10-Q

Table Of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended September 30, 2015

Or

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

For the transition period from              to             

Commission file number: 001-33033

PORTER BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky	61-1142247
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
2500 Eastpoint Parkway, Louisville, Kentucky	40223
(Address of principal executive offices)	(Zip Code)

(502) 499-4800

(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 shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No  ☐

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

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

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

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

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

20,091,205 shares of Common Stock and 6,858,000 shares of Non-Voting Common Stock, no par value, were outstanding at October 31, 2015.

INDEX

		Page
PART I –	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	37
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	58
ITEM 4.	CONTROLS AND PROCEDURES	58
PART II –	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	59
ITEM 1A.	RISK FACTORS	59
ITEM 2.	UNREGISTERED SALES ON EQUITY SECURITIES AND USE OF PROCEEDS	59
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	59
ITEM 4.	MINE SAFETY DISCLOSURES	59
ITEM 5.	OTHER INFORMATION	59
ITEM 6.	EXHIBITS	59

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The following consolidated financial statements of Porter Bancorp, Inc. and subsidiary, PBI Bank, Inc. are submitted:

Unaudited Consolidated Balance Sheets for September 30, 2015 and December 31, 2014

Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014

Unaudited Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2015 and 2014

Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended September 30, 2015

Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014

Notes to Unaudited Consolidated Financial Statements

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PORTER BANCORP, INC.

Unaudited Consolidated Balance Sheets

(dollars in thousands except share data)

	September 30, 2015			December 31, 2014
Assets
Cash and due from banks	$	6,540		$	14,169
Interest bearing deposits in banks		73,940			66,011
Cash and cash equivalents		80,480			80,180
Securities available for sale		146,837			190,791
Securities held to maturity (fair value of $44,244 and $44,498, respectively)		42,138			42,325
Loans held for sale		71			8,926
Loans, net of allowance of $14,198 and $19,364, respectively		610,216			605,635
Premises and equipment, net		19,109			19,507
Other real estate owned		29,177			46,197
Federal Home Loan Bank stock		7,323			7,323
Bank owned life insurance		9,381			9,167
Accrued interest receivable and other assets		6,748			7,938
Total assets	$	951,480		$	1,017,989
Liabilities and Stockholders’ Equity
Deposits
Non-interest bearing	$	106,160		$	114,910
Interest bearing		771,733			811,931
Total deposits		877,893			926,841
Repurchase agreements		—			1,341
Federal Home Loan Bank advances		3,255			15,752
Accrued interest payable and other liabilities		11,249			10,640
Subordinated capital note		4,275			4,950
Junior subordinated debentures		21,000			25,000
Total liabilities		917,672			984,524
Stockholders’ equity
Preferred stock, no par
Series B - 0 and 40,536 issued and outstanding, respectively		—			2,229
Series D - 0 and 64,580 issued and outstanding, respectively		—			3,552
Series E - 6,198 issued and outstanding; Liquidation preference of $6.2 million		1,644			1,644
Series F - 4,304 issued and outstanding; Liquidation preference of $4.3 million		1,127			1,127
Total preferred stockholders’ equity		2,771			8,552
Common stock, no par, 86,000,000 shares authorized, 20,091,205 and 14,890,514 voting, and 6,858,000 and 0 non-voting shares issued and outstanding, respectively		120,699			113,238
Additional paid-in capital		23,522			21,442
Retained deficit		(110,207	)		(107,595	)
Accumulated other comprehensive loss		(2,977	)		(2,172	)
Total common stockholders’ equity		31,037			24,913
Total stockholders' equity		33,808			33,465
Total liabilities and stockholders’ equity	$	951,480		$	1,017,989

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Operations

(dollars in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Interest income
Loans, including fees	$	7,895		$	8,201		$	23,496		$	25,094
Taxable securities		986			1,265			3,122			3,653
Tax exempt securities		187			231			580			707
Fed funds sold and other		111			117			351			423
		9,179			9,814			27,549			29,877
Interest expense
Deposits		1,476			2,245			4,775			6,925
Federal Home Loan Bank advances		23			31			74			96
Subordinated capital note		40			47			123			144
Junior subordinated debentures		158			153			465			458
Federal funds purchased and other		—			1			1			3
		1,697			2,477			5,438			7,626
Net interest income		7,482			7,337			22,111			22,251
Provision (negative provision) for loan losses		(2,200	)		—			(2,200	)		6,300
Net interest income after provision (negative provision) for loan losses		9,682			7,337			24,311			15,951
Non-interest income
Service charges on deposit accounts		492			535			1,376			1,490
Bank card interchange fees		212			209			644			575
Other real estate owned rental income		380			5			1,109			30
Net gain on sales of securities		—			46			1,696			92
Gain on extinguishment of junior subordinated debt		883			—			883			—
Other		243			262			763			734
		2,210			1,057			6,471			2,921
Non-interest expense
Salaries and employee benefits		3,920			4,041			11,795			11,731
Occupancy and equipment		815			857			2,513			2,645
Professional fees		620			361			2,313			1,134
FDIC Insurance		539			571			1,673			1,682
Data processing expense		278			269			860			818
State franchise and deposit tax		285			405			855			1,235
Other real estate owned expense		5,131			560			8,796			1,996
Loan collection expense		321			858			895			2,646
Other		1,059			1,359			3,694			3,700
		12,968			9,281			33,394			27,587
Loss before income taxes		(1,076	)		(887	)		(2,612	)		(8,715	)
Income tax benefit		—			(38	)		—			(1,345	)
Net loss		(1,076	)		(849	)		(2,612	)		(7,370	)
Less:
Dividends on preferred stock		—			786			—			2,361
Loss allocated to participating securities		(45	)		(162	)		(338	)		(928	)
Net loss attributable to common shareholders	$	(1,031	)	$	(1,473	)	$	(2,274	)	$	(8,803	)
Basic and diluted loss per common share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.73	)

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Comprehensive Loss

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net loss	$	(1,076	)	$	(849	)	$	(2,612	)	$	(7,370	)
Other comprehensive income (loss):
Unrealized gain (loss) on securities:
Unrealized gain arising during the period		1,227			155			794			3,936
Amortization during the period of net unrealized loss transferred to held to maturity		33			82			97			149
Reclassification adjustment for gains included in net income		—			(46	)		(1,696	)		(92	)
Net unrealized gain (loss) recognized in comprehensive income		1,260			191			(805	)		3,993
Tax effect		—			(38	)		—			(1,345	)
Other comprehensive income (loss)		1,260			153			(805	)		2,648
Comprehensive income (loss)	$	184		$	(696	)	$	(3,417	)	$	(4,722	)

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Changes in Stockholders’ Equity

For Nine Months Ended September 30,

(Dollar amounts in thousands except share and per share data)

	Shares																		Amount
	Common								Preferred												Preferred										Common
	Common			Non-Voting Common		Total Common			Series B			Series D			Series E		Series F		Common and Non-Voting Common		Series B			Series D			Series E		Series F		Additional Paid-In Capital		Retained Deficit			Accumulated Other Compre- hensive Loss			Total
Balances, January 1, 2015		14,890,514			—		14,890,514			40,536			64,580			6,198		4,304	$	113,238	$	2,229		$	3,552		$	1,644	$	1,127	$	21,442	$	(107,595	)	$	(2,172	)	$	33,465
Issuance of unvested stock		915,740			—		915,740			—			—			—		—		—		—			—			—		—		—		—			—			—
Terminated stock		(538,479	)		—		(538,479	)		—			—			—		—		—		—			—			—		—		—		—			—			—
Forfeited unvested stock		(30,170	)		—		(30,170	)		—			—			—		—		—		—			—			—		—		—		—			—			—
Stock-based compensation expense		—			—		—			—			—			—		—		—		—			—			—		—		313		—			—			313
Net loss		—			—		—			—			—			—		—		—		—			—			—		—		—		(2,612	)		—			(2,612	)
Net change in accumulated other comprehensive loss, net of taxes		—			—		—			—			—			—		—		—		—			—			—		—		—		—			(805	)		(805	)
Conversion of preferred stock to common and non-voting common stock		4,053,600			6,458,000		10,511,600			(40,536	)		(64,580	)		—		—		5,781		(2,229	)		(3,552	)		—		—		—		—			—			—
Debt to equity exchange		800,000			400,000		1,200,000			—			—			—		—		1,680		—			—			—		—		1,767		—			—			3,447
Balances, September 30, 2015		20,091,205			6,858,000		26,949,205			—			—			6,198		4,304	$	120,699	$	—		$	—		$	1,644	$	1,127	$	23,522	$	(110,207	)	$	(2,977	)	$	33,808

See accompanying notes.

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PORTER BANCORP, INC.

Unaudited Consolidated Statements of Cash Flows

For Nine Months Ended September 30, 2015 and 2014

(dollars in thousands)

	2015			2014
Cash flows from operating activities
Net loss	$	(2,612	)	$	(7,370	)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization		1,201			1,329
Provision (negative provision) for loan losses		(2,200	)		6,300
Net amortization on securities		1,084			1,219
Stock-based compensation expense		313			480
Gain on extinguishment of junior subordinated debt		(883	)		—
Tax benefit from OCI components		—			(1,345	)
Net loss (gain) on sales of loans held for sale		216			(52	)
Loans originated for sale		(5,290	)		(2,265	)
Proceeds from sales of loans held for sale		5,289			2,466
Net (gain) loss on sales of other real estate owned		(27	)		(455	)
Net write-down of other real estate owned		7,080			1,250
Net realized gain on sales of investment securities		(1,696	)		(92	)
Earnings on bank owned life insurance, net of premium expense		(214	)		(192	)
Net change in accrued interest receivable and other assets		893			(132	)
Net change in accrued interest payable and other liabilities		939			1,888
Net cash from operating activities		4,093			3,029
Cash flows from investing activities
Purchases of available for sale securities		(16,800	)		(41,156	)
Sales and calls of available for sale securities		44,340			4,151
Maturities and prepayments of available for sale securities		16,408			11,295
Proceeds from mandatory redemption of Federal Home Loan Bank stock		—			2,749
Calls of held to maturity securities		—			1,000
Proceeds from sale of other real estate owned		14,417			7,253
Proceeds from sales of loans not originated for sale		8,640			—
Loan originations and payments, net		(7,029	)		28,844
Purchases of premises and equipment, net		(308	)		(416	)
Net cash from investing activities		59,668			13,720
Cash flows from financing activities
Net change in deposits		(48,948	)		(54,173	)
Net change in repurchase agreements		(1,341	)		(653	)
Repayment of Federal Home Loan Bank advances		(17,497	)		(10,577	)
Advances from Federal Home Loan Bank		5,000			23,025
Repayment of subordinated capital note		(675	)		(675	)
Net cash from financing activities		(63,461	)		(43,053	)
Net change in cash and cash equivalents		300			(26,304	)
Beginning cash and cash equivalents		80,180			111,134
Ending cash and cash equivalents	$	80,480		$	84,830
Supplemental cash flow information:
Interest paid	$	5,523		$	7,241
Income taxes paid (refunded)		—			—
Supplemental non-cash disclosure:
Transfer from loans to other real estate	$	4,450		$	31,663
Effect of junior subordinated debt to equity exchange		4,330			—

See accompanying notes to unaudited consolidated financial statements.

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PORTER BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation – The consolidated financial statements include Porter Bancorp, Inc. (Company) and its subsidiary, PBI Bank (Bank).  The Company owns a 100% interest in the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the entire year.  A description of other significant accounting policies is presented in the notes to the Consolidated Financial Statements for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K.

Use of Estimates – To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ.

Reclassifications – Some items in the prior year financial statements were reclassified to conform to the current presentation. The reclassifications did not impact net income (loss) or stockholders’ equity.

Note 2 – Going Concern Considerations and Future Plans

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. However, the events and circumstances described in this Note create substantial doubt about the Company’s ability to continue as a going concern.

During the three and nine months ended September 30, 2015, we reported net loss attributable to common shareholders of $1.0 million and $2.3 million, respectively, compared with net loss attributable to common shareholders of $1.5 million and $8.8 million for the three and nine months ended September 30, 2014, respectively. The improvement for 2015 is primarily attributable to a negative provision for loan losses of $2.2 million in the third quarter of 2015, compared to $6.3 million of provision expense recorded in the second quarter of 2014. The $2.2 million negative provision in the third quarter was primarily driven by declining historical loss rates, improvement in asset quality, and management’s assessment of risk in the portfolio. Substandard loans decreased by $21.5 million or 31.2% over the past quarter and $44.0 million or 48% over the first nine months of 2015. Net charge-offs were $3.0 million for the first nine months of 2015 compared to $10.2 million for the first nine months of 2014, and $411,000 for the third quarter of 2015 compared to $1.8 million in the second quarter of 2015. Nonaccrual loans decreased by $13.2 million or 43.8% over the past quarter, and $30.2 million or 64.0% over the first nine months of 2015.

At September 30, 2015, we continued to be involved in various legal proceedings in which we dispute the material factual allegations against us. After conferring with our legal advisors, we believe we have meritorious grounds on which to prevail. If we do not prevail, the ultimate outcome of any one of these matters could have a material adverse effect on our financial condition, results of operations, or cash flows. These matters are more fully described in Note 13 – “Contingencies”.

For the year ended December 31, 2014, we reported a net loss of $11.2 million. This loss was attributable primarily to loan loss provision of $7.1 million, OREO expense of $5.8 million resulting from fair value write-downs driven by new appraisals and reduced marketing prices, and ongoing operating expense, along with $3.0 million in loan collection expenses. We also had lower net interest margin due to lower average loans outstanding, loans re-pricing at lower rates, and the level of non-performing loans in our portfolio. After deductions for dividends and accretion on preferred stock of $2.4 million, allocating losses to participating securities of $3.2 million, and the effect of the exchange of preferred stock for common stock of $36.1 million, net income attributable to common shareholders was $19.4 million for the year ended December 31, 2014, compared with a net loss attributable to common shareholders of $3.4 million for the year ended December 31, 2013.

In June 2011, the Bank agreed to a Consent Order with the FDIC and KDFI in which the Bank agreed, among other things, to improve asset quality, reduce loan concentrations, and maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. In October 2012, the Bank entered into a revised Consent Order with the FDIC and KDFI again agreeing to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. The Bank also agreed that if it should be unable to reach the required capital levels, and if directed in writing by the FDIC, then the Bank would within 30 days develop, adopt and implement a written plan to sell or merge itself into another federally insured financial institution or otherwise immediately obtain a sufficient capital investment into the Bank to fully meet the capital requirements. In October 2015, the Bank agreed to enter into a new revised Consent Order, which includes several of the substantive provisions of the June 2011 and October 2012 Consent Orders, but omits previous provisions related to reducing loan concentrations that the Bank had satisfied. The revised Consent Order requires the Bank to continue to adhere to the plans implemented in response to the previous Consent Orders. The revised Consent Order is included as an exhibit to this report.

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We continue to work toward capital ratio compliance. As of September 30, 2015, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were both less than the minimum capital ratios required by the Consent Order. Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a consent order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions such as directing a bank to seek a buyer or taking a bank into receivership.

In order to meet the capital requirements of the Consent Order, the Board of Directors and management are continuing to evaluate and implement strategies to achieve the following objectives:

● Increasing capital through the limited issuance of common stock to new and existing shareholders.

● Continuing to operate the Company and Bank in a safe and sound manner.  We have reduced our lending concentrations, and the size of our balance sheet while continuing to remediate non-performing loans.

● In executing on our commitment to improve credit quality, reduce loan concentrations, and reduce balance sheet risk, we have:

o Reduced the size of our loan portfolio significantly from $1.3 billion at December 31, 2010 to $624.4 million at September 30, 2015.   

o Reduced our construction and development loans to less than 75% of total risk-based capital at September 30, 2015.

o Reduced our non-owner occupied commercial real estate loans, construction and development loans, and multi-family residential real estate loans.  These loans represented 221% of total risk-based capital at September 30, 2015, down from 262% at December 31, 2014.

● Executing on our commitment to sell OREO and reinvest in quality income producing assets.

o Our acquisition of real estate assets through the loan remediation process increased during 2014, as we acquired $32.3 million of OREO in 2014 compared with $20.6 million during 2013. We acquired $4.5 million in the first nine months of 2015. Nonaccrual loans totaled $17.0 million at September 30, 2015, and we expect to resolve a portion of these loans by foreclosure, which may result in further additions to our OREO portfolio.

o We incurred OREO losses totaling $7.1 million during the first nine months of 2015, the result of fair value write-downs to reflect reductions in listing prices for certain properties, updated appraisals, and the liquidation of properties through auctions near and after the end of the third quarter, offset by a $27,000 net gain on sales of OREO. Proceeds from the sale of OREO totaled $14.4 million for the nine months ended September 30, 2015, and $7.3 million for the nine months ended September 30, 2014. OREO expense may be elevated in future periods as we work to sell these properties, given the current size of the OREO portfolio. At quarter end, $6.5 million of OREO property was subject to a contract for sale or letter of intent.

o Real estate construction represents 50% of the OREO portfolio at September 30, 2015 compared with 40% at December 31, 2014. Commercial real estate represents 41% of the OREO portfolio at September 30, 2015 compared with 31% at December 31, 2014, and 1-4 family residential properties represent 9% of the portfolio at September 30, 2015 compared with 17% at December 31, 2014.

● Continuing to improve our internal processes and procedures, distribution of labor, and work-flow to ensure we have adequately and appropriately deployed resources in an efficient manner in the current environment.

The Company’s liquid assets were $1.2 million at September 30, 2015. Since the Bank is unlikely to be in a position to pay dividends to the parent company for the foreseeable future, cash inflows for the parent are limited to earnings on investment securities, sales of investment securities, interest on deposits with the Bank, the issuance of new debt, or the issuance of capital securities. Ongoing operating expenses of the parent company are forecast at approximately $1.0 million for the next twelve months.

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Effective with the fourth quarter of 2011, we began deferring interest payments on the junior subordinated debentures relating to our trust preferred securities. Deferring interest payments on the junior subordinated debentures resulted in a deferral of distributions on our trust preferred securities. If we defer distributions on our trust preferred securities for 20 consecutive quarters, we must pay all deferred distributions in full or we will be in default. Our deferral period expires in the third quarter of 2016. Deferred distributions on our trust preferred securities, which totaled $2.3 million as of September 30, 2015, are cumulative, and unpaid distributions accrue and compound on each subsequent payment date. If as a result of a default we become subject to any liquidation, dissolution or winding up, holders of the trust preferred securities will be entitled to receive the liquidation amounts to which they are entitled, including all accrued and unpaid distributions, before any distribution can be made to our shareholders. In addition, the holders of our Series E and Series F Preferred Shares will be entitled to receive liquidation distributions totaling $10.5 million before any distribution can be made to the holders of our common shares.

On September 30, 2015, we completed a common equity for debt exchange with holders of $4.0 million of the capital securities (the “Trust Securities”) of Porter Statutory Trust IV, a trust subsidiary of the Company. Accrued and unpaid interest on the Trust Securities totaled approximately $330,000. In exchange for the $4.3 million debt and interest liability, the Company issued 800,000 common shares and 400,000 non-voting common shares, for a total of 1,200,000 shares. In the transaction, a wholly owned subsidiary of the Company received a one-third portion of the Trust Securities directly from an unrelated third party in exchange for 400,000 common shares, resulting in an $883,000 gain on extinguishment of debt. The subsidiary also received two-thirds of the Trust Securities from related parties in exchange for 400,000 common shares and 400,000 non-voting common shares. The debt and interest liability exchanged with related parties was treated as a capital transaction.

Note 3 – Securities

The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2015
Available for sale
U.S. Government and federal agency	$	30,882	$	212	$	(279	)	$	30,815
Agency mortgage-backed: residential		104,642		1,637		(113	)		106,166
State and municipal		6,595		328		(7	)		6,916
Corporate bonds		2,316		6		(33	)		2,289
Other debt securities		572		79		—			651
Total available for sale	$	145,007	$	2,262	$	(432	)	$	146,837

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	42,138	$	2,106	$	—	$	44,244
Total held to maturity	$	42,138	$	2,106	$	—	$	44,244

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Available for sale
U.S. Government and federal agency	$	35,725	$	308	$	(590	)	$	35,443
Agency mortgage-backed: residential		121,985		1,970		(357	)		123,598
State and municipal		11,690		722		(8	)		12,404
Corporate bonds		18,087		853		(252	)		18,688
Other debt securities		572		86		—			658
Total available for sale	$	188,059	$	3,939	$	(1,207	)	$	190,791

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	42,325	$	2,173	$	—	$	44,498
Total held to maturity	$	42,325	$	2,173	$	—	$	44,498

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Sales and calls of available for sale securities were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Proceeds	$	230	$	4,147	$	44,340	$	4,151
Gross gains		—		86		1,832		132
Gross losses		—		40		136		40

The amortized cost and fair value of the debt investment securities portfolio are shown by contractual maturity.  Contractual maturities may differ from actual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities not due at a single maturity date are detailed separately. 

	September 30, 2015
	Amortized Cost		Fair Value
	(in thousands)
Maturity
Available for sale
Within one year	$	5,821	$	5,854
One to five years		8,532		8,882
Five to ten years		25,440		25,284
Beyond ten years		572		651
Agency mortgage-backed: residential		104,642		106,166
Total	$	145,007	$	146,837
Held to maturity
One to five years	$	15,644	$	16,262
Five to ten years		22,937		24,208
Beyond ten years		3,557		3,774
Total	$	42,138	$	44,244

Securities pledged at September 30, 2015 and December 31, 2014 had carrying values of approximately $51.6 million and $80.8 million, respectively, and were pledged to secure public deposits and repurchase agreements.

At September 30, 2015 and December 31, 2014, we held securities issued by the Commonwealth of Kentucky or municipalities in the Commonwealth of Kentucky having a book value of $17.7 million and $19.1 million, respectively.  Additionally, at September 30, 2015 and December 31, 2014, we held securities issued by the State of Texas or municipalities in the State of Texas having a book value of $4.3 million and $4.4 million, respectively.  At September 30, 2015 and December 31, 2014, there were no other holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

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Securities with unrealized losses at September 30, 2015 and December 31, 2014, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
September 30, 2015
Available for sale
U.S. Government and federal agency	$	5,280	$	(12	)	$	14,798	$	(267	)	$	20,078	$	(279	)
Agency mortgage-backed: residential		6,071		(40	)		4,014		(73	)		10,085		(113	)
State and municipal		472		(7	)		—		—			472		(7	)
Corporate bonds		1,519		(33	)		—		—			1,519		(33	)
Total available for sale temporarily impaired	$	13,342	$	(92	)	$	18,812	$	(340	)	$	32,154	$	(432	)

	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2014
Available for sale
U.S. Government and federal agency	$	7,778	$	(60	)	$	18,681	$	(530	)	$	26,459	$	(590	)
Agency mortgage-backed: residential		6,960		(12	)		17,938		(345	)		24,898		(357	)
State and municipal		569		(8	)		—		—			569		(8	)
Corporate bonds		4,884		(119	)		1,660		(133	)		6,544		(252	)
Total temporarily impaired	$	20,191	$	(199	)	$	38,279	$	(1,008	)	$	58,470	$	(1,207	)

There were no held to maturity securities in an unrecognized loss position at September 30, 2015 or December 31, 2014.

The Company evaluates securities for other than temporary impairment (OTTI) on a quarterly basis.  Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, underlying credit quality of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the sector or industry trends and cycles affecting the issuer, and the results of reviews of the issuer’s financial condition.  Management currently intends to hold all securities with unrealized losses until recovery, which for fixed income securities may be at maturity. As of September 30, 2015, management does not believe securities within our portfolio with unrealized losses should be classified as other than temporarily impaired.

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Note 4 – Loans

Loans were as follows:

	September 30,			December 31,
	2015			2014
	(in thousands)
Commercial	$	84,908		$	60,936
Commercial Real Estate:
Construction		31,484			33,173
Farmland		76,670			77,419
Nonfarm nonresidential		145,899			175,452
Residential Real Estate:
Multi-family		39,579			41,891
1-4 Family		204,309			197,278
Consumer		10,483			11,347
Agriculture		30,609			26,966
Other		473			537
Subtotal		624,414			624,999
Less: Allowance for loan losses		(14,198	)		(19,364	)
Loans, net	$	610,216		$	605,635

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2015 and 2014:

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
September 30, 2015:
Beginning balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809
Negative provision		(180	)		(1,334	)		(489	)		(73	)		(120	)		(4	)		(2,200	)
Loans charged off		(201	)		(768	)		(486	)		(70	)		(41	)		(14	)		(1,580	)
Recoveries		5			905			144			98			2			15			1,169
Ending balance	$	1,570		$	8,016		$	4,229		$	181		$	200		$	2		$	14,198
September 30, 2014:
Beginning balance	$	3,115		$	14,359		$	6,873		$	339		$	435		$	12		$	25,133
Provision for loan losses		(471	)		(336	)		803			28			(8	)		(16	)	–
Loans charged off		(216	)		(742	)		(806	)		(59	)	–				(1	)		(1,824	)
Recoveries		108			458			284			23			2			14			889
Ending balance	$	2,536		$	13,739		$	7,154		$	331		$	429		$	9		$	24,198

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The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2015 and 2014: 

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
September 30, 2015:
Beginning balance	$	2,046		$	10,931		$	5,787		$	274		$	319		$	7		$	19,364
Negative provision		(207	)		(1,657	)		(269	)		(51	)		(13	)		(3	)		(2,200	)
Loans charged off		(675	)		(2,361	)		(1,777	)		(200	)		(111	)		(47	)		(5,171	)
Recoveries		406			1,103			488			158			5			45			2,205
Ending balance	$	1,570		$	8,016		$	4,229		$	181		$	200		$	2		$	14,198
September 30, 2014:
Beginning balance	$	3,221		$	16,414		$	7,762		$	416		$	305		$	6		$	28,124
Provision for loan losses		(355	)		4,611			1,897			19			143			(15	)		6,300
Loans charged off		(670	)		(9,110	)		(3,162	)		(238	)		(30	)		(19	)		(13,229	)
Recoveries		340			1,824			657			134			11			37			3,003
Ending balance	$	2,536		$	13,739		$	7,154		$	331		$	429		$	9		$	24,198

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of September 30, 2015:

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	–	$	65	$	404	$	–	$	–	$	–	$	469
Collectively evaluated for impairment		1,570		7,951		3,825		181		200		2		13,729
Total ending allowance balance	$	1,570	$	8,016	$	4,229	$	181	$	200	$	2	$	14,198
Loans:
Loans individually evaluated for impairment	$	1,330	$	14,910	$	18,478	$	25	$	152	$	–	$	34,895
Loans collectively evaluated for impairment		83,578		239,143		225,410		10,458		30,457		473		589,519
Total ending loans balance	$	84,908	$	254,053	$	243,888	$	10,483	$	30,609	$	473	$	624,414

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

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	33	$	491	$	227	$	1	$	–	$	–	$	752
Collectively evaluated for impairment		2,013		10,440		5,560		273		319		7		18,612
Total ending allowance balance	$	2,046	$	10,931	$	5,787	$	274	$	319	$	7	$	19,364
Loans:
Loans individually evaluated for impairment	$	2,022	$	48,141	$	21,384	$	61	$	263	$	122	$	71,993
Loans collectively evaluated for impairment		58,914		237,903		217,785		11,286		26,703		415		553,006
Total ending loans balance	$	60,936	$	286,044	$	239,169	$	11,347	$	26,966	$	537	$	624,999

Impaired Loans

Impaired loans include restructured loans and loans on nonaccrual or classified as doubtful, whereby collection of the total amount is improbable, or loss, whereby all or a portion of the loan has been written off or a specific allowance for loss has been provided.

The following tables present information related to loans individually evaluated for impairment by class of loans as of September 30, 2015 and December 31, 2014 and for the three and nine months ended September 30, 2015 and 2014:

	As of September 30, 2015						Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,774	$	1,330	$	—	$	1,439	$	—	$	1,630	$	5
Commercial real estate:
Construction		803		654		—		833		3		2,426		11
Farmland		6,521		4,164		—		4,305		34		4,555		60
Nonfarm nonresidential		13,837		9,403		—		13,347		65		18,133		202
Residential real estate:
Multi-family		32		31		—		33		—		37		—
1-4 Family		15,204		12,426		—		13,163		96		14,040		340
Consumer		123		25		—		23		—		25		—
Agriculture		260		152		—		191		—		219		—
Other		—		—		—		—		1		61		5
Subtotal		38,554		28,185		—		33,334		199		41,126		623
With An Allowance Recorded:
Commercial		—		—		—		4		—		16		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		—		—		—		—		—		79		—
Nonfarm nonresidential		788		689		65		2,708		6		5,622		18
Residential real estate:
Multi-family		4,212		4,212		65		4,216		51		4,237		153
1-4 Family		1,809		1,809		339		1,691		29		1,709		68
Consumer		—		—		—		—		—		10		—
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		6,809		6,710		469		8,619		86		11,673		239
Total	$	45,363	$	34,895	$	469	$	41,953	$	285	$	52,799	$	862

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	As of December 31, 2014						Three Months Ended September 30, 2014				Nine Months Ended September 30, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	2,546	$	1,978	$	—	$	1,972	$	—	$	2,325	$	55
Commercial real estate:
Construction		4,714		4,100		—		4,133		3		5,783		9
Farmland		6,636		4,739		—		5,684		26		6,503		74
Nonfarm nonresidential		34,437		22,418		—		30,395		128		44,211		586
Residential real estate:
Multi-family		81		81		—		85		—		2,060		—
1-4 Family		18,496		15,266		—		19,987		150		24,520		567
Consumer		93		29		—		16		—		10		—
Agriculture		276		263		—		249		—		280		3
Other		367		122		—		169		5		288		14
Subtotal		67,646		48,996		—		62,690		312		85,980		1,308
With An Allowance Recorded:
Commercial		145		44		33		161		11		1,190		31
Commercial real estate:
Construction		—		—		—		355		5		736		16
Farmland		658		315		38		—		—		62		—
Nonfarm nonresidential		19,454		16,569		453		9,983		165		13,273		336
Residential real estate:
Multi-family		4,266		4,266		91		4,274		52		4,467		128
1-4 Family		1,791		1,771		136		1,715		20		1,858		58
Consumer		32		32		1		41		1		53		2
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		26,346		22,997		752		16,529		254		21,639		571
Total	$	93,992	$	71,993	$	752	$	79,219	$	566	$	107,619	$	1,879

Cash basis income recognized for the three and nine months ended September 30, 2015 was $47,000 and $149,000, respectively, compared to $58,000 and $480,000 for the three and nine months ended September 30, 2014.

Troubled Debt Restructuring

A troubled debt restructuring (TDR) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.  The majority of the Company’s TDRs involve a reduction in interest rate, a deferral of principal for a stated period of time, or an interest only period.  All TDRs are considered impaired and the Company has allocated reserves for these loans to reflect the present value of the concessionary terms granted to the borrower.

The following table presents the types of TDR loan modifications by portfolio segment outstanding as of September 30, 2015 and December 31, 2014: 

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
September 30, 2015
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		626		626
Commercial Real Estate:
Construction
Rate reduction		264		—		264
Farmland
Principal deferral		—		2,365		2,365
Nonfarm nonresidential
Rate reduction		5,679		75		5,754
Principal deferral		—		654		654
Residential Real Estate:
Multi-family
Rate reduction		4,212		—		4,212
1-4 Family
Rate reduction		7,501		—		7,501
Total TDRs	$	17,656	$	3,788	$	21,444

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	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
December 31, 2014
Commercial
Rate reduction	$	14	$	—	$	14
Principal deferral		—		869		869
Commercial Real Estate:
Construction
Rate reduction		268		3,379		3,647
Farmland
Principal deferral		—		2,365		2,365
Other
Rate reduction		8,622		13,894		22,516
Principal deferral		671		—		671
Residential Real Estate:
Multi-family
Rate reduction		4,266		—		4,266
1-4 Family
Rate reduction		8,112		—		8,112
Consumer
Rate reduction		32		—		32
Total TDRs	$	21,985	$	20,507	$	42,492

At September 30, 2015 and December 31, 2014, 83% and 52%, respectively, of the Company’s TDRs were performing according to their modified terms.  The Company allocated $198,000 and $579,000 in reserves to borrowers whose loan terms have been modified in TDRs as of September 30, 2015, and December 31, 2014, respectively.  The Company has made no commitment to lend additional amounts to customers as of September 30, 2015 and December 31, 2014 to borrowers with outstanding loans classified as TDRs.

Management periodically reviews renewals/modifications of previously identified TDRs, for which there was no principal forgiveness, to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed as the borrower has complied with the terms of the loan at the date of renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan after the date of the renewal/modification. In this instance, the TDR was originally considered a restructuring in a prior year as a result of a modification with an interest rate that was not commensurate with the risk of the underlying loan. Additionally, TDR classification can be removed in circumstances in which the Company performs a non-concessionary re-modification of the loan at terms that were considered to be at market for loans with comparable risk. Management expects the borrower will continue to perform under the re-modified terms based on the borrower’s past history of performance.

No TDR loan modifications occurred during the three or nine months ended September 30, 2015 or September 30, 2014. During the first nine months of 2015 and 2014, no TDRs defaulted on their restructured loan within the 12 month period following the loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.

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Nonperforming Loans

Nonperforming loans include impaired loans not on accrual and smaller balance homogeneous loans, such as residential mortgage and consumer loans, that are collectively evaluated for impairment.

The following table presents the recorded investment in nonaccrual and loans past due 90 days and still on accrual by class of loan as of September 30, 2015, and December 31, 2014: 

	Nonaccrual				Loans Past Due 90 Days And Over Still Accruing
	September 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
	(in thousands)
Commercial	$	1,330	$	1,978	$	—	$	—
Commercial Real Estate:
Construction		390		3,831		—		—
Farmland		4,164		5,054		—		—
Nonfarm nonresidential		4,412		26,892		—		—
Residential Real Estate:
Multi-family		32		80		—		—
1-4 Family		6,482		8,925		—		151
Consumer		25		30		—		—
Agriculture		152		263		—		—
Other		—		122		—		—
Total	$	16,987	$	47,175	$	—	$	151

The following table presents the aging of the recorded investment in past due loans as of September 30, 2015 and December 31, 2014: 

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
September 30, 2015
Commercial	$	18	$	4	$	—	$	1,330	$	1,352
Commercial Real Estate:
Construction		—		—		—		390		390
Farmland		407		7		—		4,164		4,578
Nonfarm nonresidential		—		44		—		4,412		4,456
Residential Real Estate:
Multi-family		—		—		—		32		32
1-4 Family		1,527		523		—		6,482		8,532
Consumer		14		—		—		25		39
Agriculture		6		—		—		152		158
Total	$	1,972	$	578	$	—	$	16,987	$	19,537

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	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
December 31, 2014
Commercial	$	86	$	—	$	—	$	1,978	$	2,064
Commercial Real Estate:
Construction		—		—		—		3,831		3,831
Farmland		400		14		—		5,054		5,468
Nonfarm nonresidential		241		318		—		26,892		27,451
Residential Real Estate:
Multi-family		—		—		—		80		80
1-4 Family		3,124		601		151		8,925		12,801
Consumer		109		47		—		30		186
Agriculture		—		—		—		263		263
Other		—		—		—		122		122
Total	$	3,960	$	980	$	151	$	47,175	$	52,266

Credit Quality Indicators 

We categorize all loans into risk categories at origination based upon original underwriting. Thereafter, we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends.  Additionally, loans are analyzed continuously through our internal and external loan review processes. Borrower relationships in excess of $500,000 are routinely analyzed through our credit administration processes which classify the loans as to credit risk. The following definitions are used for risk ratings:

Watch – Loans classified as watch are those loans which have experienced a potentially adverse development which necessitates increased monitoring.

Special Mention – Loans classified as special mention do not have all of the characteristics of substandard or doubtful loans. They have one or more deficiencies which warrant special attention and which corrective action, such as accelerated collection practices, may remedy.

Substandard – Loans classified as substandard are those loans with clear and defined weaknesses such as a highly leveraged position, unfavorable financial ratios, uncertain repayment sources or poor financial condition which may jeopardize the repayment of the debt as contractually agreed. They are characterized by the distinct possibility we will sustain some losses if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful are those loans which have characteristics similar to substandard loans but with an increased risk that collection or liquidation in full is highly questionable and improbable.

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

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
September 30, 2015
Commercial	$	75,683	$	3,263	$	—	$	5,962	$	—	$	84,908
Commercial Real Estate:
Construction		25,475		5,355		—		654		—		31,484
Farmland		65,831		4,299		—		6,540		—		76,670
Nonfarm nonresidential		111,725		23,161		1,339		9,674		—		145,899
Residential Real Estate:
Multi-family		30,692		4,921		—		3,966		—		39,579
1-4 Family		165,313		18,736		68		20,192		—		204,309
Consumer		9,759		208		293		223		—		10,483
Agriculture		23,519		6,783		—		307		—		30,609
Other		473		—		—		—		—		473
Total	$	508,470	$	66,726	$	1,700	$	47,518	$	—	$	624,414

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
December 31, 2014
Commercial	$	49,440	$	5,063	$	—	$	6,433	$	—	$	60,936
Commercial Real Estate:
Construction		25,266		2,990		—		4,917		—		33,173
Farmland		61,672		7,922		—		7,825		—		77,419
Nonfarm nonresidential		111,426		21,017		3,747		39,262		—		175,452
Residential Real Estate:
Multi-family		31,526		6,039		—		4,326		—		41,891
1-4 Family		145,450		23,928		131		27,769		—		197,278
Consumer		10,115		537		311		384		—		11,347
Agriculture		25,816		704		—		446		—		26,966
Other		415		—		—		122		—		537
Total	$	461,126	$	68,200	$	4,189	$	91,484	$	—	$	624,999

Note 5 – Other Real Estate Owned

Other real estate owned (OREO) is real estate acquired as a result of foreclosure or by deed in lieu of foreclosure.  It is classified as real estate owned until such time as it is sold.  When property is acquired as a result of foreclosure or by deed in lieu of foreclosure, it is recorded at its fair market value less cost to sell.  Any write-down of the property at the time of acquisition is charged to the allowance for loan losses.  Costs incurred in order to perfect the lien prior to foreclosure may be capitalized if the fair value less the cost to sell exceeds the balance of the loan at the time of transfer to OREO. Examples of eligible costs to be capitalized are payments of delinquent property taxes to clear tax liens or payments to contractors and subcontractors to clear mechanics’ liens.

Fair value of OREO is determined on an individual property basis. To determine the fair value of OREO for smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers.  If the internally evaluated market price is below our underlying investment in the property, appropriate write-downs are taken. For larger dollar residential and commercial real estate properties, we obtain a new appraisal of the subject property or have staff from our special assets group or in our centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned.  We typically obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent. Subsequent reductions in fair value are recorded as non-interest expense when a new appraisal indicates a decline in value or in cases where a listing price is lowered below the appraised amount. 

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The following table presents the major categories of OREO at the period-ends indicated:

	September 30, 2015			December 31, 2014
	(in thousands)
Commercial Real Estate:
Construction, land development, and other land	$	14,749		$	18,748
Farmland		34			669
Nonfarm nonresidential		12,059			14,860
Residential Real Estate:
Multi-family		—			4,988
1-4 Family		2,635			7,998
		29,477			47,263
Valuation allowance		(300	)		(1,066	)
	$	29,177		$	46,197

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands)						(in thousands)
OREO Valuation Allowance Activity:
Beginning balance	$	307		$	199		$	1,066		$	230
Provision to allowance		4,450			600			7,080			1,250
Write-downs		(4,457	)		(268	)		(7,846	)		(949	)
Ending balance	$	300		$	531		$	300		$	531

Residential loans secured by 1-4 family residential properties in the process of foreclosure totaled $1.6 million and $3.6 million at September 30, 2015 and December 31, 2014, respectively. At quarter end, $6.5 million of OREO property was subject to a contract for sale or letter of intent.

