10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 2013

Commission File Number 000-52748

FIRST GUARANTY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Louisiana	26-0513559
(State or other jurisdiction incorporation or organization)	(I.R.S. Employer Identification Number)
400 East Thomas Street
Hammond, Louisiana	70401
(Address of principal executive office)	(Zip Code)
(985) 345-7685
(Telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x  No o

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

Large accelerated filer o  Accelerated filer o    Non-accelerated filer oSmaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o     No x

As of November 8, 2013 the registrant had 6,291,332 shares of $1 par value common stock outstanding.

Table of Contents
		Page
Part I.	Financial Information
Item 1.	Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012	3
	Consolidated Statements of Income for the three and nine months ended September 30, 2013 and 2012	4
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012	5
	Consolidated Statements of Shareholders' Equity for the nine months ended September 30, 2013 and 2012	6
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	35
Part II.	Other Information	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Exhibits	35
Signatures		36

2

PART I.   FINANCIAL INFORMATION

Item 1.   Consolidated Financial

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)	September 30, 2013			December 31, 2012
Assets
Cash and cash equivalents:
Cash and due from banks	$	59,583		$	83,330
Interest-earning demand deposits with banks		260			12
Federal funds sold		987			2,891
Cash and cash equivalents		60,830			86,233
Interest-earning time deposits with banks		747			747
Investment securities:
Available for sale, at fair value		483,489			602,300
Held to maturity, at cost (estimated fair value of $147,881 and $58,939, respectively)		154,112			58,943
Investment securities		637,601			661,243
		.
Federal Home Loan Bank stock, at cost		2,593			1,275
Loans held for sale		307			557
Loans, net of unearned income		689,573			629,500
Less: allowance for loan losses		10,146			10,342
Net loans		679,427			619,158
Premises and equipment, net		19,778			19,564
Goodwill		1,999			1,999
Intangible assets, net		2,155			2,413
Other real estate, net		3,689			2,394
Accrued interest receivable		6,697			6,711
Other assets		8,725			5,009
Total Assets	$	1,424,548		$	1,407,303
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand	$	191,785		$	192,232
Interest-bearing demand		336,162			348,870
Savings		65,113			63,062
Time		657,563			648,448
Total deposits		1,250,623			1,252,612
Short-term borrowings		42,457			14,746
Accrued interest payable		2,795			2,840
Long-term borrowings		650			1,100
Other liabilities		2,962			1,824
Total Liabilities		1,299,487			1,273,122
Stockholders' Equity
Preferred stock:
Series C - $1,000 par value - authorized 39,435 shares; issued and outstanding 39,435		39,435			39,435
Common stock:
$1 par value - authorized 100,600,000 shares; issued 6,294,227 shares		6,294			6,294
Surplus		39,387			39,387
Treasury stock, at cost, 2,895 shares		(54	)		(54	)
Retained earnings		45,915			43,071
Accumulated other comprehensive (loss) income		(5,916	)		6,048
Total Stockholders' Equity		125,061			134,181
Total Liabilities and Stockholders' Equity	$	1,424,548		$	1,407,303
See Notes to Consolidated Financial Statements

3

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share data)	2013			2012			2013			2012
Interest Income:
Loans (including fees)	$	9,376		$	8,903		$	27,661		$	26,537
Loans held for sale		-			-			-			1
Deposits with other banks		33			20			124			56
Securities (including FHLB stock)		3,424			4,172			10,027			15,110
Federal funds sold		-			2			1			10
Total Interest Income		12,833			13,097			37,813			41,714
Interest Expense:
Demand deposits		291			349			973			1,050
Savings deposits		8			14			33			40
Time deposits		2,450			2,782			7,441			8,905
Borrowings		39			25			114			98
Total Interest Expense		2,788			3,170			8,561			10,093
Net Interest Income		10,045			9,927			29,252			31,621
Less: Provision for loan losses		307			909			2,011			3,014
Net Interest Income after Provision for Loan Losses		9,738			9,018			27,241			28,607
Noninterest Income:
Service charges, commissions and fees		1,181			1,180			3,503			3,565
Net gains on securities		12			1,747			1,556			3,230
Net losses on sale of loans		(6	)		(20	)		(65	)		(47	)
Other		344			424			1,016			1,234
Total Noninterest Income		1,531			3,331			6,010			7,982
Noninterest Expense:
Salaries and employee benefits		3,655			3,394			10,767			10,125
Occupancy and equipment expense		981			963			2,966			2,818
Other		3,266			3,454			9,672			9,995
Total Noninterest Expense		7,902			7,811			23,405			22,938
Income Before Income Taxes		3,367			4,538			9,846			13,651
Less: Provision for income taxes		1,109			1,505			3,367			4,603
Net Income		2,258			3,033			6,479			9,048
Preferred Stock Dividends		(128	)		(493	)		(615	)		(1,479	)
Income Available to Common Shareholders	$	2,130		$	2,540		$	5,864		$	7,569
Per Common Share:
Earnings	$	0.34		$	0.40		$	0.93		$	1.20
Cash dividends paid	$	0.16		$	0.16		$	0.48		$	0.48
Weighted Average Common Shares Outstanding		6,291,332			6,292,479			6,291,332			6,293,367
See Notes to Consolidated Financial Statements

4

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2013			2012			2013			2012
Net Income	$	2,258		$	3,033		$	6,479		$	9,048
Other comprehensive (loss) income:
Unrealized (losses) gains on securities:
Unrealized holding (losses) gains arising during the period		(200	)		4,075			(16,570	)		8,332
Reclassification adjustments for gains included in net income		(12	)		(1,747	)		(1,556	)		(3,230	)
Change in unrealized (losses) gains on securities		(212	)		2,328			(18,126	)		5,102
Tax impact		72			(792	)		6,162			(1,735	)
Other comprehensive (loss) income, net of tax		(140	)		1,536			(11,964	)		3,367
Comprehensive Income (Loss)	$	2,118		$	4,569		$	(5,485	)	$	12,415
See Notes to Consolidated Financial Statements

5

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)
	Series C												Accumulated
	Preferred		Common										Other
	Stock		Stock				Treasury			Retained			Comprehensive
(in thousands, except per share data)	$1,000 Par		$1 Par		Surplus		Stock			Earnings			Income/(Loss)			Total
Balance December 31, 2011	$	39,435	$	6,294	$	39,387	$	-		$	37,019		$	4,467		$	126,602
Net income		-		-		-		-			9,048			-			9,048
Other comprehensive income				-		-		-			-			3,367			3,367
Treasury shares purchased, at cost, 2,895 shares		-		-		-		(54	)		-			-			(54	)
Cash dividends on common stock ($0.48 per share)		-		-		-		-			(3,028	)		-			(3,028	)
Preferred stock dividends		-		-		-		-			(1,479	)		-			(1,479	)
Balance September 30, 2012 (unaudited)	$	39,435	$	6,294	$	39,387	$	(54	)	$	41,560		$	7,834		$	134,456
Balance December 31, 2012	$	39,435	$	6,294	$	39,387	$	(54	)	$	43,071		$	6,048		$	134,181
Net Income		-		-		-		-			6,479			-			6,479
Other comprehensive income		-		-		-		-			-			(11,964	)		(11,964	)
Cash dividends on common stock ($0.48 per share)		-		-		-		-			(3,020	)		-			(3,020	)
Preferred stock dividends		-		-		-		-			(615	)		-			(615	)
Balance September 30, 2013 (unaudited)	$	39,435	$	6,294	$	39,387	$	(54	)	$	45,915		$	(5,916	)	$	125,061
See Notes to Consolidated Financial Statements

6

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
	Nine Months Ended September 30,
(in thousands)	2013			2012
Cash Flows From Operating Activities
Net income	$	6,479		$	9,048
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		2,011			3,014
Depreciation and amortization		1,581			1,561
Amortization of investments		1,594			1,419
Net gains on securities		(1,556	)		(3,230	)
Net losses on sale of assets		56			138
ORE writedowns and losses on disposition		194			937
FHLB stock dividends		(2	)		(1	)
Net increase in loans held for sale		250			(80	)
Change in other assets and liabilities, net		3,446			1,809
Net Cash Provided By Operating Activities		14,053			14,615
Cash Flows From Investing Activities
Funds invested in certificates of deposit		-			(747	)
Proceeds from maturities and calls of HTM securities		12,414			128,640
Proceeds from maturities, calls and sales of AFS securities		579,284			621,340
Funds invested in HTM securities		(107,616	)		(40,901	)
Funds invested in AFS securities		(478,595	)		(713,748	)
Proceeds from redemption of Federal Home Loan Bank stock		1,252			3,441
Funds invested in Federal Home Loan Bank stock		(2,568	)		(3,940	)
Net increase in loans		(64,665	)		(39,666	)
Purchase of premises and equipment		(1,495	)		(1,214	)
Proceeds from sales of premises and equipment		-			168
Proceeds from sales of other real estate owned		896			4,555
Net Cash Used In Investing Activities		(61,093	)		(42,072	)
Cash Flows From Financing Activities
Net decrease in deposits		(1,989	)		(1,132	)
Net increase (decrease) in short-term borrowings		27,711			(449	)
Repayment of long-term borrowings		(450	)		(1,950	)
Purchase of treasury stock		-			(54	)
Dividends paid		(3,635	)		(4,507	)
Net Cash Provided By (Used In) Financing Activities		21,637			(8,092	)
Net Decrease In Cash and Cash Equivalents		(25,403	)		(35,549	)
Cash and Cash Equivalents at the Beginning of the Period		86,233			112,442
Cash and Cash Equivalents at the End of the Period	$	60,830		$	76,893
Noncash Activities:
Loans transferred to foreclosed assets	$	2,385		$	4,218
Cash Paid During The Period:
Interest on deposits and borrowed funds	$	8,606		$	10,467
Income taxes	$	1,850		$	4,900
See Notes to the Consolidated Financial Statements.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. The consolidated financial statements and the footnotes of First Guaranty Bancshares, Inc. (the “Company”) thereto should be read in conjunction with the audited financial statements and note disclosures for the Company previously filed with the Securities and Exchange Commission in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2012.

The consolidated financial statements include the accounts of First Guaranty Bancshares, Inc. and its wholly owned subsidiary First Guaranty Bank. All significant intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair presentation of the consolidated financial statements. Those adjustments are of a normal recurring nature. The results of operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results expected for the full year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are susceptible to significant change in the near term are the allowance for loan losses, valuation of goodwill, intangible assets and other purchase accounting adjustments.

Note 2.  Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-02, “Comprehensive Income (Topic 220):  Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (AOCI).”  The amendment requires an entity to present the reclassification adjustments out of AOCI and into net income for each component reported. This update is intended to supplement changes made in 2012 to increase the prominence of items reported in other comprehensive income. The standard became effective for the Company on January 1, 2013.  The adoption of this guidance resulted in the disclosures in Note 9 below and did not have a material impact upon the Company’s financial statements.

8

Note 3. Securities

A summary comparison of securities by type at September 30, 2013 and December 31, 2012 is shown below.

	September 30, 2013									December 31, 2012
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale:
U.S Treasuries	$	25,000	$	-	$	-		$	25,000	$	20,000	$	-	$	-		$	20,000
U.S. Government Agencies		302,805		-		(11,858	)		290,947		392,616		751		(278	)		393,089
Corporate debt securities		146,248		4,053		(1,477	)		148,824		159,488		8,024		(401	)		167,111
Mutual funds or other equity securities		2,064		-		-			2,064		2,564		23		-			2,587
Municipal bonds		16,339		336		(21	)		16,654		18,481		1,032		-			19,513
Total available for sale securities	$	492,456	$	4,389	$	(13,356	)	$	483,489	$	593,149	$	9,830	$	(679	)	$	602,300
Held to maturity:
U.S. Government Agencies	$	89,469	$	16	$	(4,386	)	$	85,099	$	58,943	$	175	$	(179	)	$	58,939
Mortgage-backed securities		64,643		-		(1,861	)		62,782		-		-		-			-
Total held to maturity securities	$	154,112	$	16	$	(6,247	)	$	147,881	$	58,943	$	175	$	(179	)	$	58,939

The scheduled maturities of securities at September 30, 2013, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities due to call or prepayments. Mortgage-backed securities are not due at a single maturity because of amortization and potential prepayment of the underlying mortgages. For this reason they are presented separately in the maturity table below.

	September 30, 2013
(in thousands)	Amortized Cost		Fair Value
Available For Sale:
Due in one year or less	$	33,172	$	33,280
Due after one year through five years		181,967		182,023
Due after five years through 10 years		234,430		227,680
Over 10 years		42,887		40,506
Total available for sale securities	$	492,456	$	483,489
Held to Maturity:
Due in one year or less	$	-	$	-
Due after one year through five years		-		-
Due after five years through 10 years		89,469		85,099
Over 10 years		-		-
Subtotal		89,469		85,099
Mortgage-backed securities		64,643		62,782
Total held to maturity securities	$	154,112	$	147,881

At September 30, 2013 $502.4 million of the Company's securities were pledged to secure public fund deposits.

Proceeds from sales of securities classified as available for sale amounted to $1.0 million and $15.6 million for the three month period ended September 30, 2013 and 2012, respectively. Proceeds from sales of securities classified as available for sale amounted to $18.2 million and $61.3 million for the nine month period ended September 30, 2013 and 2012, respectively. Gross realized gains on sales of available for sale securities were $3,000 and $1.6 million for the three month period ended September 30, 2013 and 2012, respectively. Gross realized gains on sales of available for sale securities were $1.6 million and $2.9 million for the nine month period ended September 30, 2013 and 2012, respectively. There were no realized losses on available for sale securities for the three months period ended September 30, 2013 or 2012. There were no realized losses on available for sale securities for the nine month period ended September 30, 2013. Gross realized losses on available for sale securities were $7,000 for the nine month period ended September 30, 2012.

9

The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at September 30, 2013.

	Less Than 12 Months						12 Months or More						Total
(in thousands)	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasuries	3	$	25,000	$	-		-	$	-	$	-		3	$	25,000	$	-
U.S. Government agencies	85		288,187		(11,618	)	12		2,760		(240	)	97		290,947		(11,858	)
Corporate debt securities	149		38,718		(1,276	)	1		2,559		(201	)	150		41,277		(1,477	)
Mutual funds or other equity securities	-		-		-		-		-		-		-		-		-
Municipals	1		970		(21	)	-		-		-		1		970		(21	)
Total available for sale	238	$	352,875	$	(12,915	)	13	$	5,319	$	(441	)	251	$	358,194	$	(13,356	)
Held to maturity:
U.S. Government agencies	20	$	80,083	$	(4,386	)	-	$	-	$	-		20	$	80,083	$	(4,386	)
Mortgage-backed securities	26		62,782		(1,861	)	-		-		-		26		62,782		(1,861	)
Total held to maturity	46	$	142,865	$	(6,247	)	-	$	-	$	-		46	$	142,865	$	(6,247	)

The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at December 31, 2012.

	Less Than 12 Months						12 Months or More						Total
(in thousands)	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasuries	1	$	20,000	$	-		-	$	-	$	-		1	$	20,000	$	-
U.S. Government agencies	34		119,952		(278	)	-		-		-		34		119,952		(278	)
Corporate debt securities	59		13,222		(183	)	7		2,211		(218	)	66		15,433		(401	)
Mutual funds or other equity securities	-		-		-		-		-		-		-		-		-
Municipals	-		-		-		-		-		-		-		-		-
Total available for sale	94	$	153,174	$	(461	)	7	$	2,211	$	(218	)	101	$	155,385	$	(679	)
Held to maturity:
U.S. Government agencies	6	$	24,118	$	(179	)	-	$	-	$	-		6	$	24,118	$	(179	)
Mortgage-backed securities	-		-		-		-		-		-		-		-		-
Total held to maturity	6	$	24,118	$	(179	)	-	$	-	$	-		6	$	24,118	$	(179	)

Securities are evaluated for other-than-temporary impairment at least quarterly and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, (iii) the recovery of contractual principal and interest and (iv) 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.

The amount of investment securities issued by U.S. Government and Government sponsored agencies with unrealized losses and the amount of unrealized losses on those investment securities are the result of changes in market interest rates. The Company has the ability and intent to hold these securities until recovery, which may be until maturity.

The corporate debt securities consist primarily of corporate bonds issued by financial, insurance, utility, manufacturing, industrial, consumer products and oil and gas organizations. The Company believes that each of the issuers will be able to fulfill the obligations of these securities based on evaluations described above. The Company has the ability and intent to hold these securities until they recover, which could be at their maturity dates.

The Company believes that the securities with unrealized losses reflect impairment that is temporary and there are currently no securities with other-than-temporary impairment.

At September 30, 2013, the Company's exposure to bond issuers that exceeded 10% of stockholders’ equity is below:

	At September 30, 2013
(in thousands)	Amortized Cost		Fair Value
U.S. Treasuries	$	25,000	$	25,000
Federal Home Loan Bank (FHLB)		144,584		137,993
Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC)		51,276		49,023
Federal National Mortgage Association (Fannie Mae-FNMA)		139,417		134,664
Federal Farm Credit Bank (FFCB)		121,640		117,148
Total	$	481,917	$	463,828

10

Note 4. Loans

The following table summarizes the components of the Company's loan portfolio as of September 30, 2013 and December 31, 2012:

	September 30, 2013					December 31, 2012
(in thousands except for %)	Balance			As % of Category		Balance			As % of Category
Real Estate:
Construction & land development	$	47,457		6.9	%	$	44,856		7.1	%
Farmland		11,425		1.7	%		11,182		1.8	%
1- 4 Family		101,321		14.7	%		87,473		13.8	%
Multifamily		13,962		2.0	%		14,855		2.4	%
Non-farm non-residential		326,818		47.2	%		312,716		49.6	%
Total Real Estate		500,983		72.5	%		471,082		74.7	%
Non-Real Estate:
Agricultural		28,457		4.1	%		18,476		2.9	%
Commercial and industrial		139,455		20.2	%		117,425		18.6	%
Consumer and other		22,333		3.2	%		23,758		3.8	%
Total Non-Real Estate		190,245		27.5	%		159,659		25.3	%
Total loans before unearned income		691,228		100.0	%		630,741		100.0	%
Unearned income		(1,655	)				(1,241	)
Total loans net of unearned income	$	689,573				$	629,500

The following table summarizes fixed and floating rate loans by contractual maturity as of September 30, 2013 and December 31, 2012, including loans held for sale, unadjusted for scheduled principal payments, prepayments, or repricing opportunities. The average life of the loan portfolio may be substantially less than the contractual terms when these adjustments are considered.

	September 30, 2013							December 31, 2012
(in thousands)	Fixed		Floating		Total			Fixed		Floating		Total
One year or less	$	76,175	$	79,228	$	155,403		$	89,117	$	107,176	$	196,293
One to five years		198,793		199,507		398,300			147,896		175,743		323,639
Five to 15 years		64,461		27,467		91,928			33,770		42,595		76,365
Over 15 years		8,664		22,742		31,406			7,829		5,927		13,756
Subtotal	$	348,093	$	328,944		677,037		$	278,612	$	331,441		610,053
Nonaccrual loans						14,498							20,688
Total loans before unearned income						691,535							630,741
Unearned income						(1,655	)						(1,241	)
Total loans net of unearned income					$	689,880						$	629,500

The majority of floating rate loans have interest rate floors. As of September 30, 2013 and December 31, 2012 floating rate loans at the floor rate were $222.6 million and $231.7 million, respectively. Nonaccrual loans have been excluded from the calculation.

The following tables present the age analysis of past due loans at September 30, 2013 and December 31, 2012:

	September 30, 2013
(in thousands)	30-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans			Recorded Investment  90 Days Accruing
Real Estate:
Construction & land development	$	396	$	73	$	469	$	46,988	$	47,457		$	-
Farmland		35		341		376		11,049		11,425			-
1 - 4 family		1,588		4,283		5,871		95,450		101,321			60
Multifamily		-		-		-		13,962		13,962			-
Non-farm non-residential		1,081		7,522		8,603		318,215		326,818			-
Total Real Estate		3,100		12,219		15,319		485,664		500,983			60
Non-Real Estate:
Agricultural		316		487		803		27,654		28,457			25
Commercial and industrial		148		1,877		2,025		137,430		139,455			-
Consumer and other		161		-		161		22,172		22,333			-
Total Non-Real Estate		625		2,364		2,989		187,256		190,245			25
Total loans before unearned income	$	3,725	$	14,583	$	18,308	$	672,920		691,228		$	85
Less: unearned income										(1,655	)
Total loans net of unearned income									$	689,573

11

	As of December 31, 2012
(in thousands)	30-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans			Recorded Investment 90 Days Accruing
Real Estate:
Construction & land development	$	228	$	854	$	1,082	$	43,774	$	44,856		$	-
Farmland		96		312		408		10,774		11,182			-
1 - 4 family		4,895		5,058		9,953		77,520		87,473			455
Multifamily		156		-		156		14,699		14,855			-
Non-farm non-residential		1,137		11,571		12,708		300,008		312,716			-
Total Real Estate		6,512		17,795		24,307		446,775		471,082			455
Non-Real Estate:
Agricultural		-		512		512		17,964		18,476			-
Commercial and industrial		60		2,831		2,891		114,534		117,425			-
Consumer and other		115		5		120		23,638		23,758			-
Total Non-Real Estate		175		3,348		3,523		156,136		159,659			-
Total loans before unearned income	$	6,687	$	21,143	$	27,830	$	602,911		630,741		$	455
Unearned income										(1,241	)
Total loans net of unearned income									$	629,500

Credit quality of the Company’s loan portfolio is monitored on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed on a monthly basis to identify nonaccrual loans.

The following is a summary of nonaccrual loans by class at September 30, 2013 and December 31, 2012:

(in thousands)	As of September 30, 2013		As of December 31, 2012
Real Estate:
Construction & land development	$	73	$	854
Farmland		341		312
1 - 4 family		4,223		4,603
Multifamily		-		-
Non-farm non-residential		7,522		11,571
Total Real Estate		12,159		17,340
Non-Real Estate:
Agricultural		462		512
Commercial and industrial		1,877		2,831
Consumer and other		-		5
Total Non-Real Estate		2,339		3,348
Total Nonaccrual Loans	$	14,498	$	20,688

12

The Company’s credit quality indicators are pass, special mention, substandard, and doubtful.

Loans included in the pass category are performing loans with satisfactory debt coverage ratios, collateral, payment history, and meet documentation requirements.

Special mention loans have potential weaknesses that deserve close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Nonfinancial reasons include management problems, pending litigation, an ineffective loan agreement or other material structural weakness, and any other significant deviation from prudent lending practices.

A substandard loan is inadequately protected by the paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. These loans require more intensive supervision. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigates. For some substandard loans, the likelihood of full collection of interest and principal may be in doubt and interest is no longer accrued. For consumer loans that are 90 days or more past due or that are nonaccrual are considered substandard.

Doubtful loans have the weaknesses of substandard loans with the additional characteristic that the weaknesses make collection or liquidation in full questionable and there is a high probability of loss based on currently existing facts, conditions and values.

The following table identifies the credit exposure of the loan portfolio by specific credit ratings as of the dates indicated:

	As of September 30, 2013											As of December 31, 2012
(in thousands)	Pass		Special Mention		Substandard		Doubtful		Total			Pass		Special Mention		Substandard		Doubtful		Total
Real Estate:
Construction & land development	$	39,485	$	1,366	$	6,606	$	-	$	47,457		$	29,654	$	5,595	$	9,607	$	-	$	44,856
Farmland		11,326		-		99		-		11,425			11,059		-		123		-		11,182
1 - 4 family		86,797		3,948		10,576		-		101,321			71,240		7,117		9,116		-		87,473
Multifamily		5,913		153		7,896		-		13,962			6,746		806		7,303		-		14,855
Non-farm non-residential		296,553		9,397		20,868		-		326,818			274,970		10,605		27,141		-		312,716
Total Real Estate		440,074		14,864		46,045		-		500,983			393,669		24,123		53,290		-		471,082
Non-Real Estate:
Agricultural		28,168		12		277		-		28,457			17,969		75		432		-		18,476
Commercial and industrial		138,781		100		574		-		139,455			108,590		3,834		5,001		-		117,425
Consumer and other		22,054		209		70		-		22,333			23,560		140		58		-		23,758
Total Non-Real Estate		189,003		321		921		-		190,245			150,119		4,049		5,491		-		159,659
Total loans before unearned income	$	629,077	$	15,185	$	46,966	$	-		691,228		$	543,788	$	28,172	$	58,781	$	-		630,741
Unearned income										(1,655	)										(1,241	)
Total loans net of unearned income									$	689,573										$	629,500

13

Note 5. Allowance for Loan Losses

The allowance for loan losses is reviewed by on a monthly basis and additions thereto are recorded pursuant to the results of such reviews. In assessing the allowance, several internal and external factors that might impact the performance of individual loans are considered. These factors include, but are not limited to, economic conditions and their impact upon borrowers' ability to repay loans, respective industry trends, borrower estimates and independent appraisals. Periodic changes in these factors impact the assessment of each loan and its overall impact on the allowance for loan losses.

The monitoring of credit risk also extends to unfunded credit commitments, such as unused commercial credit lines and letters of credit. A reserve is established as needed for estimates of probable losses on such commitments.

A summary of changes in the allowance for loan losses, by loan type, for the nine months ended September 30, 2013 and 2012 are as follows:

	Allowance for Credit Losses
	As of September 30,
	2013												2012
(in thousands)	Beginning Allowance {12/31/12}		Charge-offs			Recoveries		Provision			Ending Allowance {9/30/13}		Beginning Allowance {12/31/11}		Charge-offs			Recoveries		Provision			Ending Allowance{9/30/12}
Real Estate:
Construction & land development	$	1,098	$	(233	)	$	3	$	384		$	1,252	$	1,002	$	(58	)	$	13	$	228		$	1,185
Farmland		50		-			140		(154	)		36		65		-			1		15			81
1 - 4 family		2,239		(185	)		35		169			2,258		1,917		(1,409	)		27		1,547			2,082
Multifamily		284		-			-		267			551		780		(187			-		(162	)		431
Non-farm non-residential		3,666		(1,053	)		3		543			3,159		2,980		(459	)		106		818			3,445
Total real estate		7,337		(1,471	)		181		1,209			7,256		6,744		(2,113	)		147		2,446			7,224
Non-Real Estate:
Agricultural		64		(41	)		4		23			50		125		(27	)		1		(40	)		59
Commercial and industrial		2,488		(942	)		63		748			2,357		1,407		(455	)		212		508			1,672
Consumer and other		233		(192	)		191		(41	)		191		314		(356	)		205		137			300
Unallocated		220		-			-		72			292		289		-			-		(37	)		252
Total Non-Real Estate		3,005		(1,175	)		258		802			2,890		2,135		(838	)		418		568			2,283
Total	$	10,342	$	(2,646	)	$	439	$	2,011		$	10,146	$	8,879	$	(2,951	)	$	565	$	3,014		$	9,507

Negative provisions are caused by changes in the composition and credit quality of the loan portfolio.  The result is an allocation of the loan loss reserve from one category to another.

14

The following table presents the allowance and loans, by loan type, that are individually and collectively evaluated for impairment for the period indicated.

