10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2014

or

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

For the transition period from _____________ to _____________

Commission File Number: 001-34527

EMCLAIRE FINANCIAL CORP

(Exact name of registrant as specified in its charter)

Pennsylvania	25-1606091
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
612 Main Street, Emlenton, Pennsylvania	16373
(Address of principal executive offices)	(Zip Code)

(724) 867-2311

(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  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 as defined in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨     No  x

The number of shares outstanding of the Registrant’s common stock was 1,770,158 at May 13, 2014.

EMCLAIRE FINANCIAL CORP

INDEX TO QUARTERLY REPORT ON FORM 10-Q

	PART I – FINANCIAL INFORMATION
Item 1.	Interim Financial Statements (Unaudited)
	Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013	1
	Consolidated Statements of Net Income for the three months ended March 31, 2014 and 2013	2
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2014 and 2013	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013	4
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2014 and 2013	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	34
Signatures		35

PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements

Emclaire Financial Corp

Consolidated Balance Sheets

As of March 31, 2014 (Unaudited) and December 31, 2013

(Dollar amounts in thousands, except per share data)

	March 31,			December 31,
	2014			2013
Assets
Cash and due from banks	$	2,127		$	2,485
Interest earning deposits with banks		26,639			14,173
Cash and cash equivalents		28,766			16,658
Securities available for sale		122,196			117,304
Loans receivable, net of allowance for loan losses of $4,921 and $4,869		344,915			352,430
Federal bank stocks, at cost		2,752			3,977
Bank-owned life insurance		10,484			10,401
Accrued interest receivable		1,553			1,466
Premises and equipment, net		12,839			12,310
Goodwill		3,664			3,664
Core deposit intangible, net		908			965
Prepaid expenses and other assets		6,800			6,667
Total Assets	$	534,877		$	525,842
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing	$	111,318		$	104,269
Interest bearing		355,844			327,737
Total deposits		467,162			432,006
Short-term borrowed funds		2,150			24,150
Long-term borrowed funds		15,000			20,000
Accrued interest payable		255			292
Accrued expenses and other liabilities		4,365			4,322
Total Liabilities		488,932			480,770
Commitments and Contingent Liabilities		-			-
Stockholders' Equity:
Preferred stock, $1.00 par value, 3,000,000 shares authorized;
Series B, non-cumulative preferred stock, $5,000 liquidation value, 5,000 shares issued and outstanding		5,000			5,000
Common stock, $1.25 par value, 12,000,000 shares authorized; 1,872,175 and 1,870,675 shares issued; 1,770,158 and 1,768,658 shares outstanding		2,340			2,338
Additional paid-in capital		19,544			19,478
Treasury stock, at cost; 102,017 shares		(2,114	)		(2,114	)
Retained earnings		24,077			23,650
Accumulated other comprehensive loss		(2,902	)		(3,280	)
Total Stockholders' Equity		45,945			45,072
Total Liabilities and Stockholders' Equity	$	534,877		$	525,842

See accompanying notes to consolidated financial statements.

1

Emclaire Financial Corp

Consolidated Statements of Net Income (Unaudited)

For the three months ended March 31, 2014 and 2013

(Dollar amounts in thousands, except per share data)

	For the three months ended
	March 31,
	2014		2013
Interest and dividend income:
Loans receivable, including fees	$	4,030	$	4,200
Securities:
Taxable		404		417
Exempt from federal income tax		265		266
Federal bank stocks		35		17
Interest earning deposits with banks		11		14
Total interest and dividend income		4,745		4,914
Interest expense:
Deposits		561		838
Borrowed funds		180		198
Total interest expense		741		1,036
Net interest income		4,004		3,878
Provision for loan losses		163		143
Net interest income after provision for loan losses		3,841		3,735
Noninterest income:
Fees and service charges		378		398
Commissions on financial services		9		64
Title premiums		8		22
Net gain on sales of available for sale securities		658		85
Earnings on bank-owned life insurance		99		96
Other		287		266
Total noninterest income		1,439		931
Noninterest expense:
Compensation and employee benefits		1,943		1,905
Premises and equipment		600		542
Intangible asset amortization		57		73
Professional fees		163		177
Federal deposit insurance		88		105
Other		1,371		773
Total noninterest expense		4,222		3,575
Income before provision for income taxes		1,058		1,091
Provision for income taxes		217		233
Net income		841		858
Preferred stock dividends		25		125
Net income available to common stockholders	$	816	$	733
Basic and diluted earnings per common share	$	0.46	$	0.42
Average common shares outstanding		1,769,389		1,760,927

See accompanying notes to consolidated financial statements.

2

Emclaire Financial Corp

Consolidated Statements of Comprehensive Income (Unaudited)

For the three months ended March 31, 2014 and 2013

(Dollar amounts in thousands)

	For the three months ended
	March 31,
	2014			2013
Net income	$	841		$	858
Other comprehensive income (loss)
Unrealized gains (losses) on securities:
Unrealized holding gain (loss) arising during the period		1,231			(361	)
Reclassification adjustment for gains included in net income		(658	)		(85	)
		573			(446	)
Tax effect		(195	)		152
Net of tax		378			(294	)
Comprehensive income	$	1,219		$	564

See accompanying notes to consolidated financial statements.

3

Emclaire Financial Corp

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the three months ended March 31, 2014 and 2013

(Dollar amounts in thousands)

	For the three months ended
	March 31,
	2014			2013
Cash flows from operating activities
Net income	$	841		$	858
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		184			171
Provision for loan losses		163			143
Amortization of premiums, net		65			36
Amortization of intangible assets and mortgage servicing rights		57			73
Realized gains on sales of available for sale securities, net		(658	)		(85	)
Net gains on foreclosed real estate		(2	)		(10	)
Restricted stock and stock option compensation		42			35
Increase in bank-owned life insurance, net		(83	)		(82	)
Increase in accrued interest receivable		(87	)		(171	)
(Increase) decrease in prepaid expenses and other assets		(354	)		84
Decrease in accrued interest payable		(37	)		(54	)
Increase in accrued expenses and other liabilities		43			103
Net cash provided by operating activities		174			1,101
Cash flows from investing activities
Loan originations and principal collections, net		7,285			(5,697	)
Available for sale securities:
Sales		21,559			1,775
Maturities, repayments and calls		1,131			14,615
Purchases		(26,350	)		(12,944	)
Redemption of federal bank stocks		1,225			68
Proceeds from the sale of foreclosed real estate		29			59
Write-down of foreclosed real estate		-			19
Additions to premises and equipment		(713	)		(296	)
Net cash provided by (used in) investing activities		4,166			(2,401	)
Cash flows from financing activities
Net increase in deposits		35,156			4,779
Repayments on Federal Home Loan Bank advances		(5,000	)		-
Net change in short-term borrowings		(22,000	)		-
Proceeds from exercise of stock options, including tax benefit		26			20
Dividends paid		(414	)		(478	)
Net cash provided by financing activities		7,768			4,321
Increase in cash and cash equivalents		12,108			3,021
Cash and cash equivalents at beginning of period		16,658			20,424
Cash and cash equivalents at end of period	$	28,766		$	23,445
Supplemental information:
Interest paid	$	778		$	1,090
Supplemental noncash disclosure:
Transfers from loans to foreclosed real estate		-			92

See accompanying notes to consolidated financial statements.

4

Emclaire Financial Corp

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the three months ended March 31, 2014 and 2013

(Dollar amounts in thousands, except per share data)

	For the three months ended
	March 31,
	2014			2013
Balance at beginning of period	$	45,072		$	51,725
Net income		841			858
Other comprehensive income (loss)		378			(294	)
Stock compensation expense		42			35
Dividends declared on preferred stock		(25	)		(125	)
Dividends declared on common stock		(389	)		(353	)
Exercise of stock options, including tax benefit		26			20
Balance at end of period	$	45,945		$	51,866
Common cash dividend per share	$	0.22		$	0.20

See accompanying notes to consolidated financial statements.

5

Emclaire Financial Corp

Notes to Consolidated Financial Statements (Unaudited)

1. Nature of Operations and Basis of Presentation

Emclaire Financial Corp (the Corporation) is a Pennsylvania corporation and the holding company of The Farmers National Bank of Emlenton (the Bank) and Emclaire Settlement Services, LLC (the Title Company). The Corporation provides a variety of financial services to individuals and businesses through its offices in Western Pennsylvania. Its primary deposit products are checking, savings and term certificate accounts and its primary lending products are residential and commercial mortgages, commercial business loans and consumer loans.

The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries, the Bank and the Title Company. All significant intercompany transactions and balances have been eliminated in preparing the consolidated financial statements.

The accompanying unaudited consolidated financial statements for the interim periods include all adjustments, consisting of normal recurring accruals, which are necessary, in the opinion of management, to fairly reflect the Corporation’s consolidated financial position and results of operations. Additionally, these consolidated financial statements for the interim periods have been prepared in accordance with instructions for the Securities and Exchange Commission’s (SEC’s) Form 10-Q and Article 10 of Regulation S-X and therefore do not include all information or footnotes necessary for a complete presentation of financial condition, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (GAAP). For further information, refer to the audited consolidated financial statements and footnotes thereto for the year ended December 31, 2013, as contained in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC.

The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements.

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, fair value of financial instruments, goodwill, real estate owned, the valuation of deferred tax assets and other-than-temporary impairment charges on securities. The results of operations for interim quarterly or year-to-date periods are not necessarily indicative of the results that may be expected for the entire year or any other period. Certain amounts previously reported may have been reclassified to conform to the current year’s financial statement presentation.

6

2. Participation in the Small Business Lending Fund (SBLF) of the U.S. Treasury Department (U.S. Treasury)

On August 18, 2011, the Corporation entered into a Securities Purchase Agreement (the Agreement) with the U.S. Treasury Department, pursuant to which the Corporation issued and sold to the U.S. Treasury 10,000 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series B (Series B Preferred Stock), having a liquidation preference of $1,000 per share, for aggregate proceeds of $10.0 million, pursuant to the U.S. Treasury’s SBLF program. On September 17, 2013, with the approval of the Corporation’s primary federal banking regulator, the Corporation redeemed 5,000 shares, or 50%, of its Series B Preferred Stock held by the U.S. Treasury at an aggregate redemption price of $5.0 million, plus accrued but unpaid dividends. Following this redemption, the Treasury holds 5,000 shares of the Series B Preferred Stock, representing a remaining liquidation value of $5.0 million.

The Series B Preferred Stock is entitled to receive non-cumulative dividends payable quarterly on each January 1, April 1, July 1 and October 1, beginning October 1, 2011. The dividend rate, which is calculated on the aggregate liquidation amount, was initially set at 5% per annum based upon the current level of Qualified Small Business Lending (QSBL) by the Bank at that time. The dividend rate in the subsequent periods for the first two and one-half years through the quarter ending December 31, 2013 was based upon the percentage change in qualified lending between each dividend period and the baseline QSBL level established at the time the Agreement was entered into. Such dividend rate varied from 1% to 5% per annum. For the two year period beginning January 1, 2014, the dividend rate will be fixed at a rate of 2% per annum. If the Series B Preferred Stock remains outstanding for more than four-and-one-half years, beginning January 1, 2016, the dividend rate will be fixed at 9%. The dividend rate was 2.0% and 5.0%, respectively, for the quarters ended March 31, 2014 and 2013. Such dividends are not cumulative, but the Corporation may only declare and pay dividends on its common stock (or any other equity securities junior to the Series B Preferred Stock) if it has declared and paid dividends for the current dividend period on the Series B Preferred Stock, and will be subject to other restrictions on its ability to repurchase or redeem other securities.

Holders of the Series B Preferred Stock have the right to vote as a separate class on certain matters relating to the rights of holders of Series B Preferred Stock and on certain corporate transactions. Except with respect to such matters, the Series B Preferred Stock does not have voting rights.

The Corporation may redeem the shares of Series B Preferred Stock, in whole or in part, at any time at a redemption price equal to the sum of the liquidation amount and the per-share amount of any unpaid dividends for the then-current period, subject to any required prior approval by the Corporation’s primary federal banking regulator. If paid in part, payments are required to be at least 25% of the original issuance.

3. Earnings per Common Share

Basic earnings per common share (EPS) excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the dilutive effect of additional potential common shares for assumed issuance of restricted stock and shares issued under stock options.

7

3. Earnings per Common Share (continued)

The factors used in the Corporation’s earnings per common share computation follow:

(Dollar amounts in thousands, except for per share amounts)	For the three months ended
	March 31,
	2014		2013
Earnings per common share - basic
Net income	$	841	$	858
Less: Preferred stock dividends		25		125
Net income available to common stockholders	$	816	$	733
Average common shares outstanding		1,769,389		1,760,927
Basic earnings per common share	$	0.46	$	0.42
Earnings per common share - diluted
Net income available to common stockholders	$	816	$	733
Average common shares outstanding		1,769,389		1,760,927
Add: Dilutive effects of assumed issuance of restricted stock and exercise of stock options		13,043		3,679
Average shares and dilutive potential common shares		1,782,432		1,764,606
Diluted earnings per common share	$	0.46	$	0.42
Stock options and restricted stock awards not considered in computing diluted earnings per share because they were antidilutive		67,000		68,061

4. Securities

The following table summarizes the Corporation’s securities as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale:
March 31, 2014:
U.S. Treasury and federal agency	$	3,469	$	-	$	(202	)	$	3,267
U.S. government sponsored entities and agencies		25,957		-		(539	)		25,418
U.S. agency mortgage-backed securities: residential		18,371		-		(63	)		18,308
U.S. agency collateralized mortgage obligations: residential		39,938		9		(1,629	)		38,318
State and political subdivisions		34,365		720		(623	)		34,462
Corporate debt securities		-		-		-			-
Equity securities		2,356		105		(38	)		2,423
	$	124,456	$	834	$	(3,094	)	$	122,196
December 31, 2013:
U.S. Treasury and federal agency	$	4,466	$	-	$	(298	)	$	4,168
U.S. government sponsored entities and agencies		23,637		-		(745	)		22,892
U.S. agency mortgage-backed securities: residential		11,020		341		-			11,361
U.S. agency collateralized mortgage obligations: residential		41,751		2		(2,031	)		39,722
State and political subdivisions		36,657		830		(988	)		36,499
Corporate debt securities		250		-		(9	)		241
Equity securities		2,356		131		(66	)		2,421
	$	120,137	$	1,304	$	(4,137	)	$	117,304

8

4. Securities (continued)

The following table summarizes scheduled maturities of the Corporation’s debt securities as of March 31, 2014. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are not due at a single maturity and are shown separately.

(Dollar amounts in thousands)	Available for sale
	Amortized		Fair
	Cost		Value
Due in one year or less	$	1,000	$	1,004
Due after one year through five years		23,816		23,755
Due after five through ten years		35,344		34,908
Due after ten years		3,631		3,480
Mortgage-backed securities: residential		18,371		18,308
Collateralized mortgage obligations: residential		39,938		38,318
	$	122,100	$	119,773

Information pertaining to securities with gross unrealized losses at March 31, 2014 and December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous loss position are included in the table below:

(Dollar amounts in thousands)	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
March 31, 2014:
U.S. Treasury and federal agency	$	2,840	$	(146	)	$	427	$	(56	)	$	3,267	$	(202	)
U.S. government sponsored entities and agencies		24,437		(520	)		981		(19	)		25,418		(539	)
U.S. agency mortgage-backed securities: residential		18,308		(63	)		-		-			18,308		(63	)
U.S. agency collateralized mortgage obligations: residential		26,832		(1,108	)		9,651		(521	)		36,483		(1,629	)
State and political subdivisions		13,239		(616	)		150		(7	)		13,389		(623	)
Equity securities		481		(26	)		939		(12	)		1,420		(38	)
	$	86,137	$	(2,479	)	$	12,148	$	(615	)	$	98,285	$	(3,094	)
December 31, 2013:
U.S. Treasury and federal agency	$	4,168	$	(298	)	$	-	$	-		$	4,168	$	(298	)
U.S. government sponsored entities and agencies		22,891		(745	)		-		-			22,891		(745	)
U.S. agency mortgage-backed securities: residential		33,805		(1,729	)		4,982		(302	)		38,787		(2,031	)
State and political subdivisions		13,262		(988	)		-		-			13,262		(988	)
Corporate debt securities		242		(9	)		-		-			242		(9	)
Equity securities		1,142		(66	)		-		-			1,142		(66	)
	$	75,510	$	(3,835	)	$	4,982	$	(302	)	$	80,492	$	(4,137	)

Gains on sales of available for sale securities for the three months ended March 31 were as follows:

(Dollar amounts in thousands)	For the three months
	ended March 31,
	2014		2013
Proceeds	$	21,559	$	1,775
Gains		658		85
Tax provision related to gains		224		29

9

4. Securities (continued)

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic, market or other conditions warrant such evaluation. Consideration is given to: (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 Corporation has the intent to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the Corporation intends to sell an impaired security, or if it is more likely than not the Corporation will be required to sell the security before its anticipated recovery, the Corporation records an other-than-temporary loss in an amount equal to the entire difference between fair value and amortized cost. Otherwise, only the credit portion of the estimated loss on debt securities is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. For equity securities determined to be other-than-temporarily impaired, the entire amount of impairment is recognized through earnings.

There were four equity securities in an unrealized loss position as of March 31, 2014, none of which were in an unrealized loss position for more than 12 months. Equity securities owned by the Corporation consist of common stock of various financial service providers. The investment securities are in an unrealized loss position as a result of recent market volatility. The Corporation does not invest in these securities with the intent to sell them for a profit in the near term. For investments in equity securities, in addition to the general factors mentioned above for determining whether the decline in market value is other-than-temporary, the analysis of whether an equity security is other-than-temporarily impaired includes a review of the profitability, capital adequacy and other relevant information available to determine the financial position and near term prospects of each issuer. The results of analyzing the aforementioned metrics and financial fundamentals suggest recovery of amortized cost as the sector improves. Based on that evaluation, and given that the Corporation’s current intention is not to sell any impaired security and it is more likely than not it will not be required to sell these securities before the recovery of their amortized cost basis, the Corporation does not consider the equity securities with unrealized losses as of March 31, 2014 to be other-than-temporarily impaired.

There were 113 debt securities in an unrealized loss position as of March 31, 2014, of which 11 were in an unrealized loss position for more than 12 months. Of these 113 securities, 6 were U.S. Treasury securities, 7 were U.S. agency mortgage-backed securities, 20 were U.S. government sponsored entity and agency securities, 25 were government-backed collateralized mortgage obligations and 55 were state and political subdivision securities. The unrealized losses associated with these securities were not due to the deterioration in the credit quality of the issuer that would likely result in the non-collection of contractual principal and interest, but rather have been caused by a rise in interest rates from the time the securities were purchased. Based on that evaluation and other general considerations, and given that the Corporation’s current intention is not to sell any impaired securities and it is more likely than not it will not be required to sell these securities before the recovery of its amortized cost basis, the Corporation does not consider the debt securities with unrealized losses as of March 31, 2014 to be other-than-temporarily impaired.

10

5. Loans Receivable and Related Allowance for Loan Losses

The Corporation’s loans receivable as of the respective dates are summarized as follows:

(Dollar amounts in thousands)	March 31,		December 31,
	2014		2013
Mortgage loans on real estate:
Residential first mortgages	$	105,836	$	105,541
Home equity loans and lines of credit		86,761		87,928
Commercial real estate		95,301		101,499
		287,898		294,968
Other loans:
Commercial business		52,540		53,214
Consumer		9,398		9,117
		61,938		62,331
Total loans, gross		349,836		357,299
Less allowance for loan losses		4,921		4,869
Total loans, net	$	344,915	$	352,430

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of March 31, 2014:

(Dollar amounts in thousands)
	Impaired Loans with Specific Allowance
							For the three months
	As of March 31, 2014						ended March 31, 2014
											Cash Basis
	Unpaid						Average		Interest Income		Interest
	Principal		Recorded		Related		Recorded		Recognized		Recognized
	Balance		Investment		Allowance		Investment		in Period		in Period
Residential first mortgages	$	81	$	81	$	21	$	82	$	1	$	1
Home equity and lines of credit		-		-		-		-		-		-
Commercial real estate		3,664		2,723		209		2,621		7		2
Commercial business		417		417		235		209		5		-
Consumer		-		-		-		-		-		-
Total	$	4,162	$	3,221	$	465	$	2,912	$	13	$	3

	Impaired Loans with No Specific Allowance
					For the three months
	As of March 31, 2014				ended March 31, 2014
									Cash Basis
	Unpaid				Average		Interest Income		Interest
	Principal		Recorded		Recorded		Recognized		Recognized
	Balance		Investment		Investment		in Period		in Period
Residential first mortgages	$	-	$	-	$	10	$	-	$	-
Home equity and lines of credit		-		-		-		-		-
Commercial real estate		1,103		704		690		2		2
Commercial business		388		386		361		-		-
Consumer		1,348		1,348		1,348		-		-
Total	$	2,839	$	2,438	$	2,409	$	2	$	2

11

5. Loans Receivable and Related Allowance for Loan Losses (continued)

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of December 31, 2013:

(Dollar amounts in thousands)
	Impaired Loans with Specific Allowance
							For the year ended
	As of December 31, 2013						December 31, 2013
											Cash Basis
	Unpaid						Average		Interest Income		Interest
	Principal		Recorded		Related		Recorded		Recognized		Recognized
	Balance		Investment		Allowance		Investment		in Period		in Period
Residential first mortgages	$	82	$	82	$	21	$	49	$	5	$	4
Home equity and lines of credit		-		-		-		-		-		-
Commercial real estate		3,462		2,521		181		3,202		13		13
Commercial business		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	3,544	$	2,603	$	202	$	3,251	$	18	$	17

	Impaired Loans with No Specific Allowance
					For the year ended
	As of December 31, 2013				December 31, 2013
									Cash Basis
	Unpaid				Average		Interest Income		Interest
	Principal		Recorded		Recorded		Recognized		Recognized
	Balance		Investment		Investment		in Period		in Period
Residential first mortgages	$	20	$	20	$	4	$	1	$	-
Home equity and lines of credit		-		-		-		-		-
Commercial real estate		1,074		675		584		5		5
Commercial business		336		336		354		-		-
Consumer		1,348		1,348		1,457		-		-
Total	$	2,778	$	2,379	$	2,399	$	6	$	5

During the quarter ended March 31, 2013, the average recorded investment of impaired loans with a specific allowance was $4.0 million and the Corporation recognized interest income of $4,000 on these loans and the average recorded investment of impaired loans with no specific allowance was $2.5 million and interest income of $1,000 was recognized on these loans.

