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 Quarterly Period Ended June 30, 2015

Commission File Number 001-15877

German American Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Indiana	35-1547518
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

711 Main Street, Jasper, Indiana 47546

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (812) 482-1314

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 ¨

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 ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨

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

YES   ¨      NO x

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

Class	Outstanding at August 1, 2015
Common Shares, no par value	13,259,594

CAUTION REGARDING FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

Information included in or incorporated by reference in this Quarterly Report on Form 10-Q, our other filings with the Securities and Exchange Commission (the “SEC”) and our press releases or other public statements, contains or may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to the discussions of our forward-looking statements and associated risks in our annual report on Form 10-K for the year ended December 31, 2014, in Item 1, “Business – Forward-Looking Statements and Associated Risks” and our discussion of risk factors in Item 1A, “Risk Factors” of that annual report on Form 10-K, as updated from time to time in our subsequent SEC filings, including by Item 2 of Part I of this Report (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) at the conclusion of that Item 2 under the heading “Forward-Looking Statements and Associated Risks.”

2

*****

INDEX

PART I.            FINANCIAL INFORMATION		4
Item 1.	Unaudited Financial Statements	4
	Consolidated Balance Sheets – June 30, 2015 and December 31, 2014	4
	Consolidated Statements of Income – Three Months Ended June 30, 2015 and 2014	5
	Consolidated Statements of Income – Six Months Ended June 30, 2015 and 2014	6
	Consolidated Statements of Comprehensive Income – Three and Six Months Ended June 30, 2015 and 2014	7
	Consolidated Statements of Cash Flows – Six Months Ended June 30, 2015 and 2014	8
	Notes to Consolidated Financial Statements – June 30, 2015	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	51
PART II.           OTHER INFORMATION		52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 6.	Exhibits	53
SIGNATURES		53
INDEX OF EXHIBITS		54

3

PART I.FINANCIAL INFORMATION

Item 1.           Financial Statements

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, dollars in thousands except share and per share data)

	June 30, 2015			December 31, 2014
ASSETS
Cash and Due from Banks	$	31,538		$	33,481
Federal Funds Sold and Other Short-term Investments	20,729			8,965
Cash and Cash Equivalents	52,267			42,446
Interest-bearing Time Deposits with Banks	100			100
Securities Available-for-Sale, at Fair Value	618,796			630,995
Securities Held-to-Maturity, at Cost (Fair value of $95 and $186 on June 30, 2015 and December 31, 2014, respectively)	95			184
Loans Held-for-Sale, at Fair Value	10,622			6,311
Loans	1,476,468			1,451,990
Less: Unearned Income	(3,822		)	(4,008		)
Allowance for Loan Losses	(15,258		)	(14,929		)
Loans, Net	1,457,388			1,433,053
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	8,122			7,040
Premises, Furniture and Equipment, Net	38,707			39,930
Other Real Estate	317			356
Goodwill	20,536			20,536
Intangible Assets	1,627			2,074
Company Owned Life Insurance	32,467			32,043
Accrued Interest Receivable and Other Assets	18,642			22,031
TOTAL ASSETS	$	2,259,686		$	2,237,099
LIABILITIES
Non-interest-bearing Demand Deposits	$	425,547		$	428,016
Interest-bearing Demand, Savings, and Money Market Accounts	1,014,013			1,018,320
Time Deposits	323,205			333,425
Total Deposits	1,762,765			1,779,761
FHLB Advances and Other Borrowings	240,072			206,064
Accrued Interest Payable and Other Liabilities	19,799			22,450
TOTAL LIABILITIES	2,022,636			2,008,275
SHAREHOLDERS’ EQUITY
Preferred Stock, no par value; 500,000 shares authorized, no shares issued	—			—
Common Stock, no par value, $1 stated value; 30,000,000 shares authorized	13,259			13,216
Additional Paid-in Capital	109,178			108,660
Retained Earnings	114,190			104,058
Accumulated Other Comprehensive Income	423			2,890
TOTAL SHAREHOLDERS’ EQUITY	237,050			228,824
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,259,686		$	2,237,099
End of period shares issued and outstanding	13,259,594			13,215,800

See accompanying notes to consolidated financial statements.

4

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, dollars in thousands except per share data)

	Three Months Ended   June 30,
	2015		2014
INTEREST INCOME
Interest and Fees on Loans	$	16,537	$	16,142
Interest on Federal Funds Sold and Other Short-term Investments	4		3
Interest and Dividends on Securities:
Taxable	2,219		2,654
Non-taxable	1,418		1,026
TOTAL INTEREST INCOME	20,178		19,825
INTEREST EXPENSE
Interest on Deposits	1,022		1,037
Interest on FHLB Advances and Other Borrowings	450		467
TOTAL INTEREST EXPENSE	1,472		1,504
NET INTEREST INCOME	18,706		18,321
Provision for Loan Losses	250		200
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	18,456		18,121
NON-INTEREST INCOME
Trust and Investment Product Fees	939		905
Service Charges on Deposit Accounts	1,220		1,191
Insurance Revenues	1,515		1,482
Company Owned Life Insurance	207		192
Interchange Fee Income	563		512
Other Operating Income	631		590
Net Gains on Sales of Loans	784		386
Net Gains on Securities	262		244
TOTAL NON-INTEREST INCOME	6,121		5,502
NON-INTEREST EXPENSE
Salaries and Employee Benefits	8,259		7,886
Occupancy Expense	1,201		1,198
Furniture and Equipment Expense	482		500
FDIC Premiums	284		276
Data Processing Fees	870		947
Professional Fees	642		553
Advertising and Promotion	484		544
Intangible Amortization	202		325
Other Operating Expenses	1,891		1,910
TOTAL NON-INTEREST EXPENSE	14,315		14,139
Income before Income Taxes	10,262		9,484
Income Tax Expense	2,937		2,797
NET INCOME	$	7,325	$	6,687
Basic Earnings Per Share	$	0.55	$	0.51
Diluted Earnings Per Share	$	0.55	$	0.51
Dividends Per Share	$	0.17	$	0.16

See accompanying notes to consolidated financial statements.

5

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited, dollars in thousands except per share data)

	Six Months Ended   June 30,
	2015		2014
INTEREST INCOME
Interest and Fees on Loans	$	32,836	$	32,086
Interest on Federal Funds Sold and Other Short-term Investments	7		6
Interest and Dividends on Securities:
Taxable	4,654		5,413
Non-taxable	2,681		2,001
TOTAL INTEREST INCOME	40,178		39,506
INTEREST EXPENSE
Interest on Deposits	2,015		2,073
Interest on FHLB Advances and Other Borrowings	908		916
TOTAL INTEREST EXPENSE	2,923		2,989
NET INTEREST INCOME	37,255		36,517
Provision for Loan Losses	500		550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	36,755		35,967
NON-INTEREST INCOME
Trust and Investment Product Fees	1,923		1,827
Service Charges on Deposit Accounts	2,357		2,252
Insurance Revenues	4,060		4,038
Company Owned Life Insurance	412		393
Interchange Fee Income	1,046		959
Other Operating Income	1,207		980
Net Gains on Sales of Loans	1,533		862
Net Gains on Securities	725		472
TOTAL NON-INTEREST INCOME	13,263		11,783
NON-INTEREST EXPENSE
Salaries and Employee Benefits	17,084		16,310
Occupancy Expense	2,427		2,514
Furniture and Equipment Expense	961		1,009
FDIC Premiums	566		551
Data Processing Fees	1,707		1,957
Professional Fees	1,286		1,245
Advertising and Promotion	927		1,022
Intangible Amortization	447		673
Other Operating Expenses	3,743		3,948
TOTAL NON-INTEREST EXPENSE	29,148		29,229
Income before Income Taxes	20,870		18,521
Income Tax Expense	6,239		5,529
NET INCOME	$	14,631	$	12,992
Basic Earnings Per Share	$	1.11	$	0.98
Diluted Earnings Per Share	$	1.10	$	0.98
Dividends Per Share	$	0.34	$	0.32

See accompanying notes to consolidated financial statements.

6

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, dollars in thousands)

	Three Months Ended   June 30,
	2015			2014
NET INCOME	$	7,325		$	6,687
Other Comprehensive Income (Loss):
Unrealized Gains (Losses) on Securities
Unrealized Holding Gain (Loss) Arising During the Period	(8,955		)	4,647
Reclassification Adjustment for Losses (Gains) Included in Net Income	(262		)	(244		)
Tax Effect	3,253			(1,566		)
Net of Tax	(5,964		)	2,837
Total Other Comprehensive Income (Loss)	(5,964		)	2,837
COMPREHENSIVE INCOME	$	1,361		$	9,524

	Six Months Ended   June 30,
	2015			2014
NET INCOME	$	14,631		$	12,992
Other Comprehensive Income (Loss):
Unrealized Gains (Losses) on Securities
Unrealized Holding Gain (Loss) Arising During the Period	(3,087		)	8,380
Reclassification Adjustment for Losses (Gains) Included in Net Income	(725		)	(472		)
Tax Effect	1,345			(2,807		)
Net of Tax	(2,467		)	5,101
Total Other Comprehensive Income (Loss)	(2,467		)	5,101
COMPREHENSIVE INCOME	$	12,164		$	18,093

See accompanying notes to consolidated financial statements.

7

GERMAN AMERICAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, dollars in thousands)

	Six Months Ended   June 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	14,631		$	12,992
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Net Amortization on Securities	1,225			976
Depreciation and Amortization	2,207			2,422
Loans Originated for Sale	(76,344		)	(43,022		)
Proceeds from Sales of Loans Held-for-Sale	73,482			44,295
Provision for Loan Losses	500			550
Gain on Sale of Loans, net	(1,533		)	(862		)
Gain on Securities, net	(725		)	(472		)
Loss on Sales of Other Real Estate and Repossessed Assets	37			44
Loss on Disposition and Impairment of Premises and Equipment	29			—
Increase in Cash Surrender Value of Company Owned Life Insurance	(424		)	(413		)
Equity Based Compensation	509			320
Change in Assets and Liabilities:
Interest Receivable and Other Assets	3,472			(4,120		)
Interest Payable and Other Liabilities	(1,306		)	520
Net Cash from Operating Activities	15,760			13,230
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities, Calls, Redemptions of Securities Available-for-Sale	50,842			41,415
Proceeds from Sales of Securities Available-for-Sale	18,999			7,237
Purchase of Securities Available-for-Sale	(61,954		)	(47,284		)
Proceeds from Maturities of Securities Held-to-Maturity	89			84
Purchase of Federal Home Loan Bank Stock	(1,082		)	(92		)
Purchase of Loans	(1,852		)	—
Loans Made to Customers, net of Payments Received	(23,781		)	(27,673		)
Proceeds from Sales of Other Real Estate	800			1,036
Property and Equipment Expenditures	(499		)	(1,743		)
Net Cash from Investing Activities	(18,438		)	(27,020		)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits	(16,988		)	(69,757		)
Change in Short-term Borrowings	29,021			64,453
Advances in Long-term Debt	25,000			21,500
Repayments of Long-term Debt	(20,087		)	(1,252		)
Issuance of Common Stock	52			50
Dividends Paid	(4,499		)	(4,222		)
Net Cash from Financing Activities	12,499			10,772
Net Change in Cash and Cash Equivalents	9,821			(3,018		)
Cash and Cash Equivalents at Beginning of Year	42,446			60,132
Cash and Cash Equivalents at End of Year	$	52,267		$	57,114
Cash Paid During the Year for
Interest	$	2,996		$	2,980
Income Taxes	2,976			1,769
Supplemental Non Cash Disclosures
Loans Transferred to Other Real Estate	$	798		$	986
Securities Transferred to Accounts Receivable	—			(3,323		)

See accompanying notes to consolidated financial statements.

8

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 1 – Basis of Presentation

German American Bancorp, Inc. operates primarily in the banking industry. The accounting and reporting policies of German American Bancorp, Inc. and its subsidiaries (hereinafter collectively referred to as the "Company") conform to U.S. generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements, and all such adjustments are of a normal recurring nature. It is suggested that these consolidated financial statements and notes be read in conjunction with the financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. Certain items included in the prior period financial statements were reclassified to conform to the current presentation. There was no effect on net income or total shareholder’s equity based on these reclassifications.

NOTE 2 – Per Share Data

The computations of Basic Earnings per Share and Diluted Earnings per Share are as follows:

	Three Months Ended   June 30,
	2015		2014
Basic Earnings per Share:
Net Income	$	7,325	$	6,687
Weighted Average Shares Outstanding	13,256,026		13,210,150
Basic Earnings per Share	$	0.55	$	0.51
Diluted Earnings per Share:
Net Income	$	7,325	$	6,687
Weighted Average Shares Outstanding	13,256,026		13,210,150
Potentially Dilutive Shares, Net	7,578		20,662
Diluted Weighted Average Shares Outstanding	13,263,604		13,230,812
Diluted Earnings per Share	$	0.55	$	0.51

For the three months ended June 30, 2015 and 2014, there were no anti-dilutive shares.

The computations of Basic Earnings per Share and Diluted Earnings per Share are as follows:

	Six Months Ended   June 30,
	2015		2014
Basic Earnings per Share:
Net Income	$	14,631	$	12,992
Weighted Average Shares Outstanding	13,238,836		13,194,754
Basic Earnings per Share	$	1.11	$	0.98
Diluted Earnings per Share:
Net Income	$	14,631	$	12,992
Weighted Average Shares Outstanding	13,238,836		13,194,754
Potentially Dilutive Shares, Net	7,523		21,330
Diluted Weighted Average Shares Outstanding	13,246,359		13,216,084
Diluted Earnings per Share	$	1.10	$	0.98

For the six months ended June 30, 2015 and 2014, there were no anti-dilutive shares.

9

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 3 – Securities 

The amortized cost, unrealized gross gains and losses recognized in accumulated other comprehensive income (loss), and fair value of Securities Available-for-Sale at June 30, 2015 and December 31, 2014, were as follows:

Securities Available-for-Sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2015
U.S. Treasury and Agency Securities	$	10,000	$	—	$	(110	)	$	9,890
Obligations of State and Political Subdivisions	178,386		4,812		(1,110		)	182,088
Mortgage-backed Securities - Residential	429,257		2,174		(4,966		)	426,465
Equity Securities	353		—		—			353
Total	$	617,996	$	6,986	$	(6,186	)	$	618,796
December 31, 2014
U.S. Treasury and Agency Securities	$	20,000	$	—	$	(439	)	$	19,561
Obligations of State and Political Subdivisions	147,321		6,515		(59		)	153,777
Mortgage-backed Securities - Residential	458,709		3,615		(5,020		)	457,304
Equity Securities	353		—		—			353
Total	$	626,383	$	10,130	$	(5,518	)	$	630,995

Equity securities that do not have readily determinable fair values are included in the above totals, are carried at historical cost and are evaluated for impairment on a periodic basis. All mortgage-backed securities in the above table are residential mortgage-backed securities and guaranteed by government sponsored entities.

The carrying amount, unrecognized gains and losses and fair value of Securities Held-to-Maturity at June 30, 2015 and December 31, 2014, were as follows:

Securities Held-to-Maturity:	Carrying Amount		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
June 30, 2015
Obligations of State and Political Subdivisions	$	95	$	—	$	—	$	95
December 31, 2014
Obligations of State and Political Subdivisions	$	184	$	2	$	—	$	186

The amortized cost and fair value of Securities at June 30, 2015 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay certain obligations with or without call or prepayment penalties. Mortgage-backed and Equity Securities are not due at a single maturity date and are shown separately.

Securities Available-for-Sale:	Amortized Cost		Fair Value
Due in one year or less	$	6,173	$	6,270
Due after one year through five years	18,574		18,694
Due after five years through ten years	65,573		68,131
Due after ten years	98,066		98,883
Mortgage-backed Securities - Residential	429,257		426,465
Equity Securities	353		353
Total	$	617,996	$	618,796

10

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 3 - Securities (continued)

Securities Held-to-Maturity:	Carrying Amount		Fair Value
Due in one year or less	$	95	$	95
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	—		—
Total	$	95	$	95

Proceeds from the Sales of Securities are summarized below:

	Three Months Ended		Three Months Ended
	June 30, 2015		June 30, 2014
Proceeds from Sales	$	9,191	$	6,983
Gross Gains on Sales	262		244
Income Taxes on Gross Gains	92		85

	Six Months Ended		Six Months Ended
	June 30, 2015		June 30, 2014
Proceeds from Sales	$	18,999	$	7,237
Gross Gains on Sales	725		472
Income Taxes on Gross Gains	254		165

Below is a summary of securities with unrealized losses as of June 30, 2015 and December 31, 2014, presented by length of time the securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More					Total
June 30, 2015	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury and Agency Securities	$	—	$	—		$	9,890	$	(110	)	$	9,890	$	(110	)
Obligations of State and Political Subdivisions	55,209		(1,102		)	351		(8		)	55,560		(1,110		)
Mortgage-backed Securities - Residential	122,094		(1,134		)	144,206		(3,832		)	266,300		(4,966		)
Equity Securities	—		—			—		—			—		—
Total	$	177,303	$	(2,236	)	$	154,447	$	(3,950	)	$	331,750	$	(6,186	)

	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury and Agency Securities	$	—	$	—		$	19,561	$	(439	)	$	19,561	$	(439	)
Obligations of State and Political Subdivisions	3,765		(25		)	4,298		(34		)	8,063		(59		)
Mortgage-backed Securities - Residential	26,606		(191		)	209,679		(4,829		)	236,285		(5,020		)
Equity Securities	—		—			—		—			—		—
Total	$	30,371	$	(216	)	$	233,538	$	(5,302	)	$	263,909	$	(5,518	)

11

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 3 - Securities (continued)

Securities are written down to fair value when a decline in fair value is not considered temporary. In estimating other-than-temporary losses, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The Company doesn’t intend to sell or expect to be required to sell these securities, and the decline in fair value is largely due to changes in market interest rates, therefore, the Company does not consider these securities to be other-than-temporarily impaired. All mortgage-backed securities in the Company’s portfolio are guaranteed by government sponsored entities, are investment grade, and are performing as expected.

NOTE 4 – Derivatives

The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. The notional amounts of these interest rate swaps and the offsetting counterparty derivative instruments were $21.2 million at June 30, 2015 and $23.1 million at December 31, 2014. These interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions with approved, reputable, independent counterparties with substantially matching terms. The agreements are considered stand alone derivatives and changes in the fair value of derivatives are reported in earnings as non-interest income. 

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Company’s exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. There are provisions in the agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, the Company minimizes credit risk through credit approvals, limits, and monitoring procedures.

The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of:

	June 30, 2015				December 31, 2014
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Other Assets:
Interest Rate Swaps	$	21,192	$	440	$	23,104	$	507
Included in Other Liabilities:
Interest Rate Swaps	$	21,192	$	401	$	23,104	$	508

The following tables present the effect of derivative instruments on the Consolidated Statements of Income for the periods presented:

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2015		2014		2015		2014
Interest Rate Swaps:
Included in Interest Income / (Expense)	$	—	$	—	$	—	$	—
Included in Other Income / (Expense)	107		116		165		78

12

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 – Loans

Loans were comprised of the following classifications at June 30, 2015 and December 31, 2014: 

	June 30, 2015			December 31, 2014
Commercial:
Commercial and Industrial Loans and Leases	$	396,741		$	380,079
Commercial Real Estate Loans	584,426			583,086
Agricultural Loans	222,298			216,774
Retail:
Home Equity Loans	88,303			86,234
Consumer Loans	47,571			48,613
Residential Mortgage Loans	137,129			137,204
Subtotal	1,476,468			1,451,990
Less: Unearned Income	(3,822		)	(4,008		)
Allowance for Loan Losses	(15,258		)	(14,929		)
Loans, Net	$	1,457,388		$	1,433,053

The following table presents the activity in the allowance for loan losses by portfolio class for the three months ending June 30, 2015 and 2014:

June 30, 2015	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated		Total
Beginning Balance	$	4,747		$	7,229		$	1,142	$	318		$	389		$	673		$	671	$	15,169
Provision for Loan Losses	(114		)	54			81		57			5			128			39		250
Recoveries	26			43			—		6			54			9			—		138
Loans Charged-off	—			(11		)	—		(31		)	(66		)	(191		)	—		(299		)
Ending Balance	$	4,659		$	7,315		$	1,223	$	350		$	382		$	619		$	710	$	15,258

June 30, 2014	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated			Total
Beginning Balance	$	5,374		$	7,870		$	930	$	209		$	186		$	257		$	658		$	15,484
Provision for Loan Losses	365			(695		)	86		181			171			255			(163		)	200
Recoveries	9			27			—		42			39			4			—			121
Loans Charged-off	(87		)	(3		)	—		(14		)	(70		)	(81		)	—			(255		)
Ending Balance	$	5,661		$	7,199		$	1,016	$	418		$	326		$	435		$	495		$	15,550

13

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

The following tables present the activity in the allowance for loan losses by portfolio class for the six months ending June 30, 2015 and 2014:

June 30, 2015	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated		Total
Beginning Balance	$	4,627		$	7,273		$	1,123	$	246		$	354		$	622		$	684	$	14,929
Provision for Loan Losses	(13		)	2			100		129			40			216			26		500
Recoveries	67			51			—		6			154			11			—		289
Loans Charged-off	(22		)	(11		)	—		(31		)	(166		)	(230		)	—		(460		)
Ending Balance	$	4,659		$	7,315		$	1,223	$	350		$	382		$	619		$	710	$	15,258

June 30, 2014	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated			Total
Beginning Balance	$	3,983		$	8,335		$	946	$	239		$	188		$	281		$	612		$	14,584
Provision for Loan Losses	1,687			(1,752		)	70		181			219			262			(117		)	550
Recoveries	78			730			—		42			86			8			—			944
Loans Charged-off	(87		)	(114		)	—		(44		)	(167		)	(116		)	—			(528		)
Ending Balance	$	5,661		$	7,199		$	1,016	$	418		$	326		$	435		$	495		$	15,550

In determining the adequacy of the allowance for loan loss, general allocations are made for other pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on historical averages for loan losses for these portfolios, judgmentally adjusted for current economic factors and portfolio trends. 

Loan impairment is reported when full repayment under the terms of the loan is not expected. This methodology is used for all loans, including loans acquired with deteriorated credit quality. For purchased loans, the assessment is made at the time of acquisition as well as over the life of loan. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral if repayment is expected solely from the collateral. Commercial and industrial loans, commercial real estate loans, and agricultural loans are evaluated individually for impairment. Smaller balance homogeneous loans are evaluated for impairment in total. Such loans include real estate loans secured by one-to-four family residences and loans to individuals for household, family and other personal expenditures. Individually evaluated loans on non-accrual are generally considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

14

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		Commercial and Industrial Loans and Leases		Commercial Real Estate Loans		Agricultural Loans		Home Equity Loans		Consumer Loans		Residential Mortgage Loans		Unallocated
Allowance for Loan Losses:
Ending Allowance Balance Attributable to Loans:
Individually Evaluated for Impairment	$	1,603	$	103	$	1,500	$	—	$	—	$	—	$	—	$	—
Collectively Evaluated for Impairment	13,645		4,556		5,805		1,223		350		382		619		710
Acquired with Deteriorated Credit Quality	10		—		10		—		—		—		—		—
Total Ending Allowance Balance	$	15,258	$	4,659	$	7,315	$	1,223	$	350	$	382	$	619	$	710
Loans:
Loans Individually Evaluated for Impairment	$	6,065	$	2,029	$	4,024	$	12	$	—	$	—	$	—	n/m(2)
Loans Collectively Evaluated for Impairment	1,468,603		395,321		575,765		224,579		88,639		47,700		136,599		n/m(2)
Loans Acquired with Deteriorated Credit Quality	7,217		403		5,934		—		—		—		880		n/m(2)
Total Ending Loans Balance(1)	$	1,481,885	$	397,753	$	585,723	$	224,591	$	88,639	$	47,700	$	137,479	n/m(2)

⁽¹⁾Total recorded investment in loans includes $5,417 in accrued interest.

⁽²⁾n/m = not meaningful

December 31, 2014	Total		Commercial and Industrial Loans and Leases		Commercial Real Estate Loans		Agricultural Loans		Home Equity Loans		Consumer Loans		Residential Mortgage Loans		Unallocated
Allowance for Loan Losses:
Ending Allowance Balance Attributable to Loans:
Individually Evaluated for Impairment	$	1,532	$	87	$	1,445	$	—	$	—	$	—	$	—	$	—
Collectively Evaluated for Impairment	13,343		4,540		5,818		1,123		246		354		578		684
Acquired with Deteriorated Credit Quality	54		—		10		—		—		—		44		—
Total Ending Allowance Balance	$	14,929	$	4,627	$	7,273	$	1,123	$	246	$	354	$	622	$	684
Loans:
Loans Individually Evaluated for Impairment	$	6,044	$	1,964	$	4,080	$	—	$	—	$	—	$	—	n/m(2)
Loans Collectively Evaluated for Impairment	1,443,363		378,533		573,961		219,640		86,570		48,614		136,045		n/m(2)
Loans Acquired with Deteriorated Credit Quality	8,361		354		6,385		—		—		118		1,504		n/m(2)
Total Ending Loans Balance(1)	$	1,457,768	$	380,851	$	584,426	$	219,640	$	86,570	$	48,732	$	137,549	n/m(2)

⁽¹⁾Total recorded investment in loans includes $5,778 in accrued interest.

⁽²⁾n/m = not meaningful

15

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Unpaid Principal Balance(1)		Recorded Investment		Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	502	$	498	$	—
Commercial Real Estate Loans	1,276		1,126		—
Agricultural Loans	12		12		—
Subtotal	1,790		1,636		—
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,516		1,531		103
Commercial Real Estate Loans	3,758		3,095		1,510
Agricultural Loans	—		—		—
Subtotal	5,274		4,626		1,613
Total	$	7,064	$	6,262	$	1,613
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	—	$	—	$	—
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	735	$	197	$	10

⁽¹⁾ Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.

December 31, 2014	Unpaid Principal Balance(1)		Recorded Investment		Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	1,887	$	1,877	$	—
Commercial Real Estate Loans	1,944		1,447		—
Agricultural Loans	—		—		—
Subtotal	3,831		3,324		—
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	84		87		87
Commercial Real Estate Loans	3,653		2,975		1,455
Agricultural Loans	—		—		—
Subtotal	3,737		3,062		1,542
Total	$	7,568	$	6,386	$	1,542
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	289	$	133	$	—
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	759	$	209	$	10

⁽¹⁾ Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.

16

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

The following tables present loans individually evaluated for impairment by class of loans for the three month period ended June 30, 2015 and 2014:

June 30, 2015	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	724	$	9	$	9
Commercial Real Estate Loans	1,191		66		66
Agricultural Loans	12		—		—
Subtotal	1,927		75		75
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,554		23		23
Commercial Real Estate Loans	3,181		3		2
Agricultural Loans	—		—		—
Subtotal	4,735		26		25
Total	$	6,662	$	101	$	100
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	45	$	62	$	62
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	286	$	—	$	—

June 30, 2014	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	2,176	$	45	$	45
Commercial Real Estate Loans	3,326		53		46
Agricultural Loans	—		—		—
Subtotal	5,502		98		91
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	219		1		1
Commercial Real Estate Loans	2,588		6		5
Agricultural Loans	—		—		—
Subtotal	2,807		7		6
Total	$	8,309	$	105	$	97
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	950	$	1	$	1
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	32	$	—	$	—

17

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

The following table presents loans individually evaluated for impairment by class of loans for the six month period ended June 30, 2015 and 2014:

June 30, 2015	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	524	$	12	$	12
Commercial Real Estate Loans	1,338		77		77
Agricultural Loans	6		—		—
Subtotal	1,868		89		89
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,744		46		46
Commercial Real Estate Loans	3,107		7		5
Agricultural Loans	—		—		—
Subtotal	4,851		53		51
Total	$	6,719	$	142	$	140
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	124	$	62	$	62
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	292	$	—	$	—

June 30, 2014	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	2,156	$	76	$	76
Commercial Real Estate Loans	2,879		55		48
Agricultural Loans	—		—		—
Subtotal	5,035		131		124
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	2,295		1		1
Commercial Real Estate Loans	3,416		11		10
Agricultural Loans	—		—		—
Subtotal	5,711		12		11
Total	$	10,746	$	143	$	135
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	974	$	3	$	3
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	32	$	1	$	1

18

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

All classes of loans, including loans acquired with deteriorated credit quality, are generally placed on non-accrual status when scheduled principal or interest payments are past due for 90 days or more or when the borrower’s ability to repay becomes doubtful. For purchased loans, the determination is made at the time of acquisition as well as over the life of the loan. Uncollected accrued interest for each class of loans is reversed against income at the time a loan is placed on non-accrual. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. All classes of loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are typically charged-off at 180 days past due, or earlier if deemed uncollectible. Exceptions to the non-accrual and charge-off policies are made when the loan is well secured and in the process of collection.

The following tables present the recorded investment in non-accrual loans and loans past due 90 days or more still on accrual by class of loans as of June 30, 2015 and December 31, 2014:

	Non-Accrual				Loans Past Due 90 Days or More & Still Accruing
	2015		2014		2015		2014
Commercial and Industrial Loans and Leases	$	395	$	161	$	15	$	68
Commercial Real Estate Loans	3,232		3,460		—		—
Agricultural Loans	—		—		—		75
Home Equity Loans	305		268		—		—
Consumer Loans	76		196		—		—
Residential Mortgage Loans	1,423		1,885		—		—
Total	$	5,431	$	5,970	$	15	$	143
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	271	$	1,154	$	—	$	—

The following tables present the aging of the recorded investment in past due loans by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due
Commercial and Industrial Loans and Leases	$	397,753	$	252	$	69	$	340	$	661	$	397,092
Commercial Real Estate Loans	585,723		169		249		972		1,390		584,333
Agricultural Loans	224,591		31		—		—		31		224,560
Home Equity Loans	88,639		218		97		306		621		88,018
Consumer Loans	47,700		99		45		75		219		47,481
Residential Mortgage Loans	137,479		1,769		299		1,271		3,339		134,140
Total(1)	$	1,481,885	$	2,538	$	759	$	2,964	$	6,261	$	1,475,624
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	7,217	$	—	$	—	$	—	$	—	$	7,217

⁽¹⁾Total recorded investment in loans includes $5,417 in accrued interest.