	Allowance for Impaired Loans
	As of September 30, 2013
(in thousands)	Allowance Individually Evaluated for Impairment		Allowance Collectively Evaluated for Impairment		Total Allowance for Credit Losses		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Total Loans before Unearned Income
Real Estate:
Construction & land development	$	910	$	342	$	1,252	$	6,448	$	41,009	$	47,457
Farmland		-		36		36		-		11,425		11,425
1 - 4 family		19		2,239		2,258		2,874		98,447		101,321
Multifamily		522		29		551		7,896		6,066		13,962
Non-farm non-residential		679		2,480		3,159		19,401		307,417		326,818
Total Real Estate		2,130		5,126		7,256		36,619		464,364		500,983
Non-Real Estate:
Agricultural		-		50		50		-		28,457		28,457
Commercial and industrial		-		2,357		2,357		-		139,455		139,455
Consumer and other		-		191		191		-		22,333		22,333
Unallocated		-		292		292
Total Non-Real Estate		-		2,890		2,890		-		190,245		190,245
Total	$	2,130	$	8,016	$	10,146	$	36,619	$	654,609		691,228
Unearned Income												(1,655	)
Total loans net of unearned income											$	689,573

	Allowance for Impaired Loans
	As of December 31, 2012
(in thousands)	Allowance Individually Evaluated for Impairment		Allowance Collectively Evaluated for Impairment		Total Allowance for Credit Losses		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Total Loans before Unearned Income
Real Estate:
Construction & land development	$	713	$	385	$	1,098	$	8,865	$	35,991	$	44,856
Farmland		-		50		50		-		11,182		11,182
1 - 4 family		91		2,148		2,239		2,126		85,347		87,473
Multifamily		244		40		284		7,302		7,553		14,855
Non-farm non-residential		1,535		2,131		3,666		25,904		286,812		312,716
Total Real Estate		2,583		4,754		7,337		44,197		426,885		471,082
Non-Real Estate:
Agricultural		-		64		64		-		18,476		18,476
Commercial and industrial		507		1,981		2,488		4,390		113,035		117,425
Consumer and other		-		233		233		-		23,758		23,758
Unallocated		-		220		220
Total Non-Real Estate		507		2,498		3,005		4,390		155,269		159,659
Total	$	3,090	$	7,252	$	10,342	$	48,587	$	582,154		630,741
Unearned Income												(1,241	)
Total loans net of unearned income											$	629,500

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Payment status, collateral value and the probability of collecting scheduled principal and interest payments when due are considered in evaluating loan impairment. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

The significance of payment delays and payment shortfalls are considered on a case-by-case basis; all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed are factors considered. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. This process is applied to impaired loan relationships in excess of $250,000.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, individual consumer and residential loans are not separately identified for impairment disclosures, unless such loans are the subject of a restructuring agreement.

15

The following is a summary of impaired loans by class as of the date indicated:

	As of September 30, 2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Cash Basis
Impaired Loans with no related allowance:
Real Estate:
Construction & land development	$	-	$	-	$	-	$	801	$	35	$	36
Farmland		-		-		-		-		-		-
1 - 4 family		441		440		-		483		19		24
Multifamily		619		650		-		485		47		53
Non-farm non-residential		6,049		10,188		-		10,020		437		422
Total Real Estate		7,109		11,278		-		11,789		538		535
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		-		-		-		1,968		103		131
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		1,968		103		131
Total Impaired Loans with no related allowance		7,109		11,278		-		13,757		641		666
Impaired Loans with an allowance recorded:
Real Estate:
Construction & land development		6,448		5,593		910		6,387		299		277
Farmland		-		-		-		-		-		-
1 - 4 family		2,433		8,219		19		1,378		89		71
Multifamily		7,277		7,301		522		7,294		313		323
Non-farm non-residential		13,352		6,781		679		12,924		444		419
Total Real Estate		29,510		27,894		2,130		27,983		1,145		1,090
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		-		-		-		-		-		-
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		-		-		-
Total Impaired Loans with an allowance recorded		29,510		27,894		2,130		27,983		1,145		1,090
Total Impaired Loans	$	36,619	$	39,172	$	2,130	$	41,740	$	1,786	$	1,756

16

The following is a summary of impaired loans by class as of the date indicated:

	As of December 31, 2012
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Cash Basis
Impaired Loans with no related allowance:
Real Estate:
Construction & land development	$	3,177	$	3,177	$	-	$	4,012	$	414	$	404
Farmland		-		-		-		-		-		-
1 - 4 family		1,516		2,176		-		2,102		162		73
Multifamily		1,351		1,351		-		1,355		103		110
Non-farm non-residential		2,936		2,982		-		5,963		427		287
Total Real Estate		8,980		9,686		-		13,432		1,106		874
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		3,734		3,734		-		1,098		117		87
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		3,734		3,734		-		1,098		117		87
Total Impaired Loans with no related allowance		12,714		13,420		-		14,530		1,223		961
Impaired Loans with an allowance recorded:
Real Estate:
Construction & land development		5,688		5,688		713		3,677		406		418
Farmland		-		-		-		-		-		-
1 - 4 family		610		776		91		732		70		67
Multifamily		5,951		5,951		244		5,998		597		593
Non-farm non-residential		22,968		25,720		1,535		24,669		2,616		2,711
Total Real Estate		35,217		38,135		2,583		35,076		3,689		3,789
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		656		656		507		786		94		-
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		656		656		507		786		94		-
Total Impaired Loans with an allowance recorded		35,873		38,791		3,090		35,862		3,783		3,789
Total Impaired Loans	$	48,587	$	52,211	$	3,090	$	50,392	$	5,006	$	4,750

17

Troubled Debt Restructurings

A Troubled Debt Restructuring ("TDR") is considered such if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider. The modifications to the Company's TDRs were concessions on the interest rate charged. The effect of the modifications to the Company was a reduction in interest income. These loans have an allocated reserve in the Company's reserve for loan losses. The Company has not restructured any loans that are considered troubled debt restructurings in the prior twelve months.

The following table identifies the Troubled Debt Restructurings as of September 30, 2013 and December 31, 2012:

Troubled Debt Restructurings	September 30, 2013								December 31, 2012
	Accruing Loans								Accruing Loans
(in thousands)	Current		30-89 Days Past Due		Nonaccrual		Total TDRs		Current		30-89 Days Past Due		Nonaccrual		Total TDRs
Real Estate:
Construction & land development	$	-	$	-	$	-	$	-	$	2,602	$	-	$	-	$	2,602
Farmland		-		-		-		-		-		-		-		-
1-4 Family		-		-		-		-		-		-		1,296		1,296
Multifamily		5,951		-		-		5,951		5,951		-		-		5,951
Non-farm non residential		3,007		-		324		3,331		6,103		-		678		6,781
Total Real Estate		8,958		-		324		9,282		14,656		-		1,974		16,630
Non-Real Estate:
Agricultural		-		-		-		-		-		-		-		-
Commercial and industrial		-		-		-		-		-		-		-		-
Consumer and other		-		-		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		-		-		-		-		-
Total	$	8,958	$	-	$	324	$	9,282	$	14,656	$	-	$	1,974	$	16,630

The following table discloses TDR activity for the nine months ended September 30, 2013.

	Trouble Debt Restructured Loans Activity
	Nine Months Ended September 30, 2013
(in thousands)	Beginning balance {December 31, 2012}		New TDRs		Charge-offs post-modification			Transferred to ORE			Paydowns		Construction to permanent financing		Restructured to market terms			Ending balance {September 30, 2013}
Real Estate:
Construction & land development	$	2,602	$	-	$	-		$	-		$	-	$	-	$	(2,602	)	$	-
Farmland		-		-		-			-			-		-		-			-
1 - 4 family		1,296		-		-			(1,075	)		-		-		(221	)		-
Multifamily		5,951		-		-			-			-		-		-			5,951
Non-farm non-residential		6,781		-		(355	)		-			-		-		(3,095	)		3,331
Total Real Estate		16,630		-		(355	)		(1,075	)		-		-		(5,918	)		9,282
Non-Real Estate:
Agricultural		-		-		-			-			-		-		-			-
Commercial and industrial		-		-		-			-			-		-		-			-
Consumer and other		-		-		-			-			-		-		-			-
Total Non-Real Estate		-		-		-			-			-		-		-			-
Total Impaired Loans with no related allowance	$	16,630	$	-	$	(355	)	$	(1,075	)	$	-	$	-	$	(5,918	)	$	9,282

The Company has made no commitments to lend additional funds to debtors owing receivables whose terms have been modified in a troubled debt restructuring at September 30, 2013.

18

Note 6. Goodwill and Other Intangible Assets

Goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to impairment testing. Other intangible assets continue to be amortized over their useful lives. The Company's goodwill is the difference in purchase price over the fair value of net assets acquired from the acquisition of Homestead Bancorp in 2007. Goodwill totaled $2.0 million at September 30, 2013 and December 31, 2012. No impairment charges have been recognized on the Company's intangible assets.Mortgage servicing rights totaled $0.1 million at September 30, 2013 compared to $0.2 million at December 31, 2012. Other intangible assets recorded include core deposit intangibles, which are subject to amortization. The weighted-average amortization period remaining for the Company's core deposit intangibles is 6.6 years. The core deposits intangible reflect the value of deposit relationships, including the beneficial rates, which arose from acquisitions.

Note 7. Other Real Estate (ORE)

Other real estate owned consists of the following at the dates indicated:

(in thousands)	September 30, 2013		December 31, 2012
Real Estate Owned Acquired by Foreclosure:
Residential	$	1,968	$	1,186
Construction & land development		780		1,083
Non-farm non-residential		941		125
Total Other Real Estate Owned and Foreclosed Property	$	3,689	$	2,394

Note 8. Commitments and Contingencies

Off-balance sheet commitments

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Balance Sheets. The contract or notional amounts of those instruments reflect the extent of the involvement in particular classes of financial instruments.

The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and commercial letters of credit is represented by the contractual notional amount of those instruments. The same credit policies are used in making commitments and conditional obligations as it does for balance sheet instruments. Unless otherwise noted, collateral or other security is not required to support financial instruments with credit risk.

Below is a summary of the notional amounts of the financial instruments with off-balance sheet risk at September 30, 2013 and December 31, 2012:

Contract Amount
(in thousands)	September 30, 2013		December 31, 2012
Commitments to Extend Credit	$	40,734	$	26,775
Unfunded Commitments under lines of credit	$	85,700	$	71,423
Commercial and Standby letters of credit	$	5,405	$	5,470

Litigation

The nature of the Company’s business ordinarily results in a certain amount of claims, litigation and legal and administrative cases, all of which are considered incidental to the normal conduct of business. When the Company determines it has defenses to the claims asserted, it defends itself. The Company will consider settlement of cases when it is in the best interests of both the Company and its shareholders.

While the final outcome of legal proceedings is inherently uncertain, based on information currently available, any incremental liability arising from the Company’s legal proceedings will not have a material adverse effect on the Company’s financial position.

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Note 9. Accumulated Other Comprehensive Income

The following table details the changes in the single component of accumulated other comprehensive income for the nine months ended September 30, 2013:

(in thousands)	Unrealized (Loss) Gain on Securities Available for Sale
Accumulated Other Comprehensive (Loss) Income:
Balance December 31, 2012	$	6,048
Reclassification adjustments to net income:
Realized gains on securities		(1,556	)
Provision for income taxes		541
Unrealized losses arising during the period, net of tax		(10,949	)
Balance September 30, 2013	$	(5,916	)

Note 10. Fair Value

The fair value of a financial instrument is the current amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Valuation techniques use certain inputs to arrive at fair value. Inputs to valuation techniques are the assumptions that market participants would use in pricing the asset or liability. They may be observable or unobservable. The Company uses a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Inputs – Unadjusted quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds or credit risks) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value follows, as well as the classification of such instruments within the valuation hierarchy.

Securities available for sale. Securities are classified within Level 1 where quoted market prices are available in an active market. Inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices are unavailable, fair value is estimated using quoted prices of securities with similar characteristics, at which point the securities would be classified within Level 2 of the hierarchy. Securities classified within Level 3 in the Company's portfolio include municipal bonds and one preferred equity security.

Impaired loans. Loans are measured for impairment using the methods permitted by ASC Topic 310. Fair value of impaired loans is measured by either the loan's obtainable market price, if available (Level 1), the fair value of the collateral if the loan is collateral dependent (Level 2), or the present value of expected future cash flows, discounted at the specific loan's effective interest rate (Level 3). Fair value of the collateral is determined by appraisals or by independent valuation.

Other real estate owned. Properties are recorded at the balance of the loan or at estimated fair value less estimated selling costs, whichever is less, at the date acquired. Fair values of other real estate owned ("OREO") are determined by sales agreement or appraisal, and costs to sell are based on estimation per the terms and conditions of the sales agreement or amounts commonly used in real estate transactions. Inputs include appraisal values on the properties or recent sales activity for similar assets in the property’s market, and thus OREO measured at fair value would be classified within Level 2 of the hierarchy.

Certain non-financial assets and non-financial liabilities are measured at fair value on a non-recurring basis including assets and liabilities related to reporting units measured at fair value in the testing of goodwill impairment, as well as intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment.

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The following table summarizes financial assets measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

(in thousands)	September 30, 2013		December 31, 2012
Fair Value Measurements Using: Available for Sale Securities
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	25,500	$	20,522
Significant Other Observable Inputs (Level 2)		450,654		573,071
Significant Unobservable Inputs (Level 3)		7,335		8,707
Securities available for sale measured at fair value	$	483,489	$	602,300

The Company's valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While the methodologies used are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value.

There were no transfers into Level 1 during the first nine months of 2013. One Government Agency security totaling $10.0 million was transferred from Level 1 into Level 2 because the security did not trade on the pricing date and quoted pricing for a similar asset in an active market was used.

The change in Level 3 securities available for sale from December 31, 2012 was due to the sale of a Level 3 security totaling $0.5 million and principal payments on municipal bonds totaling $0.9 million.

The following table measures financial assets and financial liabilities measured at fair value on a non-recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value:

(in thousands)	At September 30, 2013		At December 31, 2012
Fair Value Measurements Using: Impaired Loans
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	-	$	-
Significant Other Observable Inputs (Level 2)		5,215		8,563
Significant Unobservable Inputs (Level 3)		24,295		27,310
Impaired loans measured at fair value	$	29,510	$	35,873
Fair Value Measurements Using: Other Real Estate Owned
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	-	$	-
Significant Other Observable Inputs (Level 2)		3,689		2,394
Significant Unobservable Inputs (Level 3)		-		-
Other real estate owned measured at fair value	$	3,689	$	2,394

ASC 825-10 provides the Company with an option to report selected financial assets and liabilities at fair value. The fair value option established by this statement permits the Company to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each reporting date subsequent to implementation.

The Company has chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles generally accepted in the United States, and as such has not included any gains or losses in earnings for the nine months ended September 30, 2013 or 2012.

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

The following management discussion and analysis is intended to highlight the significant factors affecting the Company's financial condition and results of operations presented in the consolidated financial statements included in this Form 10-Q. This discussion is designed to provide readers with a more comprehensive view of the operating results and financial position than would be obtained from reading the consolidated financial statements alone. Reference should be made to those statements for an understanding of the following review and analysis. The financial data at September 30, 2013 and for the nine months ended September 30, 2013 and 2012 have been derived from unaudited consolidated financial statements and include, in the opinion of management, all adjustments (consisting of normal recurring accruals and provisions) necessary to present fairly the Company's financial position and results of operations for such periods.

First Guaranty Bancshares, Inc. is a bank holding company headquartered in Hammond, LA with one wholly owned subsidiary, First Guaranty Bank. First Guaranty Bank is a Louisiana state chartered commercial bank with 21 banking facilities including one drive-up only facility, located throughout Southeast, Southwest and North Louisiana. The Company emphasizes personal relationships and localized decision making to ensure that products and services are matched to customer needs. The Company competes for business principally on the basis of personal service to customers, customer access to officers and directors and competitive interest rates and fees.

Special Note Regarding Forward-Looking Statements

Congress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about a Company's anticipated future financial performance. This act provides a safe harbor for such disclosure, which protects us from unwarranted litigation, if actual results are different from Management expectations. This discussion and analysis contains forward-looking statements and reflects Management’s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. The words “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of factors and uncertainties, including, changes in general economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate acquired entities, if any; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board; changes in our organization, compensation and benefit plans; changes in our financial condition or results of operations that reduce capital available to pay dividends; and changes in the financial condition or future prospects of issuers of securities that we own, which could cause our actual results and experience to differ from the anticipated results and expectations, expressed in such forward-looking statements. 

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Three and Nine months Financial Overview 2013

Financial highlights for the three and nine months of 2013 and 2012 are as follows:

● Net income for the third quarter of 2013 and 2012 was $2.3 million and $3.0 million, respectively.  Net income for the nine months ended September 30, 2013 was $6.5 million compared to $9.0 million for the nine months ended September 30, 2012. The decrease in net income for 2013 is primarily the result of lower interest income on securities from the shortening of the maturity of the portfolio when compared to 2012. The decrease in securities interest income was partially offset by higher interest income on loans and lower interest expense on deposits. The Company also realized lower gains on securities and had higher noninterest expense. This was partially offset by a decreased provision expense.

● Net income available to common shareholders after preferred stock dividends was $2.1 million and $2.5 million for the third quarter of 2013 and 2012, respectively. Net income available to common shareholders after preferred stock dividends was $5.9 million and $7.6 million for the nine months ended September 30, 2013 and 2012, respectively. The dividends on preferred stock decreased $0.9 million to $0.6 million for the nine months ended September 30, 2013 when compared to $1.5 million for the same period in 2012. This decrease is the result of the Company qualifying for a lower dividend rate due to the increase in qualified small business loans as a part of the U.S. Treasury’s Small Business Lending Fund (“SBLF”) program.

● Earnings per common share were $0.34 and $0.40 for the third quarter of 2013 and 2012 and $0.93 and $1.20 for the nine months ended September 30, 2013 and 2012, respectively.

● Net interest income for the third quarter of 2013 was $10.0 million compared to $9.9 million for the same period in 2012.  Net interest income for the nine months ended September 30, 2013 was $29.3 million compared to $31.6 million for the same period in 2012.

● Total assets at September 30, 2013 increased $17.2 million or 1.2% to $1.42 billion when compared to $1.41 billion at December 31, 2012. The increase in assets was from an increase in loans that was partially offset by a decrease in securities and cash.

● Investment securities totaled $637.6 million at September 30, 2013, a decrease of $23.6 million when compared to $661.2 million at December 31, 2012. At September 30, 2013, available for sale securities, at fair value, totaled $483.5 million; a decrease of $118.8 million when compared to $602.3 million at December 31, 2012. At September 30, 2013, held to maturity securities, at amortized cost, totaled $154.1 million; an increase of $95.2 million when compared to $58.9 million at December 31, 2012. Mortgage-backed securities, backed by U.S. Government agencies, made up $64.6 million of the $154.1 million of HTM securities at September 30, 2013.

● The net loan portfolio at September 30, 2013 totaled $679.4 million, a net increase of $60.3 million from the December 31, 2012 net loan portfolio of $619.2 million. Net loans are reduced by the allowance for loan losses which totaled $10.1 million at September 30, 2013 and $10.3 million at December 31, 2012.  Total loans net of unearned income were $689.6 million at September 30, 2013 compared to $629.5 million at December 31, 2012.

● Total impaired loans decreased $12.0 million at September 30, 2013 to $36.6 million compared to $48.6 million at December 31, 2012.

 ● Nonaccrual loans decreased $6.2 million to $14.5 million compared to $20.7 million at December 31, 2012.

 ● Other Real Estate Owned (OREO) decreased $0.4 million during the third quarter 2013 to $3.7 million from $4.1 million at June 30, 2013.

● Return on average assets for the three months ended September 30, 2013 and 2012 was 0.62% and 0.89%, respectively.  Return on average assets for the nine months ended September 30, 2013 and 2012 was 0.64% and 0.89%, respectively.  Return on average common equity for the three months ended September 30, 2013 and 2012 was 8.55% and 11.07%, respectively.  Return on average common shareholders’ equity for the nine months ended September 30, 2013 and 2012 was 10.0% and 10.72%, respectively.  Return on average assets is calculated by dividing annualized net income by average assets.  Return on average common shareholders’ equity is calculated by dividing net income available to common shareholders after preferred dividends by average common shareholders’ equity.

● Book value per common share was $13.61 as of September 30, 2013 compared to $15.10 as of September 30, 2012.  Book value per share was $15.06 at December 31, 2012. The decrease in book value is due to the change in accumulated other comprehensive income/loss (“AOCI”). Our AOCI is comprised of unrealized gains and losses on available for sale securities. The unrealized loss on available for sale securities at September 30, 2013 was $5.9 million compared to unrealized gains of $7.8 million and $6.0 million at September 30, 2012 and December 31, 2012, respectively.

● The Company's Board of Directors declared cash dividends of $0.16 per common share in the third quarter of 2013 and 2012. Cash dividends declared for the nine months ended September 30, 2013 and 2012 were $0.48 per common share.

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Financial Condition

Changes in Financial Condition from December 31, 2012 to September 30, 2013

General.

Total assets at September 30, 2013 increased $17.2 million or 1.2% to $1.42 billion when compared to $1.41 billion at December 31, 2012. The increase in assets was from an increase in loans that was partially offset by a decrease in securities and cash.

Investment Securities.

Investment securities at September 30, 2013 totaled $637.6 million, a decrease of $23.6 million compared to $661.2 million at December 31, 2012. The decrease is primarily attributed to growth in the Company’s loan portfolio that was funded with surplus cash from sold, matured, and called securities and short-term borrowings.  The investment portfolio consisted of available for sale securities at fair value totaling $483.5 million and held to maturity securities at amortized cost total of $154.1 million.

The securities portfolio consisted principally of U.S. Government and Government Agency securities, Government Agency mortgage-backed securities, corporate debt securities and municipal bonds. The securities portfolio provides the Company with a balance to credit risk when compared to other categories of assets. Management monitors the securities portfolio for both credit and interest rate risk. The Company generally limits the purchase of corporate securities to individual issuers to manage concentration and credit risk. Corporate securities generally have a maturity of 10 years or less. U.S. Government securities consist of U.S. Treasury bills that have maturities of less than 30 days. Government Agency securities generally have maturities of 15 years or less.  Government Agency mortgage-backed securities have stated final maturities of 15 to 20 years.

During the second quarter of 2013, the Company diversified its investment portfolio with agency mortgage backed securities as a strategy to increase cash flow and manage interest rate risk.  A total of $66.0 million in mortgage backed securities were purchased and placed into the held to maturity category.  These securities have a forecasted average life of 5 to 7 years and are used to collateralize public funds deposits.  Management believes that the Company has the intent and ability to hold these securities to maturity. At September 30, 2013 the Company’s mortgage-backed securities portfolio totaled $64.6 million. 

At September 30, 2013, $33.3 million or 5.2% of the securities portfolio was scheduled to mature in less than one year. Securities with contractual maturity dates over 10 years totaled $105.1 million or 16.5% of the total portfolio. The weighted average contractual maturity of the securities portfolio was 7.2 years at September 30, 2013 compared to 7.0 years at December 31, 2012. The increase in contractual maturity from December 31, 2012 is mainly attributable to the purchase of longer dated mortgage-backed securities. The average maturity of the securities portfolio is affected by call options that may be exercised by the issuer of the securities and are influenced by market interest rates. Prepayments of mortgages that collateralize mortgage-backed securities also affect the maturity of the securities portfolio.  Based on internal forecasts at September 30, 2013, management believes that the securities portfolio has a forecasted weighted average life of approximately 5.5 years based on the current interest rate environment.  A parallel interest rate shock of 400 basis points is forecasted to increase the weighted average life of the portfolio to approximately 6.1 years.

Average securities as a percentage of average interest-earning assets were 46.6% for the nine month period ended September 30, 2013 and 51.1% for the same period in 2012. The reduction of securities as a percent of average assets is attributed to growth in the loan portfolio. At September 30, 2013, the U.S Government and Government Agency securities and municipal bonds qualified as securities available to collateralize repurchase agreements and public funds. Securities pledged totaled $502.4 million at September 30, 2013 and $476.5 million at December 31, 2012. See Note 3 of the Notes to Consolidated Financial Statements for more information on investment securities.

Loans.

Average loans as a percentage of average interest-earning assets were 48.4% for the nine month period ended September 30, 2013 and 44.7% for the same period in 2012. Net loans increased $60.3 million or 9.7% to $679.4 million from $619.2 million at December 31, 2012. Net loans are reduced by the allowance for loan losses which totaled $10.1 million at September 30, 2013 and $10.3 million at December 31, 2012. Loan charge-offs totaled $2.6 million during the first nine months of 2013 and $3.0 million for the same period in 2012. Recoveries totaled $0.4 million during the first nine months of 2013 and $0.6 million for the same period in 2012.

There are no significant concentrations of credit to any individual borrower. At September 30, 2013, 72.5% of our loan portfolio was secured primarily or secondarily by real estate. The largest portion of our loan portfolio, at 47.2%, is non-farm non-residential loans secured by real estate.

As we have increased our loans to qualified small businesses, as a part of the SBLF program, our preferred dividend on our SBLF capital decreased to $0.1 million for the third quarter of 2013 from $0.5 million for the third quarter in 2012. Year to date 2013 the Company has paid $0.6 million on the SBLF capital compared to $1.5 million for the same period in 2012.

See Note 4 of the Notes to Consolidated Financial Statements for more information on loans and Note 5 for information on the allowance for loan losses.

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Nonperforming Assets.

Nonperforming assets consist of loans on which interest is no longer accrued, certain restructured loans where the interest rate or other terms have been renegotiated and real estate acquired through foreclosure (other real estate). The accrual of interest is discontinued on loans when management believes there is reasonable uncertainty about the full collection of principal and interest or when the loan is contractually past due 90 days or more and not fully secured. If the principal amount of the loan is adequately secured, then interest income on such loans is recognized only in periods in which actual payments are received.

The table below sets forth the amounts and categories of our nonperforming assets at the dates indicated.

(in thousands)	September 30, 2013			December 31, 2012
Nonaccrual loans:
Real Estate:
Construction and land development	$	73		$	854
Farmland		341			312
1 - 4 family residential		4,223			4,603
Multifamily		-			-
Non-farm non-residential		7,522			11,571
Total Real Estate		12,159			17,340
Non-Real Estate:
Agricultural		462			512
Commercial and industrial		1,877			2,831
Consumer and other		-			5
Total Non-Real Estate		2,339			3,348
Total Nonaccrual loans		14,498			20,688
Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development		-			-
Farmland		-			-
1 - 4 family residential		60			455
Multifamily		-			-
Non-farm non-residential		-			-
Total Real Estate		60			455
Non-Real Estate:
Agricultural		25			-
Commercial and industrial		-			-
Consumer and other		-			-
Total Non-Real Estate		25			-
Total loans 90 days and greater delinquent & accruing		85			455
Total Nonperforming loans	$	14,583		$	21,143
Real Estate Owned:
Real Estate Loans:
Construction and land development		780			1,083
Farmland		-			-
1 - 4 family residential		1,968			1,186
Multifamily		-			-
Non-farm non-residential		941			125
Total Real Estate		3,689			2,394
Non-Real Estate Loans:
Agricultural		-			-
Commercial and industrial		-			-
Consumer and other		-			-
Total Non-Real Estate		-			-
Total Real Estate Owned		3,689			2,394
Total Nonperforming assets	$	18,272		$	23,537
Nonperforming assets to total loans		2.65	%		3.74	%
Nonperforming assets to total assets		1.28	%		1.67	%

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(in thousands)	September 30, 2013		December 31, 2012
Restructured Loans:
In Compliance with Modified Terms	$	8,958	$	14,656
Past Due 30 through 89 days and still accruing		-		-
Past Due 90 days and greater and still accruing		-		-
Nonaccrual		324		221
Restructured Loans that subsequently defaulted		-		1,753
Total Restructured Loans	$	9,282	$	16,630

At September 30, 2013, nonperforming assets totaled $18.3 million compared to $23.5 million at December 31, 2012; a decrease of $5.3 million or 22.4%. Management has not identified additional information on any loans not already included in impaired loans or the nonperforming assets that indicates possible credit problems that could cause doubt as to the ability of borrowers to comply with the loan repayment terms in the future. Nonperforming assets consist of loans 90 days or greater delinquent and still accruing, nonaccrual loans, and other real estate.

At September 30, 2013 loans 90 days or greater delinquent and still accruing totaled $0.1 million; a decrease of $0.4 million compared to the $0.5 million at December 31, 2012. The decrease is mainly due to the reduction of $0.4 million in the 1-4 family category of loans that were 90 days or greater delinquent and still accruing.

