10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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, 2016 

Commission file number 333-86453

UNITED BANCSHARES, INC.

(Exact name of Registrant as specified in its charter)

Ohio

(State or other jurisdiction of incorporation or organization)

100 S. High Street, Columbus Grove, Ohio

(Address of principal executive offices)

34-1516518

(I.R.S. Employer Identification Number)

45830

(Zip Code)

(419) 659-2141

(Registrant’s telephone number, including area code)

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

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

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

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

Yes ¨No x 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of June 30, 2016: 3,296,745

This document contains 42 pages. The Exhibit Index is on page 37 immediately preceding the filed exhibits.

UNITED BANCSHARES, INC.

Table of Contents

	Page
Part I – Financial Information
Item 1 – Financial Statements		3
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3 – Quantitative and Qualitative Disclosures about Market Risk		32
Item 4 – Controls and Procedures		33
Part II – Other Information
Item 1 – Legal Proceedings		34
Item 1A – Risk Factors		34
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		34
Item 3 – Defaults Upon Senior Securities		34
Item 4 – Mine Safety Disclosures		35
Item 5 – Other Information		35
Item 6 – Exhibits		35

2

PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

United Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets (Unaudited) 

	(in thousands except share data)
	June 30,			December 31,
	2016			2015
ASSETS
CASH AND CASH EQUIVALENTS
Cash and due from banks	$	8,605		$	11,482
Interest-bearing deposits in other banks		14,335			11,440
Total cash and cash equivalents		22,940			22,922
SECURITIES, available-for-sale		184,873			182,929
RESTRICTED BANK STOCK, at cost		4,830			4,830
CERTIFICATES OF DEPOSIT, at cost		1,992			1,992
LOANS HELD FOR SALE		814			347
LOANS & LEASES		359,773			354,250
Less allowance for loan and lease losses		3,368			3,834
Net loans & leases		356,405			350,416
PREMISES AND EQUIPMENT, net		11,605			12,049
GOODWILL		10,072			10,072
CORE DEPOSIT INTANGIBLE ASSETS, net		835			903
CASH SURRENDER VALUE OF LIFE INSURANCE		17,030			16,834
OTHER REAL ESTATE OWNED		644			173
OTHER ASSETS, including accrued interest receivable		6,013			5,198
TOTAL ASSETS	$	618,053		$	608,665
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits:
Non-interest bearing	$	89,088		$	93,476
Interest-bearing		422,873			424,943
Total deposits		511,961			518,419
Other borrowings		12,079			2,118
Junior subordinated deferrable interest debentures		12,789			12,773
Other liabilities		5,892			3,794
Total liabilities		542,721			537,104
SHAREHOLDERS’ EQUITY
Common stock, stated value $1.00, authorized 10,000,000 shares;
issued 3,760,557 shares		3,761			3,761
Surplus		14,671			14,669
Retained earnings		60,559			58,642
Accumulated other comprehensive income		3,460			1,397
Treasury stock, at cost, 463,812 shares at June 30, 2016
and 451,218 shares at December 31, 2015		(7,119	)		(6,908	)
Total shareholders’ equity		75,332			71,561
TOTAL LIABILITIES AND SHAREHOLDERS'  EQUITY	$	618,053		$	608,665

The accompanying notes are an integral part of the consolidated financial statements.

3

United Bancshares, Inc. and Subsidiary

Condensed Consolidated Statements of Income (Unaudited) 

	(in thousands except share data)
	Three months ended June 30,					Six months ended June 30,
	2016			2015		2016			2015
INTEREST INCOME
Loans & leases, including fees	$	4,283		$	4,494	$	8,482		$	9,045
Securities:
Taxable		534			695		1,071			1,390
Tax-exempt		404			403		834			792
Other		82			78		161			154
Total interest income		5,303			5,670		10,548			11,381
INTEREST EXPENSE
Deposits		426			394		812			838
Borrowings		131			133		259			244
Total interest expense		557			527		1,071			1,082
Net interest income		4,746			5,143		9,477			10,299
PROVISION (CREDIT) FOR LOAN
AND LEASE LOSSES		(300	)		-		(700	)		100
Net interest income after provision (credit)
for loan and lease losses		5,046			5,143		10,177			10,199
NON-INTEREST INCOME
Gain on sale of loans		138			130		207			224
Net securities gains		16			18		136			52
Other operating income		909			1,129		1,838			2,004
Total non-interest income		1,063			1,277		2,181			2,280
NON-INTEREST EXPENSES		4,361			4,316		8,917			8,943
INCOME BEFORE INCOME TAXES		1,748			2,104		3,441			3,536
PROVISION FOR INCOME TAXES		412			201		798			511
NET INCOME	$	1,336		$	1,903	$	2,643		$	3,025
NET INCOME PER SHARE (basic and diluted)	$	0.40		$	0.57	$	0.80		$	0.90
Weighted average common shares outstanding		3,296,922			3,343,553		3,299,064			3,354,839

The accompanying notes are an integral part of the consolidated financial statements.

4

United Bancshares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited) 

	( in thousands)
	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
NET INCOME	$	1,336		$	1,903		$	2,643		$	3,025
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) during period		1,085			(1,777	)		3,261			(490	)
Reclassification adjustments for gains
included in net income		(16	)		(18	)		(136	)		(52	)
Other comprehensive income (loss),
before income taxes		1,069			(1,795	)		3,125			(542	)
Income tax expense (benefit) related to
items of other comprehensive income (loss)		364			(610	)		1,062			(184	)
Other comprehensive income (loss)		705			(1,185	)		2,063			(358	)
COMPREHENSIVE INCOME	$	2,041		$	718		$	4,706		$	2,667

The accompanying notes are an integral part of the consolidated financial statements.

5

United Bancshares, Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Equity (Unaudited)

Six months ended June 30, 2016 and 2015 (in thousands except share data)

	Common stock		Surplus		Retained earnings			Accumulated other comprehensive income			Treasury stock				Total
BALANCE AT DECEMBER 31, 2015	$	3,761	$	14,669	$	58,642		$	1,397		$	(6,908	)	$	71,561
Comprehensive income:
Net income		-		-		2,643			-			-			2,643
Other comprehensive income		-		-		-			2,063			-			2,063
Repurchase of 12,901 shares		-		-		-			-			(216	)		(216	)
307 shares issued from treasury in connection with Employee Stock Purchase Plan		-		2		-			-			5			7
Cash dividends declared, $0.22 per share		-		-		(726	)		-			-			(726	)
BALANCE AT JUNE 30, 2016	$	3,761	$	14,671	$	60,559		$	3,460		$	(7,119	)	$	75,332
BALANCE AT DECEMBER 31, 2014	$	3,761	$	14,666	$	53,925		$	1,412		$	(5,992	)	$	67,772
Comprehensive income:
Net income		-		-		3,025			-			-			3,025
Other comprehensive loss		-		-		-			(358	)		-			(358	)
Repurchase of 39,321 shares		-		-		-			-			(594	)		(594	)
403 shares issued from treasury in connection with Employee Stock Purchase Plan		-		2		-			-			6			8
Cash dividends declared, $0.18 per share		-		-		(602	)		-			-			(602	)
BALANCE AT JUNE 30, 2015	$	3,761	$	14,668	$	56,348		$	1,054		$	(6,580	)	$	69,251

6

United Bancshares, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (Unaudited)

	(in thousands)
	Six months ended June 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES	$	1,328		$	4,189
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of available-for-sale securities		16,964			22,349
Purchases of available-for-sale securities		(16,035	)		(24,056	)
Proceeds from sale of OREO		123			-
Net (increase) decrease in loans and leases		(4,937	)		1,903
Purchases of premises and equipment		(11	)		(135	)
Net cash provided by (used in) investing activities		(3,896	)		61
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposits	$	(6,440	)	$	(45,763	)
Change in other borrowings		9,961			22,328
Purchase of treasury shares		(216	)		(594	)
Proceeds from sale of treasury shares		7			8
Cash dividends paid		(726	)		(603	)
Net cash provided by (used in)  financing activities		2,586			(24,624	)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS		18			(20,374	)
CASH AND CASH EQUIVALENTS
At beginning of period		22,922			32,355
At end of period	$	22,940		$	11,981
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid during the period for:
Interest	$	1,024		$	1,109
Federal income taxes	$	240		$	150
Non-cash investing activities:
Transfer of loans to other real estate owned	$	644		$	275
Change in net unrealized gain or loss on available-for-sale securities	$	3,125		$	(490	)

The accompanying notes are an integral part of the consolidated financial statements.

7

United Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2016

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of United Bancshares, Inc. and subsidiaries (the “Corporation”) have been prepared without audit and in the opinion of management reflect all adjustments (which include normal recurring adjustments) necessary to present fairly such information for the periods and dates indicated. Since the unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q, they do not contain all information and footnotes typically included in financial statements prepared in conformity with generally accepted accounting principles. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The balance sheet as of December 31, 2015 is derived from completed audited consolidated financial statements with footnotes, which are included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015.

The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiary, The Union Bank Company (the “Bank”). The Bank has formed a wholly-owned subsidiary, UBC Investments, Inc. (“UBC”), to hold and manage its securities portfolio. The operations of UBC are located in Wilmington, Delaware. The Bank has also formed a wholly-owned subsidiary, UBC Property, Inc., to hold and manage certain property. All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and reporting policies of the Corporation conform to generally accepted practices within the banking industry. The Corporation considers all of its principal activities to be banking related.

NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, amending ASU Subtopic 825-10. The amendments in this update make targeted improvements to generally accepted accounting principles (GAAP) as follows: 1) Require equity investments to be measured at fair value with changes in fair value recognized in net income.; 2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment.; 3) Eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities.; 4) Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.; 5) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.; 6) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.; 7) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements.; and 8) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments in this update are effective for fiscal years beginning after December 15, 2017. The Corporation has not yet made a determination of the impact on the financial statements of the provisions for ASU 2016-01.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For public companies, this update will be effective for interim and annual periods beginning after December 15, 2019. The Corporation has not yet determined the impact the adoption of ASU 2016-13 will have on the consolidated financial statements.

8

NOTE 3 - SECURITIES

The amortized cost and fair value of available-for-sale securities as of June 30, 2016 and December 31, 2015 are as follows (in thousands): 

	June 30, 2016				December 31, 2015
	Amortized cost		Fair value		Amortized cost		Fair value
Available-for-sale:
U.S. Government and agencies	$	2,998	$	3,012	$	3,998	$	3,966
Obligations of states and political
subdivisions		65,894		68,736		71,589		73,482
Mortgage-backed		109,737		112,103		104,223		104,480
Other		1,002		1,022		1,002		1,001
Total	$	179,631	$	184,873	$	180,812	$	182,929

A summary of gross unrealized gains and losses on available-for-sale securities as of June 30, 2016 and December 31, 2015 follows (in thousands):

	June 30, 2016				December 31, 2015
	Gross unrealized gains		Gross unrealized losses		Gross unrealized gains		Gross unrealized losses
Available-for-sale:
U.S. Government and agencies	$	14	$	-	$	-	$	32
Obligations of states and political
subdivisions		2,845		3		1,960		67
Mortgage-backed		2,391		25		1,071		814
Other		20		-		-		1
Total	$	5,270	$	28	$	3,031	$	914

9

NOTE 4 – LOANS AND LEASES

The following tables present the activity in the allowance for loan and lease losses by portfolio segment for the periods ending June 30, 2016 and 2015 (in thousands).

	Commercial		Commercial and multi- family real estate			Residential 1 – 4 family real estate			Consumer			Total
Balance at December 31, 2015	$	893	$	2,540		$	373		$	28		$	3,834
Provision (credit) charged to expenses		106		(809	)		7			(4	)		(700	)
Losses charged off		-		(11	)		(24	)		(8	)		(43	)
Recoveries		18		251			0			8			277
Balance at June 30, 2016	$	1,017	$	1,971		$	356		$	24		$	3,368

	Commercial			Commercial and multi- family real estate			Residential 1 – 4 family real estate			Consumer			Total
Balance at December 31, 2014	$	198		$	3,255		$	363		$	24		$	3,840
Provision (credit) charged to expenses		246			(183	)		37			-			100
Losses charged off		(327	)		(126	)		(108	)		(11	)		(572	)
Recoveries		60			77			19			2			158
Balance at June 30, 2015	$	177		$	3,023		$	311		$	15		$	3,526

10

The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment method for the periods ending June 30, 2016 and December 31, 2015 (in thousands):

June 30, 2016	Commercial		Commercial and multi- family real estate		Residential 1 – 4 family real estate		Consumer		Total
Allowance for loan and lease losses:
Attributable to loans and leases
individually evaluated for impairment	$	614	$	711	$	-	$	-	$	1,325
Collectively evaluated for impairment		403		1,260		356		24		2,043
Total allowance for loan
and lease losses	$	1,017	$	1,971	$	356	$	24	$	3,368
Loans and leases:
Individually evaluated for impairment	$	1,593	$	2,088	$	-	$	-	$	3,681
Acquired with deteriorated
credit quality		-		627		55		-		682
Collectively evaluated for impairment		67,586		204,732		79,280		3,812		355,410
Total ending loans and
leases balance	$	69,179	$	207,447	$	79,335	$	3,812	$	359,773

December 31, 2015	Commercial		Commercial and multi- family real estate		Residential 1 – 4 family real estate		Consumer		Total
Allowance for loan and lease losses:
Attributable to loans and leases
individually evaluated for impairment	$	528	$	842	$	-	$	-	$	1,370
Collectively evaluated for impairment		365		1,698		373		28		2,464
Total allowance for loan
and lease losses	$	893	$	2,540	$	373	$	28	$	3,834
Loans and leases:
Individually evaluated for impairment	$	2,192	$	3,820	$	-	$	-	$	6,012
Acquired with deteriorated
credit quality		43		669		74		-		786
Collectively evaluated for impairment		64,092		201,481		78,022		3,857		347,452
Total ending loans and
leases balance	$	66,327	$	205,970	$	78,096	$	3,857	$	354,250

11

Impaired loans and leases were as follows as of June 30, 2016 and December 31, 2015:

	(in thousands)
	June 30, 2016		December 31, 2015
Loans and leases with no allowance
for loan and lease losses allocated	$	-	$	-
Loans and leases with allowance
for loan and lease losses allocated		3,681		6,012
Total impaired loans and leases		3,681		6,012
Amount of the allowance allocated to impaired loans and leases	$	1,325	$	1,370

No Additional funds are committed to be advanced in connection with impaired loans and leases.

The average recorded investment in impaired loans and leases (excluding loans and leases acquired with deteriorated credit quality) for the six month periods ended June 30, 2016 and 2015 was approximately $4.2 million and $5.2 million, respectively. There was approximately $182,000 and $138,000 in interest income recognized by the Corporation on impaired loans and leases on an accrual or cash basis for the six month periods ended June 30, 2016 and 2015, respectively.

12

The following table presents loans and leases individually evaluated for impairment by class of loans as of June 30, 2016 and December 31, 2015:

	(in thousands)
	June 30, 2016				December 31, 2015
	Recorded investment		Allowance for loan and lease losses allocated		Recorded investment		Allowance for loan and lease losses allocated
With no related allowance recorded:
Commercial	$	-	$	-	$	-	$	-
Commercial and multi-family real estate		-		-		-		-
Agriculture		-		-		-		-
Agricultural real estate		-		-		-		-
Consumer		-		-		-		-
Residential 1-4 family real estate		-		-		-		-
With an allowance recorded:
Commercial		1,593		614		2,192		528
Commercial and multi-family real estate		2,088		711		3,820		842
Agriculture		-		-		-		-
Agricultural real estate		-		-		-		-
Consumer		-		-		-		-
Residential 1-4 family real estate		-		-		-		-
Total	$	3,681	$	1,325	$	6,012	$	1,370

The following tables present the recorded investment in nonaccrual loans and leases, loans and leases past due over 90 days still on accrual and troubled debt restructurings by class of loans as of June 30, 2016 and December 31, 2015:

	(in thousands)
June 30, 2016	Nonaccrual		Loans and leases past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	1,732	$	-	$	62
Commercial real estate		3,596		-		722
Agricultural real estate		40		-		-
Agriculture		-		-		-
Consumer		5		-		-
Residential:
1 – 4 family		1,211		-		391
Home equity		-		-		-
Total	$	6,584	$	-	$	1,175

13

December 31, 2015	Nonaccrual		Loans and leases past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	355	$	-	$	-
Commercial real estate		4,113		-		1,403
Agricultural real estate		52		260		-
Agriculture		19		-		-
Consumer		12		-		-
Residential:
1 – 4 family		1,394		-		393
Home equity		-		-		-
Total	$	5,945	$	260	$	1,796

The nonaccrual balances in the table above include troubled debt restructurings that have been classified as nonaccrual.