Unpaid principal balance includes any loans that have been partially charged off but not forgiven. Accrued interest is not included in the recorded investment in loans based on the amounts not being material.

Troubled debt restructurings (TDR). The Corporation has certain loans that have been modified in order to maximize collection of loan balances. If, for economic or legal reasons related to the customer’s financial difficulties, management grants a concession compared to the original terms and conditions of the loan that it would not have otherwise considered, the modified loan is classified as a TDR. Concessions related to TDRs generally do not include forgiveness of principal balances. The Corporation generally does not extend additional credit to borrowers with loans classified as TDRs.

At March 31, 2014 and December 31, 2013, the Corporation had $2.5 million of loans classified as TDRs, which are included in impaired loans above. At March 31, 2014 and December 31, 2013, the Corporation had $56,000 of the allowance for loan losses allocated to these specific loans. At March 31, 2013, the Corporation had $2.3 million of loans classified as TDRs with $35,000 of the allowance for loan losses allocated to these specific loans.

12

5. Loans Receivable and Related Allowance for Loan Losses (continued)

During the three month period ended March 31, 2014, the Corporation did not modify any additional loans as TDRs. During the three month period ended March 31, 2013, the Corporation modified a residential mortgage loan with a pre- and post-modification recorded investment of $83,000 as a TDR due to financial difficulties experienced by the borrower. The modification included a reduction in the interest rate from 6.75% to 4.00% and a 65 month extension of the original term.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. During the three month period ended March 31, 2014, there were defaults on three loans classified as TDRs which totaled $430,000. During the three month period ended March 31 2013, the Corporation did not have any loans which were modified as TDRs for which there was a payment default within twelve months following the modification.

Credit Quality Indicators. Management 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.

Commercial real estate and commercial business loans not identified as impaired are evaluated as risk rated pools of loans utilizing a risk rating practice that is supported by a quarterly special asset review. In this review process, strengths and weaknesses are identified, evaluated and documented for each criticized and classified loan and borrower, strategic action plans are developed, risk ratings are confirmed and the loan’s performance status is reviewed.

Management has determined certain portions of the loan portfolio to be homogeneous in nature and assigns like reserve factors for the following loan pool types: residential real estate, home equity loans and lines of credit, and consumer installment and personal lines of credit.

The reserve allocation for risk rated loan pools is developed by applying the following factors:

Historic: Management utilizes a computer model to develop the historical net charge-off experience which is used to formulate the assumptions employed in the migration analysis applied to estimate future losses in the portfolio. Outstanding balance and charge-off information are input into the model and historical loss migration rate assumptions are developed to apply to pass, special mention, substandard and doubtful risk rated loans. A twelve-quarter rolling weighted-average is utilized to anticipate probable incurred losses in the portfolios.

Qualitative: Qualitative adjustment factors for pass, special mention, substandard and doubtful ratings are developed and applied to risk rated loans to allow for: quality of lending policies and procedures; national and local economic and business conditions; changes in the nature and volume of the portfolio; experiences, ability and depth of lending management; changes in trends, volume and severity of past due, nonaccrual and classified loans and loss and recovery trends; quality of loan review systems; concentrations of credit and other external factors.

Management uses the following definitions for risk ratings:

Pass: Loans classified as pass typically exhibit good payment performance and have underlying borrowers with acceptable financial trends where repayment capacity is evident. These borrowers typically would have a sufficient cash flow that would allow them to weather an economic downturn and the value of any underlying collateral could withstand a moderate degree of depreciation due to economic conditions.

Special Mention: Loans classified as special mention are characterized by potential weaknesses that could jeopardize repayment as contractually agreed. These loans may exhibit adverse trends such as increasing leverage, shrinking profit margins and/or deteriorating cash flows. These borrowers would inherently be more vulnerable to the application of economic pressures.

13

5. Loans Receivable and Related Allowance for Loan Losses (continued)

Substandard: Loans classified as substandard exhibit weaknesses that are well-defined to the point that repayment is jeopardized. Typically, the Corporation is no longer adequately protected by both the apparent net worth and repayment capacity of the borrower.

Doubtful: Loans classified as doubtful have advanced to the point that collection or liquidation in full, on the basis of currently ascertainable facts, conditions and value, is highly questionable or improbable.

The following table presents the classes of the loan portfolio summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the Corporation’s internal risk rating system as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
					Special
	Not Rated		Pass		Mention		Substandard		Doubtful		Total
March 31, 2014:
Residential first mortgages	$	105,263	$	-	$	-	$	573	$	-	$	105,836
Home equity and lines of credit		86,565		-		-		196		-		86,761
Commercial real estate		-		87,933		247		7,121		-		95,301
Commercial business		-		48,142		1,688		2,710		-		52,540
Consumer		8,050		-		-		1,348		-		9,398
Total	$	199,878	$	136,075	$	1,935	$	11,948	$	-	$	349,836
December 31, 2013:
Residential first mortgages	$	104,983	$	-	$	-	$	558	$	-	$	105,541
Home equity and lines of credit		87,868		-		-		60		-		87,928
Commercial real estate		-		93,973		256		7,270		-		101,499
Commercial business		-		50,008		674		2,532		-		53,214
Consumer		7,769		-		-		1,348		-		9,117
Total	$	200,620	$	143,981	$	930	$	11,768	$	-	$	357,299

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonperforming loans as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Performing						Nonperforming
	Accruing		Accruing		Accruing		Accruing
	Loans Not		30-59 Days		60-89 Days		90 Days +				Total
	Past Due		Past Due		Past Due		Past Due		Nonaccrual		Loans
March 31, 2014:
Residential first mortgages	$	104,013	$	1,250	$	-	$	-	$	573	$	105,836
Home equity and lines of credit		86,168		278		119		-		196		86,761
Commercial real estate		91,806		50		367		-		3,078		95,301
Commercial business		51,519		217		-		-		804		52,540
Consumer		7,946		93		11		-		1,348		9,398
Total loans	$	341,452	$	1,888	$	497	$	-	$	5,999	$	349,836
December 31, 2013:
Residential first mortgages	$	103,821	$	884	$	278	$	38	$	520	$	105,541
Home equity and lines of credit		87,302		394		172		-		60		87,928
Commercial real estate		98,095		516		22		-		2,866		101,499
Commercial business		52,581		258		-		24		351		53,214
Consumer		7,682		61		26		-		1,348		9,117
Total loans	$	349,481	$	2,113	$	498	$	62	$	5,145	$	357,299

14

5. Loans Receivable and Related Allowance for Loan Losses (continued)

The following table presents the Corporation’s nonaccrual loans by aging category as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Not		30-59 Days		60-89 Days		90 Days +		Total
	Past Due		Past Due		Past Due		Past Due		Loans
March 31, 2014:
Residential first mortgages	$	87	$	81	$	-	$	405	$	573
Home equity and lines of credit		-		-		-		196		196
Commercial real estate		718		2,067		-		293		3,078
Commercial business		479		-		-		325		804
Consumer		1,348		-		-		-		1,348
Total loans	$	2,632	$	2,148	$	-	$	1,219	$	5,999
December 31, 2013:
Residential first mortgages	$	88	$	-	$	82	$	350	$	520
Home equity and lines of credit		-		-		-		60		60
Commercial real estate		412		2,148		-		306		2,866
Commercial business		65		-		-		286		351
Consumer		1,348		-		-		-		1,348
Total loans	$	1,913	$	2,148	$	82	$	1,002	$	5,145

An allowance for loan losses (ALL) is maintained to absorb probable incurred losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience and the amount of nonperforming loans.

Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL.

15

5. Loans Receivable and Related Allowance for Loan Losses (continued)

The following table details activity in the ALL and the recorded investment by portfolio segment based on impairment method:

(Dollar amounts in thousands)
				Home Equity
	Residential			& Lines			Commercial			Commercial
	Mortgages			of Credit			Real Estate			Business			Consumer			Total
Three months ended March 31, 2014:
Allowance for loan losses:
Beginning Balance	$	923		$	625		$	2,450		$	822		$	49		$	4,869
Charge-offs		(78	)		-			(2	)		(17	)		(35	)		(132	)
Recoveries		-			-			5			7			9			21
Provision		91			(6	)		(232	)		282			28			163
Ending Balance	$	936		$	619		$	2,221		$	1,094		$	51		$	4,921
Three months ended March 31, 2013:
Allowance for loan losses:
Beginning Balance	$	828		$	730		$	3,090		$	636		$	66		$	5,350
Charge-offs		(5	)		-			-			-			(32	)		(37	)
Recoveries		1			-			2			-			29			32
Provision		(17	)		(3	)		97			66			-			143
Ending Balance	$	807		$	727		$	3,189		$	702		$	63		$	5,488
At March 31, 2013:
Ending ALL balance attributable to loans:
Individually evaluated for impairment		21			-			209			235			-			465
Collectively evaluated for impairment		915			619			2,012			859			51			4,456
Total loans:
Individually evaluated for impairment		81			-			3,427			803			1,348			5,659
Collectively evaluated for impairment		105,755			86,761			91,874			51,737			8,050			344,177
At December 31, 2013:
Ending ALL balance attributable to loans:
Individually evaluated for impairment		21			-			181			-			-			202
Collectively evaluated for impairment		902			625			2,269			822			49			4,667
Total loans:
Individually evaluated for impairment		102			-			3,196			336			1,348			4,982
Collectively evaluated for impairment		105,439			87,928			98,303			52,878			7,769			352,317

The allowance for loan losses is based on estimates and actual losses may vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any given date.

16

6. Goodwill and Intangible Assets

The following table summarizes the Corporation’s acquired goodwill and intangible assets as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)	March 31, 2014				December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Goodwill	$	3,664	$	-	$	3,664	$	-
Core deposit intangibles		4,027		3,119		4,027		3,062
Total	$	7,691	$	3,119	$	7,691	$	3,062

Goodwill resulted from three previous branch acquisitions. Goodwill represents the excess of the total purchase price paid for the branch acquisitions over the fair value of the assets acquired, net of the fair value of the liabilities assumed. Goodwill is not amortized but is evaluated for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. The Corporation has selected November 30 as the date to perform the annual impairment test. No goodwill impairment charges were recorded during 2013 or in the first three months of 2014. The core deposit intangible asset is amortized using the double declining balance method over a weighted average estimated life of nine years and is not estimated to have a significant residual value. During the three month period ending March 31, 2014, the Corporation recorded intangible amortization expense totaling $57,000, compared to $73,000 for the same periods in the prior year.

7. Stock Compensation Plans

In April 2014, the Corporation adopted the 2014 Stock Incentive Plan (the Plan), which is shareholder approved and permits the grant of restricted stock awards and options to its directors, officers and employees for up to 176,866 shares of common stock.

In addition, the Corporation’s 2007 Stock Incentive Plan and Trust (the Plan), which is shareholder approved, permits the grant of restricted stock awards and options to its directors, officers and employees for up to 177,496 shares of common stock.

Incentive stock options, non-incentive or compensatory stock options and share awards may be granted under the Plans. The exercise price of each option shall at least equal the market price of a share of common stock on the date of grant and have a contractual term of ten years. Options shall vest and become exercisable at the rate, to the extent and subject to such limitations as may be specified by the Corporation. Compensation cost related to share-based payment transactions must be recognized in the financial statements with measurement based upon the fair value of the equity instruments issued.

A summary of option activity under the Plans as of March 31, 2014, and changes during the period then ended is presented below:

						Aggregate		Weighted-Average
				Weighted-Average		Intrinsic Value		Remaining Term
	Options			Exercise Price		(in thousands)		(in years)
Outstanding as of January 1, 2014		79,250		$	24.97	$	-		3.8
Granted		-			-		-		-
Exercised		(1,500	)		17.00		-		-
Forfeited		-			-		-		-
Outstanding as of March 31, 2014		77,750		$	25.12	$	63,635		3.5
Exercisable as of March 31, 2014		77,250		$	25.19	$	58,355		3.5

17

7. Stock Compensation Plans (continued)

A summary of the status of the Corporation’s nonvested option shares as of March 31, 2014, and changes during the period then ended is presented below:

			Weighted-Average
	Options		Grant-date Fair Value
Nonvested at January 1, 2014		500	$	1.44
Granted		-		-
Vested		-		-
Forfeited		-		-
Nonvested as of March 31, 2014		500	$	1.44

A summary of the status of the Corporation’s nonvested restricted stock awards as of March 31, 2014, and changes during the period then ended is presented below:

			Weighted-Average
	Shares		Grant-date Fair Value
Nonvested at January 1, 2014		25,800	$	20.11
Granted		-		-
Vested		-		-
Forfeited		-		-
Nonvested as of March 31, 2014		25,800	$	20.11

For the three month period ended March 31, 2014, the Corporation recognized $42,000 in stock compensation expense, compared to $35,000 for the same periods in 2013. As of March 31, 2014, there was $311,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average period of 1.6 years. It is the Corporation’s policy to issue shares on the vesting date for restricted stock awards. Unvested restricted stock awards do not receive dividends declared by the Corporation.

8. Employee Benefit Plans

The Corporation provides pension benefits for eligible employees through a defined benefit pension plan. Substantially all employees participate in the retirement plan on a non-contributory basis, and are fully vested after three years of service. Effective January 1, 2009, the plan was closed to new participants.

The Corporation provided the requisite notice to plan participants on March 12, 2013 of the determination to freeze the plan (curtailment). While the freeze was not effective until April 30, 2013, management determined that participants would not satisfy, within the provisions of the plan, 2013 eligibility requirements based on minimum hours worked for 2013. Therefore, employees ceased to earn benefits as of January 1, 2013. This amendment to the plan will not affect benefits earned by the participants prior to the date of the freeze. The expense associated with the plan was immaterial for the quarters ended March 31, 2014 and 2013.

9. 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 value.

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Corporation has the ability to access at 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.

18

9. Fair Value (continued)

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

An asset or liability’s level is based on the lowest level of input that is significant to the fair value measurement.

The Corporation used the following methods and significant assumptions to estimate fair value:

Cash and cash equivalents – The carrying value of cash, due from banks and interest bearing deposits approximates fair value and are classified as Level 1.

Securities available for sale – The fair value of all investment securities are based upon the assumptions market participants would use in pricing the security. If available, investment securities are determined by quoted market prices (Level 1). Level 1 includes U.S. Treasury, federal agency securities and certain equity securities. For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). Level 2 includes U.S. Government sponsored entities and agencies, mortgage-backed securities, collateralized mortgage obligations, state and political subdivision securities and corporate debt securities. For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using unobservable inputs (Level 3) and may include certain equity securities held by the Corporation. The Level 3 equity security valuations were supported by an analysis prepared by the Corporation which relies on inputs such as the security issuer’s publicly attainable financial information, multiples derived from prices in observed transactions involving comparable businesses and other market, financial and nonfinancial factors.

Loans – The fair value of loans receivable was estimated based on the discounted value of the future cash flows using the current rates being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification.

Impaired loans – At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Impaired loans carried at fair value generally receive a specific allowance for loan losses. For collateral dependent loans, fair value is commonly based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. As of March 31, 2014, the fair value of impaired loans consists of loan balances of $3.2 million, net of a valuation allowance of $465,000, compared to loan balances of $2.5 million, net of a valuation allowance of $181,000, at December 31, 2013. There was $272,000 of additional provision for loan losses recorded for impaired loans during the three month period ended March 31, 2014. There was $5,000 of additional provision recorded for impaired loans for the same period in 2013.

19

9. Fair Value (continued)

Other Real estate owned (OREO) – Assets acquired through or instead of foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. Management’s ongoing review of appraisal information may result in additional discounts or adjustments to the valuation based upon more recent market sales activity or more current appraisal information derived from properties of similar type and/or locale. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. As of March 31, 2014 and December 31, 2013, OREO measured at fair value less costs to sell had a net carrying amount of $80,000, which was made up of the outstanding balance of $104,000 and write-downs of $24,000. There was no expense recorded during the quarters ended March 31, 2014 and 2013 associated with the write-down of OREO.

Appraisals for both collateral-dependent impaired loans and OREO are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed by the Corporation. Once received, management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On an annual basis, the Corporation compares the actual selling price of OREO that has been sold to the most recent appraisal to determine what additional adjustment should be made to the appraisal value to arrive at fair value. The most recent analysis performed indicated that a discount of 10% should be applied.

Federal bank stock – It is not practical to determine the fair value of federal bank stocks due to restrictions placed on its transferability.

Deposits – The fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, checking with interest, savings and money market accounts, is equal to the amount payable on demand resulting in either a Level 1 or Level 2 classification. The fair values of time deposits are based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar maturities resulting in a Level 2 classification.

Borrowings – The fair value of borrowings with the FHLB is estimated using discounted cash flows based on current incremental borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued interest receivable and payable – The carrying value of accrued interest receivable and payable approximates fair value. The fair value classification is consistent with the related financial instrument.

20

9. Fair Value (continued)

For assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

(Dollar amounts in thousands)			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
March 31, 2014:
U.S. Treasury and federal agency	$	3,267	$	3,267	$	-	$	-
U.S. government sponsored entities and agencies		25,418		-		25,418		-
Mortgage-backed securities: residential		18,308		-		18,308		-
Collateralized mortgage obligations: residential		38,318		-		38,318		-
State and political subdivision		34,462		-		34,462		-
Equity securities		2,423		1,770		-		653
	$	122,196	$	5,037	$	116,506	$	653
December 31, 2013:
U.S. Treasury and federal agency	$	4,168	$	4,168	$	-	$	-
U.S. government sponsored entities and agencies		22,892		-		22,892		-
U.S. agency mortgage-backed securities: residential		11,361		-		11,361		-
U.S. agency collateralized mortgage obligations: residential		39,722		-		39,722		-
State and political subdivisions		36,499		-		36,499		-
Corporate debt securities		241		241		-		-
Equity securities		2,421		1,768		-		653
	$	117,304	$	6,177	$	110,474	$	653

The Corporation’s policy is to transfer assets or liabilities from one level to another when the methodology to obtain the fair value changes such that there are more or fewer unobservable inputs as of the end of the reporting period. During the three month period ended March 31, 2014, the Corporation had no transfers between levels. The following table presents changes in Level 3 assets measured on a recurring basis for the three month periods ended March 31, 2014 and 2013:

(Dollar amounts in thousands)	Three months ended
	March 31,
	2014		2013
Balance at the beginning of the period	$	653	$	653
Total gains or losses (realized/unrealized):		-		-
Included in earnings		-		-
Included in other comprehensive income		-		-
Issuances		-		-
Transfers in and/or out of Level 3		-		-
Balance at the end of the period	$	653	$	653

21

9. Fair Value (continued)

For assets measured at fair value on a non-recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

(Dollar amounts in thousands)			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
March 31, 2014:
Impaired commercial real estate loans	$	2,514	$	-	$	-	$	2,514
Impaired commercial business loans		182		-		-		182
Other residential real estate owned		80		-		-		80
	$	2,776	$	-	$	-	$	2,776
December 31, 2013:
Impaired commercial real estate loans	$	2,340	$	-	$	-	$	2,340
Other residential real estate owned		80		-		-		80
	$	2,420	$	-	$	-	$	2,420

The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis:

(Dollar amounts in thousands)			Valuation	Unobservable
			Techniques(s)	Input (s)	Range
March 31, 2014:
Impaired commercial real estate loans	$	2,514	Sales comparison approach/ Contractual provision of USDA loan	Adjustment for differences between comparable sales	0% - 10%
Impaired commercial business loans		182	Liquidation value of business assets	N/A	76%
Other residential real estate owned		80	Sales comparison approach	Adjustment for differences between comparable sales	10%
December 31, 2013:
Impaired commercial real estate loans		2,340	Sales comparison approach/ Contractual provision of USDA loan	Adjustment for differences between comparable sales	0% - 10%
Other residential real estate owned		80	Sales comparison approach	Adjustment for differences between comparable sales	10%

The two tables above exclude a $60,000 impaired residential mortgage loan classified as a troubled debt restructure which was measured at fair value using a discounted cash flow methodology at March 31, 2014.

Included in impaired commercial real estate loans is a loan guaranteed by the United States Department of Agriculture (USDA) with balances of $349,000 and $350,000, respectively, as of March 31, 2014 and December 31, 2013. The guarantee covers 90% of the principal balance outstanding. In determining the fair value of this loan, the Corporation considered the contractual provisions of the loan and did not rely on the fair value of the underlying collateral. As such, the Corporation applied a 10% discount to the loan which represents the portion of the loan at risk. The weighted average discount on impaired loans as of March 31, 2014 and December 31, 2013 was 14.4% and 1.5%, respectively.

