10-Q

United States Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2015

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   0-23090

BAY BANCORP, INC.

(Exact name of registrant as specified in its charter)

MARYLAND	52-1660951
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

7151 Columbia Gateway Drive, Suite A, Columbia, Maryland 21046

(Address of principal executive offices)                (Zip Code)

Registrant’s telephone number, including area code (410) 494-2580

Securities registered pursuant to Section 12(b) of the Act: 

Title of Each Class	Name of Each Exchange on Which Registered:
Common Stock, par value $1.00 per share	NASDAQ Capital Market

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405of 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 definition of “accelerated filer”, “large accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act).  (check one):    Large accelerated filer ☐Accelerated filer ☐Non-accelerated filer ☐Smaller reporting company ☑

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  At August 10, 2015, the number of shares outstanding of the registrant’s common stock was 11,062,665.

BAY BANCORP, INC.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements
	Consolidated Balance Sheets at June 30, 2015 (unaudited) and December 31, 2014	3
	Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2015 and 2014 (unaudited)	4
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months and Six Months Ended June 30, 2015 and 2014 (unaudited)	5
	Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2015 and 2014 (unaudited)	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014 (unaudited)	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	56
Item 4.	Controls and Procedures	56
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	57

BAY BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

	June 30,
	2015		December 31,
	(unaudited)			2014
ASSETS
Cash and due from banks	$	8,021,913	$	7,062,943
Interest bearing deposits with banks and federal funds sold		11,395,843		9,794,382
Total Cash and Cash Equivalents		19,417,756		16,857,325
Time deposits with banks		-		34,849
Investment securities available for sale, at fair value		39,822,541		35,349,889
Investment securities held to maturity, at amortized cost		1,277,799		1,315,718
Restricted equity securities, at cost		2,153,595		1,862,995
Loans held for sale		16,832,511		7,233,306
Loans, net of deferred fees and costs		385,652,537		393,051,192
Less: Allowance for loan losses		(1,432,546)		(1,294,976)
Loans, net		384,219,991		391,756,216
Real estate acquired through foreclosure		1,611,451		1,480,472
Premises and equipment, net		5,216,009		5,553,957
Bank owned life insurance		5,548,022		5,485,377
Core deposit intangible		3,019,629		3,478,282
Deferred tax assets, net		4,213,522		3,214,100
Accrued interest receivable		1,276,005		1,306,111
Prepaid expenses		942,914		925,288
Accrued taxes receivable		2,134,635		3,122,885
Defined benefit pension asset		-		680,668
Other assets		849,345		285,547
Total Assets	$	488,535,725	$	479,942,985
LIABILITIES
Noninterest-bearing deposits	$	97,646,931	$	91,676,534
Interest-bearing deposits		286,804,522		296,153,598
Total Deposits		384,451,453		387,830,132
Short-term borrowings		33,150,000		22,150,000
Defined benefit pension liability		1,704,352		-
Accrued expenses and other liabilities		3,102,767		3,319,567
Total Liabilities		422,408,572		413,299,699
STOCKHOLDERS’ EQUITY
Common stock - par $1.00 per share, authorized 20,000,000 shares, issued and outstanding 11,031,114 and 11,014,517 shares as of June 30, 2015 and December 31, 2014, respectively		11,031,114		11,014,517
Additional paid-in capital		43,341,343		43,228,950
Retained earnings		11,625,473		10,736,305
Accumulated other comprehensive income		129,223		1,663,514
Total Stockholders' Equity		66,127,153		66,643,286
Total Liabilities and Stockholders' Equity	$	488,535,725	$	479,942,985

See accompanying notes to unaudited consolidated financial statements

3

BAY BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
		2015		2014		2015		2014
Interest income:
Interest and fees on loans	$	5,585,676	$	5,779,831	$	11,093,443	$	10,920,217
Interest on loans held for sale		132,180		46,208		193,691		132,009
Interest and dividends on securities		258,262		245,104		515,698		492,453
Interest on deposits with banks and federal funds sold		5,768		18,660		16,380		32,028
Total Interest Income		5,981,886		6,089,803		11,819,212		11,576,707
Interest expense:
Interest on deposits		464,170		301,169		948,571		610,228
Interest on Fed Funds Purchased		604		-		604		-
Interest on short-term borrowings		9,868		-		23,644		-
Total Interest Expense		474,642		301,169		972,819		610,228
Net Interest Income		5,507,244		5,788,634		10,846,393		10,966,479
Provision for loan losses		296,700		140,679		571,809		359,844
Net interest income after provision for loan losses		5,210,544		5,647,955		10,274,584		10,606,635
Noninterest income:
Electronic banking fees		626,056		676,353		1,202,246		1,316,347
Mortgage banking fees and gains		604,065		195,388		997,707		508,063
Gain on sale of real estate acquired through foreclosure		40,077		27,096		39,449		28,925
Service charges on deposit accounts		70,714		111,432		149,731		203,945
Bargain purchase gain		-		524,432		-		524,432
Gain on redemption of securities		-		-		77,490		-
Other income		245,821		2,903,359		357,330		3,109,720
Total Noninterest Income		1,586,733		4,438,060		2,823,953		5,691,432
Noninterest Expenses:
Salary and employee benefits		3,143,816		3,159,029		6,062,935		6,524,461
Occupancy expenses		656,426		784,831		1,376,258		1,534,110
Furniture and equipment expenses		245,171		282,825		520,572		594,954
Legal, accounting and other professional fees		369,151		338,105		737,179		732,225
Data processing and item processing services		283,207		217,187		625,880		492,337
FDIC insurance costs		97,072		134,977		203,383		202,686
Advertising and marketing related expenses		66,555		145,560		95,304		184,965
Foreclosed property expenses		169,100		191,029		229,463		390,392
Loan collection costs		111,867		105,724		199,377		152,903
Core deposit intangible amortization		204,108		218,447		458,653		492,742
Merger and acquisition related expenses		-		128,965		-		240,288
Other expenses		585,525		549,023		1,122,878		1,053,312
Total Noninterest Expenses		5,931,998		6,255,702		11,631,882		12,595,375
Income before income taxes		865,279		3,830,313		1,466,655		3,702,692
Income tax expense		319,364		1,075,058		577,487		865,702
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Basic net income per common share	$	0.05	$	0.27	$	0.08	$	0.29
Diluted net income per common share	$	0.05	$	0.27	$	0.08	$	0.29