19

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

December 31, 2014	Total		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due
Commercial and Industrial Loans and Leases	$	380,851	$	628	$	—	$	148	$	776	$	380,075
Commercial Real Estate Loans	584,426		504		10		753		1,267		583,159
Agricultural Loans	219,640		25		—		75		100		219,540
Home Equity Loans	86,570		197		4		268		469		86,101
Consumer Loans	48,732		132		28		75		235		48,497
Residential Mortgage Loans	137,549		2,046		329		1,720		4,095		133,454
Total(1)	$	1,457,768	$	3,532	$	371	$	3,039	$	6,942	$	1,450,826
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	8,361	$	—	$	—	$	648	$	648	$	7,713

⁽¹⁾Total recorded investment in loans includes $5,778 in accrued interest.

Troubled Debt Restructurings:

In certain instances, the Company may choose to restructure the contractual terms of loans. A troubled debt restructuring occurs when the Company grants a concession to the borrower that it would not otherwise consider due to a borrower’s financial difficulty.   In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification. This evaluation is performed under the Company’s internal underwriting policy. The Company uses the same methodology for loans acquired with deteriorated credit quality as for all other loans when determining whether the loan is a troubled debt restructuring.

During the three months ended June 30, 2015 and 2014, there were no troubled debt restructurings. There were no troubled debt restructurings for the three months ended June 30, 2015 and the year ended December 31, 2014 for loans acquired with deteriorated credit quality at the time of acquisition.

During the six months ended June 30, 2015, there were no troubled debt restructurings. During the six months ended June 30, 2014, there was one loan modified as a troubled debt restructurings. The modification of the terms of this loan included a permanent reduction of the recorded investment in the loan. There were no troubled debt restructurings for the six months ended June 30, 2015 and the year ended December 31, 2014 for the loans acquired with deteriorated credit quality at the time of acquisition.

The following tables present the recorded investment of troubled debt restructurings by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		Performing		Non-Accrual(1)
Commercial and Industrial Loans and Leases	$	1,639	$	1,636	$	3
Commercial Real Estate Loans	2,729		987		1,742
Total	$	4,368	$	2,623	$	1,745

December 31, 2014	Total		Performing		Non-Accrual(1)
Commercial and Industrial Loans and Leases	$	1,809	$	1,803	$	6
Commercial Real Estate Loans	2,841		960		1,881
Total	$	4,650	$	2,763	$	1,887

⁽¹⁾The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on previous page.

The Company had not committed to lending any additional amounts as of June 30, 2015 and December 31, 2014 to customers with outstanding loans that are classified as troubled debt restructurings.

20

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

The following tables present loans by class modified as troubled debt restructurings that occurred during the three months ending June 30, 2015 and 2014:

June 30, 2015	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the three months ending June 30, 2015.

June 30, 2014	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the three months ending June 30, 2014.

The following tables present loans by class modified as troubled debt restructurings that occurred during the six months ending June 30, 2015 and 2014:

June 30, 2015	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the six months ending June 30, 2015.

June 30, 2014	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	1	201		197
Total	1	$	201	$	197

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the six months ending June 30, 2014.

21

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ending June 30, 2015 and 2014:

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2015
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	1	95
Total	1	$	95

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge off of $95 during the three months ending June 30, 2015.

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2014
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	—	—
Total	—	$	—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the three months ending June 30, 2014.

The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the six months ending June 30, 2015 and 2014:

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2015
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	1	95
Total	1	$	95

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge-off of $95 during the six months ending June 30, 2015.

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2014
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	—	—
Total	—	$	—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the six months ending June 30, 2014.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company classifies loans as to credit risk by individually analyzing loans. This analysis includes commercial and industrial loans, commercial real estate loans, and agricultural loans with an outstanding balance greater than $100. This analysis is typically performed on at least an annual basis. The Company uses the following definitions for risk ratings:

22

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans as of June 30, 2015 and December 31, 2014 is as follows:

June 30, 2015	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and Industrial Loans and Leases	$	370,372	$	13,689	$	13,692	$	—	$	397,753
Commercial Real Estate Loans	546,263		24,913		14,547		—		585,723
Agricultural Loans	218,815		5,674		102		—		224,591
Total	$	1,135,450	$	44,276	$	28,341	$	—	$	1,208,067
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	870	$	1,520	$	3,947	$	—	$	6,337

December 31, 2014	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and Industrial Loans and Leases	$	351,250	$	18,387	$	11,214	$	—	$	380,851
Commercial Real Estate Loans	545,804		23,421		15,201		—		584,426
Agricultural Loans	214,974		4,211		455		—		219,640
Total	$	1,112,028	$	46,019	$	26,870	$	—	$	1,184,917
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	651	$	1,697	$	4,391	$	—	$	6,739

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For home equity, consumer and residential mortgage loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment in home equity, consumer and residential mortgage loans based on payment activity as of June 30, 2015 and December 31, 2014:

June 30, 2015	Home Equity Loans		Consumer Loans		Residential Mortgage Loans
Performing	$	88,334	$	47,624	$	136,056
Nonperforming	305		76		1,423
Total	$	88,639	$	47,700	$	137,479
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	—	$	—	$	880

23

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 5 - Loans (continued)

December 31, 2014	Home Equity Loans		Consumer Loans		Residential Mortgage Loans
Performing	$	86,302	$	48,536	$	135,664
Nonperforming	268		196		1,885
Total	$	86,570	$	48,732	$	137,549
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	—	$	118	$	1,504

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The recorded investment of those loans is as follows: 

	June 30, 2015		December 31, 2014
Commercial and Industrial Loans	$	403	$	354
Commercial Real Estate Loans	5,934		6,385
Home Equity Loans	—		—
Consumer Loans	—		118
Residential Mortgage Loans	880		1,504
Total	$	7,217	$	8,361
Carrying Amount, Net of Allowance	$	7,207	$	8,307

Accretable yield, or income expected to be collected, is as follows:

	2015			2014
Balance at April 1	$	1,626		$	1,201
New Loans Purchased	—			—
Accretion of Income	(23		)	(75		)
Reclassifications from Non-accretable Difference	104			—
Charge-off of Accretable Yield	(27		)	—
Balance at June 30	$	1,680		$	1,126

	2015			2014
Balance at January 1	$	1,685		$	1,279
New Loans Purchased	—			—
Accretion of Income	(82		)	(153		)
Reclassifications from Non-accretable Difference	104			—
Charge-off of Accretable Yield	(27		)	—
Balance at June 30	$	1,680		$	1,126

For those purchased loans disclosed above, the Company did not increase the allowance for loan losses during the three and six months ended June 30, 2015 and 2014. No allowances for loan losses were reversed during the same period.

The carrying amount of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction totaled $123 as of June 30, 2015 and $288 as of December 31, 2014.

24

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 6 – Repurchase Agreements Accounted for as Secured Borrowings

Repurchase agreements are short term borrowings included in FHLB Advances and Other Borrowings and mature overnight and continuously. Repurchase agreements totaled $14,093 as of June 30, 2015 and were secured by mortgage-backed securities. Risk could arise when the collateral pledged to repurchase agreement declines in fair value. The Company minimizes risk by consistently monitoring the value of the collateral pledged. At the point in time where the collateral has declined in fair value, the Company is required to provide additional collateral based on the value of the underlying securities.

NOTE 7 – Segment Information

The Company’s operations include three primary segments: core banking, trust and investment advisory services, and insurance operations. The core banking segment involves attracting deposits from the general public and using such funds to originate consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, primarily in the Company’s local markets. The core banking segment also involves the sale of residential mortgage loans in the secondary market. The trust and investment advisory services segment involves providing trust, investment advisory, and brokerage services to customers. The insurance segment offers a full range of personal and corporate property and casualty insurance products, primarily in the Company’s banking subsidiary’s local markets.

The core banking segment is comprised by the Company’s banking subsidiary, German American Bancorp, which operated through 37 banking offices at June 30, 2015. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue for the core-banking segment. The trust and investment advisory services segment’s revenues are comprised primarily of fees generated by the trust operations of the Company's banking subsidiary and by German American Investment Services, Inc. These fees are derived by providing trust, investment advisory, and brokerage services to its customers. The insurance segment primarily consists of German American Insurance, Inc., which provides a full line of personal and corporate insurance products. Commissions derived from the sale of insurance products are the primary source of revenue for the insurance segment.

The following segment financial information has been derived from the internal financial statements of the Company which are used by management to monitor and manage financial performance. The accounting policies of the three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2015
Net Interest Income	$	18,800	$	4		$	1	$	(99	)	$	18,706
Net Gains on Sales of Loans	784		—			—		—			784
Net Gains on Securities	235		—			—		27			262
Trust and Investment Product Fees	1		938			—		—			939
Insurance Revenues	1		1			1,513		—			1,515
Noncash Items:
Provision for Loan Losses	250		—			—		—			250
Depreciation and Amortization	1,016		5			27		38			1,086
Income Tax Expense (Benefit)	3,075		(11		)	72		(199		)	2,937
Segment Profit (Loss)	7,268		(24		)	105		(24		)	7,325
Segment Assets at June 30, 2015	2,268,162		11,423			7,405		(27,304		)	2,259,686

25

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Segment Information (continued)

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2014
Net Interest Income	$	18,434	$	4		$	1	$	(118	)	$	18,321
Net Gains on Sales of Loans	386		—			—		—			386
Net Gains on Securities	244		—			—		—			244
Trust and Investment Product Fees	—		905			—		—			905
Insurance Revenues	8		6			1,468		—			1,482
Noncash Items:
Provision for Loan Losses	200		—			—		—			200
Depreciation and Amortization	1,132		7			30		37			1,206
Income Tax Expense (Benefit)	2,954		(65		)	99		(191		)	2,797
Segment Profit (Loss)	6,670		(103		)	144		(24		)	6,687
Segment Assets at December 31, 2014	2,242,456		11,401			6,429		(23,187		)	2,237,099

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2015
Net Interest Income	$	37,441	$	8		$	2	$	(196	)	$	37,255
Net Gains on Sales of Loans	1,533		—			—		—			1,533
Net Gains on Securities	698		—			—		27			725
Trust and Investment Product Fees	2		1,921			—		—			1,923
Insurance Revenues	11		18			4,031		—			4,060
Noncash Items:
Provision for Loan Losses	500		—			—		—			500
Depreciation and Amortization	2,068		10			54		75			2,207
Income Tax Expense (Benefit)	6,138		(12		)	492		(379		)	6,239
Segment Profit (Loss)	13,948		(33		)	734		(18		)	14,631
Segment Assets at June 30, 2015	2,268,162		11,423			7,405		(27,304		)	2,259,686

26

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 7 - Segment Information (continued)

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2014
Net Interest Income	$	36,747	$	8		$	2	$	(240	)	$	36,517
Net Gains on Sales of Loans	862		—			—		—			862
Net Gains on Securities	472		—			—		—			472
Trust and Investment Product Fees	2		1,825			—		—			1,827
Insurance Revenues	5		11			4,022		—			4,038
Noncash Items:
Provision for Loan Losses	550		—			—		—			550
Depreciation and Amortization	2,275		13			59		75			2,422
Income Tax Expense (Benefit)	5,444		(107		)	600		(408		)	5,529
Segment Profit (Loss)	12,368		(172		)	862		(66		)	12,992
Segment Assets at December 31, 2014	2,242,456		11,401			6,429		(23,187		)	2,237,099

NOTE 8 – Stock Repurchase Plan

On April 26, 2001, the Company announced that its Board of Directors approved a stock repurchase program for up to 607,754 of the outstanding shares of common stock of the Company. Shares may be purchased from time to time in the open market and in large block privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be discontinued at any time before the maximum number of shares specified by the program are purchased. The Board of Directors established no expiration date for this program. As of June 30, 2015, the Company had purchased 334,965 shares under the program. No shares were purchased under the program during the three and six months ended June 30, 2015 and 2014.

NOTE 9 – Equity Plans and Equity Based Compensation

The Company maintains three equity incentive plans under which stock options, restricted stock, and other equity incentive awards can be granted. At June 30, 2015, the Company has reserved 390,033 shares of common stock (as adjusted for subsequent stock dividends and subject to further customary anti-dilution adjustments) for the purpose of issuance pursuant to outstanding and future grants of options, restricted stock, and other equity awards to officers, directors and other employees of the Company. 

For the three and six months ended June 30, 2015 and 2014, the Company granted no options.  The Company recorded no stock compensation expense applicable to options during the three and six months ended June 30, 2015 and 2014 because all outstanding options were fully vested prior to 2007. In addition, there was no unrecognized option expense. 

During the periods presented, awards of long-term incentives were granted in the form of restricted stock.  Awards that were granted to management under a management incentive plan were granted in tandem with cash credit entitlements (typically in the form of 60% restricted stock grants and 40% cash credit entitlements). The management and employee restricted stock grants and tandem cash credit entitlements awarded will vest in three equal installments of 33.3% with the first annual vesting on December 5th of the year of the grant and on December 5th of the next two succeeding years.  Awards that were granted to directors as additional retainer for their services do not include any cash credit entitlement. These director restricted stock grants are subject to forfeiture in the event that the recipient of the grant does not continue in service as a director of the Company through December 5th of the year after grant or do not satisfy certain meeting attendance requirements, at which time they generally vest 100 percent. For measuring compensation costs, restricted stock awards are valued based upon the market value of the common shares on the date of grant. During the three months ended June 30, 2015, the Company granted awards of 768 shares of restricted stock. During the three months ended June 30, 2014, the Company granted no shares of restricted stock.  During the six months ended June 30, 2015 and 2014, the Company granted awards of 33,378 and 31,080 shares of restricted stock, respectively. 

27

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 9 - Equity Plans and Equity Based Compensation (continued)

The following tables present expense recorded for restricted stock and cash entitlements as well as the related tax information for the periods presented:

	Three Months Ended June 30,
	2015			2014
Restricted Stock Expense	$	275		$	161
Cash Entitlement Expense	142			101
Tax Effect	(169		)	(106		)
Net of Tax	$	248		$	156

	Six Months Ended June 30,
	2015			2014
Restricted Stock Expense	$	509		$	320
Cash Entitlement Expense	304			199
Tax Effect	(329		)	(210		)
Net of Tax	$	484		$	309

Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $2,235 and $1,873 as of June 30, 2015 and 2014, respectively.

The Company maintains an Employee Stock Purchase Plan whereby eligible employees have the option to purchase the Company’s common stock at a discount. The purchase price of the shares under this Plan has been set at 95% of the fair market value of the Company’s common stock as of the last day of the plan year. The plan provided for the purchase of up to 500,000 shares of common stock, which the Company may obtain by purchases on the open market or from private sources, or by issuing authorized but unissued common shares. Funding for the purchase of common stock is from employee and Company contributions. 

The Employee Stock Purchase Plan is not considered compensatory.  There was no expense recorded for the employee stock purchase plan during the three and six months ended June 30, 2015 and 2014, nor was there any unrecognized compensation expense as of June 30, 2015 and 2014 for the Employee Stock Purchase Plan.

NOTE 10 – Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

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

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

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

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

28

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 10 - Fair Value (continued)

Investment Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Level 3 pricing is obtained from a third-party based upon similar trades that are not traded frequently without adjustment by the Company. At June 30, 2015, the Company held $11.2 million in Level 3 securities which consist of $10.8 million of non-rated Obligations of State and Political Subdivisions and $353 thousand of equity securities that are not actively traded. Absent the credit rating, significant assumptions must be made such that the credit risk input becomes an unobservable input and thus these securities are reported by the Company in a Level 3 classification.

Derivatives: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2).

Impaired Loans: Fair values for impaired collateral dependent loans are generally based on appraisals obtained from licensed real estate appraisers and in certain circumstances consideration of offers obtained to purchase properties prior to foreclosure. Appraisals for commercial real estate generally use three methods to derive value: cost, sales or market comparison and income approach. The cost method bases value in the cost to replace the current property. Value of market comparison approach evaluates the sales price of similar properties in the same market area. The income approach considers net operating income generated by the property and an investor's required return. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Comparable sales adjustments are based on known sales prices of similar type and similar use properties and duration of time that the property has been on the market to sell. Such adjustments made in the appraisal process are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Company’s Risk Management Area reviews the assumptions and approaches utilized in the appraisal. In determining the value of impaired collateral dependent loans and other real estate owned, significant unobservable inputs may be used which include: physical condition of comparable properties sold, net operating income generated by the property and investor rates of return.

Other Real Estate: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate (ORE) are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property utilizing similar techniques as discussed above for Impaired Loans, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, impairment loss is recognized.

Loans Held-for-Sale: The fair values of loans held for sale are determined by using quoted prices for similar assets, adjusted for specific attributes of that loan resulting in a Level 2 classification.

29

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 10 - Fair Value (continued)

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	9,890	$	—	$	9,890
Obligations of State and Political Subdivisions	—		171,263		10,825		182,088
Mortgage-backed Securities-Residential	—		426,465		—		426,465
Equity Securities	—		—		353		353
Total Securities	$	—	$	607,618	$	11,178	$	618,796
Loans Held-for-Sale	$	—	$	10,622	$	—	$	10,622
Derivative Assets	$	—	$	440	$	—	$	440
Derivative Liabilities	$	—	$	401	$	—	$	401

	Fair Value Measurements at December 31, 2014 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	19,561	$	—	$	19,561
Obligations of State and Political Subdivisions	—		143,636		10,141		153,777
Mortgage-backed Securities-Residential	—		457,304		—		457,304
Equity Securities	—		—		353		353
Total Securities	$	—	$	620,501	$	10,494	$	630,995
Loans Held-for-Sale	$	—	$	6,311	$	—	$	6,311
Derivative Assets	$	—	$	507	$	—	$	507
Derivative Liabilities	$	—	$	508	$	—	$	508

There were no transfers between Level 1 and Level 2 for the periods ended June 30, 2015 and December 31, 2014.

At June 30, 2015, the aggregate fair value of the Loans Held-for-Sale was $10,622, aggregate contractual principal balance was $10,470 with a difference of $152. At December 31, 2014, the aggregate fair value of the Loans Held-for-Sale was $6,311, aggregate contractual principal balance was $6,227 with a difference of $84.

30

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 10 - Fair Value (continued)

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2015 and 2014:

	Obligations of State and Political Subdivisions					Equity Securities
	2015			2014		2015		2014
Balance of Recurring Level 3 Assets at April 1	$	9,602		$	10,476	$	353	$	353
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(81		)	86		—		—
Maturities / Calls	—			—		—		—
Purchases	1,304			—		—		—
Balance of Recurring Level 3 Assets at June 30	$	10,825		$	10,562	$	353	$	353

	Obligations of State and Political Subdivisions						Equity Securities
	2015			2014			2015		2014
Balance of Recurring Level 3 Assets at January 1	$	10,141		$	10,832		$	353	$	353
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(45		)	155			—		—
Maturities / Calls	(575		)	(425		)	—		—
Purchases	1,304			—			—		—
Balance of Recurring Level 3 Assets at June 30	$	10,825		$	10,562		$	353	$	353

Of the total gain/loss included in other comprehensive income for the three and six months ended June 30, 2015, $(81) and $(45), respectively, was attributable to other changes in fair value. Of the total gain/loss included in earnings for the three and six months ended June 30, 2015, $0 and $1, respectively, was attributable to interest income on securities. Of the total gain/loss included in other comprehensive income for the three and six months ended June 30, 2014, $86 and $155, respectively, was attributable to other changes in fair value. The three and six months ended June 30, 2014 included no gain/loss attributable to interest income on securities.

Assets and Liabilities Measured on a Non-Recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
Impaired Loans
Commercial and Industrial Loans	$	—	$	—	$	—	$	—
Commercial Real Estate Loans	—		—		1,566		1,566
Agricultural Loans	—		—		—		—
Other Real Estate
Commercial Real Estate	—		—		—		—

31

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 10 - Fair Value (continued)

	Fair Value Measurements at December 31, 2014 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
Impaired Loans
Commercial and Industrial Loans	$	—	$	—	$	—	$	—
Commercial Real Estate Loans	—		—		1,504		1,504
Agricultural Loans	—		—		—		—
Other Real Estate
Commercial Real Estate	—		—		68		68

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $3,143 with a valuation allowance of $1,577, resulting in an additional provision for loan losses of $49 and $35 for the three and six months ended June 30, 2015, respectively. For the three and six months ended June 30, 2014, impaired loans resulted in an additional provision for loan losses of $189 and $156, respectively. Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $3,043 with a valuation allowance of $1,539, resulting in an additional provision for loan losses of $261 for the year ended December 31, 2014.

There was no Other Real Estate carried at fair value less costs to sell at June 30, 2015. No charge to earnings was included in the three and six months ended June 30, 2015 and 2014. Other Real Estate carried at fair value less costs to sell had a carrying value of $68 at December 31, 2014. A charge to earnings through Other Operating Income of $104 was included in the year ended December 31, 2014.

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2015 and December 31, 2014:

June 30, 2015	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired Loans - Commercial Real Estate Loans	$	1,566	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30%-86% (70%)

December 31, 2014	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired Loans - Commercial Real Estate Loans	$	1,504	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30%-86% (71%)
Other Real Estate - Commercial Real Estate Loans	$	68	Sales comparison approach	Adjustment for physical condition of comparable properties sold	55% (55%)

32

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 10 - Fair Value (continued)

The carrying amounts and estimated fair values of the Company’s financial instruments not previously presented are provided in the tables below for the periods ending June 30, 2015 and December 31, 2014. Not all of the Company’s assets and liabilities are considered financial instruments, and therefore are not included in the table. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates were based on subjective judgments, and therefore cannot be determined with precision.

				Fair Value Measurements at June 30, 2015 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	52,367		$	31,538		$	20,829		$	—		$	52,367
Securities Held-to-Maturity	95			—			95			—			95
Loans, Net	1,454,409			—			—			1,455,587			1,455,587
FHLB Stock and Other Restricted Stock	8,122			N/A			N/A			N/A			N/A
Accrued Interest Receivable	7,920			—			2,352			5,568			7,920
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,439,560		)	(1,439,560		)	—			—			(1,439,560		)
Time Deposits	(323,205		)	—			(324,292		)	—			(324,292		)
Short-term Borrowings	(170,493		)	—			(170,493		)	—			(170,493		)
Long-term Debt	(69,579		)	—			(65,100		)	(5,486		)	(70,586		)
Accrued Interest Payable	(681		)	—			(674		)	(7		)	(681		)

				Fair Value Measurements at December 31, 2014 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	42,546		$	33,481		$	9,065		$	—		$	42,546
Securities Held-to-Maturity	184			—			186			—			186
Loans, Net	1,431,549			—			—			1,432,622			1,432,622
FHLB Stock and Other Restricted Stock	7,040			N/A			N/A			N/A			N/A
Accrued Interest Receivable	8,162			—			2,240			5,922			8,162
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,446,336		)	(1,446,336		)	—			—			(1,446,336		)
Time Deposits	(333,425		)	—			(335,134		)	—			(335,134		)
Short-term Borrowings	(141,473		)	—			(141,473		)	—			(141,473		)
Long-term Debt	(64,591		)	—			(60,289		)	(5,429		)	(65,718		)
Accrued Interest Payable	(754		)	—			(704		)	(50		)	(754		)

Cash and Short-term Investments:

The carrying amount of cash and short-term investments approximate fair values and are classified as Level 1 or Level 2.

Securities Held-to-Maturity:

The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

FHLB Stock and Other Restricted Stock:

It is not practical to determine the fair values of FHLB stock and other restricted stock due to restrictions placed on their transferability.

33

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 10 - Fair Value (continued)

Loans:

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

Accrued Interest Receivable:

The carrying amount of accrued interest approximates fair value resulting in a Level 2 or Level 3 classification consistent with the asset they are associated with.

Deposits:

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, savings and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. Fair values for fixed rate time deposits are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. 

Short-term Borrowings:

The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Long-term Debt:

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification. 

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

Accrued Interest Payable:

The carrying amount of accrued interest approximates fair value resulting in a Level 2 or Level 3 classification consistent with the liability they are associated with.

NOTE 11 – Other Comprehensive Income (Loss)

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2015 and 2014, net of tax:

June 30, 2015	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at April 1, 2015	$	6,455		$	—	$	(68	)	$	6,387
Other Comprehensive Income (Loss) Before Reclassification	(5,794		)	—		—			(5,794		)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(170		)	—		—			(170		)
Net Current Period Other Comprehensive Income (Loss)	(5,964		)	—		—			(5,964		)
Ending Balance at June 30, 2015	$	491		$	—	$	(68	)	$	423

34

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 11 - Other Comprehensive Income (Loss) (continued)

	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at January 1, 2015	$	2,958		$	—	$	(68	)	$	2,890
Other Comprehensive Income (Loss) Before Reclassification	(1,996		)	—		—			(1,996		)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(471		)	—		—			(471		)
Net Current Period Other Comprehensive Income (Loss)	(2,467		)	—		—			(2,467		)
Ending Balance at June 30, 2015	$	491		$	—	$	(68	)	$	423

June 30, 2014	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at April 1, 2014	$	(2,967	)	$	—	$	(32	)	$	(2,999	)
Other Comprehensive Income (Loss) Before Reclassification	2,996			—		—			2,996
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(159		)	—		—			(159		)
Net Current Period Other Comprehensive Income (Loss)	2,837			—		—			2,837
Ending Balance at June 30, 2014	$	(130	)	$	—	$	(32	)	$	(162	)

	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at January 1, 2014	$	(5,231	)	$	—	$	(32	)	$	(5,263	)
Other Comprehensive Income (Loss) Before Reclassification	5,408			—		—			5,408
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(307		)	—		—			(307		)
Net Current Period Other Comprehensive Income (Loss)	5,101			—		—			5,101
Ending Balance at June 30, 2014	$	(130	)	$	—	$	(32	)	$	(162	)

35

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 11 - Other Comprehensive Income (Loss) (continued)

The tables below summarize the classifications out of accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2015 and 2014:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	262		Net Gain (Loss) on Securities
	(92		)	Income Tax Expense
	170			Net of Tax
Total Reclassifications for the Three Months Ended June 30, 2015	$	170

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	725		Net Gain (Loss) on Securities
	(254		)	Income Tax Expense
	471			Net of Tax
Total Reclassifications for the Six Months Ended June 30, 2015	$	471

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	244		Net Gain (Loss) on Securities
	(85		)	Income Tax Expense
	159			Net of Tax
Total Reclassifications for the Three Months Ended June 30, 2014	$	159

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	472		Net Gain (Loss) on Securities
	(165		)	Income Tax Expense
	307			Net of Tax
Total Reclassifications for the Six Months Ended June 30, 2014	$	307

36

GERMAN AMERICAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

(unaudited, dollars in thousands except share and per share data)

NOTE 12 – Newly Issued Accounting Pronouncements

In January 2014, the FASB amended existing guidance clarifying that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This update did not have a material impact on the Company's consolidated financial statements.

In January 2014, the FASB issued guidance for accounting for investments in qualified affordable housing projects. The new guidance allows a limited liability investor that meets certain conditions to use the proportional amortization methods. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).

The Company adopted the proportional amortization method of accounting for its low income housing investments in the first quarter of 2015. The Company quantified the impact of adopting the proportional amortization method compared to the equity method to its current year and prior period financial statements. The Company determined that the adoption of the proportional amortization method did not have a material impact to its consolidated financial statements; therefore, the Company did not adjust its prior period consolidated financial statements. The low income housing investment losses, net of the tax benefits received, are included in income tax expense on the consolidated statements of income for the three and six months ended June 30, 2015. At June 30, 2015 and December 31, 2014, the Company had investments in qualified housing projects totaling $5.9 million and $6.1 million, respectively. These investments are reported in the Accrued Interest Receivable and Other Assets line of the Consolidated Balance Sheet. The Company had an unfunded investment in qualified affordable housing investments of $4.6 million at June 30, 2015 and $4.8 million at December 31, 2014, which are reported in the Accrued Interest Payable and Other Liabilities line of the Consolidated Balance Sheet. For the three months ended June 30, 2015, the Company recognized $40 of low income housing investment tax credit through the income tax line of the Consolidated Statements of Income. The Company recognized $80 of low income housing investment losses net of tax credits during six months ended June 30, 2015 through the income tax line of the Consolidated Statements of Income. Of this amount, $161 was due to the adoption of the proportional amortization method. For the second quarter and six months ended June 30, 2014, the Company recognized $23 and $43 in the Other Operating Expense line, respectively, and $35 and $70 benefit in the Income Tax Expense line, respectively, of the Consolidated Statements of Income.

37

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

GERMAN AMERICAN BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

German American Bancorp, Inc., is a NASDAQ-traded (symbol: GABC) financial services holding company based in Jasper, Indiana. German American Bancorp, Inc., through its banking subsidiary German American Bancorp, operates 37 banking offices in 13 southern Indiana counties. The Company also owns an investment brokerage subsidiary (German American Investment Services, Inc.) and a full line property and casualty insurance agency (German American Insurance, Inc.).

Throughout this Management’s Discussion and Analysis, as elsewhere in this report, when we use the term “Company,” we will usually be referring to the business and affairs (financial and otherwise) of German American Bancorp, Inc. and its subsidiaries and affiliates as a whole. Occasionally, we will refer to the term “parent company” or “holding company” when we mean to refer to only German American Bancorp, Inc.

This section presents an analysis of the consolidated financial condition of the Company as of June 30, 2015 and December 31, 2014 and the consolidated results of operations for the three and six months ended June 30, 2015 and 2014. This discussion should be read in conjunction with the consolidated financial statements and other financial data presented elsewhere herein and with the financial statements and other financial data, as well as the Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

MANAGEMENT OVERVIEW

This updated discussion should be read in conjunction with the Management Overview that was included in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.

Net income for the quarter ended June 30, 2015 totaled $7,325,000, or $0.55 per diluted share, an increase of $638,000, or 8% on a per share basis, from the quarter ended June 30, 2014 net income of $6,687,000, or $0.51 per diluted share. On a year-to-date basis, 2015 earnings improved to $14,631,000, or $1.10 per diluted share, as compared to $12,992,000, or $0.98 per diluted share for the first six months of 2014 representing an increase of 12% on a per share basis.

