10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 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 No.: 0-28312

                    Bear State Financial, Inc.                

(Exact name of registrant as specified in its charter)

Arkansas	71-0785261
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification Number)
900 South Shackleford Rd, Suite 401
Little Rock, Arkansas	72211
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (501) 320-4904

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller reporting company ☒

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of August 8, 2014, there were issued and outstanding 30,026,744 shares of the Registrant's Common Stock, par value $.01 per share.

BEAR STATE FINANCIAL, INC.

TABLE OF CONTENTS

Part I.	Financial Information	Page
Item 1.	Financial Statements
	Condensed Consolidated Statements of Financial Condition as of June 30, 2014 and December 31, 2013 (unaudited)	1
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014 and 2013 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 and 2013 (unaudited)	3
	Condensed Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2014 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013 (unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
Part II.	Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	43
Item 6.	Exhibits	43
Signatures
Exhibit Index

Part I. Financial Information

Item 1. Financial Statements

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except share data)

(Unaudited)

	June 30, 2014			December 31, 2013
ASSETS
Cash and cash equivalents	$	60,838		$	23,970
Federal funds sold		12,375			--
Interest-bearing time deposits in banks		18,892			24,118
Investment securities available for sale		213,557			70,828
Other investment securities, at cost		8,188			457
Loans receivable, net of allowance of $12,392 and $12,711, respectively		998,892			371,149
Loans held for sale		8,943			4,205
Accrued interest receivable		4,645			1,473
Real estate owned - net		6,226			8,627
Office properties and equipment - net		49,695			18,769
Cash surrender value of life insurance		28,655			23,811
Goodwill		25,610			--
Core deposit intangible - net		7,651			--
Prepaid expenses and other assets		4,038			1,465
TOTAL	$	1,448,205		$	548,872
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Deposits
Noninterest bearing	$	146,348		$	19,427
Interest bearing		1,085,066			450,298
		1,231,414			469,725
Short term borrowings		20,270			--
Other borrowings		47,877			5,941
Other liabilities		5,649			2,019
Total liabilities		1,305,210			477,685
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value—5,000,000 shares authorized; none issued at June 30, 2014 and December 31, 2013		--			--
Common stock, $0.01 par value—100,000,000 and 30,000,000 shares authorized at June 30, 2014 and December 31, 2013, respectively; 30,026,744 and 20,041,497 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively		300			200
Additional paid-in capital		166,332			92,740
Accumulated other comprehensive income (loss)		832			(467	)
Accumulated deficit		(24,469	)		(21,286	)
Total stockholders’ equity		142,995			71,187
TOTAL	$	1,448,205		$	548,872

See notes to unaudited condensed consolidated financial statements.

1

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except earnings per share)

(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,			June 30,		June 30,			June 30,
	2014			2013		2014			2013
INTEREST INCOME:
Loans receivable	$	5,852		$	3,970	$	9,986		$	8,051
Investment securities:
Taxable		310			56		536			110
Nontaxable		295			293		581			606
Other		111			138		216			271
Total interest income		6,568			4,457		11,319			9,038
INTEREST EXPENSE:
Deposits		984			817		1,853			1,663
Other borrowings		66			13		88			26
Total interest expense		1,050			830		1,941			1,689
NET INTEREST INCOME		5,518			3,627		9,378			7,349
PROVISION FOR LOAN LOSSES		230			--		230			--
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		5,288			3,627		9,148			7,349
NONINTEREST INCOME:
Deposit fee income		867			802		1,492			1,572
Earnings on life insurance policies		209			200		409			398
Gain on sale of loans		652			263		956			459
Other		97			75		170			164
Total noninterest income		1,825			1,340		3,027			2,593
NONINTEREST EXPENSES:
Salaries and employee benefits		6,540			2,804		9,602			5,482
Net occupancy expense		704			608		1,288			1,226
Real estate owned, net		591			45		808			(51	)
FDIC insurance		125			170		245			341
Data processing		563			397		982			733
Professional fees		235			151		430			410
Advertising and public relations		198			74		301			144
Postage and supplies		119			108		210			217
Other		944			526		1,492			1,053
Total noninterest expenses		10,019			4,883		15,358			9,555
INCOME (LOSS) BEFORE INCOME TAXES		(2,906	)		84		(3,183	)		387
INCOME TAX		--			--		--			--
NET INCOME (LOSS)	$	(2,906	)	$	84	$	(3,183	)	$	387
Basic earnings (loss) per common share	$	(0.13	)	$	0.00	$	(0.15	)	$	0.02
Diluted earnings (loss) per common share	$	(0.13	)	$	0.00	$	(0.15	)	$	0.02

See notes to unaudited condensed consolidated financial statements.

2

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2014			2013			2014			2013
Net income (loss)	$	(2,906	)	$	84		$	(3,183	)	$	387
Other comprehensive income (loss):
Unrealized holding (losses) gains arising during the period		710			(857	)		1,299			(932	)
Less: reclassification adjustments for realized gain included in net income		--			--			--			--
Other comprehensive income (loss), before tax effect		710			(857	)		1,299			(932	)
Tax effect		--			--			--			--
Other comprehensive income (loss)		710			(857	)		1,299			(932	)
COMPREHENSIVE INCOME (LOSS)	$	(2,196	)	$	(773	)	$	(1,884	)	$	(545	)

See notes to unaudited condensed consolidated financial statements.

3

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2014

(In thousands, except share data)

(Unaudited)

							Accumulated
	Issued						Other						Total
	Common Stock				Additional Paid-		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		In Capital		Income (Loss)			Deficit			Equity
BALANCE – January 1, 2014		20,041,497	$	200	$	92,740	$	(467	)	$	(21,286	)	$	71,187
Net loss		--		--		--		--			(3,183	)		(3,183	)
Other comprehensive income		--		--		--		1,299			--			1,299
Shares issued – merger with FNSC, net of issuance costs of approximately $477		6,252,400		63		49,855		--			--			49,918
Shares issued - private placement		2,531,646		25		19,975		--			--			20,000
Shares issued – warrant exercises		1,196,667		12		3,578		--			--			3,590
Shares issued - restricted stock unit vesting		4,534		--		--		--			--			--
Stock compensation		--		--		184		--			--			184
BALANCE – June 30, 2014		30,026,744	$	300	$	166,332	$	832		$	(24,469	)	$	142,995

See notes to unaudited condensed consolidated financial statements.

4

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2014			2013
OPERATING ACTIVITIES:
Net (loss) income	$	(3,183	)	$	387
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Provision for loan losses		230			--
Provision for real estate losses		860			219
Deferred tax provision (benefit)		1,973			654
Deferred tax valuation allowance		(1,973	)		(654	)
Net amortization (accretion) of investment securities		138			(12	)
Federal Home Loan Bank stock dividends		(1	)		--
Loss (gain) on sale of fixed assets, net		4			(42	)
Gain on sale of real estate owned, net		(142	)		(374	)
Originations of loans held for sale		(41,640	)		(23,788	)
Proceeds from sales of loans held for sale		39,528			25,313
Gain on sale of loans originated to sell		(956	)		(459	)
Depreciation		739			713
Amortization of deferred loan costs, net		36			54
Net accretion of fair value adjustments of purchased assets and assumed liabilities		(65	)		--
Amortization of other intangible assets		26			--
Stock compensation		184			96
Earnings on life insurance policies		(409	)		(398	)
Changes in operating assets and liabilities:
Accrued interest receivable		(218	)		144
Prepaid expenses and other assets		(151	)		81
Other liabilities		575			(709	)
Net cash (used in) provided by operating activities		(4,445	)		1,225
INVESTING ACTIVITIES:
Cash paid for purchase of FNSC, net of cash received		(8,985	)		--
Net decrease in federal funds sold		30,650			--
Redemptions of interest-bearing time deposits in banks		5,226			3,734
Purchases of investment securities available for sale (“AFS”)		(7,354	)		--
Proceeds from maturities/calls/paydowns of investment securities AFS		5,179			4,185
Purchases of Federal Home Loan Bank stock		(250	)		--
Loan originations, net of repayments		(11,126	)		(7,239	)
Loan participations purchased		(13,394	)		(3,000	)
Loans sold		--			15,438
Proceeds from sales of real estate owned		2,539			5,307
Other cash activity - real estate owned		--			(17	)
Proceeds from sales of office properties and equipment		177			362
Purchases of office properties and equipment		(1,004	)		(853	)
Purchase of bank owned life insurance		(2,500	)		--
Net cash (used in) provided by investing activities		(842	)		17,917
				(Continued)

5

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2014			2013
FINANCING ACTIVITIES:
Net (decrease) increase in deposits	$	(1,848	)	$	4,678
Sale of deposits in connection with branch sale		--			(17,836	)
Proceeds from advances from Federal Home Loan Bank		6,000			--
Repayment of advances from Federal Home Loan Bank		(62	)		(2,113	)
Proceeds from other borrowings		13,750			--
Repayments of other borrowings		(5,250	)		--
Net increase in short term borrowings		5,975			--
Proceeds from private placement		20,000			--
Proceeds from exercise of warrants		3,590			1,785
Net cash provided by (used in) financing activities		42,155			(13,486	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		36,868			5,656
CASH AND CASH EQUIVALENTS:
Beginning of period		23,970			42,607
End of period	$	60,838		$	48,263
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION—
Cash paid for:
Interest	$	1,930		$	1,688
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Real estate and other assets acquired in settlement of loans	$	787		$	1,217
Sales of real estate owned financed by the Bank	$	--		$	773
Investment securities purchased—not settled	$	1,350		$	--
Transfers from office properties and equipment to office properties and equipment held for sale	$	--		$	1,503
Transfers from deposits to deposits held for sale in probable branch sale	$	--		$	4,690
Common stock issued for purchase of FNSC	$	49,918		$	--
				(Concluded)

See notes to unaudited condensed consolidated financial statements.

6

BEAR STATE FINANCIAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General — Bear State Financial, Inc. (the “Company”) is a bank holding company headquartered in Little Rock, Arkansas. On June 13, 2014, the Company completed its merger with First National Security Company (“FNSC”). The FNSC merger was accounted for under the acquisition method of accounting. The purchased assets, assumed liabilities and identifiable intangible assets were recorded at their acquisition date estimated fair values. Fair values are subject to refinement for up to one year after the closing date of the transaction as additional information regarding closing date fair values becomes available. The Company’s results of operations for the three and six months ended June 30, 2014 includes results of operations for FNB and Heritage for the period from June 14 through June 30, 2014. See Note 3 for additional information regarding the merger transaction.

Nature of Operations —The Company owns First Federal Bank (“First Federal”), and two bank holding companies, First Community Banking Corporation (“FCBC”) and Heritage Capital Corporation (“HCC”), which own First National Bank (“FNB”) and Heritage Bank, NA (“Heritage”), respectively (collectively referred to as “the Banks”). First Federal is a federally chartered stock savings and loan association that conducts business from its home office in Harrison, Arkansas, a full-service branch office in Pulaski County, Arkansas, ten full-service branch offices and one limited service office located in a five county area in Northwest and Northcentral Arkansas and a mortgage production office in Bentonville, Arkansas. FNB offers banking services from its home office in Hot Springs, Arkansas, eighteen full service branch offices and three limited service offices located in Central and Southwest Arkansas and two full service offices in Southeast Oklahoma. Heritage has five branches in Jonesboro, Arkansas, including the home office, as well as four additional full service branches in Northeast Arkansas. The Banks provide a broad line of financial products to individuals and business customers.

Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary holding companies and banks. The consolidated financial statements also include the accounts of First Federal’s wholly owned subsidiary, First Harrison Service Corporation (“FHSC”), which is inactive. Intercompany transactions have been eliminated in consolidation.

Basis of Presentation—The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, such information reflects all adjustments which are, in the opinion of management, necessary for a fair statement of results for the interim periods. Those adjusting entries consist only of normal recurring adjustments.

Certain reclassifications of prior period amounts have been made to conform with the current period presentation. These reclassifications had no impact on previously reported net income.

The Company is substantially in the business of community banking and therefore is considered a banking operation with no separately reportable segments.

The results of operations for the three and six months ended June 30, 2014, are not necessarily indicative of the results to be expected for the year ending December 31, 2014. The unaudited condensed consolidated financial statements of the Company and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2013, contained in the Company’s 2013 Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated balance sheet of the Company has been derived from the audited consolidated balance sheet of the Company as of that date.

Acquired Loans— Acquired loans and leases are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. The fair value adjustment on acquired loans without evidence of credit deterioration since origination will be accreted into earnings as a yield adjustment using the effective yield method over the remaining life of the loan.

Acquired loans and leases with evidence of credit deterioration since origination such that it is probable at acquisition that the bank will be unable to collect all contractually required payments are accounted for under the guidance in ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the difference between contractually required payments and the cash flows expected to be collected is the nonaccretable difference, which is included as a reduction of the carrying amount of acquired loans and leases. If the timing and amount of the future cash flows is reasonably estimable, any excess of cash flows expected at acquisition over the estimated fair value is the accretable yield and is recognized in interest income over the asset's remaining life using a level yield method.

Acquired loan amounts deemed uncollectible at acquisition date become part of the fair value calculation and are excluded from the ALLL. Following acquisition, a regular review will be completed on acquired loans to determine if changes in estimated cash flows have occurred. Subsequent decreases in the amount expected to be collected may result in a provision for loan and lease losses with a corresponding increase in the ALLL. Subsequent increases in the amount expected to be collected result in a reversal of any previously recorded provision for loan and lease losses and related ALLL, if any, or prospective adjustment to the accretable yield if no provision for loan and lease losses had been recorded.

7

2. RECENT ACCOUNTING PRONOUNCEMENTS

In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (Topic 740): Income Taxes, which states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. For example, an entity should not evaluate whether the deferred tax asset expires before the statute of limitations on the tax position or whether the deferred tax asset may be used prior to the unrecognized tax benefit being settled. The amendments in this Update do not require new recurring disclosures. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this ASU did not have a material impact on the Company’s financial statements.

In January 2014, the FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (Topic 310-40): Receivables – Troubled Debt Restructurings by Creditors, which clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this Update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in this Update using either a modified retrospective transition method or a prospective transition method. Early adoption is permitted. The Company is in the process of evaluating the impact of this Update on its financial statements.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. The Company will be required to adopt this ASU beginning with the quarter ending March 31, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial statements.

3. ACQUISITION

On June 13, 2014, the Company completed its previously-announced acquisition of First National Security Company (“FNSC”) whereby FNSC merged with and into the Company in a transaction valued at approximately $124.4 million. In connection with the merger, former FNSC stockholders received in the aggregate 6,252,400 shares of Company common stock, valued at approximately $50.4 million and $74 million in cash in exchange for 100% of the outstanding shares of FNSC common stock. The Company paid $50 million of the total cash consideration and FNSC paid $24 million of the total cash consideration to its stockholders from funds it received immediately prior to the closing of the acquisition from its subsidiary bank, First National Bank. The acquisition expanded the Company’s market into Northeast and Southwest Arkansas and further diversified the Company’s loan, customer and deposit base.

8

The following table provides a summary of the assets acquired and liabilities assumed as recorded by FNSC, the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, and the resultant fair values of those assets and liabilities as recorded by the Company. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. The fair value adjustments and the resultant fair values shown in the following table remain provisional due to the timing of the acquisition and will continue to be evaluated by management and may be subject to further adjustment.

	June 13, 2014
	As Recorded by FNSC			Fair Value Adjustments			As Recorded by the Company
	(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	41,015		$	--		$	41,015
Federal funds sold		43,025			--			43,025
Investment securities available for sale		138,140			--			138,140
Other investment securities, at cost		7,480			--			7,480
Loans receivable		622,758			(16,877	)		605,881
Allowance for loan losses		(13,179	)		13,179			--
Loans receivable, net		609,579			(3,698	)		605,881
Accrued interest receivable		2,954			--			2,954
Real estate owned - net		69			--			69
Office properties and equipment, net		33,074			(2,232	)		30,842
Cash surrender value of life insurance		1,935			--			1,935
Core deposit intangible		568			7,109			7,677
Deferred tax asset, net		542			(542	)		--
Prepaid expenses and other assets		2,899			--			2,899
Total assets acquired		881,280			637			881,917
Liabilities assumed:
Deposits – noninterest bearing		151,331			--			151,331
Deposits – interest bearing		611,841			366			612,207
Total deposits		763,172			366			763,538
Short term borrowings		14,295			--			14,295
Other borrowings		27,434			64			27,498
Other liabilities		1,802			--			1,802
Total liabilities assumed		806,703			430			807,133
Net assets acquired	$	74,577		$	207			74,784
Consideration paid:
Cash								50,000
Common stock								50,394
Total consideration paid								100,394
Goodwill							$	25,610

The following is a description of the fair value adjustments used to determine the fair values of assets and liabilities presented above:

Loans – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and current discount rates. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns. Adjustment reflects the elimination of the recorded allowance for loan and lease losses.

9

Office properties and equipment – Office properties and equipment were acquired from FNSC with a $2.2 million adjustment to market value. This represents the difference between current appraisal value completed in connection with the acquisition and FNSC’s book value at the time of acquisition.

Deferred tax asset – The deferred income tax assets and liabilities are recorded to reflect the differences in the carrying values of the acquired assets and assumed liabilities for financial reporting purposes and the cost basis for federal income tax purposes, at the Company’s statutory federal and state income tax rate of 38.29%. In addition, a valuation allowance was recorded against the net deferred tax asset based on the Company’s analysis of the future realization of the net deferred tax asset.

Core deposit intangible – This intangible asset represents the value of the relationships that FNSC had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base, and the net maintenance cost attributable to customer deposits. The Company recorded a $7.7 million core deposit intangible with a weighted average life of 12.3 years.

Deposits – The $366,000 fair value adjustment applied for time deposits is because the estimated weighted average interest rate of FNSC’s time deposits were estimated to be slightly above the current market rates.

Other borrowings – The fair value of FHLB borrowed funds is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.

Beginning June 14, 2014, the operations of FNSC are included in the Company’s consolidated results of operations and contributed $1.5 million of net interest income and $574,000 of net income for the six months ended June 30, 2014. The following unaudited pro-forma combined consolidated financial information presents how the combined financial information of the Company and FNSC might have appeared had the businesses actually been combined as of the beginning of each period presented. The following schedule represents the unaudited pro-forma combined financial information as of the six month comparative periods ended June 30, 2014 and 2013, assuming the acquisition was completed as of January 1, 2014 and 2013, respectively (in thousands, except per share data):

	Six Months Ended June 30, 2014		Six Months Ended June 30, 2013
Net interest income	$	23,577	$	25,607
Total noninterest income		5,773		6,014
Net income		69		7,373
Basic earnings per common share	$	--	$	0.26
Diluted earnings per common share	$	--	$	0.25

The unaudited pro-forma consolidated financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements and expense efficiencies, among other factors, been considered and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during this period.

10

4. INVESTMENT SECURITIES AVAILABLE FOR SALE

Investment securities available for sale consisted of the following as of the dates indicated (in thousands):

	June 30, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. government agencies	$	122,745	$	12	$	(17	)	$	122,740
Municipal securities		48,850		385		(95	)		49,140
Mortgage-backed securities		37,278		577		(11	)		37,844
Corporate debt securities		3,849		1		(17	)		3,833
Total	$	212,722	$	975	$	(140	)	$	213,557

	December 31, 2013
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Municipal securities	$	42,203	$	199	$	(478	)	$	41,924
Mortgage-backed securities		29,092		11		(199	)		28,904
Total	$	71,295	$	210	$	(677	)	$	70,828

The following tables summarize the gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired (“OTTI”), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2014
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. government agencies	$	46,457	$	17	$	--	$	--	$	46,457	$	17
Municipal securities		4,181		34		4,897		61		9,078		95
Mortgage-backed securities		4,274		11		--		--		4,274		11
Corporate debt securities		3,240		17		--		--		3,240		17
Total	$	58,152	$	79	$	4,897	$	61	$	63,049	$	140

		December 31, 2013
		Less than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
Municipal securities	$	17,851	$	424	$	945	$	54	$	18,796	$	478
Mortgage-backed securities		27,004		199		--		--		27,004		199
Total	$	44,855	$	623	$	945	$	54	$	45,800	$	677

On a quarterly basis, management conducts a formal review of securities for the presence of OTTI.  Management assesses whether an OTTI is present when the fair value of a security is less than its amortized cost basis at the balance sheet date.  For such securities, OTTI is considered to have occurred if the Company intends to sell the security, if it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis or if the present values of expected cash flows is not sufficient to recover the entire amortized cost.

11

The unrealized losses are primarily a result of increases in market yields from the time of purchase.  In general, as market yields rise, the fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired.  Additionally, the unrealized losses are also considered temporary because scheduled coupon payments have been made, it is anticipated that the entire principal balance will be collected as scheduled, and management neither intends to sell the securities and nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount.

The Company has pledged investment securities with carrying values of approximately $101.3 million at June 30, 2014 and $398,000 at December 31, 2013, as collateral for certain deposits in excess of $250,000 and for other purposes, including investment securities with carrying values of approximately $14.3 million at June 30, 2014, for securities sold under agreements to repurchase. There were no investment securities pledged by the Company for securities sold under agreements to repurchase at December 31, 2013.

The following table sets forth the amount (dollars in thousands) of investment securities available for sale that contractually mature during each of the periods indicated and the weighted average yields for each range of maturities at June 30, 2014. Weighted average yields for municipal obligations have not been adjusted to a tax-equivalent basis. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligation without prepayment penalties.

	June 30, 2014
	Amortized		Fair		Weighted
	Cost		Value		Average Rate
Within one year	$	52,921	$	52,934		0.68%
Due from one year to five years		88,669		88,746		0.79%
Due from five years to ten years		27,391		27,503		3.13%
Due after ten years		6,463		6,530		4.02%
		175,444		175,713		1.25%
Mortgage-backed securities		37,278		37,844		3.04%
Total	$	212,722	$	213,557		1.56%

As of June 30, 2014 and December 31, 2013, investments with amortized cost totaling approximately $66.8 million and $34.4 million, respectively, have call options held by the issuer, of which approximately $40.8 million and $13.0 million, respectively, are or were callable within one year.

5. LOANS RECEIVABLE

Loans receivable consisted of the following at June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Real estate:
One- to four-family residential	$	303,517		$	129,308
Multifamily residential		44,679			25,773
Nonfarm nonresidential		346,169			168,902
Farmland		48,710			2,663
Construction and land development		94,084			23,891
Commercial		142,058			29,033
Consumer		32,171			4,368
Total loans receivable		1,011,388			383,938
Unearned discounts and net deferred loan costs		(104	)		(78	)
Allowance for loan and lease losses		(12,392	)		(12,711	)
Loans receivable—net	$	998,892		$	371,149

12

Mortgage loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of such loans at June 30, 2014 and December 31, 2013 were $22.8 million and $12.9 million, respectively. Servicing loans for others generally consists of collecting payments and disbursing payments to investors. Servicing income for the three and six months ended June 30, 2014 and 2013 was not significant.

As of June 30, 2014 and December 31, 2013, qualifying loans collateralized by first lien one- to four-family mortgages with balances totaling approximately $44.5 million and $50.6 million, respectively, were held in custody by the Federal Home Loan Bank of Dallas (“FHLB”) and were pledged for outstanding advances or available for future advances. The Banks also pledged substantially all of the remaining loans at June 30, 2014 under a blanket lien with the FHLB.

As of June 30, 2014 and December 31, 2013, qualifying loans collateralized by commercial real estate with balances of $7.1 million and $8.2 million, respectively, were pledged at the FRB. No FRB borrowings were outstanding at June 30, 2014.

The Company evaluated $583.4 million of net loans ($595.1 million gross loans less $11.7 million discount) purchased in conjunction with the acquisition of FNSC in accordance with the provisions of FASB ASC Topic 310-20,  Nonrefundable Fees and Other Costs . The fair value discount is being accreted into interest income over the weighted average life of the loans using a constant yield method. The Company evaluated $21.7 million of net loans ($26.9 million gross loans less $5.2 million discount) purchased in conjunction with the acquisition of FNSC in accordance with the provisions of FASB ASC Topic 310-30,  Loans and Debt Securities Acquired with Deteriorated Credit Quality. There have been no material changes to the fair value discount since the acquisition date of June 13, 2014 given its close proximity to quarter end.

13

Age analyses of loans as of the dates indicated, including both accruing and nonaccrual loans, are presented below (in thousands):

June 30, 2014	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	2,159	$	2,128	$	299,230	$	303,517
Multifamily residential		--		--		44,679		44,679
Nonfarm nonresidential		172		2,025		343,972		346,169
Farmland		--		641		48,069		48,710
Construction and land development		117		601		93,366		94,084
Commercial		132		80		141,846		142,058
Consumer		194		34		31,943		32,171
Total	$	2,774	$	5,509	$	1,003,105	$	1,011,388

December 31, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	3,511	$	1,664	$	124,133	$	129,308
Multifamily residential		--		--		25,773		25,773
Nonfarm nonresidential		176		2,340		166,386		168,902
Farmland		--		666		1,997		2,663
Construction and land development		30		2,133		21,728		23,891
Commercial		--		348		28,685		29,033
Consumer		--		19		4,349		4,368
Total	$	3,717	$	7,170	$	373,051	$	383,938

As of June 30, 2014, there was $1.2 million of purchased credit impaired loans acquired in the merger with FNSC that were 90 days or more past due and accruing. There were no loans over 90 days past due and still accruing at December 31, 2013. Restructured loans totaled $2.5 million and $2.6 million as of June 30, 2014 and December 31, 2013, respectively, with $2.0 million and $2.1 million of such restructured loans on nonaccrual status at June 30, 2014 and December 31, 2013, respectively.

The following table presents age analyses of nonaccrual loans as of the dates indicated (in thousands):

June 30, 2014	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	530	$	1,767	$	1,976	$	4,273
Nonfarm nonresidential		140		1,272		1,797		3,209
Farmland		--		641		111		752
Construction and land development		9		584		29		622
Commercial		--		--		321		321
Consumer		--		7		17		24
Total	$	679	$	4,271	$	4,251	$	9,201

December 31, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	637	$	1,664	$	1,957	$	4,258
Nonfarm nonresidential		--		2,340		1,717		4,057
Farmland		--		666		116		782
Construction and land development		--		2,133		334		2,467
Commercial		--		348		2		350
Consumer		--		19		5		24
Total	$	637	$	7,170	$	4,131	$	11,938

14

The following tables summarize information pertaining to impaired loans as of June 30, 2014 and December 31, 2013 and for the three and six months ended June 30, 2014 and 2013 (in thousands).  Purchased credit impaired loans acquired in the merger with FNSC are not included these tables.

	June 30, 2014						December 31, 2013
	Unpaid Principal Balance		Recorded Investment		Valuation Allowance		Unpaid Principal Balance		Recorded Investment		Valuation Allowance
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,187	$	1,036	$	179	$	1,213	$	1,085	$	279
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		2,509		2,296		660		3,287		3,105		1,119
Farmland		621		489		127		623		495		133
Construction and land development		275		168		118		1,865		1,505		631
Commercial		--		--		--		--		--		--
Consumer		16		16		16		--		--		--
		4,608		4,005		1,100		6,988		6,190		2,162
Impaired loans without avaluation allowance:
One- to four-family residential		4,521		3,726		--		4,430		3,668		--
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		1,690		913		--		1,077		952		--
Farmland		545		263		--		554		287		--
Construction and land development		607		539		--		1,189		962		--
Commercial		371		321		--		388		350		--
Consumer		12		8		--		27		24		--
		7,746		5,770		--		7,665		6,243		--
Total impaired loans	$	12,354	$	9,775	$	1,100	$	14,653	$	12,433	$	2,162

	Three and Six Months Ended June 30, 2014
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
	(Three Months)		(Six Months)		(Three Months)		(Six Months)
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,100	$	1,095	$	2	$	5
Multifamily residential		--		--		--		--
Nonfarm nonresidential		2,498		2,700		--		--
Farmland		491		492		--		--
Construction and land development		481		822		--		--
Commercial		126		84		--		--
Consumer		14		9		--		--
		4,710		5,202		2		5
Impaired loans without a valuation allowance:
One- to four-family residential		3,495		3,553		1		1
Multifamily residential		--		--		--		--
Nonfarm nonresidential		1,095		1,047		--		--
Farmland		269		275		--		--
Construction and land development		689		780		2		3
Commercial		332		338		--		--
Consumer		12		16		--		--
		5,892		6,009		3		4
Total impaired loans	$	10,602	$	11,211	$	5	$	9
Interest based on original terms					$	275	$	345
Interest income recognized on a cash basis on impaired loans					$	--	$	--

15

	Three and Six Months Ended June 30, 2013
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
Impaired loans with a valuation allowance:	(Three Months)		(Six Months)		(Three Months)		(Six Months)
One- to four-family residential	$	2,403	$	1,985	$	2	$	5
Multifamily residential		1,479		986		--		--
Nonfarm nonresidential		2,165		2,382		--		--
Farmland		505		378		--		--
Construction and land development		1,055		864		--		--
Commercial		--		--		--		--
Consumer		--		1		--		--
		7,607		6,596		2		5
Impaired loans without a valuation allowance:
One- to four-family residential		4,063		4,948		--		--
Multifamily residential		--		1,153		--		--
Nonfarm nonresidential		2,160		3,065		--		--
Farmland		319		460		--		--
Construction and land development		1,285		1,741		--		--
Commercial		24		23		--		--
Consumer		16		19		--		--
		7,867		11,409		--		--
Total impaired loans	$	15,474	$	18,005	$	2	$	5
Interest based on original terms					$	353	$	488
Interest income recognized on a cash basis on impaired loans					$	--	$	--

Credit Quality Indicators. As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, the Banks categorize loans into risk categories based on available and 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. First Federal analyzes loans individually by assigning a credit risk rating to loans on at least an annual basis for non-homogeneous loans over $250,000. FNB and Heritage assign a credit rating to loans at origination and review these ratings periodically thereafter. The Banks use the following definitions for risk ratings:

Pass. Loans rated as pass generally meet or exceed normal credit standards and are rated on a scale from 1 to 5, with 1 being the highest quality loan and 5 being a pass/watch loan. Factors influencing the level of pass grade include repayment source and strength, collateral, borrower cash flows, existence of and strength of guarantors, industry/business sector, financial trends, performance history, etc.

Special Mention. Loans rated as special mention, while still adequately protected by the borrower’s repayment capability, exhibit distinct weakening trends. If left unchecked or uncorrected, these potential weaknesses may result in deteriorated prospects of repayment. These exposures require management’s close attention so as to avoid becoming adversely classified credits.

Substandard. Loans rated as substandard are inadequately protected by the current sound net worth and paying capacity of the borrower or the collateral pledged, if any. These assets must have a well-defined weakness based on objective evidence and be characterized by the distinct possibility that the Banks will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans rated as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss. Loans rated as a loss are considered uncollectible and of such little value that continuance as an asset is not warranted. A loss classification does not mean that an asset has no recovery or salvage value, but that it is not practical or desirable to defer writing off or reserving all or a portion of the asset, even though partial recovery may be effected in the future.