The following table presents the aging of the recorded investment in past due loans and leases as of June 30, 2016 by class of loans and leases (in thousands):

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans and leases not past due		Total
Commercial	$	22	$	-	$	81	$	103	$	57,420	$	57,523
Commercial real estate		118		49		407		574		183,567		184,141
Agriculture		-		-		-		-		11,656		11,656
Agricultural real estate		6		266		-		272		23,034		23,306
Consumer		25		-		-		25		3,787		3,812
Residential real estate		1,854		213		267		2,334		77,001		79,335
Total	$	2,025	$	528	$	755	$	3,308	$	356,465	$	359,773

The following table presents the aging of the recorded investment in past due loans and leases as of December 31, 2015 by class of loans and leases: (in thousands)

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans and leases not past due		Total
Commercial	$	81	$	50	$	121	$	252	$	53,210	$	53,462
Commercial real estate		644		16		1,225		1,885		181,952		183,837
Agriculture		150		-		19		169		12,696		12,865
Agricultural real estate		94		-		260		354		21,779		22,133
Consumer		49		-		5		54		3,803		3,857
Residential real estate		2,147		244		389		2,780		75,316		78,096
Total	$	3,165	$	310	$	2,019	$	5,494	$	348,756	$	354,250

14

Credit Quality Indicators:

The Corporation categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as: current final financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans and leases individually by classifying the loans and leases as to the credit risk. This analysis generally includes loans and leases with an outstanding balance greater than $500,000 and non-homogenous loans and leases, such as commercial and commercial real estate loans and leases. This analysis is performed on a quarterly basis. The Corporation uses the following definitions for risk ratings:

· Special Mention: Loans and leases which possess some credit deficiency or potential weakness which deserves close attention, but which do not yet warrant substandard classification. Such loans and leases pose unwarranted financial risk that, if not corrected, could weaken the loan and lease and increase risk in the future. The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered "potential", versus "defined", impairments to the primary source of loan repayment.

· Substandard: These loans and leases are inadequately protected by the current sound net worth and paying ability of the borrower. Loans and leases of this type will generally display negative financial trends such as poor or negative net worth, earnings or cash flow. These loans and leases may also have historic and/or severe delinquency problems, and Corporation management may depend on secondary repayment sources to liquidate these loans and leases. The Corporation could sustain some degree of loss in these loans if the weaknesses remain uncorrected.

· Doubtful: Loans and leases in this category display a high degree of loss, although the amount of actual loss at the time of classification is undeterminable. This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification.

Loans and leases not meeting the previous criteria that are analyzed individually as part of the above described process are considered to be pass rated loans and leases. Loans and leases listed as not rated are generally either less than $500,000 or are included in groups of homogenous loans and leases. As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans and leases is as follows (in thousands):

June 30, 2016	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	45,295	$	-	$	4,492	$	-	$	19,392
Commercial and multi-
family real estate		148,621		4,450		4,007		-		50,369
Residential 1 - 4 family		216		-		-		-		79,119
Consumer		-		-		-		-		3,812
Total	$	194,132	$	4,450	$	8,499	$	-	$	152,692

December 31, 2015	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	41,184	$	2,806	$	2,656	$	-	$	19,681
Commercial and multi-
family real estate		139,351		7,563		5,976		-		53,080
Residential 1 - 4 family		223		-		-		-		77,873
Consumer		-		-		-		-		3,857
Total	$	180,758	$	10,369	$	8,632	$	-	$	154,491

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The Corporation considers the performance of the loan and lease portfolio and its impact on the allowance for loan and lease losses. For all loan classes that are not rated, the Corporation also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. Generally, all loans and leases not rated that are 90 days past due or are classified as nonaccrual and collectively evaluated for impairment, are considered nonperforming. The following table presents the recorded investment in all loans and leases that are not risk rated, based on payment activity as of June 30, 2016 and December 31, 2015 (in thousands):

June 30, 2016	Commercial		Commercial and multi- family real estate		Residential 1-4 family		Consumer
Performing	$	19,311	$	49,963	$	78,852	$	3,812
Nonperforming		81		406		267		-
Total	$	19,392	$	50,369	$	79,119	$	3,812

December 31, 2015	Commercial		Commercial and multi- family real estate		Residential 1-4 family		Consumer
Performing	$	19,541	$	52,248	$	77,484	$	3,852
Nonperforming		140		832		389		5
Total	$	19,681	$	53,080	$	77,873	$	3,857

Modifications:

The Corporation’s loan and lease portfolio also includes certain loans and leases that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Corporation’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. All TDRs are also classified as impaired loans and leases.

When the Corporation modifies a loan or lease, management evaluates any possible concession based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, except with the sole (remaining) source of repayment for the loan or lease is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs, instead of discounted cash flows. If management determines that the value of the modified loan or lease is less than the recorded investment in the loan or lease (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), an impairment is recognized through a specific reserve in the allowance or a direct write down of the loan or lease balance if collection is not expected.

The following table includes the recorded investment and number of modifications for TDR loans and leases during the six month period ended June 30, 2016 (in thousands):

	Number of modifications		Recorded investment		Allowance for loan and lease losses allocated
Troubled Debt Restructurings:
Commercial		1	$	62	$	-
Commercial Real Estate		3		244		-
Total		4	$	306	$	-

The concessions granted in the above TDR’s were a modification of the original term. The terms were extended on two of the notes. Two notes were re-amortized with a balloon payment at the end of the terms. The recorded investment in the loans did not change as a result of the modification. There are not any troubled debt restructurings for which there was a payment default in the current reporting period.

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The following is additional information with respect to loans and leases acquired through The Ohio State Bank acquisition (in thousands):

	Contractual
	Principal			Accretable			Carrying
	Receivable			Difference			Amount
Purchased Performing Loans and Leases
Balance at December 31, 2015	$	41,874		$	(1,809	)	$	40,065
Change due to payments received		(3,863	)		180			(3,683	)
Transfer to foreclosed real estate		-			-			-
Change due to loan charge-off		-			-			-
Balance at June 30, 2016	$	38,011		$	(1,629	)	$	36,382

	Contractual			Non
	Principal			Accretable			Carrying
	Receivable			Difference			Amount
Purchased Impaired Loans and Leases
Balance at December 31, 2015	$	1,959		$	(1,194	)	$	765
Change due to payments received		(73	)		6			(67	)
Transfer to foreclosed real estate		-			-			-
Change due to loan charge-off		(136	)		120			(16	)
Balance at June 30, 2016	$	1,750		$	(1,068	)	$	682

As a result of The Ohio State Bank acquisition, the Corporation has loans, for which there was at acquisition, evidence of deterioration of credit quality since origination and for which it was probable at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans as of June 30, 2016 and December 31, 2015 was $682,000 and $765,000, respectively.

No provision for loan and lease losses was recognized during the period ended June 30, 2016 and December 31, 2015 related to the acquired loans as there was no significant change to the credit quality of the loans.

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NOTE 5 – JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES

The Corporation has formed and invested $300,000 in a business trust, United (OH) Statutory Trust (“United Trust”) which is not consolidated by the Corporation. United Trust issued $10,000,000 of trust preferred securities, which are guaranteed by the Corporation, and are subject to mandatory redemption upon payment of the debentures. United Trust used the proceeds from the issuance of the trust preferred securities, as well as the Corporation’s capital investment, to purchase $10,300,000 of junior subordinated deferrable interest debentures issued by the Corporation. The debentures have a stated maturity date of March 26, 2033. As of March 26, 2008, and quarterly thereafter, the debentures may be shortened at the Corporation’s option. Interest is payable quarterly at a floating rate adjustable quarterly and equal to 315 basis points over the 3-month LIBOR amounting to 3.79% at June 30, 2016 and 3.43% at June 30, 2015. The Corporation has the right, subject to events in default, to defer payments of interest on the debentures by extending the interest payment period for a period not exceeding 20 consecutive quarterly periods.

The Corporation assumed $3,093,000 of trust preferred securities through The Ohio State Bank acquisition with $3,000,000 of the liability guaranteed by the Corporation and the remaining $93,000 secured by an investment in the trust preferred securities. The trust preferred securities carrying value as of June 30, 2016 and December 31, 2015 was $2,489,000 and $2,473,000 respectively. The difference between the principal owed and the carrying value is due to the below-market interest rate on the debentures. The debentures have a stated maturity date of April 23, 2034. Interest is at a floating rate adjustable quarterly and equal to 285 basis points over the 3-month LIBOR amounting to 3.49% at June 30, 2016 and 3.13% at June 30, 2015.

Each issue of the trust preferred securities carries an interest rate identical to that of the related debenture. The securities have been structured to qualify as Tier I capital for regulatory purposes and the dividends paid on such are tax deductible. However, under Federal Reserve Board guidelines, the securities cannot be used to constitute more than 25% of the Corporation’s core Tier I capital inclusive of these securities.

Interest expense on the debentures amounted to $241,000 and $219,000 for the six month periods ended June 30, 2016 and 2015, respectively, and is included in interest expense-other borrowings in the accompanying consolidated statements of income.

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NOTE 6 - FAIR VALUE MEASUREMENTS

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are independent, knowledgeable, and both able and willing to transact.

ASC 820-10 requires the use of valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, ASC 820-10 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

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

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect the Corporation’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include the Corporation’s own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment.

Financial assets (there were no financial liabilities) measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 include available-for-sale securities, which are valued using Level 2 inputs except for one security which is valued using Level 1 inputs and one other security which is valued using Level 3 inputs, as well as mortgage servicing rights, amounting to $953,000 at June 30, 2016 and $1,181,000 December 31, 2015, which are valued using Level 3 inputs. Financial assets (there were no financial liabilities) measured at fair value on a non-recurring basis at June 30, 2016 and December 31, 2015 include other real estate owned, as well as impaired loans net of specific reserves approximating $2.4 million at June 30, 2016 and $4.6 million at December 31, 2015, all of which are valued using Level 3 inputs.

There were no financial instruments measured at fair value that moved to a lower level in the fair value hierarchy during the period ended June 30, 2016, due to the lack of observable quotes in inactive markets for those instruments at June 30, 2016.

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The table below presents a reconciliation and income statement classification of gains and losses for mortgage servicing rights, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the six month period ended June 30, 2016 and year ended December 31, 2015:

	(in thousands)
	June 30,			December 31,
	2016			2015
Mortgage Servicing Rights
Balance at beginning of period	$	1,181		$	1,218
Gains or losses, including realized and unrealized:
Purchases, issuances, and settlements		79			252
Disposals - amortization based on loan payments and payoffs		(84	)		(552	)
Changes in fair value	$	(223	)	$	263
Balance at end of period		953			1,181
Securities valued using Level 3 inputs
Balance at beginning of period	$	2,389		$	2,536
Principal payments received		(75	)		(145	)
Changes in Fair Value		-			(2	)
Balance at end of period	$	2,314		$	2,389

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, and disclosure of unobservable inputs follows.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Corporation’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. The Corporation’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Corporation’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available-for-Sale

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would typically include government bonds and exchange traded equities. If quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Examples of such instruments, which would generally be classified within Level 2 of the valuation hierarchy, include U. S. Government and agencies, municipal bonds, mortgage-backed securities, and asset-backed securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. There were no gains or losses relating to securities available-for-sale included in earnings before income taxes that were attributable to changes in fair values of securities held at June 30, 2016 and December 31, 2015.

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Impaired Loans

The Corporation does not record impaired loans at fair value on a recurring basis. However, periodically, a loan is considered impaired and is reported at the fair value of the underlying collateral less estimated cost to sell, if repayment is expected solely from collateral. Collateral values are estimated using Level 2 inputs, including recent appraisals and Level 3 inputs based on customized discounting criteria such as additional appraisal adjustments to consider deterioration of value subsequent to appraisal date and estimated cost to sell. Additional appraisal adjustments range between 15% and 35% of appraised value, and estimated selling cost ranges between 10% and 20% of the adjusted appraised value.  Due to the significance of the Level 3 inputs, impaired loans fair values have been classified as Level 3.

Mortgage Servicing Rights

The Corporation records mortgage servicing rights at estimated fair value based on a discounted cash flow model which includes discount rates between 9% and 11%, in addition to prepayment, internal rate of return, servicing costs, inflation rate of servicing costs and earnings rate assumptions that are considered to be unobservable inputs. Due to the significance of the Level 3 inputs, mortgage servicing rights have been classified as Level 3.

Other Real Estate Owned

The Corporation values other real estate owned at the estimated fair value of the underlying collateral less appraisal adjustments between 10% and 70% of appraised value, and expected selling costs between 10% and 20% of adjusted appraised value. Such values are estimated primarily using appraisals and reflect a market value approach. Due to the significance of the Level 3 inputs, other real estate owned has been classified as Level 3.

Certain other financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment. Financial assets and financial liabilities, excluding impaired loans and other real estate owned, measured at fair value on a nonrecurring basis were not significant at June 30, 2016 and December 31, 2015.

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NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of recognized financial instruments at June 30, 2016 and December 31, 2015 were as follows (in thousands):

	June 30, 2016				December 31, 2015
	Carrying amount		Estimated value		Carrying amount		Estimated value		Input  Level
FINANCIAL ASSETS
Cash and cash equivalents	$	22,940	$	22,940	$	22,922	$	22,922	1
Securities, including Federal
Home Loan Bank stock		189,703		189,703		187,759		187,759	1,2,3
Certificates of deposit		1,992		1,992		1,992		1,992	2
Loans held for sale		814		814		347		347	3
Net loans		356,405		359,680		350,416		350,374	3
Mortgage servicing rights		953		953		1,181		1,181	3
	$	572,807	$	576,082	$	564,617	$	564,575
FINANCIAL LIABILITIES
Deposits
Maturity	$	141,530		141,540	$	148,486	$	147,164	3
Non-maturity		370,431		370,431		369,934		369,934	1
Other borrowings		12,079		12,079		2,118		2,118	3
Junior subordinated deferrable
interest debentures		12,789		6,700		12,773		8,265	3
	$	536,829	$	530,750	$	533,311	$	527,481

The above summary does not include accrued interest receivable or cash surrender value of life insurance which are also considered financial instruments. The estimated fair value of such items is considered to be their carrying amounts and would be considered Level 1 inputs.

There are also unrecognized financial instruments at June 30, 2016 and December 31, 2015 which relate to commitments to extend credit and letters of credit. The contract amount of such financial instruments amounted to $87,135,000 at June 30, 2016 and $84,394,000 at December 31, 2015. Such amounts are also considered to be the estimated fair values.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments shown above:

Cash and cash equivalents:

Fair value is determined to be the carrying amount for these items (which include cash on hand, due from banks, and federal funds sold) because they represent cash or mature in 90 days or less, and do not represent unanticipated credit concerns.

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Securities:

The fair value of securities is determined based on quoted market prices of the individual securities; if not available, estimated fair value is obtained by comparison to other known securities with similar risk and maturity characteristics. Such value does not consider possible tax ramifications or estimated transaction costs.

Loans and leases:

Fair value for loans and leases was estimated for portfolios of loans and leases with similar financial characteristics. For adjustable rate loans, which re-price at least annually and generally possess low risk characteristics, the carrying amount is believed to be a reasonable estimate of fair value. For fixed rate loans, the fair value is estimated based on a discounted cash flow analysis, considering weighted average rates and terms of the portfolio, adjusted for credit and interest rate risk inherent in the loans. Fair value for nonperforming loans is based on recent appraisals or estimated discounted cash flows.

Mortgage servicing rights:

The fair value for mortgage servicing rights is determined based on an analysis of the portfolio by an independent third party.

Deposit liabilities:

The fair value of core deposits, including demand deposits, savings accounts, and certain money market deposits, is the amount payable on demand. The fair value of fixed-maturity certificates of deposit is estimated using the rates offered at quarter end for deposits of similar remaining maturities. The estimated fair value does not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the marketplace.

Other borrowings and junior subordinated deferrable interest debentures:

The fair value of other borrowings (consisting of Federal Home Loan Bank borrowings, securities sold under agreements to repurchase, and customer repurchase agreements), and junior subordinated deferrable interest debentures are determined using the net present value of discounted cash flows based on current borrowing rates for similar types of borrowing arrangements, and are obtained from an independent third party.