See accompanying notes to unaudited consolidated financial statements

4

BAY BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
		2015		2014		2015		2014
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Other comprehensive (loss) income items:
		-
Unrealized (loss) gain on investment securities available for sale		(152,784)		221,980		1,198		393,823
Unrealized loss on defined benefit pension plan		-		-		(1,535,489)		-
Other comprehensive (loss) income		(152,784)		221,980		(1,534,291)		393,823
Comprehensive income (loss)	$	393,131	$	2,977,235	$	(645,123)	$	3,230,813

See accompanying notes to unaudited consolidated financial statements

5

BAY BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2015 and 2014 (unaudited)

								Accumulated
				Additional				Other
		Common		Paid-in		Retained		Comprehensive
		Stock		Capital		Earnings		Income		Total
Balance December 31, 2013	$	9,379,753	$	36,357,001	$	7,703,597	$	1,113,917	$	54,554,268
Net income		-		-		2,836,990		-		2,836,990
Other comprehensive income		-		-		-		393,823		393,823
Issuance of restricted common stock		16,256		(16,256)
Stock-based compensation		-		260,508		-		-		260,508
Issuance of common stock		1,422,764		5,577,236		-		-		7,000,000
Balance June 30, 2014	$	10,818,773	$	42,178,489	$	10,540,587	$	1,507,740	$	65,045,589
								Accumulated
				Additional				Other
		Common		Paid-in		Retained		Comprehensive
		Stock		Capital		Earnings		Income		Total
Balance December 31, 2014	$	11,014,517	$	43,228,950	$	10,736,305	$	1,663,514	$	66,643,286
Net income		-		-		889,168		-		889,168
Other comprehensive loss		-		-		-		(1,534,291)		(1,534,291)
Stock-based compensation		-		54,303		-		-		54,303
Issuance of common stock under stock option plan		16,597		58,090		-		-		74,687
Balance June 30, 2015	$	11,031,114	$	43,341,343	$	11,625,473	$	129,223	$	66,127,153

See accompanying notes to unaudited consolidated financial statements

6

BAY BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended June 30,
		2015		2014
Cash flows from operating activities:
Net income	$	889,168	$	2,836,990
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization of premises and equipment		348,228		478,225
Stock-based compensation		54,303		260,508
Amortization of investment premiums and discounts, net		97,280		117,644
Accretion of net discounts on loans		(1,937,927)		(3,153,066)
Amortization of core deposit intangibles		458,653		492,742
Amortization of deposit premiums		29,622		(633,037)
Bargain purchase gain		-		(524,432)
Provision for loan losses		571,809		359,844
Increase in cash surrender value of bank owned life insurance		(62,645)		(64,406)
Gain on redemption of securities		(77,490)		-
Loss on sale of premises and equipment		-		4,431
Write down of real estate acquired through foreclosure		140,939		274,079
Net gain on sale of real estate acquired through foreclosure		(39,449)		(28,925)
Origination of loans held for sale		(68,822,588)		(34,622,106)
Proceeds from sales of loans held for sale		61,119,076		41,276,373
Gains on sales of loans held for sale		(1,895,693)		(1,022,821)
Deferred income taxes		-		1,020,335
Net decrease (increase) in accrued interest receivable		30,106		(203,140)
Net decrease (increase) in accrued taxes receivable		988,250		(624,564)
Net decrease in defined benefit pension plan liability		(150,674)		(84,723)
Net increase in prepaid expenses and other assets		(581,424)		(749,465)
Net decrease in accrued expenses and other liabilities		(216,798)		(222,279)
Net cash (used in) provided by operating activities		(9,057,254)		5,188,207
Cash flows from investing activities:
Acquisition, net of cash acquired		-		24,745,504
Purchases of investment securities available for sale		(7,910,986)		-
Net decrease in time deposits with banks		34,849		1,046,718
Redemptions and maturities of investment securities available for sale		3,417,318		1,487,391
Redemptions and maturities of investment securities held to maturity		41,124		-
Net (purchase) redemption of restricted equity securities		(290,600)		1,343,500
Net decrease in loans		7,670,760		12,152,723
Proceeds from sale of real estate acquired through foreclosure		999,114		497,622
Purchases of premises and equipment		(10,280)		(169,791)
Proceeds from sale of premises and equipment		-		38,749
Net cash provided by investing activities		3,951,299		41,142,416
Cash flows from financing activities:
Net decrease in deposits		(3,408,301)		(52,176,674)
Net increase in short-term borrowings		11,000,000		-
Proceeds from issuance of common stock		-		7,000,000
Issuance of common stock on stock option exercise		74,687		-
Net cash provided by (used in) financing activities		7,666,386		(45,176,674)
Net increase in cash and cash equivalents		2,560,431		1,153,949
Cash and cash equivalents at beginning of period		16,857,325		23,273,060
Cash and cash equivalents at end of period	$	19,417,756	$	24,427,009