16

Based on analyses performed at June 30, 2014 and December 31, 2013, the risk categories of loans are as follows (in thousands):

	June 30, 2014
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	210,651	$	448	$	10,582	$	81,836	$	303,517
Multifamily residential		44,679		--		--		--		44,679
Nonfarm nonresidential		333,991		4,436		7,278		464		346,169
Farmland		47,457		--		1,253		--		48,710
Construction and land development		88,301		110		2,543		3,130		94,084
Commercial		140,752		--		971		335		142,058
Consumer		26,457		6		220		5,488		32,171
Total	$	892,288	$	5,000	$	22,847	$	91,253	$	1,011,388

	December 31, 2013
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	34,333	$	329	$	6,371	$	88,275	$	129,308
Multifamily residential		25,773		--		--		--		25,773
Nonfarm nonresidential		159,629		4,490		4,057		726		168,902
Farmland		1,491		--		1,172		--		2,663
Construction and land development		18,241		295		2,770		2,585		23,891
Commercial		28,555		--		350		128		29,033
Consumer		151		--		45		4,172		4,368
Total	$	268,173	$	5,114	$	14,765	$	95,886	$	383,938

As of June 30, 2014 and December 31, 2013, the Banks did not have any loans classified as doubtful or loss.

Troubled Debt Restructurings. Troubled debt restructurings (“TDRs”) are loans where the contractual terms on the loan have been modified and both of the following conditions exist: (i) the borrower is experiencing financial difficulty and (ii) the restructuring constitutes a concession that the Bank would not otherwise make. The Banks assess all loan modifications to determine if the modifications constitute a TDR. Restructurings resulting in an insignificant delay in payment are not considered to be TDRs. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. All TDRs are considered impaired loans. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

The following table summarizes TDRs as of June 30, 2014 and December 31, 2013: (dollars in thousands)

June 30, 2014	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		4	$	489		9	$	740		13	$	1,229
Nonfarm nonresidential		--		--		3		532		3		532
Farmland		--		--		1		263		1		263
Construction and land development		1		85		3		410		4		495
Consumer		--		--		2		16		2		16
Total		5	$	574		18	$	1,961		23	$	2,535

December 31, 2013	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		4	$	495		8	$	658		12	$	1,153
Nonfarm nonresidential		--		--		3		556		3		556
Farmland		--		--		1		287		1		287
Construction and land development		--		--		4		569		4		569
Consumer		--		--		1		5		1		5
Total		4	$	495		17	$	2,075		21	$	2,570

17

Loans receivable that were restructured as TDRs during the three and six months ended June 30, 2014 and six months ended June, 30 2013 were as follows. There were no loans restructured as TDRs during the three months ended June 30, 2013: (dollars in thousands)

	Three Months Ended June 30, 2014
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2014		Payment Term (1)		Other (2)
Construction and land development		1	$	85	$	85	$	--	$	85
Total		1	$	85	$	85	$	--	$	85

	Six Months Ended June 30, 2014
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2014		Payment Term (1)		Other (2)
One- to four-family residential		1	$	103	$	98	$	103	$	--
Construction and land development		1		85		85		--		85
Consumer		1		11		11		11		--
Total		3	$	199	$	194	$	114	$	85

	Six Months Ended June 30, 2013
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2013		Payment Term (1)		Other
One- to four-family residential		1	$	6	$	6	$	6	$	--
Total		1	$	6	$	6	$	6	$	--

_________________________

(1)	Concessions represent skipped payments/maturity date extensions or amortization term extensions.
(2)	The borrower did not have the financial ability to refinance at another bank at renewal.

There were no loans receivable for which a payment default occurred during the three and six months ended June 30, 2014 or 2013 that had been modified as a TDR within 12 months or less of the payment default.

18

6. ALLOWANCES FOR LOAN AND LEASE LOSSES AND REAL ESTATE LOSSES

The tables below provide a rollforward of the allowance for loan and lease losses (“ALLL”) by portfolio segment for the three and six months ended June 30, 2014 and 2013 (in thousands):

			Three Months Ended June 30, 2014
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	4,407	$	847	$	4,134		$	152	$	1,059		$	1,799		$	80		$	12,478
Provision charged to expense		72		183		(230	)		130		98			(52	)		29			230
Losses charged off		--		--		(2	)		--		(292	)		(27	)		(40	)		(361	)
Recoveries		11		--		8			--		3			1			22			45
Balance, end of period	$	4,490	$	1,030	$	3,910		$	282	$	868		$	1,721		$	91		$	12,392

				Six Months Ended June 30, 2014
	One- to Four-Family Residential			Multifamily Residential		Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	4,549		$	1,001	$	4,271		$	158	$	1,383		$	1,268		$	81		$	12,711
Provision charged to expense		(72	)		29		(256	)		124		(115	)		478			42			230
Losses charged off		(8	)		--		(115	)		--		(444	)		(27	)		(68	)		(662	)
Recoveries		21			--		10			--		44			2			36			113
Balance, end of period	$	4,490		$	1,030	$	3,910		$	282	$	868		$	1,721		$	91		$	12,392

				Three Months Ended June 30, 2013
	One- to Four-Family Residential			Multifamily Residential			Nonfarm Nonresidential			Farmland			Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	6,778		$	1,074		$	5,341		$	283		$	907		$	1,000		$	214		$	15,597
Provision charged to expense		22			382			(532	)		(10	)		124			(13	)		27			--
Losses charged off		(662	)		(876	)		(874	)		--			(115	)		(380	)		(49	)		(2,956	)
Recoveries		13			--			500			--			24			55			16			608
Balance, end of period	$	6,151		$	580		$	4,435		$	273		$	940		$	662		$	208		$	13,249

				Six Months Ended June 30, 2013
	One- to Four-Family Residential			Multifamily Residential			Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	5,099		$	1,319		$	6,949		$	251	$	879		$	956		$	223		$	15,676
Provision charged to expense		1,746			137			(2,006	)		22		69			12			20			--
Losses charged off		(747	)		(876	)		(1,008	)		--		(115	)		(380	)		(76	)		(3,202	)
Recoveries		53			--			500			--		107			74			41			775
Balance, end of period	$	6,151		$	580		$	4,435		$	273	$	940		$	662		$	208		$	13,249

The tables below present the allocation of the ALLL and the related loans receivable balances disaggregated on the basis of impairment method by portfolio segment as of June 30, 2014 and December 31, 2013 (in thousands):

			June 30, 2014
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential		Farmland		Construction and Land Development		Commercial		Consumer		Total
ALLL Balances:
Individually evaluated for impairment	$	179	$	--	$	660	$	127	$	118	$	--	$	16	$	1,100
Collectively evaluated for impairment		4,311		1,030		3,250		155		750		1,721		75		11,292
Ending balance	$	4,490	$	1,030	$	3,910	$	282	$	868	$	1,721	$	91	$	12,392
Loan balances:
Individually evaluated for impairment	$	4,762	$	--	$	3,209	$	752	$	707	$	321	$	24	$	9,775
Collectively evaluated for impairment		298,755		44,679		342,960		47,958		93,377		141,737		32,147		1,001,613
Ending balance	$	303,517	$	44,679	$	346,169	$	48,710	$	94,084	$	142,058	$	32,171	$	1,011,388

			December 31, 2013
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential		Farmland		Construction and Land Development		Commercial		Consumer		Total
ALLL Balances:
Individually evaluated for impairment	$	279	$	--	$	1,119	$	133	$	631	$	--	$	--	$	2,162
Collectively evaluated for impairment		4,270		1,001		3,152		25		752		1,268		81		10,549
Ending balance	$	4,549	$	1,001	$	4,271	$	158	$	1,383	$	1,268	$	81	$	12,711
Loan balances:
Individually evaluated for impairment	$	4,753	$	--	$	4,057	$	782	$	2,467	$	350	$	24	$	12,433
Collectively evaluated for impairment		124,555		25,773		164,845		1,881		21,424		28,683		4,344		371,505
Ending balance	$	129,308	$	25,773	$	168,902	$	2,663	$	23,891	$	29,033	$	4,368	$	383,938

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A summary of the activity in the allowance for losses on real estate owned is as follows for the three and six months ended June 30, 2014 and 2013 (in thousands):

	Three Months Ended							Six Months Ended
	June 30, 2014			June 30, 2013				June 30, 2014		June 30, 2013
Balance—beginning of period	$	8,143		$	9,396		$	8,794		$	14,877
Provisions for estimated losses		618			33			860			219
Recoveries		--			--			--			--
Losses charged off		(280	)		(23	)		(1,173	)		(5,690	)
Balance—end of period	$	8,481		$	9,406		$	8,481		$	9,406

7. OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment consisted of the following as of June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Land and land improvements	$	11,074		$	5,340
Buildings and improvements		42,173			19,358
Furniture and equipment		7,957			5,770
Automobiles		823			210
Total		62,027			30,678
Accumulated depreciation		(12,332	)		(11,909	)
Office properties and equipment—net	$	49,695		$	18,769

Depreciation expense for the six months ended June 30, 2014 and 2013 was approximately $739,000 and $713,000, respectively.

8. GOODWILL AND CORE DEPOSIT INTANGIBLE - NET

Goodwill represents the excess of the cost over the fair value of net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment at least annually and updated quarterly if necessary. At June 30, 2014, goodwill consisted of $25.6 million related to the FNSC acquisition. This goodwill is not deductible for tax purposes. The Company’s core deposit intangible is related to the core deposit premiums of FNB and Heritage. These core deposit intangibles are amortized on a straight line basis over their estimated lives ranging from 12 to 13 years.

Changes in the carrying amount and accumulated amortization of the Company’s core deposit intangible at June 30, 2014 were as follows (in thousands):

	June 30, 2014
Balance—beginning of period	$	--
FNSC merger		7,677
Amortization expense		(26	)
Balance—end of period	$	7,651

The Company’s projected amortization expense for the remainder of 2014 is approximately $313,000, $625,000 in each of the years ending December 31, 2015 through 2018, and $4.8 million thereafter.

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9. DEPOSITS

Deposits are summarized as follows (in thousands):

	June 30, 2014		December 31, 2013
Checking accounts	$	538,312	$	127,764
Money market accounts		108,033		45,153
Savings accounts		114,096		30,150
Certificates of deposit		470,973		266,658
Total	$	1,231,414	$	469,725

The aggregate amount of time deposits in denominations of $100 thousand or more was approximately $239.9 million and $138.6 million at June 30, 2014 and December 31, 2013, respectively.

At June 30, 2014, scheduled maturities of certificates of deposit were as follows (in thousands):

	Amount
Within one year	$	255,824
One to two years		64,562
Two to three years		42,533
Three to four years		52,357
Four to five years		34,663
Over five years		21,034
Total	$	470,973

10. SHORT TERM BORROWINGS

Short term borrowings are summarized as follows (in thousands):

	June 30, 2014		December 31, 2013
Repurchase agreements	$	14,295	$	--
Federal funds purchased		5,975		--
Total	$	20,270	$	--

Securities sold under repurchase agreements generally have maturities of one day and are recorded based on the amount of cash received in connection with the borrowing. Securities pledged as collateral under repurchase agreements are included in investment securities on the Condensed Consolidated Balance Sheets and are disclosed in Note 4. The fair value of the collateral pledged to a third party is continually monitored and additional collateral is pledged or returned, as deemed appropriate.

At June 30, 2014, the Company and its subsidiary banks had unused credit lines allowing contingent access to overnight borrowings of up to $117.9 million on an unsecured basis.

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11. OTHER BORROWINGS

Other borrowings are summarized as follows (in thousands):

	June 30, 2014		December 31, 2013
Federal Home Loan Bank advances with rates ranging from 0.20% to 7.80% maturing through July 1, 2024	$	34,127	$	5,941
Line of credit with a bank, $9.75 million total credit line, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, interest payments due quarterly, maturing May 30, 2016		8,500		--
Term note payable to a bank, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, principal and interest payments due quarterly, maturing May 30, 2019		5,250		--
Total	$	47,877	$	5,941

Federal Home Loan Bank. The Banks are members of the Federal Home Loan Bank System. As a member of this system, they are required to maintain an investment in capital stock of the FHLB in an amount equal to the sum of 0.04% of total assets as of the previous December 31 and 4.10% of outstanding advances. No ready market exists for such stock and it has no quoted market value. The carrying value of the stock is its cost. The Banks currently pledge as collateral for FHLB advances certain qualifying one- to four-family mortgage loans.

Notes Payable. The line of credit and note payable to a bank are collateralized by 100% of the stock of the Banks, FCBC and HCC. The related loan agreement requires the Company and the Banks to maintain certain financial ratios. As of June 30, 2014, the Company was in compliance with the applicable material covenants imposed by the loan agreement.

At June 30, 2014, scheduled maturities of other borrowings were as follows: (in thousands):

	Weighted
	Average
	Rate		Amount
Within one year		1.07%	$	9,582
One to two years		2.19		9,506
Two to three years		1.19		6,015
Three to four years		2.44		962
Four to five years		1.98		14,502
Over five years		2.68		7,310
Total		1.86%	$	47,877

12.     STOCK BASED COMPENSATION

2011 Omnibus Incentive Plan— The 2011 Omnibus Incentive Plan (the “2011 Plan”), became effective May 3, 2011, after approval by the Company’s stockholders on April 29, 2011. The objectives of the 2011 Plan are to optimize the profitability and growth of the Company through incentives that are consistent with the Company’s goals and that link the personal interests of participants to those of the Company’s stockholders. The 2011 Plan provides for a committee of the Company’s Board of Directors to award nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, and other awards representing up to 1,930,269 shares of Company stock. Awards may be granted under the 2011 Plan up to ten years following the effective date of the plan. Each award under the 2011 Plan is governed by the terms of the individual award agreement, which shall specify pricing, term, vesting, and other pertinent provisions. Shares issued in connection with stock compensation awards are issued from available authorized shares.

Stock Options. Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant, generally vest based on five years of continuous service and have seven year contractual terms. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. Expected volatilities are based on implied volatilities from historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise, employee termination, and expected term of the options within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

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A summary of the stock option activity in the Company’s 2011 Plan for the six months ended June 30, 2014, is presented below:

	Shares Underlying Awards			Weighted Average Exercise Price
Outstanding—January 1, 2014		217,500		$	6.66
Granted		--		$	--
Forfeited		(1,500	)	$	6.57
Outstanding—June 30, 2014		216,000		$	6.66

The weighted average remaining contractual life of the outstanding options was 4.4 years and the aggregate intrinsic value of the options was approximately $484,000 at June 30, 2014. None of the outstanding options are vested.

As of June 30, 2014, there was $382,000 of total unrecognized compensation costs related to nonvested stock options under the 2011 Plan. The cost is expected to be recognized over a weighted-average period of 2.6 years. Compensation expense attributable to option awards totaled approximately $36,000 for both three month periods ended June 30, 2014 and 2013, respectively, and approximately $71,000 and $73,000 for the six months ended June 30, 2014 and 2013, respectively.   

Restricted Stock Units. The fair value of each restricted stock unit (“RSU”) award is determined based on the closing market price of the Company’s stock on the grant date and amortized to compensation expense on a straight-line basis over the vesting period. The vesting periods range from three to seven years.

	Restricted Stock Units			Weighted Average Grant Date Fair Value
Outstanding—January 1, 2014		65,500		$	8.97
Granted		129,600		$	8.21
Vested		(5,817	)	$	9.75
Forfeited		(567	)	$	8.92
Outstanding—June 30, 2014		188,716		$	8.42

As of June 30, 2014, there was $1.4 million of total unrecognized compensation costs related to nonvested RSUs under the 2011 Plan. The cost is expected to be recognized over a weighted-average period of 4.3 years. Compensation expense attributable to awards of RSUs totaled approximately $66,000 and $16,000 for the three months ended June 30, 2014 and 2013, respectively, and approximately $125,000 and $23,000 for the six months ended June 30, 2014 and 2013, respectively.

13. EARNINGS PER SHARE

Basic earnings per share is computed by dividing reported earnings available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing reported earnings available to common stockholders by the weighted average number of common shares outstanding after consideration of the dilutive effect, if any, of the Company’s outstanding common stock options and warrants using the treasury stock method.

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Basic weighted average shares outstanding		22,020,238		19,897,603		21,036,359		19,660,918
Effect of dilutive securities		--		982,326		--		1,150,754
Diluted weighted average shares outstanding		22,020,238		20,879,929		21,036,359		20,811,672

The calculation of diluted earnings per share for the three months ended June 30, 2014 excluded the following antidilutive securities: warrants representing 177,215 shares, stock options representing 216,000 shares and restrictive stock units representing 188,716 shares. The calculation of diluted earnings per share for the three and six months ended June 30, 2013 excluded antidilutive stock options representing approximately 8,000 shares.

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14. FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement, provides a framework for measuring fair value and defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: 

Level 1	Unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2	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 at the measurement date for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Financial instruments are broken down by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.

The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at June 30, 2014 and December 31, 2013, as well as the general classification of such assets pursuant to the valuation hierarchy.

Securities Available for Sale

Investment securities available for sale are recorded at fair value on a recurring basis. The fair values used by the Company are obtained from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems. Recurring Level 2 securities include U.S. agency securities, mortgage-backed securities, municipal bonds and corporate debt securities. Inputs used for valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs include indicative values derived from the independent pricing service’s proprietary computerized models. No securities were included in the Recurring Level 3 category at or for the periods ended June 30, 2014 or December 31, 2013.

The following table presents major categories of assets measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in thousands):

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2014
Available for sale investment securities:
U.S. Government agencies	$	122,740	$	--	$	122,740	$	--
Municipal securities		49,140		--		49,140		--
Mortgage-backed securities		37,844		--		37,844		--
Corporate debt securities		3,833		--		3,833		--
Total	$	213,557	$	--	$	213,557	$	--
December 31, 2013
Available for sale investment securities:
Municipal securities	$	41,924	$	--	$	41,924	$	--
Mortgage-backed securities		28,904		--		28,904		--
Total	$	70,828	$	--	$	70,828	$	--

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The following is a description of valuation methodologies used for significant assets measured at fair value on a nonrecurring basis.

Impaired Loans Receivable

Loans which meet certain criteria are evaluated individually for impairment. A loan is considered impaired when, based upon current information and events, it is probable the bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Substantially all of the Bank’s impaired loans at June 30, 2014 and December 31, 2013 are secured by real estate.  Impaired loans are individually measured for impairment by comparing the carrying value of the loan to the discounted cash flows or the fair value of the collateral, less estimated selling costs, as appropriate. Fair value is estimated through current appraisals, real estate brokers’ opinions or listing prices.  Fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.   During the reported periods, collateral discounts ranged from 15% to 45% and selling costs were estimated at 8%. Fair value adjustments are made by partial charge-offs and adjustments to the allowance for loan and lease losses.

Real Estate Owned, net

REO represents real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at the lower of cost or fair value less estimated selling costs.  Fair value is estimated through current appraisals, real estate brokers’ opinions or listing prices.  As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.  During the reported periods, collateral discounts ranged from 0% to 25% and selling costs were estimated at 8%. Fair value adjustments are recorded in earnings during the period such adjustments are made. REO loss provisions recorded during the six months ended June 30, 2014 and 2013 were $860,000 and $219,000, respectively.

The following table presents major categories of assets measured at fair value on a nonrecurring basis for the six months ended June 30, 2014 and 2013 (in thousands). The assets disclosed in the following table represent REO properties or impaired loans that were remeasured at fair value during the period with a resulting valuation adjustment or fair value write-down.

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2014
Impaired loans	$	5,953	$	--	$	--	$	5,953
REO, net		3,414		--		--		3,414
June 30, 2013
Impaired loans	$	15,956	$	--	$	--	$	15,956
REO, net		3,155		--		--		3,155

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

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The estimated fair values of financial instruments that are reported at amortized cost in the Company’s statement of financial condition, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value, are as follows (in thousands):

	June 30, 2014				December 31, 2013
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
FINANCIAL ASSETS:
Level 1 inputs:
Cash and cash equivalents	$	60,838	$	60,838	$	23,970	$	23,970
Federal funds sold		12,375		12,375		--		--
Level 2 inputs:
Interest-bearing time deposits in banks		18,892		19,229		24,118		24,573
Other investment securities		8,188		8,188		457		457
Loans held for sale		8,943		8,943		4,205		4,205
Cash surrender value of life insurance		28,655		28,655		23,811		23,811
Accrued interest receivable		4,645		4,645		1,473		1,473
Level 3 inputs:
Loans receivable—net		998,892		1,007,045		371,149		377,851
FINANCIAL LIABILITIES:
Level 1 inputs:
Short term borrowings		20,270		20,270		--		--
Level 2 inputs:
Checking, money market and savings accounts		760,441		760,441		203,067		203,067
Other borrowings		47,877		47,947		5,941		6,017
Accrued interest payable		219		219		33		33
Level 3 inputs:
Certificates of deposit		470,973		471,879		266,658		266,495

For cash and cash equivalents and federal funds sold, the carrying amount approximates fair value (level 1). For other investment securities, loans held for sale, cash surrender value of life insurance and accrued interest receivable, the carrying value is a reasonable estimate of fair value, primarily because of the short-term nature of the instruments or, as to other investment securities, the ability to sell the stock back to the issuer at cost (level 2). Interest bearing time deposits in banks were valued using discounted cash flows based on current rates for similar types of deposits (level 2). Fair values of impaired loans are estimated as described in Note 9. Non-impaired loans were valued using discounted cash flows. The discount rates used to determine the present value of these loans were based on interest rates currently being charged by the Banks on comparable loans (level 3).

For federal funds purchased and securities sold under agreements to repurchase, the carrying amount approximates fair value (level 1). The fair value of checking accounts, savings accounts and money market deposits is the amount payable on demand at the reporting date (level 2). The fair value of fixed-maturity certificates of deposit is estimated using the discount rates currently offered by the Banks for deposits of similar terms (level 3). The fair value of FHLB advances is estimated using the rates for advances of similar remaining maturities at the reporting date (level 2). For accrued interest payable the carrying value is a reasonable estimate of fair value, primarily because of the short-term nature of the instruments (level 2).

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2014 and December 31, 2013. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since the reporting date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

16. REGULATORY MATTERS

The Company and subsidiary banks are subject to various regulatory capital requirements administered by the federal and state banking agencies. The Office of the Comptroller of the Currency (“OCC”) is the primary regulator for First Federal Bank, First National Bank, Hot Springs and Heritage Bank. The Federal Reserve Bank is the primary regulator for the Company. Failure to meet minimum capital requirements can result in certain mandatory—and possible additional discretionary—actions by regulators that, if undertaken, could have a direct and material effect on the Company’s or the Banks’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Banks must meet specific capital guidelines that involve quantitative measures of the Company’s and the Banks’ assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Banks’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  

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Quantitative measures established by regulation to ensure capital adequacy require the Company and the Banks to maintain minimum amounts and ratios (set forth in the following table) of tangible capital (as defined) to tangible assets (as defined) and core capital (as defined) to adjusted tangible assets (as defined), and of total risk-based capital (as defined) to risk-weighted assets (as defined). Tier 1 (core) capital includes common stockholders’ equity and qualifying preferred stock less certain other deductions. Total capital includes Tier 1 capital plus the allowance for loan and lease losses, subject to limitations.

As of the most recent notification from regulatory authorities, the Company and the Banks were all categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Banks must maintain minimum total risk-based, tier 1 risk-based, and tier 1 (core) ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed any of the Banks’ categorizations.

The actual and required capital amounts (in thousands) and ratios of the Company (Consolidated) and First Federal Bank (“First Federal”), First National Bank (“FNB”) and Heritage Bank (“Heritage”) are presented in the following tables:

											To be Categorized
											as Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2014:
Tangible Capital to Tangible Assets
First Federal		46,658		8.42	%	$	8,312		1.50	%		N/A		N/A
Tier 1 Capital to Average Assets
Consolidated	$	108,901		7.54	%	$	57,776		4.00	%		N/A		N/A
First Federal (1)		46,658		8.42	%		22,165		4.00	%	$	27,707		5.00	%
FNB		50,166		8.51	%		17,690		3.00	%		29,483		5.00	%
Heritage		23,951		8.67	%		8,286		3.00	%		13,811		5.00	%
Total Capital to Risk-Weighted Assets
Consolidated	$	114,618		10.85	%	$	84,472		8.00	%		N/A		N/A
First Federal		52,150		12.05	%		34,615		8.00	%	$	43,269		10.00	%
FNB		50,291		12.18	%		33,025		8.00	%		41,282		10.00	%
Heritage		24,051		11.43	%		16,832		8.00	%		21,040		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated	$	108,901		10.31	%		42,236		4.00	%	N/A		N/A
First Federal		46,658		10.78	%	N/A		N/A				25,961		6.00	%
FNB		50,166		12.15	%		16,513		4.00	%		24,769		6.00	%
Heritage		23,951		11.38	%		8,416		4.00	%		12,624		6.00	%

(1)   In the case of First Federal, the ratio is calculated based on adjusted assets at period end.

First Federal’s actual and required capital amounts (in thousands) and ratios as of December 31, 2013, are presented in the following table:

											To be Categorized
											as Well
											Capitalized Under					Required Per
						For Capital					Prompt Corrective					Agreement With
	Actual					Adequacy Purposes					Action Provisions					the OCC (1)
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013, :
Tangible Capital to Tangible Assets	$	70,853		12.90	%	$	8,240		1.50	%	N/A		N/A			N/A		N/A
Core Capital to Adjusted Tangible Assets		70,853		12.90	%		21,972		4.00	%	$	27,465		5.00	%	$	43,944		8.00	%
Total Capital to Risk-Weighted Assets		76,036		18.68	%		32,570		8.00	%		40,713		10.00	%		48,855		12.00	%
Tier I Capital to Risk-Weighted Assets		70,853		17.40	%	N/A		N/A				24,428		6.00	%	N/A		N/A

(1) First Federal’s Bank Order, effective through January 15, 2013, required the bank to maintain a Tier 1 (core) capital ratio of at least 8% and a total risk-based capital ratio of at least 12%. After such date and through February 21, 2014, First Federal agreed with the OCC to maintain a minimum Tier 1 (core) capital ratio of at least 8% of adjusted total assets and a total risk-based capital ratio of at least 12% of risk-weighted assets. The required amounts presented reflect these ratios.

Private Placement. In connection with the merger with FNSC, on June 13, 2014 the Company sold 2,531,646 shares of Company common stock at a price per share equal to $7.90 in a private placement (the “Private Placement”) to its principal stockholder Bear State Financial Holdings, LLC (“Bear State”) and certain of Bear State’s members in their individual capacity (the “Investors”) (including Richard N. Massey, the Company’s Chairman of the Board, President and Chief Executive Officer, and Scott T. Ford, a director of the Company). Additionally, the Company issued warrants (the “Investor Warrants”) to purchase 177,215 shares of common stock on the same terms as in the Private Placement to the Investors in exchange for their respective commitments to backstop the Private Placement. The pricing of the Private Placement and Investor Warrants was equal to the closing stock price for the Company’s common stock on June 28, 2013, which was the last business day prior to the execution of the merger agreement with FNSC. This price was also used to determine the number of shares issued to FNSC stockholders in the merger.

Authorized Shares. On March 21, 2014, the stockholders of the Company approved a proposal to amend the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 30,000,000 to 100,000,000. Effective June 3, 2014, the Company filed Amended and Restated Articles of Incorporation (the “Amended Articles”) with the Secretary of State of the State of Arkansas. The Amended Articles increased the number of authorized shares from 30,000,000 to 100,000,000.

27

Dividend Restrictions. The Banks may not declare or pay cash dividends on its shares of common stock if the effect thereof would cause the bank’s stockholders’ equity to be reduced below applicable regulatory capital maintenance requirements for insured institutions or, in the case of First Federal, below the special liquidation account established by First Federal in connection with the consummation of its conversion from the mutual holding company structure on May 3, 1996. In addition, federal regulations, as currently applied to the Banks, impose limitations upon payment of capital distributions to the Company.

The principal source of the Company’s revenues is dividends from the Banks. Our ability to pay dividends to our stockholders depends to a large extent upon the dividends we receive from the Banks.

Repurchase Program. On February 19, 2014, the Board of Directors of the Company approved a share repurchase program permitting the Company to repurchase up to $1,000,000 of its common stock over the next 12 months.

17. SUBSEQUENT EVENTS

On July 31, 2014, the Company, through its subsidiary banks, executed contracts with its data processing service provider which provided for a termination fee of $2.4 million related to converting FNB and Heritage to the Company’s data processing platform. This termination fee will be expensed in the third quarter of 2014.

On August 13, 2014, the board of directors of the Company authorized an increase in the Company’s line of credit with an unaffiliated bank from $9.75 million to $14.75 million.

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

Management's discussion and analysis of financial condition and results of operations (“MD&A”) is intended to assist a reader in understanding the consolidated financial condition and results of operations of the Company for the periods presented. The information contained in this section should be read in conjunction with the Condensed Consolidated Financial Statements and the accompanying Notes to the Condensed Consolidated Financial Statements and the other sections contained herein. References to the Company and the Banks throughout MD&A are made using the first person notations of “we”, “us” or “our”.

The Company owns First Federal Bank (“First Federal”), and two bank holding companies, First Community Banking Corporation (“FCBC”) and Heritage Capital Corporation (“HCC”), which own First National Bank (“FNB”) and Heritage Bank, NA (“Heritage”), respectively (collectively referred to as “the Banks”). First Federal is a federally chartered stock savings and loan association that conducts business from its home office in Harrison, Arkansas, a full-service branch office in Pulaski County, Arkansas, ten full-service branch offices and one limited service office located in a five county area in Northwest and Northcentral Arkansas and a mortgage production office in Bentonville, Arkansas. FNB offers banking services from its home office in Hot Springs, Arkansas, eighteen full service branch offices and three limited service offices located in Central and Southwest Arkansas and two full service offices in Southeast Oklahoma. Heritage has five branches in Jonesboro, Arkansas, including its home office, as well as four additional full service branches in Northeast Arkansas. The Banks are community oriented financial institutions providing a broad line of financial products to individuals and business customers.

The Banks offer a wide range of retail and business deposit accounts, including noninterest bearing and interest bearing checking accounts, savings and money market accounts, certificates of deposit, and individual retirement accounts. Loan products offered by the Banks include residential real estate, consumer, construction, lines of credit, commercial real estate and commercial business loans. Other financial services include automated teller machines; 24-hour telephone banking; online banking, including account access, bill payment, and e-statements; mobile banking, including remote deposit capture and funds transfer; Bounce Protection^TM overdraft service; debit cards; and safe deposit boxes.

2014 SECOND QUARTER OVERVIEW

Effective June 3, 2014, the Company changed its name from First Federal Bancshares of Arkansas, Inc. to Bear State Financial, Inc.