Other financial instruments:

The fair value of commitments to extend credit and letters of credit is determined to be the contract amount, since these financial instruments generally represent commitments at existing rates. The fair value of other borrowings is determined based on a discounted cash flow analysis using current interest rates. The fair value of other liabilities is generally considered to be carrying value except for the deferred compensation agreement. The fair value of the contract is determined based on a discounted cash flow analysis using a current interest rate for a similar instrument.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument over the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

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NOTE 8 – SUBSEQUENT EVENTS

Management evaluated subsequent events through the date the consolidated financial statements were issued. Events or transactions occurring after June 30, 2016 but prior to when the consolidated financial statements were issued, that provided additional evidence about conditions that existed at June 30, 2016 have been recognized in the consolidated financial statements for the period ended June 30, 2016. Events or transactions that provided evidence about conditions that did not exist at June 30, 2016 but arose before the financial statements were issued have not been recognized in the consolidated financial statements for the period ended June 30, 2016.

On July 19, 2016, the Corporation's Board of Directors approved a cash dividend of $0.11 per common share payable September 15, 2016 to shareholders of record at the close of business on August 31, 2016.

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ITEM 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

The following data should be read in conjunction with the unaudited consolidated financial statements and management’s discussion and analysis that follows:

	As of or for the Three   Months Ended June 30,						As of or for the Six Months Ended June 30,
	2016			2015			2016			2015
SIGNIFICANT RATIOS (Unaudited)
Net income to:
Average assets (a)		0.87	%		1.20	%		0.86	%		0.94	%
Average shareholders’ equity (a)		7.23	%		11.05	%		7.21	%		8.85	%
Net interest margin (a)		3.50	%		3.64	%		3.51	%		3.64	%
Efficiency ratio (b)		73.18	%		65.67	%		74.50	%		69.13	%
Average shareholders’ equity to average assets		12.03	%		10.82	%		11.99	%		10.66	%
Loans to deposits (end of period)		70.27	%		68.17	%		70.27	%		68.17	%
Allowance for loan losses to loans (end of period)		0.94	%		1.00	%		0.94	%		1.00	%
Book value per share	$	22.85		$	20.80		$	22.85		$	20.80

(a) Net income to average assets, net income to average shareholders’ equity and net interest margin are presented on an annualized basis. Net interest margin is calculated using fully-tax equivalent net interest income as a percentage of average interest earning assets.

(b) Efficiency ratio is a ratio of non-interest expense as a percentage of fully tax equivalent net interest income plus non-interest income.

Introduction

United Bancshares, Inc. (the “Corporation”), an Ohio corporation, is a bank holding company registered under the Bank Holding Company Act of 1956, as amended, and is subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). The Corporation was incorporated and organized in 1985. The executive offices of the Corporation are located at 100 S. High Street, Columbus Grove, Ohio 45830. The Corporation is a one-bank holding company, as that term is defined by the Federal Reserve Board.

The Union Bank Company (the “Bank”), a wholly-owned subsidiary of the Corporation, is engaged in the business of commercial banking. The Bank is an Ohio state-chartered bank, which serves Allen, Delaware, Hancock, Marion, Putnam, Sandusky, and Wood counties in Ohio, with office locations in Bowling Green, Columbus Grove, Delaware, Delphos, Findlay, Gibsonburg, Kalida, Leipsic, Lima, Marion, Ottawa and Pemberville, Ohio.

The Bank offers a full range of commercial banking services, including checking accounts, savings and money market accounts, time certificates of deposit, automatic teller machines, commercial, consumer, agricultural, residential mortgage and home equity loans, credit card services, safe deposit box rentals, and other personalized banking services. The Bank has formed UBC Investments, Inc. (“UBC”) to hold and manage its securities portfolio. The operations of UBC are located in Wilmington, Delaware. The Bank has also formed UBC Property, Inc. to hold and manage certain other real estate owned.

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When or if used in the Corporation’s Securities and Exchange Commission filings or other public or shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases: “anticipate,” “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “is estimated,” “is projected,” or similar expressions are intended to identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any such statements are subject to the risks and uncertainties that include but are not limited to: changes in economic conditions in the Corporation’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the Corporation’s market area, and competition. All or some of these factors could cause actual results to differ materially from historical earnings and those presently anticipated or projected.

The Corporation cautions readers not to place undue reliance on any such forward looking statements, which speak only as of the date made, and advises readers that various factors, including regional and national economic conditions, substantial changes in the levels of market interest rates, credit and other risks associated with lending and investing activities, and competitive and regulatory factors could affect the Corporation’s financial performance and could cause the Corporation’s actual results for future periods to differ materially from those anticipated or projected. The Corporation does not undertake, and specifically disclaims any obligation, to update any forward looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

The Corporation is registered as a Securities Exchange Act of 1934 reporting company.

The following discussion and analysis of the consolidated financial statements of the Corporation is presented to provide insight into management’s assessment of the financial results.

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RESULTS OF OPERATIONS

Overview of the Income Statement

For the quarter ended June 30, 2016, the Corporation reported net income of $1,336,000, or $0.40 basic earnings per share. This compares to the second quarter of 2015 net income of $1,903,000, or $0.57 basic earnings per share. The decrease in operating results for the second quarter of 2016 as compared to the same period in 2015 was primarily attributable to a decrease in net interest income of $397,000, a decrease in non-interest income of $214,000, an increase in non-interest expense of $45,000 and an increase in income taxes of $211,000, offset by a credit for loan losses of $300,000. The decrease in net interest income was largely attributable to less loan discount accretion relating to the November 2014 Ohio State Bank (OSB) acquisition.  The decrease in non-interest income was largely attributable to a decrease in fair value of mortgage servicing rights.  The increase in income taxes, despite a $356,000 decrease in income before income taxes, was due to a one-time tax benefit of $331,000 recognized during the second quarter of 2015 relating to the OSB acquisition.

Net income for the six months ended June 30, 2016 totaled $2,643,000, or $0.80 basic earnings per share compared to $3,025,000 or $0.90 basic earnings per share for the same period in 2015. Compared with the same period in 2015, net income decreased $382,000, or 12.6%. The decrease in operating results for the six month period ended June 30, 2016 as compared to the six month period ended June 30, 2015 was primarily attributable to a decrease in net interest income of $822,000, a decrease in non-interest income of $99,000 and an increase in income taxes of $287,000, offset by a decrease in non-interest expense of $26,000, as well as a credit for loan losses of $700,000 in 2016 compared to a $100,000 provision for the same period in 2015.

Net Interest Income

Net interest income is the amount by which income from interest-earning assets exceeds interest incurred on interest-bearing liabilities. Interest-earning assets consist principally of loans and investment securities while interest-bearing liabilities include interest-bearing deposit accounts and borrowed funds. Net interest income remains the primary source of revenue for the Corporation. Changes in market interest rates, as well as changes in the mix and volume of interest-bearing assets and interest-bearing liabilities impact net interest income. Net interest income was $4,746,000 for the second quarter of 2016, compared to $5,143,000 for the same period of 2015, a decrease of $397,000 (7.7%).

The decrease in net interest income was largely attributable to a decrease in interest income for the six months ended June 30, 2016 of $833,000, as compared to the same period in 2015, including a $563,000 decrease in interest income from loans and leases. The decrease in interest income from loans and leases was primarily attributable to less loan discount accretion being recognized from the November 2014 OSB acquisition. For the period ended June 30, 2016, $176,000 of loan discount accretion has been recognized compared to $677,000 for the same period in 2015.

Net interest margin is calculated by dividing net interest income (adjusted to reflect tax-exempt interest income on a taxable equivalent basis) by average interest-earning assets. The resulting percentage serves as a measurement for the Corporation in comparing its results with those of past periods as well as those of peer institutions. For the quarterly and six month periods ended June 30, 2016, the net interest margin (on a taxable equivalent basis) was 3.50% and 3.51% compared with 3.64% for the same periods in 2015.

Interest-bearing deposits comprised 96.6% of average interest-bearing liabilities for the six months ended June 30, 2016, compared to 98.0% for the same period in 2015.

Provision for Loan and Lease Losses

The Corporation’s provision for loan and lease losses is determined based upon management’s calculation of the allowance for loan and lease losses and is reflective of management’s assessment of the quality of the portfolio and overall management of the inherent credit risk of the loan and lease portfolio. Changes in the provision for loan and lease losses are dependent, among other things, on loan and lease delinquencies, collateral position, portfolio risks and general economic conditions in the Corporation’s lending markets. A $700,000 credit for loan losses was recognized during the six month period ended June 30, 2016. See “Allowance for Loan and Lease Losses” under Financial Condition for further discussion relating to the provision for loan and lease losses.

27

Non-Interest Income

The Corporation’s non-interest income is largely generated from activities related to the origination, servicing and gain on sales of fixed rate mortgage loans; customer deposit account fees; earnings on life insurance policies; income arising from sales of investment products to customers; and occasional security sale transactions. Income related to customer deposit accounts and life insurance policies provides a relatively steady flow of income while the other sources are more volume or transaction related and consequently can vary from quarter to quarter. For the quarter ended June 30, 2016, non-interest income was $1,063,000 compared to $1,277,000 for the second quarter of 2015, a $214,000 (16.77%) decrease.

Gain on sales of loans amounted to $138,000 for the quarter ended June 30, 2016, compared to $130,000 for the second quarter of 2015, an increase of $8,000 (6.4%).

Gain on sales of securities amounted to $16,000 for the quarter ended June 30, 2016 compared to $18,000 for the same period in 2015. Gain on sales of securities amounted to $136,000 for the six months ended June 30, 2016 compared to $52,000 for the same period in 2015, an increase of $84,000.

Other operating income decreased $214,000 for the quarter ended June 30, 2016 and $172,000 for the six months ended June 30, 2016 primarily due to the fair value adjustment of mortgage servicing rights. The Corporation typically sells in the secondary market all fixed rate residential mortgage loans it originates and retains the servicing on such loans. The Corporation’s serviced loan portfolio amounted to $172.2 million at June 30, 2016 and $173.5 million at December 31, 2015. The fair value of mortgage servicing rights decreased $228,000, for the six months ended June 30, 2016, compared to an increase in fair value of mortgage servicing rights of $70,000 for the six months ended June 30, 2015. The decrease in fair value of mortgage servicing rights was largely due to an increase in the prepayment speeds utilized which is the market’s reaction to interest rates which decreased significantly during the six month period ended June 30, 2016.

Non-Interest Expenses

For the quarter ended June 30, 2016, non-interest expenses were $4,361,000, compared to $4,316,000 for the second quarter of 2015, a $45,000 (1.1%) increase. For the six month period ended June 30, 2016, non-interest expenses totaled $8,917,000, compared to $8,943,000 for the same period of 2015, a decrease of $26,000 (0.3%). The decrease in non-interest expenses for the six month period ended June 30, 2016 was primarily attributed to decreases in premises and equipment expense, data processing expense, FDIC assessment, consultant fees, Ohio Financial Institutions tax and other real estate owned expense, offset by increases in salaries and benefits expense, media expense, loan closing fees, ATM processing expense and miscellaneous expenses.

Maintaining acceptable levels of non-interest expenses and operating efficiency are key performance indicators for the Corporation in its strategic initiatives. The financial services industry uses the efficiency ratio (total non-interest expense as a percentage of the aggregate of fully-tax equivalent net interest income and non-interest income) as a key indicator of performance. For the quarter ended June 30, 2016, the Corporation’s efficiency ratio was 73.18%, compared 65.67% for the same period of 2015. For the six month period ended June 30, 2016, the Corporation’s efficiency ratio was 74.50% compared to 69.13% for the same period of 2015.

Provision for Income Taxes

The provision for income taxes for the quarter ended June 30, 2016 was $412,000 (effective rate of 23.6%) compared to $201,000 (effective rate of 9.6%) for the comparable 2015 period. The provision for income taxes for the six month period ended June 30, 2016 was $798,000, or 23.2% of income before income taxes, compared to $511,000 or 14.5% for the comparable 2015 period. The income tax provision for the second quarter of 2015 and the six month period ended June 30, 2015, were favorably impacted as a result of the Corporation recognizing a one-time tax benefit of $331,000 during the second quarter of 2015, resulting from a January 2015 tax law change involving OSB’s tax bad debt reserve.

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FINANCIAL CONDITION

Overview of Balance Sheet

Total assets amounted to $618.1 million at June 30, 2016, compared to $608.7 million at December 31, 2015, an increase of $9.4 million (1.5%). The increase in total assets was primarily the result of increases of $6.0 million (1.7%) in net loans and leases, $1,944,000 (1.1%) in available-for-sale securities and $815,000 (15.7%) in other assets. Deposits during this same period decreased $6.5 million, or 1.2%.

Shareholders’ equity increased from $71.6 million at December 31, 2015 to $75.3 million at June 30, 2016. This increase was the result of net income of $2,643,000, dividends paid of $726,000, $216,000 from the repurchase of 12,901 treasury shares, $7,000 from the issuance of 307 treasury shares under the Corporation’s Employee Stock Purchase Plan, and a $2,063,000 increase in unrealized securities gains, net of tax. The increase in unrealized securities gains during the six month period ended June 30, 2016, was the result of customary and expected changes in the bond market. Net unrealized gains on securities are reported as accumulated other comprehensive income in the consolidated balance sheets.

Cash and Cash Equivalents

Cash and cash equivalents totaled $22.9 million at June 30, 2016 and December 31, 2015, including interest-bearing deposits in other banks of $14.3 million at June 30, 2016 and $11.4 million at December 31, 2015. Management believes the current level of cash and cash equivalents is sufficient to meet the Corporation’s present liquidity and performance needs. Total cash and cash equivalents fluctuate on a daily basis due to transactions in process and corresponding liquidity sources and uses. Management believes the Corporation’s liquidity needs in the near term will be satisfied by the current level of cash and cash equivalents, readily available access to traditional and non-traditional funding sources, and the portions of the investment and loan portfolios that will mature within one year. These sources of funds should enable the Corporation to meet cash obligations and off-balance sheet commitments as they come due. In addition, the Corporation has access to various sources of additional borrowings by virtue of long-term assets that can be used as collateral for such borrowings.

Securities

Management monitors the earnings performance and liquidity of the securities portfolio on a regular basis through Asset/Liability Committee (ALCO) meetings. As a result, all securities, except FHLB stock, have been designated as available-for-sale and may be sold if needed for liquidity, asset-liability management or other reasons. Such securities are reported at fair value, with any net unrealized gains or losses reported as a separate component of shareholders’ equity, net of related incomes taxes.

The amortized cost and fair value of available-for-sale securities as of June 30, 2016 totaled $179.6 million and $184.9 million, respectively, resulting in a net unrealized gain before tax of $5.3 million and a corresponding after-tax increase in shareholders’ equity of $3.5 million. The amortized cost of available-for-sale securities decreased $1.2 million during the six months ended June 30, 2016.

Loans and Leases

The Corporation’s lending is primarily centered in Northwestern and West Central Ohio. Gross loans and leases totaled $359.8 million at June 30, 2016, compared to $354.3 million at December 31, 2015, an increase of $5.5 million (1.6%).

There are also unrecognized financial instruments at June 30, 2016 and December 31, 2015 which relate to commitments to extend credit and letters of credit. The contract amount of such financial instruments approximated $87.1 million at June 30, 2016 and $84.4 million at December 31, 2015.

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 Allowance for Loan and Lease Losses

The following table presents a summary of activity in the allowance for loan and lease losses for the six months ended June 30, 2016 and 2015:

	(in thousands)
	2016			2015
Balance, beginning of period	$	3,834		$	3,839
Provision (credit) for loan and lease losses		(700	)		100
Charge offs		(43	)		(571	)
Recoveries		277			158
Net (charge offs) recoveries		234			(413	)
Balance, end of period	$	3,368		$	3,526

The allowance for loan and lease losses as a percentage of gross loans and leases was .94% at June 30, 2016 and 1.00% at December 31, 2015. Regular provisions are made in amounts sufficient to maintain the balance in the allowance for loan and lease losses at a level considered by management to be adequate for losses within the portfolio. Even though management uses all available information to assess possible loan and lease losses, future additions or reductions to the allowance may be required as changes occur in economic conditions and specific borrower circumstances. The regulatory agencies that periodically review the Corporation’s allowance for loan and lease losses may also require additions to the allowance or the charge-off of specific loans and leases based upon the information available to them at the time of their examinations.

Loans and leases on non-accrual status amounted to $6.6 million and $5.9 million at June 30, 2016 and December 31, 2015, respectively. Non-accrual loans and leases as a percentage of outstanding loans amounted to 1.8% at June 30, 2016 and 1.7% at December 31, 2015.

The Corporation considers a loan or lease to be impaired when it becomes probable that the Corporation will be unable to collect under the contractual terms of the loan or lease, as the case may be, based on current information and events. Impaired loans and leases, all consisting of commercial and commercial real estate credits, amounted to $3.7 million at June 30, 2016 and $6.0 million at December 31, 2015. The decrease in impaired loans and leases resulted from the payoff of one loan during the first quarter of 2016. All impaired loans at June 30, 2016 and December 31, 2015 had specific reserves, with such reserves amounting to $1,325,000 and $1,370,000 at June 30, 2016 and December 31, 2015, respectively, and included in the Corporation’s allowance for loan losses.

