March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of States and Political Subdivisions	$	42,316	$	1,501	$	(105	)	$	43,712
Corporate Debt Securities		500		1		-			501
	$	42,816	$	1,502	$	(105	)	$	44,213

	Available for Sale March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of U.S. Government Agencies	$	343,147	$	3,696	$	(141	)	$	346,702
Mortgage Backed Securities issued by U.S. Government Agencies		99,549		586		(568	)		99,567
Obligations of States and Political Subdivisions		17,160		293		(19	)		17,434
Corporate Debt Securities		5,000		-		(62	)		4,938
Equity Securities		2,044		113		-			2,157
	$	466,900	$	4,688	$	(790	)	$	470,798

	Held to Maturity December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of States and Political Subdivisions	$	40,782	$	1,333	$	(178	)	$	41,937
Corporate Debt Securities		500		-		-			500
	$	41,282	$	1,333	$	(178	)	$	42,437

-17-

	Available for Sale December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of U.S. Government Agencies	$	370,469	$	1,647	$	(3,055	)	$	369,061
Mortgage Backed Securities issued by U.S. Government Agencies		104,472		107		(1,327	)		103,252
Obligations of States and Political Subdivisions		17,212		305		(48	)		17,469
Corporate Debt Securities		5,000		-		(50	)		4,950
Equity Securities		2,044		83		-			2,127
	$	499,197	$	2,142	$	(4,480	)	$	496,859

The amortized cost and estimated market values of securities by contractual maturity as of March 31, 2016 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
	Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
Contractual maturity in
1 year or less	$	5,389	$	5,399	$	2,319	$	2,319
After 1 year through five years		26,744		27,242		216,430		218,412
After 5 years through 10 years		8,672		9,380		143,183		144,847
After 10 years		2,011		2,192		3,375		3,496
Total		42,816		44,213		365,307		369,074
Mortgage Backed Securities		-		-		99,549		99,567
Securities with no stated maturity		-		-		2,044		2,157
Total	$	42,816	$	44,213	$	466,900	$	470,798

The investment securities portfolio is evaluated for impairment throughout the year. Impairment is recorded against individual securities, unless the decrease in fair value is attributable to interest rates or the lack of an active market, and Management determines that the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before a recovery of their amortized costs bases, which may be maturity. The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses (in thousands), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2016 and December 31, 2015.

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March 31, 2016
	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	$	32,965	$	132	$	6,748	$	9	$	39,713	$	141
Mortgage Backed Securities issued by U.S. Government Agencies		26,519		196		33,047		372		59,566		568
Obligations of States and Political Subdivisions		6,066		101		4,304		23		10,370		124
Corporate Debt Securities		4,938		62		-		-		4,938		62
	$	70,488	$	491	$	44,099	$	404	$	114,587	$	895

December 31, 2015
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	170,178	$	2,367	$	53,497	$	688	$	223,675	$	3,055
Mortgage Backed Securities issued by U.S. Government Agencies		57,949		633		31,118		694		89,067		1,327
Obligations of States and Political Subdivisions		10,830		165		5,324		61		16,154		226
Corporate Debt Securities		4,950		50		-		-		4,950		50
	$	243,907	$	3,215	$	89,939	$	1,443	$	333,846	$	4,658

The amount of investment securities issued by government agencies, states, and political subdivisions with unrealized losses and the amount of unrealized losses on those investment securities are primarily the result of market interest rates and not the result of the credit quality of the issuers of the securities. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other than temporarily impaired at March 31, 2016. As of March 31, 2016 and December 31, 2015, there were 78 and 146 securities in an unrealized loss position, respectively.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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

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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 certain municipal debt obligations are classified within Level 3 of the fair value hierarchy. Fair values are initially valued based on transaction price and are adjusted to reflect exit values.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2016 and December 31, 2015, and the valuation techniques used by the Company to determine those fair values.

March 31, 2016	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	103,460	$	103,460	$	-	$	-	$	103,460
Securities - Held to Maturity
Obligations of States and Political Subdivisions		42,316		-		3,798		39,914		43,712
Corporate Debt Securities		500		-		501		-		501
Securities - Available for Sale
Obligations of U.S. Government Agencies		346,702		-		346,702		-		346,702
MBS issued by U.S. Government Agencies		99,567		-		99,567		-		99,567
Obligations of States and Political Subdivisions		17,434		-		17,434		-		17,434
Corporate Debt Securities		4,938		-		4,938		-		4,938
Other Securities		2,157		2,157		-		-		2,157
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		646		-		-		660		660
Loans, net		607,430		-		-		614,498		614,498
Accrued Interest Receivable		4,725		-		-		4,725		4,725
Financial Liabilities:
Noninterest Bearing Deposits		259,140		259,140		-		-		259,140
Interest Bearings Deposits		903,593		-		905,332		-		905,332
Repurchase Agreements		15,000		-		15,114		-		15,114
Accrued Interest Payable		115		-		-		115		115

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December 31, 2015	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	85,050	$	85,050	$	-	$	-	$	85,050
Securities - Held to Maturity
Obligations of States and Political Subdivisions		40,782		-		3,805		38,132		41,937
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		369,061		-		369,061		-		369,061
MBS issued by U.S. Government Agencies		103,252		-		103,252		-		103,252
Obligations of States and Political Subdivisions		17,469		-		17,469		-		17,469
Corporate Debt Securities		4,950		-		4,950		-		4,950
Other Securities		2,127		2,127		-		-		2,127
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		1,477		-		-		1,508		1,508
Loans, net		606,412		-		-		613,397		613,397
Accrued Interest Receivable		4,170		-		-		4,170		4,170
Financial Liabilities:
Noninterest Bearing Deposits		253,795		253,795		-		-		253,795
Interest Bearings Deposits		911,598		-		913,410		-		913,410
Repurchase Agreements		15,000		-		15,253		-		15,253
Accrued Interest Payable		108		-		-		108		108

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 Company did not have any Level 3 assets measured at fair value on a recurring basis as of March 31, 2016 or December 31, 2015. The Company did not have any sales or purchases of Level 3 available for sale securities during the period.

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 (000s omitted):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	-	$	-	$	20,850
Other Real Estate Owned	$	-	$	-	$	1,587

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	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	-	$	-	$	22,334
Other Real Estate Owned	$	-	$	-	$	2,383

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.

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
	March 31, 2016		December 31, 2015
Commitments to extend credit:
Unused portion of commercial lines of credit	$	72,880	$	70,488
Unused portion of credit card lines of credit		4,412		4,396
Unused portion of home equity lines of credit		23,762		23,164
Standby letters of credit and financial guarantees written		1,555		1,555
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 14 branch offices in Monroe County, Michigan and 6 branch offices in Wayne County, Michigan, and 1 loan and wealth management office in each Wayne County and Lenawee County, Michigan. The Bank closed 3 branch offices in Monroe County and 1 branch office in Wayne County in the first quarter of 2016. The Wayne County location where the retail branch was closed continues to serve as a loan and wealth management office.

The Bank’s primary source of income is Net Interest Income (interest income on loans and investments less interest expense on deposits and borrowings), and its primary expense is the compensation of its employees. 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 $2,997,000 for the quarter ended March 31, 2016 was an increase of $220,000 or 7.9% compared to the first quarter of 2015. The increase was the result of improvement in non-interest income and non-interest expense. These improvements exceeded the decreases in net interest income and the recovery of loan losses, resulting in increases in income before taxes and federal income tax expense. This quarter marked the nineteenth 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 slowly, and the recovery in southeast Michigan is relatively strong. Local unemployment rates continued to improve, with areas in our market better than the state and national averages. 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 nonperforming and watch list investment securities, improved significantly during 2014 and 2015, and this trend of improvement is continuing into 2016. Classified assets went down $2.5 million, or 8.1% during the first quarter of 2016, and decreased $23.27 million or 45.0% compared to a year ago. The net charge offs for the quarter were only $59,000, or 0.04% of loans, annualized. This is a very good result, however, it is an increase compared to the first quarter of 2015 when we recorded a net recovery of $783,000 mainly due to a large recovery on one credit relationship. Due to improving loan quality metrics and lower charge offs, a reduction in our Allowance for Loan and Lease Losses (ALLL) was appropriate, and we recorded a $300,000 credit to the provision expense, reflecting an increase of $500,000 when compared to the negative provision of $800,000 recorded in the first quarter of 2015. The ALLL as a percent of loans decreased from 1.76% at the end of 2015 to 1.70%. We assess the adequacy of our ALLL each quarter, and adjust it as necessary by debiting or crediting the provision expense. The allowance includes $2.4 million of specific allocations on $23.2 million of loans evaluated for impairment and $8.1 million of general allocations on the remainder of the portfolio. The general allocation is based on the historical charge off experience of the previous 16 quarters. For the last several quarters, we have been replacing high charge off periods with low charge off periods in the calculation of our historical charge off rate, necessitating the negative provisions. If we continue to experience low charge off amounts like the $209,000 recorded this quarter, further negative provisions are likely to occur. However, significant growth in loans outstanding or deterioration of asset quality could require a provision expense.

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Net Interest Income decreased $52,000, or 0.6% compared to the first quarter of 2015 even though the average earnings assets increased $50.9 million and the quarter was a day longer as the net interest margin decreased from 3.27% to 3.09%. 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. Non-interest income for the quarter increased $489,000, due to larger securities gains from bonds that were owned at discounts being called at par in the first quarter of 2016 than in the first quarter of 2015. Non-interest expenses decreased $336,000, as salaries, benefits, occupancy expenses, FDIC deposit insurance assessments, and insurance expenses decreased. These decreases were partially offset by increases in professional fees, ATM expenses, and other expenses that were related to some product changes and enhancements. We completed a branch efficiency initiative that began in the fourth quarter of 2015, which contributed to the decreases in salaries, benefits, and occupancy expenses.

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.

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Financial Condition

The regional economic recovery continued this quarter, with local unemployment and property values steadily improving since 2014. 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 8.0% during the quarter, from $29.9 million to $27.5 million, and total classified assets decreased 8.1% from $30.9 million to $28.4 million. Loan delinquencies decreased from 1.3% to 1.0% during the quarter. Over the last twelve months, NPAs decreased $12.5 million, or 31.2%, with nonperforming loans decreasing 26.2% from $35.1 million to $25.9 million, and Other Real Estate Owned (“OREO”) decreasing 67.1% from $4.9 million to $1.6 million. Total classified assets, which include internally classified watch list loans, other real estate, and watch list investment securities, decreased $23.2 million, or 45.0%. The Company’s Allowance for Loan and Lease Losses (“ALLL”) decreased $2.7 million over the last four quarters 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 1.70% of loans, down from 2.13% at March 31, 2015. The ALLL is 40.65% of nonperforming loans (“NPLs”), compared to 39.55% at year end and 37.56% at March 31, 2015. In light of current economic conditions, we believe that this level of ALLL adequately estimates the potential losses in the loan portfolio.

Since December 31, 2015, total loans held for investment increased minimally as new loan activity was largely offset by payments received and other reductions in the period. Our pipeline of loans in process grew this quarter, and we expect new loan production to exceed run off, resulting in an increase in loans outstanding, in the next few quarters.

Since December 31, 2015, deposits decreased $2.7 million, other liabilities decreased $0.6 million and capital decreased $4.9 million, and as a result our total assets decreased $8.2 million, or 0.6%. The Company expects minimal deposit funding growth in the second quarter of 2016, as local municipalities that bank with us begin to distribute their property tax collections. 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 decrease in total capital during the first quarter of 2016 was due to the payment of a special $0.50 per share dividend and the regular quarterly dividend of $0.03 per share. The total dividend payments of $12.1 million were offset by the profit of $3.0 million and the $4.1 million increase in the accumulated other comprehensive income (AOCI). AOCI increased mainly due to an increase in the value of our securities available for sale. Capital decreased at a higher rate than assets, causing the capital to assets ratio to decrease from 10.98% at December 31, 2015 to 10.68% at March 31, 2016.