On June 13, 2014, the Company completed its previously-announced acquisition of First National Security Company (“FNSC”) whereby FNSC merged with and into the Company in a transaction valued at approximately $124.4 million. In connection with the merger, former FNSC stockholders received in the aggregate 6,252,400 shares of Company common stock, valued at approximately $50.4 million and $74 million in cash in exchange for 100% of the outstanding shares of FNSC common stock. The Company paid $50 million of the total cash consideration and FNSC paid $24 million of the total cash consideration to its stockholders from funds it received immediately prior to the closing of the acquisition from its subsidiary bank, First National Bank. The acquisition expanded the Company’s market into Northeast and Southwest Arkansas and further diversified the Company’s loan, customer and deposit base. The Company’s results of operations for the three and six months ended June 30, 2014 includes results of operations for FNB and Heritage for the period from June 14 through June 30, 2014.

The Company’s net loss was $2.9 million and $3.2 million for the three and six months ended June 30, 2014, respectively, compared to net income of $84,000 and $387,000 for the same periods in 2013. The decrease in net income for the comparative period was due to increases in operating expenses, primarily related to salaries and employee benefits, real estate owned and acquisition related expenses.

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CRITICAL ACCOUNTING POLICIES

Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. These policies and the judgments, estimates and assumptions are described in greater detail in subsequent sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included herein. In particular, Note 1 to the Consolidated Financial Statements – “Summary of Significant Accounting Policies” generally describes our accounting policies. We believe that the judgments, estimates and assumptions used in the preparation of our Consolidated Financial Statements are appropriate given the factual circumstances at the time. However, given the sensitivity of our Consolidated Financial Statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in our results of operations or financial condition.

Determination of the adequacy of the allowance for loan and lease losses. In estimating the amount of credit losses inherent in our loan portfolio, various judgments and assumptions are made. For example, when assessing the condition of the overall economic environment, assumptions are made regarding market conditions and their impact on the loan portfolio. In the event the economy were to sustain a prolonged downturn, the loss factors applied to our portfolios may need to be revised, which may significantly impact the measurement of the allowance for loan and lease losses. For impaired loans that are collateral dependent and for real estate owned, the estimated fair value of the collateral may deviate significantly from the proceeds received when the collateral is sold.

Acquired loan amounts deemed uncollectible at acquisition date become part of the fair value calculation and are excluded from the ALLL. Following acquisition, a regular review will be completed on acquired loans to determine if changes in estimated cash flows have occurred. Subsequent decreases in the amount expected to be collected may result in a provision for loan and lease losses with a corresponding increase in the ALLL. Subsequent increases in the amount expected to be collected result in a reversal of any previously recorded provision for loan and lease losses and related ALLL, if any, or prospective adjustment to the accretable yield if no provision for loan and lease losses had been recorded.

Acquired Loans. Acquired loans and leases are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. The fair value adjustment on acquired loans without evidence of credit deterioration since origination will be accreted into earnings as a yield adjustment using the level yield method over the remaining life of the loan.

Acquired loans and leases with evidence of credit deterioration since origination such that it is probable at acquisition that the bank will be unable to collect all contractually required payments are accounted for under the guidance in ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the difference between contractually required payments and the cash flows expected to be collected is the nonaccretable difference, which is included as a reduction of the carrying amount of acquired loans and leases. If the timing and amount of the future cash flows is reasonably estimable, any excess of cash flows expected at acquisition over the estimated fair value is the accretable yield and is recognized in interest income over the asset's remaining life using a level yield method.

Goodwill and other intangible assets. The Company accounts for acquisitions using the acquisition method of accounting. Under acquisition accounting, if the purchase price of an acquired company exceeds the fair value of its net assets, the excess is carried on the acquirer's balance sheet as goodwill. An intangible asset is recognized as an asset apart from goodwill if it arises from contractual or other legal rights or if it is capable of being separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged. Intangible assets are identifiable assets, such as core deposit intangibles, resulting from acquisitions which are amortized on a straight-line basis over an estimated useful life and evaluated for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable.

Goodwill is not amortized but is evaluated at least annually for impairment or more frequently if events occur or circumstances change that may trigger a decline in the value of the reporting unit or otherwise indicate that a potential impairment exists. Potential impairment of goodwill exists when the carrying amount of a reporting unit exceeds its fair value. To the extent the reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired, and implied fair value of the reporting unit's goodwill will be determined. If the implied fair value of the reporting unit's goodwill is lower than its carrying amount, goodwill is impaired and is written down to the implied fair value. The loss recognized is limited to the carrying amount of goodwill. Once an impairment loss is recognized, future increases in fair value will not result in the reversal of previously recognized losses.

Valuation of real estate owned. Fair value is estimated through current appraisals, real estate brokers’ opinions or listing prices.  As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions. The estimated fair value of the collateral may deviate significantly from the proceeds received when the collateral is sold.

29

Valuation of investment securities. The Company has classified all of its investment securities as available for sale. Accordingly, its investment securities are stated at estimated fair value in the consolidated financial statements with unrealized gains and losses, net of related income taxes, reported as a separate component of stockholders’ equity with any related changes included in accumulated other comprehensive income (loss). The Company utilizes independent third parties as its principal sources for determining fair value of its investment securities that are measured on a recurring basis. For investment securities traded in an active market, the fair values are based on quoted market prices if available. If quoted market prices are not available, fair values are based on market prices for comparable securities, broker quotes or comprehensive interest rate tables, pricing matrices or a combination thereof. For investment securities traded in a market that is not active, fair value is determined using unobservable inputs. The fair values of the Company’s investment securities traded in both active and inactive markets can be volatile and may be influenced by a number of factors including market interest rates, prepayment speeds, discount rates, credit quality of the issuer, general market conditions including market liquidity conditions and other factors. Factors and conditions are constantly changing and fair values could be subject to material variations that may significantly impact the Company’s financial condition, results of operations and liquidity.

Valuation of deferred tax assets. We recognize deferred tax assets and liabilities for the future tax consequences related to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We evaluate our deferred tax assets for recoverability using a consistent approach that considers the relative impact of negative and positive evidence, including our historical profitability and projections of future taxable income. We are required to establish a valuation allowance for deferred tax assets if we determine, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance, we estimate future taxable income based on management-approved business plans and ongoing tax planning strategies. This process involves significant management judgment about assumptions that are subject to change from period to period based on changes in tax laws or variances between our projected operating performance, our actual results and other factors.

RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2014 Compared to Three and Six Months Ended June 30, 2013

Net Income. The Company recorded a net loss of $2.9 million for the three months ended June 30, 2014 compared to net income of $84,000 for the three months ended June 30, 2013. The Company recorded a net loss of $3.2 million for the six months ended June 30, 2014 compared to net income of $387,000 for the six months ended June 30, 2013.

The decrease in net income for the comparative periods was due to increases in operating expenses, primarily related to salaries and employee benefits, real estate owned and acquisition related expenses, partially offset by an increase in net interest income. During the second quarter, the Company elected to retire certain pension liabilities of the Company’s multiemployer defined benefit plan resulting in a charge of $2.9 million.  This election will improve the funded status of the plan and is expected to result in a significant reduction of the Company’s annual pension expense. Additionally, during the second quarter, the Company performed a review of its REO properties and made a decision to more aggressively market certain properties. This review resulted in a $618,000 REO loss provision during the second quarter of 2014. Finally, the Company incurred acquisition related charges in the second quarter of 2014 of approximately $392,000.

Net Interest Income. The Company's results of operations depend primarily on its net interest income, which is the difference between interest income on interest-earning assets, such as loans and investments, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Net interest income for the second quarter of 2014 was $5.3 million, compared to $3.6 million for the same period in 2013. Net interest income for the six months ended June 30, 2014 was $9.2 million, compared to $7.3 million for the same period in 2013. The increase in net interest income for the three and six month comparison periods resulted from changes in interest income and interest expense discussed below.

Interest Income. Interest income for the second quarter of 2014 was $6.6 million compared to $4.5 million for the same period in 2013. Interest income for the six months ended June 30, 2014 was $11.3 million compared to $9.0 million for the same period in 2013. The increase in interest income for the three and six months ended June 30, 2014 compared to the comparable period in 2013 was primarily related to increases in the average balances of loans receivable and investment securities and yields earned on loans receivable and other investments as a result of the acquisition of FNSC. Interest income of the Company attributable to FNB and Heritage for the three and six months ended June 30, 2014 amounted to $1.6 million.

Interest Expense.   Interest expense for the second quarter of 2014 was $1.1 million compared to $830,000 for the same period in 2013. Interest expense for the six months ended June 30, 2014 was $1.9 million compared to $1.7 million for the same period in 2013. The increase in interest expense for the three and six months ended June 30, 2014 compared to the comparable period in 2013 was primarily due to an increase in the average balance of deposit accounts, which balances substantially increased following the acquisition of FNSC. Interest expense of the Company attributable to FNB and Heritage for the three and six months ended June 30, 2014 amounted to $80,000.

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Rate/Volume Analysis. The table below sets forth certain information regarding changes in interest income and interest expense of the Company for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided regarding changes attributable to (i) changes in volume (changes in average volume multiplied by prior rate); (ii) changes in rate (changes in rate multiplied by prior average volume); (iii) changes in rate-volume (changes in rate multiplied by the change in average volume); and (iv) the net change.

	Three Months Ended June 30,
	2014 vs. 2013
	Increase (Decrease) Due to
	Volume			Rate			Rate/ Volume				Total Increase (Decrease)
	(In Thousands)
Interest income:
Loans receivable	$	1,741		$	98			$	43		$	1,882
Investment securities		357			(50	)			(51	)		256
Other interest-earning assets		(45	)		27				(9	)		(27	)
Total interest-earning assets		2,053			75				(17	)		2,111
Interest expense:
Deposits		274			(80	)			(27	)		167
Other borrowings		56			(1	)			(2	)		53
Total interest-bearing liabilities		330			(81	)			(29	)		220
Net change in net interest income	$	1,723		$	156			$	12		$	1,891

	Six Months Ended June 30,
	2014 vs. 2013
	Increase (Decrease) Due to
	Volume			Rate			Rate/ Volume			Total Increase (Decrease)
	(In Thousands)
Interest income:
Loans receivable	$	2,289		$	(276	)	$	(78	)	$	1,935
Investment securities		493			(54	)		(38	)		401
Other interest-earning assets		(110	)		93			(38	)		(55	)
Total interest-earning assets		2,672			(237	)		(154	)		2,281
Interest expense:
Deposits		319			(108	)		(21	)		190
Other borrowings		67			(1	)		(4	)		62
Total interest-bearing liabilities		386			(109	)		(25	)		252
Net change in net interest income	$	2,286		$	(128	)	$	(129	)	$	2,029

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Average Balance Sheets. The following table sets forth certain information relating to the Company's average balance sheets and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing interest income or interest expense by the average balance of assets or liabilities, respectively, for the periods presented. Average balances are based on daily balances during the periods. Interest rate spread represents the difference between the weighted average yield on average interest earning assets and the weighted average cost of average interest bearing liabilities. Net interest margin represents net interest income as a percentage of average interest earning assets.

	Three Months Ended June 30,
	2014						2013
	Average Balance		Interest		Average Yield/ Cost		Average Balance		Interest		Average Yield/ Cost
	(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1)	$	505,754	$	5,852		4.64%	$	351,591	$	3,970		4.54%
Investment securities(2)		101,562		605		2.39		50,225		349		2.80
Other interest-earning assets		58,220		111		0.76		86,287		138		0.64
Total interest-earning assets		665,536		6,568		3.96		488,103		4,457		3.67
Noninterest-earning assets		83,431						51,625
Total assets	$	748,967					$	539,728
Interest-bearing liabilities:
Deposits	$	587,429		984		0.67	$	439,927		817		0.75
Other borrowings		15,209		66		1.74		2,862		13		1.77
Total interest-bearing liabilities		602,638		1,050		0.70		442,789		830		0.75
Noninterest-bearing deposits		56,988						23,046
Noninterest-bearing liabilities		2,728						2,146
Total liabilities		662,354						467,981
Stockholders' equity		86,613						71,747
Total liabilities and stockholders' equity	$	748,967					$	539,728
Net interest income			$	5,518					$	3,627
Net earning assets	$	62,898					$	45,314
Interest rate spread						3.26%						2.92%
Net interest margin						3.33%						2.98%
Ratio of interest-earning assets to Interest-bearing liabilities						110.44%						110.23%

   (1) Includes nonaccrual loans.

   (2) Includes FHLB of Dallas and Federal Reserve Bank stock.

		Six Months Ended June 30,
		2014					2013
					Average					Average
		Average			Yield/		Average			Yield/
		Balance		Interest	Cost		Balance		Interest	Cost
		(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1)	$	454,757	$	9,986	4.43%	$	354,072	$	8,051	4.59%
Investment securities(2)		86,625		1,117	2.60		51,311		716	2.81
Other interest-earning assets		47,340		216	0.92		79,896		271	0.68
Total interest-earning assets		588,722		11,319	3.88		485,279		9,038	3.76
Noninterest-earning assets		64,461					51,983
Total assets	$	653,183				$	537,262
Interest-bearing liabilities:
Deposits	$	522,214		1,853	0.72	$	438,243		1,663	0.77
Other borrowings		10,592		88	1.68		2,966		26	1.77
Total interest-bearing liabilities		532,806		1,941	0.74		441,209		1,689	0.77
Noninterest-bearing deposits		38,752					22,581
Noninterest-bearing liabilities		2,417					2,467
Total liabilities		573,975					466,257
Stockholders' equity		79,208					71,005
Total liabilities and stockholders' equity	$	653,183				$	537,262
Net interest income			$	9,378				$	7,349
Net earning assets	$	55,916				$	44,070
Interest rate spread					3.14%					2.99%
Net interest margin					3.21%					3.05%
Ratio of interest-earning assets to Interest-bearing liabilities					110.49%					109.99%

   (1) Includes nonaccrual loans.

   (2) Includes FHLB of Dallas and Federal Reserve Bank stock.

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The Company’s net interest margin increased primarily as a result of an increase in yields on loans receivable resulting from loans acquired in the FNSC transaction.

Provision for Loan Losses. The provision for loan losses represents the amount added to the allowance for loan and lease losses (“ALLL”) for the purpose of maintaining the ALLL at a level considered adequate to cover probable credit losses related to specifically identified loans as well as probable credit losses inherent in the remainder of the loan portfolio that have been incurred as of the balance sheet date. The adequacy of the ALLL is evaluated quarterly by management of the Banks based on the Banks’ past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and other qualitative factors.

Management determined that a provision for loan losses of $230,000 was required for the three and six months ended June 30, 2014, primarily due to loans originated during the period subsequent to the acquisition date by FNB and Heritage offset by decreases in nonperforming and classified loans and continued improvement in First Federal’s loan portfolio and ALLL coverage of nonaccrual loans. The ALLL as a percentage of loans receivable was 1.2% at June 30, 2014, compared to 3.3% at December 31, 2013. The ALLL as a percentage of nonaccrual loans was 134.7% at June 30, 2014, compared to 106.5% at December 31, 2013. The ALLL as a percentage of classified loans was 53.4% at June 30, 2014, compared to 86.1% at December 31, 2013. See “Allowance for Loan and Lease Losses” in the “Asset Quality” section. No provision was made for any loans acquired in the acquisition of FNSC. Rather, such acquired loans are carried at fair value as of the date of acquisition on the Company’s balance sheet. In the coming months, a regular review will be completed on acquired loans to determine if changes in estimated cash flows have occurred. Subsequent decreases in the amount expected to be collected may result in a provision for loan and lease losses with a corresponding increase in the ALLL.

Noninterest Income. Noninterest income is generated primarily through deposit account fee income, profit on sale of loans, and earnings on life insurance policies. Total noninterest income of $1.8 million for the three months ended June 30, 2014 increased from $1.3 million for the same period in 2013. Total noninterest income of $3.0 million for the six months ended June 30, 2014 increased from $2.6 million for the same period in 2013. The increase in the three and six month comparison periods was primarily due to an increase in the number of loans sold and the average profit on loans held for sale. First Federal sold 234 loans in the secondary market during the six month period ended June 30, 2014 compared to 184 loans during the six month period ended June 30, 2013. Noninterest income of the Company attributable to FNB and Heritage for the three and six months ended June 30, 2014 amounted to $270,000.

Noninterest Expense. Noninterest expense consists primarily of employee compensation and benefits, office occupancy expense, data processing expense, real estate owned expense, and other operating expense. Total noninterest expense increased $5.1 million or 105.2% during the second quarter of 2014 compared to the second quarter of 2013. Total noninterest expense increased $5.8 million or 60.7% during the six months ended June 30, 2014 compared to the same period in 2013. The variances in certain noninterest expense items are further explained in the following paragraphs, with the aggregate expense increase for the three and six month comparison periods being primarily related to the increase in employee compensation expense, an increase in loss provision on other real estate owned for the three and six month comparison periods, and expenses related to the acquisition of FNSC. Noninterest expense of the Company attributable to FNB and Heritage for the three and six months ended June 30, 2014 amounted to $757,000.

Salaries and Employee Benefits. Salaries and employee benefits increased $3.7 million and $4.1 million for the three and six months ended June 30, 2014 compared to the same periods in 2013, respectively. The increase in the three and six month comparison periods was primarily due to the Company’s election in the second quarter of 2014 to retire certain pension liabilities of the Company’s multiemployer defined benefit plan resulting in a charge of $2.9 million.  This election will improve the funded status of the plan and is expected to result in a significant reduction of the Company’s annual pension expense. Additionally, the increase in the salaries and benefits of employees related to the merger with FNSC totaled $465,000 for the three and six months ended June 30, 2014. The changes in the composition of this line item are presented below (in thousands):

	Three Months Ended June 30,									Six Months Ended June 30,
	2014			2013			Change			2014			2013			Change
Salaries	$	3,015		$	2,327		$	688		$	5,465		$	4,475		$	990
Payroll taxes		241			191			50			527			433			94
Insurance		127			131			(4	)		258			259			(1	)
401(k) plan expenses		47			4			43			86			8			78
Defined benefit plan		3,055			110			2,945			3,208			218			2,990
Stock compensation		110			53			57			196			96			100
Other		(55	)		(12	)		(43	)		(138	)		(7	)		(131	)
Total	$	6,540		$	2,804		$	3,736		$	9,602		$	5,482		$	4,120

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Real estate owned, net. The changes in the composition of this line item are presented below (in thousands):

	Three Months Ended June 30,									Six Months Ended June 30,
	2014			2013			Change			2014			2013			Change
Loss provisions	$	618		$	33		$	585		$	860		$	176		$	684
Net gain on sales		(62	)		(43	)		(19	)		(142	)		(374	)		232
Rental income		(44	)		(26	)		(18	)		(96	)		(63	)		(33	)
Taxes and insurance		33			25			8			69			93			(24	)
Other		46			56			(10	)		117			117			--
Total	$	591		$	45		$	546		$	808		$	(51	)	$	859

During the second quarter of 2014, the Company performed a review of its REO properties and made a decision to more aggressively market certain properties, resulting in a $618,000 REO loss provision. The decrease in gains on sales of REO is due to a decrease in sales of REO in the six months of 2014 compared to the same period in 2013 due to an overall continued decrease in REO balances during the periods. Real estate owned expenses such as taxes, insurance and maintenance as well as rental income are expected to continue to decline as the size of the REO portfolio decreases. Future levels of loss provisions and net gains or losses on sales of real estate owned will depend on market conditions. The acquisition of FNSC had no material impact on real estate owned, net.

Other Noninterest Expenses. The increases in other noninterest expenses during the three and six months ended June 30, 2014 compared to the same periods in 2013 of $758,000 and $762,000, respectively, were primarily related to expenses related to the acquisition of FNSC of approximately $392,000 recognized during the second quarter of 2014. On July 31, 2014, the Company, through its subsidiary banks, executed contracts with its data processing service provider which provided for a termination fee of $2.4 million related to converting FNB and Heritage to the Company’s data processing platform. The Company also expects to negotiate a termination fee of approximately $630,000 with one of its other data processing providers in the third quarter of 2014. These termination fees are expected to be recorded as noninterest expenses in the third quarter of 2014.

	Three Months Ended June 30,							Six Months Ended June 30,
	2014		2013		Change			2014		2013		Change
FDIC insurance	$	125	$	170	$	(45	)	$	245	$	341	$	(96	)
Data processing		563		397		166			982		733		249
Professional fees		235		151		84			430		410		20
Advertising and public relations		198		74		124			301		144		157
Postage and supplies		119		108		11			210		217		(7	)
Other		944		526		418			1,492		1,053		439
Total	$	2,184	$	1,426	$	758		$	3,660	$	2,898	$	762

Income Taxes. The Company had no taxable income for the three or six months ended June 30, 2014 or 2013 and recorded a valuation allowance for the full amount of its net deferred tax asset as of June 30, 2014 and December 31, 2013, respectively.

LENDING ACTIVITIES

Loans Receivable. Changes in loan composition between June 30, 2014 and December 31, 2013, are presented in the following table (dollars in thousands).

	June 30,			December 31,			Increase
	2014			2013			(Decrease)			% Change
One- to four-family residential	$	303,517		$	129,308		$	174,209			134.7	%
Multifamily residential		44,679			25,773			18,906			73.4
Nonfarm nonresidential		346,169			168,902			177,267			105.0
Farmland		48,710			2,663			46,047			1,729.1
Construction and land development		94,084			23,891			70,193			293.8
Total real estate loans		837,159			350,537			486,622			138.8
Commercial		142,058			29,033			113,025			389.3
Consumer		32,171			4,368			27,803			636.5
Total loans receivable		1,011,388			383,938			627,450			163.4
Unearned discounts and net deferred loan costs		(104	)		(78	)		(26	)		33.3
Allowance for loan and lease losses		(12,392	)		(12,711	)		319			(2.5	)
Loans receivable, net	$	998,892		$	371,149		$	627,743			169.1	%

Total loans receivable increased $627.5 million to $1.0 billion at June 30, 2014, compared to $383.9 million at December 31, 2013. The increase in total loans receivable was primarily due to the acquisition of FNSC which increased the Company’s consolidated total loans receivable by $605.9 million. The remaining increase in the Company’s consolidated loan portfolio was due to an increase in loan originations by First Federal of commercial, nonfarm nonresidential and multifamily loans.

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ASSET QUALITY

Nonperforming Assets. The following table sets forth the amounts and categories of the Company’s nonperforming assets at the dates indicated (dollars in thousands).

	June 30, 2014					December 31, 2013
	Net (2)		% Total Assets			Net (2)		% Total Assets			Increase (Decrease)
Nonaccrual Loans:
One- to four-family residential	$	4,273		0.30	%	$	4,258		0.77	%	$	15
Nonfarm nonresidential		3,209		0.23	%		4,057		0.75	%		(848	)
Farmland		752		0.05	%		782		0.15	%		(30	)
Construction and land development		622		0.04	%		2,467		0.44	%		(1,845	)
Commercial		321		0.02	%		350		0.06	%		(29	)
Consumer		24		--			24		0.01	%		--
Total nonaccrual loans		9,201		0.64	%		11,938		2.18	%		(2,737	)
Accruing loans 90 days or more past due		--		--			--		--			--
Real estate owned		6,226		0.43	%		8,627		1.57	%		(2,401	)
Total nonperforming assets		15,427		1.07	%		20,565		3.75	%		(5,138	)
Performing restructured loans		574		0.03	%		494		0.09	%		80
Total nonperforming assets and performing restructured loans (1)	$	16,001		1.10	%	$	21,059		3.84	%	$	(5,058	)

(1)	The table does not include substandard loans which were judged not to be impaired totaling $13.6 million at June 30, 2014 and $2.9 million at December 31, 2013 or acquired ASC 310-30 purchased credit impaired loans which are considered performing at June 30, 2014.
(2)	Loan balances are presented net of undisbursed loan funds, partial charge-offs and interest payments recorded as reductions in principal balances for financial reporting purposes.

The decrease in nonperforming assets at June 30, 2014 compared to December 31, 2013, was primarily due to sales of real estate owned of $2.4 million and net cash payments on nonaccrual loans of $2.2 million during the six months ended June 30, 2014.

Nonaccrual Loans. The composition of nonaccrual loans by status was as follows as of the dates indicated (dollars in thousands):

	June 30, 2014					December 31, 2013					Increase (Decrease)
	Balance		Percentage of Total			Balance		Percentage of Total			Balance			Percentage of Total
Bankruptcy or foreclosure	$	751		8.1	%	$	1,043		8.7	%	$	(292	)		(0.6	)%
Over 90 days past due		3,520		38.3			6,308		52.8			(2,788	)		(14.5	)
30-89 days past due		670		7.3			637		5.3			33			2.0
Not past due		4,260		46.3			3,950		33.2			310			13.1
	$	9,201		100.0	%	$	11,938		100.0	%	$	(2,737	)		--

The following table presents nonaccrual loan activity for the six months ended June 30, 2014 and 2013 (in thousands):

	Six Months Ended June 30, 2014			Six Months Ended June 30, 2013
Balance of nonaccrual loans—beginning of period	$	11,938		$	18,824
Loans added to nonaccrual status		1,277			1,663
Net cash payments		(2,220	)		(3,644	)
Loans returned to accrual status		(403	)		(296	)
Charge-offs to the ALLL		(444	)		(1,597	)
Transfers to REO		(947	)		(1,223	)
Balance of nonaccrual loans—end of period	$	9,201		$	13,727

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Real Estate Owned. Changes in the composition of real estate owned between December 31, 2013 and June 30, 2014 are presented in the following table (dollars in thousands).

	December 31, 2013		Additions(1)		Fair Value Adjustments			Net Sales Proceeds			Net Gain (Loss)		June 30, 2014
One- to four-family residential	$	1,517	$	30	$	(90	)	$	(355	)	$	34	$	1,136
Land		4,688		746		(499	)		(1,731	)		55		3,259
Nonfarm nonresidential		2,422		80		(271	)		(453	)		53		1,831
Total	$	8,627	$	856	$	(860	)	$	(2,539	)	$	142	$	6,226

(1) Additions include $69,000 of real estate owned acquired in the FNSC acquisition in the second quarter of 2014.

Classified Assets. Federal regulations require that each financial institution risk rate their classified assets into three classification categories - substandard, doubtful and loss. Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified loss is generally considered uncollectible and of such little value that continuance as an asset is not warranted. As of June 30, 2014 and December 31, 2013, the Banks did not have any assets classified as doubtful or loss.  The table below summarizes the Banks’ classified assets as of the dates indicated (dollars in thousands):

	June 30, 2014		December 31, 2013		June 30, 2013
Nonaccrual loans	$	9,201	$	11,938	$	13,727
Accruing classified loans		13,646		2,827		4,543
Classified loans		22,847		14,765		18,270
Real estate owned		6,226		8,627		11,967
Total classified assets	$	29,073	$	23,392	$	30,237
Texas Ratio (1)		12.7%		24.8%		30.9%
Classified Assets Ratio (2)		24.0%		28.0%		36.3%

(1)	Defined as the ratio of nonaccrual loans and real estate owned to Tier 1 capital plus the allowance for loan and lease losses.
(2)	Defined as the ratio of total classified assets to Tier 1 capital plus the allowance for loan and lease losses.

The increase in classified assets during the three and six months ended June 30, 2014, was primarily due to loans acquired in the FNSC merger, partially offset by sales of real estate owned and net cash payments on nonaccrual loans.

Allowance for Loan and Lease Losses. The Banks maintain an allowance for loan and lease losses for known and inherent losses determined by ongoing quarterly assessments of the loan portfolio. The estimated appropriate level of the ALLL is maintained through a provision for loan losses charged to earnings. Charge-offs are recorded against the ALLL when management believes the estimated loss has been confirmed. Subsequent recoveries, if any, are credited to the ALLL.

The ALLL consists of general and allocated (also referred to as specific) loan loss components. For loans that are determined to be impaired that are troubled debt restructurings (“TDRs”) and impaired loans where the relationship totals $250,000 or more, a specific loan loss allowance is established when the discounted cash flows or collateral value of the impaired loan is lower than its carrying value. The general loan loss allowance covers loans that are not impaired and those impaired relationships under $250,000 and is based on historical loss experience adjusted for qualitative factors.

The ALLL represents management’s estimate of incurred credit losses inherent in the Banks’ loan portfolios as of the balance sheet date. The estimation of the ALLL is based on a variety of factors, including past loan loss experience, the current credit profile of the Banks’ borrowers, adverse situations that have occurred that may affect the borrowers’ ability to repay, the estimated value of underlying collateral, and general economic conditions, including unemployment, bankruptcy trends, vacancy rates and the level and trend of home sales and prices. Losses are recognized when available information indicates that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available or conditions change.

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A loan is considered impaired when, based on current information and events, it is probable that the bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the note. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the short fall in relation to the principal and interest owed. Each quarter, classified loans where the borrower’s total loan relationship exceeds $250,000 are evaluated for impairment on a loan-by-loan basis. Nonaccrual loans and TDRs are considered to be impaired loans. TDRs are restructurings in which the bank, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that the bank would not otherwise consider. Impairment is measured quarterly on a loan-by-loan basis for all TDRs and impaired loans where the aggregate relationship balance exceeds $250,000 by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral, if the loan is collateral dependent. Impaired loans under this threshold are aggregated and included in loan pools with their ALLL calculated as described in the following paragraph.

Groups of smaller balance homogeneous loans are collectively evaluated for impairment. Homogeneous loans are those that are considered to have common characteristics that provide for evaluation on an aggregate or pool basis. The bank considers the characteristics of (1) one- to four-family residential mortgage loans; (2) unsecured consumer loans; and (3) collateralized consumer loans to permit consideration of the appropriateness of the ALLL of each group of loans on a pool basis. The primary methodology used to determine the appropriateness of the ALLL includes segregating impaired loans from the pools of loans, valuing these loans, and then applying a loss factor to the remaining pool balance based on several factors including past loss experience, inherent risks, and economic conditions in the primary market areas.

Acquired loan amounts deemed uncollectible at acquisition date become part of the fair value calculation and are excluded from the ALLL. Following acquisition, a regular review will be completed on acquired loans to determine if changes in estimated cash flows have occurred. Subsequent decreases in the amount expected to be collected may result in a provision for loan and lease losses with a corresponding increase in the ALLL. Subsequent increases in the amount expected to be collected result in a reversal of any previously recorded provision for loan and lease losses and related ALLL, if any, or prospective adjustment to the accretable yield if no provision for loan and lease losses had been recorded.

In estimating the amount of credit losses inherent in the loan portfolio, various judgments and assumptions are made. For example, when assessing the condition of the overall economic environment, assumptions are made regarding market conditions and their impact on the loan portfolio. For impaired loans that are collateral dependent, the estimated fair value of the collateral may deviate significantly from the proceeds received when the collateral is sold in the event that the bank has to foreclose or repossess the collateral.

The Banks consider their consolidated ALLL totaling approximately $12.4 million to be appropriate based on evaluations of the management of the Banks of their respective loan portfolios and the losses inherent in those loan portfolios as of June 30, 2014. Actual losses may substantially differ from currently estimated losses. Adequacy of the ALLL is periodically evaluated, and the ALLL could be significantly decreased or increased, which could materially affect the Company’s financial condition and results of operations.

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The following table summarizes changes in the allowance for loan and lease losses and other selected statistics for the periods indicated.