In addition to impaired loans, the Corporation had other potential problem credits of $9.9 million at June 30, 2016 and $15.0 million at December 31, 2015. The Corporation’s credit administration department continues to closely monitor these credits.

The Corporation provides pooled reserves for potential problem loans and leases using loss rates calculated considering historic net loan-charge off experience. The Corporation has experienced $43,000 of loan charge-offs during the first six months of 2016 compared to annual loan charge-offs of $638,000 in 2015, $497,000 in 2014, and $2.6 million in 2013, with most of the charge-offs coming from the commercial and commercial real estate loan portfolios. The Corporation also provides general reserves for the remaining portion of its loan portfolio not considered to be problem or potential problem loans. These general reserves are also calculated considering, among other things, the historic net charge-off experience for the relative loan type.

Funding Sources

The Corporation considers a number of alternatives, including but not limited to, deposits, as well as short-term and long-term borrowings when evaluating funding sources. Deposits, including customer deposits, brokered certificates of deposit, and public funds deposits, continue to be the most significant source of funds for the Corporation, totaling $512.0 million, or 95.4% of the Corporation’s funding sources at June 30, 2016. Total deposits decreased $6.5 million during the six months ended June 30, 2016.

Non-interest bearing deposits remain a smaller portion of the funding source for the Corporation than for most of its peers. Non-interest bearing deposits comprised 17.4% of total deposits at June 30, 2016, compared to 18.0% at December 31, 2015.

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In addition to traditional deposits, the Corporation maintains both short-term and long-term borrowing arrangements. Other borrowings consisted of FHLB borrowings totaling $12.1 million at June 30, 2016 and $2.1 million at December 31, 2015. The Corporation also has outstanding junior subordinated deferrable interest debentures of $12.8 million at June 30, 2016 and December 31, 2015. Management plans to maintain access to various borrowing alternatives as an appropriate funding source.

Shareholders’ Equity

Shareholders’ equity increased from $71.6 million at December 31, 2015 to $75.3 million at June 30, 2016, principally due to net income of $2,643,000 and a $2,063,000 increase in unrealized securities gains, net of tax, net of dividends paid and net treasury stock transactions.

For the six month period ended June 30, 2015, shareholders’ equity increased from $67.8 million at December 31, 2014 to $69.2 million. This increase was the result of net income of $3,025,000, dividends paid of $602,000, repurchase of 39,321 shares of $594,000, the issuance of 403 treasury shares under the Corporation’s Employee Stock Purchase Plan of $8,000, and a $358,000 decrease in unrealized securities losses, net of tax.

The increase/decrease in unrealized securities gains during the six month periods ended June 30, 2016 and 2015, was the result of customary and expected changes in the bond market. Net unrealized gains/losses on securities are reported as accumulated other comprehensive income in the consolidated balance sheets.

The Corporation and Bank met all regulatory capital requirements as of June 30, 2016, and the Bank is considered “well capitalized” under regulatory and industry standards of risk-based capital.

Liquidity and Interest Rate Sensitivity

The objective of the Corporation’s asset/liability management function is to maintain consistent growth in net interest income through management of the Corporation’s balance sheet liquidity and interest rate exposure based on changes in economic conditions, interest rate levels, and customer preferences.

The Corporation manages interest rate risk to minimize the impact of fluctuating interest rates on earnings. The Corporation uses simulation techniques that attempt to measure the volatility of changes in the level of interest rates, basic banking interest rate spreads, the shape of the yield curve, and the impact of changing product growth patterns. The primary method of measuring the sensitivity of earnings of changing market interest rates is to simulate expected cash flows using varying assumed interest rates while also adjusting the timing and magnitude of non-contractual deposit re-pricing to more accurately reflect anticipated pricing behavior. These simulations include adjustments for the lag in prime loan re-pricing and the spread and volume elasticity of interest-bearing deposit accounts, regular savings and money market deposit accounts.

The principal function of interest rate risk management is to maintain an appropriate relationship between those assets and liabilities that are sensitive to changing market interest rates. The Corporation closely monitors the sensitivity of its assets and liabilities on an ongoing basis and projects the effect of various interest rate changes on its net interest margin. Interest sensitive assets and liabilities are defined as those assets or liabilities that mature or re-price within a designated time frame.

Management believes the Corporation’s current mix of assets and liabilities provides a reasonable level of risk related to significant fluctuations in net interest income and the resulting volatility of the Corporation’s earning base. The Corporation’s management reviews interest rate risk in relation to its effect on net interest income, net interest margin, and the volatility of the earnings base of the Corporation.

Effects of Inflation on Financial Statements

All of the Corporation’s assets relate to commercial banking operations and are generally monetary in nature. Therefore, they are not impacted by inflation to the same degree as companies in capital-intensive industries in a replacement cost environment. During a period of rising prices, a net monetary asset position results in loss of purchasing power and conversely a net monetary liability position results in an increase in purchasing power. In the commercial banking industry, monetary assets typically exceed monetary liabilities. The Corporation has not experienced a significant level of inflation or deflation during the six month period ended June 30, 2016. However, because of the depressed national real estate market and sluggish local economy, the Corporation has experienced declines in the value of collateral securing commercial and non-commercial real estate loans. Management continues to closely monitor these trends in calculating the Corporation’s allowance for loan and lease losses.

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ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The only significant market risk to which the Corporation is exposed is interest rate risk. The business of the Corporation and the composition of its balance sheet consist of investments in interest-earning assets (primarily loans and securities), which are funded by interest bearing liabilities (deposits and borrowings). These financial instruments have varying levels of sensitivity to changes in the market rates of interest, resulting in market risk. None of the Corporation’s financial instruments are held for trading purposes.

The Corporation manages interest rate risk regularly through its Asset Liability Committee. The Committee meets on a regular basis and reviews various asset and liability management information, including but not limited to, the bank’s liquidity positions, projected sources and uses of funds, interest rate risk positions and economic conditions.

The Corporation monitors its interest rate risk through a sensitivity analysis, whereby it measures potential changes in its future earnings and the fair values of its financial instruments that may result from one or more hypothetical changes in interest rates. This analysis is performed by estimating the expected cash flows of the Corporation’s financial instruments using interest rates in effect at year-end. For the fair value estimates, the cash flows are then discounted to year-end to arrive at an estimated present value of the Corporation’s financial instruments. Hypothetical changes in interest rates are then applied to the financial instruments, and the cash flows and fair values are again estimated using these hypothetical rates. For the net interest income estimates, the hypothetical rates are applied to the financial instruments based on the assumed cash flows. The Corporation typically applies interest rate “shocks” to its financial instruments up and down under various scenarios up to as much as 400 basis points depending on the overall level of interest rates at any point in time.

There have been no material changes in the quantitative and qualitative information about market risk from the information provided in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

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ITEM 4

CONTROLS AND PROCEDURES

Evaluation of Controls and Procedures.

With the participation of our management, including our chief executive officer and chief financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")); as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that:

(a) information required to be disclosed by the Corporation in this Quarterly Report on Form 10-Q would be accumulated and communicated to the Corporation’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure;

(b) information required to be disclosed by the Corporation in this Quarterly Report on Form 10-Q would be recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and

(c) the Corporation’s disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Corporation and its consolidated subsidiaries is made known to them, particularly during the period for which our periodic reports, including this Quarterly Report on Form 10-Q, are being prepared.

Changes in Internal Control over Financial Reporting.

There were no significant changes during the period covered by this Quarterly Report on Form 10-Q in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – Other Information

Item 1: Legal Proceedings.

There are no pending legal proceedings to which the Corporation or its subsidiaries are a party or to which any of their property is subject except routine legal proceedings to which the Corporation or its subsidiaries are a party incident to the banking business. None of such proceedings are considered by the Corporation to be material.

Item 1A: Risk Factors

There have been no material changes in the discussion pertaining to risk factors that was provided in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

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

The Corporation has not sold any of its securities which were not registered under the Securities Act during the period covered by this report. The table below includes certain information regarding the Corporation’s purchase of United Bancshares, Inc. common stock during the quarterly period ended June 30, 2016:

Period	Total number of shares purchased		Weighted Average price paid per share		Total number of shares purchased as part of a publicly announced plan or program (a)		Maximum number of shares that may yet be purchased under the plan or program (a)
04/01/16 - 04/30/16		-	$	-		353,669		246,331
05/01/16 - 05/31/16		350	$	17.85		354,019		245,981
06/01/16 - 06/30/16		-	$	-		354,019		245,981

The Plan authorizes the Corporation to repurchase up to 600,000 of the Corporation’s common shares from time to time in a program of market purchases or in privately negotiated transactions as the securities laws and market conditions permit.

Item 3: Defaults upon Senior Securities.

None

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Item 4: Mine Safety Disclosures

Not applicable

Item 5: Other Information.

None

Item 6: Exhibits

(a) Exhibits

Exhibit 2 Stock Purchase Agreement, dated July 1, 2014 among United Bancshares, Inc., Ohio State Bancshares, Inc. and Rbancshares, Inc.

Exhibit 3(i) Amended and Restated Articles of Incorporation

Exhibit 3(ii) Amended and Restated Code of Regulations

Exhibit 10.1 Salary Continuation Agreement - Brian D. Young

Exhibit 10.2 Salary Continuation Agreement – Heather M. Oatman

Exhibit 10.3 Preferred Trust Securities, Placement and Debenture agreements

Exhibit 10.4 Salary Continuation Agreement, First Amendment – Brian D. Young

Exhibit 10.5 2016 Stock Option Plan

Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification of CEO

Exhibit 31.2 Rule 13a-14(a)/15d-14(a) Certification of CFO

Exhibit 32.1 Section 1350 CEO’s Certification

Exhibit 32.2 Section 1350 CFO’s Certification

Exhibit 99 Safe Harbor under The Private Securities Litigation Reform Act of 1995

Exhibit 101.INS XBRL Instance Document

Exhibit 101.SCH XBRL Taxonomy Extension Schema

Exhibit 101.CAL XBRL Taxonomy Extension Calculation

Exhibit 101.DEF XBRL Taxonomy Extension Definition

Exhibit 101.LAB XBRL Taxonomy Extension Label

Exhibit 101.PRE XBRL Taxonomy Extension Presentation

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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.

		UNITED BANCSHARES, INC.
Date:	July 21, 2016	By:/s/ Daniel J. Lucke
		Daniel J. Lucke
		Chief Financial Officer

36

EXHIBIT INDEX

UNITED BANCSHARES, INC. QUARTERLY REPORT ON FORM 10-Q

FOR PERIOD ENDED June 30, 2016

Exhibit Number	Description	Exhibit Location
2	Stock Purchase Agreement, dated July 1, 2014 among United Bancshares, Inc., Ohio State Bancshares, Inc. and Rbancshares, Inc.	Incorporated herein by reference to the Corporation’s Form 8-K filed July 1, 2014.
3(i)	Amended and Restated Articles of Incorporation	Incorporated herein by reference to the Corporation's Definitive Proxy Statement pursuant to Section 14(a) filed March 8, 2002.
3(ii)	Amended and Restated Code of Regulations	Incorporated herein by reference to the Corporation’s Form 10Q for the quarter ended June 30, 2007.
10.1	Salary Continuation Agreement - Brian D. Young	Incorporated herein by reference to the Corporation's 2004 Form 10K/A filed August 5, 2005.
10.2	Salary Continuation Agreement – Heather M. Oatman	Incorporated herein by reference to the Corporation's 2008 Form 10K filed March 20, 2009.
10.3	Preferred Trust Securities, Placement and Debenture agreements	Incorporated herein by reference to the Corporation’s 2004 Form 10K/A filed August 5, 2005.
10.4	Salary Continuation Agreement, First Amendment – Brian D. Young	Incorporated herein by reference to the Corporation’s 2007 Form 10Q filed April 27, 2007.
10.5	2016 Stock Option Plan	Incorporated herein by reference to the Corporation’s Definitive Proxy Statement pursuant to Section 14(a) filed March 23, 2016.
31.1	Rule 13a-14(a)/15d-14(a) Certification of CEO	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certification of CFO	Filed herewith
32.1	Section 1350 CEO’s Certification	Filed herewith
32.2	Section 1350 CFO’s Certification	Filed herewith
99	Safe Harbor under the Private Securities Litigation Reform Act of 1995	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition	Filed herewith
101.LAB	XBRL Taxonomy Extension Label	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation	Filed herewith

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EX-31.1

Exhibit 31.1

Rule 13a–14(a)/15d–14(a) CERTIFICATION

I, Brian D. Young, President and Chief Executive Officer of United Bancshares, Inc., certify, that:

(1) I have reviewed this Quarterly Report on Form 10-Q of United Bancshares, Inc.;

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

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

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

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

b. Designed such internal 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

/s/ Brian D. Young

Brian D. Young

President and Chief Executive Officer

July 21, 2016

EX-31.2

Exhibit 31.2

Rule 13a–14(a)/15d–14(a) CERTIFICATION

I, Daniel J. Lucke, Chief Financial Officer of United Bancshares, Inc., certify, that:

(1) I have reviewed this Quarterly Report on Form 10-Q of United Bancshares, Inc.;

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

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

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

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

b. Designed such internal 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

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

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

/s/ Daniel J. Lucke

Daniel J. Lucke

Chief Financial Officer

July 21, 2016

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of United Bancshares, Inc. (the "Company") on Form 10-Q for the quarterly period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brian D. Young, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

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

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

/s/ Brian D. Young

Brian D. Young

President and Chief Executive Officer

Date: July 21, 2016

*This certification is being furnished as required by Rule 13a –14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of United Bancshares, Inc. (the "Company") on Form 10-Q for the quarterly period ended June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel J. Lucke, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

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

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

/s/ Daniel J. Lucke

Daniel J. Lucke

Chief Financial Officer

Date: July 21, 2016

*This certification is being furnished as required by Rule 13a –14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

EX-99

Exhibit 99

SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Private Securities Litigation Reform Act of 1995 (the "Act") provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about their companies, so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the statement. United Bancshares, Inc. ("Corporation") desires to take advantage of the "safe harbor" provisions of the Act. Certain information, particularly information regarding future economic performance and finances and plans and objectives of management, contained or incorporated by reference in the Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, is forward-looking. In some cases, information regarding certain important factors that could cause actual results of operations or outcomes of other events to differ materially from any such forward-looking statement appears together with such statement. In addition, forward-looking statements are subject to other risks and uncertainties affecting the financial institutions industry, including, but not limited to, the following:

Interest Rate Risk

The Corporation’s operating results are dependent to a significant degree on its net interest income, which is the difference between interest income from loans, investments and other interest-earning assets and interest expense on deposits, borrowings and other interest-bearing liabilities. The interest income and interest expense of the Corporation changes as the interest rates on interest-earning assets and interest-bearing liabilities change. Interest rates may change because of general economic conditions, the policies of various regulatory authorities and other factors beyond the Corporation's control. In a rising interest rate environment, loans tend to prepay slowly and new loans at higher rates increase slowly, while interest paid on deposits increases rapidly because the terms to maturity of deposits tend to be shorter than the terms to maturity or prepayment of loans. Such differences in the adjustment of interest rates on assets and liabilities may negatively affect the Corporation's income.

Possible Inadequacy of the Allowance for Loan and Lease Losses

The Corporation maintains an allowance for loan and lease losses based upon a number of relevant factors, including, but not limited to, trends in the level of non-performing assets and classified loans and leases, current economic conditions in the primary lending area, past loss experience, possible losses arising from specific problem loans and leases and changes in the composition of the loan and lease portfolio. While the Board of Directors of the Corporation believe that it uses the best information available to determine the allowance for loan and lease losses, unforeseen market conditions could result in material adjustments, and net earnings could be significantly adversely affected if circumstances differ substantially from the assumptions used in making the final determination.

Loans and leases not secured by one to four family residential real estate are generally considered to involve greater risk of loss than loans secured by one to four family residential real estate due, in part, to the effects of general economic conditions. The repayment of multifamily residential, nonresidential real estate and commercial loans generally depends upon the cash flow from the operation of the property or business, which may be negatively affected by national and local economic conditions. Construction loans may also be negatively affected by such economic conditions, particularly loans made to developers who do not have a buyer for a property before the loan is made. The risk of default on consumer loans increases during periods of recession, high unemployment and other adverse economic conditions. When consumers have trouble paying their bills, they are more likely to pay mortgage loans than consumer loans. In addition, the collateral securing such loans and leases, if any, may decrease in value more rapidly than the outstanding balance of the loan or lease.