Results of Operations – First Quarter 2016 vs. First Quarter 2015

Net Interest Income - A comparison of the income statements for the three months ended March 31, 2016 and 2015 shows a decrease of $52,000, or 0.6%, in Net Interest Income. Interest income on loans decreased $397,000 or 5.3% even though the average loans outstanding increased $4.0 million as the average yield on loans decreased from 4.89% to 4.56%. The loan yield decreased this quarter due to the continued low interest rates and a recovery of charged off interest in the first quarter of 2015, while average loans outstanding increased due to improving economic conditions and purchases of loan participations. The interest income on investments, fed funds sold, and interest bearing balances due from banks increased $219,000 even though the yield decreased from 1.97% to 1.95% because the average amount of investments, fed funds sold, and interest bearing balances due from banks increased $46.9 million and the quarter was a day longer this year. 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 $128,000 or 19.8% even though the average deposits increased $39.7 million because the average cost of deposits decreased from 0.23% to 0.18%. 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 interest expense on borrowed funds increased $2,000 as the average amount of borrowed funds was unchanged at $15.0 million and the cost of borrowed funds was unchanged at 4.65%, but the quarter was one day longer.

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Provision for Loan Losses - The Provision for Loan Losses increased $500,000 compared to the first quarter of 2015 as a $300,000 credit to provision expense was recorded in the first quarter of 2016, compared to the $800,000 credit to provision expense recorded in the first quarter of 2015. We charged off $209,000 of principal while recovering $150,000 of previously charged off loans in the first quarter of 2016, for a net charge off total of $59,000, or 0.04% of loans, annualized. 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 charge off percentages, the amount of ALLL required at the end of the first quarter of 2016 decreased from $10,896,000 at December 31, 2015 to $10,537,000. Along with the $59,000 net charge off, this required us to record a credit to the provision expense. The allowance includes $2.4 million of specific allocations and $8.1 million of general allocations. The general allocation is based on the historical charge off experience of the previous 16 quarters. For the last several quarters, we have been replacing high charge off periods with low charge off periods in the calculation of our historical charge off rate, necessitating the negative provisions. If we continue to experience low charge offs, further negative provisions are likely to occur. However, significant growth in loans outstanding or deterioration of asset quality could require a provision expense.

Other Income – Non interest income increased $489,000, or 13.5% compared to the first quarter of 2015. Excluding gains and losses on securities and other real estate owned activity, non-interest income increased $198,000, or 5.4%. Wealth management income decreased $125,000 or 10.2% as the market value of assets managed decreased. Service charges and other fees on deposit accounts increased $114,000, or 12.8% as we added new features and benefits to our primary checking account product and instituted a monthly service fee. Debit card income increased $110,000, or 19.5% due to increased activity. Gains on securities transactions increased $84,000 due to large gains in the first quarter of 2016 that were the result of the bonds purchased at discounts being called at par. Due to the low interest rates, issuers continue to call and refinance their debt, and we expect to record a larger gain in the second quarter of 2016. Losses from other real estate activity improved $207,000 due to smaller losses and write downs of the carrying values properties in the first quarter of 2016 compared to the first quarter of 2015.

Other Expenses – Total non-interest expenses decreased $336,000, or 3.4% compared to the first quarter of 2015. Salaries and Employee Benefits decreased $256,000, or 4.4%, as the number of full time equivalent employees decreased from 355 to 288 due to various efforts to reduce staffing in 2015, culminating in an efficiency initiative in the fourth quarter that resulted in the closing of 4 branch offices and the reduction of 43 staff positions. Occupancy expense decreased $119,000, or 14.5% due to lower utilities and maintenance costs, resulting from the efficiency initiative and the mild winter weather. Professional fees increased $76,000 or 13.2% due to increased consulting and legal expenses. Electronic Funds Transfer and Automated Teller Machine related expenses increased $219,000 due to increased debit card use, the reissuance of all of our debit cards with EMV chip cards in the first quarter of 2016, and an incentive payment received in the first quarter of 2015. FDIC insurance assessments decreased $245,000 and other insurance decreased $108,000 as the termination of our informal agreement with the FDIC and Michigan Department of Insurance and Financial Services in 2015 resulted in decreases in the rates. Other expense increased $165,000, primarily due to an accrual of $150,000 for estimated costs related to an incorrect filing of IRS 1099 forms.

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As a result of the above activity, the Profit Before Income Taxes in the first quarter of 2016 was $4,221,000, an increase of $273,000 compared to the pre-tax profit of $3,948,000 in the first quarter of 2015. The Company recorded a federal income tax expense of $1,224,000 in the first quarter of 2016, reflecting an effective tax rate of 29.0%, compared to the tax expense of $1,171,000 in the first quarter of 2015, which reflected an effective rate of 29.7%. The decrease in the effective tax rate was the result of the increase in the percentage of operating income that was from municipal investments and bank owned life insurance. The Net profit for the first quarter of 2016 was $2,997,000, an increase of 7.9% compared to the net profit of $2,777,000 in the first quarter of 2015.

Cash Flows

Cash flows provided by operating activities decreased $1,763,000 compared to the first quarter of 2015 even though the net income was $220,000 higher due to the increase in interest receivable and other assets. Cash flows from investing activities increased by $58.9 million from $27.5 million used in the first quarter of 2015 to $31.5 million provided in the first quarter of 2016 as more cash was provided by investment security maturities and redemptions and less was invested in securities in the first quarter of 2016 than in the first quarter of 2015. In addition, $7.8 million less cash was used for loan growth as the loan portfolio grew in the first quarter of 2015 due to participation activity. The amount of cash used for financing activities in the first quarter of 2016 was $14.7 million, mainly due to the $12.1 million paid in dividends on the common stock. In the first quarter of 2015, $23.5 million of cash was provided by deposit growth. In the first quarter of 2015, the cash provided by operations and investing activities exceeded the use of cash for financing activities, resulting in an increase of $18.4 million in cash and cash equivalents during the quarter. In the first quarter of 2015, the use of cash for investing activities was slightly more than the cash provided by operations and financing activities, and the amount of cash and cash equivalents decreased by $565,000 during the period. We expect cash flows from redemptions of callable investment securities to remain high in the second quarter of 2016, but we plan to use that cash and the cash provided by operations to fund loan growth and investment security purchases, resulting in a reduction in our cash and cash equivalents by the end of the year.

Liquidity and Capital

The Company believes it has sufficient liquidity to fund its lending activity and allow for fluctuations in deposit levels. Internal sources of liquidity include the maturities of loans and securities in the ordinary course of business as well as our available for sale securities portfolio. External sources of liquidity include a line of credit with the Federal Home Loan Bank of Indianapolis, the Federal funds line that has been established with our correspondent bank, and Repurchase Agreements with money center banks that allow us to pledge securities as collateral for borrowings. As of March 31, 2016, 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 quarter of 2016 the Company was in compliance with its Funds Management Policy regarding liquidity and capital.

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Total stockholders’ equity of the Company was $142.4 million at March 31, 2016 and $147.3 million at December 31, 2015. Common stock increased $0.1 million due to the issuance of stock under compensation programs and for our Employee Stock Purchase Plan, retained earnings decreased $9.1 million as the year to date profit of $3.0 million was exceeded by the payment of $12.1 million in common stock dividends, and the Accumulated Other Comprehensive Income (AOCI) increased $4.1 million due to an increase in the value of our securities that are classified as Available For Sale. Total equity decreased $4.9 million while total assets decreased $8.2 million, so the ratio of equity to assets decreased from 10.98% at December 31, 2015 to 10.68% at March 31, 2016.

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 began to be phased in the first quarter of 2015 increased the well capitalized requirement for the Tier 1 Capital as a percent of Risk Weighted Assets from 6% to 8%. Basel III also implemented the new Common Equity Tier 1 Capital to Risk Weighted Assets ratio, with a minimum of 6.5% required to be considered well capitalized.

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

	Actual					Minimum to Qualify as Well Capitalized
	Amount		Ratio			Amount		Ratio
As of March 31, 2016:
Total Capital to Risk-Weighted Assets
Consolidated	$	145,379		18.74	%	$	77,557		10.0	%
Monroe Bank & Trust		143,643		18.54	%		77,477		10.0	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		135,594		17.48	%		62,045		8.0	%
Monroe Bank & Trust		133,870		17.28	%		61,982		8.0	%
Common Equity Tier 1 Capital to
Risk-Weighted Assets
Consolidated		135,594		17.48	%		50,412		6.5	%
Monroe Bank & Trust		133,870		17.28	%		50,360		6.5	%
Tier 1 Capital to Average Assets
Consolidated		135,594		10.17	%		66,692		5.0	%
Monroe Bank & Trust		133,870		10.04	%		66,656		5.0	%

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	Actual					Minimum to Qualify as Well Capitalized
	Amount		Ratio			Amount		Ratio
As of December 31, 2015:
Total Capital to Risk-Weighted Assets
Consolidated	$	154,718		19.79	%	$	78,163		10.0	%
Monroe Bank & Trust		153,026		19.59	%		78,107		10.0	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		144,857		18.53	%		62,531		8.0	%
Monroe Bank & Trust		143,175		18.33	%		62,485		8.0	%
Common Equity Tier 1 Capital to
Risk-Weighted Assets
Consolidated		144,857		18.53	%		50,806		6.5	%
Monroe Bank & Trust		143,175		18.33	%		50,769		6.5	%
Tier 1 Capital to Average Assets
Consolidated		144,857		11.04	%		65,625		5.0	%
Monroe Bank & Trust		143,175		10.91	%		65,602		5.0	%

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 2015.

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.

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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 quarter of 2016, 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, 2015.

Item 4. Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of March 31, 2016, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2016, in alerting them in a timely manner to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings.

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended March 31, 2016, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II Other Information

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed by the Company in its Report on Form 10-K for the fiscal year ended December 31, 2015.

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.

-31-

Item 6. Exhibits

3.1	Articles of Incorporation of MBT Financial Corp. Previously filed as Exhibit 3.1 to MBT Financial Corp.’s Form 10-Q for its quarter ended June 30, 2011.
3.2	Amended and Restated Bylaws of MBT Financial Corp. Previously filed as Exhibit 3.2 to MBT Financial Corp.’s Form 10-Q for its quarter ended March 31, 2008.
31.1	Certification by Chief Executive Officer required by Securities and Exchange Commission Rule 13a-14.
31.2	Certification by Chief Financial Officer required by Securities and Exchange Commission Rule 13a-14.
32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

-32-

Signatures

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

	MBT Financial Corp.
	(Registrant)
May 10, 2016	By:	/s/ H. Douglas Chaffin
Date	H. Douglas Chaffin
	President &
	Chief Executive Officer
May 10, 2016	By:	/s/ John L. Skibski
Date	John L. Skibski
	Executive Vice President and
	Chief Financial Officer

-33-

Exhibit Index

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

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, H. Douglas Chaffin, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 10, 2016	/s/ H. Douglas Chaffin
	H. Douglas Chaffin
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, John L. Skibski, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of MBT Financial Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

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

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

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

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

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

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

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

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

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

Date: May 10, 2016	/s/ John L. Skibski
	John L. Skibski
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MBT Financial Corp. (the "Company") on Form 10-Q for the period ending March 31, 2016 as filed with the Securities and Exchange Commission (the "Report"), I, H. Douglas Chaffin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

/s/ H. Douglas Chaffin          

H. Douglas Chaffin

Chief Executive Officer

May 10, 2016

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

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MBT Financial Corp. (the "Company") on Form 10-Q for the period ending March 31, 2016 as filed with the Securities and Exchange Commission (the "Report"), I, John L. Skibski, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

/s/ John L. Skibski          

John L. Skibski

Chief Financial Officer

May 10, 2016

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

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 10, 2016
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		22,915,136
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	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Cash and due from banks
Non-interest bearing	$ 11,845	$ 14,996
Interest bearing	91,615	70,054
Total cash and cash equivalents	103,460	85,050
Securities - Held to Maturity	42,816	41,282
Securities - Available for Sale	470,798	496,859
Federal Home Loan Bank stock - at cost	4,148	4,148
Loans held for sale	646	1,477
Loans	617,967	617,308
Allowance for Loan Losses	(10,537)	(10,896)
Loans - Net	607,430	606,412
Accrued interest receivable and other assets	22,008	23,365
Other Real Estate Owned	1,587	2,383
Bank Owned Life Insurance	53,448	53,093
Premises and Equipment - Net	27,790	28,244
Total assets	1,334,131	1,342,313
Deposits:
Non-interest bearing	259,140	253,795
Interest-bearing	903,593	911,598
Total deposits	1,162,733	1,165,393
Repurchase agreements	15,000	15,000
Interest payable and other liabilities	13,974	14,579
Total liabilities	1,191,707	1,194,972
STOCKHOLDERS' EQUITY
Common stock (no par value; 50,000,000 shares authorized, 22,902,198 and 22,790,707 shares issued and outstanding)	23,561	23,492
Retained earnings	117,082	126,214
Unearned compensation	(10)	(13)
Accumulated other comprehensive income (loss)	1,791	(2,352)
Total stockholders' equity	142,424	147,341
Total liabilities and stockholders' equity	$ 1,334,131	$ 1,342,313