22

9. Fair Value (continued)

The following table sets forth the carrying amount and estimated fair values of the Corporation’s financial instruments included in the consolidated balance sheet as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Carrying		Fair Value Measurements using:
Description	Amount		Total		Level 1		Level 2		Level 3
March 31, 2014:
Financial Assets:
Cash and cash equivalents	$	28,766	$	28,766	$	28,766	$	-	$	-
Securities available for sale		122,196		122,196		5,037		116,506		653
Loans, net		344,915		348,670		-		-		348,670
Federal bank stock		2,752		N/A		N/A		N/A		N/A
Accrued interest receivable		1,553		1,553		42		448		1,063
		500,182		501,184		33,845		116,954		350,386
Financial Liabilities:
Deposits		467,162		469,602		347,063		122,539		-
Borrowed funds		17,150		17,913		-		17,913		-
Accrued interest payable		255		255		5		250		-
		484,567		487,770		347,068		140,702		-

	Carrying		Fair Value Measurements using:
	Amount		Total		Level 1		Level 2		Level 3
December 31, 2013:
Financial Assets:
Cash and cash equivalents	$	16,658	$	16,658	$	16,658	$	-	$	-
Securities available for sale		117,304		117,304		5,936		110,715		653
Loans, net		352,430		356,123		-		-		356,123
Federal bank stock		3,977		N/A		N/A		N/A		N/A
Accrued interest receivable		1,466		1,466		34		430		1,002
		491,835		491,551		22,628		111,145		357,778
Financial Liabilities:
Deposits		432,006		434,552		325,983		108,569		-
FHLB advances		44,150		45,241		-		45,241		-
Accrued interest payable		292		292		5		287		-
		476,448		480,085		325,988		154,097		-

23

10. Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2014 and 2013 and summarizes the significant amounts reclassified out of each component of accumulated other comprehensive income:

(Dollar amounts in thousands)	Unrealized Gains			Defined
	and Losses on			Benefit
	Available-for-Sale			Pension
	Securities			Items			Totals
Accumulated Other Comprehensive Loss at January 1, 2014	$	(1,870	)	$	(1,410	)	$	(3,280	)
Other comprehensive income before reclassification		812			-			812
Amounts reclassified from accumulated other comprehensive income		(434	)		-			(434	)
Net current period other comprehensive income		378			-			378
Accumulated Other Comprehensive Loss at March 31, 2014	$	(1,492	)	$	(1,410	)	$	(2,902	)

(Dollar amounts in thousands)	Amount Reclassified
	from Accumulated
	Other Comprehensive
	Income			Affected Line Item in the
Details about Accumulated Other	For the three months			Statement Where Net
Comprehensive Income Components	ended March 31, 2014			Income is Presented
Unrealized gains and losses on available-for-sale securities	$	658		Gain on sale of securities
		(224	)	Tax expense
Total reclassifications for the period	$	434		Net of tax

(Dollar amounts in thousands)	Unrealized Gains			Defined
	and Losses on			Benefit
	Available-for-Sale			Pension
	Securities			Items			Totals
Accumulated Other Comprehensive Income at January 1, 2013	$	2,365		$	(1,795	)	$	570
Other comprehensive income before reclassification		(238	)		-			(238	)
Amounts reclassified from accumulated other comprehensive income		(56	)		-			(56	)
Net current period other comprehensive loss		(294	)		-			(294	)
Accumulated Other Comprehensive Income at March 31, 2013	$	2,071		$	(1,795	)	$	276

(Dollar amounts in thousands)	Amount Reclassified
	from Accumulated
	Other Comprehensive
	Income			Affected Line Item in the
Details about Accumulated Other	For the three months			Statement Where Net
Comprehensive Income Components	ended March 31, 2013			Income is Presented
Unrealized gains and losses on available-for-sale securities	$	85		Gain on sale of securities
		(29	)	Tax expense
Total reclassifications for the period	$	56		Net of tax

24

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

This section discusses the consolidated financial condition and results of operations of Emclaire Financial Corp and its wholly owned subsidiaries, the Bank and the Title Company, for the three months ended March 31, 2014, compared to the same period in 2013 and should be read in conjunction with the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC and with the accompanying consolidated financial statements and notes presented on pages 1 through 24 of this Form 10-Q.

This Form 10-Q, including the financial statements and related notes, contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” or words or phrases of similar meaning. We caution that the forward looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performances or achievements could differ materially from those contemplated, expressed or implied by the forward looking statements. Therefore, we caution you not to place undue reliance on our forward looking information and statements. Except as required by applicable law or regulation, we will not update the forward looking statements to reflect actual results or changes in factors affecting the forward looking statements.

CHANGES IN FINANCIAL CONDITION

Total assets increased $9.0 million, or 1.7%, to $534.9 million at March 31, 2014 from $525.8 million at December 31, 2013. This increase resulted primarily from increases in cash and equivalents and securities of $12.1 million and $4.9 million, respectively, which was funded by a $35.2 million increase in customer deposits. This deposit increase, along with a $7.5 million decrease in loans receivable, also funded a $27.0 million decrease in borrowed funds.

Total liabilities increased $8.2 million, or 1.7%, to $488.9 million at March 31, 2014 from $480.8 million at December 31, 2013, resulting primarily from a $35.2 million increase in customer deposits, partially offset by a $27.0 million decrease in borrowed funds. Deposit growth consisted of a $7.0 million, or 6.8%, increase in noninterest bearing deposits and a $28.1 million, or 8.6%, increase in interest bearing deposits. The decrease in borrowed funds resulted from the repayment of a $5.0 million FHLB long term advance and $22.0 million of FHLB short term advances utilized to fund normal operating fluctuations.

Stockholders’ equity increased $873,000 to $45.9 million at March 31, 2014 from $45.1 million at December 31, 2013. Book value and tangible book value per common share were $23.13 and $20.55, respectively, at March 31, 2014, compared to $22.66 and $20.04, respectively, at December 31, 2013.

At March 31, 2014, the Bank was considered “well-capitalized” under regulatory guidelines with a Tier 1 leverage ratio, Tier 1 risk-based capital ratio and total risk-based capital ratio of 8.68%, 14.56% and 15.82%, respectively, compared to 8.58%, 14.08% and 15.34%, respectively, at December 31, 2013.

RESULTS OF OPERATIONS

Comparison of Results for the Three Months Ended March 31, 2014 and 2013

General. Net income decreased $17,000, or 2.0%, to $841,000 for the three months ended March 31, 2014 from $858,000 for the same period in 2013. This decrease was the result of increases in noninterest expense and the provision for loan losses of $647,000 and $20,000, respectively, partially offset by increases in net interest income and noninterest income of $126,000 and $508,000, respectively, and a decrease in the provision for income taxes of $16,000.

25

Net interest income. Net interest income on a tax equivalent basis increased $130,000, or 3.2%, to $4.2 million for the three months ended March 31, 2014 from $4.1 million for the three months ended March 31, 2013. This increase can be attributed to a decrease in interest expense of $295,000, partially offset by a decrease in tax equivalent interest income of $165,000.

Interest income. Interest income on a tax equivalent basis decreased $165,000, or 3.2%, to $4.9 million for the three months ended March 31, 2014 compared to $5.1 million for the three months ended March 31, 2013. This decrease can be attributed to decreases in interest on loans, securities and interest-earning deposits with banks of $166,000, $14,000 and $3,000, respectively, partially offset by an increase in interest earned on federal bank stocks of $18,000. The decrease in interest income occurred despite a $15.9 million increase in average earning assets, which included an $8.9 million increase in average loans.

Tax equivalent interest earned on loans receivable decreased $166,000, or 3.9%, to $4.1 million for the three months ended March 31, 2014 compared to $4.3 million for the three months ended March 31, 2013. This decrease resulted from a 32 basis point decline in the average yield on loans to 4.73% for the three months ended March 31, 2014, versus 5.05% for the same period in 2013. This unfavorable yield variance accounted for a $275,000 decrease in interest income. Partially offsetting this unfavorable yield variance, average loans increased $8.9 million, or 2.6%, accounting for an increase of $109,000 in loan interest income. Management’s strategy to increase loan production capacity, which includes the expansion of the corporate banking team and the projected entrance into new markets in the coming quarters, is key to overcoming the decrease in loan yields caused by an overall decline in market interest rates.

Tax equivalent interest earned on securities decreased $14,000, or 1.8%, to $779,000 for the three months ended March 31, 2014 as compared to $793,000 for the three months ended March 31, 2013. This decrease resulted from a 23 basis point decline in the average yield on securities to 2.59% for the three months ended March 31, 2014, versus 2.82% for the same period in 2013, due primarily to the sale of higher-yielding securities. This unfavorable yield variance accounted for a $67,000 decrease in interest income. Partially offsetting this unfavorable yield variance, the average balance of securities increased $8.0 million, or 7.0%, accounting for a $53,000 increase in interest income.

Interest expense. Interest expense decreased $295,000, or 28.5%, to $741,000 for the three months ended March 31, 2014 from $1.0 million for the same period in 2013. This decrease in interest expense can be attributed to a decrease in interest incurred on deposits and borrowed funds of $277,000 and $18,000, respectively.

Interest expense incurred on deposits decreased $277,000, or 33.1%, to $561,000 for the three months ended March 31, 2014 compared to $838,000 for the same period in 2013. The average cost of interest-bearing deposits decreased 38 basis points to 0.67% for the three months ended March 31, 2014, compared to 1.05% for the same period in 2013, resulting in a $314,000 decrease in interest expense. This decrease in the cost of deposits was primarily due to deposits repricing during 2013 and the first three months of 2014 in the prevailing low interest-rate environment. Partially offsetting this favorable variance, the average balance of interest-bearing deposits increased $15.2 million, or 4.7%, to $340.4 million for the three months ended March 31, 2014, compared to $325.2 million for the same period in 2013 causing a $37,000 increase in interest expense. Average noninterest bearing deposits increased $6.4 million, or 6.4%, to $105.6 million from $99.2 million, facilitating the overall decline in the Corporation’s cost of funds.

Interest expense incurred on borrowed funds decreased $18,000, or 9.1%, to $180,000 for the three months ended March 31, 2014, compared to $198,000 for the same period in the prior year. The average cost of long term borrowed funds decreased 61 basis points to 3.41% for the three months ended March 31, 2014, compared to 4.02% for the same period in 2013, causing a $28,000 decrease in interest expense. This resulted from the Corporation realizing a $29,000 reduction in interest expense related to capitalized interest costs on construction in progress. Additionally, the average balance of long term borrowed funds decreased $1.6 million, or 7.8%, accounting for a $15,000 decrease in interest expense. This resulted from the early repayment of a $5.0 million FHLB long term advance during the first quarter of 2014. The Corporation recognized a $550,000 prepayment penalty associated with this early repayment. Partially offsetting the favorable variance related to long term borrowings, the average balance of short term borrowed funds increased $6.2 million, which caused a $25,000 increase in interest expense. Short-term borrowings at March 31, 2014 included a $2.2 million advance on a line of credit during the third quarter of 2013 with a correspondent bank with a rate of 4.25%.

26

Average Balance Sheet and Yield/Rate Analysis. The following table sets forth, for the periods indicated, information concerning the total dollar amounts of interest income from interest-earning assets and the resulting average yields, the total dollar amounts of interest expense on interest-bearing liabilities and the resulting average costs, net interest income, interest rate spread and the net interest margin earned on average interest-earning assets. For purposes of this table, average loan balances include nonaccrual loans and exclude the allowance for loan losses and interest income includes accretion of net deferred loan fees. Interest and yields on tax-exempt loans and securities (tax-exempt for federal income tax purposes) are shown on a fully tax equivalent basis. The information is based on average daily balances during the periods presented.

(Dollar amounts in thousands)	Three months ended March 31,
	2014							2013
	Average				Yield /			Average				Yield /
	Balance		Interest		Rate			Balance		Interest		Rate
Interest-earning assets:
Loans, taxable	$	333,655	$	3,869		4.70	%	$	326,023	$	4,050		5.04	%
Loans, tax exempt		18,087		230		5.17	%		16,788		215		5.19	%
Total loans receivable		351,742		4,099		4.73	%		342,811		4,265		5.05	%
Securities, taxable		85,968		404		1.90	%		77,471		417		2.18	%
Securities, tax exempt		36,012		375		4.22	%		36,519		376		4.18	%
Total securities		121,980		779		2.59	%		113,990		793		2.82	%
Interest-earning deposits with banks		11,978		11		0.37	%		13,592		14		0.42	%
Federal bank stocks		3,469		35		4.09	%		2,859		17		2.41	%
Total interest-earning cash equivalents		15,447		46		1.21	%		16,451		31		0.76	%
Total interest-earning assets		489,169		4,924		4.08	%		473,252		5,089		4.36	%
Cash and due from banks		2,115							1,927
Other noninterest-earning assets		30,366							26,251
Total Assets	$	521,650						$	501,430
Interest-bearing liabilities:
Interest-bearing demand deposits	$	225,174	$	79		0.14	%	$	198,227	$	70		0.14	%
Time deposits		115,181		482		1.70	%		126,975		768		2.45	%
Total interest-bearing deposits		340,355		561		0.67	%		325,202		838		1.05	%
Borrowed funds, short-term		6,435		25		1.61	%		205		-		0.00	%
Borrowed funds, long-term (1)		18,441		155		3.41	%		20,000		198		4.02	%
Total borrowed funds		24,876		180		2.94	%		20,205		198		3.97	%
Total interest-bearing liabilities		365,231		741		0.82	%		345,407		1,036		1.22	%
Noninterest-bearing demand deposits		105,555		-		-			99,165		-		-
Funding and cost of funds		470,786		741		0.64	%		444,572		1,036		0.95	%
Other noninterest-bearing liabilities		4,605							5,073
Total Liabilities		475,391							449,645
Stockholders' Equity		46,259							51,785
Total Liabilities and Stockholders' Equity	$	521,650						$	501,430
Net interest income			$	4,183						$	4,053
Interest rate spread (difference between weighted average rate on interest-earning assets and interest-bearing liabilities)						3.26	%						3.14	%
Net interest margin (net interest income as a percentage of average interest-earning assets)						3.47	%						3.47	%

(1) Interest on long-term borrowed funds was reduced by $29,000 related to capitalized interest costs on construction in progress.

27

Analysis of Changes in Net Interest Income. The following table analyzes the changes in interest income and interest expense in terms of: (1) changes in volume of interest-earning assets and interest-bearing liabilities and (2) changes in yields and rates. The table reflects the extent to which changes in the Corporation’s interest income and interest expense are attributable to changes in volume (changes in volume multiplied by prior year rate), rate (change in rate multiplied by prior year volume) and changes attributable to the combined impact of volume/rate (change in rate multiplied by change in volume). The changes attributable to the combined impact of volume/rate are allocated on a consistent basis between the volume and rate variances. Changes in interest income on loans and securities reflect the changes in interest income on a fully tax equivalent basis.

(Dollar amounts in thousands)	Three months ended March 31,
	2014 versus 2013
	Increase (Decrease) due to
	Volume			Rate			Total
Interest income:
Loans	$	109		$	(275	)	$	(166	)
Securities		53			(67	)		(14	)
Interest-earning deposits with banks		(2	)		(1	)		(3	)
Federal bank stocks		4			14			18
Total interest-earning assets		164			(329	)		(165	)
Interest expense:
Interest-bearing deposits		37			(314	)		(277	)
Borrowed funds, short-term		-			25			25
Borrowed funds, long-term		(15	)		(28	)		(43	)
Total interest-bearing liabilities		22			(317	)		(295	)
Net interest income	$	142		$	(12	)	$	130

Provision for loan losses. The Corporation records provisions for loan losses to maintain a level of total allowance for loan losses that management believes, to the best of its knowledge, covers all probable incurred losses estimable at each reporting date. Management considers historical loss experience, the present and prospective financial condition of borrowers, current conditions (particularly as they relate to markets where the Corporation originates loans), the status of nonperforming assets, the estimated underlying value of the collateral and other factors related to the collectability of the loan portfolio.

Information pertaining to the allowance for loan losses and nonperforming assets for the three months ended March 31, 2014 and 2013 is as follows:

(Dollar amounts in thousands)	At or for the three months ended
	March 31,
	2014			2013
Balance at the beginning of the period	$	4,869		$	5,350
Provision for loan losses		163			143
Charge-offs		(132	)		(37	)
Recoveries		21			32
Balance at the end of the period	$	4,921		$	5,488
Nonperforming loans	$	5,999		$	6,828
Nonperforming assets		6,079			7,031
Nonperforming loans to total loans		1.71	%		1.98	%
Nonperforming assets to total assets		1.14	%		1.37	%
Allowance for loan losses to total loans		1.41	%		1.59	%
Allowance for loan losses to non-performing loans		82.03	%		80.37	%

28

Nonperforming loans decreased $829,000 to $6.0 million at March 31, 2014 from $6.8 million at March 31, 2013. The decrease in nonperforming loans was primarily due to a $941,000 partial charge-off in the second quarter of 2013 of a $3.4 million commercial real estate relationship identified as impaired. This loan had a specific reserve of $1.4 million. Also contributing to the decrease were principal reductions resulting from credit workouts and repayments. Of the $6.0 million in nonperforming loans, the Corporation continues to receive payments on $4.8 million. During the three months ended March 31, 2014, nonperforming loans increased $792,000, primarily due to a $724,000 commercial relationship being placed on nonaccrual status during the quarter after the Corporation received information from the borrower which reflected a weakened financial condition. This relationship consists of a commercial real estate loan secured by a commercial property and a commercial line of credit secured by accounts receivable, inventory and other business assets, both of which were considered impaired at March 31, 2014. The commercial real estate loan and commercial line of credit were assigned specific reserves of $38,000 and $235,000, respectively, during the quarter ended March 31, 2014.

As of March 31, 2014, the Corporation’s classified and criticized assets amounted to $13.9 million, or 2.6% of total assets, with $11.9 million classified as substandard and $1.9 identified as special mention. This compares to classified and criticized assets of $12.7 million, or 2.4% of total assets, with $11.8 million classified as substandard and $930,000 identified as special mention at December 31, 2013. The overall increase in criticized and classified assets was primarily the result of two commercial loan relationships being downgraded to special mention during the quarter ended March 31, 2014.

The provision for loan losses increased $20,000, or 14.0%, to $163,000 for the three months ended March 31, 2014 from $143,000 for the same period in the prior year. While the Corporation allocated $273,000 of the allowance for loan losses to the aforementioned loans placed on nonaccrual status and recognized as impaired during the quarter, the allowance for loan losses allocated to the commercial real estate portfolio decreased due to a $6.2 million decrease in the portfolio balance and an improvement in the historical loss ratio.

Noninterest income. Noninterest income increased $508,000, or 54.6%, to $1.4 million for the three months ended March 31, 2014, compared to $931,000 for the same period in the prior year. This increase resulted from a $573,000 increase in net gains on the sale of securities. During the quarter ended March 31, 2014, the Corporation realized securities gains of $658,000 primarily related to a balance sheet management strategy whereby securities were sold to prepay a $5.0 million FHLB long term advance and associated securities gains were used to offset the impact of prepayment penalties associated with the early retirement of the advance. Excluding the net gains on securities, noninterest income decreased $65,000, or 7.7%, to $781,000 for the quarter ended March 31, 2014 from $846,000 for the same period in 2013 due to decreases in commissions on financial services and fees and service charges of $55,000 and $20,000, respectively.

Noninterest expense. Noninterest expense increased $647,000, or 18.1%, to $4.2 million for the three months ended March 31, 2014, compared to $3.6 million for the same period in the prior year. This increase in noninterest expense can be attributed primarily to an increase in other noninterest expense of $598,000, primarily related to a $550,000 prepayment penalty assessed on the aforementioned early retirement of debt. Also contributing to the increase in noninterest expense were increases in compensation and benefits and premises and equipment expense of $38,000 and $58,000, respectively, partially offset by decreases in intangible asset amortization, professional fees and FDIC expense of $16,000, $14,000 and $17,000, respectively. Noninterest expense for the first quarter of 2014 included $64,000 related to the Bank’s new branch office in Saint Marys, Pennsylvania, which opened in October 2013.

Compensation and employee benefits expense increased $38,000, or 2.0%, to $1.9 million for the three months ended March 31, 2014. This increase can be primarily attributed to normal salary and wage increases and increased incentive compensation expense, partially offset by reduced retirement benefits cost resulting from the 2013 curtailment of the Bank’s pension plan.

Premise and equipment expense increased $58,000, or 10.7%, to $600,000 for the three months ended March 31, 2014, compared to $542,000 for the same period in the prior year. Premise and equipment expense for the first quarter of 2014 included $25,000 related to the Bank’s new branch office in Saint Marys, Pennsylvania.

Professional fees decreased $14,000, or 7.9%, to $163,000 for the three months ended March 31, 2014, compared to $177,000 for the same period in the prior year. This decrease can be primarily attributed to decreased information technology consulting costs.

29

The Corporation recognized $57,000 of core deposit intangible amortization expense during the first quarter of 2014 compared to $73,000 for the same period in the prior year. This amortization relates to a branch acquisition completed in the third quarter of 2009. Further discussion of goodwill and intangible assets related to the branch office acquisition can be found in the “Notes to Consolidated Financial Statements” beginning on page 6.

FDIC insurance decreased $17,000, or 16.2%, to $88,000 for the three months ended March 31, 2014, compared to $105,000 for the same period in the prior year. The decrease was primarily the result of a decrease in the Bank’s FDIC insurance assessment rate following a prior period decrease in the level of loans past due 30-89 days.

Provision for income taxes. The provision for income taxes decreased $16,000, or 6.9%, to $217,000 for the three months ended March 31, 2014 compared to $233,000 for the same period in the prior year. The Corporation’s effective tax rate decreased to 20.5% for the first quarter of 2014 from 21.4% for the same quarter in the prior year. The difference between the statutory rate of 34% and the Corporation’s effective tax rate of 20.5% for the quarter ended March 31, 2014 was due to tax-exempt income earned on certain tax-free loans and securities and bank-owned life insurance.

LIQUIDITY

The Corporation’s primary sources of funds generally have been deposits obtained through the offices of the Bank, borrowings from the FHLB and Federal Reserve, and amortization and prepayments of outstanding loans and maturing securities. During the three months ended March 31, 2014, the Corporation used its sources of funds primarily to fund security purchases and repay borrowed funds. As of March 31, 2014, the Corporation had outstanding loan commitments, including undisbursed loans and amounts available under credit lines, totaling $59.3 million, and standby letters of credit totaling $188,000.

At March 31, 2014, time deposits amounted to $120.6 million, or 25.8% of the Corporation’s total consolidated deposits, including approximately $44.4 million of which are scheduled to mature within the next year. Management of the Corporation believes (i) it has adequate resources to fund all of its commitments, (ii) all of its commitments will be funded as required by related maturity dates and (iii) based upon past experience and current pricing policies, it can adjust the rates of time deposits to retain a substantial portion of maturing liabilities if necessary.

Aside from liquidity available from customer deposits or through sales and maturities of securities, the Corporation has alternative sources of funds such as a term borrowing capacity from the FHLB and the Federal Reserve’s discount window. At March 31, 2014, the Corporation had borrowed funds of $17.2 million consisting of $15.0 million in long-term FHLB advances and a $2.2 million short-term advance on a line of credit with a correspondent bank. At March 31, 2014, the Corporation’s borrowing capacity with the FHLB, net of funds borrowed, was $146.5 million.