Net activity relating to other real estate owned during the nine months ended September 30, 2015 and 2014 is as follows:

	For the Nine Months Ended September 30,
	2015			2014
	(in thousands)
OREO Activity
OREO as of January 1	$	46,197		$	30,892
Real estate acquired		4,450			31,663
Valuation adjustment writedowns		(7,080	)		(1,250	)
Gain/(loss) on sale		27			455
Proceeds from sale of properties		(14,417	)		(7,253	)
OREO as of September 30	$	29,177		$	54,507

Expenses related to other real estate owned include:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015		2014			2015			2014
	(in thousands)					(in thousands)
Net (gain) loss on sales	$	16	$	(401	)	$	(27	)	$	(455	)
Provision to allowance		4,450		600			7,080			1,250
Operating expense		665		361			1,743			1,201
Total	$	5,131	$	560		$	8,796		$	1,996

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Note 6 – Deposits

The following table shows ending deposit balances by category as of:

	September 30, 2015		December 31, 2014
	(in thousands)
Non-interest bearing	$	106,160	$	114,910
Interest checking		83,247		91,086
Money market		119,324		109,734
Savings		35,131		36,430
Certificates of deposit		534,031		574,681
Total	$	877,893	$	926,841

Time deposits of $250,000 or more were $33.0 million and $34.4 million at September 30, 2015 and December 31, 2014, respectively.

Scheduled maturities of all time deposits at September 30, 2015 were as follows (in thousands):

Year 1	$	330,881
Year 2		122,321
Year 3		9,500
Year 4		21,319
Year 5		50,010
Thereafter		—
	$	534,031

Note 7 – Advances from the Federal Home Loan Bank

Advances from the Federal Home Loan Bank were as follows:

	September 30,		December 31,
	2015		2014
	(in thousands)
Monthly amortizing advances with fixed rates from 0.00% to 5.25% and maturities ranging from 2017 through 2033, averaging 2.73% at September 30, 2015 and 1.02% at December 31, 2014	$	3,255	$	15,752

Each advance is payable based upon the terms on agreement, with a prepayment penalty.  New advances are limited to a one year maturity or less. No prepayment penalties were incurred during 2015 or 2014. The advances are collateralized by first mortgage loans.  The borrowing capacity is based on the market value of the underlying pledged loans. At September 30, 2015, our additional borrowing capacity with the FHLB was $25.7 million. The availability of our borrowing capacity could be affected by our financial condition and the FHLB could require additional collateral or, among other things, exercise its right to deny a funding request, at its discretion.

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Note 8 – Fair Values Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use various valuation techniques to determine fair value, including market, income and cost approaches.  There are three levels of inputs that may be used to measure fair values:

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

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

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

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  When that occurs, we classify the fair value hierarchy on the lowest level of input that is significant to the fair value measurement.  We used the following methods and significant assumptions to estimate fair value.

Securities: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges, if available. This valuation method is classified as Level 1 in the fair value hierarchy. For securities where quoted prices are not available, fair values are calculated on market prices of similar securities, or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Matrix pricing relies on the securities’ relationship to similarly traded securities, benchmark curves, and the benchmarking of like securities. Matrix pricing utilizes observable market inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. In instances where broker quotes are used, these quotes are obtained from market makers or broker-dealers recognized to be market participants. This valuation method is classified as Level 2 in the fair value hierarchy. For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators. This valuation method is classified as Level 3 in the fair value hierarchy. Discounted cash flows are calculated using spread to swap and LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans: An impaired loan is evaluated at the time the loan is identified as impaired and is recorded at fair value less costs to sell. Fair value is measured based on the value of the collateral securing the loan and is classified as Level 3 in the fair value hierarchy. Fair value is determined using several methods. Generally, the fair value of real estate is determined based on appraisals by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. These routine adjustments are made to adjust the value of a specific property relative to comparable properties for variations in qualities such as location, size, and income production capacity relative to the subject property of the appraisal. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our impaired loans. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

We also apply discounts to the expected fair value of collateral for impaired loans where the likely resolution involves litigation or foreclosure. Resolution of this nature generally results in receiving lower values for real estate collateral in a more aggressive sales environment. We have utilized discounts ranging from 10% to 33% in our impairment evaluations when applicable.

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Impaired loans are evaluated quarterly for additional impairment. We obtain updated appraisals on properties securing our loans when circumstances are warranted such as at the time of renewal or when market conditions have significantly changed. This determination is made on a property-by-property basis in light of circumstances in the broader economic climate and our assessment of deterioration of real estate values in the market in which the property is located. The first stage of our assessment involves management’s inspection of the property in question. Management also engages in conversations with local real estate professionals, investors, and market participants to determine the likely marketing time and value range for the property. The second stage involves an assessment of current trends in the regional market. After thorough consideration of these factors, management will either internally evaluate fair value or order a new appraisal.

Other Real Estate Owned (OREO): OREO is evaluated at the time of acquisition and recorded at fair value as determined by independent appraisal or internal evaluation less cost to sell. Our quarterly evaluations of OREO for impairment are driven by property type. For smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers. Based on these consultations, we determine asking prices for OREO properties we are marketing for sale. If the internally evaluated fair value or asking price is below our recorded investment in the property, appropriate write-downs are taken.

For larger dollar commercial real estate properties, we obtain a new appraisal of the subject property or have staff in our special assets group or centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned. In some of these circumstances, an appraisal is in process at quarter end, and we must make our best estimate of the fair value of the underlying collateral based on our internal evaluation of the property, review of the most recent appraisal, and discussions with the currently engaged appraiser. We generally obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent. When an asking price is lowered below the most recent appraised value, appropriate write-downs are taken.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our OREO. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

Financial assets measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014 are summarized below:

			Fair Value Measurements at September 30, 2015 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	30,815	$	—	$	30,815	$	—
Agency mortgage-backed: residential		106,166		—		106,166		—
State and municipal		6,916		—		6,916		—
Corporate bonds		2,289		—		2,289		—
Other debt securities		651		—		—		651
Total	$	146,837	$	—	$	146,186	$	651

			Fair Value Measurements at December 31, 2014 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	35,443	$	—	$	35,443	$	—
Agency mortgage-backed: residential		123,598		—		123,598		—
State and municipal		12,404		—		12,404		—
Corporate bonds		18,688		—		18,688		—
Other debt securities		658		—		—		658
Total	$	190,791	$	—	$	190,133	$	658

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There were no transfers between Level 1 and Level 2 during 2015 or 2014.

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

	Other Debt Securities
	2015			2014
	(in thousands)
Balances of recurring Level 3 assets at January 1	$	658		$	632
Total gain (loss) for the period:
Included in other comprehensive income (loss)		(7	)		26
Balance of recurring Level 3 assets at September 30	$	651		$	658

Our other debt security valuation is determined internally by calculating discounted cash flows using the security’s coupon rate of 6.5% and an estimated current market rate of 8.25% based upon the current yield curve plus spreads that adjust for volatility, credit risk, and optionality.  We also consider the issuer’s publicly filed financial information as well as assumptions regarding the likelihood of deferrals and defaults.

Financial assets measured at fair value on a non-recurring basis are summarized below: 

			Fair Value Measurements at September 30, 2015 Using
			(in thousands)
		Carrying Value	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		—		—		—		—
Nonfarm nonresidential		339		—		—		339
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,470		—		—		1,470
Consumer		—		—		—		—
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		14,599		—		—		14,599
Farmland		33		—		—		33
Nonfarm nonresidential		11,937		—		—		11,937
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		2,608		—		—		2,608

			Fair Value Measurements at December 31, 2014 Using
			(in thousands)
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description
Impaired loans:
Commercial	$	12	$	—	$	—	$	12
Commercial real estate:
Construction		—		—		—		—
Farmland		278		—		—		278
Other		15,825		—		—		15,825
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,635		—		—		1,635
Consumer		31		—		—		31
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		18,325		—		—		18,325
Farmland		654		—		—		654
Other		14,525		—		—		14,525
Residential real estate:
Multi-family		4,875		—		—		4,875
1-4 Family		7,818		—		—		7,818

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Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $2.2 million at September 30, 2015 with a valuation allowance of $369,000, resulting in no additional provision for loan losses for the three and nine months ended September 30, 2015. Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $8.9 million at September 30, 2014 with a valuation allowance of $1.7 million, resulting in an additional provision for loan losses of $5.2 million for the nine months ended September 30, 2014. At December 31, 2014, impaired loans had a carrying amount of $18.4 million, with a valuation allowance of $622,000.

OREO, which is measured at the lower of carrying or fair value less estimated costs to sell, had a net carrying amount of $29.2 million as of September 30, 2015, compared with $54.5 million at September 30, 2014 and $46.2 million at December 31, 2014.  Fair value write-downs of $7.1 million and $1.3 million were recorded on OREO for the nine months ended September 30, 2015 and 2014, respectively.

The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2015:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Commercial real estate	$	339	Sales comparison approach	Adjustment for differences between the comparable sales	5%	-	16%(11%)
			Income approach	Discount or capitalization rate	9%	-	10%(9%)
Impaired loans – Residential real estate	$	1,470	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	16%(7%)
Other real estate owned – Commercial real estate	$	26,569	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	72%(21%)
			Income approach	Discount or capitalization rate	9%	-	20%(13%)
Other real estate owned – Residential real estate	$	2,608	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	15%(8%)

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The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2014:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Commercial	$	12	Market value approach	Adjustment for receivables and inventory discounts	16%	-	32%(24%)
Impaired loans – Commercial real estate	$	16,103	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	62%(14%)
			Income approach	Discount or capitalization rate	8%	-	9%(8%)
Impaired loans – Residential real estate	$	1,635	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	39%(11%)
Other real estate owned – Commercial real estate	$	33,504	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	45%(18%)
			Income approach	Discount or capitalization rate	9%	-	20%(13%)
Other real estate owned – Residential real estate	$	12,693	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	15%(6%)

Carrying amount and estimated fair values of financial instruments were as follows for the periods indicated:

			Fair Value Measurements at September 30, 2015 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	80,480	$	68,257	$	12,223	$	—	$	80,480
Securities available for sale		146,837		—		146,186		651		146,837
Securities held to maturity		42,138		—		44,244		—		44,244
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		71		—		71		—		71
Loans, net		610,216		—		—		620,807		620,807
Accrued interest receivable		3,291		—		1,052		2,239		3,291
Financial liabilities
Deposits	$	877,893	$	106,160	$	766,831	$	—	$	872,991
Securities sold under agreements to repurchase		—		—		—		—		—
Federal Home Loan Bank advances		3,255		—		3,263		—		3,263
Subordinated capital notes		4,275		—		—		4,142		4,142
Junior subordinated debentures		21,000		—		—		12,638		12,638
Accrued interest payable		2,851		—		530		2,321		2,851

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			Fair Value Measurements at December 31, 2014 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	80,180	$	49,007	$	31,173	$	—	$	80,180
Securities available for sale		190,791		—		190,133		658		190,791
Securities held to maturity		42,325		—		44,498		—		44,498
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		8,926		—		8,926		—		8,926
Loans, net		605,635		—		—		615,914		615,914
Accrued interest receivable		3,503		—		1,389		2,114		3,503
Financial liabilities
Deposits	$	926,841	$	114,910	$	804,508	$	—	$	919,418
Securities sold under agreements to repurchase		1,341		—		1,341		—		1,341
Federal Home Loan Bank advances		15,752		—		15,758		—		15,758
Subordinated capital notes		4,950		—		—		4,765		4,765
Junior subordinated debentures		25,000		—		—		14,214		14,214
Accrued interest payable		2,858		—		751		2,107		2,858

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

(a) Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. Non-interest bearing deposits are Level 1 whereas interest bearing due from bank accounts and fed funds sold are Level 2.

(b) FHLB Stock

It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

(c) Loans, Net

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

(d) Loans Held for Sale

The fair value of loans held for sale is estimated based upon binding contracts and and/or quotes from third party investors resulting in a Level 2 classification.

(e) Deposits

The fair values disclosed for non-interest bearing deposits are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate interest bearing deposits approximate their fair values at the reporting date resulting in a Level 2 classification.  Fair values for fixed rate interest bearing deposits are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(f) Securities Sold Under Agreements to Repurchase

The carrying amounts of borrowings under repurchase agreements approximate their fair values resulting in a Level 2 classification.

(g) Other Borrowings

The fair values of the Company’s FHLB advances are estimated using discounted cash flow analyses based on the current borrowing rates resulting in a Level 2 classification.

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

(h) Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification based on the level of the asset or liability with which the accrual is associated.

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Note 9 – Income Taxes

Deferred tax assets and liabilities were due to the following as of:

	September 30,			December 31,
	2015			2014
	(in thousands)
Deferred tax assets:
Net operating loss carry-forward	$	35,788		$	32,111
Allowance for loan losses		4,969			6,777
Other real estate owned write-down		9,647			10,000
Alternative minimum tax credit carry-forward		692			692
Net assets from acquisitions		671			668
Other than temporary impairment on securities		46			46
New market tax credit carry-forward		208			208
Nonaccrual loan interest		607			958
Amortization of non-compete agreements		12			14
Other		1,674			1,701
		54,314			53,175
Deferred tax liabilities:
FHLB stock dividends		928			928
Fixed assets		225			264
Originated mortgage servicing rights		37			53
Net unrealized gain on securities		297			579
Other		669			703
		2,156			2,527
Net deferred tax assets before valuation allowance		52,158			50,648
Valuation allowance		(52,158	)		(50,648	)
Net deferred tax asset	$	—		$	—

Our estimate of the realizability of the deferred tax asset is dependent on our estimate of projected future levels of taxable income. In analyzing future taxable income levels, we considered all evidence currently available, both positive and negative. Based on our analysis, we established a valuation allowance for all deferred tax assets as of December 31, 2011. The valuation allowance remains in effect as of September 30, 2015.

The calculation for the income tax provision or benefit generally does not consider the tax effects of changes in other comprehensive income, or OCI, which is a component of stockholders’ equity on the balance sheet. However, an exception is provided in certain circumstances, such as when there is a full valuation allowance against net deferred tax assets, there is a loss from continuing operations and there is income in other components of the financial statements. In such a case, pre-tax income from other categories, such as changes in OCI, must be considered in determining a tax benefit to be allocated to the loss from continuing operations. No tax benefit or expense was recognized for the nine months ended September 30, 2015, and a tax benefit of $1.3 million was allocated to continuing operations for the nine months ended September 30, 2014. The September 30, 2014 tax benefit is entirely due to gains in other comprehensive income that are presented in current operations in accordance with applicable accounting standards.

The Company does not have any beginning and ending unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. There were no interest and penalties recorded in the income statement or accrued for the nine months ended September 30, 2015 or September 30, 2014 related to unrecognized tax benefits. On June 24, 2015, the Board of Directors approved the adoption of a tax benefits preservation plan designed to preserve the value of certain of the Company's deferred tax assets primarily associated with net operating loss carryforwards (“NOLs”) under Section 382 of the Internal Revenue Code, as amended (“Section 382”). NOLs can generally be used to offset future taxable income and therefore reduce federal income tax obligations. However, the Company's ability to use its NOLs would be limited if there was an “ownership change” under Section 382. This would occur if shareholders owning (or deemed to own under the tax rules) 5% or more of the Company's increase their aggregate ownership of the Company by more than 50 percentage points over a defined period of time. The plan is intended to reduce the likelihood of an “ownership change” occurring as a result of the buying and selling of the Company's common stock.

In connection with the tax benefits preservation plan, the Company declared a dividend of one preferred stock purchase right for each share of common stock outstanding as of the close of business on July 10, 2015. Any shareholder or group that acquires beneficial ownership of 5% or more of the Company (an “acquiring person”) could be subject to significant dilution in its holdings if the Company's Board of Directors does not approve such acquisition. Existing shareholders holding 5% or more of the Company will not be considered acquiring persons unless they acquire additional shares, subject to certain exceptions described in the plan. In addition, in its discretion, the Board of Directors may exempt certain transactions and certain persons whose acquisition of securities is determined by the board not to jeopardize the Company's deferred tax assets.

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The rights will expire upon the earlier of (i) June 29, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefits may be carried forward, (iii) the repeal or amendment of Section 382 or any successor statute, if the Board of Directors determines that the plan is no longer needed to preserve the tax benefits, and (iv) certain other events as described in the plan.

On September 23, 2015, the Company’s shareholders approved an amendment to its articles of incorporation to further help protect the long-term value of the Company’s NOLs. The amendment provides a means to block transfers of our common shares that could result in an ownership change under Section 382. The transfer restrictions will expire on the earlier of (i) September 23, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefit may be carried forward, (iii) the repeal of Section 382 or any successor statute if our Board determines that the transfer restrictions are no longer needed to preserve the tax benefits of our NOLs, or (iv) such date as the Board otherwise determines that the transfer restrictions are no longer necessary.

The Company and its subsidiaries are subject to U.S. federal income tax and the Company is subject to income tax in the Commonwealth of Kentucky. The Company is no longer subject to examination by taxing authorities for years before 2011.

Note 10 – Stock Plans and Stock Based Compensation

The Company has two stock incentive plans. The Porter Bancorp, Inc. 2006 Stock Incentive Plan permits the issuance of up to 1,563,050 shares of the Company’s common stock upon the grant of stock awards.  As of September 30, 2015, the Company had issued and outstanding 924,091 unvested shares net of forfeitures and vesting under the stock incentive plan. Shares issued under the plan vest annually on the anniversary date of the grant over three to ten years. The Company has 301,920 shares remaining available for issuance under the plan.  

The Porter Bancorp, Inc. 2006 Non-Employee Directors Stock Ownership Incentive Plan permits the issuance of up to 700,000 shares of the Company’s voting common stock upon the grant of stock awards. The Plan awards restricted shares having a fair market value of $25,000 annually to each non-employee director. Unvested shares are granted automatically under the plan at fair market value on the date of grant and vest on December 31 in the year of grant. The Company has issued and outstanding 115,740 unvested shares, net of forfeitures and vesting, to non-employee directors. At September 30, 2015, 185,774 shares remain available for issuance under this plan.

Upon the sale of our Series A preferred shares by the U.S. Treasury at a discount to face amount on December 4, 2014, the restricted shares previously granted in the employment agreements of our senior executives became subject to permanent transfer restrictions.  On March 25, 2015, the Compensation Committee modified the equity compensation arrangements with our four named executive officers to restore the incentive that was the underlying purpose of the previous grants. The Compensation Committee and the named executive officers mutually agreed to terminate 538,479 restricted shares that were subject to permanent restrictions on transfer.  We then awarded 800,000 new service-based restricted shares to our named executive officers. The new awards were accounted for as a modification and vest over four years, with one-third of the shares vesting on each of the second, third and fourth anniversaries of the date of grant.  The modification resulted in incremental compensation expense of approximately $233,000 and will be amortized in accordance with the vesting schedule.

The fair value of the 2015 unvested shares issued to employees was $712,000, or $0.89 per weighted-average share. The fair value of the 2015 unvested shares issued to directors was $125,000, or $1.08 per weighted-average share. The Company recorded $313,000 and $480,000 of stock-based compensation during the first nine months of 2015 and 2014, respectively, to salaries and employee benefits. We expect substantially all of the unvested shares outstanding at the end of the period to vest according to the vesting schedule. No deferred tax benefit was recognized related to this expense for either period.

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The following table summarizes unvested share activity as of and for the periods indicated for the Stock Incentive Plan:

	Nine Months Ended					Twelve Months Ended
	September 30, 2015					December 31, 2014
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		770,440		$	1.33		787,426		$	1.56
Granted		800,000			0.89		122,220			0.93
Vested		(165,185	)		1.50		(133,227	)		2.20
Terminated		(450,994	)		1.25		—			—
Forfeited		(30,170	)		1.12		(5,979	)		4.21
Outstanding, ending		924,091		$	0.96		770,440		$	1.33

The following table summarizes unvested share activity as of and for the periods indicated for the Non-Employee Directors Stock Ownership Incentive Plan:

	Nine Months Ended					Twelve Months Ended
	September 30, 2015					December 31, 2014
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		5,052		$	1.65		47,428		$	1.69
Granted		115,740			1.08		166,668			0.90
Vested		(5,052	)		1.65		(154,222	)		0.98
Forfeited		—			—		(54,822	)		1.29
Outstanding, ending		115,740		$	1.08		5,052		$	1.65

Unrecognized stock based compensation expense related to unvested shares for the remainder of 2015 and beyond is estimated as follows (in thousands):

October 2015 – December 2015	$	132
2016		253
2017		156
2018		149
2019 & thereafter		—

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Note 11 – Earnings (Loss) per Share

The factors used in the basic and diluted loss per share computations follow:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(in thousands, except share and per share data)
Net loss	$	(1,076	)	$	(849	)	$	(2,612	)	$	(7,370	)
Less:
Preferred stock dividends		—			786			—			2,361
Losses allocated to unvested shares		(45	)		(122	)		(102	)		(685	)
Losses allocated to preferred		—			(40	)		(236	)		(243	)
Net loss attributable to common shareholders, basic and diluted	$	(1,031	)	$	(1,473	)	$	(2,274	)	$	(8,803	)
Basic
Weighted average common shares including unvested common shares outstanding		25,768,887			13,435,788			25,626,610			13,314,138
Less:
Weighted average unvested common shares		1,087,340			1,016,051			1,002,867			936,386
Weighted average Series B preferred		—			—			890,901			—
Weighted average Series C preferred		—			332,894			—			332,894
Weighted average Series D preferred		—			—			1,419,341			—
Weighted average common shares outstanding		24,681,547			12,086,843			22,313,501			12,044,858
Basic loss per common share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.73	)
Diluted
Add: Dilutive effects of assumed exercises of common and Preferred Series C stock warrants		—			—			—			—
Weighted average common shares and potential common shares		24,681,547			12,086,843			22,313,501			12,044,858
Diluted loss per common share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.73	)

The Company had no outstanding stock options at September 30, 2015 or 2014.  A warrant for the purchase of 330,561 shares of the Company’s common stock at an exercise price of $15.88 was outstanding at September 30, 2015 and 2014 but was not included in the diluted EPS computation as inclusion would have been anti-dilutive. Additionally, warrants for the purchase of 1,449,459 shares of non-voting common stock at an exercise price of $10.95 per share were outstanding at September 30, 2014 but were not included in the diluted EPS computation as inclusion would have been anti-dilutive. A total of 798,915 warrants were cancelled in December 2014 in a non-cash equity exchange and 650,544 warrants expired in September 2015.

Note 12 – Capital Requirements and Restrictions on Retained Earnings

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

The Basel III regulatory capital reforms became effective for the Company and Bank on January 1, 2015, and include new minimum risk-based capital and leverage ratios.  These rules refine the definition of what constitutes “capital” for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital. The final rules allowed banks and their holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and the Bank opted out of this requirement.

In its Consent Orders with the FDIC and the Kentucky Department of Financial Institutions, the Bank has agreed to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. The Consent orders are described in greater detail in Note 2 – “Going Concern and Future Plans”. As of September 30, 2015, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were both less than the minimum capital ratios required by the Consent Order. The Bank cannot be considered well-capitalized while subject to the Consent Order. We are also restricted from accepting, renewing, or rolling-over brokered deposits without the prior receipt of a waiver on a case-by-case basis from our regulators.

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On September 21, 2011, we entered into a Written Agreement with the Federal Reserve Bank of St. Louis in which we made formal commitments to use our financial and management resources to serve as a source of strength for the Bank and to assist the Bank in addressing weaknesses identified by the FDIC and the KDFI, to pay no dividends without prior written approval, to pay no interest or principal on subordinated debentures or trust preferred securities without prior written approval, and to submit an acceptable plan to maintain sufficient capital.

On September 30, 2015, we completed a common equity for debt exchange with holders of $4.0 million of the capital securities (the “Trust Securities”) of Porter Statutory Trust IV, a trust subsidiary of the Company. Accrued and unpaid interest on the Trust Securities totaled approximately $330,000. In exchange for the $4.3 million debt and interest liability, the Company issued 800,000 common shares and 400,000 non-voting common shares, for a total of 1,200,000 shares. In the transaction, a wholly owned subsidiary of the Company received a one-third portion of the Trust Securities directly from an unrelated third party in exchange for 400,000 common shares, resulting in an $883,000 gain on extinguishment of debt. The subsidiary also acquired two-thirds of the Trust Securities from related parties in exchange for 400,000 common shares and 400,000 non-voting common shares. The debt and interest liability exchanged with related parties was treated as a capital transaction.

The following table shows the ratios and amounts of Common Equity Tier 1, Tier 1 capital and total capital to risk-adjusted assets and the leverage ratios for Porter Bancorp, Inc. and the Bank at the dates indicated (dollars in thousands):

	Actual					For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of September 30, 2015:
Total risk-based capital (to risk-weighted assets)
Consolidated	$	69,354		10.40	%	$	53,324		8.00	%
Bank		69,810		10.50			53,178		8.00
Total common equity Tier I risk-based capital (to risk-weighted assets)
Consolidated		33,804		5.07			29,995		4.50
Bank		58,053		8.73			29,913		4.50
Tier I capital (to risk-weighted assets)
Consolidated		45,719		6.86			39,993		6.00
Bank		58,053		8.73			39,883		6.00
Tier I capital (to average assets)
Consolidated		45,719		4.73			38,676		4.00
Bank		58,053		6.01			38,625		4.00

	Actual					For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of December 31, 2014:
Total risk-based capital (to risk-weighted assets)
Consolidated	$	73,595		10.61	%	$	55,483		8.00	%
Bank		73,174		10.57			55,383		8.00
Tier I capital (to risk-weighted assets)
Consolidated		46,459		6.70			27,741		4.00
Bank		59,438		8.59			27,691		4.00
Tier I capital (to average assets)
Consolidated		46,459		4.51			41,193		4.00
Bank		59,438		5.78			41,143		4.00

The Consent Order requires the Bank to achieve the minimum capital ratios presented below:

	Actual as of September 30, 2015					Ratio Required by Consent Order
	Amount		Ratio			Amount		Ratio
Total capital to risk-weighted assets	$	69,810		10.50	%	$	79,767		12.00	%
Tier I capital to average assets		58,053		6.01			86,906		9.00

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At September 30, 2015, the Bank’s Tier 1 leverage ratio was 6.01%, and its total risk-based capital ratio was 10.50%, which are below the 9% and 12% minimum capital ratios required by the Consent Order. Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a Consent Order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions.

Kentucky banking laws limit the amount of dividends that may be paid to a holding company by its subsidiary banks without prior approval. These laws limit the amount of dividends that may be paid in any calendar year to current year’s net income, as defined in the laws, combined with the retained net income of the preceding two years, less any dividends declared during those periods. The Bank has agreed with its primary regulators to obtain their written consent prior to declaring or paying any future dividends. As a practical matter, the Bank cannot pay dividends to the Company for the foreseeable future.

Note 13 – Contingencies

We are defendants in various legal proceedings. Litigation is subject to inherent uncertainties and unfavorable rulings could occur. We record contingent liabilities resulting from claims against us when a loss is assessed to be probable and the amount of the loss is reasonably estimable. Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including in some cases judgments about the potential actions of third party claimants and courts. Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain.   Currently, we have accrued approximately $1.9 million related to ongoing litigation matters for which we believe liability is probable and reasonably estimable. Accruals are not made in cases where liability is not probable or the amount cannot be reasonably estimated. Aside from the amounts currently accrued, there is nothing that is reasonably probable. We disclose legal matters when we believe liability is reasonably possible and may be material to our consolidated financial statements.

Signature Point Litigation. On June 18, 2010, three real estate development companies filed suit in Kentucky state court against the Bank and Managed Assets of Kentucky (“MAKY”). Signature Point Condominiums LLC, et al. v. PBI Bank, et al., Jefferson Circuit Court, Case No 10-CI-04295. On July 16, 2013, a jury in Louisville, Kentucky returned a verdict against the Bank, awarding the plaintiffs compensatory damages of $1,515,000 and punitive damages of $5,500,000. The case arose from a settlement in which the Bank agreed to release the plaintiffs and guarantors from obligations of more than $26 million related to a real estate project in Louisville. The plaintiffs were granted a right of first refusal to repurchase a tract of land within the project. In exchange, the plaintiffs conveyed the real estate securing the loans to the Bank. After plaintiffs declined to exercise their right of first refusal, the Bank sold the tract to the third party. Plaintiffs alleged the Bank had knowledge of the third party offer before the conveyance of the land by the Plaintiffs to the Bank. Plaintiffs asserted claims of fraud, breach of fiduciary duty, breach of the duty of good faith and fair dealing, tortious interference with prospective business advantage and conspiracy to commit fraud, negligence, and conspiracy against the Bank.

After conferring with its legal advisors, the Bank believes the findings and damages are excessive and contrary to law, and that it has meritorious grounds on which it has moved to appeal. The Bank’s Notice of Appeal was filed on October 25, 2013. After a number of procedural issues were resolved, the Bank filed its appellate brief on September 30, 2014. Appellee’s brief was filed on December 1, 2014.The Appellate Court will hear oral arguments on November 17, 2015. We will continue to defend this matter vigorously. Although we have made provisions in our consolidated financial statements for this self-insured matter, the amount of our legal accrual is less than the original amount of the damages awarded, plus accrued interest. The ultimate outcome of this matter could have a material adverse effect on our financial condition, results of operations or cash flows.

SBAV LP Litigation. On December 17, 2012, SBAV LP filed a lawsuit against the Company, the Bank, J. Chester Porter and Maria L. Bouvette in New York state court.  The proceeding was removed to New York federal district court on January 16, 2013, and on February 27, 2013, SBAV LP filed an Amended Complaint. On July 10, 2013, the New York federal district court granted the defendants’ motion to transfer the case to federal district court in Kentucky.  SBAV LP v. Porter Bancorp, et. al., Civ. Action 3:13-CV-710 (W.D.KY).  The Amended Complaint alleged a violation of the Kentucky Securities Act and negligent misrepresentation against all named defendants, and breach of contract against Porter Bancorp alone. The plaintiff sought damages in an amount in excess of $4,500,000, or the difference between the $5,000,016 purchase price and the value of the securities when tendered by the plaintiff, plus interest at the applicable statutory rate, costs and reasonable attorneys’ fees.   We and other defendants disputed the material factual allegations made in the Amended Complaint, and on September 13, 2013, filed a motion to dismiss all claims in the complaint for pleading failures and for failure to state a claim upon which relief may be granted. On March 25, 2014, the judge ruled that SBAV had failed to state a claim against the Bank and dismissed the Bank from the case. On November 2, 2015, the parties agreed to settle the litigation and executed a confidential written settlement agreement. The settlement of this litigation did not have a material adverse effect on the Company’s financial condition or results of operations.

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Miller’s Health System Inc. Employee Stock Ownership Plan. On December 26, 2013, the United States Department of Labor (“DOL”) filed a lawsuit against the Bank in U.S. District Court for the Northern District of Indiana. Thomas E. Perez, Secretary of the United States Department of Labor v. PBI Bank, Inc. (Civ. Action 3:13-CV-1400-PPS). The complaint alleges that in 2007 the Bank, in the capacity of trustee for the Miller’s Health System’s Inc. Employee Stock Ownership Plan, authorized the alleged imprudent and disloyal purchase of the stock of Miller’s Health Systems, Inc. (“Miller’s Health”) in 2007 for $40 million, a price allegedly far in excess of the stock’s fair market value. The suit also alleges, among other things, that the Bank approved 100% seller financing for the transaction at an excessive rate of interest. On March 31, 2014, the Bank filed its answer, disputing the material factual allegations of the complaint. On April 10, 2014, the Bank filed a third-party complaint against Miller’s Health seeking to enforce its indemnity rights, as well as third party claims for contribution against named directors and officers of Miller’s Health. On March 12, 2015, the parties agreed to settle the litigation and executed a written settlement agreement on July 10, 2015. The Bank agreed to a settlement payment, which, to the extent not paid from insurance proceeds, had been previously reserved for. The court entered an agreed order ending the litigation on July 20, 2015.

AIT Laboratories Employee Stock Ownership Plan. On August 29, 2014, the United States Department of Labor (“DOL”) filed a lawsuit against the Bank and Michael A. Evans in the U.S. District Court for the Southern District of Indiana. Thomas E. Perez, Secretary of the United States Department of Labor v. PBI Bank, Inc. and Michael A. Evans (Case No. 1:14-CV-01429-SEB-MJD). The complaint alleges that in 2009, the Bank, in the capacity of trustee for the AIT Laboratories Employee Stock Ownership Plan, authorized the alleged imprudent and disloyal purchase of the stock of AIT Holdings, Inc. in 2009 for $90 million, a price allegedly far in excess of the stock’s fair market value. The Bank's responsive pleading was filed on November 4, 2014, disputing the material factual allegations that have been made by the DOL. A settlement conference has been set for November 19, 2015, and a trial date has been set for November 7, 2016. We intend to defend against DOL’s claims vigorously. 

United States Department of Justice Investigation. On October 17, 2014, the United States Department of Justice (the “DOJ”) notified the Bank that the Bank was the subject of an investigation into possible violations of federal laws, including, among other things, possible violations related to false bank entries, bank fraud and securities fraud.  The investigation concerns allegations that Bank personnel engaged in practices intended to delay or avoid disclosure of the Bank’s asset quality at the time of and following the United States Treasury’s purchase of preferred stock from the Company in November 2008.  The Bank will respond to and cooperate with any requests for information from DOJ. At this time the investigation is ongoing, and DOJ has made no determination whether to pursue any action in the matter.

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

This item analyzes our financial condition, change in financial condition and results of operations. It should be read in conjunction with the unaudited consolidated financial statements and accompanying notes presented in Part I, Item 1 of this report.

Cautionary Note Regarding Forward-Looking Statements

This report contains statements about the future expectations, activities and events that constitute forward-looking statements. Forward-looking statements express our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account information currently available to us. These statements are not statements of historical fact. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “plan,” “strive” or similar words, or the negatives of these words, identify forward-looking statements.

Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we expressed or implied in any forward-looking statements. These risks and uncertainties can be difficult to predict and may be out of our control. Factors that could contribute to differences in our results include, but are not limited to the following:

● Our inability to increase our capital to the levels required by our agreements with bank regulators could have a material adverse effect on our business.

● A significant percentage of our loan portfolio is comprised of non-owner occupied commercial real estate loans, real estate construction and development loans, and multi-family residential real estate loans, all of which carry a higher degree of risk.

● We continue to hold and acquire a significant amount of OREO properties, which could increase operating expenses and result in future losses.

● Our decisions regarding credit risk may not be accurate, and our allowance for loan losses may not be sufficient to cover actual losses.

● Our ability to pay cash dividends on our common and preferred stock and pay interest on the junior subordinated debentures that relate to our trust preferred securities is currently restricted. Our inability to resume paying interest on our trust preferred securities could adversely affect our common and preferred shareholders.

● While we believe our provision for legal contingencies is adequate, the outcome of legal proceedings is difficult to predict and we may settle legal claims or be subject to judgments for amounts that exceed our estimates.

We also refer you to Part II, Item 1A – Risk Factors in this report and to the risks identified and the cautionary statements discussed in greater detail in our December 31, 2014 Annual Report on Form 10-K.

Forward-looking statements are not guarantees of performance or results. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. The Company believes it has chosen these assumptions or bases in good faith and they are reasonable. We caution you however, forward looking statements relying upon such assumptions or bases almost always vary from actual results, and the differences between those statements and actual results can be material. The forward-looking statements included in this report speak only as of the date of the report.  We have no duty, and do not intend to, update these statements unless applicable laws require us to do so.

Overview

Porter Bancorp, Inc. (the “Company”) is a bank holding company headquartered in Louisville, Kentucky. Our wholly owned subsidiary PBI Bank (“the Bank”) is the sixth largest bank domiciled in the Commonwealth of Kentucky based on total assets. We operate banking offices in twelve counties in Kentucky. Our markets include metropolitan Louisville in Jefferson County and the surrounding counties of Henry and Bullitt. We serve south central Kentucky and southern Kentucky from banking offices in Butler, Green, Hart, Edmonson, Barren, Warren, Ohio, and Daviess Counties. We also have an office in Lexington, the second largest city in Kentucky. The Bank is a community bank with a wide range of commercial and personal banking products. As of September 30, 2015, we had total assets of $951.5 million, total loans of $624.4 million, total deposits of $877.9 million and stockholders’ equity of $33.8 million.

The Company reported a net loss of $1.1 million and $2.6 million for the three and nine months ended September 30, 2015, respectively, compared with a net loss of $849,000 and $7.4 million for the same periods of 2014, respectively.  After deductions for losses allocated to participating securities, net loss attributable to common shareholders was $1.0 million and $2.3 million for the three and nine months ended September 30, 2015, respectively, compared with net loss attributable to common shareholders of $1.5 million and $8.8 million for the three and nine months ended September 30, 2014, respectively.

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Basic and diluted loss per common share were ($0.04) and ($0.10) for the three and nine months ended September 30, 2015, respectively, compared with basic and diluted loss per common share of ($0.12) and ($0.73) for the three and nine months ended September 30, 2014, respectively.

The following significant items are of note for the three and nine months ended September 30, 2015:

● On September 30, 2015, we completed a common equity for debt exchange with holders of $4.0 million of the capital securities (the “Trust Securities”) of Porter Statutory Trust IV, a trust subsidiary of the Company. Accrued and unpaid interest on the Trust Securities totaled of approximately $330,000. In exchange for the $4.3 million debt and interest liability, the Company issued 800,000 common shares and 400,000 non-voting common shares, for a total of 1,200,000 shares. In the transaction, a wholly owned subsidiary of the Company received a one-third portion of the Trust Securities directly from an unrelated third party in exchange for 400,000 common shares resulting in an $883,000 gain on extinguishment of debt. The subsidiary also received two-thirds of the Trust Securities from related parties in exchange for 400,000 common shares and 400,000 non-voting common shares. The debt and interest liability exchanged with related parties was treated as a capital transaction.

● Negative provision expense of $2.2 million was recorded in the first nine months of 2015, compared to a provision for loan losses expense of $6.3 million for the first nine months of 2014, because of declining historical loss rates, improvements in asset quality, and management’s assessment of risk in the loan portfolio. Net charge-offs were $3.0 million for the first nine months of 2015, compared to $10.2 million for the nine months ended September 30, 2014. Net charge-offs were $411,000 for the third quarter of 2015, compared to $1.8 million for the quarter ended June 30, 2015. See additional discussion below regarding improving trends in non-performing loans, past due loans, and risk categories during the period, factors which led to the negative provision expense.

● Non-performing loans decreased $30.3 million to $17.0 million at September 30, 2015, compared with $47.3 million at December 31, 2014. The decrease in non-performing loans was primarily due to $25.1 million in paydowns, $4.4 million in transfers to OREO, and $4.4 million in charge-offs. Non-performing loans decreased $13.3 million to $17.0 million at September 30, 2015, compared with $30.3 million at June 30, 2015. The decrease in non-performing loans was primarily due to $9.0 million in paydowns, $3.5 million in transfers to OREO, and $1.3 million in charge-offs.

● Loans past due 30-59 days decreased from $4.0 million at December 31, 2014 to $2.0 million at September 30, 2015 and loans past due 60-89 days decreased from $980,000 at December 31, 2014 to $578,000 at September 30, 2015. Total loans past due and nonaccrual loans decreased to $19.5 million at September 30, 2015 from $52.3 million at December 31, 2014. Loans past due 30-59 days increased slightly from $1.9 million at June 30, 2015 to $2.0 million at September 30, 2015 and loans past due 60-89 days decreased from $650,000 at June 30, 2015 to $578,000 at September 30, 2015. Total loans past due and nonaccrual loans decreased to $19.5 million at September 30, 2015 from $32.9 million at June 30, 2015.

● All loan risk categories (other than pass loans) have decreased since December 31, 2014. Pass loans represent 81.4% of the portfolio at September 30, 2015, compared to 78.6% at June 30, 2015, and 73.8% at December 31, 2014. The pass category increased approximately $47.3 million, the watch category decreased approximately $1.5 million, the special mention category declined approximately $2.5 million, and the substandard category declined approximately $44.0 million. The $44.0 million decrease in loans classified as substandard was primarily driven by $33.2 million in principal payments received, $4.5 million in migration to OREO, $10.4 million in loans upgraded from substandard, and $5.0 million in charge-offs, offset by $9.0 million in loans moved to substandard during the nine months ended September 30, 2015. Since June 30, 2015, the pass category decreased approximately $1.4 million, the watch category decreased $986,000, the special mention category declined approximately $18,000, and the substandard category declined approximately $21.5 million, reflecting the overall decrease in the loan portfolio during the quarter.