The Company’s second quarter and first half of 2015 earnings were positively impacted by improved levels of net interest income and non-interest income combined with relatively stable levels of provision for loan loss and non-interest expenses. Net interest income increased $385,000, or 2%, and $738,000, or 2%, in the three and six months ended June 30, 2015 compared with the same periods of 2014. This improvement in both periods was driven by a higher level of earning assets due in large part to an increased loan portfolio. Also contributing to the improvement in earnings was the increase in non-interest income of $619,000, or 11%, and $1,480,000, or 13%, in the three months and six months ended June 30, 2015 compared with the same periods of 2014.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The financial condition and results of operations for the Company presented in the Consolidated Financial Statements, accompanying Notes to the Consolidated Financial Statements, and selected financial data appearing elsewhere within this Report, are, to a large degree, dependent upon the Company’s accounting policies. The selection of and application of these policies involve estimates, judgments, and uncertainties that are subject to change. The critical accounting policies and estimates that the Company has determined to be the most susceptible to change in the near term relate to the determination of the allowance for loan losses, the valuation of securities available for sale and income tax expense.

Allowance for Loan Losses

The Company maintains an allowance for loan losses to cover probable incurred credit losses at the balance sheet date. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. A provision for loan losses is charged to operations based on management’s periodic evaluation of the necessary allowance balance. Evaluations are conducted at least quarterly and more often if deemed necessary. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.

38

The Company has an established process to determine the adequacy of the allowance for loan losses. The determination of the allowance is inherently subjective, as it requires significant estimates, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on other classified loans and pools of homogeneous loans, and consideration of past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors, all of which may be susceptible to significant change. The allowance consists of two components of allocations, specific and general. These two components represent the total allowance for loan losses deemed adequate to cover losses inherent in the loan portfolio.

Commercial and agricultural loans are subject to a standardized grading process administered by an internal loan review function. The need for specific reserves is considered for credits when graded impaired or when: (a) the customer’s cash flow or net worth appears insufficient to repay the loan; (b) the loan has been criticized in a regulatory examination; (c) the loan is on non-accrual; or, (d) other reasons where the ultimate collectability of the loan is in question, or the loan characteristics require special monitoring. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that we believe indicates the loan is impaired.

Specific allocations on impaired loans are determined by comparing the loan balance to the present value of expected cash flows or expected collateral proceeds. Allocations are also applied to categories of loans not considered individually impaired but for which the rate of loss is expected to be greater than historical averages, including non-performing consumer or residential real estate loans. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values.

General allocations are made for commercial and agricultural loans that are graded as substandard based on migration analysis techniques to determine historical average losses for similar types of loans. General allocations are also made for other pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on historical average for loan losses for these portfolios, judgmentally adjusted for economic, external and internal factors and portfolio trends. Economic factors include evaluating changes in international, national, regional and local economic and business conditions that affect the collectability of the loan portfolio. Internal factors include evaluating changes in lending policies and procedures; changes in the nature and volume of the loan portfolio; and changes in experience, ability and depth of lending management and staff. In setting our external and internal factors we also consider the overall level of the allowance for loan losses to total loans; our allowance coverage as compared to similar size bank holding companies; and regulatory requirements.

Due to the imprecise nature of estimating the allowance for loan losses, the Company’s allowance for loan losses includes a minor unallocated component. The unallocated component of the allowance for loan losses incorporates the Company’s judgmental determination of inherent losses that may not be fully reflected in other allocations, including factors such as economic uncertainties, lending staff quality, industry trends impacting specific portfolio segments, and broad portfolio quality trends.   Therefore, the ratio of allocated to unallocated components within the total allowance may fluctuate from period to period.

Securities Valuation

Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported separately in accumulated other comprehensive income (loss), net of tax. The Company obtains market values from a third party on a monthly basis in order to adjust the securities to fair value. Equity securities that do not have readily determinable fair values are carried at cost. Additionally, when securities are deemed to be other than temporarily impaired, a charge will be recorded through earnings; therefore, future changes in the fair value of securities could have a significant impact on the Company’s operating results. In determining whether a market value decline is other than temporary, management considers the reason for the decline, the extent of the decline, the duration of the decline and whether the Company intends to sell or believes it will be required to sell the securities prior to recovery.  As of June 30, 2015, gross unrealized losses on the securities available-for-sale portfolio totaled approximately $6,186,000 and gross unrealized gains totaled approximately $6,986,000.  

Income Tax Expense

Income tax expense involves estimates related to the valuation allowance on deferred tax assets and loss contingencies related to exposure from tax examinations.

39

A valuation allowance reduces deferred tax assets to the amount management believes is more likely than not to be realized. In evaluating the realization of deferred tax assets, management considers the likelihood that sufficient taxable income of appropriate character will be generated within carryback and carryforward periods, including consideration of available tax planning strategies. Tax related loss contingencies, including assessments arising from tax examinations and tax strategies, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. In considering the likelihood of loss, management considers the nature of the contingency, the progress of any examination or related protest or appeal, the views of legal counsel and other advisors, experience of the Company or other enterprises in similar matters, if any, and management’s intended response to any assessment.

RESULTS OF OPERATIONS

Net Income:

Net income for the quarter ended June 30, 2015 totaled $7,325,000, or $0.55 per diluted share, an increase of $638,000, or 8% on a per share basis, from the quarter ended June 30, 2014 net income of $6,687,000, or $0.51 per diluted share. On a year-to-date basis, 2015 earnings improved to $14,631,000, or $1.10 per diluted share, as compared to $12,992,000, or $0.98 per diluted share for the first six months of 2014 representing an increase of 12% on a per share basis.

Net Interest Income:

Net interest income is the Company’s single largest source of earnings, and represents the difference between interest and fees realized on earning assets, less interest paid on deposits and borrowed funds. Several factors contribute to the determination of net interest income and net interest margin, including the volume and mix of earning assets, interest rates, and income taxes. Many factors affecting net interest income are subject to control by management policies and actions. Factors beyond the control of management include the general level of credit and deposit demand, Federal Reserve Board monetary policy, and changes in tax laws.

40

The following table summarizes net interest income (on a tax-equivalent basis). For tax-equivalent adjustments an effective tax rate of 35% was used for all periods presented⁽¹⁾.

	Average Balance Sheet (Tax-equivalent basis / dollars in thousands)
	Three Months Ended June 30, 2015							Three Months Ended June 30, 2014
	Principal Balance			Income / Expense		Yield / Rate		Principal Balance			Income / Expense		Yield / Rate
Assets
Federal Funds Sold and Other Short-term Investments	$	20,540		$	4	0.07	%	$	12,493		$	3	0.11	%
Securities:
Taxable	458,679			2,219		1.93	%	502,594			2,654		2.11	%
Non-taxable	173,591			2,181		5.03	%	123,463			1,578		5.18	%
Total Loans and Leases(2)	1,456,699			16,630		4.58	%	1,390,185			16,215		4.68	%
Total Interest Earning Assets	2,109,509			21,034		4.00	%	2,028,735			20,450		4.04	%
Other Assets	146,317							139,807
Less: Allowance for Loan Losses	(15,298		)					(15,757		)
Total Assets	$	2,240,528						$	2,152,785
Liabilities and Shareholders’ Equity
Interest-bearing Demand, Savings and Money Market Deposits	$	1,055,880		$	345	0.13	%	$	1,039,376		$	322	0.12	%
Time Deposits	341,678			677		0.79	%	336,901			715		0.85	%
FHLB Advances and Other Borrowings	160,196			450		1.13	%	153,989			467		1.22	%
Total Interest-bearing Liabilities	1,557,754			1,472		0.38	%	1,530,266			1,504		0.39	%
Demand Deposit Accounts	420,341							400,656
Other Liabilities	23,702							10,903
Total Liabilities	2,001,797							1,941,825
Shareholders’ Equity	238,731							210,960
Total Liabilities and Shareholders’ Equity	$	2,240,528						$	2,152,785
Cost of Funds						0.28	%						0.30	%
Net Interest Income				$	19,562						$	18,946
Net Interest Margin						3.72	%						3.74	%

⁽¹⁾  Effective tax rates were determined as though interest earned on the Company’s investments in municipal bonds and loans was fully taxable.

⁽²⁾  Loans held-for-sale and non-accruing loans have been included in average loans.

Net interest income increased $385,000 or 2% (an increase of $616,000 or 3% on a tax-equivalent basis) for the quarter ended June 30, 2015 compared with the same quarter of 2014. The increased level of net interest income during the second quarter of 2015 compared with the second quarter of 2014 was driven by a higher level of earning assets and in particular growth of the loan portfolio. In addition, the increased level of net interest income was attributable to a shift from the taxable securities portfolio to the non-taxable securities portfolio.

The net interest margin represents tax-equivalent net interest income expressed as a percentage of average earning assets. The tax equivalent net interest margin was 3.72% for the second quarter of 2015 compared to 3.74% during the second quarter of 2014. The yield on earning assets totaled 4.00% during the quarter ended June 30, 2015 compared to 4.04% in the same period of 2014 while the cost of funds (expressed as a percentage of average earning assets) totaled 0.28% during the quarter ended June 30, 2015 compared to 0.30% in the same period of 2014.

The decline in the net interest margin in the second quarter of 2015 compared with the second quarter of 2014 was largely attributable to the continued downward pressure on earning asset yields being driven by the low market interest rate environment and a competitive marketplace for lending opportunities. Partially mitigating the decline in earning asset yields was the continued decline in the Company's cost of funds. Accretion of loan discounts on acquired loans contributed approximately 5 basis points on an annualized basis to the net interest margin in the second quarter of 2015 and approximately 6 basis points in the second quarter of 2014.

41

The following table summarizes net interest income (on a tax-equivalent basis). For tax-equivalent adjustments an effective tax rate of 35% was used for all periods presented⁽¹⁾.

	Average Balance Sheet (Tax-equivalent basis / dollars in thousands)
	Six Months Ended June 30, 2015							Six Months Ended June 30, 2014
	Principal Balance			Income / Expense		Yield / Rate		Principal Balance			Income / Expense		Yield / Rate
Assets
Federal Funds Sold and Other Short-term Investments	$	18,535		$	7	0.08	%	$	12,322		$	6	0.11	%
Securities:
Taxable	469,441			4,654		1.98	%	504,456			5,413		2.15	%
Non-taxable	164,608			4,125		5.00	%	119,647			3,079		5.15	%
Total Loans and Leases(2)	1,450,328			33,019		4.59	%	1,380,825			32,233		4.70	%
Total Interest Earning Assets	2,102,912			41,805		4.00	%	2,017,250			40,731		4.06	%
Other Assets	146,120							141,083
Less: Allowance for Loan Losses	(15,177		)					(15,481		)
Total Assets	$	2,233,855						$	2,142,852
Liabilities and Shareholders’ Equity
Interest-bearing Demand, Savings and Money Market Deposits	$	1,036,193		$	656	0.13	%	$	1,040,188		$	643	0.12	%
Time Deposits	350,711			1,359		0.78	%	338,522			1,430		0.85	%
FHLB Advances and Other Borrowings	165,095			908		1.11	%	142,422			916		1.30	%
Total Interest-bearing Liabilities	1,551,999			2,923		0.38	%	1,521,132			2,989		0.40	%
Demand Deposit Accounts	423,853							403,008
Other Liabilities	22,035							10,906
Total Liabilities	1,997,887							1,935,046
Shareholders’ Equity	235,968							207,806
Total Liabilities and Shareholders’ Equity	$	2,233,855						$	2,142,852
Cost of Funds						0.28	%						0.30	%
Net Interest Income				$	38,882						$	37,742
Net Interest Margin						3.72	%						3.76	%

⁽¹⁾  Effective tax rates were determined as though interest earned on the Company’s investments in municipal bonds and loans was fully taxable.

⁽²⁾  Loans held-for-sale and non-accruing loans have been included in average loans.

Net interest income increased $738,000 or 2% (an increase of $1,140,000 or 3% on a tax-equivalent basis) for the six months ended June 30, 2015 compared with the same period of 2014. The increased level of net interest income during the first half of 2015 compared with the first half of 2014 was driven by a higher level of earning assets and in particular growth of the loan portfolio. In addition, the increased level of net interest income was attributable to a shift from the taxable securities portfolio to the non-taxable securities portfolio.

The tax equivalent net interest margin was 3.72% for the six months ended June 30, 2015 compared to 3.76% during the first half of 2014.  The yield on earning assets totaled 4.00% during the six months ended June 30, 2015 compared to 4.06% in the same period of 2014 while the cost of funds totaled 0.28% during the six months ended June 30, 2015 compared to 0.30% in the same period of 2014.

The decline in the net interest margin in the first half of 2015 compared with the first half of 2014 was largely attributable to the continued downward pressure on earning asset yields being driven by the low market interest rate environment and a competitive marketplace for lending opportunities. Partially mitigating the decline in earning asset yields was the continued decline in the Company's cost of funds. Accretion of loan discounts on acquired loans contributed approximately 6 basis points on an annualized basis to the net interest margin in both the first half of 2015 and first half of 2014.

42

Provision for Loan Losses:

The Company provides for loan losses through regular provisions to the allowance for loan losses. The provision is affected by net charge-offs on loans and changes in specific and general allocations of the allowance. During the quarter ended June 30, 2015, the provision for loan losses totaled $250,000 which represented an increase of $50,000, or 25%, from the second quarter of 2014 provision of $200,000. During the second quarter of 2015, the provision for loan loss represented approximately 7 basis points of average loans on an annualized basis compared with 6 basis points of average loans on an annualized basis during the first quarter of 2014. The provision for loan losses totaled $500,000 for the six months ended June 30, 2015, a decrease of $50,000, 9%, compared to the provision of $550,000 during the six months ended June 30, 2014. During the first half of 2015, the provision for loan loss represented approximately 7 basis points of average loans on an annualized basis compared with 8 basis points of average loans on an annualized basis during the first half of 2014.

Net charge-offs totaled $161,000 or 4 basis points on an annualized basis of average loans outstanding during the three months ended June 30, 2015, compared with $134,000 or 4 basis points on an annualized basis of average loans outstanding during the same period of 2014. The Company realized net charge-offs of $171,000 or 2 basis points on an annualized basis of average loans outstanding during the six months ended June 30, 2015, compared with net recoveries of $416,000 or 6 basis points on an annualized basis of average loans outstanding during the same period of 2014.

The provision for loan losses made during the three and six months ended June 30, 2015 was made at a level deemed necessary by management to absorb estimated, probable incurred losses in the loan portfolio. A detailed evaluation of the adequacy of the allowance for loan losses is completed quarterly by management, the results of which are used to determine provision for loan losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.

Non-interest Income:

During the quarter ended June 30, 2015, non-interest income totaled $6,121,000, an increase of $619,000, or 11%, compared with the second quarter of 2014. 

Non-interest Income (dollars in thousands)	Three Months Ended June 30,				Change From Prior Period
					Amount		Percent
	2015		2014		Change		Change
Trust and Investment Product Fees	$	939	$	905	$	34	4	%
Service Charges on Deposit Accounts	1,220		1,191		29		2
Insurance Revenues	1,515		1,482		33		2
Company Owned Life Insurance	207		192		15		8
Interchange Fee Income	563		512		51		10
Other Operating Income	631		590		41		7
Subtotal	5,075		4,872		203		4
Net Gains on Sales of Loans	784		386		398		103
Net Gains on Securities	262		244		18		7
Total Non-interest Income	$	6,121	$	5,502	$	619	11

Each category of non-interest income increased during the second quarter of 2015 compared with the same period of 2014, with the most significant increase related to the net gain on sale of residential mortgage loans. Net gains on sales of loans increased $398,000, or 103%, during the second quarter of 2015 compared with the second quarter of 2014. Loan sales totaled $38.9 million during the quarter ended June 30, 2015 compared with $21.8 million during the second quarter of 2014.

43

During the six months ended June 30, 2015, non-interest income totaled $13,263,000, an increase of $1,480,000, or 13%, compared with the first half of 2014.  During the the first half of 2015 each category of non-interest income showed a level of improvement over the same period of 2014.

Non-interest Income (dollars in thousands)	Six Months Ended June 30,				Change From Prior Period
					Amount		Percent
	2015		2014		Change		Change
Trust and Investment Product Fees	$	1,923	$	1,827	$	96	5	%
Service Charges on Deposit Accounts	2,357		2,252		105		5
Insurance Revenues	4,060		4,038		22		1
Company Owned Life Insurance	412		393		19		5
Interchange Fee Income	1,046		959		87		9
Other Operating Income	1,207		980		227		23
Subtotal	11,005		10,449		556		5
Net Gains on Sales of Loans	1,533		862		671		78
Net Gains on Securities	725		472		253		54
Total Non-interest Income	$	13,263	$	11,783	$	1,480	13

Other operating income increased $227,000 or 23% during the six months ended June 30, 2015 compared with the same period of 2014. The increase was primarily related to fees and fair value adjustments associated with interest rate swap transactions with loan customers and fees related to the Company's credit card program.

Net gains on sales of loans increased $671,000 during the six months ended June 30, 2015 compared with the first six months of 2014. Loan sales totaled $71.5 million during the first half of 2015, compared with $43.6 million during the same period of 2014.

During the six months ended June 30, 2015, the Company realized a net gain on the sale of securities of $725,000 related to the sale of $18.3 million of securities, compared with a net gain on the sale of securities of $472,000 related to the sale of $6.8 million in the first half of 2014.

Non-interest Expense:

During the quarter ended June 30, 2015, non-interest expense totaled $14,315,000, an increase of $176,000, or 1%, compared with the second quarter of 2014.

Non-interest Expense (dollars in thousands)	Three Months Ended June 30,				Change From Prior Period
					Amount			Percent
	2015		2014		Change			Change
Salaries and Employee Benefits	$	8,259	$	7,886	$	373		5	%
Occupancy, Furniture and Equipment Expense	1,683		1,698		(15		)	(1	)
FDIC Premiums	284		276		8			3
Data Processing Fees	870		947		(77		)	(8	)
Professional Fees	642		553		89			16
Advertising and Promotion	484		544		(60		)	(11	)
Intangible Amortization	202		325		(123		)	(38	)
Other Operating Expenses	1,891		1,910		(19		)	(1	)
Total Non-interest Expense	$	14,315	$	14,139	$	176		1

Salaries and employee benefits increased $373,000, or 5%, during the quarter ended June 30, 2015 compared with the second quarter of 2014. The increase in salaries and benefits during the second quarter of 2015 compared with the second quarter of 2014 was primarily attributable to an increased level of variable compensation related to an increased level of secondary market mortgage loan production and attributable to increased costs related to the Company's long-term equity incentive compensation plan.

Intangible amortization declined $123,000, or 38%, during the quarter ended June 30, 2015 compared with the second quarter of 2014. The decline was attributable to a reduced level core deposit intangible amortization expense that resulted from previous bank acquisition transactions.

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During the six months ended June 30, 2015, total non-interest expense remained relatively stable, decreasing by $81,000, compared with the first half of 2014.

Non-interest Expense (dollars in thousands)	Six Months Ended June 30,				Change From Prior Period
					Amount			Percent
	2015		2014		Change			Change
Salaries and Employee Benefits	$	17,084	$	16,310	$	774		5	%
Occupancy, Furniture and Equipment Expense	3,388		3,523		(135		)	(4	)
FDIC Premiums	566		551		15			3
Data Processing Fees	1,707		1,957		(250		)	(13	)
Professional Fees	1,286		1,245		41			3
Advertising and Promotion	927		1,022		(95		)	(9	)
Intangible Amortization	447		673		(226		)	(34	)
Other Operating Expenses	3,743		3,948		(205		)	(5	)
Total Non-interest Expense	$	29,148	$	29,229	$	(81	)	n/m(1)

⁽¹⁾n/m = not meaningful

Salaries and employee benefits increased $774,000, or 5%, during the six months ended June 30, 2015 compared with the same six-month period of 2014. The increase in salaries and benefits was attributable to an increased level of variable compensation related to an increased level of secondary market mortgage loan production and increased revenue within the Company's property and casualty insurance company. Also contributing to the increased level of salaries and employee benefits was increased costs related to the Company's long-term equity incentive compensation plan and the Company's short-term cash incentive compensation plan.

Data processing fees decreased $250,000, or 13%, during the six months ended June 30, 2015 compared with the same period of 2014. The decrease was primarily attributable to costs associated with the implementation of new commercial and retail digital banking platforms in 2014.

Intangible amortization declined $226,000, or 34%, during the six months ended June 30, 2015 compared with the first half of 2014. The decline was attributable to lower levels of amortization of core deposit intangible from previous bank acquisition transactions.

Other operating expenses decreased $205,000, or 5%, during the first half of 2015 compared with the first half of 2014. The decrease was primarily attributable to a lower level of collection costs in the first six months of 2015 compared with the first six months of 2014.

Income Taxes:

The Company’s effective income tax rate was 28.6% and 29.5%, respectively, during the three months ended June 30, 2015 and 2014. The Company’s effective income tax rate approximated 29.9% during the six months ended June 30, 2015 and 2014. The effective tax rate in all periods presented was lower than the blended statutory rate resulting primarily from the Company’s tax-exempt investment income on securities, loans and company owned life insurance, income tax credits generated from investments in a new markets tax credit project and affordable housing projects, and income generated by subsidiaries domiciled in a state with no state or local income tax.

FINANCIAL CONDITION

Total assets at June 30, 2015 increased $22.6 million, or 2% on an annualized basis, to $2.260 billion compared with $2.237 billion in total assets at December 31, 2014.  The increase in total assets was primarily attributable to an increase in period-end loan balances.

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Loans outstanding at June 30, 2015 increased $24.5 million, or 3% on an annualized basis, compared with year-end 2014. The increase in loans was primarily centered in the commercial and industrial loan and agricultural loan portfolios.

End of Period Loan Balances: (dollars in thousands)	June 30, 2015		December 31, 2014		Current Period Change
Commercial & Industrial Loans	$	396,741	$	380,079	$	16,662
Commercial Real Estate Loans	584,426		583,086		1,340
Agricultural Loans	222,298		216,774		5,524
Home Equity & Consumer Loans	135,874		134,847		1,027
Residential Mortgage Loans	137,129		137,204		(75		)
Total Loans	$	1,476,468	$	1,451,990	$	24,478

The Company’s allowance for loan losses totaled $15.3 million at June 30, 2015 representing an increase of $329,000, or 4% on an annualized basis, from December 31, 2014.  The allowance for loan losses represented 1.04% of period-end loans at June 30, 2015 compared with 1.03% of period-end loans at December 31, 2014. 

Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller. The Company held a discount on acquired loans of $3.3 million as of June 30, 2015 and $4.1 million at year-end 2014.

The following is an analysis of the Company’s non-performing assets at June 30, 2015 and December 31, 2014:

Non-performing Assets: (dollars in thousands)	June 30, 2015			December 31, 2014
Non-accrual Loans	$	5,431		$	5,970
Past Due Loans (90 days or more and still accruing)	15			140
Total Non-performing Loans	5,446			6,110
Other Real Estate	317			356
Total Non-performing Assets	$	5,763		$	6,466
Restructured Loans	$	2,587		$	2,726
Non-performing Loans to Total Loans	0.37		%	0.42		%
Allowance for Loan Loss to Non-performing Loans	280.17		%	244.34		%

Non-performing assets totaled $5.8 million, or 0.26% of total assets at June 30, 2015 compared to $6.5 million, or 0.29% of total assets at December 31, 2014.  Non-performing loans totaled $5.4 million, or 0.37% of total loans at June 30, 2015 compared to $6.1 million, or 0.42% of total loans at December 31, 2014. 

Non-accrual commercial real estate loans totaled $3.2 million at June 30, 2015 representing a decline of $228,000, or 7%, from the $3.5 million of non-accrual commercial real estate loans at year-end 2014.  Non-accrual commercial real estate loans represented 60% of the total non-performing loans at June 30, 2015 compared to 58% of total non-performing loans at year-end 2014. There were no non-accrual agricultural loans at June 30, 2015 or December 31, 2014. Non-accrual commercial and industrial loans totaled 7% of non-performing loans at June 30, 2015 compared to 3% at year-end 2014. Non-accrual home equity loans totaled 6% of non-performing loans at June 30, 2015 compared with 4% at year-end 2014. Non-accrual consumer loans totaled 1% of non-performing loans at June 30, 2015 compared with 3% at year-end 2014. Non-accrual residential mortgage loans totaled $1.4 million at June 30, 2015 representing a decline of $462,000, or 25%, from the $1.9 million of non-accrual residential mortgage loans at year-end 2014.  Non-accrual residential mortgage loans represented 26% of the total non-performing loans at June 30, 2015 compared to 32% of the total non-performing loans at year-end 2014.

At June 30, 2015, there was only one relationship included in non-performing loans that was greater than $1.0 million. This relationship was a $1.7 million commercial real estate loan secured by a commercial warehouse facility.  This loan was in non-performing status as of year-end 2014. The borrower has made all contractual payments due during 2015 and the principal balance of this relationship was reduced by $45,000 during the first six months of 2015.

46

The Company purchases individual loans and groups of loans. Purchased loans that show evidence of credit deterioration since origination are recorded at the amount paid (or allocated fair value in a purchase business combination), such that there is no carryover of the seller’s allowance for loan losses. After acquisition, incurred losses are recognized by an increase in the allowance for loan losses.

Purchased loans that indicated evidence of credit deterioration since origination at the time of acquisition by the Company did not have a material adverse impact on the Company’s key credit metrics during 2014 or during the first six months of 2015.  The key credit metrics the Company measures generally include non-performing loans, past due loans, and adversely classified loans.

Non-performing purchased loans with evidence of credit deterioration since origination totaled $271,000 at June 30, 2015 compared with $1,154,000 at December 31, 2014. The non-performing purchased loans with evidence of credit deterioration since origination represented approximately 5% of total non-performing loans at June 30, 2015 and 19% at December 31, 2014.

As of June 30, 2015 there were no past due purchased loans with evidence of credit deterioration since origination compared with $648,000 at year-end 2014.  Past due purchased loans with evidence of credit deterioration since origination represented approximately 9% of total past due loans at year-end 2014.

Adversely classified purchased loans with evidence of credit deterioration since origination totaled $3.9 million at June 30, 2015 compared with $4.4 million at December 31, 2014. Adversely classified purchased loans with evidence of credit deterioration since origination represented approximately 14% of total adversely classified loans at June 30, 2015 compared with approximately 16% of total adversely classified loans at year-end 2014.

Loan impairment is reported when full repayment under the terms of the loan is not expected.  If a loan is impaired, a portion of the allowance is specifically allocated so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral if repayment is expected solely from the collateral. Commercial and industrial loans, commercial real estate loans, and agricultural loans are evaluated individually for impairment. Smaller balance homogeneous loans are evaluated for impairment in total. Such loans include real estate loans secured by one-to-four family residences and loans to individuals for household, family and other personal expenditures. Individually evaluated loans on non-accrual are generally considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

Total deposits decreased $17.0 million, or 2% on an annualized basis, as of June 30, 2015 compared with December 31, 2014 total deposits.

End of Period Deposit Balances: (dollars in thousands)	June 30, 2015		December 31, 2014		Current Period Change
Non-interest-bearing Demand Deposits	$	425,547	$	428,016	$	(2,469	)
Interest-bearing Demand, Savings, & Money Market Accounts	1,014,013		1,018,320		(4,307		)
Time Deposits < $100,000	189,615		198,916		(9,301		)
Time Deposits of $100,000 or more	133,590		134,509		(919		)
Total Deposits	$	1,762,765	$	1,779,761	$	(16,996	)

Capital Resources:

As of June 30, 2015, shareholders’ equity increased by $8.3 million, or 7% on an annualized basis, to $237.1 million compared with $228.8 million at year-end 2014. The increase in shareholders’ equity was primarily attributable to an increase of $10.1 million in retained earnings partially offset by a decline $2.5 million in accumulated other comprehensive income related to a decrease in net unrealized gains in the Company’s securities available-for-sale portfolio. Shareholders’ equity represented 10.5% of total assets at June 30, 2015 and 10.2% of total assets at December 31, 2014. Shareholders’ equity included $22.2 million of goodwill and other intangible assets at June 30, 2015 compared to $22.6 million of goodwill and other intangible assets at year-end 2014.

Federal banking regulations provide guidelines for determining the capital adequacy of bank holding companies and banks. These guidelines provide for a more narrow definition of core capital and assign a measure of risk to the various categories of assets. The Company is required to maintain minimum levels of capital in proportion to total risk-weighted assets and off-balance sheet exposures.

47

As of March 31, 2015, the Company and its subsidiary bank adopted the new Basel III regulatory capital framework. The adoption of this new framework modified the regulatory capital calculations, minimum capital levels and well-capitalized thresholds and added the new Common Equity Tier 1 capital ratio. Additionally, under the new rules, in order to avoid limitations on capital distributions, including dividend payments, the Company will be required to maintain a capital conservation buffer above the adequately capitalized Common Equity Tier 1 capital ratio. The capital conservation buffer is being phased in from 0.00% in 2015 to 2.50% in 2019. At June 30, 2015, the capital levels for the Company and its subsidiary bank remained well in excess of of the minimum amounts needed for capital adequacy purposes and the bank's capital levels met the necessary requirements to be considered well-capitalized.

The tables below presents the Company’s consolidated and the subsidiary bank's capital ratios under regulatory guidelines:

	6/30/2015 Ratio (1)		12/31/2014 Ratio		Minimum for Capital Adequacy Purposes (2)		Well-Capitalized Guidelines (2)
Common Equity Tier 1 Capital Ratio
Consolidated	12.93	%	N/A		4.50	%	N/A
Bank	11.89	%	N/A		4.50	%	6.50	%
Tier 1 Capital Ratio
Consolidated	13.24	%	12.95	%	6.00	%	N/A
Bank	11.89	%	11.64	%	6.00	%	8.00	%
Total Capital Ratio
Consolidated	14.15	%	13.88	%	8.00	%	N/A
Bank	12.81	%	12.57	%	8.00	%	10.00	%
Tier 1 Leverage Ratio
Consolidated	10.00	%	9.57	%	4.00	%	N/A
Bank	9.00	%	8.59	%	4.00	%	5.00	%

⁽¹⁾The 6/30/2015 capital ratios are calculated based on the new Basel III regulatory capital framework.

⁽²⁾The Minimum for Capital Adequacy Purposes and Well-Capitalized Guidelines are based on the new Basel III regulatory capital framework.