At September 30, 2013 nonaccrual loans totaled $14.5 million; a decrease of $6.2 million or 29.9% compared to nonaccrual loans of $20.7 million at December 31, 2012. Nonaccrual loans were concentrated in 3 credit relationships for a total of $6.4 million or 36.7% of nonaccrual loans at September 30, 2013.

Other real estate owned at September 30, 2013 totaled $3.7 million; an increase of $1.3 million from $2.4 million at December 31, 2012. The increase in other real estate owned is mainly due to the additions of a $1.1 million residential property, a $0.3 million non-farm non-residential property, and a $0.8 million commercial property. The additions to other real estate were partially offset by sales and write-downs. Other real estate owned totaled $4.1 million at June 30, 2013.

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Allowance for Loan Losses.

The allowance for loan losses is maintained to absorb potential losses in the loan portfolio. The allowance is increased by the provision for anticipated loan losses as well as recoveries of previously charged off loans and is decreased by loan charge-offs. The provision is a charge to current expense to provide for current loan losses and to maintain the allowance commensurate with Management’s evaluation of the risks inherent in the loan portfolio. Various factors are taken into consideration when determining the amount of the provision and the adequacy of the allowance. These factors include but are not limited to:

● past due and nonperforming assets;

● specific internal analysis of loans requiring special attention;

● the current level of regulatory classified and criticized assets and the associated risk factors with each;

● changes in underwriting standards or lending procedures and policies;

● charge off and recovery practices;

● national and local economic and business conditions;

● nature and volume of loans;

● overall portfolio quality;

● adequacy of loan collateral;

● quality of loan review system and degree of oversight by its Board of Directors;

● competition and legal and regulatory requirements on borrowers;

● examinations of the loan portfolio by federal and state regulatory agencies and examinations; and

● review by our internal loan review department and independent accountants.

The data collected from all sources in determining the adequacy of the allowance is evaluated on a regular basis by Management with regard to current national and local economic trends, prior loss history, underlying collateral values, credit concentrations and industry risks. An estimate of potential loss on specific loans is developed in conjunction with an overall risk evaluation of the total loan portfolio. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as new information becomes available.

The allowance consists of specific, general, and unallocated components. The specific component relates to loans that are classified as doubtful, substandard, and impaired. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. Also, a specific reserve is allocated for our syndicated loans. The general component covers non-classified loans and special mention loans and is based on historical loss experience adjusted for qualitative factors. An unallocated component is maintained to cover uncertainties that could affect the estimate of probable losses.

Provisions made pursuant to these processes totaled $2.0 million in the first nine months of 2013 as compared to $3.0 million for the same period in 2012. The provisions made in the first nine months of 2013 were taken to provide for current loan losses and to maintain the allowance proportionate to risks inherent in the loan portfolio. Total charge-offs were $2.6 million for first nine months of 2013 and $3.0 million for the same period in 2012. The charge-offs taken in the first nine months of 2013 were concentrated in non-farm non-residential loans for $1.0 million and commercial and industrial loans for $1.0 million.  The non-farm non-residential loans charge offs were concentrated in two credit relationships which accounted for approximately $0.7 million of the $1.0 million in charge-offs for this category.  Commercial and industrial loan charge offs were concentrated in one credit relationship which accounted for $0.7 million of the $1.0 million in charge offs for this category.  The majority of these charge-offs occurred in the first quarter of 2013.  The Company has experienced reduced charge offs and lower provision expenses in the second and third quarters of 2013.  Recoveries totaled $0.4 million during the first nine months of 2013 and $0.6 million for the same period in 2012. For more information, see Note 5 to Consolidated Financial Statements.

Comparing September 30, 2013 to September 30, 2012, the decline in allowance provision is attributed to improvement in the credit quality of the loan portfolio and to the fact that the impaired loan portfolio did not suffer additional declines in estimated fair value. The credit quality improvements were across most loan portfolio types with the largest improvement in non-farm non-residential loans, commercial and industrial loans, and construction and land development.  The largest change in the allowance balance was in the non-farm non-residential category which declined approximately 13.8% from $3.7 million at December 31, 2012 to $3.2 million as of September 30, 2013. 

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All accrued but uncollected interest related to a loan is deducted from income in the period the loan is placed on nonaccrual. During the period a loan is in nonaccrual status, any cash receipts are first applied to the principal balance. Once the principal balance has been fully recovered, any residual amounts are applied to expenses resulting from the collection of the payment and to the recovery of any reversed interest income and interest income that would have been due had the loan not been nonaccrual. At September 30, 2013 and December 31, 2012 the Company had nonaccrual loans totaling $14.5 million and $20.7 million, respectively. The allowance for loan losses at September 30, 2013 was $10.1 million or 1.5% of total loans and 69.6% of nonperforming loans. See Note 4 and 5 of the Notes to Consolidated Financial Statements for more information on loans and the allowance for loan losses.

Other information relating to loans, the allowance for loan losses and other pertinent statistics follows.

(in thousands)	September 30, 2013			September 30, 2012
Loans: (including loans held for sale)
Average outstanding balance	$	659,733		$	583,046
Balance at end of period	$	689,880		$	606,162
Allowance for Loan Losses:
Balance at beginning of year	$	10,342		$	8,879
Provision charged to expense		2,011			3,014
Loans charged-off		(2,646	)		(2,951	)
Recoveries		439			565
Balance at end of period	$	10,146		$	9,507

28

Deposits.

Managing the mix and pricing the maturities of deposit liabilities is an important factor affecting our ability to maximize our net interest margin. The strategies used to manage interest-bearing deposit liabilities are designed to adjust as the interest rate environment changes. In this regard, we regularly assess our funding needs, deposit pricing and interest rate outlooks. From December 31, 2012 to September 30, 2013, total deposits decreased $2.0 million, or -0.2%, to $1.25 billion. Noninterest-bearing demand deposits decreased $0.4 million from December 31, 2012 to September 30, 2013. Interest-bearing demand deposits decreased by $12.7 million when comparing September 30, 2013 to December 31, 2012. Time deposits increased $9.1 million, or 1.4% to $657.6 million at September 30, 2013, compared to $648.4 million at December 31, 2012.

At September 30, 2013, public fund deposits totaled $464.0 million compared to $476.5 million at December 31, 2012. The Company has developed a program for the development and management of public fund deposits. Since 2007, the Company has maintained public fund deposits in excess of $175.0 million. These deposits are from local government entities such as school districts, hospital districts, sheriff departments and other municipalities. Several of these accounts are under contracts with terms up to three years. Public funds deposit accounts are collateralized by FHLB letters of credit and by eligible Government and Government agency securities such as those issued by the FHLB, FFCB, FNMA, and FHLMC. Management believes that public funds provide a low cost and stable source of funding for the Company.

As of September 30, 2013, the aggregate amount of outstanding certificates of deposit in amounts greater than or equal to $100,000 was approximately $442.0 million. At September 30, 2013, approximately $237.2 million of the Company's certificates of deposit had a remaining term greater than one year.

As we seek to strengthen our net interest margin and improve our earnings, attracting core noninterest-bearing deposits will remain a primary emphasis. Management will continue to evaluate and update our product mix in its efforts to attract additional core customers. We currently offer a number of noninterest-bearing deposit products that are competitively priced and designed to attract and retain customers with primary emphasis on core deposits. We have also offered several different time deposit promotions in an effort to increase our core deposits and to increase liquidity.

The following table sets forth the distribution of our total deposit accounts, by account type, for the periods indicated.

					Increase (Decrease)
(in thousands except for %)	September 30, 2013		December 31, 2012		Amount			Percent
Noninterest-bearing demand	$	191,785	$	192,232	$	(447	)	-0.2	%
Interest-bearing demand		336,162		348,870		(12,708	)	-3.6	%
Savings		65,113		63,062		2,051		3.3	%
Time		657,563		648,448		9,115		1.4	%
Total deposits	$	1,250,623	$	1,252,612	$	(1,989	)	-0.2	%

The following table sets forth the distribution of our time deposit accounts.

(in thousands)	September 30, 2013
Time deposits of less than $100,000	$	215,553
Time deposits of $100,000 through $250,000		172,182
Time deposits of more than $250,000		269,828
Total Time Deposits	$	657,563

The following table sets forth public funds as a percent of total deposits.

	September 30,			December 31,
(in thousands except for %)	2013			2012			2011			2010			2009
Total Public Funds	$	464,004		$	470,498		$	431,905		$	356,153		$	268,474
Total Deposits	$	1,250,623		$	1,252,612		$	1,207,302		$	1,007,383		$	799,746
Total Public Funds as a percent of Total Deposits		37.1	%		37.6	%		35.8	%		35.4	%		33.6	%

29

Borrowings.

The Company maintains borrowing relationships with other financial institutions as well as the Federal Home Loan Bank on a short and long-term basis to meet liquidity needs. At September 30, 2013, short-term borrowings totaled $42.5 million which is an increase of $27.7 million from December 31, 2012. Short-term borrowings consisted of repurchase agreements of $13.2 million, collateralized short-term borrowings from the Federal Home Loan Bank of $27.5 million and a line of credit totaling $1.8 million. Overnight repurchase agreement balances are monitored daily for sufficient collateralization. The increase in short-term borrowings was due to seasonal deposit fluctuations primarily concentrated in the Company's public funds deposits.  The Company had long-term borrowings totaling $0.7 million as of September 30, 2013 and $1.1 million at December 31, 2012.

At September 30, 2013, the Company had $70.0 million in Federal Home Loan Bank letters of credit outstanding obtained solely for collateralizing public deposits.

Equity.  

Stockholders’ equity provides a source of permanent funding, allows for future growth and the ability to absorb unforeseen adverse developments. Total equity decreased to $125.1 million at September 30, 2013 from $134.2 million at December 31, 2012. The decrease in stockholders' equity was the result of the other comprehensive loss for the nine month period ended September 30, 2013 of $12.0 million. The other comprehensive loss is the result of the change from an unrealized gain on available for sale securities at December 31, 2012 to an unrealized loss on available for sale securities at September 30, 2013. The other comprehensive loss was partially offset by net income for the nine month period ended September 30, 2013 of $6.5 million. Retained earnings were increased by the Company’s net income of $6.5 million for the nine month period ended September 30, 2013. This increase in retained earnings was partially offset by common dividends of $3.0 million and preferred dividends of $0.6 million for a total addition to the Company's retained earnings of $2.8 million.

Results of Operations for the Three Months and Nine Months Ended September 30, 2013 and 2012

Net Income.

Net income for the quarter ending September 30, 2013 was $2.3 million, a decrease of $0.8 million from $3.0 million for the quarter ending September 30, 2012.  Net income for the nine months ended September 30, 2013 was $6.5 million, a decrease of $2.6 million or 28.4% from $9.0 million for the nine months ended September 30, 2012. For the quarter ending September 30, 2013, the Company had net income available to common shareholders of $2.1 million, a decrease of $0.4 million from the same quarter in 2012 net income available to common shareholders of $2.5 million. Net income available to common shareholders for the nine months ended September 30, 2013 was $5.9 million which is a decrease of $1.7 million from $7.6 million for the same period in 2012. The decrease in net income for 2013 was primarily the result of lower interest income on securities from the shortening of the maturity of the portfolio, less gains on securities, and higher salaries expense. These decreases were partially offset by higher interest income on loans, decreased interest expense, and lower provision for loan losses. We foresee continuation of adding quality loans and reducing interest expense through 2013 and 2014.  The intent is to increase our loan interest income and income overall. Earnings per common share for the third quarter ended September 30, 2013 was $0.34 per common share, a decrease of 15.4% or $0.06 per common share from $0.40 per common share for the third quarter ended September 30, 2012. Earnings per common share for the nine months ended September 30, 2013 was $0.93 per common share, a decrease of 22.3% or $0.27 per common share from $1.20 per common share for the nine months ended September 30, 2012.

Net Interest Income.

Net interest income is the largest component of our earnings, and is calculated by subtracting the cost of interest-bearing liabilities from the income earned on interest-earning assets. This represents the earnings from our primary business of gathering deposits, and making loans and investments. Our long-term objective is to manage this income to generate optimal income that balances interest rate risk, credit risk, and liquidity risks.

A financial institution’s asset and liability structure is substantially different from that of a non-financial company, in that virtually all assets and liabilities are monetary in nature. Accordingly, changes in interest rates, which are generally impacted by inflation rates, may have a significant impact on a financial institution’s performance. The impact of interest rate changes depends on the sensitivity to the change of our interest-earning assets and interest-bearing liabilities.

Net interest income in the third quarter of 2013 was $10.0 million compared to $9.9 million for the third quarter of 2012. Net interest income for the first nine months of 2013 and 2012 was $29.3 million and $31.6 million, respectively.  

Interest from loans represents the largest portion of interest income from the Company's interest-earning assets, and 47.7% of our total loans are floating rate which are primarily tied to the prime lending rate or the London Inter-Bank Offered Rate (LIBOR). Of the $328.9 million of loans that have floating rates, $222.6 million are currently at their floor rate.

Securities interest income declined in 2013 compared to 2012.  For the third quarter 2013 interest income on securities was $3.4 million compared to $4.2 million for the same period in 2012. Year to date 2013 securities interest income decreased $5.1 million compared to 2012. The Company restructured the securities portfolio beginning in 2012 as securities were called, sold or matured in order to reduce long term interest rate risk. This allowed us to help balance the risk inherent in an uncertain interest rate environment by increasing the portfolio’s cash flow while lowering cash flow extension risk. Included in our securities portfolio are $81.2 million (amortized cost) of Government Agency step-up bonds that have scheduled rate resets that help mitigate the risk of a rise in interest rates.

The lower cost of our interest-bearing liabilities reflects a lower cost of funds from our reduction of pricing on deposits. As of September 30, 2013, time deposits represented 52.6% of total deposits, which is an increase from 51.8% at December 31, 2012.

30

The average yield on interest-earning assets decreased from 4.26% at September 30, 2012 to 3.71% at September 30, 2013. The interest-bearing liabilities average yield decreased to 1.07% at September 30, 2013, compared to 1.28% at September 30, 2012. The net yield on interest-earning assets was 2.64% for the nine months ended September 30, 2013, compared to 2.98% for the same period in 2012.

The net interest income yield shown below in the average balance sheet is calculated by dividing net interest income by average interest-earning assets and is a measure of the efficiency of the earnings from balance sheet activities. It is affected by changes in the difference between interest on interest-earning assets and interest-bearing liabilities and the percentage of interest-earning assets funded by interest-bearing liabilities.

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

	September 30, 2013						September 30, 2012
(in thousands except yield/rate)	Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Assets
Interest-earning assets:
Interest-earning deposits with banks [1]	$	66,016	$	124	0.25	%	$	29,887	$	56	0.25	%
Securities (including FHLB stock)		635,314		10,027	2.11	%		666,707		15,110	3.02	%
Federal funds sold		1,925		1	0.07	%		25,263		10	0.05	%
Loans, net of unearned income		659,733		27,661	5.61	%		583,046		26,538	6.06	%
Total interest-earning assets		1,362,988		37,813	3.71	%		1,304,903		41,714	4.26	%
Noninterest-earning assets:
Cash and due from banks		9,311						10,442
Premises and equipment, net		19,665						19,827
Other assets		8,015						22,342
Total Assets		1,399,979						1,357,514
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Demand deposits		333,558		973	0.39	%		305,547		1,050	0.46	%
Savings deposits		64,334		33	0.07	%		58,806		40	0.09	%
Time deposits		651,043		7,441	1.53	%		667,103		8,905	1.78	%
Borrowings		19,286		114	0.79	%		17,406		98	0.74	%
Total interest-bearing liabilities		1,068,221		8,561	1.07	%		1,048,862		10,093	1.28	%
Noninterest-bearing liabilities:
Demand deposits		195,643						171,854
Other		5,018						6,027
Total Liabilities		1,268,882						1,226,743
Stockholders' equity		131,097						130,771
Total Liabilities and Stockholders'		1,399,979						1,357,514
Net interest income			$	29,252					$	31,621
Net interest rate spread [2]					2.64	%					2.98	%
Net interest-earning assets [3]	$	294,767					$	256,041
Net interest margin [4]					2.86	%					3.23	%
Average interest-earning assets to interest-bearing liabilities					127.59	%					124.41	%

[1]	Interest-earning deposits with banks includes interest on reserves kept with the Federal Reserve Bank that are classified on the balance sheet as "cash and due from banks".
[2]	Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
[3]	Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
[4]	Net interest margin represents net interest income divided by average total interest-earning assets.

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Provision for Loan Losses.

The provision for loan losses was $0.3 million and $0.9 million for the third quarter of 2013 and 2012, respectively. For the nine months ending September 30, 2013, the provision for loan loss was $2.0 million, a decrease from $3.0 million for the first nine months of 2012. The allowance for loan losses at September 30, 2013 was $10.1 million, compared to $10.3 million at December 31, 2012, and was 1.47% and 1.64% of total loans, respectively. We believe that the allowance is adequate to cover losses in the loan portfolio given the current economic conditions, expected net charge-offs and nonperforming asset levels.

Noninterest Income.

For the quarters ending September 30, 2013 and 2012, noninterest income totaled $1.5 million and $3.3 million, respectively. Service charges, commissions and fees totaled $1.2 million for the third quarter ended September 30, 2013 and 2012. Net securities gains were $12,000 for the third quarter of 2013 and $1.7 million for the same period in 2012. Other noninterest income was $0.3 million for the third quarter ended September 30, 2013 and $0.4 million for the same period in 2012.

Noninterest income totaled $6.0 million for the nine months ended September 30, 2013; a decrease of $2.0 million when compared to $8.0 million for the nine months ended September 30, 2012. Service charges, commissions and fees totaled $3.5 million for the nine months ended September 30, 2013 and $3.6 million for the same period of 2012. Net securities gains were $1.6 million for the first nine months of 2013 and $3.2 million for the same period in 2012. Other noninterest income decreased by $0.2 million to $1.0 million in the first nine months of 2013 compared to $1.2 million for year to date 2012.

Noninterest Expense.

Noninterest expense includes salaries and employee benefits, occupancy and equipment expense and other types of expenses.  Noninterest expense totaled $7.9 million in the third quarter of 2013 and $7.8 million in 2012. Noninterest expense increased from $22.9 million for the first nine months of 2012 to $23.4 million for the first nine months of 2013. Salaries and benefits totaled $3.7 million for the third quarter of 2013 compared to $3.4 million for the third quarter of 2012. For the first nine months of 2013 and 2012, salaries and benefits totaled $10.8 million and $10.1 million, respectively. Occupancy and equipment expense totaled $1.0 million for the third quarter of 2013 and 2012. Occupancy and equipment expense totaled $3.0 million for the first nine months of 2013 and $2.8 million for the same period in 2012. Other noninterest expense totaled $3.3 million in the third quarter of 2013, compared to $3.5 million the third quarter of 2012.  Other noninterest expense decreased by $0.3 million to $9.7 million for the nine months ended September 30, 2013 from $10.0 million for the nine months ended September 30, 2012.

The following is a summary of the significant components of other noninterest expense:
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2013		2012		2013		2012
Other noninterest expense:
Legal and professional fees	$	729	$	438	$	1,816	$	1,527
Data processing		316		315		965		910
Marketing and public relations		219		237		697		657
Taxes - sales, capital, and franchise		176		182		499		541
Operating supplies		98		150		385		425
Travel and lodging		151		118		447		409
Net costs from other real estate and repossessions		203		739		633		1,838
Regulatory assessment		376		295		1,334		792
Other		998		980		2,896		2,896
Total other expense	$	3,266	$	3,454	$	9,672	$	9,995

Income Taxes.

The provision for income taxes was $1.1 million and $1.5 million for the quarters ended September 30, 2013 and 2012.  The provision for the nine months ended September 30, 2013 and 2012 was $3.4 million and $4.6 million, respectively. The Company's statutory tax rate was 34.0% which was unchanged from the third quarter of 2012.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Asset/Liability Management and Market Risk

Asset/Liability Management.

Our asset/liability management (ALM) process consists of quantifying, analyzing and controlling interest rate risk (IRR) to maintain reasonably stable net interest income levels under various interest rate environments. The principal objective of ALM is to maximize net interest income while operating within acceptable limits established for interest rate risk and to maintain adequate levels of liquidity.

The majority of our assets and liabilities are monetary in nature. Consequently, one of our most significant forms of market risk is interest rate risk. Our assets, consisting primarily of loans secured by real estate and fixed rate securities in our investment portfolio, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. Our Board of Directors has established two committees, the Management Asset Liability Committee and the Board Investment Committee, to oversee the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors. The Management Asset Liability Committee is comprised of senior members of Management and meets as needed to review our asset liability policies and interest rate risk position.  The Board Investment Committee is comprised of board members and meets monthly.  Senior Management makes a monthly report to the Board Investment Committee.

The interest spread and liability funding discussed below are directly related to changes in asset and liability mixes, volumes, maturities and repricing opportunities for interest-earning assets and interest-bearing liabilities. Interest-sensitive assets and liabilities are those which are subject to repricing in the near term, including both floating or adjustable rate instruments and instruments approaching maturity. The interest sensitivity gap is the difference between total interest-sensitive assets and total interest-sensitive liabilities. Interest rates on our various asset and liability categories do not respond uniformly to changing market conditions. Interest rate risk is the degree to which interest rate fluctuations in the marketplace can affect net interest income.

The need for interest sensitivity gap management is most critical in times of rapid changes in overall interest rates. Because of the significant impact on net interest margin from mismatches in repricing opportunities, the asset-liability mix is monitored periodically depending upon Management’s assessment of current business conditions and the interest rate outlook. Exposure to interest rate fluctuations is maintained within prudent levels by the use of varying investment strategies.

The following interest sensitivity analysis is one measurement of interest rate risk and is set forth on the following table. This analysis reflects the maturity and repricing of the principal of assets and liabilities over various time periods. This analysis does not factor in prepayments or principal payments and includes floating rate loans with floor rates at September 30, 2013 totaling  $222.6 million as floating loans or bonds that have interest rate resets. Considering these factors could have a significant impact on the report.  The table excludes nonaccrual loans at September 30, 2013 totaling $14.5 million. The gap indicates whether more assets or liabilities are subject to repricing over a given time period. The interest sensitivity analysis at September 30, 2013 shown below reflects a liability-sensitive position with a negative cumulative gap on a one-year basis.

	September 30, 2013
	Interest Sensitivity Within
(in thousands)	3 Months Or Less			Over 3 Months thru 12 Months			Total One Year			Over One Year		Total
Earning Assets:
Loans (including loans held for sale)	$	313,066		$	10,580		$	323,646		$	366,234	$	689,880
Securities (including FHLB stock)		28,355			7,519			35,874			604,320		640,194
Federal Funds Sold		987			-			987			-		987
Other earning assets		51,194			-			51,194			-		51,194
Total earning assets	$	393,602		$	18,099		$	411,701		$	970,554	$	1,382,255
Source of Funds:
Interest-bearing accounts:
Demand deposits	$	336,162		$	-		$	336,162		$	-	$	336,162
Savings deposits		65,113			-			65,113			-		65,113
Time deposits		215,553			172,182			387,735			269,828		657,563
Short-term borrowings		42,457			-			42,457			-		42,457
Long-term borrowings		150			300			450			200		650
Noninterest-bearing, net		-			-			-			280,310		280,310
Total source of funds	$	659,435		$	172,482		$	831,917		$	550,338	$	1,382,255
Period gap	$	(265,833	)	$	(154,383	)	$	(420,216	)	$	420,216
Cumulative gap	$	(265,833	)	$	(420,216	)	$	(420,216	)	$	-
Cumulative gap as a percent of earning assets		-19.2	%		-30.4	%		-30.4	%

33

Liquidity and Capital Resources

Liquidity.

Liquidity refers to the ability or flexibility to manage future cash flows to meet the needs of depositors and borrowers and fund operations. Maintaining appropriate levels of liquidity allows the Company to have sufficient funds available to meet customer demand for loans, withdrawal of deposit balances and maturities of deposits and other liabilities. Liquid assets include cash and due from banks, interest-earning demand deposits with banks, federal funds sold and available for sale investment securities. 

Loans maturing within one year or less at September 30, 2013 totaled $152.2 million. At September 30, 2013, time deposits maturing within one year or less totaled $420.4 million.  The Company’s held to maturity ("HTM") portfolio at September 30, 2013 was $154.1 million or 24.2% of the investment portfolio compared to $58.9 million or 8.9% at December 31, 2012.  The securities in the held to maturity portfolio are used to collateralize public funds deposits and may also be used to secure borrowings with the Federal Home Loan Bank or Federal Reserve Bank.  The agency securities in the HTM portfolio have maturities of 10 years or less.  Government Agency mortgage-backed securities in the portfolio have stated final maturities of 15 to 20 years at September 30, 2013.  The HTM portfolio had a forecasted weighted average life of approximately 5.9 years based on current interest rates.  Management regularly monitors the size and composition of the HTM portfolio to evaluate its effect on the Company’s liquidity.  The Company’s available for sale portfolio was $483.5 million or 75.8% of the investment portfolio at September 30, 2013.  The majority of the AFS portfolio was comprised of U.S. Treasuries, U.S. Government Agencies, and investment grade corporate bonds.  Management believes these securities are readily marketable and enhance the Company’s liquidity. 

The Company maintained a net borrowing capacity at the Federal Home Loan Bank totaling $81.9 million and $99.0 million at September 30, 2013 and December 31, 2012, respectively. The Company also has a discount window line with the Federal Reserve Bank. We also maintain federal funds lines of credit at various correspondent banks with borrowing capacity of $152.6 million and a revolving line of credit for $2.5 million with an availability of $0.7 million as of September 30, 2013. Management believes there is sufficient liquidity to satisfy current operating needs.

Capital Resources.

The Company's capital position is reflected in stockholders’ equity, subject to certain adjustments for regulatory purposes. Further, our capital base allows us to take advantage of business opportunities while maintaining the level of resources we deem appropriate to address business risks inherent in daily operations.

Stockholders’ equity provides a source of permanent funding, allows for future growth and the ability to absorb unforeseen adverse developments. Total equity decreased to $125.1 million at September 30, 2013 from $134.2 million at December 31, 2012. The decrease in stockholders' equity was the result of the other comprehensive loss for the nine month period ended September 30, 2013 of $12.0 million. The other comprehensive loss is the result of the change from an unrealized gain on available for sale securities at December 31, 2012 to an unrealized loss on available for sale securities at September 30, 2013. The other comprehensive loss was partially offset by net income for the nine month period ended September 30, 2013 of $6.5 million. Retained earnings were increased by the Company’s net income of $6.5 million for the nine month period ended September 30, 2013. This increase in retained earnings was partially offset by common dividends of $3.0 million and preferred dividends of $0.6 million for a total addition to the Company's retained earnings of $2.8 million.

Regulatory Capital.

Risk-based capital regulations adopted by the FDIC require banks to achieve and maintain specified ratios of capital to risk-weighted assets. Similar capital regulations apply to bank holding companies. The risk-based capital rules are designed to measure “Tier 1” capital (consisting of common equity, retained earnings and a limited amount of qualifying perpetual preferred stock and trust preferred securities, net of goodwill and other intangible assets and accumulated other comprehensive income) and total capital in relation to the credit risk of both on- and off- balance sheet items. Under the guidelines, one of its risk weights is applied to the different on balance sheet items. Off-balance sheet items, such as loan commitments, are also subject to risk weighting. All bank holding companies and banks must maintain a minimum total capital to total risk weighted assets ratio of 8.00%, at least half of which must be in the form of core or Tier 1 capital. These guidelines also specify that bank holding companies that are experiencing internal growth or making acquisitions will be expected to maintain capital positions substantially above the minimum supervisory levels.

