10-Q

Table Of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended June 30, 2016

Or

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

For the transition period from              to             

Commission file number: 001-33033

PORTER BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky	61-1142247
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2500 Eastpoint Parkway, Louisville, Kentucky	40223
(Address of principal executive offices)	(Zip Code)

(502) 499-4800

(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 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 reporting company” in Rule 12b-2 of the Exchange Act.

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  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

23,156,969 Common Shares and 7,958,000 Non-Voting Common Shares, no par value, were outstanding at July 31, 2016.

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INDEX

		Page
PART I –	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	51
ITEM 4.	CONTROLS AND PROCEDURES	51
PART II –	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	52
ITEM 1A.	RISK FACTORS	52
ITEM 2.	UNREGISTERED SALES ON EQUITY SECURITIES AND USE OF PROCEEDS	52
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	52
ITEM 4.	MINE SAFETY DISCLOSURES	52
ITEM 5.	OTHER INFORMATION	52
ITEM 6.	EXHIBITS	52

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The following consolidated financial statements of Porter Bancorp, Inc. and subsidiary, PBI Bank, Inc. are submitted:

Unaudited Consolidated Balance Sheets for June 30, 2016 and December 31, 2015

Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015

Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2016 and 2015

Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2016

Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015

Notes to Unaudited Consolidated Financial Statements

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PORTER BANCORP, INC.

Unaudited Consolidated Balance Sheets

(dollars in thousands except share data)

	June 30, 2016			December 31, 2015
Assets
Cash and due from banks	$	8,289		$	8,006
Interest bearing deposits in banks		49,313			85,329
Cash and cash equivalents		57,602			93,335
Securities available for sale		143,145			144,978
Securities held to maturity (fair value of $44,955 and $44,253, respectively)		41,948			42,075
Loans held for sale		—			186
Loans, net of allowance of $10,104 and $12,041, respectively		614,032			606,625
Premises and equipment, net		18,618			18,812
Other real estate owned		12,322			19,214
Federal Home Loan Bank stock		7,323			7,323
Bank owned life insurance		14,646			9,441
Accrued interest receivable and other assets		6,916			6,733
Total assets	$	916,552		$	948,722
Liabilities and Stockholders’ Equity
Deposits
Non-interest bearing	$	117,843		$	120,043
Interest bearing		722,248			757,954
Total deposits		840,091			877,997
Federal Home Loan Bank advances		2,775			3,081
Accrued interest payable and other liabilities		7,651			10,577
Subordinated capital note		3,600			4,050
Junior subordinated debentures		21,000			21,000
Total liabilities		875,117			916,705
Stockholders’ equity
Preferred stock, no par
Series E - 6,198 issued and outstanding; Liquidation preference of $6.2 million		1,644			1,644
Series F - 4,304 issued and outstanding; Liquidation preference of $4.3 million		1,127			1,127
Total preferred stockholders’ equity		2,771			2,771
Common stock, no par, 86,000,000 shares authorized, 23,160,302 and 20,089,533 voting, and 7,958,000 and 6,858,000 non-voting shares issued and outstanding, respectively		125,729			120,699
Additional paid-in capital		23,821			23,654
Retained deficit		(108,316	)		(110,808	)
Accumulated other comprehensive loss		(2,570	)		(4,299	)
Total common stockholders’ equity		38,664			29,246
Total stockholders' equity		41,435			32,017
Total liabilities and stockholders’ equity	$	916,552		$	948,722

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Operations

(dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Interest income
Loans, including fees	$	7,455		$	7,846		$	15,337		$	15,601
Taxable securities		950			1,010			1,939			2,136
Tax exempt securities		158			190			322			393
Fed funds sold and other		142			121			292			240
		8,705			9,167			17,890			18,370
Interest expense
Deposits		1,280			1,607			2,588			3,299
Federal Home Loan Bank advances		18			24			37			51
Subordinated capital note		38			41			77			83
Junior subordinated debentures		173			155			341			307
Federal funds purchased and other		—			1			—			1
		1,509			1,828			3,043			3,741
Net interest income		7,196			7,339			14,847			14,629
Provision (negative provision) for loan losses		(600	)		—			(1,150	)		—
Net interest income after provision for loan losses		7,796			7,339			15,997			14,629
Non-interest income
Service charges on deposit accounts		473			475			902			884
Bank card interchange fees		221			229			423			432
Other real estate owned rental income		149			372			405			729
Net gain on sales of securities		—			199			203			1,696
Other		309			290			610			520
		1,152			1,565			2,543			4,261
Non-interest expense
Salaries and employee benefits		3,857			4,028			7,679			7,875
Occupancy and equipment		808			828			1,662			1,698
Professional fees		492			714			877			1,693
FDIC Insurance		493			564			1,016			1,134
Data processing expense		295			278			592			582
State franchise and deposit tax		255			285			510			570
Other real estate owned expense		294			2,932			962			3,665
Loan collection expense		271			291			353			574
Other		1,171			1,114			2,376			2,635
		7,936			11,034			16,027			20,426
Income (loss) before income taxes		1,012			(2,130	)		2,513			(1,536	)
Income tax expense		—			—			21			—
Net income (loss)		1,012			(2,130	)		2,492			(1,536	)
Less:
Earnings (loss) allocated to participating securities		33			(91	)		84			(269	)
Net income (loss) available to common shareholders	$	979		$	(2,039	)	$	2,408		$	(1,267	)
Basic and diluted income (loss) per common share	$	0.03		$	(0.08	)	$	0.09		$	(0.06	)

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016			2015
Net income (loss)	$	1,012	$	(2,130	)	$	2,492		$	(1,536	)
Other comprehensive income (loss):
Unrealized gain (loss) on securities:
Unrealized gain (loss) arising during the period		659		(1,762	)		1,868			(433	)
Amortization during the period of net unrealized loss transferred to held to maturity		32		32			64			64
Reclassification adjustment for gains included in net income		—		(199	)		(203	)		(1,696	)
Net unrealized gain/(loss) recognized in comprehensive income		691		(1,929	)		1,729			(2,065	)
Tax effect		—		—			—			—
Other comprehensive income (loss)		691		(1,929	)		1,729			(2,065	)
Comprehensive income (loss)	$	1,703	$	(4,059	)	$	4,221		$	(3,601	)

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Changes in Stockholders’ Equity

For Six Months Ended June 30, 2016

(Dollar amounts in thousands except share and per share data) 

	Shares												Amount
	Common								Preferred						Preferred				Common
	Common			Non- Voting Common		Total Common			Series E		Series F		Common and Non-Voting Common		Series E		Series F		Additional Paid-In Capital		Retained Deficit			Accumulated Other Compre- hensive Income (Loss)			Total
Balances, January 1, 2016		20,089,533			6,858,000		26,947,533			6,198		4,304	$	120,699	$	1,644	$	1,127	$	23,654	$	(110,808	)	$	(4,299	)	$	32,017
Issuance of unvested stock		177,290			—		177,290			—		—		—		—		—		—		—			—			—
Forfeited unvested stock		(6,521	)		—		(6,521	)		—		—		—		—		—		—		—			—			—
Stock-based compensation expense		—			—		—			—		—		—		—		—		167		—			—			167
Net income		—			—		—			—		—		—		—		—		—		2,492			—			2,492
Net change in accumulated other comprehensive income (loss), net of taxes		—			—		—			—		—		—		—		—		—		—			1,729			1,729
Issuance of stock		2,900,000			1,100,000		4,000,000			—		—		5,030		—		—		—		—			—			5,030
Balances, June 30, 2016		23,160,302			7,958,000		31,118,302			6,198		4,304	$	125,729	$	1,644	$	1,127	$	23,821	$	(108,316	)	$	(2,570	)	$	41,435

See accompanying notes.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Cash Flows

For Six Months Ended June 30, 2016 and 2015

(dollars in thousands)

	2016			2015
Cash flows from operating activities
Net income	$	2,492		$	(1,536	)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization		747			814
Provision (negative provision) for loan losses		(1,150	)		—
Net amortization on securities		643			721
Stock-based compensation expense		167			181
Net loss (gain) on sales of loans held for sale		(29	)		232
Loans originated for sale		(1,814	)		(4,146	)
Proceeds from sales of loans held for sale		2,029			4,075
Net (gain) loss on sales of other real estate owned		(169	)		(43	)
Net write-down of other real estate owned		650			2,630
Net realized gain on sales of available for sale securities		(203	)		(1,696	)
Earnings on bank owned life insurance, net of premium expense		(205	)		(153	)
Net change in accrued interest receivable and other assets		(384	)		742
Net change in accrued interest payable and other liabilities		(127	)		309
Net cash from operating activities		2,647			2,130
Cash flows from investing activities
Purchases of available for sale securities		(11,295	)		(16,800	)
Sales and calls of available for sale securities		3,721			44,110
Maturities and prepayments of available for sale securities		10,823			10,756
Proceeds from sale of other real estate owned		6,987			5,020
Proceeds from sales of loans not originated for sale		—			8,640
Loan originations and payments, net		(6,903	)		(26,974	)
Purchases of premises and equipment, net		(282	)		(134	)
Purchase of bank owned life insurance		(5,000	)		—
Net cash from investing activities		(1,949	)		24,618
Cash flows from financing activities
Net change in deposits		(37,906	)		(22,690	)
Net change in repurchase agreements		—			(76	)
Repayment of Federal Home Loan Bank advances		(306	)		(17,322	)
Advances from Federal Home Loan Bank		—			5,000
Repayment of subordinated capital note		(450	)		(450	)
Issuance of common stock		2,231			—
Net cash from financing activities		(36,431	)		(35,538	)
Net change in cash and cash equivalents		(35,733	)		(8,790	)
Beginning cash and cash equivalents		93,335			80,180
Ending cash and cash equivalents	$	57,602		$	71,390
Supplemental cash flow information:
Interest paid	$	2,627		$	3,622
Income taxes paid		21			—
Supplemental non-cash disclosure:
Proceeds from common stock issuance directed by investors for junior subordinated debenture interest	$	2,799		$	—
Transfer from loans to other real estate		576			955

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation – The consolidated financial statements include Porter Bancorp, Inc. (Company) and its subsidiary, PBI Bank (Bank).  The Company owns a 100% interest in the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire year.  A description of other significant accounting policies is presented in the notes to the Consolidated Financial Statements for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K.

Use of Estimates – To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ.

Reclassifications – Some items in the prior year financial statements were reclassified to conform to the current presentation. The reclassifications did not impact net income or stockholders’ equity.

Adoption of New Accounting Standards – In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606). This ASU is an update to ASU 2014-09, and delays the effective date of ASU 2014-09. The ASU provides guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets. The core principle of the guidance is that an entity should recognize 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. Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Early adoption is not permitted. Management is currently evaluating the impact of the adoption of this guidance on the Company’s financial statements.

In January 2016, the FASB issued an update ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update impact public business entities as follows: 1) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. 3) Eliminate the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. 4) Require entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. 5) Require an entity to present separately in other comprehensive income the portion of the total change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. 6) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. 7) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In February 2016, the FASB issued an update ASU No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting in largely unchanged. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

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In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting. The amendments are intended to improve the accounting for employee shared-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The final standard will change estimates for credit losses related to financial assets measured at amortized cost such as loans, held-to-maturity debt securities, and certain other contracts. For estimating credit losses, the FASB is replacing the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The largest impact will be on the allowance for loan and lease losses. The standard is effective for public companies for fiscal years beginning after December 15, 2019. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

Note 2 – Going Concern Considerations and Future Plans

Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. However, the events and circumstances described in this discussion create substantial doubt about the Company’s ability to continue as a going concern.

For the six months ended June 30, 2016, we reported net income of $2.5 million compared with net loss of $3.2 million and $11.2 million for the years ended December 31, 2015 and 2014, respectively. Our financial performance has been negatively impacted by the Bank’s elevated level of non-performing assets, although the impact continues to diminish as we have substantially reduced non-performing assets during recent periods. Non-performing loans were 1.86%, 2.28%, and 7.57% of total loans at June 30, 2016, December 31, 2015, and December 31, 2014, respectively. Non-performing assets were 2.61%, 3.51%, and 9.19% of total assets at June 30, 2016, December 31, 2015, and December 31, 2014, respectively. See “Analysis of Financial Condition,” below.

On April 15, 2016, we completed a private placement of 2.9 million common shares and 1.1 million non-voting common shares to accredited investors for a total purchase price of $5.0 million. The investors in the private placement directed a portion of the purchase price to pay all deferred interest payments on our trust preferred securities, bringing our interest payments current through the second quarter of 2016. We had deferred interest payable on the junior subordinated debentures held by our trust subsidiaries since the fourth quarter of 2011, requiring our trust subsidiaries to defer distributions on our trust preferred securities held by investors during that period. The remaining proceeds from the private placement totaled approximately $2.2 million and will be used for general corporate purposes and to support the Bank.

On June 29, 2016, we notified the trustees of our election to again defer our interest payments effective with the third quarter 2016 payment. We have the ability to defer distributions on our trust preferred securities for 20 consecutive quarters or through the second quarter of 2021. After 20 consecutive quarters, we must pay all deferred distributions or we will be in default.

We continue to be involved in various legal proceedings, which are more fully described in Note 13 – “Contingencies”. We are appealing a judgment against us that we believe, after conferring with our legal advisors, we have meritorious grounds on which to prevail. If we do not prevail, the ultimate outcome of this matter could have a material adverse effect on our financial condition, results of operations, or cash flows.

PBI Bank is in compliance with each element of its Consent Order with the FDIC and KDFI other than the requirement for the Bank to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. As of June 30, 2016, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were 6.65% and 10.87%, respectively, both less than the minimum capital ratios required by the Consent Order, but otherwise compliant with Basel III capital requirements. The Consent Order provides that if the Bank should be unable to reach the required capital levels, and if directed in writing by the FDIC, the Bank would be required to develop, adopt and implement a written plan to sell or merge itself into another federally insured financial institution or otherwise obtain a capital investment into the Bank sufficient to recapitalize the Bank. The Bank has not been directed by the FDIC to implement such a plan.

In order to meet the 9.0% Tier 1 leverage ratio and 12.0% total risk based capital ratio requirements of the Consent Order, the Board of Directors and management are continuing to evaluate and implement strategies to achieve the following objectives:

● Continuing to increase capital through the issuance of senior debt, subordinated debt, and equity securities.

● Continuing to operate the Company and Bank in a safe and sound manner.  We have reduced our lending concentrations and the size of our balance sheet while continuing to remediate non-performing loans.

 

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● Executing on the sale of other real estate owned (“OREO”) and reinvesting the sale proceeds in quality income producing assets.

● Continuing to improve our internal processes and procedures, distribution of labor, and work-flow to ensure we have adequately and appropriately deployed resources in an efficient manner in the current environment.

Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a consent order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions such as directing a bank to seek a buyer or taking a bank into receivership.

The Consent Order requires the Bank to obtain the written consent of both agencies before declaring or paying any future dividends to the Company, which are its principal source of revenue. Since the Bank is unlikely to be in a position to pay dividends to the Company until the Consent Order is satisfied, cash inflows for the Company are limited to the issuance of new debt or the issuance of capital securities. The Company’s liquid assets were $2.3 million as of June 30, 2016. Ongoing operating expenses of the Company are forecast at approximately $1.0 million for the next twelve months.

Our consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

Note 3 – Securities

The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
Available for sale
U.S. Government and federal agency	$	34,043	$	423	$	(13	)	$	34,453
Agency mortgage-backed: residential		101,596		1,921		(56	)		103,461
State and municipal		3,035		59		—			3,094
Corporate bonds		2,330		—		(193	)		2,137
Total available for sale	$	141,004	$	2,403	$	(262	)	$	143,145

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	41,948	$	3,007	$	—	$	44,955
Total held to maturity	$	41,948	$	3,007	$	—	$	44,955

December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale
U.S. Government and federal agency	$	33,491	$	146	$	(375	)	$	33,262
Agency mortgage-backed: residential		102,135		907		(380	)		102,662
State and municipal		6,555		306		—			6,861
Corporate bonds		2,321		—		(128	)		2,193
Total available for sale	$	144,502	$	1,359	$	(883	)	$	144,978

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	42,075	$	2,178	$	—	$	44,253
Total held to maturity	$	42,075	$	2,178	$	—	$	44,253

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Sales and calls of available for sale securities were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)				(in thousands)
Proceeds	$	235	$	9,972	$	3,721	$	44,110
Gross gains		—		281		203		1,832
Gross losses		—		82		—		136

The amortized cost and fair value of the debt investment securities portfolio are shown by contractual maturity.  Contractual maturities may differ from actual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities not due at a single maturity date are detailed separately.

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Maturity
Available for sale
Within one year	$	6,272	$	6,134
One to five years		7,622		7,744
Five to ten years		25,514		25,806
Agency mortgage-backed: residential		101,596		103,461
Total	$	141,004	$	143,145
Held to maturity
One to five years	$	19,092	$	20,079
Five to ten years		21,808		23,696
Beyond ten years		1,048		1,180
Total	$	41,948	$	44,955

Securities pledged at June 30, 2016 and December 31, 2015 had carrying values of approximately $53.7 million and $68.0 million, respectively, and were pledged to secure public deposits.

At June 30, 2016 and December 31, 2015, we held securities issued by the Commonwealth of Kentucky or municipalities in the Commonwealth of Kentucky having a book value of $17.4 million and $17.7 million, respectively. Additionally, at June 30, 2016 and December 31, 2015, we held securities issued by the State of Texas or municipalities in the State of Texas having a book value of $4.3 million at each period end. At June 30, 2016 and December 31, 2015, there were no other holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

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Securities with unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
June 30, 2016
Available for sale
U.S. Government and federal agency	$	1,509	$	(1	)	$	8,835	$	(12	)	$	10,344	$	(13	)
Agency mortgage-backed: residential		10,229		(44	)		2,444		(12	)		12,673		(56	)
Corporate bonds		743		(25	)		1,394		(168	)		2,137		(193	)
Total temporarily impaired	$	12,481	$	(70	)	$	12,673	$	(192	)	$	25,154	$	(262	)
December 31, 2015
Available for sale
U.S. Government and federal agency	$	7,058	$	(44	)	$	14,527	$	(331	)	$	21,585	$	(375	)
Agency mortgage-backed: residential		36,325		(271	)		3,856		(109	)		40,181		(380	)
Corporate bonds		747		(18	)		1,446		(110	)		2,193		(128	)
Total temporarily impaired	$	44,130	$	(333	)	$	19,829	$	(550	)	$	63,959	$	(883	)

There were no held to maturity securities in an unrecognized loss position at June 30, 2016 or December 31, 2015.

The Company evaluates securities for other than temporary impairment (OTTI) on a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, underlying credit quality of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the sector or industry trends and cycles affecting the issuer, and the results of reviews of the issuer’s financial condition. Management currently intends to hold all securities with unrealized losses until recovery, which for fixed income securities may be at maturity. As of June 30, 2016, management does not believe securities within our portfolio with unrealized losses should be classified as other than temporarily impaired.

Note 4 – Loans

Loans were as follows:	June 30,			December 31,
	2016			2015
	(in thousands)
Commercial	$	75,222		$	86,176
Commercial Real Estate:
Construction		33,184			33,154
Farmland		77,742			76,412
Nonfarm nonresidential		147,969			140,570
Residential Real Estate:
Multi-family		44,652			44,131
1-4 Family		196,388			201,478
Consumer		9,853			10,010
Agriculture		38,710			26,316
Other		416			419
Subtotal		624,136			618,666
Less: Allowance for loan losses		(10,104	)		(12,041	)
Loans, net	$	614,032		$	606,625

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The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2016 and 2015:

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
June 30, 2016:
Beginning balance	$	642		$	6,763		$	3,683		$	115		$	136		$	1		$	11,340
Negative provision for loan losses		305			(1,213	)		471			(200	)		(15	)		52			(600	)
Loans charged off		(249	)		(127	)		(455	)		(22	)		(8	)		(67	)		(928	)
Recoveries		32			6			79			154			6			15			292
Ending balance	$	730		$	5,429		$	3,778		$	47		$	119		$	1		$	10,104
June 30, 2015:
Beginning balance	$	2,046		$	10,680		$	5,221		$	244		$	391		$	15		$	18,597
Provision for loan losses		(296	)		(330	)		604			10			3			9			—
Loans charged off		(99	)		(1,224	)		(809	)		(62	)		(37	)		(33	)		(2,264	)
Recoveries		295			87			44			34			2			14			476
Ending balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2016 and 2015: 

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
June 30, 2016:
Beginning balance	$	818		$	6,993		$	3,984		$	122		$	122		$	2		$	12,041
Negative provision for loan losses		106			(1,588	)		600			(233	)		(80	)		45			(1,150	)
Loans charged off		(261	)		(245	)		(1,050	)		(35	)		(8	)		(78	)		(1,677	)
Recoveries		67			269			244			193			85			32			890
Ending balance	$	730		$	5,429		$	3,778		$	47		$	119		$	1		$	10,104
June 30, 2015:
Beginning balance	$	2,046		$	10,931		$	5,787		$	274		$	319		$	7		$	19,364
Provision for loan losses		(27	)		(323	)		220			22			107			1			—
Loans charged off		(474	)		(1,593	)		(1,291	)		(130	)		(70	)		(33	)		(3,591	)
Recoveries		401			198			344			60			3			30			1,036
Ending balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809

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The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of June 30, 2016:

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	–	$	45	$	100	$	–	$	1	$	–	$	146
Collectively evaluated for impairment		730		5,384		3,678		47		118		1		9,958
Total ending allowance balance	$	730	$	5,429	$	3,778	$	47	$	119	$	1	$	10,104
Loans:
Loans individually evaluated for impairment	$	748	$	12,554	$	12,088	$	6	$	139	$	–	$	25,535
Loans collectively evaluated for impairment		74,474		246,341		228,952		9,847		38,571		416		598,601
Total ending loans balance	$	75,222	$	258,895	$	241,040	$	9,853	$	38,710	$	416	$	624,136

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of December 31, 2015:

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	–	$	43	$	385	$	–	$	–	$	–	$	428
Collectively evaluated for impairment		818		6,950		3,599		122		122		2		11,613
Total ending allowance balance	$	818	$	6,993	$	3,984	$	122	$	122	$	2	$	12,041
Loans:
Loans individually evaluated for impairment	$	1,112	$	12,819	$	17,673	$	20	$	152	$	–	$	31,776
Loans collectively evaluated for impairment		85,064		237,317		227,936		9,990		26,164		419		586,890
Total ending loans balance	$	86,176	$	250,136	$	245,609	$	10,010	$	26,316	$	419	$	618,666

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Impaired Loans

Impaired loans include restructured loans and loans on nonaccrual or classified as doubtful, whereby collection of the total amount is improbable, or loss, whereby all or a portion of the loan has been written off or a specific allowance for loss has been provided.

The following tables present information related to loans individually evaluated for impairment by class of loans as of June 30, 2016 and December 31, 2015 and for the three and six months ended June 30, 2016 and 2015:

							Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,061	$	748	$	—	$	806	$	—	$	908	$	1
Commercial real estate:
Construction		259		259		—		260		3		261		78
Farmland		6,250		4,591		—		4,358		2		4,327		8
Nonfarm nonresidential		10,056		6,692		—		6,547		58		6,974		306
Residential real estate:
Multi-family		2,387		2,387		—		2,393		28		1,606		58
1-4 Family		5,882		3,961		—		4,897		13		7,184		71
Consumer		39		6		—		7		1		11		8
Agriculture		97		69		—		73		—		99		—
Other		—		—		—		—		—		—		—
Subtotal		26,031		18,713		—		19,341		105		21,370		530
With An Allowance Recorded:
Commercial		—		—		—		—		—		—		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		614		605		8		302		—		202		—
Nonfarm nonresidential		407		407		37		409		6		427		12
Residential real estate:
Multi-family		4,159		4,159		25		4,168		51		4,177		101
1-4 Family		1,581		1,581		75		1,630		34		1,650		54
Consumer		—		—		—		—		—		—		—
Agriculture		78		70		1		35		—		23		—
Other		—		—		—		—		—		—		—
Subtotal		6,839		6,822		146		6,544		91		6,479		167
Total	$	32,870	$	25,535	$	146	$	25,885	$	196	$	27,849	$	697

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	As of December 31, 2015						Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,558	$	1,112	$	—	$	1,605	$	5	$	1,730	$	5
Commercial real estate:
Construction		278		262		—		2,475		4		3,016		8
Farmland		6,004		4,263		—		4,659		3		4,685		26
Nonfarm nonresidential		11,256		7,829		—		20,356		72		21,043		137
Residential real estate:
Multi-family		32		32		—		17		—		38		—
1-4 Family		14,066		11,756		—		14,235		110		14,579		244
Consumer		118		20		—		22		—		25		—
Agriculture		260		152		—		231		—		241		—
Other		—		—		—		62		2		82		4
Subtotal		33,572		25,426		—		43,662		196		45,439		424
With An Allowance Recorded:
Commercial		—		—		—		10		—		22		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		—		—		—		—		—		105		—
Nonfarm nonresidential		574		465		43		2,615		6		7,266		12
Residential real estate:
Multi-family		4,195		4,195		57		4,235		55		4,246		102
1-4 Family		1,690		1,690		328		1,628		14		1,676		39
Consumer		—		—		—		4		—		13		—
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		6,459		6,350		428		8,492		75		13,328		153
Total	$	40,031	$	31,776	$	428	$	52,154	$	271	$	58,767	$	577

Cash basis income recognized for the three and six months ended June 30, 2016 was $7,000 and $290,000, respectively, and $29,000 and $102,000 for the three and six months ended June 30, 2015, respectively.

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Troubled Debt Restructuring

A troubled debt restructuring (TDR) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty. The majority of the Company’s TDRs involve a reduction in interest rate, a deferral of principal for a stated period of time, or an interest only period. All TDRs are considered impaired and the Company has allocated reserves for these loans to reflect the present value of the concessionary terms granted to the borrower.

The following table presents the types of TDR loan modifications by portfolio segment outstanding as of June 30, 2016 and December 31, 2015:

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
June 30, 2016
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		439		439
Commercial Real Estate:
Construction
Rate reduction		259		—		259
Farmland
Principal deferral		—		2,340		2,340
Nonfarm nonresidential
Rate reduction		5,550		—		5,550
Principal deferral		—		606		606
Residential Real Estate:
Multi-family
Rate reduction		6,546		—		6,546
1-4 Family
Rate reduction		1,581		—		1,581
Total TDRs	$	13,936	$	3,453	$	17,389

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
December 31, 2015
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		439		439
Commercial Real Estate:
Construction
Rate reduction		262		—		262
Farmland
Principal deferral		—		2,365		2,365
Nonfarm nonresidential
Rate reduction		5,637		50		5,687
Principal deferral		—		622		622
Residential Real Estate:
Multi-family
Rate reduction		4,195		—		4,195
1-4 Family
Rate reduction		7,346		—		7,346
Total TDRs	$	17,440	$	3,544	$	20,984

At June 30, 2016 and December 31, 2015, 80% and 83%, respectively, of the Company’s TDRs were performing according to their modified terms. The Company allocated $137,000 and $179,000 in reserves to borrowers whose loan terms have been modified in TDRs as of June 30, 2016, and December 31, 2015, respectively. The Company has committed to lend no additional amounts as of June 30, 2016 and December 31, 2015 to borrowers with outstanding loans classified as TDRs.

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Management periodically reviews renewals/modifications of previously identified TDRs, for which there was no principal forgiveness, to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed as the borrower has complied with the terms of the loan at the date of renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan subsequent to the date of the renewal/modification. In this instance, the TDR was originally considered a restructuring in a prior year as a result of a modification with an interest rate that was not commensurate with the risk of the underlying loan. Additionally, TDR classification can be removed in circumstances in which the Company performs a non-concessionary re-modification of the loan at terms that were considered to be at market for loans with comparable risk. Management expects the borrower will continue to perform under the re-modified terms based on the borrower’s past history of performance.

No TDR loan modifications occurred during the three or six months ended June 30, 2016 or June 30, 2015. During the first six months of 2016 and 2015, no TDRs defaulted on their restructured loan within the 12-month period following the loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.

Nonperforming Loans

Nonperforming loans include impaired loans not on accrual and smaller balance homogeneous loans, such as residential mortgage and consumer loans, that are collectively evaluated for impairment.

The following table presents the recorded investment in nonaccrual and loans past due 90 days and still on accrual by class of loan as of June 30, 2016, and December 31, 2015: 

	Nonaccrual				Loans Past Due 90 Days And Over Still Accruing
	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
	(in thousands)
Commercial	$	748	$	1,112	$	—	$	—
Commercial Real Estate:
Construction		—		—		—		—
Farmland		5,196		4,263		—		—
Nonfarm nonresidential		1,549		2,657		—		—
Residential Real Estate:
Multi-family		—		32		—		—
1-4 Family		3,961		5,851		—		—
Consumer		6		20		—		—
Agriculture		139		152		—		—
Other		—		—		—		—
Total	$	11,599	$	14,087	$	—	$	—

The following table presents the aging of the recorded investment in past due loans as of June 30, 2016 and December 31, 2015: 

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
June 30, 2016
Commercial	$	42	$	25	$	—	$	748	$	815
Commercial Real Estate:
Construction		—		—		—		—		—
Farmland		242		—		—		5,196		5,438
Nonfarm nonresidential		110		—		—		1,549		1,659
Residential Real Estate:
Multi-family		—		—		—		—		—
1-4 Family		1,918		311		—		3,961		6,190
Consumer		89		—		—		6		95
Agriculture		—		—		—		139		139
Other		—		—		—		—		—
Total	$	2,401	$	336	$	—	$	11,599	$	14,336

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	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
December 31, 2015
Commercial	$	78	$	—	$	—	$	1,112	$	1,190
Commercial Real Estate:
Construction		—		—		—		—		—
Farmland		456		—		—		4,263		4,719
Nonfarm nonresidential		326		—		—		2,657		2,983
Residential Real Estate:
Multi-family		—		—		—		32		32
1-4 Family		2,225		241		—		5,851		8,317
Consumer		41		—		—		20		61
Agriculture		7		—		—		152		159
Other		—		—		—		—		—
Total	$	3,133	$	241	$	—	$	14,087	$	17,461

Credit Quality Indicators 

We categorize all loans into risk categories at origination based upon original underwriting. Thereafter, we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends. Additionally, loans are analyzed regularly through our internal and external loan review processes. Borrower relationships in excess of $500,000 are routinely analyzed through our credit administration processes which classify the loans as to credit risk. The following definitions are used for risk ratings:

Watch – Loans classified as watch are those loans which have experienced a potentially adverse development which necessitates increased monitoring.

Special Mention – Loans classified as special mention do not have all of the characteristics of substandard or doubtful loans. They have one or more deficiencies which warrant special attention and which corrective action, such as accelerated collection practices, may remedy.

Substandard – Loans classified as substandard are those loans with clear and defined weaknesses such as a highly leveraged position, unfavorable financial ratios, uncertain repayment sources or poor financial condition which may jeopardize the repayment of the debt as contractually agreed. They are characterized by the distinct possibility we will sustain some losses if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful are those loans which have characteristics similar to substandard loans but with an increased risk that collection or liquidation in full is highly questionable and improbable.

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Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be “Pass” rated loans. As of June 30, 2016, and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
June 30, 2016
Commercial	$	73,569	$	400	$	—	$	1,253	$	—	$	75,222
Commercial Real Estate:
Construction		27,915		5,269		—		—		—		33,184
Farmland		67,422		2,492		—		7,828		—		77,742
Nonfarm nonresidential		130,191		14,632		538		2,608		—		147,969
Residential Real Estate:
Multi-family		33,828		6,934		—		3,890		—		44,652
1-4 Family		172,447		15,036		84		8,821		—		196,388
Consumer		9,339		378		—		136		—		9,853
Agriculture		32,726		4,883		—		1,101		—		38,710
Other		416		—		—		—		—		416
Total	$	547,853	$	50,024	$	622	$	25,637	$	—	$	624,136

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
December 31, 2015
Commercial	$	81,570	$	2,953	$	—	$	1,653	$	—	$	86,176
Commercial Real Estate:
Construction		27,603		5,289		—		262		—		33,154
Farmland		65,476		4,844		—		6,092		—		76,412
Nonfarm nonresidential		111,901		22,687		1,328		4,654		—		140,570
Residential Real Estate:
Multi-family		35,300		4,879		—		3,952		—		44,131
1-4 Family		164,490		17,636		67		19,285		—		201,478
Consumer		9,323		474		—		213		—		10,010
Agriculture		21,402		4,601		—		313		—		26,316
Other		419		—		—		—		—		419
Total	$	517,484	$	63,363	$	1,395	$	36,424	$	—	$	618,666

Note 5 – Other Real Estate Owned

Other real estate owned (OREO) is real estate acquired as a result of foreclosure or by deed in lieu of foreclosure. It is classified as real estate owned until such time as it is sold. When property is acquired as a result of foreclosure or by deed in lieu of foreclosure, it is recorded at its fair market value less cost to sell. Any write-down of the property at the time of acquisition is charged to the allowance for loan losses. Costs incurred in order to perfect the lien prior to foreclosure may be capitalized if the fair value less the cost to sell exceeds the balance of the loan at the time of transfer to OREO. Examples of eligible costs to be capitalized are payments of delinquent property taxes to clear tax liens or payments to contractors and subcontractors to clear mechanics’ liens. Subsequent reductions in fair value are recorded as non-interest expense. 

To determine the fair value of OREO for smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers. If the internally evaluated market price is below our underlying investment in the property, appropriate write-downs are taken. For larger dollar residential and commercial real estate properties, we obtain a new appraisal of the subject property or have staff from our special assets group or in our centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned. We typically obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent. 

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The following table presents the major categories of OREO at the period-ends indicated:

	June 30, 2016			December 31, 2015
	(in thousands)
Commercial Real Estate:
Construction, land development, and other land	$	11,066		$	12,749
Nonfarm nonresidential		1,512			6,967
Residential Real Estate:
1-4 Family		185			128
		12,763			19,844
Valuation allowance		(441	)		(630	)
	$	12,322		$	19,214

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands) (in thousands)
OREO Valuation Allowance Activity:
Beginning balance	$	888		$	492		$	630		$	1,066
Provision to allowance		150			2,330			650			2,630
Write-downs		(597	)		(2,515	)		(839	)		(3,389	)
Ending balance	$	441		$	307		$	441		$	307

Residential loans secured by 1-4 family residential properties in the process of foreclosure totaled $533,000 and $934,000 at June 30, 2016 and December 31, 2015, respectively.