Competition

The Corporation competes for deposits with other savings associations, commercial banks and credit unions and issuers of commercial paper and other securities, such as shares in money market mutual funds. The primary factors in competing for deposits are interest rates and convenience of office location. In making loans, the Corporation competes with other commercial banks, savings associations, consumer finance companies, credit unions, leasing companies, mortgage companies and other lenders. Competition is affected by, among other things, the general availability of lendable funds, general and local economic conditions, current interest rate levels and other factors that are not readily predictable. The size of financial institutions competing with the Corporation is likely to increase as a result of changes in statutes and regulations eliminating various restrictions on interstate and inter-industry branching and acquisitions. Such increased competition may have an adverse effect upon the Corporation.

Legislation and Regulation that may Adversely Affect the Corporation's Earnings

The Corporation is subject to extensive regulation by the State of Ohio, Division of Financial Institutions (the “ODFI”), the Federal Reserve Bank (the “FED”), and the Federal Deposit Insurance Corporation (the "FDIC") and is periodically examined by such regulatory agencies to test compliance with various regulatory requirements. Such supervision and regulation of the Corporation and the bank are intended primarily for the protection of depositors and not for the maximization of shareholder value and may affect the ability of the Corporation to engage in various business activities. The assessments, filing fees and other costs associated with reports, examinations and other regulatory matters are significant and may have an adverse effect on the Corporation's net earnings.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2016 shares
Document and Entity Information [Abstract]
Entity Registrant Name	UNITED BANCSHARES INC/OH
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Trading Symbol	uboh
Entity Common Stock, Shares Outstanding	3,296,745
Amendment Flag	false
Entity Central Index Key	0001087456
Entity Filer Category	Smaller Reporting Company
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2

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Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
CASH AND CASH EQUIVALENTS
Cash and due from banks	$ 8,605	$ 11,482
Interest-bearing deposits in other banks	14,335	11,440
Total cash and cash equivalents	22,940	22,922
SECURITIES, available-for-sale	184,873	182,929
RESTRICTED BANK STOCK, at cost	4,830	4,830
CERTIFICATES OF DEPOSIT, at cost	1,992	1,992
LOANS HELD FOR SALE	814	347
LOANS AND LEASES	359,773	354,250
Less allowance for loan and lease losses	3,368	3,834
Net loans and leases	356,405	350,416
PREMISES AND EQUIPMENT, net	11,605	12,049
GOODWILL	10,072	10,072
CORE DEPOSIT INTANGIBLE ASSETS, net	835	903
CASH SURRENDER VALUE OF LIFE INSURANCE	17,030	16,834
OTHER REAL ESTATE OWNED	644	173
OTHER ASSETS, including accrued interest receivable	6,013	5,198
Total Assets	618,053	608,665
Deposits:
Non-interest bearing	89,088	93,476
Interest-bearing	422,873	424,943
Total deposits	511,961	518,419
Other borrowings	12,079	2,118
Junior subordinated deferrable interest debentures	12,789	12,773
Other liabilities	5,892	3,794
Total liabilities	542,721	537,104
SHAREHOLDERS' EQUITY
Common stock, stated value $1.00 authorized 10,000,000 shares; issued 3,760,557 shares	3,761	3,761
Surplus	14,671	14,669
Retained earnings	60,559	58,642
Accumulated other comprehensive income	3,460	1,397
Treasury stock, at cost, 463,812 shares at June 30, 2016 and 451,218 shares at December 31, 2015	(7,119)	(6,908)
Total shareholders' equity	75,332	71,561
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 618,053	$ 608,665

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Consolidated Balance Sheets (Parentheticals) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock par value (in Dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	3,760,557	3,760,557
Treasury stock, shares	463,812	451,218

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Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
INTEREST INCOME
Loans & leases, including fees	$ 4,283	$ 4,494	$ 8,482	$ 9,045
Securities:
Taxable	534	695	1,071	1,390
Tax-exempt	404	403	834	792
Other	82	78	161	154
Total interest income	5,303	5,670	10,548	11,381
INTEREST EXPENSE
Deposits	426	394	812	838
Borrowings	131	133	259	244
Total interest expense	557	527	1,071	1,082
Net interest income	4,746	5,143	9,477	10,299
PROVISION (CREDIT) FOR LOAN AND LEASE LOSSES	(300)		(700)	100
Net interest income after provision (credit) for loan and lease losses	5,046	5,143	10,177	10,199
NON-INTEREST INCOME
Gain on sale of loans	138	130	207	224
Net securities gains	16	18	136	52
Other operating income	909	1,129	1,838	2,004
Total non-interest income	1,063	1,277	2,181	2,280
NON-INTEREST EXPENSES	4,361	4,316	8,917	8,943
INCOME BEFORE INCOME TAXES	1,748	2,104	3,441	3,536
PROVISION FOR INCOME TAXES	412	201	798	511
NET INCOME	$ 1,336	$ 1,903	$ 2,643	$ 3,025
NET INCOME PER SHARE
NET INCOME PER SHARE (basic and diluted) (in dollars per share)	$ 0.40	$ 0.57	$ 0.80	$ 0.90
Weighted average common shares outstanding	3,296,922	3,343,553	3,299,064	3,354,839

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 1,336	$ 1,903	$ 2,643	$ 3,025
Unrealized gains on securities:
Unrealized holding gains (losses) during period	1,085	(1,777)	3,261	(490)
Reclassification adjustments for gains included in net income	(16)	(18)	(136)	(52)
Other comprehensive income (loss), before income taxes	1,069	(1,795)	3,125	(542)
Income tax expense (benefit) related to items of other comprehensive income (loss)	364	(610)	1,062	(184)
Other comprehensive income	705	(1,185)	2,063	(358)
COMPREHENSIVE INCOME	$ 2,041	$ 718	$ 4,706	$ 2,667

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Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Surplus [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Total
Beginning balance at Dec. 31, 2014	$ 3,761	$ 14,666	$ 53,925	$ 1,412	$ (5,992)	$ 67,772
Net income			3,025			3,025
Other comprehensive income				(358)		(358)
Repurchase of shares					(594)	(594)
Shares issued from treasury in connection with the Corporation's Employee Stock Purchase Plan		2			6	8
Dividends declared			(602)			(602)
Balance at Jun. 30, 2015	3,761	14,668	56,348	1,054	(6,580)	69,251
Beginning balance at Dec. 31, 2015	3,761	14,669	58,642	1,397	(6,908)	71,561
Net income			2,643			2,643
Other comprehensive income				2,063		2,063
Repurchase of shares					(216)	(216)
Shares issued from treasury in connection with the Corporation's Employee Stock Purchase Plan		2			5	7
Dividends declared			(726)			(726)
Balance at Jun. 30, 2016	$ 3,761	$ 14,671	$ 60,559	$ 3,460	$ (7,119)	$ 75,332

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Consolidated Shareholders' Equity (Parentheticals) - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash dividends declared per share (in Dollars per share)	$ 0.22	$ 0.18
Stock issued during the period, shares, Employee Stock Purchase Plans	307	403
Treasury Stock [Member]
Repurchase of shares	12,901	39,321

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows provided by operating activities
Cash flows from operating activities	$ 1,328	$ 4,189
Cash flows from investing activities:
Proceeds from sales of available-for-sale securities	16,964	22,349
Purchases of available-for-sale securities	(16,035)	(24,056)
Net increase in loans and leases		1,903
Net decrease in loans and leases	(4,937)
Proceeds from sale of OREO	123
Purchases of premises and equipment	(11)	(135)
Net cash provided by (used in) investing activities	(3,896)	61
Cash flows from financing activities:
Net increase (decrease) in deposits	(6,440)	(45,763)
Change in other borrowings	9,961	22,328
Purchase of treasury shares	(216)	(594)
Proceeds from sale of treasury shares	7	8
Cash dividends paid	(726)	(603)
Net cash provided by (used in) financing activities	2,586	(24,624)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	18	(20,374)
At beginning of period	22,922	32,355
At end of period	22,940	11,981
Cash paid for:
Interest	1,024	1,109
Federal income taxes	240	150
Non-cash investing activities:
Transfer of loans to other real estate owned	644	275
Change in net unrealized gain or loss on available-for-sale securities	$ 3,125	$ (490)

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Consolidated Financial Statements

6 Months Ended

Jun. 30, 2016

Consolidated Financial Statements [Abstract]

Consolidated Financial Statements

NOTE 1 – CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of United Bancshares, Inc. and subsidiaries (the “Corporation”) have been prepared without audit and in the opinion of management reflect all adjustments (which include normal recurring adjustments) necessary to present fairly such information for the periods and dates indicated.  Since the unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q, they do not contain all information and footnotes typically included in financial statements prepared in conformity with generally accepted accounting principles.  Operating results for the six months ended June  30, 2016are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.  The balance sheet as of December 31, 2015 is derived from completed audited consolidated financial statements with footnotes, which are included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015.

The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiary, The Union Bank Company (the “Bank”).  The Bank has formed a wholly-owned subsidiary, UBC Investments, Inc. (“UBC”), to hold and manage its securities portfolio.  The operations of UBC are located in Wilmington, Delaware. The Bank has also formed a wholly-owned subsidiary, UBC Property, Inc., to hold and manage certain property.  All significant intercompany balances and transactions have been eliminated in consolidation. The accounting and reporting policies of the Corporation conform to generally accepted practices within the banking industry.  The Corporation considers all of its principal activities to be banking related.

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2016

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements

NOTE 2 – NEW ACCOUNTING PRONOUNCEMENTS

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, amending ASU Subtopic 825-10.  The amendments in this update make targeted improvements to generally accepted accounting principles (GAAP) as follows:  1)Require equity investments to be measured at fair value with changes in fair value recognized in net income.;  2) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment.;  3) Eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities.;  4) Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.;  5) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.;  6) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.;  7) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements.; and 8) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets.  The amendments in this update are effective for fiscal years beginning after December 15, 2017.  The Corporation has not yet made a determination of the impact on the financial statements of the provisions for ASU 2016-01.

InJune2016,theFASBissuedASU2016-13,FinancialInstruments-CreditLosses(Topic326):MeasurementofCreditLossesonFinancialInstruments.TheASUrequiresanorganizationtomeasureallexpectedcreditlossesforfinancialassetsheldatthereportingdatebasedonhistoricalexperience,currentconditions,andreasonableandsupportableforecasts.Financialinstitutionsandotherorganizationswillnowuseforward-lookinginformationtobetterinformtheircreditlossestimates.Manyofthelossestimationtechniquesappliedtodaywillstillbepermitted,althoughtheinputstothosetechniqueswillchangetoreflectthefullamountofexpectedcreditlosses.Organizationswillcontinuetousejudgmenttodeterminewhichlossestimationmethodisappropriatefortheircircumstances.Additionally,theASUamendstheaccountingforcreditlossesonavailable-for-saledebtsecuritiesandpurchasedfinancialassetswithcreditdeterioration.Forpubliccompanies,thisupdatewillbeeffective for interimand annual periodsbeginning afterDecember 15, 2019. The Corporation has not yet determined the impact the adoption of ASU 2016-13 will have on the consolidated financial statements.

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Securities

6 Months Ended

Jun. 30, 2016

Securities [Abstract]

Securities

NOTE 3 - SECURITIES

The amortized cost and fair value of available-for-sale securities as of June 30, 2016 and December 31, 2015 are as follows (in thousands):

	June 30, 2016				December 31, 2015
	Amortized cost		Fair value		Amortized cost		Fair value
Available-for-sale:
U.S. Government and agencies	$	2,998	$	3,012	$	3,998	$	3,966
Obligations of states and political
subdivisions		65,894		68,736		71,589		73,482
Mortgage-backed		109,737		112,103		104,223		104,480
Other		1,002		1,022		1,002		1,001
Total	$	179,631	$	184,873	$	180,812	$	182,929

A summary of gross unrealized gains and losses on available-for-sale securities as of June 30, 2016 and December 31, 2015 follows (in thousands):

	June 30, 2016				December 31, 2015
	Gross unrealized gains		Gross unrealized losses		Gross unrealized gains		Gross unrealized losses
Available-for-sale:
U.S. Government and agencies	$	14	$	-	$	-	$	32
Obligations of states and political
subdivisions		2,845		3		1,960		67
Mortgage-backed		2,391		25		1,071		814
Other		20		-		-		1
Total	$	5,270	$	28	$	3,031	$	914

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Loans and Leases

6 Months Ended

Jun. 30, 2016

Loans and Leases [Abstract]

Loans and Leases

NOTE 4 – LOANSAND LEASES

The following tables present the activity in the allowance for loan and lease losses by portfolio segment for the periods ending June 30, 2016 and 2015 (in thousands).

	Commercial		Commercial and multi-family real estate			Residential 1 – 4 family real estate	Consumer		Total
Balance at December 31, 2015	$	893	$	2,540	$	373	$	28	$	3,834
Provision (credit) charged to expenses		106		(809)		7		(4)		(700)
Losses charged off		-		(11)		(24)		(8)		(43)
Recoveries		18		251		0		8		277
Balance at June 30, 2016	$	1,017	$	1,971	$	356	$	24	$	3,368
	Commercial		Commercial and multi-family real estate			Residential 1 – 4 family real estate	Consumer		Total
Balance at December 31, 2014	$	198	$	3,255	$	363	$	24	$	3,840
Provision (credit) charged to expenses		246		(183)		37		-		100
Losses charged off		(327)		(126)		(108)		(11)		(572)
Recoveries		60		77		19		2		158
Balance at June 30, 2015	$	177	$	3,023	$	311	$	15	$	3,526

The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment method for the periods ending June 30, 2016 and December 31, 2015 (in thousands):

June 30, 2016	Commercial		Commercial and multi-family real estate		Residential 1 – 4 family real estate		Consumer		Total
Allowance for loan and lease losses:
Attributable to loans and leases
individually evaluated for impairment	$	614	$	711	$	-	$	-	$	1,325
Collectively evaluated for impairment		403		1,260		356		24		2,043
Total allowance for loan
and lease losses	$	1,017	$	1,971	$	356	$	24	$	3,368
Loans and leases:
Individually evaluated for impairment	$	1,593	$	2,088	$	-	$	-	$	3,681
Acquired with deteriorated
credit quality		-		627		55		-		682
Collectively evaluated for impairment		67,586		204,732		79,280		3,812		355,410
Total ending loans and
leases balance	$	69,179	$	207,447	$	79,335	$	3,812	$	359,773
December 31, 2015	Commercial		Commercial and multi-family real estate		Residential 1 – 4 family real estate		Consumer		Total
Allowance for loan and lease losses:
Attributable to loans and leases
individually evaluated for impairment	$	528	$	842	$	-	$	-	$	1,370
Collectively evaluated for impairment		365		1,698		373		28		2,464
Total allowance for loan
and lease losses	$	893	$	2,540	$	373	$	28	$	3,834
Loans and leases:
Individually evaluated for impairment	$	2,192	$	3,820	$	-	$	-	$	6,012
Acquired with deteriorated
credit quality		43		669		74		-		786
Collectively evaluated for impairment		64,092		201,481		78,022		3,857		347,452
Total ending loans and
leases balance	$	66,327	$	205,970	$	78,096	$	3,857	$	354,250

Impaired loans and leases were as follows as of June 30, 2016 and December 31, 2015:

	(in thousands)
	June 30, 2016		December 31, 2015
Loans and leases with no allowance
for loan and lease losses allocated	$	-	$	-
Loans and leases with allowance
for loan and lease losses allocated		3,681		6,012
Total impaired loans and leases		3,681		6,012
Amount of the allowance allocated to impaired loans and leases	$	1,325	$	1,370

No Additional funds are committed to be advanced in connection with impaired loans and leases.

The average recorded investment in impaired loans and leases (excluding loans and leases acquired with deteriorated credit quality) for the six month periods ended June 30, 2016 and 2015 was approximately $4.2 millionand $5.2 million, respectively.  There was approximately $182,000 and $138,000 in interest income recognized by the Corporation on impaired loans and leases on an accrual or cash basis for the six month periods ended June 30, 2016 and 2015, respectively.