	As of September 30, 2013
	"Well Capitalized Minimums"		Actual
Tier 1 Leverage Ratio
Consolidated	5.00	%	9.03	%
Bank	5.00	%	9.07	%
Tier 1 Risk-based Capital Ratio
Consolidated	6.00	%	13.73	%
Bank	6.00	%	13.80	%
Total Risk-based Capital Ratio
Consolidated	10.00	%	14.82	%
Bank	10.00	%	14.89	%

At September 30, 2013, the Company and its subsidiary satisfied the minimum regulatory capital requirements and were well capitalized within the meaning of federal regulatory requirements.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As defined by the Securities and Exchange Commission in Exchange Act Rules 13a-15(e) and 15d-15(e), a Company's “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within time periods specified in the Commission’s rules and forms. The Company maintains such controls designed to ensure this material information is communicated to Management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decision regarding required disclosure.

Management, with the participation of the CEO and CFO, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on that evaluation, the CEO and CFO have concluded that the disclosure controls and procedures as of the end of the period covered by this quarterly report are effective. There were no changes in the Company's internal control over financial reporting during the last fiscal quarter in the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to various other legal proceedings in the normal course of business and otherwise. It is our belief that the ultimate resolution of such other claims will not have a material adverse effect on the Company's financial position or results of operations.

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed by the Company in its Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 27, 2013.

Exhibit
Number	Exhibit
14.3	Code of Ethics for Senior Financial Officers
14.4	Code of conduct and Ethics for Employees, Officers, and Directors
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

35

SIGNATURES

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

FIRST GUARANTY BANCSHARES, INC.
Date:  November 8, 2013	By: /s/ Alton B. Lewis
	Alton B. Lewis
	Principal Executive Officer
Date:  November 8, 2013	By: /s/ Eric J. Dosch
	Eric J. Dosch
	Principal Financial Officer
	Secretary and Treasurer

36

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Alton B. Lewis, certify that:

1.	I have reviewed this Annual Report on Form 10-K of First Guaranty Bancshares, Inc.;
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 annual 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 officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)	designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5.	The registrant’s other certifying officers 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.

November 8, 2013

/s/ Alton B. Lewis

Alton B. Lewis

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Eric J. Dosch, certify that:

1.	I have reviewed this Annual Report on Form 10-K of First Guaranty Bancshares, Inc.;
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 annual 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 officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)	designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5.	The registrant’s other certifying officers 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.

November 8, 2013

/s/ Eric J. Dosch

Eric J. Dosch

Chief Financial Officer,

Secretary and Treasurer

(Principal Financial & Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of First Guaranty Bancshares, Inc. (the “Company”) on Form 10-K as of and for the year ended December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alton B. Lewis, Chief Executive Officer of the Company, certify that to the best of my knowledge:

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

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

November 8, 2013

/s/ Alton B. Lewis

Alton B. Lewis

Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of First Guaranty Bancshares, Inc. (the “Company”) on Form 10-K as of and for the year ended December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eric J. Dosch, Chief Financial Officer of the Company, certify that to the best of my knowledge:

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

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

November 8, 2013

/s/ Eric J. Dosch

Eric J. Dosch

Chief Financial Officer

Secretary and Treasurer

(Principal Financial & Accounting Officer)

EX-14.3

Approved January 17, 2013

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY

CODE OF CONDUCT AND ETHICS

FOR

EMPLOYEES, OFFICERS AND DIRECTORS

Adherence to the Highest Ethical Standards

First Guaranty Bancshares, Inc. and its consolidated subsidiary (the “Company”) are committed to the highest ethical standards in the conduct of our business. Honesty, integrity, and trust are essential to our reputation with our customers, employees, and the communities we serve. They are also essential to our ability to attract and retain customers and grow our business. Users of our services must be able to do so with complete confidence in the integrity of those with whom they deal.

Although this Code of Conduct and Ethics (the “Code”) does not cover every ethical issue that may arise, it sets out basic principles to guide our employees, officers and directors.

Each of our employees, officers, and directors must read, understand and adhere to this Code, and conduct themselves accordingly, avoiding even the appearance of any impropriety.

In the event an applicable law, regulation, or regulatory rule conflicts with this Code, such law, regulation, or regulatory rule shall take precedence. However, if a local custom or policy conflicts with this Code, this Code takes precedence. We will have more detailed policies covering certain topics in this Code, as deemed necessary. You are expected to comply both with this Code and any other policies, operating rules and procedures set forth in the applicable policies or department or branch manuals. If you have any questions about compliance with policy, or possible conflicts between policies, you should seek guidance from your manager or Human Resources. Violations of the standards set forth in this Code will be subject to disciplinary action. If you are in a situation which you believe may lead to a violation of this Code, please follow the guidelines described in the section entitled “Prompt Confidential Reporting of Code Violations.”

Our Basic Ethical Principles

Honesty. Our business is based on mutual trust and absolute honesty in all our dealings whether internally or externally. We must adhere to and demonstrate this principle at all times in both our personal and corporate behavior.

Integrity. Our business creates opportunities that can be realized only if we demonstrate the integrity of the Company, as well as the integrity of our personnel. We therefore use corporate assets, including our name, with the care befitting a valuable resource.

Respect. We treat one another with respect and dignity, and we respect the diversity of our workforce, our customers, and our communities.

Responsibility. We are accountable for our actions and we ask for clarification when necessary, and are responsible for reporting concerns or observed violations of the Code.

Good Citizenship. We comply with both the intent and spirit of laws that govern our business and the community, thereby contributing to the strength and well being of our constituent customers and communities we serve.

Compliance with Laws, Rules, and Regulations

Employees should become familiar with all laws and regulations applicable to the Company, as such laws and regulations relate to daily work requirements and professional responsibilities. Each of these and other laws and regulations are addressed in our various policies and procedures which are available to employees. Therefore, all of our employees, officers, and directors are required to carry out their responsibilities in accordance with applicable laws, regulations, and policy, including all applicable federal and state criminal laws governing fraud, bribery, embezzlement, conversion, and conflicts of interest. They also must conduct their business affairs consistent with applicable safety and soundness standards and Code requirements. Everyone is expected to have sufficient knowledge of applicable laws and regulations that relate to their duties, and should know when to seek guidance from higher authority. It is imperative to follow operating rules and procedures covered in applicable department or branch manuals, and to use the proper Company or First Guaranty Bank forms, which have been prepared with legal requirements in mind.

Accurate Record Keeping and Accounting. We require honest and accurate recording and reporting of financial and other information both to make responsible business decisions, and to provide accurate reporting of our performance to regulators, depositors, and employees. We require full, fair, accurate, timely, and understandable disclosure in all reports and documents we file with, or submit to the regulators, and in other material public communications. It is a violation of law and our policy for any employee to attempt to improperly influence or mislead the financial reporting process or our accountants who audit our financial statements. Our financial and other reporting must fairly present the financial condition, results of operations and cash flow of the Company, and it must comply in all material respects with applicable law, governmental rules and regulations, including generally accepted accounting principles and applicable rules of banking regulators.

We have implemented disclosure controls and procedures to ensure that our public disclosures are timely, comply with laws and regulations, and are otherwise fair, accurate, and understandable. Employees responsible for the preparation of our public disclosures, or who provide information as part of that process, have a responsibility to ensure that such disclosures and information are complete, accurate and comply with our Company’s disclosure controls and procedures.

Document Retention and Destruction. Employees and directors must fully comply with our document retention and destruction policy. In addition, once a legal proceeding has begun (or when one is threatened or reasonably likely), federal and state obstruction-of-justice statutes require us to preserve documents relevant to the issues in that proceeding even before specific documents are requested. Any employee, officer, or director, who fails to comply with this policy, as well as industry regulations and state and federal laws, is subject to termination or removal and may also face criminal or civil prosecution, with possible fines and prison terms.

Confidentiality of Information. Employees, officers and directors who have access to confidential information are not permitted to use or share that information for any purpose except the conduct of our business. Non-public information regarding the Company, or our customers, is confidential and should be safeguarded appropriately. Any use of non-public information for personal financial benefit or to “tip” others who might make an investment choice based on this information is both unethical and illegal. Please consult the Company’s Compliance Department for further details on this topic.

Regulatory Agencies, Auditors, and Counsel.  Honesty, candor, and cooperation are required in dealing with our independent and internal auditors, and attorneys. Any request by regulatory or governmental agencies for information, which is not incidental to periodic bank and holding company examinations and required reports, should be referred to the Compliance Department.

Competition and Fair Dealing.  Competition requires fair dealing with customers, competitors, suppliers, and fellow employees. We compete based on achieving advantage in the marketplace through superior service, competitive interest rates, and ethical business practices. Accordingly, it is against our policy to attempt to win or keep business relationships based on unethical or illegal activities. Employees must not attempt to obtain unfair advantage over competitors, customers, suppliers, or fellow employees through manipulation, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

Anti-Competitive Activities. Federal and state law prohibits any combination, conspiracy, or agreement among competitors to restrict or prevent competition. Violations can occur through both formal and informal agreements between the Company and a competitor to fix prices, allocate markets or customers, or refuse to deal with particular suppliers or customers. All employees should be especially careful at social or professional meetings to avoid discussions or exchanges of information relating to competitive matters (i.e., cost, pricing, or strategy).  Employees with questions concerning any such antitrust issues should be directed to the Compliance Officer.

Vendors. Employees who select or work with vendors for the Company are required to be objective and fair and employ professional business practices when selecting sources, in negotiations, in awarding business, and in the administration of purchasing activities. Although we expect employees to strive for good relationships with suppliers, it is wrong to create even the impression that a supplier has a “friend” at the Company and can therefore exert special influence.

Safeguarding and Proper Use of Our Assets. Our employees, officers and directors are bound by this Code to protect our assets, ensuring they are used only for legitimate business purposes. Such assets include, but are not limited to, capital, facilities, equipment, proprietary information, technology, business plans, ideas for new products and services, trade secrets, inventions, copyrightable materials and customer lists.

Corporate Funds. Employees entrusted with the Company’s funds are personally responsible for the handling of those funds.

Physical Assets. Employees entrusted with use of our physical assets (such as computer equipment, corporate charge cards, telephones and office supplies) must protect them from loss, damage, misuse or theft. These assets should be used only to conduct our business and for purposes authorized by management.

Information Technology. Our information systems, such as Internet access, e-mail and software programs are vital to conducting our business and, accordingly, are to be used only for business purposes. Using the Internet for non-business purposes is inappropriate. Visiting sites with sexual or hate content as well as gambling-related sites is strictly prohibited. All data stored in the computer system, such as data files or word processing documents, must be treated as proprietary information. Our technology policy sets the standards relating to the use and protection of computer and information assets, and employees must adhere to this policy.

Conflicts of Interest.  Employees, officers and directors are expected to make business decisions on behalf of the Company free from conflicting outside interests. It is a violation of this Code and of our policies to foster personal or business interests (or those of others with whom such persons have a personal or business relationship) at the expense of the Company. Although it is impossible to cover every potential conflict of interest situation, a potential conflict exists whenever an employee, officer, or director of the Company has an outside interest, direct or indirect, which conflicts with their duty to the Company or adversely affects their judgment in the discharge of their responsibilities to the Company. Examples of conflicts of interest include receiving money or other benefits from a third party in return for the Company granting a loan to or purchasing property or services from such third party, and advocating a transaction between the Company and another entity in which such person owns stock or otherwise stands to benefit from the transaction at the expense of the Company. The appearance of a conflict of interest may be just as damaging to our reputation as a real conflict of interest and may be difficult to discern. Our employees, officers and directors are expected to objectively assess their actions periodically to determine whether a reasonable, disinterested observer, a customer, a supplier, a shareholder, an acquaintance, or a government official would have grounds to believe a conflict of interest exists.

Giving and Receiving Gifts. Employees, officers and directors or their close family members should not accept any gift, regardless of its value, that might appear to compromise independent business judgment. Neither should employees, officers or directors give a gift to a customer, vendor, or prospect that might appear to be an attempt to influence them. Gifts include cash, material goods, services, promotional premiums, knowingly accepting a discount, and receipt of a loan. When the value of the gift is appropriate to an occasion (e.g., holidays), and permitted by law, non-cash gifts may be accepted from, or provided to, customers or suppliers, provided they are valued at $100 or less. Any gift received over such amount should be politely returned or approval from the Chief Executive Officer obtained prior to acceptance. Gifts are permitted under this policy in the following circumstances:

§ Gifts of reasonable value based on a family or personal relationship where that relationship is the obvious motivating factor for the gift;

§ Discounts or rebates on merchandise or services that do not exceed those available to other customers of the merchant;

§ Awards for recognition of service or accomplishments from civic, charitable, educational, or religious organizations.

GIFTS OR GRATUITIES TO GOVERNMENT OFFICIALS ARE INAPPROPRIATE, POSSIBLY ILLEGAL AND ARE STRICTLY PROHIBITED.

Business Functions and Entertaining. Meals, refreshments, entertainment, accommodation, or travel arrangements of a reasonable value may be accepted if they are provided in the course of a meeting or occasion, the purpose of which is to hold bona fide business discussions or to foster better relations, and provided that the expense would be paid for by the Company if not paid for by another party. Customary and reasonable business and related development practices, consisting of appropriate entertainment events, including meals, are not prohibited by this Code. Such activities are prohibited if they are or may appear to be lavish. Frequent entertaining could appear to influence the judgment of the person being entertained. The purchase of tickets to fundraising events sponsored by non-profit organizations is considered a “normal business practice.” Invitations received by employees and officers that may seem inappropriate should be discussed with the Executive Vice President responsible for your functional area prior to acceptance. In matters involving Executive Vice Presidents or above, such invitations should be discussed with the Chief Executive Officer prior to acceptance. Invitations involving the Chief Executive Officer or a director should be discussed with the Chair of the Nominating and Corporate Governance Committee. Relationships with Outside Interests. Employees, officers and directors must avoid conflicts and the appearance of conflicts between personal interests and the interests of the Company. Employees, officers, and directors may own securities (e.g., debt or stock) in entities who are competitors or customers, without providing immediate notification to the Company. Employees, officers and directors must not act on behalf of the Company in any transaction involving persons or organizations with which you, or a family member, have any personal, financial, or residual interest without first providing written disclosure of such interest to the CEO, or the Board, as applicable. A family member includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law. The CEO or Board, as applicable, will review any personal disclosures and make a recusal determination promptly and will advise you if additional actions must be taken.Additionally, you must recuse yourself from any decision making process when you believe you or your family’s personal, financial, or residual interest presents a conflict or is sufficient that a conflict could be perceived. Such recusal shall be clearly documented in the minutes of any meeting at which the conflict or appearance of conflict is discussed. Relationships, other than normal and customary relationships at prevailing terms that an employee, officer or director may have with Company suppliers (for example, home improvement services, security firms, attorneys, lawn services, or automobile repair shops) should always be disclosed in writing to Human Resources prior to its commencement, and must be approved in writing in advance.

Employees and officers who serve in a “financial oversight role” are not permitted to receive any tax services from the Company’s independent auditors. The prohibition extends to the employee or officer’s Immediate Family Members. Immediate Family Member is defined as “spouse, spousal equivalent, or dependents.” The characteristic that identifies a “financial reporting role” is the ability to exercise influence over the contents of the financial statements of the Company or anyone who prepares them. The following roles are among those that meet the criterion: chief executive officer; president; chief financial officer; chief operating officer; general counsel, chief accounting officer; controller; director of internal audit; director of financial reporting, treasurer, and director of internal controls compliance. Tax services to a board member are permitted provided the Board member does not also function in any of the other financial reporting oversight roles noted immediately above.

Secondary Employment. We do not prohibit other employment; however, full time employees are expected to devote their complete attention and energy to their duties. Employees must notify their immediate supervisor and the Human Resource Officer prior to accepting any outside employment. Officers holding the title of Senior Vice President or higher (“Executive Officer”) must notify the Chief Executive Officer. Outside employment will not be approved which might subject the Company to criticism or which would encroach on working time, interfere with regular duties, or otherwise affect an individual's effectiveness. Employees are prohibited from outside employment that may appear to create a conflict of interest. This section should not be construed as prohibiting or discouraging an employee from serving as a volunteer at a non-profit organization.

Examples include:

· Engaging in any activity that competes with the Company.

· Employment which involves the use of our equipment, supplies, or facilities.

· Employment which involves the preparation, audit or certification of financial statements, tax returns, or other documents upon which we may rely for lending or other decisions. Senior Managers and employees who prepare income tax returns for individuals or entities other than themselves must obtain confirmation that the customer does not intend to use the officer's or employee's work product as part of any transaction with the Company.

· Employment which involves giving investment, legal or other advice, or exercising judgment which is based upon information, reports, or analyses that are accessible from the Company.

· Employment which may reflect adversely on the officer, employee, or the Company.

· Employment under circumstances which may suggest the sponsorship or support of the Company on behalf of the outside employer or an outside organization.

· Employment as an insurance or securities broker, agent or representative.

· Employment as a real estate salesman, broker, agent, or contractor, (except with the prior written approval of Chief Executive Officer).

Confidentiality and Privacy

Nonpublic Information. Employees are required to maintain the confidentiality of information entrusted to them by the Company and provided by our customers and vendors. Confidential information includes all non-public information that might be of use to competitors, or harmful to us or to our customers, if disclosed. It also includes non-public information about our financial condition, results of operations, business operations, and future prospects. All employees must exercise care not to misuse nonpublic information obtained during their employment, including customer lists, information about our personnel and customers, and business plans and ideas. The obligation to preserve confidential information continues even after employment ends. The obligation to maintain the confidentiality of information may be subject to legal or regulatory requirements to disclose that information. Discuss your concerns with your manager or Human Resource Officer if you have any questions regarding what constitutes confidential information or when such information must be disclosed.

Customer Information Privacy. We protect the confidentiality and security of customer information. The Company has a policy governing Customer Information Privacy and such policy should be referenced for more detailed information. Our Privacy Policy for customer information provides, among other things, that:

· We do not sell or rent customers’ personal information.

· We do not release customer information to third parties, except upon a customer’s authorization or when required by law. Employees may not discuss the business affairs of any customer with any other person, except on a strict need-to-know basis

· Third-Party service providers and vendors with access to customer information are required to keep customer information confidential and use it only to provide services to or for the Company.

Our People

We are committed to treating everyone with respect and dignity. Hostility, harassment, or unwelcome sexual advances are offensive and are not tolerated. We will strive to provide a safe and secure work environment, and to respect and protect the personal information of our employees, officers and directors.

Equal Opportunity. We are an equal opportunity employer, committed to ensuring that our workplace is free from discrimination. As such, we will recruit, hire, train, and promote individuals in accordance with all applicable laws and regulations, without regard to a person’s race, color, creed, religion, age, gender, national origin, citizenship status, marital status, sexual orientation, disability, veteran status, or other category protected by federal, state, or local law.

Harassment-Free Work Environment. One objective of this Code is to discourage unprofessional behavior that compromises trust, the quality of the work environment, or the integrity of decision-making. We prohibit behavior that harasses an employee, officer or director, or customer on the basis of race, color, creed, religion, age, gender, national origin, citizenship status, marital status, sexual orientation, disability, veteran status, or other category protected by federal, state, or local law. Forms of such harassment can include physical, verbal, and nonverbal behavior that harasses, disrupts, or interferes with work performance or in any way creates or contributes to an intimidating, hostile, or offensive work environment. This behavior includes, by way of example only, off-color jokes, threats, and derogatory e-mails or drawings. Similarly, favoritism, belittling others, and verbal outrages undermine the dignity and respect due to all employees, officers and directors. Sexual harassment is one form of conduct that undermines the integrity of the employment relationship. For purposes of this policy, sexual harassment is defined as sexual behavior that is unwelcome, is personally offensive, or creates a hostile, intimidating, or offensive work environment. We will not tolerate sexual harassment of applicants for employment, employees, officers or directors by anyone-employees, officers, directors, vendors, or customers. For additional information, contact your Human Resource Officer.

Health and Safety. Providing a safe and secure work environment is fundamental. Employees, officers and directors are responsible for complying with applicable health and safety rules. Accordingly, each person should take appropriate measures to protect his or her physical security and observe safe and responsible work practices, such as adhering to local building access security procedures, promptly reporting to management any job-related injury or illness, and following security guidelines. Moreover, violence or threats of violence by any employee against any other employee will not be tolerated. Likewise, weapons of any kind must never be brought to our offices or customer locations.

Substance Abuse. Being under the influence of alcohol or illegal drugs or improperly using medicines can diminish one’s ability to do his or her job, and can compromise the safety of others. You should not work in an impaired state or allow substances to interfere with the safety or productivity of those around you. This policy also prohibits the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance on the Company’s premises, in our vehicles, or while conducting Company business.

Code of Conduct and Ethics Administration

(Procedures for receipt, retention, and treatment of complaints received.)

Administration Responsibility. The Human Resource Director is responsible for administering this Code and enforcing the Code for employees and officers. The Audit Committee is responsible for enforcing the Code for senior officers and directors. The Human Resource Director is responsible for conducting Code-related training, maintaining all Code-related records and investigating and resolving all Code-related matters.

Responsibility to Report Code-Related Matters. All persons subject to the Code must report Code-related matters in accordance with the following procedures: Officers and employees must promptly make reports of any Code-related matters to their immediate supervisor and simultaneously to the Human Resource Officer. Supervisors receiving such reports must promptly advise the Human Resource Officer, even when the Human Resource Officer has already been advised. Directors shall promptly make reports of any Code-related matters to the Chief Executive Officer, the Corporate Secretary, or the Chair of the Audit Committee.

Permissible Transactions with the Company and Other Matters Not Involving a Code Violation. The Human Resource Officer shall promptly review all reports of Code-related matters. The Human Resource Officer shall confer with the appropriate officers to determine if the requested transaction or other matter complies with all applicable laws, regulations, and policies. If deemed necessary by the Human Resource Officer, the Human Resource Officer shall seek the advice of our legal counsel. The Human Resource Officer or his or her designee shall promptly advise the filer of the request as to our determination.

Investigation and Resolution of All Code Violations. The Human Resource Officer (or designee approved by the Board of Directors) shall promptly investigate all violations or alleged violations of any provision of the Code. Concerns regarding internal accounting controls, questionable accounting or auditing matters that have been reported to the Human Resource Officer should be forwarded by the Human Resource Officer to the Chair of the Auditing Committee. Any violation or alleged violation of the Code is referred to as a “Code Violation.” When appropriate, the Human Resource Officer shall promptly report any Code Violation to the Chief Executive Officer with recommendations for resolution, in accordance with the investigation and referral procedures described herein. The Chair of the Audit Committee should be informed of the violation and the response planned or executed. We will take appropriate action to resolve Code violations. Such resolutions may involve disciplinary actions or other sanctions including termination of employment or dismissal. We will take all reasonable steps to respond to any offense and prevent its recurrence.

The procedure for making such a report is as follows:

Prompt Confidential Reporting of Code Violations. Any employee, officer or director who becomes aware of a violation or alleged violation of any provision of this Code, including concerns regarding internal accounting controls, questionable accounting or auditing matters (any such violation or alleged violation of the Code is referred to as “Code Violation”), shall promptly report such violation. To encourage employees to fulfill their obligations under this Code, established procedures under which any employee, officer, or director suspecting that a Code Violation has been or is being committed, may report the facts in a manner that will safeguard the person’s identity to the fullest extent practicable and protect the reporting person against retribution. The procedure for making such a report is as follows:

1. Any employee or officer who becomes aware of a past or present Code Violation is required to promptly report the facts and circumstances to his or her immediate supervisor, and simultaneously to the Human Resource Officer. Once the supervisor has been advised of a Code Violation, the supervisor is required to promptly confirm the matter with the Human Resource Officer. Directors should contact the Chief Executive Officer, the Corporate Secretary, or the Chair of the Audit Committee. The Audit Committee of the Board of Directors in particular will be notified promptly about any Code Violation regarding accounting or auditing matters as well as the full board at its next regular meeting unless, in the judgment of the CEO, the matter needs to be addressed sooner.

2. An investigation into the reported Code Violation will be conducted promptly by the Human Resource Officer in consultation with the Chief Executive Officer or Audit Committee, as appropriate. Facts and circumstances in the report will be reported so as to protect, to the greatest extent possible, the anonymity of the reporting person.

3. If the Human Resource Officer and the Chief Executive Officer are not able to promptly resolve the Code Violation to their mutual satisfaction, the Human Resource Officer and the Chief Executive Officer shall promptly confer with the Audit Committee of the Board of Directors to resolve the Code Violation consistent with this Code and applicable laws and regulations.

4. Illegal or criminal conduct will also be reported to our primary regulators and any law enforcement agencies with jurisdiction consistent with confidentiality and the protection of applicable privacy privileges. We will cooperate fully with such authorities in their prosecution of parties responsible for impermissible, illegal, or criminal conduct.

5. In the event of legal proceedings, the reporting person(s) may be deposed, interviewed, and asked to testify, just as any other person having knowledge of the relevant facts and circumstances would be. We will seek to protect the identity of the reporting person to the greatest extent practicable.

Employees, officers and directors may also make reference to the Company’s Policy for Whistleblowing Procedures for further guidance regarding confidential reporting procedures. Employees, officers or directors who willfully fail to report a Code Violation or who fail to cooperate in an investigation of a Code Violation will be subject to disciplinary action, possibly including termination of employment, or in the case of a director, dismissal from the Board.

Request for Waivers. A waiver of a provision of the Code shall be requested whenever there is a question whether any contemplated action will violate the Code. It is anticipated that waivers will be granted only under exceptional or limited circumstances. The procedure for requesting a waiver is to seek approval from:

1. The Audit Committee of the Board - if the waiver sought relates to any executive officer (title of Senior Vice President or higher), and any Senior Financial Officer (CEO, CFO and all Accounting, Audit and/or Compliance officers, with the title of Vice President or higher).

2. The Human Resource Officer - if the waiver sought relates to any other employee. The determination shall be made by the employee’s immediate supervisor, in consultation with the Human Resource Officer unless such request is quantitatively or qualitatively material or outside the ordinary course of business, in which case such determination shall be made by the Audit Committee.

3. The decision with respect to the waiver request shall be documented and forwarded to the Human Resource Officer for filing and retention, with a copy to the Audit Committee of the Board of Directors.

4. All waivers of the Code shall be reported promptly by the Audit Committee or Human Resource Officer, as applicable, to the Board of Directors.

5. Waivers shall be publicly disclosed on a timely basis as determined by the Board of Directors in consultation with the Compliance Officer and/or legal counsel.

Sanctions for Code Violations. Failure to comply with the policies in this Code will result in disciplinary action, ranging from a reprimand to dismissal or removal and possible civil and criminal prosecution. Disciplinary actions will be pursued against all of the following: (a) any director, officer or employee violating this Code; (b) any director, officer or employee deliberately withholding information regarding a Code Violation; (c) the manager or supervisor of a person who has committed an act under (a) or (b), in circumstances where such violation reflected poor supervision or lack of diligence; and (d) any director, officer or employee who retaliates, directly or indirectly, against any employee who reports a suspected Code Violation. In addition, Code Violations may expose the offending employee, officer, or director and the Company to monetary damages, regulatory penalties, and criminal sanctions. We will ensure that all disciplinary actions taken to enforce this Code are applied consistently and in accordance with all applicable laws and regulations.

Retention. Reports documenting completed investigations will be confidentially maintained for no less than one year.

Your Personal Commitment to Our Code of Conduct and Ethics

All employees, officers and directors of the Company or First Guaranty Bank, are responsible for reading, understanding, and complying with the standards outlined in this Code.

Employees, officer, and directors are required to affirmatively acknowledge receipt, understanding, and compliance with this Code.

I acknowledge that I have received and will comply with the Code of Conduct and Ethics for Employees, Officer, and Directors. I understand and agree that the Code of Conduct and Ethics is not an employment contract between the Company or First Guaranty Bank and me.

I understand that if I have questions related to the standards of the Code of Conduct and Ethics, I am to discuss them promptly with my Manager (Branch or Department), Senior Management, Human Resource Officer, or the Compliance Officer.