● Foreclosed properties were $29.2 million at September 30, 2015, compared with $46.2 million at December 31, 2014, and $54.5 million at September 30, 2014.  During the first nine months of 2015, the Company acquired $4.5 million and sold $14.4 million of OREO. We incurred OREO losses totaling $7.1 million during the first nine months of 2015, reflecting fair value write-downs for reductions in listing prices for certain properties, updated appraisals, and certain properties liquidated through auctions near and after the end of the third quarter, offset by $27,000 in net gain on sales of OREO. Late in the third quarter of 2015, the Bank determined to liquidate 18 parcels of OREO with an aggregate book value at that time of $4.0 million through absolute auctions. The auctions resulted in final bids less estimated selling costs of $1.8 million. Fair value write-downs of $2.2 million were recorded in the third quarter of 2015 related to these properties, and cash settlement is expected to occur in the fourth quarter of 2015. OREO expense may be elevated in future periods as we work to sell these properties, given the current size of the OREO portfolio. At quarter end, $6.5 million of OREO property was subject to a contract for sale or letter of intent, including the $1.8 million in expected net proceeds resulting from the auctions discussed above.

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● Our ratio of non-performing assets to total assets decreased to 4.85% at September 30, 2015, compared with 7.13% at June 30, 2015, 9.19% at December 31, 2014, and 9.62% at September 30, 2014.

● Net interest margin increased 19 basis points to 3.25% in the first nine months of 2015 compared with 3.06% in the first nine months of 2014. The increase in margin between periods was primarily due to a decrease in the cost of interest bearing liabilities from 1.14% in the first nine months of 2014 to 0.87% in the first nine months of 2015. The decrease in cost of interest bearing liabilities was primarily driven by the continued repricing of certificates of deposit at lower rates. Average loans decreased 4.5% to $641.5 million in the first nine months of 2015 compared with $671.7 million in the first nine months of 2014.  Net loans decreased 0.6% to $610.2 million at September 30, 2015, compared with $614.2 million at September 30, 2014.

● Non-interest income increased $3.6 million to $6.5 million compared with $2.9 million for the first nine months of 2014 driven primarily by gains on the sales of securities totaling $1.7 million in the first nine months of 2015, compared to $92,000 in the first nine months of 2014, as well as an increase in OREO rental income of $1.1 million between the two periods. The increase in OREO income is the result of several larger properties with tenants being transferred to OREO in the second quarter of 2014. Non-interest income also increased due an $883,000 gain on extinguishment of debt.

● Non-interest expense increased $5.8 million to $33.4 million compared with $27.6 million for the first nine months of 2014, due to an increase in OREO expenses of $6.8 million primarily related to fair value write-downs for the first nine months of 2015, and an increase in professional fees of $1.2 million related to legal fees and litigation expenses, offset by a decrease in loan collection expenses of $1.8 million.

● Deposits decreased 5.3% to $877.9 million at September 30, 2015 compared with $926.8 million at December 31, 2014. Certificate of deposit balances decreased $40.7 million during the first nine months of 2015 to $534.0 million at September 30, 2015, from $574.7 million at December 31, 2014. Demand deposits decreased 7.6% during the first nine months of 2015 compared with December 31, 2014.

● On February 25, 2015, we completed the final step in the retirement of our preferred stock originally issued to the U.S. Treasury when shareholders approved the conversion of all mandatorily convertible Series B Preferred Shares into 4,053,600 common shares and the conversion of all mandatorily convertible Series D Preferred Shares into 6,458,000 non-voting common shares. The conversion reduced preferred stockholders’ equity by $5.8 million and increased common stockholders’ equity by the same amount. Total issued and outstanding common shares and non-voting common shares were 26,949,205 at September 30, 2015.

● On June 24, 2015, the Board of Directors approved the adoption of a tax benefits preservation plan designed to preserve the value of certain of the Company's deferred tax assets primarily associated with net operating loss carryforwards (NOLs) under Section 382 of the Internal Revenue Code. The plan is intended to reduce the likelihood of an “ownership change” occurring as a result of the buying and selling of the Company's common stock. The tax benefits preservation plan is more fully described in Note 9 – “Income Taxes”. On September 23, 2015, the Company’s shareholders approved an amendment to its articles of incorporation to help protect the long-term value to the Company of its NOLs. The amendment is designed to block transfers of our common shares that could result in an ownership change (the “NOL Protective Amendment”). At September 30, 2015, the Company’s net deferred tax asset totaled $52.2 million and was subject to a full valuation allowance.

Going Concern Considerations and Future Plans

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. However, the events and circumstances described in this Note create substantial doubt about the Company’s ability to continue as a going concern.

In June 2011, the Bank agreed to a Consent Order with the FDIC and KDFI in which the Bank agreed, among other things, to improve asset quality, reduce loan concentrations, and maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. In October 2012, the Bank entered into a revised Consent Order with the FDIC and KDFI again agreeing to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. The Bank also agreed that if it should be unable to reach the required capital levels, and if directed in writing by the FDIC, then the Bank would within 30 days develop, adopt and implement a written plan to sell or merge itself into another federally insured financial institution or otherwise immediately obtain a sufficient capital investment into the Bank to fully meet the capital requirements. In October 2015, the Bank agreed to enter into a revised Consent Order, which includes several of the substantive provisions of the June 2011 and October 2012 Consent Orders, but omits previous provisions related to reducing loan concentrations that the Bank has satisfied. The revised Consent Order requires the Bank to continue to adhere to the plans implemented in response to the previous Consent Orders. The revised Consent Order is included as an exhibit to this report.

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We continue to work toward capital ratio compliance. As of September 30, 2015, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were both less than the minimum capital ratios required by the Consent Order. Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a consent order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions such as directing a bank to seek a buyer or taking a bank into receivership.

At September 30, 2015, we continued to be involved in various legal proceedings in which we dispute the material factual allegations against us. After conferring with our legal advisors, we believe we have meritorious grounds on which to prevail. If we do not prevail, the ultimate outcome of any one of these matters could have a material adverse effect on our financial condition, results of operations, or cash flows. These matters are more fully described in Note 13 – “Contingencies”.

The Board of Directors and management continue to evaluate and implement strategies to meet the obligations of the Consent Order. These include:

● Increasing capital through the limited issuance of common stock to new and existing shareholders.

● Continuing to operate the Company and Bank in a safe and sound manner. We have reduced our lending concentrations and the size of our balance sheet, while continuing to remediate non-performing loans.

● In executing on our commitment to improve credit quality, reduce loan concentrations, and reduce balance sheet risk, we have:

o   Reduced the size of our loan portfolio significantly from $1.3 billion at December 31, 2010 to $624.4 million at September 30, 2015.   

o Reduced our construction and development loans to less than 75% of total risk-based capital at September 30, 2015.

o Reduced our non-owner occupied commercial real estate loans, construction and development loans, and multi-family residential real estate loans.  These loans represented 221% of total risk-based capital at September 30, 2015, down from 262% at December 31, 2014.

● Executing on our commitment to sell OREO and reinvest in quality income producing assets.

o Our acquisition of real estate assets through the loan remediation process increased during 2014, as we acquired $32.3 million of OREO in 2014 compared with $20.6 million during 2013. We acquired $4.5 million in the first nine months of 2015. However, nonaccrual loans totaled $17.0 million at September 30, 2015, and we expect to resolve a portion of these loans by foreclosure, which may result in further additions to our OREO portfolio.

o We incurred OREO losses totaling $7.1 million during the first nine months of 2015, the result of fair value write-downs to reflect reductions in listing prices for certain properties, updated appraisals, and the liquidation of other properties through auctions near and after the end of the third quarter, offset by a $27,000 net gain on sales of OREO. Proceeds from the sale of OREO totaled $14.4 million for the nine months ended September 30, 2015, and $7.3 million for the nine months ended September 30, 2014. OREO expense may be elevated in future periods as we work to sell these properties, given the current size of the OREO portfolio. At quarter end, $6.5 million of OREO property was subject to a contract for sale or letter of intent.

o Real estate construction represents 50% of the OREO portfolio at September 30, 2015 compared with 40% at December 31, 2014. Commercial real estate represents 41% of the OREO portfolio at September 30, 2015 compared with 31% at December 31, 2014, and 1-4 family residential properties represent 9% of the portfolio at September 30, 2015 compared with 17% at December 31, 2014.

●  Continuing to improve our internal processes and procedures, distribution of labor, and work-flow to ensure we have adequately and appropriately deployed resources in an efficient manner in the current environment.

The Company’s liquid assets were $1.2 million at September 30, 2015. Since the Bank is unlikely to be in a position to pay dividends to the parent company for the foreseeable future, cash inflows for the parent are limited to earnings on investment securities, sales of investment securities, interest on deposits with the Bank, the issuance of new debt, or the issuance of capital securities. Ongoing operating expenses of the parent company are forecasted at approximately $1.0 million for the next twelve months.

Effective with the fourth quarter of 2011, we began deferring interest payments on the junior subordinated debentures relating to our trust preferred securities. Deferring interest payments on the junior subordinated debentures resulted in a deferral of distributions on our trust preferred securities. If we defer distributions on our trust preferred securities for 20 consecutive quarters, we must pay all deferred distributions in full or we will be in default. Our deferral period expires in the third quarter of 2016. Deferred distributions on our trust preferred securities, which totaled $2.3 million as of September 30, 2015, are cumulative, and unpaid distributions accrue and compound on each subsequent payment date. If as a result of a default we become subject to any liquidation, dissolution or winding up, holders of the trust preferred securities will be entitled to receive the liquidation amounts to which they are entitled, including all accrued and unpaid distributions, before any distribution can be made to our shareholders. In addition, the holders of our Series E and Series F Preferred Shares will be entitled to receive liquidation distributions totaling $10.5 million before any distribution can be made to the holders of our common shares.

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On September 30, 2015, we completed a common equity for debt exchange with holders of $4.0 million of the capital securities (the “Trust Securities”) of Porter Statutory Trust IV, a trust subsidiary of the Company. Accrued and unpaid interest on the Trust Securities totaled approximately $330,000. In exchange for the $4.3 million debt and interest liability, the Company issued 800,000 common shares and 400,000 non-voting common shares, for a total of 1,200,000 shares. In the transaction, a wholly owned subsidiary of the Company received a one-third portion of the Trust Securities directly from an unrelated third party in exchange for 400,000 common shares, resulting in an $883,000 gain on extinguishment of debt. The subsidiary also received two-thirds of the Trust Securities from related parties in exchange for 400,000 common shares and 400,000 non-voting common shares. The debt and interest liability exchanged with related parties was treated as a capital transaction.

Application of Critical Accounting Policies

We continually review our accounting policies and financial information disclosures. Our more significant accounting policies that require the use of estimates and judgments in preparing the financial statements are summarized in “Application of Critical Accounting Policies” in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operation of our Annual Report on Form 10-K for the calendar year ended December 31, 2014. Management has discussed the development, selection, and application of our critical accounting policies with our Audit Committee. During the first nine months of 2015, there were no material changes in the critical accounting policies and assumptions.

Results of Operations

The following table summarizes components of income and expense and the change in those components for the three months ended September 30, 2015, compared with the same period of 2014:

	For the Three Months						Change from
	Ended September 30,						Prior Period
	2015			2014			Amount			Percent
	(dollars in thousands)
Gross interest income	$	9,179		$	9,814		$	(635	)		(6.5	)%
Gross interest expense		1,697			2,477			(780	)		(31.5	)
Net interest income		7,482			7,337			145			2.0
Provision (negative provision) for loan losses		(2,200	)		—			(2,200	)		(100.0	)
Non-interest income		2,210			1,057			1,153			109.1
Non-interest expense		12,968			9,281			3,687			39.7
Net loss before taxes		(1,076	)		(887	)		(189	)		21.3
Income tax benefit		—			(38	)		38			(100.0	)
Net loss		(1,076	)		(849	)		(227	)		26.7

Net loss before taxes for the three months ended September 30, 2015 totaled $1.1 million, compared with a net loss before taxes of $887,000 for the comparable period of 2014.

Net interest income increased $145,000 from the third quarter of 2014 and was adversely affected by the reduction in net interest earning assets as well as interest lost on nonaccrual loans in the third quarters of 2015 and 2014 of $352,000 and $616,000, respectively. A negative provision for loan losses of $2.2 million was recorded in the first nine months of 2015 because of significant improvements in asset quality and management’s assessment of risk in the loan portfolio.

Non-interest income increased to $2.2 million from $1.1 million in the third quarter of 2014. The $1.2 million increase was primarily due to an increase in OREO rental income of $375,000, and an $883,000 gain on extinguishment of junior subordinated debt. Non-interest expense also increased during the period from $9.3 million to $13.0 million for the three months ended September 30, 2014 and 2015, respectively. This increase was primarily due to increases in OREO expenses of $4.6 million, offset by a reduction in loan collection expenses of $537,000. OREO expense may be elevated in future periods as we work to sell these properties, given the current size of the OREO portfolio. Additionally, nonaccrual loans totaled $17.0 million at September 30, 2015, and we expect to resolve many of these loans by foreclosure which could result in further additions to our OREO portfolio.    

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A tax benefit was recognized in the third quarter of 2014 due to gains in other comprehensive income that are presented in current operations. The calculation for the income tax provision or benefit generally does not consider the tax effects of changes in other comprehensive income, or OCI, which is a component of stockholders’ equity on the balance sheet. However, an exception is provided in certain circumstances, such as when there is a full valuation allowance against net deferred tax assets, there is a loss from continuing operations and there is income in other components of the financial statements. In such a case, pre-tax income from other categories, such as changes in OCI, must be considered in determining a tax benefit to be allocated to the loss from continuing operations. For the quarter ended September 30, 2014, this resulted in $38,000 of income tax benefit allocated to continuing operations. The September 30, 2014 tax benefit is entirely due to gains in other comprehensive income that are presented in current operations in accordance with applicable accounting standards. There was no tax benefit recorded during the quarter ended September 30, 2015. Net loss after recognition of the tax benefit was $849,000 for the third quarter of 2014.

The following table summarizes components of income and expense and the change in those components for the nine months ended September 30, 2015, compared with the same period of 2014:

	For the Nine Months						Change from
	Ended September 30,						Prior Period
	2015			2014			Amount			Percent
	(dollars in thousands)
Gross interest income	$	27,549		$	29,877		$	(2,328	)		(7.8	)%
Gross interest expense		5,438			7,626			(2,188	)		(28.7	)
Net interest income		22,111			22,251			(140	)		(0.6	)
Provision (negative provision) for loan losses		(2,200	)		6,300			(8,500	)		(134.9	)
Non-interest income		6,471			2,921			3,550			121.5
Non-interest expense		33,394			27,587			5,807			21.0
Net loss before taxes		(2,612	)		(8,715	)		6,103			(70.0	)
Income tax benefit		—			(1,345	)		1,345			(100.0	)
Net loss		(2,612	)		(7,370	)		4,758			(64.6	)

Net loss before taxes for the nine months ended September 30, 2015 totaled $2.6 million, compared with a net loss before taxes of $8.7 million for the comparable period of 2014.  After the tax benefit recorded in the third quarter as noted above, net loss for the first nine months of 2014 was $7.4 million. Provision for loan losses expense decreased $8.5 million for the first nine months of 2015 compared with the same period in 2014, due to the $2.2 million negative provision recorded in 2015 as compared to provision for loan losses expense of $6.3 million in the first nine months of 2014. Net charge-offs were $3.0 million for the nine months ended June 30, 2015, compared to $10.2 million for the same period in 2014.

Net interest income decreased $140,000 from the first nine months of 2014 and was adversely affected by a reduction in net interest earning assets as well as interest lost on nonaccrual loans which totaled $1.4 million in the first nine months of 2015 and $2.7 million for the comparable period of 2014. Non-interest income increased by $3.6 million to $6.5 million from $2.9 million for the first nine months of 2014, primarily due to increases in net gains on sales of securities and OREO rental income, as well an $883,000 gain on extinguishment of junior subordinated debt in the third quarter.

Non-interest expense also increased during the period from $27.6 million to $33.4 million for the nine months ended September 30, 2014 and 2015, respectively. This increase was primarily due to increases in OREO expenses of $6.8 million and professional fees of $1.2 million, offset by decreases in loan collection expenses of $1.8 million and state franchise and deposit taxes of $380,000. OREO expense was elevated during the first nine months of 2015 due to write-downs of $7.1 million resulting from declines in fair value of the real estate based upon reductions in listing prices, updated appraisals, and certain properties liquidated through auctions near and after the end of the third quarter. Professional fees are elevated for 2015 as a result of current litigation as described in Note 13 – “Contingencies”.

Net Interest Income – Our net interest income was $7.5 million for the three months ended September 30, 2015, an increase of $145,000, or 2.0%, compared with $7.3 million for the same period in 2014.  Net interest spread and margin were 3.24% and 3.33%, respectively, for the third quarter of 2015, compared with 3.00% and 3.10%, respectively, for the third quarter of 2014. Net average nonaccrual loans were $26.0 million and $43.3 million for the third quarters of 2015 and 2014, respectively. Cost of funds decreased 30 basis points from 1.13% in the third quarter of 2014 to 0.83% for the third quarter of 2015.

Average loans receivable declined approximately $57,000 for the quarter ended September 30, 2015 compared with the third quarter of 2014, and the average yield decreased from 5.08% for the third quarter of 2014 to 4.89% for the third quarter of 2015.  This resulted in a decline in interest revenue of approximately $306,000 for the quarter ended September 30, 2015 compared with the prior year period.

Net interest margin increased 23 basis points from our margin of 3.10% in the prior year third quarter.  The yield on earning assets decreased six basis points from the third quarter of 2014, compared with a 30 basis point decline in rates paid on interest-bearing liabilities. The increase in net interest margin was offset by a decrease in earning assets which resulted in a $145,000 increase in net interest income.

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Net interest income was $22.1 million for the nine months ended September 30, 2015, a decrease of $140,000, or 0.6%, compared with $22.3 million for the same period in 2014.  Net interest spread and margin were 3.16% and 3.25%, respectively, for the first nine months of 2015, compared with 2.95% and 3.06%, respectively, for the first nine months of 2014. Net average nonaccrual loans were $34.5 million and $68.2 million for the first nine months of 2015 and 2014, respectively. Cost of funds decreased 27 basis points from 1.14% for the first nine months of 2014 to 0.87% for the first nine months of 2015.

Average loans receivable declined approximately $30.2 million for the nine months ended September 30, 2015 compared with the first nine months of 2014.  This resulted in a decline in interest revenue of approximately $1.6 million for the nine months ended September 30, 2015 compared with the prior year period.

Net interest margin increased 19 basis points from our margin of 3.06% in the first nine months of 2014.  The yield on earning assets decreased six basis points from the first nine months of 2014, compared with a 27 basis point decline in rates paid on interest-bearing liabilities. The increase in net interest margin was offset by a decrease in earning assets which resulted in a $140,000 reduction in net interest income.

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Average Balance Sheets

The following table presents the average balance sheets for the three month periods ended September 30, 2015 and 2014, along with the related calculations of tax-equivalent net interest income, net interest margin and net interest spread for the related periods.

	Three Months Ended September 30,
	2015								2014
	Average Balance			Interest Earned/Paid		Average Yield/Cost			Average Balance			Interest Earned/Paid		Average Yield/Cost
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loan receivables (1)(2)	$	639,954		$	7,895		4.89	%	$	640,011		$	8,201		5.08	%
Securities
Taxable		165,692			986		2.36			199,912			1,265		2.51
Tax-exempt (3)		24,819			187		4.60			30,071			231		4.69
FHLB stock		7,323			73		3.95			7,323			73		3.95
Other equity securities		—			—		—			1			—		—
Federal funds sold and other		66,069			38		0.23			76,899			44		0.23
Total interest-earning assets		903,857			9,179		4.07	%		954,217			9,814		4.13	%
Less: Allowance for loan losses		(16,818	)							(25,045	)
Non-interest earning assets		81,432								104,646
Total assets	$	968,471							$	1,033,818
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Certificates of deposit and other time deposits	$	546,502		$	1,267		0.92	%	$	625,808		$	2,064		1.31	%
NOW and money market deposits		198,752			192		0.38			173,344			160		0.37
Savings accounts		35,348			17		0.19			36,812			21		0.23
Repurchase agreements		382			—		—			2,354			1		0.17
FHLB advances		3,315			23		2.75			4,803			31		2.56
Junior subordinated debentures		29,454			198		2.67			30,399			200		2.61
Total interest-bearing liabilities		813,753			1,697		0.83	%		873,520			2,477		1.13	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		112,660								112,025
Other liabilities		11,138								17,172
Total liabilities		937,551								1,002,717
Stockholders’ equity		30,920								31,101
Total liabilities and stockholders’ equity	$	968,471							$	1,033,818
Net interest income				$	7,482							$	7,337
Net interest spread							3.24	%							3.00	%
Net interest margin							3.33	%							3.10	%

(1) Includes loan fees in both interest income and the calculation of yield on loans.

(2) Calculations include non-accruing loans averaging $26.0 million and $43.3 million, respectively, in average loan amounts outstanding.

(3) Taxable equivalent yields are calculated assuming a 35% federal income tax rate.

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The following table presents the average balance sheets for the nine month periods ended September 30, 2015 and 2014, along with the related calculations of tax-equivalent net interest income, net interest margin and net interest spread for the related periods.

	Nine Months Ended September 30,
	2015								2014
	Average Balance			Interest Earned/Paid		Average Yield/Cost			Average Balance			Interest Earned/Paid		Average Yield/Cost
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loan receivables (1)(2)	$	641,489		$	23,496		4.90	%	$	671,733		$	25,094		4.99	%
Securities
Taxable		171,960			3,122		2.43			186,481			3,653		2.62
Tax-exempt (3)		25,580			580		4.66			30,565			707		4.76
FHLB stock		7,323			219		4.00			7,907			264		4.46
Other equity securities		—			—		—			29			—		—
Federal funds sold and other		76,966			132		0.23			91,316			159		0.23
Total interest-earning assets		923,318			27,549		4.03	%		988,031			29,877		4.09	%
Less: Allowance for loan losses		(18,030	)							(26,058	)
Non-interest earning assets		89,067								92,619
Total assets	$	994,355							$	1,054,592
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Certificates of deposit and other time deposits	$	572,243		$	4,173		0.97	%	$	646,157		$	6,388		1.32	%
NOW and money market deposits		195,887			544		0.37			172,012			470		0.37
Savings accounts		36,003			58		0.22			36,997			67		0.24
Repurchase agreements		785			1		0.17			2,303			3		0.17
FHLB advances		3,583			74		2.76			4,648			96		2.76
Junior subordinated debentures		29,706			588		2.65			30,621			602		2.63
Total interest-bearing liabilities		838,207			5,438		0.87	%		892,738			7,626		1.14	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		112,326								110,809
Other liabilities		10,946								15,832
Total liabilities		961,479								1,019,379
Stockholders’ equity		32,876								35,213
Total liabilities and stockholders’ equity	$	994,355							$	1,054,592
Net interest income				$	22,111							$	22,251
Net interest spread							3.16	%							2.95	%
Net interest margin							3.25	%							3.06	%

(1) Includes loan fees in both interest income and the calculation of yield on loans.

(2) Calculations include non-accruing loans averaging $34.5 million and $68.2 million, respectively, in average loan amounts outstanding.

(3) Taxable equivalent yields are calculated assuming a 35% federal income tax rate.

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Rate/Volume Analysis

 The table below sets forth certain information regarding changes in interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in rate (changes in rate multiplied by old volume); (2) changes in volume (changes in volume multiplied by old rate); and (3) changes in rate-volume (change in rate multiplied by change in volume). Changes in rate-volume are proportionately allocated between rate and volume variance.

	Three Months Ended September 30, 2015 vs. 2014									Nine Months Ended September 30 2015 vs. 2014
	Increase (decrease) due to change in									Increase (decrease) due to change in
	Rate			Volume			Net Change			Rate			Volume			Net Change
	(in thousands)
Interest-earning assets:
Loan receivables	$	(305	)	$	(1	)	$	(306	)	$	(483	)	$	(1,115	)	$	(1,598	)
Securities		(77	)		(246	)		(323	)		(281	)		(377	)		(658	)
FHLB stock		—			—			—			(27	)		(18	)		(45	)
Other equity securities		—			—			—			—			—			—
Federal funds sold and other		—			(6	)		(6	)		(2	)		(25	)		(27	)
Total increase (decrease) in interest income		(382	)		(253	)		(635	)		(793	)		(1,535	)		(2,328	)
Interest-bearing liabilities:
Certificates of deposit and other time deposits		(558	)		(239	)		(797	)		(1,542	)		(673	)		(2,215	)
NOW and money market accounts		7			25			32			8			66			74
Savings accounts		(3	)		(1	)		(4	)		(7	)		(2	)		(9	)
Federal funds purchased and repurchase agreements		(1	)		—			(1	)		—			(2	)		(2	)
FHLB advances		2			(10	)		(8	)		—			(22	)		(22	)
Junior subordinated debentures		4			(6	)		(2	)		4			(18	)		(14	)
Total increase (decrease) in interest expense		(549	)		(231	)		(780	)		(1,537	)		(651	)		(2,188	)
Increase (decrease) in net interest income	$	167		$	(22	)	$	145		$	744		$	(884	)	$	(140	)

Non-Interest Income – The following table presents the major categories of non-interest income for the three and nine months ended September 30, 2015 and 2014:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2015		2014		2015		2014
	(in thousands)
Service charges on deposit accounts	$	492	$	535	$	1,376	$	1,490
Bank card interchange fees		212		209		644		575
Other real estate owned rental income		380		5		1,109		30
Net gain on sales of securities		—		46		1,696		92
Gain on extinguishment of junior subordinated debt		883		—		883		—
Other		243		262		763		734
Total non-interest income	$	2,210	$	1,057	$	6,471	$	2,921

Non-interest income for the third quarter ended September 30, 2015 increased by $1.2 million, or 109.1%, compared with the third quarter of 2014.  For the nine months ended September 30, 2015, non-interest income increased by $3.6 million, or 121.5% to $6.5 million compared with $2.9 million for the same period of 2014.

The increase in non-interest income between both the three and nine month comparative periods was due to an $883,000 gain on extinguishment of junior subordinated debt. The increase in non-interest income between the three month comparative periods was also due to a $375,000 increase in OREO rental income. The increase in non-interest income between the nine month comparative periods was primarily due to a $1.6 million increase in net gain on sales of investment securities, as well as an increase in OREO rental income of $1.1 million.

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Non-interest Expense – The following table presents the major categories of non-interest expense for the three and nine months ended September 30, 2015 and 2014:

	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
	2015		2014		2015		2014
	(in thousands)
Salary and employee benefits	$	3,920	$	4,041	$	11,795	$	11,731
Occupancy and equipment		815		857		2,513		2,645
Professional fees		620		361		2,313		1,134
FDIC insurance		539		571		1,673		1,682
Data processing expense		278		269		860		818
State franchise and deposit tax		285		405		855		1,235
Other real estate owned expense		5,131		560		8,796		1,996
Loan collection expense		321		858		895		2,646
Other		1,059		1,359		3,694		3,700
Total non-interest expense	$	12,968	$	9,281	$	33,394	$	27,587

Non-interest expense for the third quarter ended September 30, 2015 increased $3.7 million, or 39.7%, compared with the third quarter of 2014. For the nine months ended September 30, 2015, non-interest expense increased $5.8 million, or 21.0% to $33.4 million compared with $27.6 million for the first nine months of 2014. The increases in non-interest expense for the third quarter and nine months ended September 30, 2015 were primarily attributable to increased OREO expenses due to fair value write-downs and increased professional fees, offset by a decrease in loan collection expenses. OREO expenses increased by $4.6 million and $6.8 million for the three and nine month periods, respectively. Late in third quarter of 2015, the Bank determined to liquidate 18 parcels of OREO with an aggregate book value at that time of $3.9 million through absolute auctions. The auctions resulted in final bids less estimated selling costs of $1.8 million. Fair value write-downs of $2.2 million were recorded in the third quarter of 2015 related to these properties and cash settlement is expected to occur in the fourth quarter of 2015. Loan collection expenses decreased by $537,000 and $1.8 million, respectively for the quarter and nine months ended September 30, 2015 as the second quarter of 2014 was elevated by $860,000 of expense related to a settlement agreement with a borrower, as well as other fees incurred to collect non-performing loans. Professional fees were elevated for both the three and nine month periods of 2015 as a result of current litigation as described in Note 13 – “Contingencies”. State franchise and deposit taxes continue to decrease in connection with lower deposit and capital levels at the Bank.

Income Tax Expense – No income tax expense or benefit was recorded for the first nine months of 2015; an income tax benefit of $1.3 million was recorded for the nine months ended September 30, 2014. Our 2014 tax benefit was entirely due to gains in other comprehensive income that are presented in current operations in accordance with applicable accounting standards. The income tax effect on net loss before taxes for the nine months ended September 30, 2015, increased our deferred tax assets and related valuation allowance by $1.2 million. See discussion in the results of operations above.

Effective tax rates differ from the federal statutory rate of 35% applied to income before income taxes due to the following:

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2015			2014			2015			2014
	(in thousands)
Federal statutory rate times financial statement income	$	(376	)	$	(311	)	$	(914	)	$	(3,050	)
Effect of:
Valuation allowance		689			378			1,228			3,257
Tax-exempt income		(65	)		(79	)		(201	)		(240	)
Tax benefit from OCI components		—			(38	)		—			(1,345	)
Non-taxable life insurance income		(23	)		(24	)		(80	)		(72	)
Other, net		(225	)		36			(33	)		105
Total	$	—		$	(38	)	$	—		$	(1,345	)

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Analysis of Financial Condition

Total assets decreased $66.5 million, or 6.5%, to $951.5 million at September 30, 2015, from $1.018 billion at December 31, 2014.  This decrease was primarily attributable to a decrease in available for sale securities of $44.0 million, the sale of our loans held for sale of $8.8 million, and a decrease in OREO of $17.0 million, offset by an increase of $4.6 million in net loans receivable. The decrease in available for sale securities was driven by management’s decision during the first nine months of 2015 to reduce interest rate risk and credit risk in the available for sale securities portfolio by selling various securities, which resulted in a net gain on sale of approximately $1.7 million. OREO continued to decline as sales outpaced additions to the portfolio during the period.

Loans Receivable – Loans receivable decreased $585,000 during the nine months ended September 30, 2015 to $624.4 million. Net charge-offs of $3.0 million and transfers to OREO of $4.5 million contributed to the net decrease, while loan funding outpaced loan payoffs by approximately $6.9 million.

Loan Portfolio Composition – The following table presents a summary of the loan portfolio at the dates indicated, net of deferred loan fees, by type. There are no foreign loans in our portfolio. Except for commercial real estate and 1-4 family residential real estate, there is no concentration of loans in any industry exceeding 10% of total loans as of September 30, 2015. Loans for retail facilities (included in nonfarm nonresidential commercial real estate below) totaled $71.1 million at December 31, 2014.

	As of September 30,					As of December 31,
	2015					2014
	Amount		Percent			Amount		Percent
			(dollars in thousands)
Commercial	$	84,908		13.59	%	$	60,936		9.75	%
Commercial Real Estate
Construction		31,484		5.04			33,173		5.31
Farmland		76,670		12.28			77,419		12.39
Nonfarm nonresidential		145,899		23.37			175,452		28.07
Residential Real Estate
Multi-family		39,579		6.34			41,891		6.70
1-4 Family		204,309		32.72			197,278		31.56
Consumer		10,483		1.68			11,347		1.82
Agriculture		30,609		4.90			26,966		4.31
Other		473		0.08			537		0.09
Total loans	$	624,414		100.0	%	$	624,999		100.0	%

Loan Portfolio by Risk Category – The following table presents a summary of the loan portfolio at the dates indicated, by risk category.

	September 30, 2015					June 30, 2015					March 31, 2015					December 31, 2014
	Loans		% to Total			Loans		% to Total			Loans		% to Total			Loans		% to Total
	(dollars in thousands)
Pass	$	508,470		81.4	%	$	509,843		78.6	%	$	480,545		76.0	%	$	461,126	$	73.8	%
Watch		66,726		10.7			67,712		10.4			76,876		12.1			68,200		10.9
Special Mention		1,700		0.3			1,718		0.3			1,110		0.2			4,189		0.7
Substandard		47,518		7.6			69,048		10.7			73,897		11.7			91,484		14.6
Doubtful		—		—			—		—			—		—			—		—
Total	$	624,414		100.0	%	$	648,321		100.0	%	$	632,428		100.0	%	$	624,999	$	100.0	%

Our loans receivable have decreased $585,000 during the nine months ended September 30, 2015. All loan risk categories (other than pass loans) have decreased since December 31, 2014. The pass category increased approximately $47.3 million, the watch category decreased approximately $1.5 million, the special mention category declined approximately $2.5 million, and the substandard category declined approximately $44.0 million. The $44.0 million decrease in loans classified as substandard was primarily driven by $33.2 million in principal payments received, $4.5 million in migration to OREO, $10.4 million in loans upgraded from substandard, and $5.0 million in charge-offs, offset by $9.0 million in loans moved to substandard during the nine months ended September 30, 2015.

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Loan Delinquency – The following table presents a summary of loan delinquencies at the dates indicated.

	September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014
	(in thousands)
Past Due Loans:
30-59 Days	$	1,972	$	1,941	$	4,370	$	3,960
60-89 Days		578		650		1,769		980
90 Days and Over		—		92		18		151
Total Loans Past Due 30-90+ Days		2,550		2,683		6,157		5,091
Nonaccrual Loans		16,987		30,215		36,500		47,175
Total Past Due and Nonaccrual Loans	$	19,537	$	32,898	$	42,657	$	52,266

During the nine months ended September 30, 2015, nonaccrual loans decreased by $30.2 million to $17.0 million. This decrease was due to paydowns of $25.1 million, charge-offs of $4.4 million, $4.4 million transferred to OREO, and $1.6 million returned to accrual status, offset by $5.3 million in loans moved to nonaccrual status. During the nine months ended September 30, 2015, loans past due 30-59 days decreased from $4.0 million at December 31, 2014 to $2.0 million at September 30, 2015.  Loans past due 60-89 days decreased from $980,000 at December 31, 2014 to $578,000 at September 30, 2015. This represents a $2.4 million decrease from December 31, 2014 to September 30, 2015 in loans past due 30-89 days.  We considered this trend in delinquency levels during the evaluation of qualitative trends in the portfolio when establishing the general component of our allowance for loan losses.

Non-Performing Assets – Non-performing assets consist of loans past due 90 days or more still on accrual, loans on which interest is no longer accrued, real estate acquired through foreclosure, and repossessed assets. The following table sets forth information with respect to non-performing assets as of September 30, 2015 and December 31, 2014.

	September 30, 2015			December 31, 2014
	(dollars in thousands)
Loans past due 90 days or more still on accrual	$	—		$	151
Nonaccrual loans		16,987			47,175
Total non-performing loans		16,987			47,326
Real estate acquired through foreclosure		29,177			46,197
Other repossessed assets		—			—
Total non-performing assets	$	46,164		$	93,523
Non-performing loans to total loans		2.72	%		7.57	%
Non-performing assets to total assets		4.85	%		9.19	%
Allowance for non-performing loans	$	393		$	1,253
Allowance for non-performing loans to non-performing loans		2.31	%		2.65	%

At September 30, 2015, nonperforming loans were $17.0 million, or 2.72% of total loans, compared with $47.3 million, or 7.57% of total loans at December 31, 2014, and $44.7 million, or 7.00% of total loans at September 30, 2014. Net loan charge-offs in the first nine months of 2015 totaled $3.0 million compared to $10.2 million for the first nine months of 2014.

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Troubled Debt Restructuring - A troubled debt restructuring (TDR) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.  The majority of the Company’s TDRs involve a reduction in interest rate, a deferral of principal for a stated period of time, or an interest only period.  All TDRs are considered impaired, and the Company has allocated reserves for these loans to reflect the present value of the concessionary terms granted to the borrower. If the loan is considered collateral dependent, it is reported net of allocated reserves, at the fair value of the collateral less cost to sell.

We do not have a formal loan modification program. Rather, we work with individual borrowers on a case-by-case basis to facilitate the orderly collection of our principal and interest before a loan becomes a non-performing loan. If a borrower is unable to make contractual payments, we review the particular circumstances of the borrower’s situation and negotiate a revised payment stream. In other words, we identify performing borrowers experiencing financial difficulties, and through negotiations, we lower their interest rate, most typically on a short-term basis for three to six months. Our goal when restructuring a credit is to afford the borrower a reasonable period of time to remedy the issue causing cash flow constraints within their business so they can return to performing status over time.

Our loan modifications have taken the form of reduction in interest rate and/or curtailment of scheduled principal payments for a short-term period, usually three to six months, but in some cases until maturity of the loan. In some circumstances we restructure real estate secured loans in a bifurcated fashion whereby we have a fully amortizing “A” loan at a market interest rate and an interest-only “B” loan at a reduced interest rate. Our restructured loans are all collateral secured loans. If a borrower fails to perform under the modified terms, we place the loan(s) on nonaccrual status and begin the process of working with the borrower to liquidate the underlying collateral to satisfy the debt.

At September 30, 2015, we had 30 restructured loans totaling $21.4 million compared with 52 restructured loans totaling $42.5 million at December 31, 2014. In general, these loans were granted interest rate reductions to provide cash flow relief to borrowers experiencing cash flow difficulties.  Of these loans, three loans totaling approximately $3.6 million were also granted principal payment deferrals until maturity. There were no concessions made to forgive principal relative to these loans, although we have recorded partial charge-offs for certain restructured loans. In general, these loans are secured by first liens on 1-4 residential or commercial real estate properties, or farmland.  Restructured loans also include $694,000 of commercial loans. At September 30, 2015, $17.7 million of our restructured loans were accruing and $3.8 million were on nonaccrual compared with $22.0 million and $20.5 million, respectively, at December 31, 2014. There were no new TDRs during the first nine months of 2015 or 2014.    

The following table sets forth information with respect to TDRs, non-performing loans, real estate acquired through foreclosure, and other repossessed assets.

	September 30, 2015			December 31, 2014
	(dollars in thousands)
Total non-performing loans	$	16,987		$	47,326
TDRs on accrual		17,656			21,985
Total non-performing loans and TDRs on accrual	$	34,643		$	69,311
Real estate acquired through foreclosure		29,177			46,197
Other repossessed assets		—			—
Total non-performing assets and TDRs on accrual	$	63,820		$	115,508
Total non-performing loans and TDRs on accrual to total loans		5.55	%		11.09	%
Total non-performing assets and TDRs on accrual to total assets		6.71	%		11.35	%

We consider any loan that is restructured for a borrower experiencing financial difficulties due to a borrower’s potential inability to pay in accordance with contractual terms to be a troubled debt restructure.  Specifically, we consider a concession involving a modification of the loan terms, such as (i) a reduction of the stated interest rate, (ii) reduction or deferral of principal, or (iii) reduction or deferral of accrued interest at a stated interest rate lower than the current market rate for new debt with similar risk all to be troubled debt restructurings.  When a modification of terms is made for a competitive reason, we do not consider that to be a troubled debt restructuring.  A primary example of a competitive modification would be an interest rate reduction for a performing borrower’s loan to a market rate as the result of a market decline in rates.

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Management periodically reviews renewals/modifications of previously identified TDRs for which there was no principal forgiveness, to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed as the borrower has complied with the terms of the loan at the date of renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan after the date of the renewal/modification. In this instance, the TDR was originally considered a restructuring in a prior year as a result of a modification with an interest rate that was not commensurate with the risk of the underlying loan. Additionally, TDR classification can be removed in circumstances in which the Company performs a non-concessionary re-modification of the loan at terms that were considered to be at market for loans with comparable risk. Management expects the borrower will continue to perform under the re-modified terms based on the borrower’s past history of performance.

At September 30, 2015 and December 31, 2014, TDRs totaled $21.4 million and $42.5 million, respectively. During the nine months ended September 30, 2015, TDRs were reduced as a result of $15.9 million in payments, charge-offs of $1.7 million, and transfers to OREO of $3.5 million.