The following table presents loans and leases individually evaluated for impairment by class of loans as of June 30, 2016 and December 31, 2015:

	(in thousands)
	June 30, 2016				December 31, 2015
	Recorded investment		Allowance for loan and lease losses allocated		Recorded investment		Allowance for loan and lease losses allocated
With no related allowance recorded:
Commercial	$	-	$	-	$	-	$	-
Commercial and multi-family real estate		-		-		-		-
Agriculture		-		-		-		-
Agricultural real estate		-		-		-		-
Consumer		-		-		-		-
Residential 1-4 family real estate		-		-		-		-
With an allowance recorded:
Commercial		1,593		614		2,192		528
Commercial and multi-family real estate		2,088		711		3,820		842
Agriculture		-		-		-		-
Agricultural real estate		-		-		-		-
Consumer		-		-		-		-
Residential 1-4 family real estate		-		-		-		-
Total	$	3,681	$	1,325	$	6,012	$	1,370

The following tables present the recorded investment in nonaccrual loans and leases, loans and leases past due over 90 days still on accrual and troubled debt restructurings by class of loans as of June 30, 2016 and December 31, 2015:

	(in thousands)
June 30, 2016	Nonaccrual		Loans and leases past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	1,732	$	-	$	62
Commercial real estate		3,596		-		722
Agricultural real estate		40		-		-
Agriculture		-		-		-
Consumer		5		-		-
Residential:
1 – 4 family		1,211		-		391
Home equity		-		-		-
Total	$	6,584	$	-	$	1,175

December 31, 2015	Nonaccrual		Loans and leases past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	355	$	-	$	-
Commercial real estate		4,113		-		1,403
Agricultural real estate		52		260		-
Agriculture		19		-		-
Consumer		12		-		-
Residential:
1 – 4 family		1,394		-		393
Home equity		-		-		-
Total	$	5,945	$	260	$	1,796

The nonaccrual balances in the table above include troubled debt restructurings that have been classified as nonaccrual.

The following table presents the aging of the recorded investment in past due loans and leases as of June 30, 2016 by class of loans and leases (in thousands):

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans and leases not past due			Total
Commercial	$	22	$	-	$	81	$	103	$	57,420	$	57,523
Commercial real estate		118		49		407		574		183,567		184,141
Agriculture		-		-		-		-		11,656		11,656
Agricultural real estate		6		266		-		272		23,034		23,306
Consumer		25		-		-		25		3,787		3,812
Residential real estate		1,854		213		267		2,334		77,001		79,335
Total	$	2,025	$	528	$	755	$	3,308	$	356,465	$	359,773

The following table presents the aging of the recorded investment in past due loans and leases as of December 31, 2015 by class of loans and leases: (in thousands)

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans and leases not past due			Total
Commercial	$	81	$	50	$	121	$	252	$	53,210	$	53,462
Commercial real estate		644		16		1,225		1,885		181,952		183,837
Agriculture		150		-		19		169		12,696		12,865
Agricultural real estate		94		-		260		354		21,779		22,133
Consumer		49		-		5		54		3,803		3,857
Residential real estate		2,147		244		389		2,780		75,316		78,096
Total	$	3,165	$	310	$	2,019	$	5,494	$	348,756	$	354,250

Credit Quality Indicators:

The Corporation categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as:  current final financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  The Corporation analyzes loans and leases individually by classifying the loans and leases as to the credit risk.  This analysis generally includes loans and leases with an outstanding balance greater than $500,000and non-homogenous loans and leases, such as commercial and commercial real estate loans and leases.  This analysis is performed on a quarterly basis.  The Corporation uses the following definitions for risk ratings:

· Special Mention:  Loans and leases which possess some credit deficiency or potential weakness which deserves close attention, but which do not yet warrant substandard classification.  Such loans and leases pose unwarranted financial risk that, if not corrected, could weaken the loan and lease and increase risk in the future.  The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered "potential", versus "defined", impairments to the primary source of loan repayment.

· Substandard:  These loans and leases are inadequately protected by the current sound net worth and paying ability of the borrower.  Loans and leases of this type will generally display negative financial trends such as poor or negative net worth, earnings or cash flow.  These loans and leases may also have historic and/or severe delinquency problems, and Corporation management may depend on secondary repayment sources to liquidate these loans and leases.  The Corporation could sustain some degree of loss in these loans if the weaknesses remain uncorrected.

· Doubtful:  Loans and leases in this category display a high degree of loss, although the amount of actual loss at the time of classification is undeterminable.  This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification.

Loans and leases not meeting the previous criteria that are analyzed individually as part of the above described process are considered to be pass rated loans and leases.  Loans and leases listed as not rated are generally either less than $500,000 or are included in groups of homogenous loans and leases.  As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans and leases is as follows (in thousands):

June 30, 2016	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	45,295	$	-	$	4,492	$	-	$	19,392
Commercial and multi-
family real estate		148,621		4,450		4,007		-		50,369
Residential 1 - 4 family		216		-		-		-		79,119
Consumer		-		-		-		-		3,812
Total	$	194,132	$	4,450	$	8,499	$	-	$	152,692

December 31, 2015	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	41,184	$	2,806	$	2,656	$	-	$	19,681
Commercial and multi-
family real estate		139,351		7,563		5,976		-		53,080
Residential 1 - 4 family		223		-		-		-		77,873
Consumer		-		-		-		-		3,857
Total	$	180,758	$	10,369	$	8,632	$	-	$	154,491

The Corporation considers the performance of the loan and lease portfolio and its impact on the allowance for loan and lease losses.  For all loan classes that are not rated, the Corporation also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.  Generally, all loans and leases not rated that are 90 days past due or are classified as nonaccrual and collectively evaluated for impairment, are considered nonperforming. The following table presents the recorded investment in all loans and leases that are not risk rated, based on payment activity as of June 30, 2016 and December 31, 2015 (in thousands):

:

June 30, 2016	Commercial		Commercial and multi-family real estate		Residential 1-4 family		Consumer
Performing	$	19,311	$	49,963	$	78,852	$	3,812
Nonperforming		81		406		267		-
Total	$	19,392	$	50,369	$	79,119	$	3,812
December 31, 2015	Commercial		Commercial and multi-family real estate		Residential 1-4 family		Consumer
Performing	$	19,541	$	52,248	$	77,484	$	3,852
Nonperforming		140		832		389		5
Total	$	19,681	$	53,080	$	77,873	$	3,857

Modifications:

The Corporation’s loan and lease portfolio also includes certain loans and leases that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties.  These concessions typically result from the Corporation’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions.  All TDRs are also classified as impaired loans and leases.

When the Corporation modifies a loan or lease, management evaluates any possible concession based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, except with the sole (remaining) source of repayment for the loan or lease is the operation or liquidation of the collateral.  In these cases, management uses the current fair value of the collateral, less selling costs, instead of discounted cash flows.  If management determines that the value of the modified loan or lease is less than the recorded investment in the loan or lease (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), an impairment is recognized through a specific reserve in the allowance or a direct write down of the loan or lease balance if collection is not expected.

The following table includes the recorded investment and number of modifications for TDR loans and leases during the six month period ended June 30, 2016 (in thousands):

	Number of modifications		Recorded investment		Allowance for loan and lease losses allocated
Troubled Debt Restructurings:
Commercial		1	$	62	$	-
Commercial Real Estate		3		244		-
Total		4	$	306	$	-

The concessions granted in the above TDR’s were a modification of the original term. The terms were extended on two of the notes. Two notes were re-amortized with a balloon payment at the end of the terms. The recorded investment in the loans did not change as a result of the modification.  There are not any troubled debt restructurings for which there was a payment default in the current reporting period.

The following is additional information with respect to loans and leases acquired through The Ohio State Bank acquisition (in thousands):

		Contractual
		Principal		Accretable		Carrying
		Receivable		Difference		Amount
Purchased Performing Loans and Leases
Balance at December 31, 2015	$	41,874	$	(1,809)	$	40,065
Change due to payments received		(3,863)		180		(3,683)
Transfer to foreclosed real estate		-		-		-
Change due to loan charge-off		-		-		-
Balance at June 30, 2016	$	38,011	$	(1,629)	$	36,382
		Contractual		Non
		Principal		Accretable		Carrying
		Receivable		Difference		Amount
Purchased Impaired Loans and Leases
Balance at December 31, 2015	$	1,959	$	(1,194)	$	765
Change due to payments received		(73)		6		(67)
Transfer to foreclosed real estate		-		-		-
Change due to loan charge-off		(136)		120		(16)
Balance at June 30, 2016	$	1,750	$	(1,068)	$	682

As a result of The Ohio State Bank acquisition, the Corporation has loans, for which there was at acquisition, evidence of deterioration of credit quality since origination and for which it was probable at acquisition, that all contractually required payments would not be collected.  The carrying amount of those loans as of June 30, 2016 and December 31, 2015was $682,000and $765,000, respectively.

No provision for loan and lease losses was recognized during the period ended June 30, 2016 and December 31, 2015 related to the acquired loans as there was no significant change to the credit quality of the loans.

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Junior Subordinated Deferrable Interest Debentures

6 Months Ended

Jun. 30, 2016

Junior Subordinated Deferrable Interest Debentures [Abstract]

Junior Subordinated Deferrable Interest Debentures

NOTE 5 – JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES

The Corporation has formed and invested $300,000 in a business trust, United (OH) Statutory Trust (“United Trust”) which is not consolidated by the Corporation.  United Trust issued $10,000,000 of trust preferred securities, which are guaranteed by the Corporation, and are subject to mandatory redemption upon payment of the debentures.  United Trust used the proceeds from the issuance of the trust preferred securities, as well as the Corporation’s capital investment, to purchase $10,300,000 of junior subordinated deferrable interest debentures issued by the Corporation. The debentures have a stated maturity date of March 26, 2033.  As of March 26, 2008, and quarterly thereafter, the debentures may be shortened at the Corporation’s option.  Interest is payable quarterly at a floating rate adjustable quarterly and equal to 315 basis points over the 3-month LIBOR amounting to 3.79% atJune  30, 2016and 3.43% atJune  30, 2015.  The Corporation has the right, subject to events in default, to defer payments of interest on the debentures by extending the interest payment period for a period not exceeding 20 consecutive quarterly periods.

The Corporation assumed $3,093,000 of trust preferred securities through The Ohio State Bank acquisition with$3,000,000 of the liability guaranteed by the Corporation and the remaining $93,000secured by an investment in the trust preferred securities.  The trust preferred securities carrying value as of June  30, 2016 and December 31, 2015was $2,489,000 and$2,473,000 respectively.  The difference between the principal owed and the carrying value is due to the below-market interest rate on the debentures.  The debentures have a stated maturity date of April 23, 2034.  Interest is at a floating rate adjustable quarterly and equal to 285 basis points over the 3-month LIBOR amounting to 3.49% at June 30, 2016 and 3.13% at June 30, 2015.

Each issue of the trust preferred securities carries an interest rate identical to that of the related debenture.  The securities have been structured to qualify as Tier I capital for regulatory purposes and the dividends paid on such are tax deductible.  However, under Federal Reserve Board guidelines, the securities cannot be used to constitute more than 25% of the Corporation’s core Tier I capital inclusive of these securities.

Interest expense on the debentures amounted to$241,000 and$219,000 for the six month periods ended June  30, 2016 and 2015, respectively, and is included in interest expense-other borrowings in the accompanying consolidated statements of income.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value [Abstract]

Fair Value Measurements

NOTE 6 - FAIR VALUE MEASUREMENTS

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.  The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs.  An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are independent, knowledgeable, and both able and willing to transact.

ASC 820-10 requires the use of valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities.  The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis.  The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).  Valuation techniques should be consistently applied.  Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability.  Inputs may be observable or unobservable.  Observable inputs reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources.  Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  In that regard, ASC 820-10 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The fair value hierarchy is as follows:

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

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.  Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date.  Unobservable inputs reflect the Corporation’s own assumptions about what market participants would use to price the asset or liability.  The inputs are developed based on the best information available in the circumstances, which might include the Corporation’s own financial data such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment.

Financial assets (there were no financial liabilities) measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015 include available-for-sale securities, which are valued using Level 2 inputs except for one security which is valued using Level 1 inputs and one other security which is valued using Level 3 inputs,as well as mortgage servicing rights, amounting to $953,000 at June 30, 2016 and $1,181,000 December 31, 2015, which are valued using Level 3 inputs.  Financial assets (there were no financial liabilities) measured at fair value on a non-recurring basis at June 30, 2016 and December 31, 2015 include other real estate owned, as well as impaired loans net of specific reserves approximating $2.4 million at June 30, 2016 and $4.6 million at December 31, 2015, all of which are valued using Level 3 inputs.

There were no financial instruments measured at fair value that moved to a lower level in the fair value hierarchy during the period ended June 30, 2016, due to the lack of observable quotes in inactive markets for those instruments at June 30, 2016.

The table below presents a reconciliation and income statement classification of gains and losses for mortgage servicing rights, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the six month period ended June 30, 2016 and year ended December 31, 2015:

	(in thousands)
	June 30,		December 31,
	2016		2015
Mortgage Servicing Rights
Balance at beginning of period	$	1,181	$	1,218
Gains or losses, including realized and unrealized:
Purchases, issuances, and settlements		79		252
Disposals - amortization based on loan payments and payoffs		(84)		(552)
Changes in fair value	$	(223)	$	263
Balance at end of period		953		1,181
Securities valued using Level 3 inputs
Balance at beginning of period	$	2,389	$	2,536
Principal payments received		(75)		(145)
Changes in Fair Value		-		(2)
Balance at end of period	$	2,314	$	2,389

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, and disclosure of unobservable inputs follows. 

In general, fair value is based upon quoted market prices, where available.  If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Corporation’s creditworthiness, among other things, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.  The Corporation’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Corporation’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Securities Available-for-Sale

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.  Level 1 securities would typically include government bonds and exchange traded equities.  If quoted market prices are not available, then fair values are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows.  Examples of such instruments, which would generally be classified within Level 2 of the valuation hierarchy, include U. S. Government and agencies, municipal bonds, mortgage-backed securities, and asset-backed securities.  In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.  There were no gains or losses relating to securities available-for-sale included in earnings before income taxes that were attributable to changes in fair values of securities held at June 30, 2016 and December 31, 2015.

Impaired Loans

The Corporation does not record impaired loans at fair value on a recurring basis.  However, periodically, a loan is considered impaired and is reported at the fair value of the underlying collateral less estimated cost to sell, if repayment is expected solely from collateral.  Collateral values are estimated using Level 2 inputs, including recent appraisals and Level 3 inputs based on customized discounting criteria such as additional appraisal adjustments to consider deterioration of value subsequent to appraisal date and estimated cost to sell.  Additional appraisal adjustments range between 15% and 35% of appraised value, and estimated selling cost ranges between 10% and 20% of the adjusted appraised value.  Due to the significance of the Level 3 inputs, impaired loans fair values have been classified as Level 3.

Mortgage Servicing Rights

The Corporation records mortgage servicing rights at estimated fair value based on a discounted cash flow model which includes discount rates between 9% and 11%, in addition to prepayment, internal rate of return, servicing costs, inflation rate of servicing costs and earnings rate assumptions that are considered to be unobservable inputs.  Due to the significance of the Level 3 inputs, mortgage servicing rights have been classified as Level 3.

Other Real Estate Owned

The Corporation values other real estate owned at the estimated fair value of the underlying collateral less appraisal adjustments between 10% and 70% of appraised value, and expected selling costs between 10% and 20% of adjusted appraised value.  Such values are estimated primarily using appraisals and reflect a market value approach.  Due to the significance of the Level 3 inputs, other real estate owned has been classified as Level 3.

Certain other financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.  Financial assets and financial liabilities, excluding impaired loans and other real estate owned, measured at fair value on a nonrecurring basis were not significant atJune  30, 2016 and December 31, 2015.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2016

Fair Value [Abstract]

Fair Value of Financial Instruments

NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of recognized financial instruments at June 30, 2016 and December 31, 2015 were as follows (in thousands):

	June 30, 2016				December 31, 2015
	Carrying amount		Estimated value		Carrying amount		Estimated value		Input  Level
FINANCIAL ASSETS
Cash and cash equivalents	$	22,940	$	22,940	$	22,922	$	22,922	1
Securities, including Federal
Home Loan Bank stock		189,703		189,703		187,759		187,759	1,2,3
Certificates of deposit		1,992		1,992		1,992		1,992	2
Loans held for sale		814		814		347		347	3
Net loans		356,405		359,680		350,416		350,374	3
Mortgage servicing rights		953		953		1,181		1,181	3
	$	572,807	$	576,082	$	564,617	$	564,575
FINANCIAL LIABILITIES
Deposits
Maturity	$	141,530		141,540	$	148,486	$	147,164	3
Non-maturity		370,431		370,431		369,934		369,934	1
Other borrowings		12,079		12,079		2,118		2,118	3
Junior subordinated deferrable
interest debentures		12,789		6,700		12,773		8,265	3
	$	536,829	$	530,750	$	533,311	$	527,481

The above summary does not include accrued interest receivable or cash surrender value of life insurance which are also considered financial instruments.  The estimated fair value of such items is considered to be their carrying amounts and would be considered Level 1 inputs.