Supplemental Disclosures of Cash Flow information:
Interest paid on deposits and borrowings	$	941,832	$	1,246,842
Net income taxes paid (refunded)		(411,059)		816,413
Non Cash activities:
Transfer of loans to real estate acquired through foreclosure	$	1,231,583	$	973,265
Transfer of loans held for sale to loan portfolio		-		1,101,700
3

See accompanying notes to unaudited consolidated financial statements

7

NOTES TO UNAUDITED CONSOLIDATEDFINANCIAL STATEMENTS

NOTE 1 – ORGANIZATIONAL

Nature of Business

Bay Bancorp, Inc. is a savings and loan holding company.  Through its subsidiary, Bay Bank, FSB, (the “Bank”), a federal savings bank (an “FSB”), Bay Bancorp, Inc. serves the community with a network of 11 branches strategically located throughout the Baltimore Metropolitan Statistical Area, particularly Baltimore City and the Maryland counties of Baltimore, Anne Arundel, Howard, and Harford.  The Bank serves local consumers, small and medium size businesses, professionals and other valued customers by offering a broad suite of financial products and services, including on-line and mobile banking, commercial banking, cash management, mortgage lending and retail banking.  The Bank funds a variety of loan types including commercial and residential real estate loans, commercial term loans and lines of credit, consumer loans and letters of credit.

As used in these notes, the term “the Company” refers to Bay Bancorp, Inc. and, unless the context clearly requires otherwise, its consolidated subsidiaries.

NOTE 2 – BASIS OF PRESENTATION

The consolidated financial statements include the accounts of BayBancorp, Inc., the Bank and the Bank’s consolidated subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation. The investment in subsidiary is recorded on Bay Bancorp’s books on the basis of its equity in the net assets of the Bank.  

In management’s opinion, the accompanying unaudited consolidated financial statements, which have been prepared in conformity with U.S. GAAP for interim period reporting, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial position at June 30, 2015 and December 31, 2014, the results of operations for the three and six months ended June 30, 2015 and 2014, and the statements of cash flows for the six months ended June 30, 2015 and 2014.  The results of the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015 or any future interim period.  The unaudited consolidated financial statements and accompanying notes should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes to consolidated financial statements included in the Company’s Annual Report on 10-K for the year ended December 31, 2014.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ materially from those estimates.

Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses (the “allowance”); the fair value of financial instruments, such as loans, investment securities, and derivatives; measurement and assessment of intangible assets and other purchase accounting related adjustments; benefit plan obligations and expenses; the valuation of deferred tax assets; real estate acquired through foreclosure; and the estimate of expected cash flows for loans acquired with deteriorated credit quality.

Recent Accounting Pronouncements and Developments

In January 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-04, Receivables-Troubled Debt Restructuring by Creditors (Subtopic 310-40), clarifying that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, uponeither (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  Additionally, the guidance  requires interim and annual disclosure of  the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014and did not have an impact on the consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will supersede the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the ASC.  The amendments in this update affect any entity that either

8

enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets unless those contracts, including leases and insurance contracts, are within the scope of other standards.  The amendments establish a core principle requiring the recognition of revenue to depict the transfer of goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services.  The amendments also require expanded disclosures concerning the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers.While the ASU as originally issued was scheduled to be effective for all annual and interim periods beginning January 1,2017, in July 2015, the FASB agreed to defer the effective date by one year, but will provide entities the option to adopt it as of the original effective date. The amendments in the ASU may be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of adoption recognized in equity at the date of initial application.  Management is currently evaluating the impact of adoption.

In June 2014, the FASB issued ASU No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.The new guidance aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as repurchase financings with the accounting for other typical repurchase agreements.  Going forward, these transactions would all be accounted for as secured borrowings.  The guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting.  The amendments in the ASU require a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction.  The amendments in the ASU also require expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.  The amendments in this ASU are effective for public companies for the first interim or annual period beginning after December 15, 2014.  In addition, for public companies, the disclosure for certain transactions accounted for as a sale is effective for the first interim or annual reporting periods beginning on or after December 15, 2014, and the disclosure for transactions accounted for as secured borrowings is required to be presented for annual reporting periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015.  As of December 31, 2014 and June 30, 2015, all of the Company's repurchase agreements were typical in nature (i.e., not repurchase-to-maturity transactions or repurchase agreements executed as a repurchase financing) and are accounted for as secured borrowings.  As such, the amendments in this update did not have an impact on the consolidated financial statements and no change to the current disclosure was required.