If the borrower fails to perform, we place the loan on nonaccrual status and seek to liquidate the underlying collateral for these loans. Our nonaccrual policy for restructured loans is identical to our nonaccrual policy for all loans. Our policy calls for a loan to be reported as nonaccrual if it is maintained on a cash basis because of deterioration in the financial condition of the borrower, payment in full of principal and interest is not expected, or principal or interest has been in default for a period of 90 days or more unless the assets are both well secured and in the process of collection. Changes in value for impairment, including the amount attributed to the passage of time, are recorded entirely within the provision for loan losses. Upon determination that a loan is collateral dependent, the loan is charged down to the fair value of collateral less estimated costs to sell.

See “Note 4 - Loans,” of the notes to the financial statements for additional disclosure related to troubled debt restructuring.

Allowance for Loan Losses – The allowance for loan losses is based on management’s continuing review and evaluation of individual loans, loss experience, current economic conditions, risk characteristics of various categories of loans and such other factors that, in management’s judgment, require consideration in estimating loan losses.

Management has established loan grading procedures that result in specific allowance allocations for any estimated inherent risk of loss.  For loans not individually evaluated, a general allowance allocation is computed using factors developed over time based on actual loss experience.  The specific and general allocations plus consideration of qualitative factors represent management’s best estimate of probable losses contained in the loan portfolio at the evaluation date.  Although the allowance for loan losses is comprised of specific and general allocations, the entire allowance is available to absorb any credit losses.

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An analysis of changes in the allowance for loan losses and selected ratios for the three and nine month periods ended September 30, 2015 and 2014, and for the year ended December 31, 2014 follows: 

	Three Months Ended September 30,						Nine Months Ended September 30,						Year Ended December 31,
	2015			2014			2015			2014			2014
	(dollars in thousands)
Balance at beginning of period	$	16,809		$	25,133		$	19,364		$	28,124		$	28,124
Loans charged-off:
Real estate		1,254			1,548			4,138			12,272			17,943
Commercial		201			216			675			670			1,099
Consumer		70			59			200			238			354
Agriculture		41			—			111			30			30
Other		14			1			47			19			—
Total charge-offs		1,580			1,824			5,171			13,229			19,426
Recoveries
Real estate		1,049			742			1,591			2,481			2,726
Commercial		5			108			406			340			614
Consumer		98			23			158			134			213
Agriculture		2			2			5			11			13
Other		15			14			45			37			—
Total recoveries		1,169			889			2,205			3,003			3,566
Net charge-offs		411			935			2,966			10,226			15,860
Provision (negative provision) for loan losses		(2,200	)		—			(2,200	)		6,300			7,100
Balance at end of period	$	14,198		$	24,198		$	14,198		$	24,198		$	19,364
Allowance for loan losses to period-end loans		2.27	%		3.79	%		2.27	%		3.79	%		3.10	%
Net charge-offs to average loans (annualized)		0.25	%		0.58	%		0.62	%		2.04	%		2.39	%
Allowance for loan losses to non-performing loans		83.58	%		54.17	%		83.58	%		54.17	%		40.92	%
Allowance for loan losses for loans individually evaluated for impairment	$	469		$	1,788		$	469		$	1,788		$	752
Loans individually evaluated for impairment		34,895			78,695			34,895			78,695			71,993
Allowance for loan losses to loans individually evaluated for impairment		1.34	%		2.27	%		1.34	%		2.27	%		1.04	%
Allowance for loan losses for loans collectively evaluated for impairment	$	13,729		$	22,410		$	13,729		$	22,410		$	18,612
Loans collectively evaluated for impairment		589,519			559,665			589,519			559,665			553,006
Allowance for loan losses to loans collectively evaluated for impairment		2.33	%		4.00	%		2.33	%		4.00	%		3.37	%

Our loan loss reserve, as a percentage of total loans at September 30, 2015, decreased to 2.27% from 3.79% at September 30, 2014, and from 3.10% at December 31, 2014.  The change in our loan loss reserve as a percentage of total loans between periods is attributable to the improving historical loss experience, qualitative factors, improvement in risk grade classification metrics, improving charge-off levels, and improving past due trends.  Our allowance for loan losses to non-performing loans was 83.58% at September 30, 2015, compared with 40.92% at December 31, 2014, and 54.17% at September 30, 2014. Net charge-offs in the first nine months of 2015 totaled $3.0 million. Gross charge-offs for the first nine months of 2015 totaled $5.2 million, of which $2.9 million were the result of charging off the allowance for individually evaluated loans deemed to be collateral dependent during the period.

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The following table sets forth the net charge-offs (recoveries) for the periods indicated:

	Nine Months Ended September 30, 2015		Year Ended December 31, 2014			Year Ended December 31, 2013
	(in thousands)
Commercial	$	269	$	485		$	1,616
Commercial Real Estate		1,258		11,878			20,045
Residential Real Estate		1,289		3,339			7,212
Consumer		42		167			507
Agriculture		106		17			(124	)
Other		2		(26	)		—
Total net charge-offs	$	2,966	$	15,860		$	29,256

The majority of our nonperforming loans are secured by real estate collateral, and the underlying collateral coverage for nonperforming loans supports the likelihood of collection of our principal. We have assessed these loans for collectability and considered, among other things, the borrower’s ability to repay, the value of the underlying collateral, and other market conditions to ensure the allowance for loan losses is adequate to absorb probable incurred losses. Our allowance for non-performing loans was $393,000 or 2.31% of non-performing loans at September 30, 2015 compared with $1.3 million or 2.65% at December 31, 2014, and $1.2 million or 2.72% at September 30, 2014 as non-performing loan trends continue to improve.

The following table presents the unpaid principal balance, recorded investment and allocated allowance related to loans individually evaluated for impairment in the commercial real estate and residential real estate portfolios as of September 30, 2015 and December 31, 2014.

	September 30, 2015						December 31, 2014
	Commercial Real Estate			Residential Real Estate			Commercial Real Estate			Residential Real Estate
	(in thousands)
Unpaid principal balance	$	21,949		$	21,257		$	65,899		$	24,633
Prior charge-offs		(7,039	)		(2,779	)		(17,758	)		(3,249	)
Recorded investment		14,910			18,478			48,141			21,384
Allocated allowance		(65	)		(404	)		(491	)		(227	)
Recorded investment, less allocated allowance	$	14,845		$	18,074		$	47,650		$	21,157
Recorded investment, less allocated allowance/ Unpaid principal balance		67.63	%		85.03	%		72.31	%		85.89	%

Based on previous charge-offs, our current recorded investment in the commercial real estate and residential real estate segments is significantly below the unpaid principal balance for these loans. The recorded investment and allocated allowance were 67.63% and 85.03% of the unpaid principal balance in the commercial real estate and residential real estate segments of the portfolio, respectively, at September 30, 2015.

The following table illustrates recent trends in loans collectively evaluated for impairment and the related allowance for loan losses by portfolio segment:

	September 30, 2015							June 30, 2015							March 31, 2015							December 31, 2014
	Loans		Allowance		% to Total			Loans		Allowance		% to Total			Loans		Allowance		% to Total			Loans		Allowance		% to Total
Commercial	$	83,578	$	1,570		1.88	%	$	77,187	$	1,945		2.52	%	$	75,277	$	2,044		2.72	%	$	58,914	$	2,013		3.42	%
Commercial real estate		239,143		7,951		3.32			249,989		8,542		3.42			241,286		10,629		4.41			237,903		10,440		4.39
Residential real estate		225,410		3,825		1.70			231,538		4,890		2.11			220,229		5,021		2.28			217,785		5,560		2.55
Consumer		10,458		181		1.73			9,938		226		2.27			10,799		243		2.25			11,286		273		2.42
Agriculture		30,457		200		0.66			30,161		359		1.19			28,441		391		1.37			26,703		319		1.19
Other		473		2		0.42			497		5		1.01			1,097		15		1.37			415		7		1.69
Total	$	589,519	$	13,729		2.33	%	$	599,310	$	15,967		2.66	%	$	577,129	$	18,343		3.18	%	$	553,006	$	18,612		3.37	%

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Our allowance for loan losses for loans collectively evaluated for impairment declined to 2.33% at September 30, 2015 from 4.00% at September 30, 2014 and 3.37% at December 31, 2014. This decline was driven primarily by an improving loan risk category classification mix and volume as well as improving historical loss trends which are key factors for estimating general reserves. Other factors include the consideration of growth, composition and diversification of our loan portfolio, current delinquency levels, the results of recent regulatory communications and general economic conditions.

Provision for Loan Losses – A negative provision of $2.2 million was recorded for the first nine months of 2015 compared to $6.3 million of provision expense for the first nine months of 2014. The $2.2 million negative provision in the third quarter was primarily driven by declining historical loss rates, improvements in asset quality, and management’s assessment of risk in the portfolio. Substandard loans decreased by $21.5 million or 31.2% over the past quarter and $44.0 million or 48% over the first nine months of 2015, net charge-offs were $3.0 million for the first nine months of 2015 compared to $10.2 million for the first nine months of 2014 and $411,000 for the third quarter of 2015 compared to $1.8 million in the second quarter of 2015, and nonaccrual loans decreased by $13.2 million or 43.8% over the past quarter and $30.2 million or 64.0% over the first nine months of 2015. We consider the size and volume of our portfolio as well as the credit quality of our loan portfolio based upon risk category classification when determining the loan loss provision for each period and the allowance for loan losses at period end.

Foreclosed Properties – Foreclosed properties at September 30, 2015 were $29.2 million compared with $54.5 million at September 30, 2014 and $46.2 million at December 31, 2014.  See “Note 5 - Other Real Estate Owned,” of the notes to the financial statements. During the first nine months of 2015, we acquired $4.5 million of OREO properties and sold properties totaling approximately $14.4 million. We value foreclosed properties at fair value less estimated costs to sell when acquired and expect to liquidate these properties to recover our investment in the due course of business.

OREO is recorded at fair market value less estimated cost to sell at time of acquisition.  Any write-down of the property at the time of acquisition is charged to the allowance for loan losses.  Subsequent reductions in fair value are recorded as non-interest expense.  To determine the fair value of OREO for smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers.  If the internally evaluated market price is below our underlying investment in the property, appropriate write-downs are recorded. 

For larger dollar commercial real estate properties, we obtain a new appraisal of the subject property or have staff in our special assets group or centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to OREO.  In some of these circumstances, an appraisal is in process at quarter end and we must make our best estimate of the fair value of the underlying collateral based on our internal evaluation of the property, our review of the most recent appraisal, and discussions with the currently engaged appraiser.  We typically obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent. When an asking price is lowered below the most recent appraised value, appropriate write-downs are taken.

Net gain (loss) on sales, write-downs, and operating expenses for OREO totaled $8.8 million for the nine months ended September 30, 2015, compared with $2.0 million for the same period of 2014. During the nine months ended September 30, 2015, fair value write-downs of $7.1 million were recorded to reflect declines in the fair value of the real estate based upon reductions in listing prices for certain properties, updated appraisals, and properties liquidated through auctions near and after the end of the third quarter, compared with $1.3 million for the nine months ended September 30, 2014. Late in the third quarter of 2015, the Bank determined to liquidate 18 parcels of OREO with an aggregate book value at that time of $4.0 million through absolute auctions. The auctions resulted in final bids less estimated selling costs of $1.8 million. Fair value write-downs of $2.2 million were recorded in the third quarter of 2015 related to these properties and cash settlement is expected to occur in the fourth quarter of 2015. At quarter end, $6.5 million of OREO property was subject to a contract for sale or letter of intent including the $1.8 million in estimated net proceeds resulting from the auctions discussed above.

Given the current size of the OREO portfolio, OREO expenses may be elevated in future periods as we work to sell these properties. Additionally, nonaccrual loans totaled $17.0 million at September 30, 2015, and we expect to resolve certain of these loans by foreclosure which may result in further additions to our OREO portfolio.

Liabilities – Total liabilities at September 30, 2015 were $917.7 million compared with $984.5 million at December 31, 2014, a decrease of $66.9 million, or 6.8%. This decrease was primarily attributable to a decrease in deposits of $48.9 million from $926.8 million at December 31, 2014 to $877.9 million at September 30, 2015, a decrease in Federal Home Loan Bank advances of $12.5 million and a decrease of $4.0 million in junior subordinated debentures due to the debt to equity transaction on September 30, 2015. Federal Home Loan Bank advances are used from time to time to fund asset growth and manage interest rate risk in accordance with our asset/liability management strategies.

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Deposits are our primary source of funds. The following table sets forth the average daily balances and weighted average rates paid for our deposits for the periods indicated:

	For the Nine Months					For the Year
	Ended September 30,					Ended December 31,
	2015					2014
	Average		Average			Average		Average
	Balance		Rate			Balance		Rate
	(dollars in thousands)
Demand	$	112,326				$	113,150
Interest checking		87,413		0.13	%		83,504		0.15	%
Money market		108,474		0.56			96,194		0.55
Savings		36,003		0.22			36,803		0.24
Certificates of deposit		572,243		0.97			632,020		1.29
Total deposits	$	916,459		0.70	%	$	961,671		0.92	%

The following table sets forth the average daily balances and weighted average rates paid for our certificates of deposit for the periods indicated:

	For the Nine Months					For the Year
	Ended September 30,					Ended December 31,
	2015					2014
	Average		Average			Average		Average
	Balance		Rate			Balance		Rate
	(dollars in thousands)
Less than $100,000	$	312,772		0.94	%	$	354,250		1.22	%
$100,000 or more		259,471		1.01			277,770		1.37
Total	$	572,243		0.97	%	$	632,020		1.29	%

The following table shows at September 30, 2015 the amount of our time deposits of $100,000 or more by time remaining until maturity (in thousands):

Maturity Period
Three months or less	$	53,113
Three months through six months		36,668
Six months through twelve months		62,584
Over twelve months		89,665
Total	$	242,030

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Liquidity

Liquidity risk arises from the possibility we may not be able to satisfy current or future financial commitments, or may become unduly reliant on alternative funding sources. The objective of liquidity risk management is to ensure we meet the cash flow requirements of depositors and borrowers, as well as our operating cash needs, taking into account all on- and off-balance sheet funding demands. Liquidity risk management also involves ensuring we meet our cash flow needs at a reasonable cost. We maintain an investment and funds management policy, which identifies primary sources of liquidity, establishes procedures for monitoring and measuring liquidity, and establishes minimum liquidity requirements in compliance with regulatory guidance. Our Asset Liability Committee regularly monitors and reviews our liquidity position.

Funds are available from a number of sources, including the sale of securities in the available for sale portion of the investment portfolio, principal pay-downs on loans and mortgage-backed securities, customer deposit inflows, and other wholesale funding. Our available for sale investment portfolio totaled $146.8 million at September 30, 2015 and within that portfolio, $32.2 million of our securities currently have an unrealized loss of $432,000.

Traditionally, we have borrowed from the FHLB to supplement our funding requirements. The advances are collateralized by first mortgage residential loans. The borrowing capacity is based on the market value of the underlying pledged loans. At September 30, 2015, our additional borrowing capacity with the FHLB was $25.7 million. Any new advances are limited to a one year maturity or less. The availability of our borrowing capacity could be affected by our financial condition and the FHLB could require additional collateral or, among other things, exercise its right to deny a funding request, at its discretion.

We also have federal funds borrowing lines from correspondent banks totaling $5.0 million on a secured basis. Management believes our sources of liquidity are adequate to meet expected cash needs for the foreseeable future. However, the availability of these lines could be affected by our financial position, and our lenders could exercise their right to deny a funding request at their discretion. We are also subject to FDIC interest rate restrictions for deposits. As such, we are permitted to offer up to the “national rate” plus 75 basis points as published weekly by the FDIC. We are also precluded from accepting brokered deposits without the pre-approval of our primary regulators.

We use cash to pay dividends on common stock, if and when declared by the Board of Directors, and to service debt. The main sources of funding for the Company include dividends paid by the Bank and financing obtained in the capital markets. During 2011, the Company contributed $13.1 million to the Bank which substantially decreased its liquid assets. The contribution was made to strengthen the Bank’s capital in an effort to help it comply with its capital ratio requirements under the consent order. The Company’s liquid assets decreased from $20.3 million at December 31, 2010, to $1.2 million at September 30, 2015. Since the Bank is unlikely to be in a position to pay dividends to the parent company for the foreseeable future, cash inflows for the parent are limited to earnings on investment securities, sales of investment securities, and interest on deposits with the Bank. Ongoing cash operating expenses of the parent company are expected to be approximately $1.0 million over the next twelve months. We have elected to defer payments on our trust preferred securities.

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Capital

In the fourth quarter of 2011, we began deferring interest payments on our junior subordinated notes, which resulted in a deferral of distributions on our trust preferred securities. Therefore, we will not be able to pay cash dividends on our common shares until such time that we have paid all deferred distributions on our trust preferred securities. If we defer interest payments on our trust preferred securities for 20 consecutive quarters (through September 30, 2016), we must pay all deferred interest or we will be in default. At September 30, 2015, cumulative accrued and unpaid interest on our junior subordinated notes totaled $2.3 million.

Stockholders’ equity increased $343,000 to $33.8 million at September 30, 2015, compared with $33.5 million at December 31, 2014 due to the issuance of common stock related to the retirement of $4.0 million of the Company’s junior subordinated debt. This increase in common stock was offset by current year net loss of $2.6 million, and a decrease in the fair value of our available for sale securities portfolio of $805,000.

On February 25, 2015, shareholders approved the conversion of all mandatorily convertible Series B Preferred Shares into 4,053,600 common shares and the conversion of all mandatorily convertible Series D Preferred Shares into 6,458,000 non-voting common shares. The conversion reduced preferred stockholders’ equity by $5.8 million and increased common stockholders’ equity by the same amount. Total issued and outstanding common shares and non-voting common shares were 26,949,205 at September 30, 2015.

On September 30, 2015, we completed a common equity for debt exchange with holders of $4.0 million of the capital securities (the “Trust Securities”) of Porter Statutory Trust IV, a trust subsidiary of the Company. Accrued and unpaid interest on the Trust Securities totaled approximately $330,000. In exchange for the $4.3 million debt and interest liability, the Company issued 800,000 common shares and 400,000 non-voting common shares, for a total of 1,200,000 shares. In the transaction, a wholly owned subsidiary of the Company received a one-third portion of the Trust Securities directly from an unrelated third party in exchange for 400,000 common shares, resulting in an $883,000 gain on extinguishment of debt. The subsidiary also received two-thirds of the Trust Securities from related parties in exchange for 400,000 common shares and 400,000 non-voting common shares. The debt and interest liability exchanged with related parties was treated as a capital transaction.

Each of the federal bank regulatory agencies has established risk-based capital requirements for banking organizations. The Basel III regulatory capital reforms became effective for the Company and Bank on January 1, 2015, and include new minimum risk-based capital and leverage ratios.  These rules refine the definition of what constitutes “capital” for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital. The final rules allowed banks and their holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and the Bank opted out of this requirement. In addition, the Bank has agreed with its primary regulators to maintain a ratio of total capital to total risk-weighted assets (“total risk-based capital ratio”) of at least 12.0%, and a ratio of Tier 1 capital to total assets (“leverage ratio”) of 9.0%.

The following table shows the ratios of Tier 1 capital and total capital to risk-adjusted assets and the leverage ratios for the Company and the Bank at the dates indicated:

						September 30, 2015				December 31, 2014
	Regulatory Minimums		Well-Capitalized Minimums		Minimum Capital Ratios Under Consent Order	Porter Bancorp		PBI Bank		Porter Bancorp		PBI Bank
Tier 1 Capital		6.0%		8.0%	N/A		6.86%		8.73%		6.70%		8.59%
Common equity Tier I capital		4.5		6.5	N/A		5.07		8.73	N/A		N/A
Total risk-based capital		8.0		10.0	12.0%		10.40		10.50		10.61		10.57
Tier 1 leverage ratio		4.0		5.0	9.0		4.73		6.01		4.51		5.78

At September 30, 2015, the Bank’s Tier 1 leverage ratio was 6.01%, and its total risk-based capital ratio was 10.50%, both of which are below the minimum capital ratios required by the Consent Order. Failure to meet minimum capital requirements could result in additional discretionary actions by regulators that, if undertaken, could have a materially adverse effect on our financial condition.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s interest sensitivity profile was liability sensitive at September 30, 2015 and December 31, 2014. Given a 100 basis point increase in interest rates sustained for one year, base net interest income would decrease by an estimated 0.82% at September 30, 2015, compared with a decrease of 3.15% at December 31, 2014, and is within the risk tolerance parameters of our risk management policy. Given a 200 basis point increase in interest rates sustained for one year, base net interest income would decrease by an estimated 1.44% at September 30, 2015, compared with a decrease of 5.86% at December 31, 2014, and also is within the risk tolerance parameters of our risk management policy.

The following table indicates the estimated impact on net interest income under various interest rate scenarios for the twelve months following September 30, 2015, as calculated using the static shock model approach:

	Change in Future Net Interest Income
	Dollar Change			Percentage Change
	(dollars in thousands)
+ 200 basis points	$	(399	)		(1.44	)%
+ 100 basis points		(227	)		(0.82	)

We did not run a model simulation for declining interest rates as of September 30, 2015 because the Federal Reserve effectively lowered the federal funds target rate from between 0.00% to 0.25% in December 2008.  Therefore, no significant further short-term rate reductions can occur.

Item 4. Controls and Procedures

Management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. As of September 30, 2015, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Management determined that a material weakness existed in the Company’s internal control over financial reporting at June 30, 2014. The Company utilized information to record the fair value of other real estate owned at June 30, 2014 which was obtained prior to taking possession of commercial real estate through a settlement agreement with a contentious borrower on June 24, 2014, rather than promptly obtaining new information material to the fair value of the properties before the filing of the financial statements as of and for the three and six month periods ended June 30, 2014. We determined, after the filing of those financial statements, that our initial estimate of fair value was significantly higher than the actual fair value as it was not based upon the best information available. Based upon the restatement of the Company’s financial statements as of and for the three and six month periods ended June 30, 2014, the Company determined that our internal controls for recording other real estate owned at estimated fair value less costs to sell did not in this instance establish an accurate initial book value and were not effective. Our management, overseen by the Audit Committee, worked throughout the fourth quarter of 2014 to implement controls, procedures, and processes to remediate this control weakness.

These enhanced controls, procedures, and process improvements include:

● The Special Assets Group promptly and thoroughly reviews new information material to the fair value of the property and analyzes key assumptions relevant to the fair value conclusion and cost to sell estimate. New information includes, but it not limited to, updated appraisals, site visits performed by the Special Assets Group, and discussions with current tenants.

● Personnel, including senior management, consult with the Special Assets Group and external experts, such as property management professionals, to evaluate the new information material to the fair value of the property including comparable sales, income and expenses, and other relevant valuation factors.

● Finance and accounting personnel engage in detailed discussions regarding valuation issues and review other real estate owned, including additions, with the Special Assets Group throughout each reporting period and through the subsequent period up to the filing of the financial statements.

During the fourth quarter of 2014 and throughout the first nine months of 2015, we took steps to resolve the material weakness by changing our controls, procedures, and processes for recording other real estate owned at estimated fair value less cost to sell, as discussed above. Based on our evaluation, management including our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. There were no other changes in our internal control over financial reporting that occurred during the nine months ended September 30, 2015 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

We are defendants in various legal proceedings.  Litigation is subject to inherent uncertainties and unfavorable outcomes could occur. See Footnote 13, “Contingencies” in the Notes to our consolidated financial statements for additional detail regarding ongoing legal proceedings.

Item 1A. Risk Factors

We refer you to the detailed cautionary statements and discussion of risks that affect our Company and its business in “Item 1A – Risk Factors” of our December 31, 2014 Annual Report on Form 10-K. There have been no material changes from the risk factors previously discussed in those reports.

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

Not applicable.

Item 3. Default Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable

Item 6. Exhibits

(a)           Exhibits

The following exhibits are filed or furnished as part of this report:

Exhibit Number	Description of Exhibit
10.1	Exchange Agreement with Patriot Financial Partners, L.P dated September 30, 2015 (incorporated by reference to Exhibit 10.1 to Form 8-K filed October 2, 2015).
10.2	Exchange Agreement with W. Glenn Hogan dated September 30, 2015 (incorporated by reference to Exhibit 10.2 to Form 8-K filed October 2, 2015).
10.3	Consent Order dated November 12, 2015.
31.1	Certification of Principal Executive Officer, pursuant to Rule 13a - 14(a).
31.2	Certification of Principal Financial Officer, pursuant to Rule 13a - 14(a).
32.1	Certification of Principal Executive Officer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements from the Company’s Quarterly Report on Form 10Q for the quarter ended September 30, 2015, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statement of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements.

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SIGNATURES

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

	PORTER BANCORP, INC.
	(Registrant)
November 12, 2015	By:	/s/ John T. Taylor
		John T. Taylor
		Chief Executive Officer
November 12, 2015	By:	/s/ Phillip W. Barnhouse
		Phillip W. Barnhouse
		Chief Financial Officer

60

EX-10.3

Exhibit 10.3

FEDERAL DEPOSIT INSURANCE CORPORATION

WASHINGTON, D.C.

AND

COMMONWEALTH OF KENTUCKY

DEPARTMENT OF FINANCIAL INSTITUTIONS

FRANKFORT, KENTUCKY

	)
In the Matter of                                          )
	)	CONSENT ORDER
PBI BANK	)
LOUISVILLE, KENTUCKY                                                 )		FDIC-15-0227b
	)	KDFI 2015-AH-00140
(KENTUCKY CHARTERED	)
INSURED NONMEMBER BANK)	)
	)

PBI Bank, Louisville, Kentucky (“Bank”), having been advised of its right to a NOTICE OF CHARGES AND OF HEARING detailing the unsafe or unsound banking practices and violations of law or regulation alleged to have been committed by the Bank, and of its right to a hearing on the charges under section 8(b) of the Federal Deposit Insurance Act (“Act”), 12 U.S.C. § 1818(b), and under section 286.3-690 of the Kentucky Revised Statutes , Ky. Rev. Stat. Ann. Section 286.3-690, regarding hearings before the Department of Financial Institutions for the Commonwealth of Kentucky, (“KDFI”), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (“STIPULATION”) with representatives of the Federal Deposit Insurance Corporation (“FDIC”) and the KDFI, dated November 12, 2015, whereby, solely for the purpose of this proceeding and without admitting or denying the charges of unsafe or unsound banking practices and violations of law or regulation relating to capital, asset quality, earnings, and liquidity, the Bank consented to the issuance of a CONSENT ORDER (“ORDER”) by the FDIC and the KDFI.

The FDIC and the KDFI considered the matter and decided to accept the STIPULATION.

Having also determined that the requirements for issuance of an order under 12 U.S.C. § 1818(b) and section 286.3-690 of the Kentucky Revised Statutes, Ky. Rev. Stat. Ann. § 286.3-690 have been satisfied, the FDIC and the KDFI HEREBY ORDER that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns, take affirmative action as follows:

CAPITAL

     1.     (a)     Within thirty (30) days of the effective date of this ORDER, the Bank shall have and maintain its leverage ratio at a minimum of nine (9.0%) percent and its total capital ratio at a minimum of twelve (12.0%) percent. For purposes of this ORDER, leverage ratio and total capital ratio shall be calculated in accordance with Part 324 of the FDIC Rules and Regulations (“Part 324”), 12 C.F.R. Part 324.

(b)     If, while this ORDER is in effect, the Bank increases capital by the sale of new securities, the board of directors of the Bank shall adopt and implement a plan for the sale of such additional securities, including the voting of any shares owned or proxies held by or controlled by them in favor of said plan. Should the implementation of the plan involve public distribution of Bank securities, including a distribution limited only to the Bank’s existing shareholders, the Bank shall prepare detailed offering materials fully describing the securities being offered, including an accurate description of the financial condition of the Bank and the circumstances giving rise to the offering, and other material disclosures necessary to comply with Federal securities laws. Prior to the implementation of the plan and, in any event, not less than twenty (20) days prior to the dissemination of such materials, the materials used in the sale of the securities shall be submitted to the FDIC Registration and Disclosure Section, 550 17th Street, N.W., Washington, D.C. 20429 and to the KDFI, 1025 Capital Center Drive, Suite 200, Frankfort, Kentucky 40601, for their review. Any changes requested to be made in the materials by the FDIC or the KDFI shall be made prior to their dissemination.

(c)     In complying with the provisions of this paragraph, the Bank shall provide to any subscriber and/or purchaser of Bank securities written notice of any planned or existing development or other changes which are materially different from the information reflected in any offering materials used in connection with the sale of Bank securities. The written notice required by this paragraph shall be furnished within ten (10) days of the date any material development or change was planned or occurred, whichever is earlier, and shall be furnished to every purchaser and/or subscriber of the Bank’s original offering materials.

(d)     Should the Bank be unable to maintain the required capital levels within the time frame specified in subparagraph (a) above, then within thirty (30) days of receipt of written direction from the Regional Director and the Commissioner of the KDFI (“Commissioner”), the Bank shall develop, adopt, and implement a written plan to sell or merge itself into another federally insured financial institution or to otherwise immediately obtain a sufficient capital investment into the Bank to fully meet the capital requirements of this paragraph. A copy of the plan required by this paragraph shall be submitted to, and be determined acceptable by, the Regional Director and the Commissioner.

PAYMENTS AND TRANSFERS

2.     During the life of this ORDER:

(a)      The Bank shall not make any payment which would cause it to become Undercapitalized as defined in Part 324;

(b)     The Bank shall immediately notify the Regional Director and Commissioner in writing if a Judgment is, or is about to be, entered against the Bank, where payment of said Judgment would cause the Bank to become Undercapitalized as defined in Part 324; and

(c)     The Bank shall not pledge or otherwise transfer any of its assets for the benefit of any creditor if such pledge or transfer would cause the Bank to become Undercapitalized as defined in Part 324, except for any such pledges made in accordance with Kentucky Revised Statute section 286.3-330, Ky. Rev. Stat. Ann § 286.3-330.

REDUCTION OF DELINQUENCIES AND CLASSIFIED ASSETS 

     3.     (a)     As of the effective date of this ORDER, the Bank shall adhere to its written plan to reduce the Bank’s risk position in each asset in excess of $1,000,000 which is delinquent or classified “Substandard” or “Doubtful,” including those assets identified in the Joint Report of Examination as of May 26, 2015 (“ROE”). Such plan shall be used to reduce the Bank’s risk position in such assets revealed in subsequent examinations or visitations.

(b)     As used in this paragraph, “reduce” means to: (1) collect; (2) charge off; (3) sell; or (4) improve the quality of such assets so as to warrant removal of any adverse classification by the FDIC and the KDFI.

(c)     The plan required by this paragraph shall continue to be acceptable to the Regional Director and the Commissioner.

PROHIBITION OF ADDITIONAL LOANS TO CLASSIFIED BORROWERS

     4.     (a)     As of the effective date of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower who is already obligated in any manner to the Bank on any extension of credit (including any portion thereof) that has been charged off the books of the Bank or classified “Loss” in the ROE, so long as such credit remains uncollected.

(b)     As of the effective date of this ORDER, the Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower whose loan or other credit has been classified “Substandard”, “Doubtful”, in the ROE, and is uncollected unless the Bank’s board of directors has adopted, prior to such extension of credit, a detailed written statement giving the reasons why such extension of credit is in the best interest of the Bank. A copy of the statement shall be signed by each Director, and incorporated in the minutes of the applicable board of directors’ meeting. A copy of the statement shall be placed in the appropriate loan file.

ALLOWANCE FOR LOAN AND LEASE LOSSES

     5.     (a)     As of the effective date of this ORDER, and prior to the submission of all Reports of Condition and Income required by the FDIC, the board of directors of the Bank shall review the adequacy of the Bank’s Allowance for Loan and Lease Losses (“ALLL”), provide for an adequate ALLL, and thereafter maintain and accurately report the same. The minutes of the board meeting at which such review is undertaken shall indicate the findings of the review, the amount of increase in the ALLL recommended, if any, and the basis for determination of the amount of ALLL provided. In making these determinations, the board of directors shall consider the Federal Financial Institutions Examination Council’s (“FFIEC”) Instructions for the Reports of Condition and Income and any analysis of the Bank’s ALLL provided by the FDIC or the KDFI.

(b)     ALLL entries required by this paragraph shall be made prior to any capital determinations required by this ORDER.

STRATEGIC PLAN

6.     (a)     As of the effective date of this ORDER, the Bank shall adhere to its comprehensive strategic plan. The plan shall continue to contain an assessment of the Bank’s current financial condition and market area, and a description of the operating assumptions that form the basis for major projected income and expense components.

(b)     Within 30 days from the end of each calendar

quarter following the effective date of this ORDER, the Bank’s board of directors shall evaluate the Bank’s actual performance in relation to its strategic plan and record the results of the evaluation, and any actions taken by the Bank, in the minutes of the board of directors’ meeting at which such evaluation is undertaken.

(c)     The strategic plan required by this ORDER shall be revised thirty (30) days prior to the end of each calendar year for which this ORDER is in effect.

(d) The strategic plan and any revisions thereto shall continue to be acceptable to the Regional Director and the Commissioner.

GROWTH RESTRICTION

7.     During the life of this ORDER, the Bank shall not increase its total assets by more than five (5.0%) percent during any consecutive three-month period without providing, at least thirty (30) days prior to its implementation, a growth plan to the Regional Director and the Commissioner. Such growth plan, at a minimum, shall include the funding source to support the projected growth, as well as the anticipated use of funds. This growth plan shall not be implemented without the prior written approval of the Regional Director and the Commissioner. In no event shall the Bank increase its total assets by more than ten (10.0%) percent annually. For the purpose of this paragraph, “total assets” shall be defined as in the FFIEC’s Instructions for the Reports of Condition and Income.

DIVIDEND RESTRICTION

8.     As of the effective date of this ORDER, the Bank shall not declare or pay any dividend without the prior written consent of the Regional Director and the Commissioner.

LIQUIDITY

9.     During the life of this ORDER, the Bank shall submit to the Regional Director and the Commissioner liquidity analysis reports in a format that is acceptable to the Regional Director and the Commissioner on a weekly basis.

CORRECTION OF VIOLATIONS

10.     Within sixty (60) days from the effective date of this ORDER, the Bank shall eliminate and/or correct all violations of law, rule, and regulation listed in the ROE, and implement procedures to ensure future compliance with all applicable laws, rules, and regulations.

COMPLIANCE WITH ORDER

     11.     (a)     Within thirty (30) days from the effective date of this ORDER, the Board shall have in place a program that will provide for monitoring of the Bank’s compliance with this ORDER.

(b)     Following the required date of compliance with subparagraph (a) of this paragraph, the Board shall review the Bank’s compliance with this ORDER and record its review in the minutes of each regularly scheduled Board meeting.

NOTIFICATION TO SHAREHOLDER

12.     Following the effective date of this ORDER, the Bank shall send to its shareholder a copy of this ORDER: (a) in conjunction with the Bank’s next shareholder communication; or (b) in conjunction with its notice or proxy statement preceding the Bank’s next shareholder meeting.

PROGRESS REPORTS

13.     Within thirty (30) days from the end of each calendar quarter following the effective date of this ORDER, the Bank shall furnish to the Regional Director and the Commissioner written progress reports signed by each member of the Bank’s board of directors, detailing the actions taken to secure compliance with the ORDER and the results thereof.

The effective date of this ORDER shall be the date of its issuance by the FDIC and the KDFI.

The provisions of this ORDER shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns thereof.

The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provision has been modified, terminated, suspended, or set aside by the FDIC and the KDFI.

Pursuant to delegated authority.

Dated:     November 12, 2015.

M. Anthony Lowe	Charles A. Vice
Regional Director	Commissioner
Chicago Regional Office	Commonwealth of Kentucky
Federal Deposit Insurance	Department of Financial
Corporation	Institutions

EX-31.1

Exhibit 31.1

Porter Bancorp, Inc.

Rule 13a-14(a) Certification

of Chief Executive Officer

I, John T. Taylor, Chief Executive Officer of Porter Bancorp, Inc. (the “Company”), certify that:

1.         I have reviewed this Quarterly Report on Form 10-Q of the Company;

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

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

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

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

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

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

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

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

Dated:  November 12, 2015	/s/ John T. Taylor
	John T. Taylor
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Porter Bancorp, Inc.