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	22,902,198	22,790,707
Common stock, shares outstanding	22,902,198	22,790,707
Common stock, par value (in Dollars per share)	$ 0	$ 0

XML

Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest Income
Interest and fees on loans	$ 7,035,000	$ 7,432,000
Interest on investment securities-
Tax-exempt	305,000	275,000
Taxable	2,526,000	2,428,000
Interest on balances due from banks	117,000	26,000
Total interest income	9,983,000	10,161,000
Interest Expense
Interest on deposits	517,000	645,000
Interest on borrowed funds	176,000	174,000
Total interest expense	693,000	819,000
Net Interest Income	9,290,000	9,342,000
Provision For (Recovery Of) Loan Losses	(300,000)	(800,000)
Net Interest Income After
Provision For Loan Losses	9,590,000	10,142,000
Other Income
Income from wealth management services	1,097,000	1,222,000
Service charges and other fees	1,008,000	894,000
Debit card income	674,000	564,000
Net gain on sales of securities available for sale	320,000	236,000
Net loss on sales of Other Real Estate Owned	(56,000)	(263,000)
Origination fees on mortgage loans sold	130,000	129,000
Bank owned life insurance income	355,000	271,000
Other	586,000	572,000
Total other income	4,114,000	3,625,000
Other Expenses
Salaries and employee benefits	5,618,000	5,874,000
Occupancy expense	701,000	820,000
Equipment expense	684,000	734,000
Marketing expense	259,000	246,000
Professional fees	652,000	576,000
EFT/ATM Expense	309,000	90,000
Other Real Estate Owned expenses	64,000	126,000
FDIC Deposit Insurance Assessment	169,000	414,000
Bonding and other insurance expense	122,000	230,000
Telephone expense	126,000	95,000
Other	779,000	614,000
Total other expenses	9,483,000	9,819,000
Income Before Income Taxes	4,221,000	3,948,000
Income Tax Expense	1,224,000	1,171,000
Net Income	2,997,000	2,777,000
Other Comprehensive Income - Net of Tax
Unrealized gains on securities	4,327,000	2,941,000
Reclassification adjustment for gains included in net income	(211,000)	(156,000)
Postretirement benefit liability	27,000	27,000
Total Other Comprehensive Income - Net of Tax	4,143,000	2,812,000
Comprehensive Income	$ 7,140,000	$ 5,589,000
Basic Earnings Per Common Share (in Dollars per share)	$ 0.13	$ 0.12
Diluted Earnings Per Common Share (in Dollars per share)	0.13	$ 0.12
Common Stock Dividends Declared Per Share (in Dollars per share)	$ 0.53

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Stock Appreciation Rights (SARs) [Member] Common Stock [Member]	Stock Appreciation Rights (SARs) [Member] Deferred Compensation, Share-based Payments [Member]	Stock Appreciation Rights (SARs) [Member]	Common Stock [Member]	Retained Earnings [Member]	Deferred Compensation, Share-based Payments [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2014				$ 23,037,000	$ 114,132,000		$ (2,633,000)	$ 134,536,000
Issuance of Common Stock
SOSARs exercised		$ 0
Other stock issued				26,000				26,000
Equity Compensation				57,000				57,000
Net income					2,777,000			2,777,000
Other comprehensive income (loss) - net of tax							2,812,000	2,812,000
Balance at Mar. 31, 2015				23,120,000	116,909,000		179,000	140,208,000
Balance at Dec. 31, 2015				23,492,000	126,214,000	$ (13,000)	(2,352,000)	147,341,000
Issuance of Common Stock
SOSARs exercised	$ 73,000		$ 73,000
Other stock issued				124,000				124,000
Equity Compensation				(128,000)		3,000		(125,000)
Dividends declared ($0.53 per share)					(12,129,000)			(12,129,000)
Net income					2,997,000			2,997,000
Other comprehensive income (loss) - net of tax							4,143,000	4,143,000
Balance at Mar. 31, 2016				$ 23,561,000	$ 117,082,000	$ (10,000)	$ 1,791,000	$ 142,424,000

XML

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Other stock issued	15,635	4,714
Dividends declared, per share (in Dollars per share)	$ 0.53
Stock Appreciation Rights (SARs) [Member]
SOSARs exercised	95,856	7,856

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities
Net Income	$ 2,997,000	$ 2,777,000
Adjustments to reconcile net income to net cash from operating activities
Recovery of loan losses	(300,000)	(800,000)
Depreciation	395,000	398,000
Decrease in net deferred taxes	1,224,000	1,155,000
Net amortization of investment premium and discount	290,000	282,000
Writedowns of Other Real Estate Owned	68,000	312,000
Net decrease in interest payable and other liabilities	(565,000)	(737,000)
Net (increase) decrease in interest receivable and other assets	(1,764,000)	443,000
Equity based compensation expense	(52,000)	58,000
Net gain on sale/settlement of securities	(320,000)	(236,000)
Increase in cash surrender value of life insurance	(355,000)	(271,000)
Net cash provided by operating activities	1,618,000	3,381,000
Cash Flows from Investing Activities
Proceeds from maturities and redemptions of investment securities held to maturity	1,793,000	686,000
Proceeds from maturities and redemptions of investment securities available for sale	57,157,000	47,011,000
Proceeds from sales of investment securities available for sale		8,430,000
Net (increase) decrease in loans	63,000	(7,807,000)
Proceeds from sales of other real estate owned	770,000	562,000
Proceeds from sales of other assets	149,000	65,000
Purchase of investment securities held to maturity	(3,350,000)	(4,439,000)
Purchase of investment securities available for sale	(24,807,000)	(71,629,000)
Purchase of bank premises and equipment	(318,000)	(352,000)
Net cash provided by (used for) investing activities	31,457,000	(27,473,000)
Cash Flows from Financing Activities
Net increase (decrease) in deposits	(2,660,000)	23,501,000
Proceeds from issuance of common stock	124,000	26,000
Dividends paid	(12,129,000)
Net cash provided by (used for) financing activities	(14,665,000)	23,527,000
Net Increase (Decrease) in Cash and Cash Equivalents	18,410,000	(565,000)
Cash and Cash Equivalents at Beginning of Period	85,050,000	52,122,000
Cash and Cash Equivalents at End of Period	103,460,000	51,557,000
Supplemental Cash Flow Information
Cash paid for interest	687,000	823,000
Cash paid for federal income taxes		15,000
Supplemental Schedule of Non Cash Investing Activities
Transfer of loans to other real estate owned	29,000	40,000
Transfer of loans to other assets	$ 21,000	$ 45,000

XML

Note 1 - Basis of Presentation and Accounting Policies

3 Months Ended

Mar. 31, 2016

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 fourteen branches in Monroe County, Michigan, six branches in Wayne County, Michigan, and one loan and wealth management office in each Wayne County and 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.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments in ASU 2016-01 supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. The amendments allow equity investments that do not have readily determinable fair values to be re-measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. The amendments improve financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material effect on the Company’s financial position or results of operations.

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, “Leases”, which will supersede the current lease requirements in ASC 840. The ASU requires lessees to recognize a right of use asset and related lease liability for all leases, with a limited exception for short-term leases.  Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the statement of operations.  Currently, leases are classified as either capital or operating, with only capital leases recognized on the balance sheet.  The reporting of lease related expenses in the statements of operations and cash flows will be generally consistent with the current guidance. The new lease footnote guidance will be effective for the Company’s year ending December 31, 2019 and will be applied using a modified retrospective transition method to the beginning of the earliest period presented.  The effect of applying the new lease guidance on the financial statements as not yet been determined, however the new lease standard is not expected to have a significant effect on the Company’s financial statements.

XML

Note 2 - Earnings Per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

2. EARNINGS PER SHARE

The calculations of earnings per common share are as follows:

	For the three months ended March 31,
	2016		2015
Basic
Net income	$	2,997,000	$	2,777,000
Average common shares outstanding		22,854,556		22,721,845
Earnings per common share - basic	$	0.13	$	0.12
Diluted
Net income	$	2,997,000	$	2,777,000
Average common shares outstanding		22,854,556		22,721,845
Equity compensation		160,401		184,489
Average common shares outstanding - diluted		23,014,957		22,906,334
Earnings per common share - diluted	$	0.13	$	0.12

XML

Note 3 - Stock Based Compensation

3 Months Ended

Mar. 31, 2016

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

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

3. STOCK BASED COMPENSATION

Stock Only Stock Appreciation Rights (SOSARs) - On February 25, 2016, 106,000 Stock Only Stock Appreciation Rights (SOSARs) were awarded to certain 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. The SOSARs have a term of ten years and vest in three equal annual installments beginning on December 31, 2016. The fair value of $3.08 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 41.21%, a risk free interest rate of 1.47% and dividend yield of 1.50%. The fair value of the Company’s common stock was $8.26 on the grant date.

SOSARs granted under the plan are structured as fixed grants with the base 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, 2016		609,275		$	4.02
Granted		106,000			8.26
Exercised		(174,227	)		2.60
Forfeited		-			-
Expired		-			-
SOSARs Outstanding, March 31, 2016		541,048		$	5.31
SOSARs Exercisable, March 31, 2016		316,829		$	4.36

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 base price of the SOSAR. The market value of the Company’s common stock on March 31, 2016 was $8.05. The value of the exercisable SOSARs that are in-the-money as of March 31, 2016 was $1,200,000, and exercise of those SOSARs on that date would have resulted in the issuance of 149,118 shares of common stock. The plan allows participants to elect to withhold shares from the exercise of SOSARs to cover their tax liability. This may affect the number of shares issued and the value of the common stock account on the balance sheet and the statement of changes in equity.

Restricted Stock Unit Awards – On February 25, 2016, 35,000 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, 2017 if the defined performance targets are achieved. Earned RSUs vest on December 15, 2018 and as of March 31, 2016 none of the RSUs were vested.

Restricted Stock Awards – On February 25, 2016, 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, 2016. The expense for the restricted stock is based on the grant date value of $8.26 and is recognized over the vesting period. The unrecognized cost related to the non-vested restricted stock awards was $50,000 as of March 31, 2016.

The total expense for equity based compensation was $114,000 in the first quarter of 2016 and $83,000 in the first quarter of 2015.

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Note 4 - Loans

3 Months Ended

Mar. 31, 2016

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):

	March 31, 2016		December 31, 2015
Residential real estate loans	$	218,305	$	213,989
Commercial and Construction real estate loans		259,149		259,139
Agriculture and agricultural real estate loans		19,344		19,243
Commercial and industrial loans		82,881		84,438
Loans to individuals for household, family, and other personal expenditures		38,288		40,499
Total loans, gross	$	617,967	$	617,308
Less: Allowance for loan losses		10,537		10,896
Net Loans	$	607,430	$	606,412

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 (000s omitted):

	March 31, 2016			December 31, 2015
Nonaccrual loans	$	8,079		$	8,633
Loans 90 days past due and accruing		17			4
Restructured loans		17,828			18,910
Total nonperforming loans	$	25,924		$	27,547
Other real estate owned		1,587			2,383
Other assets		21			-
Total nonperforming assets	$	27,532		$	29,930
Nonperforming assets to total assets		2.06	%		2.23	%
Allowance for loan losses to nonperforming loans		40.65	%		39.55	%

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Note 5 - Allowance For Loan Losses

3 Months Ended

Mar. 31, 2016

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 months ended March 31, 2016 was as follows (000s omitted):

	Agriculture and Agricultural Real Estate		Commercial			Commercial Real Estate			Construction Real Estate		Residential Real Estate			Consumer and Other			Total
Allowance for loan losses: For the three months ended March 31, 2016
Beginning Balance	$	389	$	2,279		$	4,350		$	420	$	2,235		$	1,223		$	10,896
Charge-offs		-		-			(56	)		-		(91	)		(62	)		(209	)
Recoveries		-		33			23			13		58			23			150
Provision		98		(715	)		701			42		(282	)		(144	)		(300	)
Ending balance	$	487	$	1,597		$	5,018		$	475	$	1,920		$	1,040		$	10,537
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment	$	241	$	525		$	763		$	269	$	387		$	209		$	2,394
Ending balance collectively evaluated for impairment		246		1,072			4,255			206		1,533			831			8,143
Ending balance	$	487	$	1,597		$	5,018		$	475	$	1,920		$	1,040		$	10,537
Loans as of March 31, 2016
Ending balance individually evaluated for impairment	$	695	$	895		$	11,898		$	1,796	$	7,510		$	450		$	23,244
Ending balance collectively evaluated for impairment		18,649		81,986			230,917			14,538		210,795			37,838			594,723
Ending balance	$	19,344	$	82,881		$	242,815		$	16,334	$	218,305		$	38,288		$	617,967

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

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

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 10 through 45 are considered “pass” credits and grades 50 through 65 are considered “watch” credits and are subject to greater scrutiny. Loans with grades 70 through 95 and considered “doubtful” or “loss” and have generally been charged off. A description of the general characteristics of each grade is as follows:

• Grades 10 and 15 – 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.