Net activity relating to other real estate owned during the six months ended June 30, 2016 and 2015 is as follows:

	For the Six Months Ended June 30,
	2016			2015
	(in thousands)
OREO Activity
OREO as of January 1	$	19,214		$	46,197
Real estate acquired		576			955
Valuation adjustment write-downs		(650	)		(2,630	)
Net gain on sales		169			43
Proceeds from sales of properties		(6,987	)		(5,020	)
OREO as of June 30	$	12,322		$	39,545

OREO rental income totaled $149,000 and $405,000 for the three and six months ended June 30, 2016, respectively, and $372,000 and $729,000 for the three and six months ended June 30, 2015, respectively. 

Expenses related to other real estate owned include:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands) (in thousands)
Net gain on sales	$	(114	)	$	(40	)	$	(169	)	$	(43	)
Provision to allowance		150			2,330			650			2,630
Operating expense		258			642			481			1,078
Total	$	294		$	2,932		$	962		$	3,665

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 Note 6 – Deposits

The following table shows ending deposit balances by category as of:

	June 30, 2016		December 31, 2015
	(in thousands)
Non-interest bearing	$	117,843	$	120,043
Interest checking		90,806		97,515
Money market		135,643		125,935
Savings		34,616		34,677
Certificates of deposit		461,183		499,827
Total	$	840,091	$	877,997

Time deposits of $250,000 or more were $26.7 million and $28.4 million at June 30, 2016 and December 31, 2015, respectively.

Scheduled maturities of all time deposits at June 30, 2016 were as follows (in thousands):

Year 1	$	345,900
Year 2		41,056
Year 3		13,916
Year 4		44,484
Year 5		15,827
	$	461,183

Note 7 – Advances from the Federal Home Loan Bank

Advances from the Federal Home Loan Bank were as follows:

	June 30,		December 31,
	2016		2015
	(in thousands)
Monthly amortizing advances with fixed rates from 0.00% to 5.25% and maturities ranging from 2017 through 2033, averaging 2.50% at June 30, 2016 and 2.65% at December 31, 2015	$	2,775	$	3,081

Each advance is payable based upon the terms of agreement, with a prepayment penalty.  New advances are limited to a one-year maturity or less. No prepayment penalties were incurred during 2016 or 2015. The advances are collateralized by first mortgage loans. The borrowing capacity is based on the market value of the underlying pledged loans. At June 30, 2016, our additional borrowing capacity with the FHLB was $29.5 million. The availability of our borrowing capacity could be affected by our financial condition and the FHLB could require additional collateral or, among other things, exercise its right to deny a funding request, at its discretion.

Note 8 – Fair Values Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use various valuation techniques to determine fair value, including market, income and cost approaches. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets an entity has the ability to access as of the measurement date, or observable inputs.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

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

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In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When that occurs, we classify the fair value hierarchy on the lowest level of input that is significant to the fair value measurement. We used the following methods and significant assumptions to estimate fair value.

Securities: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges, if available. This valuation method is classified as Level 1 in the fair value hierarchy. For securities where quoted prices are not available, fair values are calculated on market prices of similar securities, or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Matrix pricing relies on the securities’ relationship to similarly traded securities, benchmark curves, and the benchmarking of like securities. Matrix pricing utilizes observable market inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. In instances where broker quotes are used, these quotes are obtained from market makers or broker-dealers recognized to be market participants. This valuation method is classified as Level 2 in the fair value hierarchy. For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators. This valuation method is classified as Level 3 in the fair value hierarchy. Discounted cash flows are calculated using spread to swap and LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans: An impaired loan is evaluated at the time the loan is identified as impaired and is recorded at fair value less costs to sell. Fair value is measured based on the value of the collateral securing the loan and is classified as Level 3 in the fair value hierarchy. Fair value is determined using several methods. Generally, the fair value of real estate is determined based on appraisals by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. These routine adjustments are made to adjust the value of a specific property relative to comparable properties for variations in qualities such as location, size, and income production capacity relative to the subject property of the appraisal. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our impaired loans. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

We also apply discounts to the expected fair value of collateral for impaired loans where the likely resolution involves litigation or foreclosure. Resolution of this nature generally results in receiving lower values for real estate collateral in a more aggressive sales environment. We have utilized discounts ranging from 10% to 33% in our impairment evaluations when applicable.

Impaired loans are evaluated quarterly for additional impairment. We obtain updated appraisals on properties securing our loans when circumstances are warranted such as at the time of renewal or when market conditions have significantly changed. This determination is made on a property-by-property basis in light of circumstances in the broader economic climate and our assessment of deterioration of real estate values in the market in which the property is located. The first stage of our assessment involves management’s inspection of the property in question. Management also engages in conversations with local real estate professionals, investors, and market participants to determine the likely marketing time and value range for the property. The second stage involves an assessment of current trends in the regional market. After thorough consideration of these factors, management will either internally evaluate fair value or order a new appraisal.

Other Real Estate Owned (OREO): OREO is evaluated at the time of acquisition and recorded at fair value as determined by independent appraisal or internal evaluation less cost to sell. Our quarterly evaluations of OREO for impairment are driven by property type. For smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers. Based on these consultations, we determine asking prices for OREO properties we are marketing for sale. If the internally evaluated fair value is below our recorded investment in the property, appropriate write-downs are taken.

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For larger dollar commercial real estate properties, we obtain a new appraisal of the subject property or have staff in our special assets group or centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned. In some of these circumstances, an appraisal is in process at quarter end, and we must make our best estimate of the fair value of the underlying collateral based on our internal evaluation of the property, review of the most recent appraisal, and discussions with the currently engaged appraiser. We generally obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our OREO. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

Financial assets measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 are summarized below:

			Fair Value Measurements at June 30, 2016 Using
			(in thousands)
			Quoted Prices In				Significant
			Active Markets for		Significant Other		Unobservable
	Carrying		Identical Assets		Observable Inputs		Inputs
Description	Value		(Level 1)		(Level 2)		(Level 3)
Available for sale securities
U.S. Government and federal agency	$	34,453	$	—	$	34,453	$	—
Agency mortgage-backed: residential		103,461		—		103,461		—
State and municipal		3,094		—		3,094		—
Corporate bonds		2,137		—		2,137		—
Total	$	143,145	$	—	$	143,145	$	—

			Fair Value Measurements at December 31, 2015 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	33,262	$	—	$	33,262	$	—
Agency mortgage-backed: residential		102,662		—		102,662		—
State and municipal		6,861		—		6,861		—
Corporate bonds		2,193		—		2,193		—
Total	$	144,978	$	—	$	144,978	$	—

There were no transfers between Level 1 and Level 2 during 2016 or 2015.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods ended June 30, 2016 and 2015:

	Other Debt Securities
	2016		2015
	(in thousands)
Balances of recurring Level 3 assets at January 1	$	—	$	658
Total gain (loss) for the period:
Included in other comprehensive income (loss)		—		(7	)
Balance of recurring Level 3 assets at June 30	$	—	$	651

At June 30, 2015, our other debt security valuation was determined internally by calculating discounted cash flows using the security’s coupon rate of 6.5% and an estimated current market rate of 8.25% based upon the current yield curve plus spreads that adjust for volatility, credit risk, and optionality.  We also considered the issuer’s publicly filed financial information as well as assumptions regarding the likelihood of deferrals and defaults. This security was sold in December 2015.

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Financial assets measured at fair value on a non-recurring basis are summarized below: 

			Fair Value Measurements at June 30, 2016 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		597		—		—		597
Nonfarm nonresidential		92		—		—		92
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,506		—		—		1,506
Consumer		—		—		—		—
Agriculture		69		—		—		69
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		10,684		—		—		10,684
Farmland		—		—		—		—
Nonfarm nonresidential		1,460		—		—		1,460
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		178		—		—		178

			Fair Value Measurements at December 31, 2015 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		—		—		—		—
Nonfarm nonresidential		139		—		—		139
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,362		—		—		1,362
Consumer		—		—		—		—
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		12,344		—		—		12,344
Farmland		—		—		—		—
Nonfarm nonresidential		6,746		—		—		6,746
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		124		—		—		124

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $2.4 million at June 30, 2016 with a valuation allowance of $89,000, resulting in no additional provision for loan losses for the three and six months ended June 30, 2016. Impaired loans had a carrying amount of $5.9 million with a valuation allowance of $742,000, and no additional provision for the three and six months ended June 30, 2015. At December 31, 2015, impaired loans had a carrying amount of $1.8 million, with a valuation allowance of $337,000.

OREO, which is measured at the lower of carrying or fair value less estimated costs to sell, had a net carrying amount of $12.3 million as of June 30, 2016, compared with $39.5 million at June 30, 2015 and $19.2 million at December 31, 2015. Fair value write-downs of $150,000 and $650,000 were recorded on OREO for the three and six months ended June 30, 2016, respectively, and $2.3 million and $2.6 million for the three and six months ended June 30, 2015, respectively.

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The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2016:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Residential real estate	$	1,506	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	22%	(10%)
Other real estate owned – Commercial real estate	$	12,144	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	30%	(12%)
			Income approach	Discount or capitalization rate	10%	-	20%	(17%)

The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2015:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Residential real estate	$	1,362	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	16%	(7%)
Other real estate owned – Commercial real estate	$	19,090	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	30%	(12%)
			Income approach	Discount or capitalization rate	10%	-	20%	(17%)

Carrying amount and estimated fair values of financial instruments were as follows for the periods indicated:

			Fair Value Measurements at June 30, 2016 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	57,602	$	44,391	$	13,211	$	—	$	57,602
Securities available for sale		143,145		—		143,145		—		143,145
Securities held to maturity		41,948		—		44,955		—		44,955
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		—		—		—		—		—
Loans, net		614,032		—		—		620,542		620,542
Accrued interest receivable		3,048		—		1,076		1,972		3,048
Financial liabilities
Deposits	$	840,091	$	117,845	$	711,563	$	—	$	829,408
Federal Home Loan Bank advances		2,775		—		2,852		—		2,852
Subordinated capital notes		3,600		—		—		3,515		3,515
Junior subordinated debentures		21,000		—		—		12,973		12,973
Accrued interest payable		422		—		388		34		422

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			Fair Value Measurements at December 31, 2015 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	93,335	$	79,498	$	13,837	$	—	$	93,335
Securities available for sale		144,978		—		144,978		—		144,978
Securities held to maturity		42,075		—		44,253		—		44,253
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		186		—		186		—		186
Loans, net		606,625		—		—		614,162		614,162
Accrued interest receivable		3,116		—		1,111		2,005		3,116
Financial liabilities
Deposits	$	877,997	$	120,043	$	739,152	$	—	$	859,195
Federal Home Loan Bank advances		3,081		—		3,076		—		3,076
Subordinated capital notes		4,050		—		—		3,933		3,933
Junior subordinated debentures		21,000		—		—		12,810		12,810
Accrued interest payable		2,805		—		422		2,383		2,805

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

(a) Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. Non-interest bearing deposits are Level 1 whereas interest bearing due from bank accounts and fed funds sold are Level 2.

(b) FHLB Stock

It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

(c) Loans, Net

Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

(d) Loans Held for Sale

The fair value of loans held for sale is estimated based upon binding contracts and and/or quotes from third party investors resulting in a Level 2 classification.

(e) Deposits

The fair values disclosed for non-interest bearing deposits are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate interest bearing deposits approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate interest bearing deposits are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(f) Other Borrowings

The fair values of the Company’s FHLB advances are estimated using discounted cash flow analyses based on the current borrowing rates resulting in a Level 2 classification.

The fair values of the Company’s subordinated capital notes and junior subordinated debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

(g) Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification based on the level of the asset or liability with which the accrual is associated.

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Note 9 – Income Taxes

Deferred tax assets and liabilities were due to the following as of:

	June 30,			December 31,
	2016			2015
	(in thousands)
Deferred tax assets:
Net operating loss carry-forward	$	39,336		$	38,085
Allowance for loan losses		3,536			4,214
Other real estate owned write-down		6,327			7,619
Alternative minimum tax credit carry-forward		692			692
Net assets from acquisitions		673			671
Net unrealized loss on securities		—			166
New market tax credit carry-forward		208			208
Nonaccrual loan interest		562			549
Other		1,854			1,875
		53,188			54,079
Deferred tax liabilities:
FHLB stock dividends		928			928
Fixed assets		203			176
Net unrealized gain on securities		749			—
Other		536			865
		2,416			1,969
Net deferred tax assets before valuation allowance		50,772			52,110
Valuation allowance		(50,772	)		(52,110	)
Net deferred tax asset	$	—		$	—

Our estimate of our ability to realize the deferred tax asset depends on our estimate of projected future levels of taxable income. In analyzing future taxable income levels, we considered all evidence currently available, both positive and negative. Based on our analysis, we established a valuation allowance for all deferred tax assets as of December 31, 2011. The valuation allowance remains in effect as of June 30, 2016.

The Company does not have any beginning and ending unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. There were no interest and penalties recorded in the income statement or accrued for the three or six months ended June 30, 2016 or June 30, 2015 related to unrecognized tax benefits.

Under Section 382 of the Internal Revenue Code, as amended (“Section 382”), the Company’s net operating loss carryforwards (“NOLs”) and other deferred tax assets can generally be used to offset future taxable income and therefore reduce federal income tax obligations. However, the Company's ability to use its NOLs would be limited if there was an “ownership change” as defined by Section 382. This would occur if shareholders owning (or deemed to own under the tax rules) 5% or more of the Company's increase their aggregate ownership of the Company by more than 50 percentage points over a defined period of time.

In 2015, the Company took two measures to preserve the value of its NOLs. First, we adopted a tax benefits preservation plan designed to reduce the likelihood of an “ownership change” occurring as a result of purchases and sales of the Company's common shares. Upon adoption of this plan, the Company declared a dividend of one preferred stock purchase right for each common share outstanding as of the close of business on July 10, 2015. Any shareholder or group that acquires beneficial ownership of 5% or more of the Company (an “acquiring person”) could be subject to significant dilution in its holdings if the Company's Board of Directors does not approve such acquisition. Existing shareholders holding 5% or more of the Company will not be considered acquiring persons unless they acquire additional shares, subject to certain exceptions described in the plan. In addition, the Board of Directors has the discretion to exempt certain transactions and certain persons whose acquisition of securities is determined by the Board not to jeopardize the Company's deferred tax assets. The rights will expire upon the earlier of (i) June 29, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefits may be carried forward, (iii) the repeal or amendment of Section 382 or any successor statute, if the Board of Directors determines that the plan is no longer needed to preserve the tax benefits, and (iv) certain other events as described in the plan.

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On September 23, 2015, our shareholders approved an amendment to the Company’s articles of incorporation to further help protect the long-term value of the Company’s NOLs. The amendment provides a means to block transfers of our common shares that could result in an ownership change under Section 382. The transfer restrictions will expire on the earlier of (i) September 23, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefit may be carried forward, (iii) the repeal of Section 382 or any successor statute if our Board determines that the transfer restrictions are no longer needed to preserve the tax benefits of our NOLs, or (iv) such date as the Board otherwise determines that the transfer restrictions are no longer necessary.

The Company and its subsidiaries are subject to U.S. federal income tax and the Company is subject to income tax in the Commonwealth of Kentucky. The Company is no longer subject to examination by taxing authorities for years before 2012.

Note 10 – Stock Plans and Stock Based Compensation

At the annual meeting on May 25, 2016, shareholders approved the Porter Bancorp, Inc. 2016 Stock Option and Incentive Compensation Plan (“2016 Plan”), which replaces the Porter Bancorp, Inc. 2006 Stock Incentive Plan (“2006 Employee Plan”) that had expired earlier in 2016. The shares available for issuance under the 2016 Plan total 229,180 shares which represents the number of shares that had previously been authorized by shareholders for issuance under the 2006 Employee Plan. Shares issued to employees under the plan vest annually on the anniversary date of the grant over three to ten years.

The Company also maintains the Porter Bancorp, Inc. 2006 Non-Employee Directors Stock Ownership Incentive Plan (“2006 Director Plan”) pursuant to which 89,622 shares remain available for issuance as annual awards of restricted stock to the Company’s non-employee directors. Shares issued annually to non-employee directors have a fair market value of $25,000 and vest on December 31 in the year of grant.

On December 4, 2014, the U.S. Treasury sold our Series A preferred shares at a discount to face amount. As a result, restricted shares previously granted to senior executives became subject to permanent transfer restrictions. On March 25, 2015, the Compensation Committee modified the equity compensation arrangements with our four named executive officers to restore the incentive that was intended by including equity grants in their employment agreements. The Compensation Committee and our four named executive officers mutually agreed to terminate 538,479 restricted shares that were subject to permanent restrictions on transfer. We then awarded 800,000 new service-based restricted shares to those executive officers. The new awards are accounted for as a modification and vest over four years, with one-third of the shares vesting on each of the second, third and fourth anniversaries of the date of grant. The modification resulted in incremental compensation expense of approximately $233,000, which is being amortized in accordance with the vesting schedule.

The fair value of the 2016 unvested shares issued was $323,000, or $1.82 per weighted-average share. The Company recorded $73,000 and $167,000 of stock-based compensation to salaries and employee benefits for the three and six months ended June 30, 2016, respectively, and $49,000 and $181,000 for the three and six months ended June 30, 2015, respectively. We expect substantially all of the unvested shares outstanding at the end of the period will vest according to the vesting schedule. No deferred tax benefit was recognized related to this expense for either period.

The following table summarizes unvested share activity as of and for the periods indicated for the Plan:

	Six Months Ended					Twelve Months Ended
	June 30, 2016					December 31, 2015
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		922,419		$	0.96		775,492		$	1.33
Granted		177,290			1.82		915,740			0.91
Vested		(18,637	)		2.79		(285,977	)		1.33
Terminated		—			—		(450,994	)		1.25
Forfeited		(6,521	)		1.25		(31,842	)		1.13
Outstanding, ending		1,074,551		$	1.07		922,419		$	0.96

Unrecognized stock based compensation expense related to unvested shares for the remainder of 2016 and beyond is estimated as follows (in thousands):

July 2016 – December 2016	$	278
2017		197
2018		190
2019		30
2020 & thereafter		9

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Note 11 – Earnings (Loss) per Share

The factors used in the basic and diluted earnings per share computations follow:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016		2015			2016		2015
	(in thousands, except share and per share data)
Net income (loss)	$	1,012	$	(2,130	)	$	2,492	$	(1,536	)
Less:
Earnings (loss) allocated to unvested shares		33		(91	)		84		(60	)
Earnings (loss) allocated to participating preferred shares		—		—			—		(209	)
Net income (loss) available to common shareholders, basic and diluted	$	979	$	(2,039	)	$	2,408	$	(1,267	)
Basic
Weighted average common shares including unvested common shares outstanding		30,385,850		25,687,579			28,665,579		25,554,292
Less:
Weighted average unvested common shares		996,046		1,098,072			971,504		990,545
Weighted average Series B preferred		—		—			—		1,343,735
Weighted average Series D preferred		—		—			—		2,140,774
Weighted average common shares outstanding		29,389,804		24,589,507			27,694,075		21,079,238
Basic income (loss) per common share	$	0.03	$	(0.08	)	$	0.09	$	(0.06	)
Diluted
Add: Dilutive effects of assumed exercises of common stock warrants		—		—			—		—
Weighted average common shares and potential common shares		29,389,804		24,589,507			27,694,075		21,079,238
Diluted income (loss) per common share	$	0.03	$	(0.08	)	$	0.09	$	(0.06	)

The Company had no outstanding stock options at June 30, 2016 or 2015. A warrant for the purchase of 330,561 shares of the Company’s common stock at an exercise price of $15.88 was outstanding at June 30, 2016 and 2015 but was not included in the diluted EPS computation as inclusion would have been anti-dilutive. Additionally, warrants for the purchase of 650,544 shares of non-voting common stock at an exercise price of $10.95 per share were outstanding at June 30, 2015, but were not included in the diluted EPS computation as inclusion would have been anti-dilutive. The 650,544 warrants outstanding as of June 30, 2015 expired in September 2015.

Note 12 – Capital Requirements and Restrictions on Retained Earnings

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. Banks (Basel III rules) became effective for the Company and Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. The final rules allowed banks and their holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and the Bank opted out of this requirement. The rules also establish a “capital conservation buffer” of 2.5%, to be phased in over three years, above the regulatory minimum risk-based capital ratios. Once the capital conservation buffer is fully phased in, the minimum ratios are a common equity Tier 1 risk-based capital ratio of 7.0%, a Tier 1 risk-based capital ratio of 8.5%, and a total risk-based capital ratio of 10.5%. The phase-in of the capital conservation buffer requirement begins in January 2016 at 0.625% of risk-weighted assets and will increase each year until fully implemented in January 2019. An institution is subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if capital levels fall below minimum levels plus the buffer amounts. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.     

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In its Consent Order with the FDIC and the KDFI, the Bank has agreed to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. The Consent Order is described in greater detail in Note 2 – “Going Concern and Future Plans”. As of June 30, 2016, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were both less than the minimum capital ratios required by the Consent Order. The Bank cannot be considered well-capitalized while subject to the Consent Order. We are also restricted from accepting, renewing, or rolling-over brokered deposits without the prior receipt of a waiver on a case-by-case basis from our regulators.

On September 21, 2011, we entered into a Written Agreement with the Federal Reserve Bank of St. Louis. In the Agreement, we made formal commitments to use our financial and management resources to serve as a source of strength for the Bank and to assist the Bank in addressing weaknesses identified by the FDIC and the KDFI, to pay no dividends without prior written approval, to pay no interest or principal on subordinated debentures or trust preferred securities without prior written approval, and to submit an acceptable plan to maintain sufficient capital.

The following table shows the ratios and amounts of Common Equity Tier 1, Tier 1 capital and total capital to risk-adjusted assets and the leverage ratios for Porter Bancorp, Inc. and the Bank at the dates indicated (dollars in thousands):

	Actual					Regulatory Minimums For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of June 30, 2016:
Total risk-based capital (to risk- weighted assets)
Consolidated	$	75,959		11.31	%	$	53,750		8.00	%
Bank		72,974		10.87			53,692		8.00
Total common equity Tier I risk-based capital (to risk- weighted assets)
Consolidated		41,068		6.11			30,235		4.50
Bank		61,863		9.22			30,202		4.50
Tier I capital (to risk-weighted assets)
Consolidated		54,799		8.16			40,313		6.00
Bank		61,863		9.22			40,269		6.00
Tier I capital (to average assets)
Consolidated		54,799		5.87			37,370		4.00
Bank		61,863		6.65			37,237		4.00

	Actual					Regulatory Minimums For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of December 31, 2015:
Total risk-based capital (to risk- weighted assets)
Consolidated	$	68,530		10.46	%	$	52,436		8.00	%
Bank		69,250		10.58			52,347		8.00
Total common equity Tier I risk-based capital (to risk weighted assets)
Consolidated		33,368		5.09	%		29,495		4.50	%
Bank		57,873		8.84			29,445		4.50
Tier I capital (to risk-weighted assets)
Consolidated		45,174		6.89			39,327		6.00
Bank		57,873		8.84			39,260		6.00
Tier I capital (to average assets)
Consolidated		45,174		4.74			38,131		4.00
Bank		57,873		6.08			38,085		4.00

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The Consent Order requires the Bank to achieve the minimum capital ratios presented below:

	Actual as of June 30, 2016					Ratios Required by Consent Order
	Amount		Ratio			Amount		Ratio
Total capital to risk-weighted assets	$	72,974		10.87	%	$	80,538		12.00	%
Tier I capital to average assets		61,863		6.65			83,783		9.00

Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a Consent Order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions.

Kentucky banking laws limit the amount of dividends that may be paid to a holding company by its subsidiary banks without prior approval. These laws limit the amount of dividends that may be paid in any calendar year to current year’s net income, as defined in the laws, combined with the retained net income of the preceding two years, less any dividends declared during those periods. The Bank has agreed with its primary regulators to obtain their written consent prior to declaring or paying any future dividends. As a practical matter, the Bank cannot pay dividends to the Company until the Consent Order is satisfied.

Note 13 – Contingencies

We are defendants in various legal proceedings. Litigation is subject to inherent uncertainties and unfavorable rulings could occur. We record contingent liabilities resulting from claims against us when a loss is assessed to be probable and the amount of the loss is reasonably estimable. Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including in some cases judgments about the potential actions of third party claimants and courts. Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain.  Currently, we have accrued approximately $2.1 million related to ongoing litigation matters for which we believe liability is probable and reasonably estimable. Accruals are not made in cases where liability is not probable or the amount cannot be reasonably estimated. We disclose legal matters when we believe liability is reasonably possible and may be material to our consolidated financial statements.

Signature Point Litigation. On June 18, 2010, three real estate development companies filed suit in Kentucky state court against the Bank and Managed Assets of Kentucky (“MAKY”). Signature Point Condominiums LLC, et al. v. PBI Bank, et al., Jefferson Circuit Court, Case No 10-CI-04295. On July 16, 2013, a jury in Louisville, Kentucky returned a verdict against the Bank, awarding the plaintiffs compensatory damages of $1,515,000 and punitive damages of $5,500,000. The case arose from a settlement in which the Bank agreed to release the plaintiffs and guarantors from obligations of more than $26 million related to a real estate project in Louisville. The plaintiffs were granted a right of first refusal to repurchase a tract of land within the project. In exchange, the plaintiffs conveyed the real estate securing the loans to the Bank. After plaintiffs declined to exercise their right of first refusal, the Bank sold the tract to the third party. Plaintiffs alleged the Bank had knowledge of the third party offer before the conveyance of the land by the Plaintiffs to the Bank. Plaintiffs asserted claims of fraud, breach of fiduciary duty, breach of the duty of good faith and fair dealing, tortious interference with prospective business advantage and conspiracy to commit fraud, negligence, and conspiracy against the Bank.

After conferring with its legal advisors, the Bank believes the findings and damages are excessive and contrary to law, and that it has meritorious grounds on which it has moved to appeal. The Bank’s Notice of Appeal was filed on October 25, 2013. After a number of procedural issues were resolved, the Bank filed its appellate brief on September 30, 2014. Appellee’s brief was filed on December 1, 2014. The Appellate Court heard oral arguments on November 16, 2015. We await the Appellate Court’s ruling. We will continue to defend this matter vigorously.

In accordance with the guidance provided in ASC 450-20-25, and after consultation with its legal counsel engaged for the appeal of the verdict, the Company concluded that it was not probable the full amount of the compensatory damages awarded by the jury would be overturned. Therefore, a liability was accrued for the full $1.5 million of compensatory damages awarded, plus statutory interest. After conferring with its legal counsel for the appeal, the Company concluded that the jury verdict for punitive damages was contrary to law, unsupported, excessive, and otherwise inappropriate. Based on this advice, the Company concluded it was probable that the verdict amount for $5.5 million in punitive damages would be overturned by the appeals court, and therefore it was not probable that the $5.5 million in punitive damages would become an actual liability. The ultimate outcome of this self-insured matter could have a material adverse effect on our financial condition, results of operations or cash flows.

AIT Laboratories Employee Stock Ownership Plan. On August 29, 2014, the United States Department of Labor (“DOL”) filed a lawsuit against the Bank and Michael A. Evans in the U.S. District Court for the Southern District of Indiana. Thomas E. Perez, Secretary of the United States Department of Labor v. PBI Bank, Inc. and Michael A. Evans (Case No. 1:14-CV-01429-SEB-MJD). The complaint alleges that in 2009, the Bank, in the capacity of trustee for the AIT Laboratories Employee Stock Ownership Plan, authorized the alleged imprudent and disloyal purchase of the stock of AIT Holdings, Inc. in 2009 for $90 million, a price allegedly far in excess of the stock’s fair market value. The Bank's responsive pleading was filed on November 4, 2014, disputing the material factual allegations that have been made by the DOL. On November 19, 2015, the parties agreed to settle the litigation and executed a written settlement agreement on May 12, 2016. The Bank agreed to a settlement payment, which, to the extent not paid from insurance proceeds, had been previously reserved for. The court entered an agreed order ending the litigation on May 13, 2016.

United States Department of Justice Investigation. On October 17, 2014, the United States Department of Justice (the “DOJ”) notified the Bank that the Bank was the subject of an investigation into possible violations of federal laws, including, among other things, possible violations related to false bank entries, bank fraud and securities fraud.  The investigation concerns allegations that Bank personnel engaged in practices intended to delay or avoid disclosure of the Bank’s asset quality at the time of and following the United States Treasury’s purchase of preferred shares from the Company in November 2008.  The Bank is responding to and cooperating with any requests for information from DOJ. At this time the investigation is ongoing, and DOJ has made no determination whether to pursue any action in the matter.

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

This item analyzes our financial condition, change in financial condition and results of operations. It should be read in conjunction with the unaudited consolidated financial statements and accompanying notes presented in Part I, Item 1 of this report.

Cautionary Note Regarding Forward-Looking Statements

This report contains statements about the future expectations, activities and events that constitute forward-looking statements. Forward-looking statements express our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account information currently available to us. These statements are not statements of historical fact. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “plan,” “strive” or similar words, or the negatives of these words, identify forward-looking statements.

Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we expressed or implied in any forward-looking statements. These risks and uncertainties can be difficult to predict and may be out of our control. Factors that could contribute to differences in our results include, but are not limited to the following:

● Our inability to increase our capital to the levels required by our agreements with bank regulators could have a material adverse effect on our business.

● A significant percentage of our loan portfolio is comprised of non-owner occupied commercial real estate loans, real estate construction and development loans, and multi-family residential real estate loans, all of which carry a higher degree of risk.

● We continue to hold and acquire a significant amount of other real estate owned (“OREO”) properties, which could increase operating expenses and result in future losses.

● Our decisions regarding credit risk may not be accurate, and our allowance for loan losses may not be sufficient to cover actual losses.

● Our ability to pay cash dividends on our common and preferred shares and pay interest on the junior subordinated debentures that relate to our trust preferred securities is currently restricted. Our inability to resume paying interest on our trust preferred securities could adversely affect our common and preferred shareholders.

● While we believe our provision for legal contingencies is adequate, the outcome of legal proceedings is difficult to predict and we may settle legal claims or be subject to judgments for amounts that exceed our estimates.

We also refer you to Part II, Item 1A – Risk Factors in this report and to the risks identified and the cautionary statements discussed in greater detail in our December 31, 2015 Annual Report on Form 10-K.

Forward-looking statements are not guarantees of performance or results. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes it has chosen these assumptions and bases in good faith and they are reasonable. We caution you however, forward looking statements relying upon such assumptions or bases almost always vary from actual results, and the differences between those statements and actual results can be material. The forward-looking statements included in this report speak only as of the date of the report.  We have no duty, and do not intend to, update these statements unless applicable laws require us to do so.

Overview

Porter Bancorp, Inc. (the “Company”) is a bank holding company headquartered in Louisville, Kentucky. Our wholly owned subsidiary PBI Bank (“the Bank”) is the tenth largest bank domiciled in the Commonwealth of Kentucky based on total assets. We operate banking offices in twelve counties in Kentucky. Our markets include metropolitan Louisville in Jefferson County and the surrounding counties of Henry and Bullitt. We serve south central Kentucky and southern Kentucky from banking offices in Butler, Green, Hart, Edmonson, Barren, Warren, Ohio, and Daviess Counties. We also have an office in Lexington, the second largest city in Kentucky. The Bank is a community bank with a wide range of commercial and personal banking products. As of June 30, 2016, we had total assets of $916.6 million, total loans of $624.1 million, total deposits of $840.1 million and stockholders’ equity of $41.4 million.

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The Company reported net income of $1.0 million and $2.5 million for the three and six months ended June 30, 2016, compared with net loss of $2.1 million and $1.5 million for the same periods of 2015. After deductions for earnings allocated to participating securities, net income attributable to common shareholders was $979,000 and $2.4 million for the three and six months ended June 30, 2016, respectively, compared with net loss attributable to common shareholders of $2.0 million and $1.3 million for the three and six months ended June 30, 2015, respectively.

Basic and diluted net income per common share were $0.03 and $0.09 for the three and six months ended June 30, 2016, respectively, compared with basic and diluted net loss per common share of ($0.08) and ($0.06) for the three and six months ended June 30, 2015, respectively.

We note the following significant items during the six months ended June 30, 2016:

● On April 15, 2016, we completed the private placement of 2.9 million common shares and 1.1 million non-voting common shares to accredited investors resulting in total proceeds of $5.0 million. The investors in the private placement directed a portion of purchase price to pay all deferred interest payments on junior subordinated debentures, bringing our interest payments current through the second quarter of 2016. The remaining proceeds totaled approximately $2.2 million and will be used for general corporate purposes and to support the Bank.

● We recorded negative provision for loan losses expense of $1.2 million for the six months ended June 30, 2016, compared to no provision for loan losses expense for the six months ended June 30, 2015, because of declining historical loss rates, improvements in loan quality, and management’s assessment of risk in the loan portfolio. Net loan charge-offs were $787,000 for the first six months of 2016, compared to $2.6 million for the first six months of 2015. In the following paragraphs we discuss our improving trends in non-performing loans, past due loans, and loan risk categories during the period, the factors that led to the negative provision expense.

● Non-performing loans decreased $2.5 million to $11.6 million at June 30, 2016, compared with $14.1 million at December 31, 2015. The decrease in non-performing loans was primarily due to $3.4 million in paydowns, $988,000 in charge-offs, and $576,000 in transfers to OREO, which were offset by $2.9 million in loans being placed on nonaccrual.

● Loans past due 30-59 days decreased from $3.1 million at December 31, 2015 to $2.4 million at June 30, 2016, and loans past due 60-89 days increased from $241,000 at December 31, 2015 to $336,000 at June 30, 2016. Total loans past due and nonaccrual loans decreased to $14.3 million at June 30, 2016, from $17.5 million at December 31, 2015.

● All loan risk categories (other than pass loans) have decreased since December 31, 2015. Pass loans represent 87.8% of the portfolio at June 30, 2016, compared to 83.6% at December 31, 2015. During the six months ended June 30, 2016, the pass category increased approximately $30.4 million, the watch category declined approximately $13.3 million, the special mention category declined approximately $773,000, and the substandard category declined approximately $10.8 million. The $10.8 million decrease in loans classified as substandard was primarily driven by $7.1 million in principal payments received and $7.7 million in loans upgraded from substandard, offset by $6.1 million in loans downgraded to substandard during the six months ended June 30, 2016.

● Foreclosed properties were $12.3 million at June 30, 2016, compared with $19.2 million at December 31, 2015, and $39.5 million at June 30, 2015. During the first six months of 2016, the Company acquired $576,000 and sold $7.0 million of OREO. We incurred OREO losses totaling $481,000 during the first six months of 2016 compared to $2.6 million during the first six months of 2015, reflecting gains and losses on sales and fair value write-downs for reductions in listing prices for certain properties and updated appraisals.