	Six Months Ended June 30,
	2014			2013
	(Dollars in Thousands)
Total loans outstanding at end of period	$	1,011,388		$	345,005
Average loans outstanding	$	454,757		$	354,072
Allowance at beginning of period	$	12,711		$	15,676
Charge-offs:
One- to four-family residential		(8	)		(747	)
Multifamily residential		--			(876	)
Nonfarm nonresidential		(115	)		(1,008	)
Farmland		--			--
Construction and land development		(444	)		(115	)
Commercial		(27	)		(380	)
Consumer (1)		(68	)		(76	)
Total charge-offs		(662	)		(3,202	)
Recoveries:
One- to four-family residential		21			53
Multifamily residential		--			--
Nonfarm nonresidential		10			500
Farmland		--			--
Construction and land development		44			107
Commercial		2			74
Consumer (1)		36			41
Total recoveries		113			775
Net charge-offs		(549	)		(2,427	)
Total provisions for losses		230			--
Allowance at end of period	$	12,392		$	13,249
Allowance for loan and lease losses as a percentage of total loans outstanding at end of period		1.2	%		3.8	%
Net loans charged-off as a percentage of average loans outstanding		0.2	%		1.4	%
Allowance for loan and lease losses to nonaccrual loans		134.7	%		96.5	%

(1)      Consumer loan charge-offs include overdraft charge-offs of $53,000 and $58,000 for the six months ended June 30, 2014 and 2013, respectively. Consumer loan recoveries include recoveries of overdraft charge-offs of $24,000 and $33,000 for the six months ended June 30, 2014 and 2013, respectively.

The following table presents, on a consolidated basis, the allocation of the Banks’ ALLL by the type of loan at each of the dates indicated as well as the percentage of loans in each category to total loans receivable. These allowance amounts have been computed using the Banks’ internal models. The amounts shown are not necessarily indicative of the actual future losses that may occur within a particular category.

	June 30,
	2014					2013
	Amount		Percentage of Loans			Amount		Percentage of Loans
	(Dollars in Thousands)
One-to-four family residential	$	4,490		30.00	%	$	6,151		40.33	%
Multifamily residential		1,030		4.42			580		5.73
Nonfarm nonresidential		3,910		34.27			4,435		43.75
Farmland		282		4.81			273		0.66
Construction and land development		868		9.31			940		3.47
Commercial		1,721		14.02			662		4.61
Consumer		91		3.17			208		1.45
Total	$	12,392		100.00	%	$	13,249		100.00	%

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The decrease in the allowance for loan and lease losses from $13.2 million as of June 30, 2013 to $12.4 million as of June 30, 2014 was primarily related to a decrease in specific allowances primarily due to an improvement in the credit quality of the loan portfolio as well as a decrease in the overall historical net charge-off rate. The allowance for loan and lease losses remains at an elevated level due to the level of nonperforming loans and estimated inherent losses remaining in First Federal’s loan portfolio as the Company continues its efforts to reduce nonperforming assets.

INVESTMENT SECURITIES

The following table sets forth the carrying values of the Company's investment securities available for sale (dollars in thousands).

	June 30, 2014		December 31, 2013		Increase (Decrease)
U.S. Government agencies	$	122,740	$	--	$	122,740
Municipal securities		49,140		41,924		7,216
Mortgage-backed securities		37,844		28,904		8,940
Corporate debt securities		3,833		--		3,833
Total	$	213,557	$	70,828	$	142,729

The increase is due to the acquisition of FNSC which held $138.1 million of investments at the time of the acquisition. The overall yield of the investment portfolio was 1.56% as of June 30, 2014 compared to 2.86% at December 31, 2013.

DEPOSITS

Changes in the composition of deposits between June 30, 2014 and December 31, 2013, are presented in the following table (dollars in thousands).

	June 30,		December 31,		Increase
	2014		2013		(Decrease)		% Change
Checking accounts	$	538,312	$	127,764	$	410,548		321.33%
Money market accounts		108,033		45,153		62,880		139.26
Savings accounts		114,096		30,150		83,946		278.43
Certificates of deposit		470,973		266,658		204,315		76.62
Total deposits	$	1,231,414	$	469,725	$	761,689		162.16%

Total deposits increased in the comparison period primarily due to the acquisition of FNSC, with $740.1 million of the Company’s total deposits at June 30, 2014 being attributed to the FNSC acquisition. The remaining increase of $21.5 million in First Federal deposits was primarily in certificates of deposit (“CDs”) due to an increase in new CDs opened in the period. The Banks manage the pricing of their deposits to maintain deposit balances commensurate with their overall balance sheet management and liquidity position.

OFF-BALANCE SHEET ARRANGEMENTS AND COMMITMENTS

In the normal course of business and to meet the needs of its customers, the Banks are a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments could involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company’s consolidated statements of financial condition.

The Banks do not use financial instruments with off-balance sheet risk as part of their asset/liability management program or for trading purposes. The Banks’ exposure to credit loss in the event of nonperformance by the counterparty to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amounts of those instruments. The Banks use the same credit policies in making commitments and conditional obligations as they do for on-balance sheet instruments.

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Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. The Banks evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Standby letters of credit are conditional commitments issued by the Banks to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

The funding period for construction loans is generally six to eighteen months and commitments to originate mortgage loans are generally outstanding for no more than 60 days.

In the normal course of business, the Banks make commitments to buy or sell assets or to incur or fund liabilities. Commitments include, but are not limited to:

■ the origination, purchase or sale of loans; and

■ the fulfillment of commitments under letters of credit, extensions of credit on lines of credit, construction loans, and under predetermined overdraft protection limits.

At June 30, 2014, the Banks’ off-balance sheet arrangements principally included lending commitments, which are described below. At June 30, 2014, the Company had no interests in non-consolidated special purpose entities.

At June 30, 2014, commitments included:

■ total approved loan origination commitments outstanding amounting to $76.9 million, including approximately $2.5 million of loans committed to sell;

■ rate lock agreements with customers of $11.4 million, all of which have been locked with an investor;

■ funded mortgage loans committed to sell of $8.9 million;

■ unadvanced portion of construction loans of $29.9 million;

■ unused lines of credit of $93.4 million;

■ outstanding standby letters of credit of $3.9 million; and

■ total predetermined overdraft protection limits of $16.0 million.

Total unfunded commitments to originate loans for sale and the related commitments to sell of $11.4 million meet the definition of a derivative financial instrument. The related asset and liability are considered immaterial at June 30, 2014.

Historically, a very small percentage of predetermined overdraft limits have been used. At June 30, 2014, overdrafts of accounts with Bounce Protection™ represented usage of 2.96% of the limit.

LIQUIDITY AND CAPITAL RESOURCES

The primary source of funds for the Company is the receipt of dividends from its subsidiary banks, the receipt of management fees from its subsidiary banks, cash balances maintained, and borrowings from nonaffiliated sources. Payment of dividends by the Company’s subsidiary banks is subject to certain regulatory restrictions as set forth in banking laws and regulations.

The Company’s primary uses of cash include injecting capital into subsidiaries, stock repurchases, debt service requirements, and paying for general operating expenses. The Company had a cash balance of $1.2 million at June 30, 2014.

The Company's objective as it relates to liquidity is to ensure that its subsidiary banks have funding and access to sources of funding to ensure that cash flow requirements for deposit withdrawals and credit demands are met in an orderly and timely manner without unduly penalizing profitability. A major component of our overall asset/liability management efforts surrounds pricing of the liability side to ensure adequate liquidity and proper spread and interest margin management. Reliance on any one funding source is kept to a minimum by prioritizing those sources in terms of both availability and time to activation.

In order to maintain proper levels of liquidity, the subsidiary banks have several sources of funds available. Generally the subsidiary banks rely on cash on hand and due from banks, fed funds sold, cash flow generated by the repayment of principal and interest and loans and securities and deposits as its primary sources of funds. Commercial, consumer and public funds customers in our local markets are the principal deposit sources utilized. The subsidiary banks use those local market deposits, along with secondary sources of funding including FHLB Advances, federal funds purchased, FRB borrowings and other alternative funding sources to fund continuing operations, make loans and leases, acquire investment securities and other assets.

At June 30, 2014, the Company had substantial unused borrowing availability. This availability was primarily comprised of the following four options for its subsidiary banks: (1) $283.8 million of available blanket borrowing capacity with the FHLB-Dallas, (2) $112.3 million of investment securities available to pledge for federal funds or other borrowings, (3) $117.9 million of available unsecured federal funds borrowing lines and (4) up to $9 million of available borrowing capacity from borrowing programs of the FRB. In addition, at June 30, 2014, the Company had available borrowing capacity of $1.25 million with an unaffiliated bank.

40

At June 30, 2014, the Company’s and the Banks’ overall liquidity ratio was approximately 14.3% which represents liquid assets as a percent of deposits and borrowings. As of the same date, the Company’s overall adjusted liquidity ratio was 45.8%, which represents liquid assets plus borrowing capacity at the FHLB, FRB and correspondent banks as a percentage of deposit and borrowings. The Company anticipates it will continue to rely primarily on principal and interest repayments on loans and securities, and deposits to provide liquidity, as well as other funding sources as appropriate. Additionally, where appropriate, the secondary sources of borrowed funds described above will be used to augment the Company’s primary funding sources. We believe that we have sufficient liquidity to satisfy our current operations of the Company and the subsidiary banks.

At June 30, 2014, the Company’s core, tier 1 and total risk-based capital ratios amount to 7.54%, 10.31% and 10.85%, respectively, compared to capital adequacy requirements of 4%, 4% and 8%. See Note 16 to the Consolidated Financial Statements for more information about the Company’s and the Banks’ capital requirements and ratios.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain forward-looking statements and information relating to the Company and its subsidieary banks that are based on the beliefs of management as well as assumptions made by and information currently available to management. As used in this document, the words "anticipate," "believe," "estimate," "expect," "intend," "should" and similar expressions, or the negative thereof, as they relate to the Company, its subsidiary banks or the management thereof, are intended to identify forward-looking statements.

The statements presented herein with respect to, among other things, the Company’s or any of the Banks’ plans, objectives, expectations and intentions, anticipated changes in noninterest expenses in future periods (including changes as a result of the merger with FNSC and the continued evaluation of the fair value adjustments presented), changes in earnings, impact of outstanding off-balance sheet commitments, sources of liquidity and that we have sufficient liquidity, the sufficiency of the allowance for loan losses, expected loan, asset, and earnings growth, growth in new and existing customer relationships, our intentions with respect to our investment securities, and financial and other goals and plans are forward looking.

Such statements reflect the current views of the Company with respect to future looking events and are subject to certain risks, uncertainties and assumptions, including those risk factors described in Part I, Item 1A. of the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2014 and in Part II, Item 1A. hereof. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause actual results for the remainder of fiscal 2014 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us and could negatively affect the Company’s operating and stock performance.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

MARKET RISK MANAGEMENT

Market risk arises from changes in interest rates.  We have risk management policies to monitor and limit exposure to market risk.  In asset and liability management activities, policies designed to minimize structural interest rate risk are in place.  The measurement of market risk associated with financial instruments is meaningful only when all related and offsetting on- and off-balance-sheet transactions are aggregated, and the resulting net positions are identified.

INTEREST RATE SENSITIVITY

Interest rate risk represents the potential impact of interest rate changes on net income and capital resulting from mismatches in repricing opportunities of assets and liabilities over a period of time.  A number of tools are used to monitor and manage interest rate risk, including simulation models and interest sensitivity gap analysis.  Management uses simulation models to estimate the effects of changing interest rates and various balance sheet strategies on the level of the Company’s net income and capital.  As a means of limiting interest rate risk to an acceptable level, management may alter the mix of floating and fixed-rate assets and liabilities, change pricing schedules on assets and liabilities and manage investment maturities during future security purchases.

The simulation model incorporates management’s assumptions regarding the level of interest rates or balance changes for indeterminate maturity deposits for a given level of market rate changes.  These assumptions have been developed through anticipated pricing behavior.  Key assumptions in the simulation models include the relative timing of prepayments, cash flows and maturities.  These assumptions are inherently uncertain and, as a result, the model cannot precisely estimate net interest income or precisely predict the impact of a change in interest rates on net income or capital.  Actual results will differ from simulated results due to the timing, magnitude and frequency of interest rate changes and changes in market conditions and management strategies, among other factors.

41

As of June 30, 2014, the model simulations projected that 100 and 200 basis point increases in interest rates would result in positive variances in net interest income of 2.8% and 6.1%, respectively, relative to the base case over the next twelve months and decreases in interest rates of 100 basis points would result in a positive variance in net interest income of 0.2% relative to the base case over the next twelve months.  The likelihood of a decrease in interest rates as of June 30, 2014 is considered remote given current interest rate levels.  These are good faith estimates and assume that the composition of our interest sensitive assets and liabilities existing at each year-end will remain constant over the relevant twelve month measurement period and that changes in market interest rates are instantaneous and sustained across the yield curve regardless of duration of pricing characteristics of specific assets or liabilities. Also, this analysis does not contemplate any actions that we might undertake in response to changes in market interest rates.  We believe these estimates are not necessarily indicative of what actually could occur in the event of immediate interest rate increases or decreases of this magnitude.  As interest-bearing assets and liabilities reprice in different time frames and proportions to market interest rate movements, various assumptions must be made based on historical relationships of these variables in reaching any conclusion.  Since these correlations are based on competitive and market conditions, we anticipate that our future results will likely be different from the foregoing estimates, and such differences could be material.

Item 4. Controls and Procedures.

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are operating effectively.

The Company’s management, including the Company’s Chief Executive Officer and the Chief Financial Officer, regularly review our controls and procedures and make changes intended to ensure the quality of our financial reporting. On June 13, 2014, we completed the acquisition of FNSC, and as a result, we extended our oversight and monitoring processes that support our internal control over financial reporting during the second quarter of 2014 to include the operations of FNSC. Otherwise, no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2014 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. Other Information

Item 1.      Legal Proceedings

Neither the Company nor the Banks are a party to or involved in any pending legal proceedings other than non-material legal proceedings occurring in the ordinary course of business.

42

Item 1A.     Risk Factors

The Company may fail to realize the anticipated cost savings or any other benefits from the acquisition of FNSC.

The Company pursued the acquisition of FNSC with the expectation that the merger would result in benefits to the Company, including cost savings. Although the Company estimates that it will realize cost savings of approximately $500,000 annually (excluding one-time costs and expenses associated with the acquisition) from the merger, it is possible that the estimates of the potential cost savings could be incorrect. For example, future business developments may require the Company to continue to operate or maintain some facilities or support functions that are currently expected to be combined or reduced. The cost savings estimates also depend on the Company’s ability to combine the acquired businesses with the Company’s existing operations in a manner that permits those costs savings to be realized. If the estimates turn out to be incorrect or the Company is not able to combine the two companies successfully, the anticipated cost savings may not be fully or partially realized, or may take longer to realize than expected.

Integrating the operations of FNSC may be more difficult, costly or time-consuming than expected, and failure to do so quickly and efficiently could reduce the Company’s profitability, affect its stock price and either delay or prevent realization of many of the potential benefits of the merger.

If the Company is not able to integrate its existing business with the operations of FNSC efficiently and timely, the expected benefits of the merger may not be realized. It is possible that the integration process could result in the loss of key employees, disruption of each bank’s ongoing business or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect the Company’s ability to maintain relationships with the Company’s or FNSC’s existing customers and employees or to achieve the anticipated benefits of the merger. As with any merger of banking institutions, there also may be business disruptions that cause the Company and FNSC to lose customers. The Company may be required to spend additional time and money on operating compatibility, which could otherwise be spent on developing the Company’s business. If the Company does not integrate the operations of FNSC effectively or efficiently, it could harm the Company’s business, financial condition and results of operations.

Item 6.     Exhibits

The exhibits required to be filed as part of this Quarterly Report on Form 10-Q are listed in the Exhibit Index attached hereto and are incorporated herein by reference.

43

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.

BEAR STATE FINANCIAL, INC.

Date:	August 14, 2014	By:	/s/ Richard N. Massey
			Richard N. Massey
			Chief Executive Officer

Date:	August 14, 2014	By:	/s/ Matt Machen
			Matt Machen
			Chief Financial Officer

44

Bear State Financial, Inc.

Exhibit Index

Exhibit No.	Description
2.1	Agreement and Plan of Merger by and between Bear State Financial, Inc. (formerly known as First Federal Bancshares of Arkansas, Inc.) and First National Security Company, dated July 1, 2013 (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the SEC on July 3, 2013). (1)
2.2	List of Schedules to the Agreement and Plan of Merger (incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K filed with the SEC on July 3, 2013).
3.1	Amended and Restated Articles of Incorporation of Bear State Financial, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on July 21, 2011).
3.2	Amended and Restated Bylaws of Bear State Financial, Inc. (incorporated herein by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on July 21, 2011).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Section 906 Certification of the CEO
32.2	Section 906 Certification of the CFO
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase

(1) Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules to this Agreement have not been filed with this exhibit. The schedules contain various items related to the business of and the representations and warranties made by the Company and FNSC. The Registrant agrees to furnish supplementally any omitted schedule to the SEC upon request.

45

EX-31

EXHIBIT 31.1

PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Richard N. Massey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bear State Financial, Inc. (the “Registrant”);

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

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

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

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

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

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

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

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of 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:	August 14, 2014	/s/ Richard N. Massey
		Richard N. Massey Chief Executive Officer

EX-31

EXHIBIT 31.2

PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Matt Machen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bear State Financial, Inc. (the “Registrant”);

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

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

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

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

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

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

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

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of 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:	August 14, 2014	/s/ Matt Machen
		Matt Machen Chief Financial Officer

EX-32

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

In connection with the Quarterly Report of Bear State Financial, Inc. (the “Registrant”) on Form 10-Q for the three and six months ended June 30, 2014 as filed with the Securities and Exchange Commission (the “Report”), the undersigned certifies, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of and for the period covered by the Report.

Date:	August 14, 2014	/s/ Richard N. Massey
		Richard N. Massey Chief Executive Officer

EX-32

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

In connection with the Quarterly Report of Bear State Financial, Inc. (the “Registrant”) on Form 10-Q for the three and six months ended June 30, 2014 as filed with the Securities and Exchange Commission (the “Report”), the undersigned certifies, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of and for the period covered by the Report.

Date:	August 14, 2014	/s/ Matt Machen
		Matt Machen Chief Financial Officer

XML

Note 15 - Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure Text Block Supplement [Abstract]

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

	June 30, 2014				December 31, 2013
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
FINANCIAL ASSETS:
Level 1 inputs:
Cash and cash equivalents	$	60,838	$	60,838	$	23,970	$	23,970
Federal funds sold		12,375		12,375		--		--
Level 2 inputs:
Interest-bearing time deposits in banks		18,892		19,229		24,118		24,573
Other investment securities		8,188		8,188		457		457
Loans held for sale		8,943		8,943		4,205		4,205
Cash surrender value of life insurance		28,655		28,655		23,811		23,811
Accrued interest receivable		4,645		4,645		1,473		1,473
Level 3 inputs:
Loans receivable—net		998,892		1,007,045		371,149		377,851
FINANCIAL LIABILITIES:
Level 1 inputs:
Short term borrowings		20,270		20,270		--		--
Level 2 inputs:
Checking, money market and savings accounts		760,441		760,441		203,067		203,067
Other borrowings		47,877		47,947		5,941		6,017
Accrued interest payable		219		219		33		33
Level 3 inputs:
Certificates of deposit		470,973		471,879		266,658		266,495

XML

Note 5 - Loans Receivable (Details) - Loans by Risk Categories (USD $)	Jun. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 1,011,388,000	$ 383,938,000
One-to-Four-Family Residential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	210,651,000	34,333,000
One-to-Four-Family Residential [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	448,000	329,000
One-to-Four-Family Residential [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	10,582,000	6,371,000
One-to-Four-Family Residential [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	81,836,000	88,275,000
One-to-Four-Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	303,517,000	129,308,000
Multifamily Residential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	44,679,000	25,773,000
Multifamily Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	44,679,000	25,773,000
Nonfarm Nonresidential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	333,991,000	159,629,000
Nonfarm Nonresidential [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	4,436,000	4,490,000
Nonfarm Nonresidential [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	7,278,000	4,057,000
Nonfarm Nonresidential [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	464,000	726,000
Nonfarm Nonresidential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	346,169,000	168,902,000
Farmland [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	47,457,000	1,491,000
Farmland [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,253,000	1,172,000
Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	48,710,000	2,663,000
Construction and Land Development [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	88,301,000	18,241,000
Construction and Land Development [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	110,000	295,000
Construction and Land Development [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	2,543,000	2,770,000
Construction and Land Development [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,130,000	2,585,000
Construction and Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	94,084,000	23,891,000
Commercial Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	140,752,000	28,555,000
Commercial Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	971,000	350,000
Commercial Loans [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	335,000	128,000
Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	142,058,000	29,033,000
Consumer Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	26,457,000	151,000
Consumer Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	6,000
Consumer Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	220,000	45,000
Consumer Loans [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	5,488,000	4,172,000
Consumer Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	32,171,000	4,368,000
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	892,288,000	268,173,000
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	5,000,000	5,114,000
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	22,847,000	14,765,000
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 91,253,000	$ 95,886,000

XML

Note 4 - Investment Securities Available for Sale (Details) - Maturities of Debt Securities (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Maturities of Debt Securities [Abstract]
Within one year	$ 52,921
Within one year	52,934
Within one year	0.68%
Due from one year to five years	88,669
Due from one year to five years	88,746
Due from one year to five years	0.79%
Due from five years to ten years	27,391
Due from five years to ten years	27,503
Due from five years to ten years	3.13%
Due after ten years	6,463
Due after ten years	6,530
Due after ten years	4.02%
	175,444
	175,713
	1.25%
Mortgage-backed securities	37,278
Mortgage-backed securities	37,844
Mortgage-backed securities	3.04%
Total	212,722
Total	$ 213,557	$ 70,828
Total	1.56%

XML

Note 11 - Other Borrowings (Details) - Other Borrowings (Parentheticals) (USD $) In Thousands, unless otherwise specified		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Line of Credit [Member]	Jun. 30, 2014 Notes Payable to Banks [Member]	Jun. 30, 2014 Minimum [Member]	Dec. 31, 2013 Minimum [Member]	Jun. 30, 2014 Maximum [Member]	Dec. 31, 2013 Maximum [Member]
Note 11 - Other Borrowings (Details) - Other Borrowings (Parentheticals) [Line Items]
Federal Home Loan Bank advances, rates				0.20%	0.20%	7.80%	7.80%
Total credit line (in Dollars)	$ 9,750
Floating rate		1.95%	1.95%

XML

Note 5 - Loans Receivable (Details) - Troubled Debt Restructurings (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended			6 Months Ended	12 Months Ended	6 Months Ended		12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Accruing Troubled Debt Restructurings [Member] One-to-Four-Family Residential [Member]	Dec. 31, 2013 Accruing Troubled Debt Restructurings [Member] One-to-Four-Family Residential [Member]	Jun. 30, 2014 Accruing Troubled Debt Restructurings [Member] Construction and Land Development [Member]	Jun. 30, 2014 Accruing Troubled Debt Restructurings [Member]	Dec. 31, 2013 Accruing Troubled Debt Restructurings [Member]	Jun. 30, 2014 Nonaccrual Troubled Debt Restructurings [Member] One-to-Four-Family Residential [Member]	Dec. 31, 2013 Nonaccrual Troubled Debt Restructurings [Member] One-to-Four-Family Residential [Member]	Jun. 30, 2014 Nonaccrual Troubled Debt Restructurings [Member] Nonfarm Nonresidential [Member]	Dec. 31, 2013 Nonaccrual Troubled Debt Restructurings [Member] Nonfarm Nonresidential [Member]	Jun. 30, 2014 Nonaccrual Troubled Debt Restructurings [Member] Farmland [Member]	Dec. 31, 2013 Nonaccrual Troubled Debt Restructurings [Member] Farmland [Member]	Jun. 30, 2014 Nonaccrual Troubled Debt Restructurings [Member] Construction and Land Development [Member]	Dec. 31, 2013 Nonaccrual Troubled Debt Restructurings [Member] Construction and Land Development [Member]	Jun. 30, 2014 Nonaccrual Troubled Debt Restructurings [Member] Consumer Loan [Member]	Dec. 31, 2013 Nonaccrual Troubled Debt Restructurings [Member] Consumer Loan [Member]	Jun. 30, 2014 Nonaccrual Troubled Debt Restructurings [Member]	Dec. 31, 2013 Nonaccrual Troubled Debt Restructurings [Member]	Jun. 30, 2014 Troubled Debt Restructuring [Member] One-to-Four-Family Residential [Member]	Dec. 31, 2013 Troubled Debt Restructuring [Member] One-to-Four-Family Residential [Member]	Jun. 30, 2014 Troubled Debt Restructuring [Member] Nonfarm Nonresidential [Member]	Dec. 31, 2013 Troubled Debt Restructuring [Member] Nonfarm Nonresidential [Member]	Jun. 30, 2014 Troubled Debt Restructuring [Member] Farmland [Member]	Dec. 31, 2013 Troubled Debt Restructuring [Member] Farmland [Member]	Jun. 30, 2014 Troubled Debt Restructuring [Member] Construction and Land Development [Member]	Dec. 31, 2013 Troubled Debt Restructuring [Member] Construction and Land Development [Member]	Jun. 30, 2014 Troubled Debt Restructuring [Member] Consumer Loan [Member]	Dec. 31, 2013 Troubled Debt Restructuring [Member] Consumer Loan [Member]	Jun. 30, 2014 Troubled Debt Restructuring [Member]	Dec. 31, 2013 Troubled Debt Restructuring [Member]
Financing Receivable, Modifications [Line Items]
Number of loans	1	3	1		4	4	1	5	4	9	8	3	3	1	1	3	4	2	1	18	17	13	12	3	3	1	1	4	4	2	1	23	21
Balance	$ 2,500	$ 2,500		$ 2,600	$ 489	$ 495	$ 85	$ 574	$ 495	$ 740	$ 658	$ 532	$ 556	$ 263	$ 287	$ 410	$ 569	$ 16	$ 5	$ 1,961	$ 2,075	$ 1,229	$ 1,153	$ 532	$ 556	$ 263	$ 287	$ 495	$ 569	$ 16	$ 5	$ 2,535	$ 2,570

XML

Note 14 - Fair Value Measurements (Details) - Assets Measured at Fair Value on a Recurring Basis (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Available for sale investment securities:
Available For Sale Securities	$ 213,557	$ 70,828
US Government Corporations and Agencies Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale investment securities:
Available For Sale Securities	122,740
US Government Corporations and Agencies Securities [Member]
Available for sale investment securities:
Available For Sale Securities	122,740
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale investment securities:
Available For Sale Securities	49,140	41,924
US States and Political Subdivisions Debt Securities [Member]
Available for sale investment securities:
Available For Sale Securities	49,140	41,924
Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale investment securities:
Available For Sale Securities	37,844	28,904
Collateralized Mortgage Backed Securities [Member]
Available for sale investment securities:
Available For Sale Securities	37,844	28,904
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale investment securities:
Available For Sale Securities	3,833
Corporate Debt Securities [Member]
Available for sale investment securities:
Available For Sale Securities	3,833
Fair Value, Inputs, Level 2 [Member]
Available for sale investment securities:
Available For Sale Securities	$ 213,557	$ 70,828

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Note 4 - Investment Securities Available for Sale (Details) - Investment Securities (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Investment securities available for sale, amortized cost	$ 212,722	$ 71,295
Investment securities available for sale, gross unrealized gains	975	210
Investment securities available for sale, gross unrealized losses	(140)	(677)
Investment securities available for sale	213,557	70,828
US Government Agencies Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment securities available for sale, amortized cost	122,745
Investment securities available for sale, gross unrealized gains	12
Investment securities available for sale, gross unrealized losses	(17)
Investment securities available for sale	122,740
US States and Political Subdivisions Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment securities available for sale, amortized cost	48,850	42,203
Investment securities available for sale, gross unrealized gains	385	199
Investment securities available for sale, gross unrealized losses	(95)	(478)
Investment securities available for sale	49,140	41,924
Collateralized Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment securities available for sale, amortized cost	37,278	29,092
Investment securities available for sale, gross unrealized gains	577	11
Investment securities available for sale, gross unrealized losses	(11)	(199)
Investment securities available for sale	37,844	28,904
Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Investment securities available for sale, amortized cost	3,849
Investment securities available for sale, gross unrealized gains	1
Investment securities available for sale, gross unrealized losses	(17)
Investment securities available for sale	$ 3,833

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Note 9 - Deposits (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Summary of Deposits [Table Text Block]

	June 30, 2014		December 31, 2013
Checking accounts	$	538,312	$	127,764
Money market accounts		108,033		45,153
Savings accounts		114,096		30,150
Certificates of deposit		470,973		266,658
Total	$	1,231,414	$	469,725

Schedule of Maturities of Certificates of Deposit [Table Text Block]

	Amount
Within one year	$	255,824
One to two years		64,562
Two to three years		42,533
Three to four years		52,357
Four to five years		34,663
Over five years		21,034
Total	$	470,973

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Note 14 - Fair Value Measurements (Details) - Assets Measured at Fair Value on a Nonrecurring Basis (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Estimate of Fair Value Measurement [Member]
Note 14 - Fair Value Measurements (Details) - Assets Measured at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	$ 5,953	$ 15,956
REO, net	3,414	3,155
Fair Value, Inputs, Level 3 [Member]
Note 14 - Fair Value Measurements (Details) - Assets Measured at Fair Value on a Nonrecurring Basis [Line Items]
Impaired loans	5,953	15,956
REO, net	$ 3,414	$ 3,155

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Note 12 - Stock Based Compensation (Details) - Stock Option Activity (Employee Stock Option [Member], 2011 Omnibus Incentive Plan [Member], USD $)	6 Months Ended
	Jun. 30, 2014
Employee Stock Option [Member] | 2011 Omnibus Incentive Plan [Member]
Note 12 - Stock Based Compensation (Details) - Stock Option Activity [Line Items]
Outstanding— Shares Underlying Awards	217,500
Outstanding— Weighted Average Exercise Price	$ 6.66
Forfeited	(1,500)
Forfeited	$ 6.57
Outstanding— Shares Underlying Awards	216,000
Outstanding— Weighted Average Exercise Price	$ 6.66