Management is not aware of any conditions, including any regulatory recommendations or requirements, which would adversely impact its liquidity or its ability to meet funding needs in the ordinary course of business.

30

RECENT REGULATORY DEVELOPMENTS

In July 2013, the Office of the Comptroller of the Currency and the other federal bank regulatory agencies issued a final rule that will revise their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. Among other things, the rule established a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), increases the minimum Tier 1 capital to risk-based assets requirement (from 4% to 6% of risk-weighted assets), phases out certain kinds of intangibles and instruments treated as capital and assigns a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance acquisition, development or construction of real property. The final rule also requires unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital requirements unless a one-time opt-out is exercised. The rule limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements. The new capital rules maintain the general structure of the prompt corrective action rules, but incorporate the new common equity Tier 1 capital requirement and the increased Tier 1 risk-weighted asset requirement into the prompt corrective action framework.

The final rule becomes effective for the Bank on January 1, 2015. The capital conservation buffer requirement will be phased in beginning January 1, 2016 and ending January 1, 2019, when the full capital conservation buffer requirement will be effective. The final rule also implements consolidated capital requirements for bank holding companies, such as the Corporation, effective January 1, 2015.

CRITICAL ACCOUNTING POLICIES

The Corporation’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the industry in which it operates. Application of these principles requires management to make estimates or judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates or judgments. Certain policies inherently have a greater reliance on the use of estimates, and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates or judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or valuation reserve to be established or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility. The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by third-party sources, when available. When third-party information is not available, valuation adjustments are estimated in good faith by management primarily though the use of internal cash flow modeling techniques.

The most significant accounting policies followed by the Corporation are presented in Note 1 to the consolidated financial statements included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013. These policies, along with the disclosures presented in the other financial statement notes provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Management views critical accounting policies to be those which are highly dependent on subjective or complex judgments, estimates and assumptions and where changes in those estimates and assumptions could have a significant impact on the financial statements. Management has identified the following as critical accounting policies.

31

Allowance for loan losses. The Corporation considers that the determination of the allowance for loan losses involves a higher degree of judgment and complexity than its other significant accounting policies. The balance in the allowance for loan losses is determined based on management’s review and evaluation of the loan portfolio in relation to past loss experience, the size and composition of the portfolio, current economic events and conditions and other pertinent factors, including management’s assumptions as to future delinquencies, recoveries and losses. All of these factors may be susceptible to significant change. Among the many factors affecting the allowance for loan losses, some are quantitative while others require qualitative judgment. Although management believes its process for determining the allowance adequately considers all of the potential factors that could potentially result in credit losses, the process includes subjective elements and may be susceptible to significant change. To the extent actual outcomes differ from management’s estimates, additional provisions for loan losses may be required that would adversely impact the Corporation’s financial condition or earnings in future periods.

Other-than-temporary impairment. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic, market or other concerns warrant such evaluation. Consideration is given to (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 Corporation 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.

Goodwill and intangible assets. Goodwill represents the excess cost over fair value of assets acquired in a business combination. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values. The impairment test is a two-step process that begins with an initial impairment evaluation. If the initial evaluation suggests that an impairment of the asset value exists, the second step is to determine the amount of the impairment. If the tests conclude that goodwill is impaired, the carrying value is adjusted and an impairment charge is recorded. As of November 30, 2013, the required annual impairment test of goodwill was performed and management concluded that no impairment existed as of that date.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk for the Corporation consists primarily of interest rate risk exposure and liquidity risk. Since virtually all of the interest-earning assets and interest-bearing liabilities are at the Bank, virtually all of the interest rate risk and liquidity risk lies at the Bank level. The Bank is not subject to currency exchange risk or commodity price risk, and has no trading portfolio, and therefore, is not subject to any trading risk. In addition, the Bank does not participate in hedging transactions such as interest rate swaps and caps. Changes in interest rates will impact both income and expense recorded and also the market value of long-term interest-earning assets and interest-bearing liabilities. Interest rate risk and liquidity risk management is performed at the Bank level. Although the Bank has a diversified loan portfolio, loans outstanding to individuals and businesses depend upon the local economic conditions in the immediate trade area.

One of the primary functions of the Corporation’s asset/liability management committee is to monitor the level to which the balance sheet is subject to interest rate risk. The goal of the asset/liability committee is to manage the relationship between interest rate sensitive assets and liabilities, thereby minimizing the fluctuations in the net interest margin, which achieves consistent growth of net interest income during periods of changing interest rates.

Interest rate sensitivity is the result of differences in the amounts and repricing dates of the Bank’s rate sensitive assets and rate sensitive liabilities. These differences, or interest rate repricing “gap”, provide an indication of the extent that the Corporation’s net interest income is affected by future changes in interest rates. A gap is considered positive when the amount of interest rate-sensitive assets exceeds the amount of interest rate-sensitive liabilities and is considered negative when the amount of interest rate-sensitive liabilities exceeds the amount of interest rate-sensitive assets. Generally, during a period of rising interest rates, a negative gap would adversely affect net interest income while a positive gap would result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would result in an increase in net interest income and a positive gap would adversely affect net interest income. The closer to zero that gap is maintained, generally, the lesser the impact of market interest rate changes on net interest income.

32

Assumptions about the timing and variability of cash flows are critical in gap analysis. Particularly important are the assumptions driving mortgage prepayments and the expected attrition of the core deposits portfolios. These assumptions are based on the Corporation’s historical experience, industry standards and assumptions provided by a federal regulatory agency, which management believes most accurately represents the sensitivity of the Corporation’s assets and liabilities to interest rate changes. As of March 31, 2014, the Corporation’s interest-earning assets maturing or repricing within one year totaled $167.7 million while the Corporation’s interest-bearing liabilities maturing or repricing within one-year totaled $142.9 million, providing an excess of interest-earning assets over interest-bearing liabilities of $24.8 million. At March 31, 2014, the percentage of the Corporation’s assets to liabilities maturing or repricing within one year was 117.4%.

For more information, see “Market Risk Management” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013.

Item 4. Controls and Procedures

The Corporation maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Corporation’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Corporation’s management, including its Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e).

As of March 31, 2014, the Corporation carried out an evaluation, under the supervision and with the participation of the Corporation’s management, including the Corporation’s CEO and CFO, of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures. Based on the foregoing, the Corporation’s CEO and CFO concluded that the Corporation’s disclosure controls and procedures were effective. There have been no significant changes in the Corporation’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Corporation completed its evaluation.

There has been no change made in the Corporation’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Corporation is involved in various legal proceedings occurring in the ordinary course of business. It is the opinion of management, after consultation with legal counsel, that these matters will not materially affect the Corporation’s consolidated financial position or results of operations.

Item 1A. Risk Factors

Not applicable.

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

None.

Item 3. Defaults Upon Senior Securities

None.

33

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a) Not applicable.

(b) Not applicable.

Item 6. Exhibits

Exhibit 31.1	Rule 13a-14(a) Certification of Principal Executive Officer
Exhibit 31.2	Rule 13a-14(a) Certification of Principal Financial Officer
Exhibit 32.1	CEO Certification Pursuant to 18 U.S.C. Section 1350
Exhibit 32.2	CFO Certification Pursuant to 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

34

Signatures

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

	EMCLAIRE FINANCIAL CORP
Date: May 13, 2014	By:	/s/ William C. Marsh
	William C. Marsh
	Chairman of the Board,
	President and Chief Executive Officer
Date: May 13, 2014	By:	/s/ Matthew J. Lucco
	Matthew J. Lucco
	Chief Financial Officer
	Treasurer

35

EX-31.1

Exhibit 31.1

Certification of the Principal Executive Officer

(Pursuant to Rule 13a-14(a))

I, William C. Marsh, Chairman of the Board, President and Chief Executive Officer, certify that:

1. I have reviewed this Form 10-Q of Emclaire Financial Corp;

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

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

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls 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 subsidiary, 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 controls over financial reporting or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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

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

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

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

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

Date:  May 13, 2014	By:	/s/ William C. Marsh
	William C. Marsh
	Chairman of the Board,
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of the Principal Financial Officer

(Pursuant to Rule 13a-14(a))

I, Matthew J. Lucco, Chief Financial Officer and Treasurer, certify that:

1. I have reviewed this Form 10-Q of Emclaire Financial Corp;

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

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

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls 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 subsidiary, 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 controls over financial reporting or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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

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

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

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

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

Date:  May 13, 2014	By:	/s/ Matthew J. Lucco
	Matthew J. Lucco
	Chief Financial Officer
	Treasurer

EX-32.1

Exhibit 32.1

CEO CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350 

In connection with the Quarterly Report of Emclaire Financial Corp (the Corporation) on Form 10-Q for the period ending March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, William C. Marsh, Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

/s/  William C. Marsh

William C. Marsh

Chairman of the Board,

President and Chief Executive Officer

May 13, 2014 

Note: A signed original of this written statement has been provided to Emclaire Financial Corp and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CFO CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350 

In connection with the Quarterly Report of Emclaire Financial Corp (the Corporation) on Form 10-Q for the period ending March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Matthew J. Lucco, Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

/s/  Matthew J. Lucco

Matthew J. Lucco

Chief Financial Officer

May 13, 2014

Note: A signed original of this written statement has been provided to Emclaire Financial Corp and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Goodwill and Intangible Assets (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Intangible asset amortization	$ 57	$ 73

XML

Fair Value (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Financial assets:
Cash and cash equivalents - Carrying Amount	$ 28,766	$ 16,658	$ 23,445	$ 20,424
Securities available for sale	122,196	117,304
Loans, net - Carrying Amount	344,915	352,430
Federal bank stock - Carrying Amount	2,752	3,977
Accrued interest receivable - Carrying Amount	1,553	1,466
Financial Assets - Carrying Amount, Total	500,182	491,835
Financial liabilities:
Deposits - Carrying Amount	467,162	432,006
Borrowed funds - Carrying Amount	17,150	44,150
Accrued interest payable - Carrying Amount	255	292
Financial Liabilities - Carrying Amount, Total	484,567	476,448
Financial assets:
Cash and cash equivalents - Fair Value	28,766	16,658
Securities available for sale - Fair Value	122,196	117,304
Loans, net - Fair Value	348,670	356,123
Federal bank stock - Fair Value	0	0
Accrued interest receivable - Fair value	1,553	1,466
Financial Assets - Fair Value, Total	501,184	491,551
Financial liabilities:
Deposits - Fair Value	469,602	434,552
Borrowed funds - Fair Value	17,913	45,241
Accrued interest payable - Fair Value	255	292
Financial Liabilities - Fair Value, Total	487,770	480,085
Fair Value, Inputs, Level 1 [Member]
Financial assets:
Securities available for sale	5,037	6,177
Financial assets:
Cash and cash equivalents - Fair Value	28,766	16,658
Securities available for sale - Fair Value	5,037	6,177
Loans, net - Fair Value	0	0
Federal bank stock - Fair Value	0	0
Accrued interest receivable - Fair value	42	34
Financial Assets - Fair Value, Total	33,845	22,628
Financial liabilities:
Deposits - Fair Value	347,063	325,983
Borrowed funds - Fair Value	0	0
Accrued interest payable - Fair Value	5	5
Financial Liabilities - Fair Value, Total	347,068	325,988
Fair Value, Inputs, Level 2 [Member]
Financial assets:
Securities available for sale	116,506	110,474
Financial assets:
Cash and cash equivalents - Fair Value	0	0
Securities available for sale - Fair Value	116,506	110,474
Loans, net - Fair Value	0	0
Federal bank stock - Fair Value	0	0
Accrued interest receivable - Fair value	448	430
Financial Assets - Fair Value, Total	116,954	111,145
Financial liabilities:
Deposits - Fair Value	122,539	108,569
Borrowed funds - Fair Value	17,913	45,241
Accrued interest payable - Fair Value	250	287
Financial Liabilities - Fair Value, Total	140,702	154,097
Fair Value, Inputs, Level 3 [Member]
Financial assets:
Securities available for sale	653	653
Financial assets:
Cash and cash equivalents - Fair Value	0	0
Securities available for sale - Fair Value	653	653
Loans, net - Fair Value	348,670	356,123
Federal bank stock - Fair Value	0	0
Accrued interest receivable - Fair value	1,063	1,002
Financial Assets - Fair Value, Total	350,386	357,778
Financial liabilities:
Deposits - Fair Value	0	0
Borrowed funds - Fair Value	0	0
Accrued interest payable - Fair Value	0	0
Financial Liabilities - Fair Value, Total	$ 0	$ 0

XML

Fair Value (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 2,776	$ 2,420
Fair Value, Inputs, Level 1 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0	0
Fair Value, Inputs, Level 2 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0	0
Fair Value, Inputs, Level 3 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,776	2,420
Impaired commercial real estate loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,514	2,340
Impaired commercial real estate loans [Member] | Fair Value, Inputs, Level 1 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0	0
Impaired commercial real estate loans [Member] | Fair Value, Inputs, Level 2 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0	0
Impaired commercial real estate loans [Member] | Fair Value, Inputs, Level 3 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,514	2,340
Impaired commercial business loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	182
Impaired commercial business loans [Member] | Fair Value, Inputs, Level 1 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0
Impaired commercial business loans [Member] | Fair Value, Inputs, Level 2 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0
Impaired commercial business loans [Member] | Fair Value, Inputs, Level 3 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	182
Other residential real estate owned [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	80	80
Other residential real estate owned [Member] | Fair Value, Inputs, Level 1 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0	0
Other residential real estate owned [Member] | Fair Value, Inputs, Level 2 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0	0
Other residential real estate owned [Member] | Fair Value, Inputs, Level 3 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 80	$ 80

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Loans Receivable and Related Allowance for Loan Losses (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 349,836	$ 357,299
Not Rated [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	199,878	200,620
Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	136,075	143,981
Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,935	930
Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	11,948	11,768
Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Residential first mortgages [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	105,836	105,541
Residential first mortgages [Member] | Not Rated [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	105,263	104,983
Residential first mortgages [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Residential first mortgages [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Residential first mortgages [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	573	558
Residential first mortgages [Member] | Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Home equity and lines of credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	86,761	87,928
Home equity and lines of credit [Member] | Not Rated [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	86,565	87,868
Home equity and lines of credit [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Home equity and lines of credit [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Home equity and lines of credit [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	196	60
Home equity and lines of credit [Member] | Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Commercial real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	95,301	101,499
Commercial real estate [Member] | Not Rated [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Commercial real estate [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	87,933	93,973
Commercial real estate [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	247	256
Commercial real estate [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	7,121	7,270
Commercial real estate [Member] | Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Commercial business [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	52,540	53,214
Commercial business [Member] | Not Rated [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Commercial business [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	48,142	50,008
Commercial business [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,688	674
Commercial business [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	2,710	2,532
Commercial business [Member] | Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	9,398	9,117
Consumer [Member] | Not Rated [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	8,050	7,769
Consumer [Member] | Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Consumer [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Consumer [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,348	1,348
Consumer [Member] | Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 0	$ 0

XML

Participation in the Small Business Lending Fund (SBLF) of the U.S. Treasury Department (U.S. Treasury) (Details Textual) (USD $)	0 Months Ended	3 Months Ended			3 Months Ended		0 Months Ended			0 Months Ended	3 Months Ended
	Aug. 18, 2011	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014 Minimum [Member]	Mar. 31, 2014 Maximum [Member]	Aug. 18, 2011 Series B Non Cumulative Preferred Stock [Member]	Mar. 31, 2014 Series B Non Cumulative Preferred Stock [Member]	Dec. 31, 2013 Series B Non Cumulative Preferred Stock [Member]	Sep. 17, 2013 Series B Preferred Stock [Member]	Mar. 31, 2014 Series B Preferred Stock [Member]	Mar. 31, 2014 Two Year from January 1 2014 [Member]
Non-Cumulative Perpetual Series B Preferred Stock Issued, Shares Pursuant To U.S. Treasury's Small Business Lending Fund Program (in shares)	10,000
Preferred Stock, Dividend Payment Rate, Variable		5,000
Preferred Stock, Dividend Rate, Percentage		2.00%	5.00%		1.00%	5.00%					9.00%	2.00%
Preferred Stock, Redemption Terms		The Corporation may redeem the shares of Series B Preferred Stock, in whole or in part, at any time at a redemption price equal to the sum of the liquidation amount and the per-share amount of any unpaid dividends for the then-current period, subject to any required prior approval by the Corporation’s primary federal banking regulator. If paid in part, payments are required to be at least 25% of the original proceeds.
Preferred Stock Redemption Shares										5,000
Preferred Stock Redemption Percentage										50.00%
Preferred Stock, Redemption Amount										$ 5,000,000
Preferred Stock, Liquidation Preference Per Share							$ 1,000
Proceeds from Issuance or Sale of Equity, Total							10,000,000
Treasury Stock, Shares		102,017		102,017						5,000
Preferred Stock, Liquidation Preference, Value								$ 5,000,000	$ 5,000,000	$ 5,000,000

XML

Accumulated Other Comprehensive Income(Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income Loss, Unrealized Gains and Losses on Available-for-Sale Securities, Beginning Balance	$ (1,870)	$ 2,365
Other comprehensive income before reclassification, Unrealized Gains and Losses on Available-for-Sale Securities	812	(238)
Amounts reclassified from accumulated other comprehensive income, Totals, Unrealized Gains and Losses on Available-for-Sale Securities	(434)	(56)
Net current period other comprehensive loss, Totals, Unrealized Gains and Losses on Available-for-Sale Securities	378	(294)
Accumulated Other Comprehensive Income Loss, Unrealized Gains and Losses on Available-for-Sale Securities, Ending Balance	(1,492)	2,071
Accumulated Other Comprehensive Income Loss, Defined Benefit Pension Items, Beginning Balance	(1,410)	(1,795)
Other comprehensive income before reclassification, Defined Benefit Pension Items	0	0
Amounts reclassified from accumulated other comprehensive income, Defined Benefit Pension Items	0	0
Net current period other comprehensive loss, Defined Benefit Pension Items	0	0
Accumulated Other Comprehensive Income Loss, Defined Benefit Pension Items, Ending Balance	(1,410)	(1,795)
Accumulated Other Comprehensive Income Loss, Totals, Beginning Balance	(3,280)	570
Other comprehensive income before reclassification, Totals	812	(238)
Amounts reclassified from accumulated other comprehensive, Defined Benefit Pension Item income	(434)	(56)
Net current period other comprehensive loss, Totals	378	(294)
Accumulated Other Comprehensive Income Loss, Totals, Ending Balance	$ (2,902)	$ 276

XML

Stock Compensation Plans (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2014
Nonvested, Shares (in shares)	25,800
Granted, Shares (in shares)	0
Vested, Shares (in shares)	0
Forfeited, Shares (in shares)	0
Nonvested, Shares (in shares)	25,800
Nonvested, Weighted-Average Grant-date Fair Value	$ 20.11
Granted, Weighted-Average Grant-date Fair Value	$ 0
Vested, Weighted-Average Grant-date Fair Value	$ 0
Forfeited, Weighted-Average Grant-date Fair Value	$ 0
Nonvested, Weighted-Average Grant-date Fair Value	$ 20.11

XML

Loans Receivable and Related Allowance for Loan Losses (Details Textual) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 2,500,000	$ 2,300,000	$ 2,500,000
Allowance For Losses Allocated To Loans Classified As Tdrs	56,000	35,000	56,000
Troubled Debt Restructuring Pre Modification Interest Rate		6.75%
Troubled Debt Restructuring Post Modification Interest Rate		4.00%
Troubled Debt Restructuring Extended Term		65 months
Payments for Loans	430,000
Loans Receivable With Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Average Recorded Investment	2,912,000	4,000,000	3,251,000
Impaired Financing Receivable, Interest Income, Accrual Method	13,000	4,000	18,000
Loans Receivable With No Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Average Recorded Investment	2,409,000	2,500,000	2,399,000
Impaired Financing Receivable, Interest Income, Accrual Method	2,000	1,000	6,000
Consumer Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance For Losses Allocated To Loans Classified As Tdrs		83,000
Consumer Loan [Member] | Loans Receivable With Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Average Recorded Investment	0		0
Impaired Financing Receivable, Interest Income, Accrual Method	0		0
Consumer Loan [Member] | Loans Receivable With No Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Average Recorded Investment	1,348,000		1,457,000
Impaired Financing Receivable, Interest Income, Accrual Method	0		0
Commercial Real Estate [Member] | Loans Receivable With Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Average Recorded Investment	2,621,000		3,202,000
Impaired Financing Receivable, Interest Income, Accrual Method	7,000		13,000
Commercial Real Estate [Member] | Loans Receivable With No Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Impaired Financing Receivable, Average Recorded Investment	690,000		584,000
Impaired Financing Receivable, Interest Income, Accrual Method	$ 2,000		$ 5,000

XML

Fair Value (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 2,776	$ 2,420
Impaired commercial real estate loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,514	2,340
Other residential real estate owned [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	80	80
Commercial Business Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	182
Fair Value, Inputs, Level 3 [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,776	2,420
Fair Value, Inputs, Level 3 [Member] | Impaired commercial real estate loans [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,514	2,340
Fair Value Measurements, Valuation Techniques	Sales comparison approach/ Contractual provision of USDA loan	Sales comparison approach/ Contractual provision of USDA loan
Fair Value Measurements Unobservable Inputs	Adjustment for differences between comparable sales	Adjustment for differences between comparable sales
Impaired Commercial Real Estate Loan Minimum Interest Rate In Range	0.00%	0.00%
Impaired Commercial Real Estate Loan Maximum Interest Rate In Range	10.00%	10.00%
Fair Value, Inputs, Level 3 [Member] | Other residential real estate owned [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	80	80
Fair Value Measurements, Valuation Techniques	Sales comparison approach	Sales comparison approach
Fair Value Measurements Unobservable Inputs	Adjustment for differences between comparable sales	Adjustment for differences between comparable sales
Other Residential Real Estate Owned Loan Interest Rate	10.00%	10.00%
Fair Value, Inputs, Level 3 [Member] | Commercial Business Loan [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 182
Fair Value Measurements, Valuation Techniques	Liquidation value of business assets
Fair Value Measurements Unobservable Inputs	N/A
Other Residential Real Estate Owned Loan Interest Rate	76.00%

XML

Participation in the Small Business Lending Fund (SBLF) of the U.S. Treasury Department (U.S. Treasury)

3 Months Ended

Mar. 31, 2014

Participation In Small Business Lending Fund Self Of U S Treasury Department U S Treasury and Repurchase Of Shares Issued Under Troubled Asset Relief Program Tarp [Abstract]

Participation In Small Business Lending Fund and Repurchase Of Shares Issued Under Troubled Asset Relief Program [Text Block]

2. Participation in the Small Business Lending Fund (SBLF) of the U.S. Treasury Department (U.S. Treasury)

On August 18, 2011, the Corporation entered into a Securities Purchase Agreement (the Agreement) with the U.S. Treasury Department, pursuant to which the Corporation issued and sold to the U.S. Treasury 10,000 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series B (Series B Preferred Stock), having a liquidation preference of $1,000 per share, for aggregate proceeds of $10.0 million, pursuant to the U.S. Treasury’s SBLF program. On September 17, 2013, with the approval of the Corporation’s primary federal banking regulator, the Corporation redeemed 5,000 shares, or 50%, of its Series B Preferred Stock held by the U.S. Treasury at an aggregate redemption price of $5.0 million, plus accrued but unpaid dividends. Following this redemption, the Treasury holds 5,000 shares of the Series B Preferred Stock, representing a remaining liquidation value of $5.0 million.