Sign here:___________________________________________________________________________________________

Print:_______________________________________________________________________________________________

Name Title Date

EX-14.4

Approved January 17, 2013

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY

CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS

A. INTRODUCTION

This “Code of Ethics for Senior Financial Officers” (“Code”) was approved and adopted by the Board of Directors of First Guaranty Bancshares, Inc. (the “Company”). Its purpose is to ensure that the Company’s Senior Financial Officers are committed to the highest standards of integrity and professionalism when conducting and reporting the financial affairs of the Company. This Code, the text of which is posted on the Company’s Internet Web site at www.fgb.net, supplements the Company’s corporate-wide Code of Ethics that applies to all directors, officers and employees of the Company.

For the purposes of this Code, the term “Senior Financial Officer” includes each of the following officers of the Company:

● Chief Executive Office

● Chief Financial Officer

● All Executive Officers

B. STANDARDS OF CONDUCT

Each Senior Financial Officer of the Company shall be bound by the following standards of integrity and professionalism when conducting and reporting the Company’s financial affairs:

• Honest and Ethical Conduct

Each Senior Financial Officer shall engage in honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between his or her personal and professional relationships.

• Full Disclosure

Each Senior Financial Officer shall, to the best of their knowledge and ability, promote full, fair, accurate, timely and understandable disclosures in reports and documents that the Company files with or submits to the Securities and Exchange Commission (“SEC”), to other regulatory agencies, and in other public communications made by the Company.

• Compliance with Laws, Rules and Regulations

Each Senior Financial Officer shall, to the best of their knowledge and ability, promote full compliance with applicable governmental laws, rules and regulations.

• Reporting of Code Violations

Each Senior Financial Officer shall promptly report any known or suspected violation of this Code to the Company’s Audit Committee of the Board using the confidential “whistleblower” procedures established by the Bank for reporting questionable accounting or auditing practices or other significant business concerns. Where possible and appropriate, the identity of any person who reports a known or suspected violation of this Code as provided herein will be kept anonymous. The Company prohibits retaliation of any kind against individuals who make good-faith reports of ethical violations or other known or suspected illegal conduct.

• Accountability

Each Senior Financial Officer shall be held accountable for adherence to this Code.

C. AMENDMENTS TO OR WAIVERS OF THIS CODE

Any amendment to or waiver of this Code must be approved by the Company’s Board of Directors. A “waiver of this Code” is defined as a material departure from a provision of this Code. As a general rule, a waiver of this Code will not be approved unless necessary and warranted. The Company will disclose any amendment to or waiver of this Code in the manner required by then-applicable law, rule or listing standard.

First Guaranty Bancshares, Inc.

Senior Financial Officers Code of Ethics

Your Personal Commitment to Our Code of Ethics

All Senior Financial Officers of the First Guaranty Bancshares, Inc. are responsible for reading, understanding, and complying with the standards outlined in this Code.

Senior Financial Officers are required to affirmatively acknowledge receipt, understanding, and compliance with this Code.

I acknowledge that I have received and will comply with the Code of Ethics for Senior Financial Officers. I understand and agree that the Code of Ethics is not an employment contract between First Guaranty Bancshares, Inc. and me.

Sign here:________________________________________________________________________________________

Print:___________________________________________________________________________________________

 Name  Title  Date

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

Note 9. Accumulated Other Comprehensive Income

The following table details the changes in the single component of accumulated other comprehensive income for the nine months ended September 30, 2013:

(in thousands)	Unrealized (Loss) Gain on Securities Available for Sale
Accumulated Other Comprehensive (Loss) Income:
Balance December 31, 2012	$	6,048
Reclassification adjustments to net income:
Realized gains on securities		(1,556	)
Provision for income taxes		541
Unrealized losses arising during the period, net of tax		(10,949	)
Balance September 30, 2013	$	(5,916	)

XML

CONSOLIDATED STATEMENTS OF INCOME (unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Interest Income:
Loans (including fees)	$ 9,376	$ 8,903	$ 27,661	$ 26,537
Loans held for sale	0	0	0	1
Deposits with other banks	33	20	124	56
Securities (including FHLB stock)	3,424	4,172	10,027	15,110
Federal funds sold	0	2	1	10
Total Interest Income	12,833	13,097	37,813	41,714
Interest Expense:
Demand deposits	291	349	973	1,050
Savings deposits	8	14	33	40
Time deposits	2,450	2,782	7,441	8,905
Borrowings	39	25	114	98
Total Interest Expense	2,788	3,170	8,561	10,093
Net Interest Income	10,045	9,927	29,252	31,621
Less: Provision for loan losses	307	909	2,011	3,014
Net Interest Income after Provision for Loan Losses	9,738	9,018	27,241	28,607
Noninterest Income:
Service charges, commissions and fees	1,181	1,180	3,503	3,565
Net gains on securities	12	1,747	1,556	3,230
Net losses on sale of loans	(6)	(20)	(65)	(47)
Other	344	424	1,016	1,234
Total Noninterest Income	1,531	3,331	6,010	7,982
Noninterest Expense:
Salaries and employee benefits	3,655	3,394	10,767	10,125
Occupancy and equipment expense	981	963	2,966	2,818
Other	3,266	3,454	9,672	9,995
Total Noninterest Expense	7,902	7,811	23,405	22,938
Income Before Income Taxes	3,367	4,538	9,846	13,651
Less: Provision for income taxes	1,109	1,505	3,367	4,603
Net Income	2,258	3,033	6,479	9,048
Preferred Stock Dividends	(128)	(493)	(615)	(1,479)
Income Available to Common Shareholders	$ 2,130	$ 2,540	$ 5,864	$ 7,569
Per Common Share:
Earnings (in dollars per share)	$ 0.34	$ 0.40	$ 0.93	$ 1.20
Cash dividends paid (in dollars per share)	$ 0.16	$ 0.16	$ 0.48	$ 0.48
Weighted Average Common Shares Outstanding (in shares)	6,291,332	6,292,479	6,291,332	6,293,367

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2013

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

Note 2.  Recent Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-02, “Comprehensive Income (Topic 220):  Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (AOCI).”  The amendment requires an entity to present the reclassification adjustments out of AOCI and into net income for each component reported. This update is intended to supplement changes made in 2012 to increase the prominence of items reported in other comprehensive income. The standard became effective for the Company on January 1, 2013.  The adoption of this guidance resulted in the disclosures in Note 9 below and did not have a material impact upon the Company’s financial statements.

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income [Abstract]

Schedule of accumulated other comprehensive income (loss)

The following table details the changes in the single component of accumulated other comprehensive income for the nine months ended September 30, 2013:

(in thousands)	Unrealized (Loss) Gain on Securities Available for Sale
Accumulated Other Comprehensive (Loss) Income:
Balance December 31, 2012	$	6,048
Reclassification adjustments to net income:
Realized gains on securities		(1,556	)
Provision for income taxes		541
Unrealized losses arising during the period, net of tax		(10,949	)
Balance September 30, 2013	$	(5,916	)

XML

Fair Value

9 Months Ended

Sep. 30, 2013

Fair Value [Abstract]

Fair Value

Note 10. Fair Value

The fair value of a financial instrument is the current amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Valuation techniques use certain inputs to arrive at fair value. Inputs to valuation techniques are the assumptions that market participants would use in pricing the asset or liability. They may be observable or unobservable. The Company uses a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Inputs – Unadjusted quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds or credit risks) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value follows, as well as the classification of such instruments within the valuation hierarchy.

Securities available for sale. Securities are classified within Level 1 where quoted market prices are available in an active market. Inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices are unavailable, fair value is estimated using quoted prices of securities with similar characteristics, at which point the securities would be classified within Level 2 of the hierarchy. Securities classified within Level 3 in the Company's portfolio include municipal bonds and one preferred equity security.

Impaired loans. Loans are measured for impairment using the methods permitted by ASC Topic 310. Fair value of impaired loans is measured by either the loan's obtainable market price, if available (Level 1), the fair value of the collateral if the loan is collateral dependent (Level 2), or the present value of expected future cash flows, discounted at the specific loan's effective interest rate (Level 3). Fair value of the collateral is determined by appraisals or by independent valuation.

Other real estate owned. Properties are recorded at the balance of the loan or at estimated fair value less estimated selling costs, whichever is less, at the date acquired. Fair values of other real estate owned ("OREO") are determined by sales agreement or appraisal, and costs to sell are based on estimation per the terms and conditions of the sales agreement or amounts commonly used in real estate transactions. Inputs include appraisal values on the properties or recent sales activity for similar assets in the property’s market, and thus OREO measured at fair value would be classified within Level 2 of the hierarchy.

Certain non-financial assets and non-financial liabilities are measured at fair value on a non-recurring basis including assets and liabilities related to reporting units measured at fair value in the testing of goodwill impairment, as well as intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment.

The following table summarizes financial assets measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

(in thousands)	September 30, 2013		December 31, 2012
Fair Value Measurements Using: Available for Sale Securities
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	25,500	$	20,522
Significant Other Observable Inputs (Level 2)		450,654		573,071
Significant Unobservable Inputs (Level 3)		7,335		8,707
Securities available for sale measured at fair value	$	483,489	$	602,300

The Company's valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While the methodologies used are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value.

There were no transfers into Level 1 during the first nine months of 2013. One Government Agency security totaling $10.0 million was transferred from Level 1 into Level 2 because the security did not trade on the pricing date and quoted pricing for a similar asset in an active market was used.

The change in Level 3 securities available for sale from December 31, 2012 was due to the sale of a Level 3 security totaling $0.5 million and principal payments on municipal bonds totaling $0.9 million.

The following table measures financial assets and financial liabilities measured at fair value on a non-recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value:

(in thousands)	At September 30, 2013		At December 31, 2012
Fair Value Measurements Using: Impaired Loans
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	-	$	-
Significant Other Observable Inputs (Level 2)		5,215		8,563
Significant Unobservable Inputs (Level 3)		24,295		27,310
Impaired loans measured at fair value	$	29,510	$	35,873
Fair Value Measurements Using: Other Real Estate Owned
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	-	$	-
Significant Other Observable Inputs (Level 2)		3,689		2,394
Significant Unobservable Inputs (Level 3)		-		-
Other real estate owned measured at fair value	$	3,689	$	2,394

ASC 825-10 provides the Company with an option to report selected financial assets and liabilities at fair value. The fair value option established by this statement permits the Company to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each reporting date subsequent to implementation.

The Company has chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles generally accepted in the United States, and as such has not included any gains or losses in earnings for the nine months ended September 30, 2013 or 2012.

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Loans (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 691,228	$ 630,741
Percent of category (in hundredths)	100.00%	100.00%
Unearned income	(1,655)	(1,241)
Total loans net of unearned income	689,573	629,500
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
One year or less	155,403	196,293
One to five years	398,300	323,639
Five to 15 years	91,928	76,365
Over 15 years	31,406	13,756
Subtotal	677,037	610,053
Nonaccrual loans	14,498	20,688
Total loans before unearned income	691,535	630,741
Unearned income	(1,655)	(1,241)
Total loans net of unearned income	689,880	629,500
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	500,983	471,082
Percent of category (in hundredths)	72.50%	74.70%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	12,159	17,340
Real Estate [Member] | Construction & Land Development [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	47,457	44,856
Percent of category (in hundredths)	6.90%	7.10%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	73	854
Real Estate [Member] | Farmland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	11,425	11,182
Percent of category (in hundredths)	1.70%	1.80%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	341	312
Real Estate [Member] | 1- 4 Family [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	101,321	87,473
Percent of category (in hundredths)	14.70%	13.80%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	4,223	4,603
Real Estate [Member] | Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	13,962	14,855
Percent of category (in hundredths)	2.00%	2.40%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	0	0
Real Estate [Member] | Non-Farm Non-Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	326,818	312,716
Percent of category (in hundredths)	47.20%	49.60%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	7,522	11,571
Non-Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	190,245	159,659
Percent of category (in hundredths)	27.50%	25.30%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	2,339	3,348
Non-Real Estate [Member] | Agricultural [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	28,457	18,476
Percent of category (in hundredths)	4.10%	2.90%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	462	512
Non-Real Estate [Member] | Commercial and Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	139,455	117,425
Percent of category (in hundredths)	20.20%	18.60%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	1,877	2,831
Non-Real Estate [Member] | Consumer and Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	22,333	23,758
Percent of category (in hundredths)	3.20%	3.80%
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
Nonaccrual loans	0	5
Fixed Rate Loans [Member]
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
One year or less	76,175	89,117
One to five years	198,793	147,896
Five to 15 years	64,461	33,770
Over 15 years	8,664	7,829
Subtotal	348,093	278,612
Floating Rate Loans [Member]
Fixed and Floating Rate Loans by Maturity and Repricing Frequencies [Abstract]
One year or less	79,228	107,176
One to five years	199,507	175,743
Five to 15 years	27,467	42,595
Over 15 years	22,742	5,927
Subtotal	$ 328,944	$ 331,441

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Securities (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013 Security	Sep. 30, 2012	Sep. 30, 2013 Security	Sep. 30, 2012	Dec. 31, 2012 Security
Summary comparison, Available-for-sale securities [Abstract]
Amortized Cost	$ 492,456,000		$ 492,456,000		$ 593,149,000
Gross Unrealized Gains	4,389,000		4,389,000		9,830,000
Gross Unrealized Losses	(13,356,000)		(13,356,000)		(679,000)
Fair Value	483,489,000		483,489,000		602,300,000
Available-for-sale Securities, Debt Maturities, Cost [Abstract]
Due in one year or less, Amortized Cost	33,172,000		33,172,000
Due after one year through five years, Amortized Cost	181,967,000		181,967,000
Due after five years through 10 years, Amortized Cost	234,430,000		234,430,000
Over 10 years, Amortized Cost	42,887,000		42,887,000
Amortized cost	492,456,000		492,456,000
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Due in one year or less, Fair Value	33,280,000		33,280,000
Due after one year through five years, Fair Value	182,023,000		182,023,000
Due after five years through 10 years, Fair Value	227,680,000		227,680,000
Over 10 years, Fair Value	40,506,000		40,506,000
Fair Value	483,489,000		483,489,000		602,300,000
Available-for-sale Securities, Temporarily Impaired Securities [Abstract]
Less than 12 months, number of securities	238		238		94
12 months or more, number of securities	13		13		7
Number of Securities, Total	251		251		101
Less Than 12 Months, Fair Value	352,875,000		352,875,000		153,174,000
12 Months or More, Fair Value	5,319,000		5,319,000		2,211,000
Available-For-Sale Securities, Fair Value, Total	358,194,000		358,194,000		155,385,000
Less Than 12 Months, Gross Unrealized losses	(12,915,000)		(12,915,000)		(461,000)
12 Months or More, Gross Unrealized Losses	(441,000)		(441,000)		(218,000)
Gross Unrealized Losses, Total	(13,356,000)		(13,356,000)		(679,000)
Exposure to Investment Securities [Abstract]
Exposure to investment securities issuers threshold percentage of stockholder's equity (in hundredths)			10.00%
Amortized Cost	637,601,000		637,601,000		661,243,000
Summary comparison, Held to maturity [Abstract]
Amortized Cost	154,112,000		154,112,000		58,943,000
Gross Unrealized Gains	16,000		16,000		175,000
Gross Unrealized Losses	(6,247,000)		(6,247,000)		(179,000)
Fair Value	147,881,000		147,881,000		58,939,000
Held-to-maturity Securities, Debt Maturities, Net Carrying Amount [Abstract]
Due in one year or less, Amortized Cost	0		0
Due after one year through five years, Amortized Cost	0		0
Due after five years through 10 years, Amortized Cost	89,469,000		89,469,000
Over 10 years, Amortized Cost	0		0
Subtotal, Amortized Cost	89,469,000		89,469,000
Mortgage-backed securities, Amortized Cost	64,643,000		64,643,000
Total held to maturity, Amortized Cost	154,112,000		154,112,000
Held-to-maturity Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Due in one year or less, Fair Value	0		0
Due after on year through five years, Fair Value	0		0
Due after five years through 10 years, Fair Value	85,099,000		85,099,000
Over 10 years, Fair Value	0		0
Subtotal, Fair Value	85,099,000		85,099,000
Mortgage-backed securities, Fair Value	62,782,000		62,782,000
Total held to maturity securities, Fair Value	147,881,000		147,881,000
Held-to-maturity Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months,, number of securities	46		46		6
12 months or more, number of securities	0		0		0
Number of Securities, Total	46		46		6
Less Than 12 Months, Fair Value	142,865,000		142,865,000		24,118,000
12 Months or More, Fair Value	0		0		0
Total Held to Maturity Securities , Fair Value	142,865,000		142,865,000		24,118,000
Less Than 12 Months, Gross Unrealized losses	(6,247,000)		(6,247,000)		(179,000)
12 Months or More, Gross Unrealized Losses	0		0		0
Total Held-to-Maturity Securities, Gross Unrealized Losses	(6,247,000)		(6,247,000)		(179,000)
Securities Disclosures [Abstract]
Marketable securities, restricted, total	502,400,000		502,400,000
Proceeds from sales of securities, available for sale	1,000,000	15,600,000	18,200,000	61,300,000
Gross realized gains on sales of available for safe securities	3,000	1,600,000	1,600,000	2,900,000
Realized losses on available for sale securities	0	0	0	7,000
US Government Agencies [Member]
Summary comparison, Held to maturity [Abstract]
Amortized Cost	89,469,000		89,469,000		58,943,000
Gross Unrealized Gains	16,000		16,000		175,000
Gross Unrealized Losses	(4,386,000)		(4,386,000)		(179,000)
Fair Value	85,099,000		85,099,000		58,939,000
Held-to-maturity Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months,, number of securities	20		20		6
12 months or more, number of securities	0		0		0
Number of Securities, Total	20		20		6
Less Than 12 Months, Fair Value	80,083,000		80,083,000		24,118,000
12 Months or More, Fair Value	0		0		0
Total Held to Maturity Securities , Fair Value	80,083,000		80,083,000		24,118,000
Less Than 12 Months, Gross Unrealized losses	(4,386,000)		(4,386,000)		(179,000)
12 Months or More, Gross Unrealized Losses	0		0		0
Total Held-to-Maturity Securities, Gross Unrealized Losses	(4,386,000)		(4,386,000)		(179,000)
Mortgage-backed Securities [Member]
Summary comparison, Held to maturity [Abstract]
Amortized Cost	64,643,000		64,643,000		0
Gross Unrealized Gains	0		0		0
Gross Unrealized Losses	(1,861,000)		(1,861,000)		0
Fair Value	62,782,000		62,782,000		0
Held-to-maturity Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months,, number of securities	26		26		0
12 months or more, number of securities	0		0		0
Number of Securities, Total	26		26		0
Less Than 12 Months, Fair Value	62,782,000		62,782,000		0
12 Months or More, Fair Value	0		0		0
Total Held to Maturity Securities , Fair Value	62,782,000		62,782,000		0
Less Than 12 Months, Gross Unrealized losses	(1,861,000)		(1,861,000)		0
12 Months or More, Gross Unrealized Losses	0		0		0
Total Held-to-Maturity Securities, Gross Unrealized Losses	(1,861,000)		(1,861,000)		0
U.S. Treasuries [Member]
Summary comparison, Available-for-sale securities [Abstract]
Amortized Cost	25,000,000		25,000,000		20,000,000
Gross Unrealized Gains	0		0		0
Gross Unrealized Losses	0		0		0
Fair Value	25,000,000		25,000,000		20,000,000
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Fair Value	25,000,000		25,000,000		20,000,000
Available-for-sale Securities, Temporarily Impaired Securities [Abstract]
Less than 12 months, number of securities	3		3		1
12 months or more, number of securities	0		0		0
Number of Securities, Total	3		3		1
Less Than 12 Months, Fair Value	25,000,000		25,000,000		20,000,000
12 Months or More, Fair Value	0		0		0
Available-For-Sale Securities, Fair Value, Total	25,000,000		25,000,000		20,000,000
Less Than 12 Months, Gross Unrealized losses	0		0		0
12 Months or More, Gross Unrealized Losses	0		0		0
Gross Unrealized Losses, Total	0		0		0
U.S. Government Agencies [Member]
Summary comparison, Available-for-sale securities [Abstract]
Amortized Cost	302,805,000		302,805,000		392,616,000
Gross Unrealized Gains	0		0		751,000
Gross Unrealized Losses	(11,858,000)		(11,858,000)		(278,000)
Fair Value	290,947,000		290,947,000		393,089,000
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Fair Value	290,947,000		290,947,000		393,089,000
Available-for-sale Securities, Temporarily Impaired Securities [Abstract]
Less than 12 months, number of securities	85		85		34
12 months or more, number of securities	12		12		0
Number of Securities, Total	97		97		34
Less Than 12 Months, Fair Value	288,187,000		288,187,000		119,952,000
12 Months or More, Fair Value	2,760,000		2,760,000		0
Available-For-Sale Securities, Fair Value, Total	290,947,000		290,947,000		119,952,000
Less Than 12 Months, Gross Unrealized losses	(11,618,000)		(11,618,000)		(278,000)
12 Months or More, Gross Unrealized Losses	(240,000)		(240,000)		0
Gross Unrealized Losses, Total	(11,858,000)		(11,858,000)		(278,000)
Corporate Debt Securities [Member]
Summary comparison, Available-for-sale securities [Abstract]
Amortized Cost	146,248,000		146,248,000		159,488,000
Gross Unrealized Gains	4,053,000		4,053,000		8,024,000
Gross Unrealized Losses	(1,477,000)		(1,477,000)		(401,000)
Fair Value	148,824,000		148,824,000		167,111,000
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Fair Value	148,824,000		148,824,000		167,111,000
Available-for-sale Securities, Temporarily Impaired Securities [Abstract]
Less than 12 months, number of securities	149		149		59
12 months or more, number of securities	1		1		7
Number of Securities, Total	150		150		66
Less Than 12 Months, Fair Value	38,718,000		38,718,000		13,222,000
12 Months or More, Fair Value	2,559,000		2,559,000		2,211,000
Available-For-Sale Securities, Fair Value, Total	41,277,000		41,277,000		15,433,000
Less Than 12 Months, Gross Unrealized losses	(1,276,000)		(1,276,000)		(183,000)
12 Months or More, Gross Unrealized Losses	(201,000)		(201,000)		(218,000)
Gross Unrealized Losses, Total	(1,477,000)		(1,477,000)		(401,000)
Mutual Funds or Other Equity Securities [Member]
Summary comparison, Available-for-sale securities [Abstract]
Amortized Cost	2,064,000		2,064,000		2,564,000
Gross Unrealized Gains	0		0		23,000
Gross Unrealized Losses	0		0		0
Fair Value	2,064,000		2,064,000		2,587,000
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Fair Value	2,064,000		2,064,000		2,587,000
Available-for-sale Securities, Temporarily Impaired Securities [Abstract]
Less than 12 months, number of securities	0		0		0
12 months or more, number of securities	0		0		0
Number of Securities, Total	0		0		0
Less Than 12 Months, Fair Value	0		0		0
12 Months or More, Fair Value	0		0		0
Available-For-Sale Securities, Fair Value, Total	0		0		0
Less Than 12 Months, Gross Unrealized losses	0		0		0
12 Months or More, Gross Unrealized Losses	0		0		0
Gross Unrealized Losses, Total	0		0		0
Municipal Bonds [Member]
Summary comparison, Available-for-sale securities [Abstract]
Amortized Cost	16,339,000		16,339,000		18,481,000
Gross Unrealized Gains	336,000		336,000		1,032,000
Gross Unrealized Losses	(21,000)		(21,000)		0
Fair Value	16,654,000		16,654,000		19,513,000
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]
Fair Value	16,654,000		16,654,000		19,513,000
Available-for-sale Securities, Temporarily Impaired Securities [Abstract]
Less than 12 months, number of securities	1		1		0
12 months or more, number of securities	0		0		0
Number of Securities, Total	1		1		0
Less Than 12 Months, Fair Value	970,000		970,000		0
12 Months or More, Fair Value	0		0		0
Available-For-Sale Securities, Fair Value, Total	970,000		970,000		0
Less Than 12 Months, Gross Unrealized losses	(21,000)		(21,000)		0
12 Months or More, Gross Unrealized Losses	0		0		0
Gross Unrealized Losses, Total	(21,000)		(21,000)		0
Exceeds 10 percent of stockholders' equity [Member]
Exposure to Investment Securities [Abstract]
Amortized Cost	481,917,000		481,917,000
Fair Value	463,828,000		463,828,000
Exceeds 10 percent of stockholders' equity [Member] | U.S. Treasuries [Member]
Exposure to Investment Securities [Abstract]
Amortized Cost	25,000,000		25,000,000
Fair Value	25,000,000		25,000,000
Exceeds 10 percent of stockholders' equity [Member] | Federal Home Loan Bank (FHLB) [Member]
Exposure to Investment Securities [Abstract]
Amortized Cost	144,584,000		144,584,000
Fair Value	137,993,000		137,993,000
Exceeds 10 percent of stockholders' equity [Member] | Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC) [Member]
Exposure to Investment Securities [Abstract]
Amortized Cost	51,276,000		51,276,000
Fair Value	49,023,000		49,023,000
Exceeds 10 percent of stockholders' equity [Member] | Federal National Mortgage Association (Fannie Mae-FNMA) [Member]
Exposure to Investment Securities [Abstract]
Amortized Cost	139,417,000		139,417,000
Fair Value	134,664,000		134,664,000
Exceeds 10 percent of stockholders' equity [Member] | Federal Farm Credit Bank (FFCB) [Member]
Exposure to Investment Securities [Abstract]
Amortized Cost	121,640,000		121,640,000
Fair Value	$ 117,148,000		$ 117,148,000

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Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period			$ 6,048
Reclassification adjustment to net income:
Provision for income taxes	1,109	1,505	3,367	4,603
Balance, end of period	(5,916)		(5,916)
Unrealized Gain (Loss) on Securities Available for Sale [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period			6,048
Reclassification adjustment to net income:
Realized gains on securities			(1,556)
Provision for income taxes			541
Unrealized losses arising during the period, net of tax			(10,949)
Balance, end of period	$ (5,916)		$ (5,916)

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Goodwill and Other Intangible Assets (Details) (USD $)			9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Core Deposits [Member]
Company's purchased accounting intangible assets subject to amortization [Line Items]
Goodwill	$ 1,999,000	$ 1,999,000
Mortgage servicing rights	$ 100,000	$ 200,000
Weighted-average amortization			6 years 7 months 6 days

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value [Abstract]

Fair value, assets measured on recurring basis

The following table summarizes financial assets measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

(in thousands)	September 30, 2013		December 31, 2012
Fair Value Measurements Using: Available for Sale Securities
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	25,500	$	20,522
Significant Other Observable Inputs (Level 2)		450,654		573,071
Significant Unobservable Inputs (Level 3)		7,335		8,707
Securities available for sale measured at fair value	$	483,489	$	602,300

Fair value measurements, nonrecurring

The following table measures financial assets and financial liabilities measured at fair value on a non-recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value:

(in thousands)	At September 30, 2013		At December 31, 2012
Fair Value Measurements Using: Impaired Loans
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	-	$	-
Significant Other Observable Inputs (Level 2)		5,215		8,563
Significant Unobservable Inputs (Level 3)		24,295		27,310
Impaired loans measured at fair value	$	29,510	$	35,873
Fair Value Measurements Using: Other Real Estate Owned
Quoted Prices in Active Markets For Identical Assets (Level 1)	$	-	$	-
Significant Other Observable Inputs (Level 2)		3,689		2,394
Significant Unobservable Inputs (Level 3)		-		-
Other real estate owned measured at fair value	$	3,689	$	2,394

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) (USD $) In Thousands, unless otherwise specified	Series C - Preferred Stock $1,000 par value [Member]	Common Stock $1 Par [Member]	Surplus [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income/(Loss) [Member]	Total
Balance at beginning of period at Dec. 31, 2011	$ 39,435	$ 6,294	$ 39,387	$ 0	$ 37,019	$ 4,467	$ 126,602
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	0	0	9,048	0	9,048
Other comprehensive income	0	0	0	0	0	3,367	3,367
Treasury shares purchased, at cost, 2,895 shares	0	0	0	(54)	0	0	(54)
Cash dividends on common stock ($0.48 per share)	0	0	0	0	(3,028)	0	(3,028)
Preferred stock dividend	0	0	0	0	(1,479)	0	(1,479)
Balance at end of period at Sep. 30, 2012	39,435	6,294	39,387	(54)	41,560	7,834	134,456
Balance at beginning of period at Dec. 31, 2012	39,435	6,294	39,387	(54)	43,071	6,048	134,181
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	0	0	0	0	6,479	0	6,479
Other comprehensive income	0	0	0	0	0	(11,964)	(11,964)
Treasury shares purchased, at cost, 2,895 shares							0
Cash dividends on common stock ($0.48 per share)	0	0	0	0	(3,020)	0	(3,020)
Preferred stock dividend	0	0	0	0	(615)	0	(615)
Balance at end of period at Sep. 30, 2013	$ 39,435	$ 6,294	$ 39,387	$ (54)	$ 45,915	$ (5,916)	$ 125,061

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CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash Flows From Operating Activities
Net income	$ 6,479	$ 9,048
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	2,011	3,014
Depreciation and amortization	1,581	1,561
Amortization of investments	1,594	1,419
Net gains on securities	(1,556)	(3,230)
Net losses on sale of assets	56	138
ORE writedowns and loss on disposition	194	937
FHLB stock dividends	(2)	(1)
Net increase in loans held for sale	250	(80)
Change in other assets and liabilities, net	3,446	1,809
Net Cash Provided By Operating Activities	14,053	14,615
Cash Flows From Investing Activities
Funds invested in certificates of deposits	0	(747)
Proceeds from maturities and calls of HTM securities	12,414	128,640
Proceeds from maturities, calls and sales of AFS securities	579,284	621,340
Funds invested in HTM securities	(107,616)	(40,901)
Funds Invested in AFS securities	(478,595)	(713,748)
Proceeds from redemption of Federal Home Loan Bank stock	1,252	3,441
Funds invested in Federal Home Loan Bank stock	(2,568)	(3,940)
Net increase in loans	(64,665)	(39,666)
Purchases of premises and equipment	(1,495)	(1,214)
Proceeds from sales of premises and equipment	0	168
Proceeds from sales of other real estate owned	896	4,555
Net Cash Used In Investing Activities	(61,093)	(42,072)
Cash Flows From Financing Activities
Net decrease in deposits	(1,989)	(1,132)
Net increase (decrease) in short-term borrowings	27,711	(449)
Repayment of long-term borrowings	(450)	(1,950)
Purchase of treasury stock	0	(54)
Dividends paid	(3,635)	(4,507)
Net Cash Provided By (Used In) Financing Activities	21,637	(8,092)
Net Decrease In Cash and Cash Equivalents	(25,403)	(35,549)
Cash and Cash Equivalents at the Beginning of the Period	86,233	112,442
Cash and Cash Equivalents at the End of the Period	60,830	76,893
Noncash Activities:
Loans transferred to foreclosed assets	2,385	4,218
Cash Paid During The Period:
Interest on deposits and borrowed funds	8,606	10,467
Income taxes	$ 1,850	$ 4,900

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Securities

9 Months Ended

Sep. 30, 2013

Securities [Abstract]

Securities

Note 3. Securities

A summary comparison of securities by type at September 30, 2013 and December 31, 2012 is shown below.