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Note 6 - Allowances for Loan and Lease Losses and Real Estate Losses (Details) - Allowance for Loan and Lease Losses (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	$ 12,478	$ 15,597	$ 12,711	$ 15,676
Provision charged to expense	230		230
Losses charged off	(361)	(2,956)	(662)	(3,202)
Recoveries	45	608	113	775
ALLL, ending balance	12,392	13,249	12,392	13,249
ALLL Balances:
ALLL, Individually evaluated for impairment	1,100		1,100		2,162
ALLL, Collectively evaluated for impairment	11,292		11,292		10,549
Loan balances:
Loans, Individually evaluated for impairment	9,775		9,775		12,433
Loans, Collectively evaluated for impairment	1,001,613		1,001,613		371,505
Loans, ending balance	1,011,388		1,011,388		383,938
One-to-Four-Family Residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	4,407	6,778	4,549	5,099
Provision charged to expense	72	22	(72)	1,746
Losses charged off		(662)	(8)	(747)
Recoveries	11	13	21	53
ALLL, ending balance	4,490	6,151	4,490	6,151
ALLL Balances:
ALLL, Individually evaluated for impairment	179		179		279
ALLL, Collectively evaluated for impairment	4,311		4,311		4,270
Loan balances:
Loans, Individually evaluated for impairment	4,762		4,762		4,753
Loans, Collectively evaluated for impairment	298,755		298,755		124,555
Loans, ending balance	303,517		303,517		129,308
Multifamily Residential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	847	1,074	1,001	1,319
Provision charged to expense	183	382	29	137
Losses charged off		(876)		(876)
ALLL, ending balance	1,030	580	1,030	580
ALLL Balances:
ALLL, Collectively evaluated for impairment	1,030		1,030		1,001
Loan balances:
Loans, Collectively evaluated for impairment	44,679		44,679		25,773
Loans, ending balance	44,679		44,679		25,773
Nonfarm Nonresidential [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	4,134	5,341	4,271	6,949
Provision charged to expense	(230)	(532)	(256)	(2,006)
Losses charged off	(2)	(874)	(115)	(1,008)
Recoveries	8	500	10	500
ALLL, ending balance	3,910	4,435	3,910	4,435
ALLL Balances:
ALLL, Individually evaluated for impairment	660		660		1,119
ALLL, Collectively evaluated for impairment	3,250		3,250		3,152
Loan balances:
Loans, Individually evaluated for impairment	3,209		3,209		4,057
Loans, Collectively evaluated for impairment	342,960		342,960		164,845
Loans, ending balance	346,169		346,169		168,902
Farmland [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	152	283	158	251
Provision charged to expense	130	(10)	124	22
ALLL, ending balance	282	273	282	273
ALLL Balances:
ALLL, Individually evaluated for impairment	127		127		133
ALLL, Collectively evaluated for impairment	155		155		25
Loan balances:
Loans, Individually evaluated for impairment	752		752		782
Loans, Collectively evaluated for impairment	47,958		47,958		1,881
Loans, ending balance	48,710		48,710		2,663
Construction and Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	1,059	907	1,383	879
Provision charged to expense	98	124	(115)	69
Losses charged off	(292)	(115)	(444)	(115)
Recoveries	3	24	44	107
ALLL, ending balance	868	940	868	940
ALLL Balances:
ALLL, Individually evaluated for impairment	118		118		631
ALLL, Collectively evaluated for impairment	750		750		752
Loan balances:
Loans, Individually evaluated for impairment	707		707		2,467
Loans, Collectively evaluated for impairment	93,377		93,377		21,424
Loans, ending balance	94,084		94,084		23,891
Commercial Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	1,799	1,000	1,268	956
Provision charged to expense	(52)	(13)	478	12
Losses charged off	(27)	(380)	(27)	(380)
Recoveries	1	55	2	74
ALLL, ending balance	1,721	662	1,721	662
ALLL Balances:
ALLL, Collectively evaluated for impairment	1,721		1,721		1,268
Loan balances:
Loans, Individually evaluated for impairment	321		321		350
Loans, Collectively evaluated for impairment	141,737		141,737		28,683
Loans, ending balance	142,058		142,058		29,033
Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
ALLL, beginning balance	80	214	81	223
Provision charged to expense	29	27	42	20
Losses charged off	(40)	(49)	(68)	(76)
Recoveries	22	16	36	41
ALLL, ending balance	91	208	91	208
ALLL Balances:
ALLL, Individually evaluated for impairment	16		16
ALLL, Collectively evaluated for impairment	75		75		81
Loan balances:
Loans, Individually evaluated for impairment	24		24		24
Loans, Collectively evaluated for impairment	32,147		32,147		4,344
Loans, ending balance	$ 32,171		$ 32,171		$ 4,368

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Note 13 - Earnings Per Share (Details) - Weighted Average Shares Outstanding, Basic and Diluted Earnings Per Share Calculations	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Weighted Average Shares Outstanding, Basic and Diluted Earnings Per Share Calculations [Abstract]
Basic weighted average shares outstanding	22,020,238	19,897,603	21,036,359	19,660,918
Effect of dilutive securities		982,326		1,150,754
Diluted weighted average shares outstanding	22,020,238	20,879,929	21,036,359	20,811,672

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Note 16 - Regulatory Matters (Details) (USD $)						0 Months Ended
	Jun. 30, 2014	Mar. 21, 2014	Mar. 20, 2014	Feb. 19, 2014	Dec. 31, 2013	Jun. 13, 2014 Affiliated Entity [Member] Private Placement [Member] First National Security Company Acquisition [Member]	Jun. 13, 2014 Affiliated Entity [Member] Private Placement [Member] First National Security Company Acquisition [Member]	Jun. 13, 2014 First National Security Company Acquisition [Member]	Feb. 20, 2014 Minimum [Member]
Note 16 - Regulatory Matters (Details) [Line Items]
Tier One Leverage Capital Required for Capital Adequacy to Average Assets					4.00%				8.00%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets									12.00%
Stock Issued During Period, Shares, New Issues						2,531,646
Sale of Stock, Price Per Share (in Dollars per share)							$ 7.90
Class of Warrant or Right, Number of Securities Called by Warrants or Rights								177,215
Common Stock, Shares Authorized	100,000,000	100,000,000	30,000,000		30,000,000
Stock Repurchase Program, Number of Shares Authorized to be Repurchased				1,000,000

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Note 14 - Fair Value Measurements (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Note 14 - Fair Value Measurements (Details) [Line Items]
Real Estate Owned, Valuation Allowance, Provision (in Dollars)	$ 618,000	$ 33,000	$ 860,000	$ 219,000
Impaired Loans Receivable [Member]
Note 14 - Fair Value Measurements (Details) [Line Items]
Fair Value Input, Selling Costs			8.00%
Impaired Loans Receivable [Member] | Minimum [Member]
Note 14 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs, Discount Rate			15.00%
Impaired Loans Receivable [Member] | Maximum [Member]
Note 14 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs, Discount Rate			45.00%
Real Estate Owned [Member]
Note 14 - Fair Value Measurements (Details) [Line Items]
Fair Value Input, Selling Costs			8.00%
Real Estate Owned [Member] | Minimum [Member]
Note 14 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs, Discount Rate			0.00%
Real Estate Owned [Member] | Maximum [Member]
Note 14 - Fair Value Measurements (Details) [Line Items]
Fair Value Inputs, Discount Rate			25.00%

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Note 11 - Other Borrowings (Details) - Maturities of Other Borrowings (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Maturities of Other Borrowings [Abstract]
Within one year	1.07%
Within one year	$ 9,582
One to two years	2.19%
One to two years	9,506
Two to three years	1.19%
Two to three years	6,015
Three to four years	2.44%
Three to four years	962
Four to five years	1.98%
Four to five years	14,502
Over five years	2.68%
Over five years	7,310
Total	1.86%
Total	$ 47,877	$ 5,941

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Note 17 - Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

17. SUBSEQUENT EVENTS

On July 31, 2014, the Company, through its subsidiary banks, executed contracts with its data processing service provider which provided for a termination fee of $2.4 million related to converting FNB and Heritage to the Company’s data processing platform. This termination fee will be expensed in the third quarter of 2014.

On August 13, 2014, the board of directors of the Company authorized an increase in the Company’s line of credit with an unaffiliated bank from $9.75 million to $14.75 million.

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Note 5 - Loans Receivable (Details) - Loans Receivable (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Real estate:
Loans receivable	$ 1,011,388		$ 383,938
Commercial	142,058		29,033
Consumer	32,171		4,368
Unearned discounts and net deferred loan costs	(104)		(78)
Allowance for loan and lease losses	(12,392)	(12,478)	(12,711)	(13,249)	(15,597)	(15,676)
Loans receivable—net	998,892		371,149
One-to-Four-Family Residential [Member]
Real estate:
Loans receivable	303,517		129,308
Multifamily Residential [Member]
Real estate:
Loans receivable	44,679		25,773
Nonfarm Nonresidential [Member]
Real estate:
Loans receivable	346,169		168,902
Farmland [Member]
Real estate:
Loans receivable	48,710		2,663
Construction and Land Development [Member]
Real estate:
Loans receivable	$ 94,084		$ 23,891

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Note 3 - Acquisition (Details) (USD $)	6 Months Ended	0 Months Ended		0 Months Ended
	Jun. 30, 2014	Jun. 13, 2014 Core Deposits [Member] First National Security Company Acquisition [Member]	Jun. 13, 2014 Core Deposits [Member] First National Security Company Acquisition [Member]	Jun. 13, 2014 First National Security Company Acquisition [Member] Parent Company [Member]	Jun. 13, 2014 First National Security Company Acquisition [Member] First National Security Company [Member]	Jun. 13, 2014 First National Security Company Acquisition [Member]	Jun. 13, 2014 First National Security Company Acquisition [Member]	Jun. 13, 2014 First National Security Company Acquisition [Member] Changes Measurement [Member]
Note 3 - Acquisition (Details) [Line Items]
Business Combination, Consideration Transferred						$ 124,400,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares)						6,252,400
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned							50,400,000
Payments to Acquire Businesses, Gross				50,000,000	24,000,000	74,000,000
Business Acquisition, Percentage of Voting Interests Acquired							100.00%
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment								2,200,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	38.29%
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles			7,700,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		12 years 109 days
								366,000
Business Combination, Pro Forma Information, Net Interest Income of Acquiree Since Acquisition Date, Actual	1,500,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual	$ 574,000

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Note 13 - Earnings Per Share (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2013
Warrant [Member]
Note 13 - Earnings Per Share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	177,215
Equity Option [Member]
Note 13 - Earnings Per Share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	216,000	8,000	8,000
Restricted Stock Units (RSUs) [Member]
Note 13 - Earnings Per Share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	188,716

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Note 13 - Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Basic weighted average shares outstanding		22,020,238		19,897,603		21,036,359		19,660,918
Effect of dilutive securities		--		982,326		--		1,150,754
Diluted weighted average shares outstanding		22,020,238		20,879,929		21,036,359		20,811,672

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Note 5 - Loans Receivable (Details) - Impaired Loans (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, unpaid principal balance	$ 4,608	$ 6,988
Impaired loans with a valuation allowance, recorded investment	4,005	6,190
Impaired loans with a valuation allowance, valuation allowance	1,100	2,162
Impaired loans without avaluation allowance:
Impaired loans without a valuation allowance, unpaid principal balance	7,746	7,665
Impaired loans without a valuation allowance, recorded investment	5,770	6,243
Total impaired loans	12,354	14,653
Total impaired loans	9,775	12,433
Total impaired loans	1,100	2,162
One-to-Four-Family Residential [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, unpaid principal balance	1,187	1,213
Impaired loans with a valuation allowance, recorded investment	1,036	1,085
Impaired loans with a valuation allowance, valuation allowance	179	279
Impaired loans without avaluation allowance:
Impaired loans without a valuation allowance, unpaid principal balance	4,521	4,430
Impaired loans without a valuation allowance, recorded investment	3,726	3,668
Total impaired loans	179	279
Nonfarm Nonresidential [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, unpaid principal balance	2,509	3,287
Impaired loans with a valuation allowance, recorded investment	2,296	3,105
Impaired loans with a valuation allowance, valuation allowance	660	1,119
Impaired loans without avaluation allowance:
Impaired loans without a valuation allowance, unpaid principal balance	1,690	1,077
Impaired loans without a valuation allowance, recorded investment	913	952
Total impaired loans	660	1,119
Farmland [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, unpaid principal balance	621	623
Impaired loans with a valuation allowance, recorded investment	489	495
Impaired loans with a valuation allowance, valuation allowance	127	133
Impaired loans without avaluation allowance:
Impaired loans without a valuation allowance, unpaid principal balance	545	554
Impaired loans without a valuation allowance, recorded investment	263	287
Total impaired loans	127	133
Construction and Land Development [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, unpaid principal balance	275	1,865
Impaired loans with a valuation allowance, recorded investment	168	1,505
Impaired loans with a valuation allowance, valuation allowance	118	631
Impaired loans without avaluation allowance:
Impaired loans without a valuation allowance, unpaid principal balance	607	1,189
Impaired loans without a valuation allowance, recorded investment	539	962
Total impaired loans	118	631
Commercial Loan [Member]
Impaired loans without avaluation allowance:
Impaired loans without a valuation allowance, unpaid principal balance	371	388
Impaired loans without a valuation allowance, recorded investment	321	350
Consumer Loan [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, unpaid principal balance	16
Impaired loans with a valuation allowance, recorded investment	16
Impaired loans with a valuation allowance, valuation allowance	16
Impaired loans without avaluation allowance:
Impaired loans without a valuation allowance, unpaid principal balance	12	27
Impaired loans without a valuation allowance, recorded investment	8	24
Total impaired loans	$ 16

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Note 10 - Short Term Borrowings (Details) - Short Term Borrowings (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Short Term Borrowings [Abstract]
Repurchase agreements	$ 14,295
Federal funds purchased	5,975
Total	$ 20,270

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Note 8 - Goodwill and Core Deposit Intangible (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Note 8 - Goodwill and Core Deposit Intangible (Details) [Line Items]
Goodwill	$ 25,610,000
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	313,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	625,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	625,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	625,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	625,000
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	4,800,000
Core Deposits [Member] | Minimum [Member]
Note 8 - Goodwill and Core Deposit Intangible (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life	12 years
Core Deposits [Member] | Maximum [Member]
Note 8 - Goodwill and Core Deposit Intangible (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life	13 years
First National Security Company [Member]
Note 8 - Goodwill and Core Deposit Intangible (Details) [Line Items]
Goodwill	$ 25,600,000

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Note 4 - Investment Securities Available for Sale (Details) - Securities in a Continuous Loss Position (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Note 4 - Investment Securities Available for Sale (Details) - Securities in a Continuous Loss Position [Line Items]
Securities in continuous unrealized loss position, less than 12 months, fair value	$ 58,152	$ 44,855
Securities in continuous unrealized loss position, less than 12 months, unrealized losses	79	623
Securities in continuous unrealized loss position, 12 months or more, fair value	4,897	945
Securities in continuous unrealized loss position, 12 months or more, unrealized losses	61	54
Securities in continuous unrealized loss position, fair value	63,049	45,800
Securities in continuous unrealized loss position, unrealized losses	140	677
US Government Agencies Debt Securities [Member]
Note 4 - Investment Securities Available for Sale (Details) - Securities in a Continuous Loss Position [Line Items]
Securities in continuous unrealized loss position, less than 12 months, fair value	46,457
Securities in continuous unrealized loss position, less than 12 months, unrealized losses	17
Securities in continuous unrealized loss position, fair value	46,457
Securities in continuous unrealized loss position, unrealized losses	17
US States and Political Subdivisions Debt Securities [Member]
Note 4 - Investment Securities Available for Sale (Details) - Securities in a Continuous Loss Position [Line Items]
Securities in continuous unrealized loss position, less than 12 months, fair value	4,181	17,851
Securities in continuous unrealized loss position, less than 12 months, unrealized losses	34	424
Securities in continuous unrealized loss position, 12 months or more, fair value	4,897	945
Securities in continuous unrealized loss position, 12 months or more, unrealized losses	61	54
Securities in continuous unrealized loss position, fair value	9,078	18,796
Securities in continuous unrealized loss position, unrealized losses	95	478
Collateralized Mortgage Backed Securities [Member]
Note 4 - Investment Securities Available for Sale (Details) - Securities in a Continuous Loss Position [Line Items]
Securities in continuous unrealized loss position, less than 12 months, fair value	4,274	27,004
Securities in continuous unrealized loss position, less than 12 months, unrealized losses	11	199
Securities in continuous unrealized loss position, fair value	4,274	27,004
Securities in continuous unrealized loss position, unrealized losses	11	199
Corporate Debt Securities [Member]
Note 4 - Investment Securities Available for Sale (Details) - Securities in a Continuous Loss Position [Line Items]
Securities in continuous unrealized loss position, less than 12 months, fair value	3,240
Securities in continuous unrealized loss position, less than 12 months, unrealized losses	17
Securities in continuous unrealized loss position, fair value	3,240
Securities in continuous unrealized loss position, unrealized losses	$ 17

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Note 1 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General —Bear State Financial, Inc. (the “Company”) is a bank holding company headquartered in Little Rock, Arkansas. On June 13, 2014, the Company completed its merger with First National Security Company (“FNSC”). The FNSC merger was accounted for under the acquisition method of accounting. The purchased assets, assumed liabilities and identifiable intangible assets were recorded at their acquisition date estimated fair values. Fair values are subject to refinement for up to one year after the closing date of the transaction as additional information regarding closing date fair values becomes available. The Company’s results of operations for the three and six months ended June 30, 2014 includes results of operations for FNB and Heritage for the period from June 14 through June 30, 2014. See Note 3 for additional information regarding the merger transaction.

Nature of Operations —The Company owns First Federal Bank (“First Federal”), and two bank holding companies, First Community Banking Corporation (“FCBC”) and Heritage Capital Corporation (“HCC”), which own First National Bank (“FNB”) and Heritage Bank, NA (“Heritage”), respectively (collectively referred to as “the Banks”). First Federal is a federally chartered stock savings and loan association that conducts business from its home office in Harrison, Arkansas, a full-service branch office in Pulaski County, Arkansas, ten full-service branch offices and one limited service office located in a five county area in Northwest and Northcentral Arkansas and a mortgage production office in Bentonville, Arkansas. FNB offers banking services from its home office in Hot Springs, Arkansas, eighteen full service branch offices and three limited service offices located in Central and Southwest Arkansas and two full service offices in Southeast Oklahoma. Heritage has five branches in Jonesboro, Arkansas, including the home office, as well as four additional full service branches in Northeast Arkansas. The Banks provide a broad line of financial products to individuals and business customers.

Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary holding companies and banks. The consolidated financial statements also include the accounts of First Federal’s wholly owned subsidiary, First Harrison Service Corporation (“FHSC”), which is inactive. Intercompany transactions have been eliminated in consolidation.

Basisof Presentation—The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, such information reflects all adjustments which are, in the opinion of management, necessary for a fair statement of results for the interim periods. Those adjusting entries consist only of normal recurring adjustments.

Certain reclassifications of prior period amounts have been made to conform with the current period presentation. These reclassifications had no impact on previously reported net income.

The Company is substantially in the business of community banking and therefore is considered a banking operation with no separately reportable segments.

The results of operations for the three and six months ended June 30, 2014, are not necessarily indicative of the results to be expected for the year ending December 31, 2014. The unaudited condensed consolidated financial statements of the Company and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2013, contained in the Company’s 2013 Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated balance sheet of the Company has been derived from the audited consolidated balance sheet of the Company as of that date.

Acquired Loans— Acquired loans and leases are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. The fair value adjustment on acquired loans without evidence of credit deterioration since origination will be accreted into earnings as a yield adjustment using the effective yield method over the remaining life of the loan.

Acquired loans and leases with evidence of credit deterioration since origination such that it is probable at acquisition that the bank will be unable to collect all contractually required payments are accounted for under the guidance in ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the difference between contractually required payments and the cash flows expected to be collected is the nonaccretable difference, which is included as a reduction of the carrying amount of acquired loans and leases. If the timing and amount of the future cash flows is reasonably estimable, any excess of cash flows expected at acquisition over the estimated fair value is the accretable yield and is recognized in interest income over the asset's remaining life using a level yield method.

Acquired loan amounts deemed uncollectible at acquisition date become part of the fair value calculation and are excluded from the ALLL. Following acquisition, a regular review will be completed on acquired loans to determine if changes in estimated cash flows have occurred. Subsequent decreases in the amount expected to be collected may result in a provision for loan and lease losses with a corresponding increase in the ALLL. Subsequent increases in the amount expected to be collected result in a reversal of any previously recorded provision for loan and lease losses and related ALLL, if any, or prospective adjustment to the accretable yield if no provision for loan and lease losses had been recorded.

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Note 8 - Goodwill and Core Deposit Intangible (Details) - Core Deposit Intangible (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ (26)
Core Deposits [Member]
Finite-Lived Intangible Assets [Line Items]
FNSC merger	7,677
Amortization expense	(26)
Balance—end of period	$ 7,651

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Note 3 - Acquisition (Details) - Assets Acquired and Liabilities Assumed (USD $)					0 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 First National Security Company [Member]	Jun. 13, 2014 First National Security Company [Member] Portion at Other than Fair Value Measurement [Member]	Jun. 13, 2014 First National Security Company [Member] Changes Measurement [Member]	Jun. 13, 2014 First National Security Company [Member] Estimate of Fair Value Measurement [Member]	Jun. 13, 2014 First National Security Company [Member] Estimate of Fair Value Measurement [Member]
Assets acquired:
Cash and cash equivalents			$ 41,015,000			$ 41,015,000
Federal funds sold			43,025,000			43,025,000
Investment securities available for sale			138,140,000			138,140,000
Other investment securities, at cost			7,480,000			7,480,000
Loans receivable			622,758,000	(16,877,000)		605,881,000
Allowance for loan losses			(13,179,000)	13,179,000
Loans receivable, net			609,579,000	(3,698,000)		605,881,000
Accrued interest receivable			2,954,000			2,954,000
Real estate owned - net			69,000			69,000
Office properties and equipment, net			33,074,000	(2,232,000)		30,842,000
Cash surrender value of life insurance			1,935,000			1,935,000
Core deposit intangible			568,000	7,109,000		7,677,000
Deferred tax asset, net			542,000	(542,000)
Prepaid expenses and other assets			2,899,000			2,899,000
Total assets acquired			881,280,000	637,000		881,917,000
Liabilities assumed:
Deposits – noninterest bearing			151,331,000			151,331,000
Deposits – interest bearing			611,841,000	366,000		612,207,000
Total deposits			763,172,000	366,000		763,538,000
Short term borrowings			14,295,000			14,295,000
Other borrowings			27,434,000	64,000		27,498,000
Other liabilities			1,802,000			1,802,000
Total liabilities assumed			806,703,000	430,000		807,133,000
Net assets acquired			74,577,000	207,000		74,784,000
Consideration paid:
Cash					50,000,000
Common stock					50,394,000
Total consideration paid					100,394,000
Goodwill	$ 25,610,000	$ 25,600,000				$ 25,610,000

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Note 5 - Loans Receivable (Tables)

6 Months Ended

Jun. 30, 2014

Note 5 - Loans Receivable (Tables) [Line Items]

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

	June 30, 2014			December 31, 2013
Real estate:
One- to four-family residential	$	303,517		$	129,308
Multifamily residential		44,679			25,773
Nonfarm nonresidential		346,169			168,902
Farmland		48,710			2,663
Construction and land development		94,084			23,891
Commercial		142,058			29,033
Consumer		32,171			4,368
Total loans receivable		1,011,388			383,938
Unearned discounts and net deferred loan costs		(104	)		(78	)
Allowance for loan and lease losses		(12,392	)		(12,711	)
Loans receivable—net	$	998,892		$	371,149

Past Due Financing Receivables [Table Text Block]

June 30, 2014	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	2,159	$	2,128	$	299,230	$	303,517
Multifamily residential		--		--		44,679		44,679
Nonfarm nonresidential		172		2,025		343,972		346,169
Farmland		--		641		48,069		48,710
Construction and land development		117		601		93,366		94,084
Commercial		132		80		141,846		142,058
Consumer		194		34		31,943		32,171
Total	$	2,774	$	5,509	$	1,003,105	$	1,011,388

December 31, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	3,511	$	1,664	$	124,133	$	129,308
Multifamily residential		--		--		25,773		25,773
Nonfarm nonresidential		176		2,340		166,386		168,902
Farmland		--		666		1,997		2,663
Construction and land development		30		2,133		21,728		23,891
Commercial		--		348		28,685		29,033
Consumer		--		19		4,349		4,368
Total	$	3,717	$	7,170	$	373,051	$	383,938

June 30, 2014	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	530	$	1,767	$	1,976	$	4,273
Nonfarm nonresidential		140		1,272		1,797		3,209
Farmland		--		641		111		752
Construction and land development		9		584		29		622
Commercial		--		--		321		321
Consumer		--		7		17		24
Total	$	679	$	4,271	$	4,251	$	9,201

December 31, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	637	$	1,664	$	1,957	$	4,258
Nonfarm nonresidential		--		2,340		1,717		4,057
Farmland		--		666		116		782
Construction and land development		--		2,133		334		2,467
Commercial		--		348		2		350
Consumer		--		19		5		24
Total	$	637	$	7,170	$	4,131	$	11,938

Impaired Financing Receivables [Table Text Block]

	June 30, 2014						December 31, 2013
	Unpaid Principal Balance		Recorded Investment		Valuation Allowance		Unpaid Principal Balance		Recorded Investment		Valuation Allowance
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,187	$	1,036	$	179	$	1,213	$	1,085	$	279
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		2,509		2,296		660		3,287		3,105		1,119
Farmland		621		489		127		623		495		133
Construction and land development		275		168		118		1,865		1,505		631
Commercial		--		--		--		--		--		--
Consumer		16		16		16		--		--		--
		4,608		4,005		1,100		6,988		6,190		2,162
Impaired loans without avaluation allowance:
One- to four-family residential		4,521		3,726		--		4,430		3,668		--
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		1,690		913		--		1,077		952		--
Farmland		545		263		--		554		287		--
Construction and land development		607		539		--		1,189		962		--
Commercial		371		321		--		388		350		--
Consumer		12		8		--		27		24		--
		7,746		5,770		--		7,665		6,243		--
Total impaired loans	$	12,354	$	9,775	$	1,100	$	14,653	$	12,433	$	2,162

Financing Receivable Credit Quality Indicators [Table Text Block]

	June 30, 2014
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	210,651	$	448	$	10,582	$	81,836	$	303,517
Multifamily residential		44,679		--		--		--		44,679
Nonfarm nonresidential		333,991		4,436		7,278		464		346,169
Farmland		47,457		--		1,253		--		48,710
Construction and land development		88,301		110		2,543		3,130		94,084
Commercial		140,752		--		971		335		142,058
Consumer		26,457		6		220		5,488		32,171
Total	$	892,288	$	5,000	$	22,847	$	91,253	$	1,011,388

	December 31, 2013
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	34,333	$	329	$	6,371	$	88,275	$	129,308
Multifamily residential		25,773		--		--		--		25,773
Nonfarm nonresidential		159,629		4,490		4,057		726		168,902
Farmland		1,491		--		1,172		--		2,663
Construction and land development		18,241		295		2,770		2,585		23,891
Commercial		28,555		--		350		128		29,033
Consumer		151		--		45		4,172		4,368
Total	$	268,173	$	5,114	$	14,765	$	95,886	$	383,938

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

June 30, 2014	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		4	$	489		9	$	740		13	$	1,229
Nonfarm nonresidential		--		--		3		532		3		532
Farmland		--		--		1		263		1		263
Construction and land development		1		85		3		410		4		495
Consumer		--		--		2		16		2		16
Total		5	$	574		18	$	1,961		23	$	2,535

December 31, 2013	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		4	$	495		8	$	658		12	$	1,153
Nonfarm nonresidential		--		--		3		556		3		556
Farmland		--		--		1		287		1		287
Construction and land development		--		--		4		569		4		569
Consumer		--		--		1		5		1		5
Total		4	$	495		17	$	2,075		21	$	2,570

Schedule of Loans Restructured As TDRs in Current Period [Table Text Block]

	Three Months Ended June 30, 2014
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2014		Payment Term (1)		Other (2)
Construction and land development		1	$	85	$	85	$	--	$	85
Total		1	$	85	$	85	$	--	$	85

	Six Months Ended June 30, 2014
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2014		Payment Term (1)		Other (2)
One- to four-family residential		1	$	103	$	98	$	103	$	--
Construction and land development		1		85		85		--		85
Consumer		1		11		11		11		--
Total		3	$	199	$	194	$	114	$	85

	Six Months Ended June 30, 2013
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2013		Payment Term (1)		Other
One- to four-family residential		1	$	6	$	6	$	6	$	--
Total		1	$	6	$	6	$	6	$	--

Three and Six Months Ended [Member]

Note 5 - Loans Receivable (Tables) [Line Items]

Impaired Financing Receivables [Table Text Block]

	Three and Six Months Ended June 30, 2014
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
	(Three Months)		(Six Months)		(Three Months)		(Six Months)
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,100	$	1,095	$	2	$	5
Multifamily residential		--		--		--		--
Nonfarm nonresidential		2,498		2,700		--		--
Farmland		491		492		--		--
Construction and land development		481		822		--		--
Commercial		126		84		--		--
Consumer		14		9		--		--
		4,710		5,202		2		5
Impaired loans without a valuation allowance:
One- to four-family residential		3,495		3,553		1		1
Multifamily residential		--		--		--		--
Nonfarm nonresidential		1,095		1,047		--		--
Farmland		269		275		--		--
Construction and land development		689		780		2		3
Commercial		332		338		--		--
Consumer		12		16		--		--
		5,892		6,009		3		4
Total impaired loans	$	10,602	$	11,211	$	5	$	9
Interest based on original terms					$	275	$	345
Interest income recognized on a cash basis on impaired loans					$	--	$	--

	Three and Six Months Ended June 30, 2013
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
	(Three Months)		(Six Months)		(Three Months)		(Six Months)
Impaired loans with a valuation allowance:
One- to four-family residential	$	2,403	$	1,985	$	2	$	5
Multifamily residential		1,479		986		--		--
Nonfarm nonresidential		2,165		2,382		--		--
Farmland		505		378		--		--
Construction and land development		1,055		864		--		--
Commercial		--		--		--		--
Consumer		--		1		--		--
		7,607		6,596		2		5
Impaired loans without a valuation allowance:
One- to four-family residential		4,063		4,948		--		--
Multifamily residential		--		1,153		--		--
Nonfarm nonresidential		2,160		3,065		--		--
Farmland		319		460		--		--
Construction and land development		1,285		1,741		--		--
Commercial		24		23		--		--
Consumer		16		19		--		--
		7,867		11,409		--		--
Total impaired loans	$	15,474	$	18,005	$	2	$	5
Interest based on original terms					$	353	$	488
Interest income recognized on a cash basis on impaired loans					$	--	$	--

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Note 4 - Investment Securities Available for Sale (Tables)

6 Months Ended

Jun. 30, 2014

Investment Holdings [Abstract]

Available-for-sale Securities [Table Text Block]

	June 30, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. government agencies	$	122,745	$	12	$	(17	)	$	122,740
Municipal securities		48,850		385		(95	)		49,140
Mortgage-backed securities		37,278		577		(11	)		37,844
Corporate debt securities		3,849		1		(17	)		3,833
Total	$	212,722	$	975	$	(140	)	$	213,557

	December 31, 2013
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Municipal securities	$	42,203	$	199	$	(478	)	$	41,924
Mortgage-backed securities		29,092		11		(199	)		28,904
Total	$	71,295	$	210	$	(677	)	$	70,828

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block]

	June 30, 2014
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. government agencies	$	46,457	$	17	$	--	$	--	$	46,457	$	17
Municipal securities		4,181		34		4,897		61		9,078		95
Mortgage-backed securities		4,274		11		--		--		4,274		11
Corporate debt securities		3,240		17		--		--		3,240		17
Total	$	58,152	$	79	$	4,897	$	61	$	63,049	$	140

		December 31, 2013
		Less than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
Municipal securities	$	17,851	$	424	$	945	$	54	$	18,796	$	478
Mortgage-backed securities		27,004		199		--		--		27,004		199
Total	$	44,855	$	623	$	945	$	54	$	45,800	$	677

Investments Classified by Contractual Maturity Date [Table Text Block]

	June 30, 2014
	Amortized		Fair		Weighted
	Cost		Value		Average Rate
Within one year	$	52,921	$	52,934		0.68%
Due from one year to five years		88,669		88,746		0.79%
Due from five years to ten years		27,391		27,503		3.13%
Due after ten years		6,463		6,530		4.02%
		175,444		175,713		1.25%
Mortgage-backed securities		37,278		37,844		3.04%
Total	$	212,722	$	213,557		1.56%

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Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014		Jun. 30, 2014		Jun. 30, 2013
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, number of loans	1		3		1
Troubled debt restructurings, balance prior to TDR	$ 85		$ 199		$ 6
Troubled debt restructurings, balance	85		194		6
Construction and Land Development [Member] | Modification of Payment Terms [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance		[1]		[1]
Construction and Land Development [Member] | Other Modifications [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance	85	[2]	85	[2]
Construction and Land Development [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, number of loans	1		1
Troubled debt restructurings, balance prior to TDR	85		85
Troubled debt restructurings, balance	85		85
One-to-Four-Family Residential [Member] | Modification of Payment Terms [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance			103	[1]	6	[1]
One-to-Four-Family Residential [Member] | Other Modifications [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance				[2]		[2]
One-to-Four-Family Residential [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, number of loans			1		1
Troubled debt restructurings, balance prior to TDR			103		6
Troubled debt restructurings, balance			98		6
Consumer Loans [Member] | Modification of Payment Terms [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance			11	[1]
Consumer Loans [Member] | Other Modifications [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance				[2]
Consumer Loans [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, number of loans			1
Troubled debt restructurings, balance prior to TDR			11
Troubled debt restructurings, balance			11
Modification of Payment Terms [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance		[1]	114	[1]	6	[1]
Other Modifications [Member]
Note 5 - Loans Receivable (Details) - Loans Restructured as TDRs [Line Items]
Troubled debt restructurings, balance	$ 85	[2]	$ 85	[2]		[2]

[1] Concessions represent skipped payments/maturity date extensions or amortization term extensions.