● Our ratio of non-performing assets to total assets decreased to 2.61% at June 30, 2016, compared with 3.51% at December 31, 2015, and 7.13% at June 30, 2015.

● Net interest margin increased 23 basis points to 3.44% for the first six months of 2016 compared with 3.21% for the first six months of 2015. The increase in margin between periods was due to an increase in the yield on earning assets from 4.02% for the first six months of 2015 to 4.13% for the first six months of 2016, coupled with a decrease in the cost of interest bearing liabilities from 0.89% for the first six months of 2015 to 0.79% in the first six months of 2016. The yield on earning assets was positively impacted by the collection of previously charged-off accrued uncollected interest of approximately $285,000 along with the full unpaid balance of three nonaccrual loans.

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● Average loans receivable declined approximately $22.6 million or 3.5% to $619.7 million for the six months ended June 30, 2016 compared with $642.3 million for the six months ended June 30, 2015. This resulted in an interest revenue volume decline of approximately $556,000. The decrease in the cost of interest bearing liabilities was primarily driven by the continued repricing of certificates of deposit at lower rates and the declining volume of certificates of deposit.

● Non-interest income decreased $1.7 million to $2.5 million for the first six months of 2016, compared with $4.3 million for the first six months of 2015. The decrease was driven primarily by gains on the sales of securities totaling $203,000 in the first six months of 2016, compared to $1.7 million in the first six months of 2015. Non-interest expense decreased $4.4 million to $16.0 million for the first six months of 2016 compared with $20.4 million for the first six months of 2015, primarily due to other real estate owned expense totaling $962,000 in the first six months of 2016, compared to $3.7 million in the first six months of 2015 as well as professional fees totaling $877,000 in the first six months of 2016, compared to $1.7 million in the first six months of 2015.

● Deposits decreased 4.3% to $840.1 million at June 30, 2016, compared with $878.0 million at December 31, 2015. Certificate of deposit balances decreased $38.6 million during the first six months of 2016 to $461.2 million at June 30, 2016, from $499.8 million at December 31, 2015. Money market deposits increased 7.7% at June 30, 2016 compared with December 31, 2015.

Going Concern Considerations and Future Plans

As described in Note 2 – “Going Concern Considerations and Future Plans,” our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future.

For the six months ended June 30, 2016, we reported net income of $2.5 million compared with net loss of $3.2 million and $11.2 million for the years ended December 31, 2015 and 2014, respectively. Our financial performance has been negatively impacted by the Bank’s elevated level of non-performing assets, although the impact continues to diminish as we have substantially reduced non-performing assets during recent periods. Non-performing loans were 1.86%, 2.28%, and 7.57% of total loans at June 30, 2016, December 31, 2015, and December 31, 2014, respectively. Non-performing assets were 2.61%, 3.51%, and 9.19% of total assets at June 30, 2016, December 31, 2015, and December 31, 2014, respectively. See “Analysis of Financial Condition,” below.

On April 15, 2016, we completed a private placement of 2.9 million common shares and 1.1 million non-voting common shares to accredited investors for a total purchase price of $5.0 million. The investors in the private placement directed a portion of the purchase price to pay all deferred interest payments on our trust preferred securities, bringing our interest payments current through the second quarter of 2016. We had deferred interest payable on the junior subordinated debentures held by our trust subsidiaries since the fourth quarter of 2011, requiring our trust subsidiaries to defer distributions on our trust preferred securities held by investors during that period. The remaining proceeds from the private placement totaled approximately $2.2 million and will be used for general corporate purposes and to support the Bank.

On June 29, 2016, we notified the trustees of our election to again defer our interest payments effective with the third quarter 2016 payment. We have the ability to defer distributions on our trust preferred securities for 20 consecutive quarters or through the second quarter of 2021. After 20 consecutive quarters, we must pay all deferred distributions or we will be in default.

We continue to be involved in various legal proceedings, which are more fully described in Note 13 – “Contingencies”. We are appealing a judgment against us that we believe, after conferring with our legal advisors, we have meritorious grounds on which to prevail. If we do not prevail, the ultimate outcome of this matter could have a material adverse effect on our financial condition, results of operations, or cash flows.

PBI Bank is in compliance with each element of its Consent Order with the FDIC and KDFI other than the requirement for the Bank to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. As of June 30, 2016, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were 6.65% and 10.87%, respectively, both less than the minimum capital ratios required by the Consent Order, but otherwise compliant with Basel III capital requirements. The Consent Order provides that if the Bank should be unable to reach the required capital levels, and if directed in writing by the FDIC, the Bank would be required to develop, adopt and implement a written plan to sell or merge itself into another federally insured financial institution or otherwise obtain a capital investment into the Bank sufficient to recapitalize the Bank. The Bank has not been directed by the FDIC to implement such a plan.

In order to meet the 9.0% Tier 1 leverage ratio and 12.0% total risk based capital ratio requirements of the Consent Order, the Board of Directors and management are continuing to evaluate and implement strategies to achieve the following objectives:

● Continuing to increase capital through the issuance of senior debt, subordinated debt, and equity securities.

● Continuing to operate the Company and Bank in a safe and sound manner.  We have reduced our lending concentrations and the size of our balance sheet while continuing to remediate non-performing loans.

● Executing on the sale of OREO and reinvesting the sale proceeds in quality income producing assets.

● Continuing to improve our internal processes and procedures, distribution of labor, and work-flow to ensure we have adequately and appropriately deployed resources in an efficient manner in the current environment.

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Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a consent order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions.

The Consent Order requires the Bank to obtain the written consent of both agencies before declaring or paying any future dividends to the Company, which are its principal source of revenue. Since the Bank is unlikely to be in a position to pay dividends to the Company until the Consent Order is satisfied, cash inflows for the Company are limited to the issuance of new debt or the issuance of capital securities. The Company’s liquid assets were $2.3 million at June 30, 2016. Ongoing operating expenses of the Company are forecast at approximately $1.0 million for the next twelve months.

Our consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

Application of Critical Accounting Policies

We continually review our accounting policies and financial information disclosures. Our more significant accounting policies that require the use of estimates and judgments in preparing the financial statements are summarized in “Application of Critical Accounting Policies” in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operation of our Annual Report on Form 10-K for the calendar year ended December 31, 2015. Management has discussed the development, selection, and application of our critical accounting policies with our Audit Committee. During the first six months of 2016, there were no material changes in the critical accounting policies and assumptions.

Results of Operations

The following table summarizes components of income and expense and the change in those components for the three months ended June 30, 2016, compared with the same period of 2015:

	For the Three Months						Change from
	Ended June 30,						Prior Period
	2016			2015			Amount			Percent
	(dollars in thousands)
Gross interest income	$	8,705		$	9,167		$	(462	)		(5.0	)%
Gross interest expense		1,509			1,828			(319	)		(17.5	)
Net interest income		7,196			7,339			(143	)		(1.9	)
Provision (negative provision) for loan losses		(600	)		—			(600	)		100.0
Non-interest income		1,152			1,565			(413	)		(26.4	)
Non-interest expense		7,936			11,034			(3,098	)		(28.1	)
Net income (loss) before taxes		1,012			(2,130	)		3,142			147.5
Income tax expense		—			—			—			—
Net income (loss)		1,012			(2,130	)		3,142			147.5

Net income for the three months ended June 30, 2016 totaled $1.0 million, compared with net loss of $2.1 million for the comparable period of 2015. Net interest income decreased $143,000 from the second quarter of 2015 as a result of a decrease in earning assets, offset by an increase in net interest margin. Net interest margin increased 13 basis points to 3.34% in the second quarter of 2016 compared with 3.21% in the second quarter of 2015. The increase in margin between periods was due to an increase in the yield on earning assets from 4.00% for the second quarter of 2015 to 4.03% for the second quarter of 2016, coupled with a decrease in the cost of interest bearing liabilities from 0.87% in the second quarter of 2015 to 0.79% in the second quarter of 2016. Average earning assets decreased from $930.4 million for the second quarter of 2015 to $876.7 for the second quarter of 2016. Non-interest income decreased by $413,000 to $1.2 million from $1.6 million in the second quarter of 2015 primarily due to a decrease in other real estate owned income of $223,000. Non-interest expense decreased from $11.0 million in the second quarter of 2015 to $7.9 million in the second quarter of 2016 primarily due to a decrease in other real estate owned expense of $2.6 million, a $222,000 decline in professional fees, and a decline in salaries and employee benefits of $171,000.

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The following table summarizes components of income and expense and the change in those components for the six months ended June 30, 2016, compared with the same period of 2015:

	For the Six Months						Change from
	Ended June 30,						Prior Period
	2016			2015			Amount			Percent
	(dollars in thousands)
Gross interest income	$	17,890		$	18,370		$	(480	)		(2.6	)%
Gross interest expense		3,043			3,741			(698	)		(18.7	)
Net interest income		14,847			14,629			218			1.5
Provision (negative provision) for loan losses		(1,150	)		—			(1,150	)		100.0
Non-interest income		2,543			4,261			(1,718	)		(40.3	)
Non-interest expense		16,027			20,426			(4,399	)		(21.5	)
Net income (loss) before taxes		2,513			(1,536	)		4,049			263.6
Income tax expense		21			—			21			100.0
Net income (loss)		2,492			(1,536	)		4,028			262.2

Net income for the six months ended June 30, 2016 totaled $2.5 million, compared with net loss of $1.5 million for the comparable period of 2015. Net interest income increased $218,000 from the first six months of 2015 as a result of the positive impact during the first quarter of 2016 of the collection of previously charged-off accrued uncollected interest of approximately $285,000, offset by a decrease in earning assets for the first six months of 2016. Net interest margin increased 23 basis points to 3.44% in the first six months of 2016 compared with 3.21% in the first six months of 2015. The increase in margin between periods was due to an increase in the yield on earning assets from 4.02% for the first six months of 2015 to 4.13% for the first six months of 2016, coupled with a decrease in the cost of interest bearing liabilities from 0.89% in the first six months of 2015 to 0.79% in the first six months of 2016. Average earning assets decreased from $933.2 million for the first six months of 2015 to $879.2 for the first six months of 2016. Non-interest income decreased by $1.7 million to $2.5 million from $4.3 million in the first six months of 2015 primarily due to a decrease in net gain on sales of securities of $1.5 million. Non-interest expense decreased from $20.4 million in the first six months of 2015 to $16.0 million in the first six months of 2016 primarily due to a decrease in other real estate owned expense of $2.7 million, an $816,000 decline in professional fees, and a decline in loan collection expense of $221,000.

Net Interest Income – Our net interest income was $7.2 million for the three months ended June 30, 2016, a decrease of $143,000, or 1.9%, compared with $7.3 million for the same period in 2015. Net interest spread and margin were 3.24% and 3.34%, respectively, for the second quarter of 2016, compared with 3.13% and 3.21%, respectively, for the second quarter of 2015. Net average non-accrual loans were $11.4 million and $33.4 million for the second quarters of 2016 and 2015, respectively.

Average loans receivable declined approximately $22.3 million for the second quarter of 2016 compared with the second quarter of 2015. This resulted in an in interest revenue volume decline of approximately $270,000 as well as a decline in interest recoveries and rate improvements aggregating $121,000 for the quarter ended June 30, 2016 compared with the prior year period. Interest foregone on non-accrual loans totaled $181,000 in the second quarter of 2016, compared with $215,000 in the first quarter of 2016, and $464,000 in the second quarter of 2015.

Net interest margin increased 13 basis points from our margin of 3.21% in the prior year second quarter to 3.34% for the second quarter of 2016. The yield on earning assets increased three basis points and rates paid on interest-bearing liabilities declined eight basis points from the second quarter of 2015. The reduction in the cost of interest bearing liabilities was primarily driven by declines in the average rates paid on and volume declines in certificates of deposit between periods.

Net interest income was $14.8 million for the six months ended June 30, 2016, an increase of $218,000, or 1.5%, compared with $14.6 million for the same period in 2015. Net interest spread and margin were 3.34% and 3.44%, respectively, for the first six months of 2016, compared with 3.13% and 3.21%, respectively, for the first six months of 2015. Net average non-accrual loans were $12.4 million and $38.8 million for the first six months of 2016 and 2015, respectively. Cost of funds decreased ten basis points from 0.89% for the first six months of 2015 to 0.79% for the first six months of 2016.

Average loans receivable declined approximately $22.6 million for the six months ended June 30, 2016 compared with the first six months of 2015. This resulted in a decline in interest revenue of approximately $556,000 for the six months ended June 30, 2016 compared with the prior year period.

Net interest margin increased 23 basis points from our margin of 3.21% in the first six months of 2015. The yield on earning assets increased 11 basis points from the first six months of 2015, compared with a 10 basis point decline in rates paid on interest-bearing liabilities. The reduction in the cost of interest bearing liabilities was primarily driven by declines in the average rates paid on and volume declines in and certificates of deposit between periods.

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Average Balance Sheets

The following table presents the average balance sheets for the three month periods ended June 30, 2016 and 2015, along with the related calculations of tax-equivalent net interest income, net interest margin and net interest spread for the related periods.

	Three Months Ended June 30,
	2016								2015
	Average Balance			Interest Earned/Paid		Average Yield/Cost			Average Balance			Interest Earned/Paid		Average Yield/Cost
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loan receivables (1)(2)	$	619,253		$	7,455		4.84	%	$	641,587		$	7,846		4.91	%
Securities
Taxable		162,119			950		2.36			171,608			1,010		2.36
Tax-exempt (3)		21,240			158		4.60			25,187			190		4.65
FHLB stock		7,323			73		4.01			7,323			72		3.94
Federal funds sold and other		66,786			69		0.42			84,710			49		0.23
Total interest-earning assets		876,721			8,705		4.03	%		930,415			9,167		4.00	%
Less: Allowance for loan losses		(11,257	)							(18,035	)
Non-interest earning assets		70,536								91,127
Total assets	$	936,000							$	1,003,507
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Certificates of deposit and other time deposits	$	470,399		$	1,030		0.88	%	$	581,786		$	1,410		0.97	%
NOW and money market deposits		233,808			235		0.40			194,730			176		0.36
Savings accounts		34,856			15		0.17			36,217			21		0.23
Repurchase agreements		—			—		—			951			1		0.42
FHLB advances		2,827			18		2.56			3,487			24		2.76
Junior subordinated debentures		24,822			211		3.42			29,721			196		2.65
Total interest-bearing liabilities		766,712			1,509		0.79	%		846,892			1,828		0.87	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		119,786								112,107
Other liabilities		10,288								10,738
Total liabilities		896,786								969,737
Stockholders’ equity		39,214								33,770
Total liabilities and stockholders’ equity	$	936,000							$	1,003,507
Net interest income				$	7,196							$	7,339
Net interest spread							3.24	%							3.13	%
Net interest margin							3.34	%							3.21	%

(1) Includes loan fees in both interest income and the calculation of yield on loans.

(2) Calculations include non-accruing loans averaging $11.4 million and $33.4 million, respectively, in average loan amounts outstanding.

(3) Taxable equivalent yields are calculated assuming a 35% federal income tax rate.

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The following table presents the average balance sheets for the six month periods ended June 30, 2016 and 2015, along with the related calculations of tax-equivalent net interest income, net interest margin and net interest spread for the related periods.

	Six Months Ended June 30,
	2016								2015
	Average Balance			Interest Earned/Paid		Average Yield/Cost			Average Balance			Interest Earned/Paid		Average Yield/Cost
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loan receivables (1)(2)	$	619,665		$	15,337		4.98	%	$	642,269		$	15,601		4.90	%
Securities
Taxable		161,789			1,939		2.41			175,146			2,136		2.46
Tax-exempt (3)		21,646			322		4.60			25,967			393		4.70
FHLB stock		7,323			147		4.04			7,323			146		4.02
Federal funds sold and other		68,755			145		0.42			82,505			94		0.23
Total interest-earning assets		879,178			17,890		4.13	%		933,210			18,370		4.02	%
Less: Allowance for loan losses		(11,645	)							(18,646	)
Non-interest earning assets		69,156								92,948
Total assets	$	936,689							$	1,007,512
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Certificates of deposit and other time deposits	$	479,461		$	2,099		0.88	%	$	585,327		$	2,906		1.00	%
NOW and money market deposits		231,017			458		0.40			194,431			352		0.37
Savings accounts		34,756			31		0.18			36,336			41		0.23
Repurchase agreements		—			—		—			990			1		0.20
FHLB advances		2,906			37		2.56			3,719			51		2.77
Junior subordinated debentures		24,935			418		3.37			29,834			390		2.64
Total interest-bearing liabilities		773,075			3,043		0.79	%		850,637			3,741		0.89	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		116,753								112,156
Other liabilities		10,481								10,849
Total liabilities		900,309								973,642
Stockholders’ equity		36,380								33,870
Total liabilities and stockholders’ equity	$	936,689							$	1,007,512
Net interest income				$	14,847							$	14,629
Net interest spread							3.34	%							3.13	%
Net interest margin							3.44	%							3.21	%

(1) Includes loan fees in both interest income and the calculation of yield on loans.

(2) Calculations include non-accruing loans averaging $12.4 million and $38.8 million, respectively, in average loan amounts outstanding.

(3) Taxable equivalent yields are calculated assuming a 35% federal income tax rate.

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Rate/Volume Analysis

The table below sets forth certain information regarding changes in interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in rate (changes in rate multiplied by old volume); (2) changes in volume (changes in volume multiplied by old rate); and (3) changes in rate-volume (change in rate multiplied by change in volume). Changes in rate-volume are proportionately allocated between rate and volume variance.

	Three Months Ended June 30, 2016 vs. 2015									Six Months Ended June 30, 2016 vs. 2015
	Increase (decrease) due to change in									Increase (decrease) due to change in
	Rate			Volume			Net Change			Rate			Volume			Net Change
	(in thousands)
Interest-earning assets:
Loan receivables	$	(121	)	$	(270	)	$	(391	)	$	292		$	(556	)	$	(264	)
Securities		(11	)		(81	)		(92	)		(49	)		(219	)		(268	)
FHLB stock		1			—			1			1			—			1
Federal funds sold and other		32			(12	)		(20	)		69			(18	)		51
Total increase (decrease) in interest income		(99	)		(363	)		(462	)		313			(793	)		(480	)
Interest-bearing liabilities:
Certificates of deposit and other time deposits		(127	)		(253	)		(380	)		(319	)		(488	)		(807	)
NOW and money market accounts		21			38			59			35			71			106
Savings accounts		(5	)		(1	)		(6	)		(8	)		(2	)		(10	)
Federal funds purchased and repurchase agreements		—			(1	)		(1	)		—			(1	)		(1	)
FHLB advances		(2	)		(4	)		(6	)		(4	)		(10	)		(14	)
Junior subordinated debentures		50			(35	)		15			99			(71	)		28
Total increase (decrease) in interest expense		(63	)		(256	)		(319	)		(197	)		(501	)		(698	)
Increase (decrease) in net interest income	$	(36	)	$	(107	)	$	(143	)	$	510		$	(292	)	$	218

Non-Interest Income – The following table presents the major categories of non-interest income for the three and six months ended June 30, 2016 and 2015:

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2016		2015		2016		2015
	(dollars in thousands)
Service charges on deposit accounts	$	473	$	475	$	902	$	884
Bank card interchange fees		221		229		423		432
Other real estate owned rental income		149		372		405		729
Net gain on sales of securities		—		199		203		1,696
Other		309		290		610		520
Total non-interest income	$	1,152	$	1,565	$	2,543	$	4,261

Non-interest income for the second quarter of 2016 decreased by $413,000, or 26.4%, compared with the second quarter of 2015. For the six months ended June 30, 2016, non-interest income decreased by $1.7 million, or 40.3% to $2.5 million compared with $4.3 million for the same period of 2015. The decrease in non-interest income between the three month comparative periods was primarily due to a $223,000 decrease in OREO rental income as income producing properties have been sold, as well as a decrease in net gain on sales of securities of $199,000. The decrease in non-interest income between the six month comparative periods was primarily due to a $1.5 million decrease in net gain on sales of investment securities, as well as a decrease in OREO income of $324,000.

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Non-interest Expense – The following table presents the major categories of non-interest expense for the three and six months ended June 30, 2016 and 2015:

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2016		2015		2016		2015
	(dollars in thousands)
Salary and employee benefits	$	3,857	$	4,028	$	7,679	$	7,875
Occupancy and equipment		808		828		1,662		1,698
Professional fees		492		714		877		1,693
FDIC insurance		493		564		1,016		1,134
Data processing expense		295		278		592		582
State franchise and deposit tax		255		285		510		570
Other real estate owned expense		294		2,932		962		3,665
Loan collection expense		271		291		353		574
Other		1,171		1,114		2,376		2,635
Total non-interest expense	$	7,936	$	11,034	$	16,027	$	20,426

Non-interest expense for the second quarter ended June 30, 2016 decreased $3.1 million, or 28.1%, compared with the second quarter of 2015. For the six months ended June 30, 2016, non-interest expense decreased $4.4 million, or 21.5% to $16.0 million compared with $20.4 million for the first six months of 2015. The decreases in non-interest expense for the second quarter and six months ended June 30, 2016 were primarily attributable to decreased OREO expenses, as fair value write downs based upon listing process as well as new appraisals declined, and decreased professional fees.

Income Tax Expense – Effective tax rates differ from the federal statutory rate of 35% applied to income before income taxes due to the following:

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2016			2015			2016			2015
	(dollars in thousands)
Federal statutory rate times financial statement income	$	354		$	(745	)	$	879		$	(537	)
Effect of:
Valuation allowance		(282	)		833			(732	)		539
Tax-exempt income		(53	)		(66	)		(109	)		(136	)
Non-taxable life insurance income		(42	)		(33	)		(75	)		(57	)
Other, net		23			11			58			191
Total	$	—		$	—		$	21		$	—

Analysis of Financial Condition

Total assets decreased $32.2 million, or 3.4%, to $916.6 million at June 30, 2016, from $948.7 million at December 31, 2015. This decrease was primarily attributable to a decrease in interest bearing deposits of $36.0 million and a decrease of OREO of $6.9 million, offset by an increase in net loans of $7.4 million and an increase in bank owned life insurance of $5.2 million.

Loans Receivable – Loans receivable increased $5.5 million, or 0.9%, during the six months ended June 30, 2016 to $624.1 million as loan growth outpaced payoffs.

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Loan Portfolio Composition – The following table presents a summary of the loan portfolio at the dates indicated, net of deferred loan fees, by type. There are no foreign loans in our portfolio. Except for commercial real estate and 1-4 family residential real estate, there is no concentration of loans in any industry exceeding 10% of total loans, with the exception of loans for retail facilities (included in nonfarm nonresidential commercial real estate below). Those loans totaled $69.5 million at June 30, 2016 and $59.1 million at December 31, 2015.

	As of June 30,					As of December 31,
	2016					2015
	Amount		Percent			Amount		Percent
			(dollars in thousands)
Commercial	$	75,222		12.04	%	$	86,176		13.93	%
Commercial Real Estate
Construction		33,184		5.32			33,154		5.36
Farmland		77,742		12.45			76,412		12.35
Nonfarm nonresidential		147,969		23.71			140,570		22.72
Residential Real Estate
Multi-family		44,652		7.15			44,131		7.13
1-4 Family		196,388		31.47			201,478		32.57
Consumer		9,853		1.58			10,010		1.62
Agriculture		38,710		6.20			26,316		4.25
Other		416		0.07			419		0.07
Total loans	$	624,136		100.00	%	$	618,666		100.0	%

Loan Portfolio by Risk Category – The following table presents a summary of the loan portfolio at the dates indicated, by risk category.

	June 30, 2016					March 31, 2016					December 31, 2015
	Loans		% to Total			Loans		% to Total			Loans		% to Total
	(dollars in thousands)
Pass	$	547,853		87.8	%	$	534,451		86.2	%	$	517,484		83.7	%
Watch		50,024		8.0			59,265		9.6			63,363		10.2
Special Mention		622		0.1			1,383		0.2			1,395		0.2
Substandard		25,637		4.1			24,728		4.0			36,424		5.9
Doubtful		—		—			—		—			—		—
Total	$	624,136		100.0	%	$	619,827		100.0	%	$	618,666		100.0	%

Our loans receivable have increased $5.5 million, or 0.9%, during the six months ended June 30, 2016. All loan risk categories have decreased since December 31, 2015, with the exception of pass loans. The pass category increased approximately $30.4 million, the watch category decreased approximately $13.3 million, the special mention category declined approximately $773,000, and the substandard category declined approximately $10.8 million. The $10.8 million decrease in loans classified as substandard was primarily driven by $7.7 million in loans upgraded from substandard, $7.1 million in principal payments received, $576,000 in migration to OREO, and $1.5 million in charge-offs, offset by $6.1 million in loans moved to substandard during the period.

Loan Delinquency – The following table presents a summary of loan delinquencies at the dates indicated.

	June 30, 2016		March 31, 2016		December 31, 2015
	(in thousands)
Past Due Loans:
30-59 Days	$	2,401	$	1,829	$	3,133
60-89 Days		336		62		241
90 Days and Over		—		—		—
Total Loans Past Due 30-90+ Days		2,737		1,891		3,374
Nonaccrual Loans		11,599		11,119		14,087
Total Past Due and Nonaccrual Loans	$	14,336	$	13,010	$	17,461

During the six months ended June 30, 2016, nonaccrual loans decreased by $2.5 million to $11.6 million. This decrease was due primarily to $3.4 million in paydowns, $988,000 in charge offs, and $576,000 in loans migrating to OREO, offset by $2.9 in loans moved to nonaccrual during the period. During the six months ended June 30, 2016, loans past due 30-59 days decreased from $3.1 million at December 31, 2015 to $2.4 million at June 30, 2016. Loans past due 60-89 days increased from $241,000 at December 31, 2015 to $336,000 at June 30, 2016. This represents a $637,000 decrease from December 31, 2015 to June 30, 2016, in loans past due 30-89 days. We considered this trend in delinquency levels during the evaluation of qualitative trends in the portfolio when establishing the general component of our allowance for loan losses.

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Non-Performing Assets – Non-performing assets consist of loans past due 90 days or more still on accrual, loans on which interest is no longer accrued, real estate acquired through foreclosure, and repossessed assets. The following table sets forth information with respect to non-performing assets as of June 30, 2016 and December 31, 2015.

	June 30, 2016			December 31, 2015
	(dollars in thousands)
Loans past due 90 days or more still on accrual	$	—		$	—
Nonaccrual loans		11,599			14,087
Total non-performing loans		11,599			14,087
Real estate acquired through foreclosure		12,322			19,214
Other repossessed assets		—			—
Total non-performing assets	$	23,921		$	33,301
Non-performing loans to total loans		1.86	%		2.28	%
Non-performing assets to total assets		2.61	%		3.51	%
Allowance for non-performing loans	$	241		$	295
Allowance for non-performing loans to non-performing loans		2.08	%		2.09	%

Nonperforming loans at June 30, 2016, were $11.6 million, or 1.86% of total loans, compared with $14.1 million, or 2.28% of total loans at December 31, 2015, and $30.3 million, or 4.67% of total loans at June 30, 2015.

Troubled Debt Restructuring - A troubled debt restructuring (TDR) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty. The majority of the Company’s TDRs involve a reduction in interest rate, a deferral of principal for a stated period of time, or an interest only period. All TDRs are considered impaired, and the Company has allocated reserves for these loans to reflect the present value of the concessionary terms granted to the borrower. If the loan is considered collateral dependent, it is reported net of allocated reserves, at the fair value of the collateral less cost to sell.

We do not have a formal loan modification program. Rather, we work with individual borrowers on a case-by-case basis to facilitate the orderly collection of our principal and interest before a loan becomes a non-performing loan. If a borrower is unable to make contractual payments, we review the particular circumstances of the borrower’s situation and negotiate a revised payment stream. In other words, we identify performing borrowers experiencing financial difficulties, and through negotiations, we lower their interest rate, most typically on a short-term basis for three to six months. Our goal when restructuring a credit is to afford the borrower a reasonable period of time to remedy the issue causing cash flow constraints within their business so they can return to performing status over time.

Our loan modifications have taken the form of reduction in interest rate and/or curtailment of scheduled principal payments for a short-term period, usually three to six months, but in some cases until maturity of the loan. In some circumstances we restructure real estate secured loans in a bifurcated fashion whereby we have a fully amortizing “A” loan at a market interest rate and an interest-only “B” loan at a reduced interest rate. Our restructured loans are all collateral secured loans. If a borrower fails to perform under the modified terms, we place the loan(s) on nonaccrual status and begin the process of working with the borrower to liquidate the underlying collateral to satisfy the debt.

We consider any loan that is restructured for a borrower experiencing financial difficulties due to a borrower’s potential inability to pay in accordance with contractual terms to be a troubled debt restructure. Specifically, we consider a concession involving a modification of the loan terms, such as (i) a reduction of the stated interest rate, (ii) reduction or deferral of principal, or (iii) reduction or deferral of accrued interest at a stated interest rate lower than the current market rate for new debt with similar risk all to be troubled debt restructurings. When a modification of terms is made for a competitive reason, we do not consider that to be a troubled debt restructuring.  A primary example of a competitive modification would be an interest rate reduction for a performing borrower’s loan to a market rate as the result of a market decline in rates.

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Management periodically reviews renewals/modifications of previously identified TDRs for which there was no principal forgiveness, to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed as the borrower has complied with the terms of the loan at the date of renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan after the date of the renewal/modification. In this instance, the TDR was originally considered a restructuring in a prior year as a result of a modification with an interest rate that was not commensurate with the risk of the underlying loan. Additionally, TDR classification can be removed in circumstances in which the Company performs a non-concessionary re-modification of the loan at terms that were considered to be at market for loans with comparable risk. Management expects the borrower will continue to perform under the re-modified terms based on the borrower’s past history of performance.

If the borrower fails to perform, we place the loan on nonaccrual status and seek to liquidate the underlying collateral for these loans. Our nonaccrual policy for restructured loans is identical to our nonaccrual policy for all loans. Our policy calls for a loan to be reported as nonaccrual if it is maintained on a cash basis because of deterioration in the financial condition of the borrower, payment in full of principal and interest is not expected, or principal or interest has been in default for a period of 90 days or more unless the assets are both well secured and in the process of collection. Changes in value for impairment, including the amount attributed to the passage of time, are recorded entirely within the provision for loan losses. Upon determination that a loan is collateral dependent, the loan is charged down to the fair value of collateral less estimated costs to sell.

At June 30, 2016, we had 29 restructured loans totaling $17.4 million with borrowers who experienced deterioration in financial condition compared with 30 loans totaling $21.0 million at December 31, 2015. In general, these loans were granted interest rate reductions to provide cash flow relief to borrowers experiencing cash flow difficulties. Of these loans, three loans totaling approximately $3.4 million were also granted principal payment deferrals until maturity. There were no concessions made to forgive principal relative to these loans, although we have recorded partial charge-offs for certain restructured loans. In general, these loans are secured by first liens on 1-4 residential or commercial real estate properties, or farmland. Restructured loans also include $507,000 of commercial loans. At June 30, 2016, $13.9 million of our restructured loans were accruing and $3.5 million were on nonaccrual compared with $17.4 million and $3.5 million, respectively, at December 31, 2015. There were no new TDRs during the first six months of 2016 or 2015. During the six months ended June 30, 2016, TDRs were reduced as a result of $3.6 million in payments.

The following table sets forth information with respect to TDRs, non-performing loans, real estate acquired through foreclosure, and other repossessed assets.

	June 30, 2016			December 31, 2015
	(dollars in thousands)
Total non-performing loans	$	11,599		$	14,087
TDRs on accrual		13,936			17,440
Total non-performing loans and TDRs on accrual	$	25,535		$	31,527
Real estate acquired through foreclosure		12,322			19,214
Other repossessed assets		—			—
Total non-performing assets and TDRs on accrual	$	37,857		$	50,741
Total non-performing loans and TDRs on accrual to total loans		4.09	%		5.10	%
Total non-performing assets and TDRs on accrual to total assets		4.13	%		5.35	%

See “Note 4 - Loans,” of the notes to the financial statements for additional disclosure related to troubled debt restructuring.

Allowance for Loan Losses – The allowance for loan losses is based on management’s continuing review and evaluation of individual loans, loss experience, current economic conditions, risk characteristics of various categories of loans and such other factors that, in management’s judgment, require consideration in estimating loan losses.

Management has established loan grading procedures that result in specific allowance allocations for any estimated inherent risk of loss. For loans not individually evaluated, a general allowance allocation is computed using factors developed over time based on actual loss experience. The specific and general allocations plus consideration of qualitative factors represent management’s best estimate of probable losses contained in the loan portfolio at the evaluation date. Although the allowance for loan losses is comprised of specific and general allocations, the entire allowance is available to absorb any credit losses.

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An analysis of changes in the allowance for loan losses and selected ratios for the three and six month periods ended June 30, 2016 and 2015, and for the year ended December 31, 2015 follows: 

													Year Ended
	Three Months Ended June 30,						Six Months Ended June 30,						December 31,
	2016			2015			2016			2015			2015
	(in thousands)
Balance at beginning of period	$	11,340		$	18,597		$	12,041		$	19,364		$	19,364
Loans charged-off:
Real estate		582			2,033			1,295			2,884			5,050
Commercial		249			99			261			474			696
Consumer		22			62			35			130			268
Agriculture		8			37			8			70			118
Other		67			33			78			33			—
Total charge-offs		928			2,264			1,677			3,591			6,132
Recoveries
Real estate		85			131			513			542			2,338
Commercial		32			295			67			401			723
Consumer		154			34			193			60			240
Agriculture		6			2			85			3			8
Other		15			14			32			30			—
Total recoveries		292			476			890			1,036			3,309
Net charge-offs		636			1,788			787			2,555			2,823
Provision (negative provision) for loan losses		(600	)		—			(1,150	)		—			(4,500	)
Balance at end of period	$	10,104		$	16,809		$	10,104		$	16,809		$	12,041
Allowance for loan losses to period-end loans		1.62	%		2.59	%		1.62	%		2.59	%		1.95	%
Net charge-offs to average loans		0.41	%		1.12	%		0.26	%		0.80	%		0.44	%
Allowance for loan losses to non-performing loans		87.11	%		55.46	%		87.11	%		55.46	%		85.48	%
Allowance for loan losses for loans individually evaluated for impairment	$	146		$	842		$	146		$	842		$	428
Loans individually evaluated for impairment		25,535			49,011			25,535			49,011			31,776
Allowance for loan losses to loans individually evaluated for impairment		0.57	%		1.72	%		0.57	%		1.72	%		1.35	%
Allowance for loan losses for loans collectively evaluated for impairment	$	9,958		$	15,967		$	9,958		$	15,967		$	11,613
Loans collectively evaluated for impairment		598,601			599,310			598,601			599,310			586,890
Allowance for loan losses to loans collectively evaluated for impairment		1.66	%		2.66	%		1.66	%		2.66	%		1.98	%

Our loan loss reserve, as a percentage of total loans at June 30, 2016, decreased to 1.62% from 1.95% at December 31, 2015 and from 2.59% at June 30, 2015. The change in our loan loss reserve as a percentage of total loans between periods is attributable to the fluctuation in historical loss experience, qualitative factors, fewer loans migrating downward in risk grade classifications, improved charge-off levels, and negative provision expense. Our allowance for loan losses to non-performing loans was 87.11% at June 30, 2016, compared with 85.48% at December 31, 2015, and 55.46% at June 30, 2015. Net charge-offs in the first six months of 2016 totaled $787,000 compared to $2.6 million in the first six months of 2015.   