	September 30, 2013									December 31, 2012
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale:
U.S Treasuries	$	25,000	$	-	$	-		$	25,000	$	20,000	$	-	$	-		$	20,000
U.S. Government Agencies		302,805		-		(11,858	)		290,947		392,616		751		(278	)		393,089
Corporate debt securities		146,248		4,053		(1,477	)		148,824		159,488		8,024		(401	)		167,111
Mutual funds or other equity securities		2,064		-		-			2,064		2,564		23		-			2,587
Municipal bonds		16,339		336		(21	)		16,654		18,481		1,032		-			19,513
Total available for sale securities	$	492,456	$	4,389	$	(13,356	)	$	483,489	$	593,149	$	9,830	$	(679	)	$	602,300
Held to maturity:
U.S. Government Agencies	$	89,469	$	16	$	(4,386	)	$	85,099	$	58,943	$	175	$	(179	)	$	58,939
Mortgage-backed securities		64,643		-		(1,861	)		62,782		-		-		-			-
Total held to maturity securities	$	154,112	$	16	$	(6,247	)	$	147,881	$	58,943	$	175	$	(179	)	$	58,939

The scheduled maturities of securities at September 30, 2013, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities due to call or prepayments. Mortgage-backed securities are not due at a single maturity because of amortization and potential prepayment of the underlying mortgages. For this reason they are presented separately in the maturity table below.

	September 30, 2013
(in thousands)	Amortized Cost		Fair Value
Available For Sale:
Due in one year or less	$	33,172	$	33,280
Due after one year through five years		181,967		182,023
Due after five years through 10 years		234,430		227,680
Over 10 years		42,887		40,506
Total available for sale securities	$	492,456	$	483,489
Held to Maturity:
Due in one year or less	$	-	$	-
Due after one year through five years		-		-
Due after five years through 10 years		89,469		85,099
Over 10 years		-		-
Subtotal		89,469		85,099
Mortgage-backed securities		64,643		62,782
Total held to maturity securities	$	154,112	$	147,881

At September 30, 2013 $502.4 million of the Company's securities were pledged to secure public fund deposits.

Proceeds from sales of securities classified as available for sale amounted to $1.0 million and $15.6 million for the three month period ended September 30, 2013 and 2012, respectively. Proceeds from sales of securities classified as available for sale amounted to $18.2 million and $61.3 million for the nine month period ended September 30, 2013 and 2012, respectively. Gross realized gains on sales of available for sale securities were $3,000 and $1.6 million for the three month period ended September 30, 2013 and 2012, respectively. Gross realized gains on sales of available for sale securities were $1.6 million and $2.9 million for the nine month period ended September 30, 2013 and 2012, respectively. There were no realized losses on available for sale securities for the three months period ended September 30, 2013 or 2012. There were no realized losses on available for sale securities for the nine month period ended September 30, 2013. Gross realized losses on available for sale securities were $7,000 for the nine month period ended September 30, 2012.

The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at September 30, 2013.

	Less Than 12 Months						12 Months or More						Total
(in thousands)	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasuries	3	$	25,000	$	-		-	$	-	$	-		3	$	25,000	$	-
U.S. Government agencies	85		288,187		(11,618	)	12		2,760		(240	)	97		290,947		(11,858	)
Corporate debt securities	149		38,718		(1,276	)	1		2,559		(201	)	150		41,277		(1,477	)
Mutual funds or other equity securities	-		-		-		-		-		-		-		-		-
Municipals	1		970		(21	)	-		-		-		1		970		(21	)
Total available for sale	238	$	352,875	$	(12,915	)	13	$	5,319	$	(441	)	251	$	358,194	$	(13,356	)
Held to maturity:
U.S. Government agencies	20	$	80,083	$	(4,386	)	-	$	-	$	-		20	$	80,083	$	(4,386	)
Mortgage-backed securities	26		62,782		(1,861	)	-		-		-		26		62,782		(1,861	)
Total held to maturity	46	$	142,865	$	(6,247	)	-	$	-	$	-		46	$	142,865	$	(6,247	)

The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at December 31, 2012.

	Less Than 12 Months						12 Months or More						Total
(in thousands)	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasuries	1	$	20,000	$	-		-	$	-	$	-		1	$	20,000	$	-
U.S. Government agencies	34		119,952		(278	)	-		-		-		34		119,952		(278	)
Corporate debt securities	59		13,222		(183	)	7		2,211		(218	)	66		15,433		(401	)
Mutual funds or other equity securities	-		-		-		-		-		-		-		-		-
Municipals	-		-		-		-		-		-		-		-		-
Total available for sale	94	$	153,174	$	(461	)	7	$	2,211	$	(218	)	101	$	155,385	$	(679	)
Held to maturity:
U.S. Government agencies	6	$	24,118	$	(179	)	-	$	-	$	-		6	$	24,118	$	(179	)
Mortgage-backed securities	-		-		-		-		-		-		-		-		-
Total held to maturity	6	$	24,118	$	(179	)	-	$	-	$	-		6	$	24,118	$	(179	)

Securities are evaluated for other-than-temporary impairment at least quarterly and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, (iii) the recovery of contractual principal and interest and (iv) 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.

The amount of investment securities issued by U.S. Government and Government sponsored agencies with unrealized losses and the amount of unrealized losses on those investment securities are the result of changes in market interest rates. The Company has the ability and intent to hold these securities until recovery, which may be until maturity.

The corporate debt securities consist primarily of corporate bonds issued by financial, insurance, utility, manufacturing, industrial, consumer products and oil and gas organizations. The Company believes that each of the issuers will be able to fulfill the obligations of these securities based on evaluations described above. The Company has the ability and intent to hold these securities until they recover, which could be at their maturity dates.

The Company believes that the securities with unrealized losses reflect impairment that is temporary and there are currently no securities with other-than-temporary impairment.

At September 30, 2013, the Company's exposure to bond issuers that exceeded 10% of stockholders’ equity is below:

	At September 30, 2013
(in thousands)	Amortized Cost		Fair Value
U.S. Treasuries	$	25,000	$	25,000
Federal Home Loan Bank (FHLB)		144,584		137,993
Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC)		51,276		49,023
Federal National Mortgage Association (Fannie Mae-FNMA)		139,417		134,664
Federal Farm Credit Bank (FFCB)		121,640		117,148
Total	$	481,917	$	463,828

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Basis of Presentation

9 Months Ended

Sep. 30, 2013

Basis of Presentation [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. The consolidated financial statements and the footnotes of First Guaranty Bancshares, Inc. (the “Company”) thereto should be read in conjunction with the audited financial statements and note disclosures for the Company previously filed with the Securities and Exchange Commission in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2012.

The consolidated financial statements include the accounts of First Guaranty Bancshares, Inc. and its wholly owned subsidiary First Guaranty Bank. All significant intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair presentation of the consolidated financial statements. Those adjustments are of a normal recurring nature. The results of operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results expected for the full year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are susceptible to significant change in the near term are the allowance for loan losses, valuation of goodwill, intangible assets and other purchase accounting adjustments.

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Loans, Receivables Past Due (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	$ 3,725,000	$ 6,687,000
90 Days or Greater Past Due	14,583,000	21,143,000
Total Past Due	18,308,000	27,830,000
Current	672,920,000	602,911,000
Total Loans	691,228,000	630,741,000
Recorded Investment, 90 Days Accruing	85,000	455,000
Unearned income	(1,655,000)	(1,241,000)
Total loans net of unearned income	689,573,000	629,500,000
Floor rate of nonaccrual status loans	222,600,000	231,700,000
Real Estate [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	3,100,000	6,512,000
90 Days or Greater Past Due	12,219,000	17,795,000
Total Past Due	15,319,000	24,307,000
Current	485,664,000	446,775,000
Total Loans	500,983,000	471,082,000
Recorded Investment, 90 Days Accruing	60,000	455,000
Real Estate [Member] | Construction & Land Development [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	396,000	228,000
90 Days or Greater Past Due	73,000	854,000
Total Past Due	469,000	1,082,000
Current	46,988,000	43,774,000
Total Loans	47,457,000	44,856,000
Recorded Investment, 90 Days Accruing	0	0
Real Estate [Member] | Farmland [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	35,000	96,000
90 Days or Greater Past Due	341,000	312,000
Total Past Due	376,000	408,000
Current	11,049,000	10,774,000
Total Loans	11,425,000	11,182,000
Recorded Investment, 90 Days Accruing	0	0
Real Estate [Member] | 1- 4 Family [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	1,588,000	4,895,000
90 Days or Greater Past Due	4,283,000	5,058,000
Total Past Due	5,871,000	9,953,000
Current	95,450,000	77,520,000
Total Loans	101,321,000	87,473,000
Recorded Investment, 90 Days Accruing	60,000	455,000
Real Estate [Member] | Multifamily [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	0	156,000
90 Days or Greater Past Due	0	0
Total Past Due	0	156,000
Current	13,962,000	14,699,000
Total Loans	13,962,000	14,855,000
Recorded Investment, 90 Days Accruing	0	0
Real Estate [Member] | Non-Farm Non-Residential [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	1,081,000	1,137,000
90 Days or Greater Past Due	7,522,000	11,571,000
Total Past Due	8,603,000	12,708,000
Current	318,215,000	300,008,000
Total Loans	326,818,000	312,716,000
Recorded Investment, 90 Days Accruing	0	0
Non-Real Estate [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	625,000	175,000
90 Days or Greater Past Due	2,364,000	3,348,000
Total Past Due	2,989,000	3,523,000
Current	187,256,000	156,136,000
Total Loans	190,245,000	159,659,000
Recorded Investment, 90 Days Accruing	25,000	0
Non-Real Estate [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	316,000	0
90 Days or Greater Past Due	487,000	512,000
Total Past Due	803,000	512,000
Current	27,654,000	17,964,000
Total Loans	28,457,000	18,476,000
Recorded Investment, 90 Days Accruing	25,000	0
Non-Real Estate [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	148,000	60,000
90 Days or Greater Past Due	1,877,000	2,831,000
Total Past Due	2,025,000	2,891,000
Current	137,430,000	114,534,000
Total Loans	139,455,000	117,425,000
Recorded Investment, 90 Days Accruing	0	0
Non-Real Estate [Member] | Consumer and Other [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30-89 Days Past Due	161,000	115,000
90 Days or Greater Past Due	0	5,000
Total Past Due	161,000	120,000
Current	22,172,000	23,638,000
Total Loans	22,333,000	23,758,000
Recorded Investment, 90 Days Accruing	$ 0	$ 0

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Other Real Estate (ORE) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Real Estate Owned Acquired by Foreclosure [Abstract]
Residential	$ 1,968	$ 1,186
Construction & land development	780	1,083
Non-farm non-residential	941	125
Total Other Real Estate Owned and Foreclosed Property	$ 3,689	$ 2,394

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CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Investment securities:
Held to maturity investments, fair value	$ 147,881	$ 58,939
Common stock:
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	100,600,000	100,600,000
Common stock, shares issued (in shares)	6,294,227	6,294,227
Treasury Stock (in shares)	2,895	2,895
Series C - Preferred Stock $1,000 par value [Member]
Preferred stock:
Preferred stock, par value (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares authorized (in shares)	39,435	39,435
Preferred stock, shares issued (in shares)	39,435	39,435
Preferred stock, shares outstanding (in shares)	39,435	39,435

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2013

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

Note 6. Goodwill and Other Intangible Assets

Goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to impairment testing. Other intangible assets continue to be amortized over their useful lives. The Company's goodwill is the difference in purchase price over the fair value of net assets acquired from the acquisition of Homestead Bancorp in 2007. Goodwill totaled $2.0 million at September 30, 2013 and December 31, 2012. No impairment charges have been recognized on the Company's intangible assets.Mortgage servicing rights totaled $0.1 million at September 30, 2013 compared to $0.2 million at December 31, 2012. Other intangible assets recorded include core deposit intangibles, which are subject to amortization. The weighted-average amortization period remaining for the Company's core deposit intangibles is 6.6 years. The core deposits intangible reflect the value of deposit relationships, including the beneficial rates, which arose from acquisitions.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) [Abstract]
Net Income	$ 2,258	$ 3,033	$ 6,479	$ 9,048
Unrealized (losses) gains on securities:
Unrealized holding (losses) gains arising during the period	(200)	4,075	(16,570)	8,332
Reclassification adjustments for gains included in net income	(12)	(1,747)	(1,556)	(3,230)
Change in unrealized (losses) gains on securities	(212)	2,328	(18,126)	5,102
Tax impact	72	(792)	6,162	(1,735)
Other comprehensive (loss) income, net of tax	(140)	1,536	(11,964)	3,367
Comprehensive Income (Loss)	$ 2,118	$ 4,569	$ (5,485)	$ 12,415

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CONSOLIDATED BALANCE SHEETS (unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Cash and cash equivalents:
Cash and due from banks	$ 59,583	$ 83,330
Interest-earning demand deposits with banks	260	12
Federal funds sold	987	2,891
Cash and cash equivalents	60,830	86,233
Interest-earning time deposits with banks	747	747
Investment securities:
Available for sale, at fair value	483,489	602,300
Held to maturity, at cost (estimated fair value of $147,881 and $58,939, respectively)	154,112	58,943
Investment securities	637,601	661,243
Federal Home Loan Bank stock, at cost	2,593	1,275
Loans held for sale	307	557
Loans, net of unearned income	689,573	629,500
Less: allowance for loan losses	10,146	10,342
Net loans	679,427	619,158
Premises and equipment, net	19,778	19,564
Goodwill	1,999	1,999
Intangible assets, net	2,155	2,413
Other real estate, net	3,689	2,394
Accrued interest receivable	6,697	6,711
Other assets	8,725	5,009
Total Assets	1,424,548	1,407,303
Deposits:
Noninterest-bearing demand	191,785	192,232
Interest-bearing demand	336,162	348,870
Savings	65,113	63,062
Time	657,563	648,448
Total deposits	1,250,623	1,252,612
Short-term borrowings	42,457	14,746
Accrued interest payable	2,795	2,840
Long-term borrowings	650	1,100
Other liabilities	2,962	1,824
Total Liabilities	1,299,487	1,273,122
Stockholders' Equity
Preferred stock: Series C - $1,000 par value - authorized 39,435 shares; issued and outstanding 39,435	39,435	39,435
Common stock: $1 par value - authorized 100,600,000 shares; issued 6,294,227 shares	6,294	6,294
Surplus	39,387	39,387
Treasury stock, at cost, 2,895 shares	(54)	(54)
Retained earnings	45,915	43,071
Accumulated other comprehensive (loss) income	(5,916)	6,048
Total Stockholders' Equity	125,061	134,181
Total Liabilities and Stockholders' Equity	1,424,548	1,407,303
Series C - Preferred Stock $1,000 par value [Member]
Stockholders' Equity
Total Stockholders' Equity	$ 39,435	$ 39,435

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Loans, Credit Exposure of Portfolio (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 691,228	$ 630,741
Unearned income	(1,655)	(1,241)
Total loans net of unearned income	689,573	629,500
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	629,077	543,788
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	15,185	28,172
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	46,966	58,781
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	500,983	471,082
Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	440,074	393,669
Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	14,864	24,123
Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	46,045	53,290
Real Estate [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Real Estate [Member] | Construction and Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	47,457	44,856
Real Estate [Member] | Construction and Land Development [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	39,485	29,654
Real Estate [Member] | Construction and Land Development [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	1,366	5,595
Real Estate [Member] | Construction and Land Development [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	6,606	9,607
Real Estate [Member] | Construction and Land Development [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Real Estate [Member] | Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	11,425	11,182
Real Estate [Member] | Farmland [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	11,326	11,059
Real Estate [Member] | Farmland [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Real Estate [Member] | Farmland [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	99	123
Real Estate [Member] | Farmland [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Real Estate [Member] | 1- 4 Family [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	101,321	87,473
Real Estate [Member] | 1- 4 Family [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	86,797	71,240
Real Estate [Member] | 1- 4 Family [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	3,948	7,117
Real Estate [Member] | 1- 4 Family [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	10,576	9,116
Real Estate [Member] | 1- 4 Family [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Real Estate [Member] | Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	13,962	14,855
Real Estate [Member] | Multifamily [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	5,913	6,746
Real Estate [Member] | Multifamily [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	153	806
Real Estate [Member] | Multifamily [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	7,896	7,303
Real Estate [Member] | Multifamily [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Real Estate [Member] | Non-Farm Non-Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	326,818	312,716
Real Estate [Member] | Non-Farm Non-Residential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	296,553	274,970
Real Estate [Member] | Non-Farm Non-Residential [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	9,397	10,605
Real Estate [Member] | Non-Farm Non-Residential [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	20,868	27,141
Real Estate [Member] | Non-Farm Non-Residential [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Non-Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	190,245	159,659
Non-Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	189,003	150,119
Non-Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	321	4,049
Non-Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	921	5,491
Non-Real Estate [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Non-Real Estate [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	28,457	18,476
Non-Real Estate [Member] | Agricultural [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	28,168	17,969
Non-Real Estate [Member] | Agricultural [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	12	75
Non-Real Estate [Member] | Agricultural [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	277	432
Non-Real Estate [Member] | Agricultural [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Non-Real Estate [Member] | Commercial and Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	139,455	117,425
Non-Real Estate [Member] | Commercial and Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	138,781	108,590
Non-Real Estate [Member] | Commercial and Industrial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	100	3,834
Non-Real Estate [Member] | Commercial and Industrial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	574	5,001
Non-Real Estate [Member] | Commercial and Industrial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	0	0
Non-Real Estate [Member] | Consumer and Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	22,333	23,758
Non-Real Estate [Member] | Consumer and Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	22,054	23,560
Non-Real Estate [Member] | Consumer and Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	209	140
Non-Real Estate [Member] | Consumer and Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	70	58
Non-Real Estate [Member] | Consumer and Other [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans	$ 0	$ 0

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies [Abstract]

Schedule of notional amounts of outstanding financial instruments

Below is a summary of the notional amounts of the financial instruments with off-balance sheet risk at September 30, 2013 and December 31, 2012:

Contract Amount
(in thousands)	September 30, 2013		December 31, 2012
Commitments to Extend Credit	$	40,734	$	26,775
Unfunded Commitments under lines of credit	$	85,700	$	71,423
Commercial and Standby letters of credit	$	5,405	$	5,470

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Fair Value Measurements (Details) (USD $)	9 Months Ended
	Sep. 30, 2013 Securities	Sep. 30, 2013 Recurring Basis [Member]	Dec. 31, 2012 Recurring Basis [Member]	Sep. 30, 2013 Recurring Basis [Member] Quoted Prices in Active Markets For Identical Assets (Level 1) [Member]	Dec. 31, 2012 Recurring Basis [Member] Quoted Prices in Active Markets For Identical Assets (Level 1) [Member]	Sep. 30, 2013 Recurring Basis [Member] Significant Other Observable Inputs (Level 2) [Member]	Dec. 31, 2012 Recurring Basis [Member] Significant Other Observable Inputs (Level 2) [Member]	Sep. 30, 2013 Recurring Basis [Member] Significant Unobservable Inputs (Level 3) [Member]	Dec. 31, 2012 Recurring Basis [Member] Significant Unobservable Inputs (Level 3) [Member]	Sep. 30, 2013 Non-Recurring Basis [Member]	Dec. 31, 2012 Non-Recurring Basis [Member]	Sep. 30, 2013 Non-Recurring Basis [Member] Quoted Prices in Active Markets For Identical Assets (Level 1) [Member]	Dec. 31, 2012 Non-Recurring Basis [Member] Quoted Prices in Active Markets For Identical Assets (Level 1) [Member]	Sep. 30, 2013 Non-Recurring Basis [Member] Significant Other Observable Inputs (Level 2) [Member]	Dec. 31, 2012 Non-Recurring Basis [Member] Significant Other Observable Inputs (Level 2) [Member]	Sep. 30, 2013 Non-Recurring Basis [Member] Significant Unobservable Inputs (Level 3) [Member]	Dec. 31, 2012 Non-Recurring Basis [Member] Significant Unobservable Inputs (Level 3) [Member]
Assets measured on recurring basis [Abstract]
Securities available for sale measured at fair value		$ 483,489,000	$ 602,300,000	$ 25,500,000	$ 20,522,000	$ 450,654,000	$ 573,071,000	$ 7,335,000	$ 8,707,000
Assets measured on a nonrecurring basis [Abstract]
Impaired loans measured at fair value										29,510,000	35,873,000	0	0	5,215,000	8,563,000	24,295,000	27,310,000
Other real estate owned measured at fair value										3,689,000	2,394,000	0	0	3,689,000	2,394,000	0	0
Fair value assets transfers to Level 1	0
Fair value asset transfers from Level 1 to Level 2	10,000,000
Fair value number of asset transfers from Level 1 to Level 2	1
Change in level 3 securities available for sale	500,000
Principal payment on municipal bonds	$ 900,000

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Allowance for Loan Losses

9 Months Ended

Sep. 30, 2013

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses

Note 5. Allowance for Loan Losses

The allowance for loan losses is reviewed by on a monthly basis and additions thereto are recorded pursuant to the results of such reviews. In assessing the allowance, several internal and external factors that might impact the performance of individual loans are considered. These factors include, but are not limited to, economic conditions and their impact upon borrowers' ability to repay loans, respective industry trends, borrower estimates and independent appraisals. Periodic changes in these factors impact the assessment of each loan and its overall impact on the allowance for loan losses.

The monitoring of credit risk also extends to unfunded credit commitments, such as unused commercial credit lines and letters of credit. A reserve is established as needed for estimates of probable losses on such commitments.

A summary of changes in the allowance for loan losses, by loan type, for the nine months ended September 30, 2013 and 2012 are as follows:

	Allowance for Credit Losses
	As of September 30,
	2013												2012
(in thousands)	Beginning Allowance {12/31/12}		Charge-offs			Recoveries		Provision			Ending Allowance {9/30/13}		Beginning Allowance {12/31/11}		Charge-offs			Recoveries		Provision			Ending Allowance{9/30/12}
Real Estate:
Construction & land development	$	1,098	$	(233	)	$	3	$	384		$	1,252	$	1,002	$	(58	)	$	13	$	228		$	1,185
Farmland		50		-			140		(154	)		36		65		-			1		15			81
1 - 4 family		2,239		(185	)		35		169			2,258		1,917		(1,409	)		27		1,547			2,082
Multifamily		284		-			-		267			551		780		(187			-		(162	)		431
Non-farm non-residential		3,666		(1,053	)		3		543			3,159		2,980		(459	)		106		818			3,445
Total real estate		7,337		(1,471	)		181		1,209			7,256		6,744		(2,113	)		147		2,446			7,224
Non-Real Estate:
Agricultural		64		(41	)		4		23			50		125		(27	)		1		(40	)		59
Commercial and industrial		2,488		(942	)		63		748			2,357		1,407		(455	)		212		508			1,672
Consumer and other		233		(192	)		191		(41	)		191		314		(356	)		205		137			300
Unallocated		220		-			-		72			292		289		-			-		(37	)		252
Total Non-Real Estate		3,005		(1,175	)		258		802			2,890		2,135		(838	)		418		568			2,283
Total	$	10,342	$	(2,646	)	$	439	$	2,011		$	10,146	$	8,879	$	(2,951	)	$	565	$	3,014		$	9,507

Negative provisions are caused by changes in the composition and credit quality of the loan portfolio.  The result is an allocation of the loan loss reserve from one category to another.

The following table presents the allowance and loans, by loan type, that are individually and collectively evaluated for impairment for the period indicated.