There are also unrecognized financial instruments at June 30, 2016 and December 31, 2015 which relate to commitments to extend credit and letters of credit.  The contract amount of such financial instruments amounted to$87,135,000 atJune  30, 2016and $84,394,000 at December 31, 2015.  Such amounts are also considered to be the estimated fair values.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments shown above:

Cash and cash equivalents:

Fair value is determined to be the carrying amount for these items (which include cash on hand, due from banks, and federal funds sold) because they represent cash or mature in 90 days or less, and do not represent unanticipated credit concerns.

Securities:

The fair value of securities is determined based on quoted market prices of the individual securities; if not available, estimated fair value is obtained by comparison to other known securities with similar risk and maturity characteristics.  Such value does not consider possible tax ramifications or estimated transaction costs.

Loans and leases:

Fair value for loans and leases was estimated for portfolios of loans and leases with similar financial characteristics.  For adjustable rate loans, which re-price at least annually and generally possess low risk characteristics, the carrying amount is believed to be a reasonable estimate of fair value.  For fixed rate loans, the fair value is estimated based on a discounted cash flow analysis, considering weighted average rates and terms of the portfolio, adjusted for credit and interest rate risk inherent in the loans.  Fair value for nonperforming loans is based on recent appraisals or estimated discounted cash flows. 

Mortgage servicing rights:

The fair value for mortgage servicing rights is determined based on an analysis of the portfolio by an independent third party.

Deposit liabilities:

The fair value of core deposits, including demand deposits, savings accounts, and certain money market deposits, is the amount payable on demand.  The fair value of fixed-maturity certificates of deposit is estimated using the rates offered at quarter end for deposits of similar remaining maturities.  The estimated fair value does not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the marketplace.

Other borrowings and junior subordinated deferrable interest debentures:

The fair value of other borrowings (consisting of Federal Home Loan Bank borrowings, securities sold under agreements to repurchase, and customer repurchase agreements), and junior subordinated deferrable interest debentures are determined using the net present value of discounted cash flows based on current borrowing rates for similar types of borrowing arrangements, and are obtained from an independent third party.

Other financial instruments:

The fair value of commitments to extend credit and letters of credit is determined to be the contract amount, since these financial instruments generally represent commitments at existing rates.  The fair value of other borrowings is determined based on a discounted cash flow analysis using current interest rates.  The fair value of other liabilities is generally considered to be carrying value except for the deferred compensation agreement.  The fair value of the contract is determined based on a discounted cash flow analysis using a current interest rate for a similar instrument.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information.  These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument over the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.  Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in assumptions could significantly affect these estimates.

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Subsequent Events

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

NOTE 8 – SUBSEQUENT EVENTS

Management evaluated subsequent events through the date the consolidated financial statements were issued. Events or transactions occurring after June  30, 2016 but prior to when the consolidated financial statements were issued, that provided additional evidence about conditions that existed at June  30, 2016 have been recognized in the consolidated financial statements for the period ended June  30, 2016.  Events or transactions that provided evidence about conditions that did not exist at June  30, 2016 but arose before the financial statements were issued have not been recognized in the consolidated financial statements for the period ended June  30, 2016.

On July 19, 2016, the Corporation's Board of Directors approved a cash dividend of $0.11 per common share payable September 15, 2016 to shareholders of record at the close of business on August 31, 2016.

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Securities (Tables)

6 Months Ended

Jun. 30, 2016

Securities [Abstract]

Amortized Cost and Fair Value of Securities

The amortized cost and fair value of available-for-sale securities as of June 30, 2016 and December 31, 2015 are as follows (in thousands):

	June 30, 2016				December 31, 2015
	Amortized cost		Fair value		Amortized cost		Fair value
Available-for-sale:
U.S. Government and agencies	$	2,998	$	3,012	$	3,998	$	3,966
Obligations of states and political
subdivisions		65,894		68,736		71,589		73,482
Mortgage-backed		109,737		112,103		104,223		104,480
Other		1,002		1,022		1,002		1,001
Total	$	179,631	$	184,873	$	180,812	$	182,929

Unrealized Gain (Loss) on Securities

A summary of gross unrealized gains and losses on available-for-sale securities as of June 30, 2016 and December 31, 2015 follows (in thousands):

	June 30, 2016				December 31, 2015
	Gross unrealized gains		Gross unrealized losses		Gross unrealized gains		Gross unrealized losses
Available-for-sale:
U.S. Government and agencies	$	14	$	-	$	-	$	32
Obligations of states and political
subdivisions		2,845		3		1,960		67
Mortgage-backed		2,391		25		1,071		814
Other		20		-		-		1
Total	$	5,270	$	28	$	3,031	$	914

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Loans and Leases (Tables)

6 Months Ended

Jun. 30, 2016

Loans and Leases [Abstract]

Activity in the Allowance for Credit Losses on Financing Receivables

The following tables present the activity in the allowance for loan and lease losses by portfolio segment for the periods ending June 30, 2016 and 2015 (in thousands).

	Commercial		Commercial and multi-family real estate			Residential 1 – 4 family real estate	Consumer		Total
Balance at December 31, 2015	$	893	$	2,540	$	373	$	28	$	3,834
Provision (credit) charged to expenses		106		(809)		7		(4)		(700)
Losses charged off		-		(11)		(24)		(8)		(43)
Recoveries		18		251		0		8		277
Balance at June 30, 2016	$	1,017	$	1,971	$	356	$	24	$	3,368
	Commercial		Commercial and multi-family real estate			Residential 1 – 4 family real estate	Consumer		Total
Balance at December 31, 2014	$	198	$	3,255	$	363	$	24	$	3,840
Provision (credit) charged to expenses		246		(183)		37		-		100
Losses charged off		(327)		(126)		(108)		(11)		(572)
Recoveries		60		77		19		2		158
Balance at June 30, 2015	$	177	$	3,023	$	311	$	15	$	3,526

Allowance for Loan and Lease Losses, Current

The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment method for the periods ending June 30, 2016 and December 31, 2015 (in thousands):

June 30, 2016	Commercial		Commercial and multi-family real estate		Residential 1 – 4 family real estate		Consumer		Total
Allowance for loan and lease losses:
Attributable to loans and leases
individually evaluated for impairment	$	614	$	711	$	-	$	-	$	1,325
Collectively evaluated for impairment		403		1,260		356		24		2,043
Total allowance for loan
and lease losses	$	1,017	$	1,971	$	356	$	24	$	3,368
Loans and leases:
Individually evaluated for impairment	$	1,593	$	2,088	$	-	$	-	$	3,681
Acquired with deteriorated
credit quality		-		627		55		-		682
Collectively evaluated for impairment		67,586		204,732		79,280		3,812		355,410
Total ending loans and
leases balance	$	69,179	$	207,447	$	79,335	$	3,812	$	359,773
December 31, 2015	Commercial		Commercial and multi-family real estate		Residential 1 – 4 family real estate		Consumer		Total
Allowance for loan and lease losses:
Attributable to loans and leases
individually evaluated for impairment	$	528	$	842	$	-	$	-	$	1,370
Collectively evaluated for impairment		365		1,698		373		28		2,464
Total allowance for loan
and lease losses	$	893	$	2,540	$	373	$	28	$	3,834
Loans and leases:
Individually evaluated for impairment	$	2,192	$	3,820	$	-	$	-	$	6,012
Acquired with deteriorated
credit quality		43		669		74		-		786
Collectively evaluated for impairment		64,092		201,481		78,022		3,857		347,452
Total ending loans and
leases balance	$	66,327	$	205,970	$	78,096	$	3,857	$	354,250

Schedule of Impaired Loans and Leases

Impaired loans and leases were as follows as of June 30, 2016 and December 31, 2015:

	(in thousands)
	June 30, 2016		December 31, 2015
Loans and leases with no allowance
for loan and lease losses allocated	$	-	$	-
Loans and leases with allowance
for loan and lease losses allocated		3,681		6,012
Total impaired loans and leases		3,681		6,012
Amount of the allowance allocated to impaired loans and leases	$	1,325	$	1,370

Schedule of Activity in Allowance of Impaired Loans and Leases

The following table presents loans and leases individually evaluated for impairment by class of loans as of June 30, 2016 and December 31, 2015:

	(in thousands)
	June 30, 2016				December 31, 2015
	Recorded investment		Allowance for loan and lease losses allocated		Recorded investment		Allowance for loan and lease losses allocated
With no related allowance recorded:
Commercial	$	-	$	-	$	-	$	-
Commercial and multi-family real estate		-		-		-		-
Agriculture		-		-		-		-
Agricultural real estate		-		-		-		-
Consumer		-		-		-		-
Residential 1-4 family real estate		-		-		-		-
With an allowance recorded:
Commercial		1,593		614		2,192		528
Commercial and multi-family real estate		2,088		711		3,820		842
Agriculture		-		-		-		-
Agricultural real estate		-		-		-		-
Consumer		-		-		-		-
Residential 1-4 family real estate		-		-		-		-
Total	$	3,681	$	1,325	$	6,012	$	1,370

Schedule of Financing Receivables, Non-Accrual Status

The following tables present the recorded investment in nonaccrual loans and leases, loans and leases past due over 90 days still on accrual and troubled debt restructurings by class of loans as of June 30, 2016 and December 31, 2015:

	(in thousands)
June 30, 2016	Nonaccrual		Loans and leases past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	1,732	$	-	$	62
Commercial real estate		3,596		-		722
Agricultural real estate		40		-		-
Agriculture		-		-		-
Consumer		5		-		-
Residential:
1 – 4 family		1,211		-		391
Home equity		-		-		-
Total	$	6,584	$	-	$	1,175

December 31, 2015	Nonaccrual		Loans and leases past due over 90 days still accruing		Troubled Debt Restructurings
Commercial	$	355	$	-	$	-
Commercial real estate		4,113		-		1,403
Agricultural real estate		52		260		-
Agriculture		19		-		-
Consumer		12		-		-
Residential:
1 – 4 family		1,394		-		393
Home equity		-		-		-
Total	$	5,945	$	260	$	1,796

Past Due Financing Receivables

The following table presents the aging of the recorded investment in past due loans and leases as of June 30, 2016 by class of loans and leases (in thousands):

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans and leases not past due			Total
Commercial	$	22	$	-	$	81	$	103	$	57,420	$	57,523
Commercial real estate		118		49		407		574		183,567		184,141
Agriculture		-		-		-		-		11,656		11,656
Agricultural real estate		6		266		-		272		23,034		23,306
Consumer		25		-		-		25		3,787		3,812
Residential real estate		1,854		213		267		2,334		77,001		79,335
Total	$	2,025	$	528	$	755	$	3,308	$	356,465	$	359,773

The following table presents the aging of the recorded investment in past due loans and leases as of December 31, 2015 by class of loans and leases: (in thousands)

	30 – 59 days past due		60 – 89 days past due		Greater than 90 days past due		Total past due		Loans and leases not past due			Total
Commercial	$	81	$	50	$	121	$	252	$	53,210	$	53,462
Commercial real estate		644		16		1,225		1,885		181,952		183,837
Agriculture		150		-		19		169		12,696		12,865
Agricultural real estate		94		-		260		354		21,779		22,133
Consumer		49		-		5		54		3,803		3,857
Residential real estate		2,147		244		389		2,780		75,316		78,096
Total	$	3,165	$	310	$	2,019	$	5,494	$	348,756	$	354,250

Risk Category of Loans, Credit Quality Indicators

As of June 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans and leases is as follows (in thousands):

June 30, 2016	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	45,295	$	-	$	4,492	$	-	$	19,392
Commercial and multi-
family real estate		148,621		4,450		4,007		-		50,369
Residential 1 - 4 family		216		-		-		-		79,119
Consumer		-		-		-		-		3,812
Total	$	194,132	$	4,450	$	8,499	$	-	$	152,692

December 31, 2015	Pass		Special Mention		Substandard		Doubtful		Not rated
Commercial	$	41,184	$	2,806	$	2,656	$	-	$	19,681
Commercial and multi-
family real estate		139,351		7,563		5,976		-		53,080
Residential 1 - 4 family		223		-		-		-		77,873
Consumer		-		-		-		-		3,857
Total	$	180,758	$	10,369	$	8,632	$	-	$	154,491

Performance of Residential and Consumer Loan Portfolio

The following table presents the recorded investment in all loans and leases that are not risk rated, based on payment activity as of June 30, 2016 and December 31, 2015 (in thousands):

:

June 30, 2016	Commercial		Commercial and multi-family real estate		Residential 1-4 family		Consumer
Performing	$	19,311	$	49,963	$	78,852	$	3,812
Nonperforming		81		406		267		-
Total	$	19,392	$	50,369	$	79,119	$	3,812
December 31, 2015	Commercial		Commercial and multi-family real estate		Residential 1-4 family		Consumer
Performing	$	19,541	$	52,248	$	77,484	$	3,852
Nonperforming		140		832		389		5
Total	$	19,681	$	53,080	$	77,873	$	3,857

Troubled Debt Restructurings on Financing Receivables

The following table includes the recorded investment and number of modifications for TDR loans and leases during the six month period ended June 30, 2016 (in thousands):

	Number of modifications		Recorded investment		Allowance for loan and lease losses allocated
Troubled Debt Restructurings:
Commercial		1	$	62	$	-
Commercial Real Estate		3		244		-
Total		4	$	306	$	-

Schedule of Loans Acquired in Acquisition

The following is additional information with respect to loans and leases acquired through The Ohio State Bank acquisition (in thousands):

		Contractual
		Principal		Accretable		Carrying
		Receivable		Difference		Amount
Purchased Performing Loans and Leases
Balance at December 31, 2015	$	41,874	$	(1,809)	$	40,065
Change due to payments received		(3,863)		180		(3,683)
Transfer to foreclosed real estate		-		-		-
Change due to loan charge-off		-		-		-
Balance at June 30, 2016	$	38,011	$	(1,629)	$	36,382
		Contractual		Non
		Principal		Accretable		Carrying
		Receivable		Difference		Amount
Purchased Impaired Loans and Leases
Balance at December 31, 2015	$	1,959	$	(1,194)	$	765
Change due to payments received		(73)		6		(67)
Transfer to foreclosed real estate		-		-		-
Change due to loan charge-off		(136)		120		(16)
Balance at June 30, 2016	$	1,750	$	(1,068)	$	682

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value [Abstract]

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The table below presents a reconciliation and income statement classification of gains and losses for mortgage servicing rights, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the six month period ended June 30, 2016 and year ended December 31, 2015:

	(in thousands)
	June 30,		December 31,
	2016		2015
Mortgage Servicing Rights
Balance at beginning of period	$	1,181	$	1,218
Gains or losses, including realized and unrealized:
Purchases, issuances, and settlements		79		252
Disposals - amortization based on loan payments and payoffs		(84)		(552)
Changes in fair value	$	(223)	$	263
Balance at end of period		953		1,181
Securities valued using Level 3 inputs
Balance at beginning of period	$	2,389	$	2,536
Principal payments received		(75)		(145)
Changes in Fair Value		-		(2)
Balance at end of period	$	2,314	$	2,389

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value [Abstract]

Carrying Amounts and Fair Values of Recognized Financial Instruments

The carrying amounts and estimated fair values of recognized financial instruments at June 30, 2016 and December 31, 2015 were as follows (in thousands):

	June 30, 2016				December 31, 2015
	Carrying amount		Estimated value		Carrying amount		Estimated value		Input  Level
FINANCIAL ASSETS
Cash and cash equivalents	$	22,940	$	22,940	$	22,922	$	22,922	1
Securities, including Federal
Home Loan Bank stock		189,703		189,703		187,759		187,759	1,2,3
Certificates of deposit		1,992		1,992		1,992		1,992	2
Loans held for sale		814		814		347		347	3
Net loans		356,405		359,680		350,416		350,374	3
Mortgage servicing rights		953		953		1,181		1,181	3
	$	572,807	$	576,082	$	564,617	$	564,575
FINANCIAL LIABILITIES
Deposits
Maturity	$	141,530		141,540	$	148,486	$	147,164	3
Non-maturity		370,431		370,431		369,934		369,934	1
Other borrowings		12,079		12,079		2,118		2,118	3
Junior subordinated deferrable
interest debentures		12,789		6,700		12,773		8,265	3
	$	536,829	$	530,750	$	533,311	$	527,481

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Securities (Amortized Cost and Fair Value of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized cost	$ 179,631	$ 180,812
Fair value	184,873	182,929
U.S. Government and Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized cost	2,998	3,998
Fair value	3,012	3,966
Obligations of States and Political Subdivisions [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized cost	65,894	71,589
Fair value	68,736	73,482
Mortgage-backed Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized cost	109,737	104,223
Fair value	112,103	104,480
Other Available-for-Sale Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized cost	1,002	1,002
Fair value	$ 1,022	$ 1,001