• Grades 20 and 25 – 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.

• Grades 30 and 35 – 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.

• Grades 40 and 45 – 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.

• Grades 50 and 55 – 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.

• Grades 60 and 65 – 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.

• Grades 70 and 75 – 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 80-95 - Loss – Loans are considered uncollectible and of such little value that continuing to carry them on the Bank’s financial statements is not feasible.

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

The portfolio segments in each credit risk grade as of March 31, 2016 are as follows (000s omitted):

Credit Quality Indicators as of March 31, 2016

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	$	137	$	1,368	$	256	$	6,734	$	134,608	$	30,495	$	173,598
10		-		5,656		-		-		59		-		5,715
20		306		340		512		-		-		365		1,523
30		614		13,020		8,175		-		367		-		22,176
40		13,076		55,403		184,484		5,579		68,456		7,247		334,245
45		2,106		2,139		7,402		1,454		3,852		-		16,953
50		1,326		3,491		22,343		2,206		3,137		16		32,519
55		179		240		3,961		-		90		-		4,470
60		1,600		1,224		15,682		361		7,736		165		26,768
70		-		-		-		-		-		-		-
80		-		-		-		-		-		-		-
90		-		-		-		-		-		-		-
Total	$	19,344	$	82,881	$	242,815	$	16,334	$	218,305	$	38,288	$	617,967
Performing	$	18,650	$	81,844	$	229,496	$	14,447	$	209,924	$	37,682	$	592,043
Nonperforming		694		1,037		13,319		1,887		8,381		606		25,924
Total	$	19,344	$	82,881	$	242,815	$	16,334	$	218,305	$	38,288	$	617,967

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

Credit Quality Indicators as of December 31, 2015

Credit Risk by Internally Assigned Grade

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	102	$	2,173	$	310	$	6,789	$	136,049	$	32,461	$	177,884
10		-		2,717		-		-		60		-		2,777
20		306		359		533		-		-		366		1,564
30		432		17,024		7,620		-		373		-		25,449
40		14,413		55,204		184,504		6,548		62,347		7,453		330,469
45		840		1,094		6,506		74		2,957		-		11,471
50		1,340		3,428		23,678		2,163		3,948		18		34,575
55		929		-		3,700		-		-		-		4,629
60		881		2,439		16,369		345		8,255		201		28,490
70		-		-		-		-		-		-		-
80		-		-		-		-		-		-		-
90		-		-		-		-		-		-		-
Total	$	19,243	$	84,438	$	243,220	$	15,919	$	213,989	$	40,499	$	617,308
Performing	$	18,362	$	83,372	$	228,624	$	14,104	$	205,430	$	39,869	$	589,761
Nonperforming		881		1,066		14,596		1,815		8,559		630		27,547
Total	$	19,243	$	84,438	$	243,220	$	15,919	$	213,989	$	40,499	$	617,308

Loans are considered past due when contractually required payment of interest or principal has not been received. The amount classified as past due is the entire principal balance outstanding of the loan, not just the amount of payments that are past due. The following is a summary of past due loans as of March 31, 2016 and December 31, 2015 (000s omitted):

March 31, 2016	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	$	134	$	-	$	141	$	275	$	19,069	$	19,344	$	-
Commercial		44		58		60		162		82,719		82,881		17
Commercial Real Estate		1,320		108		2,129		3,557		239,258		242,815		-
Construction Real Estate		-		-		-		-		16,334		16,334		-
Residential Real Estate		1,487		327		465		2,279		216,026		218,305		-
Consumer and Other		14		27		41		82		38,206		38,288		-
Total	$	2,999	$	520	$	2,836	$	6,355	$	611,612	$	617,967	$	17

December 31, 2015	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90 Days Past Due and Accruing
Agriculture and Agricultural Real Estate	$	136	$	213	$	44	$	393	$	18,850	$	19,243	$	-
Commercial		10		75		76		161		84,277		84,438		4
Commercial Real Estate		2,194		230		2,123		4,547		238,673		243,220		-
Construction Real Estate		-		-		-		-		15,919		15,919		-
Residential Real Estate		2,252		227		464		2,943		211,046		213,989		-
Consumer and Other		130		81		52		263		40,236		40,499		-
Total	$	4,722	$	826	$	2,759	$	8,307	$	609,001	$	617,308	$	4

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

The following is a summary of non-accrual loans as of March 31, 2016 and December 31, 2015 (000s omitted):

	March 31, 2016		December 31, 2015
Agriculture and Agricultural Real Estate	$	444	$	565
Commercial		167		148
Commercial Real Estate		4,611		4,823
Construction Real Estate		130		46
Residential Real Estate		2,572		2,915
Consumer and Other		155		136
Total	$	8,079	$	8,633

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

The following is a summary of impaired loans as of March 31, 2016 and 2015 (000s omitted):

March 31, 2016	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	-	$	-
Commercial		156		206		-		163		3
Commercial Real Estate		6,679		7,206		-		7,017		66
Construction Real Estate		195		227		-		214		3
Residential Real Estate		4,238		4,484		-		4,447		55
Consumer and Other		16		16		-		17		-
With an allowance recorded:
Agriculture and Agricultural Real Estate		695		702		241		825		4
Commercial		739		758		525		789		8
Commercial Real Estate		5,219		5,496		763		5,410		53
Construction Real Estate		1,601		1,600		269		1,605		18
Residential Real Estate		3,272		3,400		387		3,392		34
Consumer and Other		434		434		209		438		5
Total:
Agriculture and Agricultural Real Estate	$	695	$	702	$	241	$	825	$	4
Commercial		895		964		525		952		11
Commercial Real Estate		11,898		12,702		763		12,427		119
Construction Real Estate		1,796		1,827		269		1,819		21
Residential Real Estate		7,510		7,884		387		7,839		89
Consumer and Other		450		450		209		455		5

	Recorded Investment as of December 31, 2015		Unpaid Principal Balance as of December 31, 2015		Related Allowance as of December 31, 2015		Average Recorded Investment for the Three Months Ended March 31, 2015		Interest Income Recognized in the Three Months Ended March 31, 2015
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	255	$	3
Commercial		63		113		-		413		5
Commercial Real Estate		7,701		8,107		-		8,365		76
Construction Real Estate		200		233		-		339		3
Residential Real Estate		4,137		4,359		-		7,035		85
Consumer and Other		26		26		-		37		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		882		885		240		662		9
Commercial		895		916		672		936		11
Commercial Real Estate		5,697		6,183		634		11,903		124
Construction Real Estate		1,609		1,609		277		1,833		21
Residential Real Estate		3,206		3,310		506		5,055		57
Consumer and Other		470		468		223		491		5
Total:
Agriculture and Agricultural Real Estate	$	882	$	885	$	240	$	917	$	12
Commercial		958		1,029		672		1,349		16
Commercial Real Estate		13,398		14,290		634		20,268		200
Construction Real Estate		1,809		1,842		277		2,172		24
Residential Real Estate		7,343		7,669		506		12,090		142
Consumer and Other		496		494		223		528		6

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

Loans that have been classified as TDRs during the three month period ended March 31, 2016 and March 31, 2015 are as follows (000s omitted from dollar amounts):

	Three months ended March 31, 2016						Three months ended March 31, 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		-		-		-		-		-		-
Commercial Real Estate		-		-		-		1		332		332
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		1		200		199		-		-		-
Consumer and Other		-		-		-		-		-		-
Total		1	$	200	$	199		1	$	332	$	332

The Bank considers TDRs that become past due under the modified terms as defaulted. There were no loans that became TDRs during the three month periods ended March 31, 2016 and March 31, 2015 that subsequently defaulted during the three month periods ended March 31, 2016 and March 31, 2015, respectively.

The Company has allocated $2,250,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at March 31, 2016. In addition, there were no commitments to lend additional amounts to borrowers that are classified as troubled debt restructurings as of March 31, 2016 and March 31, 2015.

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Note 6 - Investment Securities

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

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

6. INVESTMENT SECURITIES

The following is a summary of the Bank’s investment securities portfolio as of March 31, 2016 and December 31, 2015 (000s omitted):

	Held to Maturity March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of States and Political Subdivisions	$	42,316	$	1,501	$	(105	)	$	43,712
Corporate Debt Securities		500		1		-			501
	$	42,816	$	1,502	$	(105	)	$	44,213

	Available for Sale March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of U.S. Government Agencies	$	343,147	$	3,696	$	(141	)	$	346,702
Mortgage Backed Securities issued by U.S. Government Agencies		99,549		586		(568	)		99,567
Obligations of States and Political Subdivisions		17,160		293		(19	)		17,434
Corporate Debt Securities		5,000		-		(62	)		4,938
Equity Securities		2,044		113		-			2,157
	$	466,900	$	4,688	$	(790	)	$	470,798

	Held to Maturity December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of States and Political Subdivisions	$	40,782	$	1,333	$	(178	)	$	41,937
Corporate Debt Securities		500		-		-			500
	$	41,282	$	1,333	$	(178	)	$	42,437

	Available for Sale December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of U.S. Government Agencies	$	370,469	$	1,647	$	(3,055	)	$	369,061
Mortgage Backed Securities issued by U.S. Government Agencies		104,472		107		(1,327	)		103,252
Obligations of States and Political Subdivisions		17,212		305		(48	)		17,469
Corporate Debt Securities		5,000		-		(50	)		4,950
Equity Securities		2,044		83		-			2,127
	$	499,197	$	2,142	$	(4,480	)	$	496,859

The amortized cost and estimated market values of securities by contractual maturity as of March 31, 2016 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
	Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
Contractual maturity in
1 year or less	$	5,389	$	5,399	$	2,319	$	2,319
After 1 year through five years		26,744		27,242		216,430		218,412
After 5 years through 10 years		8,672		9,380		143,183		144,847
After 10 years		2,011		2,192		3,375		3,496
Total		42,816		44,213		365,307		369,074
Mortgage Backed Securities		-		-		99,549		99,567
Securities with no stated maturity		-		-		2,044		2,157
Total	$	42,816	$	44,213	$	466,900	$	470,798

The investment securities portfolio is evaluated for impairment throughout the year. Impairment is recorded against individual securities, unless the decrease in fair value is attributable to interest rates or the lack of an active market, and Management determines that the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before a recovery of their amortized costs bases, which may be maturity. The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses (in thousands), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2016 and December 31, 2015.

March 31, 2016
	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	$	32,965	$	132	$	6,748	$	9	$	39,713	$	141
Mortgage Backed Securities issued by U.S. Government Agencies		26,519		196		33,047		372		59,566		568
Obligations of States and Political Subdivisions		6,066		101		4,304		23		10,370		124
Corporate Debt Securities		4,938		62		-		-		4,938		62
	$	70,488	$	491	$	44,099	$	404	$	114,587	$	895

December 31, 2015
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	170,178	$	2,367	$	53,497	$	688	$	223,675	$	3,055
Mortgage Backed Securities issued by U.S. Government Agencies		57,949		633		31,118		694		89,067		1,327
Obligations of States and Political Subdivisions		10,830		165		5,324		61		16,154		226
Corporate Debt Securities		4,950		50		-		-		4,950		50
	$	243,907	$	3,215	$	89,939	$	1,443	$	333,846	$	4,658

The amount of investment securities issued by government agencies, states, and political subdivisions with unrealized losses and the amount of unrealized losses on those investment securities are primarily the result of market interest rates and not the result of the credit quality of the issuers of the securities. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other than temporarily impaired at March 31, 2016. As of March 31, 2016 and December 31, 2015, there were 78 and 146 securities in an unrealized loss position, respectively.