Rule 13a-14(a) Certification

of Chief Financial Officer

I, Phillip W. Barnhouse, Chief Financial Officer of Porter Bancorp, Inc. (the “Company”), certify that:

1.         I have reviewed this Quarterly Report on Form 10-Q of the Company;

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

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

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

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

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

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

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

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

Dated:  November 12, 2015	/s/ Phillip W. Barnhouse
	Phillip W. Barnhouse
	Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 906 CERTIFICATION

In connection with the Quarterly Report on Form 10-Q of Porter Bancorp, Inc. (the “Company”) for the quarterly period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John T. Taylor, Chief Executive Officer of the Company, do hereby certify, in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	PORTER BANCORP, INC.
Dated:  November 12, 2015	By:	/s/ John T. Taylor
		John T. Taylor
		Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 906 CERTIFICATION

In connection with the Quarterly Report on Form 10-Q of Porter Bancorp, Inc. (the “Company”) for the quarterly period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Phillip W. Barnhouse, Chief Financial Officer of the Company, do hereby certify, in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	PORTER BANCORP, INC.
Dated:  November 12, 2015	By:	/s/ Phillip W. Barnhouse
		Phillip W. Barnhouse
		Chief Financial Officer

XML

Note 4 - Loans (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Receivables [Abstract]
Impaired Financing Receivable, Interest Income, Cash Basis Method	$ 47,000	$ 58,000	$ 149,000	$ 480,000
Financing Receivable, Modifications, Percentage of Performing TDR's to Total TDR's	83.00%		83.00%		52.00%
Troubled Debt Restructuring Reserve	$ 198,000		$ 198,000		$ 579,000
Loans and Leases Receivable, Impaired, Commitment to Lend	$ 0		$ 0		$ 0
Financing Receivable, Modifications, Number of Contracts	0	0	0	0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	0
Minimum Outstanding Balance for Loans to Be Qualified for Credit Risk Analysis	$ 500,000		$ 500,000

XML

Note 6 - Deposits (Details) - Deposit Balances by Category - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Deposit Balances by Category [Abstract]
Non-interest bearing	$ 106,160	$ 114,910
Interest checking	83,247	91,086
Money market	119,324	109,734
Savings	35,131	36,430
Certificates of deposit	534,031	574,681
Total	$ 877,893	$ 926,841

XML

Note 5 - Other Real Estate Owned (Details) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Note 5 - Other Real Estate Owned (Details) [Line Items]
Real Estate Held-for-sale	$ 6.5	$ 6.5
One- to Four-family Residential Properties [Member]
Note 5 - Other Real Estate Owned (Details) [Line Items]
Mortgage Loans in Process of Foreclosure, Amount	$ 1.6	$ 3.6

XML

Note 11 - Earnings (Loss) per Share (Details) - $ / shares	1 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Note 11 - Earnings (Loss) per Share (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	0		0	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period			30,170		5,979
Common Stock [Member]
Note 11 - Earnings (Loss) per Share (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)	$ 15.88		$ 15.88
Warrant [Member]
Note 11 - Earnings (Loss) per Share (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period		798,915
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations	650,544
Warrant [Member] | Common Stock [Member]
Note 11 - Earnings (Loss) per Share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			330,561	330,561
Nonvoting Common Stock [Member]
Note 11 - Earnings (Loss) per Share (Details) [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)				$ 10.95
Nonvoting Common Stock [Member] | Warrant [Member]
Note 11 - Earnings (Loss) per Share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount				1,449,459

XML

Note 6 - Deposits (Details) - Maturities of Time Deposits $ in Thousands	Sep. 30, 2015 USD ($)
Maturities of Time Deposits [Abstract]
Year 1	$ 330,881
Year 2	122,321
Year 3	9,500
Year 4	21,319
Year 5	50,010
Thereafter	0
	$ 534,031

XML

Note 4 - Loans (Details) - Aging of Recorded Investment in Past Due Loans - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	$ 16,987	$ 47,175
Total past due and nonaccrual	19,537	52,266
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	1,972	3,960
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	578	980
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due		151
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	1,330	1,978
Total past due and nonaccrual	1,352	2,064
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	18	86
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	4
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	390	3,831
Total past due and nonaccrual	390	3,831
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	4,164	5,054
Total past due and nonaccrual	4,578	5,468
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	407	400
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	7	14
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	4,412	26,892
Total past due and nonaccrual	4,456	27,451
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due		241
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	44	318
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	32	80
Total past due and nonaccrual	32	80
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	6,482	8,925
Total past due and nonaccrual	8,532	12,801
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	1,527	3,124
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	523	601
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due		151
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	25	30
Total past due and nonaccrual	39	186
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	14	109
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due		47
Agriculture Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual	152	263
Total past due and nonaccrual	158	263
Agriculture Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past due	$ 6
Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Noaccrual		122
Total past due and nonaccrual		$ 122

XML

Note 2 - Going Concern Considerations and Future Plans (Details) - USD ($)		3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2016	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2010
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Net Income (Loss) Available to Common Stockholders, Basic		$ (1,031,000)	$ (1,473,000)		$ (2,274,000)	$ (8,803,000)		$ 19,400,000	$ (3,400,000)
Provision for Loan and Lease Losses		(2,200,000)		$ 6,300,000	(2,200,000)	6,300,000		7,100,000
Net Income (Loss) Attributable to Parent		(1,076,000)	(849,000)		(2,612,000)	(7,370,000)		(11,200,000)
Foreclosed Real Estate Expense		5,131,000	560,000		8,796,000	1,996,000		5,800,000
Loan Collection Expense		321,000	858,000		895,000	2,646,000		3,000,000
Redeemable Preferred Stock Accretion and Dividend								2,400,000
Other Preferred Stock Dividends and Adjustments		(45,000)	(162,000)		(338,000)	(928,000)		(3,200,000)
Preferred Stock Conversions, Inducements								36,100,000
Loans and Leases Receivable, Gross	$ 624,414,000	$ 624,414,000			$ 624,414,000			$ 624,999,000		$ 1,300,000,000
Maximum Ratio of Loans to Total Risk Based Capital	75.00%	75.00%			75.00%
Ratio of Loans to Total Risk Based Capital	221.00%	221.00%			221.00%			262.00%
SEC Schedule III, Real Estate, Other Acquisitions					$ 4,500,000			$ 32,300,000	$ 20,600,000
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 16,987,000	$ 16,987,000			16,987,000			47,175,000
Impairment of Real Estate					7,080,000	1,250,000
Other Real Estate, Period Increase (Decrease)					(27,000)
Proceeds from Sale of Other Real Estate					14,400,000	7,300,000
Real Estate Held-for-sale	6,500,000	6,500,000			6,500,000			$ 6,500,000
Cash	1,200,000	1,200,000			1,200,000
Debt Conversion, Original Debt, Principal Amount	4,000,000
Debt Conversion, Original Debt, Interest Amount	330,000
Debt Conversion, Original Debt, Amount	4,300,000				4,330,000
Gains (Losses) on Extinguishment of Debt		883,000			883,000
Series E Preferred Stock and Series F Preferred Stock [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Preferred Stock, Liquidation Preference, Value	$ 10,500,000	$ 10,500,000			$ 10,500,000
Construction Loans [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Percentage of Real Estate Owned	50.00%	50.00%			50.00%			40.00%
One- to Four-family Residential Properties [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Percentage of Real Estate Owned	9.00%	9.00%			9.00%			17.00%
Nonperforming Financial Instruments [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Increase (Decrease) in Finance Receivables		$ 13,200,000			$ 30,200,000
Finance Receivables, Decrease Percentage		43.80%			64.00%
Commercial Real Estate Portfolio Segment [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Provision for Loan and Lease Losses		$ (1,334,000)	(336,000)		$ (1,657,000)	4,611,000
Loans and Leases Receivable, Gross	$ 254,053,000	$ 254,053,000			$ 254,053,000			$ 286,044,000
Percentage of Real Estate Owned	41.00%	41.00%			41.00%			31.00%
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Loans and Leases Receivable, Gross	$ 31,484,000	$ 31,484,000			$ 31,484,000			$ 33,173,000
Financing Receivable, Recorded Investment, Nonaccrual Status	390,000	390,000			390,000			3,831,000
Substandard [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Increase (Decrease) in Finance Receivables		$ (21,500,000)			$ 44,000,000
Finance Receivables, Decrease Percentage		31.20%			48.00%
Allowance for Loan and Lease Losses Write-offs, Net		$ 411,000	$ 1,800,000		$ 3,000,000	$ 10,200,000
Loans and Leases Receivable, Gross	47,518,000	47,518,000			47,518,000			91,484,000
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Loans and Leases Receivable, Gross	$ 654,000	$ 654,000			$ 654,000			$ 4,917,000
Parent [Member] | Scenario, Forecast [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Operating Expenses							$ 1,000,000
Common Stock [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	1,200,000				1,200,000
Common Stock [Member] | Voting Common Stock [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	800,000				800,000
Common Stock [Member] | Nonvoting Common Stock [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	400,000				400,000
PBI Bank [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	9.00%	9.00%			9.00%
Capital Required to be Well Capitalized to Risk Weighted Assets	12.00%	12.00%			12.00%
Subsidiaries [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Gains (Losses) on Extinguishment of Debt	$ 883,000
Subsidiaries [Member] | Common Stock [Member] | Unrelated Third Party [Member] | Voting Common Stock [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	400,000
Subsidiaries [Member] | Common Stock [Member] | Related Party [Member] | Voting Common Stock [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	400,000
Subsidiaries [Member] | Common Stock [Member] | Related Party [Member] | Nonvoting Common Stock [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	400,000
Junior Subordinated Debt [Member]
Note 2 - Going Concern Considerations and Future Plans (Details) [Line Items]
Number of Consecutive Quarterly Periods to Defer Interest Payments Without Default or Penalty	20	20			20
Dividends Payable	$ 2,300,000	$ 2,300,000			$ 2,300,000

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Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) - Ratios and Amounts of Common Equity Tier 1, Tier 1 Capital and Total Capital to Risk-Adjusted Assets and the Leverage Ratios - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Consolidated Entities [Member]
Total risk-based capital (to risk-weighted assets)
Total risk-based capital to risk-weighted assets, actual amount	$ 69,354	$ 73,595
Total risk-based capital (to risk-weighted ssets, actual ratio	10.40%	10.61%
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 53,324	$ 55,483
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, ratio	8.00%	8.00%
Total common equity Tier I risk-based capital (to risk-weighted assets)
Total common equity Tier I risk-based capital to risk-weighted assets, actual amount	$ 33,804
Total common equity Tier I risk-based capital to risk-weighted assets, actual ratio	5.07%
Total common equity Tier I risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 29,995
Total common equity Tier I risk-based capital to risk-weighted assets, for captial adequacy purposes, ratio	4.50%
Tier I capital (to risk-weighted assets)
Tier I capital to risk-weighted assets, actual amount	$ 45,719	$ 46,459
Tier I capital to risk-weighted assets, actual ratio	6.86%	6.70%
Tier I capital to risk-weighted assets, for capital adequacy purposes, amount	$ 39,993	$ 27,741
Tier I capital to risk-weighted assets, for capital adequacy purposes, ratio	6.00%	4.00%
Tier I capital (to average assets)
Tier I capital to average assets, actual amount	$ 45,719	$ 46,459
Tier I capital to average assets, actual ratio	4.73%	4.51%
Tier I capital to average assets, for capital adequacy purposes, amount	$ 38,676	$ 41,193
Tier I capital to average assets, for capital adequacy purposes, ratio	4.00%	4.00%
PBI Bank [Member]
Total risk-based capital (to risk-weighted assets)
Total risk-based capital to risk-weighted assets, actual amount	$ 69,810	$ 73,174
Total risk-based capital (to risk-weighted ssets, actual ratio	10.50%	10.57%
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 53,178	$ 55,383
Total risk-based capital to risk-weighted assets, for capital adequacy purposes, ratio	8.00%	8.00%
Total common equity Tier I risk-based capital (to risk-weighted assets)
Total common equity Tier I risk-based capital to risk-weighted assets, actual amount	$ 58,053
Total common equity Tier I risk-based capital to risk-weighted assets, actual ratio	8.73%
Total common equity Tier I risk-based capital to risk-weighted assets, for capital adequacy purposes, amount	$ 29,913
Total common equity Tier I risk-based capital to risk-weighted assets, for captial adequacy purposes, ratio	4.50%
Tier I capital (to risk-weighted assets)
Tier I capital to risk-weighted assets, actual amount	$ 58,053	$ 59,438
Tier I capital to risk-weighted assets, actual ratio	8.73%	8.59%
Tier I capital to risk-weighted assets, for capital adequacy purposes, amount	$ 39,883	$ 27,691
Tier I capital to risk-weighted assets, for capital adequacy purposes, ratio	6.00%	4.00%
Tier I capital (to average assets)
Tier I capital to average assets, actual amount	$ 58,053	$ 59,438
Tier I capital to average assets, actual ratio	6.01%	5.78%
Tier I capital to average assets, for capital adequacy purposes, amount	$ 38,625	$ 41,143
Tier I capital to average assets, for capital adequacy purposes, ratio	4.00%	4.00%

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Note 7 - Advances from the Federal Home Loan Bank (Details) - Advances from the Federal Home Loan Bank - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Advances from the Federal Home Loan Bank [Abstract]
Monthly amortizing advances with fixed rates from 0.00% to 5.25% and maturities ranging from 2017 through 2033, averaging 2.73% at September 30, 2015 and 1.02% at December 31, 2014	$ 3,255	$ 15,752

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Note 11 - Earnings (Loss) per Share (Details) - Basic and Diluted Loss per Share - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Note 11 - Earnings (Loss) per Share (Details) - Basic and Diluted Loss per Share [Line Items]
Net loss (in Dollars)	$ (1,076)	$ (849)	$ (2,612)	$ (7,370)	$ (11,200)
Less:
Preferred stock dividends (in Dollars)		786		2,361
Earnings allocated (in Dollars)	(45)	(162)	(338)	(928)	(3,200)
Net loss attributable to common shareholders, basic and diluted (in Dollars)	$ (1,031)	$ (1,473)	$ (2,274)	$ (8,803)	$ 19,400	$ (3,400)
Basic
Weighted average common shares including unvested common shares outstanding	25,768,887	13,435,788	25,626,610	13,314,138
Less:
Weighted average shares outstanding	24,681,547	12,086,843	22,313,501	12,044,858
Basic loss per common share (in Dollars per share)	$ (0.04)	$ (0.12)	$ (0.10)	$ (0.73)
Diluted
Add: Dilutive effects of assumed exercises of common and Preferred Series C stock warrants	0	0	0	0
Weighted average common shares and potential common shares	24,681,547	12,086,843	22,313,501	12,044,858
Diluted loss per common share (in Dollars per share)	$ (0.04)	$ (0.12)	$ (0.10)	$ (0.73)
Series C Preferred Stock [Member]
Less:
Earnings allocated (in Dollars)		$ (40)	$ (236)	$ (243)
Less:
Weighted average shares outstanding		332,894		332,894
Series B Preferred Stock [Member]
Less:
Weighted average shares outstanding			890,901
Series D Preferred Stock [Member]
Less:
Weighted average shares outstanding			1,419,341
Unvested Shares [Member]
Less:
Earnings allocated (in Dollars)	$ (45)	$ (122)	$ (102)	$ (685)
Less:
Weighted average shares outstanding	1,087,340	1,016,051	1,002,867	936,386

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Note 6 - Deposits (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Deposits [Table Text Block]

	September 30, 2015		December 31, 2014
	(in thousands)
Non-interest bearing	$	106,160	$	114,910
Interest checking		83,247		91,086
Money market		119,324		109,734
Savings		35,131		36,430
Certificates of deposit		534,031		574,681
Total	$	877,893	$	926,841

Schedule of Maturities of Time Deposits [Table Text Block]

Year 1	$	330,881
Year 2		122,321
Year 3		9,500
Year 4		21,319
Year 5		50,010
Thereafter		—
	$	534,031

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Note 5 - Other Real Estate Owned (Details) - OREO Valuation Allowance Activity - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
OREO Valuation Allowance Activity:
Beginning balance	$ 307	$ 199	$ 1,066	$ 230
Provision to allowance	4,450	600	7,080	1,250
Write-downs	(4,457)	(268)	(7,846)	(949)
Ending balance	$ 300	$ 531	$ 300	$ 531

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Note 4 - Loans (Details) - Balance in Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Bases on Impairment Method - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2010
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 469	$ 752
Collectively evaluated for impairment	13,729	18,612
Total ending allowance balance	14,198	19,364
Loans:
Loans individually evaluated for impairment	34,895	71,993
Loans collectively evaluated for impairment	589,519	553,006
Total ending loans balance	624,414	624,999	$ 1,300,000
Commercial Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	33
Collectively evaluated for impairment	1,570	2,013
Total ending allowance balance	1,570	2,046
Loans:
Loans individually evaluated for impairment	1,330	2,022
Loans collectively evaluated for impairment	83,578	58,914
Total ending loans balance	84,908	60,936
Commercial Real Estate Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	65	491
Collectively evaluated for impairment	7,951	10,440
Total ending allowance balance	8,016	10,931
Loans:
Loans individually evaluated for impairment	14,910	48,141
Loans collectively evaluated for impairment	239,143	237,903
Total ending loans balance	254,053	286,044
Residential Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	404	227
Collectively evaluated for impairment	3,825	5,560
Total ending allowance balance	4,229	5,787
Loans:
Loans individually evaluated for impairment	18,478	21,384
Loans collectively evaluated for impairment	225,410	217,785
Total ending loans balance	243,888	239,169
Consumer Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	1
Collectively evaluated for impairment	181	273
Total ending allowance balance	181	274
Loans:
Loans individually evaluated for impairment	25	61
Loans collectively evaluated for impairment	10,458	11,286
Total ending loans balance	10,483	11,347
Agriculture Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	200	319
Total ending allowance balance	200	319
Loans:
Loans individually evaluated for impairment	152	263
Loans collectively evaluated for impairment	30,457	26,703
Total ending loans balance	30,609	26,966
Other Portfolio Segment [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	2	7
Total ending allowance balance	2	7
Loans:
Loans individually evaluated for impairment	0	122
Loans collectively evaluated for impairment	473	415
Total ending loans balance	$ 473	$ 537

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Note 13 - Contingencies (Details)				12 Months Ended
	Jul. 16, 2013 USD ($)	Dec. 17, 2012 USD ($)	Jun. 18, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2007 USD ($)	Sep. 30, 2015 USD ($)
Note 13 - Contingencies (Details) [Line Items]
Loss Contingency Accrual						$ 1,900,000
Loss Contingency, Number of Plaintiffs			3
Signature Point Litigation [Member]
Note 13 - Contingencies (Details) [Line Items]
Loss Contingency, Estimate of Possible Loss			$ 26,000,000
Miller’s Health System Inc. Employee Stock Ownership Plan Litigation [Member]
Note 13 - Contingencies (Details) [Line Items]
Alleged Imprudent and Disloyal Purchase of Stock Authorized					$ 40,000,000
Financing Percentage at Excessive Rate of Interest					100.00%
AIT Laboratories Employee Stock Ownership Plan Litigation [Member]
Note 13 - Contingencies (Details) [Line Items]
Alleged Imprudent and Disloyal Purchase of Stock Authorized				$ 90,000,000
Compensatory Damages [Member] | Signature Point Litigation [Member]
Note 13 - Contingencies (Details) [Line Items]
Loss Contingency, Damages Awarded, Value	$ 1,515,000
Punitive Damages [Member] | Signature Point Litigation [Member]
Note 13 - Contingencies (Details) [Line Items]
Loss Contingency, Damages Awarded, Value	$ 5,500,000
Minimum [Member] | SBAV LP Litigation [Member]
Note 13 - Contingencies (Details) [Line Items]
Loss Contingency, Damages Sought, Value		$ 4,500,000
Maximum [Member] | SBAV LP Litigation [Member]
Note 13 - Contingencies (Details) [Line Items]
Loss Contingency, Damages Sought, Value		$ 5,000,016

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Note 3 - Securities (Details) - Amortized Cost and Fair Value of Debt Investment Securities Portfolio by Contractual Maturity - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Available for sale
Within one year	$ 5,821
Within one year	5,854
One to five years	8,532
One to five years	8,882
Five to ten years	25,440
Five to ten years	25,284
Beyond ten years	572
Beyond ten years	651
Agency mortgage-backed: residential	104,642
Agency mortgage-backed: residential	106,166
Total	145,007
Total	146,837
Held to maturity
One to five years	15,644
One to five years	16,262
Five to ten years	22,937
Five to ten years	24,208
Beyond ten years	3,557
Beyond ten years	3,774
Total	42,138	$ 42,325
Total	$ 44,244	$ 44,498

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Note 5 - Other Real Estate Owned (Details) - Expenses Related to Other Real Estate Owned - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Expenses Related to Other Real Estate Owned [Abstract]
Net (gain) loss on sales	$ 16	$ (401)	$ (27)	$ (455)
Provision to allowance	4,450	600	7,080	1,250
Operating expense	665	361	1,743	1,201
Total	$ 5,131	$ 560	$ 8,796	$ 1,996	$ 5,800

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Note 10 - Stock Plans and Stock Based Compensation (Details) - Unvested Share Activity - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Unvested Share Activity [Abstract]
Outstanding, beginning	770,440	787,426
Outstanding, beginning	$ 1.33	$ 1.56
Granted	800,000	122,220
Granted	$ 0.89	$ 0.93
Vested	(165,185)	(133,227)
Vested	$ 1.50	$ 2.20
Terminated	(450,994)
Terminated	$ 1.25
Forfeited	(30,170)	(5,979)
Forfeited	$ 1.12	$ 4.21
Outstanding, ending	924,091	770,440
Outstanding, ending	$ 0.96	$ 1.33

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Note 8 - Fair Values Measurement (Details) - Reconcilation of All Assets Measured at Fair Value On Recurring Basis Using Significant Unobservable Inputs Level 3 - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Reconcilation of All Assets Measured at Fair Value On Recurring Basis Using Significant Unobservable Inputs Level 3 [Abstract]
Balances of recurring Level 3 assets	$ 658	$ 632
Total gain (loss) for the period:
Included in other comprehensive income (loss)	(7)	26
Balances of recurring Level 3 assets	$ 651	$ 658

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Note 4 - Loans (Details) - Risk Category of Loans by Class of Loans - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2010
Financing Receivable, Recorded Investment [Line Items]
Gross loans	$ 624,414	$ 624,999	$ 1,300,000
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	508,470	461,126
Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	66,726	68,200
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	1,700	4,189
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	47,518	91,484
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	84,908	60,936
Commercial Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	75,683	49,440
Commercial Portfolio Segment [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	3,263	5,063
Commercial Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	5,962	6,433
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	254,053	286,044
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	31,484	33,173
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	25,475	25,266
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	5,355	2,990
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	654	4,917
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	76,670	77,419
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	65,831	61,672
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	4,299	7,922
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	6,540	7,825
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	145,899	175,452
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	111,725	111,426
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	23,161	21,017
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	1,339	3,747
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	9,674	39,262
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	243,888	239,169
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	39,579	41,891
Residential Portfolio Segment [Member] | Multifamily Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	30,692	31,526
Residential Portfolio Segment [Member] | Multifamily Loans [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	4,921	6,039
Residential Portfolio Segment [Member] | Multifamily Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	3,966	4,326
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	204,309	197,278
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	165,313	145,450
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	18,736	23,928
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	68	131
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	20,192	27,769
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	10,483	11,347
Consumer Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	9,759	10,115
Consumer Portfolio Segment [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	208	537
Consumer Portfolio Segment [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	293	311
Consumer Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	223	384
Agriculture Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	30,609	26,966
Agriculture Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	23,519	25,816
Agriculture Portfolio Segment [Member] | Watch [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	6,783	704
Agriculture Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	307	446
Other Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	473	537
Other Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans	$ 473	415
Other Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Gross loans		$ 122

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Note 2 - Going Concern Considerations and Future Plans

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Substantial Doubt about Going Concern [Text Block]

Note 2 – Going Concern Considerations and Future Plans

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future. However, the events and circumstances described in this Note create substantial doubt about the Company’s ability to continue as a going concern.

During the three and nine months ended September 30, 2015, we reported net loss attributable to common shareholders of $1.0 million and $2.3 million, respectively, compared with net loss attributable to common shareholders of $1.5 million and $8.8 million for the three and nine months ended September 30, 2014, respectively. The improvement for 2015 is primarily attributable to a negative provision for loan losses of $2.2 million in the third quarter of 2015, compared to $6.3 million of provision expense recorded in the second quarter of 2014. The $2.2 million negative provision in the third quarter was primarily driven by declining historical loss rates, improvement in asset quality, and management’s assessment of risk in the portfolio. Substandard loans decreased by $21.5 million or 31.2% over the past quarter and $44.0 million or 48% over the first nine months of 2015. Net charge-offs were $3.0 million for the first nine months of 2015 compared to $10.2 million for the first nine months of 2014, and $411,000 for the third quarter of 2015 compared to $1.8 million in the second quarter of 2015. Nonaccrual loans decreased by $13.2 million or 43.8% over the past quarter, and $30.2 million or 64.0% over the first nine months of 2015.

At September 30, 2015, we continued to be involved in various legal proceedings in which we dispute the material factual allegations against us. After conferring with our legal advisors, we believe we have meritorious grounds on which to prevail. If we do not prevail, the ultimate outcome of any one of these matters could have a material adverse effect on our financial condition, results of operations, or cash flows. These matters are more fully described in Note 13 – “Contingencies”.

For the year ended December 31, 2014, we reported a net loss of $11.2 million. This loss was attributable primarily to loan loss provision of $7.1 million, OREO expense of $5.8 million resulting from fair value write-downs driven by new appraisals and reduced marketing prices, and ongoing operating expense, along with $3.0 million in loan collection expenses. We also had lower net interest margin due to lower average loans outstanding, loans re-pricing at lower rates, and the level of non-performing loans in our portfolio. After deductions for dividends and accretion on preferred stock of $2.4 million, allocating losses to participating securities of $3.2 million, and the effect of the exchange of preferred stock for common stock of $36.1 million, net income attributable to common shareholders was $19.4 million for the year ended December 31, 2014, compared with a net loss attributable to common shareholders of $3.4 million for the year ended December 31, 2013.

In June 2011, the Bank agreed to a Consent Order with the FDIC and KDFI in which the Bank agreed, among other things, to improve asset quality, reduce loan concentrations, and maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. In October 2012, the Bank entered into a revised Consent Order with the FDIC and KDFI again agreeing to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. The Bank also agreed that if it should be unable to reach the required capital levels, and if directed in writing by the FDIC, then the Bank would within 30 days develop, adopt and implement a written plan to sell or merge itself into another federally insured financial institution or otherwise immediately obtain a sufficient capital investment into the Bank to fully meet the capital requirements. In October 2015, the Bank agreed to enter into a new revised Consent Order, which includes several of the substantive provisions of the June 2011 and October 2012 Consent Orders, but omits previous provisions related to reducing loan concentrations that the Bank had satisfied. The revised Consent Order requires the Bank to continue to adhere to the plans implemented in response to the previous Consent Orders. The revised Consent Order is included as an exhibit to this report.

We continue to work toward capital ratio compliance. As of September 30, 2015, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were both less than the minimum capital ratios required by the Consent Order. Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a consent order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions such as directing a bank to seek a buyer or taking a bank into receivership.

In order to meet the capital requirements of the Consent Order, the Board of Directors and management are continuing to evaluate and implement strategies to achieve the following objectives:

● Increasing capital through the limited issuance of common stock to new and existing shareholders.

● Continuing to operate the Company and Bank in a safe and sound manner.  We have reduced our lending concentrations, and the size of our balance sheet while continuing to remediate non-performing loans.

● In executing on our commitment to improve credit quality, reduce loan concentrations, and reduce balance sheet risk, we have:

o Reduced the size of our loan portfolio significantly from $1.3 billion at December 31, 2010 to $624.4 million at September 30, 2015.   

o Reduced our construction and development loans to less than 75% of total risk-based capital at September 30, 2015.

o Reduced our non-owner occupied commercial real estate loans, construction and development loans, and multi-family residential real estate loans.  These loans represented 221% of total risk-based capital at September 30, 2015, down from 262% at December 31, 2014.

● Executing on our commitment to sell OREO and reinvest in quality income producing assets.

o Our acquisition of real estate assets through the loan remediation process increased during 2014, as we acquired $32.3 million of OREO in 2014 compared with $20.6 million during 2013. We acquired $4.5 million in the first nine months of 2015. Nonaccrual loans totaled $17.0 million at September 30, 2015, and we expect to resolve a portion of these loans by foreclosure, which may result in further additions to our OREO portfolio.

o We incurred OREO losses totaling $7.1 million during the first nine months of 2015, the result of fair value write-downs to reflect reductions in listing prices for certain properties, updated appraisals, and the liquidation of properties through auctions near and after the end of the third quarter, offset by a $27,000 net gain on sales of OREO. Proceeds from the sale of OREO totaled $14.4 million for the nine months ended September 30, 2015, and $7.3 million for the nine months ended September 30, 2014. OREO expense may be elevated in future periods as we work to sell these properties, given the current size of the OREO portfolio. At quarter end, $6.5 million of OREO property was subject to a contract for sale or letter of intent.

o Real estate construction represents 50% of the OREO portfolio at September 30, 2015 compared with 40% at December 31, 2014. Commercial real estate represents 41% of the OREO portfolio at September 30, 2015 compared with 31% at December 31, 2014, and 1-4 family residential properties represent 9% of the portfolio at September 30, 2015 compared with 17% at December 31, 2014.

● Continuing to improve our internal processes and procedures, distribution of labor, and work-flow to ensure we have adequately and appropriately deployed resources in an efficient manner in the current environment.

The Company’s liquid assets were $1.2 million at September 30, 2015. Since the Bank is unlikely to be in a position to pay dividends to the parent company for the foreseeable future, cash inflows for the parent are limited to earnings on investment securities, sales of investment securities, interest on deposits with the Bank, the issuance of new debt, or the issuance of capital securities. Ongoing operating expenses of the parent company are forecast at approximately $1.0 million for the next twelve months.

Effective with the fourth quarter of 2011, we began deferring interest payments on the junior subordinated debentures relating to our trust preferred securities. Deferring interest payments on the junior subordinated debentures resulted in a deferral of distributions on our trust preferred securities. If we defer distributions on our trust preferred securities for 20 consecutive quarters, we must pay all deferred distributions in full or we will be in default. Our deferral period expires in the third quarter of 2016. Deferred distributions on our trust preferred securities, which totaled $2.3 million as of September 30, 2015, are cumulative, and unpaid distributions accrue and compound on each subsequent payment date. If as a result of a default we become subject to any liquidation, dissolution or winding up, holders of the trust preferred securities will be entitled to receive the liquidation amounts to which they are entitled, including all accrued and unpaid distributions, before any distribution can be made to our shareholders. In addition, the holders of our Series E and Series F Preferred Shares will be entitled to receive liquidation distributions totaling $10.5 million before any distribution can be made to the holders of our common shares.

On September 30, 2015, we completed a common equity for debt exchange with holders of $4.0 million of the capital securities (the “Trust Securities”) of Porter Statutory Trust IV, a trust subsidiary of the Company. Accrued and unpaid interest on the Trust Securities totaled approximately $330,000. In exchange for the $4.3 million debt and interest liability, the Company issued 800,000 common shares and 400,000 non-voting common shares, for a total of 1,200,000 shares. In the transaction, a wholly owned subsidiary of the Company received a one-third portion of the Trust Securities directly from an unrelated third party in exchange for 400,000 common shares, resulting in an $883,000 gain on extinguishment of debt. The subsidiary also received two-thirds of the Trust Securities from related parties in exchange for 400,000 common shares and 400,000 non-voting common shares. The debt and interest liability exchanged with related parties was treated as a capital transaction.

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Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Fair value (in Dollars)	$ 339	$ 16,103
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Fair value (in Dollars)	$ 339	$ 16,103
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Fair value (in Dollars)	$ 26,569	$ 33,504
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Fair value (in Dollars)	$ 26,569	$ 33,504
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Unobservable input(s)	Discount or capitalization rate	Discount or capitalization rate
Unobservable input(s)	Discount or capitalization rate	Discount or capitalization rate
Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Unobservable input(s)	Discount or capitalization rate	Discount or capitalization rate
Unobservable input(s)	Discount or capitalization rate	Discount or capitalization rate
Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Fair value (in Dollars)	$ 1,470	$ 1,635
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Fair value (in Dollars)	$ 1,470	$ 1,635
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Fair value (in Dollars)	$ 2,608	$ 12,693
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Fair value (in Dollars)	$ 2,608	$ 12,693
Unobservable input(s)	Adjustment for differences between the comparable sales	Adjustment for differences between the comparable sales
Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Fair value (in Dollars)		$ 12
Unobservable input(s)		Adjustment for receivables and inventory discounts
Fair value (in Dollars)		$ 12
Unobservable input(s)		Adjustment for receivables and inventory discounts
Minimum [Member] | Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	5.00%	0.00%
Weighted average	(5.00%)	(0.00%)
Minimum [Member] | Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	0.00%	0.00%
Weighted average	(0.00%)	(0.00%)
Minimum [Member] | Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	9.00%	8.00%
Weighted average	(9.00%)	(8.00%)
Minimum [Member] | Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	9.00%	9.00%
Weighted average	(9.00%)	(9.00%)
Minimum [Member] | Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	1.00%	0.00%
Weighted average	(1.00%)	(0.00%)
Minimum [Member] | Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	0.00%	0.00%
Weighted average	(0.00%)	(0.00%)
Minimum [Member] | Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs		16.00%
Weighted average		(16.00%)
Maximum [Member] | Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	16.00%	62.00%
Weighted average	(16.00%)	(62.00%)
Maximum [Member] | Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	72.00%	45.00%
Weighted average	(72.00%)	(45.00%)
Maximum [Member] | Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	10.00%	9.00%
Weighted average	(10.00%)	(9.00%)
Maximum [Member] | Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	20.00%	20.00%
Weighted average	(20.00%)	(20.00%)
Maximum [Member] | Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	16.00%	39.00%
Weighted average	(16.00%)	(39.00%)
Maximum [Member] | Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	15.00%	15.00%
Weighted average	(15.00%)	(15.00%)
Maximum [Member] | Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs		32.00%
Weighted average		(32.00%)
Weighted Average [Member] | Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	11.00%	14.00%
Weighted average	(11.00%)	(14.00%)
Weighted Average [Member] | Commercial Real Estate Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	21.00%	18.00%
Weighted average	(21.00%)	(18.00%)
Weighted Average [Member] | Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	9.00%	8.00%
Weighted average	(9.00%)	(8.00%)
Weighted Average [Member] | Commercial Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	13.00%	13.00%
Weighted average	(13.00%)	(13.00%)
Weighted Average [Member] | Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	7.00%	11.00%
Weighted average	(7.00%)	(11.00%)
Weighted Average [Member] | Residential Portfolio Segment [Member] | Cost Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs	8.00%	6.00%
Weighted average	(8.00%)	(6.00%)
Weighted Average [Member] | Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) - Qualitative Information about Level Three Fair Value Measurements for Financial Instruments Measured at Fair Value on Non-recurring Basis [Line Items]
Range of inputs		24.00%
Weighted average		(24.00%)

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Note 4 - Loans (Details) - Loans Individually Evaluated for Impairment by Class of Loans - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	$ 38,554		$ 38,554		$ 67,646
Recorded investment-with no related allowance	28,185		28,185		48,996
Average recorded investment-with no related allowance	33,334	$ 62,690	41,126	$ 85,980
Interest income recognized-with no related allowance	199	312	623	1,308
With An Allowance Recorded:
Unpaid Principal Balance-with an allowance recorded	6,809		6,809		26,346
Recorded investment-with an allowance recorded	6,710	8,900	6,710	8,900	22,997
Allowance for loan losses allocated-with an allowance recorded	469		469		752
Average recorded investment-with an allowance recorded	8,619	16,529	11,673	21,639
Interest income recognized-with an allowance recorded	86	254	239	571
Commercial real estate:
Total	45,363		45,363		93,992
Total	34,895		34,895		71,993
Total	469		469		752
Total	41,953	79,219	52,799	107,619
Total	285	566	862	1,879
Commercial Portfolio Segment [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	1,774		1,774		2,546
Recorded investment-with no related allowance	1,330		1,330		1,978
Average recorded investment-with no related allowance	1,439	1,972	1,630	2,325
Interest income recognized-with no related allowance			5	55
With An Allowance Recorded:
Unpaid Principal Balance-with an allowance recorded					145
Recorded investment-with an allowance recorded					44
Allowance for loan losses allocated-with an allowance recorded					33
Average recorded investment-with an allowance recorded	4	161	16	1,190
Interest income recognized-with an allowance recorded		11		31
Commercial real estate:
Total					33
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	803		803		4,714
Recorded investment-with no related allowance	654		654		4,100
Average recorded investment-with no related allowance	833	4,133	2,426	5,783
Interest income recognized-with no related allowance	3	3	11	9
With An Allowance Recorded:
Average recorded investment-with an allowance recorded		355		736
Interest income recognized-with an allowance recorded		5		16
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	6,521		6,521		6,636
Recorded investment-with no related allowance	4,164		4,164		4,739
Average recorded investment-with no related allowance	4,305	5,684	4,555	6,503
Interest income recognized-with no related allowance	34	26	60	74
With An Allowance Recorded:
Unpaid Principal Balance-with an allowance recorded					658
Recorded investment-with an allowance recorded					315
Allowance for loan losses allocated-with an allowance recorded					38
Average recorded investment-with an allowance recorded			79	62
Commercial real estate:
Total					38
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	13,837		13,837		34,437
Recorded investment-with no related allowance	9,403		9,403		22,418
Average recorded investment-with no related allowance	13,347	30,395	18,133	44,211
Interest income recognized-with no related allowance	65	128	202	586
With An Allowance Recorded:
Unpaid Principal Balance-with an allowance recorded	788		788		19,454
Recorded investment-with an allowance recorded	689		689		16,569
Allowance for loan losses allocated-with an allowance recorded	65		65		453
Average recorded investment-with an allowance recorded	2,708	9,983	5,622	13,273
Interest income recognized-with an allowance recorded	6	165	18	336
Commercial real estate:
Total	65		65		453
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	32		32		81
Recorded investment-with no related allowance	31		31		81
Average recorded investment-with no related allowance	33	85	37	2,060
With An Allowance Recorded:
Unpaid Principal Balance-with an allowance recorded	4,212		4,212		4,266
Recorded investment-with an allowance recorded	4,212		4,212		4,266
Allowance for loan losses allocated-with an allowance recorded	65		65		91
Average recorded investment-with an allowance recorded	4,216	4,274	4,237	4,467
Interest income recognized-with an allowance recorded	51	52	153	128
Commercial real estate:
Total	65		65		91
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	15,204		15,204		18,496
Recorded investment-with no related allowance	12,426		12,426		15,266
Average recorded investment-with no related allowance	13,163	19,987	14,040	24,520
Interest income recognized-with no related allowance	96	150	340	567
With An Allowance Recorded:
Unpaid Principal Balance-with an allowance recorded	1,809		1,809		1,791
Recorded investment-with an allowance recorded	1,809		1,809		1,771
Allowance for loan losses allocated-with an allowance recorded	339		339		136
Average recorded investment-with an allowance recorded	1,691	1,715	1,709	1,858
Interest income recognized-with an allowance recorded	29	20	68	58
Commercial real estate:
Total	339		339		136
Consumer Portfolio Segment [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	123		123		93
Recorded investment-with no related allowance	25		25		29
Average recorded investment-with no related allowance	23	16	25	10
With An Allowance Recorded:
Unpaid Principal Balance-with an allowance recorded					32
Recorded investment-with an allowance recorded					32
Allowance for loan losses allocated-with an allowance recorded					1
Average recorded investment-with an allowance recorded		41	10	53
Interest income recognized-with an allowance recorded		1		2
Commercial real estate:
Total					1
Agriculture Portfolio Segment [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance	260		260		276
Recorded investment-with no related allowance	152		152		263
Average recorded investment-with no related allowance	191	249	219	280
Interest income recognized-with no related allowance				3
Other Portfolio Segment [Member]
With No Related Allowance Recorded:
Unpaid Principal Balance-with no related allowance					367
Recorded investment-with no related allowance					$ 122
Average recorded investment-with no related allowance		169	61	288
Interest income recognized-with no related allowance	$ 1	$ 5	$ 5	$ 14

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Note 10 - Stock Plans and Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

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

Schedule of Nonvested Share Activity [Table Text Block]

	Nine Months Ended					Twelve Months Ended
	September 30, 2015					December 31, 2014
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		770,440		$	1.33		787,426		$	1.56
Granted		800,000			0.89		122,220			0.93
Vested		(165,185	)		1.50		(133,227	)		2.20
Terminated		(450,994	)		1.25		—			—
Forfeited		(30,170	)		1.12		(5,979	)		4.21
Outstanding, ending		924,091		$	0.96		770,440		$	1.33

Schedule of Share-based Compensation, Nonemployee Director Stock Award Plan, Activity [Table Text Block]

	Nine Months Ended					Twelve Months Ended
	September 30, 2015					December 31, 2014
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		5,052		$	1.65		47,428		$	1.69
Granted		115,740			1.08		166,668			0.90
Vested		(5,052	)		1.65		(154,222	)		0.98
Forfeited		—			—		(54,822	)		1.29
Outstanding, ending		115,740		$	1.08		5,052		$	1.65

Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block]

October 2015 – December 2015	$	132
2016		253
2017		156
2018		149
2019 & thereafter		—

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Note 9 - Income Taxes (Tables)

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	September 30,			December 31,
	2015			2014
	(in thousands)
Deferred tax assets:
Net operating loss carry-forward	$	35,788		$	32,111
Allowance for loan losses		4,969			6,777
Other real estate owned write-down		9,647			10,000
Alternative minimum tax credit carry-forward		692			692
Net assets from acquisitions		671			668
Other than temporary impairment on securities		46			46
New market tax credit carry-forward		208			208
Nonaccrual loan interest		607			958
Amortization of non-compete agreements		12			14
Other		1,674			1,701
		54,314			53,175
Deferred tax liabilities:
FHLB stock dividends		928			928
Fixed assets		225			264
Originated mortgage servicing rights		37			53
Net unrealized gain on securities		297			579
Other		669			703
		2,156			2,527
Net deferred tax assets before valuation allowance		52,158			50,648
Valuation allowance		(52,158	)		(50,648	)
Net deferred tax asset	$	—		$	—

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Note 7 - Advances from the Federal Home Loan Bank (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Note 7 - Advances from the Federal Home Loan Bank (Details) [Line Items]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Repayment and Penalties	$ 0	$ 0
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	$ 25,700,000
Maximum [Member]
Note 7 - Advances from the Federal Home Loan Bank (Details) [Line Items]
Debt Instrument, Term	1 year

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Note 4 - Loans (Details) - Types of Troubled Debt Restructuring Loan Modification by Portfolio Segment - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Multi-family
Troubled Debt Restructuring	$ 21,444	$ 42,492
Performing Financial Instruments [Member]
Multi-family
Troubled Debt Restructuring	17,656	21,985
Performing Financial Instruments [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring		8,622
Performing Financial Instruments [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring		671
Nonperforming Financial Instruments [Member]
Multi-family
Troubled Debt Restructuring	3,788	20,507
Nonperforming Financial Instruments [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring		13,894
Other Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring		22,516
Other Portfolio Segment [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring		671
Commercial Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	68	14
Commercial Portfolio Segment [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring	626	869
Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring		14
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	68
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring	626	869
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	264	3,647
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring	2,365	2,365
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	5,754
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring	654
Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member] | Construction Loans [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	264	268
Commercial Real Estate Portfolio Segment [Member] | Performing Financial Instruments [Member] | Nonfarm Nonresidential [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	5,679
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Construction Loans [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring		3,379
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Farmland Loans [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring	2,365	2,365
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Nonfarm Nonresidential [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	75
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Nonfarm Nonresidential [Member] | Payment Deferral [Member]
Multi-family
Troubled Debt Restructuring	654
Residential Portfolio Segment [Member] | Multifamily Loans [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	4,212	4,266
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	7,501	8,112
Residential Portfolio Segment [Member] | Performing Financial Instruments [Member] | Multifamily Loans [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	4,212	4,266
Residential Portfolio Segment [Member] | Performing Financial Instruments [Member] | One- to Four-family Residential Properties [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring	$ 7,501	8,112
Consumer Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring		32
Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member] | Contractual Interest Rate Reduction [Member]
Multi-family
Troubled Debt Restructuring		$ 32

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Note 11 - Earnings (Loss) per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(in thousands, except share and per share data)
Net loss	$	(1,076	)	$	(849	)	$	(2,612	)	$	(7,370	)
Less:
Preferred stock dividends		—			786			—			2,361
Losses allocated to unvested shares		(45	)		(122	)		(102	)		(685	)
Losses allocated to preferred		—			(40	)		(236	)		(243	)
Net loss attributable to common shareholders, basic and diluted	$	(1,031	)	$	(1,473	)	$	(2,274	)	$	(8,803	)
Basic
Weighted average common shares including unvested common shares outstanding		25,768,887			13,435,788			25,626,610			13,314,138
Less:
Weighted average unvested common shares		1,087,340			1,016,051			1,002,867			936,386
Weighted average Series B preferred		—			—			890,901			—
Weighted average Series C preferred		—			332,894			—			332,894
Weighted average Series D preferred		—			—			1,419,341			—
Weighted average common shares outstanding		24,681,547			12,086,843			22,313,501			12,044,858
Basic loss per common share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.73	)
Diluted
Add: Dilutive effects of assumed exercises of common and Preferred Series C stock warrants		—			—			—			—
Weighted average common shares and potential common shares		24,681,547			12,086,843			22,313,501			12,044,858
Diluted loss per common share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.73	)

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Note 12 - Capital Requirements and Restrictions on Retained Earnings (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

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

	Actual					For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of September 30, 2015:
Total risk-based capital (to risk-weighted assets)
Consolidated	$	69,354		10.40	%	$	53,324		8.00	%
Bank		69,810		10.50			53,178		8.00
Total common equity Tier I risk-based capital (to risk-weighted assets)
Consolidated		33,804		5.07			29,995		4.50
Bank		58,053		8.73			29,913		4.50
Tier I capital (to risk-weighted assets)
Consolidated		45,719		6.86			39,993		6.00
Bank		58,053		8.73			39,883		6.00
Tier I capital (to average assets)
Consolidated		45,719		4.73			38,676		4.00
Bank		58,053		6.01			38,625		4.00

	Actual					For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of December 31, 2014:
Total risk-based capital (to risk-weighted assets)
Consolidated	$	73,595		10.61	%	$	55,483		8.00	%
Bank		73,174		10.57			55,383		8.00
Tier I capital (to risk-weighted assets)
Consolidated		46,459		6.70			27,741		4.00
Bank		59,438		8.59			27,691		4.00
Tier I capital (to average assets)
Consolidated		46,459		4.51			41,193		4.00
Bank		59,438		5.78			41,143		4.00

Banker's Acceptance Disclosures [Table Text Block]

	Actual as of September 30, 2015					Ratio Required by Consent Order
	Amount		Ratio			Amount		Ratio
Total capital to risk-weighted assets	$	69,810		10.50	%	$	79,767		12.00	%
Tier I capital to average assets		58,053		6.01			86,906		9.00

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

Note 1 – Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation – The consolidated financial statements include Porter Bancorp, Inc. (Company) and its subsidiary, PBI Bank (Bank).  The Company owns a 100% interest in the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the entire year.  A description of other significant accounting policies is presented in the notes to the Consolidated Financial Statements for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K.