	Allowance for Impaired Loans
	As of September 30, 2013
(in thousands)	Allowance Individually Evaluated for Impairment		Allowance Collectively Evaluated for Impairment		Total Allowance for Credit Losses		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Total Loans before Unearned Income
Real Estate:
Construction & land development	$	910	$	342	$	1,252	$	6,448	$	41,009	$	47,457
Farmland		-		36		36		-		11,425		11,425
1 - 4 family		19		2,239		2,258		2,874		98,447		101,321
Multifamily		522		29		551		7,896		6,066		13,962
Non-farm non-residential		679		2,480		3,159		19,401		307,417		326,818
Total Real Estate		2,130		5,126		7,256		36,619		464,364		500,983
Non-Real Estate:
Agricultural		-		50		50		-		28,457		28,457
Commercial and industrial		-		2,357		2,357		-		139,455		139,455
Consumer and other		-		191		191		-		22,333		22,333
Unallocated		-		292		292
Total Non-Real Estate		-		2,890		2,890		-		190,245		190,245
Total	$	2,130	$	8,016	$	10,146	$	36,619	$	654,609		691,228
Unearned Income												(1,655	)
Total loans net of unearned income											$	689,573

	Allowance for Impaired Loans
	As of December 31, 2012
(in thousands)	Allowance Individually Evaluated for Impairment		Allowance Collectively Evaluated for Impairment		Total Allowance for Credit Losses		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Total Loans before Unearned Income
Real Estate:
Construction & land development	$	713	$	385	$	1,098	$	8,865	$	35,991	$	44,856
Farmland		-		50		50		-		11,182		11,182
1 - 4 family		91		2,148		2,239		2,126		85,347		87,473
Multifamily		244		40		284		7,302		7,553		14,855
Non-farm non-residential		1,535		2,131		3,666		25,904		286,812		312,716
Total Real Estate		2,583		4,754		7,337		44,197		426,885		471,082
Non-Real Estate:
Agricultural		-		64		64		-		18,476		18,476
Commercial and industrial		507		1,981		2,488		4,390		113,035		117,425
Consumer and other		-		233		233		-		23,758		23,758
Unallocated		-		220		220
Total Non-Real Estate		507		2,498		3,005		4,390		155,269		159,659
Total	$	3,090	$	7,252	$	10,342	$	48,587	$	582,154		630,741
Unearned Income												(1,241	)
Total loans net of unearned income											$	629,500

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Payment status, collateral value and the probability of collecting scheduled principal and interest payments when due are considered in evaluating loan impairment. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

The significance of payment delays and payment shortfalls are considered on a case-by-case basis; all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed are factors considered. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. This process is applied to impaired loan relationships in excess of $250,000.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, individual consumer and residential loans are not separately identified for impairment disclosures, unless such loans are the subject of a restructuring agreement.

The following is a summary of impaired loans by class as of the date indicated:

	As of September 30, 2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Cash Basis
Impaired Loans with no related allowance:
Real Estate:
Construction & land development	$	-	$	-	$	-	$	801	$	35	$	36
Farmland		-		-		-		-		-		-
1 - 4 family		441		440		-		483		19		24
Multifamily		619		650		-		485		47		53
Non-farm non-residential		6,049		10,188		-		10,020		437		422
Total Real Estate		7,109		11,278		-		11,789		538		535
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		-		-		-		1,968		103		131
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		1,968		103		131
Total Impaired Loans with no related allowance		7,109		11,278		-		13,757		641		666
Impaired Loans with an allowance recorded:
Real Estate:
Construction & land development		6,448		5,593		910		6,387		299		277
Farmland		-		-		-		-		-		-
1 - 4 family		2,433		8,219		19		1,378		89		71
Multifamily		7,277		7,301		522		7,294		313		323
Non-farm non-residential		13,352		6,781		679		12,924		444		419
Total Real Estate		29,510		27,894		2,130		27,983		1,145		1,090
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		-		-		-		-		-		-
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		-		-		-
Total Impaired Loans with an allowance recorded		29,510		27,894		2,130		27,983		1,145		1,090
Total Impaired Loans	$	36,619	$	39,172	$	2,130	$	41,740	$	1,786	$	1,756

The following is a summary of impaired loans by class as of the date indicated:

	As of December 31, 2012
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Cash Basis
Impaired Loans with no related allowance:
Real Estate:
Construction & land development	$	3,177	$	3,177	$	-	$	4,012	$	414	$	404
Farmland		-		-		-		-		-		-
1 - 4 family		1,516		2,176		-		2,102		162		73
Multifamily		1,351		1,351		-		1,355		103		110
Non-farm non-residential		2,936		2,982		-		5,963		427		287
Total Real Estate		8,980		9,686		-		13,432		1,106		874
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		3,734		3,734		-		1,098		117		87
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		3,734		3,734		-		1,098		117		87
Total Impaired Loans with no related allowance		12,714		13,420		-		14,530		1,223		961
Impaired Loans with an allowance recorded:
Real Estate:
Construction & land development		5,688		5,688		713		3,677		406		418
Farmland		-		-		-		-		-		-
1 - 4 family		610		776		91		732		70		67
Multifamily		5,951		5,951		244		5,998		597		593
Non-farm non-residential		22,968		25,720		1,535		24,669		2,616		2,711
Total Real Estate		35,217		38,135		2,583		35,076		3,689		3,789
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		656		656		507		786		94		-
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		656		656		507		786		94		-
Total Impaired Loans with an allowance recorded		35,873		38,791		3,090		35,862		3,783		3,789
Total Impaired Loans	$	48,587	$	52,211	$	3,090	$	50,392	$	5,006	$	4,750

Troubled Debt Restructurings

A Troubled Debt Restructuring ("TDR") is considered such if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider. The modifications to the Company's TDRs were concessions on the interest rate charged. The effect of the modifications to the Company was a reduction in interest income. These loans have an allocated reserve in the Company's reserve for loan losses. The Company has not restructured any loans that are considered troubled debt restructurings in the prior twelve months.

The following table identifies the Troubled Debt Restructurings as of September 30, 2013 and December 31, 2012:

Troubled Debt Restructurings	September 30, 2013								December 31, 2012
	Accruing Loans								Accruing Loans
(in thousands)	Current		30-89 Days Past Due		Nonaccrual		Total TDRs		Current		30-89 Days Past Due		Nonaccrual		Total TDRs
Real Estate:
Construction & land development	$	-	$	-	$	-	$	-	$	2,602	$	-	$	-	$	2,602
Farmland		-		-		-		-		-		-		-		-
1-4 Family		-		-		-		-		-		-		1,296		1,296
Multifamily		5,951		-		-		5,951		5,951		-		-		5,951
Non-farm non residential		3,007		-		324		3,331		6,103		-		678		6,781
Total Real Estate		8,958		-		324		9,282		14,656		-		1,974		16,630
Non-Real Estate:
Agricultural		-		-		-		-		-		-		-		-
Commercial and industrial		-		-		-		-		-		-		-		-
Consumer and other		-		-		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		-		-		-		-		-
Total	$	8,958	$	-	$	324	$	9,282	$	14,656	$	-	$	1,974	$	16,630

The following table discloses TDR activity for the nine months ended September 30, 2013.

	Trouble Debt Restructured Loans Activity
	Nine Months Ended September 30, 2013
(in thousands)	Beginning balance {December 31, 2012}		New TDRs		Charge-offs post-modification			Transferred to ORE			Paydowns		Construction to permanent financing		Restructured to market terms			Ending balance {September 30, 2013}
Real Estate:
Construction & land development	$	2,602	$	-	$	-		$	-		$	-	$	-	$	(2,602	)	$	-
Farmland		-		-		-			-			-		-		-			-
1 - 4 family		1,296		-		-			(1,075	)		-		-		(221	)		-
Multifamily		5,951		-		-			-			-		-		-			5,951
Non-farm non-residential		6,781		-		(355	)		-			-		-		(3,095	)		3,331
Total Real Estate		16,630		-		(355	)		(1,075	)		-		-		(5,918	)		9,282
Non-Real Estate:
Agricultural		-		-		-			-			-		-		-			-
Commercial and industrial		-		-		-			-			-		-		-			-
Consumer and other		-		-		-			-			-		-		-			-
Total Non-Real Estate		-		-		-			-			-		-		-			-
Total Impaired Loans with no related allowance	$	16,630	$	-	$	(355	)	$	(1,075	)	$	-	$	-	$	(5,918	)	$	9,282

The Company has made no commitments to lend additional funds to debtors owing receivables whose terms have been modified in a troubled debt restructuring at September 30, 2013.

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Allowance for Loan Losses (Details) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	$ 10,342,000	$ 8,879,000	$ 8,879,000
Charge offs	(2,646,000)	(2,951,000)
Recoveries	439,000	565,000
Provision	2,011,000	3,014,000
Allowance at ending of period	10,146,000	9,507,000	10,342,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	2,130,000		3,090,000
Allowance Collectively Evaluated for Impairment	8,016,000		7,252,000
Total Allowance for Credit Losses	10,146,000	9,507,000	10,342,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	36,619,000		48,587,000
Loans Collectively Evaluated for Impairment	654,609,000		582,154,000
Total Loans before Unearned Income	691,228,000		630,741,000
Unearned income	(1,655,000)		(1,241,000)
Total loans net of unearned income	689,573,000		629,500,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	7,109,000		12,714,000
Unpaid principal balance - no related allowance	11,278,000		13,420,000
No related allowance	0		0
Average recorded investment - no related allowance	13,757,000		14,530,000
Interest income recognized - no related allowance	641,000		1,223,000
Interest income cash basis - no related allowance	666,000		961,000
Recorded investment - with related allowance	29,510,000		35,873,000
Unpaid principal balance - with related allowance	27,894,000		38,791,000
Related allowance	2,130,000		3,090,000
Average recorded investment - with related allowance	27,983,000		35,862,000
Interest income, recognized - with related allowance	1,145,000		3,783,000
Interest income, cash basis - with related allowance	1,090,000		3,789,000
Total Impaired Loans, Recorded Investment	36,619,000		48,587,000
Total Impaired Loans, Unpaid Principal Balance	39,172,000		52,211,000
Total Impaired Loans, Related Allowance	2,130,000		3,090,000
Total Impaired Loans, Average Recorded Investment	41,740,000		50,392,000
Total Impaired Loans, Interest Income Recognized	1,786,000		5,006,000
Total Impaired Loans, Interest Income Cash Basis	1,756,000		4,750,000
Minimum amount of impaired loans or relationships	250,000
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	8,958,000		14,656,000
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	324,000		1,974,000
Total TDRs	9,282,000		16,630,000
TDR activity [Roll Forward]
Balance of TDRs	16,630,000
New TDRs	0
Charge-offs post-modification	(355,000)
Transferred to ORE	(1,075,000)
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	(5,918,000)
Balance of TDRs	9,282,000		16,630,000
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	7,337,000	6,744,000	6,744,000
Charge offs	(1,471,000)	(2,113,000)
Recoveries	181,000	147,000
Provision	1,209,000	2,446,000
Allowance at ending of period	7,256,000	7,224,000	7,337,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	2,130,000		2,583,000
Allowance Collectively Evaluated for Impairment	5,126,000		4,754,000
Total Allowance for Credit Losses	7,256,000	7,224,000	7,337,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	36,619,000		44,197,000
Loans Collectively Evaluated for Impairment	464,364,000		426,885,000
Total Loans before Unearned Income	500,983,000		471,082,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	7,109,000		8,980,000
Unpaid principal balance - no related allowance	11,278,000		9,686,000
No related allowance	0		0
Average recorded investment - no related allowance	11,789,000		13,432,000
Interest income recognized - no related allowance	538,000		1,106,000
Interest income cash basis - no related allowance	535,000		874,000
Recorded investment - with related allowance	29,510,000		35,217,000
Unpaid principal balance - with related allowance	27,894,000		38,135,000
Related allowance	2,130,000		2,583,000
Average recorded investment - with related allowance	27,983,000		35,076,000
Interest income, recognized - with related allowance	1,145,000		3,689,000
Interest income, cash basis - with related allowance	1,090,000		3,789,000
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	8,958,000		14,656,000
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	324,000		1,974,000
Total TDRs	9,282,000		16,630,000
TDR activity [Roll Forward]
Balance of TDRs	16,630,000
New TDRs	0
Charge-offs post-modification	(355,000)
Transferred to ORE	(1,075,000)
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	(5,918,000)
Balance of TDRs	9,282,000		16,630,000
Non-Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	3,005,000	2,135,000	2,135,000
Charge offs	(1,175,000)	(838,000)
Recoveries	258,000	418,000
Provision	802,000	568,000
Allowance at ending of period	2,890,000	2,283,000	3,005,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	0		507,000
Allowance Collectively Evaluated for Impairment	2,890,000		2,498,000
Total Allowance for Credit Losses	2,890,000	2,283,000	3,005,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	0		4,390,000
Loans Collectively Evaluated for Impairment	190,245,000		155,269,000
Total Loans before Unearned Income	190,245,000		159,659,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	0		3,734,000
Unpaid principal balance - no related allowance	0		3,734,000
No related allowance	0		0
Average recorded investment - no related allowance	1,968,000		1,098,000
Interest income recognized - no related allowance	103,000		117,000
Interest income cash basis - no related allowance	131,000		87,000
Recorded investment - with related allowance	0		656,000
Unpaid principal balance - with related allowance	0		656,000
Related allowance	0		507,000
Average recorded investment - with related allowance	0		786,000
Interest income, recognized - with related allowance	0		94,000
Interest income, cash basis - with related allowance	0		0
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	0		0
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		0
Total TDRs	0		0
TDR activity [Roll Forward]
Balance of TDRs	0
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	0
Balance of TDRs	0		0
Construction & Land Development [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	1,098,000	1,002,000	1,002,000
Charge offs	(233,000)	(58,000)
Recoveries	3,000	13,000
Provision	384,000	228,000
Allowance at ending of period	1,252,000	1,185,000	1,098,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	910,000		713,000
Allowance Collectively Evaluated for Impairment	342,000		385,000
Total Allowance for Credit Losses	1,252,000	1,185,000	1,098,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	6,448,000		8,865,000
Loans Collectively Evaluated for Impairment	41,009,000		35,991,000
Total Loans before Unearned Income	47,457,000		44,856,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	0		3,177,000
Unpaid principal balance - no related allowance	0		3,177,000
No related allowance	0		0
Average recorded investment - no related allowance	801,000		4,012,000
Interest income recognized - no related allowance	35,000		414,000
Interest income cash basis - no related allowance	36,000		404,000
Recorded investment - with related allowance	6,448,000		5,688,000
Unpaid principal balance - with related allowance	5,593,000		5,688,000
Related allowance	910,000		713,000
Average recorded investment - with related allowance	6,387,000		3,677,000
Interest income, recognized - with related allowance	299,000		406,000
Interest income, cash basis - with related allowance	277,000		418,000
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	0		2,602,000
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		0
Total TDRs	0		2,602,000
TDR activity [Roll Forward]
Balance of TDRs	2,602,000
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	(2,602,000)
Balance of TDRs	0		2,602,000
Farmland [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	50,000	65,000	65,000
Charge offs	0	0
Recoveries	140,000	1,000
Provision	(154,000)	15,000
Allowance at ending of period	36,000	81,000	50,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	0		0
Allowance Collectively Evaluated for Impairment	36,000		50,000
Total Allowance for Credit Losses	36,000	81,000	50,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	0		0
Loans Collectively Evaluated for Impairment	11,425,000		11,182,000
Total Loans before Unearned Income	11,425,000		11,182,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	0		0
Unpaid principal balance - no related allowance	0		0
No related allowance	0		0
Average recorded investment - no related allowance	0		0
Interest income recognized - no related allowance	0		0
Interest income cash basis - no related allowance	0		0
Recorded investment - with related allowance	0		0
Unpaid principal balance - with related allowance	0		0
Related allowance	0		0
Average recorded investment - with related allowance	0		0
Interest income, recognized - with related allowance	0		0
Interest income, cash basis - with related allowance	0		0
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	0		0
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		0
Total TDRs	0		0
TDR activity [Roll Forward]
Balance of TDRs	0
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	0
Balance of TDRs	0		0
1- 4 Family [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	2,239,000	1,917,000	1,917,000
Charge offs	(185,000)	(1,409,000)
Recoveries	35,000	27,000
Provision	169,000	1,547,000
Allowance at ending of period	2,258,000	2,082,000	2,239,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	19,000		91,000
Allowance Collectively Evaluated for Impairment	2,239,000		2,148,000
Total Allowance for Credit Losses	2,258,000	2,082,000	2,239,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	2,874,000		2,126,000
Loans Collectively Evaluated for Impairment	98,447,000		85,347,000
Total Loans before Unearned Income	101,321,000		87,473,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	441,000		1,516,000
Unpaid principal balance - no related allowance	440,000		2,176,000
No related allowance	0		0
Average recorded investment - no related allowance	483,000		2,102,000
Interest income recognized - no related allowance	19,000		162,000
Interest income cash basis - no related allowance	24,000		73,000
Recorded investment - with related allowance	2,433,000		610,000
Unpaid principal balance - with related allowance	8,219,000		776,000
Related allowance	19,000		91,000
Average recorded investment - with related allowance	1,378,000		732,000
Interest income, recognized - with related allowance	89,000		70,000
Interest income, cash basis - with related allowance	71,000		67,000
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	0		0
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		1,296,000
Total TDRs	0		1,296,000
TDR activity [Roll Forward]
Balance of TDRs	1,296,000
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	(1,075,000)
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	(221,000)
Balance of TDRs	0		1,296,000
Multifamily [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	284,000	780,000	780,000
Charge offs	0	(187,000)
Recoveries	0	0
Provision	267,000	(162,000)
Allowance at ending of period	551,000	431,000	284,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	522,000		244,000
Allowance Collectively Evaluated for Impairment	29,000		40,000
Total Allowance for Credit Losses	551,000	431,000	284,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	7,896,000		7,302,000
Loans Collectively Evaluated for Impairment	6,066,000		7,553,000
Total Loans before Unearned Income	13,962,000		14,855,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	619,000		1,351,000
Unpaid principal balance - no related allowance	650,000		1,351,000
No related allowance	0		0
Average recorded investment - no related allowance	485,000		1,355,000
Interest income recognized - no related allowance	47,000		103,000
Interest income cash basis - no related allowance	53,000		110,000
Recorded investment - with related allowance	7,277,000		5,951,000
Unpaid principal balance - with related allowance	7,301,000		5,951,000
Related allowance	522,000		244,000
Average recorded investment - with related allowance	7,294,000		5,998,000
Interest income, recognized - with related allowance	313,000		597,000
Interest income, cash basis - with related allowance	323,000		593,000
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	5,951,000		5,951,000
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		0
Total TDRs	5,951,000		5,951,000
TDR activity [Roll Forward]
Balance of TDRs	5,951,000
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	0
Balance of TDRs	5,951,000		5,951,000
Non-Farm Non-Residential [Member] | Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	3,666,000	2,980,000	2,980,000
Charge offs	(1,053,000)	(459,000)
Recoveries	3,000	106,000
Provision	543,000	818,000
Allowance at ending of period	3,159,000	3,445,000	3,666,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	679,000		1,535,000
Allowance Collectively Evaluated for Impairment	2,480,000		2,131,000
Total Allowance for Credit Losses	3,159,000	3,445,000	3,666,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	19,401,000		25,904,000
Loans Collectively Evaluated for Impairment	307,417,000		286,812,000
Total Loans before Unearned Income	326,818,000		312,716,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	6,049,000		2,936,000
Unpaid principal balance - no related allowance	10,188,000		2,982,000
No related allowance	0		0
Average recorded investment - no related allowance	10,020,000		5,963,000
Interest income recognized - no related allowance	437,000		427,000
Interest income cash basis - no related allowance	422,000		287,000
Recorded investment - with related allowance	13,352,000		22,968,000
Unpaid principal balance - with related allowance	6,781,000		25,720,000
Related allowance	679,000		1,535,000
Average recorded investment - with related allowance	12,924,000		24,669,000
Interest income, recognized - with related allowance	444,000		2,616,000
Interest income, cash basis - with related allowance	419,000		2,711,000
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	3,007,000		6,103,000
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	324,000		678,000
Total TDRs	3,331,000		6,781,000
TDR activity [Roll Forward]
Balance of TDRs	6,781,000
New TDRs	0
Charge-offs post-modification	(355,000)
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	(3,095,000)
Balance of TDRs	3,331,000		6,781,000
Agricultural [Member] | Non-Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	64,000	125,000	125,000
Charge offs	(41,000)	(27,000)
Recoveries	4,000	1,000
Provision	23,000	(40,000)
Allowance at ending of period	50,000	59,000	64,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	0		0
Allowance Collectively Evaluated for Impairment	50,000		64,000
Total Allowance for Credit Losses	50,000	59,000	64,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	0		0
Loans Collectively Evaluated for Impairment	28,457,000		18,476,000
Total Loans before Unearned Income	28,457,000		18,476,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	0		0
Unpaid principal balance - no related allowance	0		0
No related allowance	0		0
Average recorded investment - no related allowance	0		0
Interest income recognized - no related allowance	0		0
Interest income cash basis - no related allowance	0		0
Recorded investment - with related allowance	0		0
Unpaid principal balance - with related allowance	0		0
Related allowance	0		0
Average recorded investment - with related allowance	0		0
Interest income, recognized - with related allowance	0		0
Interest income, cash basis - with related allowance	0		0
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	0		0
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		0
Total TDRs	0		0
TDR activity [Roll Forward]
Balance of TDRs	0
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	0
Balance of TDRs	0		0
Commercial and Industrial [Member] | Non-Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	2,488,000	1,407,000	1,407,000
Charge offs	(942,000)	(455,000)
Recoveries	63,000	212,000
Provision	748,000	508,000
Allowance at ending of period	2,357,000	1,672,000	2,488,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	0		507,000
Allowance Collectively Evaluated for Impairment	2,357,000		1,981,000
Total Allowance for Credit Losses	2,357,000	1,672,000	2,488,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	0		4,390,000
Loans Collectively Evaluated for Impairment	139,455,000		113,035,000
Total Loans before Unearned Income	139,455,000		117,425,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	0		3,734,000
Unpaid principal balance - no related allowance	0		3,734,000
No related allowance	0		0
Average recorded investment - no related allowance	1,968,000		1,098,000
Interest income recognized - no related allowance	103,000		117,000
Interest income cash basis - no related allowance	131,000		87,000
Recorded investment - with related allowance	0		656,000
Unpaid principal balance - with related allowance	0		656,000
Related allowance	0		507,000
Average recorded investment - with related allowance	0		786,000
Interest income, recognized - with related allowance	0		94,000
Interest income, cash basis - with related allowance	0		0
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	0		0
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		0
Total TDRs	0		0
TDR activity [Roll Forward]
Balance of TDRs	0
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	0
Balance of TDRs	0		0
Consumer and Other [Member] | Non-Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	233,000	314,000	314,000
Charge offs	(192,000)	(356,000)
Recoveries	191,000	205,000
Provision	(41,000)	137,000
Allowance at ending of period	191,000	300,000	233,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	0		0
Allowance Collectively Evaluated for Impairment	191,000		233,000
Total Allowance for Credit Losses	191,000	300,000	233,000
Loans Receivable [Abstract]
Loans Individually Evaluated for Impairment	0		0
Loans Collectively Evaluated for Impairment	22,333,000		23,758,000
Total Loans before Unearned Income	22,333,000		23,758,000
Impaired Loans [Abstract]
Recorded investment - no related allowance	0		0
Unpaid principal balance - no related allowance	0		0
No related allowance	0		0
Average recorded investment - no related allowance	0		0
Interest income recognized - no related allowance	0		0
Interest income cash basis - no related allowance	0		0
Recorded investment - with related allowance	0		0
Unpaid principal balance - with related allowance	0		0
Related allowance	0		0
Average recorded investment - with related allowance	0		0
Interest income, recognized - with related allowance	0		0
Interest income, cash basis - with related allowance	0		0
Troubled Debt Restructuring [Abstract]
Accruing Loans, Current	0		0
Accruing Loans, 30-89 Days Past Due	0		0
Nonaccrual	0		0
Total TDRs	0		0
TDR activity [Roll Forward]
Balance of TDRs	0
New TDRs	0
Charge-offs post-modification	0
Transferred to ORE	0
Paydowns	0
Construction to permanent financing	0
Restructured to market terms	0
Balance of TDRs	0		0
Unallocated [Member] | Non-Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance at beginning of period	220,000	289,000	289,000
Charge offs	0	0
Recoveries	0	0
Provision	72,000	(37,000)
Allowance at ending of period	292,000	252,000
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Allowance Individually Evaluated for Impairment	0		0
Allowance Collectively Evaluated for Impairment	292,000		220,000
Total Allowance for Credit Losses	$ 292,000	$ 252,000

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 8. Commitments and Contingencies

Off-balance sheet commitments

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Balance Sheets. The contract or notional amounts of those instruments reflect the extent of the involvement in particular classes of financial instruments.

The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and commercial letters of credit is represented by the contractual notional amount of those instruments. The same credit policies are used in making commitments and conditional obligations as it does for balance sheet instruments. Unless otherwise noted, collateral or other security is not required to support financial instruments with credit risk.

Below is a summary of the notional amounts of the financial instruments with off-balance sheet risk at September 30, 2013 and December 31, 2012:

Contract Amount
(in thousands)	September 30, 2013		December 31, 2012
Commitments to Extend Credit	$	40,734	$	26,775
Unfunded Commitments under lines of credit	$	85,700	$	71,423
Commercial and Standby letters of credit	$	5,405	$	5,470

Litigation

The nature of the Company’s business ordinarily results in a certain amount of claims, litigation and legal and administrative cases, all of which are considered incidental to the normal conduct of business. When the Company determines it has defenses to the claims asserted, it defends itself. The Company will consider settlement of cases when it is in the best interests of both the Company and its shareholders.

While the final outcome of legal proceedings is inherently uncertain, based on information currently available, any incremental liability arising from the Company’s legal proceedings will not have a material adverse effect on the Company’s financial position.

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Loans

9 Months Ended

Sep. 30, 2013

Loans [Abstract]

Loans

Note 4. Loans

The following table summarizes the components of the Company's loan portfolio as of September 30, 2013 and December 31, 2012:

	September 30, 2013					December 31, 2012
(in thousands except for %)	Balance			As % of Category		Balance			As % of Category
Real Estate:
Construction & land development	$	47,457		6.9	%	$	44,856		7.1	%
Farmland		11,425		1.7	%		11,182		1.8	%
1- 4 Family		101,321		14.7	%		87,473		13.8	%
Multifamily		13,962		2.0	%		14,855		2.4	%
Non-farm non-residential		326,818		47.2	%		312,716		49.6	%
Total Real Estate		500,983		72.5	%		471,082		74.7	%
Non-Real Estate:
Agricultural		28,457		4.1	%		18,476		2.9	%
Commercial and industrial		139,455		20.2	%		117,425		18.6	%
Consumer and other		22,333		3.2	%		23,758		3.8	%
Total Non-Real Estate		190,245		27.5	%		159,659		25.3	%
Total loans before unearned income		691,228		100.0	%		630,741		100.0	%
Unearned income		(1,655	)				(1,241	)
Total loans net of unearned income	$	689,573				$	629,500

The following table summarizes fixed and floating rate loans by contractual maturity as of September 30, 2013 and December 31, 2012, including loans held for sale, unadjusted for scheduled principal payments, prepayments, or repricing opportunities. The average life of the loan portfolio may be substantially less than the contractual terms when these adjustments are considered.

	September 30, 2013							December 31, 2012
(in thousands)	Fixed		Floating		Total			Fixed		Floating		Total
One year or less	$	76,175	$	79,228	$	155,403		$	89,117	$	107,176	$	196,293
One to five years		198,793		199,507		398,300			147,896		175,743		323,639
Five to 15 years		64,461		27,467		91,928			33,770		42,595		76,365
Over 15 years		8,664		22,742		31,406			7,829		5,927		13,756
Subtotal	$	348,093	$	328,944		677,037		$	278,612	$	331,441		610,053
Nonaccrual loans						14,498							20,688
Total loans before unearned income						691,535							630,741
Unearned income						(1,655	)						(1,241	)
Total loans net of unearned income					$	689,880						$	629,500

The majority of floating rate loans have interest rate floors. As of September 30, 2013 and December 31, 2012 floating rate loans at the floor rate were $222.6 million and $231.7 million, respectively. Nonaccrual loans have been excluded from the calculation.