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Securities (Gross Unrealized Gains and Losses on Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities gross unrealized gains	$ 5,270	$ 3,031
Available-for-sale securities gross unrealized losses	28	914
U.S. Government and Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities gross unrealized gains	14
Available-for-sale securities gross unrealized losses		32
Obligations of States and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities gross unrealized gains	2,845	1,960
Available-for-sale securities gross unrealized losses	3	67
Mortgage-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities gross unrealized gains	2,391	1,071
Available-for-sale securities gross unrealized losses	25	814
Other Available-for-Sale Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities gross unrealized gains	$ 20
Available-for-sale securities gross unrealized losses		$ 1

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Loans and Leases (Narrative) (Details) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Impaired financing receivable, average recorded investment	$ 4,200,000	$ 5,200,000
Impaired financing receivable, interest income, accrual method	182,000	138,000
Provision charged to expenses	(700,000)	$ 100,000
Ohio State Bancshares, Inc. [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases acquired with deteriorated credit quality	682,000		$ 765,000
Provision charged to expenses	$ 0		$ 0

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Loans and Leases (Activity in the Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses balance	$ 3,834	$ 3,840	$ 3,840
Provision (credit) charged to expenses	(700)	100
Losses charged-off	(43)	(572)
Recoveries	277	158
Allowance for loan and lease losses balance	3,368	3,526	3,834
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses balance	893	198	198
Provision (credit) charged to expenses	106	246
Losses charged-off		(327)
Recoveries	18	60
Allowance for loan and lease losses balance	1,017	177	893
Commercial and Multi-Family Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses balance	2,540	3,255	3,255
Provision (credit) charged to expenses	(809)	(183)
Losses charged-off	(11)	(126)
Recoveries	251	77
Allowance for loan and lease losses balance	1,971	3,023	2,540
Residential 1 - 4 Family Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses balance	373	363	363
Provision (credit) charged to expenses	7	37
Losses charged-off	(24)	(108)
Recoveries	0	19
Allowance for loan and lease losses balance	356	311	373
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses balance	28	24	24
Provision (credit) charged to expenses	(4)
Losses charged-off	(8)	(11)
Recoveries	8	2
Allowance for loan and lease losses balance	$ 24	$ 15	$ 28

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Loans and Leases (Activity in the Allowance for Loan Losses by Portfolio Segment) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, attributable to loans individually evaluated for impairment	$ 1,325	$ 1,370
Allowance for loan and lease losses, collectively evaluated for impairment	2,043	2,464
Allowance for loan and lease losses	3,368	3,834
Loans and leases individually evaluated for impairment	3,681	6,012
Loans and leases collectively evaluated for impairment	355,410	347,452
Total loans and leases balance	359,773	354,250
Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases acquired with deteriorated credit quality	682	786
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, attributable to loans individually evaluated for impairment	614	528
Allowance for loan and lease losses, collectively evaluated for impairment	403	365
Allowance for loan and lease losses	1,017	893
Loans and leases individually evaluated for impairment	1,593	2,192
Loans and leases acquired with deteriorated credit quality	19,392	19,681
Loans and leases collectively evaluated for impairment	67,586	64,092
Total loans and leases balance	57,523	53,462
Commercial [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases acquired with deteriorated credit quality		43
Commercial [Member] | Commercial Borrower [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans and leases balance	69,179	66,327
Commercial and Multi-Family Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, attributable to loans individually evaluated for impairment	711	842
Allowance for loan and lease losses, collectively evaluated for impairment	1,260	1,698
Allowance for loan and lease losses	1,971	2,540
Loans and leases individually evaluated for impairment	2,088	3,820
Loans and leases acquired with deteriorated credit quality	50,369	53,080
Loans and leases collectively evaluated for impairment	204,732	201,481
Total loans and leases balance	207,447	205,970
Commercial and Multi-Family Real Estate [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases acquired with deteriorated credit quality	627	669
Residential 1 - 4 Family Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, collectively evaluated for impairment	356	373
Allowance for loan and lease losses	356	373
Loans and leases acquired with deteriorated credit quality	79,119	77,873
Loans and leases collectively evaluated for impairment	79,280	78,022
Total loans and leases balance	79,335	78,096
Residential 1 - 4 Family Real Estate [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases acquired with deteriorated credit quality	55	74
Agriculture [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Total loans and leases balance	11,656	12,865
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan and lease losses, collectively evaluated for impairment	24	28
Allowance for loan and lease losses	24	28
Loans and leases acquired with deteriorated credit quality	3,812	3,857
Loans and leases collectively evaluated for impairment	3,812	3,857
Total loans and leases balance	$ 3,812	$ 3,857

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Loans and Leases (Loans Individually Evaluated for Impairment) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Recorded investment, with allowance recorded	$ 3,681	$ 6,012
Total impaired loans and leases	3,681	6,012
Amount of the allowance allocated to impaired loans and leases	1,325	1,370
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Recorded investment, with allowance recorded	1,593	2,192
Amount of the allowance allocated to impaired loans and leases	614	528
Commercial and Multi-Family Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded investment, with allowance recorded	2,088	3,820
Amount of the allowance allocated to impaired loans and leases	$ 711	$ 842

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Loans and Leases (Nonaccrual Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual	$ 6,584	$ 5,945
Loans past due over 90 days and still accruing		260
Troubled debt restructurings	1,175	1,796
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual	1,732	355
Loans past due over 90 days and still accruing
Troubled debt restructurings	62
Commercial [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual	3,596	4,113
Loans past due over 90 days and still accruing
Troubled debt restructurings	722	1,403
Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual		19
Loans past due over 90 days and still accruing
Agriculture [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual	40	52
Loans past due over 90 days and still accruing		260
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual	5	12
Loans past due over 90 days and still accruing
Residential 1 - 4 Family Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual	1,211	1,394
Loans past due over 90 days and still accruing
Troubled debt restructurings	391	$ 393
Residential Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans past due over 90 days and still accruing

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Loans and Leases (Aging of the Recorded Investment in Past Due Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 3,308	$ 5,494
Loans not past due	356,465	348,756
Total loans and leases balance	359,773	354,250
30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,025	3,165
60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	528	310
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	755	2,019
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	103	252
Loans not past due	57,420	53,210
Total loans and leases balance	57,523	53,462
Commercial [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	22	81
Commercial [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		50
Commercial [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	81	121
Commercial [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	574	1,885
Loans not past due	183,567	181,952
Total loans and leases balance	184,141	183,837
Commercial [Member] | Real Estate [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	118	644
Commercial [Member] | Real Estate [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	49	16
Commercial [Member] | Real Estate [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	407	1,225
Agriculture [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		169
Loans not past due	11,656	12,696
Total loans and leases balance	11,656	12,865
Agriculture [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		150
Agriculture [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due
Agriculture [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		19
Agriculture [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	272	354
Loans not past due	23,034	21,779
Total loans and leases balance	23,306	22,133
Agriculture [Member] | Real Estate [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	6	94
Agriculture [Member] | Real Estate [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	266
Agriculture [Member] | Real Estate [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		260
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	25	54
Loans not past due	3,787	3,803
Total loans and leases balance	3,812	3,857
Consumer [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	25	49
Consumer [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due
Consumer [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		5
Residential 1 - 4 Family Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans and leases balance	79,335	78,096
Residential 1 - 4 Family Real Estate [Member] | Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,334	2,780
Loans not past due	77,001	75,316
Total loans and leases balance	79,335	78,096
Residential 1 - 4 Family Real Estate [Member] | Real Estate [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,854	2,147
Residential 1 - 4 Family Real Estate [Member] | Real Estate [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	213	244
Residential 1 - 4 Family Real Estate [Member] | Real Estate [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 267	$ 389

XML

Loans and Leases (Loans by Credit Quality Indicators) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 359,773	$ 354,250
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	194,132	180,758
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	4,450	10,369
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	8,499	8,632
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	152,692	154,491
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	57,523	53,462
Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	45,295	41,184
Commercial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable		2,806
Commercial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	4,492	2,656
Commercial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Commercial [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	19,392	19,681
Commercial and Multi-Family Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	207,447	205,970
Commercial and Multi-Family Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	148,621	139,351
Commercial and Multi-Family Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	4,450	7,563
Commercial and Multi-Family Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	4,007	5,976
Commercial and Multi-Family Real Estate [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Commercial and Multi-Family Real Estate [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	50,369	53,080
Residential 1 - 4 Family Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	79,335	78,096
Residential 1 - 4 Family Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	216	223
Residential 1 - 4 Family Real Estate [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Residential 1 - 4 Family Real Estate [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	79,119	77,873
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,812	3,857
Consumer [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable
Consumer [Member] | Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 3,812	$ 3,857

XML

Loans and Leases (Performance of the Loan Portfolio) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	$ 19,392	$ 19,681
Commercial [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	19,311	19,541
Commercial [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	81	140
Commercial and Multi-Family Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	50,369	53,080
Commercial and Multi-Family Real Estate [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	49,963	52,248
Commercial and Multi-Family Real Estate [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	406	832
Residential 1 - 4 Family Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	79,119	77,873
Residential 1 - 4 Family Real Estate [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	78,852	77,484
Residential 1 - 4 Family Real Estate [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	267	389
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	3,812	3,857
Consumer [Member] | Performing Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans	$ 3,812	3,852
Consumer [Member] | Nonperforming Financial Instruments [Member]
Financing Receivable, Recorded Investment [Line Items]
Nonimpaired loans		$ 5

XML

Loans and Leases (Troubled Debt Restructurings) (Details) loan in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) loan	Dec. 31, 2015 USD ($)
Financing Receivable, Modifications [Line Items]
Allowance for loan losses allocated	$ 1,325	$ 1,370
Extended Maturity [Member]
Financing Receivable, Modifications [Line Items]
Number of modifications | loan	4
Recorded investment	$ 306
Allowance for loan losses allocated
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Allowance for loan losses allocated	$ 614	$ 528
Commercial [Member] | Extended Maturity [Member]
Financing Receivable, Modifications [Line Items]
Number of modifications | loan	1
Recorded investment	$ 62
Allowance for loan losses allocated
Commercial Real Estate [Member] | Extended Maturity [Member]
Financing Receivable, Modifications [Line Items]
Number of modifications | loan	3
Recorded investment	$ 244
Allowance for loan losses allocated

XML

Loans and Leases (Schedule of Loans Acquired in Acquisition) (Details) - Ohio State Bancshares, Inc. [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Performing Financial Instruments [Member]
Contractual Principal Receivable [Abstract]
Contractual principal receivable, beginning balance	$ 41,874
Contractual principal receivable, change due to payments received	(3,863)
Contractual principal receivable, ending balance	38,011
Accretable Difference [Abstract]
Accretable yield, beginning balance	(1,809)
Accretable yield, change due to payments received	180
Accretable yield, ending balance	(1,629)
Carrying Amount [Abstract]
Carrying amount, beginning balance	40,065
Carrying amount, change due to payments received	(3,683)
Carrying amount, ending balance	36,382
Nonperforming Financial Instruments [Member]
Contractual Principal Receivable [Abstract]
Contractual principal receivable, beginning balance	1,959
Contractual principal receivable, change due to payments received	(73)
Contractual principal receivable, change due to loan charge-off	(136)
Contractual principal receivable, ending balance	1,750
Accretable Difference [Abstract]
Non-accretable difference, beginning balance	(1,194)
Accretable yield, change due to payments received	6
Accretable yield, change due to loan charge-off	120
Non-accretable difference, ending balance	(1,068)
Carrying Amount [Abstract]
Carrying amount, beginning balance	765
Carrying amount, change due to payments received	(67)
Carrying amount, change due to loan charge-off	(16)
Carrying amount, ending balance	$ 682

XML

Junior Subordinated Deferrable Interest Debentures (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investments in and Advances to Affiliates, Balance, Principal Amount	$ 300,000
Guarantor Obligations, Maximum Exposure, Undiscounted	10,000,000
Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust	$ 12,789,000		$ 12,773,000
Subordinated Borrowing, Interest Rate	3.79%	3.43%
Interest Expense, Debt	$ 241,000	$ 219,000
Maximum Amount of Core Capital	25.00%
Maximum Consecutive Period that Interest Payments may be Deferred	5 years
Trust Preferred Securities [Member]
Junior Subordinated Debenture Owed to Unconsolidated Subsidiary Trust	$ 10,300,000
Debt Instrument, Maturity Date	Apr. 23, 2034
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	3.15%
Ohio State Bancshares, Inc. [Member]
Other Debt, Carrying Value	$ 2,489,000		$ 2,473,000
Ohio State Bancshares, Inc. [Member] | Junior Subordinated Debt [Member]
Debt Instrument, Maturity Date	Mar. 26, 2033
Ohio State Bancshares, Inc. [Member] | Trust Preferred Securities [Member]
Subordinated Borrowing, Interest Rate	3.49%	3.13%
Debt Instrument, Basis Spread on Variable Rate	2.85%
Liability Assumed	$ 3,093,000
Ohio State Bancshares, Inc. [Member] | Guaranteed Trust Preferred Securities [Member]
Liability Assumed	3,000,000
Ohio State Bancshares, Inc. [Member] | Trust Preferred Securities Secured by an Investment [Member]
Liability Assumed	$ 93,000

XML

Fair Value Measurements (Narrative) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value assets moved to a lower level fair value hierarchy	$ 0
Gain (loss) relating to securities available-for-sale included in earnings	0	$ 0
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial liabilities, fair value	0	0
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial liabilities, fair value	0	0
Assets, nonrecurring, fair value	2,400,000	4,600,000
Mortgage Servicing Rights [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, recurring, fair value	$ 953,000	$ 1,181,000
Minimum [Member] | Mortgage Servicing Rights [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	9.00%
Minimum [Member] | Additional Appraisal Adjustments [Member] | Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	15.00%
Minimum [Member] | Additional Appraisal Adjustments [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	10.00%
Minimum [Member] | Estimated Selling Costs [Member] | Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	10.00%
Minimum [Member] | Estimated Selling Costs [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	10.00%
Maximum [Member] | Mortgage Servicing Rights [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	11.00%
Maximum [Member] | Additional Appraisal Adjustments [Member] | Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	35.00%
Maximum [Member] | Additional Appraisal Adjustments [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	70.00%
Maximum [Member] | Estimated Selling Costs [Member] | Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	20.00%
Maximum [Member] | Estimated Selling Costs [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value inputs, discount rate	20.00%

XML

Fair Value Measurements (Reconciliation and Income Statement Classification of Gains and Losses) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Servicing Contracts [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of period	$ 1,181	$ 1,218
Purchases, issuances, and settlements	79	252
Disposals - amortization based on loan payments and payoffs	(84)	(552)
Changes in fair value	(223)	263
Balance at end of period	953	1,181
Fair Value, Inputs, Level 3 [Member] | Securities (Assets) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of period	2,389	2,536
Principal payments received	(75)	(145)
Changes in fair value		(2)
Balance at end of period	$ 2,314	$ 2,389

XML

Fair Value of Financial Instruments (Narrative) (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Commitments to Extend Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Other commitments	$ 87,135,000	$ 84,394,000

XML

Fair Value of Financial Instruments (Carrying Amounts and Estimated Fair Values of Recognized Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities, including Federal Home Loan Bank stock	$ 189,703	$ 187,759
Total Assets	576,082	564,575
Total financial liabilities	530,750	527,481
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	22,940	22,922
Securities, including Federal Home Loan Bank stock	189,703	187,759
Certificates of deposit	1,992	1,992
Loans held for sale	814	347
Net loans	356,405	350,416
Mortgage servicing rights	953	1,181
Total Assets	572,807	564,617
Other borrowings	12,079	2,118
Junior subordinated deferrable interest debentures	12,789	12,773
Total financial liabilities	536,829	533,311
Maturity Deposits [Member] | Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deposits estimated value	141,530	148,486
Non-Maturity Deposits [Member] | Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deposits estimated value	370,431	369,934
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	22,940	22,922
Fair Value, Inputs, Level 1 [Member] | Non-Maturity Deposits [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deposits estimated value	370,431	369,934
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Certificates of deposit	1,992	1,992
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans held for sale	814	347
Net loans	359,680	350,374
Mortgage servicing rights	953	1,181
Other borrowings	12,079	2,118
Junior subordinated deferrable interest debentures	6,700	8,265
Fair Value, Inputs, Level 3 [Member] | Maturity Deposits [Member] | Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deposits estimated value	$ 141,540	$ 147,164

XML

Subsequent Events (Narrative) (Details) - Subsequent Event [Member]	Jul. 19, 2016 $ / shares
Subsequent Event [Line Items]
Dividends, date declared	Jul. 19, 2016
Dividends payable (dollars per share)	$ 0.11
Dividends, date to be paid	Sep. 15, 2016
Dividends, date of record	Aug. 31, 2016