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Note 7 - Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2016

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 certain municipal debt obligations are classified within Level 3 of the fair value hierarchy. Fair values are initially valued based on transaction price and are adjusted to reflect exit values.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2016 and December 31, 2015, and the valuation techniques used by the Company to determine those fair values.

March 31, 2016	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	103,460	$	103,460	$	-	$	-	$	103,460
Securities - Held to Maturity
Obligations of States and Political Subdivisions		42,316		-		3,798		39,914		43,712
Corporate Debt Securities		500		-		501		-		501
Securities - Available for Sale
Obligations of U.S. Government Agencies		346,702		-		346,702		-		346,702
MBS issued by U.S. Government Agencies		99,567		-		99,567		-		99,567
Obligations of States and Political Subdivisions		17,434		-		17,434		-		17,434
Corporate Debt Securities		4,938		-		4,938		-		4,938
Other Securities		2,157		2,157		-		-		2,157
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		646		-		-		660		660
Loans, net		607,430		-		-		614,498		614,498
Accrued Interest Receivable		4,725		-		-		4,725		4,725
Financial Liabilities:
Noninterest Bearing Deposits		259,140		259,140		-		-		259,140
Interest Bearings Deposits		903,593		-		905,332		-		905,332
Repurchase Agreements		15,000		-		15,114		-		15,114
Accrued Interest Payable		115		-		-		115		115

December 31, 2015	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	85,050	$	85,050	$	-	$	-	$	85,050
Securities - Held to Maturity
Obligations of States and Political Subdivisions		40,782		-		3,805		38,132		41,937
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		369,061		-		369,061		-		369,061
MBS issued by U.S. Government Agencies		103,252		-		103,252		-		103,252
Obligations of States and Political Subdivisions		17,469		-		17,469		-		17,469
Corporate Debt Securities		4,950		-		4,950		-		4,950
Other Securities		2,127		2,127		-		-		2,127
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		1,477		-		-		1,508		1,508
Loans, net		606,412		-		-		613,397		613,397
Accrued Interest Receivable		4,170		-		-		4,170		4,170
Financial Liabilities:
Noninterest Bearing Deposits		253,795		253,795		-		-		253,795
Interest Bearings Deposits		911,598		-		913,410		-		913,410
Repurchase Agreements		15,000		-		15,253		-		15,253
Accrued Interest Payable		108		-		-		108		108

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 Company did not have any Level 3 assets measured at fair value on a recurring basis as of March 31, 2016 or December 31, 2015. The Company did not have any sales or purchases of Level 3 available for sale securities during the period.

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 (000s omitted):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	-	$	-	$	20,850
Other Real Estate Owned	$	-	$	-	$	1,587

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	-	$	-	$	22,334
Other Real Estate Owned	$	-	$	-	$	2,383

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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Note 8 - Financial Instruments with Off-Balance Sheet Risk

3 Months Ended

Mar. 31, 2016

Fair Value Of Off Balance Sheet Risks Disclosure [Abstract]

Fair Value Of 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
	March 31, 2016		December 31, 2015
Commitments to extend credit:
Unused portion of commercial lines of credit	$	72,880	$	70,488
Unused portion of credit card lines of credit		4,412		4,396
Unused portion of home equity lines of credit		23,762		23,164
Standby letters of credit and financial guarantees written		1,555		1,555
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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Accounting Policies, by Policy (Policies)

3 Months Ended

Mar. 31, 2016

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.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments in ASU 2016-01 supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. The amendments allow equity investments that do not have readily determinable fair values to be re-measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. The amendments improve financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material effect on the Company’s financial position or results of operations.

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, “Leases”, which will supersede the current lease requirements in ASC 840. The ASU requires lessees to recognize a right of use asset and related lease liability for all leases, with a limited exception for short-term leases.  Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the statement of operations.  Currently, leases are classified as either capital or operating, with only capital leases recognized on the balance sheet.  The reporting of lease related expenses in the statements of operations and cash flows will be generally consistent with the current guidance. The new lease footnote guidance will be effective for the Company’s year ending December 31, 2019 and will be applied using a modified retrospective transition method to the beginning of the earliest period presented.  The effect of applying the new lease guidance on the financial statements as not yet been determined, however the new lease standard is not expected to have a significant effect on the Company’s financial statements.

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Note 2 - Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

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

	For the three months ended March 31,
	2016		2015
Basic
Net income	$	2,997,000	$	2,777,000
Average common shares outstanding		22,854,556		22,721,845
Earnings per common share - basic	$	0.13	$	0.12
Diluted
Net income	$	2,997,000	$	2,777,000
Average common shares outstanding		22,854,556		22,721,845
Equity compensation		160,401		184,489
Average common shares outstanding - diluted		23,014,957		22,906,334
Earnings per common share - diluted	$	0.13	$	0.12

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Note 3 - Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

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

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

				Weighted Average
	SOSARs			Base Price
SOSARs Outstanding, January 1, 2016		609,275		$	4.02
Granted		106,000			8.26
Exercised		(174,227	)		2.60
Forfeited		-			-
Expired		-			-
SOSARs Outstanding, March 31, 2016		541,048		$	5.31
SOSARs Exercisable, March 31, 2016		316,829		$	4.36

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Note 4 - Loans (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure Text Block Supplement [Abstract]

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

	March 31, 2016		December 31, 2015
Residential real estate loans	$	218,305	$	213,989
Commercial and Construction real estate loans		259,149		259,139
Agriculture and agricultural real estate loans		19,344		19,243
Commercial and industrial loans		82,881		84,438
Loans to individuals for household, family, and other personal expenditures		38,288		40,499
Total loans, gross	$	617,967	$	617,308
Less: Allowance for loan losses		10,537		10,896
Net Loans	$	607,430	$	606,412

Schedule of Non Performing Assets [Table Text Block]

	March 31, 2016			December 31, 2015
Nonaccrual loans	$	8,079		$	8,633
Loans 90 days past due and accruing		17			4
Restructured loans		17,828			18,910
Total nonperforming loans	$	25,924		$	27,547
Other real estate owned		1,587			2,383
Other assets		21			-
Total nonperforming assets	$	27,532		$	29,930
Nonperforming assets to total assets		2.06	%		2.23	%
Allowance for loan losses to nonperforming loans		40.65	%		39.55	%

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Note 5 - Allowance For Loan Losses (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016
Beginning Balance	$	389	$	2,279		$	4,350		$	420	$	2,235		$	1,223		$	10,896
Charge-offs		-		-			(56	)		-		(91	)		(62	)		(209	)
Recoveries		-		33			23			13		58			23			150
Provision		98		(715	)		701			42		(282	)		(144	)		(300	)
Ending balance	$	487	$	1,597		$	5,018		$	475	$	1,920		$	1,040		$	10,537
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment	$	241	$	525		$	763		$	269	$	387		$	209		$	2,394
Ending balance collectively evaluated for impairment		246		1,072			4,255			206		1,533			831			8,143
Ending balance	$	487	$	1,597		$	5,018		$	475	$	1,920		$	1,040		$	10,537
Loans as of March 31, 2016
Ending balance individually evaluated for impairment	$	695	$	895		$	11,898		$	1,796	$	7,510		$	450		$	23,244
Ending balance collectively evaluated for impairment		18,649		81,986			230,917			14,538		210,795			37,838			594,723
Ending balance	$	19,344	$	82,881		$	242,815		$	16,334	$	218,305		$	38,288		$	617,967

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

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	$	137	$	1,368	$	256	$	6,734	$	134,608	$	30,495	$	173,598
10		-		5,656		-		-		59		-		5,715
20		306		340		512		-		-		365		1,523
30		614		13,020		8,175		-		367		-		22,176
40		13,076		55,403		184,484		5,579		68,456		7,247		334,245
45		2,106		2,139		7,402		1,454		3,852		-		16,953
50		1,326		3,491		22,343		2,206		3,137		16		32,519
55		179		240		3,961		-		90		-		4,470
60		1,600		1,224		15,682		361		7,736		165		26,768
70		-		-		-		-		-		-		-
80		-		-		-		-		-		-		-
90		-		-		-		-		-		-		-
Total	$	19,344	$	82,881	$	242,815	$	16,334	$	218,305	$	38,288	$	617,967
Performing	$	18,650	$	81,844	$	229,496	$	14,447	$	209,924	$	37,682	$	592,043
Nonperforming		694		1,037		13,319		1,887		8,381		606		25,924
Total	$	19,344	$	82,881	$	242,815	$	16,334	$	218,305	$	38,288	$	617,967

	Agriculture and Agricultural Real Estate		Commercial		Commercial Real Estate		Construction Real Estate		Residential Real Estate		Consumer and Other		Total
Not Rated	$	102	$	2,173	$	310	$	6,789	$	136,049	$	32,461	$	177,884
10		-		2,717		-		-		60		-		2,777
20		306		359		533		-		-		366		1,564
30		432		17,024		7,620		-		373		-		25,449
40		14,413		55,204		184,504		6,548		62,347		7,453		330,469
45		840		1,094		6,506		74		2,957		-		11,471
50		1,340		3,428		23,678		2,163		3,948		18		34,575
55		929		-		3,700		-		-		-		4,629
60		881		2,439		16,369		345		8,255		201		28,490
70		-		-		-		-		-		-		-
80		-		-		-		-		-		-		-
90		-		-		-		-		-		-		-
Total	$	19,243	$	84,438	$	243,220	$	15,919	$	213,989	$	40,499	$	617,308
Performing	$	18,362	$	83,372	$	228,624	$	14,104	$	205,430	$	39,869	$	589,761
Nonperforming		881		1,066		14,596		1,815		8,559		630		27,547
Total	$	19,243	$	84,438	$	243,220	$	15,919	$	213,989	$	40,499	$	617,308

Past Due Financing Receivables [Table Text Block]

March 31, 2016	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	$	134	$	-	$	141	$	275	$	19,069	$	19,344	$	-
Commercial		44		58		60		162		82,719		82,881		17
Commercial Real Estate		1,320		108		2,129		3,557		239,258		242,815		-
Construction Real Estate		-		-		-		-		16,334		16,334		-
Residential Real Estate		1,487		327		465		2,279		216,026		218,305		-
Consumer and Other		14		27		41		82		38,206		38,288		-
Total	$	2,999	$	520	$	2,836	$	6,355	$	611,612	$	617,967	$	17

December 31, 2015	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment >90 Days Past Due and Accruing
Agriculture and Agricultural Real Estate	$	136	$	213	$	44	$	393	$	18,850	$	19,243	$	-
Commercial		10		75		76		161		84,277		84,438		4
Commercial Real Estate		2,194		230		2,123		4,547		238,673		243,220		-
Construction Real Estate		-		-		-		-		15,919		15,919		-
Residential Real Estate		2,252		227		464		2,943		211,046		213,989		-
Consumer and Other		130		81		52		263		40,236		40,499		-
Total	$	4,722	$	826	$	2,759	$	8,307	$	609,001	$	617,308	$	4

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

	March 31, 2016		December 31, 2015
Agriculture and Agricultural Real Estate	$	444	$	565
Commercial		167		148
Commercial Real Estate		4,611		4,823
Construction Real Estate		130		46
Residential Real Estate		2,572		2,915
Consumer and Other		155		136
Total	$	8,079	$	8,633

Impaired Financing Receivables [Table Text Block]

March 31, 2016	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment for the Three Months Ended		Interest Income Recognized in the Three Months Ended
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	-	$	-
Commercial		156		206		-		163		3
Commercial Real Estate		6,679		7,206		-		7,017		66
Construction Real Estate		195		227		-		214		3
Residential Real Estate		4,238		4,484		-		4,447		55
Consumer and Other		16		16		-		17		-
With an allowance recorded:
Agriculture and Agricultural Real Estate		695		702		241		825		4
Commercial		739		758		525		789		8
Commercial Real Estate		5,219		5,496		763		5,410		53
Construction Real Estate		1,601		1,600		269		1,605		18
Residential Real Estate		3,272		3,400		387		3,392		34
Consumer and Other		434		434		209		438		5
Total:
Agriculture and Agricultural Real Estate	$	695	$	702	$	241	$	825	$	4
Commercial		895		964		525		952		11
Commercial Real Estate		11,898		12,702		763		12,427		119
Construction Real Estate		1,796		1,827		269		1,819		21
Residential Real Estate		7,510		7,884		387		7,839		89
Consumer and Other		450		450		209		455		5