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The following table sets forth the net charge-offs (recoveries) for the periods indicated: 

	Six Months Ended June 30, 2016			Year Ended December 31, 2015			Year Ended December 31, 2014
	(in thousands)
Commercial	$	194		$	(27	)	$	485
Commercial Real Estate		(24	)		1,225			11,878
Residential Real Estate		806			1,487			3,339
Consumer		(158	)		37			167
Agriculture		(77	)		110			17
Other		46			(9	)		(26	)
Total net charge-offs	$	787		$	2,823		$	15,860

The majority of our nonperforming loans are secured by real estate collateral, and the underlying collateral coverage for nonperforming loans supports the likelihood of collection of our principal. We have assessed these loans for collectability and considered, among other things, the borrower’s ability to repay, the value of the underlying collateral, and other market conditions to ensure the allowance for loan losses is adequate to absorb probable incurred losses. Our allowance for non-performing loans to non-performing loans was 2.08% at June 30, 2016 compared with 2.09% at December 31, 2015, and 3.94% at June 30, 2015.

The following table presents the unpaid principal balance, recorded investment and allocated allowance related to loans individually evaluated for impairment in the commercial real estate and residential real estate portfolios as of June 30, 2016 and December 31, 2015.

	June 30, 2016						December 31, 2015
	Commercial Real Estate			Residential Real Estate			Commercial Real Estate			Residential Real Estate
	(in thousands)
Unpaid principal balance	$	17,586		$	14,009		$	18,112		$	19,983
Prior charge-offs		(5,032	)		(1,921	)		(5,293	)		(2,310	)
Recorded investment		12,554			12,088			12,819			17,673
Allocated allowance		(45	)		(100	)		(43	)		(385	)
Recorded investment, less allocated allowance	$	12,509		$	11,988		$	12,776		$	17,288
Recorded investment, less allocated allowance/ Unpaid principal balance		71.13	%		85.57	%		70.54	%		86.51	%

Based on prior charge-offs, our current recorded investment in the commercial real estate and residential real estate segments is significantly below the unpaid principal balance for these loans. The recorded investment net of the allocated allowance was 71.13% and 85.57% of the unpaid principal balance in the commercial real estate and residential real estate segments of the portfolio, respectively, at June 30, 2016.

The following table illustrates recent trends in loans collectively evaluated for impairment and the related allowance for loan losses by portfolio segment:

	June 30, 2016							March 31, 2016							December 31, 2015
	Loans		Allowance		% to Total			Loans		Allowance		% to Total			Loans		Allowance		% to Total
Commercial	$	74,474	$	730		0.98	%	$	82,879	$	642		0.77	%	$	85,064	$	818		0.96	%
Commercial real estate		246,341		5,384		2.19			240,319		6,724		2.80			237,317		6,950		2.93
Residential real estate		228,952		3,678		1.61			227,435		3,258		1.43			227,936		3,599		1.58
Consumer		9,847		47		0.48			9,921		115		1.16			9,990		122		1.22
Agriculture		38,571		118		0.31			32,654		136		0.42			26,164		122		0.47
Other		416		1		0.24			383		1		0.26			419		2		0.48
Total	$	598,601	$	9,958		1.66	%	$	593,591	$	10,876		1.83	%	$	586,890	$	11,613		1.98	%

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Our allowance for loan losses for loans collectively evaluated for impairment declined to 1.66% at June 30, 2016 from 2.66% at June 30, 2015 and 1.98% at December 31, 2015. This decline was driven primarily by declining historical loss trends, the negative provision for loan losses, and an improving loan risk category classification mix and volume which are key factors for estimating general reserves. Other factors include the consideration of growth, composition and diversification of our loan portfolio, current delinquency levels, the results of recent regulatory communications and general economic conditions.

Provision for Loan Losses – A negative provision for loan losses of $1.2 million was recorded for the six months ended June 30, 2016, compared to no provision for loan losses for the six months ended June 30, 2015. The negative provision for 2016 was driven by declining historical loss rates, improvements in asset quality, and management’s assessment of risk within the portfolio. All loan risk categories have decreased since December 31, 2015, with the exception of pass loans. The pass category increased approximately $30.4 million, the watch category decreased approximately $13.3 million, the special mention category declined approximately $773,000, and the substandard category declined approximately $10.8 million. Net charge-offs were $787,000 for the six months ended June 30, 2016, compared with $2.6 million for June 30, 2015. We consider the size and volume of our portfolio as well as the credit quality of our loan portfolio based upon risk category classification when determining the loan loss provision for each period and the allowance for loan losses at period end.

Foreclosed Properties – Foreclosed properties at June 30, 2016 were $12.3 million compared with $39.5 million at June 30, 2015 and $19.2 million at December 31, 2015.  See “Note 5 - Other Real Estate Owned,” of the notes to the financial statements. During the first six months of 2016, we acquired $576,000 of OREO properties, and sold properties totaling approximately $7.0 million. We value foreclosed properties at fair value less estimated costs to sell when acquired and expect to liquidate these properties to recover our investment in the due course of business.

OREO is recorded at fair market value less estimated cost to sell at time of acquisition. Any write-down of the property at the time of acquisition is charged to the allowance for loan losses. Subsequent reductions in fair value are recorded as non-interest expense. To determine the fair value of OREO for smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers. If the internally evaluated market price is below our underlying investment in the property, appropriate write-downs are recorded. 

For larger dollar commercial real estate properties, we obtain a new appraisal of the subject property or have staff in our special assets group or centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to OREO. In some of these circumstances, an appraisal is in process at quarter end and we must make our best estimate of the fair value of the underlying collateral based on our internal evaluation of the property, our review of the most recent appraisal, and discussions with the currently engaged appraiser. We typically obtain updated appraisals on the anniversary date of ownership unless a sale is imminent.

Net gain (loss) on sales, write-downs, and operating expenses for OREO totaled $962,000 for the six months ended June 30, 2016, compared with $3.7 million for the same period of 2015. During the six months ended June 30, 2016, fair value write-downs of $650,000 were recorded to reflect declines in fair value driven by reductions in listing prices and new appraisals compared with $2.6 million for the six months ended June 30, 2015.

Liabilities – Total liabilities at June 30, 2016 were $875.1 million compared with $916.7 million at December 31, 2015, a decrease of $41.6 million, or 4.5%. This decrease was primarily attributable to a decrease in deposits of $37.9 million from $878.0 million at December 31, 2015 to $840.1 million at June 30, 2016.

Deposits are our primary source of funds. The following table sets forth the average daily balances and weighted average rates paid for our deposits for the periods indicated:

	For the Six Months					For the Year
	Ended June 30,					Ended December 31,
	2016					2015
	Average		Average			Average		Average
	Balance		Rate			Balance		Rate
	(dollars in thousands)
Demand	$	116,753				$	113,576
Interest checking		98,159		0.13	%		88,814		0.13	%
Money market		132,858		0.60			112,350		0.57
Savings		34,756		0.18			35,604		0.21
Certificates of deposit		479,461		0.88			557,441		0.96
Total deposits	$	861,987		0.61	%	$	907,785		0.68	%

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The following table sets forth the average daily balances and weighted average rates paid for our certificates of deposit for the periods indicated:

	For the Six Months					For the Year
	Ended March 31,					Ended December 31,
	2016					2015
	Average		Average			Average		Average
	Balance		Rate			Balance		Rate
	(dollars in thousands)
Less than $100,000	$	270,904		0.86	%	$	306,941		0.93	%
$100,000 or more		208,557		0.92	%		250,500		0.99	%
Total	$	479,461		0.88	%	$	557,441		0.96	%

The following table shows at June 30, 2016 the amount of our time deposits of $100,000 or more by time remaining until maturity (in thousands):

Maturity Period
Three months or less	$	48,641
Three months through six months		32,456
Six months through twelve months		73,446
Over twelve months		46,930
Total	$	201,473

Liquidity

Liquidity risk arises from the possibility we may not be able to satisfy current or future financial commitments, or may become unduly reliant on alternative funding sources. The objective of liquidity risk management is to ensure that we meet the cash flow requirements of depositors and borrowers, as well as our operating cash needs, taking into account all on- and off-balance sheet funding demands. Liquidity risk management also involves ensuring that we meet our cash flow needs at a reasonable cost. We maintain an investment and funds management policy, which identifies the primary sources of liquidity, establishes procedures for monitoring and measuring liquidity, and establishes minimum liquidity requirements in compliance with regulatory guidance. Our Asset Liability Committee regularly monitors and reviews our liquidity position.

Funds are available from a number of sources, including the sale of securities in the available for sale investment portfolio, principal pay-downs on loans and mortgage-backed securities, customer deposit inflows, and other wholesale funding. Historically, we also utilized brokered and wholesale deposits to supplement our funding strategy. We are currently restricted from accepting, renewing, or rolling-over brokered deposits without the prior receipt of a waiver on a case-by-case basis from our regulators. At June 30, 2016, we had no brokered deposits.

Traditionally, we have borrowed from the FHLB to supplement our funding requirements. At June 30, 2016, we had an unused borrowing capacity with the FHLB of $29.5 million. Our borrowing capacity is under a detailed loan listing requirement and is based on the market value of the underlying pledged loans. Any new advances are limited to a one-year maturity or less.

We also have available, on a secured basis, federal funds borrowing lines from a correspondent bank totaling $5.0 million. Management believes our sources of liquidity are adequate to meet expected cash needs for the foreseeable future. However, the availability of these lines could be affected by our financial position. We are also subject to FDIC interest rate restrictions for deposits. As such, we are permitted to offer up to the “national rate” plus 75 basis points as published weekly by the FDIC.

Capital

Stockholders’ equity increased $9.4 million to $41.4 million at June 30, 2016, compared with $32.0 million at December 31, 2015 due to the issuance of $5.0 in common stock, current year net income of $2.5 million and an increase in the fair value of our available for sale securities portfolio of $1.7 million.

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The following table shows the ratios of Tier 1 capital and total capital to risk-adjusted assets and the leverage ratios for the Company and the Bank at the dates indicated:

										June 30, 2016						December 31, 2015
	Regulatory Minimums			Well-Capitalized Minimums			Minimum Capital Ratios Under Consent Order			Porter Bancorp			PBI Bank			Porter Bancorp			PBI Bank
Tier 1 Capital		6.0	%		8.0	%		N/A			8.16	%		9.22	%		6.89	%		8.84	%
Common equity Tier I capital		4.5			6.5			N/A			6.11			9.22			5.09			8.84
Total risk-based capital		8.0			10.0			12.0	%		11.31			10.87			10.46			10.58
Tier 1 leverage ratio		4.0			5.0			9.0			5.87			6.65			4.74			6.08

Failure to meet minimum capital requirements could result in additional discretionary actions by regulators that, if undertaken, could have a materially adverse effect on our financial condition.

Each of the federal bank regulatory agencies has established risk-based capital requirements for banking organizations. The Basel III regulatory capital reforms became effective for the Company and Bank on January 1, 2015, and include new minimum risk-based capital and leverage ratios. These rules refine the definition of what constitutes “capital” for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital. The final rules allow banks and their holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and the Bank opted out of this requirement. The rules also establish a “capital conservation buffer” of 2.5%, to be phased in over three years, above the regulatory minimum risk-based capital ratios. Once the capital conservation buffer is fully phased in, the minimum ratios are a common equity Tier 1 risk-based capital ratio of 7.0%, a Tier 1 risk-based capital ratio of 8.5%, and a total risk-based capital ratio of 10.5%. The phase-in of the capital conservation buffer requirement begins in January 2016 at 0.625% of risk-weighted assets and will increase each year until fully implemented in January 2019. An institution is subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if capital levels fall below minimum levels plus the buffer amounts. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions. In addition, the Bank has agreed with its primary regulators to maintain a ratio of total capital to total risk-weighted assets (“total risk-based capital ratio”) of at least 12.0%, and a ratio of Tier 1 capital to total assets (“leverage ratio”) of 9.0%.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Given a 100 basis point increase in interest rates sustained for one year, base net interest income would decrease by an estimated 1.42% at June 30, 2016, compared with an increase of 0.6% at December 31, 2015, and is within the risk tolerance parameters of our risk management policy. Given a 200 basis point increase in interest rates sustained for one year, base net interest income would decrease by an estimated 3.23% at June 30, 2016, compared with an increase of 1.6% at December 31, 2015, and is within the risk tolerance parameters of our risk management policy.

The following table indicates the estimated impact on net interest income under various interest rate scenarios for the twelve months following June 30, 2016, as calculated using the static shock model approach:

	Change in Future Net Interest Income
	Dollar Change			Percentage Change
	(dollars in thousands)
+ 200 basis points	$	(910	)		(3.23	)%
+ 100 basis points		(400	)		(1.42	)
- 100 basis points		(1,060	)		(3.77	)
- 200 basis points		(2,718	)		(9.67	)

Item 4. Controls and Procedures

As of the end of the quarterly period covered by this report, an evaluation was carried out 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 Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)). Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were, to the best of their knowledge, effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms as of such date.

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter covered by this report 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

We are defendants in various legal proceedings.  Litigation is subject to inherent uncertainties and unfavorable outcomes could occur. See Footnote 13, “Contingencies” in the Notes to our consolidated financial statements for additional detail regarding ongoing legal proceedings.

Item 1A. Risk Factors

We refer you to the detailed cautionary statements and discussion of risks that affect our Company and its business in “Item 1A – Risk Factors” of our December 31, 2015 Annual Report on Form 10-K. There have been no material changes from the risk factors previously discussed in those reports.

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

Not applicable.

Item 3. Default Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

(a)           Exhibits

The following exhibits are filed or furnished as part of this report:

Exhibit Number	Description of Exhibit
10.1	Porter Bancorp, Inc. 2016 Incentive Compensation Bonus Plan (incorporated by reference to Exhibit A to definitive proxy statement on Schedule 14A filed April 25, 2016).
10.2	Non-Employee Director Stock Incentive Program (incorporated by reference to Exhibit 10.1 to the Form 8-K filed June 22, 2016).
10.3	Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 to the Form 8-K filed June 22, 2016).
31.1	Certification of Principal Executive Officer, pursuant to Rule 13a - 14(a).
31.2	Certification of Principal Financial Officer, pursuant to Rule 13a - 14(a).
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements from the Company’s Quarterly Report on Form 10Q for the quarter ended June 30, 2016, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statement of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements.

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SIGNATURES

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

	PORTER BANCORP, INC.
	(Registrant)
August 4, 2016	By:	/s/ John T. Taylor
		John T. Taylor
		Chief Executive Officer
August 4, 2016	By:	/s/ Phillip W. Barnhouse
		Phillip W. Barnhouse
		Chief Financial Officer

53

EX-31.1

Exhibit 31.1

Porter Bancorp, Inc.

Rule 13a-14(a) Certification

of Chief Executive Officer

I, John T. Taylor, Chief Executive Officer of Porter Bancorp, Inc. (the “Company”), certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of the Company;

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

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

4.     The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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.

Dated:  August 4, 2016	/s/ John T. Taylor
	John T. Taylor
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Porter Bancorp, Inc.

Rule 13a-14(a) Certification

of Chief Financial Officer

I, Phillip W. Barnhouse, Chief Financial Officer of Porter Bancorp, Inc. (the “Company”), certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of the Company;

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

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

4.     The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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.

Dated:  August 4, 2016	/s/ Phillip W. Barnhouse
	Phillip W. Barnhouse
	Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 906 CERTIFICATION

In connection with the Quarterly Report on Form 10-Q of Porter Bancorp, Inc. (the “Company”) for the quarterly period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John T. Taylor, Chief Executive Officer of the Company, do hereby certify, in accordance with 18 U.S.C. Section 1350, as adopted 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), as applicable, of the Securities Exchange Act of 1934, as amended; and

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

	PORTER BANCORP, INC.
Dated:  August 4, 2016	By:	/s/ John T. Taylor
		John T. Taylor
		Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 906 CERTIFICATION

In connection with the Quarterly Report on Form 10-Q of Porter Bancorp, Inc. (the “Company”) for the quarterly period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Phillip W. Barnhouse, Chief Financial Officer of the Company, do hereby certify, in accordance with 18 U.S.C. Section 1350, as adopted 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), as applicable, of the Securities Exchange Act of 1934, as amended; and

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

	PORTER BANCORP, INC.
Dated:  August 4, 2016	By:	/s/ Phillip W. Barnhouse
		Phillip W. Barnhouse
		Chief Financial Officer

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 31, 2016
Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		23,156,969
Nonvoting Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		7,958,000
Entity Registrant Name	PORTER BANCORP, INC.
Entity Central Index Key	0001358356
Trading Symbol	pbib
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false

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Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Series E Preferred Stock [Member]
Stockholders’ equity
Preferred stock	$ 1,644	$ 1,644
Series F Preferred Stock [Member]
Stockholders’ equity
Preferred stock	1,127	1,127
Cash and due from banks	8,289	8,006
Interest bearing deposits in banks	49,313	85,329
Cash and cash equivalents	57,602	93,335
Securities available for sale	143,145	144,978
Securities held to maturity (fair value of $44,955 and $44,253, respectively)	41,948	42,075
Loans held for sale		186
Loans, net of allowance of $10,104 and $12,041, respectively	614,032	606,625
Premises and equipment, net	18,618	18,812
Other real estate owned	12,322	19,214
Federal Home Loan Bank stock	7,323	7,323
Bank owned life insurance	14,646	9,441
Accrued interest receivable and other assets	6,916	6,733
Total assets	916,552	948,722
Non-interest bearing	117,843	120,043
Interest bearing	722,248	757,954
Total deposits	840,091	877,997
Federal Home Loan Bank advances	2,775	3,081
Accrued interest payable and other liabilities	7,651	10,577
Subordinated capital note	3,600	4,050
Junior subordinated debentures	21,000	21,000
Total liabilities	875,117	916,705
Preferred stock	2,771	2,771
Common stock, no par, 86,000,000 shares authorized, 23,160,302 and 20,089,533 voting, and 7,958,000 and 6,858,000 non-voting shares issued and outstanding, respectively	125,729	120,699
Additional paid-in capital	23,821	23,654
Retained deficit	(108,316)	(110,808)
Accumulated other comprehensive loss	(2,570)	(4,299)
Total common stockholders’ equity	38,664	29,246
Total stockholders' equity	41,435	32,017
Total liabilities and stockholders’ equity	$ 916,552	$ 948,722

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Unaudited Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Series E Preferred Stock [Member]
Preferred stock, issued (in shares)	6,198	6,198
Preferred stock, outstanding (in shares)	6,198	6,198
Preferred stock, liquidation preference	$ 6,200	$ 6,200
Preferred stock, no par (in dollars per share)	$ 0	$ 0
Series F Preferred Stock [Member]
Preferred stock, issued (in shares)	4,304	4,304
Preferred stock, outstanding (in shares)	4,304	4,304
Preferred stock, liquidation preference	$ 4,300	$ 4,300
Preferred stock, no par (in dollars per share)	$ 0	$ 0
Voting Common Stock [Member]
Common stock, shares issued (in shares)	23,160,302	20,089,533
Common stock, shares outstanding (in shares)	23,160,302	20,089,533
Nonvoting Common Stock [Member]
Common stock, shares issued (in shares)	7,958,000	6,858,000
Common stock, shares outstanding (in shares)	7,958,000	6,858,000
Securities held to maturity, fair value	$ 44,955	$ 44,253
Loans, allowance	$ 10,104	$ 12,041
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	86,000,000	86,000,000

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Unaudited Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest income
Loans, including fees	$ 7,455,000	$ 7,846,000	$ 15,337,000	$ 15,601,000
Taxable securities	950,000	1,010,000	1,939,000	2,136,000
Tax exempt securities	158,000	190,000	322,000	393,000
Fed funds sold and other	142,000	121,000	292,000	240,000
	8,705,000	9,167,000	17,890,000	18,370,000
Interest expense
Deposits	1,280,000	1,607,000	2,588,000	3,299,000
Federal Home Loan Bank advances	18,000	24,000	37,000	51,000
Subordinated capital note	38,000	41,000	77,000	83,000
Junior subordinated debentures	173,000	155,000	341,000	307,000
Federal funds purchased and other		1,000		1,000
	1,509,000	1,828,000	3,043,000	3,741,000
Net interest income	7,196,000	7,339,000	14,847,000	14,629,000
Provision (negative provision) for loan losses	(600,000)		(1,150,000)
Net interest income after provision for loan losses	7,796,000	7,339,000	15,997,000	14,629,000
Non-interest income
Service charges on deposit accounts	473,000	475,000	902,000	884,000
Bank card interchange fees	221,000	229,000	423,000	432,000
Other real estate owned rental income	149,000	372,000	405,000	729,000
Net gain on sales of securities		199,000	203,000	1,696,000
Other	309,000	290,000	610,000	520,000
	1,152,000	1,565,000	2,543,000	4,261,000
Non-interest expense
Salaries and employee benefits	3,857,000	4,028,000	7,679,000	7,875,000
Occupancy and equipment	808,000	828,000	1,662,000	1,698,000
Professional fees	492,000	714,000	877,000	1,693,000
FDIC Insurance	493,000	564,000	1,016,000	1,134,000
Data processing expense	295,000	278,000	592,000	582,000
State franchise and deposit tax	255,000	285,000	510,000	570,000
Other real estate owned expense	294,000	2,932,000	962,000	3,665,000
Loan collection expense	271,000	291,000	353,000	574,000
Other	1,171,000	1,114,000	2,376,000	2,635,000
	7,936,000	11,034,000	16,027,000	20,426,000
Income (loss) before income taxes	1,012,000	(2,130,000)	2,513,000	(1,536,000)
Income tax expense			21,000
Net income (loss)	1,012,000	(2,130,000)	2,492,000	(1,536,000)
Earnings (loss) allocated to participating securities	33,000	(91,000)	84,000	(269,000)
Net income (loss) available to common shareholders	$ 979,000	$ (2,039,000)	$ 2,408,000	$ (1,267,000)
Basic and diluted income (loss) per common share (in dollars per share)	$ 0.03	$ (0.08)	$ 0.09	$ (0.06)

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Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net income	$ 1,012	$ (2,130)	$ 2,492	$ (1,536)
Other comprehensive income (loss):
Unrealized gain (loss) arising during the period	659	(1,762)	1,868	(433)
Amortization during the period of net unrealized loss transferred to held to maturity	32	32	64	64
Reclassification adjustment for gains included in net income		(199)	(203)	(1,696)
Net unrealized gain/(loss) recognized in comprehensive income	691	(1,929)	1,729	(2,065)
Tax effect
Other comprehensive income (loss)	691	(1,929)	1,729	(2,065)
Comprehensive income (loss)	$ 1,703	$ (4,059)	$ 4,221	$ (3,601)

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Unaudited Consolidated Statements of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands	Common Stock [Member] Voting Common Stock [Member]	Common Stock [Member] Nonvoting Common Stock [Member]	Common Stock [Member]	Series E Preferred Stock [Member]	Series F Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balances (in shares) at Dec. 31, 2015	20,089,533	6,858,000	26,947,533	6,198	4,304
Balances at Dec. 31, 2015			$ 120,699	$ 1,644	$ 1,127	$ 23,654	$ (110,808)	$ (4,299)	$ 32,017
Forfeited unvested stock (in shares)	(6,521)		(6,521)
Stock-based compensation expense						167			167
Net income							2,492		2,492
Net change in accumulated other comprehensive income (loss), net of taxes								1,729	1,729
Issuance of stock (in shares)	2,900,000	1,100,000	4,000,000
Issuance of stock			$ 5,030						5,030
Balances (in shares) at Jun. 30, 2016	23,160,302	7,958,000	31,118,302	6,198	4,304
Balances at Jun. 30, 2016			$ 125,729	$ 1,644	$ 1,127	$ 23,821	$ (108,316)	$ (2,570)	$ 41,435

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Unaudited Consolidated Statements of Cash Flows - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities
Net income	$ 1,012,000	$ (2,130,000)	$ 2,492,000	$ (1,536,000)	$ (3,200,000)	$ (11,200,000)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization			747,000	814,000
Provision (negative provision) for loan losses	(600,000)		(1,150,000)
Net amortization on securities			643,000	721,000
Stock-based compensation expense	73,000	49,000	167,000	181,000
Net loss (gain) on sales of loans held for sale			(29,000)	232,000
Loans originated for sale			(1,814,000)	(4,146,000)
Proceeds from sales of loans held for sale			(2,029,000)	(4,075,000)
Net (gain) loss on sales of other real estate owned	(114,000)	(40,000)	(169,000)	(43,000)
Net write-down of other real estate owned			650,000	2,630,000
Net realized gain on sales of available for sale securities		(199,000)	(203,000)	(1,696,000)
Earnings on bank owned life insurance, net of premium expense			(205,000)	(153,000)
Net change in accrued interest receivable and other assets			(384,000)	742,000
Net change in accrued interest payable and other liabilities			(127,000)	309,000
Net cash from operating activities			2,647,000	2,130,000
Cash flows from investing activities
Purchases of available for sale securities			(11,295,000)	(16,800,000)
Sales and calls of available for sale securities	235,000	9,972,000	3,721,000	44,110,000
Maturities and prepayments of available for sale securities			10,823,000	10,756,000
Proceeds from sale of other real estate owned			6,987,000	5,020,000
Proceeds from sales of loans not originated for sale				8,640,000
Loan originations and payments, net			(6,903,000)	(26,974,000)
Purchases of premises and equipment, net			(282,000)	(134,000)
Purchase of bank owned life insurance			(5,000,000)
Net cash from investing activities			(1,949,000)	24,618,000
Cash flows from financing activities
Net change in deposits			(37,906,000)	(22,690,000)
Net change in repurchase agreements				(76,000)
Repayment of Federal Home Loan Bank advances			(306,000)	(17,322,000)
Advances from Federal Home Loan Bank				5,000,000
Repayment of subordinated capital note			(450,000)	(450,000)
Issuance of common stock			2,231,000
Net cash from financing activities			(36,431,000)	(35,538,000)
Net change in cash and cash equivalents			(35,733,000)	(8,790,000)
Beginning cash and cash equivalents			93,335,000	80,180,000	80,180,000
Ending cash and cash equivalents	$ 57,602,000	$ 71,390,000	57,602,000	71,390,000	$ 93,335,000	$ 80,180,000
Supplemental cash flow information:
Interest paid			2,627,000	3,622,000
Income taxes paid			21,000
Supplemental non-cash disclosure:
Proceeds from common stock issuance directed by investors for junior subordinated debenture interest			2,799,000
Transfer from loans to other real estate			$ 576,000	$ 955,000

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

– The consolidated financial statements include Porter Bancorp, Inc. (Company) and its subsidiary, PBI Bank (Bank).  The Company owns a 100% interest in the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire year.  A description of other significant accounting policies is presented in the notes to the Consolidated Financial Statements for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K.

Use of Estimates

– To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ.

Reclassifications

– Some items in the prior year financial statements were reclassified to conform to the current presentation. The reclassifications did not impact net income or stockholders’ equity.

Adoption of New Accounting Standards

– In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606). This ASU is an update to ASU 2014-09, and delays the effective date of ASU 2014-09. The ASU provides guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets. The core principle of the guidance is that an entity should recognize 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. Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Early adoption is not permitted. Management is currently evaluating the impact of the adoption of this guidance on the Company’s financial statements.

In January 2016, the FASB issued an update ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update impact public business entities as follows: 1) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. 3) Eliminate the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. 4) Require entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. 5) Require an entity to present separately in other comprehensive income the portion of the total change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. 6) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. 7) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In February 2016, the FASB issued an update ASU No. 2016-02, Leases (Topic 842).

Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting in largely unchanged. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting. The amendments are intended to improve the accounting for employee shared-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The final standard will change estimates for credit losses related to financial assets measured at amortized cost such as loans, held-to-maturity debt securities, and certain other contracts. For estimating credit losses, the FASB is replacing the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The largest impact will be on the allowance for loan and lease losses. The standard is effective for public companies for fiscal years beginning after December 15, 2019. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

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Note 2 - Going Concern Considerations and Future Plans

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

Note 2 – Going Concern Considerations and Future Plans

Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. However, the events and circumstances described in this discussion create substantial doubt about the Company’s ability to continue as a going concern.

For the six months ended June 30, 2016, we reported net income of $2.5 million compared with net loss of $3.2 million and $11.2 million for the years ended December 31, 2015 and 2014, respectively. Our financial performance has been negatively impacted by the Bank’s elevated level of non-performing assets, although the impact continues to diminish as we have substantially reduced non-performing assets during recent periods. Non-performing loans were 1.86%, 2.28%, and 7.57% of total loans at June 30, 2016, December 31, 2015, and December 31, 2014, respectively. Non-performing assets were 2.61%, 3.51%, and 9.19% of total assets at June 30, 2016, December 31, 2015, and December 31, 2014, respectively. See “Analysis of Financial Condition,” below.

On April 15, 2016, we completed a private placement of 2.9 million common shares and 1.1 million non-voting common shares to accredited investors for a total purchase price of $5.0 million. The investors in the private placement directed a portion of the purchase price to pay all deferred interest payments on our trust preferred securities, bringing our interest payments current through the second quarter of 2016. We had deferred interest payable on the junior subordinated debentures held by our trust subsidiaries since the fourth quarter of 2011, requiring our trust subsidiaries to defer distributions on our trust preferred securities held by investors during that period. The remaining proceeds from the private placement totaled approximately $2.2 million and will be used for general corporate purposes and to support the Bank.

On June 29, 2016, we notified the trustees of our election to again defer our interest payments effective with the third quarter 2016 payment. We have the ability to defer distributions on our trust preferred securities for 20 consecutive quarters or through the second quarter of 2021. After 20 consecutive quarters, we must pay all deferred distributions or we will be in default.

We continue to be involved in various legal proceedings, which are more fully described in Note 13 – “Contingencies”. We are appealing a judgment against us that we believe, after conferring with our legal advisors, we have meritorious grounds on which to prevail. If we do not prevail, the ultimate outcome of this matter could have a material adverse effect on our financial condition, results of operations, or cash flows.

PBI Bank is in compliance with each element of its Consent Order with the FDIC and KDFI other than the requirement for the Bank to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. As of June 30, 2016, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were 6.65% and 10.87%, respectively, both less than the minimum capital ratios required by the Consent Order, but otherwise compliant with Basel III capital requirements. The Consent Order provides that if the Bank should be unable to reach the required capital levels, and if directed in writing by the FDIC, the Bank would be required to develop, adopt and implement a written plan to sell or merge itself into another federally insured financial institution or otherwise obtain a capital investment into the Bank sufficient to recapitalize the Bank. The Bank has not been directed by the FDIC to implement such a plan.

In order to meet the 9.0% Tier 1 leverage ratio and 12.0% total risk based capital ratio requirements of the Consent Order, the Board of Directors and management are continuing to evaluate and implement strategies to achieve the following objectives:

● Continuing to increase capital through the issuance of senior debt, subordinated debt, and equity securities.

● Continuing to operate the Company and Bank in a safe and sound manner.  We have reduced our lending concentrations and the size of our balance sheet while continuing to remediate non-performing loans.

 

● Executing on the sale of other real estate owned (“OREO”) and reinvesting the sale proceeds in quality income producing assets.

● Continuing to improve our internal processes and procedures, distribution of labor, and work-flow to ensure we have adequately and appropriately deployed resources in an efficient manner in the current environment.

Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a consent order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions such as directing a bank to seek a buyer or taking a bank into receivership.

The Consent Order requires the Bank to obtain the written consent of both agencies before declaring or paying any future dividends to the Company, which are its principal source of revenue. Since the Bank is unlikely to be in a position to pay dividends to the Company until the Consent Order is satisfied, cash inflows for the Company are limited to the issuance of new debt or the issuance of capital securities. The Company’s liquid assets were $2.3 million as of June 30, 2016. Ongoing operating expenses of the Company are forecast at approximately $1.0 million for the next twelve months.

Our consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

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Note 3 - Securities

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

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

Note 3 – Securities

The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
Available for sale
U.S. Government and federal agency	$	34,043	$	423	$	(13	)	$	34,453
Agency mortgage-backed: residential		101,596		1,921		(56	)		103,461
State and municipal		3,035		59		—			3,094
Corporate bonds		2,330		—		(193	)		2,137
Total available for sale	$	141,004	$	2,403	$	(262	)	$	143,145

	Amortized Cost		Gross Unre cognized Gains		Gross Unre cognized Losses		Fair Value
Held to maturity
State and municipal	$	41,948	$	3,007	$	—	$	44,955
Total held to maturity	$	41,948	$	3,007	$	—	$	44,955

December 31, 201 5	Amortized Cost		Gross Unre alized Gains		Gross Unre alized Losses			Fair Value
Available for sale
U.S. Government and federal agency	$	33,491	$	146	$	(375	)	$	33,262
Agency mortgage-backed: residential		102,135		907		(380	)		102,662
State and municipal		6,555		306		—			6,861
Corporate bonds		2,321		—		(128	)		2,193
Total available for sale	$	144,502	$	1,359	$	(883	)	$	144,978

	Amortized Cost		Gross Unre cognized Gains		Gross Unre cognized Losses		Fair Value
Held to maturity
State and municipal	$	42,075	$	2,178	$	—	$	44,253
Total held to maturity	$	42,075	$	2,178	$	—	$	44,253

Sales and calls of available for sale securities were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)				(in thousands)
Proceeds	$	235	$	9,972	$	3,721	$	44,110
Gross gains		—		281		203		1,832
Gross losses		—		82		—		136

The amortized cost and fair value of the debt investment securities portfolio are shown by contractual maturity.  Contractual maturities may differ from actual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities not due at a single maturity date are detailed separately.