In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.  The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.  A reporting entity should apply existing guidance in ASC Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards.  The performance target should not be reflected in estimating the grant-date fair value of the award.  However, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered.  If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period.  The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.  The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved.  The amendments in this ASU are effective for interim or annual reporting periods beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments in this ASU either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter.  As of June 30, 2015, the Company did not have any share-based payment awards that included performance targets that could be achieved after the requisite service period.  As such, the adoption of ASU No. 2014-12 is not expected to have a material impact on the Company's consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.  The objective of this guidance is to reduce diversity in practice related to how creditors classify government-guaranteed mortgage loans, including FHA or VA guaranteed loans, upon foreclosure.  Some creditors reclassify those loans to real estate consistent with other foreclosed loans that do not have guarantees; others reclassify the loans to other receivables.  The amendments in this guidance require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met:  (1) the loan has a government guarantee that is not separable from the loan before foreclosure; (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed.  Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor.  ASU No. 2014-14 is effective for interim and annual reporting periods beginning after December 15, 2014.  The adoption of ASU No. 2014-14 in the first quarter of 2015 did not have an impact on the Company's consolidated financial statements.

9

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis, which rescinds the deferral ofvariable interest entity (“VIE”) consolidationguidance for reporting entities with interests in certain investment funds and provides a new scope exception to registered money market funds and similar unregistered money market funds. The ASU makes several other amendments including (1)the elimination of certain criteria previously used for determining whether fees paid to a decision maker represent a variable interest; (2) revising the consolidation model for limited partnerships and similar entities which could be variable interest entities or voting interest entities; (3) excluding certain fees paid to a decision maker from the risk and benefit test in the primary beneficiary determination if certain conditions are met; and (4)  reducing the application of the related party guidance for VIEs. The ASU will be effective for all annual and interim periods beginning January 1, 2016 and the guidance can be applied either retrospectively or by recording a cumulative effect adjustment to equity with early adoption permitted. Management is currently evaluating the impact of adoption.

NOTE 3 – BUSINESS COMBINATION

The Company has accounted for the Slavie Acquisition (defined below) under the acquisitionmethod of accounting in accordance with ASC Topic 805, Business Combinations, whereby the acquired net assets and assumed liabilities were recorded by the Company at their estimated fair values as of their acquisition dates.  Fair value estimates were based on management’s assessment of the best information available as of the acquisition dates.

In accordance with the framework established by ASC Topic 820,” Fair Value Measurements and Disclosure,” the Company used a fair value hierarchy to prioritize the information used to develop assumptions to calculate estimates in determining fair values.  These fair value hierarchies are discussed in Note 16.

Slavie Acquisition

On May 30, 2014, the Bank acquired certain assets and assumed substantially all deposits and certain other liabilities (the “Slavie Acquisition”) of Slavie Federal Savings Bank (“Slavie”), which was closed on May 30, 2014 by the Office of the Comptroller of the Currency (the “OCC”).  The Slavie Acquisition was completed in accordance with the terms of the Purchase and Assumption Agreement All Deposits, with the Federal Deposit Insurance Corporation (the “FDIC”).  The Bank did not acquire any of Slavie’s other real estate owned.  Additionally, the Bank did not at closing commit to purchase any owned or leased bank premises of Slavie; however, the Bank was granted an option to elect following closing to purchase any or all of the banking premises owned by Slavie, or, in the case of leased banking premises, to assume the lease.  The Bank terminated the lease for Slavie’s Bel Air location in October 2014 and extended its current lease at the Overlea branch.

The following table presents the allocation of the consideration received to the acquired assets and assumed liabilities in the Slavie Acquisition as of the acquisition date.  The allocation resulted in an after-tax bargain purchase gain of $317,544 recorded in 2014.

Assets acquired at fair value:
	Cash and Cash Equivalents		$    30,341,150
	Time deposits with banks		1,546,718
	Investment securities available for sale, at fair value		197,311
	Restricted equity securities, at cost		1,253,600
	Loans, net of deferred fees and costs		82,914,607
	Accrued interest receivable		347,772
	Core deposit intangible		477,563
		Total assets acquired	$  117,078,721
Liabilities assumed at fair value:
	Deposits		$  110,833,046
	Accrued expenses and other liabilities		3,266
		Total liabilities assumed	$  110,836,312
Net assets acquired at fair value:				$    6,242,409
Transaction cash consideration paid				(5,717,977)
Total estimated bargain purchase gain, before tax				524,432
Tax expense				(206,888)
Total estimated bargain purchase gain, after tax				$       317,544

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In many cases, determining the fair value of the acquired assets and assumed liabilities requires the Company to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest.  The most significant of these determinations related to the valuation of acquired loans. 

The following is a summary of the loans acquired in the Slavie Acquisition:

		Purchased Credit Impaired Loans		Purchased Non-Impaired Loans		Total Purchased Loans
Contractually required principal and interest at acquisition	$	26,970,809	$	68,701,805	$	95,672,614
Contractual cash flows not expected to be collected		(7,018,601)		(3,983,263)		(11,001,864)
Expected cash flows at acquisition		19,952,208		64,718,542		84,670,750
Interest component of expected cash flows		(1,114,951)		(641,192)		(1,756,143)
Basis in purchased loans at acquisition - estimated fair value	$	18,837,257	$	64,077,350	$	82,914,607

In connection with the Slavie Acquisition and the Company’s April 19, 2013 merger (the “Merger”) with Jefferson Bancorp, Inc. (“Jefferson”), the Company incurred acquisition and merger related expenses.  These expenses were primarily related to professional services, system conversions and integration of operations, termination of existing contractual arrangements to purchase various services, initial marketing and promotion expenses designed to introduce the Bank to the former Slavie Bank customers, and other costs of completing the transaction.  For the three months and six months ended June 30, 2015, there were $0 merger and acquisition related costs incurred.  For the three months and six months ended June 30, 2014, there were $128,965 and $240,288, respectively, merger and acquisition related costs incurred.