Under the the final rules provided for by Basel III, accumulated other comprehensive income ("AOCI") is to be included in a banking organization's Common Tier 1 capital. The final rules allow community banks to make a one-time election not to include these additional components of AOCI in regulatory capital and instead use the existing treatment under the general risk-based capital rules that excludes most AOCI components from regulatory capital. The opt-out election was to be made in the first regulatory filings (call report and FRY-9) that were made after the banking organizations became subject to the final rules. The Company elected to opt-out and continue the existing treatment of AOCI for regulatory capital purposes. For additional information, also see the discussion in Item 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Liquidity:

The Consolidated Statement of Cash Flows details the elements of changes in the Company’s consolidated cash and cash equivalents. Total cash and cash equivalents increased $9.8 million during the six months ended June 30, 2015 ending at $52.3 million.  During the six months ended June 30, 2015, operating activities resulted in net cash inflows of $15.8 million. Investing activities resulted in net cash outflows of $18.4 million during the six months ended June 30, 2015.  Financing activities resulted in net cash outflows for the six months ended June 30, 2015 of $12.5 million.

The parent company is a corporation separate and distinct from its bank and other subsidiaries. The Company uses funds at the parent-company level to pay dividends to its shareholders, to acquire or make other investments in other businesses or their securities or assets, to repurchase its stock from time to time, and for other general corporate purposes including debt service. The parent company does not have access at the parent-company level to the deposits and certain other sources of funds that are available to its bank subsidiary to support its operations. Instead, the parent company has historically derived most of its revenues from dividends paid to the parent company by its bank subsidiary. The Company’s banking subsidiary is subject to statutory restrictions on its ability to pay dividends to the parent company. The parent company has in recent years supplemented the dividends received from its subsidiaries with borrowings. As of June 30, 2015, the parent company had approximately $18.0 million of cash and cash equivalents available to meet its cash flow needs.

48

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

The Company from time to time in its oral and written communications makes statements relating to its expectations regarding the future. These types of statements are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may include forward-looking statements in filings with the Securities and Exchange Commission (“SEC”), such as this Form 10-Q, in other written materials, and in oral statements made by senior management to analysts, investors, representatives of the media, and others. Such forward looking statements can include statements about the Company’s net interest income or net interest margin; its adequacy of allowance for loan losses, levels of provisions for loan losses, and the quality of the Company’s loans and other assets; simulations of changes in interest rates; expected results from mergers with or acquisitions of other businesses; litigation results; tax estimates and recognition; dividend policy; parent company cash resources and cash requirements, and parent company capital resources; estimated cost savings, plans and objectives for future operations; and expectations about the Company’s financial and business performance and other business matters as well as economic and market conditions and trends. They often can be identified by the use of words like “expect,” “may,” “will,” “would,” “could,” “should,” “intend,” “project,” “estimate,” “believe” or “anticipate,” or similar expressions.

Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made.

Readers are cautioned that, by their nature, all forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results may differ materially and adversely from the expectations of the Company that are expressed or implied by any forward-looking statement. The discussions in this Item 2 list some of the factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward-looking statements. Other risks, uncertainties, and factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward-looking statement include the unknown future direction of interest rates and the timing and magnitude of any changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; deterioration in general economic conditions, either nationally or locally, resulting in, among other things, credit quality deterioration; capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by the Company of outstanding debt or equity securities; risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base of the acquired institution or branches, and difficulties in integration of the acquired operations; factors driving impairment charges on investments; the impact, extent and timing of technological changes; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future; actions of the Federal Reserve Board; changes in accounting principles and interpretations; potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to the Company’s banking subsidiary; actions of the regulatory authorities under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; and the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends. Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements.

Investors should consider these risks, uncertainties, and other factors, in addition to those mentioned by the Company in its Annual Report on Form 10-K for its fiscal year ended December 31, 2014, and other SEC filings from time to time, when considering any forward-looking statement.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s exposure to market risk is reviewed on a regular basis by the Asset/Liability Committee and Boards of Directors of the parent company and its subsidiary bank. Primary market risks which impact the Company’s operations are liquidity risk and interest rate risk.

The liquidity of the parent company is dependent upon the receipt of dividends from its subsidiary bank, which is subject to certain regulatory limitations. The Bank’s source of funding is predominately core deposits, maturities of securities, repayments of loan principal and interest, federal funds purchased, securities sold under agreements to repurchase and borrowings from the Federal Home Loan Bank.

49

The Company monitors interest rate risk by the use of computer simulation modeling to estimate the potential impact on its net interest income under various interest rate scenarios, and by estimating its static interest rate sensitivity position. Another method by which the Company’s interest rate risk position can be estimated is by computing estimated changes in its net portfolio value (“NPV”). This method estimates interest rate risk exposure from movements in interest rates by using interest rate sensitivity analysis to determine the change in the NPV of discounted cash flows from assets and liabilities. NPV represents the market value of portfolio equity and is equal to the estimated market value of assets minus the estimated market value of liabilities.

Computations for measuring both net interest income and NPV are based on a number of assumptions, including the relative levels of market interest rates and prepayments in mortgage loans and certain types of investments. These computations do not contemplate any actions management may undertake in response to changes in interest rates, and should not be relied upon as indicative of actual results. In addition, certain shortcomings are inherent in the method of computing both net interest income and NPV. Should interest rates remain or decrease below current levels, the proportion of adjustable rate loans could decrease in future periods due to refinancing activity. In the event of an interest rate change, prepayment levels would likely be different from those assumed in the modeling. Lastly, the ability of many borrowers to repay their adjustable rate debt may decline during a rising interest rate environment.

The Company from time to time utilizes derivatives to manage interest rate risk. Management continuously evaluates the merits of such interest rate risk products but does not anticipate the use of such products to become a major part of the Company’s risk management strategy.

The table below provides an assessment of the risk to net interest income over the next 12 months in the event of a sudden and sustained 1% and 2% increase and decrease in prevailing interest rates (dollars in thousands).

Interest Rate Sensitivity as of June 30, 2015 - Net Interest Income

	Net Interest Income
Changes in Rates	Amount		% Change
+2%	$	69,433	(8.30	)%
+1%	72,441		(4.40	)%
Base	75,750		—
-1%	74,611		(1.50	)%
-2%	72,429		(4.40	)%

The above table is a measurement of the Company’s net interest income at risk, assuming a static balance sheet as of June 30, 2015 and instantaneous parallel changes in interest rates. The Company also monitors interest rate risk under other scenarios including a more gradual movement in market interest rates. This type of scenario can at times produce different modeling results in measuring interest rate risk sensitivity. As an example, a gradual change in rates compared with a sudden and significant change in interest rates can impact rate movement of the Company’s variable rate commercial and agricultural loan portfolio due to the Company’s extensive utilization of interest rate floors in its commercial and agricultural portfolio.

The Company’s loan portfolio as of June 30, 2015 totaled approximately $1.5 billion of which approximately $1.2 billion were commercial and industrial, commercial real estate, and agricultural loans and leases. Within the commercial and agricultural portfolio, approximately 25% were fixed rate and 75% were variable rate loans. Of the commercial and agricultural variable rate loans, approximately one-third are currently at their interest rate floors, which are, on a weighted average basis, approximately 80 basis points above their fully indexed rate based on current market interest rates.

50

The table below provides an assessment of the risk to NPV in the event of a sudden and sustained 1% and 2% increase and decrease in prevailing interest rates (dollars in thousands).

Interest Rate Sensitivity as of June 30, 2015 - Net Portfolio Value

	Net Portfolio Value				Net Portfolio Value as a % of Present Value of Assets
Changes in Rates	Amount		% Change		NPV Ratio		Change
+2%	$	263,764	(11.17	)%	12.37	%	(88) b.p.
+1%	280,513		(5.53	)%	12.84	%	(41) b.p.
Base	296,937		—		13.25	%	—
-1%	269,529		(9.23	)%	11.85	%	(140) b.p.
-2%	224,120		(24.52	)%	9.79	%	(346) b.p.

This Item 3 includes forward-looking statements. See “Forward-looking Statements and Associated Risks” included in Part I, Item 2 of this Report for a discussion of certain factors that could cause the Company’s actual exposure to market risk to vary materially from that expressed or implied above. These factors include possible changes in economic conditions; interest rate fluctuations, competitive product and pricing pressures within the Company’s markets; and equity and fixed income market fluctuations. Actual experience may also vary materially to the extent that the Company’s assumptions described above prove to be inaccurate.

Item 4.  Controls and Procedures

As of June 30, 2015, the Company carried out an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were as of that date effective in timely alerting them to material information required to be included in the Company’s periodic reports filed with the Securities and Exchange Commission. There are inherent limitations to the effectiveness of systems of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective systems of disclosure controls and procedures can provide only reasonable assurances of achieving their control objectives.

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

51

PART II. OTHER INFORMATION

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

(c) The following table sets forth information regarding the Company’s purchases of its common shares during each of the three months ended June 30, 2015.

Period	Total Number of Shares (or Units) Purchased	Average Price Paid Per Share (or Unit)	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs (1)
April 2015	—	—	—	272,789
May 2015	—	—	—	272,789
June 2015	—	—	—	272,789

⁽¹⁾ On April 26, 2001, the Company announced that its Board of Directors had approved a stock repurchase program for up to 607,754 of its outstanding common shares, of which the Company had purchased 334,965 common shares through March 31, 2015 (both such numbers adjusted for subsequent stock dividends). The Board of Directors established no expiration date for this program. The Company purchased no shares under this program during the three months ended June 30, 2015.

52

Item 6.      Exhibits

The exhibits described by the Exhibit Index immediately following the Signature Page of this Report are incorporated herein by reference.

SIGNATURES

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

	GERMAN AMERICAN BANCORP, INC.
Date: August 7, 2015	By/s/Mark A. Schroeder
	Mark A. Schroeder
	Chairman and Chief Executive Officer
Date: August 7, 2015	By/s/Bradley M. Rust
	Bradley M. Rust
	Executive Vice President and Chief Financial Officer

53

INDEX OF EXHIBITS

Exhibit No.	Description
3.1	Restatement of the Articles of Incorporation of the Registrant is incorporated by reference from Exhibit 3.1 to the Registrant’s Current Report on 8-K filed July 1, 2011.
3.2	Restated Bylaws of German American Bancorp, Inc., as amended and restated July 27, 2009, is incorporated by reference from Exhibit 3.2 to the Registrant's Annual Report on Form 10-K filed March 9, 2015.
4.1	No long-term debt instrument issued by the Registrant exceeds 10% of consolidated total assets or is registered. In accordance with paragraph 4 (iii) of Item 601(b) of Regulation S-K, the Registrant will furnish the Securities and Exchange Commission copies of long-term debt instruments and related agreements upon request.
4.2	Terms of Common Shares and Preferred Shares of the Registrant (included in Restatement of Articles of Incorporation) are incorporated by reference from Exhibit 3.1 to the Registrant’s Current Report on 8-K filed July 1, 2011.
4.3	Specimen stock certificate for Common Shares of the Registrant is incorporated by reference from Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed October 21, 2010.
10.1*	Description of Director Compensation Arrangements for the 12 month period ending June 30, 2016, is incorporated by reference from the description included in Item 5.02 of the Registrant’s Current Report on Form 8-K filed July 1, 2015.
31.1**	Sarbanes-Oxley Act of 2002, Section 302 Certification for Chairman of the Board and Chief Executive Officer.
31.2**	Sarbanes-Oxley Act of 2002, Section 302 Certification for Executive Vice President and Chief Financial Officer.
32.1**	Sarbanes-Oxley Act of 2002, Section 906 Certification for Chairman of the Board and Chief Executive Officer.
32.2**	Sarbanes-Oxley Act of 2002, Section 906 Certification for Executive Vice President and Chief Financial Officer.
101**+	The following materials from German American Bancorp, Inc.’s Form 10-Q Report for the quarterly period ended June 30, 2015, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii)  the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.

*Exhibits that describe or evidence all management contracts or compensatory plans or arrangements required to be filed as exhibits to this Report are indicated by an asterisk.

**Exhibits that are furnished or filed with this Report (other than through incorporation by reference to other disclosures or exhibits) are indicated by a double asterisk.

+Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are furnished and not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

54

EX-31.1

Exhibit 31.1

Sarbanes-Oxley Act of 2002, Section 302 Certification for Chairman and Chief Executive Officer

I, Mark A. Schroeder, Chairman and Chief Executive Officer of German American Bancorp, Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of German American Bancorp, Inc. (the “registrant”):

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

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

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

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

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

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

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

5. The registrant's other certifying officer 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.

August 7, 2015

Date

/s/ Mark A. Schroeder

Mark A. Schroeder

Chairman and Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

Sarbanes-Oxley Act of 2002, Section 302 Certification for Executive Vice President and Chief Financial Officer

I, Bradley M. Rust, Executive Vice President and Chief Financial Officer of German American Bancorp, Inc. certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of German American Bancorp, Inc. (the “registrant”):

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

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

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

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

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

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

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

5. The registrant's other certifying officer 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.

August 7, 2015
Date

/s/ Bradley M. Rust

Bradley M. Rust

Executive Vice President and Chief Financial Officer

(principal accounting officer and principal financial officer)

EX-32.1

Exhibit 32.1

Sarbanes-Oxley Act of 2002, Section 906 Certification for Chairman and Chief Executive Officer

I, Mark A. Schroeder, Chairman and Chief Executive Officer of German American Bancorp, Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that:

1. The Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. Information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of German American Bancorp, Inc.

This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Periodic Report.

August 7, 2015

Date

/s/ Mark A. Schroeder

Mark A. Schroeder

Chairman and Chief Executive Officer

(principal executive officer)

EX-32.2

Exhibit 32.2

Sarbanes-Oxley Act of 2002, Section 906 Certification for Executive Vice President and Chief Financial Officer

I, Bradley M. Rust, Executive Vice President and Chief Financial Officer of German American Bancorp, Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that:

1. The Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. Information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of German American Bancorp, Inc.

This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Periodic Report.

August 7, 2015

Date

/s/ Bradley M. Rust

Bradley M. Rust

Executive Vice President and Chief Financial Officer

(principal accounting officer and principal financial officer)

XML

Loans (Components of Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Subtotal	$ 1,476,468		$ 1,451,990
Less: Unearned Income	(3,822)		(4,008)
Allowance for Loan Losses	(15,258)	$ (15,169)	(14,929)	$ (15,550)	$ (15,484)	$ (14,584)
Loans, Net	1,457,388		1,433,053
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Commercial and Industrial Loans and Leases	396,741		380,079
Commercial Real Estate Loans	584,426		583,086
Agricultural Loans	222,298		216,774
Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Home Equity Loans	88,303		86,234
Consumer Loans	47,571		48,613
Residential Mortgage Loans	$ 137,129		$ 137,204

XML

Segment Information (Segment Financial Information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Segment Reporting Information [Line Items]
Net Interest Income	$ 18,706	$ 18,321	$ 37,255	$ 36,517
Net Gains on Sales of Loans	784	386	1,533	862
Net Gains on Securities	262	244	725	472
Trust and Investment Product Fees	939	905	1,923	1,827
Insurance Revenues	1,515	1,482	4,060	4,038
Noncash Items:
Provision for Loan Losses	250	200	500	550
Depreciation and Amortization	1,086	1,206	2,207	2,422
Income Tax Expense (Benefit)	2,937	2,797	6,239	5,529
Segment Profit (Loss)	7,325	6,687	14,631	12,992
Segment Assets	2,259,686		2,259,686		$ 2,237,099
Core Banking
Segment Reporting Information [Line Items]
Net Interest Income	18,800	18,434	37,441	36,747
Net Gains on Sales of Loans	784	386	1,533	862
Net Gains on Securities	235	244	698	472
Trust and Investment Product Fees	1	0	2	2
Insurance Revenues	1	8	11	5
Noncash Items:
Provision for Loan Losses	250	200	500	550
Depreciation and Amortization	1,016	1,132	2,068	2,275
Income Tax Expense (Benefit)	3,075	2,954	6,138	5,444
Segment Profit (Loss)	7,268	6,670	13,948	12,368
Segment Assets	2,268,162		2,268,162		2,242,456
Trust and Investment Advisory Services
Segment Reporting Information [Line Items]
Net Interest Income	4	4	8	8
Net Gains on Sales of Loans	0	0	0	0
Net Gains on Securities	0	0	0	0
Trust and Investment Product Fees	938	905	1,921	1,825
Insurance Revenues	1	6	18	11
Noncash Items:
Provision for Loan Losses	0	0	0	0
Depreciation and Amortization	5	7	10	13
Income Tax Expense (Benefit)	(11)	(65)	(12)	(107)
Segment Profit (Loss)	(24)	(103)	(33)	(172)
Segment Assets	11,423		11,423		11,401
Insurance
Segment Reporting Information [Line Items]
Net Interest Income	1	1	2	2
Net Gains on Sales of Loans	0	0	0	0
Net Gains on Securities	0	0	0	0
Trust and Investment Product Fees	0	0	0	0
Insurance Revenues	1,513	1,468	4,031	4,022
Noncash Items:
Provision for Loan Losses	0	0	0	0
Depreciation and Amortization	27	30	54	59
Income Tax Expense (Benefit)	72	99	492	600
Segment Profit (Loss)	105	144	734	862
Segment Assets	7,405		7,405		6,429
Other
Segment Reporting Information [Line Items]
Net Interest Income	(99)	(118)	(196)	(240)
Net Gains on Sales of Loans	0	0	0	0
Net Gains on Securities	27	0	27	0
Trust and Investment Product Fees	0	0	0	0
Insurance Revenues	0	0	0	0
Noncash Items:
Provision for Loan Losses	0	0	0	0
Depreciation and Amortization	38	37	75	75
Income Tax Expense (Benefit)	(199)	(191)	(379)	(408)
Segment Profit (Loss)	(24)	$ (24)	(18)	$ (66)
Segment Assets	$ (27,304)		$ (27,304)		$ (23,187)

XML

Loans (Schedule of Risk Category of Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015		Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	$ 1,481,885	[1],[2]	$ 1,457,768	[3],[4]
Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	397,753	[1]	380,851	[4]
Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	585,723	[1]	584,426	[4]
Agricultural Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	224,591	[1]	219,640	[4]
Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	1,135,450		1,112,028
Pass | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	370,372		351,250
Pass | Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	546,263		545,804
Pass | Agricultural Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	218,815		214,974
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	44,276		46,019
Special Mention | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	13,689		18,387
Special Mention | Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	24,913		23,421
Special Mention | Agricultural Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	5,674		4,211
Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	28,341		26,870
Substandard | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	13,692		11,214
Substandard | Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	14,547		15,201
Substandard | Agricultural Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	102		455
Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	0		0
Doubtful | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	0		0
Doubtful | Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	0		0
Doubtful | Agricultural Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	0		0
Total
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	1,208,067		1,184,917
Total | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	397,753		380,851
Total | Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	585,723		584,426
Total | Agricultural Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans and leases	224,591		219,640
Receivables Acquired with Deteriorated Credit Quality
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	7,217		8,361
Receivables Acquired with Deteriorated Credit Quality | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	403		354
Receivables Acquired with Deteriorated Credit Quality | Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	5,934		6,385
Receivables Acquired with Deteriorated Credit Quality | Agricultural Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	0		0
Receivables Acquired with Deteriorated Credit Quality | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	870		651
Receivables Acquired with Deteriorated Credit Quality | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	1,520		1,697
Receivables Acquired with Deteriorated Credit Quality | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	3,947		4,391
Receivables Acquired with Deteriorated Credit Quality | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	0		0
Receivables Acquired with Deteriorated Credit Quality | Total
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$ 6,337		$ 6,739

[1] Total recorded investment in loans includes $5,417 in accrued interest.

[2] Total recorded investment in loans includes $5,417 in accrued interest.

[3] Total recorded investment in loans includes $5,778 in accrued interest.

[4] Total recorded investment in loans includes $5,778 in accrued interest.

XML

Stock Repurchase Plan (Additional Information) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Apr. 26, 2001
Stockholders' Equity Note [Abstract]
Common stock, authorized shares repurchase					607,754
Common stock, total shares repurchased	334,965		334,965
Common stock, shares purchased	0	0	0	0

XML

Loans (Schedule of Loans Modified as Troubled Debt Restructuring) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	0	0	0	1
Pre-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 0	$ 201
Post-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 0	$ 197
Commercial and Industrial Loans and Leases
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	0	0	0	0
Pre-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 0	$ 0
Post-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 0	$ 0
Commercial Real Estate Loans
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	0	0	0	1
Pre-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 0	$ 201
Post-Modification Outstanding Recorded Investment	$ 0	$ 0	$ 0	$ 197

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Securities (Schedule of Proceeds from Sales of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule of Investments [Line Items]
Proceeds from Sales			$ 18,999	$ 7,237
Gross Gains on Sales	$ 262	$ 244	725	472
Sale of Securities
Schedule of Investments [Line Items]
Proceeds from Sales	9,191	6,983	18,999	7,237
Gross Gains on Sales	262	244	725	472
Income Taxes on Gross Gains	$ 92	$ 85	$ 254	$ 165

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Equity Plans and Equity Based Compensation (Expense Recorded For Restricted Stock And Cash Entitlements) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Restricted Stock Expense	$ 275	$ 161	$ 509	$ 320
Cash Entitlement Expense	142	101	304	199
Tax Effect	(169)	(106)	(329)	(210)
Net of Tax	$ 248	$ 156	$ 484	$ 309

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Equity Plans and Equity Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

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

Expense Recorded For Restricted Stock And Cash Entitlements

The following tables present expense recorded for restricted stock and cash entitlements as well as the related tax information for the periods presented:

	Three Months Ended June 30,
	2015			2014
Restricted Stock Expense	$	275		$	161
Cash Entitlement Expense	142			101
Tax Effect	(169		)	(106		)
Net of Tax	$	248		$	156

	Six Months Ended June 30,
	2015			2014
Restricted Stock Expense	$	509		$	320
Cash Entitlement Expense	304			199
Tax Effect	(329		)	(210		)
Net of Tax	$	484		$	309

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Loans (Schedule of Carrying Amount of Loans with Deterioration of Credit Quality) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Carrying Amount, Net of Allowance	$ 7,207	$ 8,307
Receivables Acquired with Deteriorated Credit Quality
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired with Deteriorated Credit Quality	7,217	8,361
Receivables Acquired with Deteriorated Credit Quality | Commercial and Industrial Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired with Deteriorated Credit Quality	403	354
Receivables Acquired with Deteriorated Credit Quality | Commercial Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired with Deteriorated Credit Quality	5,934	6,385
Receivables Acquired with Deteriorated Credit Quality | Home Equity Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired with Deteriorated Credit Quality	0	0
Receivables Acquired with Deteriorated Credit Quality | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired with Deteriorated Credit Quality	0	118
Receivables Acquired with Deteriorated Credit Quality | Residential Mortgage Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired with Deteriorated Credit Quality	$ 880	$ 1,504

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Loans (Schedule for Loans Individually Evaluated for Impairment) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
With An Allowance Recorded:
Allowance for Loan Losses Allocated		$ 1,613		$ 1,613		$ 1,542
Unpaid Principal Balance	[1]	7,064		7,064		7,568
Recorded Investment		6,262		6,262		6,386
Average Recorded Investment		6,662	$ 8,309	6,719	$ 10,746
Interest Income Recognized		101	105	142	143
Cash Basis Recognized		100	97	140	135
Commercial and Industrial Loans and Leases
With No Related Allowance Recorded:
Unpaid Principal Balance	[1]	502		502		1,887
Recorded Investment		498		498		1,877
Average Recorded Investment		724	2,176	524	2,156
Interest Income Recognized		9	45	12	76
Cash Basis Recognized		9	45	12	76
With An Allowance Recorded:
Unpaid Principal Balance	[1]	1,516		1,516		84
Recorded Investment		1,531		1,531		87
Allowance for Loan Losses Allocated		103		103		87
Average Recorded Investment		1,554	219	1,744	2,295
Interest Income Recognized		23	1	46	1
Cash Basis Recognized		23	1	46	1
Commercial Real Estate Loans
With No Related Allowance Recorded:
Unpaid Principal Balance	[1]	1,276		1,276		1,944
Recorded Investment		1,126		1,126		1,447
Average Recorded Investment		1,191	3,326	1,338	2,879
Interest Income Recognized		66	53	77	55
Cash Basis Recognized		66	46	77	48
With An Allowance Recorded:
Unpaid Principal Balance	[1]	3,758		3,758		3,653
Recorded Investment		3,095		3,095		2,975
Allowance for Loan Losses Allocated		1,510		1,510		1,455
Average Recorded Investment		3,181	2,588	3,107	3,416
Interest Income Recognized		3	6	7	11
Cash Basis Recognized		2	5	5	10
Agricultural Loans
With No Related Allowance Recorded:
Unpaid Principal Balance	[1]	12		12		0
Recorded Investment		12		12		0
Average Recorded Investment		12	0	6	0
Interest Income Recognized		0	0	0	0
Cash Basis Recognized		0	0	0	0
With An Allowance Recorded:
Unpaid Principal Balance	[1]	0		0		0
Recorded Investment		0		0		0
Allowance for Loan Losses Allocated		0		0		0
Average Recorded Investment		0	0	0	0
Interest Income Recognized		0	0	0	0
Cash Basis Recognized		0	0	0	0
Subtotal
With No Related Allowance Recorded:
Unpaid Principal Balance	[1]	1,790		1,790		3,831
Recorded Investment		1,636		1,636		3,324
Average Recorded Investment		1,927	5,502	1,868	5,035
Interest Income Recognized		75	98	89	131
Cash Basis Recognized		75	91	89	124
With An Allowance Recorded:
Unpaid Principal Balance	[1]	5,274		5,274		3,737
Recorded Investment		4,626		4,626		3,062
Allowance for Loan Losses Allocated		1,613		1,613		1,542
Average Recorded Investment		4,735	2,807	4,851	5,711
Interest Income Recognized		26	7	53	12
Cash Basis Recognized		25	6	51	11
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)
With No Related Allowance Recorded:
Unpaid Principal Balance	[1]	0		0		289
Recorded Investment		0		0		133
Average Recorded Investment		45	950	124	974
Interest Income Recognized		62	1	62	3
Cash Basis Recognized		62	1	62	3
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)
With An Allowance Recorded:
Unpaid Principal Balance	[1]	735		735		759
Recorded Investment		197		197		209
Allowance for Loan Losses Allocated		10		10		$ 10
Average Recorded Investment		286	32	292	32
Interest Income Recognized		0	0	0	1
Cash Basis Recognized		$ 0	$ 0	$ 0	$ 1

[1] Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.

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Derivatives (Derivative Instruments Consolidated Statement) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Trading Activity, Gains and Losses, Net [Line Items]
Included in Interest Income / (Expense)	$ 18,706	$ 18,321	$ 37,255	$ 36,517
Interest Rate Swap
Trading Activity, Gains and Losses, Net [Line Items]
Included in Interest Income / (Expense)	0	0	0	0
Included in Other Income / (Expense)	$ 107	$ 116	$ 165	$ 78

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Loans (Additional Information) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan	Dec. 31, 2014 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans modified as troubled debt restructurings | loan	0	0	0	1
Additional lending amount to customers whose loan terms has been modified in troubled debt restructuring	$ 0		$ 0		$ 0
Increase (decrease) in allowance for loan losses	0	$ 0	0	$ 0
Charge-offs due to troubled debt restructurings	0	0	0	0
Carrying amount of consumer mortgage loans secured by residential real estate properties	123,000		123,000		$ 288,000
Troubled Debt Restructuring that Subsequently Defaulted
Accounts, Notes, Loans and Financing Receivable [Line Items]
Increase (decrease) in allowance for loan losses	0	0		0
Charge-offs due to troubled debt restructurings	95,000	0	95,000	0
Loans Purchased
Accounts, Notes, Loans and Financing Receivable [Line Items]
Increase (decrease) in allowance for loan losses	0	0	0	0
Loan losses reversed	$ 0	$ 0	$ 0	$ 0

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Fair Value (Assets and Liabilities Measured at Fair Value on Non-Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Impaired Loans | Commercial and Industrial Loans and Leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	$ 0	$ 0
Impaired Loans | Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	1,566	1,504
Impaired Loans | Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Other Real Estate | Commercial Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	68
Quoted Prices in Active Markets for Identical Assets (Level 1) | Impaired Loans | Commercial and Industrial Loans and Leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Impaired Loans | Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Impaired Loans | Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Real Estate | Commercial Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Significant Other Observable Inputs (Level 2) | Impaired Loans | Commercial and Industrial Loans and Leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Significant Other Observable Inputs (Level 2) | Impaired Loans | Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Significant Other Observable Inputs (Level 2) | Impaired Loans | Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Significant Other Observable Inputs (Level 2) | Other Real Estate | Commercial Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Significant Unobservable Inputs (Level 3) | Impaired Loans | Commercial and Industrial Loans and Leases
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Significant Unobservable Inputs (Level 3) | Impaired Loans | Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	1,566	1,504
Significant Unobservable Inputs (Level 3) | Impaired Loans | Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	0	0
Significant Unobservable Inputs (Level 3) | Other Real Estate | Commercial Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Assets	$ 0	$ 68

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Loans (Schedule of Troubled Debt Restructuring, Subsequently Defaulted) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	1	0	1	0
Recorded Investment	$ 95	$ 0	$ 95	$ 0
Commercial and Industrial Loans and Leases
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	0	0	0	0
Recorded Investment	$ 0	$ 0	$ 0	$ 0
Commercial Real Estate Loans
Financing Receivable, Modifications [Line Items]
Number of Loans | loan	1	0	1	0
Recorded Investment	$ 95	$ 0	$ 95	$ 0

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Securities

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Securities

Securities 

The amortized cost, unrealized gross gains and losses recognized in accumulated other comprehensive income (loss), and fair value of Securities Available-for-Sale at June 30, 2015 and December 31, 2014, were as follows:

Securities Available-for-Sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2015
U.S. Treasury and Agency Securities	$	10,000	$	—	$	(110	)	$	9,890
Obligations of State and Political Subdivisions	178,386		4,812		(1,110		)	182,088
Mortgage-backed Securities - Residential	429,257		2,174		(4,966		)	426,465
Equity Securities	353		—		—			353
Total	$	617,996	$	6,986	$	(6,186	)	$	618,796
December 31, 2014
U.S. Treasury and Agency Securities	$	20,000	$	—	$	(439	)	$	19,561
Obligations of State and Political Subdivisions	147,321		6,515		(59		)	153,777
Mortgage-backed Securities - Residential	458,709		3,615		(5,020		)	457,304
Equity Securities	353		—		—			353
Total	$	626,383	$	10,130	$	(5,518	)	$	630,995

Equity securities that do not have readily determinable fair values are included in the above totals, are carried at historical cost and are evaluated for impairment on a periodic basis. All mortgage-backed securities in the above table are residential mortgage-backed securities and guaranteed by government sponsored entities.