	Recorded Investment as of December 31, 2015		Unpaid Principal Balance as of December 31, 2015		Related Allowance as of December 31, 2015		Average Recorded Investment for the Three Months Ended March 31, 2015		Interest Income Recognized in the Three Months Ended March 31, 2015
With no related allowance recorded:
Agriculture and Agricultural Real Estate	$	-	$	-	$	-	$	255	$	3
Commercial		63		113		-		413		5
Commercial Real Estate		7,701		8,107		-		8,365		76
Construction Real Estate		200		233		-		339		3
Residential Real Estate		4,137		4,359		-		7,035		85
Consumer and Other		26		26		-		37		1
With an allowance recorded:
Agriculture and Agricultural Real Estate		882		885		240		662		9
Commercial		895		916		672		936		11
Commercial Real Estate		5,697		6,183		634		11,903		124
Construction Real Estate		1,609		1,609		277		1,833		21
Residential Real Estate		3,206		3,310		506		5,055		57
Consumer and Other		470		468		223		491		5
Total:
Agriculture and Agricultural Real Estate	$	882	$	885	$	240	$	917	$	12
Commercial		958		1,029		672		1,349		16
Commercial Real Estate		13,398		14,290		634		20,268		200
Construction Real Estate		1,809		1,842		277		2,172		24
Residential Real Estate		7,343		7,669		506		12,090		142
Consumer and Other		496		494		223		528		6

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Three months ended March 31, 2016						Three months ended March 31, 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		-		-		-		-		-		-
Commercial Real Estate		-		-		-		1		332		332
Construction Real Estate		-		-		-		-		-		-
Residential Real Estate		1		200		199		-		-		-
Consumer and Other		-		-		-		-		-		-
Total		1	$	200	$	199		1	$	332	$	332

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Note 6 - Investment Securities (Tables)

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Held-to-maturity Securities [Table Text Block]

	Held to Maturity March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of States and Political Subdivisions	$	42,316	$	1,501	$	(105	)	$	43,712
Corporate Debt Securities		500		1		-			501
	$	42,816	$	1,502	$	(105	)	$	44,213

	Held to Maturity December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of States and Political Subdivisions	$	40,782	$	1,333	$	(178	)	$	41,937
Corporate Debt Securities		500		-		-			500
	$	41,282	$	1,333	$	(178	)	$	42,437

Available-for-sale Securities [Table Text Block]

	Available for Sale March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of U.S. Government Agencies	$	343,147	$	3,696	$	(141	)	$	346,702
Mortgage Backed Securities issued by U.S. Government Agencies		99,549		586		(568	)		99,567
Obligations of States and Political Subdivisions		17,160		293		(19	)		17,434
Corporate Debt Securities		5,000		-		(62	)		4,938
Equity Securities		2,044		113		-			2,157
	$	466,900	$	4,688	$	(790	)	$	470,798

	Available for Sale December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Market Value
Obligations of U.S. Government Agencies	$	370,469	$	1,647	$	(3,055	)	$	369,061
Mortgage Backed Securities issued by U.S. Government Agencies		104,472		107		(1,327	)		103,252
Obligations of States and Political Subdivisions		17,212		305		(48	)		17,469
Corporate Debt Securities		5,000		-		(50	)		4,950
Equity Securities		2,044		83		-			2,127
	$	499,197	$	2,142	$	(4,480	)	$	496,859

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

	Held to Maturity				Available for Sale
	Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
Contractual maturity in
1 year or less	$	5,389	$	5,399	$	2,319	$	2,319
After 1 year through five years		26,744		27,242		216,430		218,412
After 5 years through 10 years		8,672		9,380		143,183		144,847
After 10 years		2,011		2,192		3,375		3,496
Total		42,816		44,213		365,307		369,074
Mortgage Backed Securities		-		-		99,549		99,567
Securities with no stated maturity		-		-		2,044		2,157
Total	$	42,816	$	44,213	$	466,900	$	470,798

Schedule of Unrealized Loss on Investments [Table Text Block]

March 31, 2016
	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	$	32,965	$	132	$	6,748	$	9	$	39,713	$	141
Mortgage Backed Securities issued by U.S. Government Agencies		26,519		196		33,047		372		59,566		568
Obligations of States and Political Subdivisions		6,066		101		4,304		23		10,370		124
Corporate Debt Securities		4,938		62		-		-		4,938		62
	$	70,488	$	491	$	44,099	$	404	$	114,587	$	895

December 31, 2015
	Less than 12 months				12 months or longer				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Obligations of United States Government Agencies	$	170,178	$	2,367	$	53,497	$	688	$	223,675	$	3,055
Mortgage Backed Securities issued by U.S. Government Agencies		57,949		633		31,118		694		89,067		1,327
Obligations of States and Political Subdivisions		10,830		165		5,324		61		16,154		226
Corporate Debt Securities		4,950		50		-		-		4,950		50
	$	243,907	$	3,215	$	89,939	$	1,443	$	333,846	$	4,658

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Note 7 - Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

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

March 31, 2016	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	103,460	$	103,460	$	-	$	-	$	103,460
Securities - Held to Maturity
Obligations of States and Political Subdivisions		42,316		-		3,798		39,914		43,712
Corporate Debt Securities		500		-		501		-		501
Securities - Available for Sale
Obligations of U.S. Government Agencies		346,702		-		346,702		-		346,702
MBS issued by U.S. Government Agencies		99,567		-		99,567		-		99,567
Obligations of States and Political Subdivisions		17,434		-		17,434		-		17,434
Corporate Debt Securities		4,938		-		4,938		-		4,938
Other Securities		2,157		2,157		-		-		2,157
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		646		-		-		660		660
Loans, net		607,430		-		-		614,498		614,498
Accrued Interest Receivable		4,725		-		-		4,725		4,725
Financial Liabilities:
Noninterest Bearing Deposits		259,140		259,140		-		-		259,140
Interest Bearings Deposits		903,593		-		905,332		-		905,332
Repurchase Agreements		15,000		-		15,114		-		15,114
Accrued Interest Payable		115		-		-		115		115

December 31, 2015	Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
Financial Assets:
Cash and due from banks	$	85,050	$	85,050	$	-	$	-	$	85,050
Securities - Held to Maturity
Obligations of States and Political Subdivisions		40,782		-		3,805		38,132		41,937
Corporate Debt Securities		500		-		500		-		500
Securities - Available for Sale
Obligations of U.S. Government Agencies		369,061		-		369,061		-		369,061
MBS issued by U.S. Government Agencies		103,252		-		103,252		-		103,252
Obligations of States and Political Subdivisions		17,469		-		17,469		-		17,469
Corporate Debt Securities		4,950		-		4,950		-		4,950
Other Securities		2,127		2,127		-		-		2,127
Federal Home Loan Bank Stock		4,148		-		4,148		-		4,148
Loans Held for Sale		1,477		-		-		1,508		1,508
Loans, net		606,412		-		-		613,397		613,397
Accrued Interest Receivable		4,170		-		-		4,170		4,170
Financial Liabilities:
Noninterest Bearing Deposits		253,795		253,795		-		-		253,795
Interest Bearings Deposits		911,598		-		913,410		-		913,410
Repurchase Agreements		15,000		-		15,253		-		15,253
Accrued Interest Payable		108		-		-		108		108

Fair Value Measurements, Nonrecurring [Table Text Block]

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	-	$	-	$	20,850
Other Real Estate Owned	$	-	$	-	$	1,587

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	-	$	-	$	22,334
Other Real Estate Owned	$	-	$	-	$	2,383

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

3 Months Ended

Mar. 31, 2016

Fair Value Of Off Balance Sheet Risks Disclosure [Abstract]

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

	Contractual Amount
	March 31, 2016		December 31, 2015
Commitments to extend credit:
Unused portion of commercial lines of credit	$	72,880	$	70,488
Unused portion of credit card lines of credit		4,412		4,396
Unused portion of home equity lines of credit		23,762		23,164
Standby letters of credit and financial guarantees written		1,555		1,555
All other off-balance sheet commitments		-		-

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Note 1 - Basis of Presentation and Accounting Policies (Details)	Mar. 31, 2016
Monroe County, Michigan [Member]
Note 1 - Basis of Presentation and Accounting Policies (Details) [Line Items]
Number of Stores	14
Wayne County, Michigan [Member]
Note 1 - Basis of Presentation and Accounting Policies (Details) [Line Items]
Number of Stores	6
Number of Loan and Wealth Management Offices	1
Lenawee County, Michigan [Member]
Note 1 - Basis of Presentation and Accounting Policies (Details) [Line Items]
Number of Loan and Wealth Management Offices	1

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Note 2 - Earnings Per Share (Details) - Calculations of Earnings Per Common Share - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Basic
Net income (in Dollars)	$ 2,997,000	$ 2,777,000
Average common shares outstanding	22,854,556	22,721,845
Earnings per common share - basic (in Dollars per share)	$ 0.13	$ 0.12
Diluted
Net income (in Dollars)	$ 2,997,000	$ 2,777,000
Average common shares outstanding	22,854,556	22,721,845
Equity compensation	160,401	184,489
Average common shares outstanding - diluted	23,014,957	22,906,334
Earnings per common share - diluted (in Dollars per share)	$ 0.13	$ 0.12

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Note 3 - Stock Based Compensation (Details) - USD ($)		3 Months Ended
	Feb. 25, 2016	Mar. 31, 2016	Mar. 31, 2015
Note 3 - Stock Based Compensation (Details) [Line Items]
Share Price	$ 8.26	$ 8.05
Allocated Share-based Compensation Expense		$ 114,000	$ 83,000
Stock Incentive Plan 2008 [Member]
Note 3 - Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	7 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	41.21%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.47%
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		106,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 3.08
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	1.50%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value		$ 1,200,000
Shares, Issued		149,118
Stock Appreciation Rights (SARs) [Member] | Certain Officers [Member] | Stock Incentive Plan 2008 [Member]
Note 3 - Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted	106,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Restricted Stock [Member] | Executive Officer [Member] | Stock Incentive Plan 2008 [Member]
Note 3 - Stock Based Compensation (Details) [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross	35,000
Restricted Stock [Member] | Director [Member] | Stock Incentive Plan 2008 [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	$ 8.26
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 50,000

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Note 3 - Stock Based Compensation (Details) - SOSARs Activity - Stock Appreciation Rights (SARs) [Member]	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Note 3 - Stock Based Compensation (Details) - SOSARs Activity [Line Items]
SOSARs Outstanding, January 1, 2016 | shares	609,275
SOSARs Outstanding, January 1, 2016 | $ / shares	$ 4.02
Granted | shares	106,000
Granted | $ / shares	$ 8.26
Exercised | shares	(174,227)
Exercised | $ / shares	$ 2.60
Forfeited | shares	0
Forfeited | $ / shares	$ 0
Expired | shares	0
Expired | $ / shares	$ 0
SOSARs Outstanding, March 31, 2016 | shares	541,048
SOSARs Outstanding, March 31, 2016 | $ / shares	$ 5.31
SOSARs Exercisable, March 31, 2016 | shares	316,829
SOSARs Exercisable, March 31, 2016 | $ / shares	$ 4.36

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Note 4 - Loans (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)
Disclosure Text Block Supplement [Abstract]
Impairment Review Minimum Amount Threshold	$ 250,000

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Note 4 - Loans (Details) - Loans Receviable Outstanding - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	$ 617,967	$ 617,308	$ 618,723
Less: Allowance for loan losses	10,537	10,896
Net Loans	607,430	606,412
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	218,305	213,989	221,329
Commercial and Construction Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	259,149	259,139
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	19,344	19,243	17,106
Commercial and Industrial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	82,881	84,438
Consumer and Other Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans, gross	$ 38,288	$ 40,499	$ 42,706

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Note 4 - Loans (Details) - Nonperforming Assets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Note 4 - Loans (Details) - Nonperforming Assets [Line Items]
Nonaccrual loans	$ 8,079	$ 8,633
Loans 90 days past due and accruing	17	4
Total nonperforming loans	617,967	617,308	$ 618,723
Other real estate owned	1,587	2,383
Total nonperforming assets	1,334,131	1,342,313
Nonperforming Financial Instruments [Member]
Note 4 - Loans (Details) - Nonperforming Assets [Line Items]
Nonaccrual loans	8,079	8,633
Loans 90 days past due and accruing	17	4
Restructured loans	17,828	18,910
Total nonperforming loans	25,924	27,547
Other real estate owned	1,587	2,383
Other assets	21
Total nonperforming assets	$ 27,532	$ 29,930
Nonperforming assets to total assets	2.06%	2.23%
Allowance for loan losses to nonperforming loans	40.65%	39.55%