Pro Forma Condensed Combined Financial Information

The following pro forma information combines the historical results of Slavie and pre-Slavie Acquisition Bay Bancorp, Inc.  The pro forma financial information does not include the potential impacts of possible business model changes, current market conditions, revenue enhancements, expense efficiencies, or other factors.  The pro forma results exclude the impact of the bargain purchase gain of $524,432 and Slavie Acquisition-related expenses of $240,288.  While adjustments were made for the estimated impact of certain fair value adjustments, the following results are not indicative of what would have occurred had the Slavie Acquisition taken place on indicated dates.

If the Slavie Acquisition had been completed on January 1, 2014, total revenue would have been approximately $10.5 million and $18.5 million, respectively, for the three and six-month periods ended June 30, 2014.  Net income would have been approximately $2.4 million and $2.7 million, respectively, for the same periods.  Basic and diluted earnings per share would have been $0.23 for the three months ended June 30, 2014 and $0.28 for the six months ended June 30, 2014.

The disclosure of Slavie’s post-Slavie Acquisition total revenue, net of interest expense, and net income is not practicable due to the integration of operations shortly after the Slavie Acquisition.

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NOTE 4 – INVESTMENT SECURITIES

Investment securities are accounted for according to their purpose and holding period.  Trading securities are those that are bought and held principally for the purpose of selling them in the near term.  The Company held no trading securities at June 30, 2015 or December 31, 2014.  Available-for-sale investment securities, comprised of debt and mortgage-backed securities, are those that may be sold before maturity due to changes in the Company's interest rate risk profile or funding needs, and are reported at fair value with unrealized gains and losses, net of taxes, reported as a component of other comprehensive income.  Held-to-maturity investment securities, comprised of debt and mortgage-backed securities, are those that management has the positive intent and ability to hold to maturity and are reported at amortized cost.

Realized gains and losses are recorded in noninterest income and are determined on a trade date basis using the specific identification method.  Interest and dividends on investment securities are recognized in interest income on an accrual basis.  Premiums and discounts are amortized or accreted into interest income using the interest method over the expected lives of the individual securities.

At June 30, 2015 and December 31, 2014, the amortized cost and estimated fair value of the Company’s investment securities portfolio are summarized as follows:

		Amortized		Gross Unrealized				Estimated
Available for Sale		cost		Gains		Losses		Fair Value
June 30, 2015
U.S. government agency	$	5,622,011	$	171,297	$	-	$	5,793,308
U.S. treasury securities		5,912,117		17,113		-		5,929,230
Residential mortgage-backed securities		19,249,664		337,383		(148,029)		19,439,018
State and municipal		4,575,983		17,821		(1,567)		4,592,237
Corporate bonds		4,033,187		13,093		-		4,046,280
Total debt securities		39,392,962		556,707		(149,596)		39,800,073
Equity securities		78,752		-		(56,284)		22,468
Totals	$	39,471,714	$	556,707	$	(205,880)	$	39,822,541
		Amortized		Gross Unrealized				Estimated
Held-to-Maturity		cost		Gains		Losses		Fair Value
June 30, 2015
Residential mortgage-backed securities	$	1,277,799	$	4,565	$	-	$	1,282,364
		Amortized		Gross Unrealized				Estimated
Available for Sale		cost		Gains		Losses		Fair Value
December 31, 2014
U.S. government agency	$	7,561,238	$	217,033	$	-	$	7,778,271
Residential mortgage-backed securities		20,679,345		399,198		(207,616)		20,870,927
State and municipal		4,639,988		17,779		(3,621)		4,654,146
Corporate bonds		2,041,718		-		(11,718)		2,030,000
Total debt securities		34,922,289		634,010		(222,955)		35,333,344
Equity securities		78,754		-		(62,209)		16,545
Totals	$	35,001,043	$	634,010	$	(285,164)	$	35,349,889
		Amortized		Gross Unrealized				Estimated
Held-to-Maturity		cost		Gains		Losses		Fair Value
December 31, 2014
Residential mortgage-backed securities	$	1,315,718	$	9,079	$	-	$	1,324,797

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At  June 30, 2015 securities with unrealized losses segregated by length of impairment were as follows:

		Less than 12 months				12 months or longer				Total
Available for Sale		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2015		Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	-		-	$	-	$	-	$	-	$	-
U.S. treasury securities		-		-		-		-		-		-
Residential mortgage-backed securities		1,794,721		(26,737)		4,829,161		(121,292)		6,623,882		(148,029)
State and municipals		749,820		(1,567)		-		-		749,820		(1,567)
Corporate		-		-		-		-		-		-
Total debt securities		2,544,541		(28,304)		4,829,161		(121,292)		7,373,702		(149,596)
Equity securities						22,468		(56,284)		22,468		(56,284)
Totals	$	2,544,541	$	(28,304)	$	4,851,629	$	(177,576)	$	7,396,170	$	(205,880)

At December 31, 2014, securities with unrealized losses segregated by length of impairment were as follows:

		Less than 12 months				12 months or longer				Total
Available for Sale		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2014		Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	-	$	-	$	-	$	-	$	-	$	-
Residential mortgage-backed securities		791		(3)		6,901,324		(207,613)		6,902,115		(207,616)
State and municipals		757,939		(3,621)						757,939		(3,621)
Corporate		2,030,000		(11,718)		-		-		2,030,000		(11,718)
Total debt securities		2,788,730		(15,342)		6,901,324		(207,613)		9,690,054		(222,955)
Equity securities		-		-		16,545		(62,209)		16,545		(62,209)
Totals	$	2,788,730	$	(15,342)	$	6,917,869	$	(269,822)	$	9,706,599	$	(285,164)

At June 30, 2015, unrealized losses in the Company’s portfolio of debt securities of $149,596 in the aggregate were related to 9 securities and caused by increases in market interest rates, spread volatility, or other factors that management deems to be temporary.  Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired.