The Series B Preferred Stock is entitled to receive non-cumulative dividends payable quarterly on each January 1, April 1, July 1 and October 1, beginning October 1, 2011. The dividend rate, which is calculated on the aggregate liquidation amount, was initially set at 5% per annum based upon the current level of Qualified Small Business Lending (QSBL) by the Bank at that time. The dividend rate in the subsequent periods for the first two and one-half years through the quarter ending December 31, 2013 was based upon the percentage change in qualified lending between each dividend period and the baseline QSBL level established at the time the Agreement was entered into. Such dividend rate varied from 1% to 5% per annum. For the two year period beginning January 1, 2014, the dividend rate will be fixed at a rate of 2% per annum. If the Series B Preferred Stock remains outstanding for more than four-and-one-half years, beginning January 1, 2016, the dividend rate will be fixed at 9%. The dividend rate was 2.0% and 5.0%, respectively, for the quarters ended March 31, 2014 and 2013. Such dividends are not cumulative, but the Corporation may only declare and pay dividends on its common stock (or any other equity securities junior to the Series B Preferred Stock) if it has declared and paid dividends for the current dividend period on the Series B Preferred Stock, and will be subject to other restrictions on its ability to repurchase or redeem other securities.

Holders of the Series B Preferred Stock have the right to vote as a separate class on certain matters relating to the rights of holders of Series B Preferred Stock and on certain corporate transactions. Except with respect to such matters, the Series B Preferred Stock does not have voting rights.

The Corporation may redeem the shares of Series B Preferred Stock, in whole or in part, at any time at a redemption price equal to the sum of the liquidation amount and the per-share amount of any unpaid dividends for the then-current period, subject to any required prior approval by the Corporation’s primary federal banking regulator. If paid in part, payments are required to be at least 25% of the original issuance.

XML

Stock Compensation Plans (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2007
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			177,496
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 311,000
Allocated Share-based Compensation Expense	$ 42,000	$ 35,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 7 months 6 days
Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	176,866

XML

Securities (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	$ 86,137	$ 75,510
Unrealized Loss, Less than 12 Months	(2,479)	(3,835)
Fair Value, 12 Months or More	12,148	4,982
Unrealized Loss, 12 Months or More	(615)	(302)
Fair Value, Total	98,285	80,492
Unrealized Loss, Total	(3,094)	(4,137)
U.S. Treasury and federal agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	2,840	4,168
Unrealized Loss, Less than 12 Months	(146)	(298)
Fair Value, 12 Months or More	427	0
Unrealized Loss, 12 Months or More	(56)	0
Fair Value, Total	3,267	4,168
Unrealized Loss, Total	(202)	(298)
U.S. government sponsored entities and agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	24,437	22,891
Unrealized Loss, Less than 12 Months	(520)	(745)
Fair Value, 12 Months or More	981	0
Unrealized Loss, 12 Months or More	(19)	0
Fair Value, Total	25,418	22,891
Unrealized Loss, Total	(539)	(745)
U.S. agency mortgage-backed securities: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	18,308	33,805
Unrealized Loss, Less than 12 Months	(63)	(1,729)
Fair Value, 12 Months or More	0	4,982
Unrealized Loss, 12 Months or More	0	(302)
Fair Value, Total	18,308	38,787
Unrealized Loss, Total	(63)	(2,031)
U.S. agency collateralized mortgage obligations: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	26,832
Unrealized Loss, Less than 12 Months	(1,108)
Fair Value, 12 Months or More	9,651
Unrealized Loss, 12 Months or More	(521)
Fair Value, Total	36,483
Unrealized Loss, Total	(1,629)
State and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	13,239	13,262
Unrealized Loss, Less than 12 Months	(616)	(988)
Fair Value, 12 Months or More	150	0
Unrealized Loss, 12 Months or More	(7)	0
Fair Value, Total	13,389	13,262
Unrealized Loss, Total	(623)	(988)
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months		242
Unrealized Loss, Less than 12 Months		(9)
Fair Value, 12 Months or More		0
Unrealized Loss, 12 Months or More		0
Fair Value, Total		242
Unrealized Loss, Total		(9)
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	481	1,142
Unrealized Loss, Less than 12 Months	(26)	(66)
Fair Value, 12 Months or More	939	0
Unrealized Loss, 12 Months or More	(12)	0
Fair Value, Total	1,420	1,142
Unrealized Loss, Total	$ (38)	$ (66)

XML

Securities (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Due in one year or less, amortized cost	$ 1,000
Due after one year through five years, amortized cost	23,816
Due after five through ten years, amortized cost	35,344
Due after ten years, amortized cost	3,631
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis	122,100
Due in one year or less, fair value	1,004
Due after one year through five years, fair value	23,755
Due after five through ten years, fair value	34,908
Due after ten years, fair value	3,480
Available-for-sale Securities, Debt Securities	119,773
Mortgage-backed securities: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	18,371
Fair value	18,308
Collateralized mortgage obligations: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	39,938
Fair value	$ 38,318

XML

Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	$ 122,196	$ 117,304
U.S. Treasury and federal agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	3,267	4,168
U.S. government sponsored entities and agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	25,418	22,892
U.S. agency mortgage-backed securities: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	18,308	11,361
U.S. agency collateralized mortgage obligations: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	38,318	39,722
State and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	34,462	36,499
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale		241
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	2,423	2,421
Fair Value, Inputs, Level 1 [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	5,037	6,177
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury and federal agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	3,267	4,168
Fair Value, Inputs, Level 1 [Member] | U.S. government sponsored entities and agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | U.S. agency mortgage-backed securities: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | U.S. agency collateralized mortgage obligations: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | State and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 1 [Member] | Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale		241
Fair Value, Inputs, Level 1 [Member] | Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	1,770	1,768
Fair Value, Inputs, Level 2 [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	116,506	110,474
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury and federal agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 2 [Member] | U.S. government sponsored entities and agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	25,418	22,892
Fair Value, Inputs, Level 2 [Member] | U.S. agency mortgage-backed securities: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	18,308	11,361
Fair Value, Inputs, Level 2 [Member] | U.S. agency collateralized mortgage obligations: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	38,318	39,722
Fair Value, Inputs, Level 2 [Member] | State and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	34,462	36,499
Fair Value, Inputs, Level 2 [Member] | Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale		0
Fair Value, Inputs, Level 2 [Member] | Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	653	653
Fair Value, Inputs, Level 3 [Member] | U.S. Treasury and federal agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | U.S. government sponsored entities and agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | U.S. agency mortgage-backed securities: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | U.S. agency collateralized mortgage obligations: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | State and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	0	0
Fair Value, Inputs, Level 3 [Member] | Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale		0
Fair Value, Inputs, Level 3 [Member] | Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available for sale	$ 653	$ 653

XML

Securities (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Proceeds	$ 21,559	$ 1,775
Gains	658	85
Tax provision related to gains	$ 224	$ 29

XML

Loans Receivable and Related Allowance for Loan Losses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Mortgage loans on real estate:
Residential first mortgages	$ 105,836	$ 105,541
Home equity loans and lines of credit	86,761	87,928
Commercial real estate	95,301	101,499
Mortgage Loans on Real Estate	287,898	294,968
Other loans:
Commercial business	52,540	53,214
Consumer	9,398	9,117
Loans Receivable Commercial and Consumer	61,938	62,331
Total loans, gross	349,836	357,299
Less allowance for loan losses	4,921	4,869
Total loans, net	$ 344,915	$ 352,430

XML

Nature of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Nature of Operations and Basis of Presentation

Emclaire Financial Corp (the Corporation) is a Pennsylvania corporation and the holding company of The Farmers National Bank of Emlenton (the Bank) and Emclaire Settlement Services, LLC (the Title Company). The Corporation provides a variety of financial services to individuals and businesses through its offices in Western Pennsylvania. Its primary deposit products are checking, savings and term certificate accounts and its primary lending products are residential and commercial mortgages, commercial business loans and consumer loans.

The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries, the Bank and the Title Company. All significant intercompany transactions and balances have been eliminated in preparing the consolidated financial statements.

The accompanying unaudited consolidated financial statements for the interim periods include all adjustments, consisting of normal recurring accruals, which are necessary, in the opinion of management, to fairly reflect the Corporation’s consolidated financial position and results of operations. Additionally, these consolidated financial statements for the interim periods have been prepared in accordance with instructions for the Securities and Exchange Commission’s (SEC’s) Form 10-Q and Article 10 of Regulation S-X and therefore do not include all information or footnotes necessary for a complete presentation of financial condition, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America (GAAP). For further information, refer to the audited consolidated financial statements and footnotes thereto for the year ended December 31, 2013, as contained in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC.

The balance sheet at December 31, 2013 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by GAAP for complete financial statements.

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, fair value of financial instruments, goodwill, real estate owned, the valuation of deferred tax assets and other-than-temporary impairment charges on securities. The results of operations for interim quarterly or year-to-date periods are not necessarily indicative of the results that may be expected for the entire year or any other period. Certain amounts previously reported may have been reclassified to conform to the current year’s financial statement presentation.

XML

Loans Receivable and Related Allowance for Loan Losses (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 2,776		$ 2,420
Recorded Investment	3,200		2,500
Related Allowance	465		181
Loans Receivable With Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	4,162		3,544
Recorded Investment	3,221		2,603
Related Allowance	465		202
Average Recorded Investment	2,912	4,000	3,251
Interest Income Recognized in Period	13	4	18
Cash Basis Interest Recognized in Period	3		17
Loans Receivable With No Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,839		2,778
Recorded Investment	2,438		2,379
Average Recorded Investment	2,409	2,500	2,399
Interest Income Recognized in Period	2	1	6
Cash Basis Interest Recognized in Period	2		5
Residential First Mortgages [Member] | Loans Receivable With Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	81		82
Recorded Investment	81		82
Related Allowance	21		21
Average Recorded Investment	82		49
Interest Income Recognized in Period	1		5
Cash Basis Interest Recognized in Period	1		4
Residential First Mortgages [Member] | Loans Receivable With No Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0		20
Recorded Investment	0		20
Average Recorded Investment	10		4
Interest Income Recognized in Period	0		1
Cash Basis Interest Recognized in Period	0		0
Home equity and lines of credit [Member] | Loans Receivable With Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0		0
Recorded Investment	0		0
Related Allowance	0		0
Average Recorded Investment	0		0
Interest Income Recognized in Period	0		0
Cash Basis Interest Recognized in Period	0		0
Home equity and lines of credit [Member] | Loans Receivable With No Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0		0
Recorded Investment	0		0
Average Recorded Investment	0		0
Interest Income Recognized in Period	0		0
Cash Basis Interest Recognized in Period	0		0
Commercial real estate [Member] | Loans Receivable With Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	3,664		3,462
Recorded Investment	2,723		2,521
Related Allowance	209		181
Average Recorded Investment	2,621		3,202
Interest Income Recognized in Period	7		13
Cash Basis Interest Recognized in Period	2		13
Commercial real estate [Member] | Loans Receivable With No Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,103		1,074
Recorded Investment	704		675
Average Recorded Investment	690		584
Interest Income Recognized in Period	2		5
Cash Basis Interest Recognized in Period	2		5
Commercial business [Member] | Loans Receivable With Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	417		0
Recorded Investment	417		0
Related Allowance	235		0
Average Recorded Investment	209		0
Interest Income Recognized in Period	5		0
Cash Basis Interest Recognized in Period	0		0
Commercial business [Member] | Loans Receivable With No Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	388		336
Recorded Investment	386		336
Average Recorded Investment	361		354
Interest Income Recognized in Period	0		0
Cash Basis Interest Recognized in Period	0		0
Consumer [Member] | Loans Receivable With Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	0		0
Recorded Investment	0		0
Related Allowance	0		0
Average Recorded Investment	0		0
Interest Income Recognized in Period	0		0
Cash Basis Interest Recognized in Period	0		0
Consumer [Member] | Loans Receivable With No Specific Allowance [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,348		1,348
Recorded Investment	1,348		1,348
Average Recorded Investment	1,348		1,457
Interest Income Recognized in Period	0		0
Cash Basis Interest Recognized in Period	$ 0		$ 0

XML

Stock Compensation Plans (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Options - Outstanding (in shares)	79,250
Options - Granted (in shares)	0
Options - Exercised (in shares)	(1,500)
Options - Forfeited (in shares)	0
Options - Outstanding (in shares)	77,750	79,250
Options - Exercisable (in shares)	77,250
Weighted-Average Exercise Price - Outstanding (in dollars per share)	$ 24.97
Weighted-Average Exercise Price - Granted (in dollars per share)	$ 0
Weighted-Average Exercise Price - Exercised (in dollars per share)	$ 17.00
Weighted-Average Exercise Price - Forfeited (in dollars per share)	$ 0
Weighted-Average Exercise Price - Outstanding (in dollars per share)	$ 25.12	$ 24.97
Weighted-Average Exercise Price - Exercisable (in dollars per share)	$ 25.19
Aggregate Intrinsic Value - Outstanding	$ 0
Aggregate Intrinsic Value - Granted	0
Aggregate Intrinsic Value - Exercised	0
Aggregate Intrinsic Value - Forfeited	0
Aggregate Intrinsic Value - Outstanding	63,635	0
Aggregate Intrinsic Value - Exercisable	$ 58,355
Weighted-Average Remaining Term - Outstanding (in years)	3 years 6 months	3 years 9 months 18 days
Weighted-Average Remaining Term - Granted (in years)	0 years
Weighted-Average Remaining Term - Exercised (in years)	0 years
Weighted-Average Remaining Term - Forfeited (in years)	0 years
Weighted-Average Remaining Term - Exercisable (in years)	3 years 6 months

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Assets
Cash and due from banks	$ 2,127	$ 2,485
Interest earning deposits with banks	26,639	14,173
Cash and cash equivalents	28,766	16,658
Securities available for sale	122,196	117,304
Loans receivable, net of allowance for loan losses of $4,921 and $4,869	344,915	352,430
Federal bank stocks, at cost	2,752	3,977
Bank-owned life insurance	10,484	10,401
Accrued interest receivable	1,553	1,466
Premises and equipment, net	12,839	12,310
Goodwill	3,664	3,664
Core deposit intangible, net	908	965
Prepaid expenses and other assets	6,800	6,667
Total Assets	534,877	525,842
Deposits:
Non-interest bearing	111,318	104,269
Interest bearing	355,844	327,737
Total deposits	467,162	432,006
Short-term borrowed funds	2,150	24,150
Long-term borrowed funds	15,000	20,000
Accrued interest payable	255	292
Accrued expenses and other liabilities	4,365	4,322
Total Liabilities	488,932	480,770
Commitments and Contingent Liabilities
Stockholders' Equity:
Common stock, $1.25 par value, 12,000,000 shares authorized; 1,872,175 and 1,870,675 shares issued; 1,770,158 and 1,768,658 shares outstanding	2,340	2,338
Additional paid-in capital	19,544	19,478
Treasury stock, at cost; 102,017 shares	(2,114)	(2,114)
Retained earnings	24,077	23,650
Accumulated other comprehensive loss	(2,902)	(3,280)
Total Stockholders' Equity	45,945	45,072
Total Liabilities and Stockholders' Equity	534,877	525,842
Series B Non Cumulative Preferred Stock [Member]
Stockholders' Equity:
Preferred stock, $1.00 par value, 3,000,000 shares authorized; Series B, non-cumulative preferred stock, $5,000 liquidation value, 5,000 shares issued and outstanding	$ 5,000	$ 5,000

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Fair Value (Details 1) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Fair Value, Inputs, Level 3 [Member]
Balance at the beginning of the period	$ 653	$ 653
Total gains or losses (realized/unrealized):
Included in earnings	0	0
Included in other comprehensive income	0	0
Issuances	0	0
Transfers in and/or out of Level 3	0	0
Balance at the end of the period	$ 653	$ 653

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities
Net income	$ 841	$ 858
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	184	171
Provision for loan losses	163	143
Amortization of premiums, net	65	36
Amortization of intangible assets and mortgage servicing rights	57	73
Realized gains on sales of available for sale securities, net	(658)	(85)
Net gains on foreclosed real estate	(2)	(10)
Restricted stock and stock option compensation	42	35
Increase in bank-owned life insurance, net	(83)	(82)
Increase in accrued interest receivable	(87)	(171)
(Increase) decrease in prepaid expenses and other assets	(354)	84
Decrease in accrued interest payable	(37)	(54)
Increase in accrued expenses and other liabilities	43	103
Net cash provided by operating activities	174	1,101
Cash flows from investing activities
Loan originations and principal collections, net	7,285	(5,697)
Available for sale securities:
Sales	21,559	1,775
Maturities, repayments and calls	1,131	14,615
Purchases	(26,350)	(12,944)
Redemption of federal bank stocks	1,225	68
Proceeds from the sale of foreclosed real estate	29	59
Write-down of foreclosed real estate	0	19
Additions to premises and equipment	(713)	(296)
Net cash provided by (used in) investing activities	4,166	(2,401)
Cash flows from financing activities
Net increase in deposits	35,156	4,779
Repayments on Federal Home Loan Bank advances	(5,000)	0
Net change in short-term borrowings	(22,000)	0
Proceeds from exercise of stock options, including tax benefit	26	20
Dividends paid	(414)	(478)
Net cash provided by financing activities	7,768	4,321
Increase in cash and cash equivalents	12,108	3,021
Cash and cash equivalents at beginning of period	16,658	20,424
Cash and cash equivalents at end of period	28,766	23,445
Supplemental information:
Interest paid	778	1,090
Supplemental noncash disclosure:
Transfers from loans to foreclosed real estate	$ 0	$ 92

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Loans Receivable and Related Allowance for Loan Losses (Details 4) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 5,999	$ 5,145
Residential first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	573	520
Home equity and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	196	60
Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	3,078	2,866
Commercial business [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	804	351
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,348	1,348
Not Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,632	1,913
Not Past Due [Member] | Residential first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	87	88
Not Past Due [Member] | Home equity and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Not Past Due [Member] | Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	718	412
Not Past Due [Member] | Commercial business [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	479	65
Not Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,348	1,348
Thirty To Fifty Nine Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,148	2,148
Thirty To Fifty Nine Days Past Due [Member] | Residential first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	81	0
Thirty To Fifty Nine Days Past Due [Member] | Home equity and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Thirty To Fifty Nine Days Past Due [Member] | Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,067	2,148
Thirty To Fifty Nine Days Past Due [Member] | Commercial business [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Thirty To Fifty Nine Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Sixty To Eighty Nine Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	82
Sixty To Eighty Nine Days Past Due [Member] | Residential first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	82
Sixty To Eighty Nine Days Past Due [Member] | Home equity and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Sixty To Eighty Nine Days Past Due [Member] | Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Sixty To Eighty Nine Days Past Due [Member] | Commercial business [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Sixty To Eighty Nine Days Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0
Ninty Days Or More Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,219	1,002
Ninty Days Or More Past Due [Member] | Residential first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	405	350
Ninty Days Or More Past Due [Member] | Home equity and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	196	60
Ninty Days Or More Past Due [Member] | Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	293	306
Ninty Days Or More Past Due [Member] | Commercial business [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	325	286
Ninty Days Or More Past Due [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 0	$ 0

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Stock Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

A summary of option activity under the Plans as of March 31, 2014, and changes during the period then ended is presented below:

				Aggregate		Weighted-Average
		Weighted-Average		Intrinsic Value		Remaining Term
	Options	Exercise Price		(in thousands)		(in years)
Outstanding as of January 1, 2014	79,250	$	24.97	$	-	3.8
Granted	-		-		-	-
Exercised	(1,500)		17.00		-	-
Forfeited	-		-		-	-
Outstanding as of March 31, 2014	77,750	$	25.12	$	63,635	3.5
Exercisable as of March 31, 2014	77,250	$	25.19	$	58,355	3.5

Schedule Of Nonvested Stock Options Activity [Table Text Block]

A summary of the status of the Corporation’s nonvested option shares as of March 31, 2014, and changes during the period then ended is presented below:

		Weighted-Average
	Options	Grant-date Fair Value
Nonvested at January 1, 2014	500	$	1.44
Granted	-		-
Vested	-		-
Forfeited	-		-
Nonvested as of March 31, 2014	500	$	1.44

Schedule of Nonvested Share Activity [Table Text Block]

A summary of the status of the Corporation’s nonvested restricted stock awards as of March 31, 2014, and changes during the period then ended is presented below:

		Weighted-Average
	Shares	Grant-date Fair Value
Nonvested at January 1, 2014	25,800	$	20.11
Granted	-		-
Vested	-		-
Forfeited	-		-
Nonvested as of March 31, 2014	25,800	$	20.11