[2] The borrower did not have the financial ability to refinance at another bank at renewal.

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Note 3 - Acquisition (Details) - Pro Forma Information (First National Security Company Acquisition [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
First National Security Company Acquisition [Member]
Note 3 - Acquisition (Details) - Pro Forma Information [Line Items]
Net interest income	$ 23,577	$ 25,607
Total noninterest income	5,773	6,014
Net income	$ 69	$ 7,373
Basic earnings per common share (in Dollars per share)		$ 0.26
Diluted earnings per common share (in Dollars per share)		$ 0.25

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Note 6 - Allowances for Loan and Lease Losses and Real Estate Losses (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure Text Block Supplement [Abstract]

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

			Three Months Ended June 30, 2014
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	4,407	$	847	$	4,134		$	152	$	1,059		$	1,799		$	80		$	12,478
Provision charged to expense		72		183		(230	)		130		98			(52	)		29			230
Losses charged off		--		--		(2	)		--		(292	)		(27	)		(40	)		(361	)
Recoveries		11		--		8			--		3			1			22			45
Balance, end of period	$	4,490	$	1,030	$	3,910		$	282	$	868		$	1,721		$	91		$	12,392

				Six Months Ended June 30, 2014
	One- to Four-Family Residential			Multifamily Residential		Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	4,549		$	1,001	$	4,271		$	158	$	1,383		$	1,268		$	81		$	12,711
Provision charged to expense		(72	)		29		(256	)		124		(115	)		478			42			230
Losses charged off		(8	)		--		(115	)		--		(444	)		(27	)		(68	)		(662	)
Recoveries		21			--		10			--		44			2			36			113
Balance, end of period	$	4,490		$	1,030	$	3,910		$	282	$	868		$	1,721		$	91		$	12,392

				Three Months Ended June 30, 2013
	One- to Four-Family Residential			Multifamily Residential			Nonfarm Nonresidential			Farmland			Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	6,778		$	1,074		$	5,341		$	283		$	907		$	1,000		$	214		$	15,597
Provision charged to expense		22			382			(532	)		(10	)		124			(13	)		27			--
Losses charged off		(662	)		(876	)		(874	)		--			(115	)		(380	)		(49	)		(2,956	)
Recoveries		13			--			500			--			24			55			16			608
Balance, end of period	$	6,151		$	580		$	4,435		$	273		$	940		$	662		$	208		$	13,249

				Six Months Ended June 30, 2013
	One- to Four-Family Residential			Multifamily Residential			Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	5,099		$	1,319		$	6,949		$	251	$	879		$	956		$	223		$	15,676
Provision charged to expense		1,746			137			(2,006	)		22		69			12			20			--
Losses charged off		(747	)		(876	)		(1,008	)		--		(115	)		(380	)		(76	)		(3,202	)
Recoveries		53			--			500			--		107			74			41			775
Balance, end of period	$	6,151		$	580		$	4,435		$	273	$	940		$	662		$	208		$	13,249

			June 30, 2014
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential		Farmland		Construction and Land Development		Commercial		Consumer		Total
ALLL Balances:
Individually evaluated for impairment	$	179	$	--	$	660	$	127	$	118	$	--	$	16	$	1,100
Collectively evaluated for impairment		4,311		1,030		3,250		155		750		1,721		75		11,292
Ending balance	$	4,490	$	1,030	$	3,910	$	282	$	868	$	1,721	$	91	$	12,392
Loan balances:
Individually evaluated for impairment	$	4,762	$	--	$	3,209	$	752	$	707	$	321	$	24	$	9,775
Collectively evaluated for impairment		298,755		44,679		342,960		47,958		93,377		141,737		32,147		1,001,613
Ending balance	$	303,517	$	44,679	$	346,169	$	48,710	$	94,084	$	142,058	$	32,171	$	1,011,388

			December 31, 2013
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential		Farmland		Construction and Land Development		Commercial		Consumer		Total
ALLL Balances:
Individually evaluated for impairment	$	279	$	--	$	1,119	$	133	$	631	$	--	$	--	$	2,162
Collectively evaluated for impairment		4,270		1,001		3,152		25		752		1,268		81		10,549
Ending balance	$	4,549	$	1,001	$	4,271	$	158	$	1,383	$	1,268	$	81	$	12,711
Loan balances:
Individually evaluated for impairment	$	4,753	$	--	$	4,057	$	782	$	2,467	$	350	$	24	$	12,433
Collectively evaluated for impairment		124,555		25,773		164,845		1,881		21,424		28,683		4,344		371,505
Ending balance	$	129,308	$	25,773	$	168,902	$	2,663	$	23,891	$	29,033	$	4,368	$	383,938

Schedule of Credit Losses Related to Real Estate Owned, Current and Noncurrent [Table Text Block]

	Three Months Ended							Six Months Ended
	June 30, 2014			June 30, 2013				June 30, 2014		June 30, 2013
Balance—beginning of period	$	8,143		$	9,396		$	8,794		$	14,877
Provisions for estimated losses		618			33			860			219
Recoveries		--			--			--			--
Losses charged off		(280	)		(23	)		(1,173	)		(5,690	)
Balance—end of period	$	8,481		$	9,406		$	8,481		$	9,406

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Note 7 - Office Properties and Equipment (Tables)

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	June 30, 2014			December 31, 2013
Land and land improvements	$	11,074		$	5,340
Buildings and improvements		42,173			19,358
Furniture and equipment		7,957			5,770
Automobiles		823			210
Total		62,027			30,678
Accumulated depreciation		(12,332	)		(11,909	)
Office properties and equipment—net	$	49,695		$	18,769

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
OPERATING ACTIVITIES:
Net (loss) income	$ (3,183,000)	$ 387,000
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Provision for loan losses	230,000
Provision for real estate losses	860,000	219,000
Deferred tax provision (benefit)	1,973,000	654,000
Deferred tax valuation allowance	(1,973,000)	(654,000)
Net amortization (accretion) of investment securities	138,000	(12,000)
Federal Home Loan Bank stock dividends	(1,000)
Loss (gain) on sale of fixed assets, net	4,000	(42,000)
Gain on sale of real estate owned, net	(142,000)	(374,000)
Originations of loans held for sale	(41,640,000)	(23,788,000)
Proceeds from sales of loans held for sale	39,528,000	25,313,000
Gain on sale of loans originated to sell	(956,000)	(459,000)
Depreciation	739,000	713,000
Amortization of deferred loan costs, net	36,000	54,000
Net accretion of fair value adjustments of purchased assets and assumed liabilities	(65,000)
Amortization of other intangible assets	26,000
Stock compensation	184,000	96,000
Earnings on life insurance policies	(409,000)	(398,000)
Changes in operating assets and liabilities:
Accrued interest receivable	(218,000)	144,000
Prepaid expenses and other assets	(151,000)	81,000
Other liabilities	575,000	(709,000)
Net cash (used in) provided by operating activities	(4,445,000)	1,225,000
INVESTING ACTIVITIES:
Cash paid for purchase of FNSC, net of cash received	(8,985,000)
Net decrease in federal funds sold	30,650,000
Redemptions of interest-bearing time deposits in banks	5,226,000	3,734,000
Purchases of investment securities available for sale (“AFS”)	(7,354,000)
Proceeds from maturities/calls/paydowns of investment securities AFS	5,179,000	4,185,000
Purchases of Federal Home Loan Bank stock	(250,000)
Loan originations, net of repayments	(11,126,000)	(7,239,000)
Loan participations purchased	(13,394,000)	(3,000,000)
Loans sold		15,438,000
Proceeds from sales of real estate owned	2,539,000	5,307,000
Other cash activity - real estate owned		(17,000)
Proceeds from sales of office properties and equipment	177,000	362,000
Purchases of office properties and equipment	(1,004,000)	(853,000)
Purchase of bank owned life insurance	(2,500,000)
Net cash (used in) provided by investing activities	(842,000)	17,917,000
FINANCING ACTIVITIES:
Net (decrease) increase in deposits	(1,848,000)	4,678,000
Sale of deposits in connection with branch sale		(17,836,000)
Proceeds from advances from Federal Home Loan Bank	6,000,000
Repayment of advances from Federal Home Loan Bank	(62,000)	(2,113,000)
Proceeds from other borrowings	13,750,000
Repayments of other borrowings	(5,250,000)
Net increase in short term borrowings	5,975,000
Proceeds from private placement	20,000,000
Proceeds from exercise of warrants	3,590,000	1,785,000
Net cash provided by (used in) financing activities	42,155,000	(13,486,000)
NET INCREASE IN CASH AND CASH EQUIVALENTS	36,868,000	5,656,000
CASH AND CASH EQUIVALENTS:
Beginning of period	23,970,000	42,607,000
End of period	60,838,000	48,263,000
Cash paid for:
Interest	1,930,000	1,688,000
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Real estate and other assets acquired in settlement of loans	787,000	1,217,000
Sales of real estate owned financed by the Bank		773,000
Investment securities purchased—not settled	1,350,000
Transfers from office properties and equipment to office properties and equipment held for sale		1,503,000
Transfers from deposits to deposits held for sale in probable branch sale		4,690,000
Common stock issued for purchase of FNSC	$ 49,918,000

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Note 8 - Goodwill and Core Deposit Intangible (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	June 30, 2014
Balance—beginning of period	$	--
FNSC merger		7,677
Amortization expense		(26	)
Balance—end of period	$	7,651

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Note 16 - Regulatory Matters (Details) - The Bank’s Actual and Required Capital Amounts (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Tangible Capital to Tangible Assets	$ 70,853
Tangible Capital to Tangible Assets	12.90%
Tangible Capital to Tangible Assets	8,240
Tangible Capital to Tangible Assets	1.50%
Core Capital to Adjusted Tangible Assets	70,853
Core Capital to Adjusted Tangible Assets	12.90%
Core Capital to Adjusted Tangible Assets	21,972
Core Capital to Adjusted Tangible Assets	4.00%
Total Capital to Risk-Weighted Assets	76,036
Total Capital to Risk-Weighted Assets	18.68%
Total Capital to Risk-Weighted Assets	32,570
Total Capital to Risk-Weighted Assets	8.00%
Tier I Capital to Risk-Weighted Assets	70,853
Tier I Capital to Risk-Weighted Assets	17.40%
To be Categorized as Adequately Capitalized Under Prompt Corrective Action Provisions [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Core Capital to Adjusted Tangible Assets	27,465
Core Capital to Adjusted Tangible Assets	5.00%
Total Capital to Risk-Weighted Assets	40,713
Total Capital to Risk-Weighted Assets	10.00%
Tier I Capital to Risk-Weighted Assets	24,428
Tier I Capital to Risk-Weighted Assets	6.00%
Required Per Agreement with the OCC [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Core Capital to Adjusted Tangible Assets	43,944
Core Capital to Adjusted Tangible Assets	8.00%
Total Capital to Risk-Weighted Assets	$ 48,855
Total Capital to Risk-Weighted Assets	12.00%

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Note 16 - Regulatory Matters (Tables)

6 Months Ended

Jun. 30, 2014

Note 16 - Regulatory Matters (Tables) [Line Items]

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

											To be Categorized
											as Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2014:
Tangible Capital to Tangible Assets
First Federal		46,658		8.42	%	$	8,312		1.50	%		N/A		N/A
Tier 1 Capital to Average Assets
Consolidated	$	108,901		7.54	%	$	57,776		4.00	%		N/A		N/A
First Federal (1)		46,658		8.42	%		22,165		4.00	%	$	27,707		5.00	%
FNB		50,166		8.51	%		17,690		3.00	%		29,483		5.00	%
Heritage		23,951		8.67	%		8,286		3.00	%		13,811		5.00	%
Total Capital to Risk-Weighted Assets
Consolidated	$	114,618		10.85	%	$	84,472		8.00	%		N/A		N/A
First Federal		52,150		12.05	%		34,615		8.00	%	$	43,269		10.00	%
FNB		50,291		12.18	%		33,025		8.00	%		41,282		10.00	%
Heritage		24,051		11.43	%		16,832		8.00	%		21,040		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated	$	108,901		10.31	%		42,236		4.00	%	N/A		N/A
First Federal		46,658		10.78	%	N/A		N/A				25,961		6.00	%
FNB		50,166		12.15	%		16,513		4.00	%		24,769		6.00	%
Heritage		23,951		11.38	%		8,416		4.00	%		12,624		6.00	%

First Federal Bank [Member]

Note 16 - Regulatory Matters (Tables) [Line Items]

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

											To be Categorized
											as Well
											Capitalized Under					Required Per
						For Capital					Prompt Corrective					Agreement With
	Actual					Adequacy Purposes					Action Provisions					the OCC (1)
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013, :
Tangible Capital to Tangible Assets	$	70,853		12.90	%	$	8,240		1.50	%	N/A		N/A			N/A		N/A
Core Capital to Adjusted Tangible Assets		70,853		12.90	%		21,972		4.00	%	$	27,465		5.00	%	$	43,944		8.00	%
Total Capital to Risk-Weighted Assets		76,036		18.68	%		32,570		8.00	%		40,713		10.00	%		48,855		12.00	%
Tier I Capital to Risk-Weighted Assets		70,853		17.40	%	N/A		N/A				24,428		6.00	%	N/A		N/A

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Note 5 - Loans Receivable (Details) - Impaired Loans Interest Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment	$ 4,710	$ 7,607	$ 5,202	$ 6,596
Impaired loans with a valuation allowance, interest income recognized	2	2	5	5
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment	5,892	7,867	6,009	11,409
Impaired loans without a valuation allowance, interest income recognized	3		4
Total impaired loans	10,602	15,474	11,211	18,005
Total impaired loans	5	2	9	5
Interest based on original terms	275	353	345	488
One-to-Four-Family Residential [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment	1,100	2,403	1,095	1,985
Impaired loans with a valuation allowance, interest income recognized	2	2	5	5
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment	3,495	4,063	3,553	4,948
Impaired loans without a valuation allowance, interest income recognized	1		1
Multifamily Residential [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment		1,479		986
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment				1,153
Nonfarm Nonresidential [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment	2,498	2,165	2,700	2,382
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment	1,095	2,160	1,047	3,065
Farmland [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment	491	505	492	378
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment	269	319	275	460
Construction and Land Development [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment	481	1,055	822	864
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment	689	1,285	780	1,741
Impaired loans without a valuation allowance, interest income recognized	2		3
Commercial Loan [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment	126		84
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment	332	24	338	23
Consumer Loan [Member]
Impaired loans with a valuation allowance:
Impaired loans with a valuation allowance, average recorded investment	14		9	1
Impaired loans without a valuation allowance:
Impaired loans without a valuation allowance, average recorded investment	$ 12	$ 16	$ 16	$ 19

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Note 12 - Stock Based Compensation (Details) (USD $)		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Employee Stock Option [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2013 Employee Stock Option [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2014 Employee Stock Option [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2013 Employee Stock Option [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2013 Restricted Stock Units (RSUs) [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member] Minimum [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member] Maximum [Member] 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2014 2011 Omnibus Incentive Plan [Member]	Jun. 30, 2012 2011 Omnibus Incentive Plan [Member]
Note 12 - Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)												1,930,269
Share-based Compensation Award Term													10
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period												5 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term												7 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term												4 years 146 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value												$ 484,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number (in Shares)	0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized						1,400,000		1,400,000				382,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition								4 years 109 days				2 years 219 days
Allocated Share-based Compensation Expense		$ 36,000	$ 36,000	$ 71,000	$ 73,000	$ 66,000	$ 16,000	$ 125,000	$ 23,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period										3 years	7 years

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Condensed Consolidated Statements of Financial Condition (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Cash and cash equivalents	$ 60,838	$ 23,970
Federal funds sold	12,375
Interest-bearing time deposits in banks	18,892	24,118
Investment securities available for sale	213,557	70,828
Other investment securities, at cost	8,188	457
Loans receivable, net of allowance of $12,392 and $12,711, respectively	998,892	371,149
Loans held for sale	8,943	4,205
Accrued interest receivable	4,645	1,473
Real estate owned - net	6,226	8,627
Office properties and equipment - net	49,695	18,769
Cash surrender value of life insurance	28,655	23,811
Goodwill	25,610
Core deposit intangible - net	7,651
Prepaid expenses and other assets	4,038	1,465
TOTAL	1,448,205	548,872
LIABILITIES:
Noninterest bearing	146,348	19,427
Interest bearing	1,085,066	450,298
	1,231,414	469,725
Short term borrowings	20,270
Other borrowings	47,877	5,941
Other liabilities	5,649	2,019
Total liabilities	1,305,210	477,685
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value—5,000,000 shares authorized; none issued at June 30, 2014 and December 31, 2013
Common stock, $0.01 par value—100,000,000 and 30,000,000 shares authorized at June 30, 2014 and December 31, 2013, respectively; 30,026,744 and 20,041,497 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively	300	200
Additional paid-in capital	166,332	92,740
Accumulated other comprehensive income (loss)	832	(467)
Accumulated deficit	(24,469)	(21,286)
Total stockholders’ equity	142,995	71,187
TOTAL	$ 1,448,205	$ 548,872

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Note 4 - Investment Securities Available for Sale (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Note 4 - Investment Securities Available for Sale (Details) [Line Items]
Available-for-sale Securities Pledged as Collateral	$ 101,300,000	$ 398,000
Cash, FDIC Insured Amount	250,000
Securities Sold under Agreements to Repurchase, Asset	14,300,000	0
Available-for-sale Securities, Amortized Cost Basis	212,722,000	71,295,000
Call Option [Member]
Note 4 - Investment Securities Available for Sale (Details) [Line Items]
Available-for-sale Securities, Amortized Cost Basis	66,800,000	34,400,000
Callable Within One Year [Member]
Note 4 - Investment Securities Available for Sale (Details) [Line Items]
Available-for-sale Securities, Amortized Cost Basis	$ 40,800,000	$ 13,000,000

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (USD $) In Thousands, except Share data	Private Placement [Member] Common Stock [Member]	Private Placement [Member] Additional Paid-in Capital [Member]	Private Placement [Member]	Common Stock [Member] First National Security Company [Member]	Common Stock [Member]	Additional Paid-in Capital [Member] First National Security Company [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]	First National Security Company [Member]	Total
BALANCE – January 1, 2014 at Dec. 31, 2013					$ 200		$ 92,740	$ (467)	$ (21,286)		$ 71,187
BALANCE – January 1, 2014 (in Shares) at Dec. 31, 2013					20,041,497
Net loss									(3,183)		(3,183)
Other comprehensive income								1,299			1,299
Shares issued – merger with FNSC, net of issuance costs of approximately $477				63		49,855				49,918
Shares issued – merger with FNSC, net of issuance costs of approximately $477 (in Shares)				6,252,400
Shares issued - private placement	25	19,975	20,000
Shares issued - private placement (in Shares)	2,531,646
Shares issued – warrant exercises					12		3,578				3,590
Shares issued – warrant exercises (in Shares)					1,196,667
Shares issued - restricted stock unit vesting (in Shares)					4,534
Stock compensation							184				184
BALANCE – June 30, 2014 at Jun. 30, 2014					$ 300		$ 166,332	$ 832	$ (24,469)		$ 142,995
BALANCE – June 30, 2014 (in Shares) at Jun. 30, 2014					30,026,744

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Note 7 - Office Properties and Equipment (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Property, Plant and Equipment [Abstract]
Depreciation	$ 739,000	$ 713,000

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Note 11 - Other Borrowings (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Schedule of Debt [Table Text Block]

	June 30, 2014		December 31, 2013
Federal Home Loan Bank advances with rates ranging from 0.20% to 7.80% maturing through July 1, 2024	$	34,127	$	5,941
Line of credit with a bank, $9.75 million total credit line, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, interest payments due quarterly, maturing May 30, 2016		8,500		--
Term note payable to a bank, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, principal and interest payments due quarterly, maturing May 30, 2019		5,250		--
Total	$	47,877	$	5,941

Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block]

	Weighted
	Average
	Rate		Amount
Within one year		1.07%	$	9,582
One to two years		2.19		9,506
Two to three years		1.19		6,015
Three to four years		2.44		962
Four to five years		1.98		14,502
Over five years		2.68		7,310
Total		1.86%	$	47,877

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Note 9 - Deposits (Details) - Certificates of Deposit by Maturity (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Certificates of Deposit by Maturity [Abstract]
Within one year	$ 255,824
One to two years	64,562
Two to three years	42,533
Three to four years	52,357
Four to five years	34,663
Over five years	21,034
Total	$ 470,973

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Note 14 - Fair Value Measurements

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

14. FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurement, provides a framework for measuring fair value and defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: 

Level 1	Unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2	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 at the measurement date for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Financial instruments are broken down by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.

The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at June 30, 2014 and December 31, 2013, as well as the general classification of such assets pursuant to the valuation hierarchy.

Securities Available for Sale

Investment securities available for sale are recorded at fair value on a recurring basis. The fair values used by the Company are obtained from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems. Recurring Level 2 securities include U.S. agency securities, mortgage-backed securities, municipal bonds and corporate debt securities. Inputs used for valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs include indicative values derived from the independent pricing service’s proprietary computerized models. No securities were included in the Recurring Level 3 category at or for the periods ended June 30, 2014 or December 31, 2013.

The following table presents major categories of assets measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in thousands):

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2014
Available for sale investment securities:
U.S. Government agencies	$	122,740	$	--	$	122,740	$	--
Municipal securities		49,140		--		49,140		--
Mortgage-backed securities		37,844		--		37,844		--
Corporate debt securities		3,833		--		3,833		--
Total	$	213,557	$	--	$	213,557	$	--
December 31, 2013
Available for sale investment securities:
Municipal securities	$	41,924	$	--	$	41,924	$	--
Mortgage-backed securities		28,904		--		28,904		--
Total	$	70,828	$	--	$	70,828	$	--

The following is a description of valuation methodologies used for significant assets measured at fair value on a nonrecurring basis.

Impaired Loans Receivable

Loans which meet certain criteria are evaluated individually for impairment. A loan is considered impaired when, based upon current information and events, it is probable the bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Substantially all of the Bank’s impaired loans at June 30, 2014 and December 31, 2013 are secured by real estate.  Impaired loans are individually measured for impairment by comparing the carrying value of the loan to the discounted cash flows or the fair value of the collateral, less estimated selling costs, as appropriate. Fair value is estimated through current appraisals, real estate brokers’ opinions or listing prices.  Fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.   During the reported periods, collateral discounts ranged from 15% to 45% and selling costs were estimated at 8%. Fair value adjustments are made by partial charge-offs and adjustments to the allowance for loan and lease losses.

Real Estate Owned, net

REO represents real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at the lower of cost or fair value less estimated selling costs.  Fair value is estimated through current appraisals, real estate brokers’ opinions or listing prices.  As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.  During the reported periods, collateral discounts ranged from 0% to 25% and selling costs were estimated at 8%. Fair value adjustments are recorded in earnings during the period such adjustments are made. REO loss provisions recorded during the six months ended June 30, 2014 and 2013 were $860,000 and $219,000, respectively.

The following table presents major categories of assets measured at fair value on a nonrecurring basis for the six months ended June 30, 2014 and 2013 (in thousands). The assets disclosed in the following table represent REO properties or impaired loans that were remeasured at fair value during the period with a resulting valuation adjustment or fair value write-down.

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2014
Impaired loans	$	5,953	$	--	$	--	$	5,953
REO, net		3,414		--		--		3,414
June 30, 2013
Impaired loans	$	15,956	$	--	$	--	$	15,956
REO, net		3,155		--		--		3,155

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Note 12 - Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2014

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

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

	Shares Underlying Awards			Weighted Average Exercise Price
Outstanding—January 1, 2014		217,500		$	6.66
Granted		--		$	--
Forfeited		(1,500	)	$	6.57
Outstanding—June 30, 2014		216,000		$	6.66

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

	Restricted Stock Units			Weighted Average Grant Date Fair Value
Outstanding—January 1, 2014		65,500		$	8.97
Granted		129,600		$	8.21
Vested		(5,817	)	$	9.75
Forfeited		(567	)	$	8.92
Outstanding—June 30, 2014		188,716		$	8.42

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Note 16 - Regulatory Matters

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

16. REGULATORY MATTERS

The Company and subsidiary banks are subject to various regulatory capital requirements administered by the federal and state banking agencies. The Office of the Comptroller of the Currency (“OCC”) is the primary regulator for First Federal Bank, First National Bank, Hot Springs and Heritage Bank. The Federal Reserve Bank is the primary regulator for the Company. Failure to meet minimum capital requirements can result in certain mandatory—and possible additional discretionary—actions by regulators that, if undertaken, could have a direct and material effect on the Company’s or the Banks’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Banks must meet specific capital guidelines that involve quantitative measures of the Company’s and the Banks’ assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Banks’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Banks to maintain minimum amounts and ratios (set forth in the following table) of tangible capital (as defined) to tangible assets (as defined) and core capital (as defined) to adjusted tangible assets (as defined), and of total risk-based capital (as defined) to risk-weighted assets (as defined). Tier 1 (core) capital includes common stockholders’ equity and qualifying preferred stock less certain other deductions. Total capital includes Tier 1 capital plus the allowance for loan and lease losses, subject to limitations.

As of the most recent notification from regulatory authorities, the Company and the Banks were all categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Banks must maintain minimum total risk-based, tier 1 risk-based, and tier 1 (core) ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed any of the Banks’ categorizations.

The actual and required capital amounts (in thousands) and ratios of the Company (Consolidated) and First Federal Bank (“First Federal”), First National Bank (“FNB”) and Heritage Bank (“Heritage”) are presented in the following tables:

											To be Categorized
											as Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2014:
Tangible Capital to Tangible Assets
First Federal		46,658		8.42	%	$	8,312		1.50	%		N/A		N/A
Tier 1 Capital to Average Assets
Consolidated	$	108,901		7.54	%	$	57,776		4.00	%		N/A		N/A
First Federal (1)		46,658		8.42	%		22,165		4.00	%	$	27,707		5.00	%
FNB		50,166		8.51	%		17,690		3.00	%		29,483		5.00	%
Heritage		23,951		8.67	%		8,286		3.00	%		13,811		5.00	%
Total Capital to Risk-Weighted Assets
Consolidated	$	114,618		10.85	%	$	84,472		8.00	%		N/A		N/A
First Federal		52,150		12.05	%		34,615		8.00	%	$	43,269		10.00	%
FNB		50,291		12.18	%		33,025		8.00	%		41,282		10.00	%
Heritage		24,051		11.43	%		16,832		8.00	%		21,040		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated	$	108,901		10.31	%		42,236		4.00	%	N/A		N/A
First Federal		46,658		10.78	%	N/A		N/A				25,961		6.00	%
FNB		50,166		12.15	%		16,513		4.00	%		24,769		6.00	%
Heritage		23,951		11.38	%		8,416		4.00	%		12,624		6.00	%

(1)   In the case of First Federal, the ratio is calculated based on adjusted assets at period end.

First Federal’s actual and required capital amounts (in thousands) and ratios as of December 31, 2013, are presented in the following table:

											To be Categorized
											as Well
											Capitalized Under					Required Per
						For Capital					Prompt Corrective					Agreement With
	Actual					Adequacy Purposes					Action Provisions					the OCC (1)
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013, :
Tangible Capital to Tangible Assets	$	70,853		12.90	%	$	8,240		1.50	%	N/A		N/A			N/A		N/A
Core Capital to Adjusted Tangible Assets		70,853		12.90	%		21,972		4.00	%	$	27,465		5.00	%	$	43,944		8.00	%
Total Capital to Risk-Weighted Assets		76,036		18.68	%		32,570		8.00	%		40,713		10.00	%		48,855		12.00	%
Tier I Capital to Risk-Weighted Assets		70,853		17.40	%	N/A		N/A				24,428		6.00	%	N/A		N/A

(1) First Federal’s Bank Order, effective through January 15, 2013, required the bank to maintain a Tier 1 (core) capital ratio of at least 8% and a total risk-based capital ratio of at least 12%. After such date and through February 21, 2014, First Federal agreed with the OCC to maintain a minimum Tier 1 (core) capital ratio of at least 8% of adjusted total assets and a total risk-based capital ratio of at least 12% of risk-weighted assets. The required amounts presented reflect these ratios.