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Maturity
Available for sale
Within one year	$	6,272	$	6,134
One to five years		7,622		7,744
Five to ten years		25,514		25,806
Agency mortgage-backed: residential		101,596		103,461
Total	$	141,004	$	143,145
Held to maturity
One to five years	$	19,092	$	20,079
Five to ten years		21,808		23,696
Beyond ten years		1,048		1,180
Total	$	41,948	$	44,955

Securities pledged at June 30, 2016 and December 31, 2015 had carrying values of approximately $53.7 million and $68.0 million, respectively, and were pledged to secure public deposits.

At June 30, 2016 and December 31, 2015, we held securities issued by the Commonwealth of Kentucky or municipalities in the Commonwealth of Kentucky having a book value of $17.4 million and $17.7 million, respectively. Additionally, at June 30, 2016 and December 31, 2015, we held securities issued by the State of Texas or municipalities in the State of Texas having a book value of $4.3 million at each period end. At June 30, 2016 and December 31, 2015, there were no other holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

Securities with unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
June 30, 2016
Available for sale
U.S. Government and federal agency	$	1,509	$	(1	)	$	8,835	$	(12	)	$	10,344	$	(13	)
Agency mortgage-backed: residential		10,229		(44	)		2,444		(12	)		12,673		(56	)
Corporate bonds		743		(25	)		1,394		(168	)		2,137		(193	)
Total temporarily impaired	$	12,481	$	(70	)	$	12,673	$	(192	)	$	25,154	$	(262	)
December 31, 2015
Available for sale
U.S. Government and federal agency	$	7,058	$	(44	)	$	14,527	$	(331	)	$	21,585	$	(375	)
Agency mortgage-backed: residential		36,325		(271	)		3,856		(109	)		40,181		(380	)
Corporate bonds		747		(18	)		1,446		(110	)		2,193		(128	)
Total temporarily impaired	$	44,130	$	(333	)	$	19,829	$	(550	)	$	63,959	$	(883	)

There were no held to maturity securities in an unrecognized loss position at June 30, 2016 or December 31, 2015.

The Company evaluates securities for other than temporary impairment (OTTI) on a quarterly basis. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, underlying credit quality of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the sector or industry trends and cycles affecting the issuer, and the results of reviews of the issuer’s financial condition. Management currently intends to hold all securities with unrealized losses until recovery, which for fixed income securities may be at maturity. As of June 30, 2016, management does not believe securities within our portfolio with unrealized losses should be classified as other than temporarily impaired.

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Note 4 - Loans

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

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

Note 4 – Loans

Loans were as follows:	June 30,			December 31,
	2016			2015
	(in thousands)
Commercial	$	75,222		$	86,176
Commercial Real Estate:
Construction		33,184			33,154
Farmland		77,742			76,412
Nonfarm nonresidential		147,969			140,570
Residential Real Estate:
Multi-family		44,652			44,131
1-4 Family		196,388			201,478
Consumer		9,853			10,010
Agriculture		38,710			26,316
Other		416			419
Subtotal		624,136			618,666
Less: Allowance for loan losses		(10,104	)		(12,041	)
Loans, net	$	614,032		$	606,625

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2016 and 2015:

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
June 30, 2016:
Beginning balance	$	642		$	6,763		$	3,683		$	115		$	136		$	1		$	11,340
Negative provision for loan losses		305			(1,213	)		471			(200	)		(15	)		52			(600	)
Loans charged off		(249	)		(127	)		(455	)		(22	)		(8	)		(67	)		(928	)
Recoveries		32			6			79			154			6			15			292
Ending balance	$	730		$	5,429		$	3,778		$	47		$	119		$	1		$	10,104
June 30, 2015:
Beginning balance	$	2,046		$	10,680		$	5,221		$	244		$	391		$	15		$	18,597
Provision for loan losses		(296	)		(330	)		604			10			3			9			—
Loans charged off		(99	)		(1,224	)		(809	)		(62	)		(37	)		(33	)		(2,264	)
Recoveries		295			87			44			34			2			14			476
Ending balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2016 and 2015: 

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
June 30, 2016:
Beginning balance	$	818		$	6,993		$	3,984		$	122		$	122		$	2		$	12,041
Negative provision for loan losses		106			(1,588	)		600			(233	)		(80	)		45			(1,150	)
Loans charged off		(261	)		(245	)		(1,050	)		(35	)		(8	)		(78	)		(1,677	)
Recoveries		67			269			244			193			85			32			890
Ending balance	$	730		$	5,429		$	3,778		$	47		$	119		$	1		$	10,104
June 30, 2015:
Beginning balance	$	2,046		$	10,931		$	5,787		$	274		$	319		$	7		$	19,364
Provision for loan losses		(27	)		(323	)		220			22			107			1			—
Loans charged off		(474	)		(1,593	)		(1,291	)		(130	)		(70	)		(33	)		(3,591	)
Recoveries		401			198			344			60			3			30			1,036
Ending balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of June 30, 2016:

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	–	$	45	$	100	$	–	$	1	$	–	$	146
Collectively evaluated for impairment		730		5,384		3,678		47		118		1		9,958
Total ending allowance balance	$	730	$	5,429	$	3,778	$	47	$	119	$	1	$	10,104
Loans:
Loans individually evaluated for impairment	$	748	$	12,554	$	12,088	$	6	$	139	$	–	$	25,535
Loans collectively evaluated for impairment		74,474		246,341		228,952		9,847		38,571		416		598,601
Total ending loans balance	$	75,222	$	258,895	$	241,040	$	9,853	$	38,710	$	416	$	624,136

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of December 31, 2015:

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	–	$	43	$	385	$	–	$	–	$	–	$	428
Collectively evaluated for impairment		818		6,950		3,599		122		122		2		11,613
Total ending allowance balance	$	818	$	6,993	$	3,984	$	122	$	122	$	2	$	12,041
Loans:
Loans individually evaluated for impairment	$	1,112	$	12,819	$	17,673	$	20	$	152	$	–	$	31,776
Loans collectively evaluated for impairment		85,064		237,317		227,936		9,990		26,164		419		586,890
Total ending loans balance	$	86,176	$	250,136	$	245,609	$	10,010	$	26,316	$	419	$	618,666

Impaired Loans

Impaired loans include restructured loans and loans on nonaccrual or classified as doubtful, whereby collection of the total amount is improbable, or loss, whereby all or a portion of the loan has been written off or a specific allowance for loss has been provided.

The following tables present information related to loans individually evaluated for impairment by class of loans as of June 30, 2016 and December 31, 2015 and for the three and six months ended June 30, 2016 and 2015:

							Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,061	$	748	$	—	$	806	$	—	$	908	$	1
Commercial real estate:
Construction		259		259		—		260		3		261		78
Farmland		6,250		4,591		—		4,358		2		4,327		8
Nonfarm nonresidential		10,056		6,692		—		6,547		58		6,974		306
Residential real estate:
Multi-family		2,387		2,387		—		2,393		28		1,606		58
1-4 Family		5,882		3,961		—		4,897		13		7,184		71
Consumer		39		6		—		7		1		11		8
Agriculture		97		69		—		73		—		99		—
Other		—		—		—		—		—		—		—
Subtotal		26,031		18,713		—		19,341		105		21,370		530
With An Allowance Recorded:
Commercial		—		—		—		—		—		—		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		614		605		8		302		—		202		—
Nonfarm nonresidential		407		407		37		409		6		427		12
Residential real estate:
Multi-family		4,159		4,159		25		4,168		51		4,177		101
1-4 Family		1,581		1,581		75		1,630		34		1,650		54
Consumer		—		—		—		—		—		—		—
Agriculture		78		70		1		35		—		23		—
Other		—		—		—		—		—		—		—
Subtotal		6,839		6,822		146		6,544		91		6,479		167
Total	$	32,870	$	25,535	$	146	$	25,885	$	196	$	27,849	$	697

	As of December 31, 2015						Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,558	$	1,112	$	—	$	1,605	$	5	$	1,730	$	5
Commercial real estate:
Construction		278		262		—		2,475		4		3,016		8
Farmland		6,004		4,263		—		4,659		3		4,685		26
Nonfarm nonresidential		11,256		7,829		—		20,356		72		21,043		137
Residential real estate:
Multi-family		32		32		—		17		—		38		—
1-4 Family		14,066		11,756		—		14,235		110		14,579		244
Consumer		118		20		—		22		—		25		—
Agriculture		260		152		—		231		—		241		—
Other		—		—		—		62		2		82		4
Subtotal		33,572		25,426		—		43,662		196		45,439		424
With An Allowance Recorded:
Commercial		—		—		—		10		—		22		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		—		—		—		—		—		105		—
Nonfarm nonresidential		574		465		43		2,615		6		7,266		12
Residential real estate:
Multi-family		4,195		4,195		57		4,235		55		4,246		102
1-4 Family		1,690		1,690		328		1,628		14		1,676		39
Consumer		—		—		—		4		—		13		—
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		6,459		6,350		428		8,492		75		13,328		153
Total	$	40,031	$	31,776	$	428	$	52,154	$	271	$	58,767	$	577

Cash basis income recognized for the three and six months ended June 30, 2016 was $7,000 and $290,000, respectively, and $29,000 and $102,000 for the three and six months ended June 30, 2015, respectively.

Troubled Debt Restructuring

A troubled debt restructuring (TDR) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty. The majority of the Company’s TDRs involve a reduction in interest rate, a deferral of principal for a stated period of time, or an interest only period. All TDRs are considered impaired and the Company has allocated reserves for these loans to reflect the present value of the concessionary terms granted to the borrower.

The following table presents the types of TDR loan modifications by portfolio segment outstanding as of June 30, 2016 and December 31, 2015:

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
June 30, 2016
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		439		439
Commercial Real Estate:
Construction
Rate reduction		259		—		259
Farmland
Principal deferral		—		2,340		2,340
Nonfarm nonresidential
Rate reduction		5,550		—		5,550
Principal deferral		—		606		606
Residential Real Estate:
Multi-family
Rate reduction		6,546		—		6,546
1-4 Family
Rate reduction		1,581		—		1,581
Total TDRs	$	13,936	$	3,453	$	17,389

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
December 31, 2015
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		439		439
Commercial Real Estate:
Construction
Rate reduction		262		—		262
Farmland
Principal deferral		—		2,365		2,365
Nonfarm nonresidential
Rate reduction		5,637		50		5,687
Principal deferral		—		622		622
Residential Real Estate:
Multi-family
Rate reduction		4,195		—		4,195
1-4 Family
Rate reduction		7,346		—		7,346
Total TDRs	$	17,440	$	3,544	$	20,984

At June 30, 2016 and December 31, 2015, 80% and 83%, respectively, of the Company’s TDRs were performing according to their modified terms. The Company allocated $137,000 and $179,000 in reserves to borrowers whose loan terms have been modified in TDRs as of June 30, 2016, and December 31, 2015, respectively. The Company has committed to lend no additional amounts as of June 30, 2016 and December 31, 2015 to borrowers with outstanding loans classified as TDRs.

Management periodically reviews renewals/modifications of previously identified TDRs, for which there was no principal forgiveness, to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed as the borrower has complied with the terms of the loan at the date of renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan subsequent to the date of the renewal/modification. In this instance, the TDR was originally considered a restructuring in a prior year as a result of a modification with an interest rate that was not commensurate with the risk of the underlying loan. Additionally, TDR classification can be removed in circumstances in which the Company performs a non-concessionary re-modification of the loan at terms that were considered to be at market for loans with comparable risk. Management expects the borrower will continue to perform under the re-modified terms based on the borrower’s past history of performance.

No TDR loan modifications occurred during the three or six months ended June 30, 2016 or June 30, 2015. During the first six months of 2016 and 2015, no TDRs defaulted on their restructured loan within the 12-month period following the loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.

Nonperforming Loans

Nonperforming loans include impaired loans not on accrual and smaller balance homogeneous loans, such as residential mortgage and consumer loans, that are collectively evaluated for impairment.

The following table presents the recorded investment in nonaccrual and loans past due 90 days and still on accrual by class of loan as of June 30, 2016, and December 31, 2015: 

	Nonaccrual				Loans Past Due 90 Days And Over Still Accruing
	June 30, 2016		December 31, 201 5		June 30 , 201 6		December 31, 201 5
	(in thousands)
Commercial	$	748	$	1,112	$	—	$	—
Commercial Real Estate:
Construction		—		—		—		—
Farmland		5,196		4,263		—		—
Nonfarm nonresidential		1,549		2,657		—		—
Residential Real Estate:
Multi-family		—		32		—		—
1-4 Family		3,961		5,851		—		—
Consumer		6		20		—		—
Agriculture		139		152		—		—
Other		—		—		—		—
Total	$	11,599	$	14,087	$	—	$	—

The following table presents the aging of the recorded investment in past due loans as of June 30, 2016 and December 31, 2015: 

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
June 30, 2016
Commercial	$	42	$	25	$	—	$	748	$	815
Commercial Real Estate:
Construction		—		—		—		—		—
Farmland		242		—		—		5,196		5,438
Nonfarm nonresidential		110		—		—		1,549		1,659
Residential Real Estate:
Multi-family		—		—		—		—		—
1-4 Family		1,918		311		—		3,961		6,190
Consumer		89		—		—		6		95
Agriculture		—		—		—		139		139
Other		—		—		—		—		—
Total	$	2,401	$	336	$	—	$	11,599	$	14,336

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
December 31, 2015
Commercial	$	78	$	—	$	—	$	1,112	$	1,190
Commercial Real Estate:
Construction		—		—		—		—		—
Farmland		456		—		—		4,263		4,719
Nonfarm nonresidential		326		—		—		2,657		2,983
Residential Real Estate:
Multi-family		—		—		—		32		32
1-4 Family		2,225		241		—		5,851		8,317
Consumer		41		—		—		20		61
Agriculture		7		—		—		152		159
Other		—		—		—		—		—
Total	$	3,133	$	241	$	—	$	14,087	$	17,461

Credit Quality Indicators

 

We categorize all loans into risk categories at origination based upon original underwriting. Thereafter, we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends. Additionally, loans are analyzed regularly through our internal and external loan review processes. Borrower relationships in excess of $500,000 are routinely analyzed through our credit administration processes which classify the loans as to credit risk. The following definitions are used for risk ratings:

Watch –

Loansclassified as watch are those loans which have experienced a potentially adverse development which necessitates increased monitoring.

Special Mention –

Loans classified as special mention do not have all of the characteristics of substandard or doubtful loans. They have one or more deficiencies which warrant special attention and which corrective action, such as accelerated collection practices, may remedy.

Substandard –

Loans classified as substandard are those loans with clear and defined weaknesses such as a highly leveraged position, unfavorable financial ratios, uncertain repayment sources or poor financial condition which may jeopardize the repayment of the debt as contractually agreed. They are characterized by the distinct possibility we will sustain some losses if the deficiencies are not corrected.

Doubtful

– Loans classified as doubtful are those loans which have characteristics similar to substandard loans but with an increased risk that collection or liquidation in full is highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be “Pass” rated loans. As of June 30, 2016, and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
June 30, 2016
Commercial	$	73,569	$	400	$	—	$	1,253	$	—	$	75,222
Commercial Real Estate:
Construction		27,915		5,269		—		—		—		33,184
Farmland		67,422		2,492		—		7,828		—		77,742
Nonfarm nonresidential		130,191		14,632		538		2,608		—		147,969
Residential Real Estate:
Multi-family		33,828		6,934		—		3,890		—		44,652
1-4 Family		172,447		15,036		84		8,821		—		196,388
Consumer		9,339		378		—		136		—		9,853
Agriculture		32,726		4,883		—		1,101		—		38,710
Other		416		—		—		—		—		416
Total	$	547,853	$	50,024	$	622	$	25,637	$	—	$	624,136

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
December 31, 2015
Commercial	$	81,570	$	2,953	$	—	$	1,653	$	—	$	86,176
Commercial Real Estate:
Construction		27,603		5,289		—		262		—		33,154
Farmland		65,476		4,844		—		6,092		—		76,412
Nonfarm nonresidential		111,901		22,687		1,328		4,654		—		140,570
Residential Real Estate:
Multi-family		35,300		4,879		—		3,952		—		44,131
1-4 Family		164,490		17,636		67		19,285		—		201,478
Consumer		9,323		474		—		213		—		10,010
Agriculture		21,402		4,601		—		313		—		26,316
Other		419		—		—		—		—		419
Total	$	517,484	$	63,363	$	1,395	$	36,424	$	—	$	618,666

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Note 5 - Other Real Estate Owned

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Real Estate Owned [Text Block]

Note 5 – Other Real Estate Owned

Other real estate owned (OREO) is real estate acquired as a result of foreclosure or by deed in lieu of foreclosure. It is classified as real estate owned until such time as it is sold. When property is acquired as a result of foreclosure or by deed in lieu of foreclosure, it is recorded at its fair market value less cost to sell. Any write-down of the property at the time of acquisition is charged to the allowance for loan losses. Costs incurred in order to perfect the lien prior to foreclosure may be capitalized if the fair value less the cost to sell exceeds the balance of the loan at the time of transfer to OREO. Examples of eligible costs to be capitalized are payments of delinquent property taxes to clear tax liens or payments to contractors and subcontractors to clear mechanics’ liens. Subsequent reductions in fair value are recorded as non-interest expense. 

To determine the fair value of OREO for smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers. If the internally evaluated market price is below our underlying investment in the property, appropriate write-downs are taken. For larger dollar residential and commercial real estate properties, we obtain a new appraisal of the subject property or have staff from our special assets group or in our centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned. We typically obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent. 

The following table presents the major categories of OREO at the period-ends indicated:

	June 30, 2016			December 31, 2015
	(in thousands)
Commercial Real Estate:
Construction, land development, and other land	$	11,066		$	12,749
Nonfarm nonresidential		1,512			6,967
Residential Real Estate:
1-4 Family		185			128
		12,763			19,844
Valuation allowance		(441	)		(630	)
	$	12,322		$	19,214

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	201 6			201 5			201 6			201 5
	(in thousands) (in thousands)
OREO Valuation Allowance Activity:
Beginning balance	$	888		$	492		$	630		$	1,066
Provision to allowance		150			2,330			650			2,630
Write-downs		(597	)		(2,515	)		(839	)		(3,389	)
Ending balance	$	441		$	307		$	441		$	307

Residential loans secured by 1-4 family residential properties in the process of foreclosure totaled $533,000 and $934,000 at June 30, 2016 and December 31, 2015, respectively.

Net activity relating to other real estate owned during the six months ended June 30, 2016 and 2015 is as follows:

	For the Six Months Ended June 30 ,
	2016			201 5
	(in thousands)
OREO Activity
OREO as of January 1	$	19,214		$	46,197
Real estate acquired		576			955
Valuation adjustment write-downs		(650	)		(2,630	)
Net gain on sales		169			43
Proceeds from sales of properties		(6,987	)		(5,020	)
OREO as of June 30	$	12,322		$	39,545

OREO rental income totaled $149,000 and $405,000 for the three and six months ended June 30, 2016, respectively, and $372,000 and $729,000 for the three and six months ended June 30, 2015, respectively. 

Expenses related to other real estate owned include:

	Three Months Ended June 30 ,						Six Months Ended June 30 ,
	201 6			201 5			201 6			201 5
	(in thousands) (in thousands)
Net gain on sales	$	(114	)	$	(40	)	$	(169	)	$	(43	)
Provision to allowance		150			2,330			650			2,630
Operating expense		258			642			481			1,078
Total	$	294		$	2,932		$	962		$	3,665

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Note 6 - Deposits

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

 Note 6 – Deposits

The following table shows ending deposit balances by category as of:

	June 30 , 201 6		December 31, 201 5
	(in thousands)
Non-interest bearing	$	117,843	$	120,043
Interest checking		90,806		97,515
Money market		135,643		125,935
Savings		34,616		34,677
Certificates of deposit		461,183		499,827
Total	$	840,091	$	877,997

Time deposits of $250,000 or more were $26.7 million and $28.4 million at June 30, 2016 and December 31, 2015, respectively.

Scheduled maturities of all time deposits at June 30, 2016 were as follows (in thousands):

Year 1	$	345,900
Year 2		41,056
Year 3		13,916
Year 4		44,484
Year 5		15,827
	$	461,183

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Note 7 - Advances From the Federal Home Loan Bank

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Federal Home Loan Bank Advances, Disclosure [Text Block]

Note 7 – Advances from the Federal Home Loan Bank

Advances from the Federal Home Loan Bank were as follows:

	June 30,		December 31,
	2016		2015
	(in thousands)
Monthly amortizing advances with fixed rates from 0.00% to 5.25% and maturities ranging from 2017 through 2033, averaging 2.50% at June 30, 2016 and 2.65% at December 31, 2015	$	2,775	$	3,081

Each advance is payable based upon the terms of agreement, with a prepayment penalty.  New advances are limited to a one-year maturity or less. No prepayment penalties were incurred during 2016 or 2015. The advances are collateralized by first mortgage loans. The borrowing capacity is based on the market value of the underlying pledged loans. At June 30, 2016, our additional borrowing capacity with the FHLB was $29.5 million. The availability of our borrowing capacity could be affected by our financial condition and the FHLB could require additional collateral or, among other things, exercise its right to deny a funding request, at its discretion.

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Note 8 - Fair Values Measurement

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 8 – Fair Values Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use various valuation techniques to determine fair value, including market, income and cost approaches. There are three levels of inputs that may be used to measure fair values:

Level 1:

Quoted prices (unadjusted) for identical assets or liabilities in active markets an entity has the ability to access as of the measurement date, or observable inputs.

Level 2:

Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3:

Significant unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When that occurs, we classify the fair value hierarchy on the lowest level of input that is significant to the fair value measurement. We used the following methods and significant assumptions to estimate fair value.

Securities:

The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges, if available. This valuation method is classified as Level 1 in the fair value hierarchy. For securities where quoted prices are not available, fair values are calculated on market prices of similar securities, or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Matrix pricing relies on the securities’ relationship to similarly traded securities, benchmark curves, and the benchmarking of like securities. Matrix pricing utilizes observable market inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. In instances where broker quotes are used, these quotes are obtained from market makers or broker-dealers recognized to be market participants. This valuation method is classified as Level 2 in the fair value hierarchy. For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators.

This valuation method is classified as Level 3 in the fair value hierarchy. Discounted cash flows are calculated using spread to swap and LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model.

Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans:

An impaired loan is evaluated at the time the loan is identified as impaired and is recorded at fair value less costs to sell. Fair value is measured based on the value of the collateral securing the loan and is classified as Level 3 in the fair value hierarchy. Fair value is determined using several methods. Generally, the fair value of real estate is determined based on appraisals by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. These routine adjustments are made to adjust the value of a specific property relative to comparable properties for variations in qualities such as location, size, and income production capacity relative to the subject property of the appraisal. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our impaired loans. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

We also apply discounts to the expected fair value of collateral for impaired loans where the likely resolution involves litigation or foreclosure. Resolution of this nature generally results in receiving lower values for real estate collateral in a more aggressive sales environment. We have utilized discounts ranging from 10% to 33% in our impairment evaluations when applicable.

Impaired loans are evaluated quarterly for additional impairment. We obtain updated appraisals on properties securing our loans when circumstances are warranted such as at the time of renewal or when market conditions have significantly changed. This determination is made on a property-by-property basis in light of circumstances in the broader economic climate and our assessment of deterioration of real estate values in the market in which the property is located. The first stage of our assessment involves management’s inspection of the property in question. Management also engages in conversations with local real estate professionals, investors, and market participants to determine the likely marketing time and value range for the property. The second stage involves an assessment of current trends in the regional market. After thorough consideration of these factors, management will either internally evaluate fair value or order a new appraisal.

Other Real Estate Owned (OREO)

: OREO is evaluated at the time of acquisition and recorded at fair value as determined by independent appraisal or internal evaluation less cost to sell. Our quarterly evaluations of OREO for impairment are driven by property type. For smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers. Based on these consultations, we determine asking prices for OREO properties we are marketing for sale. If the internally evaluated fair value is below our recorded investment in the property, appropriate write-downs are taken.

For larger dollar commercial real estate properties, we obtain a new appraisal of the subject property or have staff in our special assets group or centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned. In some of these circumstances, an appraisal is in process at quarter end, and we must make our best estimate of the fair value of the underlying collateral based on our internal evaluation of the property, review of the most recent appraisal, and discussions with the currently engaged appraiser. We generally obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our OREO. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

Financial assets measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 are summarized below:

			Fair Value Measurements at June 30, 2016 Using
			(in thousands)
			Quoted Prices In				Significant
			Active Markets for		Significant Other		Unobservable
	Carrying		Identical Assets		Observable Inputs		Inputs
Description	Value		(Level 1)		(Level 2)		(Level 3)
Available for sale securities
U.S. Government and federal agency	$	34,453	$	—	$	34,453	$	—
Agency mortgage-backed: residential		103,461		—		103,461		—
State and municipal		3,094		—		3,094		—
Corporate bonds		2,137		—		2,137		—
Total	$	143,145	$	—	$	143,145	$	—

			Fair Value Measurements at December 31, 201 5 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	33,262	$	—	$	33,262	$	—
Agency mortgage-backed: residential		102,662		—		102,662		—
State and municipal		6,861		—		6,861		—
Corporate bonds		2,193		—		2,193		—
Total	$	144,978	$	—	$	144,978	$	—

There were no transfers between Level 1 and Level 2 during 2016 or 2015.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods ended June 30, 2016 and 2015:

	Other Debt Securities
	2016		2015
	(in thousands)
Balances of recurring Level 3 assets at January 1	$	—	$	658
Total gain (loss) for the period:
Included in other comprehensive income (loss)		—		(7	)
Balance of recurring Level 3 assets at June 30	$	—	$	651

At June 30, 2015, our other debt security valuation was determined internally by calculating discounted cash flows using the security’s coupon rate of 6.5% and an estimated current market rate of 8.25% based upon the current yield curve plus spreads that adjust for volatility, credit risk, and optionality.  We also considered the issuer’s publicly filed financial information as well as assumptions regarding the likelihood of deferrals and defaults. This security was sold in December 2015.

Financial assets measured at fair value on a non-recurring basis are summarized below: 

			Fair Value Measurements at June 30, 2016 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		597		—		—		597
Nonfarm nonresidential		92		—		—		92
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,506		—		—		1,506
Consumer		—		—		—		—
Agriculture		69		—		—		69
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		10,684		—		—		10,684
Farmland		—		—		—		—
Nonfarm nonresidential		1,460		—		—		1,460
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		178		—		—		178

			Fair Value Measurements at December 31, 201 5 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		—		—		—		—
Nonfarm nonresidential		139		—		—		139
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,362		—		—		1,362
Consumer		—		—		—		—
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		12,344		—		—		12,344
Farmland		—		—		—		—
Nonfarm nonresidential		6,746		—		—		6,746
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		124		—		—		124

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $2.4 million at June 30, 2016 with a valuation allowance of $89,000, resulting in no additional provision for loan losses for the three and six months ended June 30, 2016. Impaired loans had a carrying amount of $5.9 million with a valuation allowance of $742,000, and no additional provision for the three and six months ended June 30, 2015. At December 31, 2015, impaired loans had a carrying amount of $1.8 million, with a valuation allowance of $337,000.

OREO, which is measured at the lower of carrying or fair value less estimated costs to sell, had a net carrying amount of $12.3 million as of June 30, 2016, compared with $39.5 million at June 30, 2015 and $19.2 million at December 31, 2015. Fair value write-downs of $150,000 and $650,000 were recorded on OREO for the three and six months ended June 30, 2016, respectively, and $2.3 million and $2.6 million for the three and six months ended June 30, 2015, respectively.

The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2016:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands )
Impaired loans – Residential real estate	$	1,506	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	22%	(10%)
Other real estate owned – Commercial real estate	$	12,144	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	30%	(12%)
			Income approach	Discount or capitalization rate	10%	-	20%	(17%)

The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2015:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Residential real estate	$	1,362	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	16%	(7%)
Other real estate owned – Commercial real estate	$	19,090	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	30%	(12%)
			Income approach	Discount or capitalization rate	10%	-	20%	(17%)

Carrying amount and estimated fair values of financial instruments were as follows for the periods indicated:

			Fair Value Measurements at June 30, 2016 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	57,602	$	44,391	$	13,211	$	—	$	57,602
Securities available for sale		143,145		—		143,145		—		143,145
Securities held to maturity		41,948		—		44,955		—		44,955
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		—		—		—		—		—
Loans, net		614,032		—		—		620,542		620,542
Accrued interest receivable		3,048		—		1,076		1,972		3,048
Financial liabilities
Deposits	$	840,091	$	117,845	$	711,563	$	—	$	829,408
Federal Home Loan Bank advances		2,775		—		2,852		—		2,852
Subordinated capital notes		3,600		—		—		3,515		3,515
Junior subordinated debentures		21,000		—		—		12,973		12,973
Accrued interest payable		422		—		388		34		422

			Fair Value Measurements at December 31, 201 5 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	93,335	$	79,498	$	13,837	$	—	$	93,335
Securities available for sale		144,978		—		144,978		—		144,978
Securities held to maturity		42,075		—		44,253		—		44,253
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		186		—		186		—		186
Loans, net		606,625		—		—		614,162		614,162
Accrued interest receivable		3,116		—		1,111		2,005		3,116
Financial liabilities
Deposits	$	877,997	$	120,043	$	739,152	$	—	$	859,195
Federal Home Loan Bank advances		3,081		—		3,076		—		3,076
Subordinated capital notes		4,050		—		—		3,933		3,933
Junior subordinated debentures		21,000		—		—		12,810		12,810
Accrued interest payable		2,805		—		422		2,383		2,805

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

(a) Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. Non-interest bearing deposits are Level 1 whereas interest bearing due from bank accounts and fed funds sold are Level 2.

(b) FHLB Stock

It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

(c) Loans, Net

Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

(d) Loans Held for Sale

The fair value of loans held for sale is estimated based upon binding contracts and and/or quotes from third party investors resulting in a Level 2 classification.

(e) Deposits

The fair values disclosed for non-interest bearing deposits are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate interest bearing deposits approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate interest bearing deposits are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(

f) Other Borrowings

The fair values of the Company’s FHLB advances are estimated using discounted cash flow analyses based on the current borrowing rates resulting in a Level 2 classification.

The fair values of the Company’s subordinated capital notes and junior subordinated debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

(g) Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification based on the level of the asset or liability with which the accrual is associated.

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Note 9 - Income Taxes

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 9 – Income Taxes

Deferred tax assets and liabilities were due to the following as of:

	June 30 ,			December 31,
	201 6			201 5
	(in thousands)
Deferred tax assets:
Net operating loss carry-forward	$	39,336		$	38,085
Allowance for loan losses		3,536			4,214
Other real estate owned write-down		6,327			7,619
Alternative minimum tax credit carry-forward		692			692
Net assets from acquisitions		673			671
Net unrealized loss on securities		—			166
New market tax credit carry-forward		208			208
Nonaccrual loan interest		562			549
Other		1,854			1,875
		53,188			54,079
Deferred tax liabilities:
FHLB stock dividends		928			928
Fixed assets		203			176
Net unrealized gain on securities		749			—
Other		536			865
		2,416			1,969
Net deferred tax assets before valuation allowance		50,772			52,110
Valuation allowance		(50,772	)		(52,110	)
Net deferred tax asset	$	—		$	—

Our estimate of our ability to realize the deferred tax asset depends on our estimate of projected future levels of taxable income. In analyzing future taxable income levels, we considered all evidence currently available, both positive and negative. Based on our analysis, we established a valuation allowance for all deferred tax assets as of December 31, 2011. The valuation allowance remains in effect as of June 30, 2016.

The Company does not have any beginning and ending unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. There were no interest and penalties recorded in the income statement or accrued for the three or six months ended June 30, 2016 or June 30, 2015 related to unrecognized tax benefits.

Under Section 382 of the Internal Revenue Code, as amended (“Section 382”), the Company’s net operating loss carryforwards (“NOLs”) and other deferred tax assets can generally be used to offset future taxable income and therefore reduce federal income tax obligations. However, the Company's ability to use its NOLs would be limited if there was an “ownership change” as defined by Section 382. This would occur if shareholders owning (or deemed to own under the tax rules) 5% or more of the Company's increase their aggregate ownership of the Company by more than 50 percentage points over a defined period of time.

In 2015, the Company took two measures to preserve the value of its NOLs. First, we adopted a tax benefits preservation plan designed to reduce the likelihood of an “ownership change” occurring as a result of purchases and sales of the Company's common shares. Upon adoption of this plan, the Company declared a dividend of one preferred stock purchase right for each common share outstanding as of the close of business on July 10, 2015. Any shareholder or group that acquires beneficial ownership of 5% or more of the Company (an “acquiring person”) could be subject to significant dilution in its holdings if the Company's Board of Directors does not approve such acquisition. Existing shareholders holding 5% or more of the Company will not be considered acquiring persons unless they acquire additional shares, subject to certain exceptions described in the plan. In addition, the Board of Directors has the discretion to exempt certain transactions and certain persons whose acquisition of securities is determined by the Board not to jeopardize the Company's deferred tax assets. The rights will expire upon the earlier of (i) June 29, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefits may be carried forward, (iii) the repeal or amendment of Section 382 or any successor statute, if the Board of Directors determines that the plan is no longer needed to preserve the tax benefits, and (iv) certain other events as described in the plan.

On September 23, 2015, our shareholders approved an amendment to the Company’s articles of incorporation to further help protect the long-term value of the Company’s NOLs. The amendment provides a means to block transfers of our common shares that could result in an ownership change under Section 382. The transfer restrictions will expire on the earlier of (i) September 23, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefit may be carried forward, (iii) the repeal of Section 382 or any successor statute if our Board determines that the transfer restrictions are no longer needed to preserve the tax benefits of our NOLs, or (iv) such date as the Board otherwise determines that the transfer restrictions are no longer necessary.

The Company and its subsidiaries are subject to U.S. federal income tax and the Company is subject to income tax in the Commonwealth of Kentucky. The Company is no longer subject to examination by taxing authorities for years before 2012.

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Note 10 - Stock Plans and Stock Based Compensation

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

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

Note 10 – Stock Plans and Stock Based Compensation

At the annual meeting on May 25, 2016, shareholders approved the Porter Bancorp, Inc. 2016 Stock Option and Incentive Compensation Plan (“2016 Plan”), which replaces the Porter Bancorp, Inc. 2006 Stock Incentive Plan (“2006 Employee Plan”) that had expired earlier in 2016. The shares available for issuance under the 2016 Plan total 229,180 shares which represents the number of shares that had previously been authorized by shareholders for issuance under the 2006 Employee Plan. Shares issued to employees under the plan vest annually on the anniversary date of the grant over three to ten years.