Use of Estimates – To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ.

Reclassifications – Some items in the prior year financial statements were reclassified to conform to the current presentation. The reclassifications did not impact net income (loss) or stockholders’ equity.

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (Details)	Sep. 30, 2015
Disclosure Text Block [Abstract]
Noncontrolling Interest, Ownership Percentage by Parent	100.00%

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Note 4 - Loans (Details) - Loans - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 624,414	$ 624,999	$ 1,300,000
Less: Allowance for loan losses	(14,198)	(19,364)
Loans, net	610,216	605,635
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	84,908	60,936
Less: Allowance for loan losses	(1,570)	(2,046)
Commercial Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	254,053	286,044
Less: Allowance for loan losses	(8,016)	(10,931)
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	31,484	33,173
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	76,670	77,419
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	145,899	175,452
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	243,888	239,169
Less: Allowance for loan losses	(4,229)	(5,787)
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	39,579	41,891
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	204,309	197,278
Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	10,483	11,347
Less: Allowance for loan losses	(181)	(274)
Agriculture Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	30,609	26,966
Less: Allowance for loan losses	(200)	(319)
Other Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	473	537
Less: Allowance for loan losses	$ (2)	$ (7)

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Note 6 - Deposits (Details) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Disclosure Text Block [Abstract]
Time Deposits, $250,000 or More	$ 33.0	$ 34.4

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Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) - USD ($)		3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014	Jun. 24, 2011
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Maximum Asset for Opt Out Requirement in Capital Calculation (in Dollars)	$ 250,000,000,000	$ 250,000,000,000	$ 250,000,000,000
Debt Conversion, Original Debt, Principal Amount (in Dollars)	4,000,000
Debt Conversion, Original Debt, Interest Amount (in Dollars)	330,000
Debt Conversion, Original Debt, Amount (in Dollars)	$ 4,300,000		4,330,000
Gains (Losses) on Extinguishment of Debt (in Dollars)		$ 883,000	$ 883,000
Common Stock [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	1,200,000		1,200,000
Voting Common Stock [Member] | Common Stock [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	800,000		800,000
Nonvoting Common Stock [Member] | Common Stock [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	400,000		400,000
PBI Bank [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%	4.00%	4.00%
Capital Required for Capital Adequacy to Risk Weighted Assets	8.00%	8.00%	8.00%	8.00%
Tier One Leverage Capital to Average Assets	6.01%	6.01%	6.01%	5.78%
Capital to Risk Weighted Assets	10.50%	10.50%	10.50%	10.57%
Subsidiaries [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Gains (Losses) on Extinguishment of Debt (in Dollars)	$ 883,000
Subsidiaries [Member] | Voting Common Stock [Member] | Common Stock [Member] | Unrelated Third Party [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	400,000
Subsidiaries [Member] | Voting Common Stock [Member] | Common Stock [Member] | Related Party [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	400,000
Subsidiaries [Member] | Nonvoting Common Stock [Member] | Common Stock [Member] | Related Party [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	400,000
Consent Order [Member] | PBI Bank [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) [Line Items]
Tier One Leverage Capital Required for Capital Adequacy to Average Assets	9.00%	9.00%	9.00%		9.00%
Capital Required for Capital Adequacy to Risk Weighted Assets	12.00%	12.00%	12.00%		12.00%

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Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 6,540	$ 14,169
Interest bearing deposits in banks	73,940	66,011
Cash and cash equivalents	80,480	80,180
Securities available for sale	146,837	190,791
Securities held to maturity (fair value of $44,244 and $44,498, respectively)	42,138	42,325
Loans held for sale	71	8,926
Loans, net of allowance of $14,198 and $19,364, respectively	610,216	605,635
Premises and equipment, net	19,109	19,507
Other real estate owned	29,177	46,197
Federal Home Loan Bank stock	7,323	7,323
Bank owned life insurance	9,381	9,167
Accrued interest receivable and other assets	6,748	7,938
Total assets	951,480	1,017,989
Deposits
Non-interest bearing	106,160	114,910
Interest bearing	771,733	811,931
Total deposits	877,893	926,841
Repurchase agreements		1,341
Federal Home Loan Bank advances	3,255	15,752
Accrued interest payable and other liabilities	11,249	10,640
Subordinated capital note	4,275	4,950
Junior subordinated debentures	21,000	25,000
Total liabilities	917,672	984,524
Preferred stock, no par
Preferred stock	2,771	8,552
Common stock, no par, 86,000,000 shares authorized, 20,091,205 and 14,890,514 voting, and 6,858,000 and 0 non-voting shares issued and outstanding, respectively	120,699	113,238
Additional paid-in capital	23,522	21,442
Retained deficit	(110,207)	(107,595)
Accumulated other comprehensive loss	(2,977)	(2,172)
Total common stockholders’ equity	31,037	24,913
Total stockholders' equity	33,808	33,465
Total liabilities and stockholders’ equity	951,480	1,017,989
Series B Preferred Stock [Member]
Preferred stock, no par
Preferred stock		2,229
Series D Preferred Stock [Member]
Preferred stock, no par
Preferred stock		3,552
Series E Preferred Stock [Member]
Preferred stock, no par
Preferred stock	1,644	1,644
Series F Preferred Stock [Member]
Preferred stock, no par
Preferred stock	$ 1,127	$ 1,127

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Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	$ 16,987	$ 47,175
Loans Past Due 90 Day and Over Still Accruing		151
Commercial Portfolio Segment [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	1,330	1,978
Commercial Real Estate Portfolio Segment [Member] | Construction Loans [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	390	3,831
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	4,164	5,054
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	4,412	26,892
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	32	80
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	6,482	8,925
Loans Past Due 90 Day and Over Still Accruing		151
Consumer Portfolio Segment [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	25	30
Agriculture Portfolio Segment [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual	$ 152	263
Other Portfolio Segment [Member]
Note 4 - Loans (Details) - Recorded Investment in Nonaccrual and Loans Past due 90 Days and Still on Accrual by Class of Loan [Line Items]
Nonaccrual		$ 122

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Unaudited Consolidated Statements of Changes in Stockholders’ Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Voting Common Stock [Member] Common Stock [Member]	Nonvoting Common Stock [Member] Common Stock [Member]	Series B Preferred Stock [Member] Preferred Stock [Member]	Series D Preferred Stock [Member] Preferred Stock [Member]	Series E Preferred Stock [Member] Preferred Stock [Member]	Series F Preferred Stock [Member] Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2014			$ 2,229	$ 3,552	$ 1,644	$ 1,127	$ 113,238	$ 21,442	$ (107,595)	$ (2,172)	$ 33,465
Balance (in Shares) at Dec. 31, 2014	14,890,514		40,536	64,580	6,198	4,304	14,890,514
Issuance of unvested stock (in Shares)	915,740						915,740
Terminated stock (in Shares)	(538,479)						(538,479)
Forfeited unvested stock (in Shares)	(30,170)						(30,170)
Stock-based compensation expense								313			313
Net loss									(2,612)		(2,612)
Net change in accumulated other comprehensive loss, net of taxes										(805)	(805)
Conversion of preferred stock to common and non-voting common stock			$ (2,229)	$ (3,552)			$ 5,781
Conversion of preferred stock to common and non-voting common stock (in Shares)	4,053,600	6,458,000	(40,536)	(64,580)			10,511,600
Debt to equity exchange							$ 1,680	1,767			3,447
Debt to equity exchange (in Shares)	800,000	400,000					1,200,000
Balance at Sep. 30, 2015					$ 1,644	$ 1,127	$ 120,699	$ 23,522	$ (110,207)	$ (2,977)	$ 33,808
Balance (in Shares) at Sep. 30, 2015	20,091,205	6,858,000			6,198	4,304	26,949,205

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Note 8 - Fair Values Measurement (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Note 8 - Fair Values Measurement (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.50%		6.50%
Debt Instrument, Interest Rate, Effective Percentage	8.25%		8.25%
Impaired Financing Receivable, with Related Allowance, Recorded Investment	$ 6,710,000	$ 8,900,000	$ 6,710,000	$ 8,900,000	$ 22,997,000
Impaired Financing Receivable, Related Allowance	469,000		469,000		752,000
Impaired Financing Receivable Provision for Loan Losses	0		0	5,200,000
Other Repossessed Assets	29,200,000	54,500,000	29,200,000	54,500,000	46,200,000
Real Estate Owned, Valuation Allowance, Provision	4,450,000	600,000	7,080,000	1,250,000
Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Impaired Financing Receivable, Related Allowance	369,000	$ 1,700,000	369,000	$ 1,700,000	622,000
Measured for Impairment Using Fair Value of Collateral [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	$ 2,200,000		$ 2,200,000		$ 18,400,000
Routine Real Estate Collateral [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs, Discount Rate			10.00%
Thin Trading Market or Specialized Collateral [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs, Discount Rate			25.00%
Other Real Estate Owned [Member] | Routine Real Estate Collateral [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs, Discount Rate			10.00%
Other Real Estate Owned [Member] | Thin Trading Market or Specialized Collateral [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs, Discount Rate			25.00%
Minimum [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs Estimated Discount Rate for Cost to Sell			6.00%
Minimum [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs, Discount Rate			10.00%
Minimum [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs Estimated Discount Rate for Cost to Sell			6.00%
Maximum [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs Estimated Discount Rate for Cost to Sell			10.00%
Maximum [Member] | Impaired Loans [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs, Discount Rate			33.00%
Maximum [Member] | Other Real Estate Owned [Member]
Note 8 - Fair Values Measurement (Details) [Line Items]
Fair Value Inputs Estimated Discount Rate for Cost to Sell			10.00%

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Note 3 - Securities (Details) - Amortized Cost, Gross Unrealized Gains or Losses, and Fair Value of Investment Securities - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Available for sale
Available for sale securities, amortized cost	$ 145,007	$ 188,059
Available for sale securities, gross unrealized gains	2,262	3,939
Available for sale securities, gross unrealized losses	(432)	(1,207)
Securities available for sale	146,837	190,791
Held to maturity
Held to maturity securities, amortized cost	42,138	42,325
Held to maturity securities, gross unrealized gains	2,106	2,173
Held to maturity securities, fair value	44,244	44,498
US Treasury and Government [Member]
Available for sale
Available for sale securities, amortized cost	30,882	35,725
Available for sale securities, gross unrealized gains	212	308
Available for sale securities, gross unrealized losses	(279)	(590)
Securities available for sale	30,815	35,443
Residential Mortgage Backed Securities [Member]
Available for sale
Available for sale securities, amortized cost	104,642	121,985
Available for sale securities, gross unrealized gains	1,637	1,970
Available for sale securities, gross unrealized losses	(113)	(357)
Securities available for sale	106,166	123,598
US States and Political Subdivisions Debt Securities [Member]
Available for sale
Available for sale securities, amortized cost	6,595	11,690
Available for sale securities, gross unrealized gains	328	722
Available for sale securities, gross unrealized losses	(7)	(8)
Securities available for sale	6,916	12,404
Held to maturity
Held to maturity securities, amortized cost	42,138	42,325
Held to maturity securities, gross unrealized gains	2,106	2,173
Held to maturity securities, fair value	44,244	44,498
Corporate Debt Securities [Member]
Available for sale
Available for sale securities, amortized cost	2,316	18,087
Available for sale securities, gross unrealized gains	6	853
Available for sale securities, gross unrealized losses	(33)	(252)
Securities available for sale	2,289	18,688
Other Debt Obligations [Member]
Available for sale
Available for sale securities, amortized cost	572	572
Available for sale securities, gross unrealized gains	79	86
Securities available for sale	$ 651	$ 658

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Note 9 - Income Taxes (Details) - Deferred Tax Assets and Liabilities - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Deferred tax assets:
Net operating loss carry-forward	$ 35,788	$ 32,111
Allowance for loan losses	4,969	6,777
Other real estate owned write-down	9,647	10,000
Alternative minimum tax credit carry-forward	692	692
Net assets from acquisitions	671	668
Other than temporary impairment on securities	46	46
New market tax credit carry-forward	208	208
Nonaccrual loan interest	607	958
Amortization of non-compete agreements	12	14
Other	1,674	1,701
	54,314	53,175
Deferred tax liabilities:
FHLB stock dividends	928	928
Fixed assets	225	264
Originated mortgage servicing rights	37	53
Net unrealized gain on securities	297	579
Other	669	703
	2,156	2,527
Net deferred tax assets before valuation allowance	52,158	50,648
Valuation allowance	(52,158)	(50,648)
Net deferred tax asset	$ 0	$ 0

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Note 3 - Securities (Tables)

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Marketable Securities [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2015
Available for sale
U.S. Government and federal agency	$	30,882	$	212	$	(279	)	$	30,815
Agency mortgage-backed: residential		104,642		1,637		(113	)		106,166
State and municipal		6,595		328		(7	)		6,916
Corporate bonds		2,316		6		(33	)		2,289
Other debt securities		572		79		—			651
Total available for sale	$	145,007	$	2,262	$	(432	)	$	146,837

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	42,138	$	2,106	$	—	$	44,244
Total held to maturity	$	42,138	$	2,106	$	—	$	44,244

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Available for sale
U.S. Government and federal agency	$	35,725	$	308	$	(590	)	$	35,443
Agency mortgage-backed: residential		121,985		1,970		(357	)		123,598
State and municipal		11,690		722		(8	)		12,404
Corporate bonds		18,087		853		(252	)		18,688
Other debt securities		572		86		—			658
Total available for sale	$	188,059	$	3,939	$	(1,207	)	$	190,791

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	42,325	$	2,173	$	—	$	44,498
Total held to maturity	$	42,325	$	2,173	$	—	$	44,498

Schedule of Realized Gain (Loss) [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Proceeds	$	230	$	4,147	$	44,340	$	4,151
Gross gains		—		86		1,832		132
Gross losses		—		40		136		40

Investments Classified by Contractual Maturity Date [Table Text Block]

	September 30, 2015
	Amortized Cost		Fair Value
	(in thousands)
Maturity
Available for sale
Within one year	$	5,821	$	5,854
One to five years		8,532		8,882
Five to ten years		25,440		25,284
Beyond ten years		572		651
Agency mortgage-backed: residential		104,642		106,166
Total	$	145,007	$	146,837
Held to maturity
One to five years	$	15,644	$	16,262
Five to ten years		22,937		24,208
Beyond ten years		3,557		3,774
Total	$	42,138	$	44,244

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
September 30, 2015
Available for sale
U.S. Government and federal agency	$	5,280	$	(12	)	$	14,798	$	(267	)	$	20,078	$	(279	)
Agency mortgage-backed: residential		6,071		(40	)		4,014		(73	)		10,085		(113	)
State and municipal		472		(7	)		—		—			472		(7	)
Corporate bonds		1,519		(33	)		—		—			1,519		(33	)
Total available for sale temporarily impaired	$	13,342	$	(92	)	$	18,812	$	(340	)	$	32,154	$	(432	)

	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2014
Available for sale
U.S. Government and federal agency	$	7,778	$	(60	)	$	18,681	$	(530	)	$	26,459	$	(590	)
Agency mortgage-backed: residential		6,960		(12	)		17,938		(345	)		24,898		(357	)
State and municipal		569		(8	)		—		—			569		(8	)
Corporate bonds		4,884		(119	)		1,660		(133	)		6,544		(252	)
Total temporarily impaired	$	20,191	$	(199	)	$	38,279	$	(1,008	)	$	58,470	$	(1,207	)

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Note 3 - Securities (Details) - Sales and Calls of Available for Sale Securities - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Sales and Calls of Available for Sale Securities [Abstract]
Proceeds	$ 230	$ 4,147	$ 44,340	$ 4,151
Gross gains		86	1,832	132
Gross losses		$ 40	$ 136	$ 40

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Note 5 - Other Real Estate Owned (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Real Estate Properties [Table Text Block]

	September 30, 2015			December 31, 2014
	(in thousands)
Commercial Real Estate:
Construction, land development, and other land	$	14,749		$	18,748
Farmland		34			669
Nonfarm nonresidential		12,059			14,860
Residential Real Estate:
Multi-family		—			4,988
1-4 Family		2,635			7,998
		29,477			47,263
Valuation allowance		(300	)		(1,066	)
	$	29,177		$	46,197

Schedule of Valuation Allowance and Activity Related to Foreclosed Real Estate [Table Text Block]

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands)						(in thousands)
OREO Valuation Allowance Activity:
Beginning balance	$	307		$	199		$	1,066		$	230
Provision to allowance		4,450			600			7,080			1,250
Write-downs		(4,457	)		(268	)		(7,846	)		(949	)
Ending balance	$	300		$	531		$	300		$	531

Schedule of Expenses Related to Foreclosed Real Estate [Table Text Block]

	For the Nine Months Ended September 30,
	2015			2014
	(in thousands)
OREO Activity
OREO as of January 1	$	46,197		$	30,892
Real estate acquired		4,450			31,663
Valuation adjustment writedowns		(7,080	)		(1,250	)
Gain/(loss) on sale		27			455
Proceeds from sale of properties		(14,417	)		(7,253	)
OREO as of September 30	$	29,177		$	54,507

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015		2014			2015			2014
	(in thousands)					(in thousands)
Net (gain) loss on sales	$	16	$	(401	)	$	(27	)	$	(455	)
Provision to allowance		4,450		600			7,080			1,250
Operating expense		665		361			1,743			1,201
Total	$	5,131	$	560		$	8,796		$	1,996

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Note 10 - Stock Plans and Stock Based Compensation (Details) - Unvested Share Activity for Non-Employee Directors - $ / shares	6 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Note 10 - Stock Plans and Stock Based Compensation (Details) - Unvested Share Activity for Non-Employee Directors [Line Items]
Outstanding, beginning	770,440	770,440	787,426
Outstanding, beginning	$ 1.33	$ 1.33	$ 1.56
Granted		800,000	122,220
Granted		$ 0.89	$ 0.93
Vested		(165,185)	(133,227)
Vested		$ 1.50	$ 2.20
Forfeited		(30,170)	(5,979)
Forfeited		$ 1.12	$ 4.21
Outstanding, ending		924,091	770,440
Outstanding, ending		$ 0.96	$ 1.33
Non-Employee Directors Stock Incentive Plan 2006 [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) - Unvested Share Activity for Non-Employee Directors [Line Items]
Outstanding, beginning	5,052	5,052	47,428
Outstanding, beginning	$ 1.65	$ 1.65	$ 1.69
Granted	115,740		166,668
Granted	$ 1.08		$ 0.90
Vested	(5,052)		(154,222)
Vested	$ 1.65		$ 0.98
Forfeited			(54,822)
Forfeited			$ 1.29
Outstanding, ending	115,740	115,740	5,052
Outstanding, ending	$ 1.08		$ 1.65

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Unaudited Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities
Net loss	$ (2,612,000)	$ (7,370,000)
Adjustments to reconcile net loss to net cash from operating activities
Depreciation and amortization	1,201,000	1,329,000
Provision (negative provision) for loan losses	(2,200,000)	6,300,000
Net amortization on securities	1,084,000	1,219,000
Stock-based compensation expense	313,000	480,000
Gain on extinguishment of junior subordinated debt	(883,000)
Tax benefit from OCI components	0	(1,345,000)
Net loss (gain) on sales of loans held for sale	216,000	(52,000)
Loans originated for sale	(5,290,000)	(2,265,000)
Proceeds from sales of loans held for sale	5,289,000	2,466,000
Net (gain) loss on sales of other real estate owned	(27,000)	(455,000)
Net write-down of other real estate owned	7,080,000	1,250,000
Net realized gain on sales of investment securities	(1,696,000)	(92,000)
Earnings on bank owned life insurance, net of premium expense	(214,000)	(192,000)
Net change in accrued interest receivable and other assets	893,000	(132,000)
Net change in accrued interest payable and other liabilities	939,000	1,888,000
Net cash from operating activities	4,093,000	3,029,000
Cash flows from investing activities
Purchases of available for sale securities	(16,800,000)	(41,156,000)
Sales and calls of available for sale securities	44,340,000	4,151,000
Maturities and prepayments of available for sale securities	16,408,000	11,295,000
Proceeds from mandatory redemption of Federal Home Loan Bank stock		2,749,000
Calls of held to maturity securities		1,000,000
Proceeds from sale of other real estate owned	14,417,000	7,253,000
Proceeds from sales of loans not originated for sale	8,640,000
Loan originations and payments, net	(7,029,000)	28,844,000
Purchases of premises and equipment, net	(308,000)	(416,000)
Net cash from investing activities	59,668,000	13,720,000
Cash flows from financing activities
Net change in deposits	(48,948,000)	(54,173,000)
Net change in repurchase agreements	(1,341,000)	(653,000)
Repayment of Federal Home Loan Bank advances	(17,497,000)	(10,577,000)
Advances from Federal Home Loan Bank	5,000,000	23,025,000
Repayment of subordinated capital note	(675,000)	(675,000)
Net cash from financing activities	(63,461,000)	(43,053,000)
Net change in cash and cash equivalents	300,000	(26,304,000)
Beginning cash and cash equivalents	80,180,000	111,134,000
Ending cash and cash equivalents	80,480,000	84,830,000
Supplemental cash flow information:
Interest paid	5,523,000	7,241,000
Income taxes paid (refunded)	0	0
Supplemental non-cash disclosure:
Transfer from loans to other real estate	4,450,000	$ 31,663,000
Effect of junior subordinated debt to equity exchange	$ 4,330,000

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Unaudited Consolidated Balance Sheets (Parentheticals) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Securities held to maturity, fair value (in Dollars)	$ 44,244,000	$ 44,498,000
Loans, allowance (in Dollars)	$ 14,198,000	$ 19,364,000
Common stock, par value (in Dollars per share)	$ 0	$ 0
Common stock, shares authorized	86,000,000	86,000,000
Series B Preferred Stock [Member]
Preferred stock, issued	0	40,536
Preferred stock, outstanding	0	40,536
Series D Preferred Stock [Member]
Preferred stock, issued	0	64,580
Preferred stock, outstanding	0	64,580
Series E Preferred Stock [Member]
Preferred stock, issued	6,198	6,198
Preferred stock, outstanding	6,198	6,198
Preferred stock, liquidation preference (in Dollars)	$ 6,200	$ 6,200
Series F Preferred Stock [Member]
Preferred stock, issued	4,304	4,304
Preferred stock, outstanding	4,304	4,304
Preferred stock, liquidation preference (in Dollars)	$ 4,300	$ 4,300
Voting Common Stock [Member]
Common stock, shares issued	20,091,205	14,890,514
Common stock, shares outstanding	20,091,205	14,890,514
Nonvoting Common Stock [Member]
Common stock, shares issued	6,858,000	0
Common stock, shares outstanding	6,858,000	0

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Note 10 - Stock Plans and Stock Based Compensation

9 Months Ended

Sep. 30, 2015

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

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

Note 10 – Stock Plans and Stock Based Compensation

The Company has two stock incentive plans. The Porter Bancorp, Inc. 2006 Stock Incentive Plan permits the issuance of up to 1,563,050 shares of the Company’s common stock upon the grant of stock awards.  As of September 30, 2015, the Company had issued and outstanding 924,091 unvested shares net of forfeitures and vesting under the stock incentive plan. Shares issued under the plan vest annually on the anniversary date of the grant over three to ten years. The Company has 301,920 shares remaining available for issuance under the plan.  

The Porter Bancorp, Inc. 2006 Non-Employee Directors Stock Ownership Incentive Plan permits the issuance of up to 700,000 shares of the Company’s voting common stock upon the grant of stock awards. The Plan awards restricted shares having a fair market value of $25,000 annually to each non-employee director. Unvested shares are granted automatically under the plan at fair market value on the date of grant and vest on December 31 in the year of grant. The Company has issued and outstanding 115,740 unvested shares, net of forfeitures and vesting, to non-employee directors. At September 30, 2015, 185,774 shares remain available for issuance under this plan.

Upon the sale of our Series A preferred shares by the U.S. Treasury at a discount to face amount on December 4, 2014, the restricted shares previously granted in the employment agreements of our senior executives became subject to permanent transfer restrictions.  On March 25, 2015, the Compensation Committee modified the equity compensation arrangements with our four named executive officers to restore the incentive that was the underlying purpose of the previous grants. The Compensation Committee and the named executive officers mutually agreed to terminate 538,479 restricted shares that were subject to permanent restrictions on transfer.  We then awarded 800,000 new service-based restricted shares to our named executive officers. The new awards were accounted for as a modification and vest over four years, with one-third of the shares vesting on each of the second, third and fourth anniversaries of the date of grant.  The modification resulted in incremental compensation expense of approximately $233,000 and will be amortized in accordance with the vesting schedule.

The fair value of the 2015 unvested shares issued to employees was $712,000, or $0.89 per weighted-average share. The fair value of the 2015 unvested shares issued to directors was $125,000, or $1.08 per weighted-average share. The Company recorded $313,000 and $480,000 of stock-based compensation during the first nine months of 2015 and 2014, respectively, to salaries and employee benefits. We expect substantially all of the unvested shares outstanding at the end of the period to vest according to the vesting schedule. No deferred tax benefit was recognized related to this expense for either period.

The following table summarizes unvested share activity as of and for the periods indicated for the Stock Incentive Plan:

	Nine Months Ended					Twelve Months Ended
	September 30, 2015					December 31, 2014
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		770,440		$	1.33		787,426		$	1.56
Granted		800,000			0.89		122,220			0.93
Vested		(165,185	)		1.50		(133,227	)		2.20
Terminated		(450,994	)		1.25		—			—
Forfeited		(30,170	)		1.12		(5,979	)		4.21
Outstanding, ending		924,091		$	0.96		770,440		$	1.33

The following table summarizes unvested share activity as of and for the periods indicated for the Non-Employee Directors Stock Ownership Incentive Plan:

	Nine Months Ended					Twelve Months Ended
	September 30, 2015					December 31, 2014
				Weighted					Weighted
				Average					Average
				Grant					Grant
	Shares			Price		Shares			Price
Outstanding, beginning		5,052		$	1.65		47,428		$	1.69
Granted		115,740			1.08		166,668			0.90
Vested		(5,052	)		1.65		(154,222	)		0.98
Forfeited		—			—		(54,822	)		1.29
Outstanding, ending		115,740		$	1.08		5,052		$	1.65

Unrecognized stock based compensation expense related to unvested shares for the remainder of 2015 and beyond is estimated as follows (in thousands):

October 2015 – December 2015	$	132
2016		253
2017		156
2018		149
2019 & thereafter		—

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 31, 2015
Document Information [Line Items]
Entity Registrant Name	PORTER BANCORP, INC.
Trading Symbol	pbib
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Central Index Key	0001358356
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		20,091,205
Nonvoting Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		6,858,000

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Note 11 - Earnings (Loss) per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 11 – Earnings (Loss) per Share

The factors used in the basic and diluted loss per share computations follow:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(in thousands, except share and per share data)
Net loss	$	(1,076	)	$	(849	)	$	(2,612	)	$	(7,370	)
Less:
Preferred stock dividends		—			786			—			2,361
Losses allocated to unvested shares		(45	)		(122	)		(102	)		(685	)
Losses allocated to preferred		—			(40	)		(236	)		(243	)
Net loss attributable to common shareholders, basic and diluted	$	(1,031	)	$	(1,473	)	$	(2,274	)	$	(8,803	)
Basic
Weighted average common shares including unvested common shares outstanding		25,768,887			13,435,788			25,626,610			13,314,138
Less:
Weighted average unvested common shares		1,087,340			1,016,051			1,002,867			936,386
Weighted average Series B preferred		—			—			890,901			—
Weighted average Series C preferred		—			332,894			—			332,894
Weighted average Series D preferred		—			—			1,419,341			—
Weighted average common shares outstanding		24,681,547			12,086,843			22,313,501			12,044,858
Basic loss per common share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.73	)
Diluted
Add: Dilutive effects of assumed exercises of common and Preferred Series C stock warrants		—			—			—			—
Weighted average common shares and potential common shares		24,681,547			12,086,843			22,313,501			12,044,858
Diluted loss per common share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.73	)

The Company had no outstanding stock options at September 30, 2015 or 2014.  A warrant for the purchase of 330,561 shares of the Company’s common stock at an exercise price of $15.88 was outstanding at September 30, 2015 and 2014 but was not included in the diluted EPS computation as inclusion would have been anti-dilutive. Additionally, warrants for the purchase of 1,449,459 shares of non-voting common stock at an exercise price of $10.95 per share were outstanding at September 30, 2014 but were not included in the diluted EPS computation as inclusion would have been anti-dilutive. A total of 798,915 warrants were cancelled in December 2014 in a non-cash equity exchange and 650,544 warrants expired in September 2015.

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Unaudited Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest income
Loans, including fees	$ 7,895,000	$ 8,201,000	$ 23,496,000	$ 25,094,000
Taxable securities	986,000	1,265,000	3,122,000	3,653,000
Tax exempt securities	187,000	231,000	580,000	707,000
Fed funds sold and other	111,000	117,000	351,000	423,000
	9,179,000	9,814,000	27,549,000	29,877,000
Interest expense
Deposits	1,476,000	2,245,000	4,775,000	6,925,000
Federal Home Loan Bank advances	23,000	31,000	74,000	96,000
Subordinated capital note	40,000	47,000	123,000	144,000
Junior subordinated debentures	158,000	153,000	465,000	458,000
Federal funds purchased and other		1,000	1,000	3,000
	1,697,000	2,477,000	5,438,000	7,626,000
Net interest income	7,482,000	7,337,000	22,111,000	22,251,000
Provision (negative provision) for loan losses	(2,200,000)		(2,200,000)	6,300,000
Net interest income after provision (negative provision) for loan losses	9,682,000	7,337,000	24,311,000	15,951,000
Non-interest income
Service charges on deposit accounts	492,000	535,000	1,376,000	1,490,000
Bank card interchange fees	212,000	209,000	644,000	575,000
Other real estate owned rental income	380,000	5,000	1,109,000	30,000
Net gain on sales of securities		46,000	1,696,000	92,000
Gain on extinguishment of junior subordinated debt	883,000		883,000
Other	243,000	262,000	763,000	734,000
	2,210,000	1,057,000	6,471,000	2,921,000
Non-interest expense
Salaries and employee benefits	3,920,000	4,041,000	11,795,000	11,731,000
Occupancy and equipment	815,000	857,000	2,513,000	2,645,000
Professional fees	620,000	361,000	2,313,000	1,134,000
FDIC Insurance	539,000	571,000	1,673,000	1,682,000
Data processing expense	278,000	269,000	860,000	818,000
State franchise and deposit tax	285,000	405,000	855,000	1,235,000
Other real estate owned expense	5,131,000	560,000	8,796,000	1,996,000
Loan collection expense	321,000	858,000	895,000	2,646,000
Other	1,059,000	1,359,000	3,694,000	3,700,000
	12,968,000	9,281,000	33,394,000	27,587,000
Loss before income taxes	(1,076,000)	(887,000)	(2,612,000)	(8,715,000)
Income tax benefit		(38,000)	0	(1,345,000)
Net loss	(1,076,000)	(849,000)	(2,612,000)	(7,370,000)
Less:
Dividends on preferred stock		786,000		2,361,000
Loss allocated to participating securities	(45,000)	(162,000)	(338,000)	(928,000)
Net loss attributable to common shareholders	$ (1,031,000)	$ (1,473,000)	$ (2,274,000)	$ (8,803,000)
Basic and diluted loss per common share (in Dollars per share)	$ (0.04)	$ (0.12)	$ (0.10)	$ (0.73)

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Note 5 - Other Real Estate Owned

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Real Estate Owned [Text Block]

Note 5 – Other Real Estate Owned

Other real estate owned (OREO) is real estate acquired as a result of foreclosure or by deed in lieu of foreclosure.  It is classified as real estate owned until such time as it is sold.  When property is acquired as a result of foreclosure or by deed in lieu of foreclosure, it is recorded at its fair market value less cost to sell.  Any write-down of the property at the time of acquisition is charged to the allowance for loan losses.  Costs incurred in order to perfect the lien prior to foreclosure may be capitalized if the fair value less the cost to sell exceeds the balance of the loan at the time of transfer to OREO. Examples of eligible costs to be capitalized are payments of delinquent property taxes to clear tax liens or payments to contractors and subcontractors to clear mechanics’ liens.

Fair value of OREO is determined on an individual property basis. To determine the fair value of OREO for smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers.  If the internally evaluated market price is below our underlying investment in the property, appropriate write-downs are taken. For larger dollar residential and commercial real estate properties, we obtain a new appraisal of the subject property or have staff from our special assets group or in our centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned.  We typically obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent. Subsequent reductions in fair value are recorded as non-interest expense when a new appraisal indicates a decline in value or in cases where a listing price is lowered below the appraised amount. 

The following table presents the major categories of OREO at the period-ends indicated:

	September 30, 2015			December 31, 2014
	(in thousands)
Commercial Real Estate:
Construction, land development, and other land	$	14,749		$	18,748
Farmland		34			669
Nonfarm nonresidential		12,059			14,860
Residential Real Estate:
Multi-family		—			4,988
1-4 Family		2,635			7,998
		29,477			47,263
Valuation allowance		(300	)		(1,066	)
	$	29,177		$	46,197

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands)						(in thousands)
OREO Valuation Allowance Activity:
Beginning balance	$	307		$	199		$	1,066		$	230
Provision to allowance		4,450			600			7,080			1,250
Write-downs		(4,457	)		(268	)		(7,846	)		(949	)
Ending balance	$	300		$	531		$	300		$	531

Residential loans secured by 1-4 family residential properties in the process of foreclosure totaled $1.6 million and $3.6 million at September 30, 2015 and December 31, 2014, respectively. At quarter end, $6.5 million of OREO property was subject to a contract for sale or letter of intent.

Net activity relating to other real estate owned during the nine months ended September 30, 2015 and 2014 is as follows:

	For the Nine Months Ended September 30,
	2015			2014
	(in thousands)
OREO Activity
OREO as of January 1	$	46,197		$	30,892
Real estate acquired		4,450			31,663
Valuation adjustment writedowns		(7,080	)		(1,250	)
Gain/(loss) on sale		27			455
Proceeds from sale of properties		(14,417	)		(7,253	)
OREO as of September 30	$	29,177		$	54,507

Expenses related to other real estate owned include:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015		2014			2015			2014
	(in thousands)					(in thousands)
Net (gain) loss on sales	$	16	$	(401	)	$	(27	)	$	(455	)
Provision to allowance		4,450		600			7,080			1,250
Operating expense		665		361			1,743			1,201
Total	$	5,131	$	560		$	8,796		$	1,996

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Note 4 - Loans

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

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

Note 4 – Loans

Loans were as follows:

	September 30,			December 31,
	2015			2014
	(in thousands)
Commercial	$	84,908		$	60,936
Commercial Real Estate:
Construction		31,484			33,173
Farmland		76,670			77,419
Nonfarm nonresidential		145,899			175,452
Residential Real Estate:
Multi-family		39,579			41,891
1-4 Family		204,309			197,278
Consumer		10,483			11,347
Agriculture		30,609			26,966
Other		473			537
Subtotal		624,414			624,999
Less: Allowance for loan losses		(14,198	)		(19,364	)
Loans, net	$	610,216		$	605,635

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2015 and 2014:

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
September 30, 2015:
Beginning balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809
Negative provision		(180	)		(1,334	)		(489	)		(73	)		(120	)		(4	)		(2,200	)
Loans charged off		(201	)		(768	)		(486	)		(70	)		(41	)		(14	)		(1,580	)
Recoveries		5			905			144			98			2			15			1,169
Ending balance	$	1,570		$	8,016		$	4,229		$	181		$	200		$	2		$	14,198
September 30, 2014:
Beginning balance	$	3,115		$	14,359		$	6,873		$	339		$	435		$	12		$	25,133
Provision for loan losses		(471	)		(336	)		803			28			(8	)		(16	)	–
Loans charged off		(216	)		(742	)		(806	)		(59	)	–				(1	)		(1,824	)
Recoveries		108			458			284			23			2			14			889
Ending balance	$	2,536		$	13,739		$	7,154		$	331		$	429		$	9		$	24,198

The following table presents the activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2015 and 2014: 

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
September 30, 2015:
Beginning balance	$	2,046		$	10,931		$	5,787		$	274		$	319		$	7		$	19,364
Negative provision		(207	)		(1,657	)		(269	)		(51	)		(13	)		(3	)		(2,200	)
Loans charged off		(675	)		(2,361	)		(1,777	)		(200	)		(111	)		(47	)		(5,171	)
Recoveries		406			1,103			488			158			5			45			2,205
Ending balance	$	1,570		$	8,016		$	4,229		$	181		$	200		$	2		$	14,198
September 30, 2014:
Beginning balance	$	3,221		$	16,414		$	7,762		$	416		$	305		$	6		$	28,124
Provision for loan losses		(355	)		4,611			1,897			19			143			(15	)		6,300
Loans charged off		(670	)		(9,110	)		(3,162	)		(238	)		(30	)		(19	)		(13,229	)
Recoveries		340			1,824			657			134			11			37			3,003
Ending balance	$	2,536		$	13,739		$	7,154		$	331		$	429		$	9		$	24,198

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of September 30, 2015:

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	65	$	404	$	-	$	-	$	-	$	469
Collectively evaluated for impairment		1,570		7,951		3,825		181		200		2		13,729
Total ending allowance balance	$	1,570	$	8,016	$	4,229	$	181	$	200	$	2	$	14,198
Loans:
Loans individually evaluated for impairment	$	1,330	$	14,910	$	18,478	$	25	$	152	$	-	$	34,895
Loans collectively evaluated for impairment		83,578		239,143		225,410		10,458		30,457		473		589,519
Total ending loans balance	$	84,908	$	254,053	$	243,888	$	10,483	$	30,609	$	473	$	624,414

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

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	33	$	491	$	227	$	1	$	-	$	-	$	752
Collectively evaluated for impairment		2,013		10,440		5,560		273		319		7		18,612
Total ending allowance balance	$	2,046	$	10,931	$	5,787	$	274	$	319	$	7	$	19,364
Loans:
Loans individually evaluated for impairment	$	2,022	$	48,141	$	21,384	$	61	$	263	$	122	$	71,993
Loans collectively evaluated for impairment		58,914		237,903		217,785		11,286		26,703		415		553,006
Total ending loans balance	$	60,936	$	286,044	$	239,169	$	11,347	$	26,966	$	537	$	624,999

Impaired Loans

Impaired loans include restructured loans and loans on nonaccrual or classified as doubtful, whereby collection of the total amount is improbable, or loss, whereby all or a portion of the loan has been written off or a specific allowance for loss has been provided.