Private Placement. In connection with the merger with FNSC, on June 13, 2014 the Company sold 2,531,646 shares of Company common stock at a price per share equal to $7.90 in a private placement (the “Private Placement”) to its principal stockholder Bear State Financial Holdings, LLC (“Bear State”) and certain of Bear State’s members in their individual capacity (the “Investors”) (including Richard N. Massey, the Company’s Chairman of the Board, President and Chief Executive Officer, and Scott T. Ford, a director of the Company). Additionally, the Company issued warrants (the “Investor Warrants”) to purchase 177,215 shares of common stock on the same terms as in the Private Placement to the Investors in exchange for their respective commitments to backstop the Private Placement. The pricing of the Private Placement and Investor Warrants was equal to the closing stock price for the Company’s common stock on June 28, 2013, which was the last business day prior to the execution of the merger agreement with FNSC. This price was also used to determine the number of shares issued to FNSC stockholders in the merger.

Authorized Shares. On March 21, 2014, the stockholders of the Company approved a proposal to amend the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 30,000,000 to 100,000,000. Effective June 3, 2014, the Company filed Amended and Restated Articles of Incorporation (the “Amended Articles”) with the Secretary of State of the State of Arkansas. The Amended Articles increased the number of authorized shares from 30,000,000 to 100,000,000.

Dividend Restrictions. The Banks may not declare or pay cash dividends on its shares of common stock if the effect thereof would cause the bank’s stockholders’ equity to be reduced below applicable regulatory capital maintenance requirements for insured institutions or, in the case of First Federal, below the special liquidation account established by First Federal in connection with the consummation of its conversion from the mutual holding company structure on May 3, 1996. In addition, federal regulations, as currently applied to the Banks, impose limitations upon payment of capital distributions to the Company.

The principal source of the Company’s revenues is dividends from the Banks. Our ability to pay dividends to our stockholders depends to a large extent upon the dividends we receive from the Banks.

Repurchase Program. On February 19, 2014, the Board of Directors of the Company approved a share repurchase program permitting the Company to repurchase up to $1,000,000 of its common stock over the next 12 months.

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Note 11 - Other Borrowings (Details)	6 Months Ended
	Jun. 30, 2014
Disclosure Text Block [Abstract]
FHLB Capital Stock Requirement Total Assets	0.04%
FHLB Capital Stock Requirement Advances Outstanding	4.10%

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) (First National Security Company [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Issuance costs	$ 477
Additional Paid-in Capital [Member]
Issuance costs	$ 477

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Condensed Consolidated Statements of Financial Condition (Unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Loans receivable, allowance (in Dollars)	$ 12,392	$ 12,711
Preferred stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, none issued	0	0
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	30,000,000
Common stock, shares issued	30,026,744	20,041,497
Common stock, shares outstanding	30,026,744	20,041,497

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Note 9 - Deposits

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Deposit Liabilities Disclosures [Text Block]

9. DEPOSITS

Deposits are summarized as follows (in thousands):

	June 30, 2014		December 31, 2013
Checking accounts	$	538,312	$	127,764
Money market accounts		108,033		45,153
Savings accounts		114,096		30,150
Certificates of deposit		470,973		266,658
Total	$	1,231,414	$	469,725

The aggregate amount of time deposits in denominations of $100 thousand or more was approximately $239.9 million and $138.6 million at June 30, 2014 and December 31, 2013, respectively.

At June 30, 2014, scheduled maturities of certificates of deposit were as follows (in thousands):

	Amount
Within one year	$	255,824
One to two years		64,562
Two to three years		42,533
Three to four years		52,357
Four to five years		34,663
Over five years		21,034
Total	$	470,973

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Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 08, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	BEAR STATE FINANCIAL, INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		30,026,744
Amendment Flag	false
Entity Central Index Key	0001006424
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

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Note 10 - Short Term Borrowings

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Short-term Debt [Text Block]

10. SHORT TERM BORROWINGS

Short term borrowings are summarized as follows (in thousands):

	June 30, 2014		December 31, 2013
Repurchase agreements	$	14,295	$	--
Federal funds purchased		5,975		--
Total	$	20,270	$	--

Securities sold under repurchase agreements generally have maturities of one day and are recorded based on the amount of cash received in connection with the borrowing. Securities pledged as collateral under repurchase agreements are included in investment securities on the Condensed Consolidated Balance Sheets and are disclosed in Note 4. The fair value of the collateral pledged to a third party is continually monitored and additional collateral is pledged or returned, as deemed appropriate.

At June 30, 2014, the Company and its subsidiary banks had unused credit lines allowing contingent access to overnight borrowings of up to $117.9 million on an unsecured basis.

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Note 15 - Fair Value of Financial Instruments (Details) - Estimated Fair Values of Financial Instruments (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
FINANCIAL ASSETS:
Cash and cash equivalents	$ 60,838	$ 23,970	$ 48,263	$ 42,607
Federal funds sold	12,375
Other investment securities	8,188	457
Loans held for sale	8,943	4,205
Accrued interest receivable	4,645	1,473
Loans receivable—net	998,892	371,149
FINANCIAL LIABILITIES:
Short term borrowings	20,270
Other borrowings	47,877	5,941
Fair Value, Inputs, Level 1 [Member]
FINANCIAL ASSETS:
Cash and cash equivalents	60,838	23,970
Cash and cash equivalents	60,838	23,970
Federal funds sold	12,375
FINANCIAL LIABILITIES:
Short term borrowings	20,270
Short term borrowings	20,270
Fair Value, Inputs, Level 2 [Member]
FINANCIAL ASSETS:
Interest-bearing time deposits in banks	18,892	24,118
Interest-bearing time deposits in banks	19,229	24,573
Other investment securities	8,188	457
Other investment securities	8,188	457
Loans held for sale	8,943	4,205
Loans held for sale	8,943	4,205
Cash surrender value of life insurance	28,655	23,811
Cash surrender value of life insurance	28,655	23,811
Accrued interest receivable	4,645	1,473
FINANCIAL LIABILITIES:
Checking, money market and savings accounts	760,441	203,067
Other borrowings	47,877	5,941
Other borrowings	47,947	6,017
Accrued interest payable	219	33
Fair Value, Inputs, Level 3 [Member]
FINANCIAL ASSETS:
Loans receivable—net	998,892	371,149
Loans receivable—net	1,007,045	377,851
FINANCIAL LIABILITIES:
Certificates of deposit	470,973	266,658
Certificates of deposit	$ 471,879	$ 266,495

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
INTEREST INCOME:
Loans receivable	$ 5,852	$ 3,970	$ 9,986	$ 8,051
Investment securities:
Taxable	310	56	536	110
Nontaxable	295	293	581	606
Other	111	138	216	271
Total interest income	6,568	4,457	11,319	9,038
INTEREST EXPENSE:
Deposits	984	817	1,853	1,663
Other borrowings	66	13	88	26
Total interest expense	1,050	830	1,941	1,689
NET INTEREST INCOME	5,518	3,627	9,378	7,349
PROVISION FOR LOAN LOSSES	230		230
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	5,288	3,627	9,148	7,349
NONINTEREST INCOME:
Deposit fee income	867	802	1,492	1,572
Earnings on life insurance policies	209	200	409	398
Gain on sale of loans	652	263	956	459
Other	97	75	170	164
Total noninterest income	1,825	1,340	3,027	2,593
NONINTEREST EXPENSES:
Salaries and employee benefits	6,540	2,804	9,602	5,482
Net occupancy expense	704	608	1,288	1,226
Real estate owned, net	591	45	808	(51)
FDIC insurance	125	170	245	341
Data processing	563	397	982	733
Professional fees	235	151	430	410
Advertising and public relations	198	74	301	144
Postage and supplies	119	108	210	217
Other	944	526	1,492	1,053
Total noninterest expenses	10,019	4,883	15,358	9,555
INCOME (LOSS) BEFORE INCOME TAXES	(2,906)	84	(3,183)	387
NET INCOME (LOSS)	$ (2,906)	$ 84	$ (3,183)	$ 387
Basic earnings (loss) per common share (in Dollars per share)	$ (0.13)	$ 0.00	$ (0.15)	$ 0.02
Diluted earnings (loss) per common share (in Dollars per share)	$ (0.13)	$ 0.00	$ (0.15)	$ 0.02

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Note 4 - Investment Securities Available for Sale

6 Months Ended

Jun. 30, 2014

Investment Holdings [Abstract]

Investment Holdings [Text Block]

4. INVESTMENT SECURITIES AVAILABLE FOR SALE

Investment securities available for sale consisted of the following as of the dates indicated (in thousands):

	June 30, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. government agencies	$	122,745	$	12	$	(17	)	$	122,740
Municipal securities		48,850		385		(95	)		49,140
Mortgage-backed securities		37,278		577		(11	)		37,844
Corporate debt securities		3,849		1		(17	)		3,833
Total	$	212,722	$	975	$	(140	)	$	213,557

	December 31, 2013
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Municipal securities	$	42,203	$	199	$	(478	)	$	41,924
Mortgage-backed securities		29,092		11		(199	)		28,904
Total	$	71,295	$	210	$	(677	)	$	70,828

The following tables summarize the gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired (“OTTI”), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2014
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. government agencies	$	46,457	$	17	$	--	$	--	$	46,457	$	17
Municipal securities		4,181		34		4,897		61		9,078		95
Mortgage-backed securities		4,274		11		--		--		4,274		11
Corporate debt securities		3,240		17		--		--		3,240		17
Total	$	58,152	$	79	$	4,897	$	61	$	63,049	$	140

		December 31, 2013
		Less than 12 Months				12 Months or More				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
Municipal securities	$	17,851	$	424	$	945	$	54	$	18,796	$	478
Mortgage-backed securities		27,004		199		--		--		27,004		199
Total	$	44,855	$	623	$	945	$	54	$	45,800	$	677

On a quarterly basis, management conducts a formal review of securities for the presence of OTTI.  Management assesses whether an OTTI is present when the fair value of a security is less than its amortized cost basis at the balance sheet date.  For such securities, OTTI is considered to have occurred if the Company intends to sell the security, if it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis or if the present values of expected cash flows is not sufficient to recover the entire amortized cost.

The unrealized losses are primarily a result of increases in market yields from the time of purchase.  In general, as market yields rise, the fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired.  Additionally, the unrealized losses are also considered temporary because scheduled coupon payments have been made, it is anticipated that the entire principal balance will be collected as scheduled, and management neither intends to sell the securities and nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount.

The Company has pledged investment securities with carrying values of approximately $101.3 million at June 30, 2014 and $398,000 at December 31, 2013, as collateral for certain deposits in excess of $250,000 and for other purposes, including investment securities with carrying values of approximately $14.3 million at June 30, 2014, for securities sold under agreements to repurchase. There were no investment securities pledged by the Company for securities sold under agreements to repurchase at December 31, 2013.

The following table sets forth the amount (dollars in thousands) of investment securities available for sale that contractually mature during each of the periods indicated and the weighted average yields for each range of maturities at June 30, 2014. Weighted average yields for municipal obligations have not been adjusted to a tax-equivalent basis. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligation without prepayment penalties.

	June 30, 2014
	Amortized		Fair		Weighted
	Cost		Value		Average Rate
Within one year	$	52,921	$	52,934		0.68%
Due from one year to five years		88,669		88,746		0.79%
Due from five years to ten years		27,391		27,503		3.13%
Due after ten years		6,463		6,530		4.02%
		175,444		175,713		1.25%
Mortgage-backed securities		37,278		37,844		3.04%
Total	$	212,722	$	213,557		1.56%

As of June 30, 2014 and December 31, 2013, investments with amortized cost totaling approximately $66.8 million and $34.4 million, respectively, have call options held by the issuer, of which approximately $40.8 million and $13.0 million, respectively, are or were callable within one year.

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Note 3 - Acquisition

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

3. ACQUISITION

On June 13, 2014, the Company completed its previously-announced acquisition of First National Security Company (“FNSC”) whereby FNSC merged with and into the Company in a transaction valued at approximately $124.4 million. In connection with the merger, former FNSC stockholders received in the aggregate 6,252,400 shares of Company common stock, valued at approximately $50.4 million and $74 million in cash in exchange for 100% of the outstanding shares of FNSC common stock. The Company paid $50 million of the total cash consideration and FNSC paid $24 million of the total cash consideration to its stockholders from funds it received immediately prior to the closing of the acquisition from its subsidiary bank, First National Bank. The acquisition expanded the Company’s market into Northeast and Southwest Arkansas and further diversified the Company’s loan, customer and deposit base.

The following table provides a summary of the assets acquired and liabilities assumed as recorded by FNSC, the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, and the resultant fair values of those assets and liabilities as recorded by the Company. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. The fair value adjustments and the resultant fair values shown in the following table remain provisional due to the timing of the acquisition and will continue to be evaluated by management and may be subject to further adjustment.

	June 13, 2014
	As Recorded by FNSC			Fair Value Adjustments			As Recorded by the Company
	(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	41,015		$	--		$	41,015
Federal funds sold		43,025			--			43,025
Investment securities available for sale		138,140			--			138,140
Other investment securities, at cost		7,480			--			7,480
Loans receivable		622,758			(16,877	)		605,881
Allowance for loan losses		(13,179	)		13,179			--
Loans receivable, net		609,579			(3,698	)		605,881
Accrued interest receivable		2,954			--			2,954
Real estate owned - net		69			--			69
Office properties and equipment, net		33,074			(2,232	)		30,842
Cash surrender value of life insurance		1,935			--			1,935
Core deposit intangible		568			7,109			7,677
Deferred tax asset, net		542			(542	)		--
Prepaid expenses and other assets		2,899			--			2,899
Total assets acquired		881,280			637			881,917
Liabilities assumed:
Deposits – noninterest bearing		151,331			--			151,331
Deposits – interest bearing		611,841			366			612,207
Total deposits		763,172			366			763,538
Short term borrowings		14,295			--			14,295
Other borrowings		27,434			64			27,498
Other liabilities		1,802			--			1,802
Total liabilities assumed		806,703			430			807,133
Net assets acquired	$	74,577		$	207			74,784
Consideration paid:
Cash								50,000
Common stock								50,394
Total consideration paid								100,394
Goodwill							$	25,610

The following is a description of the fair value adjustments used to determine the fair values of assets and liabilities presented above:

Loans – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and current discount rates. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns. Adjustment reflects the elimination of the recorded allowance for loan and lease losses.

Office properties and equipment – Office properties and equipment were acquired from FNSC with a $2.2 million adjustment to market value. This represents the difference between current appraisal value completed in connection with the acquisition and FNSC’s book value at the time of acquisition.

Deferred tax asset – The deferred income tax assets and liabilities are recorded to reflect the differences in the carrying values of the acquired assets and assumed liabilities for financial reporting purposes and the cost basis for federal income tax purposes, at the Company’s statutory federal and state income tax rate of 38.29%. In addition, a valuation allowance was recorded against the net deferred tax asset based on the Company’s analysis of the future realization of the net deferred tax asset.

Core deposit intangible – This intangible asset represents the value of the relationships that FNSC had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base, and the net maintenance cost attributable to customer deposits. The Company recorded a $7.7 million core deposit intangible with a weighted average life of 12.3 years.

Deposits – The $366,000 fair value adjustment applied for time deposits is because the estimated weighted average interest rate of FNSC’s time deposits were estimated to be slightly above the current market rates.

Other borrowings – The fair value of FHLB borrowed funds is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.

Beginning June 14, 2014, the operations of FNSC are included in the Company’s consolidated results of operations and contributed $1.5 million of net interest income and $574,000 of net income for the six months ended June 30, 2014. The following unaudited pro-forma combined consolidated financial information presents how the combined financial information of the Company and FNSC might have appeared had the businesses actually been combined as of the beginning of each period presented. The following schedule represents the unaudited pro-forma combined financial information as of the six month comparative periods ended June 30, 2014 and 2013, assuming the acquisition was completed as of January 1, 2014 and 2013, respectively (in thousands, except per share data):

	Six Months Ended June 30, 2014		Six Months Ended June 30, 2013
Net interest income	$	23,577	$	25,607
Total noninterest income		5,773		6,014
Net income		69		7,373
Basic earnings per common share	$	--	$	0.26
Diluted earnings per common share	$	--	$	0.25

The unaudited pro-forma consolidated financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements and expense efficiencies, among other factors, been considered and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during this period.

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Note 15 - Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2014

Disclosure Text Block Supplement [Abstract]

Financial Instruments Disclosure [Text Block]

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The estimated fair values of financial instruments that are reported at amortized cost in the Company’s statement of financial condition, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value, are as follows (in thousands):

	June 30, 2014				December 31, 2013
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
FINANCIAL ASSETS:
Level 1 inputs:
Cash and cash equivalents	$	60,838	$	60,838	$	23,970	$	23,970
Federal funds sold		12,375		12,375		--		--
Level 2 inputs:
Interest-bearing time deposits in banks		18,892		19,229		24,118		24,573
Other investment securities		8,188		8,188		457		457
Loans held for sale		8,943		8,943		4,205		4,205
Cash surrender value of life insurance		28,655		28,655		23,811		23,811
Accrued interest receivable		4,645		4,645		1,473		1,473
Level 3 inputs:
Loans receivable—net		998,892		1,007,045		371,149		377,851
FINANCIAL LIABILITIES:
Level 1 inputs:
Short term borrowings		20,270		20,270		--		--
Level 2 inputs:
Checking, money market and savings accounts		760,441		760,441		203,067		203,067
Other borrowings		47,877		47,947		5,941		6,017
Accrued interest payable		219		219		33		33
Level 3 inputs:
Certificates of deposit		470,973		471,879		266,658		266,495

For cash and cash equivalents and federal funds sold, the carrying amount approximates fair value (level 1). For other investment securities, loans held for sale, cash surrender value of life insurance and accrued interest receivable, the carrying value is a reasonable estimate of fair value, primarily because of the short-term nature of the instruments or, as to other investment securities, the ability to sell the stock back to the issuer at cost (level 2). Interest bearing time deposits in banks were valued using discounted cash flows based on current rates for similar types of deposits (level 2). Fair values of impaired loans are estimated as described in Note 9. Non-impaired loans were valued using discounted cash flows. The discount rates used to determine the present value of these loans were based on interest rates currently being charged by the Banks on comparable loans (level 3).

For federal funds purchased and securities sold under agreements to repurchase, the carrying amount approximates fair value (level 1). The fair value of checking accounts, savings accounts and money market deposits is the amount payable on demand at the reporting date (level 2). The fair value of fixed-maturity certificates of deposit is estimated using the discount rates currently offered by the Banks for deposits of similar terms (level 3). The fair value of FHLB advances is estimated using the rates for advances of similar remaining maturities at the reporting date (level 2). For accrued interest payable the carrying value is a reasonable estimate of fair value, primarily because of the short-term nature of the instruments (level 2).

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2014 and December 31, 2013. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since the reporting date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

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Note 11 - Other Borrowings

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Long-term Debt [Text Block]

11. OTHER BORROWINGS

Other borrowings are summarized as follows (in thousands):

	June 30, 2014		December 31, 2013
Federal Home Loan Bank advances with rates ranging from 0.20% to 7.80% maturing through July 1, 2024	$	34,127	$	5,941
Line of credit with a bank, $9.75 million total credit line, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, interest payments due quarterly, maturing May 30, 2016		8,500		--
Term note payable to a bank, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, principal and interest payments due quarterly, maturing May 30, 2019		5,250		--
Total	$	47,877	$	5,941

Federal Home Loan Bank. The Banks are members of the Federal Home Loan Bank System. As a member of this system, they are required to maintain an investment in capital stock of the FHLB in an amount equal to the sum of 0.04% of total assets as of the previous December 31 and 4.10% of outstanding advances. No ready market exists for such stock and it has no quoted market value. The carrying value of the stock is its cost. The Banks currently pledge as collateral for FHLB advances certain qualifying one- to four-family mortgage loans.

Notes Payable. The line of credit and note payable to a bank are collateralized by 100% of the stock of the Banks, FCBC and HCC. The related loan agreement requires the Company and the Banks to maintain certain financial ratios. As of June 30, 2014, the Company was in compliance with the applicable material covenants imposed by the loan agreement.

At June 30, 2014, scheduled maturities of other borrowings were as follows: (in thousands):

	Weighted
	Average
	Rate		Amount
Within one year		1.07%	$	9,582
One to two years		2.19		9,506
Two to three years		1.19		6,015
Three to four years		2.44		962
Four to five years		1.98		14,502
Over five years		2.68		7,310
Total		1.86%	$	47,877

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Note 17 - Subsequent Events (Details) (USD $)		1 Months Ended
	Jun. 30, 2014	Jul. 31, 2014 Subsequent Event [Member]	Aug. 13, 2014 Subsequent Event [Member]
Note 17 - Subsequent Events (Details) [Line Items]
Loss on Contract Termination		$ 2,400,000
Line of Credit Facility, Maximum Borrowing Capacity	$ 9,750,000		$ 14,750,000

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Note 7 - Office Properties and Equipment

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

7. OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment consisted of the following as of June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Land and land improvements	$	11,074		$	5,340
Buildings and improvements		42,173			19,358
Furniture and equipment		7,957			5,770
Automobiles		823			210
Total		62,027			30,678
Accumulated depreciation		(12,332	)		(11,909	)
Office properties and equipment—net	$	49,695		$	18,769

Depreciation expense for the six months ended June 30, 2014 and 2013 was approximately $739,000 and $713,000, respectively.

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Note 7 - Office Properties and Equipment (Details) - Components of Properties and Equipment (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Components of Properties and Equipment [Abstract]
Land and land improvements	$ 11,074	$ 5,340
Buildings and improvements	42,173	19,358
Furniture and equipment	7,957	5,770
Automobiles	823	210
Total	62,027	30,678
Accumulated depreciation	(12,332)	(11,909)
Office properties and equipment—net	$ 49,695	$ 18,769

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Note 5 - Loans Receivable

6 Months Ended

Jun. 30, 2014

Receivables [Abstract]

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

5. LOANS RECEIVABLE

Loans receivable consisted of the following at June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Real estate:
One- to four-family residential	$	303,517		$	129,308
Multifamily residential		44,679			25,773
Nonfarm nonresidential		346,169			168,902
Farmland		48,710			2,663
Construction and land development		94,084			23,891
Commercial		142,058			29,033
Consumer		32,171			4,368
Total loans receivable		1,011,388			383,938
Unearned discounts and net deferred loan costs		(104	)		(78	)
Allowance for loan and lease losses		(12,392	)		(12,711	)
Loans receivable—net	$	998,892		$	371,149

Mortgage loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of such loans at June 30, 2014 and December 31, 2013 were $22.8 million and $12.9 million, respectively. Servicing loans for others generally consists of collecting payments and disbursing payments to investors. Servicing income for the three and six months ended June 30, 2014 and 2013 was not significant.

As of June 30, 2014 and December 31, 2013, qualifying loans collateralized by first lien one- to four-family mortgages with balances totaling approximately $44.5 million and $50.6 million, respectively, were held in custody by the Federal Home Loan Bank of Dallas (“FHLB”) and were pledged for outstanding advances or available for future advances. The Banks also pledged substantially all of the remaining loans at June 30, 2014 under a blanket lien with the FHLB.

As of June 30, 2014 and December 31, 2013, qualifying loans collateralized by commercial real estate with balances of $7.1 million and $8.2 million, respectively, were pledged at the FRB. No FRB borrowings were outstanding at June 30, 2014.

The Company evaluated $583.4 million of net loans ($595.1 million gross loans less $11.7 million discount) purchased in conjunction with the acquisition of FNSC in accordance with the provisions of FASB ASC Topic 310-20,  Nonrefundable Fees and Other Costs . The fair value discount is being accreted into interest income over the weighted average life of the loans using a constant yield method. The Company evaluated $21.7 million of net loans ($26.9 million gross loans less $5.2 million discount) purchased in conjunction with the acquisition of FNSC in accordance with the provisions of FASB ASC Topic 310-30,  Loans and Debt Securities Acquired with Deteriorated Credit Quality. There have been no material changes to the fair value discount since the acquisition date of June 13, 2014 given its close proximity to quarter end.

Age analyses of loans as of the dates indicated, including both accruing and nonaccrual loans, are presented below (in thousands):

June 30, 2014	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	2,159	$	2,128	$	299,230	$	303,517
Multifamily residential		--		--		44,679		44,679
Nonfarm nonresidential		172		2,025		343,972		346,169
Farmland		--		641		48,069		48,710
Construction and land development		117		601		93,366		94,084
Commercial		132		80		141,846		142,058
Consumer		194		34		31,943		32,171
Total	$	2,774	$	5,509	$	1,003,105	$	1,011,388

December 31, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	3,511	$	1,664	$	124,133	$	129,308
Multifamily residential		--		--		25,773		25,773
Nonfarm nonresidential		176		2,340		166,386		168,902
Farmland		--		666		1,997		2,663
Construction and land development		30		2,133		21,728		23,891
Commercial		--		348		28,685		29,033
Consumer		--		19		4,349		4,368
Total	$	3,717	$	7,170	$	373,051	$	383,938

As of June 30, 2014, there was $1.2 million of purchased credit impaired loans acquired in the merger with FNSC that were 90 days or more past due and accruing. There were no loans over 90 days past due and still accruing at December 31, 2013. Restructured loans totaled $2.5 million and $2.6 million as of June 30, 2014 and December 31, 2013, respectively, with $2.0 million and $2.1 million of such restructured loans on nonaccrual status at June 30, 2014 and December 31, 2013, respectively.

The following table presents age analyses of nonaccrual loans as of the dates indicated (in thousands):

June 30, 2014	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	530	$	1,767	$	1,976	$	4,273
Nonfarm nonresidential		140		1,272		1,797		3,209
Farmland		--		641		111		752
Construction and land development		9		584		29		622
Commercial		--		--		321		321
Consumer		--		7		17		24
Total	$	679	$	4,271	$	4,251	$	9,201

December 31, 2013	30-89 Days Past Due		90 Days or More Past Due		Current		Total
One- to four-family residential	$	637	$	1,664	$	1,957	$	4,258
Nonfarm nonresidential		--		2,340		1,717		4,057
Farmland		--		666		116		782
Construction and land development		--		2,133		334		2,467
Commercial		--		348		2		350
Consumer		--		19		5		24
Total	$	637	$	7,170	$	4,131	$	11,938

The following tables summarize information pertaining to impaired loans as of June 30, 2014 and December 31, 2013 and for the three and six months ended June 30, 2014 and 2013 (in thousands).  Purchased credit impaired loans acquired in the merger with FNSC are not included these tables.

	June 30, 2014						December 31, 2013
	Unpaid Principal Balance		Recorded Investment		Valuation Allowance		Unpaid Principal Balance		Recorded Investment		Valuation Allowance
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,187	$	1,036	$	179	$	1,213	$	1,085	$	279
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		2,509		2,296		660		3,287		3,105		1,119
Farmland		621		489		127		623		495		133
Construction and land development		275		168		118		1,865		1,505		631
Commercial		--		--		--		--		--		--
Consumer		16		16		16		--		--		--
		4,608		4,005		1,100		6,988		6,190		2,162
Impaired loans without avaluation allowance:
One- to four-family residential		4,521		3,726		--		4,430		3,668		--
Multifamily residential		--		--		--		--		--		--
Nonfarm nonresidential		1,690		913		--		1,077		952		--
Farmland		545		263		--		554		287		--
Construction and land development		607		539		--		1,189		962		--
Commercial		371		321		--		388		350		--
Consumer		12		8		--		27		24		--
		7,746		5,770		--		7,665		6,243		--
Total impaired loans	$	12,354	$	9,775	$	1,100	$	14,653	$	12,433	$	2,162

	Three and Six Months Ended June 30, 2014
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
	(Three Months)		(Six Months)		(Three Months)		(Six Months)
Impaired loans with a valuation allowance:
One- to four-family residential	$	1,100	$	1,095	$	2	$	5
Multifamily residential		--		--		--		--
Nonfarm nonresidential		2,498		2,700		--		--
Farmland		491		492		--		--
Construction and land development		481		822		--		--
Commercial		126		84		--		--
Consumer		14		9		--		--
		4,710		5,202		2		5
Impaired loans without a valuation allowance:
One- to four-family residential		3,495		3,553		1		1
Multifamily residential		--		--		--		--
Nonfarm nonresidential		1,095		1,047		--		--
Farmland		269		275		--		--
Construction and land development		689		780		2		3
Commercial		332		338		--		--
Consumer		12		16		--		--
		5,892		6,009		3		4
Total impaired loans	$	10,602	$	11,211	$	5	$	9
Interest based on original terms					$	275	$	345
Interest income recognized on a cash basis on impaired loans					$	--	$	--

	Three and Six Months Ended June 30, 2013
	Average Recorded Investment		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized
	(Three Months)		(Six Months)		(Three Months)		(Six Months)
Impaired loans with a valuation allowance:
One- to four-family residential	$	2,403	$	1,985	$	2	$	5
Multifamily residential		1,479		986		--		--
Nonfarm nonresidential		2,165		2,382		--		--
Farmland		505		378		--		--
Construction and land development		1,055		864		--		--
Commercial		--		--		--		--
Consumer		--		1		--		--
		7,607		6,596		2		5
Impaired loans without a valuation allowance:
One- to four-family residential		4,063		4,948		--		--
Multifamily residential		--		1,153		--		--
Nonfarm nonresidential		2,160		3,065		--		--
Farmland		319		460		--		--
Construction and land development		1,285		1,741		--		--
Commercial		24		23		--		--
Consumer		16		19		--		--
		7,867		11,409		--		--
Total impaired loans	$	15,474	$	18,005	$	2	$	5
Interest based on original terms					$	353	$	488
Interest income recognized on a cash basis on impaired loans					$	--	$	--

Credit Quality Indicators. As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, the Banks categorize loans into risk categories based on available and 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. First Federal analyzes loans individually by assigning a credit risk rating to loans on at least an annual basis for non-homogeneous loans over $250,000. FNB and Heritage assign a credit rating to loans at origination and review these ratings periodically thereafter. The Banks use the following definitions for risk ratings:

Pass. Loans rated as pass generally meet or exceed normal credit standards and are rated on a scale from 1 to 5, with 1 being the highest quality loan and 5 being a pass/watch loan. Factors influencing the level of pass grade include repayment source and strength, collateral, borrower cash flows, existence of and strength of guarantors, industry/business sector, financial trends, performance history, etc.

Special Mention. Loans rated as special mention, while still adequately protected by the borrower’s repayment capability, exhibit distinct weakening trends. If left unchecked or uncorrected, these potential weaknesses may result in deteriorated prospects of repayment. These exposures require management’s close attention so as to avoid becoming adversely classified credits.

Substandard. Loans rated as substandard are inadequately protected by the current sound net worth and paying capacity of the borrower or the collateral pledged, if any. These assets must have a well-defined weakness based on objective evidence and be characterized by the distinct possibility that the Banks will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans rated as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss. Loans rated as a loss are considered uncollectible and of such little value that continuance as an asset is not warranted. A loss classification does not mean that an asset has no recovery or salvage value, but that it is not practical or desirable to defer writing off or reserving all or a portion of the asset, even though partial recovery may be effected in the future.