The Company also maintains the Porter Bancorp, Inc. 2006 Non-Employee Directors Stock Ownership Incentive Plan (“2006 Director Plan”) pursuant to which 89,622 shares remain available for issuance as annual awards of restricted stock to the Company’s non-employee directors. Shares issued annually to non-employee directors have a fair market value of $25,000 and vest on December 31 in the year of grant.

On December 4, 2014, the U.S. Treasury sold our Series A preferred shares at a discount to face amount

. As a result, restricted shares previously granted to senior executives became subject to permanent transfer restrictions. On March 25, 2015, the Compensation Committee modified the equity compensation arrangements with our four named executive officers to restore the incentive that was intended by including equity grants in their employment agreements. The Compensation Committee and our four named executive officers mutually agreed to terminate 538,479 restricted shares that were subject to permanent restrictions on transfer. We then awarded 800,000 new service-based restricted shares to those executive officers. The new awards are accounted for as a modification and vest over four years, with one-third of the shares vesting on each of the second, third and fourth anniversaries of the date of grant. The modification resulted in incremental compensation expense of approximately $233,000, which is being amortized in accordance with the vesting schedule.

The fair value of the 2016 unvested shares issued was $323

,000, or $1.82 per weighted-average share. The Company recorded $73,000 and $167,000 of stock-based compensation to salaries and employee benefits for the three and six months ended June 30, 2016, respectively, and $49,000 and $181,000 for the three and six months ended June 30, 2015, respectively. We expect substantially all of the unvested shares outstanding at the end of the period will vest according to the vesting schedule. No deferred tax benefit was recognized related to this expense for either period.

The following table summarizes unvested share activity as of and for the periods indicated for the Plan:

	Six Months Ended					Twelve Months Ended
	June 30 , 201 6					December 31, 201 5
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		922,419		$	0.96		775,492		$	1.33
Granted		177,290			1.82		915,740			0.91
Vested		(18,637	)		2.79		(285,977	)		1.33
Terminated		—			—		(450,994	)		1.25
Forfeited		(6,521	)		1.25		(31,842	)		1.13
Outstanding, ending		1,074,551		$	1.07		922,419		$	0.96

Unrecognized stock based compensation expense related to unvested shares for the remainder of 2016 and beyond is estimated as follows (in thousands):

July 2016 – December 2016	$	278
2017		197
2018		190
2019		30
2020 & thereafter		9

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Note 11 - Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 11 – Earnings (Loss) per Share

The factors used in the basic and diluted earnings per share computations follow:

	Three Months Ended					Six Months Ended
	June 30 ,					June 30 ,
	201 6		201 5			2016		2015
	(in thousands, except share and per share data)
Net income (loss)	$	1,012	$	(2,130	)	$	2,492	$	(1,536	)
Less:
Earnings (loss) allocated to unvested shares		33		(91	)		84		(60	)
Earnings (loss) allocated to participating preferred shares		—		—			—		(209	)
Net income (loss) available to common shareholders,  basic and diluted	$	979	$	(2,039	)	$	2,408	$	(1,267	)
Basic
Weighted average common shares including unvested common shares outstanding		30,385,850		25,687,579			28,665,579		25,554,292
Less:
Weighted average unvested common shares		996,046		1,098,072			971,504		990,545
Weighted average Series B preferred		—		—			—		1,343,735
Weighted average Series D preferred		—		—			—		2,140,774
Weighted average common shares outstanding		29,389,804		24,589,507			27,694,075		21,079,238
Basic income (loss) per common share	$	0.03	$	(0.08	)	$	0.09	$	(0.06	)
Diluted
Add: Dilutive effects of assumed exercises of common stock warrants		—		—			—		—
Weighted average common shares and potential common shares		29,389,804		24,589,507			27,694,075		21,079,238
Diluted income (loss) per common share	$	0.03	$	(0.08	)	$	0.09	$	(0.06	)

The Company had no outstanding stock options at June 30, 2016 or 2015. A warrant for the purchase of 330,561 shares of the Company’s common stock at an exercise price of $15.88 was outstanding at June 30, 2016 and 2015 but was not included in the diluted EPS computation as inclusion would have been anti-dilutive. Additionally, warrants for the purchase of 650,544 shares of non-voting common stock at an exercise price of $10.95 per share were outstanding at June 30, 2015, but were not included in the diluted EPS computation as inclusion would have been anti-dilutive. The 650,544 warrants outstanding as of June 30, 2015 expired in September 2015.

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Note 12 - Capital Requirements and Restrictions on Retained Earnings

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 12 – Capital Requirements and Restrictions on Retained Earnings

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. Banks (Basel III rules) became effective for the Company and Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. The final rules allowed banks and their holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and the Bank opted out of this requirement. The rules also establish a “capital conservation buffer” of 2.5%, to be phased in over three years, above the regulatory minimum risk-based capital ratios. Once the capital conservation buffer is fully phased in, the minimum ratios are a common equity Tier 1 risk-based capital ratio of 7.0%, a Tier 1 risk-based capital ratio of 8.5%, and a total risk-based capital ratio of 10.5%. The phase-in of the capital conservation buffer requirement begins in January 2016 at 0.625% of risk-weighted assets and will increase each year until fully implemented in January 2019. An institution is subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if capital levels fall below minimum levels plus the buffer amounts. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.     

In its Consent Order with the FDIC and the KDFI, the Bank has agreed to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. The Consent Order is described in greater detail in Note 2 – “Going Concern and Future Plans”. As of June 30, 2016, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were both less than the minimum capital ratios required by the Consent Order. The Bank cannot be considered well-capitalized while subject to the Consent Order. We are also restricted from accepting, renewing, or rolling-over brokered deposits without the prior receipt of a waiver on a case-by-case basis from our regulators.

On September 21, 2011, we entered into a Written Agreement with the Federal Reserve Bank of St. Louis. In the Agreement, we made formal commitments to use our financial and management resources to serve as a source of strength for the Bank and to assist the Bank in addressing weaknesses identified by the FDIC and the KDFI, to pay no dividends without prior written approval, to pay no interest or principal on subordinated debentures or trust preferred securities without prior written approval, and to submit an acceptable plan to maintain sufficient capital.

The following table shows the ratios and amounts of Common Equity Tier 1, Tier 1 capital and total capital to risk-adjusted assets and the leverage ratios for Porter Bancorp, Inc. and the Bank at the dates indicated (dollars in thousands):

	Actual					Regulatory Minimums For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of June 30, 2016 :
Total risk-based capital (to risk- weighted assets)
Consolidated	$	75,959		11.31	%	$	53,750		8.00	%
Bank		72,974		10.87			53,692		8.00
Total common equity Tier I risk-based capital (to risk- weighted assets)
Consolidated		41,068		6.11			30,235		4.50
Bank		61,863		9.22			30,202		4.50
Tier I capital (to risk-weighted assets)
Consolidated		54,799		8.16			40,313		6.00
Bank		61,863		9.22			40,269		6.00
Tier I capital (to average assets)
Consolidated		54,799		5.87			37,370		4.00
Bank		61,863		6.65			37,237		4.00

	Actual					Regulatory Minimums For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of December 31, 2015:
Total risk-based capital (to risk- weighted assets)
Consolidated	$	68,530		10.46	%	$	52,436		8.00	%
Bank		69,250		10.58			52,347		8.00
Total common equity Tier I risk- based capital (to risk weighted assets)
Consolidated		33,368		5.09	%		29,495		4.50	%
Bank		57,873		8.84			29,445		4.50
Tier I capital (to risk-weighted assets)
Consolidated		45,174		6.89			39,327		6.00
Bank		57,873		8.84			39,260		6.00
Tier I capital (to average assets)
Consolidated		45,174		4.74			38,131		4.00
Bank		57,873		6.08			38,085		4.00

The Consent Order requires the Bank to achieve the minimum capital ratios presented below:

	Actual as of June 30, 2016					Ratio s Required by Consent Order
	Amount		Ratio			Amount		Ratio
Total capital to risk-weighted assets	$	72,974		10.87	%	$	80,538		12.00	%
Tier I capital to average assets		61,863		6.65			83,783		9.00

Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a Consent Order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions.

Kentucky banking laws limit the amount of dividends that may be paid to a holding company by its subsidiary banks without prior approval. These laws limit the amount of dividends that may be paid in any calendar year to current year’s net income, as defined in the laws, combined with the retained net income of the preceding two years, less any dividends declared during those periods. The Bank has agreed with its primary regulators to obtain their written consent prior to declaring or paying any future dividends. As a practical matter, the Bank cannot pay dividends to the Company until the Consent Order is satisfied.

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Note 13 - Contingencies

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Contingencies Disclosure [Text Block]

Note 13 – Contingencies

We are defendants in various legal proceedings. Litigation is subject to inherent uncertainties and unfavorable rulings could occur. We record contingent liabilities resulting from claims against us when a loss is assessed to be probable and the amount of the loss is reasonably estimable. Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including in some cases judgments about the potential actions of third party claimants and courts. Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain.  Currently, we have accrued approximately $2.1 million related to ongoing litigation matters for which we believe liability is probable and reasonably estimable. Accruals are not made in cases where liability is not probable or the amount cannot be reasonably estimated. We disclose legal matters when we believe liability is reasonably possible and may be material to our consolidated financial statements.

Signature Point Litigation. 

On June 18, 2010, three real estate development companies filed suit in Kentucky state court against the Bank and Managed Assets of Kentucky (“MAKY”). 

Signature Point Condominiums LLC, et al. v. PBI Bank, et al

., Jefferson Circuit Court, Case No 10-CI-04295. On July 16, 2013, a jury in Louisville, Kentucky returned a verdict against the Bank, awarding the plaintiffs compensatory damages of $1,515,000 and punitive damages of $5,500,000. The case arose from a settlement in which the Bank agreed to release the plaintiffs and guarantors from obligations of more than $26 million related to a real estate project in Louisville. The plaintiffs were granted a right of first refusal to repurchase a tract of land within the project. In exchange, the plaintiffs conveyed the real estate securing the loans to the Bank. After plaintiffs declined to exercise their right of first refusal, the Bank sold the tract to the third party. Plaintiffs alleged the Bank had knowledge of the third party offer before the conveyance of the land by the Plaintiffs to the Bank. Plaintiffs asserted claims of fraud, breach of fiduciary duty, breach of the duty of good faith and fair dealing, tortious interference with prospective business advantage and conspiracy to commit fraud, negligence, and conspiracy against the Bank.

After conferring with its legal advisors, the Bank believes the findings and damages are excessive and contrary to law, and that it has meritorious grounds on which it has moved to appeal. The Bank’s Notice of Appeal was filed on October 25, 2013. After a number of procedural issues were resolved, the Bank filed its appellate brief on September 30, 2014. Appellee’s brief was filed on December 1, 2014. The Appellate Court heard oral arguments on November 16, 2015. We await the Appellate Court’s ruling. We will continue to defend this matter vigorously.

In accordance with the guidance provided in ASC 450-20-25, and after consultation with its legal counsel engaged for the appeal of the verdict, the Company concluded that it was not probable the full amount of the compensatory damages awarded by the jury would be overturned. Therefore, a liability was accrued for the full $1.5 million of compensatory damages awarded, plus statutory interest. After conferring with its legal counsel for the appeal, the Company concluded that the jury verdict for punitive damages was contrary to law, unsupported, excessive, and otherwise inappropriate. Based on this advice, the Company concluded it was probable that the verdict amount for $5.5 million in punitive damages would be overturned by the appeals court, and therefore it was not probable that the $5.5 million in punitive damages would become an actual liability. The ultimate outcome of this self-insured matter could have a material adverse effect on our financial condition, results of operations or cash flows.

AIT Laboratories Employee Stock Ownership Plan.

On August 29, 2014, the United States Department of Labor (“DOL”) filed a lawsuit against the Bank and Michael A. Evans in the U.S. District Court for the Southern District of Indiana. 

Thomas E. Perez, Secretary of the United States Department of Labor v. PBI Bank, Inc. and Michael A. Evans

 (Case No. 1:14-CV-01429-SEB-MJD). The complaint alleges that in 2009, the Bank, in the capacity of trustee for the AIT Laboratories Employee Stock Ownership Plan, authorized the alleged imprudent and disloyal purchase of the stock of AIT Holdings, Inc. in 2009 for $90 million, a price allegedly far in excess of the stock’s fair market value. The Bank's responsive pleading was filed on November 4, 2014, disputing the material factual allegations that have been made by the DOL.On November 19, 2015, the parties agreed to settle the litigation and executed a written settlement agreement on May 12, 2016. The Bank agreed to a settlement payment, which, to the extent not paid from insurance proceeds, had been previously reserved for. The court entered an agreed order ending the litigation on May 13, 2016.

United States Department of Justice Investigation.

 On October 17, 2014, the United States Department of Justice (the “DOJ”) notified the Bank that the Bank was the subject of an investigation into possible violations of federal laws, including, among other things, possible violations related to false bank entries, bank fraud and securities fraud.  The investigation concerns allegations that Bank personnel engaged in practices intended to delay or avoid disclosure of the Bank’s asset quality at the time of and following the United States Treasury’s purchase of preferred shares from the Company in November 2008.  The Bank is responding to and cooperating with any requests for information from DOJ. At this time the investigation is ongoing, and DOJ has made no determination whether to pursue any action in the matter.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

– The consolidated financial statements include Porter Bancorp, Inc. (Company) and its subsidiary, PBI Bank (Bank).  The Company owns a 100% interest in the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire year.  A description of other significant accounting policies is presented in the notes to the Consolidated Financial Statements for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

– To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ.

Reclassification, Policy [Policy Text Block]

Reclassifications

– Some items in the prior year financial statements were reclassified to conform to the current presentation. The reclassifications did not impact net income or stockholders’ equity.

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of New Accounting Standards

– In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606). This ASU is an update to ASU 2014-09, and delays the effective date of ASU 2014-09. The ASU provides guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets. The core principle of the guidance is that an entity should recognize 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. Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017. Early adoption is not permitted. Management is currently evaluating the impact of the adoption of this guidance on the Company’s financial statements.

In January 2016, the FASB issued an update ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update impact public business entities as follows: 1) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. 3) Eliminate the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. 4) Require entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. 5) Require an entity to present separately in other comprehensive income the portion of the total change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. 6) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. 7) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In February 2016, the FASB issued an update ASU No. 2016-02, Leases (Topic 842).

Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting in largely unchanged. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting. The amendments are intended to improve the accounting for employee shared-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The final standard will change estimates for credit losses related to financial assets measured at amortized cost such as loans, held-to-maturity debt securities, and certain other contracts. For estimating credit losses, the FASB is replacing the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The largest impact will be on the allowance for loan and lease losses. The standard is effective for public companies for fiscal years beginning after December 15, 2019. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements.

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Note 3 - Securities (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Marketable Securities [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2016
Available for sale
U.S. Government and federal agency	$	34,043	$	423	$	(13	)	$	34,453
Agency mortgage-backed: residential		101,596		1,921		(56	)		103,461
State and municipal		3,035		59		—			3,094
Corporate bonds		2,330		—		(193	)		2,137
Total available for sale	$	141,004	$	2,403	$	(262	)	$	143,145

	Amortized Cost		Gross Unre cognized Gains		Gross Unre cognized Losses		Fair Value
Held to maturity
State and municipal	$	41,948	$	3,007	$	—	$	44,955
Total held to maturity	$	41,948	$	3,007	$	—	$	44,955

December 31, 201 5	Amortized Cost		Gross Unre alized Gains		Gross Unre alized Losses			Fair Value
Available for sale
U.S. Government and federal agency	$	33,491	$	146	$	(375	)	$	33,262
Agency mortgage-backed: residential		102,135		907		(380	)		102,662
State and municipal		6,555		306		—			6,861
Corporate bonds		2,321		—		(128	)		2,193
Total available for sale	$	144,502	$	1,359	$	(883	)	$	144,978

	Amortized Cost		Gross Unre cognized Gains		Gross Unre cognized Losses		Fair Value
Held to maturity
State and municipal	$	42,075	$	2,178	$	—	$	44,253
Total held to maturity	$	42,075	$	2,178	$	—	$	44,253

Schedule of Realized Gain (Loss) [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)				(in thousands)
Proceeds	$	235	$	9,972	$	3,721	$	44,110
Gross gains		—		281		203		1,832
Gross losses		—		82		—		136

Investments Classified by Contractual Maturity Date [Table Text Block]

	June 30, 2016
	Amortized Cost		Fair Value
	(in thousands)
Maturity
Available for sale
Within one year	$	6,272	$	6,134
One to five years		7,622		7,744
Five to ten years		25,514		25,806
Agency mortgage-backed: residential		101,596		103,461
Total	$	141,004	$	143,145
Held to maturity
One to five years	$	19,092	$	20,079
Five to ten years		21,808		23,696
Beyond ten years		1,048		1,180
Total	$	41,948	$	44,955

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
June 30, 2016
Available for sale
U.S. Government and federal agency	$	1,509	$	(1	)	$	8,835	$	(12	)	$	10,344	$	(13	)
Agency mortgage-backed: residential		10,229		(44	)		2,444		(12	)		12,673		(56	)
Corporate bonds		743		(25	)		1,394		(168	)		2,137		(193	)
Total temporarily impaired	$	12,481	$	(70	)	$	12,673	$	(192	)	$	25,154	$	(262	)
December 31, 2015
Available for sale
U.S. Government and federal agency	$	7,058	$	(44	)	$	14,527	$	(331	)	$	21,585	$	(375	)
Agency mortgage-backed: residential		36,325		(271	)		3,856		(109	)		40,181		(380	)
Corporate bonds		747		(18	)		1,446		(110	)		2,193		(128	)
Total temporarily impaired	$	44,130	$	(333	)	$	19,829	$	(550	)	$	63,959	$	(883	)

XML

Note 4 - Loans (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

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

Loans were as follows:	June 30,			December 31,
	2016			2015
	(in thousands)
Commercial	$	75,222		$	86,176
Commercial Real Estate:
Construction		33,184			33,154
Farmland		77,742			76,412
Nonfarm nonresidential		147,969			140,570
Residential Real Estate:
Multi-family		44,652			44,131
1-4 Family		196,388			201,478
Consumer		9,853			10,010
Agriculture		38,710			26,316
Other		416			419
Subtotal		624,136			618,666
Less: Allowance for loan losses		(10,104	)		(12,041	)
Loans, net	$	614,032		$	606,625

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

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
June 30, 2016:
Beginning balance	$	642		$	6,763		$	3,683		$	115		$	136		$	1		$	11,340
Negative provision for loan losses		305			(1,213	)		471			(200	)		(15	)		52			(600	)
Loans charged off		(249	)		(127	)		(455	)		(22	)		(8	)		(67	)		(928	)
Recoveries		32			6			79			154			6			15			292
Ending balance	$	730		$	5,429		$	3,778		$	47		$	119		$	1		$	10,104
June 30, 2015:
Beginning balance	$	2,046		$	10,680		$	5,221		$	244		$	391		$	15		$	18,597
Provision for loan losses		(296	)		(330	)		604			10			3			9			—
Loans charged off		(99	)		(1,224	)		(809	)		(62	)		(37	)		(33	)		(2,264	)
Recoveries		295			87			44			34			2			14			476
Ending balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
June 30, 2016:
Beginning balance	$	818		$	6,993		$	3,984		$	122		$	122		$	2		$	12,041
Negative provision for loan losses		106			(1,588	)		600			(233	)		(80	)		45			(1,150	)
Loans charged off		(261	)		(245	)		(1,050	)		(35	)		(8	)		(78	)		(1,677	)
Recoveries		67			269			244			193			85			32			890
Ending balance	$	730		$	5,429		$	3,778		$	47		$	119		$	1		$	10,104
June 30, 2015:
Beginning balance	$	2,046		$	10,931		$	5,787		$	274		$	319		$	7		$	19,364
Provision for loan losses		(27	)		(323	)		220			22			107			1			—
Loans charged off		(474	)		(1,593	)		(1,291	)		(130	)		(70	)		(33	)		(3,591	)
Recoveries		401			198			344			60			3			30			1,036
Ending balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809

Impairment Evaluation of Financing Receivables [Table Text Block]

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	–	$	45	$	100	$	–	$	1	$	–	$	146
Collectively evaluated for impairment		730		5,384		3,678		47		118		1		9,958
Total ending allowance balance	$	730	$	5,429	$	3,778	$	47	$	119	$	1	$	10,104
Loans:
Loans individually evaluated for impairment	$	748	$	12,554	$	12,088	$	6	$	139	$	–	$	25,535
Loans collectively evaluated for impairment		74,474		246,341		228,952		9,847		38,571		416		598,601
Total ending loans balance	$	75,222	$	258,895	$	241,040	$	9,853	$	38,710	$	416	$	624,136

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	–	$	43	$	385	$	–	$	–	$	–	$	428
Collectively evaluated for impairment		818		6,950		3,599		122		122		2		11,613
Total ending allowance balance	$	818	$	6,993	$	3,984	$	122	$	122	$	2	$	12,041
Loans:
Loans individually evaluated for impairment	$	1,112	$	12,819	$	17,673	$	20	$	152	$	–	$	31,776
Loans collectively evaluated for impairment		85,064		237,317		227,936		9,990		26,164		419		586,890
Total ending loans balance	$	86,176	$	250,136	$	245,609	$	10,010	$	26,316	$	419	$	618,666

Impaired Financing Receivables [Table Text Block]

							Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,061	$	748	$	—	$	806	$	—	$	908	$	1
Commercial real estate:
Construction		259		259		—		260		3		261		78
Farmland		6,250		4,591		—		4,358		2		4,327		8
Nonfarm nonresidential		10,056		6,692		—		6,547		58		6,974		306
Residential real estate:
Multi-family		2,387		2,387		—		2,393		28		1,606		58
1-4 Family		5,882		3,961		—		4,897		13		7,184		71
Consumer		39		6		—		7		1		11		8
Agriculture		97		69		—		73		—		99		—
Other		—		—		—		—		—		—		—
Subtotal		26,031		18,713		—		19,341		105		21,370		530
With An Allowance Recorded:
Commercial		—		—		—		—		—		—		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		614		605		8		302		—		202		—
Nonfarm nonresidential		407		407		37		409		6		427		12
Residential real estate:
Multi-family		4,159		4,159		25		4,168		51		4,177		101
1-4 Family		1,581		1,581		75		1,630		34		1,650		54
Consumer		—		—		—		—		—		—		—
Agriculture		78		70		1		35		—		23		—
Other		—		—		—		—		—		—		—
Subtotal		6,839		6,822		146		6,544		91		6,479		167
Total	$	32,870	$	25,535	$	146	$	25,885	$	196	$	27,849	$	697

	As of December 31, 2015						Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,558	$	1,112	$	—	$	1,605	$	5	$	1,730	$	5
Commercial real estate:
Construction		278		262		—		2,475		4		3,016		8
Farmland		6,004		4,263		—		4,659		3		4,685		26
Nonfarm nonresidential		11,256		7,829		—		20,356		72		21,043		137
Residential real estate:
Multi-family		32		32		—		17		—		38		—
1-4 Family		14,066		11,756		—		14,235		110		14,579		244
Consumer		118		20		—		22		—		25		—
Agriculture		260		152		—		231		—		241		—
Other		—		—		—		62		2		82		4
Subtotal		33,572		25,426		—		43,662		196		45,439		424
With An Allowance Recorded:
Commercial		—		—		—		10		—		22		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		—		—		—		—		—		105		—
Nonfarm nonresidential		574		465		43		2,615		6		7,266		12
Residential real estate:
Multi-family		4,195		4,195		57		4,235		55		4,246		102
1-4 Family		1,690		1,690		328		1,628		14		1,676		39
Consumer		—		—		—		4		—		13		—
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		6,459		6,350		428		8,492		75		13,328		153
Total	$	40,031	$	31,776	$	428	$	52,154	$	271	$	58,767	$	577

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
June 30, 2016
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		439		439
Commercial Real Estate:
Construction
Rate reduction		259		—		259
Farmland
Principal deferral		—		2,340		2,340
Nonfarm nonresidential
Rate reduction		5,550		—		5,550
Principal deferral		—		606		606
Residential Real Estate:
Multi-family
Rate reduction		6,546		—		6,546
1-4 Family
Rate reduction		1,581		—		1,581
Total TDRs	$	13,936	$	3,453	$	17,389

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
December 31, 2015
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		439		439
Commercial Real Estate:
Construction
Rate reduction		262		—		262
Farmland
Principal deferral		—		2,365		2,365
Nonfarm nonresidential
Rate reduction		5,637		50		5,687
Principal deferral		—		622		622
Residential Real Estate:
Multi-family
Rate reduction		4,195		—		4,195
1-4 Family
Rate reduction		7,346		—		7,346
Total TDRs	$	17,440	$	3,544	$	20,984

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

	Nonaccrual				Loans Past Due 90 Days And Over Still Accruing
	June 30, 2016		December 31, 201 5		June 30 , 201 6		December 31, 201 5
	(in thousands)
Commercial	$	748	$	1,112	$	—	$	—
Commercial Real Estate:
Construction		—		—		—		—
Farmland		5,196		4,263		—		—
Nonfarm nonresidential		1,549		2,657		—		—
Residential Real Estate:
Multi-family		—		32		—		—
1-4 Family		3,961		5,851		—		—
Consumer		6		20		—		—
Agriculture		139		152		—		—
Other		—		—		—		—
Total	$	11,599	$	14,087	$	—	$	—

Past Due Financing Receivables [Table Text Block]

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
June 30, 2016
Commercial	$	42	$	25	$	—	$	748	$	815
Commercial Real Estate:
Construction		—		—		—		—		—
Farmland		242		—		—		5,196		5,438
Nonfarm nonresidential		110		—		—		1,549		1,659
Residential Real Estate:
Multi-family		—		—		—		—		—
1-4 Family		1,918		311		—		3,961		6,190
Consumer		89		—		—		6		95
Agriculture		—		—		—		139		139
Other		—		—		—		—		—
Total	$	2,401	$	336	$	—	$	11,599	$	14,336

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
December 31, 2015
Commercial	$	78	$	—	$	—	$	1,112	$	1,190
Commercial Real Estate:
Construction		—		—		—		—		—
Farmland		456		—		—		4,263		4,719
Nonfarm nonresidential		326		—		—		2,657		2,983
Residential Real Estate:
Multi-family		—		—		—		32		32
1-4 Family		2,225		241		—		5,851		8,317
Consumer		41		—		—		20		61
Agriculture		7		—		—		152		159
Other		—		—		—		—		—
Total	$	3,133	$	241	$	—	$	14,087	$	17,461

Financing Receivable Credit Quality Indicators [Table Text Block]

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
June 30, 2016
Commercial	$	73,569	$	400	$	—	$	1,253	$	—	$	75,222
Commercial Real Estate:
Construction		27,915		5,269		—		—		—		33,184
Farmland		67,422		2,492		—		7,828		—		77,742
Nonfarm nonresidential		130,191		14,632		538		2,608		—		147,969
Residential Real Estate:
Multi-family		33,828		6,934		—		3,890		—		44,652
1-4 Family		172,447		15,036		84		8,821		—		196,388
Consumer		9,339		378		—		136		—		9,853
Agriculture		32,726		4,883		—		1,101		—		38,710
Other		416		—		—		—		—		416
Total	$	547,853	$	50,024	$	622	$	25,637	$	—	$	624,136

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
December 31, 2015
Commercial	$	81,570	$	2,953	$	—	$	1,653	$	—	$	86,176
Commercial Real Estate:
Construction		27,603		5,289		—		262		—		33,154
Farmland		65,476		4,844		—		6,092		—		76,412
Nonfarm nonresidential		111,901		22,687		1,328		4,654		—		140,570
Residential Real Estate:
Multi-family		35,300		4,879		—		3,952		—		44,131
1-4 Family		164,490		17,636		67		19,285		—		201,478
Consumer		9,323		474		—		213		—		10,010
Agriculture		21,402		4,601		—		313		—		26,316
Other		419		—		—		—		—		419
Total	$	517,484	$	63,363	$	1,395	$	36,424	$	—	$	618,666

XML

Note 5 - Other Real Estate Owned (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Real Estate Properties [Table Text Block]

	June 30, 2016			December 31, 2015
	(in thousands)
Commercial Real Estate:
Construction, land development, and other land	$	11,066		$	12,749
Nonfarm nonresidential		1,512			6,967
Residential Real Estate:
1-4 Family		185			128
		12,763			19,844
Valuation allowance		(441	)		(630	)
	$	12,322		$	19,214

Schedule of Valuation Allowance and Activity Related to Foreclosed Real Estate [Table Text Block]

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	201 6			201 5			201 6			201 5
	(in thousands) (in thousands)
OREO Valuation Allowance Activity:
Beginning balance	$	888		$	492		$	630		$	1,066
Provision to allowance		150			2,330			650			2,630
Write-downs		(597	)		(2,515	)		(839	)		(3,389	)
Ending balance	$	441		$	307		$	441		$	307

Schedule of Expenses Related to Foreclosed Real Estate [Table Text Block]

	For the Six Months Ended June 30 ,
	2016			201 5
	(in thousands)
OREO Activity
OREO as of January 1	$	19,214		$	46,197
Real estate acquired		576			955
Valuation adjustment write-downs		(650	)		(2,630	)
Net gain on sales		169			43
Proceeds from sales of properties		(6,987	)		(5,020	)
OREO as of June 30	$	12,322		$	39,545

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

	Three Months Ended June 30 ,						Six Months Ended June 30 ,
	201 6			201 5			201 6			201 5
	(in thousands) (in thousands)
Net gain on sales	$	(114	)	$	(40	)	$	(169	)	$	(43	)
Provision to allowance		150			2,330			650			2,630
Operating expense		258			642			481			1,078
Total	$	294		$	2,932		$	962		$	3,665

XML

Note 6 - Deposits (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Deposits [Table Text Block]

	June 30 , 201 6		December 31, 201 5
	(in thousands)
Non-interest bearing	$	117,843	$	120,043
Interest checking		90,806		97,515
Money market		135,643		125,935
Savings		34,616		34,677
Certificates of deposit		461,183		499,827
Total	$	840,091	$	877,997

Schedule of Maturities of Time Deposits [Table Text Block]

Year 1	$	345,900
Year 2		41,056
Year 3		13,916
Year 4		44,484
Year 5		15,827
	$	461,183

XML

Note 7 - Advances From the Federal Home Loan Bank (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

	June 30,		December 31,
	2016		2015
	(in thousands)
Monthly amortizing advances with fixed rates from 0.00% to 5.25% and maturities ranging from 2017 through 2033, averaging 2.50% at June 30, 2016 and 2.65% at December 31, 2015	$	2,775	$	3,081

XML

Note 8 - Fair Values Measurement (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block]

			Fair Value Measurements at June 30, 2016 Using
			(in thousands)
			Quoted Prices In				Significant
			Active Markets for		Significant Other		Unobservable
	Carrying		Identical Assets		Observable Inputs		Inputs
Description	Value		(Level 1)		(Level 2)		(Level 3)
Available for sale securities
U.S. Government and federal agency	$	34,453	$	—	$	34,453	$	—
Agency mortgage-backed: residential		103,461		—		103,461		—
State and municipal		3,094		—		3,094		—
Corporate bonds		2,137		—		2,137		—
Total	$	143,145	$	—	$	143,145	$	—

			Fair Value Measurements at December 31, 201 5 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	33,262	$	—	$	33,262	$	—
Agency mortgage-backed: residential		102,662		—		102,662		—
State and municipal		6,861		—		6,861		—
Corporate bonds		2,193		—		2,193		—
Total	$	144,978	$	—	$	144,978	$	—

			Fair Value Measurements at June 30, 2016 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		597		—		—		597
Nonfarm nonresidential		92		—		—		92
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,506		—		—		1,506
Consumer		—		—		—		—
Agriculture		69		—		—		69
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		10,684		—		—		10,684
Farmland		—		—		—		—
Nonfarm nonresidential		1,460		—		—		1,460
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		178		—		—		178

			Fair Value Measurements at December 31, 201 5 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		—		—		—		—
Nonfarm nonresidential		139		—		—		139
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,362		—		—		1,362
Consumer		—		—		—		—
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		12,344		—		—		12,344
Farmland		—		—		—		—
Nonfarm nonresidential		6,746		—		—		6,746
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		124		—		—		124

Fair-value Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Table Text Block]

	Other Debt Securities
	2016		2015
	(in thousands)
Balances of recurring Level 3 assets at January 1	$	—	$	658
Total gain (loss) for the period:
Included in other comprehensive income (loss)		—		(7	)
Balance of recurring Level 3 assets at June 30	$	—	$	651

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

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands )
Impaired loans – Residential real estate	$	1,506	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	22%	(10%)
Other real estate owned – Commercial real estate	$	12,144	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	30%	(12%)
			Income approach	Discount or capitalization rate	10%	-	20%	(17%)

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Residential real estate	$	1,362	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	16%	(7%)
Other real estate owned – Commercial real estate	$	19,090	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	30%	(12%)
			Income approach	Discount or capitalization rate	10%	-	20%	(17%)

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

			Fair Value Measurements at June 30, 2016 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	57,602	$	44,391	$	13,211	$	—	$	57,602
Securities available for sale		143,145		—		143,145		—		143,145
Securities held to maturity		41,948		—		44,955		—		44,955
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		—		—		—		—		—
Loans, net		614,032		—		—		620,542		620,542
Accrued interest receivable		3,048		—		1,076		1,972		3,048
Financial liabilities
Deposits	$	840,091	$	117,845	$	711,563	$	—	$	829,408
Federal Home Loan Bank advances		2,775		—		2,852		—		2,852
Subordinated capital notes		3,600		—		—		3,515		3,515
Junior subordinated debentures		21,000		—		—		12,973		12,973
Accrued interest payable		422		—		388		34		422

			Fair Value Measurements at December 31, 201 5 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	93,335	$	79,498	$	13,837	$	—	$	93,335
Securities available for sale		144,978		—		144,978		—		144,978
Securities held to maturity		42,075		—		44,253		—		44,253
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		186		—		186		—		186
Loans, net		606,625		—		—		614,162		614,162
Accrued interest receivable		3,116		—		1,111		2,005		3,116
Financial liabilities
Deposits	$	877,997	$	120,043	$	739,152	$	—	$	859,195
Federal Home Loan Bank advances		3,081		—		3,076		—		3,076
Subordinated capital notes		4,050		—		—		3,933		3,933
Junior subordinated debentures		21,000		—		—		12,810		12,810
Accrued interest payable		2,805		—		422		2,383		2,805