The carrying amount, unrecognized gains and losses and fair value of Securities Held-to-Maturity at June 30, 2015 and December 31, 2014, were as follows:

Securities Held-to-Maturity:	Carrying Amount		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
June 30, 2015
Obligations of State and Political Subdivisions	$	95	$	—	$	—	$	95
December 31, 2014
Obligations of State and Political Subdivisions	$	184	$	2	$	—	$	186

The amortized cost and fair value of Securities at June 30, 2015 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay certain obligations with or without call or prepayment penalties. Mortgage-backed and Equity Securities are not due at a single maturity date and are shown separately.

Securities Available-for-Sale:	Amortized Cost		Fair Value
Due in one year or less	$	6,173	$	6,270
Due after one year through five years	18,574		18,694
Due after five years through ten years	65,573		68,131
Due after ten years	98,066		98,883
Mortgage-backed Securities - Residential	429,257		426,465
Equity Securities	353		353
Total	$	617,996	$	618,796

Securities Held-to-Maturity:	Carrying Amount		Fair Value
Due in one year or less	$	95	$	95
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	—		—
Total	$	95	$	95

Proceeds from the Sales of Securities are summarized below:

	Three Months Ended		Three Months Ended
	June 30, 2015		June 30, 2014
Proceeds from Sales	$	9,191	$	6,983
Gross Gains on Sales	262		244
Income Taxes on Gross Gains	92		85

	Six Months Ended		Six Months Ended
	June 30, 2015		June 30, 2014
Proceeds from Sales	$	18,999	$	7,237
Gross Gains on Sales	725		472
Income Taxes on Gross Gains	254		165

Below is a summary of securities with unrealized losses as of June 30, 2015 and December 31, 2014, presented by length of time the securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More					Total
June 30, 2015	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury and Agency Securities	$	—	$	—		$	9,890	$	(110	)	$	9,890	$	(110	)
Obligations of State and Political Subdivisions	55,209		(1,102		)	351		(8		)	55,560		(1,110		)
Mortgage-backed Securities - Residential	122,094		(1,134		)	144,206		(3,832		)	266,300		(4,966		)
Equity Securities	—		—			—		—			—		—
Total	$	177,303	$	(2,236	)	$	154,447	$	(3,950	)	$	331,750	$	(6,186	)

	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury and Agency Securities	$	—	$	—		$	19,561	$	(439	)	$	19,561	$	(439	)
Obligations of State and Political Subdivisions	3,765		(25		)	4,298		(34		)	8,063		(59		)
Mortgage-backed Securities - Residential	26,606		(191		)	209,679		(4,829		)	236,285		(5,020		)
Equity Securities	—		—			—		—			—		—
Total	$	30,371	$	(216	)	$	233,538	$	(5,302	)	$	263,909	$	(5,518	)

Securities are written down to fair value when a decline in fair value is not considered temporary. In estimating other-than-temporary losses, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The Company doesn’t intend to sell or expect to be required to sell these securities, and the decline in fair value is largely due to changes in market interest rates, therefore, the Company does not consider these securities to be other-than-temporarily impaired. All mortgage-backed securities in the Company’s portfolio are guaranteed by government sponsored entities, are investment grade, and are performing as expected.

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Fair Value (Quantitative Information of Fair Value Measurements) (Details) - Significant Unobservable Inputs (Level 3) - Commercial Real Estate Loans - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Impaired Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 1,566	$ 1,504
Impaired Loans | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	30.00%	30.00%
Impaired Loans | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	86.00%	86.00%
Impaired Loans | Weighted Average
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)	70.00%	71.00%
Other Real Estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value		$ 68
Other Real Estate | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)		55.00%
Other Real Estate | Weighted Average
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Range (Weighted Average)		55.00%

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Loans (Schedule of Recorded Investment in Nonaccrual Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	$ 5,431	$ 5,970
Loans Past Due 90 Days or More & Still Accruing	15	143
Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	395	161
Loans Past Due 90 Days or More & Still Accruing	15	68
Commercial Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	3,232	3,460
Loans Past Due 90 Days or More & Still Accruing	0	0
Agricultural Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	0	0
Loans Past Due 90 Days or More & Still Accruing	0	75
Home Equity Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	305	268
Loans Past Due 90 Days or More & Still Accruing	0	0
Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	76	196
Loans Past Due 90 Days or More & Still Accruing	0	0
Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	1,423	1,885
Loans Past Due 90 Days or More & Still Accruing	0	0
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Non-Accrual	271	1,154
Loans Past Due 90 Days or More & Still Accruing	$ 0	$ 0

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Per share Data (Additional Information) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share	0	0	0	0

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Per Share Data (Computations of Basic Earnings Per Share and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic Earnings per Share:
Net Income	$ 7,325	$ 6,687	$ 14,631	$ 12,992
Weighted Average Shares Outstanding	13,256,026	13,210,150	13,238,836	13,194,754
Basic Earnings per Share (USD per share)	$ 0.55	$ 0.51	$ 1.11	$ 0.98
Diluted Earnings per Share:
Net Income	$ 7,325	$ 6,687	$ 14,631	$ 12,992
Weighted Average Shares Outstanding	13,256,026	13,210,150	13,238,836	13,194,754
Potentially Dilutive Shares, Net	7,578	20,662	7,523	21,330
Diluted Weighted Average Shares Outstanding	13,263,604	13,230,812	13,246,359	13,216,084
Diluted Earnings per Share (USD per share)	$ 0.55	$ 0.51	$ 1.10	$ 0.98

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Equity Plans and Equity Based Compensation (Additional Information) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) Plan shares	Jun. 30, 2014 USD ($) shares	Jun. 30, 2015 USD ($) Plan installment shares	Jun. 30, 2014 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, number of plans | Plan	3		3
Number of shares available for grant | shares	390,033		390,033
Stock compensation expense	$ 142,000	$ 101,000	$ 304,000	$ 199,000
Stock granted during period percentage			60.00%
Stock cash credit entitlement percentage			40.00%
Number of equal installments | installment			3
Vested in period percentage			33.33%
Stock issued during period | shares	768	0	33,378	31,080
Unrecognized stock expenses in restricted stock			$ 2,235,000	$ 1,873,000
Discount from market price, offering date			95.00%
Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested in period percentage			100.00%
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted | shares	0
Expense of stock options granted		$ 0	$ 0	0
Stock compensation expense	$ 0	0	0	0
Unrecognized option expense	$ 0		$ 0
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant | shares	500,000		500,000
Stock compensation expense	$ 0	0	$ 0	0
Unrecognized option expense	$ 0	$ 0	$ 0	$ 0

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Loans (Schedule of Aging of Recorded Investment in Past Due Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015		Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 1,481,885	[1],[2]	$ 1,457,768	[3],[4]
Loans Past Due	6,261	[2]	6,942	[3]
Loans Not Past Due	1,475,624	[2]	1,450,826	[3]
Accrued interest	5,417		5,778
Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	397,753	[1]	380,851	[4]
Loans Past Due	661		776
Loans Not Past Due	397,092		380,075
Commercial Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	585,723	[1]	584,426	[4]
Loans Past Due	1,390		1,267
Loans Not Past Due	584,333		583,159
Agricultural Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	224,591	[1]	219,640	[4]
Loans Past Due	31		100
Loans Not Past Due	224,560		219,540
Home Equity Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	88,639	[1]	86,570	[4]
Loans Past Due	621		469
Loans Not Past Due	88,018		86,101
Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	47,700	[1]	48,732	[4]
Loans Past Due	219		235
Loans Not Past Due	47,481		48,497
Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	137,479	[1]	137,549	[4]
Loans Past Due	3,339		4,095
Loans Not Past Due	134,140		133,454
30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	2,538	[2]	3,532	[3]
30-59 Days Past Due | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	252		628
30-59 Days Past Due | Commercial Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	169		504
30-59 Days Past Due | Agricultural Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	31		25
30-59 Days Past Due | Home Equity Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	218		197
30-59 Days Past Due | Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	99		132
30-59 Days Past Due | Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	1,769		2,046
60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	759	[2]	371	[3]
60-89 Days Past Due | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	69		0
60-89 Days Past Due | Commercial Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	249		10
60-89 Days Past Due | Agricultural Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	0		0
60-89 Days Past Due | Home Equity Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	97		4
60-89 Days Past Due | Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	45		28
60-89 Days Past Due | Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	299		329
90 Days or More Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	2,964	[2]	3,039	[3]
90 Days or More Past Due | Commercial and Industrial Loans and Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	340		148
90 Days or More Past Due | Commercial Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	972		753
90 Days or More Past Due | Agricultural Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	0		75
90 Days or More Past Due | Home Equity Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	306		268
90 Days or More Past Due | Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	75		75
90 Days or More Past Due | Residential Mortgage Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	1,271		1,720
Receivables Acquired with Deteriorated Credit Quality | Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	7,217		8,361
Loans Past Due	0		648
Loans Not Past Due	7,217		7,713
Receivables Acquired with Deteriorated Credit Quality | 30-59 Days Past Due | Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	0		0
Receivables Acquired with Deteriorated Credit Quality | 60-89 Days Past Due | Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	0		0
Receivables Acquired with Deteriorated Credit Quality | 90 Days or More Past Due | Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans Past Due	$ 0		$ 648

[1] Total recorded investment in loans includes $5,417 in accrued interest.

[2] Total recorded investment in loans includes $5,417 in accrued interest.

[3] Total recorded investment in loans includes $5,778 in accrued interest.

[4] Total recorded investment in loans includes $5,778 in accrued interest.

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Securities (Schedule of Securities Available-for-Sale) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 617,996	$ 626,383
Gross Unrealized Gains	6,986	10,130
Gross Unrealized Losses	(6,186)	(5,518)
Securities Available-for-Sale, at Fair Value	618,796	630,995
U.S. Treasury and Agency Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	10,000	20,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(110)	(439)
Securities Available-for-Sale, at Fair Value	9,890	19,561
Obligations of State and Political Subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	178,386	147,321
Gross Unrealized Gains	4,812	6,515
Gross Unrealized Losses	(1,110)	(59)
Securities Available-for-Sale, at Fair Value	182,088	153,777
Mortgage-backed Securities - Residential
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	429,257	458,709
Gross Unrealized Gains	2,174	3,615
Gross Unrealized Losses	(4,966)	(5,020)
Securities Available-for-Sale, at Fair Value	426,465	457,304
Equity Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	353	353
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Securities Available-for-Sale, at Fair Value	$ 353	$ 353

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Securities (Schedule of Securities Held-to-Maturity) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Held-to-maturity Securities [Line Items]
Total Carrying Amount	$ 95	$ 184
Fair Value	95	186
Obligations of State and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Total Carrying Amount	95	184
Gross Unrecognized Gains	0	2
Gross Unrecognized Losses	0	0
Fair Value	$ 95	$ 186

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Per Share Data

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Per Share Data

Per Share Data

The computations of Basic Earnings per Share and Diluted Earnings per Share are as follows:

	Three Months Ended   June 30,
	2015		2014
Basic Earnings per Share:
Net Income	$	7,325	$	6,687
Weighted Average Shares Outstanding	13,256,026		13,210,150
Basic Earnings per Share	$	0.55	$	0.51
Diluted Earnings per Share:
Net Income	$	7,325	$	6,687
Weighted Average Shares Outstanding	13,256,026		13,210,150
Potentially Dilutive Shares, Net	7,578		20,662
Diluted Weighted Average Shares Outstanding	13,263,604		13,230,812
Diluted Earnings per Share	$	0.55	$	0.51

For the three months ended June 30, 2015 and 2014, there were no anti-dilutive shares.

The computations of Basic Earnings per Share and Diluted Earnings per Share are as follows:

	Six Months Ended   June 30,
	2015		2014
Basic Earnings per Share:
Net Income	$	14,631	$	12,992
Weighted Average Shares Outstanding	13,238,836		13,194,754
Basic Earnings per Share	$	1.11	$	0.98
Diluted Earnings per Share:
Net Income	$	14,631	$	12,992
Weighted Average Shares Outstanding	13,238,836		13,194,754
Potentially Dilutive Shares, Net	7,523		21,330
Diluted Weighted Average Shares Outstanding	13,246,359		13,216,084
Diluted Earnings per Share	$	1.10	$	0.98

For the six months ended June 30, 2015 and 2014, there were no anti-dilutive shares.

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Securities (Schedule of by Contractual Maturity) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Securities Available-for-Sale: Amortized cost
Due in one year or less	$ 6,173
Due after one year through five years	18,574
Due after five years through ten years	65,573
Due after ten years	98,066
Total Amortized Cost	617,996	$ 626,383
Securities Available-for-Sale, Fair Value
Due in one year or less	6,270
Due after one year through five years	18,694
Due after five years through ten years	68,131
Due after ten years	98,883
Total Fair Value	618,796	630,995
Securities Held-to-Maturity, Carrying Amount
Due in one year or less	95
Due after one year through five years	0
Due after five years through ten years	0
Due after ten years	0
Total Carrying Amount	95	184
Securities Held-to-Maturity, Fair Value
Due in one year or less	95
Due after one year through five years	0
Due after five years through ten years	0
Due after ten years	0
Total Fair Value	95	186
Mortgage-backed Securities - Residential
Securities Available-for-Sale: Amortized cost
Available-for-Sale, Amortized Cost	429,257
Total Amortized Cost	429,257	458,709
Securities Available-for-Sale, Fair Value
Available-for-Sale, Fair value	426,465
Total Fair Value	426,465	457,304
Equity Securities
Securities Available-for-Sale: Amortized cost
Available-for-Sale, Amortized Cost	353
Total Amortized Cost	353	353
Securities Available-for-Sale, Fair Value
Available-for-Sale, Fair value	353
Total Fair Value	$ 353	$ 353

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Loans (Schedule of Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	$ 15,169	$ 15,484	$ 14,929	$ 14,584
Provision for Loan Losses	250	200	500	550
Recoveries	138	121	289	944
Loans Charged-off	(299)	(255)	(460)	(528)
Ending Balance	15,258	15,550	15,258	15,550
Commercial and Industrial Loans and Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	4,747	5,374	4,627	3,983
Provision for Loan Losses	(114)	365	(13)	1,687
Recoveries	26	9	67	78
Loans Charged-off	0	(87)	(22)	(87)
Ending Balance	4,659	5,661	4,659	5,661
Commercial Real Estate Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	7,229	7,870	7,273	8,335
Provision for Loan Losses	54	(695)	2	(1,752)
Recoveries	43	27	51	730
Loans Charged-off	(11)	(3)	(11)	(114)
Ending Balance	7,315	7,199	7,315	7,199
Agricultural Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	1,142	930	1,123	946
Provision for Loan Losses	81	86	100	70
Recoveries	0	0	0	0
Loans Charged-off	0	0	0	0
Ending Balance	1,223	1,016	1,223	1,016
Home Equity Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	318	209	246	239
Provision for Loan Losses	57	181	129	181
Recoveries	6	42	6	42
Loans Charged-off	(31)	(14)	(31)	(44)
Ending Balance	350	418	350	418
Consumer Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	389	186	354	188
Provision for Loan Losses	5	171	40	219
Recoveries	54	39	154	86
Loans Charged-off	(66)	(70)	(166)	(167)
Ending Balance	382	326	382	326
Residential Mortgage Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	673	257	622	281
Provision for Loan Losses	128	255	216	262
Recoveries	9	4	11	8
Loans Charged-off	(191)	(81)	(230)	(116)
Ending Balance	619	435	619	435
Unallocated
Allowance for Loan and Lease Losses [Roll Forward]
Beginning Balance	671	658	684	612
Provision for Loan Losses	39	(163)	26	(117)
Recoveries	0	0	0	0
Loans Charged-off	0	0	0	0
Ending Balance	$ 710	$ 495	$ 710	$ 495

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Segment Information (Additional Information) (Details) - Jun. 30, 2015	segment office
Segment Reporting [Abstract]
Number of operating segments | segment	3
Number of offices	37

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Cash and Due from Banks	$ 31,538	$ 33,481
Federal Funds Sold and Other Short-term Investments	20,729	8,965
Cash and Cash Equivalents	52,267	42,446
Interest-bearing Time Deposits with Banks	100	100
Securities Available-for-Sale, at Fair Value	618,796	630,995
Securities Held-to-Maturity, at Cost (Fair value of $95 and $186 on June 30, 2015 and December 31, 2014, respectively)	95	184
Loans Held-for-Sale, at Fair Value	10,622	6,311
Loans	1,476,468	1,451,990
Less: Unearned Income	(3,822)	(4,008)
Allowance for Loan Losses	(15,258)	(14,929)
Loans, Net	1,457,388	1,433,053
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	8,122	7,040
Premises, Furniture and Equipment, Net	38,707	39,930
Other Real Estate	317	356
Goodwill	20,536	20,536
Intangible Assets	1,627	2,074
Company Owned Life Insurance	32,467	32,043
Accrued Interest Receivable and Other Assets	18,642	22,031
TOTAL ASSETS	2,259,686	2,237,099
LIABILITIES
Non-interest-bearing Demand Deposits	425,547	428,016
Interest-bearing Demand, Savings, and Money Market Accounts	1,014,013	1,018,320
Time Deposits	323,205	333,425
Total Deposits	1,762,765	1,779,761
FHLB Advances and Other Borrowings	240,072	206,064
Accrued Interest Payable and Other Liabilities	19,799	22,450
TOTAL LIABILITIES	2,022,636	2,008,275
SHAREHOLDERS’ EQUITY
Preferred Stock, no par value; 500,000 shares authorized, no shares issued	0	0
Common Stock, no par value, $1 stated value; 30,000,000 shares authorized	13,259	13,216
Additional Paid-in Capital	109,178	108,660
Retained Earnings	114,190	104,058
Accumulated Other Comprehensive Income	423	2,890
TOTAL SHAREHOLDERS’ EQUITY	237,050	228,824
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 2,259,686	$ 2,237,099
End of period shares issued (shares)	13,259,594	13,215,800
End of period shares outstanding (shares)	13,259,594	13,215,800

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Loans (Schedule of Recorded Investment of Troubled Debt Restructurings) (Details) - USD ($) $ in Thousands		Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Modifications [Line Items]
Total		$ 4,368	$ 4,650
Commercial and Industrial Loans and Leases
Financing Receivable, Modifications [Line Items]
Total		1,639	1,809
Commercial Real Estate Loans
Financing Receivable, Modifications [Line Items]
Total		2,729	2,841
Performing
Financing Receivable, Modifications [Line Items]
Total		2,623	2,763
Performing | Commercial and Industrial Loans and Leases
Financing Receivable, Modifications [Line Items]
Total		1,636	1,803
Performing | Commercial Real Estate Loans
Financing Receivable, Modifications [Line Items]
Total		987	960
Non-Accrual
Financing Receivable, Modifications [Line Items]
Total	[1]	1,745	1,887
Non-Accrual | Commercial and Industrial Loans and Leases
Financing Receivable, Modifications [Line Items]
Total	[1]	3	6
Non-Accrual | Commercial Real Estate Loans
Financing Receivable, Modifications [Line Items]
Total	[1]	$ 1,742	$ 1,881

[1] The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on previous page.

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME	$ 14,631	$ 12,992
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Net Amortization on Securities	1,225	976
Depreciation and Amortization	2,207	2,422
Loans Originated for Sale	(76,344)	(43,022)
Proceeds from Sales of Loans Held-for-Sale	73,482	44,295
Provision for Loan Losses	500	550
Gain on Sale of Loans, net	(1,533)	(862)
Gain on Securities, net	(725)	(472)
Loss on Sales of Other Real Estate and Repossessed Assets	37	44
Loss on Disposition and Impairment of Premises and Equipment	29	0
Increase in Cash Surrender Value of Company Owned Life Insurance	(424)	(413)
Equity Based Compensation	509	320
Change in Assets and Liabilities:
Interest Receivable and Other Assets	3,472	(4,120)
Interest Payable and Other Liabilities	(1,306)	520
Net Cash from Operating Activities	15,760	13,230
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities, Calls, Redemptions of Securities Available-for-Sale	50,842	41,415
Proceeds from Sales of Securities Available-for-Sale	18,999	7,237
Purchase of Securities Available-for-Sale	(61,954)	(47,284)
Proceeds from Maturities of Securities Held-to-Maturity	89	84
Purchase of Federal Home Loan Bank Stock	(1,082)	(92)
Purchase of Loans	(1,852)	0
Loans Made to Customers, net of Payments Received	(23,781)	(27,673)
Proceeds from Sales of Other Real Estate	800	1,036
Property and Equipment Expenditures	(499)	(1,743)
Net Cash from Investing Activities	(18,438)	(27,020)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits	(16,988)	(69,757)
Change in Short-term Borrowings	29,021	64,453
Advances in Long-term Debt	25,000	21,500
Repayments of Long-term Debt	(20,087)	(1,252)
Issuance of Common Stock	52	50
Dividends Paid	(4,499)	(4,222)
Net Cash from Financing Activities	12,499	10,772
Net Change in Cash and Cash Equivalents	9,821	(3,018)
Cash and Cash Equivalents at Beginning of Year	42,446	60,132
Cash and Cash Equivalents at End of Year	52,267	57,114
Cash Paid During the Year for
Interest	2,996	2,980
Income Taxes	2,976	1,769
Supplemental Non Cash Disclosures
Loans Transferred to Other Real Estate	798	986
Securities Transferred to Accounts Receivable	$ 0	$ (3,323)

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Fair Value (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets:
Securities	$ 618,796	$ 630,995
Loans Held-for-Sale	10,622	6,311
Derivative Assets	440	507
Derivative Liabilities	401	508
U.S. Treasury and Agency Securities
Assets:
Securities	9,890	19,561
Obligations of State and Political Subdivisions
Assets:
Securities	182,088	153,777
Mortgage-backed Securities - Residential
Assets:
Securities	426,465	457,304
Equity Securities
Assets:
Securities	353	353
Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Securities	0	0
Loans Held-for-Sale	0	0
Derivative Assets	0	0
Derivative Liabilities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury and Agency Securities
Assets:
Securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Obligations of State and Political Subdivisions
Assets:
Securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed Securities - Residential
Assets:
Securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity Securities
Assets:
Securities	0	0
Significant Other Observable Inputs (Level 2)
Assets:
Securities	607,618	620,501
Loans Held-for-Sale	10,622	6,311
Derivative Assets	440	507
Derivative Liabilities	401	508
Significant Other Observable Inputs (Level 2) | U.S. Treasury and Agency Securities
Assets:
Securities	9,890	19,561
Significant Other Observable Inputs (Level 2) | Obligations of State and Political Subdivisions
Assets:
Securities	171,263	143,636
Significant Other Observable Inputs (Level 2) | Mortgage-backed Securities - Residential
Assets:
Securities	426,465	457,304
Significant Other Observable Inputs (Level 2) | Equity Securities
Assets:
Securities	0	0
Significant Unobservable Inputs (Level 3)
Assets:
Securities	11,178	10,494
Loans Held-for-Sale	0	0
Derivative Assets	0	0
Derivative Liabilities	0	0
Significant Unobservable Inputs (Level 3) | U.S. Treasury and Agency Securities
Assets:
Securities	0	0
Significant Unobservable Inputs (Level 3) | Obligations of State and Political Subdivisions
Assets:
Securities	10,825	10,141
Significant Unobservable Inputs (Level 3) | Mortgage-backed Securities - Residential
Assets:
Securities	0	0
Significant Unobservable Inputs (Level 3) | Equity Securities
Assets:
Securities	$ 353	$ 353

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Derivatives (Additional Information) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Derivatives, Fair Value [Line Items]
Offsetting counterparty derivative instruments	$ 21,200,000	$ 23,100,000
Interest Rate Swap
Derivatives, Fair Value [Line Items]
Notional amount	$ 21,192,000.000	$ 23,104,000.000

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Other Comprehensive Income (Loss) (Classifications out of accumulated other comprehensive income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income Tax Expense	$ 2,937	$ 2,797	$ 6,239	$ 5,529
Amount Reclassified From Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amount Reclassified From Accumulated Other Comprehensive Income (Loss)	170	159	471	307
Unrealized Gains and Losses on Available-for-Sale Securities | Amount Reclassified From Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net Gain (Loss) on Securities	262	244	725	472
Income Tax Expense	(92)	(85)	(254)	(165)
Amount Reclassified From Accumulated Other Comprehensive Income (Loss)	$ 170	$ 159	$ 471	$ 307

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities

The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of:

	June 30, 2015				December 31, 2014
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Other Assets:
Interest Rate Swaps	$	21,192	$	440	$	23,104	$	507
Included in Other Liabilities:
Interest Rate Swaps	$	21,192	$	401	$	23,104	$	508

Derivative Instruments Consolidated Statement

The following tables present the effect of derivative instruments on the Consolidated Statements of Income for the periods presented:

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2015		2014		2015		2014
Interest Rate Swaps:
Included in Interest Income / (Expense)	$	—	$	—	$	—	$	—
Included in Other Income / (Expense)	107		116		165		78

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Derivatives (Derivative Instruments And Hedging Activities) (Details) - Interest Rate Swap - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Derivatives, Fair Value [Line Items]
Other Assets, Notional Amount of Interest Rate Swaps	$ 21,192,000	$ 23,104,000
Other Assets, Fair Value of Interest Rate Swaps	440,000	507,000
Other liabilities, Notional Amount of Interest Rate Swap	21,192,000	23,104,000
Other liabilities, Fair Value of Interest Rate Swap	$ 401,000	$ 508,000

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Financial Information

The following segment financial information has been derived from the internal financial statements of the Company which are used by management to monitor and manage financial performance. The accounting policies of the three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2015
Net Interest Income	$	18,800	$	4		$	1	$	(99	)	$	18,706
Net Gains on Sales of Loans	784		—			—		—			784
Net Gains on Securities	235		—			—		27			262
Trust and Investment Product Fees	1		938			—		—			939
Insurance Revenues	1		1			1,513		—			1,515
Noncash Items:
Provision for Loan Losses	250		—			—		—			250
Depreciation and Amortization	1,016		5			27		38			1,086
Income Tax Expense (Benefit)	3,075		(11		)	72		(199		)	2,937
Segment Profit (Loss)	7,268		(24		)	105		(24		)	7,325
Segment Assets at June 30, 2015	2,268,162		11,423			7,405		(27,304		)	2,259,686

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2014
Net Interest Income	$	18,434	$	4		$	1	$	(118	)	$	18,321
Net Gains on Sales of Loans	386		—			—		—			386
Net Gains on Securities	244		—			—		—			244
Trust and Investment Product Fees	—		905			—		—			905
Insurance Revenues	8		6			1,468		—			1,482
Noncash Items:
Provision for Loan Losses	200		—			—		—			200
Depreciation and Amortization	1,132		7			30		37			1,206
Income Tax Expense (Benefit)	2,954		(65		)	99		(191		)	2,797
Segment Profit (Loss)	6,670		(103		)	144		(24		)	6,687
Segment Assets at December 31, 2014	2,242,456		11,401			6,429		(23,187		)	2,237,099

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2015
Net Interest Income	$	37,441	$	8		$	2	$	(196	)	$	37,255
Net Gains on Sales of Loans	1,533		—			—		—			1,533
Net Gains on Securities	698		—			—		27			725
Trust and Investment Product Fees	2		1,921			—		—			1,923
Insurance Revenues	11		18			4,031		—			4,060
Noncash Items:
Provision for Loan Losses	500		—			—		—			500
Depreciation and Amortization	2,068		10			54		75			2,207
Income Tax Expense (Benefit)	6,138		(12		)	492		(379		)	6,239
Segment Profit (Loss)	13,948		(33		)	734		(18		)	14,631
Segment Assets at June 30, 2015	2,268,162		11,423			7,405		(27,304		)	2,259,686

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2014
Net Interest Income	$	36,747	$	8		$	2	$	(240	)	$	36,517
Net Gains on Sales of Loans	862		—			—		—			862
Net Gains on Securities	472		—			—		—			472
Trust and Investment Product Fees	2		1,825			—		—			1,827
Insurance Revenues	5		11			4,022		—			4,038
Noncash Items:
Provision for Loan Losses	550		—			—		—			550
Depreciation and Amortization	2,275		13			59		75			2,422
Income Tax Expense (Benefit)	5,444		(107		)	600		(408		)	5,529
Segment Profit (Loss)	12,368		(172		)	862		(66		)	12,992
Segment Assets at December 31, 2014	2,242,456		11,401			6,429		(23,187		)	2,237,099

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Basis of Presentation

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

German American Bancorp, Inc. operates primarily in the banking industry. The accounting and reporting policies of German American Bancorp, Inc. and its subsidiaries (hereinafter collectively referred to as the "Company") conform to U.S. generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements, and all such adjustments are of a normal recurring nature. It is suggested that these consolidated financial statements and notes be read in conjunction with the financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. Certain items included in the prior period financial statements were reclassified to conform to the current presentation. There was no effect on net income or total shareholder’s equity based on these reclassifications.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Securities Held-to-Maturity, Fair value	$ 95	$ 186
Preferred Stock, shares authorized	500,000	500,000
Preferred Stock, shares issued	0	0
Common Stock, stated value (USD per share)	$ 1	$ 1
Common Stock, shares authorized	30,000,000	30,000,000

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Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2015 and 2014, net of tax:

June 30, 2015	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at April 1, 2015	$	6,455		$	—	$	(68	)	$	6,387
Other Comprehensive Income (Loss) Before Reclassification	(5,794		)	—		—			(5,794		)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(170		)	—		—			(170		)
Net Current Period Other Comprehensive Income (Loss)	(5,964		)	—		—			(5,964		)
Ending Balance at June 30, 2015	$	491		$	—	$	(68	)	$	423

	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at January 1, 2015	$	2,958		$	—	$	(68	)	$	2,890
Other Comprehensive Income (Loss) Before Reclassification	(1,996		)	—		—			(1,996		)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(471		)	—		—			(471		)
Net Current Period Other Comprehensive Income (Loss)	(2,467		)	—		—			(2,467		)
Ending Balance at June 30, 2015	$	491		$	—	$	(68	)	$	423

June 30, 2014	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at April 1, 2014	$	(2,967	)	$	—	$	(32	)	$	(2,999	)
Other Comprehensive Income (Loss) Before Reclassification	2,996			—		—			2,996
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(159		)	—		—			(159		)
Net Current Period Other Comprehensive Income (Loss)	2,837			—		—			2,837
Ending Balance at June 30, 2014	$	(130	)	$	—	$	(32	)	$	(162	)

	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at January 1, 2014	$	(5,231	)	$	—	$	(32	)	$	(5,263	)
Other Comprehensive Income (Loss) Before Reclassification	5,408			—		—			5,408
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(307		)	—		—			(307		)
Net Current Period Other Comprehensive Income (Loss)	5,101			—		—			5,101
Ending Balance at June 30, 2014	$	(130	)	$	—	$	(32	)	$	(162	)

The tables below summarize the classifications out of accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2015 and 2014:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	262		Net Gain (Loss) on Securities
	(92		)	Income Tax Expense
	170			Net of Tax
Total Reclassifications for the Three Months Ended June 30, 2015	$	170

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	725		Net Gain (Loss) on Securities
	(254		)	Income Tax Expense
	471			Net of Tax
Total Reclassifications for the Six Months Ended June 30, 2015	$	471

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	244		Net Gain (Loss) on Securities
	(85		)	Income Tax Expense
	159			Net of Tax
Total Reclassifications for the Three Months Ended June 30, 2014	$	159

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	472		Net Gain (Loss) on Securities
	(165		)	Income Tax Expense
	307			Net of Tax
Total Reclassifications for the Six Months Ended June 30, 2014	$	307

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 01, 2015
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	GABC
Entity Common Stock, Shares Outstanding		13,259,594
Entity Registrant Name	GERMAN AMERICAN BANCORP, INC.
Entity Central Index Key	0000714395
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer

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Newly Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Newly Issued Accounting Pronouncements

Newly Issued Accounting Pronouncements

In January 2014, the FASB amended existing guidance clarifying that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This update did not have a material impact on the Company's consolidated financial statements.