At June 30, 2015, unrealized losses in the Company’s portfolio of equity securities of $56,284 was related to one security and considered temporary.  Since management believes that it is more likely than not the Company will not be required to sell these equity positions for a reasonable period of time sufficient for recovery of fair value, the Company does not consider these equity securities to be other-than-temporarily impaired.

At December 31, 2014, unrealized losses in the Company’s portfolio of debt securities of $222,955 in the aggregate were related to 11 securities and caused by increases in market interest rates, spread volatility, or other factors that management deems to be temporary.  Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired.

At December 31, 2014, unrealized losses in the Company’s portfolio of equity securities of $62,209 were related to one security and considered temporary.  Since management believes that it is more likely than not the Company will not be required to sell these equity positions for a reasonable period of time sufficient for recovery of fair value, the Company does not consider these equity securities to be other-than-temporarily impaired.

At June 30, 2015, the outstanding balance of no single issuerexceeded 10% of stockholders’ equity.  At December 31, 2014, no single issuer exceeded 10% of stockholders’ equity, except for U. S. Agency securities.

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No investment securities held by the Company at  June 30, 2015 or December 31, 2014 were subject to a write-down due to credit related other-than-temporary impairment.

Contractual maturities of debt securities at June 30, 2015 are shown below.  Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held-to-Maturity
		Amortized		Fair		Amortized		Fair
		Cost		Value		Cost		Value
Within one year	$	622,397	$	624,985	$	-	$	-
Over one to five years		10,004,142		10,121,944		-		-
Over five to ten years		7,517,179		7,612,846		-		-
Over ten years		1,999,580		2,001,280		-		-
Residential mortgage-backed securities		19,249,664		19,439,018		1,277,799		1,282,364
Totals	$	39,392,962	$	39,800,073	$	1,277,799	$	1,282,364

The Company’s residential mortgage-backed securities portfolio is presented as a separate line within the maturity table, since borrowers have the right to prepay obligations without prepayment penalties.

At June 30, 2015, securities with an amortized cost of $17,573,505 (fair value of $17,870,257) were pledged as collateral for potential borrowings from the Federal Home Loan Bank of Atlanta (the “FHLB”) and the Federal Reserve Bank.  At December 31, 2014, securities with an amortized cost of $20,035,812 (fair value of $20,358,237)  were pledged as collateral for potential borrowings from the FHLB of Atlanta and the Federal Reserve Bank.

NOTE 5 – LOANS AND ALLOWANCE FOR LOAN LOSSES

The fundamental lending business of the Company is based on understanding, measuring, and controlling the credit risk inherent in the loan portfolio.  The Company's loan portfolio is subject to varying degrees of credit risk.  These risks entail both general risks, which are inherent in the lending process, and risks specific to individual borrowers.  The Company's credit risk is mitigated through portfolio diversification, which limits exposure to any single customer, industry or collateral type.  The loan portfolio segment balances are presented in the following table:

		June 30,		December 31,
		2015		2014
Commercial & Industrial	$	32,835,146	$	33,454,280
Commercial Real Estate		159,175,342		158,714,554
Residential Real Estate		134,762,675		140,374,035
Home Equity Line of Credit		34,241,193		35,717,982
Land		4,791,897		5,856,875
Construction		18,773,848		18,052,287
Consumer & Other		1,072,436		881,179
Total Loans		385,652,537		393,051,192
Less: Allowance for Loan Losses		(1,432,546)		(1,294,976)
Net Loans	$	384,219,991	$	391,756,216

At June 30, 2015 and December 31, 2014, loans not considered to have deteriorated credit quality at acquisition had a total remaining unamortized discount of $4,894,745 and $5,281,192, respectively.

Portfolio Segments:

The Company currently manages its credit products and the respective exposure to loan losses by the following specific portfolio segments, which are levels at which the Company develops and documents its systematic methodology to determine the allowance for loan losses.  The Company considers each loan type to be a portfolio segment having unique risk characteristics.

Commercial & Industrial

Commercial & Industrial (“C&I”) loans are made to provide funds for equipment and general corporate needs.  Repayment of these loans primarily uses the funds obtained from the operation of the borrower's business.  C&I loans also include lines of credit that are utilized to finance a borrower's short-term credit needs and/or to finance a percentage of eligible receivables or inventory.  Of primary concern in C&I lending is the borrower's creditworthiness and ability to successfully generate sufficient cash flow from their business to service the debt.