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Note 9 - Income Taxes (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	June 30 ,			December 31,
	201 6			201 5
	(in thousands)
Deferred tax assets:
Net operating loss carry-forward	$	39,336		$	38,085
Allowance for loan losses		3,536			4,214
Other real estate owned write-down		6,327			7,619
Alternative minimum tax credit carry-forward		692			692
Net assets from acquisitions		673			671
Net unrealized loss on securities		—			166
New market tax credit carry-forward		208			208
Nonaccrual loan interest		562			549
Other		1,854			1,875
		53,188			54,079
Deferred tax liabilities:
FHLB stock dividends		928			928
Fixed assets		203			176
Net unrealized gain on securities		749			—
Other		536			865
		2,416			1,969
Net deferred tax assets before valuation allowance		50,772			52,110
Valuation allowance		(50,772	)		(52,110	)
Net deferred tax asset	$	—		$	—

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Note 10 - Stock Plans and Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Nonvested Share Activity [Table Text Block]

	Six Months Ended					Twelve Months Ended
	June 30 , 201 6					December 31, 201 5
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		922,419		$	0.96		775,492		$	1.33
Granted		177,290			1.82		915,740			0.91
Vested		(18,637	)		2.79		(285,977	)		1.33
Terminated		—			—		(450,994	)		1.25
Forfeited		(6,521	)		1.25		(31,842	)		1.13
Outstanding, ending		1,074,551		$	1.07		922,419		$	0.96

Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block]

July 2016 – December 2016	$	278
2017		197
2018		190
2019		30
2020 & thereafter		9

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Note 11 - Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

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

	Three Months Ended					Six Months Ended
	June 30 ,					June 30 ,
	201 6		201 5			2016		2015
	(in thousands, except share and per share data)
Net income (loss)	$	1,012	$	(2,130	)	$	2,492	$	(1,536	)
Less:
Earnings (loss) allocated to unvested shares		33		(91	)		84		(60	)
Earnings (loss) allocated to participating preferred shares		—		—			—		(209	)
Net income (loss) available to common shareholders,  basic and diluted	$	979	$	(2,039	)	$	2,408	$	(1,267	)
Basic
Weighted average common shares including unvested common shares outstanding		30,385,850		25,687,579			28,665,579		25,554,292
Less:
Weighted average unvested common shares		996,046		1,098,072			971,504		990,545
Weighted average Series B preferred		—		—			—		1,343,735
Weighted average Series D preferred		—		—			—		2,140,774
Weighted average common shares outstanding		29,389,804		24,589,507			27,694,075		21,079,238
Basic income (loss) per common share	$	0.03	$	(0.08	)	$	0.09	$	(0.06	)
Diluted
Add: Dilutive effects of assumed exercises of common stock warrants		—		—			—		—
Weighted average common shares and potential common shares		29,389,804		24,589,507			27,694,075		21,079,238
Diluted income (loss) per common share	$	0.03	$	(0.08	)	$	0.09	$	(0.06	)

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Note 12 - Capital Requirements and Restrictions on Retained Earnings (Tables)

6 Months Ended

Jun. 30, 2016

Notes Tables

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

	Actual					Regulatory Minimums For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of June 30, 2016 :
Total risk-based capital (to risk- weighted assets)
Consolidated	$	75,959		11.31	%	$	53,750		8.00	%
Bank		72,974		10.87			53,692		8.00
Total common equity Tier I risk-based capital (to risk- weighted assets)
Consolidated		41,068		6.11			30,235		4.50
Bank		61,863		9.22			30,202		4.50
Tier I capital (to risk-weighted assets)
Consolidated		54,799		8.16			40,313		6.00
Bank		61,863		9.22			40,269		6.00
Tier I capital (to average assets)
Consolidated		54,799		5.87			37,370		4.00
Bank		61,863		6.65			37,237		4.00

	Actual					Regulatory Minimums For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of December 31, 2015:
Total risk-based capital (to risk- weighted assets)
Consolidated	$	68,530		10.46	%	$	52,436		8.00	%
Bank		69,250		10.58			52,347		8.00
Total common equity Tier I risk- based capital (to risk weighted assets)
Consolidated		33,368		5.09	%		29,495		4.50	%
Bank		57,873		8.84			29,445		4.50
Tier I capital (to risk-weighted assets)
Consolidated		45,174		6.89			39,327		6.00
Bank		57,873		8.84			39,260		6.00
Tier I capital (to average assets)
Consolidated		45,174		4.74			38,131		4.00
Bank		57,873		6.08			38,085		4.00

Bankers Acceptance Disclosures [Table Text Block]

	Actual as of June 30, 2016					Ratio s Required by Consent Order
	Amount		Ratio			Amount		Ratio
Total capital to risk-weighted assets	$	72,974		10.87	%	$	80,538		12.00	%
Tier I capital to average assets		61,863		6.65			83,783		9.00

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual)	Jun. 30, 2016
Noncontrolling Interest, Ownership Percentage by Parent	100.00%

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Note 2 - Going Concern Considerations and Future Plans (Details Textual) - USD ($) $ in Thousands, shares in Millions		3 Months Ended		6 Months Ended		12 Months Ended
	Apr. 15, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2017	Dec. 31, 2015	Dec. 31, 2014	Jan. 01, 2019
Loans, Total [Member] | Credit Concentration Risk [Member] | Nonperforming Financial Instruments [Member]
Concentration Risk, Percentage				1.86%			2.28%	7.57%
Assets, Total [Member] | Credit Concentration Risk [Member] | Nonperforming Financial Instruments [Member]
Concentration Risk, Percentage				2.61%			3.51%	9.19%
Voting Common Stock [Member] | Private Placement [Member]
Stock Issued During Period, Shares, New Issues	2.9
Nonvoting Common Stock [Member] | Private Placement [Member]
Stock Issued During Period, Shares, New Issues	1.1
Private Placement [Member]
Sale of Stock, Consideration Received on Transaction	$ 5,000
Proceeds From Issuance of Shares Used for General Corporate Purposes	$ 2,200
PBI Bank [Member] | Consent Order [Member]
Tier One Leverage Capital Required for Capital Adequacy to Average Assets		9.00%		9.00%
Capital Required for Capital Adequacy to Risk Weighted Assets		12.00%		12.00%
PBI Bank [Member]
Tier One Leverage Capital Required for Capital Adequacy to Average Assets		4.00%		4.00%			4.00%
Capital Required for Capital Adequacy to Risk Weighted Assets		8.00%		8.00%			8.00%
Tier One Leverage Capital to Average Assets		6.65%		6.65%			6.08%
Capital to Risk Weighted Assets		10.87%		10.87%			10.58%
Scenario, Forecast [Member] | Parent [Member]
Operating Expenses						$ 1,000
Scenario, Forecast [Member]
Capital Required for Capital Adequacy to Risk Weighted Assets									10.50%
Net Income (Loss) Attributable to Parent		$ 1,012	$ (2,130)	$ 2,492	$ (1,536)		$ (3,200)	$ (11,200)
Tier One Leverage Capital Required for Capital Adequacy to Average Assets		4.00%		4.00%			4.00%
Capital Required for Capital Adequacy to Risk Weighted Assets		8.00%		8.00%			8.00%
Tier One Leverage Capital to Average Assets		5.87%		5.87%			4.74%
Capital to Risk Weighted Assets		11.31%		11.31%			10.46%
Cash		$ 2,300		$ 2,300

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Note 3 - Securities (Details Textual)	6 Months Ended
	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Texas [Member]
Available-for-sale Securities	$ 4,300,000	$ 4,300,000
Kentucky [Member]
Available-for-sale Securities	17,400,000	17,700,000
Available-for-sale Securities	$ 143,145,000	$ 144,978,000
Concentration Risk Number	0	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	$ 0	$ 0
Other than Temporary Impairment Losses, Investments	0
Available-for-sale Securities Pledged as Collateral	$ 53,700,000	$ 68,000,000

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Note 3 - Securities - Amortized Cost, Gross Unrealized Gains or Losses, and Fair Value of Investment Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
US States and Political Subdivisions Debt Securities [Member]
Available for sale
Available for sale securities, amortized cost	$ 3,035	$ 6,555
Available for sale securities, gross unrealized gains	59	306
Available for sale securities, gross unrealized losses
Securities available for sale	3,094	6,861
Held to maturity
Held to maturity securities, amortized cost	41,948	42,075
Held to maturity securities, gross unrecognized gains	3,007	2,178
Held to maturity securities, gross unrecognized losses
Held to maturity securities, fair value	44,955	44,253
US Treasury and Government [Member]
Available for sale
Available for sale securities, amortized cost	34,043	33,491
Available for sale securities, gross unrealized gains	423	146
Available for sale securities, gross unrealized losses	(13)	(375)
Securities available for sale	34,453	33,262
Residential Mortgage Backed Securities [Member]
Available for sale
Available for sale securities, amortized cost	101,596	102,135
Available for sale securities, gross unrealized gains	1,921	907
Available for sale securities, gross unrealized losses	(56)	(380)
Securities available for sale	103,461	102,662
Corporate Debt Securities [Member]
Available for sale
Available for sale securities, amortized cost	2,330	2,321
Available for sale securities, gross unrealized gains
Available for sale securities, gross unrealized losses	(193)	(128)
Securities available for sale	2,137	2,193
Available for sale securities, amortized cost	141,004	144,502
Available for sale securities, gross unrealized gains	2,403	1,359
Available for sale securities, gross unrealized losses	(262)	(883)
Securities available for sale	143,145	144,978
Held to maturity
Held to maturity securities, amortized cost	41,948	42,075
Held to maturity securities, gross unrecognized gains	3,007	2,178
Held to maturity securities, gross unrecognized losses
Held to maturity securities, fair value	$ 44,955	$ 44,253

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Note 3 - Securities - Sales and Calls of Available for Sale Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Sales and calls of available for sale securities	$ 235	$ 9,972	$ 3,721	$ 44,110
Gross gains		281	203	1,832
Gross losses		$ 82		$ 136

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Note 3 - Securities - Amortized Cost and Fair Value of Debt Investment Securities Portfolio by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Within one year	$ 6,272
Within one year	6,134
One to five years	7,622
One to five years	7,744
Five to ten years	25,514
Five to ten years	25,806
Agency mortgage-backed: residential	101,596
Agency mortgage-backed: residential	103,461
Total	141,004
Total	143,145
One to five years	19,092
One to five years	20,079
Five to ten years	21,808
Five to ten years	23,696
Beyond ten years	1,048
Beyond ten years	1,180
Held to maturity securities, amortized cost	41,948	$ 42,075
Held to maturity securities, fair value	$ 44,955	$ 44,253

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Note 3 - Securities - Securities With Unrealized Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
US Treasury and Government [Member]
Available for sale, fair value, less than 12 months	$ 1,509	$ 7,058
Available for sale, unrealized loss, less than 12 months	(1)	(44)
Available for sale, fair value, 12 months or more	8,835	14,527
Available for sale, unrealized loss, 12 months or more	(12)	(331)
Available for sale, fair value	10,344	21,585
Available for sale, unrealized loss	(13)	(375)
Residential Mortgage Backed Securities [Member]
Available for sale, fair value, less than 12 months	10,229	36,325
Available for sale, unrealized loss, less than 12 months	(44)	(271)
Available for sale, fair value, 12 months or more	2,444	3,856
Available for sale, unrealized loss, 12 months or more	(12)	(109)
Available for sale, fair value	12,673	40,181
Available for sale, unrealized loss	(56)	(380)
Corporate Debt Securities [Member]
Available for sale, fair value, less than 12 months	743	747
Available for sale, unrealized loss, less than 12 months	(25)	(18)
Available for sale, fair value, 12 months or more	1,394	1,446
Available for sale, unrealized loss, 12 months or more	(168)	(110)
Available for sale, fair value	2,137	2,193
Available for sale, unrealized loss	(193)	(128)
Available for sale, fair value, less than 12 months	12,481	44,130
Available for sale, unrealized loss, less than 12 months	(70)	(333)
Available for sale, fair value, 12 months or more	12,673	19,829
Available for sale, unrealized loss, 12 months or more	(192)	(550)
Available for sale, fair value	25,154	63,959
Available for sale, unrealized loss	$ (262)	$ (883)

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Note 4 - Loans (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Loans and Leases Receivable, Impaired, Commitment to Lend	$ 0		$ 0		$ 0
Financing Receivable, Modifications, Number of Contracts			0	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Impaired Financing Receivable, Interest Income, Cash Basis Method	$ 7,000	$ 29,000	$ 290,000	$ 102,000
Financing Receivable Modifications Percentage of Performing TDRs to Total TDRs	80.00%		80.00%		83.00%
Troubled Debt Restructuring Reserve	$ 137,000		$ 137,000		$ 179,000
Minimum Outstanding Balance for Loans to be Qualified for Credit Risk Analysis	$ 500,000		$ 500,000

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Note 4 - Loans - Loans (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Commercial Portfolio Segment [Member]
Gross loans	$ 75,222,000	$ 86,176,000
Less: Allowance for loan losses	(730,000)	(818,000)
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Gross loans	33,184,000	33,154,000
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Gross loans	77,742,000	76,412,000
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Gross loans	147,969,000	140,570,000
Commercial Real Estate Portfolio Segment [Member]
Gross loans	258,895,000	250,136,000
Less: Allowance for loan losses	(5,429,000)	(6,993,000)
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Gross loans	44,652,000	44,131,000
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Gross loans	196,388,000	201,478,000
Residential Portfolio Segment [Member]
Gross loans	241,040,000	245,609,000
Less: Allowance for loan losses	(3,778,000)	(3,984,000)
Consumer Portfolio Segment [Member]
Gross loans	9,853,000	10,010,000
Less: Allowance for loan losses	(47,000)	(122,000)
Agriculture Portfolio Segment [Member]
Gross loans	38,710,000	26,316,000
Less: Allowance for loan losses	(119,000)	(122,000)
Other Portfolio Segment [Member]
Gross loans	416,000	419,000
Less: Allowance for loan losses	(1,000)
Gross loans	624,136,000	618,666,000
Less: Allowance for loan losses	(10,104,000)	(12,041,000)
Loans, net	$ 614,032,000	$ 606,625,000

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Note 4 - Loans - Activity in Allowance for Loan Losses by Portfolio Segment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Commercial Portfolio Segment [Member]
Beginning balance	$ 642,000	$ 2,046,000	$ 818,000	$ 2,046,000
Provision (negative provision) for loan losses	305,000	(296,000)	106,000	(27,000)
Loans charged off	(249,000)	(99,000)	(261,000)	(474,000)
Recoveries	32,000	295,000	67,000	401,000
Ending balance	730,000	1,946,000	730,000	1,946,000
Commercial Real Estate Portfolio Segment [Member]
Beginning balance	6,763,000	10,680,000	6,993,000	10,931,000
Provision (negative provision) for loan losses	(1,213,000)	(330,000)	(1,588,000)	(323,000)
Loans charged off	(127,000)	(1,224,000)	(245,000)	(1,593,000)
Recoveries	6,000	87,000	269,000	198,000
Ending balance	5,429,000	9,213,000	5,429,000	9,213,000
Residential Portfolio Segment [Member]
Beginning balance	3,683,000	5,221,000	3,984,000	5,787,000
Provision (negative provision) for loan losses	471,000	604,000	600,000	220,000
Loans charged off	(455,000)	(809,000)	(1,050,000)	(1,291,000)
Recoveries	79,000	44,000	244,000	344,000
Ending balance	3,778,000	5,060,000	3,778,000	5,060,000
Consumer Portfolio Segment [Member]
Beginning balance	115,000	244,000	122,000	274,000
Provision (negative provision) for loan losses	(200,000)	10,000	(233,000)	22,000
Loans charged off	(22,000)	(62,000)	(35,000)	(130,000)
Recoveries	154,000	34,000	193,000	60,000
Ending balance	47,000	226,000	47,000	226,000
Agriculture Portfolio Segment [Member]
Beginning balance	136,000	391,000	122,000	319,000
Provision (negative provision) for loan losses	(15,000)	3,000	(80,000)	107,000
Loans charged off	(8,000)	(37,000)	(8,000)	(70,000)
Recoveries	6,000	2,000	85,000	3,000
Ending balance	119,000	359,000	119,000	359,000
Other Portfolio Segment [Member]
Beginning balance	1,000	15,000	2,000	7,000
Provision (negative provision) for loan losses	52,000	9,000	45,000	1,000
Loans charged off	(67,000)	(33,000)	(78,000)	(33,000)
Recoveries	15,000	14,000	32,000	30,000
Ending balance	1,000	5,000	1,000	5,000
Beginning balance	11,340,000	18,597,000	12,041,000	19,364,000
Provision (negative provision) for loan losses	(600,000)		(1,150,000)
Loans charged off	(928,000)	(2,264,000)	(1,677,000)	(3,591,000)
Recoveries	292,000	476,000	890,000	1,036,000
Ending balance	$ 10,104,000	$ 16,809,000	$ 10,104,000	$ 16,809,000

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Note 4 - Loans - Balance in Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Bases on Impairment Method (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Commercial Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	$ 0	$ 0
Collectively evaluated for impairment	730,000	818,000
Total ending allowance balance	730,000	818,000
Loans individually evaluated for impairment	748,000	1,112,000
Loans collectively evaluated for impairment	74,474,000	85,064,000
Total ending loans balance	75,222,000	86,176,000
Commercial Real Estate Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	45,000	43,000
Collectively evaluated for impairment	5,384,000	6,950,000
Total ending allowance balance	5,429,000	6,993,000
Loans individually evaluated for impairment	12,554,000	12,819,000
Loans collectively evaluated for impairment	246,341,000	237,317,000
Total ending loans balance	258,895,000	250,136,000
Residential Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	100,000	385,000
Collectively evaluated for impairment	3,678,000	3,599,000
Total ending allowance balance	3,778,000	3,984,000
Loans individually evaluated for impairment	12,088,000	17,673,000
Loans collectively evaluated for impairment	228,952,000	227,936,000
Total ending loans balance	241,040,000	245,609,000
Consumer Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	47,000	122,000
Total ending allowance balance	47,000	122,000
Loans individually evaluated for impairment	6,000	20,000
Loans collectively evaluated for impairment	9,847,000	9,990,000
Total ending loans balance	9,853,000	10,010,000
Agriculture Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	1,000	0
Collectively evaluated for impairment	118,000	122,000
Total ending allowance balance	119,000	122,000
Loans individually evaluated for impairment	139,000	152,000
Loans collectively evaluated for impairment	38,571,000	26,164,000
Total ending loans balance	38,710,000	26,316,000
Other Portfolio Segment [Member]
Allowance for loan losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	1,000
Total ending allowance balance	1,000
Loans individually evaluated for impairment	0
Loans collectively evaluated for impairment	416,000
Total ending loans balance	416,000	419,000
Other Real Estate Owned [Member]
Allowance for loan losses:
Collectively evaluated for impairment		2,000
Total ending allowance balance		2,000
Loans individually evaluated for impairment		0
Loans collectively evaluated for impairment		419,000
Total ending loans balance		419,000
Individually evaluated for impairment	146,000	428,000
Collectively evaluated for impairment	9,958,000	11,613,000
Total ending allowance balance	10,104,000	12,041,000
Loans individually evaluated for impairment	25,535,000	31,776,000
Loans collectively evaluated for impairment	598,601,000	586,890,000
Total ending loans balance	$ 624,136,000	$ 618,666,000

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Note 4 - Loans - Loans Individually Evaluated for Impairment by Class of Loans (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Commercial Portfolio Segment [Member]
Unpaid principal balance, with no related allowance recorded	$ 1,061,000		$ 1,061,000		$ 1,558,000
Recorded investment, with no related allowance recorded	748,000		748,000		1,112,000
Average recorded investment, with no related allowance recorded	806,000	$ 1,605,000	908,000	$ 1,730,000
Interest income recognized, with no related allowance recorded	0	5,000	1,000	5,000
Unpaid principal balance, with an allowance recorded	0		0		0
Recorded investment, with an allowance recorded	0		0		0
Allowance for loan losses allocated, with an allowance recorded	0		0		0
Average recorded investment, with an allowance recorded	0	10,000	0	22,000
Interest income recognized, with an allowance recorded	0	0	0	0
Impaired Financing Receivable, Related Allowance	0		0		0
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Unpaid principal balance, with no related allowance recorded	259,000		259,000		278,000
Recorded investment, with no related allowance recorded	259,000		259,000		262,000
Average recorded investment, with no related allowance recorded	260,000	2,475,000	261,000	3,016,000
Interest income recognized, with no related allowance recorded	3,000	4,000	78,000	8,000
Unpaid principal balance, with an allowance recorded	0		0		0
Recorded investment, with an allowance recorded	0		0		0
Allowance for loan losses allocated, with an allowance recorded	0		0		0
Average recorded investment, with an allowance recorded	0	0	0	0
Interest income recognized, with an allowance recorded	0	0	0	0
Impaired Financing Receivable, Related Allowance	0		0		0
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Unpaid principal balance, with no related allowance recorded	6,250,000		6,250,000		6,004,000
Recorded investment, with no related allowance recorded	4,591,000		4,591,000		4,263,000
Average recorded investment, with no related allowance recorded	4,358,000	4,659,000	4,327,000	4,685,000
Interest income recognized, with no related allowance recorded	2,000	3,000	8,000	26,000
Unpaid principal balance, with an allowance recorded	614,000		614,000		0
Recorded investment, with an allowance recorded	605		605		0
Allowance for loan losses allocated, with an allowance recorded	8,000		8,000		0
Average recorded investment, with an allowance recorded	302,000	0	202,000	105,000
Interest income recognized, with an allowance recorded	0	0	0	0
Impaired Financing Receivable, Related Allowance	8,000		8,000		0
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Unpaid principal balance, with no related allowance recorded	10,056,000		10,056,000		11,256,000
Recorded investment, with no related allowance recorded	6,692,000		6,692,000		7,829,000
Average recorded investment, with no related allowance recorded	6,547,000	20,356,000	6,974,000	21,043,000
Interest income recognized, with no related allowance recorded	58,000	72,000	306,000	137,000
Unpaid principal balance, with an allowance recorded	407,000		407,000		574,000
Recorded investment, with an allowance recorded	407		407		465
Allowance for loan losses allocated, with an allowance recorded	37,000		37,000		43,000
Average recorded investment, with an allowance recorded	409,000	2,615,000	427,000	7,266,000
Interest income recognized, with an allowance recorded	6,000	6,000	12,000	12,000
Impaired Financing Receivable, Related Allowance	37,000		37,000		43,000
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Unpaid principal balance, with no related allowance recorded	2,387,000		2,387,000		32,000
Recorded investment, with no related allowance recorded	2,387,000		2,387,000		32,000
Average recorded investment, with no related allowance recorded	2,393,000	17,000	1,606,000	38,000
Interest income recognized, with no related allowance recorded	28,000	0	58,000	0
Unpaid principal balance, with an allowance recorded	4,159,000		4,159,000		4,195,000
Recorded investment, with an allowance recorded	4,159		4,159		4,195
Allowance for loan losses allocated, with an allowance recorded	25,000		25,000		57,000
Average recorded investment, with an allowance recorded	4,168,000	4,235,000	4,177,000	4,246,000
Interest income recognized, with an allowance recorded	51,000	55,000	101,000	102,000
Impaired Financing Receivable, Related Allowance	25,000		25,000		57,000
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Unpaid principal balance, with no related allowance recorded	5,882,000		5,882,000		14,066,000
Recorded investment, with no related allowance recorded	3,961,000		3,961,000		11,756,000
Average recorded investment, with no related allowance recorded	4,897,000	14,235,000	7,184,000	14,579,000
Interest income recognized, with no related allowance recorded	13,000	110,000	71,000	244,000
Unpaid principal balance, with an allowance recorded	1,581,000		1,581,000		1,690,000
Recorded investment, with an allowance recorded	1,581		1,581		1,690
Allowance for loan losses allocated, with an allowance recorded	75,000		75,000		328,000
Average recorded investment, with an allowance recorded	1,630,000	1,628,000	1,650,000	1,676,000
Interest income recognized, with an allowance recorded	34,000	14,000	54,000	39,000
Impaired Financing Receivable, Related Allowance	75,000		75,000		328,000
Consumer Portfolio Segment [Member]
Unpaid principal balance, with no related allowance recorded	39,000		39,000		118,000
Recorded investment, with no related allowance recorded	6,000		6,000		20,000
Average recorded investment, with no related allowance recorded	7,000	22,000	11,000	25,000
Interest income recognized, with no related allowance recorded	1,000	0	8,000	0
Unpaid principal balance, with an allowance recorded	0		0		0
Recorded investment, with an allowance recorded	0		0		0
Allowance for loan losses allocated, with an allowance recorded	0		0		0
Average recorded investment, with an allowance recorded	0	4,000	0	13,000
Interest income recognized, with an allowance recorded	0	0	0	0
Impaired Financing Receivable, Related Allowance	0		0		0
Agriculture Portfolio Segment [Member]
Unpaid principal balance, with no related allowance recorded	97,000		97,000		260,000
Recorded investment, with no related allowance recorded	69,000		69,000		152,000
Average recorded investment, with no related allowance recorded	73,000	231,000	99,000	241,000
Interest income recognized, with no related allowance recorded	0	0	0	0
Unpaid principal balance, with an allowance recorded	78,000		78,000		0
Recorded investment, with an allowance recorded	70		70		0
Allowance for loan losses allocated, with an allowance recorded	1,000		1,000		0
Average recorded investment, with an allowance recorded	35,000	0	23,000	0
Interest income recognized, with an allowance recorded	0	0	0	0
Impaired Financing Receivable, Related Allowance	1,000		1,000		0
Other Portfolio Segment [Member]
Unpaid principal balance, with no related allowance recorded	0		0		0
Recorded investment, with no related allowance recorded	0		0		0
Average recorded investment, with no related allowance recorded	0	62,000	0	82,000
Interest income recognized, with no related allowance recorded	0	2,000	0	4,000
Unpaid principal balance, with an allowance recorded	0		0		0
Recorded investment, with an allowance recorded	0		0		0
Allowance for loan losses allocated, with an allowance recorded	0		0		0
Average recorded investment, with an allowance recorded	0	0	0	0
Interest income recognized, with an allowance recorded	0	0	0	0
Impaired Financing Receivable, Related Allowance	0		0		0
Unpaid principal balance, with no related allowance recorded	26,031,000		26,031,000		33,572,000
Recorded investment, with no related allowance recorded	18,713,000		18,713,000		25,426,000
Average recorded investment, with no related allowance recorded	19,341,000	43,662,000	21,370,000	45,439,000
Interest income recognized, with no related allowance recorded	105,000	196,000	530,000	424,000
Unpaid principal balance, with an allowance recorded	6,839,000		6,839,000		6,459,000
Recorded investment, with an allowance recorded	6,822		6,822		6,350
Allowance for loan losses allocated, with an allowance recorded	146,000		146,000		428,000
Average recorded investment, with an allowance recorded	6,544,000	8,492,000	6,479,000	13,328,000
Interest income recognized, with an allowance recorded	91,000	75,000	167,000	153,000
Unpaid principal balance, total	32,870,000		32,870,000		40,031,000
Recorded investment, total	25,535,000		25,535,000		31,776,000
Impaired Financing Receivable, Related Allowance	146,000		146,000		$ 428,000
Average recorded investment, total	25,885,000	52,154,000	27,849,000	58,767,000
Interest income recognized, total	$ 196,000	$ 271,000	$ 697,000	$ 577,000

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Note 4 - Loans - Types of Troubled Debt Restructuring Loan Modification by Portfolio Segment (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Commercial Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Performing Financial Instruments [Member]
Troubled Debt Restructuring	$ 0	$ 0
Commercial Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Nonperforming Financial Instruments [Member]
Troubled Debt Restructuring	68,000	68,000
Commercial Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Troubled Debt Restructuring	68,000	68,000
Commercial Portfolio Segment [Member] | Payment Deferral [Member] | Performing Financial Instruments [Member]
Troubled Debt Restructuring	0	0
Commercial Portfolio Segment [Member] | Payment Deferral [Member] | Nonperforming Financial Instruments [Member]
Troubled Debt Restructuring	439,000	439,000
Commercial Portfolio Segment [Member] | Payment Deferral [Member]
Troubled Debt Restructuring	439,000	439,000
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Performing Financial Instruments [Member] | Construction Loans [Member]
Troubled Debt Restructuring	259,000	262,000
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Performing Financial Instruments [Member] | Nonfarm Nonresidential [Member]
Troubled Debt Restructuring	5,550,000	5,637,000
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Nonperforming Financial Instruments [Member] | Construction Loans [Member]
Troubled Debt Restructuring	0	0
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Nonperforming Financial Instruments [Member] | Nonfarm Nonresidential [Member]
Troubled Debt Restructuring	0	50,000
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Construction Loans [Member]
Troubled Debt Restructuring	259,000	262,000
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Nonfarm Nonresidential [Member]
Troubled Debt Restructuring	5,550,000	5,687,000
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member] | Performing Financial Instruments [Member] | Farmland Loans [Member]
Troubled Debt Restructuring	0	0
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member] | Performing Financial Instruments [Member] | Nonfarm Nonresidential [Member]
Troubled Debt Restructuring	0	0
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member] | Nonperforming Financial Instruments [Member] | Farmland Loans [Member]
Troubled Debt Restructuring	2,340,000	2,365,000
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member] | Nonperforming Financial Instruments [Member] | Nonfarm Nonresidential [Member]
Troubled Debt Restructuring	606,000	622,000
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member] | Farmland Loans [Member]
Troubled Debt Restructuring	2,340,000	2,365,000
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member] | Nonfarm Nonresidential [Member]
Troubled Debt Restructuring	606,000	622,000
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Performing Financial Instruments [Member] | Multifamily Loans [Member]
Troubled Debt Restructuring	6,546,000	4,195,000
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Performing Financial Instruments [Member] | One- to Four-family Residential Properties [Member]
Troubled Debt Restructuring	1,581,000	7,346,000
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Nonperforming Financial Instruments [Member] | Multifamily Loans [Member]
Troubled Debt Restructuring	0	0
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Nonperforming Financial Instruments [Member] | One- to Four-family Residential Properties [Member]
Troubled Debt Restructuring	0	0
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | Multifamily Loans [Member]
Troubled Debt Restructuring	6,546,000	4,195,000
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member] | One- to Four-family Residential Properties [Member]
Troubled Debt Restructuring	1,581,000	7,346,000
Performing Financial Instruments [Member]
Troubled Debt Restructuring	13,936,000	17,440,000
Nonperforming Financial Instruments [Member]
Troubled Debt Restructuring	3,453,000	3,544,000
Troubled Debt Restructuring	$ 17,389,000	$ 20,984,000

XML

Note 4 - Loans - Recorded Investment in Nonaccrual and Loans Past Due 90 Days and Still on Accrual by Class of Loan (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Commercial Portfolio Segment [Member]
Nonaccrual	$ 748,000	$ 1,112,000
Loans Past Due 90 Days and Over Still Accruing	0	0
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Nonaccrual	0	0
Loans Past Due 90 Days and Over Still Accruing	0	0
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Nonaccrual	5,196,000	4,263,000
Loans Past Due 90 Days and Over Still Accruing	0	0
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Nonaccrual	1,549,000	2,657,000
Loans Past Due 90 Days and Over Still Accruing	0	0
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Nonaccrual	0	32,000
Loans Past Due 90 Days and Over Still Accruing	0	0
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Nonaccrual	3,961,000	5,851,000
Loans Past Due 90 Days and Over Still Accruing	0	0
Consumer Portfolio Segment [Member]
Nonaccrual	6,000	20,000
Loans Past Due 90 Days and Over Still Accruing	0	0
Agriculture Portfolio Segment [Member]
Nonaccrual	139,000	152,000
Loans Past Due 90 Days and Over Still Accruing	0	0
Other Portfolio Segment [Member]
Nonaccrual	0	0
Loans Past Due 90 Days and Over Still Accruing	0	0
Nonaccrual	11,599,000	14,087,000
Loans Past Due 90 Days and Over Still Accruing	$ 0	$ 0

XML

Note 4 - Loans - Aging of Recorded Investment in Past Due Loans (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due	$ 42,000	$ 78,000
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due	25,000	0
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due	0	0
Commercial Portfolio Segment [Member]
Nonaccrual	748,000	1,112,000
Total past due and nonaccrual	815,000	1,190,000
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Construction Loans [Member]
Past due	0	0
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Farmland Loans [Member]
Past due	242,000	456,000
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Nonfarm Nonresidential [Member]
Past due	110,000	326,000
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | Construction Loans [Member]
Past due	0	0
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | Farmland Loans [Member]
Past due	0	0
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | Nonfarm Nonresidential [Member]
Past due	0	0
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Construction Loans [Member]
Past due	0	0
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Farmland Loans [Member]
Past due	0	0
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Nonfarm Nonresidential [Member]
Past due	0	0
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Nonaccrual	0	0
Total past due and nonaccrual	0	0
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Nonaccrual	5,196,000	4,263,000
Total past due and nonaccrual	5,438,000	4,719,000
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Nonaccrual	1,549,000	2,657,000
Total past due and nonaccrual	1,659,000	2,983,000
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Multifamily Loans [Member]
Past due	0	0
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | One- to Four-family Residential Properties [Member]
Past due	1,918,000	2,225,000
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | Multifamily Loans [Member]
Past due	0	0
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | One- to Four-family Residential Properties [Member]
Past due	311,000	241,000
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Multifamily Loans [Member]
Past due	0	0
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | One- to Four-family Residential Properties [Member]
Past due	0	0
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Nonaccrual	0	32,000
Total past due and nonaccrual	0	32,000
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Nonaccrual	3,961,000	5,851,000
Total past due and nonaccrual	6,190,000	8,317,000
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due	89,000	41,000
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due	0	0
Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due	0	0
Consumer Portfolio Segment [Member]
Nonaccrual	6,000	20,000
Total past due and nonaccrual	95,000	61,000
Agriculture Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due	0	7,000
Agriculture Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due	0	0
Agriculture Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due	0	0
Agriculture Portfolio Segment [Member]
Nonaccrual	139,000	152,000
Total past due and nonaccrual	139,000	159,000
Other Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Past due	0	0
Other Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Past due	0	0
Other Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due	0	0
Other Portfolio Segment [Member]
Nonaccrual	0	0
Total past due and nonaccrual	0	0
Financing Receivables, 30 to 59 Days Past Due [Member]
Past due	2,401,000	3,133,000
Financing Receivables, 60 to 89 Days Past Due [Member]
Past due	336,000	241,000
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Past due	0	0
Nonaccrual	11,599,000	14,087,000
Total past due and nonaccrual	$ 14,336,000	$ 17,461,000