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Note 5 - Allowance For Loan Losses (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Note 5 - Allowance For Loan Losses (Details) [Line Items]
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0
Financing Receivable, Allowance for Credit Losses	$ 10,537,000	$ 13,191,000	$ 10,896,000	$ 13,208,000
Loans and Leases Receivable, Impaired, Commitment to Lend	0	$ 0
Troubled Debt Restructuring [Member]
Note 5 - Allowance For Loan Losses (Details) [Line Items]
Financing Receivable, Allowance for Credit Losses	$ 2,250,000

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Note 5 - Allowance For Loan Losses (Details) - Activity in the Allowance for Loan Losses - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	$ 10,896	$ 13,208
Charge-offs	(209)	(322)
Recoveries	150	1,105
Provision	(300)	(800)
Ending balance	10,537	13,191
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment, allowance			$ 2,394		$ 3,242
Ending balance collectively evaluated for impairment, allowance			8,143		9,949
Ending balance of allowances	10,896	13,208	10,537	$ 10,896	13,191
Loans as of March 31, 2016
Ending balance individually evaluated for impairment, loans			23,244		34,392
Ending balance collectively evaluated for impairment, loans			594,723		584,331
Ending balance of loans			617,967	617,308	618,723
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	389	216
Recoveries		7
Provision	98	32
Ending balance	487	255
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment, allowance			241		34
Ending balance collectively evaluated for impairment, allowance			246		221
Ending balance of allowances	389	216	487	389	255
Loans as of March 31, 2016
Ending balance individually evaluated for impairment, loans			695		917
Ending balance collectively evaluated for impairment, loans			18,649		16,189
Ending balance of loans			19,344	19,243	17,106
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	2,279	1,361
Charge-offs		(106)
Recoveries	33	74
Provision	(715)	51
Ending balance	1,597	1,380
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment, allowance			525		449
Ending balance collectively evaluated for impairment, allowance			1,072		931
Ending balance of allowances	2,279	1,361	1,597	2,279	1,380
Loans as of March 31, 2016
Ending balance individually evaluated for impairment, loans			895		1,255
Ending balance collectively evaluated for impairment, loans			81,986		72,816
Ending balance of loans			82,881	84,438	74,071
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	4,350	6,179
Charge-offs	(56)
Recoveries	23	161
Provision	701	(662)
Ending balance	5,018	5,678
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment, allowance			763		1,296
Ending balance collectively evaluated for impairment, allowance			4,255		4,382
Ending balance of allowances	4,350	6,179	5,018	4,350	5,678
Loans as of March 31, 2016
Ending balance individually evaluated for impairment, loans			11,898		18,248
Ending balance collectively evaluated for impairment, loans			230,917		232,479
Ending balance of loans			242,815	243,220	250,727
Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	420	803
Recoveries	13	609
Provision	42	(602)
Ending balance	475	810
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment, allowance			269		671
Ending balance collectively evaluated for impairment, allowance			206		139
Ending balance of allowances	420	803	475	420	810
Loans as of March 31, 2016
Ending balance individually evaluated for impairment, loans			1,796		1,969
Ending balance collectively evaluated for impairment, loans			14,538		10,815
Ending balance of loans			16,334	15,919	12,784
Residential Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	2,235	3,226
Charge-offs	(91)	(196)
Recoveries	58	223
Provision	(282)	(180)
Ending balance	1,920	3,073
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment, allowance			387		580
Ending balance collectively evaluated for impairment, allowance			1,533		2,493
Ending balance of allowances	2,235	3,226	1,920	2,235	3,073
Loans as of March 31, 2016
Ending balance individually evaluated for impairment, loans			7,510		11,480
Ending balance collectively evaluated for impairment, loans			210,795		209,849
Ending balance of loans			218,305	213,989	221,329
Consumer and Other Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	1,223	1,423
Charge-offs	(62)	(20)
Recoveries	23	31
Provision	(144)	561
Ending balance	1,040	1,995
Allowance for loan losses as of March 31, 2016
Ending balance individually evaluated for impairment, allowance			209		212
Ending balance collectively evaluated for impairment, allowance			831		1,783
Ending balance of allowances	$ 1,223	$ 1,423	1,040	1,223	1,995
Loans as of March 31, 2016
Ending balance individually evaluated for impairment, loans			450		523
Ending balance collectively evaluated for impairment, loans			37,838		42,183
Ending balance of loans			$ 38,288	$ 40,499	$ 42,706

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Note 5 - Allowance For Loan Losses (Details) - Credit Risk by Internally Assigned Grade - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	$ 617,967	$ 617,308	$ 618,723
Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	592,043	589,761
Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	25,924	27,547
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	173,598	177,884
Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	5,715	2,777
Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,523	1,564
Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	22,176	25,449
Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	334,245	330,469
Risk Grade Rating 4.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	16,953	11,471
Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	32,519	34,575
Risk Grade Rating 5.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	4,470	4,629
Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	26,768	28,490
Risk Grade Rating 7 [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 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	19,344	19,243	17,106
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	18,650	18,362
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	694	881
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	137	102
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	306	306
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	614	432
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	13,076	14,413
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 4.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,106	840
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,326	1,340
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 5.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	179	929
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,600	881
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	82,881	84,438	74,071
Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	81,844	83,372
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,037	1,066
Commercial Portfolio Segment [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,368	2,173
Commercial Portfolio Segment [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	5,656	2,717
Commercial Portfolio Segment [Member] | Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	340	359
Commercial Portfolio Segment [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	13,020	17,024
Commercial Portfolio Segment [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	55,403	55,204
Commercial Portfolio Segment [Member] | Risk Grade Rating 4.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,139	1,094
Commercial Portfolio Segment [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	3,491	3,428
Commercial Portfolio Segment [Member] | Risk Grade Rating 5.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	240	0
Commercial Portfolio Segment [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,224	2,439
Commercial Portfolio Segment [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Commercial Portfolio Segment [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Commercial Portfolio Segment [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	242,815	243,220	250,727
Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	229,496	228,624
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	13,319	14,596
Commercial Real Estate Portfolio Segment [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	256	310
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Commercial Real Estate Portfolio Segment [Member] | Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	512	533
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	8,175	7,620
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	184,484	184,504
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 4.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	7,402	6,506
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	22,343	23,678
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 5.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	3,961	3,700
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	15,682	16,369
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Commercial Real Estate Portfolio Segment [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	16,334	15,919	12,784
Construction Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	14,447	14,104
Construction Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,887	1,815
Construction Real Estate Portfolio Segment [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	6,734	6,789
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Construction Real Estate Portfolio Segment [Member] | Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	5,579	6,548
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 4.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	1,454	74
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	2,206	2,163
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 5.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	361	345
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Construction Real Estate Portfolio Segment [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	218,305	213,989	221,329
Residential Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	209,924	205,430
Residential Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	8,381	8,559
Residential Portfolio Segment [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	134,608	136,049
Residential Portfolio Segment [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	59	60
Residential Portfolio Segment [Member] | Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Residential Portfolio Segment [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	367	373
Residential Portfolio Segment [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	68,456	62,347
Residential Portfolio Segment [Member] | Risk Grade Rating 4.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	3,852	2,957
Residential Portfolio Segment [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	3,137	3,948
Residential Portfolio Segment [Member] | Risk Grade Rating 5.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	90	0
Residential Portfolio Segment [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	7,736	8,255
Residential Portfolio Segment [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Residential Portfolio Segment [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Residential Portfolio Segment [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	38,288	40,499	$ 42,706
Consumer and Other Portfolio Segment [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	37,682	39,869
Consumer and Other Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	606	630
Consumer and Other Portfolio Segment [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	30,495	32,461
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 1 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Consumer and Other Portfolio Segment [Member] | Risk Rating Grade 2 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	365	366
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 3 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 4 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	7,247	7,453
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 4.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	16	18
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 5.5 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 6 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	165	201
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 7 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 8 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	0	0
Consumer and Other Portfolio Segment [Member] | Risk Grade Rating 9 [Member]
Financing Receivable, Recorded Investment [Line Items]
Total loans, gross	$ 0	$ 0

XML

Note 5 - Allowance For Loan Losses (Details) - Past Due Loans - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 6,355	$ 8,307
Current past due	611,612	609,001
Total loans, gross	617,967	617,308	$ 618,723
Recorded investment >90 days past due and accruing	17	4
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,999	4,722
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	520	826
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,836	2,759
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	275	393
Current past due	19,069	18,850
Total loans, gross	19,344	19,243	17,106
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	134	136
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	213
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	141	44
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	162	161
Current past due	82,719	84,277
Total loans, gross	82,881	84,438	74,071
Recorded investment >90 days past due and accruing	17	4
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	44	10
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	58	75
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	60	76
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	3,557	4,547
Current past due	239,258	238,673
Total loans, gross	242,815	243,220	250,727
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	1,320	2,194
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	108	230
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	2,129	2,123
Construction Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Current past due	16,334	15,919
Total loans, gross	16,334	15,919	12,784
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	0
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	2,279	2,943
Current past due	216,026	211,046
Total loans, gross	218,305	213,989	221,329
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	1,487	2,252
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	327	227
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	465	464
Consumer and Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	82	263
Current past due	38,206	40,236
Total loans, gross	38,288	40,499	$ 42,706
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	14	130
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	27	81
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	$ 41	$ 52

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Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	$ 8,079	$ 8,633
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	444	565
Commercial Portfolio Segment [Member]
Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	167	148
Commercial Real Estate Portfolio Segment [Member]
Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	4,611	4,823
Construction Real Estate Portfolio Segment [Member]
Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	130	46
Residential Portfolio Segment [Member]
Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	2,572	2,915
Consumer and Other Portfolio Segment [Member]
Note 5 - Allowance For Loan Losses (Details) - Non-accrual Loans [Line Items]
Non accrual loans	$ 155	$ 136

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Note 5 - Allowance For Loan Losses (Details) - Impaired Loans - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Agriculture and Agricultural Real Estate Loans Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	$ 0	$ 0
Unpaid principal balance-without allowance	0	0
Average recorded investment-without allowance	0	255
Interest income recognized without allowance	0	3
With an allowance recorded:
Recorded investment-with allowance	695	882
Unpaid principal balance-with allowance	702	885
Related allowance	241	240
Average recorded investment-with allowance	825	662
Interest income recognized with allowance	4	9
Total:
Recorded investment	695	882
Unpaid principal balance	702	885
Related allowance	241	240
Average recorded investment	825	917
Interest income recognized	4	12
Commercial Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	156	63
Unpaid principal balance-without allowance	206	113
Average recorded investment-without allowance	163	413
Interest income recognized without allowance	3	5
With an allowance recorded:
Recorded investment-with allowance	739	895
Unpaid principal balance-with allowance	758	916
Related allowance	525	672
Average recorded investment-with allowance	789	936
Interest income recognized with allowance	8	11
Total:
Recorded investment	895	958
Unpaid principal balance	964	1,029
Related allowance	525	672
Average recorded investment	952	1,349
Interest income recognized	11	16
Commercial Real Estate Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	6,679	7,701
Unpaid principal balance-without allowance	7,206	8,107
Average recorded investment-without allowance	7,017	8,365
Interest income recognized without allowance	66	76
With an allowance recorded:
Recorded investment-with allowance	5,219	5,697
Unpaid principal balance-with allowance	5,496	6,183
Related allowance	763	634
Average recorded investment-with allowance	5,410	11,903
Interest income recognized with allowance	53	124
Total:
Recorded investment	11,898	13,398
Unpaid principal balance	12,702	14,290
Related allowance	763	634
Average recorded investment	12,427	20,268
Interest income recognized	119	200
Construction Real Estate Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	195	200
Unpaid principal balance-without allowance	227	233
Average recorded investment-without allowance	214	339
Interest income recognized without allowance	3	3
With an allowance recorded:
Recorded investment-with allowance	1,601	1,609
Unpaid principal balance-with allowance	1,600	1,609
Related allowance	269	277
Average recorded investment-with allowance	1,605	1,833
Interest income recognized with allowance	18	21
Total:
Recorded investment	1,796	1,809
Unpaid principal balance	1,827	1,842
Related allowance	269	277
Average recorded investment	1,819	2,172
Interest income recognized	21	24
Residential Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	4,238	4,137
Unpaid principal balance-without allowance	4,484	4,359
Average recorded investment-without allowance	4,447	7,035
Interest income recognized without allowance	55	85
With an allowance recorded:
Recorded investment-with allowance	3,272	3,206
Unpaid principal balance-with allowance	3,400	3,310
Related allowance	387	506
Average recorded investment-with allowance	3,392	5,055
Interest income recognized with allowance	34	57
Total:
Recorded investment	7,510	7,343
Unpaid principal balance	7,884	7,669
Related allowance	387	506
Average recorded investment	7,839	12,090
Interest income recognized	89	142
Consumer and Other Portfolio Segment [Member]
With no related allowance recorded:
Recorded investment-without allowance	16	26
Unpaid principal balance-without allowance	16	26
Average recorded investment-without allowance	17	37
Interest income recognized without allowance	0	1
With an allowance recorded:
Recorded investment-with allowance	434	470
Unpaid principal balance-with allowance	434	468
Related allowance	209	223
Average recorded investment-with allowance	438	491
Interest income recognized with allowance	5	5
Total:
Recorded investment	450	496
Unpaid principal balance	450	494
Related allowance	209	223
Average recorded investment	455	528
Interest income recognized	$ 5	$ 6