In January 2014, the FASB issued guidance for accounting for investments in qualified affordable housing projects. The new guidance allows a limited liability investor that meets certain conditions to use the proportional amortization methods. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).

The Company adopted the proportional amortization method of accounting for its low income housing investments in the first quarter of 2015. The Company quantified the impact of adopting the proportional amortization method compared to the equity method to its current year and prior period financial statements. The Company determined that the adoption of the proportional amortization method did not have a material impact to its consolidated financial statements; therefore, the Company did not adjust its prior period consolidated financial statements. The low income housing investment losses, net of the tax benefits received, are included in income tax expense on the consolidated statements of income for the three and six months ended June 30, 2015. At June 30, 2015 and December 31, 2014, the Company had investments in qualified housing projects totaling $5.9 million and $6.1 million, respectively. These investments are reported in the Accrued Interest Receivable and Other Assets line of the Consolidated Balance Sheet. The Company had an unfunded investment in qualified affordable housing investments of $4.6 million at June 30, 2015 and $4.8 million at December 31, 2014, which are reported in the Accrued Interest Payable and Other Liabilities line of the Consolidated Balance Sheet. For the three months ended June 30, 2015, the Company recognized $40 of low income housing investment tax credit through the income tax line of the Consolidated Statements of Income. The Company recognized $80 of low income housing investment losses net of tax credits during six months ended June 30, 2015 through the income tax line of the Consolidated Statements of Income. Of this amount, $161 was due to the adoption of the proportional amortization method. For the second quarter and six months ended June 30, 2014, the Company recognized $23 and $43 in the Other Operating Expense line, respectively, and $35 and $70 benefit in the Income Tax Expense line, respectively, of the Consolidated Statements of Income.

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
INTEREST INCOME
Interest and Fees on Loans	$ 16,537	$ 16,142	$ 32,836	$ 32,086
Interest on Federal Funds Sold and Other Short-term Investments	4	3	7	6
Interest and Dividends on Securities:
Taxable	2,219	2,654	4,654	5,413
Non-taxable	1,418	1,026	2,681	2,001
TOTAL INTEREST INCOME	20,178	19,825	40,178	39,506
INTEREST EXPENSE
Interest on Deposits	1,022	1,037	2,015	2,073
Interest on FHLB Advances and Other Borrowings	450	467	908	916
TOTAL INTEREST EXPENSE	1,472	1,504	2,923	2,989
NET INTEREST INCOME	18,706	18,321	37,255	36,517
Provision for Loan Losses	250	200	500	550
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	18,456	18,121	36,755	35,967
NON-INTEREST INCOME
Trust and Investment Product Fees	939	905	1,923	1,827
Service Charges on Deposit Accounts	1,220	1,191	2,357	2,252
Insurance Revenues	1,515	1,482	4,060	4,038
Company Owned Life Insurance	207	192	412	393
Interchange Fee Income	563	512	1,046	959
Other Operating Income	631	590	1,207	980
Net Gains on Sales of Loans	784	386	1,533	862
Net Gains on Securities	262	244	725	472
TOTAL NON-INTEREST INCOME	6,121	5,502	13,263	11,783
NON-INTEREST EXPENSE
Salaries and Employee Benefits	8,259	7,886	17,084	16,310
Occupancy Expense	1,201	1,198	2,427	2,514
Furniture and Equipment Expense	482	500	961	1,009
FDIC Premiums	284	276	566	551
Data Processing Fees	870	947	1,707	1,957
Professional Fees	642	553	1,286	1,245
Advertising and Promotion	484	544	927	1,022
Intangible Amortization	202	325	447	673
Other Operating Expenses	1,891	1,910	3,743	3,948
TOTAL NON-INTEREST EXPENSE	14,315	14,139	29,148	29,229
Income before Income Taxes	10,262	9,484	20,870	18,521
Income Tax Expense	2,937	2,797	6,239	5,529
NET INCOME	$ 7,325	$ 6,687	$ 14,631	$ 12,992
Basic Earnings Per Share (USD per share)	$ 0.55	$ 0.51	$ 1.11	$ 0.98
Diluted Earnings Per Share (USD per share)	0.55	0.51	1.10	0.98
Dividends Per Share (USD per share)	$ 0.17	$ 0.16	$ 0.34	$ 0.32

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Repurchase Agreements Accounted for as Secured Borrowings

6 Months Ended

Jun. 30, 2015

Transfers and Servicing [Abstract]

Repurchase Agreements Accounted for as Secured Borrowings

Repurchase Agreements Accounted for as Secured Borrowings

Repurchase agreements are short term borrowings included in FHLB Advances and Other Borrowings and mature overnight and continuously. Repurchase agreements totaled $14,093 as of June 30, 2015 and were secured by mortgage-backed securities. Risk could arise when the collateral pledged to repurchase agreement declines in fair value. The Company minimizes risk by consistently monitoring the value of the collateral pledged. At the point in time where the collateral has declined in fair value, the Company is required to provide additional collateral based on the value of the underlying securities.

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Loans

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Loans

Loans

Loans were comprised of the following classifications at June 30, 2015 and December 31, 2014: 

	June 30, 2015			December 31, 2014
Commercial:
Commercial and Industrial Loans and Leases	$	396,741		$	380,079
Commercial Real Estate Loans	584,426			583,086
Agricultural Loans	222,298			216,774
Retail:
Home Equity Loans	88,303			86,234
Consumer Loans	47,571			48,613
Residential Mortgage Loans	137,129			137,204
Subtotal	1,476,468			1,451,990
Less: Unearned Income	(3,822		)	(4,008		)
Allowance for Loan Losses	(15,258		)	(14,929		)
Loans, Net	$	1,457,388		$	1,433,053

The following table presents the activity in the allowance for loan losses by portfolio class for the three months ending June 30, 2015 and 2014:

June 30, 2015	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated		Total
Beginning Balance	$	4,747		$	7,229		$	1,142	$	318		$	389		$	673		$	671	$	15,169
Provision for Loan Losses	(114		)	54			81		57			5			128			39		250
Recoveries	26			43			—		6			54			9			—		138
Loans Charged-off	—			(11		)	—		(31		)	(66		)	(191		)	—		(299		)
Ending Balance	$	4,659		$	7,315		$	1,223	$	350		$	382		$	619		$	710	$	15,258

June 30, 2014	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated			Total
Beginning Balance	$	5,374		$	7,870		$	930	$	209		$	186		$	257		$	658		$	15,484
Provision for Loan Losses	365			(695		)	86		181			171			255			(163		)	200
Recoveries	9			27			—		42			39			4			—			121
Loans Charged-off	(87		)	(3		)	—		(14		)	(70		)	(81		)	—			(255		)
Ending Balance	$	5,661		$	7,199		$	1,016	$	418		$	326		$	435		$	495		$	15,550

The following tables present the activity in the allowance for loan losses by portfolio class for the six months ending June 30, 2015 and 2014:

June 30, 2015	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated		Total
Beginning Balance	$	4,627		$	7,273		$	1,123	$	246		$	354		$	622		$	684	$	14,929
Provision for Loan Losses	(13		)	2			100		129			40			216			26		500
Recoveries	67			51			—		6			154			11			—		289
Loans Charged-off	(22		)	(11		)	—		(31		)	(166		)	(230		)	—		(460		)
Ending Balance	$	4,659		$	7,315		$	1,223	$	350		$	382		$	619		$	710	$	15,258

June 30, 2014	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated			Total
Beginning Balance	$	3,983		$	8,335		$	946	$	239		$	188		$	281		$	612		$	14,584
Provision for Loan Losses	1,687			(1,752		)	70		181			219			262			(117		)	550
Recoveries	78			730			—		42			86			8			—			944
Loans Charged-off	(87		)	(114		)	—		(44		)	(167		)	(116		)	—			(528		)
Ending Balance	$	5,661		$	7,199		$	1,016	$	418		$	326		$	435		$	495		$	15,550

In determining the adequacy of the allowance for loan loss, general allocations are made for other pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on historical averages for loan losses for these portfolios, judgmentally adjusted for current economic factors and portfolio trends. 

Loan impairment is reported when full repayment under the terms of the loan is not expected. This methodology is used for all loans, including loans acquired with deteriorated credit quality. For purchased loans, the assessment is made at the time of acquisition as well as over the life of loan. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate, or at the fair value of collateral if repayment is expected solely from the collateral. Commercial and industrial loans, commercial real estate loans, and agricultural loans are evaluated individually for impairment. Smaller balance homogeneous loans are evaluated for impairment in total. Such loans include real estate loans secured by one-to-four family residences and loans to individuals for household, family and other personal expenditures. Individually evaluated loans on non-accrual are generally considered impaired. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		Commercial and Industrial Loans and Leases		Commercial Real Estate Loans		Agricultural Loans		Home Equity Loans		Consumer Loans		Residential Mortgage Loans		Unallocated
Allowance for Loan Losses:
Ending Allowance Balance Attributable to Loans:
Individually Evaluated for Impairment	$	1,603	$	103	$	1,500	$	—	$	—	$	—	$	—	$	—
Collectively Evaluated for Impairment	13,645		4,556		5,805		1,223		350		382		619		710
Acquired with Deteriorated Credit Quality	10		—		10		—		—		—		—		—
Total Ending Allowance Balance	$	15,258	$	4,659	$	7,315	$	1,223	$	350	$	382	$	619	$	710
Loans:
Loans Individually Evaluated for Impairment	$	6,065	$	2,029	$	4,024	$	12	$	—	$	—	$	—	n/m(2)
Loans Collectively Evaluated for Impairment	1,468,603		395,321		575,765		224,579		88,639		47,700		136,599		n/m(2)
Loans Acquired with Deteriorated Credit Quality	7,217		403		5,934		—		—		—		880		n/m(2)
Total Ending Loans Balance(1)	$	1,481,885	$	397,753	$	585,723	$	224,591	$	88,639	$	47,700	$	137,479	n/m(2)

⁽¹⁾Total recorded investment in loans includes $5,417 in accrued interest.

⁽²⁾n/m = not meaningful

December 31, 2014	Total		Commercial and Industrial Loans and Leases		Commercial Real Estate Loans		Agricultural Loans		Home Equity Loans		Consumer Loans		Residential Mortgage Loans		Unallocated
Allowance for Loan Losses:
Ending Allowance Balance Attributable to Loans:
Individually Evaluated for Impairment	$	1,532	$	87	$	1,445	$	—	$	—	$	—	$	—	$	—
Collectively Evaluated for Impairment	13,343		4,540		5,818		1,123		246		354		578		684
Acquired with Deteriorated Credit Quality	54		—		10		—		—		—		44		—
Total Ending Allowance Balance	$	14,929	$	4,627	$	7,273	$	1,123	$	246	$	354	$	622	$	684
Loans:
Loans Individually Evaluated for Impairment	$	6,044	$	1,964	$	4,080	$	—	$	—	$	—	$	—	n/m(2)
Loans Collectively Evaluated for Impairment	1,443,363		378,533		573,961		219,640		86,570		48,614		136,045		n/m(2)
Loans Acquired with Deteriorated Credit Quality	8,361		354		6,385		—		—		118		1,504		n/m(2)
Total Ending Loans Balance(1)	$	1,457,768	$	380,851	$	584,426	$	219,640	$	86,570	$	48,732	$	137,549	n/m(2)

⁽¹⁾Total recorded investment in loans includes $5,778 in accrued interest.

⁽²⁾n/m = not meaningful

The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Unpaid Principal Balance(1)		Recorded Investment		Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	502	$	498	$	—
Commercial Real Estate Loans	1,276		1,126		—
Agricultural Loans	12		12		—
Subtotal	1,790		1,636		—
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,516		1,531		103
Commercial Real Estate Loans	3,758		3,095		1,510
Agricultural Loans	—		—		—
Subtotal	5,274		4,626		1,613
Total	$	7,064	$	6,262	$	1,613
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	—	$	—	$	—
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	735	$	197	$	10

⁽¹⁾ Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.

December 31, 2014	Unpaid Principal Balance(1)		Recorded Investment		Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	1,887	$	1,877	$	—
Commercial Real Estate Loans	1,944		1,447		—
Agricultural Loans	—		—		—
Subtotal	3,831		3,324		—
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	84		87		87
Commercial Real Estate Loans	3,653		2,975		1,455
Agricultural Loans	—		—		—
Subtotal	3,737		3,062		1,542
Total	$	7,568	$	6,386	$	1,542
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	289	$	133	$	—
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	759	$	209	$	10

⁽¹⁾ Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.

The following tables present loans individually evaluated for impairment by class of loans for the three month period ended June 30, 2015 and 2014:

June 30, 2015	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	724	$	9	$	9
Commercial Real Estate Loans	1,191		66		66
Agricultural Loans	12		—		—
Subtotal	1,927		75		75
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,554		23		23
Commercial Real Estate Loans	3,181		3		2
Agricultural Loans	—		—		—
Subtotal	4,735		26		25
Total	$	6,662	$	101	$	100
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	45	$	62	$	62
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	286	$	—	$	—

June 30, 2014	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	2,176	$	45	$	45
Commercial Real Estate Loans	3,326		53		46
Agricultural Loans	—		—		—
Subtotal	5,502		98		91
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	219		1		1
Commercial Real Estate Loans	2,588		6		5
Agricultural Loans	—		—		—
Subtotal	2,807		7		6
Total	$	8,309	$	105	$	97
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	950	$	1	$	1
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	32	$	—	$	—

The following table presents loans individually evaluated for impairment by class of loans for the six month period ended June 30, 2015 and 2014:

June 30, 2015	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	524	$	12	$	12
Commercial Real Estate Loans	1,338		77		77
Agricultural Loans	6		—		—
Subtotal	1,868		89		89
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,744		46		46
Commercial Real Estate Loans	3,107		7		5
Agricultural Loans	—		—		—
Subtotal	4,851		53		51
Total	$	6,719	$	142	$	140
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	124	$	62	$	62
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	292	$	—	$	—

June 30, 2014	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	2,156	$	76	$	76
Commercial Real Estate Loans	2,879		55		48
Agricultural Loans	—		—		—
Subtotal	5,035		131		124
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	2,295		1		1
Commercial Real Estate Loans	3,416		11		10
Agricultural Loans	—		—		—
Subtotal	5,711		12		11
Total	$	10,746	$	143	$	135
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	974	$	3	$	3
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	32	$	1	$	1

All classes of loans, including loans acquired with deteriorated credit quality, are generally placed on non-accrual status when scheduled principal or interest payments are past due for 90 days or more or when the borrower’s ability to repay becomes doubtful. For purchased loans, the determination is made at the time of acquisition as well as over the life of the loan. Uncollected accrued interest for each class of loans is reversed against income at the time a loan is placed on non-accrual. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. All classes of loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Loans are typically charged-off at 180 days past due, or earlier if deemed uncollectible. Exceptions to the non-accrual and charge-off policies are made when the loan is well secured and in the process of collection.

The following tables present the recorded investment in non-accrual loans and loans past due 90 days or more still on accrual by class of loans as of June 30, 2015 and December 31, 2014:

	Non-Accrual				Loans Past Due 90 Days or More & Still Accruing
	2015		2014		2015		2014
Commercial and Industrial Loans and Leases	$	395	$	161	$	15	$	68
Commercial Real Estate Loans	3,232		3,460		—		—
Agricultural Loans	—		—		—		75
Home Equity Loans	305		268		—		—
Consumer Loans	76		196		—		—
Residential Mortgage Loans	1,423		1,885		—		—
Total	$	5,431	$	5,970	$	15	$	143
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	271	$	1,154	$	—	$	—

The following tables present the aging of the recorded investment in past due loans by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due
Commercial and Industrial Loans and Leases	$	397,753	$	252	$	69	$	340	$	661	$	397,092
Commercial Real Estate Loans	585,723		169		249		972		1,390		584,333
Agricultural Loans	224,591		31		—		—		31		224,560
Home Equity Loans	88,639		218		97		306		621		88,018
Consumer Loans	47,700		99		45		75		219		47,481
Residential Mortgage Loans	137,479		1,769		299		1,271		3,339		134,140
Total(1)	$	1,481,885	$	2,538	$	759	$	2,964	$	6,261	$	1,475,624
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	7,217	$	—	$	—	$	—	$	—	$	7,217

⁽¹⁾Total recorded investment in loans includes $5,417 in accrued interest.

December 31, 2014	Total		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due
Commercial and Industrial Loans and Leases	$	380,851	$	628	$	—	$	148	$	776	$	380,075
Commercial Real Estate Loans	584,426		504		10		753		1,267		583,159
Agricultural Loans	219,640		25		—		75		100		219,540
Home Equity Loans	86,570		197		4		268		469		86,101
Consumer Loans	48,732		132		28		75		235		48,497
Residential Mortgage Loans	137,549		2,046		329		1,720		4,095		133,454
Total(1)	$	1,457,768	$	3,532	$	371	$	3,039	$	6,942	$	1,450,826
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	8,361	$	—	$	—	$	648	$	648	$	7,713

⁽¹⁾Total recorded investment in loans includes $5,778 in accrued interest.

Troubled Debt Restructurings:

In certain instances, the Company may choose to restructure the contractual terms of loans. A troubled debt restructuring occurs when the Company grants a concession to the borrower that it would not otherwise consider due to a borrower’s financial difficulty.   In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without modification. This evaluation is performed under the Company’s internal underwriting policy. The Company uses the same methodology for loans acquired with deteriorated credit quality as for all other loans when determining whether the loan is a troubled debt restructuring.

During the three months ended June 30, 2015 and 2014, there were no troubled debt restructurings. There were no troubled debt restructurings for the three months ended June 30, 2015 and the year ended December 31, 2014 for loans acquired with deteriorated credit quality at the time of acquisition.

During the six months ended June 30, 2015, there were no troubled debt restructurings. During the six months ended June 30, 2014, there was one loan modified as a troubled debt restructurings. The modification of the terms of this loan included a permanent reduction of the recorded investment in the loan. There were no troubled debt restructurings for the six months ended June 30, 2015 and the year ended December 31, 2014 for the loans acquired with deteriorated credit quality at the time of acquisition.

The following tables present the recorded investment of troubled debt restructurings by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		Performing		Non-Accrual(1)
Commercial and Industrial Loans and Leases	$	1,639	$	1,636	$	3
Commercial Real Estate Loans	2,729		987		1,742
Total	$	4,368	$	2,623	$	1,745

December 31, 2014	Total		Performing		Non-Accrual(1)
Commercial and Industrial Loans and Leases	$	1,809	$	1,803	$	6
Commercial Real Estate Loans	2,841		960		1,881
Total	$	4,650	$	2,763	$	1,887

⁽¹⁾The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on previous page.

The Company had not committed to lending any additional amounts as of June 30, 2015 and December 31, 2014 to customers with outstanding loans that are classified as troubled debt restructurings.

The following tables present loans by class modified as troubled debt restructurings that occurred during the three months ending June 30, 2015 and 2014:

June 30, 2015	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the three months ending June 30, 2015.

June 30, 2014	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the three months ending June 30, 2014.

The following tables present loans by class modified as troubled debt restructurings that occurred during the six months ending June 30, 2015 and 2014:

June 30, 2015	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the six months ending June 30, 2015.

June 30, 2014	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	1	201		197
Total	1	$	201	$	197

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the six months ending June 30, 2014.

The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ending June 30, 2015 and 2014:

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2015
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	1	95
Total	1	$	95

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge off of $95 during the three months ending June 30, 2015.

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2014
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	—	—
Total	—	$	—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the three months ending June 30, 2014.

The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the six months ending June 30, 2015 and 2014:

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2015
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	1	95
Total	1	$	95

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge-off of $95 during the six months ending June 30, 2015.

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2014
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	—	—
Total	—	$	—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the six months ending June 30, 2014.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company classifies loans as to credit risk by individually analyzing loans. This analysis includes commercial and industrial loans, commercial real estate loans, and agricultural loans with an outstanding balance greater than $100. This analysis is typically performed on at least an annual basis. The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans as of June 30, 2015 and December 31, 2014 is as follows:

June 30, 2015	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and Industrial Loans and Leases	$	370,372	$	13,689	$	13,692	$	—	$	397,753
Commercial Real Estate Loans	546,263		24,913		14,547		—		585,723
Agricultural Loans	218,815		5,674		102		—		224,591
Total	$	1,135,450	$	44,276	$	28,341	$	—	$	1,208,067
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	870	$	1,520	$	3,947	$	—	$	6,337

December 31, 2014	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and Industrial Loans and Leases	$	351,250	$	18,387	$	11,214	$	—	$	380,851
Commercial Real Estate Loans	545,804		23,421		15,201		—		584,426
Agricultural Loans	214,974		4,211		455		—		219,640
Total	$	1,112,028	$	46,019	$	26,870	$	—	$	1,184,917
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	651	$	1,697	$	4,391	$	—	$	6,739

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For home equity, consumer and residential mortgage loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  The following table presents the recorded investment in home equity, consumer and residential mortgage loans based on payment activity as of June 30, 2015 and December 31, 2014:

June 30, 2015	Home Equity Loans		Consumer Loans		Residential Mortgage Loans
Performing	$	88,334	$	47,624	$	136,056
Nonperforming	305		76		1,423
Total	$	88,639	$	47,700	$	137,479
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	—	$	—	$	880

December 31, 2014	Home Equity Loans		Consumer Loans		Residential Mortgage Loans
Performing	$	86,302	$	48,536	$	135,664
Nonperforming	268		196		1,885
Total	$	86,570	$	48,732	$	137,549
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	—	$	118	$	1,504

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The recorded investment of those loans is as follows: 

	June 30, 2015		December 31, 2014
Commercial and Industrial Loans	$	403	$	354
Commercial Real Estate Loans	5,934		6,385
Home Equity Loans	—		—
Consumer Loans	—		118
Residential Mortgage Loans	880		1,504
Total	$	7,217	$	8,361
Carrying Amount, Net of Allowance	$	7,207	$	8,307

Accretable yield, or income expected to be collected, is as follows:

	2015			2014
Balance at April 1	$	1,626		$	1,201
New Loans Purchased	—			—
Accretion of Income	(23		)	(75		)
Reclassifications from Non-accretable Difference	104			—
Charge-off of Accretable Yield	(27		)	—
Balance at June 30	$	1,680		$	1,126

	2015			2014
Balance at January 1	$	1,685		$	1,279
New Loans Purchased	—			—
Accretion of Income	(82		)	(153		)
Reclassifications from Non-accretable Difference	104			—
Charge-off of Accretable Yield	(27		)	—
Balance at June 30	$	1,680		$	1,126

For those purchased loans disclosed above, the Company did not increase the allowance for loan losses during the three and six months ended June 30, 2015 and 2014. No allowances for loan losses were reversed during the same period.

The carrying amount of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction totaled $123 as of June 30, 2015 and $288 as of December 31, 2014.

XML

Loans (Tables)

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Components of Loans

Loans were comprised of the following classifications at June 30, 2015 and December 31, 2014: 

	June 30, 2015			December 31, 2014
Commercial:
Commercial and Industrial Loans and Leases	$	396,741		$	380,079
Commercial Real Estate Loans	584,426			583,086
Agricultural Loans	222,298			216,774
Retail:
Home Equity Loans	88,303			86,234
Consumer Loans	47,571			48,613
Residential Mortgage Loans	137,129			137,204
Subtotal	1,476,468			1,451,990
Less: Unearned Income	(3,822		)	(4,008		)
Allowance for Loan Losses	(15,258		)	(14,929		)
Loans, Net	$	1,457,388		$	1,433,053

Schedule of Allowance for Loan Losses

The following table presents the activity in the allowance for loan losses by portfolio class for the three months ending June 30, 2015 and 2014:

June 30, 2015	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated		Total
Beginning Balance	$	4,747		$	7,229		$	1,142	$	318		$	389		$	673		$	671	$	15,169
Provision for Loan Losses	(114		)	54			81		57			5			128			39		250
Recoveries	26			43			—		6			54			9			—		138
Loans Charged-off	—			(11		)	—		(31		)	(66		)	(191		)	—		(299		)
Ending Balance	$	4,659		$	7,315		$	1,223	$	350		$	382		$	619		$	710	$	15,258

June 30, 2014	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated			Total
Beginning Balance	$	5,374		$	7,870		$	930	$	209		$	186		$	257		$	658		$	15,484
Provision for Loan Losses	365			(695		)	86		181			171			255			(163		)	200
Recoveries	9			27			—		42			39			4			—			121
Loans Charged-off	(87		)	(3		)	—		(14		)	(70		)	(81		)	—			(255		)
Ending Balance	$	5,661		$	7,199		$	1,016	$	418		$	326		$	435		$	495		$	15,550

The following tables present the activity in the allowance for loan losses by portfolio class for the six months ending June 30, 2015 and 2014:

June 30, 2015	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated		Total
Beginning Balance	$	4,627		$	7,273		$	1,123	$	246		$	354		$	622		$	684	$	14,929
Provision for Loan Losses	(13		)	2			100		129			40			216			26		500
Recoveries	67			51			—		6			154			11			—		289
Loans Charged-off	(22		)	(11		)	—		(31		)	(166		)	(230		)	—		(460		)
Ending Balance	$	4,659		$	7,315		$	1,223	$	350		$	382		$	619		$	710	$	15,258

June 30, 2014	Commercial and Industrial Loans and Leases			Commercial Real Estate Loans			Agricultural Loans		Home Equity Loans			Consumer Loans			Residential Mortgage Loans			Unallocated			Total
Beginning Balance	$	3,983		$	8,335		$	946	$	239		$	188		$	281		$	612		$	14,584
Provision for Loan Losses	1,687			(1,752		)	70		181			219			262			(117		)	550
Recoveries	78			730			—		42			86			8			—			944
Loans Charged-off	(87		)	(114		)	—		(44		)	(167		)	(116		)	—			(528		)
Ending Balance	$	5,661		$	7,199		$	1,016	$	418		$	326		$	435		$	495		$	15,550

Schedule of Allowance for Loan Losses and Recorded Investment in Loans

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		Commercial and Industrial Loans and Leases		Commercial Real Estate Loans		Agricultural Loans		Home Equity Loans		Consumer Loans		Residential Mortgage Loans		Unallocated
Allowance for Loan Losses:
Ending Allowance Balance Attributable to Loans:
Individually Evaluated for Impairment	$	1,603	$	103	$	1,500	$	—	$	—	$	—	$	—	$	—
Collectively Evaluated for Impairment	13,645		4,556		5,805		1,223		350		382		619		710
Acquired with Deteriorated Credit Quality	10		—		10		—		—		—		—		—
Total Ending Allowance Balance	$	15,258	$	4,659	$	7,315	$	1,223	$	350	$	382	$	619	$	710
Loans:
Loans Individually Evaluated for Impairment	$	6,065	$	2,029	$	4,024	$	12	$	—	$	—	$	—	n/m(2)
Loans Collectively Evaluated for Impairment	1,468,603		395,321		575,765		224,579		88,639		47,700		136,599		n/m(2)
Loans Acquired with Deteriorated Credit Quality	7,217		403		5,934		—		—		—		880		n/m(2)
Total Ending Loans Balance(1)	$	1,481,885	$	397,753	$	585,723	$	224,591	$	88,639	$	47,700	$	137,479	n/m(2)

⁽¹⁾Total recorded investment in loans includes $5,417 in accrued interest.

⁽²⁾n/m = not meaningful

December 31, 2014	Total		Commercial and Industrial Loans and Leases		Commercial Real Estate Loans		Agricultural Loans		Home Equity Loans		Consumer Loans		Residential Mortgage Loans		Unallocated
Allowance for Loan Losses:
Ending Allowance Balance Attributable to Loans:
Individually Evaluated for Impairment	$	1,532	$	87	$	1,445	$	—	$	—	$	—	$	—	$	—
Collectively Evaluated for Impairment	13,343		4,540		5,818		1,123		246		354		578		684
Acquired with Deteriorated Credit Quality	54		—		10		—		—		—		44		—
Total Ending Allowance Balance	$	14,929	$	4,627	$	7,273	$	1,123	$	246	$	354	$	622	$	684
Loans:
Loans Individually Evaluated for Impairment	$	6,044	$	1,964	$	4,080	$	—	$	—	$	—	$	—	n/m(2)
Loans Collectively Evaluated for Impairment	1,443,363		378,533		573,961		219,640		86,570		48,614		136,045		n/m(2)
Loans Acquired with Deteriorated Credit Quality	8,361		354		6,385		—		—		118		1,504		n/m(2)
Total Ending Loans Balance(1)	$	1,457,768	$	380,851	$	584,426	$	219,640	$	86,570	$	48,732	$	137,549	n/m(2)

⁽¹⁾Total recorded investment in loans includes $5,778 in accrued interest.