The following tables present the age analysis of past due loans at September 30, 2013 and December 31, 2012:

	September 30, 2013
(in thousands)	30-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans			Recorded Investment  90 Days Accruing
Real Estate:
Construction & land development	$	396	$	73	$	469	$	46,988	$	47,457		$	-
Farmland		35		341		376		11,049		11,425			-
1 - 4 family		1,588		4,283		5,871		95,450		101,321			60
Multifamily		-		-		-		13,962		13,962			-
Non-farm non-residential		1,081		7,522		8,603		318,215		326,818			-
Total Real Estate		3,100		12,219		15,319		485,664		500,983			60
Non-Real Estate:
Agricultural		316		487		803		27,654		28,457			25
Commercial and industrial		148		1,877		2,025		137,430		139,455			-
Consumer and other		161		-		161		22,172		22,333			-
Total Non-Real Estate		625		2,364		2,989		187,256		190,245			25
Total loans before unearned income	$	3,725	$	14,583	$	18,308	$	672,920		691,228		$	85
Less: unearned income										(1,655	)
Total loans net of unearned income									$	689,573

	As of December 31, 2012
(in thousands)	30-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans			Recorded Investment 90 Days Accruing
Real Estate:
Construction & land development	$	228	$	854	$	1,082	$	43,774	$	44,856		$	-
Farmland		96		312		408		10,774		11,182			-
1 - 4 family		4,895		5,058		9,953		77,520		87,473			455
Multifamily		156		-		156		14,699		14,855			-
Non-farm non-residential		1,137		11,571		12,708		300,008		312,716			-
Total Real Estate		6,512		17,795		24,307		446,775		471,082			455
Non-Real Estate:
Agricultural		-		512		512		17,964		18,476			-
Commercial and industrial		60		2,831		2,891		114,534		117,425			-
Consumer and other		115		5		120		23,638		23,758			-
Total Non-Real Estate		175		3,348		3,523		156,136		159,659			-
Total loans before unearned income	$	6,687	$	21,143	$	27,830	$	602,911		630,741		$	455
Unearned income										(1,241	)
Total loans net of unearned income									$	629,500

Credit quality of the Company’s loan portfolio is monitored on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed on a monthly basis to identify nonaccrual loans.

The following is a summary of nonaccrual loans by class at September 30, 2013 and December 31, 2012:

(in thousands)	As of September 30, 2013		As of December 31, 2012
Real Estate:
Construction & land development	$	73	$	854
Farmland		341		312
1 - 4 family		4,223		4,603
Multifamily		-		-
Non-farm non-residential		7,522		11,571
Total Real Estate		12,159		17,340
Non-Real Estate:
Agricultural		462		512
Commercial and industrial		1,877		2,831
Consumer and other		-		5
Total Non-Real Estate		2,339		3,348
Total Nonaccrual Loans	$	14,498	$	20,688

The Company’s credit quality indicators are pass, special mention, substandard, and doubtful.

Loans included in the pass category are performing loans with satisfactory debt coverage ratios, collateral, payment history, and meet documentation requirements.

Special mention loans have potential weaknesses that deserve close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Nonfinancial reasons include management problems, pending litigation, an ineffective loan agreement or other material structural weakness, and any other significant deviation from prudent lending practices.

A substandard loan is inadequately protected by the paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. These loans require more intensive supervision. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigates. For some substandard loans, the likelihood of full collection of interest and principal may be in doubt and interest is no longer accrued. For consumer loans that are 90 days or more past due or that are nonaccrual are considered substandard.

Doubtful loans have the weaknesses of substandard loans with the additional characteristic that the weaknesses make collection or liquidation in full questionable and there is a high probability of loss based on currently existing facts, conditions and values.

The following table identifies the credit exposure of the loan portfolio by specific credit ratings as of the dates indicated:

	As of September 30, 2013											As of December 31, 2012
(in thousands)	Pass		Special Mention		Substandard		Doubtful		Total			Pass		Special Mention		Substandard		Doubtful		Total
Real Estate:
Construction & land development	$	39,485	$	1,366	$	6,606	$	-	$	47,457		$	29,654	$	5,595	$	9,607	$	-	$	44,856
Farmland		11,326		-		99		-		11,425			11,059		-		123		-		11,182
1 - 4 family		86,797		3,948		10,576		-		101,321			71,240		7,117		9,116		-		87,473
Multifamily		5,913		153		7,896		-		13,962			6,746		806		7,303		-		14,855
Non-farm non-residential		296,553		9,397		20,868		-		326,818			274,970		10,605		27,141		-		312,716
Total Real Estate		440,074		14,864		46,045		-		500,983			393,669		24,123		53,290		-		471,082
Non-Real Estate:
Agricultural		28,168		12		277		-		28,457			17,969		75		432		-		18,476
Commercial and industrial		138,781		100		574		-		139,455			108,590		3,834		5,001		-		117,425
Consumer and other		22,054		209		70		-		22,333			23,560		140		58		-		23,758
Total Non-Real Estate		189,003		321		921		-		190,245			150,119		4,049		5,491		-		159,659
Total loans before unearned income	$	629,077	$	15,185	$	46,966	$	-		691,228		$	543,788	$	28,172	$	58,781	$	-		630,741
Unearned income										(1,655	)										(1,241	)
Total loans net of unearned income									$	689,573										$	629,500

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Common stock, par value (in dollars per share)	$ 1
Cash dividends per share (in dollars per share)	$ 0.48
Treasury shares purchased, at cost (in shares)	2,985
Series C - Preferred Stock $1,000 par value [Member]
Preferred stock, par value (in dollars per share)	$ 1,000

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Commitments to Extend Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Notional value	$ 40,734	$ 26,775
Unfunded Commitments Under Lines of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Notional value	85,700	71,423
Commercial and Standby Letters of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Notional value	$ 5,405	$ 5,470

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Securities (Tables)

9 Months Ended

Sep. 30, 2013

Securities [Abstract]

Schedule of available-for-sale securities reconciliation

A summary comparison of securities by type at September 30, 2013 and December 31, 2012 is shown below.

	September 30, 2013									December 31, 2012
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale:
U.S Treasuries	$	25,000	$	-	$	-		$	25,000	$	20,000	$	-	$	-		$	20,000
U.S. Government Agencies		302,805		-		(11,858	)		290,947		392,616		751		(278	)		393,089
Corporate debt securities		146,248		4,053		(1,477	)		148,824		159,488		8,024		(401	)		167,111
Mutual funds or other equity securities		2,064		-		-			2,064		2,564		23		-			2,587
Municipal bonds		16,339		336		(21	)		16,654		18,481		1,032		-			19,513
Total available for sale securities	$	492,456	$	4,389	$	(13,356	)	$	483,489	$	593,149	$	9,830	$	(679	)	$	602,300
Held to maturity:
U.S. Government Agencies	$	89,469	$	16	$	(4,386	)	$	85,099	$	58,943	$	175	$	(179	)	$	58,939
Mortgage-backed securities		64,643		-		(1,861	)		62,782		-		-		-			-
Total held to maturity securities	$	154,112	$	16	$	(6,247	)	$	147,881	$	58,943	$	175	$	(179	)	$	58,939

Investments classified by contractual maturity date

The scheduled maturities of securities at September 30, 2013, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities due to call or prepayments. Mortgage-backed securities are not due at a single maturity because of amortization and potential prepayment of the underlying mortgages. For this reason they are presented separately in the maturity table below.

	September 30, 2013
(in thousands)	Amortized Cost		Fair Value
Available For Sale:
Due in one year or less	$	33,172	$	33,280
Due after one year through five years		181,967		182,023
Due after five years through 10 years		234,430		227,680
Over 10 years		42,887		40,506
Total available for sale securities	$	492,456	$	483,489
Held to Maturity:
Due in one year or less	$	-	$	-
Due after one year through five years		-		-
Due after five years through 10 years		89,469		85,099
Over 10 years		-		-
Subtotal		89,469		85,099
Mortgage-backed securities		64,643		62,782
Total held to maturity securities	$	154,112	$	147,881

Schedule of unrealized loss on investments

The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at September 30, 2013.

	Less Than 12 Months						12 Months or More						Total
(in thousands)	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasuries	3	$	25,000	$	-		-	$	-	$	-		3	$	25,000	$	-
U.S. Government agencies	85		288,187		(11,618	)	12		2,760		(240	)	97		290,947		(11,858	)
Corporate debt securities	149		38,718		(1,276	)	1		2,559		(201	)	150		41,277		(1,477	)
Mutual funds or other equity securities	-		-		-		-		-		-		-		-		-
Municipals	1		970		(21	)	-		-		-		1		970		(21	)
Total available for sale	238	$	352,875	$	(12,915	)	13	$	5,319	$	(441	)	251	$	358,194	$	(13,356	)
Held to maturity:
U.S. Government agencies	20	$	80,083	$	(4,386	)	-	$	-	$	-		20	$	80,083	$	(4,386	)
Mortgage-backed securities	26		62,782		(1,861	)	-		-		-		26		62,782		(1,861	)
Total held to maturity	46	$	142,865	$	(6,247	)	-	$	-	$	-		46	$	142,865	$	(6,247	)

The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at December 31, 2012.

	Less Than 12 Months						12 Months or More						Total
(in thousands)	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
Available for sale:
U.S. Treasuries	1	$	20,000	$	-		-	$	-	$	-		1	$	20,000	$	-
U.S. Government agencies	34		119,952		(278	)	-		-		-		34		119,952		(278	)
Corporate debt securities	59		13,222		(183	)	7		2,211		(218	)	66		15,433		(401	)
Mutual funds or other equity securities	-		-		-		-		-		-		-		-		-
Municipals	-		-		-		-		-		-		-		-		-
Total available for sale	94	$	153,174	$	(461	)	7	$	2,211	$	(218	)	101	$	155,385	$	(679	)
Held to maturity:
U.S. Government agencies	6	$	24,118	$	(179	)	-	$	-	$	-		6	$	24,118	$	(179	)
Mortgage-backed securities	-		-		-		-		-		-		-		-		-
Total held to maturity	6	$	24,118	$	(179	)	-	$	-	$	-		6	$	24,118	$	(179	)

Schedule of exposure to investment securities issuers that exceeded 10 percent of stockholder's equity

At September 30, 2013, the Company's exposure to bond issuers that exceeded 10% of stockholders’ equity is below:

	At September 30, 2013
(in thousands)	Amortized Cost		Fair Value
U.S. Treasuries	$	25,000	$	25,000
Federal Home Loan Bank (FHLB)		144,584		137,993
Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC)		51,276		49,023
Federal National Mortgage Association (Fannie Mae-FNMA)		139,417		134,664
Federal Farm Credit Bank (FFCB)		121,640		117,148
Total	$	481,917	$	463,828

XML

Other Real Estate (ORE)

9 Months Ended

Sep. 30, 2013

Other Real Estate (ORE) [Abstract]

Other Real Estate (ORE)

Note 7. Other Real Estate (ORE)

Other real estate owned consists of the following at the dates indicated:

(in thousands)	September 30, 2013		December 31, 2012
Real Estate Owned Acquired by Foreclosure:
Residential	$	1,968	$	1,186
Construction & land development		780		1,083
Non-farm non-residential		941		125
Total Other Real Estate Owned and Foreclosed Property	$	3,689	$	2,394

XML

Other Real Estate (ORE) (Tables)

9 Months Ended

Sep. 30, 2013

Other Real Estate (ORE) [Abstract]

Other real estate

Other real estate owned consists of the following at the dates indicated:

(in thousands)	September 30, 2013		December 31, 2012
Real Estate Owned Acquired by Foreclosure:
Residential	$	1,968	$	1,186
Construction & land development		780		1,083
Non-farm non-residential		941		125
Total Other Real Estate Owned and Foreclosed Property	$	3,689	$	2,394

XML

Loans (Tables)

9 Months Ended

Sep. 30, 2013

Loans [Abstract]

Financing receivables

The following table summarizes the components of the Company's loan portfolio as of September 30, 2013 and December 31, 2012:

	September 30, 2013					December 31, 2012
(in thousands except for %)	Balance			As % of Category		Balance			As % of Category
Real Estate:
Construction & land development	$	47,457		6.9	%	$	44,856		7.1	%
Farmland		11,425		1.7	%		11,182		1.8	%
1- 4 Family		101,321		14.7	%		87,473		13.8	%
Multifamily		13,962		2.0	%		14,855		2.4	%
Non-farm non-residential		326,818		47.2	%		312,716		49.6	%
Total Real Estate		500,983		72.5	%		471,082		74.7	%
Non-Real Estate:
Agricultural		28,457		4.1	%		18,476		2.9	%
Commercial and industrial		139,455		20.2	%		117,425		18.6	%
Consumer and other		22,333		3.2	%		23,758		3.8	%
Total Non-Real Estate		190,245		27.5	%		159,659		25.3	%
Total loans before unearned income		691,228		100.0	%		630,741		100.0	%
Unearned income		(1,655	)				(1,241	)
Total loans net of unearned income	$	689,573				$	629,500

Schedule of financing receivables, minimum payments

The following table summarizes fixed and floating rate loans by contractual maturity as of September 30, 2013 and December 31, 2012, including loans held for sale, unadjusted for scheduled principal payments, prepayments, or repricing opportunities. The average life of the loan portfolio may be substantially less than the contractual terms when these adjustments are considered.

	September 30, 2013							December 31, 2012
(in thousands)	Fixed		Floating		Total			Fixed		Floating		Total
One year or less	$	76,175	$	79,228	$	155,403		$	89,117	$	107,176	$	196,293
One to five years		198,793		199,507		398,300			147,896		175,743		323,639
Five to 15 years		64,461		27,467		91,928			33,770		42,595		76,365
Over 15 years		8,664		22,742		31,406			7,829		5,927		13,756
Subtotal	$	348,093	$	328,944		677,037		$	278,612	$	331,441		610,053
Nonaccrual loans						14,498							20,688
Total loans before unearned income						691,535							630,741
Unearned income						(1,655	)						(1,241	)
Total loans net of unearned income					$	689,880						$	629,500

Past due financing receivables

The following tables present the age analysis of past due loans at September 30, 2013 and December 31, 2012:

	September 30, 2013
(in thousands)	30-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans			Recorded Investment  90 Days Accruing
Real Estate:
Construction & land development	$	396	$	73	$	469	$	46,988	$	47,457		$	-
Farmland		35		341		376		11,049		11,425			-
1 - 4 family		1,588		4,283		5,871		95,450		101,321			60
Multifamily		-		-		-		13,962		13,962			-
Non-farm non-residential		1,081		7,522		8,603		318,215		326,818			-
Total Real Estate		3,100		12,219		15,319		485,664		500,983			60
Non-Real Estate:
Agricultural		316		487		803		27,654		28,457			25
Commercial and industrial		148		1,877		2,025		137,430		139,455			-
Consumer and other		161		-		161		22,172		22,333			-
Total Non-Real Estate		625		2,364		2,989		187,256		190,245			25
Total loans before unearned income	$	3,725	$	14,583	$	18,308	$	672,920		691,228		$	85
Less: unearned income										(1,655	)
Total loans net of unearned income									$	689,573

	As of December 31, 2012
(in thousands)	30-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans			Recorded Investment 90 Days Accruing
Real Estate:
Construction & land development	$	228	$	854	$	1,082	$	43,774	$	44,856		$	-
Farmland		96		312		408		10,774		11,182			-
1 - 4 family		4,895		5,058		9,953		77,520		87,473			455
Multifamily		156		-		156		14,699		14,855			-
Non-farm non-residential		1,137		11,571		12,708		300,008		312,716			-
Total Real Estate		6,512		17,795		24,307		446,775		471,082			455
Non-Real Estate:
Agricultural		-		512		512		17,964		18,476			-
Commercial and industrial		60		2,831		2,891		114,534		117,425			-
Consumer and other		115		5		120		23,638		23,758			-
Total Non-Real Estate		175		3,348		3,523		156,136		159,659			-
Total loans before unearned income	$	6,687	$	21,143	$	27,830	$	602,911		630,741		$	455
Unearned income										(1,241	)
Total loans net of unearned income									$	629,500

Schedule of financing receivables, non accrual status

The following is a summary of nonaccrual loans by class at September 30, 2013 and December 31, 2012:

(in thousands)	As of September 30, 2013		As of December 31, 2012
Real Estate:
Construction & land development	$	73	$	854
Farmland		341		312
1 - 4 family		4,223		4,603
Multifamily		-		-
Non-farm non-residential		7,522		11,571
Total Real Estate		12,159		17,340
Non-Real Estate:
Agricultural		462		512
Commercial and industrial		1,877		2,831
Consumer and other		-		5
Total Non-Real Estate		2,339		3,348
Total Nonaccrual Loans	$	14,498	$	20,688

Financing receivable credit quality indicators

The following table identifies the credit exposure of the loan portfolio by specific credit ratings as of the dates indicated:

	As of September 30, 2013											As of December 31, 2012
(in thousands)	Pass		Special Mention		Substandard		Doubtful		Total			Pass		Special Mention		Substandard		Doubtful		Total
Real Estate:
Construction & land development	$	39,485	$	1,366	$	6,606	$	-	$	47,457		$	29,654	$	5,595	$	9,607	$	-	$	44,856
Farmland		11,326		-		99		-		11,425			11,059		-		123		-		11,182
1 - 4 family		86,797		3,948		10,576		-		101,321			71,240		7,117		9,116		-		87,473
Multifamily		5,913		153		7,896		-		13,962			6,746		806		7,303		-		14,855
Non-farm non-residential		296,553		9,397		20,868		-		326,818			274,970		10,605		27,141		-		312,716
Total Real Estate		440,074		14,864		46,045		-		500,983			393,669		24,123		53,290		-		471,082
Non-Real Estate:
Agricultural		28,168		12		277		-		28,457			17,969		75		432		-		18,476
Commercial and industrial		138,781		100		574		-		139,455			108,590		3,834		5,001		-		117,425
Consumer and other		22,054		209		70		-		22,333			23,560		140		58		-		23,758
Total Non-Real Estate		189,003		321		921		-		190,245			150,119		4,049		5,491		-		159,659
Total loans before unearned income	$	629,077	$	15,185	$	46,966	$	-		691,228		$	543,788	$	28,172	$	58,781	$	-		630,741
Unearned income										(1,655	)										(1,241	)
Total loans net of unearned income									$	689,573										$	629,500

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 12, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	First Guaranty Bancshares, Inc.
Entity Central Index Key	0001408534
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		6,291,332
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013

XML

Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2013

Allowance for Loan Losses [Abstract]

Allowance for credit losses on financing receivables

A summary of changes in the allowance for loan losses, by loan type, for the nine months ended September 30, 2013 and 2012 are as follows:

	Allowance for Credit Losses
	As of September 30,
	2013												2012
(in thousands)	Beginning Allowance {12/31/12}		Charge-offs			Recoveries		Provision			Ending Allowance {9/30/13}		Beginning Allowance {12/31/11}		Charge-offs			Recoveries		Provision			Ending Allowance{9/30/12}
Real Estate:
Construction & land development	$	1,098	$	(233	)	$	3	$	384		$	1,252	$	1,002	$	(58	)	$	13	$	228		$	1,185
Farmland		50		-			140		(154	)		36		65		-			1		15			81
1 - 4 family		2,239		(185	)		35		169			2,258		1,917		(1,409	)		27		1,547			2,082
Multifamily		284		-			-		267			551		780		(187			-		(162	)		431
Non-farm non-residential		3,666		(1,053	)		3		543			3,159		2,980		(459	)		106		818			3,445
Total real estate		7,337		(1,471	)		181		1,209			7,256		6,744		(2,113	)		147		2,446			7,224
Non-Real Estate:
Agricultural		64		(41	)		4		23			50		125		(27	)		1		(40	)		59
Commercial and industrial		2,488		(942	)		63		748			2,357		1,407		(455	)		212		508			1,672
Consumer and other		233		(192	)		191		(41	)		191		314		(356	)		205		137			300
Unallocated		220		-			-		72			292		289		-			-		(37	)		252
Total Non-Real Estate		3,005		(1,175	)		258		802			2,890		2,135		(838	)		418		568			2,283
Total	$	10,342	$	(2,646	)	$	439	$	2,011		$	10,146	$	8,879	$	(2,951	)	$	565	$	3,014		$	9,507

Negative provisions are caused by changes in the composition and credit quality of the loan portfolio.  The result is an allocation of the loan loss reserve from one category to another.

The following table presents the allowance and loans, by loan type, that are individually and collectively evaluated for impairment for the period indicated.

	Allowance for Impaired Loans
	As of September 30, 2013
(in thousands)	Allowance Individually Evaluated for Impairment		Allowance Collectively Evaluated for Impairment		Total Allowance for Credit Losses		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Total Loans before Unearned Income
Real Estate:
Construction & land development	$	910	$	342	$	1,252	$	6,448	$	41,009	$	47,457
Farmland		-		36		36		-		11,425		11,425
1 - 4 family		19		2,239		2,258		2,874		98,447		101,321
Multifamily		522		29		551		7,896		6,066		13,962
Non-farm non-residential		679		2,480		3,159		19,401		307,417		326,818
Total Real Estate		2,130		5,126		7,256		36,619		464,364		500,983
Non-Real Estate:
Agricultural		-		50		50		-		28,457		28,457
Commercial and industrial		-		2,357		2,357		-		139,455		139,455
Consumer and other		-		191		191		-		22,333		22,333
Unallocated		-		292		292
Total Non-Real Estate		-		2,890		2,890		-		190,245		190,245
Total	$	2,130	$	8,016	$	10,146	$	36,619	$	654,609		691,228
Unearned Income												(1,655	)
Total loans net of unearned income											$	689,573

	Allowance for Impaired Loans
	As of December 31, 2012
(in thousands)	Allowance Individually Evaluated for Impairment		Allowance Collectively Evaluated for Impairment		Total Allowance for Credit Losses		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Total Loans before Unearned Income
Real Estate:
Construction & land development	$	713	$	385	$	1,098	$	8,865	$	35,991	$	44,856
Farmland		-		50		50		-		11,182		11,182
1 - 4 family		91		2,148		2,239		2,126		85,347		87,473
Multifamily		244		40		284		7,302		7,553		14,855
Non-farm non-residential		1,535		2,131		3,666		25,904		286,812		312,716
Total Real Estate		2,583		4,754		7,337		44,197		426,885		471,082
Non-Real Estate:
Agricultural		-		64		64		-		18,476		18,476
Commercial and industrial		507		1,981		2,488		4,390		113,035		117,425
Consumer and other		-		233		233		-		23,758		23,758
Unallocated		-		220		220
Total Non-Real Estate		507		2,498		3,005		4,390		155,269		159,659
Total	$	3,090	$	7,252	$	10,342	$	48,587	$	582,154		630,741
Unearned Income												(1,241	)
Total loans net of unearned income											$	629,500

Impaired financing receivables

The following is a summary of impaired loans by class as of the date indicated:

	As of September 30, 2013
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Cash Basis
Impaired Loans with no related allowance:
Real Estate:
Construction & land development	$	-	$	-	$	-	$	801	$	35	$	36
Farmland		-		-		-		-		-		-
1 - 4 family		441		440		-		483		19		24
Multifamily		619		650		-		485		47		53
Non-farm non-residential		6,049		10,188		-		10,020		437		422
Total Real Estate		7,109		11,278		-		11,789		538		535
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		-		-		-		1,968		103		131
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		1,968		103		131
Total Impaired Loans with no related allowance		7,109		11,278		-		13,757		641		666
Impaired Loans with an allowance recorded:
Real Estate:
Construction & land development		6,448		5,593		910		6,387		299		277
Farmland		-		-		-		-		-		-
1 - 4 family		2,433		8,219		19		1,378		89		71
Multifamily		7,277		7,301		522		7,294		313		323
Non-farm non-residential		13,352		6,781		679		12,924		444		419
Total Real Estate		29,510		27,894		2,130		27,983		1,145		1,090
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		-		-		-		-		-		-
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		-		-		-
Total Impaired Loans with an allowance recorded		29,510		27,894		2,130		27,983		1,145		1,090
Total Impaired Loans	$	36,619	$	39,172	$	2,130	$	41,740	$	1,786	$	1,756

The following is a summary of impaired loans by class as of the date indicated:

	As of December 31, 2012
(in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Cash Basis
Impaired Loans with no related allowance:
Real Estate:
Construction & land development	$	3,177	$	3,177	$	-	$	4,012	$	414	$	404
Farmland		-		-		-		-		-		-
1 - 4 family		1,516		2,176		-		2,102		162		73
Multifamily		1,351		1,351		-		1,355		103		110
Non-farm non-residential		2,936		2,982		-		5,963		427		287
Total Real Estate		8,980		9,686		-		13,432		1,106		874
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		3,734		3,734		-		1,098		117		87
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		3,734		3,734		-		1,098		117		87
Total Impaired Loans with no related allowance		12,714		13,420		-		14,530		1,223		961
Impaired Loans with an allowance recorded:
Real Estate:
Construction & land development		5,688		5,688		713		3,677		406		418
Farmland		-		-		-		-		-		-
1 - 4 family		610		776		91		732		70		67
Multifamily		5,951		5,951		244		5,998		597		593
Non-farm non-residential		22,968		25,720		1,535		24,669		2,616		2,711
Total Real Estate		35,217		38,135		2,583		35,076		3,689		3,789
Non-Real Estate:
Agricultural		-		-		-		-		-		-
Commercial and industrial		656		656		507		786		94		-
Consumer and other		-		-		-		-		-		-
Total Non-Real Estate		656		656		507		786		94		-
Total Impaired Loans with an allowance recorded		35,873		38,791		3,090		35,862		3,783		3,789
Total Impaired Loans	$	48,587	$	52,211	$	3,090	$	50,392	$	5,006	$	4,750

Troubled debt restructurings on financing receivables

The following table identifies the Troubled Debt Restructurings as of September 30, 2013 and December 31, 2012:

Troubled Debt Restructurings	September 30, 2013								December 31, 2012
	Accruing Loans								Accruing Loans
(in thousands)	Current		30-89 Days Past Due		Nonaccrual		Total TDRs		Current		30-89 Days Past Due		Nonaccrual		Total TDRs
Real Estate:
Construction & land development	$	-	$	-	$	-	$	-	$	2,602	$	-	$	-	$	2,602
Farmland		-		-		-		-		-		-		-		-
1-4 Family		-		-		-		-		-		-		1,296		1,296
Multifamily		5,951		-		-		5,951		5,951		-		-		5,951
Non-farm non residential		3,007		-		324		3,331		6,103		-		678		6,781
Total Real Estate		8,958		-		324		9,282		14,656		-		1,974		16,630
Non-Real Estate:
Agricultural		-		-		-		-		-		-		-		-
Commercial and industrial		-		-		-		-		-		-		-		-
Consumer and other		-		-		-		-		-		-		-		-
Total Non-Real Estate		-		-		-		-		-		-		-		-
Total	$	8,958	$	-	$	324	$	9,282	$	14,656	$	-	$	1,974	$	16,630

The following table discloses TDR activity for the nine months ended September 30, 2013.

	Trouble Debt Restructured Loans Activity
	Nine Months Ended September 30, 2013
(in thousands)	Beginning balance {December 31, 2012}		New TDRs		Charge-offs post-modification			Transferred to ORE			Paydowns		Construction to permanent financing		Restructured to market terms			Ending balance {September 30, 2013}
Real Estate:
Construction & land development	$	2,602	$	-	$	-		$	-		$	-	$	-	$	(2,602	)	$	-
Farmland		-		-		-			-			-		-		-			-
1 - 4 family		1,296		-		-			(1,075	)		-		-		(221	)		-
Multifamily		5,951		-		-			-			-		-		-			5,951
Non-farm non-residential		6,781		-		(355	)		-			-		-		(3,095	)		3,331
Total Real Estate		16,630		-		(355	)		(1,075	)		-		-		(5,918	)		9,282
Non-Real Estate:
Agricultural		-		-		-			-			-		-		-			-
Commercial and industrial		-		-		-			-			-		-		-			-
Consumer and other		-		-		-			-			-		-		-			-
Total Non-Real Estate		-		-		-			-			-		-		-			-
Total Impaired Loans with no related allowance	$	16,630	$	-	$	(355	)	$	(1,075	)	$	-	$	-	$	(5,918	)	$	9,282