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Commercial Real Estate

Commercial Real Estate loans are bifurcated into Investor and Owner Occupied types (classes).  Commercial Real Estate - Investor loans consist of loans secured by non-owner occupied properties and involve investment properties for warehouse, retail, apartment, and office space with a history of occupancy and cash flow.  This commercial real estate class includes mortgage loans to the developers and owners of commercial real estate where the borrower intends to operate or sell the property at a profit and use the income stream or proceeds from the sale(s) to repay the loan.  Commercial Real Estate - Owner Occupied loans consist of commercial mortgage loans secured by owner occupied properties and involves a variety of property types to conduct the borrower's operations.  The primary source of repayment for this type of loan is the cash flow from the business and is based upon the borrower's financial health and the ability of the borrower and the business to repay.  At June 30, 2015 and December 31, 2014, Commercial Real Estate – Investor loans had a total balance of $102,295,758 and $101,947,596, respectively.  At June 30, 2015 and December 31, 2014, Commercial Real Estate – Owner Occupied loans had a total balance of $56,879,584 and $56,766,958, respectively.

Residential Real Estate

Residential Real Estate loans are bifurcated into Investor and Owner Occupied types (classes).  Residential Real Estate - Investor loans consist of loans secured by non-owner occupied residential properties and usually carry higher credit risk than Residential Real Estate – Owner Occupied loans due to their reliance on stable rental income and due to lower incentive for the borrower to avoid foreclosure.  Payments on loans secured by rental properties often depend on the successful operation and management of the properties and the payment of rent by tenants.  At June 30, 2015 and December 31, 2014, Residential Real Estate – Investor loans had a total balance of $45,273,399 and $50,708,153, respectively.  At June 30, 2015 and December 31, 2014, Residential Real Estate – Owner Occupied loans had a total balance of $89,489,276and $89,665,882, respectively.

Home Equity Line of Credit

Home Equity Lines of Credit (“HELOCs”) are a form of revolving credit in which a borrower's primary residence serves as collateral.  Borrowers use HELOCs primarily for education, home improvements, and other significant personal expenditures.  The borrower will be approved for a specific credit limit set at a percentage of the home's appraised value less the balance owed on the existing first mortgage.  Major risks in HELOC lending include the borrower's ability to service the existing first mortgage plus proposed HELOC, the Company's ability to pursue collection in a second lien position upon default, and overall risks in fluctuation in the value of the underlying collateral property.

Land

Land loans are secured by underlying properties that usually consist of tracts of undeveloped land that do not produce income.  These loans carry the risk that there will be inadequate demand to ensure the sale of the property within an acceptable time.  As a result, land loans carry the risk that the builder will have to pay the property taxes and other carrying costs of the property until an end buyer is found.

Construction

Construction loans, which include land development loans, are generally considered to involve a higher degree of credit risk than long-term financing on improved, occupied real estate.  Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property's value at completion of construction and estimated costs of construction, as well as the property’s ability to attract and retain tenants.  Loan funds are disbursed periodically as pre-specified stages of completion are attained based upon site inspections.  If the Company is forced to foreclose on a building before or at completion due to a default, it may be unable to recover all of the unpaid balance of and accrued interest on the loan as well as related foreclosure and holding costs.

Consumer & Other

Consumer & Other loans include installment loans, personal lines of credit, and automobile loans.  Payment on these loans often depends on the borrower's creditworthiness and ability to generate sufficient cash flow to service the debt.

Allowance for Loan Losses

To control and monitor credit risk, management has an internal credit process in place to determine whether credit standards are maintained along with in-house loan administration accompanied by oversight and review procedures.  The primary purpose of loan underwriting is the evaluation of specific lending risks that involves the analysis of the borrower's ability to service the debt as well as the assessment of the underlying collateral.  Oversight and review procedures include the monitoring of the portfolio credit quality, early identification of potential problem credits and the management of the problem credits.  As part of the oversight and

15

review process, the Company maintains an allowance for loan losses to absorb estimated and probable losses inherent in the loan portfolio. 

For purposes of calculating the allowance, the Company segregates its loan portfolio into segments based primarily on the type of supporting collateral.  The Commercial Real Estate and Residential Real Estate segments, which both exclude any collateral property currently under construction, are further disaggregated into Owner Occupied and Investor classes for each.  Further, all segments are also segregated as either purchased credit impaired loans, purchased loans not deemed impaired, troubled debt restructurings, or new originations.

The analysis for determining the allowance is consistent with guidance set forth in U.S. GAAP and the Interagency Policy Statement on the Allowance for Loan and Lease Losses.  Pursuant to Bank policy, the allowance is evaluated quarterly by management and is based upon management's review of the collectability of loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrowers' ability to repay, estimated value of any underlying collateral and prevailing economic conditions.  The allowance consists of specific and general reserves.  The specific reserves relate to loans classified as impaired primarily including nonaccrual loans, troubled debt restructurings, and purchased credit impaired loans where cash flows have deteriorated from those forecasted as of the acquisition date.  The reserve for these loans is established when the discounted cash flows, collateral value, or observable market price, whichever is appropriate, of the impaired loan is lower than the carrying value.  For impaired loans, any measured impairment is charged-off against the loan and allowance for those loans that are collateral dependent in the applicable reporting period.  