⁽²⁾n/m = not meaningful

Schedule for Loans Individually Evaluated for Impairment

The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Unpaid Principal Balance(1)		Recorded Investment		Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	502	$	498	$	—
Commercial Real Estate Loans	1,276		1,126		—
Agricultural Loans	12		12		—
Subtotal	1,790		1,636		—
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,516		1,531		103
Commercial Real Estate Loans	3,758		3,095		1,510
Agricultural Loans	—		—		—
Subtotal	5,274		4,626		1,613
Total	$	7,064	$	6,262	$	1,613
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	—	$	—	$	—
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	735	$	197	$	10

⁽¹⁾ Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.

December 31, 2014	Unpaid Principal Balance(1)		Recorded Investment		Allowance for Loan Losses Allocated
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	1,887	$	1,877	$	—
Commercial Real Estate Loans	1,944		1,447		—
Agricultural Loans	—		—		—
Subtotal	3,831		3,324		—
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	84		87		87
Commercial Real Estate Loans	3,653		2,975		1,455
Agricultural Loans	—		—		—
Subtotal	3,737		3,062		1,542
Total	$	7,568	$	6,386	$	1,542
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	289	$	133	$	—
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	759	$	209	$	10

⁽¹⁾ Unpaid Principal Balance is the remaining contractual payments inclusive of partial charge-offs.

The following tables present loans individually evaluated for impairment by class of loans for the three month period ended June 30, 2015 and 2014:

June 30, 2015	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	724	$	9	$	9
Commercial Real Estate Loans	1,191		66		66
Agricultural Loans	12		—		—
Subtotal	1,927		75		75
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,554		23		23
Commercial Real Estate Loans	3,181		3		2
Agricultural Loans	—		—		—
Subtotal	4,735		26		25
Total	$	6,662	$	101	$	100
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	45	$	62	$	62
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	286	$	—	$	—

June 30, 2014	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	2,176	$	45	$	45
Commercial Real Estate Loans	3,326		53		46
Agricultural Loans	—		—		—
Subtotal	5,502		98		91
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	219		1		1
Commercial Real Estate Loans	2,588		6		5
Agricultural Loans	—		—		—
Subtotal	2,807		7		6
Total	$	8,309	$	105	$	97
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	950	$	1	$	1
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	32	$	—	$	—

The following table presents loans individually evaluated for impairment by class of loans for the six month period ended June 30, 2015 and 2014:

June 30, 2015	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	524	$	12	$	12
Commercial Real Estate Loans	1,338		77		77
Agricultural Loans	6		—		—
Subtotal	1,868		89		89
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	1,744		46		46
Commercial Real Estate Loans	3,107		7		5
Agricultural Loans	—		—		—
Subtotal	4,851		53		51
Total	$	6,719	$	142	$	140
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	124	$	62	$	62
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	292	$	—	$	—

June 30, 2014	Average Recorded Investment		Interest Income Recognized		Cash Basis Recognized
With No Related Allowance Recorded:
Commercial and Industrial Loans and Leases	$	2,156	$	76	$	76
Commercial Real Estate Loans	2,879		55		48
Agricultural Loans	—		—		—
Subtotal	5,035		131		124
With An Allowance Recorded:
Commercial and Industrial Loans and Leases	2,295		1		1
Commercial Real Estate Loans	3,416		11		10
Agricultural Loans	—		—		—
Subtotal	5,711		12		11
Total	$	10,746	$	143	$	135
Loans Acquired With Deteriorated Credit Quality With No Related Allowance Recorded (Included in the Total Above)	$	974	$	3	$	3
Loans Acquired With Deteriorated Credit Quality With An Additional Allowance Recorded (Included in the Total Above)	$	32	$	1	$	1

Schedule of Recorded Investment in Nonaccrual Loans

The following tables present the recorded investment in non-accrual loans and loans past due 90 days or more still on accrual by class of loans as of June 30, 2015 and December 31, 2014:

	Non-Accrual				Loans Past Due 90 Days or More & Still Accruing
	2015		2014		2015		2014
Commercial and Industrial Loans and Leases	$	395	$	161	$	15	$	68
Commercial Real Estate Loans	3,232		3,460		—		—
Agricultural Loans	—		—		—		75
Home Equity Loans	305		268		—		—
Consumer Loans	76		196		—		—
Residential Mortgage Loans	1,423		1,885		—		—
Total	$	5,431	$	5,970	$	15	$	143
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	271	$	1,154	$	—	$	—

Schedule of Aging of Recorded Investment in Past Due Loans

The following tables present the aging of the recorded investment in past due loans by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due
Commercial and Industrial Loans and Leases	$	397,753	$	252	$	69	$	340	$	661	$	397,092
Commercial Real Estate Loans	585,723		169		249		972		1,390		584,333
Agricultural Loans	224,591		31		—		—		31		224,560
Home Equity Loans	88,639		218		97		306		621		88,018
Consumer Loans	47,700		99		45		75		219		47,481
Residential Mortgage Loans	137,479		1,769		299		1,271		3,339		134,140
Total(1)	$	1,481,885	$	2,538	$	759	$	2,964	$	6,261	$	1,475,624
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	7,217	$	—	$	—	$	—	$	—	$	7,217

⁽¹⁾Total recorded investment in loans includes $5,417 in accrued interest.

December 31, 2014	Total		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due
Commercial and Industrial Loans and Leases	$	380,851	$	628	$	—	$	148	$	776	$	380,075
Commercial Real Estate Loans	584,426		504		10		753		1,267		583,159
Agricultural Loans	219,640		25		—		75		100		219,540
Home Equity Loans	86,570		197		4		268		469		86,101
Consumer Loans	48,732		132		28		75		235		48,497
Residential Mortgage Loans	137,549		2,046		329		1,720		4,095		133,454
Total(1)	$	1,457,768	$	3,532	$	371	$	3,039	$	6,942	$	1,450,826
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	8,361	$	—	$	—	$	648	$	648	$	7,713

⁽¹⁾Total recorded investment in loans includes $5,778 in accrued interest.

Schedule of Recorded Investment of Troubled Debt Restructurings

The following tables present the recorded investment of troubled debt restructurings by class of loans as of June 30, 2015 and December 31, 2014:

June 30, 2015	Total		Performing		Non-Accrual(1)
Commercial and Industrial Loans and Leases	$	1,639	$	1,636	$	3
Commercial Real Estate Loans	2,729		987		1,742
Total	$	4,368	$	2,623	$	1,745

December 31, 2014	Total		Performing		Non-Accrual(1)
Commercial and Industrial Loans and Leases	$	1,809	$	1,803	$	6
Commercial Real Estate Loans	2,841		960		1,881
Total	$	4,650	$	2,763	$	1,887

⁽¹⁾The non-accrual troubled debt restructurings are included in the Non-Accrual Loan table presented on previous page.

Schedule of Loans Modified as Troubled Debt Restructuring

The following tables present loans by class modified as troubled debt restructurings that occurred during the three months ending June 30, 2015 and 2014:

June 30, 2015	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the three months ending June 30, 2015.

June 30, 2014	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the three months ending June 30, 2014.

The following tables present loans by class modified as troubled debt restructurings that occurred during the six months ending June 30, 2015 and 2014:

June 30, 2015	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	—	—		—
Total	—	$	—	$	—

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the six months ending June 30, 2015.

June 30, 2014	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and Industrial Loans and Leases	—	$	—	$	—
Commercial Real Estate Loans	1	201		197
Total	1	$	201	$	197

The troubled debt restructurings described above increased the allowance for loan losses by $0 and resulted in charge-offs of $0 during the six months ending June 30, 2014.

Schedule of Troubled Debt Restructuring, Subsequently Defaulted

The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ending June 30, 2015 and 2014:

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2015
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	1	95
Total	1	$	95

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge off of $95 during the three months ending June 30, 2015.

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2014
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	—	—
Total	—	$	—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the three months ending June 30, 2014.

The following tables present loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the six months ending June 30, 2015 and 2014:

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2015
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	1	95
Total	1	$	95

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and a charge-off of $95 during the six months ending June 30, 2015.

Troubled Debt Restructurings That Subsequently Defaulted:	Number of Loans	Recorded Investment
June 30, 2014
Commercial and Industrial Loans and Leases	—	$	—
Commercial Real Estate Loans	—	—
Total	—	$	—

The troubled debt restructurings that subsequently defaulted described above resulted in no change to the allowance for loan losses and no charge-offs during the six months ending June 30, 2014.

Schedule of Risk Category of Loans

Based on the most recent analysis performed, the risk category of loans by class of loans as of June 30, 2015 and December 31, 2014 is as follows:

June 30, 2015	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and Industrial Loans and Leases	$	370,372	$	13,689	$	13,692	$	—	$	397,753
Commercial Real Estate Loans	546,263		24,913		14,547		—		585,723
Agricultural Loans	218,815		5,674		102		—		224,591
Total	$	1,135,450	$	44,276	$	28,341	$	—	$	1,208,067
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	870	$	1,520	$	3,947	$	—	$	6,337

December 31, 2014	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and Industrial Loans and Leases	$	351,250	$	18,387	$	11,214	$	—	$	380,851
Commercial Real Estate Loans	545,804		23,421		15,201		—		584,426
Agricultural Loans	214,974		4,211		455		—		219,640
Total	$	1,112,028	$	46,019	$	26,870	$	—	$	1,184,917
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	651	$	1,697	$	4,391	$	—	$	6,739

Schedule of Recorded Investment in Home Equity, Consumer and Residential Mortgage Loans

The following table presents the recorded investment in home equity, consumer and residential mortgage loans based on payment activity as of June 30, 2015 and December 31, 2014:

June 30, 2015	Home Equity Loans		Consumer Loans		Residential Mortgage Loans
Performing	$	88,334	$	47,624	$	136,056
Nonperforming	305		76		1,423
Total	$	88,639	$	47,700	$	137,479
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	—	$	—	$	880

December 31, 2014	Home Equity Loans		Consumer Loans		Residential Mortgage Loans
Performing	$	86,302	$	48,536	$	135,664
Nonperforming	268		196		1,885
Total	$	86,570	$	48,732	$	137,549
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$	—	$	118	$	1,504

Schedule of Carrying Amount of Loans with Deterioration of Credit Quality

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The recorded investment of those loans is as follows: 

	June 30, 2015		December 31, 2014
Commercial and Industrial Loans	$	403	$	354
Commercial Real Estate Loans	5,934		6,385
Home Equity Loans	—		—
Consumer Loans	—		118
Residential Mortgage Loans	880		1,504
Total	$	7,217	$	8,361
Carrying Amount, Net of Allowance	$	7,207	$	8,307

Schedule of Accretable Yield, or Income Expected to be Collected

Accretable yield, or income expected to be collected, is as follows:

	2015			2014
Balance at April 1	$	1,626		$	1,201
New Loans Purchased	—			—
Accretion of Income	(23		)	(75		)
Reclassifications from Non-accretable Difference	104			—
Charge-off of Accretable Yield	(27		)	—
Balance at June 30	$	1,680		$	1,126

	2015			2014
Balance at January 1	$	1,685		$	1,279
New Loans Purchased	—			—
Accretion of Income	(82		)	(153		)
Reclassifications from Non-accretable Difference	104			—
Charge-off of Accretable Yield	(27		)	—
Balance at June 30	$	1,680		$	1,126

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Newly Issued Accounting Pronouncements

Newly Issued Accounting Pronouncements

In January 2014, the FASB amended existing guidance clarifying that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This update did not have a material impact on the Company's consolidated financial statements.

In January 2014, the FASB issued guidance for accounting for investments in qualified affordable housing projects. The new guidance allows a limited liability investor that meets certain conditions to use the proportional amortization methods. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).

The Company adopted the proportional amortization method of accounting for its low income housing investments in the first quarter of 2015. The Company quantified the impact of adopting the proportional amortization method compared to the equity method to its current year and prior period financial statements. The Company determined that the adoption of the proportional amortization method did not have a material impact to its consolidated financial statements; therefore, the Company did not adjust its prior period consolidated financial statements. The low income housing investment losses, net of the tax benefits received, are included in income tax expense on the consolidated statements of income for the three and six months ended June 30, 2015.

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Equity Plans and Equity Based Compensation

6 Months Ended

Jun. 30, 2015

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

Equity Plans and Equity Based Compensation

Equity Plans and Equity Based Compensation

The Company maintains three equity incentive plans under which stock options, restricted stock, and other equity incentive awards can be granted. At June 30, 2015, the Company has reserved 390,033 shares of common stock (as adjusted for subsequent stock dividends and subject to further customary anti-dilution adjustments) for the purpose of issuance pursuant to outstanding and future grants of options, restricted stock, and other equity awards to officers, directors and other employees of the Company. 

For the three and six months ended June 30, 2015 and 2014, the Company granted no options.  The Company recorded no stock compensation expense applicable to options during the three and six months ended June 30, 2015 and 2014 because all outstanding options were fully vested prior to 2007. In addition, there was no unrecognized option expense. 

During the periods presented, awards of long-term incentives were granted in the form of restricted stock.  Awards that were granted to management under a management incentive plan were granted in tandem with cash credit entitlements (typically in the form of 60% restricted stock grants and 40% cash credit entitlements). The management and employee restricted stock grants and tandem cash credit entitlements awarded will vest in three equal installments of 33.3% with the first annual vesting on December 5th of the year of the grant and on December 5th of the next two succeeding years.  Awards that were granted to directors as additional retainer for their services do not include any cash credit entitlement. These director restricted stock grants are subject to forfeiture in the event that the recipient of the grant does not continue in service as a director of the Company through December 5th of the year after grant or do not satisfy certain meeting attendance requirements, at which time they generally vest 100 percent. For measuring compensation costs, restricted stock awards are valued based upon the market value of the common shares on the date of grant. During the three months ended June 30, 2015, the Company granted awards of 768 shares of restricted stock. During the three months ended June 30, 2014, the Company granted no shares of restricted stock.  During the six months ended June 30, 2015 and 2014, the Company granted awards of 33,378 and 31,080 shares of restricted stock, respectively. 

The following tables present expense recorded for restricted stock and cash entitlements as well as the related tax information for the periods presented:

	Three Months Ended June 30,
	2015			2014
Restricted Stock Expense	$	275		$	161
Cash Entitlement Expense	142			101
Tax Effect	(169		)	(106		)
Net of Tax	$	248		$	156

	Six Months Ended June 30,
	2015			2014
Restricted Stock Expense	$	509		$	320
Cash Entitlement Expense	304			199
Tax Effect	(329		)	(210		)
Net of Tax	$	484		$	309

Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $2,235 and $1,873 as of June 30, 2015 and 2014, respectively.

The Company maintains an Employee Stock Purchase Plan whereby eligible employees have the option to purchase the Company’s common stock at a discount. The purchase price of the shares under this Plan has been set at 95% of the fair market value of the Company’s common stock as of the last day of the plan year. The plan provided for the purchase of up to 500,000 shares of common stock, which the Company may obtain by purchases on the open market or from private sources, or by issuing authorized but unissued common shares. Funding for the purchase of common stock is from employee and Company contributions. 

The Employee Stock Purchase Plan is not considered compensatory.  There was no expense recorded for the employee stock purchase plan during the three and six months ended June 30, 2015 and 2014, nor was there any unrecognized compensation expense as of June 30, 2015 and 2014 for the Employee Stock Purchase Plan.

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Fair Value (Reconciliation of all Assets Measured at Fair Value on Recurring Basis, Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Obligations of State and Political Subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	$ (81)	$ 86	$ (45)	$ 155
Fair Value, Measurements, Recurring | Obligations of State and Political Subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance of Recurring Level 3 Assets	9,602	10,476	10,141	10,832
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(81)	86	(45)	155
Maturities / Calls	0	0	(575)	(425)
Purchases	1,304	0	1,304	0
Ending Balance of Recurring Level 3 Assets	10,825	10,562	10,825	10,562
Fair Value, Measurements, Recurring | Equity Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance of Recurring Level 3 Assets	353	353	353	353
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	0	0	0	0
Maturities / Calls	0	0	0	0
Purchases	0	0	0	0
Ending Balance of Recurring Level 3 Assets	$ 353	$ 353	$ 353	$ 353

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Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s operations include three primary segments: core banking, trust and investment advisory services, and insurance operations. The core banking segment involves attracting deposits from the general public and using such funds to originate consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, primarily in the Company’s local markets. The core banking segment also involves the sale of residential mortgage loans in the secondary market. The trust and investment advisory services segment involves providing trust, investment advisory, and brokerage services to customers. The insurance segment offers a full range of personal and corporate property and casualty insurance products, primarily in the Company’s banking subsidiary’s local markets.

The core banking segment is comprised by the Company’s banking subsidiary, German American Bancorp, which operated through 37 banking offices at June 30, 2015. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue for the core-banking segment. The trust and investment advisory services segment’s revenues are comprised primarily of fees generated by the trust operations of the Company's banking subsidiary and by German American Investment Services, Inc. These fees are derived by providing trust, investment advisory, and brokerage services to its customers. The insurance segment primarily consists of German American Insurance, Inc., which provides a full line of personal and corporate insurance products. Commissions derived from the sale of insurance products are the primary source of revenue for the insurance segment.

The following segment financial information has been derived from the internal financial statements of the Company which are used by management to monitor and manage financial performance. The accounting policies of the three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2015
Net Interest Income	$	18,800	$	4		$	1	$	(99	)	$	18,706
Net Gains on Sales of Loans	784		—			—		—			784
Net Gains on Securities	235		—			—		27			262
Trust and Investment Product Fees	1		938			—		—			939
Insurance Revenues	1		1			1,513		—			1,515
Noncash Items:
Provision for Loan Losses	250		—			—		—			250
Depreciation and Amortization	1,016		5			27		38			1,086
Income Tax Expense (Benefit)	3,075		(11		)	72		(199		)	2,937
Segment Profit (Loss)	7,268		(24		)	105		(24		)	7,325
Segment Assets at June 30, 2015	2,268,162		11,423			7,405		(27,304		)	2,259,686

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2014
Net Interest Income	$	18,434	$	4		$	1	$	(118	)	$	18,321
Net Gains on Sales of Loans	386		—			—		—			386
Net Gains on Securities	244		—			—		—			244
Trust and Investment Product Fees	—		905			—		—			905
Insurance Revenues	8		6			1,468		—			1,482
Noncash Items:
Provision for Loan Losses	200		—			—		—			200
Depreciation and Amortization	1,132		7			30		37			1,206
Income Tax Expense (Benefit)	2,954		(65		)	99		(191		)	2,797
Segment Profit (Loss)	6,670		(103		)	144		(24		)	6,687
Segment Assets at December 31, 2014	2,242,456		11,401			6,429		(23,187		)	2,237,099

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2015
Net Interest Income	$	37,441	$	8		$	2	$	(196	)	$	37,255
Net Gains on Sales of Loans	1,533		—			—		—			1,533
Net Gains on Securities	698		—			—		27			725
Trust and Investment Product Fees	2		1,921			—		—			1,923
Insurance Revenues	11		18			4,031		—			4,060
Noncash Items:
Provision for Loan Losses	500		—			—		—			500
Depreciation and Amortization	2,068		10			54		75			2,207
Income Tax Expense (Benefit)	6,138		(12		)	492		(379		)	6,239
Segment Profit (Loss)	13,948		(33		)	734		(18		)	14,631
Segment Assets at June 30, 2015	2,268,162		11,423			7,405		(27,304		)	2,259,686

	Core Banking		Trust and Investment Advisory Services			Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2014
Net Interest Income	$	36,747	$	8		$	2	$	(240	)	$	36,517
Net Gains on Sales of Loans	862		—			—		—			862
Net Gains on Securities	472		—			—		—			472
Trust and Investment Product Fees	2		1,825			—		—			1,827
Insurance Revenues	5		11			4,022		—			4,038
Noncash Items:
Provision for Loan Losses	550		—			—		—			550
Depreciation and Amortization	2,275		13			59		75			2,422
Income Tax Expense (Benefit)	5,444		(107		)	600		(408		)	5,529
Segment Profit (Loss)	12,368		(172		)	862		(66		)	12,992
Segment Assets at December 31, 2014	2,242,456		11,401			6,429		(23,187		)	2,237,099

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Stock Repurchase Plan

6 Months Ended

Jun. 30, 2015

Stockholders' Equity Note [Abstract]

Stock Repurchase Plan

Stock Repurchase Plan

On April 26, 2001, the Company announced that its Board of Directors approved a stock repurchase program for up to 607,754 of the outstanding shares of common stock of the Company. Shares may be purchased from time to time in the open market and in large block privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be discontinued at any time before the maximum number of shares specified by the program are purchased. The Board of Directors established no expiration date for this program. As of June 30, 2015, the Company had purchased 334,965 shares under the program. No shares were purchased under the program during the three and six months ended June 30, 2015 and 2014.

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Fair Value

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

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

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

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

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Level 3 pricing is obtained from a third-party based upon similar trades that are not traded frequently without adjustment by the Company. At June 30, 2015, the Company held $11.2 million in Level 3 securities which consist of $10.8 million of non-rated Obligations of State and Political Subdivisions and $353 thousand of equity securities that are not actively traded. Absent the credit rating, significant assumptions must be made such that the credit risk input becomes an unobservable input and thus these securities are reported by the Company in a Level 3 classification.

Derivatives: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2).

Impaired Loans: Fair values for impaired collateral dependent loans are generally based on appraisals obtained from licensed real estate appraisers and in certain circumstances consideration of offers obtained to purchase properties prior to foreclosure. Appraisals for commercial real estate generally use three methods to derive value: cost, sales or market comparison and income approach. The cost method bases value in the cost to replace the current property. Value of market comparison approach evaluates the sales price of similar properties in the same market area. The income approach considers net operating income generated by the property and an investor's required return. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Comparable sales adjustments are based on known sales prices of similar type and similar use properties and duration of time that the property has been on the market to sell. Such adjustments made in the appraisal process are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Company’s Risk Management Area reviews the assumptions and approaches utilized in the appraisal. In determining the value of impaired collateral dependent loans and other real estate owned, significant unobservable inputs may be used which include: physical condition of comparable properties sold, net operating income generated by the property and investor rates of return.

Other Real Estate: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate (ORE) are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property utilizing similar techniques as discussed above for Impaired Loans, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, impairment loss is recognized.

Loans Held-for-Sale: The fair values of loans held for sale are determined by using quoted prices for similar assets, adjusted for specific attributes of that loan resulting in a Level 2 classification.

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	9,890	$	—	$	9,890
Obligations of State and Political Subdivisions	—		171,263		10,825		182,088
Mortgage-backed Securities-Residential	—		426,465		—		426,465
Equity Securities	—		—		353		353
Total Securities	$	—	$	607,618	$	11,178	$	618,796
Loans Held-for-Sale	$	—	$	10,622	$	—	$	10,622
Derivative Assets	$	—	$	440	$	—	$	440
Derivative Liabilities	$	—	$	401	$	—	$	401

	Fair Value Measurements at December 31, 2014 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	19,561	$	—	$	19,561
Obligations of State and Political Subdivisions	—		143,636		10,141		153,777
Mortgage-backed Securities-Residential	—		457,304		—		457,304
Equity Securities	—		—		353		353
Total Securities	$	—	$	620,501	$	10,494	$	630,995
Loans Held-for-Sale	$	—	$	6,311	$	—	$	6,311
Derivative Assets	$	—	$	507	$	—	$	507
Derivative Liabilities	$	—	$	508	$	—	$	508

There were no transfers between Level 1 and Level 2 for the periods ended June 30, 2015 and December 31, 2014.

At June 30, 2015, the aggregate fair value of the Loans Held-for-Sale was $10,622, aggregate contractual principal balance was $10,470 with a difference of $152. At December 31, 2014, the aggregate fair value of the Loans Held-for-Sale was $6,311, aggregate contractual principal balance was $6,227 with a difference of $84.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2015 and 2014:

	Obligations of State and Political Subdivisions					Equity Securities
	2015			2014		2015		2014
Balance of Recurring Level 3 Assets at April 1	$	9,602		$	10,476	$	353	$	353
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(81		)	86		—		—
Maturities / Calls	—			—		—		—
Purchases	1,304			—		—		—
Balance of Recurring Level 3 Assets at June 30	$	10,825		$	10,562	$	353	$	353

	Obligations of State and Political Subdivisions						Equity Securities
	2015			2014			2015		2014
Balance of Recurring Level 3 Assets at January 1	$	10,141		$	10,832		$	353	$	353
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(45		)	155			—		—
Maturities / Calls	(575		)	(425		)	—		—
Purchases	1,304			—			—		—
Balance of Recurring Level 3 Assets at June 30	$	10,825		$	10,562		$	353	$	353

Of the total gain/loss included in other comprehensive income for the three and six months ended June 30, 2015, $(81) and $(45), respectively, was attributable to other changes in fair value. Of the total gain/loss included in earnings for the three and six months ended June 30, 2015, $0 and $1, respectively, was attributable to interest income on securities. Of the total gain/loss included in other comprehensive income for the three and six months ended June 30, 2014, $86 and $155, respectively, was attributable to other changes in fair value. The three and six months ended June 30, 2014 included no gain/loss attributable to interest income on securities.

Assets and Liabilities Measured on a Non-Recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
Impaired Loans
Commercial and Industrial Loans	$	—	$	—	$	—	$	—
Commercial Real Estate Loans	—		—		1,566		1,566
Agricultural Loans	—		—		—		—
Other Real Estate
Commercial Real Estate	—		—		—		—

	Fair Value Measurements at December 31, 2014 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
Impaired Loans
Commercial and Industrial Loans	$	—	$	—	$	—	$	—
Commercial Real Estate Loans	—		—		1,504		1,504
Agricultural Loans	—		—		—		—
Other Real Estate
Commercial Real Estate	—		—		68		68

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $3,143 with a valuation allowance of $1,577, resulting in an additional provision for loan losses of $49 and $35 for the three and six months ended June 30, 2015, respectively. For the three and six months ended June 30, 2014, impaired loans resulted in an additional provision for loan losses of $189 and $156, respectively. Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $3,043 with a valuation allowance of $1,539, resulting in an additional provision for loan losses of $261 for the year ended December 31, 2014.

There was no Other Real Estate carried at fair value less costs to sell at June 30, 2015. No charge to earnings was included in the three and six months ended June 30, 2015 and 2014. Other Real Estate carried at fair value less costs to sell had a carrying value of $68 at December 31, 2014. A charge to earnings through Other Operating Income of $104 was included in the year ended December 31, 2014.

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2015 and December 31, 2014:

June 30, 2015	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired Loans - Commercial Real Estate Loans	$	1,566	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30%-86% (70%)

December 31, 2014	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired Loans - Commercial Real Estate Loans	$	1,504	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30%-86% (71%)
Other Real Estate - Commercial Real Estate Loans	$	68	Sales comparison approach	Adjustment for physical condition of comparable properties sold	55% (55%)

The carrying amounts and estimated fair values of the Company’s financial instruments not previously presented are provided in the tables below for the periods ending June 30, 2015 and December 31, 2014. Not all of the Company’s assets and liabilities are considered financial instruments, and therefore are not included in the table. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates were based on subjective judgments, and therefore cannot be determined with precision.

				Fair Value Measurements at June 30, 2015 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	52,367		$	31,538		$	20,829		$	—		$	52,367
Securities Held-to-Maturity	95			—			95			—			95
Loans, Net	1,454,409			—			—			1,455,587			1,455,587
FHLB Stock and Other Restricted Stock	8,122			N/A			N/A			N/A			N/A
Accrued Interest Receivable	7,920			—			2,352			5,568			7,920
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,439,560		)	(1,439,560		)	—			—			(1,439,560		)
Time Deposits	(323,205		)	—			(324,292		)	—			(324,292		)
Short-term Borrowings	(170,493		)	—			(170,493		)	—			(170,493		)
Long-term Debt	(69,579		)	—			(65,100		)	(5,486		)	(70,586		)
Accrued Interest Payable	(681		)	—			(674		)	(7		)	(681		)

				Fair Value Measurements at December 31, 2014 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	42,546		$	33,481		$	9,065		$	—		$	42,546
Securities Held-to-Maturity	184			—			186			—			186
Loans, Net	1,431,549			—			—			1,432,622			1,432,622
FHLB Stock and Other Restricted Stock	7,040			N/A			N/A			N/A			N/A
Accrued Interest Receivable	8,162			—			2,240			5,922			8,162
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,446,336		)	(1,446,336		)	—			—			(1,446,336		)
Time Deposits	(333,425		)	—			(335,134		)	—			(335,134		)
Short-term Borrowings	(141,473		)	—			(141,473		)	—			(141,473		)
Long-term Debt	(64,591		)	—			(60,289		)	(5,429		)	(65,718		)
Accrued Interest Payable	(754		)	—			(704		)	(50		)	(754		)

Cash and Short-term Investments:

The carrying amount of cash and short-term investments approximate fair values and are classified as Level 1 or Level 2.

Securities Held-to-Maturity:

The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2).

FHLB Stock and Other Restricted Stock:

It is not practical to determine the fair values of FHLB stock and other restricted stock due to restrictions placed on their transferability.

Loans:

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

Accrued Interest Receivable:

The carrying amount of accrued interest approximates fair value resulting in a Level 2 or Level 3 classification consistent with the asset they are associated with.

Deposits:

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, savings and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. Fair values for fixed rate time deposits are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. 

Short-term Borrowings:

The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Long-term Debt:

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification. 

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

Accrued Interest Payable:

The carrying amount of accrued interest approximates fair value resulting in a Level 2 or Level 3 classification consistent with the liability they are associated with.