XML

Note 4 - Loans - Risk Category of Loans by Class of Loans (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Commercial Portfolio Segment [Member] | Pass [Member]
Gross loans	$ 73,569,000	$ 81,570,000
Commercial Portfolio Segment [Member] | Watch [Member]
Gross loans	400,000	2,953,000
Commercial Portfolio Segment [Member] | Special Mention [Member]
Gross loans	0	0
Commercial Portfolio Segment [Member] | Substandard [Member]
Gross loans	1,253,000	1,653,000
Commercial Portfolio Segment [Member] | Doubtful [Member]
Gross loans	0	0
Commercial Portfolio Segment [Member]
Gross loans	75,222,000	86,176,000
Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Construction Loans [Member]
Gross loans	27,915,000	27,603,000
Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Farmland Loans [Member]
Gross loans	67,422,000	65,476,000
Commercial Real Estate Portfolio Segment [Member] | Pass [Member] | Nonfarm Nonresidential [Member]
Gross loans	130,191,000	111,901,000
Commercial Real Estate Portfolio Segment [Member] | Watch [Member] | Construction Loans [Member]
Gross loans	5,269,000	5,289,000
Commercial Real Estate Portfolio Segment [Member] | Watch [Member] | Farmland Loans [Member]
Gross loans	2,492,000	4,844,000
Commercial Real Estate Portfolio Segment [Member] | Watch [Member] | Nonfarm Nonresidential [Member]
Gross loans	14,632,000	22,687,000
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Construction Loans [Member]
Gross loans	0	0
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Farmland Loans [Member]
Gross loans	0	0
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | Nonfarm Nonresidential [Member]
Gross loans	538,000	1,328,000
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Construction Loans [Member]
Gross loans	0	262,000
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Farmland Loans [Member]
Gross loans	7,828,000	6,092,000
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | Nonfarm Nonresidential [Member]
Gross loans	2,608,000	4,654,000
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Construction Loans [Member]
Gross loans	0	0
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Farmland Loans [Member]
Gross loans	0	0
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member] | Nonfarm Nonresidential [Member]
Gross loans	0	0
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Gross loans	33,184,000	33,154,000
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Gross loans	77,742,000	76,412,000
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Gross loans	147,969,000	140,570,000
Commercial Real Estate Portfolio Segment [Member]
Gross loans	258,895,000	250,136,000
Residential Portfolio Segment [Member] | Pass [Member] | Multifamily Loans [Member]
Gross loans	33,828,000	35,300,000
Residential Portfolio Segment [Member] | Pass [Member] | One- to Four-family Residential Properties [Member]
Gross loans	172,447,000	164,490,000
Residential Portfolio Segment [Member] | Watch [Member] | Multifamily Loans [Member]
Gross loans	6,934,000	4,879,000
Residential Portfolio Segment [Member] | Watch [Member] | One- to Four-family Residential Properties [Member]
Gross loans	15,036,000	17,636,000
Residential Portfolio Segment [Member] | Special Mention [Member] | Multifamily Loans [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | Special Mention [Member] | One- to Four-family Residential Properties [Member]
Gross loans	84,000	67,000
Residential Portfolio Segment [Member] | Substandard [Member] | Multifamily Loans [Member]
Gross loans	3,890,000	3,952,000
Residential Portfolio Segment [Member] | Substandard [Member] | One- to Four-family Residential Properties [Member]
Gross loans	8,821,000	19,285,000
Residential Portfolio Segment [Member] | Doubtful [Member] | Multifamily Loans [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | Doubtful [Member] | One- to Four-family Residential Properties [Member]
Gross loans	0	0
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Gross loans	44,652,000	44,131,000
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Gross loans	196,388,000	201,478,000
Residential Portfolio Segment [Member]
Gross loans	241,040,000	245,609,000
Consumer Portfolio Segment [Member] | Pass [Member]
Gross loans	9,339,000	9,323,000
Consumer Portfolio Segment [Member] | Watch [Member]
Gross loans	378,000	474,000
Consumer Portfolio Segment [Member] | Special Mention [Member]
Gross loans	0	0
Consumer Portfolio Segment [Member] | Substandard [Member]
Gross loans	136,000	213,000
Consumer Portfolio Segment [Member] | Doubtful [Member]
Gross loans	0	0
Consumer Portfolio Segment [Member]
Gross loans	9,853,000	10,010,000
Agriculture Portfolio Segment [Member] | Pass [Member]
Gross loans	32,726,000	21,402,000
Agriculture Portfolio Segment [Member] | Watch [Member]
Gross loans	4,883,000	4,601,000
Agriculture Portfolio Segment [Member] | Special Mention [Member]
Gross loans	0	0
Agriculture Portfolio Segment [Member] | Substandard [Member]
Gross loans	1,101,000	313,000
Agriculture Portfolio Segment [Member] | Doubtful [Member]
Gross loans	0	0
Agriculture Portfolio Segment [Member]
Gross loans	38,710,000	26,316,000
Other Portfolio Segment [Member] | Pass [Member]
Gross loans	416,000	419,000
Other Portfolio Segment [Member] | Watch [Member]
Gross loans	0	0
Other Portfolio Segment [Member] | Special Mention [Member]
Gross loans	0	0
Other Portfolio Segment [Member] | Substandard [Member]
Gross loans	0
Other Portfolio Segment [Member] | Doubtful [Member]
Gross loans	0	0
Other Portfolio Segment [Member]
Gross loans	416,000	419,000
Pass [Member]
Gross loans	547,853,000	517,484,000
Watch [Member]
Gross loans	50,024,000	63,363,000
Special Mention [Member]
Gross loans	622,000	1,395,000
Substandard [Member]
Gross loans	25,637,000	36,424,000
Doubtful [Member]
Gross loans	0	0
Gross loans	$ 624,136,000	$ 618,666,000

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Note 5 - Other Real Estate Owned (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
One- to Four-family Residential Properties [Member]
Mortgage Loans in Process of Foreclosure, Amount	$ 533,000		$ 533,000		$ 934,000
Foreclosed Real Estate Rental Income	$ 149,000	$ 372,000	$ 405,000	$ 729,000

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Note 5 - Other Real Estate Owned - Major Categories of OREO (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Commercial Real Estate Portfolio Segment [Member] | Construction, Land Development, and Other Land Loans [Member]
Other real estate owned, gross	$ 11,066		$ 12,749
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Other real estate owned, gross	1,512		6,967
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Other real estate owned, gross	185		128
Other real estate owned, gross	12,763		19,844
Valuation allowance	(441)	$ (888)	(630)	$ (307)	$ (492)	$ (1,066)
	$ 12,322		$ 19,214	$ 39,545		$ 46,197

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Note 5 - Other Real Estate Owned - OREO Valuation Allowance Activity (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
OREO Valuation Allowance Activity:
Beginning balance	$ 888,000	$ 492,000	$ 630,000	$ 1,066,000
Provision to allowance	150,000	2,330,000	650,000	2,630,000
Write-downs	(597,000)	(2,515,000)	(839,000)	(3,389,000)
Ending balance	$ 441,000	$ 307,000	$ 441,000	$ 307,000

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Note 5 - Other Real Estate Owned - Activity Relating to Other Real Estate Owned (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
OREO Activity
OREO as of January 1			$ 19,214,000	$ 46,197,000
Real estate acquired			576,000	955,000
Valuation adjustment write-downs	$ (150,000)	$ (2,330,000)	(650,000)	(2,630,000)
Net gain on sales	114,000	40,000	169,000	43,000
Proceeds from sales of properties			(6,987,000)	(5,020,000)
OREO as of June 30	$ 12,322,000	$ 39,545,000	$ 12,322,000	$ 39,545,000

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Note 5 - Other Real Estate Owned - Expenses Related to Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net (gain) loss on sales of other real estate owned	$ (114)	$ (40)	$ (169)	$ (43)
Provision to allowance	150	2,330	650	2,630
Operating expense	258	642	481	1,078
Total	$ 294	$ 2,932	$ 962	$ 3,665

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Note 6 - Deposits (Details Textual) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Time Deposits 250000 or More	$ 26.7	$ 28.4

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Note 6 - Deposits - Deposit Balances by Category (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Non-interest bearing	$ 117,843	$ 120,043
Interest checking	90,806	97,515
Money market	135,643	125,935
Savings	34,616	34,677
Certificates of deposit	461,183	499,827
Total	$ 840,091	$ 877,997

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Note 6 - Deposits - Maturities of Time Deposits (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Year 1	$ 345,900
Year 2	41,056
Year 3	13,916
Year 4	44,484
Year 5	15,827
	$ 461,183

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Note 7 - Advances From the Federal Home Loan Bank (Details Textual) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Maximum [Member] | Federal Home Loan Bank Advances [Member]
Debt Instrument, Term	1 year
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Repayment and Penalties	$ 0	$ 0
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	$ 29,500,000

XML

Note 7 - Advances From Federal Home Loan Bank - Advances From the Federal Home Loan Bank (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Federal Home Loan Bank advances	$ 2,775	$ 3,081

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Note 7 - Advances From Federal Home Loan Bank - Advances From the Federal Home Loan Bank (Details) (Parentheticals)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Minimum [Member]
Advances from the FHLB, fixed rate	0.00%	0.00%
Maximum [Member]
Advances from the FHLB, fixed rate	5.25%	5.25%
Advances from the FHLB, earliest maturity	2017	2017
Advances from the FHLB, latest maturity	2033	2033
Advances from the FHLB, average interest rate	2.50%	2.65%

XML

Note 8 - Fair Values Measurement (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Routine Real Estate Collateral [Member] | Impaired Loans [Member]
Fair Value Inputs, Discount Rate			10.00%
Routine Real Estate Collateral [Member] | Other Real Estate Owned [Member]
Fair Value Inputs, Discount Rate			10.00%
Thin Trading Market or Specialized Collateral [Member] | Impaired Loans [Member]
Fair Value Inputs, Discount Rate			25.00%
Thin Trading Market or Specialized Collateral [Member] | Other Real Estate Owned [Member]
Fair Value Inputs, Discount Rate			25.00%
Impaired Loans [Member] | Minimum [Member]
Fair Value Inputs, Discount Rate			10.00%
Fair Value Inputs Estimated Discount Rate for Cost to Sell			6.00%
Impaired Loans [Member] | Maximum [Member]
Fair Value Inputs, Discount Rate			33.00%
Fair Value Inputs Estimated Discount Rate for Cost to Sell			10.00%
Impaired Loans [Member]
Impaired Financing Receivable, Related Allowance	$ 89,000	$ 742,000	$ 89,000	$ 742,000	$ 337,000
Minimum [Member] | Other Real Estate Owned [Member]
Fair Value Inputs Estimated Discount Rate for Cost to Sell			6.00%
Maximum [Member] | Other Real Estate Owned [Member]
Fair Value Inputs Estimated Discount Rate for Cost to Sell			10.00%
Measured for Impairment Using Fair Value of Collateral [Member]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	2,400,000	5,900,000	$ 2,400,000	5,900,000	1,800,000
Impaired Financing Receivable Provision for Loan Losses	$ 0	0	$ 0	0
Debt Instrument, Interest Rate, Stated Percentage	6.50%		6.50%
Debt Instrument, Interest Rate, Effective Percentage	8.25%		8.25%
Impaired Financing Receivable, with Related Allowance, Recorded Investment	$ 6,822		$ 6,822		6,350
Impaired Financing Receivable, Related Allowance	146,000		146,000		428,000
Other Repossessed Assets	12,300,000	39,500,000	12,300,000	39,500,000	$ 19,200,000
Real Estate Owned, Valuation Allowance, Provision	$ 150,000	$ 2,330,000	$ 650,000	$ 2,630,000

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Note 8 - Fair Values Measurement - Financial Assets Measured at Fair Value on Recurring and Non-recurring Basis (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale	$ 0	$ 0
US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale	34,453,000	33,262,000
US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale	0	0
US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	34,453,000	33,262,000
US Treasury and Government [Member]
Securities available for sale	34,453,000	33,262,000
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale	0	0
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale	103,461,000	102,662,000
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale	0	0
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	103,461,000	102,662,000
Residential Mortgage Backed Securities [Member]
Securities available for sale	103,461,000	102,662,000
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale	0	0
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale	3,094,000	6,861,000
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale	0	0
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	3,094,000	6,861,000
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale	3,094,000	6,861,000
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale	0	0
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale	2,137,000	2,193,000
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale	0	0
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Securities available for sale	2,137,000	2,193,000
Corporate Debt Securities [Member]
Securities available for sale	2,137,000	2,193,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available for sale	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available for sale	143,145,000	144,978,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available for sale	0	0
Fair Value, Measurements, Recurring [Member]
Securities available for sale	143,145,000	144,978,000
Fair Value, Measurements, Nonrecurring [Member] | Commercial Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Portfolio Segment [Member] | Impaired Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Construction Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Farmland Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Nonfarm Nonresidential [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Construction Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Farmland Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Nonfarm Nonresidential [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Construction Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Farmland Loans [Member]
Impaired loans	597,000	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Nonfarm Nonresidential [Member]
Impaired loans	92,000	139,000
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Construction Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Farmland Loans [Member]
Impaired loans	597,000	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Impaired Loans [Member] | Nonfarm Nonresidential [Member]
Impaired loans	92,000	139,000
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member] | Construction Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member] | Farmland Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member] | Nonfarm Nonresidential [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member] | Construction Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member] | Farmland Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member] | Nonfarm Nonresidential [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Construction Loans [Member]
Other real-estate	10,684,000	12,344,000
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Farmland Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Nonfarm Nonresidential [Member]
Other real-estate	1,460,000	6,746,000
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Construction Loans [Member]
Other real-estate	10,684,000	12,344,000
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Farmland Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Commercial Real Estate Portfolio Segment [Member] | Other Real Estate Owned [Member] | Nonfarm Nonresidential [Member]
Other real-estate	1,460,000	6,746,000
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Multifamily Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member] | One- to Four-family Residential Properties [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Multifamily Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member] | One- to Four-family Residential Properties [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Multifamily Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | One- to Four-family Residential Properties [Member]
Impaired loans	1,506,000	1,362,000
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | Multifamily Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Impaired Loans [Member] | One- to Four-family Residential Properties [Member]
Impaired loans	1,506,000	1,362,000
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member] | Multifamily Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member] | One- to Four-family Residential Properties [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member] | Multifamily Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member] | One- to Four-family Residential Properties [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Multifamily Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | One- to Four-family Residential Properties [Member]
Other real-estate	178,000	124,000
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | Multifamily Loans [Member]
Other real-estate	0	0
Fair Value, Measurements, Nonrecurring [Member] | Residential Portfolio Segment [Member] | Other Real Estate Owned [Member] | One- to Four-family Residential Properties [Member]
Other real-estate	178,000	124,000
Fair Value, Measurements, Nonrecurring [Member] | Consumer Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Consumer Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Consumer Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Consumer Portfolio Segment [Member] | Impaired Loans [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Agriculture Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans	0
Fair Value, Measurements, Nonrecurring [Member] | Agriculture Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans	0
Fair Value, Measurements, Nonrecurring [Member] | Agriculture Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans	69,000
Fair Value, Measurements, Nonrecurring [Member] | Agriculture Portfolio Segment [Member] | Impaired Loans [Member]
Impaired loans	69,000
Fair Value, Measurements, Nonrecurring [Member] | Other Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Other Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Other Portfolio Segment [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans	0	0
Fair Value, Measurements, Nonrecurring [Member] | Other Portfolio Segment [Member] | Impaired Loans [Member]
Impaired loans	0	0
Securities available for sale	143,145,000	144,978,000
Impaired loans	$ 25,535,000	$ 31,776,000

XML

Note 8 - Fair Values Measurement - Reconciliation of All Assets Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs Level 3 (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Balances of recurring Level 3 assets at January 1	$ 0	$ 658,000
Included in other comprehensive income (loss)	0	(7,000)
Balance of recurring Level 3 assets at June 30	$ 0	$ 651,000

XML

Note 8 - Fair Values Measurement - Qualitative Information About Level Three Fair Value Measurements for Financial Instruments Measured At Fair Value On Non-recurring Basis (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member] | Minimum [Member]
Range of inputs	1.00%	1.00%
Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member] | Maximum [Member]
Range of inputs	22.00%	16.00%
Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member] | Weighted Average [Member]
Range of inputs	10.00%	7.00%
Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Fair value	$ 1,506	$ 1,362
Unobservable inputs	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Minimum [Member]
Range of inputs	0.00%	0.00%
Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Maximum [Member]
Range of inputs	30.00%	30.00%
Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Range of inputs	12.00%	12.00%
Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Fair value	$ 12,144	$ 19,090
Unobservable inputs	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Minimum [Member]
Range of inputs	10.00%	10.00%
Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Maximum [Member]
Range of inputs	20.00%	20.00%
Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Range of inputs	17.00%	17.00%
Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Unobservable inputs	Discount or capitalization rate	Discount or capitalization rate

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Note 8 - Fair Values Measurement - Carrying Amount and Estimated Fair Values of Financial Instruments (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Reported Value Measurement [Member]
Cash and cash equivalents	$ 57,602,000	$ 93,335,000
Available-for-sale Securities	143,145,000	144,978,000
Held to maturity securities, fair value	41,948,000	42,075,000
Federal Home Loan Bank stock	7,323,000	7,323,000
Loans held for sale		186,000
Loans, net	614,032,000	606,625,000
Accrued interest receivable	3,048,000	3,116,000
Deposits	840,091,000	877,997,000
Federal Home Loan Bank advances	2,775,000	3,081,000
Subordinated capital notes	3,600,000	4,050,000
Junior subordinated debentures	21,000,000	21,000,000
Accrued interest payable	422,000	2,805,000
Financial assets
Cash and cash equivalents	57,602,000	93,335,000
Available-for-sale Securities	143,145,000	144,978,000
Held to maturity securities, fair value	41,948,000	42,075,000
Federal Home Loan Bank stock	7,323,000	7,323,000
Loans held for sale		186,000
Loans, net	614,032,000	606,625,000
Accrued interest receivable	3,048,000	3,116,000
Financial liabilities
Deposits	840,091,000	877,997,000
Federal Home Loan Bank advances	2,775,000	3,081,000
Subordinated capital notes	3,600,000	4,050,000
Junior subordinated debentures	21,000,000	21,000,000
Accrued interest payable	422,000	2,805,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	44,391,000	79,498,000
Available-for-sale Securities
Held to maturity securities, fair value
Federal Home Loan Bank stock	0
Loans held for sale	0
Loans, net
Accrued interest receivable
Deposits	117,845,000	120,043,000
Federal Home Loan Bank advances
Subordinated capital notes
Junior subordinated debentures
Accrued interest payable
Financial assets
Cash and cash equivalents	44,391,000	79,498,000
Available-for-sale Securities
Held to maturity securities, fair value
Federal Home Loan Bank stock	0
Loans held for sale	0
Loans, net
Accrued interest receivable
Financial liabilities
Deposits	117,845,000	120,043,000
Federal Home Loan Bank advances
Subordinated capital notes
Junior subordinated debentures
Accrued interest payable
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents	13,211,000	13,837,000
Available-for-sale Securities	143,145,000	144,978,000
Held to maturity securities, fair value	44,955,000	44,253,000
Federal Home Loan Bank stock	0
Loans held for sale		186,000
Loans, net
Accrued interest receivable	1,076,000	1,111,000
Deposits	711,563,000	739,152,000
Federal Home Loan Bank advances	2,852,000	3,076,000
Subordinated capital notes
Junior subordinated debentures
Accrued interest payable	388,000	422,000
Financial assets
Cash and cash equivalents	13,211,000	13,837,000
Available-for-sale Securities	143,145,000	144,978,000
Held to maturity securities, fair value	44,955,000	44,253,000
Federal Home Loan Bank stock	0
Loans held for sale		186,000
Loans, net
Accrued interest receivable	1,076,000	1,111,000
Financial liabilities
Deposits	711,563,000	739,152,000
Federal Home Loan Bank advances	2,852,000	3,076,000
Subordinated capital notes
Junior subordinated debentures
Accrued interest payable	388,000	422,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents
Available-for-sale Securities
Held to maturity securities, fair value
Federal Home Loan Bank stock	0
Loans held for sale	0
Loans, net	620,542,000	614,162,000
Accrued interest receivable	1,972,000	2,005,000
Deposits
Federal Home Loan Bank advances
Subordinated capital notes	3,515,000	3,933,000
Junior subordinated debentures	12,973,000	12,810,000
Accrued interest payable	34,000	2,383,000
Financial assets
Cash and cash equivalents
Available-for-sale Securities
Held to maturity securities, fair value
Federal Home Loan Bank stock	0
Loans held for sale	0
Loans, net	620,542,000	614,162,000
Accrued interest receivable	1,972,000	2,005,000
Financial liabilities
Deposits
Federal Home Loan Bank advances
Subordinated capital notes	3,515,000	3,933,000
Junior subordinated debentures	12,973,000	12,810,000
Accrued interest payable	34,000	2,383,000
Estimate of Fair Value Measurement [Member]
Cash and cash equivalents	57,602,000
Available-for-sale Securities	143,145,000
Held to maturity securities, fair value	44,955,000
Federal Home Loan Bank stock	0
Loans held for sale
Loans, net	620,542,000
Accrued interest receivable	3,048,000
Deposits	829,408,000
Federal Home Loan Bank advances	2,852,000
Subordinated capital notes	3,515,000
Junior subordinated debentures	12,973,000
Accrued interest payable	422,000
Financial assets
Cash and cash equivalents	57,602,000
Available-for-sale Securities	143,145,000
Held to maturity securities, fair value	44,955,000
Federal Home Loan Bank stock	0
Loans held for sale
Loans, net	620,542,000
Accrued interest receivable	3,048,000
Financial liabilities
Deposits	829,408,000
Federal Home Loan Bank advances	2,852,000
Subordinated capital notes	3,515,000
Junior subordinated debentures	12,973,000
Accrued interest payable	422,000
Cash and cash equivalents		93,335,000
Available-for-sale Securities	143,145,000	144,978,000
Held to maturity securities, fair value	44,955,000	44,253,000
Loans held for sale		186,000
Loans, net		614,162,000
Accrued interest receivable		3,116,000
Deposits		859,195,000
Federal Home Loan Bank advances		3,076,000
Subordinated capital notes		3,933,000
Junior subordinated debentures		12,810,000
Accrued interest payable		2,805,000
Cash and cash equivalents		93,335,000
Available-for-sale Securities	143,145,000	144,978,000
Held to maturity securities, fair value	$ 44,955,000	44,253,000
Loans held for sale		186,000
Loans, net		614,162,000
Accrued interest receivable		3,116,000
Deposits		859,195,000
Federal Home Loan Bank advances		3,076,000
Subordinated capital notes		3,933,000
Junior subordinated debentures		12,810,000
Accrued interest payable		$ 2,805,000

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Note 9 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Jul. 10, 2015
Unrecognized Tax Benefits	$ 0		$ 0		$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	0	$ 0	0	$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	$ 0	$ 0	$ 0	$ 0
Common Stock Ownership Percentage by Individual			5.00%
Common Stock Ownership Percentage			50.00%
Dividend Declared Preferred Stock Purchase Right Per Each Share of Common Stock						1

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Note 9 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Deferred tax assets:
Net operating loss carry-forward	$ 39,336,000	$ 38,085,000
Allowance for loan losses	3,536,000	4,214,000
Other real estate owned write-down	6,327,000	7,619,000
Alternative minimum tax credit carry-forward	692,000	692,000
Net assets from acquisitions	673,000	671,000
Net unrealized loss on securities	0	166,000
New market tax credit carry-forward	208,000	208,000
Nonaccrual loan interest	562,000	549,000
Other	1,854,000	1,875,000
	53,188,000	54,079,000
Deferred tax liabilities:
FHLB stock dividends	928,000	928,000
Fixed assets	203,000	176,000
Net unrealized gain on securities	749,000	0
Other	536,000	865,000
	2,416,000	1,969,000
Net deferred tax assets before valuation allowance	50,772,000	52,110,000
Valuation allowance	(50,772,000)	(52,110,000)
Net deferred tax asset	$ 0	$ 0

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Note 10 - Stock Plans and Stock Based Compensation (Details Textual) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 25, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Stock Incentive Plan 2016 [Member] | Unvested Shares [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				3 years
Stock Incentive Plan 2016 [Member] | Unvested Shares [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				10 years
Stock Incentive Plan 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		229,180		229,180
Restricted Stock Shares Cancelled	538,479
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value				$ 1.82		$ 0.91
Non-Employee Directors Stock Incentive Plan 2006 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		89,622		89,622
Share Based Compensation Arrangement by Share Based Payment Award Annual Award to Non Employee Directors Value				$ 25,000
Service-based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Stock Issued During Period, Shares, Restricted Stock Award, Gross	800,000
Share Based Compensation Arrangement by Share Based Payment Award Plan Modification Incremental Expense Recognized	$ 233,000
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost		$ 0	$ 0	0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Nonvested Intrinsic Value1		323,000		$ 323,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value				$ 1.82
Share-based Compensation		$ 73,000	$ 49,000	$ 167,000	$ 181,000

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Note 10 - Stock Plans and Stock Based Compensation - Unvested Share Activity (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Stock Incentive Plan 2016 [Member]
Outstanding, beginning (in shares)	922,419	775,492
Outstanding, beginning (in dollars per share)	$ 0.96	$ 1.33
Granted (in shares)	177,290	915,740
Granted (in dollars per share)	$ 1.82	$ 0.91
Vested (in shares)	(18,637)	(285,977)
Vested (in dollars per share)	$ 2.79	$ 1.33
Terminated (in shares)	0	(450,994)
Terminated (in dollars per share)	$ 0	$ 1.25
Forfeited (in shares)	(6,521)	(31,842)
Forfeited (in dollars per share)	$ 1.25	$ 1.13
Outstanding, ending (in shares)	1,074,551	922,419
Outstanding, ending (in dollars per share)	$ 1.07	$ 0.96
Granted (in dollars per share)	$ 1.82

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Note 10 - Stock Plans and Stock Based Compensation - Unrecognized Stock Based Compensation Expense Related to Unvested Shares (Details) $ in Thousands	Jun. 30, 2016 USD ($)
July 2016 – December 2016	$ 278
2017	197
2018	190
2019	30
2020 & thereafter	$ 9

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Note 11 - Earnings (Loss) Per Share (Details Textual) - $ / shares	1 Months Ended	6 Months Ended
	Sep. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Warrant [Member] | Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		330,561	330,561
Warrant [Member] | Nonvoting Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			650,544
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations	650,544
Common Stock [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 15.88	$ 15.88
Nonvoting Common Stock [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 10.95
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number		0	0

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Note 11 - Earnings (Loss) Per Share - Basic and Diluted Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Unvested Shares [Member]
Earnings (loss) allocated to participating securities	$ 33,000	$ (91,000)	$ 84,000	$ (60,000)
Basic
Weighted average shares outstanding (in shares)	996,046	1,098,072	971,504	990,545
Series C Preferred Stock [Member]
Earnings (loss) allocated to participating securities	$ 0	$ 0	$ 0	$ (209,000)
Series B Preferred Stock [Member]
Basic
Weighted average shares outstanding (in shares)	0	0	0	1,343,735
Series D Preferred Stock [Member]
Basic
Weighted average shares outstanding (in shares)	0	0	0	2,140,774
Net income	$ 1,012,000	$ (2,130,000)	$ 2,492,000	$ (1,536,000)	$ (3,200,000)	$ (11,200,000)
Earnings (loss) allocated to participating securities	33,000	(91,000)	84,000	(269,000)
Net income (loss) available to common shareholders, basic and diluted	$ 979,000	$ (2,039,000)	$ 2,408,000	$ (1,267,000)
Weighted average common shares including unvested common shares outstanding (in shares)	30,385,850	25,687,579	28,665,579	25,554,292
Weighted average shares outstanding (in shares)	29,389,804	24,589,507	27,694,075	21,079,238
Basic income (loss) per common share (in dollars per share)	$ 0.03	$ (0.08)	$ 0.09	$ (0.06)
Diluted
Add: Dilutive effects of assumed exercises of common stock warrants (in shares)
Weighted average common shares and potential common shares (in shares)	29,389,804	24,589,507	27,694,075	21,079,238
Diluted income (loss) per common share (in dollars per share)	$ 0.03	$ (0.08)	$ 0.09	$ (0.06)

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Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details Textual) - USD ($) $ in Billions	6 Months Ended
	Jun. 30, 2016	Jan. 01, 2019	Dec. 31, 2015
Scenario, Forecast [Member]
Capital Conservation Buffer		2.50%
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		7.00%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		8.50%
Capital Required for Capital Adequacy to Risk Weighted Assets		10.50%
Consent Order [Member] | PBI Bank [Member]
Capital Required for Capital Adequacy to Risk Weighted Assets	12.00%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	9.00%
PBI Bank [Member]
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.50%		4.50%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	6.00%		6.00%
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%		8.00%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%		4.00%
Maximum Asset for Opt Out Requirement in Capital Calculation	$ 250
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	4.50%		4.50%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	6.00%		6.00%
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%		8.00%
Capital Conservation Buffer, Annual Phase-In	0.625%
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%		4.00%

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Note 12 - Capital Requirements and Restrictions on Retained Earnings - Ratios and Amounts of Risk-Adjusted Assets and the Leverage Ratios (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
PBI Bank [Member]
Total risk-based capital (to risk- weighted assets)
Total risk-based capital to risk-weighted assets, actual amount	$ 72,974	$ 69,250
Total risk-based capital to risk-weighted assets, actual ratio	10.87%	10.58%
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 53,692	$ 52,347
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, ratio	8.00%	8.00%
Total common equity Tier I risk-based capital (to risk- weighted assets)
Total common equity Tier 1 risk-based capital to risk-weighted assets, actual amount	$ 61,863	$ 57,873
Total common equity Tier 1 risk-based capital to risk-weighted assets	9.22%	8.84%
Total common equity Tier 1 risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 30,202	$ 29,445
Total common equity Tier 1 risk-based capital to risk-weighted assets, for capital adequacy purposes, ratio	4.50%	4.50%
Tier I capital (to risk-weighted assets)
Tier 1 capital to risk-weighted assets, actual amount	$ 61,863	$ 57,873
Tier 1 capital to risk-weighted assets, actual ratio	9.22%	8.84%
Tier 1 capital to risk-weighted assets, for capital adequacy purposes, amount	$ 40,269	$ 39,260
Tier 1 capital to risk-weighted assets, for capital adequacy purposes, ratio	6.00%	6.00%
Tier I capital (to average assets)
Tier 1 capital to average assets, actual amount	$ 61,863	$ 57,873
Tier 1 capital to average assets, actual ratio	6.65%	6.08%
Tier 1 capital to average assets, for capital adequacy purposes, amount	$ 37,237	$ 38,085
Tier 1 capital to average assets, for capital adequacy purposes, ratio	4.00%	4.00%
Total risk-based capital to risk-weighted assets, actual amount	$ 75,959	$ 68,530
Total risk-based capital to risk-weighted assets, actual ratio	11.31%	10.46%
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 53,750	$ 52,436
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, ratio	8.00%	8.00%
Total common equity Tier 1 risk-based capital to risk-weighted assets, actual amount	$ 41,068	$ 33,368
Total common equity Tier 1 risk-based capital to risk-weighted assets	6.11%	5.09%
Total common equity Tier 1 risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 30,235	$ 29,495
Total common equity Tier 1 risk-based capital to risk-weighted assets, for capital adequacy purposes, ratio	4.50%	4.50%
Tier 1 capital to risk-weighted assets, actual amount	$ 54,799	$ 45,174
Tier 1 capital to risk-weighted assets, actual ratio	8.16%	6.89%
Tier 1 capital to risk-weighted assets, for capital adequacy purposes, amount	$ 40,313	$ 39,327
Tier 1 capital to risk-weighted assets, for capital adequacy purposes, ratio	6.00%	6.00%
Tier 1 capital to average assets, actual amount	$ 54,799	$ 45,174
Tier 1 capital to average assets, actual ratio	5.87%	4.74%
Tier 1 capital to average assets, for capital adequacy purposes, amount	$ 37,370	$ 38,131
Tier 1 capital to average assets, for capital adequacy purposes, ratio	4.00%	4.00%

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Note 12 - Capital Requirements and Restrictions on Retained Earnings - Minimum Capital Ratios (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
PBI Bank [Member] | Consent Order [Member]
Total capital to risk-weighted assets	$ 80,538
Total capital to risk-weighted assets	12.00%
Tier I capital to average assets	$ 83,783
Tier I capital to average assets	9.00%
PBI Bank [Member]
Total capital to risk-weighted assets	$ 72,974	$ 69,250
Total capital to risk-weighted assets	10.87%	10.58%
Total capital to risk-weighted assets	$ 53,692	$ 52,347
Total capital to risk-weighted assets	8.00%	8.00%
Tier I capital to average assets	$ 61,863	$ 57,873
Tier I capital to average assets	6.65%	6.08%
Tier I capital to average assets	$ 37,237	$ 38,085
Tier I capital to average assets	4.00%	4.00%
Total capital to risk-weighted assets	$ 75,959	$ 68,530
Total capital to risk-weighted assets	11.31%	10.46%
Total capital to risk-weighted assets	$ 53,750	$ 52,436
Total capital to risk-weighted assets	8.00%	8.00%
Tier I capital to average assets	$ 54,799	$ 45,174
Tier I capital to average assets	5.87%	4.74%
Tier I capital to average assets	$ 37,370	$ 38,131
Tier I capital to average assets	4.00%	4.00%

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Note 13 - Contingencies (Details Textual)			12 Months Ended
	Jul. 16, 2013 USD ($)	Jun. 18, 2010 USD ($)	Dec. 31, 2009 USD ($)	Jun. 30, 2016 USD ($)
Signature Point Litigation [Member] | Compensatory Damages [Member]
Loss Contingency, Damages Awarded, Value	$ 1,515,000
Signature Point Litigation [Member] | Punitive Damages [Member]
Loss Contingency, Damages Awarded, Value	$ 5,500,000
Signature Point Litigation [Member]
Loss Contingency Accrual				$ 1,500,000
Loss Contingency, Estimate of Possible Loss		$ 26,000,000
AIT Laboratories Employee Stock Ownership Plan Litigation [Member]
Alleged Imprudent and Disloyal Purchase of Stock Authorized			$ 90,000,000
Loss Contingency Accrual				$ 2,100,000
Loss Contingency, Number of Plaintiffs		3