Based on analyses performed at June 30, 2014 and December 31, 2013, the risk categories of loans are as follows (in thousands):

	June 30, 2014
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	210,651	$	448	$	10,582	$	81,836	$	303,517
Multifamily residential		44,679		--		--		--		44,679
Nonfarm nonresidential		333,991		4,436		7,278		464		346,169
Farmland		47,457		--		1,253		--		48,710
Construction and land development		88,301		110		2,543		3,130		94,084
Commercial		140,752		--		971		335		142,058
Consumer		26,457		6		220		5,488		32,171
Total	$	892,288	$	5,000	$	22,847	$	91,253	$	1,011,388

	December 31, 2013
	Pass		Special Mention		Substandard		Not Rated		Total
One- to four-family residential	$	34,333	$	329	$	6,371	$	88,275	$	129,308
Multifamily residential		25,773		--		--		--		25,773
Nonfarm nonresidential		159,629		4,490		4,057		726		168,902
Farmland		1,491		--		1,172		--		2,663
Construction and land development		18,241		295		2,770		2,585		23,891
Commercial		28,555		--		350		128		29,033
Consumer		151		--		45		4,172		4,368
Total	$	268,173	$	5,114	$	14,765	$	95,886	$	383,938

As of June 30, 2014 and December 31, 2013, the Banks did not have any loans classified as doubtful or loss.

Troubled Debt Restructurings. Troubled debt restructurings (“TDRs”) are loans where the contractual terms on the loan have been modified and both of the following conditions exist: (i) the borrower is experiencing financial difficulty and (ii) the restructuring constitutes a concession that the Bank would not otherwise make. The Banks assess all loan modifications to determine if the modifications constitute a TDR. Restructurings resulting in an insignificant delay in payment are not considered to be TDRs. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length and the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. All TDRs are considered impaired loans. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

The following table summarizes TDRs as of June 30, 2014 and December 31, 2013: (dollars in thousands)

June 30, 2014	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		4	$	489		9	$	740		13	$	1,229
Nonfarm nonresidential		--		--		3		532		3		532
Farmland		--		--		1		263		1		263
Construction and land development		1		85		3		410		4		495
Consumer		--		--		2		16		2		16
Total		5	$	574		18	$	1,961		23	$	2,535

December 31, 2013	Number of Accruing TDR Loans		Balance		Number of Nonaccrual TDR Loans		Balance		Total Number of TDR Loans		Total Balance
One- to four-family residential		4	$	495		8	$	658		12	$	1,153
Nonfarm nonresidential		--		--		3		556		3		556
Farmland		--		--		1		287		1		287
Construction and land development		--		--		4		569		4		569
Consumer		--		--		1		5		1		5
Total		4	$	495		17	$	2,075		21	$	2,570

Loans receivable that were restructured as TDRs during the three and six months ended June 30, 2014 and six months ended June, 30 2013 were as follows. There were no loans restructured as TDRs during the three months ended June 30, 2013: (dollars in thousands)

	Three Months Ended June 30, 2014
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2014		Payment Term (1)		Other (2)
Construction and land development		1	$	85	$	85	$	--	$	85
Total		1	$	85	$	85	$	--	$	85

	Six Months Ended June 30, 2014
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2014		Payment Term (1)		Other (2)
One- to four-family residential		1	$	103	$	98	$	103	$	--
Construction and land development		1		85		85		--		85
Consumer		1		11		11		11		--
Total		3	$	199	$	194	$	114	$	85

	Six Months Ended June 30, 2013
							Nature of Modification
	Number of Loans		Balance Prior to TDR		Balance at June 30, 2013		Payment Term (1)		Other
One- to four-family residential		1	$	6	$	6	$	6	$	--
Total		1	$	6	$	6	$	6	$	--

(1)	Concessions represent skipped payments/maturity date extensions or amortization term extensions.
(2)	The borrower did not have the financial ability to refinance at another bank at renewal.

There were no loans receivable for which a payment default occurred during the three and six months ended June 30, 2014 or 2013 that had been modified as a TDR within 12 months or less of the payment default.

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Note 6 - Allowances for Loan and Lease Losses and Real Estate Losses

6 Months Ended

Jun. 30, 2014

Disclosure Text Block Supplement [Abstract]

Allowance for Credit Losses [Text Block]

6. ALLOWANCES FOR LOAN AND LEASE LOSSES AND REAL ESTATE LOSSES

The tables below provide a rollforward of the allowance for loan and lease losses (“ALLL”) by portfolio segment for the three and six months ended June 30, 2014 and 2013 (in thousands):

			Three Months Ended June 30, 2014
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	4,407	$	847	$	4,134		$	152	$	1,059		$	1,799		$	80		$	12,478
Provision charged to expense		72		183		(230	)		130		98			(52	)		29			230
Losses charged off		--		--		(2	)		--		(292	)		(27	)		(40	)		(361	)
Recoveries		11		--		8			--		3			1			22			45
Balance, end of period	$	4,490	$	1,030	$	3,910		$	282	$	868		$	1,721		$	91		$	12,392

				Six Months Ended June 30, 2014
	One- to Four-Family Residential			Multifamily Residential		Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	4,549		$	1,001	$	4,271		$	158	$	1,383		$	1,268		$	81		$	12,711
Provision charged to expense		(72	)		29		(256	)		124		(115	)		478			42			230
Losses charged off		(8	)		--		(115	)		--		(444	)		(27	)		(68	)		(662	)
Recoveries		21			--		10			--		44			2			36			113
Balance, end of period	$	4,490		$	1,030	$	3,910		$	282	$	868		$	1,721		$	91		$	12,392

				Three Months Ended June 30, 2013
	One- to Four-Family Residential			Multifamily Residential			Nonfarm Nonresidential			Farmland			Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	6,778		$	1,074		$	5,341		$	283		$	907		$	1,000		$	214		$	15,597
Provision charged to expense		22			382			(532	)		(10	)		124			(13	)		27			--
Losses charged off		(662	)		(876	)		(874	)		--			(115	)		(380	)		(49	)		(2,956	)
Recoveries		13			--			500			--			24			55			16			608
Balance, end of period	$	6,151		$	580		$	4,435		$	273		$	940		$	662		$	208		$	13,249

				Six Months Ended June 30, 2013
	One- to Four-Family Residential			Multifamily Residential			Nonfarm Nonresidential			Farmland		Construction and Land Development			Commercial			Consumer			Total
Balance, beginning of period	$	5,099		$	1,319		$	6,949		$	251	$	879		$	956		$	223		$	15,676
Provision charged to expense		1,746			137			(2,006	)		22		69			12			20			--
Losses charged off		(747	)		(876	)		(1,008	)		--		(115	)		(380	)		(76	)		(3,202	)
Recoveries		53			--			500			--		107			74			41			775
Balance, end of period	$	6,151		$	580		$	4,435		$	273	$	940		$	662		$	208		$	13,249

The tables below present the allocation of the ALLL and the related loans receivable balances disaggregated on the basis of impairment method by portfolio segment as of June 30, 2014 and December 31, 2013 (in thousands):

			June 30, 2014
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential		Farmland		Construction and Land Development		Commercial		Consumer		Total
ALLL Balances:
Individually evaluated for impairment	$	179	$	--	$	660	$	127	$	118	$	--	$	16	$	1,100
Collectively evaluated for impairment		4,311		1,030		3,250		155		750		1,721		75		11,292
Ending balance	$	4,490	$	1,030	$	3,910	$	282	$	868	$	1,721	$	91	$	12,392
Loan balances:
Individually evaluated for impairment	$	4,762	$	--	$	3,209	$	752	$	707	$	321	$	24	$	9,775
Collectively evaluated for impairment		298,755		44,679		342,960		47,958		93,377		141,737		32,147		1,001,613
Ending balance	$	303,517	$	44,679	$	346,169	$	48,710	$	94,084	$	142,058	$	32,171	$	1,011,388

			December 31, 2013
	One- to Four-Family Residential		Multifamily Residential		Nonfarm Nonresidential		Farmland		Construction and Land Development		Commercial		Consumer		Total
ALLL Balances:
Individually evaluated for impairment	$	279	$	--	$	1,119	$	133	$	631	$	--	$	--	$	2,162
Collectively evaluated for impairment		4,270		1,001		3,152		25		752		1,268		81		10,549
Ending balance	$	4,549	$	1,001	$	4,271	$	158	$	1,383	$	1,268	$	81	$	12,711
Loan balances:
Individually evaluated for impairment	$	4,753	$	--	$	4,057	$	782	$	2,467	$	350	$	24	$	12,433
Collectively evaluated for impairment		124,555		25,773		164,845		1,881		21,424		28,683		4,344		371,505
Ending balance	$	129,308	$	25,773	$	168,902	$	2,663	$	23,891	$	29,033	$	4,368	$	383,938

A summary of the activity in the allowance for losses on real estate owned is as follows for the three and six months ended June 30, 2014 and 2013 (in thousands):

	Three Months Ended							Six Months Ended
	June 30, 2014			June 30, 2013				June 30, 2014		June 30, 2013
Balance—beginning of period	$	8,143		$	9,396		$	8,794		$	14,877
Provisions for estimated losses		618			33			860			219
Recoveries		--			--			--			--
Losses charged off		(280	)		(23	)		(1,173	)		(5,690	)
Balance—end of period	$	8,481		$	9,406		$	8,481		$	9,406

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Note 8 - Goodwill and Core Deposit Intangible

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

8. GOODWILL AND CORE DEPOSIT INTANGIBLE - NET

Goodwill represents the excess of the cost over the fair value of net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment at least annually and updated quarterly if necessary. At June 30, 2014, goodwill consisted of $25.6 million related to the FNSC acquisition. This goodwill is not deductible for tax purposes. The Company’s core deposit intangible is related to the core deposit premiums of FNB and Heritage. These core deposit intangibles are amortized on a straight line basis over their estimated lives ranging from 12 to 13 years.

Changes in the carrying amount and accumulated amortization of the Company’s core deposit intangible at June 30, 2014 were as follows (in thousands):

	June 30, 2014
Balance—beginning of period	$	--
FNSC merger		7,677
Amortization expense		(26	)
Balance—end of period	$	7,651

The Company’s projected amortization expense for the remainder of 2014 is approximately $313,000, $625,000 in each of the years ending December 31, 2015 through 2018, and $4.8 million thereafter.

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Note 9 - Deposits (Details) - Deposits (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Deposits [Abstract]
Checking accounts	$ 538,312	$ 127,764
Money market accounts	108,033	45,153
Savings accounts	114,096	30,150
Certificates of deposit	470,973	266,658
Total	$ 1,231,414	$ 469,725

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Note 10 - Short Term Borrowings (Details) (Overnight Borrowings [Member], USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Overnight Borrowings [Member]
Note 10 - Short Term Borrowings (Details) [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity	$ 117.9

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Note 9 - Deposits (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Disclosure Text Block [Abstract]
Time Deposits, $100,000 or More	$ 239.9	$ 138.6

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Note 10 - Short Term Borrowings (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure Text Block [Abstract]

Schedule of Short-term Debt [Table Text Block]

	June 30, 2014		December 31, 2013
Repurchase agreements	$	14,295	$	--
Federal funds purchased		5,975		--
Total	$	20,270	$	--

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Note 5 - Loans Receivable (Details) - Past Due and Nonaccrual Loans (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable	$ 1,011,388	$ 383,938
One-to-Four-Family Residential [Member] | Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	2,159	3,511
Loans receivable, 90 days or more past due	2,128	1,664
Loans receivable, current	299,230	124,133
Loans receivable	303,517	129,308
One-to-Four-Family Residential [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	530	637
Loans receivable, 90 days or more past due	1,767	1,664
Loans receivable, current	1,976	1,957
Loans receivable	4,273	4,258
Multifamily Residential [Member] | Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, current	44,679	25,773
Loans receivable	44,679	25,773
Nonfarm Nonresidential [Member] | Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	172	176
Loans receivable, 90 days or more past due	2,025	2,340
Loans receivable, current	343,972	166,386
Loans receivable	346,169	168,902
Nonfarm Nonresidential [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	140
Loans receivable, 90 days or more past due	1,272	2,340
Loans receivable, current	1,797	1,717
Loans receivable	3,209	4,057
Farmland [Member] | Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 90 days or more past due	641	666
Loans receivable, current	48,069	1,997
Loans receivable	48,710	2,663
Farmland [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 90 days or more past due	641	666
Loans receivable, current	111	116
Loans receivable	752	782
Construction and Land Development [Member] | Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	117	30
Loans receivable, 90 days or more past due	601	2,133
Loans receivable, current	93,366	21,728
Loans receivable	94,084	23,891
Construction and Land Development [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	9
Loans receivable, 90 days or more past due	584	2,133
Loans receivable, current	29	334
Loans receivable	622	2,467
Commercial Loans [Member] | Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	132
Loans receivable, 90 days or more past due	80	348
Loans receivable, current	141,846	28,685
Loans receivable	142,058	29,033
Commercial Loans [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 90 days or more past due		348
Loans receivable, current	321	2
Loans receivable	321	350
Consumer Loans [Member] | Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	194
Loans receivable, 90 days or more past due	34	19
Loans receivable, current	31,943	4,349
Loans receivable	32,171	4,368
Consumer Loans [Member] | Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 90 days or more past due	7	19
Loans receivable, current	17	5
Loans receivable	24	24
Gross of Undisbursed Funds, Unearned Discounts and Net Loan Fees, and Allowance for Loan and Lease Losses [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	2,774	3,717
Loans receivable, 90 days or more past due	5,509	7,170
Loans receivable, current	1,003,105	373,051
Loans receivable	1,011,388	383,938
Nonaccrual [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, 30-89 days past due	679	637
Loans receivable, 90 days or more past due	4,271	7,170
Loans receivable, current	4,251	4,131
Loans receivable	$ 9,201	$ 11,938

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Note 13 - Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

13. EARNINGS PER SHARE

Basic earnings per share is computed by dividing reported earnings available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing reported earnings available to common stockholders by the weighted average number of common shares outstanding after consideration of the dilutive effect, if any, of the Company’s outstanding common stock options and warrants using the treasury stock method.

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Basic weighted average shares outstanding		22,020,238		19,897,603		21,036,359		19,660,918
Effect of dilutive securities		--		982,326		--		1,150,754
Diluted weighted average shares outstanding		22,020,238		20,879,929		21,036,359		20,811,672

The calculation of diluted earnings per share for the three months ended June 30, 2014 excluded the following antidilutive securities: warrants representing 177,215 shares, stock options representing 216,000 shares and restrictive stock units representing 188,716 shares. The calculation of diluted earnings per share for the three and six months ended June 30, 2013 excluded antidilutive stock options representing approximately 8,000 shares.

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Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary holding companies and banks. The consolidated financial statements also include the accounts of First Federal’s wholly owned subsidiary, First Harrison Service Corporation (“FHSC”), which is inactive. Intercompany transactions have been eliminated in consolidation.

Basis of Accounting, Policy [Policy Text Block]

Basisof Presentation—The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, such information reflects all adjustments which are, in the opinion of management, necessary for a fair statement of results for the interim periods. Those adjusting entries consist only of normal recurring adjustments.

Certain reclassifications of prior period amounts have been made to conform with the current period presentation. These reclassifications had no impact on previously reported net income.

The Company is substantially in the business of community banking and therefore is considered a banking operation with no separately reportable segments.

The results of operations for the three and six months ended June 30, 2014, are not necessarily indicative of the results to be expected for the year ending December 31, 2014. The unaudited condensed consolidated financial statements of the Company and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2013, contained in the Company’s 2013 Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated balance sheet of the Company has been derived from the audited consolidated balance sheet of the Company as of that date.

Acquired Loans [Policy Text Block]

Acquired Loans— Acquired loans and leases are recorded at fair value at the date of acquisition. No allowance for loan and lease losses is recorded on the acquisition date as the fair value of the acquired assets incorporates assumptions regarding credit risk. The fair value adjustment on acquired loans without evidence of credit deterioration since origination will be accreted into earnings as a yield adjustment using the effective yield method over the remaining life of the loan.

Acquired loans and leases with evidence of credit deterioration since origination such that it is probable at acquisition that the bank will be unable to collect all contractually required payments are accounted for under the guidance in ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the difference between contractually required payments and the cash flows expected to be collected is the nonaccretable difference, which is included as a reduction of the carrying amount of acquired loans and leases. If the timing and amount of the future cash flows is reasonably estimable, any excess of cash flows expected at acquisition over the estimated fair value is the accretable yield and is recognized in interest income over the asset's remaining life using a level yield method.

Acquired loan amounts deemed uncollectible at acquisition date become part of the fair value calculation and are excluded from the ALLL. Following acquisition, a regular review will be completed on acquired loans to determine if changes in estimated cash flows have occurred. Subsequent decreases in the amount expected to be collected may result in a provision for loan and lease losses with a corresponding increase in the ALLL. Subsequent increases in the amount expected to be collected result in a reversal of any previously recorded provision for loan and lease losses and related ALLL, if any, or prospective adjustment to the accretable yield if no provision for loan and lease losses had been recorded.

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Note 5 - Loans Receivable (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Note 5 - Loans Receivable (Details) [Line Items]
Financing Receivable, Gross	$ 1,011,388,000		$ 1,011,388,000		$ 383,938,000
Long-term Line of Credit	8,500,000		8,500,000
Business Combination, Acquired Receivables, Fair Value	583,400,000		583,400,000
Business Combination, Acquired Receivables, Gross Contractual Amount	595,100,000		595,100,000
Business Combination, Acquired Receivables, Discount	11,700,000		11,700,000
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net	21,700,000		21,700,000
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Outstanding Balance	26,900,000		26,900,000
Certain Loans Acquired in Transfer not Accounted for as Debt Securities Discount	5,200,000		5,200,000
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing					0
Financing Receivable, Modifications, Recorded Investment	2,500,000		2,500,000		2,600,000
Minimum Loan Amount for Loans Analyzed by Credit Risk	250,000		250,000
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0	0	0
Nonaccrual Troubled Debt Restructurings [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Financing Receivable, Modifications, Recorded Investment	1,961,000		1,961,000		2,075,000
Federal Reserve Bank Advances [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Long-term Line of Credit	0		0
One-to-Four-Family Residential [Member] | Federal Home Loan Bank of Dallas [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Loans Pledged as Collateral	44,500,000		44,500,000		50,600,000
Commercial Real Estate Loans [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Loans Pledged as Collateral	7,100,000		7,100,000		8,200,000
Serviced for Others [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Financing Receivable, Gross	22,800,000		22,800,000		12,900,000
Purchased Credit Impaired [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	1,200,000		1,200,000
Unlikely to be Collected Financing Receivable [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Financing Receivable, Gross	0		0		0
Doubtful [Member]
Note 5 - Loans Receivable (Details) [Line Items]
Financing Receivable, Gross	$ 0		$ 0		$ 0

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Note 1 - Summary of Significant Accounting Policies (Details)	6 Months Ended
	Jun. 30, 2014
First Federal Bank [Member] | ARKANSAS
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Full-Service Branch Offices	10
Number of Limited Service Offices	1
First National Bank [Member] | ARKANSAS
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Full-Service Branch Offices	18
Number of Limited Service Offices	3
First National Bank [Member] | OKLAHOMA
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Full-Service Branch Offices	2
Heritage Bank [Member] | Jonesboro, Arkansas [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Full-Service Branch Offices	5
Heritage Bank [Member] | Northeast Arkansas [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Full-Service Branch Offices	4

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net income (loss)	$ (2,906)	$ 84	$ (3,183)	$ 387
Other comprehensive income (loss):
Unrealized holding (losses) gains arising during the period	710	(857)	1,299	(932)
Other comprehensive income (loss), before tax effect	710	(857)	1,299	(932)
Other comprehensive income (loss)	710	(857)	1,299	(932)
COMPREHENSIVE INCOME (LOSS)	$ (2,196)	$ (773)	$ (1,884)	$ (545)

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Note 2 - Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

2. RECENT ACCOUNTING PRONOUNCEMENTS

In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (Topic 740): Income Taxes, which states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. For example, an entity should not evaluate whether the deferred tax asset expires before the statute of limitations on the tax position or whether the deferred tax asset may be used prior to the unrecognized tax benefit being settled. The amendments in this Update do not require new recurring disclosures. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this ASU did not have a material impact on the Company’s financial statements.

In January 2014, the FASB issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (Topic 310-40): Receivables – Troubled Debt Restructurings by Creditors, which clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this Update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in this Update using either a modified retrospective transition method or a prospective transition method. Early adoption is permitted. The Company is in the process of evaluating the impact of this Update on its financial statements.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods. The Company will be required to adopt this ASU beginning with the quarter ending March 31, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial statements.

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Note 6 - Allowances for Loan and Lease Losses and Real Estate Losses (Details) - Allowance for Losses on Real Estate Owned (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Allowance for Losses on Real Estate Owned [Abstract]
Balance	$ 8,143,000	$ 9,396,000	$ 8,794,000	$ 14,877,000
Provisions for estimated losses	618,000	33,000	860,000	219,000
Losses charged off	(280,000)	(23,000)	(1,173,000)	(5,690,000)
Balance	$ 8,481,000	$ 9,406,000	$ 8,481,000	$ 9,406,000

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Note 16 - Regulatory Matters (Details) - The Bank’s Actual and Required Capital Amounts (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Jun. 30, 2014 To be Categorized as Adequately Capitalized Under Prompt Corrective Action Provisions [Member] First Federal Bank [Member]		Jun. 30, 2014 To be Categorized as Adequately Capitalized Under Prompt Corrective Action Provisions [Member] Consolidated Entities [Member]	Jun. 30, 2014 To be Categorized as Adequately Capitalized Under Prompt Corrective Action Provisions [Member] First National Bank [Member]	Jun. 30, 2014 To be Categorized as Adequately Capitalized Under Prompt Corrective Action Provisions [Member] Heritage Bank [Member]	Dec. 31, 2013 To be Categorized as Adequately Capitalized Under Prompt Corrective Action Provisions [Member]	Jun. 30, 2014 First Federal Bank [Member]		Jun. 30, 2014 Consolidated Entities [Member]	Jun. 30, 2014 First National Bank [Member]	Jun. 30, 2014 Heritage Bank [Member]
Tangible Capital to Tangible Assets
First Federal	$ 70,853							$ 46,658
First Federal	12.90%							8.42%
First Federal	8,240							8,312
First Federal	1.50%							1.50%
Tier 1 Capital to Average Assets
Tier 1 capital to adjusted tangible assets, actual amount	70,853	27,707	[1]		29,483	13,811	27,465	46,658	[1]	108,901	50,166	23,951
Tier 1 capital to adjusted tangible assets, actual ratio	12.90%	5.00%	[1]		5.00%	5.00%	5.00%	8.42%	[1]	7.54%	8.51%	8.67%
Tier 1 capital to adjusted tangible assets, for capital adequacy purposes, amount	21,972							22,165	[1]	57,776	17,690	8,286
Tier 1 capital to adjusted tangible assets, for capital adequacy purposes, ratio	4.00%							4.00%	[1]	4.00%	3.00%	3.00%
Total Capital to Risk-Weighted Assets
Total capital to risk-weighted assets, actual amount	76,036	43,269			41,282	21,040	40,713	52,150		114,618	50,291	24,051
Total capital to risk-weighted assets, actual ratio	18.68%	10.00%			10.00%	10.00%	10.00%	12.05%		10.85%	12.18%	11.43%
Total capital to risk-weighted assets, for capital adequacy purposes, amount	32,570							34,615		84,472	33,025	16,832
Total capital to risk-weighted assets, for capital adequacy purposes, ratio	8.00%							8.00%		8.00%	8.00%	8.00%
Tier I Capital to Risk-Weighted Assets
Tier i capital to risk-weighted assets, actual amount	70,853	25,961			24,769	12,624	24,428	46,658		108,901	50,166	23,951
Tier i capital to risk-weighted assets, actual ratio	17.40%	6.00%			6.00%	6.00%	6.00%	10.78%		10.31%	12.15%	11.38%
Tier i capital to risk-weighted assets, for capital adequacy purposes, amount										$ 42,236	$ 16,513	$ 8,416
Tier i capital to risk-weighted assets, for capital adequacy purposes, ratio										4.00%	4.00%	4.00%

[1] In the case of First Federal, the ratio is calculated based on adjusted assets at period end.

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Note 11 - Other Borrowings (Details) - Other Borrowings (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Note 11 - Other Borrowings (Details) - Other Borrowings [Line Items]
Federal Home Loan Bank advances with rates ranging from 0.20% to 7.80% maturing through July 1, 2024	$ 34,127	$ 5,941
Line of credit with a bank, $9.75 million total credit line, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, interest payments due quarterly, maturing May 30, 2016	8,500
Term note payable to a bank, floating rate of 1.95% above the three-month LIBOR rate, reset quarterly, principal and interest payments due quarterly, maturing May 30, 2019	5,250
Total	$ 47,877	$ 5,941

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Note 3 - Acquisition (Tables)

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	June 13, 2014
	As Recorded by FNSC			Fair Value Adjustments			As Recorded by the Company
	(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	41,015		$	--		$	41,015
Federal funds sold		43,025			--			43,025
Investment securities available for sale		138,140			--			138,140
Other investment securities, at cost		7,480			--			7,480
Loans receivable		622,758			(16,877	)		605,881
Allowance for loan losses		(13,179	)		13,179			--
Loans receivable, net		609,579			(3,698	)		605,881
Accrued interest receivable		2,954			--			2,954
Real estate owned - net		69			--			69
Office properties and equipment, net		33,074			(2,232	)		30,842
Cash surrender value of life insurance		1,935			--			1,935
Core deposit intangible		568			7,109			7,677
Deferred tax asset, net		542			(542	)		--
Prepaid expenses and other assets		2,899			--			2,899
Total assets acquired		881,280			637			881,917
Liabilities assumed:
Deposits – noninterest bearing		151,331			--			151,331
Deposits – interest bearing		611,841			366			612,207
Total deposits		763,172			366			763,538
Short term borrowings		14,295			--			14,295
Other borrowings		27,434			64			27,498
Other liabilities		1,802			--			1,802
Total liabilities assumed		806,703			430			807,133
Net assets acquired	$	74,577		$	207			74,784
Consideration paid:
Cash								50,000
Common stock								50,394
Total consideration paid								100,394
Goodwill							$	25,610

Business Acquisition, Pro Forma Information [Table Text Block]

	Six Months Ended June 30, 2014		Six Months Ended June 30, 2013
Net interest income	$	23,577	$	25,607
Total noninterest income		5,773		6,014
Net income		69		7,373
Basic earnings per common share	$	--	$	0.26
Diluted earnings per common share	$	--	$	0.25

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Note 12 - Stock Based Compensation (Details) - Restricted Stock Unit Activity (Restricted Stock Units (RSUs) [Member], 2011 Omnibus Incentive Plan [Member], USD $)	6 Months Ended
	Jun. 30, 2014
Restricted Stock Units (RSUs) [Member] | 2011 Omnibus Incentive Plan [Member]
Note 12 - Stock Based Compensation (Details) - Restricted Stock Unit Activity [Line Items]
Outstanding— Restricted Stock Units	65,500
Outstanding— Weighted Average Grant Date Fair Value	$ 8.97
Granted	129,600
Granted	$ 8.21
Vested	(5,817)
Vested	$ 9.75
Forfeited	(567)
Forfeited	$ 8.92
Outstanding— Restricted Stock Units	188,716
Outstanding— Weighted Average Grant Date Fair Value	$ 8.42

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Note 14 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

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

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2014
Available for sale investment securities:
U.S. Government agencies	$	122,740	$	--	$	122,740	$	--
Municipal securities		49,140		--		49,140		--
Mortgage-backed securities		37,844		--		37,844		--
Corporate debt securities		3,833		--		3,833		--
Total	$	213,557	$	--	$	213,557	$	--
December 31, 2013
Available for sale investment securities:
Municipal securities	$	41,924	$	--	$	41,924	$	--
Mortgage-backed securities		28,904		--		28,904		--
Total	$	70,828	$	--	$	70,828	$	--

Fair Value Measurements, Nonrecurring [Table Text Block]

	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2014
Impaired loans	$	5,953	$	--	$	--	$	5,953
REO, net		3,414		--		--		3,414
June 30, 2013
Impaired loans	$	15,956	$	--	$	--	$	15,956
REO, net		3,155		--		--		3,155

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Note 12 - Stock Based Compensation

6 Months Ended

Jun. 30, 2014

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

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

12.     STOCK BASED COMPENSATION

2011 Omnibus Incentive Plan— The 2011 Omnibus Incentive Plan (the “2011 Plan”), became effective May 3, 2011, after approval by the Company’s stockholders on April 29, 2011. The objectives of the 2011 Plan are to optimize the profitability and growth of the Company through incentives that are consistent with the Company’s goals and that link the personal interests of participants to those of the Company’s stockholders. The 2011 Plan provides for a committee of the Company’s Board of Directors to award nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, and other awards representing up to 1,930,269 shares of Company stock. Awards may be granted under the 2011 Plan up to ten years following the effective date of the plan. Each award under the 2011 Plan is governed by the terms of the individual award agreement, which shall specify pricing, term, vesting, and other pertinent provisions. Shares issued in connection with stock compensation awards are issued from available authorized shares.

Stock Options. Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant, generally vest based on five years of continuous service and have seven year contractual terms. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. Expected volatilities are based on implied volatilities from historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise, employee termination, and expected term of the options within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

A summary of the stock option activity in the Company’s 2011 Plan for the six months ended June 30, 2014, is presented below:

	Shares Underlying Awards			Weighted Average Exercise Price
Outstanding—January 1, 2014		217,500		$	6.66
Granted		--		$	--
Forfeited		(1,500	)	$	6.57
Outstanding—June 30, 2014		216,000		$	6.66

The weighted average remaining contractual life of the outstanding options was 4.4 years and the aggregate intrinsic value of the options was approximately $484,000 at June 30, 2014. None of the outstanding options are vested.

As of June 30, 2014, there was $382,000 of total unrecognized compensation costs related to nonvested stock options under the 2011 Plan. The cost is expected to be recognized over a weighted-average period of 2.6 years. Compensation expense attributable to option awards totaled approximately $36,000 for both three month periods ended June 30, 2014 and 2013, respectively, and approximately $71,000 and $73,000 for the six months ended June 30, 2014 and 2013, respectively.   

Restricted Stock Units. The fair value of each restricted stock unit (“RSU”) award is determined based on the closing market price of the Company’s stock on the grant date and amortized to compensation expense on a straight-line basis over the vesting period. The vesting periods range from three to seven years.

	Restricted Stock Units			Weighted Average Grant Date Fair Value
Outstanding—January 1, 2014		65,500		$	8.97
Granted		129,600		$	8.21
Vested		(5,817	)	$	9.75
Forfeited		(567	)	$	8.92
Outstanding—June 30, 2014		188,716		$	8.42

As of June 30, 2014, there was $1.4 million of total unrecognized compensation costs related to nonvested RSUs under the 2011 Plan. The cost is expected to be recognized over a weighted-average period of 4.3 years. Compensation expense attributable to awards of RSUs totaled approximately $66,000 and $16,000 for the three months ended June 30, 2014 and 2013, respectively, and approximately $125,000 and $23,000 for the six months ended June 30, 2014 and 2013, respectively.