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Other Comprehensive Income (Loss) (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income, Beginning Balance	$ 6,387	$ (2,999)	$ 2,890	$ (5,263)
Other Comprehensive Income (Loss) Before Reclassification	(5,794)	2,996	(1,996)	5,408
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(170)	(159)	(471)	(307)
Total Other Comprehensive Income (Loss)	(5,964)	2,837	(2,467)	5,101
Accumulated other comprehensive income, Ending Balance	423	(162)	423	(162)
Unrealized Gains and Losses on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income, Beginning Balance	6,455	(2,967)	2,958	(5,231)
Other Comprehensive Income (Loss) Before Reclassification	(5,794)	2,996	(1,996)	5,408
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(170)	(159)	(471)	(307)
Total Other Comprehensive Income (Loss)	(5,964)	2,837	(2,467)	5,101
Accumulated other comprehensive income, Ending Balance	491	(130)	491	(130)
Defined Benefit Pension Items
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income, Beginning Balance	0	0	0	0
Other Comprehensive Income (Loss) Before Reclassification	0	0	0	0
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	0	0	0	0
Total Other Comprehensive Income (Loss)	0	0	0	0
Accumulated other comprehensive income, Ending Balance	0	0	0	0
Postretirement Benefit Items
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income, Beginning Balance	(68)	(32)	(68)	(32)
Other Comprehensive Income (Loss) Before Reclassification	0	0	0	0
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	0	0	0	0
Total Other Comprehensive Income (Loss)	0	0	0	0
Accumulated other comprehensive income, Ending Balance	$ (68)	$ (32)	$ (68)	$ (32)

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Newly Issued Accounting Pronouncements (Additional Information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Accrued Interest Receivable and Other Assets
Schedule of Equity Method Investments [Line Items]
Investments in qualified housing projects	$ 5,900		$ 5,900		$ 6,100
Accrued Interest Payable and Other Liabilities
Schedule of Equity Method Investments [Line Items]
Unfunded investment in qualified affordable housing investments	4,600		4,600		$ 4,800
Income Tax Expense
Schedule of Equity Method Investments [Line Items]
Low income housing investment tax credit (loss), amortization method	40		(80)
Low income housing investment (benefit) losses, equity method		$ (35)		$ (70)
Other Operating Expense
Schedule of Equity Method Investments [Line Items]
Low income housing investment (benefit) losses, equity method		$ 23		$ 43
FASB Issued Guidance For Qualified Housing Projects
Schedule of Equity Method Investments [Line Items]
Low income housing investment loss, due to adoption of amortization method	$ 161		$ 161

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Fair Value (Carrying Amounts and Estimated Fair Values of Company's Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financial Assets:
Securities Held-to-Maturity	$ 95	$ 184
Loans, Net	1,457,388	1,433,053
FHLB Stock and Other Restricted Stock	8,122	7,040
Financial Liabilities:
Time Deposits	(323,205)	(333,425)
Level 1
Financial Assets:
Cash and Short-term Investments	31,538	33,481
Securities Held-to-Maturity	0	0
Loans, Net	0	0
Accrued Interest Receivable	0	0
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,439,560)	(1,446,336)
Time Deposits	0	0
Short-term Borrowings	0	0
Long-term Debt	0	0
Accrued Interest Payable	0	0
Level 2
Financial Assets:
Cash and Short-term Investments	20,829	9,065
Securities Held-to-Maturity	95	186
Loans, Net	0	0
Accrued Interest Receivable	2,352	2,240
Financial Liabilities:
Demand, Savings, and Money Market Deposits	0	0
Time Deposits	(324,292)	(335,134)
Short-term Borrowings	(170,493)	(141,473)
Long-term Debt	(65,100)	(60,289)
Accrued Interest Payable	(674)	(704)
Level 3
Financial Assets:
Cash and Short-term Investments	0	0
Securities Held-to-Maturity	0	0
Loans, Net	1,455,587	1,432,622
Accrued Interest Receivable	5,568	5,922
Financial Liabilities:
Demand, Savings, and Money Market Deposits	0	0
Time Deposits	0	0
Short-term Borrowings	0	0
Long-term Debt	(5,486)	(5,429)
Accrued Interest Payable	(7)	(50)
Carrying Value
Financial Assets:
Cash and Short-term Investments	52,367	42,546
Securities Held-to-Maturity	95	184
Loans, Net	1,454,409	1,431,549
FHLB Stock and Other Restricted Stock	8,122	7,040
Accrued Interest Receivable	7,920	8,162
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,439,560)	(1,446,336)
Time Deposits	(323,205)	(333,425)
Short-term Borrowings	(170,493)	(141,473)
Long-term Debt	(69,579)	(64,591)
Accrued Interest Payable	(681)	(754)
Total
Financial Assets:
Cash and Short-term Investments	52,367	42,546
Securities Held-to-Maturity	95	186
Loans, Net	1,455,587	1,432,622
Accrued Interest Receivable	7,920	8,162
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,439,560)	(1,446,336)
Time Deposits	(324,292)	(335,134)
Short-term Borrowings	(170,493)	(141,473)
Long-term Debt	(70,586)	(65,718)
Accrued Interest Payable	$ (681)	$ (754)

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Securities (Schedule of Securities with Unrealized Losses) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	$ 177,303	$ 30,371
Less than 12 Months Unrealized Loss	(2,236)	(216)
12 Months or More Fair Value	154,447	233,538
12 Months or More Unrealized Loss	(3,950)	(5,302)
Total Fair Value	331,750	263,909
Total Unrealized Loss	(6,186)	(5,518)
U.S. Treasury and Agency Securities
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	0	0
Less than 12 Months Unrealized Loss	0	0
12 Months or More Fair Value	9,890	19,561
12 Months or More Unrealized Loss	(110)	(439)
Total Fair Value	9,890	19,561
Total Unrealized Loss	(110)	(439)
Obligations of State and Political Subdivisions
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	55,209	3,765
Less than 12 Months Unrealized Loss	(1,102)	(25)
12 Months or More Fair Value	351	4,298
12 Months or More Unrealized Loss	(8)	(34)
Total Fair Value	55,560	8,063
Total Unrealized Loss	(1,110)	(59)
Mortgage-backed Securities - Residential
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	122,094	26,606
Less than 12 Months Unrealized Loss	(1,134)	(191)
12 Months or More Fair Value	144,206	209,679
12 Months or More Unrealized Loss	(3,832)	(4,829)
Total Fair Value	266,300	236,285
Total Unrealized Loss	(4,966)	(5,020)
Equity Securities
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	0	0
Less than 12 Months Unrealized Loss	0	0
12 Months or More Fair Value	0	0
12 Months or More Unrealized Loss	0	0
Total Fair Value	0	0
Total Unrealized Loss	$ 0	$ 0

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Loans (Schedule of Accretable Yield, or Income Expected to be Collected) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning Balance	$ 1,626	$ 1,201	$ 1,685	$ 1,279
New Loans Purchased	0	0	0	0
Accretion of Income	(23)	(75)	(82)	(153)
Reclassifications from Non-accretable Difference	104	0	104	0
Charge-off of Accretable Yield	(27)	0	(27)	0
Ending Balance	$ 1,680	$ 1,126	$ 1,680	$ 1,126

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Securities (Tables)

6 Months Ended

Jun. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Schedule of Securities Available-for-Sale

The amortized cost, unrealized gross gains and losses recognized in accumulated other comprehensive income (loss), and fair value of Securities Available-for-Sale at June 30, 2015 and December 31, 2014, were as follows:

Securities Available-for-Sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2015
U.S. Treasury and Agency Securities	$	10,000	$	—	$	(110	)	$	9,890
Obligations of State and Political Subdivisions	178,386		4,812		(1,110		)	182,088
Mortgage-backed Securities - Residential	429,257		2,174		(4,966		)	426,465
Equity Securities	353		—		—			353
Total	$	617,996	$	6,986	$	(6,186	)	$	618,796
December 31, 2014
U.S. Treasury and Agency Securities	$	20,000	$	—	$	(439	)	$	19,561
Obligations of State and Political Subdivisions	147,321		6,515		(59		)	153,777
Mortgage-backed Securities - Residential	458,709		3,615		(5,020		)	457,304
Equity Securities	353		—		—			353
Total	$	626,383	$	10,130	$	(5,518	)	$	630,995

Schedule of Securities Held-to-Maturity

The carrying amount, unrecognized gains and losses and fair value of Securities Held-to-Maturity at June 30, 2015 and December 31, 2014, were as follows:

Securities Held-to-Maturity:	Carrying Amount		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
June 30, 2015
Obligations of State and Political Subdivisions	$	95	$	—	$	—	$	95
December 31, 2014
Obligations of State and Political Subdivisions	$	184	$	2	$	—	$	186

Schedule of Securities by Contractual Maturity

The amortized cost and fair value of Securities at June 30, 2015 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay certain obligations with or without call or prepayment penalties. Mortgage-backed and Equity Securities are not due at a single maturity date and are shown separately.

Securities Available-for-Sale:	Amortized Cost		Fair Value
Due in one year or less	$	6,173	$	6,270
Due after one year through five years	18,574		18,694
Due after five years through ten years	65,573		68,131
Due after ten years	98,066		98,883
Mortgage-backed Securities - Residential	429,257		426,465
Equity Securities	353		353
Total	$	617,996	$	618,796

Securities Held-to-Maturity:	Carrying Amount		Fair Value
Due in one year or less	$	95	$	95
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	—		—
Total	$	95	$	95

Schedule of Proceeds from the Sales of Securities

Proceeds from the Sales of Securities are summarized below:

	Three Months Ended		Three Months Ended
	June 30, 2015		June 30, 2014
Proceeds from Sales	$	9,191	$	6,983
Gross Gains on Sales	262		244
Income Taxes on Gross Gains	92		85

	Six Months Ended		Six Months Ended
	June 30, 2015		June 30, 2014
Proceeds from Sales	$	18,999	$	7,237
Gross Gains on Sales	725		472
Income Taxes on Gross Gains	254		165

Schedule of Securities with Unrealized Losses

Below is a summary of securities with unrealized losses as of June 30, 2015 and December 31, 2014, presented by length of time the securities have been in a continuous unrealized loss position:

	Less than 12 Months					12 Months or More					Total
June 30, 2015	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury and Agency Securities	$	—	$	—		$	9,890	$	(110	)	$	9,890	$	(110	)
Obligations of State and Political Subdivisions	55,209		(1,102		)	351		(8		)	55,560		(1,110		)
Mortgage-backed Securities - Residential	122,094		(1,134		)	144,206		(3,832		)	266,300		(4,966		)
Equity Securities	—		—			—		—			—		—
Total	$	177,303	$	(2,236	)	$	154,447	$	(3,950	)	$	331,750	$	(6,186	)

	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury and Agency Securities	$	—	$	—		$	19,561	$	(439	)	$	19,561	$	(439	)
Obligations of State and Political Subdivisions	3,765		(25		)	4,298		(34		)	8,063		(59		)
Mortgage-backed Securities - Residential	26,606		(191		)	209,679		(4,829		)	236,285		(5,020		)
Equity Securities	—		—			—		—			—		—
Total	$	30,371	$	(216	)	$	233,538	$	(5,302	)	$	263,909	$	(5,518	)

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	9,890	$	—	$	9,890
Obligations of State and Political Subdivisions	—		171,263		10,825		182,088
Mortgage-backed Securities-Residential	—		426,465		—		426,465
Equity Securities	—		—		353		353
Total Securities	$	—	$	607,618	$	11,178	$	618,796
Loans Held-for-Sale	$	—	$	10,622	$	—	$	10,622
Derivative Assets	$	—	$	440	$	—	$	440
Derivative Liabilities	$	—	$	401	$	—	$	401

	Fair Value Measurements at December 31, 2014 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
U.S. Treasury and Agency Securities	$	—	$	19,561	$	—	$	19,561
Obligations of State and Political Subdivisions	—		143,636		10,141		153,777
Mortgage-backed Securities-Residential	—		457,304		—		457,304
Equity Securities	—		—		353		353
Total Securities	$	—	$	620,501	$	10,494	$	630,995
Loans Held-for-Sale	$	—	$	6,311	$	—	$	6,311
Derivative Assets	$	—	$	507	$	—	$	507
Derivative Liabilities	$	—	$	508	$	—	$	508

Reconciliation of all Assets Measured at Fair Value on Recurring Basis, Using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2015 and 2014:

	Obligations of State and Political Subdivisions					Equity Securities
	2015			2014		2015		2014
Balance of Recurring Level 3 Assets at April 1	$	9,602		$	10,476	$	353	$	353
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(81		)	86		—		—
Maturities / Calls	—			—		—		—
Purchases	1,304			—		—		—
Balance of Recurring Level 3 Assets at June 30	$	10,825		$	10,562	$	353	$	353

	Obligations of State and Political Subdivisions						Equity Securities
	2015			2014			2015		2014
Balance of Recurring Level 3 Assets at January 1	$	10,141		$	10,832		$	353	$	353
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(45		)	155			—		—
Maturities / Calls	(575		)	(425		)	—		—
Purchases	1,304			—			—		—
Balance of Recurring Level 3 Assets at June 30	$	10,825		$	10,562		$	353	$	353

Assets and Liabilities Measured at Fair Value on Non-Recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis are summarized below:

	Fair Value Measurements at June 30, 2015 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
Impaired Loans
Commercial and Industrial Loans	$	—	$	—	$	—	$	—
Commercial Real Estate Loans	—		—		1,566		1,566
Agricultural Loans	—		—		—		—
Other Real Estate
Commercial Real Estate	—		—		—		—

	Fair Value Measurements at December 31, 2014 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
Assets:
Impaired Loans
Commercial and Industrial Loans	$	—	$	—	$	—	$	—
Commercial Real Estate Loans	—		—		1,504		1,504
Agricultural Loans	—		—		—		—
Other Real Estate
Commercial Real Estate	—		—		68		68

Fair Value Assets and Liabilities Measured on Nonrecurring Basis Valuation Techniques

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2015 and December 31, 2014:

June 30, 2015	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired Loans - Commercial Real Estate Loans	$	1,566	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30%-86% (70%)

December 31, 2014	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Impaired Loans - Commercial Real Estate Loans	$	1,504	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30%-86% (71%)
Other Real Estate - Commercial Real Estate Loans	$	68	Sales comparison approach	Adjustment for physical condition of comparable properties sold	55% (55%)

Carrying Amounts and Estimated Fair Values of Company's Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments not previously presented are provided in the tables below for the periods ending June 30, 2015 and December 31, 2014. Not all of the Company’s assets and liabilities are considered financial instruments, and therefore are not included in the table. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates were based on subjective judgments, and therefore cannot be determined with precision.

				Fair Value Measurements at June 30, 2015 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	52,367		$	31,538		$	20,829		$	—		$	52,367
Securities Held-to-Maturity	95			—			95			—			95
Loans, Net	1,454,409			—			—			1,455,587			1,455,587
FHLB Stock and Other Restricted Stock	8,122			N/A			N/A			N/A			N/A
Accrued Interest Receivable	7,920			—			2,352			5,568			7,920
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,439,560		)	(1,439,560		)	—			—			(1,439,560		)
Time Deposits	(323,205		)	—			(324,292		)	—			(324,292		)
Short-term Borrowings	(170,493		)	—			(170,493		)	—			(170,493		)
Long-term Debt	(69,579		)	—			(65,100		)	(5,486		)	(70,586		)
Accrued Interest Payable	(681		)	—			(674		)	(7		)	(681		)

				Fair Value Measurements at December 31, 2014 Using
	Carrying Value			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash and Short-term Investments	$	42,546		$	33,481		$	9,065		$	—		$	42,546
Securities Held-to-Maturity	184			—			186			—			186
Loans, Net	1,431,549			—			—			1,432,622			1,432,622
FHLB Stock and Other Restricted Stock	7,040			N/A			N/A			N/A			N/A
Accrued Interest Receivable	8,162			—			2,240			5,922			8,162
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(1,446,336		)	(1,446,336		)	—			—			(1,446,336		)
Time Deposits	(333,425		)	—			(335,134		)	—			(335,134		)
Short-term Borrowings	(141,473		)	—			(141,473		)	—			(141,473		)
Long-term Debt	(64,591		)	—			(60,289		)	(5,429		)	(65,718		)
Accrued Interest Payable	(754		)	—			(704		)	(50		)	(754		)

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Loans (Schedule of Recorded Investment in Home Equity, Consumer and Residential Mortgage Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015		Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 1,481,885	[1],[2]	$ 1,457,768	[3],[4]
Home Equity Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	88,639	[1]	86,570	[4]
Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	47,700	[1]	48,732	[4]
Residential Mortgage Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	137,479	[1]	137,549	[4]
Performing | Home Equity Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	88,334		86,302
Performing | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	47,624		48,536
Performing | Residential Mortgage Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	136,056		135,664
Nonperforming | Home Equity Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	305		268
Nonperforming | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	76		196
Nonperforming | Residential Mortgage Loans
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,423		1,885
Receivables Acquired with Deteriorated Credit Quality
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	7,217		8,361
Receivables Acquired with Deteriorated Credit Quality | Home Equity Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	0		0
Receivables Acquired with Deteriorated Credit Quality | Consumer Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	0		118
Receivables Acquired with Deteriorated Credit Quality | Residential Mortgage Loans
Financing Receivable, Recorded Investment [Line Items]
Loans Acquired With Deteriorated Credit Quality (Included in the Total Above)	$ 880		$ 1,504

[1] Total recorded investment in loans includes $5,417 in accrued interest.

[2] Total recorded investment in loans includes $5,417 in accrued interest.

[3] Total recorded investment in loans includes $5,778 in accrued interest.

[4] Total recorded investment in loans includes $5,778 in accrued interest.

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Loans (Schedule of Allowance for Loan Losses and Recorded Investment in Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015		Mar. 31, 2015	Dec. 31, 2014		Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Allowance for Loan Losses:
Individually Evaluated for Impairment	$ 1,603			$ 1,532
Collectively Evaluated for Impairment	13,645			13,343
Total Ending Allowance Balance	15,258		$ 15,169	14,929		$ 15,550	$ 15,484	$ 14,584
Loans:
Loans Individually Evaluated for Impairment	6,065			6,044
Loans Collectively Evaluated for Impairment	1,468,603			1,443,363
Total loans	1,481,885	[1],[2]		1,457,768	[3],[4]
Accrued interest	5,417			5,778
Commercial and Industrial Loans and Leases
Allowance for Loan Losses:
Individually Evaluated for Impairment	103			87
Collectively Evaluated for Impairment	4,556			4,540
Total Ending Allowance Balance	4,659		4,747	4,627		5,661	5,374	3,983
Loans:
Loans Individually Evaluated for Impairment	2,029			1,964
Loans Collectively Evaluated for Impairment	395,321			378,533
Total loans	397,753	[1]		380,851	[4]
Commercial Real Estate Loans
Allowance for Loan Losses:
Individually Evaluated for Impairment	1,500			1,445
Collectively Evaluated for Impairment	5,805			5,818
Total Ending Allowance Balance	7,315		7,229	7,273		7,199	7,870	8,335
Loans:
Loans Individually Evaluated for Impairment	4,024			4,080
Loans Collectively Evaluated for Impairment	575,765			573,961
Total loans	585,723	[1]		584,426	[4]
Agricultural Loans
Allowance for Loan Losses:
Individually Evaluated for Impairment	0			0
Collectively Evaluated for Impairment	1,223			1,123
Total Ending Allowance Balance	1,223		1,142	1,123		1,016	930	946
Loans:
Loans Individually Evaluated for Impairment	12			0
Loans Collectively Evaluated for Impairment	224,579			219,640
Total loans	224,591	[1]		219,640	[4]
Home Equity Loans
Allowance for Loan Losses:
Individually Evaluated for Impairment	0			0
Collectively Evaluated for Impairment	350			246
Total Ending Allowance Balance	350		318	246		418	209	239
Loans:
Loans Individually Evaluated for Impairment	0			0
Loans Collectively Evaluated for Impairment	88,639			86,570
Total loans	88,639	[1]		86,570	[4]
Consumer Loans
Allowance for Loan Losses:
Individually Evaluated for Impairment	0			0
Collectively Evaluated for Impairment	382			354
Total Ending Allowance Balance	382		389	354		326	186	188
Loans:
Loans Individually Evaluated for Impairment	0			0
Loans Collectively Evaluated for Impairment	47,700			48,614
Total loans	47,700	[1]		48,732	[4]
Residential Mortgage Loans
Allowance for Loan Losses:
Individually Evaluated for Impairment	0			0
Collectively Evaluated for Impairment	619			578
Total Ending Allowance Balance	619		673	622		435	257	281
Loans:
Loans Individually Evaluated for Impairment	0			0
Loans Collectively Evaluated for Impairment	136,599			136,045
Total loans	137,479	[1]		137,549	[4]
Unallocated
Allowance for Loan Losses:
Individually Evaluated for Impairment	0			0
Collectively Evaluated for Impairment	710			684
Total Ending Allowance Balance	710		$ 671	684		$ 495	$ 658	$ 612
Receivables Acquired with Deteriorated Credit Quality
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	10			54
Loans:
Loans Acquired with Deteriorated Credit Quality	7,217			8,361
Receivables Acquired with Deteriorated Credit Quality | Commercial and Industrial Loans and Leases
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	0			0
Loans:
Loans Acquired with Deteriorated Credit Quality	403			354
Receivables Acquired with Deteriorated Credit Quality | Commercial Real Estate Loans
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	10			10
Loans:
Loans Acquired with Deteriorated Credit Quality	5,934			6,385
Receivables Acquired with Deteriorated Credit Quality | Agricultural Loans
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	0			0
Loans:
Loans Acquired with Deteriorated Credit Quality	0			0
Receivables Acquired with Deteriorated Credit Quality | Home Equity Loans
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	0			0
Loans:
Loans Acquired with Deteriorated Credit Quality	0			0
Receivables Acquired with Deteriorated Credit Quality | Consumer Loans
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	0			0
Loans:
Loans Acquired with Deteriorated Credit Quality	0			118
Receivables Acquired with Deteriorated Credit Quality | Residential Mortgage Loans
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	0			44
Loans:
Loans Acquired with Deteriorated Credit Quality	880			1,504
Receivables Acquired with Deteriorated Credit Quality | Unallocated
Allowance for Loan Losses:
Acquired with Deteriorated Credit Quality	$ 0			$ 0

[1] Total recorded investment in loans includes $5,417 in accrued interest.

[2] Total recorded investment in loans includes $5,417 in accrued interest.

[3] Total recorded investment in loans includes $5,778 in accrued interest.

[4] Total recorded investment in loans includes $5,778 in accrued interest.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 7,325	$ 6,687	$ 14,631	$ 12,992
Unrealized Gains (Losses) on Securities
Unrealized Holding Gain (Loss) Arising During the Period	(8,955)	4,647	(3,087)	8,380
Reclassification Adjustment for Losses (Gains) Included in Net Income	(262)	(244)	(725)	(472)
Tax Effect	3,253	(1,566)	1,345	(2,807)
Net of Tax	(5,964)	2,837	(2,467)	5,101
Total Other Comprehensive Income (Loss)	(5,964)	2,837	(2,467)	5,101
COMPREHENSIVE INCOME	$ 1,361	$ 9,524	$ 12,164	$ 18,093

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Derivatives

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. The notional amounts of these interest rate swaps and the offsetting counterparty derivative instruments were $21.2 million at June 30, 2015 and $23.1 million at December 31, 2014. These interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions with approved, reputable, independent counterparties with substantially matching terms. The agreements are considered stand alone derivatives and changes in the fair value of derivatives are reported in earnings as non-interest income. 

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts. The Company’s exposure is limited to the replacement value of the contracts rather than the notional, principal or contract amounts. There are provisions in the agreements with the counterparties that allow for certain unsecured credit exposure up to an agreed threshold. Exposures in excess of the agreed thresholds are collateralized. In addition, the Company minimizes credit risk through credit approvals, limits, and monitoring procedures.

The following table reflects the fair value hedges included in the Consolidated Balance Sheets as of:

	June 30, 2015				December 31, 2014
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Other Assets:
Interest Rate Swaps	$	21,192	$	440	$	23,104	$	507
Included in Other Liabilities:
Interest Rate Swaps	$	21,192	$	401	$	23,104	$	508

The following tables present the effect of derivative instruments on the Consolidated Statements of Income for the periods presented:

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2015		2014		2015		2014
Interest Rate Swaps:
Included in Interest Income / (Expense)	$	—	$	—	$	—	$	—
Included in Other Income / (Expense)	107		116		165		78

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Fair Value (Additional Information) (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loan held for sale, at fair value	$ 10,622,000		$ 10,622,000		$ 6,311,000
Contractual principal balance of Loan held for sale	10,470,000		10,470,000		6,227,000
Difference in amount of loan held for sale	152,000		152,000		84,000
Valuation allowance for loans losses	1,613,000		1,613,000		1,542,000
Cost of real estate sales	0	$ 0	0	$ 0	104,000
Other real estate, carrying value	0		0		68,000
Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	618,796,000		618,796,000		630,995,000
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	11,178,000		11,178,000		10,494,000
Obligations of State and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(81,000)	86,000	(45,000)	155,000
Obligations of State and Political Subdivisions | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	182,088,000		182,088,000		153,777,000
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	(81,000)	86,000	(45,000)	155,000
Obligations of State and Political Subdivisions | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	10,825,000		10,825,000		10,141,000
Equity Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Gains or Losses (realized/unrealized) Included in Earnings	0	0	1,000	0
Equity Securities | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	353,000		353,000		353,000
Total Gains or Losses (realized/unrealized) Included in Other Comprehensive Income	0	0	0	0
Equity Securities | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	353,000		353,000		353,000
Commercial Real Estate
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impaired loans, carrying amount	3,143,000		3,143,000		3,043,000
Valuation allowance for loans losses	1,577,000		1,577,000		1,539,000
Provision for loan losses	$ 49,000		$ 35,000		$ 261,000
Provision for loan lease and other losses		$ 189,000		$ 156,000

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Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2015 and 2014, net of tax:

June 30, 2015	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at April 1, 2015	$	6,455		$	—	$	(68	)	$	6,387
Other Comprehensive Income (Loss) Before Reclassification	(5,794		)	—		—			(5,794		)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(170		)	—		—			(170		)
Net Current Period Other Comprehensive Income (Loss)	(5,964		)	—		—			(5,964		)
Ending Balance at June 30, 2015	$	491		$	—	$	(68	)	$	423

	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at January 1, 2015	$	2,958		$	—	$	(68	)	$	2,890
Other Comprehensive Income (Loss) Before Reclassification	(1,996		)	—		—			(1,996		)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(471		)	—		—			(471		)
Net Current Period Other Comprehensive Income (Loss)	(2,467		)	—		—			(2,467		)
Ending Balance at June 30, 2015	$	491		$	—	$	(68	)	$	423

June 30, 2014	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at April 1, 2014	$	(2,967	)	$	—	$	(32	)	$	(2,999	)
Other Comprehensive Income (Loss) Before Reclassification	2,996			—		—			2,996
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(159		)	—		—			(159		)
Net Current Period Other Comprehensive Income (Loss)	2,837			—		—			2,837
Ending Balance at June 30, 2014	$	(130	)	$	—	$	(32	)	$	(162	)

	Unrealized Gains and Losses on Available-for-Sale Securities			Defined Benefit Pension Items		Postretirement Benefit Items			Total
Beginning Balance at January 1, 2014	$	(5,231	)	$	—	$	(32	)	$	(5,263	)
Other Comprehensive Income (Loss) Before Reclassification	5,408			—		—			5,408
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(307		)	—		—			(307		)
Net Current Period Other Comprehensive Income (Loss)	5,101			—		—			5,101
Ending Balance at June 30, 2014	$	(130	)	$	—	$	(32	)	$	(162	)

Classifications Out of Accumulated Other Comprehensive Income

The tables below summarize the classifications out of accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2015 and 2014:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	262		Net Gain (Loss) on Securities
	(92		)	Income Tax Expense
	170			Net of Tax
Total Reclassifications for the Three Months Ended June 30, 2015	$	170

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	725		Net Gain (Loss) on Securities
	(254		)	Income Tax Expense
	471			Net of Tax
Total Reclassifications for the Six Months Ended June 30, 2015	$	471

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	244		Net Gain (Loss) on Securities
	(85		)	Income Tax Expense
	159			Net of Tax
Total Reclassifications for the Three Months Ended June 30, 2014	$	159

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified From Accumulated Other Comprehensive Income (Loss)			Affected Line Item in the Statement Where Net Income is Presented
Unrealized Gains and Losses on Available-for-Sale Securities	$	472		Net Gain (Loss) on Securities
	(165		)	Income Tax Expense
	307			Net of Tax
Total Reclassifications for the Six Months Ended June 30, 2014	$	307

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Repurchase Agreements Accounted for as Secured Borrowings (Details) $ in Thousands	Jun. 30, 2015 USD ($)
FHLB Advances and Other Borrowings | Collateralized Mortgage Backed Securities | Maturity Overnight
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Total repurchased agreement	$ 14,093

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Per Share Data (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Computations of Basic Earnings Per Share and Diluted Earnings Per Share

The computations of Basic Earnings per Share and Diluted Earnings per Share are as follows:

	Three Months Ended   June 30,
	2015		2014
Basic Earnings per Share:
Net Income	$	7,325	$	6,687
Weighted Average Shares Outstanding	13,256,026		13,210,150
Basic Earnings per Share	$	0.55	$	0.51
Diluted Earnings per Share:
Net Income	$	7,325	$	6,687
Weighted Average Shares Outstanding	13,256,026		13,210,150
Potentially Dilutive Shares, Net	7,578		20,662
Diluted Weighted Average Shares Outstanding	13,263,604		13,230,812
Diluted Earnings per Share	$	0.55	$	0.51

For the three months ended June 30, 2015 and 2014, there were no anti-dilutive shares.

The computations of Basic Earnings per Share and Diluted Earnings per Share are as follows:

	Six Months Ended   June 30,
	2015		2014
Basic Earnings per Share:
Net Income	$	14,631	$	12,992
Weighted Average Shares Outstanding	13,238,836		13,194,754
Basic Earnings per Share	$	1.11	$	0.98
Diluted Earnings per Share:
Net Income	$	14,631	$	12,992
Weighted Average Shares Outstanding	13,238,836		13,194,754
Potentially Dilutive Shares, Net	7,523		21,330
Diluted Weighted Average Shares Outstanding	13,246,359		13,216,084
Diluted Earnings per Share	$	1.10	$	0.98