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Note 5 - Allowance For Loan Losses (Details) - Troubled Debt Restructurings $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)
Financing Receivable, Modifications [Line Items]
Number of contracts	1	1
Pre-modification recorded principal balance	$ 200	$ 332
Post-modification recorded principal balance	$ 199	$ 332
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts		1
Pre-modification recorded principal balance		$ 332
Post-modification recorded principal balance		$ 332
Residential Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of contracts	1
Pre-modification recorded principal balance	$ 200
Post-modification recorded principal balance	$ 199

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Note 6 - Investment Securities (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015
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	78	146

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Note 6 - Investment Securities (Details) - Held to Maturity Securities - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Held to maturity, amortized cost	$ 42,816	$ 41,282
Held to maturity, gross unrealized gains	1,502	1,333
Held to maturity, gross unrealized losses	(105)	(178)
Held to maturity, estimated market value	44,213	42,437
US States and Political Subdivisions Debt Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held to maturity, amortized cost	42,316	40,782
Held to maturity, gross unrealized gains	1,501	1,333
Held to maturity, gross unrealized losses	(105)	(178)
Held to maturity, estimated market value	43,712	41,937
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	1	0
Held to maturity, gross unrealized losses	0	0
Held to maturity, estimated market value	$ 501	$ 500

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Note 6 - Investment Securities (Details) - Available for Sale Securities - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	$ 466,900	$ 499,197
Available for sale securities, gross unrealized gains	4,688	2,142
Available for sale securities, gross unrealized losses	(790)	(4,480)
Available for sale securities, estimated market value	470,798	496,859
US Treasury and Government [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	343,147	370,469
Available for sale securities, gross unrealized gains	3,696	1,647
Available for sale securities, gross unrealized losses	(141)	(3,055)
Available for sale securities, estimated market value	346,702	369,061
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	99,549	104,472
Available for sale securities, gross unrealized gains	586	107
Available for sale securities, gross unrealized losses	(568)	(1,327)
Available for sale securities, estimated market value	99,567	103,252
US States and Political Subdivisions Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	17,160	17,212
Available for sale securities, gross unrealized gains	293	305
Available for sale securities, gross unrealized losses	(19)	(48)
Available for sale securities, estimated market value	17,434	17,469
Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale securities, amortized cost	5,000	5,000
Available for sale securities, gross unrealized gains	0	0
Available for sale securities, gross unrealized losses	(62)	(50)
Available for sale securities, estimated market value	4,938	4,950
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	113	83
Available for sale securities, gross unrealized losses	0	0
Available for sale securities, estimated market value	$ 2,157	$ 2,127

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Note 6 - Investment Securities (Details) - Amortized Cost and Estimated Market Values of Securities - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Contractual maturity in
1 year or less	$ 5,389
1 year or less	5,399
1 year or less	2,319
1 year or less	2,319
After 1 year through five years	26,744
After 1 year through five years	27,242
After 1 year through five years	216,430
After 1 year through five years	218,412
After 5 years through 10 years	8,672
After 5 years through 10 years	9,380
After 5 years through 10 years	143,183
After 5 years through 10 years	144,847
After 10 years	2,011
After 10 years	2,192
After 10 years	3,375
After 10 years	3,496
Total	42,816
Total	44,213
Total	365,307
Total	369,074
Mortgage Backed Securities	0
Mortgage Backed Securities	0
Mortgage Backed Securities	99,549
Mortgage Backed Securities	99,567
Securities with no stated maturity	0
Securities with no stated maturity	0
Securities with no stated maturity	2,044
Securities with no stated maturity	2,157
Total	42,816	$ 41,282
Total	44,213	$ 42,437
Total	466,900
Total	$ 470,798

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Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 months, aggregate fair value	$ 70,488	$ 243,907
Less than 12 months, gross unrealized losses	491	3,215
12 months or longer, aggregate fair value	44,099	89,939
12 months or longer, gross unrealized losses	404	1,443
Total, aggregate fair value	114,587	333,846
Total, gross unrealized losses	895	4,658
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	32,965	170,178
Less than 12 months, gross unrealized losses	132	2,367
12 months or longer, aggregate fair value	6,748	53,497
12 months or longer, gross unrealized losses	9	688
Total, aggregate fair value	39,713	223,675
Total, gross unrealized losses	141	3,055
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	26,519	57,949
Less than 12 months, gross unrealized losses	196	633
12 months or longer, aggregate fair value	33,047	31,118
12 months or longer, gross unrealized losses	372	694
Total, aggregate fair value	59,566	89,067
Total, gross unrealized losses	568	1,327
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	6,066	10,830
Less than 12 months, gross unrealized losses	101	165
12 months or longer, aggregate fair value	4,304	5,324
12 months or longer, gross unrealized losses	23	61
Total, aggregate fair value	10,370	16,154
Total, gross unrealized losses	124	226
Corporate Debt Securities [Member]
Note 6 - Investment Securities (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 months, aggregate fair value	4,938	4,950
Less than 12 months, gross unrealized losses	62	50
12 months or longer, aggregate fair value	0	0
12 months or longer, gross unrealized losses	0	0
Total, aggregate fair value	4,938	4,950
Total, gross unrealized losses	$ 62	$ 50

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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	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Financial Assets:
Cash and due from banks, carrying value	$ 103,460	$ 85,050	$ 51,557	$ 52,122
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	42,816	41,282
Securities - Held to Maturity, fair value	44,213	42,437
Securities - Available for Sale
Securities - Available for sale, carrying value	470,798	496,859
Securities - Available for sale, fair value	470,798	496,859
Federal Home Loan Bank Stock, carrying value	4,148	4,148
Loans Held for Sale, carrying value	646	1,477
Loans, net, carrying value	607,430	606,412
Financial Liabilities:
Noninterest Bearing Deposits, carrying value	259,140	253,795
Interest Bearings Deposits, carrying value	903,593	911,598
Repurchase Agreements, carrying value	15,000	15,000
Fair Value, Measurements, Recurring [Member]
Financial Assets:
Cash and due from banks, carrying value	103,460	85,050
Cash and due from banks, fair value	103,460	85,050
Securities - Available for Sale
Federal Home Loan Bank Stock, carrying value	4,148	4,148
Federal Home Loan Bank Stock, fair value	4,148	4,148
Loans Held for Sale, carrying value	646	1,477
Loans Held for Sale, fair value	660	1,508
Loans, net, carrying value	607,430	606,412
Loans, net, fair value	614,498	613,397
Accrued Interest Receivable, carrying value	4,725	4,170
Accrued Interest Receivable, fair value	4,725	4,170
Financial Liabilities:
Noninterest Bearing Deposits, carrying value	259,140	253,795
Noninterest Bearing Deposits, fair value	259,140	253,795
Interest Bearings Deposits, carrying value	903,593	911,598
Interest Bearings Deposits, fair value	905,332	913,410
Repurchase Agreements, carrying value	15,000	15,000
Repurchase Agreements, fair value	15,114	15,253
Accrued Interest Payable, carrying value	115	108
Accrued Interest Payable, fair value	115	108
US States and Political Subdivisions Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	42,316	40,782
Securities - Held to Maturity, fair value	43,712	41,937
Securities - Available for Sale
Securities - Available for sale, carrying value	17,434	17,469
Securities - Available for sale, fair value	17,434	17,469
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	42,316	40,782
Securities - Held to Maturity, fair value	43,712	41,937
Securities - Available for Sale
Securities - Available for sale, carrying value	17,434	17,469
Securities - Available for sale, fair value	17,434	17,469
Corporate Debt Securities [Member]
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	500	500
Securities - Held to Maturity, fair value	501	500
Securities - Available for Sale
Securities - Available for sale, carrying value	4,938	4,950
Securities - Available for sale, fair value	4,938	4,950
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Held to Maturity
Securities - Held to Maturity, carrying value	500	500
Securities - Held to Maturity, fair value	501	500
Securities - Available for Sale
Securities - Available for sale, carrying value	4,938	4,950
Securities - Available for sale, fair value	4,938	4,950
US Treasury and Government [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	346,702	369,061
Securities - Available for sale, fair value	346,702	369,061
US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	346,702	369,061
Securities - Available for sale, fair value	346,702	369,061
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	99,567	103,252
Securities - Available for sale, fair value	99,567	103,252
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	99,567	103,252
Securities - Available for sale, fair value	99,567	103,252
Equity Securities [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	2,157	2,127
Securities - Available for sale, fair value	2,157	2,127
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	2,157	2,127
Securities - Available for sale, fair value	2,157	2,127
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Financial Assets:
Cash and due from banks, fair value	103,460	85,050
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	259,140	253,795
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] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	2,157	2,127
Securities - Available for sale, fair value	2,157	2,127
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [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	4,148
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	905,332	913,410
Repurchase Agreements, fair value	15,114	15,253
Accrued Interest Payable, fair value	0	0
Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	3,798	3,805
Securities - Available for Sale
Securities - Available for sale, carrying value	17,434	17,469
Securities - Available for sale, fair value	17,434	17,469
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	501	500
Securities - Available for Sale
Securities - Available for sale, carrying value	4,938	4,950
Securities - Available for sale, fair value	4,938	4,950
Fair Value, Inputs, Level 2 [Member] | US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	346,702	369,061
Securities - Available for sale, fair value	346,702	369,061
Fair Value, Inputs, Level 2 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Available for Sale
Securities - Available for sale, carrying value	99,567	103,252
Securities - Available for sale, fair value	99,567	103,252
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [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	660	1,508
Loans, net, fair value	614,498	613,397
Accrued Interest Receivable, fair value	4,725	4,170
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	115	108
Fair Value, Inputs, Level 3 [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities - Held to Maturity
Securities - Held to Maturity, fair value	39,914	38,132
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] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [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] | Fair Value, Measurements, Recurring [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 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis [Line Items]
Other Real Estate Owned	$ 1,587	$ 2,383
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [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, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [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, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Note 7 - Fair Value of Financial Instruments (Details) - Assets Measure at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	20,850	22,334
Other Real Estate Owned	$ 1,587	$ 2,383

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Note 8 - Financial Instruments with Off-Balance Sheet Risk (Details)	3 Months Ended
	Mar. 31, 2016
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 8 - Financial Instruments with Off-Balance Sheet Risk (Details) - Off-Balance Sheet Credit Risk Financial Insturments - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Commitments to Extend Credit - Commercial Lines of Credit [Member]
Commitments to extend credit:
Off-balance sheet credit risks	$ 72,880	$ 70,488
Commitments to Extend Credit - Credit Card Lines of Credit [Member]
Commitments to extend credit:
Off-balance sheet credit risks	4,412	4,396
Commitments to Extend Credit - Home Equity Lines of Credit [Member]
Commitments to extend credit:
Off-balance sheet credit risks	23,762	23,164
Standby Letters of Credit and Financial Guarantees [Member]
Commitments to extend credit:
Off-balance sheet credit risks	1,555	1,555
All Other Off-Balance Sheet Commitments [Member]
Commitments to extend credit:
Off-balance sheet credit risks	$ 0	$ 0