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Loans Receivable and Related Allowance for Loan Losses (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	$ 4,869	$ 5,350
Charge-offs	(132)	(37)
Recoveries	21	32
Provision	163	143
Ending Balance	4,921	5,488
Ending ALL balance attributable to loans:
Individually evaluated for impairment		465	202
Collectively evaluated for impairment		4,456	4,667
Total loans:
Individually evaluated for impairment		5,659	4,982
Collectively evaluated for impairment		344,177	352,317
Residential first mortgages [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	923	828
Charge-offs	(78)	(5)
Recoveries	0	1
Provision	91	(17)
Ending Balance	936	807
Ending ALL balance attributable to loans:
Individually evaluated for impairment		21	21
Collectively evaluated for impairment		915	902
Total loans:
Individually evaluated for impairment		81	102
Collectively evaluated for impairment		105,755	105,439
Home equity and lines of credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	625	730
Charge-offs	0	0
Recoveries	0	0
Provision	(6)	(3)
Ending Balance	619	727
Ending ALL balance attributable to loans:
Individually evaluated for impairment		0	0
Collectively evaluated for impairment		619	625
Total loans:
Individually evaluated for impairment		0	0
Collectively evaluated for impairment		86,761	87,928
Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	2,450	3,090
Charge-offs	(2)	0
Recoveries	5	2
Provision	(232)	97
Ending Balance	2,221	3,189
Ending ALL balance attributable to loans:
Individually evaluated for impairment		209	181
Collectively evaluated for impairment		2,012	2,269
Total loans:
Individually evaluated for impairment		3,427	3,196
Collectively evaluated for impairment		91,874	98,303
Commercial business [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	822	636
Charge-offs	(17)	0
Recoveries	7	0
Provision	282	66
Ending Balance	1,094	702
Ending ALL balance attributable to loans:
Individually evaluated for impairment		235	0
Collectively evaluated for impairment		859	822
Total loans:
Individually evaluated for impairment		803	336
Collectively evaluated for impairment		51,737	52,878
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	49	66
Charge-offs	(35)	(32)
Recoveries	9	29
Provision	28	0
Ending Balance	51	63
Ending ALL balance attributable to loans:
Individually evaluated for impairment		0	0
Collectively evaluated for impairment		51	49
Total loans:
Individually evaluated for impairment		1,348	1,348
Collectively evaluated for impairment		$ 8,050	$ 7,769

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Accumulated Other Comprehensive Income(Loss) (Tables)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2014 and 2013 and summarizes the significant amounts reclassified out of each component of accumulated other comprehensive income:

(Dollar amounts in thousands)	Unrealized Gains		Defined
	and Losses on		Benefit
	Available-for-Sale		Pension
	Securities		Items		Totals
Accumulated Other Comprehensive Loss at January 1, 2014	$	(1,870)	$	(1,410)	$	(3,280)
Other comprehensive income before reclassification		812		-		812
Amounts reclassified from accumulated other comprehensive income		(434)		-		(434)
Net current period other comprehensive income		378		-		378
Accumulated Other Comprehensive Loss at March 31, 2014	$	(1,492)	$	(1,410)	$	(2,902)

(Dollar amounts in thousands)	Unrealized Gains		Defined
	and Losses on		Benefit
	Available-for-Sale		Pension
	Securities		Items		Totals
Accumulated Other Comprehensive Income at January 1, 2013	$	2,365	$	(1,795)	$	570
Other comprehensive income before reclassification		(238)		-		(238)
Amounts reclassified from accumulated other comprehensive income		(56)		-		(56)
Net current period other comprehensive loss		(294)		-		(294)
Accumulated Other Comprehensive Income at March 31, 2013	$	2,071	$	(1,795)	$	276

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

(Dollar amounts in thousands)	Amount Reclassified
	from Accumulated
	Other Comprehensive
	Income		Affected Line Item in the
Details about Accumulated Other	For the three months		Statement Where Net
Comprehensive Income Components	ended March 31, 2014		Income is Presented
Unrealized gains and losses on available-for-sale securities	$	658	Gain on sale of securities
		(224)	Tax expense
Total reclassifications for the period	$	434	Net of tax

(Dollar amounts in thousands)	Amount Reclassified
	from Accumulated
	Other Comprehensive
	Income		Affected Line Item in the
Details about Accumulated Other	For the three months		Statement Where Net
Comprehensive Income Components	ended March 31, 2013		Income is Presented
Unrealized gains and losses on available-for-sale securities	$	85	Gain on sale of securities
		(29)	Tax expense
Total reclassifications for the period	$	56	Net of tax

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Consolidated Statements of Changes in Stockholders' Equity (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Balance at beginning of period	$ 45,072	$ 51,725
Net income	841	858
Other comprehensive income (loss)	378	(294)
Stock compensation expense	42	35
Dividends declared on preferred stock	(25)	(125)
Unrealized Loss, 12 Months or More	(389)	(353)
Exercise of stock options, including tax benefit	26	20
Balance at end of period	$ 45,945	$ 51,866
Common cash dividend per share (in dollars per share)	$ 0.22	$ 0.20

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Consolidated Balance Sheets [Parenthetical] (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Allowance for loan losses (in dollars)	$ 4,921	$ 4,869
Preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized	3,000,000	3,000,000
Common stock, par value (in dollars per share)	$ 1.25	$ 1.25
Common stock, shares authorized	12,000,000	12,000,000
Common stock, shares issued	1,872,175	1,870,675
Common stock, shares outstanding	1,770,158	1,768,658
Treasury stock, shares	102,017	102,017
Series B Non Cumulative Preferred Stock [Member]
Preferred stock, liquidation value (in dollars)	$ 5,000	$ 5,000
Preferred stock, shares issued	5,000	5,000
Preferred stock, shares outstanding	5,000	5,000

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Accumulated Other Comprehensive Income(Loss)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Other Comprehensive Income, Noncontrolling Interest [Text Block]

10. Accumulated Other Comprehensive Income(Loss)

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2014 and 2013 and summarizes the significant amounts reclassified out of each component of accumulated other comprehensive income:

(Dollar amounts in thousands)	Unrealized Gains		Defined
	and Losses on		Benefit
	Available-for-Sale		Pension
	Securities		Items		Totals
Accumulated Other Comprehensive Loss at January 1, 2014	$	(1,870)	$	(1,410)	$	(3,280)
Other comprehensive income before reclassification		812		-		812
Amounts reclassified from accumulated other comprehensive income		(434)		-		(434)
Net current period other comprehensive income		378		-		378
Accumulated Other Comprehensive Loss at March 31, 2014	$	(1,492)	$	(1,410)	$	(2,902)

(Dollar amounts in thousands)	Amount Reclassified
	from Accumulated
	Other Comprehensive
	Income		Affected Line Item in the
Details about Accumulated Other	For the three months		Statement Where Net
Comprehensive Income Components	ended March 31, 2014		Income is Presented
Unrealized gains and losses on available-for-sale securities	$	658	Gain on sale of securities
		(224)	Tax expense
Total reclassifications for the period	$	434	Net of tax

(Dollar amounts in thousands)	Unrealized Gains		Defined
	and Losses on		Benefit
	Available-for-Sale		Pension
	Securities		Items		Totals
Accumulated Other Comprehensive Income at January 1, 2013	$	2,365	$	(1,795)	$	570
Other comprehensive income before reclassification		(238)		-		(238)
Amounts reclassified from accumulated other comprehensive income		(56)		-		(56)
Net current period other comprehensive loss		(294)		-		(294)
Accumulated Other Comprehensive Income at March 31, 2013	$	2,071	$	(1,795)	$	276

(Dollar amounts in thousands)	Amount Reclassified
	from Accumulated
	Other Comprehensive
	Income		Affected Line Item in the
Details about Accumulated Other	For the three months		Statement Where Net
Comprehensive Income Components	ended March 31, 2013		Income is Presented
Unrealized gains and losses on available-for-sale securities	$	85	Gain on sale of securities
		(29)	Tax expense
Total reclassifications for the period	$	56	Net of tax

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Document And Entity Information	3 Months Ended
	Mar. 31, 2014	May 13, 2014
Document Information [Line Items]
Entity Registrant Name	EMCLAIRE FINANCIAL CORP
Entity Central Index Key	0000858800
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	EMCF
Entity Common Stock, Shares Outstanding		1,770,158
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014

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Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

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

The factors used in the Corporation’s earnings per common share computation follow:

(Dollar amounts in thousands, except for per share amounts)	For the three months ended
	March 31,
	2014		2013
Earnings per common share - basic
Net income	$	841	$	858
Less: Preferred stock dividends		25		125
Net income available to common stockholders	$	816	$	733
Average common shares outstanding		1,769,389		1,760,927
Basic earnings per common share	$	0.46	$	0.42
Earnings per common share - diluted
Net income available to common stockholders	$	816	$	733
Average common shares outstanding		1,769,389		1,760,927
Add: Dilutive effects of assumed issuance of restricted stock and exercise of stock options		13,043		3,679
Average shares and dilutive potential common shares		1,782,432		1,764,606
Diluted earnings per common share	$	0.46	$	0.42
Stock options and restricted stock awards not considered in computing diluted earnings per share because they were antidilutive		67,000		68,061

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Consolidated Statements of Net Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Interest and dividend income:
Loans receivable, including fees	$ 4,030	$ 4,200
Securities:
Taxable	404	417
Exempt from federal income tax	265	266
Federal bank stocks	35	17
Interest earning deposits with banks	11	14
Total interest and dividend income	4,745	4,914
Interest expense:
Deposits	561	838
Borrowed funds	180	198
Total interest expense	741	1,036
Net interest income	4,004	3,878
Provision for loan losses	163	143
Net interest income after provision for loan losses	3,841	3,735
Noninterest income:
Fees and service charges	378	398
Commissions on financial services	9	64
Title premiums	8	22
Net gain on sales of available for sale securities	658	85
Earnings on bank-owned life insurance	99	96
Other	287	266
Total noninterest income	1,439	931
Noninterest expense:
Compensation and employee benefits	1,943	1,905
Premises and equipment	600	542
Intangible asset amortization	57	73
Professional fees	163	177
Federal deposit insurance	88	105
Other	1,371	773
Total noninterest expense	4,222	3,575
Income before provision for income taxes	1,058	1,091
Provision for income taxes	217	233
Net income	841	858
Preferred stock dividends	25	125
Net income available to common stockholders	$ 816	$ 733
Basic and diluted earnings per common share (in dollars per share)	$ 0.46	$ 0.42
Average common shares outstanding (in shares)	1,769,389	1,760,927

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Loans Receivable and Related Allowance for Loan Losses

3 Months Ended

Mar. 31, 2014

Loans Notes Trade and Other Receivables Disclosure [Abstract]

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

5. Loans Receivable and Related Allowance for Loan Losses

The Corporation’s loans receivable as of the respective dates are summarized as follows:

(Dollar amounts in thousands)	March 31,		December 31,
	2014		2013
Mortgage loans on real estate:
Residential first mortgages	$	105,836	$	105,541
Home equity loans and lines of credit		86,761		87,928
Commercial real estate		95,301		101,499
		287,898		294,968
Other loans:
Commercial business		52,540		53,214
Consumer		9,398		9,117
		61,938		62,331
Total loans, gross		349,836		357,299
Less allowance for loan losses		4,921		4,869
Total loans, net	$	344,915	$	352,430

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of March 31, 2014:

(Dollar amounts in thousands)
	Impaired Loans with Specific Allowance
							For the three months
	As of March 31, 2014						ended March 31, 2014
											Cash Basis
	Unpaid						Average		Interest Income		Interest
	Principal		Recorded		Related		Recorded		Recognized		Recognized
	Balance		Investment		Allowance		Investment		in Period		in Period
Residential first mortgages	$	81	$	81	$	21	$	82	$	1	$	1
Home equity and lines of credit		-		-		-		-		-		-
Commercial real estate		3,664		2,723		209		2,621		7		2
Commercial business		417		417		235		209		5		-
Consumer		-		-		-		-		-		-
Total	$	4,162	$	3,221	$	465	$	2,912	$	13	$	3

	Impaired Loans with No Specific Allowance
					For the three months
	As of March 31, 2014				ended March 31, 2014
									Cash Basis
	Unpaid				Average		Interest Income		Interest
	Principal		Recorded		Recorded		Recognized		Recognized
	Balance		Investment		Investment		in Period		in Period
Residential first mortgages	$	-	$	-	$	10	$	-	$	-
Home equity and lines of credit		-		-		-		-		-
Commercial real estate		1,103		704		690		2		2
Commercial business		388		386		361		-		-
Consumer		1,348		1,348		1,348		-		-
Total	$	2,839	$	2,438	$	2,409	$	2	$	2

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of December 31, 2013:

(Dollar amounts in thousands)
	Impaired Loans with Specific Allowance
							For the year ended
	As of December 31, 2013						December 31, 2013
											Cash Basis
	Unpaid						Average		Interest Income		Interest
	Principal		Recorded		Related		Recorded		Recognized		Recognized
	Balance		Investment		Allowance		Investment		in Period		in Period
Residential first mortgages	$	82	$	82	$	21	$	49	$	5	$	4
Home equity and lines of credit		-		-		-		-		-		-
Commercial real estate		3,462		2,521		181		3,202		13		13
Commercial business		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	3,544	$	2,603	$	202	$	3,251	$	18	$	17

	Impaired Loans with No Specific Allowance
					For the year ended
	As of December 31, 2013				December 31, 2013
									Cash Basis
	Unpaid				Average		Interest Income		Interest
	Principal		Recorded		Recorded		Recognized		Recognized
	Balance		Investment		Investment		in Period		in Period
Residential first mortgages	$	20	$	20	$	4	$	1	$	-
Home equity and lines of credit		-		-		-		-		-
Commercial real estate		1,074		675		584		5		5
Commercial business		336		336		354		-		-
Consumer		1,348		1,348		1,457		-		-
Total	$	2,778	$	2,379	$	2,399	$	6	$	5

During the quarter ended March 31, 2013, the average recorded investment of impaired loans with a specific allowance was $4.0 million and the Corporation recognized interest income of $4,000 on these loans and the average recorded investment of impaired loans with no specific allowance was $2.5 million and interest income of $1,000 was recognized on these loans.

Unpaid principal balance includes any loans that have been partially charged off but not forgiven. Accrued interest is not included in the recorded investment in loans based on the amounts not being material.

Troubled debt restructurings (TDR). The Corporation has certain loans that have been modified in order to maximize collection of loan balances. If, for economic or legal reasons related to the customer’s financial difficulties, management grants a concession compared to the original terms and conditions of the loan that it would not have otherwise considered, the modified loan is classified as a TDR. Concessions related to TDRs generally do not include forgiveness of principal balances. The Corporation generally does not extend additional credit to borrowers with loans classified as TDRs.

At March 31, 2014 and December 31, 2013, the Corporation had $2.5 million of loans classified as TDRs, which are included in impaired loans above. At March 31, 2014 and December 31, 2013, the Corporation had $56,000 of the allowance for loan losses allocated to these specific loans. At March 31, 2013, the Corporation had $2.3 million of loans classified as TDRs with $35,000 of the allowance for loan losses allocated to these specific loans.

During the three month period ended March 31, 2014, the Corporation did not modify any additional loans as TDRs. During the three month period ended March 31, 2013, the Corporation modified a residential mortgage loan with a pre- and post-modification recorded investment of $83,000 as a TDR due to financial difficulties experienced by the borrower. The modification included a reduction in the interest rate from 6.75% to 4.00% and a 65 month extension of the original term.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. During the three month period ended March 31, 2014, there were defaults on three loans classified as TDRs which totaled $430,000. During the three month period ended March 31 2013, the Corporation did not have any loans which were modified as TDRs for which there was a payment default within twelve months following the modification.

Credit Quality Indicators. Management 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.

Commercial real estate and commercial business loans not identified as impaired are evaluated as risk rated pools of loans utilizing a risk rating practice that is supported by a quarterly special asset review. In this review process, strengths and weaknesses are identified, evaluated and documented for each criticized and classified loan and borrower, strategic action plans are developed, risk ratings are confirmed and the loan’s performance status is reviewed.

Management has determined certain portions of the loan portfolio to be homogeneous in nature and assigns like reserve factors for the following loan pool types: residential real estate, home equity loans and lines of credit, and consumer installment and personal lines of credit.

The reserve allocation for risk rated loan pools is developed by applying the following factors:

Historic: Management utilizes a computer model to develop the historical net charge-off experience which is used to formulate the assumptions employed in the migration analysis applied to estimate future losses in the portfolio. Outstanding balance and charge-off information are input into the model and historical loss migration rate assumptions are developed to apply to pass, special mention, substandard and doubtful risk rated loans. A twelve-quarter rolling weighted-average is utilized to anticipate probable incurred losses in the portfolios.

Qualitative: Qualitative adjustment factors for pass, special mention, substandard and doubtful ratings are developed and applied to risk rated loans to allow for: quality of lending policies and procedures; national and local economic and business conditions; changes in the nature and volume of the portfolio; experiences, ability and depth of lending management; changes in trends, volume and severity of past due, nonaccrual and classified loans and loss and recovery trends; quality of loan review systems; concentrations of credit and other external factors.

Management uses the following definitions for risk ratings:

Pass: Loans classified as pass typically exhibit good payment performance and have underlying borrowers with acceptable financial trends where repayment capacity is evident. These borrowers typically would have a sufficient cash flow that would allow them to weather an economic downturn and the value of any underlying collateral could withstand a moderate degree of depreciation due to economic conditions.

Special Mention: Loans classified as special mention are characterized by potential weaknesses that could jeopardize repayment as contractually agreed. These loans may exhibit adverse trends such as increasing leverage, shrinking profit margins and/or deteriorating cash flows. These borrowers would inherently be more vulnerable to the application of economic pressures.

Substandard: Loans classified as substandard exhibit weaknesses that are well-defined to the point that repayment is jeopardized. Typically, the Corporation is no longer adequately protected by both the apparent net worth and repayment capacity of the borrower.

Doubtful: Loans classified as doubtful have advanced to the point that collection or liquidation in full, on the basis of currently ascertainable facts, conditions and value, is highly questionable or improbable.

The following table presents the classes of the loan portfolio summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the Corporation’s internal risk rating system as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
					Special
	Not Rated		Pass		Mention		Substandard		Doubtful		Total
March 31, 2014:
Residential first mortgages	$	105,263	$	-	$	-	$	573	$	-	$	105,836
Home equity and lines of credit		86,565		-		-		196		-		86,761
Commercial real estate		-		87,933		247		7,121		-		95,301
Commercial business		-		48,142		1,688		2,710		-		52,540
Consumer		8,050		-		-		1,348		-		9,398
Total	$	199,878	$	136,075	$	1,935	$	11,948	$	-	$	349,836
December 31, 2013:
Residential first mortgages	$	104,983	$	-	$	-	$	558	$	-	$	105,541
Home equity and lines of credit		87,868		-		-		60		-		87,928
Commercial real estate		-		93,973		256		7,270		-		101,499
Commercial business		-		50,008		674		2,532		-		53,214
Consumer		7,769		-		-		1,348		-		9,117
Total	$	200,620	$	143,981	$	930	$	11,768	$	-	$	357,299

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonperforming loans as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Performing						Nonperforming
	Accruing		Accruing		Accruing		Accruing
	Loans Not		30-59 Days		60-89 Days		90 Days +				Total
	Past Due		Past Due		Past Due		Past Due		Nonaccrual		Loans
March 31, 2014:
Residential first mortgages	$	104,013	$	1,250	$	-	$	-	$	573	$	105,836
Home equity and lines of credit		86,168		278		119		-		196		86,761
Commercial real estate		91,806		50		367		-		3,078		95,301
Commercial business		51,519		217		-		-		804		52,540
Consumer		7,946		93		11		-		1,348		9,398
Total loans	$	341,452	$	1,888	$	497	$	-	$	5,999	$	349,836
December 31, 2013:
Residential first mortgages	$	103,821	$	884	$	278	$	38	$	520	$	105,541
Home equity and lines of credit		87,302		394		172		-		60		87,928
Commercial real estate		98,095		516		22		-		2,866		101,499
Commercial business		52,581		258		-		24		351		53,214
Consumer		7,682		61		26		-		1,348		9,117
Total loans	$	349,481	$	2,113	$	498	$	62	$	5,145	$	357,299

The following table presents the Corporation’s nonaccrual loans by aging category as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Not		30-59 Days		60-89 Days		90 Days +		Total
	Past Due		Past Due		Past Due		Past Due		Loans
March 31, 2014:
Residential first mortgages	$	87	$	81	$	-	$	405	$	573
Home equity and lines of credit		-		-		-		196		196
Commercial real estate		718		2,067		-		293		3,078
Commercial business		479		-		-		325		804
Consumer		1,348		-		-		-		1,348
Total loans	$	2,632	$	2,148	$	-	$	1,219	$	5,999
December 31, 2013:
Residential first mortgages	$	88	$	-	$	82	$	350	$	520
Home equity and lines of credit		-		-		-		60		60
Commercial real estate		412		2,148		-		306		2,866
Commercial business		65		-		-		286		351
Consumer		1,348		-		-		-		1,348
Total loans	$	1,913	$	2,148	$	82	$	1,002	$	5,145

An allowance for loan losses (ALL) is maintained to absorb probable incurred losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience and the amount of nonperforming loans.

Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL.

The following table details activity in the ALL and the recorded investment by portfolio segment based on impairment method:

(Dollar amounts in thousands)
			Home Equity
	Residential		& Lines		Commercial		Commercial
	Mortgages		of Credit		Real Estate		Business		Consumer		Total
Three months ended March 31, 2014:
Allowance for loan losses:
Beginning Balance	$	923	$	625	$	2,450	$	822	$	49	$	4,869
Charge-offs		(78)		-		(2)		(17)		(35)		(132)
Recoveries		-		-		5		7		9		21
Provision		91		(6)		(232)		282		28		163
Ending Balance	$	936	$	619	$	2,221	$	1,094	$	51	$	4,921
Three months ended March 31, 2013:
Allowance for loan losses:
Beginning Balance	$	828	$	730	$	3,090	$	636	$	66	$	5,350
Charge-offs		(5)		-		-		-		(32)		(37)
Recoveries		1		-		2		-		29		32
Provision		(17)		(3)		97		66		-		143
Ending Balance	$	807	$	727	$	3,189	$	702	$	63	$	5,488
At March 31, 2013:
Ending ALL balance attributable to loans:
Individually evaluated for impairment		21		-		209		235		-		465
Collectively evaluated for impairment		915		619		2,012		859		51		4,456
Total loans:
Individually evaluated for impairment		81		-		3,427		803		1,348		5,659
Collectively evaluated for impairment		105,755		86,761		91,874		51,737		8,050		344,177
At December 31, 2013:
Ending ALL balance attributable to loans:
Individually evaluated for impairment		21		-		181		-		-		202
Collectively evaluated for impairment		902		625		2,269		822		49		4,667
Total loans:
Individually evaluated for impairment		102		-		3,196		336		1,348		4,982
Collectively evaluated for impairment		105,439		87,928		98,303		52,878		7,769		352,317

The allowance for loan losses is based on estimates and actual losses may vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any given date.