The following tables present information related to loans individually evaluated for impairment by class of loans as of September 30, 2015 and December 31, 2014 and for the three and nine months ended September 30, 2015 and 2014:

	As of September 30, 2015						Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,774	$	1,330	$	—	$	1,439	$	—	$	1,630	$	5
Commercial real estate:
Construction		803		654		—		833		3		2,426		11
Farmland		6,521		4,164		—		4,305		34		4,555		60
Nonfarm nonresidential		13,837		9,403		—		13,347		65		18,133		202
Residential real estate:
Multi-family		32		31		—		33		—		37		—
1-4 Family		15,204		12,426		—		13,163		96		14,040		340
Consumer		123		25		—		23		—		25		—
Agriculture		260		152		—		191		—		219		—
Other		—		—		—		—		1		61		5
Subtotal		38,554		28,185		—		33,334		199		41,126		623
With An Allowance Recorded:
Commercial		—		—		—		4		—		16		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		—		—		—		—		—		79		—
Nonfarm nonresidential		788		689		65		2,708		6		5,622		18
Residential real estate:
Multi-family		4,212		4,212		65		4,216		51		4,237		153
1-4 Family		1,809		1,809		339		1,691		29		1,709		68
Consumer		—		—		—		—		—		10		—
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		6,809		6,710		469		8,619		86		11,673		239
Total	$	45,363	$	34,895	$	469	$	41,953	$	285	$	52,799	$	862

	As of December 31, 2014						Three Months Ended September 30, 2014				Nine Months Ended September 30, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	2,546	$	1,978	$	—	$	1,972	$	—	$	2,325	$	55
Commercial real estate:
Construction		4,714		4,100		—		4,133		3		5,783		9
Farmland		6,636		4,739		—		5,684		26		6,503		74
Nonfarm nonresidential		34,437		22,418		—		30,395		128		44,211		586
Residential real estate:
Multi-family		81		81		—		85		—		2,060		—
1-4 Family		18,496		15,266		—		19,987		150		24,520		567
Consumer		93		29		—		16		—		10		—
Agriculture		276		263		—		249		—		280		3
Other		367		122		—		169		5		288		14
Subtotal		67,646		48,996		—		62,690		312		85,980		1,308
With An Allowance Recorded:
Commercial		145		44		33		161		11		1,190		31
Commercial real estate:
Construction		—		—		—		355		5		736		16
Farmland		658		315		38		—		—		62		—
Nonfarm nonresidential		19,454		16,569		453		9,983		165		13,273		336
Residential real estate:
Multi-family		4,266		4,266		91		4,274		52		4,467		128
1-4 Family		1,791		1,771		136		1,715		20		1,858		58
Consumer		32		32		1		41		1		53		2
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		26,346		22,997		752		16,529		254		21,639		571
Total	$	93,992	$	71,993	$	752	$	79,219	$	566	$	107,619	$	1,879

Cash basis income recognized for the three and nine months ended September 30, 2015 was $47,000 and $149,000, respectively, compared to $58,000 and $480,000 for the three and nine months ended September 30, 2014.

Troubled Debt Restructuring

A troubled debt restructuring (TDR) occurs when the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty.  The majority of the Company’s TDRs involve a reduction in interest rate, a deferral of principal for a stated period of time, or an interest only period.  All TDRs are considered impaired and the Company has allocated reserves for these loans to reflect the present value of the concessionary terms granted to the borrower.

The following table presents the types of TDR loan modifications by portfolio segment outstanding as of September 30, 2015 and December 31, 2014: 

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
September 30, 2015
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		626		626
Commercial Real Estate:
Construction
Rate reduction		264		—		264
Farmland
Principal deferral		—		2,365		2,365
Nonfarm nonresidential
Rate reduction		5,679		75		5,754
Principal deferral		—		654		654
Residential Real Estate:
Multi-family
Rate reduction		4,212		—		4,212
1-4 Family
Rate reduction		7,501		—		7,501
Total TDRs	$	17,656	$	3,788	$	21,444

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
December 31, 2014
Commercial
Rate reduction	$	14	$	—	$	14
Principal deferral		—		869		869
Commercial Real Estate:
Construction
Rate reduction		268		3,379		3,647
Farmland
Principal deferral		—		2,365		2,365
Other
Rate reduction		8,622		13,894		22,516
Principal deferral		671		—		671
Residential Real Estate:
Multi-family
Rate reduction		4,266		—		4,266
1-4 Family
Rate reduction		8,112		—		8,112
Consumer
Rate reduction		32		—		32
Total TDRs	$	21,985	$	20,507	$	42,492

At September 30, 2015 and December 31, 2014, 83% and 52%, respectively, of the Company’s TDRs were performing according to their modified terms.  The Company allocated $198,000 and $579,000 in reserves to borrowers whose loan terms have been modified in TDRs as of September 30, 2015, and December 31, 2014, respectively.  The Company has made no commitment to lend additional amounts to customers as of September 30, 2015 and December 31, 2014 to borrowers with outstanding loans classified as TDRs.

Management periodically reviews renewals/modifications of previously identified TDRs, for which there was no principal forgiveness, to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed as the borrower has complied with the terms of the loan at the date of renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan after the date of the renewal/modification. In this instance, the TDR was originally considered a restructuring in a prior year as a result of a modification with an interest rate that was not commensurate with the risk of the underlying loan. Additionally, TDR classification can be removed in circumstances in which the Company performs a non-concessionary re-modification of the loan at terms that were considered to be at market for loans with comparable risk. Management expects the borrower will continue to perform under the re-modified terms based on the borrower’s past history of performance.

No TDR loan modifications occurred during the three or nine months ended September 30, 2015 or September 30, 2014. During the first nine months of 2015 and 2014, no TDRs defaulted on their restructured loan within the 12 month period following the loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.

Nonperforming Loans

Nonperforming loans include impaired loans not on accrual and smaller balance homogeneous loans, such as residential mortgage and consumer loans, that are collectively evaluated for impairment.

The following table presents the recorded investment in nonaccrual and loans past due 90 days and still on accrual by class of loan as of September 30, 2015, and December 31, 2014: 

	Nonaccrual				Loans Past Due 90 Days And Over Still Accruing
	September 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
	(in thousands)
Commercial	$	1,330	$	1,978	$	—	$	—
Commercial Real Estate:
Construction		390		3,831		—		—
Farmland		4,164		5,054		—		—
Nonfarm nonresidential		4,412		26,892		—		—
Residential Real Estate:
Multi-family		32		80		—		—
1-4 Family		6,482		8,925		—		151
Consumer		25		30		—		—
Agriculture		152		263		—		—
Other		—		122		—		—
Total	$	16,987	$	47,175	$	—	$	151

The following table presents the aging of the recorded investment in past due loans as of September 30, 2015 and December 31, 2014: 

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
September 30, 2015
Commercial	$	18	$	4	$	—	$	1,330	$	1,352
Commercial Real Estate:
Construction		—		—		—		390		390
Farmland		407		7		—		4,164		4,578
Nonfarm nonresidential		—		44		—		4,412		4,456
Residential Real Estate:
Multi-family		—		—		—		32		32
1-4 Family		1,527		523		—		6,482		8,532
Consumer		14		—		—		25		39
Agriculture		6		—		—		152		158
Total	$	1,972	$	578	$	—	$	16,987	$	19,537

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
December 31, 2014
Commercial	$	86	$	—	$	—	$	1,978	$	2,064
Commercial Real Estate:
Construction		—		—		—		3,831		3,831
Farmland		400		14		—		5,054		5,468
Nonfarm nonresidential		241		318		—		26,892		27,451
Residential Real Estate:
Multi-family		—		—		—		80		80
1-4 Family		3,124		601		151		8,925		12,801
Consumer		109		47		—		30		186
Agriculture		—		—		—		263		263
Other		—		—		—		122		122
Total	$	3,960	$	980	$	151	$	47,175	$	52,266

Credit Quality Indicators 

We categorize all loans into risk categories at origination based upon original underwriting. Thereafter, we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends.  Additionally, loans are analyzed continuously through our internal and external loan review processes. Borrower relationships in excess of $500,000 are routinely analyzed through our credit administration processes which classify the loans as to credit risk. The following definitions are used for risk ratings:

Watch – Loans classified as watch are those loans which have experienced a potentially adverse development which necessitates increased monitoring.

Special Mention – Loans classified as special mention do not have all of the characteristics of substandard or doubtful loans. They have one or more deficiencies which warrant special attention and which corrective action, such as accelerated collection practices, may remedy.

Substandard – Loans classified as substandard are those loans with clear and defined weaknesses such as a highly leveraged position, unfavorable financial ratios, uncertain repayment sources or poor financial condition which may jeopardize the repayment of the debt as contractually agreed. They are characterized by the distinct possibility we will sustain some losses if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful are those loans which have characteristics similar to substandard loans but with an increased risk that collection or liquidation in full is highly questionable and improbable.

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

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
September 30, 2015
Commercial	$	75,683	$	3,263	$	—	$	5,962	$	—	$	84,908
Commercial Real Estate:
Construction		25,475		5,355		—		654		—		31,484
Farmland		65,831		4,299		—		6,540		—		76,670
Nonfarm nonresidential		111,725		23,161		1,339		9,674		—		145,899
Residential Real Estate:
Multi-family		30,692		4,921		—		3,966		—		39,579
1-4 Family		165,313		18,736		68		20,192		—		204,309
Consumer		9,759		208		293		223		—		10,483
Agriculture		23,519		6,783		—		307		—		30,609
Other		473		—		—		—		—		473
Total	$	508,470	$	66,726	$	1,700	$	47,518	$	—	$	624,414

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
December 31, 2014
Commercial	$	49,440	$	5,063	$	—	$	6,433	$	—	$	60,936
Commercial Real Estate:
Construction		25,266		2,990		—		4,917		—		33,173
Farmland		61,672		7,922		—		7,825		—		77,419
Nonfarm nonresidential		111,426		21,017		3,747		39,262		—		175,452
Residential Real Estate:
Multi-family		31,526		6,039		—		4,326		—		41,891
1-4 Family		145,450		23,928		131		27,769		—		197,278
Consumer		10,115		537		311		384		—		11,347
Agriculture		25,816		704		—		446		—		26,966
Other		415		—		—		122		—		537
Total	$	461,126	$	68,200	$	4,189	$	91,484	$	—	$	624,999

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Note 4 - Loans (Tables)

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

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

	September 30,			December 31,
	2015			2014
	(in thousands)
Commercial	$	84,908		$	60,936
Commercial Real Estate:
Construction		31,484			33,173
Farmland		76,670			77,419
Nonfarm nonresidential		145,899			175,452
Residential Real Estate:
Multi-family		39,579			41,891
1-4 Family		204,309			197,278
Consumer		10,483			11,347
Agriculture		30,609			26,966
Other		473			537
Subtotal		624,414			624,999
Less: Allowance for loan losses		(14,198	)		(19,364	)
Loans, net	$	610,216		$	605,635

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

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
September 30, 2015:
Beginning balance	$	1,946		$	9,213		$	5,060		$	226		$	359		$	5		$	16,809
Negative provision		(180	)		(1,334	)		(489	)		(73	)		(120	)		(4	)		(2,200	)
Loans charged off		(201	)		(768	)		(486	)		(70	)		(41	)		(14	)		(1,580	)
Recoveries		5			905			144			98			2			15			1,169
Ending balance	$	1,570		$	8,016		$	4,229		$	181		$	200		$	2		$	14,198
September 30, 2014:
Beginning balance	$	3,115		$	14,359		$	6,873		$	339		$	435		$	12		$	25,133
Provision for loan losses		(471	)		(336	)		803			28			(8	)		(16	)	–
Loans charged off		(216	)		(742	)		(806	)		(59	)	–				(1	)		(1,824	)
Recoveries		108			458			284			23			2			14			889
Ending balance	$	2,536		$	13,739		$	7,154		$	331		$	429		$	9		$	24,198

	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Agriculture			Other			Total
	(in thousands)
September 30, 2015:
Beginning balance	$	2,046		$	10,931		$	5,787		$	274		$	319		$	7		$	19,364
Negative provision		(207	)		(1,657	)		(269	)		(51	)		(13	)		(3	)		(2,200	)
Loans charged off		(675	)		(2,361	)		(1,777	)		(200	)		(111	)		(47	)		(5,171	)
Recoveries		406			1,103			488			158			5			45			2,205
Ending balance	$	1,570		$	8,016		$	4,229		$	181		$	200		$	2		$	14,198
September 30, 2014:
Beginning balance	$	3,221		$	16,414		$	7,762		$	416		$	305		$	6		$	28,124
Provision for loan losses		(355	)		4,611			1,897			19			143			(15	)		6,300
Loans charged off		(670	)		(9,110	)		(3,162	)		(238	)		(30	)		(19	)		(13,229	)
Recoveries		340			1,824			657			134			11			37			3,003
Ending balance	$	2,536		$	13,739		$	7,154		$	331		$	429		$	9		$	24,198

Impairment Evaluation of Financing Receivables [Table Text Block]

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	65	$	404	$	-	$	-	$	-	$	469
Collectively evaluated for impairment		1,570		7,951		3,825		181		200		2		13,729
Total ending allowance balance	$	1,570	$	8,016	$	4,229	$	181	$	200	$	2	$	14,198
Loans:
Loans individually evaluated for impairment	$	1,330	$	14,910	$	18,478	$	25	$	152	$	-	$	34,895
Loans collectively evaluated for impairment		83,578		239,143		225,410		10,458		30,457		473		589,519
Total ending loans balance	$	84,908	$	254,053	$	243,888	$	10,483	$	30,609	$	473	$	624,414

	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Agriculture		Other		Total
	(in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	33	$	491	$	227	$	1	$	-	$	-	$	752
Collectively evaluated for impairment		2,013		10,440		5,560		273		319		7		18,612
Total ending allowance balance	$	2,046	$	10,931	$	5,787	$	274	$	319	$	7	$	19,364
Loans:
Loans individually evaluated for impairment	$	2,022	$	48,141	$	21,384	$	61	$	263	$	122	$	71,993
Loans collectively evaluated for impairment		58,914		237,903		217,785		11,286		26,703		415		553,006
Total ending loans balance	$	60,936	$	286,044	$	239,169	$	11,347	$	26,966	$	537	$	624,999

Impaired Financing Receivables [Table Text Block]

	As of September 30, 2015						Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	1,774	$	1,330	$	—	$	1,439	$	—	$	1,630	$	5
Commercial real estate:
Construction		803		654		—		833		3		2,426		11
Farmland		6,521		4,164		—		4,305		34		4,555		60
Nonfarm nonresidential		13,837		9,403		—		13,347		65		18,133		202
Residential real estate:
Multi-family		32		31		—		33		—		37		—
1-4 Family		15,204		12,426		—		13,163		96		14,040		340
Consumer		123		25		—		23		—		25		—
Agriculture		260		152		—		191		—		219		—
Other		—		—		—		—		1		61		5
Subtotal		38,554		28,185		—		33,334		199		41,126		623
With An Allowance Recorded:
Commercial		—		—		—		4		—		16		—
Commercial real estate:
Construction		—		—		—		—		—		—		—
Farmland		—		—		—		—		—		79		—
Nonfarm nonresidential		788		689		65		2,708		6		5,622		18
Residential real estate:
Multi-family		4,212		4,212		65		4,216		51		4,237		153
1-4 Family		1,809		1,809		339		1,691		29		1,709		68
Consumer		—		—		—		—		—		10		—
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		6,809		6,710		469		8,619		86		11,673		239
Total	$	45,363	$	34,895	$	469	$	41,953	$	285	$	52,799	$	862

	As of December 31, 2014						Three Months Ended September 30, 2014				Nine Months Ended September 30, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance For Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(in thousands)
With No Related Allowance Recorded:
Commercial	$	2,546	$	1,978	$	—	$	1,972	$	—	$	2,325	$	55
Commercial real estate:
Construction		4,714		4,100		—		4,133		3		5,783		9
Farmland		6,636		4,739		—		5,684		26		6,503		74
Nonfarm nonresidential		34,437		22,418		—		30,395		128		44,211		586
Residential real estate:
Multi-family		81		81		—		85		—		2,060		—
1-4 Family		18,496		15,266		—		19,987		150		24,520		567
Consumer		93		29		—		16		—		10		—
Agriculture		276		263		—		249		—		280		3
Other		367		122		—		169		5		288		14
Subtotal		67,646		48,996		—		62,690		312		85,980		1,308
With An Allowance Recorded:
Commercial		145		44		33		161		11		1,190		31
Commercial real estate:
Construction		—		—		—		355		5		736		16
Farmland		658		315		38		—		—		62		—
Nonfarm nonresidential		19,454		16,569		453		9,983		165		13,273		336
Residential real estate:
Multi-family		4,266		4,266		91		4,274		52		4,467		128
1-4 Family		1,791		1,771		136		1,715		20		1,858		58
Consumer		32		32		1		41		1		53		2
Agriculture		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Subtotal		26,346		22,997		752		16,529		254		21,639		571
Total	$	93,992	$	71,993	$	752	$	79,219	$	566	$	107,619	$	1,879

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
September 30, 2015
Commercial
Rate reduction	$	—	$	68	$	68
Principal deferral		—		626		626
Commercial Real Estate:
Construction
Rate reduction		264		—		264
Farmland
Principal deferral		—		2,365		2,365
Nonfarm nonresidential
Rate reduction		5,679		75		5,754
Principal deferral		—		654		654
Residential Real Estate:
Multi-family
Rate reduction		4,212		—		4,212
1-4 Family
Rate reduction		7,501		—		7,501
Total TDRs	$	17,656	$	3,788	$	21,444

	TDRs Performing to Modified Terms		TDRs Not Performing to Modified Terms		Total TDRs
	(in thousands)
December 31, 2014
Commercial
Rate reduction	$	14	$	—	$	14
Principal deferral		—		869		869
Commercial Real Estate:
Construction
Rate reduction		268		3,379		3,647
Farmland
Principal deferral		—		2,365		2,365
Other
Rate reduction		8,622		13,894		22,516
Principal deferral		671		—		671
Residential Real Estate:
Multi-family
Rate reduction		4,266		—		4,266
1-4 Family
Rate reduction		8,112		—		8,112
Consumer
Rate reduction		32		—		32
Total TDRs	$	21,985	$	20,507	$	42,492

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

	Nonaccrual				Loans Past Due 90 Days And Over Still Accruing
	September 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
	(in thousands)
Commercial	$	1,330	$	1,978	$	—	$	—
Commercial Real Estate:
Construction		390		3,831		—		—
Farmland		4,164		5,054		—		—
Nonfarm nonresidential		4,412		26,892		—		—
Residential Real Estate:
Multi-family		32		80		—		—
1-4 Family		6,482		8,925		—		151
Consumer		25		30		—		—
Agriculture		152		263		—		—
Other		—		122		—		—
Total	$	16,987	$	47,175	$	—	$	151

Past Due Financing Receivables [Table Text Block]

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
September 30, 2015
Commercial	$	18	$	4	$	—	$	1,330	$	1,352
Commercial Real Estate:
Construction		—		—		—		390		390
Farmland		407		7		—		4,164		4,578
Nonfarm nonresidential		—		44		—		4,412		4,456
Residential Real Estate:
Multi-family		—		—		—		32		32
1-4 Family		1,527		523		—		6,482		8,532
Consumer		14		—		—		25		39
Agriculture		6		—		—		152		158
Total	$	1,972	$	578	$	—	$	16,987	$	19,537

	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days And Over Past Due		Nonaccrual		Total Past Due And Nonaccrual
	(in thousands)
December 31, 2014
Commercial	$	86	$	—	$	—	$	1,978	$	2,064
Commercial Real Estate:
Construction		—		—		—		3,831		3,831
Farmland		400		14		—		5,054		5,468
Nonfarm nonresidential		241		318		—		26,892		27,451
Residential Real Estate:
Multi-family		—		—		—		80		80
1-4 Family		3,124		601		151		8,925		12,801
Consumer		109		47		—		30		186
Agriculture		—		—		—		263		263
Other		—		—		—		122		122
Total	$	3,960	$	980	$	151	$	47,175	$	52,266

Financing Receivable Credit Quality Indicators [Table Text Block]

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
September 30, 2015
Commercial	$	75,683	$	3,263	$	—	$	5,962	$	—	$	84,908
Commercial Real Estate:
Construction		25,475		5,355		—		654		—		31,484
Farmland		65,831		4,299		—		6,540		—		76,670
Nonfarm nonresidential		111,725		23,161		1,339		9,674		—		145,899
Residential Real Estate:
Multi-family		30,692		4,921		—		3,966		—		39,579
1-4 Family		165,313		18,736		68		20,192		—		204,309
Consumer		9,759		208		293		223		—		10,483
Agriculture		23,519		6,783		—		307		—		30,609
Other		473		—		—		—		—		473
Total	$	508,470	$	66,726	$	1,700	$	47,518	$	—	$	624,414

	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(in thousands)
December 31, 2014
Commercial	$	49,440	$	5,063	$	—	$	6,433	$	—	$	60,936
Commercial Real Estate:
Construction		25,266		2,990		—		4,917		—		33,173
Farmland		61,672		7,922		—		7,825		—		77,419
Nonfarm nonresidential		111,426		21,017		3,747		39,262		—		175,452
Residential Real Estate:
Multi-family		31,526		6,039		—		4,326		—		41,891
1-4 Family		145,450		23,928		131		27,769		—		197,278
Consumer		10,115		537		311		384		—		11,347
Agriculture		25,816		704		—		446		—		26,966
Other		415		—		—		122		—		537
Total	$	461,126	$	68,200	$	4,189	$	91,484	$	—	$	624,999

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Note 12 - Capital Requirements and Restrictions on Retained Earnings

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 12 – Capital Requirements and Restrictions on Retained Earnings

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.

The Basel III regulatory capital reforms became effective for the Company and Bank on January 1, 2015, and include new minimum risk-based capital and leverage ratios.  These rules refine the definition of what constitutes “capital” for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital. The final rules allowed banks and their holding companies with less than $250 billion in assets a one-time opportunity to opt-out of a requirement to include unrealized gains and losses in accumulated other comprehensive income in their capital calculation. The Company and the Bank opted out of this requirement.

In its Consent Orders with the FDIC and the Kentucky Department of Financial Institutions, the Bank has agreed to maintain a minimum Tier 1 leverage ratio of 9% and a minimum total risk based capital ratio of 12%. The Consent orders are described in greater detail in Note 2 – “Going Concern and Future Plans”. As of September 30, 2015, the Bank’s Tier 1 leverage ratio and total risk based capital ratio were both less than the minimum capital ratios required by the Consent Order. The Bank cannot be considered well-capitalized while subject to the Consent Order. We are also restricted from accepting, renewing, or rolling-over brokered deposits without the prior receipt of a waiver on a case-by-case basis from our regulators.

On September 21, 2011, we entered into a Written Agreement with the Federal Reserve Bank of St. Louis in which we made formal commitments to use our financial and management resources to serve as a source of strength for the Bank and to assist the Bank in addressing weaknesses identified by the FDIC and the KDFI, to pay no dividends without prior written approval, to pay no interest or principal on subordinated debentures or trust preferred securities without prior written approval, and to submit an acceptable plan to maintain sufficient capital.

On September 30, 2015, we completed a common equity for debt exchange with holders of $4.0 million of the capital securities (the “Trust Securities”) of Porter Statutory Trust IV, a trust subsidiary of the Company. Accrued and unpaid interest on the Trust Securities totaled approximately $330,000. In exchange for the $4.3 million debt and interest liability, the Company issued 800,000 common shares and 400,000 non-voting common shares, for a total of 1,200,000 shares. In the transaction, a wholly owned subsidiary of the Company received a one-third portion of the Trust Securities directly from an unrelated third party in exchange for 400,000 common shares, resulting in an $883,000 gain on extinguishment of debt. The subsidiary also acquired two-thirds of the Trust Securities from related parties in exchange for 400,000 common shares and 400,000 non-voting common shares. The debt and interest liability exchanged with related parties was treated as a capital transaction.

The following table shows the ratios and amounts of Common Equity Tier 1, Tier 1 capital and total capital to risk-adjusted assets and the leverage ratios for Porter Bancorp, Inc. and the Bank at the dates indicated (dollars in thousands):

	Actual					For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of September 30, 2015:
Total risk-based capital (to risk-weighted assets)
Consolidated	$	69,354		10.40	%	$	53,324		8.00	%
Bank		69,810		10.50			53,178		8.00
Total common equity Tier I risk-based capital (to risk-weighted assets)
Consolidated		33,804		5.07			29,995		4.50
Bank		58,053		8.73			29,913		4.50
Tier I capital (to risk-weighted assets)
Consolidated		45,719		6.86			39,993		6.00
Bank		58,053		8.73			39,883		6.00
Tier I capital (to average assets)
Consolidated		45,719		4.73			38,676		4.00
Bank		58,053		6.01			38,625		4.00

	Actual					For Capital Adequacy Purposes
	Amount		Ratio			Amount		Ratio
As of December 31, 2014:
Total risk-based capital (to risk-weighted assets)
Consolidated	$	73,595		10.61	%	$	55,483		8.00	%
Bank		73,174		10.57			55,383		8.00
Tier I capital (to risk-weighted assets)
Consolidated		46,459		6.70			27,741		4.00
Bank		59,438		8.59			27,691		4.00
Tier I capital (to average assets)
Consolidated		46,459		4.51			41,193		4.00
Bank		59,438		5.78			41,143		4.00

The Consent Order requires the Bank to achieve the minimum capital ratios presented below:

	Actual as of September 30, 2015					Ratio Required by Consent Order
	Amount		Ratio			Amount		Ratio
Total capital to risk-weighted assets	$	69,810		10.50	%	$	79,767		12.00	%
Tier I capital to average assets		58,053		6.01			86,906		9.00

At September 30, 2015, the Bank’s Tier 1 leverage ratio was 6.01%, and its total risk-based capital ratio was 10.50%, which are below the 9% and 12% minimum capital ratios required by the Consent Order. Bank regulatory agencies can exercise discretion when an institution does not meet the terms of a Consent Order. Based on individual circumstances, the agencies may issue mandatory directives, impose monetary penalties, initiate changes in management, or take more serious adverse actions.

Kentucky banking laws limit the amount of dividends that may be paid to a holding company by its subsidiary banks without prior approval. These laws limit the amount of dividends that may be paid in any calendar year to current year’s net income, as defined in the laws, combined with the retained net income of the preceding two years, less any dividends declared during those periods. The Bank has agreed with its primary regulators to obtain their written consent prior to declaring or paying any future dividends. As a practical matter, the Bank cannot pay dividends to the Company for the foreseeable future.

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Note 8 - Fair Values Measurement

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 8 – Fair Values Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use various valuation techniques to determine fair value, including market, income and cost approaches.  There are three levels of inputs that may be used to measure fair values:

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

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

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

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  When that occurs, we classify the fair value hierarchy on the lowest level of input that is significant to the fair value measurement.  We used the following methods and significant assumptions to estimate fair value.

Securities: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges, if available. This valuation method is classified as Level 1 in the fair value hierarchy. For securities where quoted prices are not available, fair values are calculated on market prices of similar securities, or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. Matrix pricing relies on the securities’ relationship to similarly traded securities, benchmark curves, and the benchmarking of like securities. Matrix pricing utilizes observable market inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, and industry and economic events. In instances where broker quotes are used, these quotes are obtained from market makers or broker-dealers recognized to be market participants. This valuation method is classified as Level 2 in the fair value hierarchy. For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators. This valuation method is classified as Level 3 in the fair value hierarchy. Discounted cash flows are calculated using spread to swap and LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.

Impaired Loans: An impaired loan is evaluated at the time the loan is identified as impaired and is recorded at fair value less costs to sell. Fair value is measured based on the value of the collateral securing the loan and is classified as Level 3 in the fair value hierarchy. Fair value is determined using several methods. Generally, the fair value of real estate is determined based on appraisals by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. These routine adjustments are made to adjust the value of a specific property relative to comparable properties for variations in qualities such as location, size, and income production capacity relative to the subject property of the appraisal. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our impaired loans. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

We also apply discounts to the expected fair value of collateral for impaired loans where the likely resolution involves litigation or foreclosure. Resolution of this nature generally results in receiving lower values for real estate collateral in a more aggressive sales environment. We have utilized discounts ranging from 10% to 33% in our impairment evaluations when applicable.

Impaired loans are evaluated quarterly for additional impairment. We obtain updated appraisals on properties securing our loans when circumstances are warranted such as at the time of renewal or when market conditions have significantly changed. This determination is made on a property-by-property basis in light of circumstances in the broader economic climate and our assessment of deterioration of real estate values in the market in which the property is located. The first stage of our assessment involves management’s inspection of the property in question. Management also engages in conversations with local real estate professionals, investors, and market participants to determine the likely marketing time and value range for the property. The second stage involves an assessment of current trends in the regional market. After thorough consideration of these factors, management will either internally evaluate fair value or order a new appraisal.

Other Real Estate Owned (OREO): OREO is evaluated at the time of acquisition and recorded at fair value as determined by independent appraisal or internal evaluation less cost to sell. Our quarterly evaluations of OREO for impairment are driven by property type. For smaller dollar single family homes, we consult with internal real estate sales staff and external realtors, investors, and appraisers. Based on these consultations, we determine asking prices for OREO properties we are marketing for sale. If the internally evaluated fair value or asking price is below our recorded investment in the property, appropriate write-downs are taken.

For larger dollar commercial real estate properties, we obtain a new appraisal of the subject property or have staff in our special assets group or centralized appraisal department evaluate the latest in-file appraisal in connection with the transfer to other real estate owned. In some of these circumstances, an appraisal is in process at quarter end, and we must make our best estimate of the fair value of the underlying collateral based on our internal evaluation of the property, review of the most recent appraisal, and discussions with the currently engaged appraiser. We generally obtain updated appraisals within five quarters of the anniversary date of ownership unless a sale is imminent. When an asking price is lowered below the most recent appraised value, appropriate write-downs are taken.

We routinely apply an internal discount to the value of appraisals used in the fair value evaluation of our OREO. The deductions to the appraisal take into account changing business factors and market conditions, as well as potential value impairment in cases where our appraisal date predates a likely change in market conditions. These deductions range from 10% for routine real estate collateral to 25% for real estate that is determined (1) to have a thin trading market or (2) to be specialized collateral. This is in addition to estimated discounts for cost to sell of six to ten percent.

Financial assets measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014 are summarized below:

			Fair Value Measurements at September 30, 2015 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	30,815	$	—	$	30,815	$	—
Agency mortgage-backed: residential		106,166		—		106,166		—
State and municipal		6,916		—		6,916		—
Corporate bonds		2,289		—		2,289		—
Other debt securities		651		—		—		651
Total	$	146,837	$	—	$	146,186	$	651

			Fair Value Measurements at December 31, 2014 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	35,443	$	—	$	35,443	$	—
Agency mortgage-backed: residential		123,598		—		123,598		—
State and municipal		12,404		—		12,404		—
Corporate bonds		18,688		—		18,688		—
Other debt securities		658		—		—		658
Total	$	190,791	$	—	$	190,133	$	658

There were no transfers between Level 1 and Level 2 during 2015 or 2014.

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

	Other Debt Securities
	2015			2014
	(in thousands)
Balances of recurring Level 3 assets at January 1	$	658		$	632
Total gain (loss) for the period:
Included in other comprehensive income (loss)		(7	)		26
Balance of recurring Level 3 assets at September 30	$	651		$	658

Our other debt security valuation is determined internally by calculating discounted cash flows using the security’s coupon rate of 6.5% and an estimated current market rate of 8.25% based upon the current yield curve plus spreads that adjust for volatility, credit risk, and optionality.  We also consider the issuer’s publicly filed financial information as well as assumptions regarding the likelihood of deferrals and defaults.

Financial assets measured at fair value on a non-recurring basis are summarized below: 

			Fair Value Measurements at September 30, 2015 Using
			(in thousands)
		Carrying Value	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		—		—		—		—
Nonfarm nonresidential		339		—		—		339
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,470		—		—		1,470
Consumer		—		—		—		—
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		14,599		—		—		14,599
Farmland		33		—		—		33
Nonfarm nonresidential		11,937		—		—		11,937
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		2,608		—		—		2,608

			Fair Value Measurements at December 31, 2014 Using
			(in thousands)
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description
Impaired loans:
Commercial	$	12	$	—	$	—	$	12
Commercial real estate:
Construction		—		—		—		—
Farmland		278		—		—		278
Other		15,825		—		—		15,825
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,635		—		—		1,635
Consumer		31		—		—		31
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		18,325		—		—		18,325
Farmland		654		—		—		654
Other		14,525		—		—		14,525
Residential real estate:
Multi-family		4,875		—		—		4,875
1-4 Family		7,818		—		—		7,818

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $2.2 million at September 30, 2015 with a valuation allowance of $369,000, resulting in no additional provision for loan losses for the three and nine months ended September 30, 2015. Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $8.9 million at September 30, 2014 with a valuation allowance of $1.7 million, resulting in an additional provision for loan losses of $5.2 million for the nine months ended September 30, 2014. At December 31, 2014, impaired loans had a carrying amount of $18.4 million, with a valuation allowance of $622,000.

OREO, which is measured at the lower of carrying or fair value less estimated costs to sell, had a net carrying amount of $29.2 million as of September 30, 2015, compared with $54.5 million at September 30, 2014 and $46.2 million at December 31, 2014.  Fair value write-downs of $7.1 million and $1.3 million were recorded on OREO for the nine months ended September 30, 2015 and 2014, respectively.

The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2015:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Commercial real estate	$	339	Sales comparison approach	Adjustment for differences between the comparable sales	5%	-	16%(11%)
			Income approach	Discount or capitalization rate	9%	-	10%(9%)
Impaired loans – Residential real estate	$	1,470	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	16%(7%)
Other real estate owned – Commercial real estate	$	26,569	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	72%(21%)
			Income approach	Discount or capitalization rate	9%	-	20%(13%)
Other real estate owned – Residential real estate	$	2,608	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	15%(8%)

The following table presents qualitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2014:

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Commercial	$	12	Market value approach	Adjustment for receivables and inventory discounts	16%	-	32%(24%)
Impaired loans – Commercial real estate	$	16,103	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	62%(14%)
			Income approach	Discount or capitalization rate	8%	-	9%(8%)
Impaired loans – Residential real estate	$	1,635	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	39%(11%)
Other real estate owned – Commercial real estate	$	33,504	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	45%(18%)
			Income approach	Discount or capitalization rate	9%	-	20%(13%)
Other real estate owned – Residential real estate	$	12,693	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	15%(6%)

Carrying amount and estimated fair values of financial instruments were as follows for the periods indicated:

			Fair Value Measurements at September 30, 2015 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	80,480	$	68,257	$	12,223	$	—	$	80,480
Securities available for sale		146,837		—		146,186		651		146,837
Securities held to maturity		42,138		—		44,244		—		44,244
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		71		—		71		—		71
Loans, net		610,216		—		—		620,807		620,807
Accrued interest receivable		3,291		—		1,052		2,239		3,291
Financial liabilities
Deposits	$	877,893	$	106,160	$	766,831	$	—	$	872,991
Securities sold under agreements to repurchase		—		—		—		—		—
Federal Home Loan Bank advances		3,255		—		3,263		—		3,263
Subordinated capital notes		4,275		—		—		4,142		4,142
Junior subordinated debentures		21,000		—		—		12,638		12,638
Accrued interest payable		2,851		—		530		2,321		2,851

			Fair Value Measurements at December 31, 2014 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	80,180	$	49,007	$	31,173	$	—	$	80,180
Securities available for sale		190,791		—		190,133		658		190,791
Securities held to maturity		42,325		—		44,498		—		44,498
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		8,926		—		8,926		—		8,926
Loans, net		605,635		—		—		615,914		615,914
Accrued interest receivable		3,503		—		1,389		2,114		3,503
Financial liabilities
Deposits	$	926,841	$	114,910	$	804,508	$	—	$	919,418
Securities sold under agreements to repurchase		1,341		—		1,341		—		1,341
Federal Home Loan Bank advances		15,752		—		15,758		—		15,758
Subordinated capital notes		4,950		—		—		4,765		4,765
Junior subordinated debentures		25,000		—		—		14,214		14,214
Accrued interest payable		2,858		—		751		2,107		2,858

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

(a) Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values and are classified as either Level 1 or Level 2. Non-interest bearing deposits are Level 1 whereas interest bearing due from bank accounts and fed funds sold are Level 2.

(b) FHLB Stock

It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

(c) Loans, Net

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

(d) Loans Held for Sale

The fair value of loans held for sale is estimated based upon binding contracts and and/or quotes from third party investors resulting in a Level 2 classification.

(e) Deposits

The fair values disclosed for non-interest bearing deposits are, by definition, equal to the amount payable on demand at the reporting date resulting in a Level 1 classification. The carrying amounts of variable rate interest bearing deposits approximate their fair values at the reporting date resulting in a Level 2 classification.  Fair values for fixed rate interest bearing deposits are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(f) Securities Sold Under Agreements to Repurchase

The carrying amounts of borrowings under repurchase agreements approximate their fair values resulting in a Level 2 classification.

(g) Other Borrowings

The fair values of the Company’s FHLB advances are estimated using discounted cash flow analyses based on the current borrowing rates resulting in a Level 2 classification.

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

(h) Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification based on the level of the asset or liability with which the accrual is associated.