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Securities

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Marketable Securities [Text Block]

4. Securities

The following table summarizes the Corporation’s securities as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available for sale:
March 31, 2014:
U.S. Treasury and federal agency	$	3,469	$	-	$	(202)	$	3,267
U.S. government sponsored entities and agencies		25,957		-		(539)		25,418
U.S. agency mortgage-backed securities: residential		18,371		-		(63)		18,308
U.S. agency collateralized mortgage obligations: residential		39,938		9		(1,629)		38,318
State and political subdivisions		34,365		720		(623)		34,462
Corporate debt securities		-		-		-		-
Equity securities		2,356		105		(38)		2,423
	$	124,456	$	834	$	(3,094)	$	122,196
December 31, 2013:
U.S. Treasury and federal agency	$	4,466	$	-	$	(298)	$	4,168
U.S. government sponsored entities and agencies		23,637		-		(745)		22,892
U.S. agency mortgage-backed securities: residential		11,020		341		-		11,361
U.S. agency collateralized mortgage obligations: residential		41,751		2		(2,031)		39,722
State and political subdivisions		36,657		830		(988)		36,499
Corporate debt securities		250		-		(9)		241
Equity securities		2,356		131		(66)		2,421
	$	120,137	$	1,304	$	(4,137)	$	117,304

The following table summarizes scheduled maturities of the Corporation’s debt securities as of March 31, 2014. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are not due at a single maturity and are shown separately.

(Dollar amounts in thousands)	Available for sale
	Amortized		Fair
	Cost		Value
Due in one year or less	$	1,000	$	1,004
Due after one year through five years		23,816		23,755
Due after five through ten years		35,344		34,908
Due after ten years		3,631		3,480
Mortgage-backed securities: residential		18,371		18,308
Collateralized mortgage obligations: residential		39,938		38,318
	$	122,100	$	119,773

Information pertaining to securities with gross unrealized losses at March 31, 2014 and December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous loss position are included in the table below:

(Dollar amounts in thousands)	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss
March 31, 2014:
U.S. Treasury and federal agency	$	2,840	$	(146)	$	427	$	(56)	$	3,267	$	(202)
U.S. government sponsored entities and agencies		24,437		(520)		981		(19)		25,418		(539)
U.S. agency mortgage-backed securities: residential		18,308		(63)		-		-		18,308		(63)
U.S. agency collateralized mortgage obligations: residential		26,832		(1,108)		9,651		(521)		36,483		(1,629)
State and political subdivisions		13,239		(616)		150		(7)		13,389		(623)
Equity securities		481		(26)		939		(12)		1,420		(38)
	$	86,137	$	(2,479)	$	12,148	$	(615)	$	98,285	$	(3,094)
December 31, 2013:
U.S. Treasury and federal agency	$	4,168	$	(298)	$	-	$	-	$	4,168	$	(298)
U.S. government sponsored entities and agencies		22,891		(745)		-		-		22,891		(745)
U.S. agency mortgage-backed securities: residential		33,805		(1,729)		4,982		(302)		38,787		(2,031)
State and political subdivisions		13,262		(988)		-		-		13,262		(988)
Corporate debt securities		242		(9)		-		-		242		(9)
Equity securities		1,142		(66)		-		-		1,142		(66)
	$	75,510	$	(3,835)	$	4,982	$	(302)	$	80,492	$	(4,137)

Gains on sales of available for sale securities for the three months ended March 31 were as follows:

(Dollar amounts in thousands)	For the three months
	ended March 31,
	2014		2013
Proceeds	$	21,559	$	1,775
Gains		658		85
Tax provision related to gains		224		29

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic, market or other conditions warrant such evaluation. Consideration is given to: (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 Corporation has the intent to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the Corporation intends to sell an impaired security, or if it is more likely than not the Corporation will be required to sell the security before its anticipated recovery, the Corporation records an other-than-temporary loss in an amount equal to the entire difference between fair value and amortized cost. Otherwise, only the credit portion of the estimated loss on debt securities is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. For equity securities determined to be other-than-temporarily impaired, the entire amount of impairment is recognized through earnings.

There were four equity securities in an unrealized loss position as of March 31, 2014, none of which were in an unrealized loss position for more than 12 months. Equity securities owned by the Corporation consist of common stock of various financial service providers. The investment securities are in an unrealized loss position as a result of recent market volatility. The Corporation does not invest in these securities with the intent to sell them for a profit in the near term. For investments in equity securities, in addition to the general factors mentioned above for determining whether the decline in market value is other-than-temporary, the analysis of whether an equity security is other-than-temporarily impaired includes a review of the profitability, capital adequacy and other relevant information available to determine the financial position and near term prospects of each issuer. The results of analyzing the aforementioned metrics and financial fundamentals suggest recovery of amortized cost as the sector improves. Based on that evaluation, and given that the Corporation’s current intention is not to sell any impaired security and it is more likely than not it will not be required to sell these securities before the recovery of their amortized cost basis, the Corporation does not consider the equity securities with unrealized losses as of March 31, 2014 to be other-than-temporarily impaired.

There were 113 debt securities in an unrealized loss position as of March 31, 2014, of which 11 were in an unrealized loss position for more than 12 months. Of these 113 securities, 6 were U.S. Treasury securities, 7 were U.S. agency mortgage-backed securities, 20 were U.S. government sponsored entity and agency securities, 25 were government-backed collateralized mortgage obligations and 55 were state and political subdivision securities. The unrealized losses associated with these securities were not due to the deterioration in the credit quality of the issuer that would likely result in the non-collection of contractual principal and interest, but rather have been caused by a rise in interest rates from the time the securities were purchased. Based on that evaluation and other general considerations, and given that the Corporation’s current intention is not to sell any impaired securities and it is more likely than not it will not be required to sell these securities before the recovery of its amortized cost basis, the Corporation does not consider the debt securities with unrealized losses as of March 31, 2014 to be other-than-temporarily impaired.

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

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

For assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

(Dollar amounts in thousands)			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
March 31, 2014:
U.S. Treasury and federal agency	$	3,267	$	3,267	$	-	$	-
U.S. government sponsored entities and agencies		25,418		-		25,418		-
Mortgage-backed securities: residential		18,308		-		18,308		-
Collateralized mortgage obligations: residential		38,318		-		38,318		-
State and political subdivision		34,462		-		34,462		-
Equity securities		2,423		1,770		-		653
	$	122,196	$	5,037	$	116,506	$	653
December 31, 2013:
U.S. Treasury and federal agency	$	4,168	$	4,168	$	-	$	-
U.S. government sponsored entities and agencies		22,892		-		22,892		-
U.S. agency mortgage-backed securities: residential		11,361		-		11,361		-
U.S. agency collateralized mortgage obligations: residential		39,722		-		39,722		-
State and political subdivisions		36,499		-		36,499		-
Corporate debt securities		241		241		-		-
Equity securities		2,421		1,768		-		653
	$	117,304	$	6,177	$	110,474	$	653

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

The following table presents changes in Level 3 assets measured on a recurring basis for the three month periods ended March 31, 2014 and 2013:

(Dollar amounts in thousands)	Three months ended
	March 31,
	2014		2013
Balance at the beginning of the period	$	653	$	653
Total gains or losses (realized/unrealized):		-		-
Included in earnings		-		-
Included in other comprehensive income		-		-
Issuances		-		-
Transfers in and/or out of Level 3		-		-
Balance at the end of the period	$	653	$	653

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

For assets measured at fair value on a non-recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

(Dollar amounts in thousands)			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
March 31, 2014:
Impaired commercial real estate loans	$	2,514	$	-	$	-	$	2,514
Impaired commercial business loans		182		-		-		182
Other residential real estate owned		80		-		-		80
	$	2,776	$	-	$	-	$	2,776
December 31, 2013:
Impaired commercial real estate loans	$	2,340	$	-	$	-	$	2,340
Other residential real estate owned		80		-		-		80
	$	2,420	$	-	$	-	$	2,420

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis:

(Dollar amounts in thousands)			Valuation	Unobservable
			Techniques(s)	Input (s)	Range
March 31, 2014:
Impaired commercial real estate loans	$	2,514	Sales comparison approach/ Contractual provision of USDA loan	Adjustment for differences between comparable sales	0% - 10%
Impaired commercial business loans		182	Liquidation value of business assets	N/A	76%
Other residential real estate owned		80	Sales comparison approach	Adjustment for differences between comparable sales	10%
December 31, 2013:
Impaired commercial real estate loans		2,340	Sales comparison approach/ Contractual provision of USDA loan	Adjustment for differences between comparable sales	0% - 10%
Other residential real estate owned		80	Sales comparison approach	Adjustment for differences between comparable sales	10%

Schedule Of Carrying Amount and Fair Values Of Financial Instruments [Table Text Block]

The following table sets forth the carrying amount and estimated fair values of the Corporation’s financial instruments included in the consolidated balance sheet as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Carrying		Fair Value Measurements using:
Description	Amount		Total		Level 1		Level 2		Level 3
March 31, 2014:
Financial Assets:
Cash and cash equivalents	$	28,766	$	28,766	$	28,766	$	-	$	-
Securities available for sale		122,196		122,196		5,037		116,506		653
Loans, net		344,915		348,670		-		-		348,670
Federal bank stock		2,752		N/A		N/A		N/A		N/A
Accrued interest receivable		1,553		1,553		42		448		1,063
		500,182		501,184		33,845		116,954		350,386
Financial Liabilities:
Deposits		467,162		469,602		347,063		122,539		-
Borrowed funds		17,150		17,913		-		17,913		-
Accrued interest payable		255		255		5		250		-
		484,567		487,770		347,068		140,702		-

	Carrying		Fair Value Measurements using:
	Amount		Total		Level 1		Level 2		Level 3
December 31, 2013:
Financial Assets:
Cash and cash equivalents	$	16,658	$	16,658	$	16,658	$	-	$	-
Securities available for sale		117,304		117,304		5,936		110,715		653
Loans, net		352,430		356,123		-		-		356,123
Federal bank stock		3,977		N/A		N/A		N/A		N/A
Accrued interest receivable		1,466		1,466		34		430		1,002
		491,835		491,551		22,628		111,145		357,778
Financial Liabilities:
Deposits		432,006		434,552		325,983		108,569		-
FHLB advances		44,150		45,241		-		45,241		-
Accrued interest payable		292		292		5		287		-
		476,448		480,085		325,988		154,097		-

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Securities (Tables)

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule Of Classification Of Available For Sale Securities Investment [Table Text Block]

The following table summarizes the Corporation’s securities as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available for sale:
March 31, 2014:
U.S. Treasury and federal agency	$	3,469	$	-	$	(202)	$	3,267
U.S. government sponsored entities and agencies		25,957		-		(539)		25,418
U.S. agency mortgage-backed securities: residential		18,371		-		(63)		18,308
U.S. agency collateralized mortgage obligations: residential		39,938		9		(1,629)		38,318
State and political subdivisions		34,365		720		(623)		34,462
Corporate debt securities		-		-		-		-
Equity securities		2,356		105		(38)		2,423
	$	124,456	$	834	$	(3,094)	$	122,196
December 31, 2013:
U.S. Treasury and federal agency	$	4,466	$	-	$	(298)	$	4,168
U.S. government sponsored entities and agencies		23,637		-		(745)		22,892
U.S. agency mortgage-backed securities: residential		11,020		341		-		11,361
U.S. agency collateralized mortgage obligations: residential		41,751		2		(2,031)		39,722
State and political subdivisions		36,657		830		(988)		36,499
Corporate debt securities		250		-		(9)		241
Equity securities		2,356		131		(66)		2,421
	$	120,137	$	1,304	$	(4,137)	$	117,304

Schedule Of Contractual Maturities Of Available For Sale Securities Debt Maturities [Table Text Block]

The following table summarizes scheduled maturities of the Corporation’s debt securities as of March 31, 2014. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are not due at a single maturity and are shown separately.

(Dollar amounts in thousands)	Available for sale
	Amortized		Fair
	Cost		Value
Due in one year or less	$	1,000	$	1,004
Due after one year through five years		23,816		23,755
Due after five through ten years		35,344		34,908
Due after ten years		3,631		3,480
Mortgage-backed securities: residential		18,371		18,308
Collateralized mortgage obligations: residential		39,938		38,318
	$	122,100	$	119,773

Schedule of Unrealized Loss on Investments [Table Text Block]

Information pertaining to securities with gross unrealized losses at March 31, 2014 and December 31, 2013, aggregated by investment category and length of time that individual securities have been in a continuous loss position are included in the table below:

(Dollar amounts in thousands)	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss
March 31, 2014:
U.S. Treasury and federal agency	$	2,840	$	(146)	$	427	$	(56)	$	3,267	$	(202)
U.S. government sponsored entities and agencies		24,437		(520)		981		(19)		25,418		(539)
U.S. agency mortgage-backed securities: residential		18,308		(63)		-		-		18,308		(63)
U.S. agency collateralized mortgage obligations: residential		26,832		(1,108)		9,651		(521)		36,483		(1,629)
State and political subdivisions		13,239		(616)		150		(7)		13,389		(623)
Equity securities		481		(26)		939		(12)		1,420		(38)
	$	86,137	$	(2,479)	$	12,148	$	(615)	$	98,285	$	(3,094)
December 31, 2013:
U.S. Treasury and federal agency	$	4,168	$	(298)	$	-	$	-	$	4,168	$	(298)
U.S. government sponsored entities and agencies		22,891		(745)		-		-		22,891		(745)
U.S. agency mortgage-backed securities: residential		33,805		(1,729)		4,982		(302)		38,787		(2,031)
State and political subdivisions		13,262		(988)		-		-		13,262		(988)
Corporate debt securities		242		(9)		-		-		242		(9)
Equity securities		1,142		(66)		-		-		1,142		(66)
	$	75,510	$	(3,835)	$	4,982	$	(302)	$	80,492	$	(4,137)

Available-for-sale Securities [Table Text Block]

Gains on sales of available for sale securities for the three months ended March 31 were as follows:

(Dollar amounts in thousands)	For the three months
	ended March 31,
	2014		2013
Proceeds	$	21,559	$	1,775
Gains		658		85
Tax provision related to gains		224		29

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Compensation and Employee Benefit Plans [Text Block]

8. Employee Benefit Plans

The Corporation provides pension benefits for eligible employees through a defined benefit pension plan. Substantially all employees participate in the retirement plan on a non-contributory basis, and are fully vested after three years of service. Effective January 1, 2009, the plan was closed to new participants.

The Corporation provided the requisite notice to plan participants on March 12, 2013 of the determination to freeze the plan (curtailment). While the freeze was not effective until April 30, 2013, management determined that participants would not satisfy, within the provisions of the plan, 2013 eligibility requirements based on minimum hours worked for 2013. Therefore, employees ceased to earn benefits as of January 1, 2013. This amendment to the plan will not affect benefits earned by the participants prior to the date of the freeze. The expense associated with the plan was immaterial for the quarters ended March 31, 2014 and 2013.

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

6. Goodwill and Intangible Assets

The following table summarizes the Corporation’s acquired goodwill and intangible assets as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)	March 31, 2014				December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Goodwill	$	3,664	$	-	$	3,664	$	-
Core deposit intangibles		4,027		3,119		4,027		3,062
Total	$	7,691	$	3,119	$	7,691	$	3,062

Goodwill resulted from three previous branch acquisitions. Goodwill represents the excess of the total purchase price paid for the branch acquisitions over the fair value of the assets acquired, net of the fair value of the liabilities assumed. Goodwill is not amortized but is evaluated for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. The Corporation has selected November 30 as the date to perform the annual impairment test. No goodwill impairment charges were recorded during 2013 or in the first three months of 2014. The core deposit intangible asset is amortized using the double declining balance method over a weighted average estimated life of nine years and is not estimated to have a significant residual value. During the three month period ending March 31, 2014, the Corporation recorded intangible amortization expense totaling $57,000, compared to $73,000 for the same periods in the prior year.

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Stock Compensation Plans

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

7. Stock Compensation Plans

In April 2014, the Corporation adopted the 2014 Stock Incentive Plan (the Plan), which is shareholder approved and permits the grant of restricted stock awards and options to its directors, officers and employees for up to 176,866 shares of common stock.

In addition, the Corporation’s 2007 Stock Incentive Plan and Trust (the Plan), which is shareholder approved, permits the grant of restricted stock awards and options to its directors, officers and employees for up to 177,496 shares of common stock.

Incentive stock options, non-incentive or compensatory stock options and share awards may be granted under the Plans. The exercise price of each option shall at least equal the market price of a share of common stock on the date of grant and have a contractual term of ten years. Options shall vest and become exercisable at the rate, to the extent and subject to such limitations as may be specified by the Corporation. Compensation cost related to share-based payment transactions must be recognized in the financial statements with measurement based upon the fair value of the equity instruments issued.

A summary of option activity under the Plans as of March 31, 2014, and changes during the period then ended is presented below:

				Aggregate		Weighted-Average
		Weighted-Average		Intrinsic Value		Remaining Term
	Options	Exercise Price		(in thousands)		(in years)
Outstanding as of January 1, 2014	79,250	$	24.97	$	-	3.8
Granted	-		-		-	-
Exercised	(1,500)		17.00		-	-
Forfeited	-		-		-	-
Outstanding as of March 31, 2014	77,750	$	25.12	$	63,635	3.5
Exercisable as of March 31, 2014	77,250	$	25.19	$	58,355	3.5

A summary of the status of the Corporation’s nonvested option shares as of March 31, 2014, and changes during the period then ended is presented below:

		Weighted-Average
	Options	Grant-date Fair Value
Nonvested at January 1, 2014	500	$	1.44
Granted	-		-
Vested	-		-
Forfeited	-		-
Nonvested as of March 31, 2014	500	$	1.44

A summary of the status of the Corporation’s nonvested restricted stock awards as of March 31, 2014, and changes during the period then ended is presented below:

		Weighted-Average
	Shares	Grant-date Fair Value
Nonvested at January 1, 2014	25,800	$	20.11
Granted	-		-
Vested	-		-
Forfeited	-		-
Nonvested as of March 31, 2014	25,800	$	20.11

For the three month period ended March 31, 2014, the Corporation recognized $42,000 in stock compensation expense, compared to $35,000 for the same periods in 2013. As of March 31, 2014, there was $311,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average period of 1.6 years. It is the Corporation’s policy to issue shares on the vesting date for restricted stock awards. Unvested restricted stock awards do not receive dividends declared by the Corporation.

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Fair Value

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

9. 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 value.

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Corporation has the ability to access at 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 the Corporation’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

An asset or liability’s level is based on the lowest level of input that is significant to the fair value measurement.

The Corporation used the following methods and significant assumptions to estimate fair value:

Cash and cash equivalents – The carrying value of cash, due from banks and interest bearing deposits approximates fair value and are classified as Level 1.

Securities available for sale – The fair value of all investment securities are based upon the assumptions market participants would use in pricing the security. If available, investment securities are determined by quoted market prices (Level 1). Level 1 includes U.S. Treasury, federal agency securities and certain equity securities. For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). Level 2 includes U.S. Government sponsored entities and agencies, mortgage-backed securities, collateralized mortgage obligations, state and political subdivision securities and corporate debt securities. For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using unobservable inputs (Level 3) and may include certain equity securities held by the Corporation. The Level 3 equity security valuations were supported by an analysis prepared by the Corporation which relies on inputs such as the security issuer’s publicly attainable financial information, multiples derived from prices in observed transactions involving comparable businesses and other market, financial and nonfinancial factors.

Loans – The fair value of loans receivable was estimated based on the discounted value of the future cash flows using the current rates being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification.

Impaired loans – At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Impaired loans carried at fair value generally receive a specific allowance for loan losses. For collateral dependent loans, fair value is commonly based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. As of March 31, 2014, the fair value of impaired loans consists of loan balances of $3.2 million, net of a valuation allowance of $465,000, compared to loan balances of $2.5 million, net of a valuation allowance of $181,000, at December 31, 2013. There was $272,000 of additional provision for loan losses recorded for impaired loans during the three month period ended March 31, 2014. There was $5,000 of additional provision recorded for impaired loans for the same period in 2013.

Other Real estate owned (OREO) – Assets acquired through or instead of foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals. Management’s ongoing review of appraisal information may result in additional discounts or adjustments to the valuation based upon more recent market sales activity or more current appraisal information derived from properties of similar type and/or locale. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. As of March 31, 2014 and December 31, 2013, OREO measured at fair value less costs to sell had a net carrying amount of $80,000, which was made up of the outstanding balance of $104,000 and write-downs of $24,000.There was no expense recorded during the quarters ended March 31, 2014 and 2013 associated with the write-down of OREO.

Appraisals for both collateral-dependent impaired loans and OREO are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed by the Corporation. Once received, management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On an annual basis, the Corporation compares the actual selling price of OREO that has been sold to the most recent appraisal to determine what additional adjustment should be made to the appraisal value to arrive at fair value. The most recent analysis performed indicated that a discount of 10% should be applied.

Federal bank stock – It is not practical to determine the fair value of federal bank stocks due to restrictions placed on its transferability.

Deposits – The fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, checking with interest, savings and money market accounts, is equal to the amount payable on demand resulting in either a Level 1 or Level 2 classification. The fair values of time deposits are based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar maturities resulting in a Level 2 classification.

Borrowings – The fair value of borrowings with the FHLB is estimated using discounted cash flows based on current incremental borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued interest receivable and payable – The carrying value of accrued interest receivable and payable approximates fair value. The fair value classification is consistent with the related financial instrument.

For assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

(Dollar amounts in thousands)			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
March 31, 2014:
U.S. Treasury and federal agency	$	3,267	$	3,267	$	-	$	-
U.S. government sponsored entities and agencies		25,418		-		25,418		-
Mortgage-backed securities: residential		18,308		-		18,308		-
Collateralized mortgage obligations: residential		38,318		-		38,318		-
State and political subdivision		34,462		-		34,462		-
Equity securities		2,423		1,770		-		653
	$	122,196	$	5,037	$	116,506	$	653
December 31, 2013:
U.S. Treasury and federal agency	$	4,168	$	4,168	$	-	$	-
U.S. government sponsored entities and agencies		22,892		-		22,892		-
U.S. agency mortgage-backed securities: residential		11,361		-		11,361		-
U.S. agency collateralized mortgage obligations: residential		39,722		-		39,722		-
State and political subdivisions		36,499		-		36,499		-
Corporate debt securities		241		241		-		-
Equity securities		2,421		1,768		-		653
	$	117,304	$	6,177	$	110,474	$	653

The Corporation’s policy is to transfer assets or liabilities from one level to another when the methodology to obtain the fair value changes such that there are more or fewer unobservable inputs as of the end of the reporting period. During the three month period ended March 31, 2014, the Corporation had no transfers between levels. The following table presents changes in Level 3 assets measured on a recurring basis for the three month periods ended March 31, 2014 and 2013:

(Dollar amounts in thousands)	Three months ended
	March 31,
	2014		2013
Balance at the beginning of the period	$	653	$	653
Total gains or losses (realized/unrealized):		-		-
Included in earnings		-		-
Included in other comprehensive income		-		-
Issuances		-		-
Transfers in and/or out of Level 3		-		-
Balance at the end of the period	$	653	$	653

For assets measured at fair value on a non-recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

(Dollar amounts in thousands)			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
March 31, 2014:
Impaired commercial real estate loans	$	2,514	$	-	$	-	$	2,514
Impaired commercial business loans		182		-		-		182
Other residential real estate owned		80		-		-		80
	$	2,776	$	-	$	-	$	2,776
December 31, 2013:
Impaired commercial real estate loans	$	2,340	$	-	$	-	$	2,340
Other residential real estate owned		80		-		-		80
	$	2,420	$	-	$	-	$	2,420

The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a non-recurring basis:

(Dollar amounts in thousands)			Valuation	Unobservable
			Techniques(s)	Input (s)	Range
March 31, 2014:
Impaired commercial real estate loans	$	2,514	Sales comparison approach/ Contractual provision of USDA loan	Adjustment for differences between comparable sales	0% - 10%
Impaired commercial business loans		182	Liquidation value of business assets	N/A	76%
Other residential real estate owned		80	Sales comparison approach	Adjustment for differences between comparable sales	10%
December 31, 2013:
Impaired commercial real estate loans		2,340	Sales comparison approach/ Contractual provision of USDA loan	Adjustment for differences between comparable sales	0% - 10%
Other residential real estate owned		80	Sales comparison approach	Adjustment for differences between comparable sales	10%

The two tables above exclude a $60,000 impaired residential mortgage loan classified as a troubled debt restructure which was measured at fair value using a discounted cash flow methodology at March 31, 2014.

Included in impaired commercial real estate loans is a loan guaranteed by the United States Department of Agriculture (USDA) with balances of $349,000 and $350,000, respectively, as of March 31, 2014 and December 31, 2013. The guarantee covers 90% of the principal balance outstanding. In determining the fair value of this loan, the Corporation considered the contractual provisions of the loan and did not rely on the fair value of the underlying collateral. As such, the Corporation applied a 10% discount to the loan which represents the portion of the loan at risk. The weighted average discount on impaired loans as of March 31, 2014 and December 31, 2013 was 14.4% and 1.5%, respectively.

The following table sets forth the carrying amount and estimated fair values of the Corporation’s financial instruments included in the consolidated balance sheet as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Carrying		Fair Value Measurements using:
Description	Amount		Total		Level 1		Level 2		Level 3
March 31, 2014:
Financial Assets:
Cash and cash equivalents	$	28,766	$	28,766	$	28,766	$	-	$	-
Securities available for sale		122,196		122,196		5,037		116,506		653
Loans, net		344,915		348,670		-		-		348,670
Federal bank stock		2,752		N/A		N/A		N/A		N/A
Accrued interest receivable		1,553		1,553		42		448		1,063
		500,182		501,184		33,845		116,954		350,386
Financial Liabilities:
Deposits		467,162		469,602		347,063		122,539		-
Borrowed funds		17,150		17,913		-		17,913		-
Accrued interest payable		255		255		5		250		-
		484,567		487,770		347,068		140,702		-

	Carrying		Fair Value Measurements using:
	Amount		Total		Level 1		Level 2		Level 3
December 31, 2013:
Financial Assets:
Cash and cash equivalents	$	16,658	$	16,658	$	16,658	$	-	$	-
Securities available for sale		117,304		117,304		5,936		110,715		653
Loans, net		352,430		356,123		-		-		356,123
Federal bank stock		3,977		N/A		N/A		N/A		N/A
Accrued interest receivable		1,466		1,466		34		430		1,002
		491,835		491,551		22,628		111,145		357,778
Financial Liabilities:
Deposits		432,006		434,552		325,983		108,569		-
FHLB advances		44,150		45,241		-		45,241		-
Accrued interest payable		292		292		5		287		-
		476,448		480,085		325,988		154,097		-

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Loans Receivable and Related Allowance for Loan Losses (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Performing, Accruing Loans Not Past Due	$ 341,452	$ 349,481
Performing, Accruing 30-59 Days Past Due	1,888	2,113
Performing, Accruing 60-89 Days Past Due	497	498
Nonperforming, Accruing 90 Days + Past Due	0	62
Nonperforming, Non Accrual	5,999	5,145
Total	349,836	357,299
Residential first mortgages [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Performing, Accruing Loans Not Past Due	104,013	103,821
Performing, Accruing 30-59 Days Past Due	1,250	884
Performing, Accruing 60-89 Days Past Due	0	278
Nonperforming, Accruing 90 Days + Past Due	0	38
Nonperforming, Non Accrual	573	520
Total	105,836	105,541
Home equity and lines of credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Performing, Accruing Loans Not Past Due	86,168	87,302
Performing, Accruing 30-59 Days Past Due	278	394
Performing, Accruing 60-89 Days Past Due	119	172
Nonperforming, Accruing 90 Days + Past Due	0	0
Nonperforming, Non Accrual	196	60
Total	86,761	87,928
Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Performing, Accruing Loans Not Past Due	91,806	98,095
Performing, Accruing 30-59 Days Past Due	50	516
Performing, Accruing 60-89 Days Past Due	367	22
Nonperforming, Accruing 90 Days + Past Due	0	0
Nonperforming, Non Accrual	3,078	2,866
Total	95,301	101,499
Commercial business [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Performing, Accruing Loans Not Past Due	51,519	52,581
Performing, Accruing 30-59 Days Past Due	217	258
Performing, Accruing 60-89 Days Past Due	0	0
Nonperforming, Accruing 90 Days + Past Due	0	24
Nonperforming, Non Accrual	804	351
Total	52,540	53,214
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Performing, Accruing Loans Not Past Due	7,946	7,682
Performing, Accruing 30-59 Days Past Due	93	61
Performing, Accruing 60-89 Days Past Due	11	26
Nonperforming, Accruing 90 Days + Past Due	0	0
Nonperforming, Non Accrual	1,348	1,348
Total	$ 9,398	$ 9,117

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Accumulated Other Comprehensive Income(Loss) (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Unrealized gains and losses on available-for-sale securities
Gain on sale of securities	$ 658	$ 85
Tax expense	(224)	(29)
Net of tax	$ 434	$ 56

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

The following table summarizes the Corporation’s acquired goodwill and intangible assets as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)	March 31, 2014				December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Goodwill	$	3,664	$	-	$	3,664	$	-
Core deposit intangibles		4,027		3,119		4,027		3,062
Total	$	7,691	$	3,119	$	7,691	$	3,062

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Earnings per Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings per common share - basic
Net income	$ 841	$ 858
Less: Preferred stock dividends	25	125
Net income available to common stockholders	816	733
Average common shares outstanding (in shares)	1,769,389	1,760,927
Basic earnings per common share (in dollars per share)	$ 0.46	$ 0.42
Earnings per common share - diluted
Net income available to common stockholders	$ 816	$ 733
Average common shares outstanding (in shares)	1,769,389	1,760,927
Add: Dilutive effects of assumed issuance of restricted stock and exercise of stock options	13,043	3,679
Average shares and dilutive potential common shares	1,782,432	1,764,606
Diluted earnings per common share (in dollars per share)	$ 0.46	$ 0.42
Stock options and restricted stock awards not considered in computing diluted earnings per share because they were antidilutive (in shares)	67,000	68,061

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Fair Value (Details Textual) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Fair Values Of Financial Instruments [Line Items]
Impaired Financing Receivable, Recorded Investment	$ 3,200,000		$ 2,500,000
Impaired Financing Receivable, Related Allowance	465,000		181,000
Other Real Estate and Foreclosed Assets	80,000		80,000
Real Estate, Gross	104,000		104,000
Commercial Real Estate Loan Discounting Rate	10.00%
Provision For Loan Losses Expensed	163,000	143,000
SEC Schedule III, Real Estate, Write-down or Reserve, Amount	24,000		24,000
Impaired Loans [Member]
Fair Values Of Financial Instruments [Line Items]
Provision For Loan Losses Expensed	272,000	5,000	5,000
Impaired Residential Mortgage Loan [Member]
Fair Values Of Financial Instruments [Line Items]
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	60,000
United States Department Of Agriculture [Member]
Fair Values Of Financial Instruments [Line Items]
Percentage Of Commercial Real Estate Loan Principal Balance Outstanding Guarantee By Third Party	90.00%
Percentage Of Weighted Average Discount On Impaired Commercial Real Estate Loans	14.40%		1.50%
Loans Held-for-sale, Commercial, Real Estate	$ 349,000		$ 350,000

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Stock Compensation Plans (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2014
Nonvested, Options (in shares)	500
Granted, Options (in shares)	0
Vested, Options (in shares)	0
Forfeited, Options (in shares)	0
Nonvested, Options (in shares)	500
Nonvested, Weighted-Average Grant-date Fair Value	$ 1.44
Granted, Weighted-Average Grant-date Fair Value	$ 0
Vested, Weighted-Average Grant-date Fair Value	$ 0
Forfeited, Weighted-Average Grant-date Fair Value	$ 0
Nonvested, Weighted-Average Grant-date Fair Value	$ 1.44

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Net income	$ 841	$ 858
Unrealized gains (losses) on securities:
Unrealized holding gain (loss) arising during the period	1,231	(361)
Reclassification adjustment for gains included in net income	(658)	(85)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Tax, Total	573	(446)
Tax effect	(195)	152
Net of tax	378	(294)
Comprehensive income	$ 1,219	$ 564

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Earnings per Common Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

3. Earnings per Common Share

Basic earnings per common share (EPS) excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the dilutive effect of additional potential common shares for assumed issuance of restricted stock and shares issued under stock options.

The factors used in the Corporation’s earnings per common share computation follow:

(Dollar amounts in thousands, except for per share amounts)	For the three months ended
	March 31,
	2014		2013
Earnings per common share - basic
Net income	$	841	$	858
Less: Preferred stock dividends		25		125
Net income available to common stockholders	$	816	$	733
Average common shares outstanding		1,769,389		1,760,927
Basic earnings per common share	$	0.46	$	0.42
Earnings per common share - diluted
Net income available to common stockholders	$	816	$	733
Average common shares outstanding		1,769,389		1,760,927
Add: Dilutive effects of assumed issuance of restricted stock and exercise of stock options		13,043		3,679
Average shares and dilutive potential common shares		1,782,432		1,764,606
Diluted earnings per common share	$	0.46	$	0.42
Stock options and restricted stock awards not considered in computing diluted earnings per share because they were antidilutive		67,000		68,061

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Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 124,456	$ 120,137
Gross Unrealized Gains	834	1,304
Gross Unrealized Losses	(3,094)	(4,137)
Fair value	122,196	117,304
U.S. Treasury and federal agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,469	4,466
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(202)	(298)
Fair value	3,267	4,168
U.S. government sponsored entities and agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	25,957	23,637
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(539)	(745)
Fair value	25,418	22,892
U.S. agency mortgage-backed securities: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	18,371	11,020
Gross Unrealized Gains	0	341
Gross Unrealized Losses	(63)	0
Fair value	18,308	11,361
U.S. agency collateralized mortgage obligations: residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	39,938	41,751
Gross Unrealized Gains	9	2
Gross Unrealized Losses	(1,629)	(2,031)
Fair value	38,318	39,722
State and political subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	34,365	36,657
Gross Unrealized Gains	720	830
Gross Unrealized Losses	(623)	(988)
Fair value	34,462	36,499
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	0	250
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	(9)
Fair value	0	241
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,356	2,356
Gross Unrealized Gains	105	131
Gross Unrealized Losses	(38)	(66)
Fair value	$ 2,423	$ 2,421

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Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Goodwill, Gross Carrying Amount	$ 3,664	$ 3,664
Core deposit intangibles, Goodwill, Gross Carrying Amount	4,027	4,027
Goodwill, Gross Carrying Amount, Total	7,691	7,691
Goodwill, Accumulated Amortization	0	0
Core deposit intangibles, Accumulated Amortization	3,119	3,062
Accumulated Amortization, Total	$ 3,119	$ 3,062

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Loans Receivable and Related Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2014

Loans Notes Trade and Other Receivables Disclosure [Abstract]

Schedule Of Classification Of Loans Receivable [Table Text Block]

The Corporation’s loans receivable as of the respective dates are summarized as follows:

(Dollar amounts in thousands)	March 31,		December 31,
	2014		2013
Mortgage loans on real estate:
Residential first mortgages	$	105,836	$	105,541
Home equity loans and lines of credit		86,761		87,928
Commercial real estate		95,301		101,499
		287,898		294,968
Other loans:
Commercial business		52,540		53,214
Consumer		9,398		9,117
		61,938		62,331
Total loans, gross		349,836		357,299
Less allowance for loan losses		4,921		4,869
Total loans, net	$	344,915	$	352,430

Schedule Of Impaired Loans Receivable, Additional Information [Table Text Block]

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of March 31, 2014:

(Dollar amounts in thousands)
	Impaired Loans with Specific Allowance
							For the three months
	As of March 31, 2014						ended March 31, 2014
											Cash Basis
	Unpaid						Average		Interest Income		Interest
	Principal		Recorded		Related		Recorded		Recognized		Recognized
	Balance		Investment		Allowance		Investment		in Period		in Period
Residential first mortgages	$	81	$	81	$	21	$	82	$	1	$	1
Home equity and lines of credit		-		-		-		-		-		-
Commercial real estate		3,664		2,723		209		2,621		7		2
Commercial business		417		417		235		209		5		-
Consumer		-		-		-		-		-		-
Total	$	4,162	$	3,221	$	465	$	2,912	$	13	$	3

	Impaired Loans with No Specific Allowance
					For the three months
	As of March 31, 2014				ended March 31, 2014
									Cash Basis
	Unpaid				Average		Interest Income		Interest
	Principal		Recorded		Recorded		Recognized		Recognized
	Balance		Investment		Investment		in Period		in Period
Residential first mortgages	$	-	$	-	$	10	$	-	$	-
Home equity and lines of credit		-		-		-		-		-
Commercial real estate		1,103		704		690		2		2
Commercial business		388		386		361		-		-
Consumer		1,348		1,348		1,348		-		-
Total	$	2,839	$	2,438	$	2,409	$	2	$	2

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary as of December 31, 2013:

(Dollar amounts in thousands)
	Impaired Loans with Specific Allowance
							For the year ended
	As of December 31, 2013						December 31, 2013
											Cash Basis
	Unpaid						Average		Interest Income		Interest
	Principal		Recorded		Related		Recorded		Recognized		Recognized
	Balance		Investment		Allowance		Investment		in Period		in Period
Residential first mortgages	$	82	$	82	$	21	$	49	$	5	$	4
Home equity and lines of credit		-		-		-		-		-		-
Commercial real estate		3,462		2,521		181		3,202		13		13
Commercial business		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	3,544	$	2,603	$	202	$	3,251	$	18	$	17

	Impaired Loans with No Specific Allowance
					For the year ended
	As of December 31, 2013				December 31, 2013
									Cash Basis
	Unpaid				Average		Interest Income		Interest
	Principal		Recorded		Recorded		Recognized		Recognized
	Balance		Investment		Investment		in Period		in Period
Residential first mortgages	$	20	$	20	$	4	$	1	$	-
Home equity and lines of credit		-		-		-		-		-
Commercial real estate		1,074		675		584		5		5
Commercial business		336		336		354		-		-
Consumer		1,348		1,348		1,457		-		-
Total	$	2,778	$	2,379	$	2,399	$	6	$	5

Financing Receivable Credit Quality Indicators [Table Text Block]

The following table presents the classes of the loan portfolio summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the Corporation’s internal risk rating system as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
					Special
	Not Rated		Pass		Mention		Substandard		Doubtful		Total
March 31, 2014:
Residential first mortgages	$	105,263	$	-	$	-	$	573	$	-	$	105,836
Home equity and lines of credit		86,565		-		-		196		-		86,761
Commercial real estate		-		87,933		247		7,121		-		95,301
Commercial business		-		48,142		1,688		2,710		-		52,540
Consumer		8,050		-		-		1,348		-		9,398
Total	$	199,878	$	136,075	$	1,935	$	11,948	$	-	$	349,836
December 31, 2013:
Residential first mortgages	$	104,983	$	-	$	-	$	558	$	-	$	105,541
Home equity and lines of credit		87,868		-		-		60		-		87,928
Commercial real estate		-		93,973		256		7,270		-		101,499
Commercial business		-		50,008		674		2,532		-		53,214
Consumer		7,769		-		-		1,348		-		9,117
Total	$	200,620	$	143,981	$	930	$	11,768	$	-	$	357,299

Past Due Financing Receivables [Table Text Block]

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonperforming loans as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Performing						Nonperforming
	Accruing		Accruing		Accruing		Accruing
	Loans Not		30-59 Days		60-89 Days		90 Days +				Total
	Past Due		Past Due		Past Due		Past Due		Nonaccrual		Loans
March 31, 2014:
Residential first mortgages	$	104,013	$	1,250	$	-	$	-	$	573	$	105,836
Home equity and lines of credit		86,168		278		119		-		196		86,761
Commercial real estate		91,806		50		367		-		3,078		95,301
Commercial business		51,519		217		-		-		804		52,540
Consumer		7,946		93		11		-		1,348		9,398
Total loans	$	341,452	$	1,888	$	497	$	-	$	5,999	$	349,836
December 31, 2013:
Residential first mortgages	$	103,821	$	884	$	278	$	38	$	520	$	105,541
Home equity and lines of credit		87,302		394		172		-		60		87,928
Commercial real estate		98,095		516		22		-		2,866		101,499
Commercial business		52,581		258		-		24		351		53,214
Consumer		7,682		61		26		-		1,348		9,117
Total loans	$	349,481	$	2,113	$	498	$	62	$	5,145	$	357,299

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

The following table presents the Corporation’s nonaccrual loans by aging category as of March 31, 2014 and December 31, 2013:

(Dollar amounts in thousands)
	Not		30-59 Days		60-89 Days		90 Days +		Total
	Past Due		Past Due		Past Due		Past Due		Loans
March 31, 2014:
Residential first mortgages	$	87	$	81	$	-	$	405	$	573
Home equity and lines of credit		-		-		-		196		196
Commercial real estate		718		2,067		-		293		3,078
Commercial business		479		-		-		325		804
Consumer		1,348		-		-		-		1,348
Total loans	$	2,632	$	2,148	$	-	$	1,219	$	5,999
December 31, 2013:
Residential first mortgages	$	88	$	-	$	82	$	350	$	520
Home equity and lines of credit		-		-		-		60		60
Commercial real estate		412		2,148		-		306		2,866
Commercial business		65		-		-		286		351
Consumer		1,348		-		-		-		1,348
Total loans	$	1,913	$	2,148	$	82	$	1,002	$	5,145

Allowance For Credit Losses On Loans Receivables, Additional Information [Table Text Block]

The following table details activity in the ALL and the recorded investment by portfolio segment based on impairment method:

(Dollar amounts in thousands)
			Home Equity
	Residential		& Lines		Commercial		Commercial
	Mortgages		of Credit		Real Estate		Business		Consumer		Total
Three months ended March 31, 2014:
Allowance for loan losses:
Beginning Balance	$	923	$	625	$	2,450	$	822	$	49	$	4,869
Charge-offs		(78)		-		(2)		(17)		(35)		(132)
Recoveries		-		-		5		7		9		21
Provision		91		(6)		(232)		282		28		163
Ending Balance	$	936	$	619	$	2,221	$	1,094	$	51	$	4,921
Three months ended March 31, 2013:
Allowance for loan losses:
Beginning Balance	$	828	$	730	$	3,090	$	636	$	66	$	5,350
Charge-offs		(5)		-		-		-		(32)		(37)
Recoveries		1		-		2		-		29		32
Provision		(17)		(3)		97		66		-		143
Ending Balance	$	807	$	727	$	3,189	$	702	$	63	$	5,488
At March 31, 2013:
Ending ALL balance attributable to loans:
Individually evaluated for impairment		21		-		209		235		-		465
Collectively evaluated for impairment		915		619		2,012		859		51		4,456
Total loans:
Individually evaluated for impairment		81		-		3,427		803		1,348		5,659
Collectively evaluated for impairment		105,755		86,761		91,874		51,737		8,050		344,177
At December 31, 2013:
Ending ALL balance attributable to loans:
Individually evaluated for impairment		21		-		181		-		-		202
Collectively evaluated for impairment		902		625		2,269		822		49		4,667
Total loans:
Individually evaluated for impairment		102		-		3,196		336		1,348		4,982
Collectively evaluated for impairment		105,439		87,928		98,303		52,878		7,769		352,317