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Note 8 - Fair Values Measurement (Details) - Financial Assets Measured at Fair Value on Recurring and Non Recurring Basis - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Available for sale securities
Available-for-sale securities	$ 146,837	$ 190,791
US Treasury and Government [Member]
Available for sale securities
Available-for-sale securities	30,815	35,443
US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	30,815	35,443
Residential Mortgage Backed Securities [Member]
Available for sale securities
Available-for-sale securities	106,166	123,598
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	106,166	123,598
US States and Political Subdivisions Debt Securities [Member]
Available for sale securities
Available-for-sale securities	6,916	12,404
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	6,916	12,404
Corporate Debt Securities [Member]
Available for sale securities
Available-for-sale securities	2,289	18,688
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	2,289	18,688
Other Debt Obligations [Member]
Available for sale securities
Available-for-sale securities	651	658
Other Debt Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	651	658
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Available for sale securities
Available-for-sale securities		12
Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Farmland Loans [Member]
Available for sale securities
Available-for-sale securities		278
Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Nonfarm Nonresidential [Member]
Available for sale securities
Available-for-sale securities	339
Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Loans [Member]
Available for sale securities
Available-for-sale securities		15,825
Impaired Loans [Member] | Residential Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | One- to Four-family Residential Properties [Member]
Available for sale securities
Available-for-sale securities	1,470	1,635
Impaired Loans [Member] | Consumer Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Available for sale securities
Available-for-sale securities		31
Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Construction Loans [Member]
Available for sale securities
Available-for-sale securities	14,599	18,325
Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Farmland Loans [Member]
Available for sale securities
Available-for-sale securities	33	654
Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Nonfarm Nonresidential [Member]
Available for sale securities
Available-for-sale securities	11,937
Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Loans [Member]
Available for sale securities
Available-for-sale securities		14,525
Other Real Estate Owned [Member] | Residential Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Multifamily Loans [Member]
Available for sale securities
Available-for-sale securities		4,875
Other Real Estate Owned [Member] | Residential Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | One- to Four-family Residential Properties [Member]
Available for sale securities
Available-for-sale securities	2,608	7,818
Fair Value, Inputs, Level 2 [Member]
Available for sale securities
Available-for-sale securities	146,186	190,133
Fair Value, Inputs, Level 2 [Member] | US Treasury and Government [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	30,815	35,443
Fair Value, Inputs, Level 2 [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	106,166	123,598
Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	6,916	12,404
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	2,289	18,688
Fair Value, Inputs, Level 3 [Member]
Available for sale securities
Available-for-sale securities	651	658
Fair Value, Inputs, Level 3 [Member] | Other Debt Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities
Available-for-sale securities	651	658
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Available for sale securities
Available-for-sale securities		12
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Farmland Loans [Member]
Available for sale securities
Available-for-sale securities		278
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Nonfarm Nonresidential [Member]
Available for sale securities
Available-for-sale securities	339
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Loans [Member]
Available for sale securities
Available-for-sale securities		15,825
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member] | Residential Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | One- to Four-family Residential Properties [Member]
Available for sale securities
Available-for-sale securities	1,470	1,635
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member] | Consumer Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member]
Available for sale securities
Available-for-sale securities		31
Fair Value, Inputs, Level 3 [Member] | Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Construction Loans [Member]
Available for sale securities
Available-for-sale securities	14,599	18,325
Fair Value, Inputs, Level 3 [Member] | Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Farmland Loans [Member]
Available for sale securities
Available-for-sale securities	33	654
Fair Value, Inputs, Level 3 [Member] | Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Nonfarm Nonresidential [Member]
Available for sale securities
Available-for-sale securities	11,937
Fair Value, Inputs, Level 3 [Member] | Other Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Other Loans [Member]
Available for sale securities
Available-for-sale securities		14,525
Fair Value, Inputs, Level 3 [Member] | Other Real Estate Owned [Member] | Residential Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | Multifamily Loans [Member]
Available for sale securities
Available-for-sale securities		4,875
Fair Value, Inputs, Level 3 [Member] | Other Real Estate Owned [Member] | Residential Portfolio Segment [Member] | Fair Value, Measurements, Nonrecurring [Member] | One- to Four-family Residential Properties [Member]
Available for sale securities
Available-for-sale securities	$ 2,608	$ 7,818

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Note 6 - Deposits

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Deposit Liabilities Disclosures [Text Block]

Note 6 – Deposits

The following table shows ending deposit balances by category as of:

	September 30, 2015		December 31, 2014
	(in thousands)
Non-interest bearing	$	106,160	$	114,910
Interest checking		83,247		91,086
Money market		119,324		109,734
Savings		35,131		36,430
Certificates of deposit		534,031		574,681
Total	$	877,893	$	926,841

Time deposits of $250,000 or more were $33.0 million and $34.4 million at September 30, 2015 and December 31, 2014, respectively.

Scheduled maturities of all time deposits at September 30, 2015 were as follows (in thousands):

Year 1	$	330,881
Year 2		122,321
Year 3		9,500
Year 4		21,319
Year 5		50,010
Thereafter		—
	$	534,031

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Note 7 - Advances from the Federal Home Loan Bank

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Federal Home Loan Bank Advances, Disclosure [Text Block]

Note 7 – Advances from the Federal Home Loan Bank

Advances from the Federal Home Loan Bank were as follows:

	September 30,		December 31,
	2015		2014
	(in thousands)
Monthly amortizing advances with fixed rates from 0.00% to 5.25% and maturities ranging from 2017 through 2033, averaging 2.73% at September 30, 2015 and 1.02% at December 31, 2014	$	3,255	$	15,752

Each advance is payable based upon the terms on agreement, with a prepayment penalty.  New advances are limited to a one year maturity or less. No prepayment penalties were incurred during 2015 or 2014. The advances are collateralized by first mortgage loans.  The borrowing capacity is based on the market value of the underlying pledged loans. At September 30, 2015, our additional borrowing capacity with the FHLB was $25.7 million. The availability of our borrowing capacity could be affected by our financial condition and the FHLB could require additional collateral or, among other things, exercise its right to deny a funding request, at its discretion.

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Note 9 - Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 9 – Income Taxes

Deferred tax assets and liabilities were due to the following as of:

	September 30,			December 31,
	2015			2014
	(in thousands)
Deferred tax assets:
Net operating loss carry-forward	$	35,788		$	32,111
Allowance for loan losses		4,969			6,777
Other real estate owned write-down		9,647			10,000
Alternative minimum tax credit carry-forward		692			692
Net assets from acquisitions		671			668
Other than temporary impairment on securities		46			46
New market tax credit carry-forward		208			208
Nonaccrual loan interest		607			958
Amortization of non-compete agreements		12			14
Other		1,674			1,701
		54,314			53,175
Deferred tax liabilities:
FHLB stock dividends		928			928
Fixed assets		225			264
Originated mortgage servicing rights		37			53
Net unrealized gain on securities		297			579
Other		669			703
		2,156			2,527
Net deferred tax assets before valuation allowance		52,158			50,648
Valuation allowance		(52,158	)		(50,648	)
Net deferred tax asset	$	—		$	—

Our estimate of the realizability of the deferred tax asset is dependent on our estimate of projected future levels of taxable income. In analyzing future taxable income levels, we considered all evidence currently available, both positive and negative. Based on our analysis, we established a valuation allowance for all deferred tax assets as of December 31, 2011. The valuation allowance remains in effect as of September 30, 2015.

The calculation for the income tax provision or benefit generally does not consider the tax effects of changes in other comprehensive income, or OCI, which is a component of stockholders’ equity on the balance sheet. However, an exception is provided in certain circumstances, such as when there is a full valuation allowance against net deferred tax assets, there is a loss from continuing operations and there is income in other components of the financial statements. In such a case, pre-tax income from other categories, such as changes in OCI, must be considered in determining a tax benefit to be allocated to the loss from continuing operations. No tax benefit or expense was recognized for the nine months ended September 30, 2015, and a tax benefit of $1.3 million was allocated to continuing operations for the nine months ended September 30, 2014. The September 30, 2014 tax benefit is entirely due to gains in other comprehensive income that are presented in current operations in accordance with applicable accounting standards.

The Company does not have any beginning and ending unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. There were no interest and penalties recorded in the income statement or accrued for the nine months ended September 30, 2015 or September 30, 2014 related to unrecognized tax benefits. On June 24, 2015, the Board of Directors approved the adoption of a tax benefits preservation plan designed to preserve the value of certain of the Company's deferred tax assets primarily associated with net operating loss carryforwards (“NOLs”) under Section 382 of the Internal Revenue Code, as amended (“Section 382”). NOLs can generally be used to offset future taxable income and therefore reduce federal income tax obligations. However, the Company's ability to use its NOLs would be limited if there was an “ownership change” under Section 382. This would occur if shareholders owning (or deemed to own under the tax rules) 5% or more of the Company's increase their aggregate ownership of the Company by more than 50 percentage points over a defined period of time. The plan is intended to reduce the likelihood of an “ownership change” occurring as a result of the buying and selling of the Company's common stock.

In connection with the tax benefits preservation plan, the Company declared a dividend of one preferred stock purchase right for each share of common stock outstanding as of the close of business on July 10, 2015. Any shareholder or group that acquires beneficial ownership of 5% or more of the Company (an “acquiring person”) could be subject to significant dilution in its holdings if the Company's Board of Directors does not approve such acquisition. Existing shareholders holding 5% or more of the Company will not be considered acquiring persons unless they acquire additional shares, subject to certain exceptions described in the plan. In addition, in its discretion, the Board of Directors may exempt certain transactions and certain persons whose acquisition of securities is determined by the board not to jeopardize the Company's deferred tax assets.

The rights will expire upon the earlier of (i) June 29, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefits may be carried forward, (iii) the repeal or amendment of Section 382 or any successor statute, if the Board of Directors determines that the plan is no longer needed to preserve the tax benefits, and (iv) certain other events as described in the plan.

On September 23, 2015, the Company’s shareholders approved an amendment to its articles of incorporation to further help protect the long-term value of the Company’s NOLs. The amendment provides a means to block transfers of our common shares that could result in an ownership change under Section 382. The transfer restrictions will expire on the earlier of (i) September 23, 2018, (ii) the beginning of a taxable year with respect to which the Board of Directors determines that no tax benefit may be carried forward, (iii) the repeal of Section 382 or any successor statute if our Board determines that the transfer restrictions are no longer needed to preserve the tax benefits of our NOLs, or (iv) such date as the Board otherwise determines that the transfer restrictions are no longer necessary.

The Company and its subsidiaries are subject to U.S. federal income tax and the Company is subject to income tax in the Commonwealth of Kentucky. The Company is no longer subject to examination by taxing authorities for years before 2011.

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Note 9 - Income Taxes (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Jul. 10, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit)	$ (38,000)	$ 0	$ (1,345,000)
Unrecognized Tax Benefits		0			$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 0	0	0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense		$ 0	$ 0
Common Stock Ownership Percentage by Individual		5.00%
Common Stock Ownership Percentage		50.00%
Dividend Declared, Preferred Stock Purchase Right Per Each Share of Common Stock (in Shares)				1

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Note 10 - Stock Plans and Stock Based Compensation (Details) - USD ($)		6 Months Ended	9 Months Ended		12 Months Ended
	Mar. 25, 2015	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number			924,091		770,440	787,426
Restricted Stock, Shares Cancelled	538,479
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 0.89		$ 0.93
Share-based Compensation			$ 313,000	$ 480,000
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost			0	$ 0
Employee [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award Equity Instruments, Other than Options, Nonvested Intrinsic Value 1			$ 712,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 0.89
Director [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award Equity Instruments, Other than Options, Nonvested Intrinsic Value 1			$ 125,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value			$ 1.08
Stock Incentive Plan 2006 [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			1,563,050
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number			924,091
Share-based Compensation Arrangement by Share-based Payment Award, Shares Remaining Available for Issuance			301,920
Non-Employee Directors Stock Incentive Plan 2006 [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			700,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		115,740	115,740		5,052	47,428
Share-based Compensation Arrangement by Share-based Payment Award, Shares Remaining Available for Issuance			185,774
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 1.08			$ 0.90
Restricted Stock [Member] | Non-Employee Directors Stock Incentive Plan 2006 [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Annual Award to Non-Employee Directors, Value			$ 25,000
Service-based Restricted Stock [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Stock Issued During Period, Shares, Restricted Stock Award, Gross	800,000
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification Incremental Expense Recognized	$ 233,000
Minimum [Member] | Unvested Shares [Member] | Stock Incentive Plan 2006 [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Maximum [Member] | Unvested Shares [Member] | Stock Incentive Plan 2006 [Member]
Note 10 - Stock Plans and Stock Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			10 years

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Note 8 - Fair Values Measurement (Details) - Carrying Amount and Estimated Fair Values of Financial Instruments - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Financial assets
Cash and cash equivalents	$ 80,480	$ 80,180	$ 84,830	$ 111,134
Cash and cash equivalents	80,480	80,180
Securities available for sale	146,837	190,791
Securities held to maturity	42,138	42,325
Securities held to maturity	44,244	44,498
Federal Home Loan Bank stock	$ 7,323	$ 7,323
Federal Home Loan Bank stock
Loans held for sale	$ 71	$ 8,926
Loans held for sale	71	8,926
Loans, net	610,216	605,635
Loans, net	620,807	615,914
Accrued interest receivable	3,291	3,503
Accrued interest receivable	3,291	3,503
Financial liabilities
Deposits	877,893	926,841
Deposits	872,991	919,418
Securities sold under agreements to repurchase		1,341
Securities sold under agreements to repurchase		1,341
Federal Home Loan Bank advances	3,255	15,752
Federal Home Loan Bank advances	3,263	15,758
Subordinated capital notes	4,275	4,950
Subordinated capital notes	4,142	4,765
Junior subordinated debentures	21,000	25,000
Junior subordinated debentures	12,638	14,214
Accrued interest payable	2,851	2,858
Accrued interest payable	2,851	2,858
Fair Value, Inputs, Level 1 [Member]
Financial assets
Cash and cash equivalents	$ 68,257	$ 49,007
Federal Home Loan Bank stock
Financial liabilities
Deposits	$ 106,160	$ 114,910
Fair Value, Inputs, Level 2 [Member]
Financial assets
Cash and cash equivalents	12,223	31,173
Securities available for sale	146,186	190,133
Securities held to maturity	$ 44,244	$ 44,498
Federal Home Loan Bank stock
Loans held for sale	$ 71	$ 8,926
Accrued interest receivable	1,052	1,389
Financial liabilities
Deposits	766,831	804,508
Securities sold under agreements to repurchase		1,341
Federal Home Loan Bank advances	3,263	15,758
Accrued interest payable	530	751
Fair Value, Inputs, Level 3 [Member]
Financial assets
Securities available for sale	$ 651	$ 658
Federal Home Loan Bank stock
Loans, net	$ 620,807	$ 615,914
Accrued interest receivable	2,239	2,114
Financial liabilities
Subordinated capital notes	4,142	4,765
Junior subordinated debentures	12,638	14,214
Accrued interest payable	$ 2,321	$ 2,107

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Note 3 - Securities (Details)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Note 3 - Securities (Details) [Line Items]
Available-for-sale Securities Pledged as Collateral	$ 51,600,000	$ 80,800,000
Available-for-sale Securities	$ 146,837,000	$ 190,791,000
Concentration Risk, Number	0	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	$ 0	$ 0
KENTUCKY
Note 3 - Securities (Details) [Line Items]
Available-for-sale Securities	17,700,000	19,100,000
TEXAS
Note 3 - Securities (Details) [Line Items]
Available-for-sale Securities	$ 4,300,000	$ 4,400,000

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Note 5 - Other Real Estate Owned (Details) - Activity Relating to Other Real Estate Owned - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
OREO Activity
OREO			$ 46,197	$ 30,892
Real estate acquired			4,450	31,663
Valuation adjustment writedowns	$ (4,450)	$ (600)	(7,080)	(1,250)
Gain/(loss) on sale	(16)	401	27	455
Proceeds from sale of properties			(14,417)	(7,253)
OREO	$ 29,177	$ 54,507	$ 29,177	$ 54,507

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation – The consolidated financial statements include Porter Bancorp, Inc. (Company) and its subsidiary, PBI Bank (Bank).  The Company owns a 100% interest in the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the entire year.  A description of other significant accounting policies is presented in the notes to the Consolidated Financial Statements for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates – To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ.

Reclassification, Policy [Policy Text Block]

Reclassifications – Some items in the prior year financial statements were reclassified to conform to the current presentation. The reclassifications did not impact net income (loss) or stockholders’ equity.

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Note 7 - Advances from the Federal Home Loan Bank (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

	September 30,		December 31,
	2015		2014
	(in thousands)
Monthly amortizing advances with fixed rates from 0.00% to 5.25% and maturities ranging from 2017 through 2033, averaging 2.73% at September 30, 2015 and 1.02% at December 31, 2014	$	3,255	$	15,752

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Note 5 - Other Real Estate Owned (Details) - Major Categories of OREO - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Real Estate Properties [Line Items]
Valuation allowance	$ (300)	$ (307)	$ (1,066)	$ (531)	$ (199)	$ (230)
	29,177		46,197	$ 54,507		$ 30,892
Commercial Real Estate Portfolio Segment [Member] | Construction, Land Development, and Other Land Loans [Member]
Real Estate Properties [Line Items]
Other real estate owned, gross	14,749		18,748
Commercial Real Estate Portfolio Segment [Member] | Farmland Loans [Member]
Real Estate Properties [Line Items]
Other real estate owned, gross	34		669
Commercial Real Estate Portfolio Segment [Member] | Nonfarm Nonresidential [Member]
Real Estate Properties [Line Items]
Other real estate owned, gross	12,059		14,860
Residential Portfolio Segment [Member]
Real Estate Properties [Line Items]
Other real estate owned, gross	29,477		47,263
Residential Portfolio Segment [Member] | Multifamily Loans [Member]
Real Estate Properties [Line Items]
Other real estate owned, gross			4,988
Residential Portfolio Segment [Member] | One- to Four-family Residential Properties [Member]
Real Estate Properties [Line Items]
Other real estate owned, gross	$ 2,635		$ 7,998

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Note 4 - Loans (Details) - Activity in Allowance for Loan Losses by Portfolio Segment - USD ($) $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 16,809	$ 25,133		$ 19,364	$ 28,124	$ 28,124
Provision for loan losses	(2,200)		$ 6,300	(2,200)	6,300	7,100
Loans charged off	(1,580)	(1,824)		(5,171)	(13,229)
Recoveries	1,169	889		2,205	3,003
Ending balance	14,198	24,198	25,133	14,198	24,198	19,364
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	1,946	3,115		2,046	3,221	3,221
Provision for loan losses	(180)	(471)		(207)	(355)
Loans charged off	(201)	(216)		(675)	(670)
Recoveries	5	108		406	340
Ending balance	1,570	2,536	3,115	1,570	2,536	2,046
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	9,213	14,359		10,931	16,414	16,414
Provision for loan losses	(1,334)	(336)		(1,657)	4,611
Loans charged off	(768)	(742)		(2,361)	(9,110)
Recoveries	905	458		1,103	1,824
Ending balance	8,016	13,739	14,359	8,016	13,739	10,931
Residential Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	5,060	6,873		5,787	7,762	7,762
Provision for loan losses	(489)	803		(269)	1,897
Loans charged off	(486)	(806)		(1,777)	(3,162)
Recoveries	144	284		488	657
Ending balance	4,229	7,154	6,873	4,229	7,154	5,787
Consumer Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	226	339		274	416	416
Provision for loan losses	(73)	28		(51)	19
Loans charged off	(70)	(59)		(200)	(238)
Recoveries	98	23		158	134
Ending balance	181	331	339	181	331	274
Agriculture Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	359	435		319	305	305
Provision for loan losses	(120)	(8)		(13)	143
Loans charged off	(41)			(111)	(30)
Recoveries	2	2		5	11
Ending balance	200	429	435	200	429	319
Other Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	5	12		7	6	6
Provision for loan losses	(4)	(16)		(3)	(15)
Loans charged off	(14)	(1)		(47)	(19)
Recoveries	15	14		45	37
Ending balance	$ 2	$ 9	$ 12	$ 2	$ 9	$ 7

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Unaudited Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net loss	$ (1,076)	$ (849)	$ (2,612)	$ (7,370)
Unrealized gain (loss) on securities:
Unrealized gain arising during the period	1,227	155	794	3,936
Amortization during the period of net unrealized loss transferred to held to maturity	33	82	97	149
Reclassification adjustment for gains included in net income		(46)	(1,696)	(92)
Net unrealized gain (loss) recognized in comprehensive income	1,260	191	(805)	3,993
Tax effect		(38)		(1,345)
Other comprehensive income (loss)	1,260	153	(805)	2,648
Comprehensive income (loss)	$ 184	$ (696)	$ (3,417)	$ (4,722)

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Note 3 - Securities

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 3 – Securities

The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2015
Available for sale
U.S. Government and federal agency	$	30,882	$	212	$	(279	)	$	30,815
Agency mortgage-backed: residential		104,642		1,637		(113	)		106,166
State and municipal		6,595		328		(7	)		6,916
Corporate bonds		2,316		6		(33	)		2,289
Other debt securities		572		79		—			651
Total available for sale	$	145,007	$	2,262	$	(432	)	$	146,837

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	42,138	$	2,106	$	—	$	44,244
Total held to maturity	$	42,138	$	2,106	$	—	$	44,244

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Available for sale
U.S. Government and federal agency	$	35,725	$	308	$	(590	)	$	35,443
Agency mortgage-backed: residential		121,985		1,970		(357	)		123,598
State and municipal		11,690		722		(8	)		12,404
Corporate bonds		18,087		853		(252	)		18,688
Other debt securities		572		86		—			658
Total available for sale	$	188,059	$	3,939	$	(1,207	)	$	190,791

	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
Held to maturity
State and municipal	$	42,325	$	2,173	$	—	$	44,498
Total held to maturity	$	42,325	$	2,173	$	—	$	44,498

Sales and calls of available for sale securities were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Proceeds	$	230	$	4,147	$	44,340	$	4,151
Gross gains		—		86		1,832		132
Gross losses		—		40		136		40

The amortized cost and fair value of the debt investment securities portfolio are shown by contractual maturity.  Contractual maturities may differ from actual maturities if issuers have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities not due at a single maturity date are detailed separately. 

	September 30, 2015
	Amortized Cost		Fair Value
	(in thousands)
Maturity
Available for sale
Within one year	$	5,821	$	5,854
One to five years		8,532		8,882
Five to ten years		25,440		25,284
Beyond ten years		572		651
Agency mortgage-backed: residential		104,642		106,166
Total	$	145,007	$	146,837
Held to maturity
One to five years	$	15,644	$	16,262
Five to ten years		22,937		24,208
Beyond ten years		3,557		3,774
Total	$	42,138	$	44,244

Securities pledged at September 30, 2015 and December 31, 2014 had carrying values of approximately $51.6 million and $80.8 million, respectively, and were pledged to secure public deposits and repurchase agreements.

At September 30, 2015 and December 31, 2014, we held securities issued by the Commonwealth of Kentucky or municipalities in the Commonwealth of Kentucky having a book value of $17.7 million and $19.1 million, respectively.  Additionally, at September 30, 2015 and December 31, 2014, we held securities issued by the State of Texas or municipalities in the State of Texas having a book value of $4.3 million and $4.4 million, respectively.  At September 30, 2015 and December 31, 2014, there were no other holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

Securities with unrealized losses at September 30, 2015 and December 31, 2014, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
September 30, 2015
Available for sale
U.S. Government and federal agency	$	5,280	$	(12	)	$	14,798	$	(267	)	$	20,078	$	(279	)
Agency mortgage-backed: residential		6,071		(40	)		4,014		(73	)		10,085		(113	)
State and municipal		472		(7	)		—		—			472		(7	)
Corporate bonds		1,519		(33	)		—		—			1,519		(33	)
Total available for sale temporarily impaired	$	13,342	$	(92	)	$	18,812	$	(340	)	$	32,154	$	(432	)

	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
December 31, 2014
Available for sale
U.S. Government and federal agency	$	7,778	$	(60	)	$	18,681	$	(530	)	$	26,459	$	(590	)
Agency mortgage-backed: residential		6,960		(12	)		17,938		(345	)		24,898		(357	)
State and municipal		569		(8	)		—		—			569		(8	)
Corporate bonds		4,884		(119	)		1,660		(133	)		6,544		(252	)
Total temporarily impaired	$	20,191	$	(199	)	$	38,279	$	(1,008	)	$	58,470	$	(1,207	)

There were no held to maturity securities in an unrecognized loss position at September 30, 2015 or December 31, 2014.

The Company evaluates securities for other than temporary impairment (OTTI) on a quarterly basis.  Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, underlying credit quality of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, the sector or industry trends and cycles affecting the issuer, and the results of reviews of the issuer’s financial condition.  Management currently intends to hold all securities with unrealized losses until recovery, which for fixed income securities may be at maturity. As of September 30, 2015, management does not believe securities within our portfolio with unrealized losses should be classified as other than temporarily impaired.

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Note 7 - Advances from the Federal Home Loan Bank (Details) - Advances from the Federal Home Loan Bank (Parentheticals)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Advances from the Federal Home Loan Bank [Abstract]
Advances from FHLB, lowest fixed rate	0.00%
Advances from FHLB, highest fixed rate	5.25%
Advances from FHLB, earliest maturity	2017
Advances from FHLB, latest maturity	2033
Advances from FHLB, average interest rate	2.73%	1.02%

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Note 10 - Stock Plans and Stock Based Compensation (Details) - Unrecognized Stock Based Compensation Expense Related to Unvested Shares $ in Thousands	Sep. 30, 2015 USD ($)
Unrecognized Stock Based Compensation Expense Related to Unvested Shares [Abstract]
October 2015 – December 2015	$ 132
2016	253
2017	156
2018	149
2019 & thereafter	$ 0

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Note 8 - Fair Values Measurement (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

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

			Fair Value Measurements at September 30, 2015 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	30,815	$	—	$	30,815	$	—
Agency mortgage-backed: residential		106,166		—		106,166		—
State and municipal		6,916		—		6,916		—
Corporate bonds		2,289		—		2,289		—
Other debt securities		651		—		—		651
Total	$	146,837	$	—	$	146,186	$	651

			Fair Value Measurements at December 31, 2014 Using
			(in thousands)
Description	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities
U.S. Government and federal agency	$	35,443	$	—	$	35,443	$	—
Agency mortgage-backed: residential		123,598		—		123,598		—
State and municipal		12,404		—		12,404		—
Corporate bonds		18,688		—		18,688		—
Other debt securities		658		—		—		658
Total	$	190,791	$	—	$	190,133	$	658

			Fair Value Measurements at September 30, 2015 Using
			(in thousands)
		Carrying Value	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description
Impaired loans:
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—
Farmland		—		—		—		—
Nonfarm nonresidential		339		—		—		339
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,470		—		—		1,470
Consumer		—		—		—		—
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		14,599		—		—		14,599
Farmland		33		—		—		33
Nonfarm nonresidential		11,937		—		—		11,937
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		2,608		—		—		2,608

			Fair Value Measurements at December 31, 2014 Using
			(in thousands)
	Carrying Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description
Impaired loans:
Commercial	$	12	$	—	$	—	$	12
Commercial real estate:
Construction		—		—		—		—
Farmland		278		—		—		278
Other		15,825		—		—		15,825
Residential real estate:
Multi-family		—		—		—		—
1-4 Family		1,635		—		—		1,635
Consumer		31		—		—		31
Other		—		—		—		—
Other real estate owned, net:
Commercial real estate:
Construction		18,325		—		—		18,325
Farmland		654		—		—		654
Other		14,525		—		—		14,525
Residential real estate:
Multi-family		4,875		—		—		4,875
1-4 Family		7,818		—		—		7,818

Fairvalue Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation [Table Text Block]

	Other Debt Securities
	2015			2014
	(in thousands)
Balances of recurring Level 3 assets at January 1	$	658		$	632
Total gain (loss) for the period:
Included in other comprehensive income (loss)		(7	)		26
Balance of recurring Level 3 assets at September 30	$	651		$	658

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

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Commercial real estate	$	339	Sales comparison approach	Adjustment for differences between the comparable sales	5%	-	16%(11%)
			Income approach	Discount or capitalization rate	9%	-	10%(9%)
Impaired loans – Residential real estate	$	1,470	Sales comparison approach	Adjustment for differences between the comparable sales	1%	-	16%(7%)
Other real estate owned – Commercial real estate	$	26,569	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	72%(21%)
			Income approach	Discount or capitalization rate	9%	-	20%(13%)
Other real estate owned – Residential real estate	$	2,608	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	15%(8%)

	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	(in thousands)
Impaired loans – Commercial	$	12	Market value approach	Adjustment for receivables and inventory discounts	16%	-	32%(24%)
Impaired loans – Commercial real estate	$	16,103	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	62%(14%)
			Income approach	Discount or capitalization rate	8%	-	9%(8%)
Impaired loans – Residential real estate	$	1,635	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	39%(11%)
Other real estate owned – Commercial real estate	$	33,504	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	45%(18%)
			Income approach	Discount or capitalization rate	9%	-	20%(13%)
Other real estate owned – Residential real estate	$	12,693	Sales comparison approach	Adjustment for differences between the comparable sales	0%	-	15%(6%)

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

			Fair Value Measurements at September 30, 2015 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	80,480	$	68,257	$	12,223	$	—	$	80,480
Securities available for sale		146,837		—		146,186		651		146,837
Securities held to maturity		42,138		—		44,244		—		44,244
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		71		—		71		—		71
Loans, net		610,216		—		—		620,807		620,807
Accrued interest receivable		3,291		—		1,052		2,239		3,291
Financial liabilities
Deposits	$	877,893	$	106,160	$	766,831	$	—	$	872,991
Securities sold under agreements to repurchase		—		—		—		—		—
Federal Home Loan Bank advances		3,255		—		3,263		—		3,263
Subordinated capital notes		4,275		—		—		4,142		4,142
Junior subordinated debentures		21,000		—		—		12,638		12,638
Accrued interest payable		2,851		—		530		2,321		2,851

			Fair Value Measurements at December 31, 2014 Using
	Carrying Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets
Cash and cash equivalents	$	80,180	$	49,007	$	31,173	$	—	$	80,180
Securities available for sale		190,791		—		190,133		658		190,791
Securities held to maturity		42,325		—		44,498		—		44,498
Federal Home Loan Bank stock		7,323		N/A		N/A		N/A		N/A
Loans held for sale		8,926		—		8,926		—		8,926
Loans, net		605,635		—		—		615,914		615,914
Accrued interest receivable		3,503		—		1,389		2,114		3,503
Financial liabilities
Deposits	$	926,841	$	114,910	$	804,508	$	—	$	919,418
Securities sold under agreements to repurchase		1,341		—		1,341		—		1,341
Federal Home Loan Bank advances		15,752		—		15,758		—		15,758
Subordinated capital notes		4,950		—		—		4,765		4,765
Junior subordinated debentures		25,000		—		—		14,214		14,214
Accrued interest payable		2,858		—		751		2,107		2,858

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Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) - Minimum Capital Ratios - PBI Bank [Member] - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Jun. 24, 2011
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) - Minimum Capital Ratios [Line Items]
Total capital to risk-weighted assets	$ 69,810	$ 73,174
Total capital to risk-weighted assets	10.50%	10.57%
Total capital to risk-weighted assets	$ 53,178	$ 55,383
Total capital to risk-weighted assets	8.00%	8.00%
Tier I capital to average assets	$ 58,053	$ 59,438
Tier I capital to average assets	6.01%	5.78%
Tier I capital to average assets	$ 38,625	$ 41,143
Tier I capital to average assets	4.00%	4.00%
Consent Order [Member]
Note 12 - Capital Requirements and Restrictions on Retained Earnings (Details) - Minimum Capital Ratios [Line Items]
Total capital to risk-weighted assets	$ 79,767
Total capital to risk-weighted assets	12.00%		12.00%
Tier I capital to average assets	$ 86,906
Tier I capital to average assets	9.00%		9.00%

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Note 3 - Securities (Details) - Securities with Unrealized Losses - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Available for sale
Available for sale, fair value, less than 12 months	$ 13,342	$ 20,191
Available for sale, unrealized loss, less than 12 months	(92)	(199)
Available for sale, fair value, 12 months or more	18,812	38,279
Available for sale, unrealized loss, 12 months or more	(340)	(1,008)
Available for sale, fair value	32,154	58,470
Available for sale, unrealized loss	(432)	(1,207)
US Treasury and Government [Member]
Available for sale
Available for sale, fair value, less than 12 months	5,280	7,778
Available for sale, unrealized loss, less than 12 months	(12)	(60)
Available for sale, fair value, 12 months or more	14,798	18,681
Available for sale, unrealized loss, 12 months or more	(267)	(530)
Available for sale, fair value	20,078	26,459
Available for sale, unrealized loss	(279)	(590)
Residential Mortgage Backed Securities [Member]
Available for sale
Available for sale, fair value, less than 12 months	6,071	6,960
Available for sale, unrealized loss, less than 12 months	(40)	(12)
Available for sale, fair value, 12 months or more	4,014	17,938
Available for sale, unrealized loss, 12 months or more	(73)	(345)
Available for sale, fair value	10,085	24,898
Available for sale, unrealized loss	(113)	(357)
US States and Political Subdivisions Debt Securities [Member]
Available for sale
Available for sale, fair value, less than 12 months	472	569
Available for sale, unrealized loss, less than 12 months	(7)	(8)
Available for sale, fair value, 12 months or more	0	0
Available for sale, unrealized loss, 12 months or more	0	0
Available for sale, fair value	472	569
Available for sale, unrealized loss	(7)	(8)
Corporate Debt Securities [Member]
Available for sale
Available for sale, fair value, less than 12 months	1,519	4,884
Available for sale, unrealized loss, less than 12 months	(33)	(119)
Available for sale, fair value, 12 months or more	0	1,660
Available for sale, unrealized loss, 12 months or more	0	(133)
Available for sale, fair value	1,519	6,544
Available for sale, unrealized loss	$ (33)	$ (252)

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Note 13 - Contingencies

9 Months Ended

Sep. 30, 2015

Loss Contingency [Abstract]

Contingencies Disclosure [Text Block]

Note 13 – Contingencies

We are defendants in various legal proceedings. Litigation is subject to inherent uncertainties and unfavorable rulings could occur. We record contingent liabilities resulting from claims against us when a loss is assessed to be probable and the amount of the loss is reasonably estimable. Assessing probability of loss and estimating probable losses requires analysis of multiple factors, including in some cases judgments about the potential actions of third party claimants and courts. Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain.   Currently, we have accrued approximately $1.9 million related to ongoing litigation matters for which we believe liability is probable and reasonably estimable. Accruals are not made in cases where liability is not probable or the amount cannot be reasonably estimated. Aside from the amounts currently accrued, there is nothing that is reasonably probable. We disclose legal matters when we believe liability is reasonably possible and may be material to our consolidated financial statements.

Signature Point Litigation. On June 18, 2010, three real estate development companies filed suit in Kentucky state court against the Bank and Managed Assets of Kentucky (“MAKY”). Signature Point Condominiums LLC, et al. v. PBI Bank, et al., Jefferson Circuit Court, Case No 10-CI-04295. On July 16, 2013, a jury in Louisville, Kentucky returned a verdict against the Bank, awarding the plaintiffs compensatory damages of $1,515,000 and punitive damages of $5,500,000. The case arose from a settlement in which the Bank agreed to release the plaintiffs and guarantors from obligations of more than $26 million related to a real estate project in Louisville. The plaintiffs were granted a right of first refusal to repurchase a tract of land within the project. In exchange, the plaintiffs conveyed the real estate securing the loans to the Bank. After plaintiffs declined to exercise their right of first refusal, the Bank sold the tract to the third party. Plaintiffs alleged the Bank had knowledge of the third party offer before the conveyance of the land by the Plaintiffs to the Bank. Plaintiffs asserted claims of fraud, breach of fiduciary duty, breach of the duty of good faith and fair dealing, tortious interference with prospective business advantage and conspiracy to commit fraud, negligence, and conspiracy against the Bank.

After conferring with its legal advisors, the Bank believes the findings and damages are excessive and contrary to law, and that it has meritorious grounds on which it has moved to appeal. The Bank’s Notice of Appeal was filed on October 25, 2013. After a number of procedural issues were resolved, the Bank filed its appellate brief on September 30, 2014. Appellee’s brief was filed on December 1, 2014.The Appellate Court will hear oral arguments on November 17, 2015. We will continue to defend this matter vigorously. Although we have made provisions in our consolidated financial statements for this self-insured matter, the amount of our legal accrual is less than the original amount of the damages awarded, plus accrued interest. The ultimate outcome of this matter could have a material adverse effect on our financial condition, results of operations or cash flows.

SBAV LP Litigation. On December 17, 2012, SBAV LP filed a lawsuit against the Company, the Bank, J. Chester Porter and Maria L. Bouvette in New York state court.  The proceeding was removed to New York federal district court on January 16, 2013, and on February 27, 2013, SBAV LP filed an Amended Complaint. On July 10, 2013, the New York federal district court granted the defendants’ motion to transfer the case to federal district court in Kentucky.  SBAV LP v. Porter Bancorp, et. al., Civ. Action 3:13-CV-710 (W.D.KY).  The Amended Complaint alleged a violation of the Kentucky Securities Act and negligent misrepresentation against all named defendants, and breach of contract against Porter Bancorp alone. The plaintiff sought damages in an amount in excess of $4,500,000, or the difference between the $5,000,016 purchase price and the value of the securities when tendered by the plaintiff, plus interest at the applicable statutory rate, costs and reasonable attorneys’ fees.   We and other defendants disputed the material factual allegations made in the Amended Complaint, and on September 13, 2013, filed a motion to dismiss all claims in the complaint for pleading failures and for failure to state a claim upon which relief may be granted. On March 25, 2014, the judge ruled that SBAV had failed to state a claim against the Bank and dismissed the Bank from the case. On November 2, 2015, the parties agreed to settle the litigation and executed a confidential written settlement agreement. The settlement of this litigation did not have a material adverse effect on the Company’s financial condition or results of operations.

Miller’s Health System Inc. Employee Stock Ownership Plan. On December 26, 2013, the United States Department of Labor (“DOL”) filed a lawsuit against the Bank in U.S. District Court for the Northern District of Indiana. Thomas E. Perez, Secretary of the United States Department of Labor v. PBI Bank, Inc. (Civ. Action 3:13-CV-1400-PPS). The complaint alleges that in 2007 the Bank, in the capacity of trustee for the Miller’s Health System’s Inc. Employee Stock Ownership Plan, authorized the alleged imprudent and disloyal purchase of the stock of Miller’s Health Systems, Inc. (“Miller’s Health”) in 2007 for $40 million, a price allegedly far in excess of the stock’s fair market value. The suit also alleges, among other things, that the Bank approved 100% seller financing for the transaction at an excessive rate of interest. On March 31, 2014, the Bank filed its answer, disputing the material factual allegations of the complaint. On April 10, 2014, the Bank filed a third-party complaint against Miller’s Health seeking to enforce its indemnity rights, as well as third party claims for contribution against named directors and officers of Miller’s Health. On March 12, 2015, the parties agreed to settle the litigation and executed a written settlement agreement on July 10, 2015. The Bank agreed to a settlement payment, which, to the extent not paid from insurance proceeds, had been previously reserved for. The court entered an agreed order ending the litigation on July 20, 2015.

AIT Laboratories Employee Stock Ownership Plan. On August 29, 2014, the United States Department of Labor (“DOL”) filed a lawsuit against the Bank and Michael A. Evans in the U.S. District Court for the Southern District of Indiana. Thomas E. Perez, Secretary of the United States Department of Labor v. PBI Bank, Inc. and Michael A. Evans (Case No. 1:14-CV-01429-SEB-MJD). The complaint alleges that in 2009, the Bank, in the capacity of trustee for the AIT Laboratories Employee Stock Ownership Plan, authorized the alleged imprudent and disloyal purchase of the stock of AIT Holdings, Inc. in 2009 for $90 million, a price allegedly far in excess of the stock’s fair market value. The Bank's responsive pleading was filed on November 4, 2014, disputing the material factual allegations that have been made by the DOL. A settlement conference has been set for November 19, 2015, and a trial date has been set for November 7, 2016. We intend to defend against DOL’s claims vigorously. 

United States Department of Justice Investigation. On October 17, 2014, the United States Department of Justice (the “DOJ”) notified the Bank that the Bank was the subject of an investigation into possible violations of federal laws, including, among other things, possible violations related to false bank entries, bank fraud and securities fraud.  The investigation concerns allegations that Bank personnel engaged in practices intended to delay or avoid disclosure of the Bank’s asset quality at the time of and following the United States Treasury’s purchase of preferred stock from the Company in November 2008.  The Bank will respond to and cooperate with any requests for information from DOJ. At this time the investigation is ongoing, and DOJ has made no determination whether to pursue any action in the matter.