The general reserve covers loans that are not classified as impaired and primarily includes purchased loans not deemed impaired and new loan originations.  The general reserve requirement is based on historical loss experience and several qualitative factors derived from economic and market conditions that have been determined to have an effect on the probability and magnitude of a loss.  Since the Bank does not have its own sufficient loss experience, management also references the historical net charge-off experience of peer groups to determine a reasonable range of reserve values, which is permissible per Bank policy.  The peer groups consist of competing Maryland-based financial institutions with established ranges in total asset size.  Management will continue to evaluate the appropriateness of the peer group data used with each quarterly allowance analysis until such time that the Bank has sufficient loss experience to provide a foundation for the general reserve requirement.  The qualitative analysis incorporates global environmental factors in the following trends: national and local economic metrics; portfolio risk ratings and composition; and concentrations in credit.

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The following table provides information on the activity in the allowance for loan losses by the respective loan portfolio segment for the three and six months ended June 30, 2015:

Three Months Ended June 30:		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	221,103	$	692,775	$	68,267	$	188,657	$	10,590	$	164,788	$	7,669	$	1,353,849
Charge-offs		(80,869)		(45,573)		(45,479)		(54,639)		-		-		(1,389)		(227,949)
Recoveries		-		-		1,391		7,000		-		-		1,555		9,946
Provision		29,686		94,620		117,199		33,103		2,597		18,437		1,058		296,700
Ending balance	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546

Six Months Ended June 30:		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	200,510	$	554,585	$	203,413	$	166,733	$	8,687	$	153,089	$	7,959	$	1,294,976
Charge-offs		(80,869)		(45,573)		(260,715)		(54,639)		-		-		(2,389)		(444,185)
Recoveries		-		-		1,391		7,000		-		-		1,555		9,946
Provision		50,279		232,810		197,289		55,027		4,500		30,136		1,768		571,809
Ending balance	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546

The following table presents loans and the related allowance for loan losses, by loan portfolio segment, at June 30, 2015:

		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: collectively evaluated for impairment		169,920		741,822		141,378		174,121		13,187		183,225		8,893		1,432,546
Totals	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546
Loans:
Ending balance: individually evaluated for impairment	$	1,257,565	$	1,141,996	$	4,532,318	$	146,055	$	-	$	-	$	-	$	7,077,934
Ending balance: collectively evaluated for impairment		29,933,299		141,169,506		119,214,275		33,379,522		2,729,659		18,280,533		1,072,436		345,779,230
Ending balance: loans acquired with deteriorated credit quality		1,644,282		16,863,840		11,016,082		715,616		2,062,238		493,315		-		32,795,373
Totals	$	32,835,146	$	159,175,342	$	134,762,675	$	34,241,193	$	4,791,897	$	18,773,848	$	1,072,436	$	385,652,537

(1) Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

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The following table provides information on the activity in the allowance for loan losses by the respective loan portfolio segment for the three and six months ended June 30, 2014:

Three Months Ended June 30:
		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	167,400	$	324,080	$	170,954	$	129,203	$	6,918	$	135,416	$	7,744	$	941,715
Charge-offs		-		(89,165)		-		-		-		-		-		(89,165)
Recoveries (1)		-		101,614		3,683		1,000		-		-		120		106,417
Provision		11,964		170,714		(57,719)		11,661		117		3,639		303		140,679
Ending balance	$	179,364	$	507,243	$	116,918	$	141,864	$	7,035	$	139,055	$	8,167	$	1,099,646

Six Months Ended June 30:
		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	167,400	$	324,080	$	80,239	$	129,203	$	6,918	$	135,416	$	7,744	$	851,000
Charge-offs		-		(136,956)		(37,478)		(63,984)		-		-		-		(238,418)
Recoveries(1)		-		101,614		5,542		9,844		-		-		10,220		127,220
Provision		11,964		218,505		68,615		66,801		117		3,639		(9,797)		359,844
Ending balance	$	179,364	$	507,243	$	116,918	$	141,864	$	7,035	$	139,055	$	8,167	$	1,099,646

The following table presents loans and the related allowance for loan losses, by loan portfolio segment, at December 31, 2014:

		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: collectively evaluated for impairment		200,510		554,585		203,413		166,733		8,687		153,089		7,959		1,294,976
Totals	$	200,510	$	554,585	$	203,413	$	166,733	$	8,687	$	153,089	$	7,959	$	1,294,976
Loans:
Ending balance: individually evaluated for impairment	$	957,080	$	828,264	$	4,314,191	$	320,329	$	-	$	-	$	-	$	6,419,864
Ending balance: collectively evaluated for impairment		30,474,533		137,781,830		124,042,412		34,686,415		2,448,388		17,380,581		881,179		347,695,338
Ending balance: loans acquired with deteriorated credit quality(2)		2,022,667		20,104,460		12,017,432		711,238		3,408,487		671,706		-		38,935,990
Totals	$	33,454,280	$	158,714,554	$	140,374,035	$	35,717,982	$	5,856,875	$	18,052,287	$	881,179	$	393,051,192

(1) Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

(2) Includes loans acquired with deteriorated credit quality of $104,460 that have current period charge-offs. 18  

The following table presents information with respect to impaired loans, which include loans acquired with deteriorated credit quality that have current period charge-offs, at  June 30, 2015 and for the three and six months ended June 30, 2015:

		At June 30, 2015						For the Three Months Ended June 30, 2015					For the Six Months Ended June 30, 2015
				Unpaid				Average		Interest			Average			Interest
		Recorded		Principal		Related		Recorded		Income			Recorded			Income
		Investment		Balance		Allowance		Investment		Recognized			Investment			Recognized
With no related allowance recorded:
Commercial & Industrial	$	1,257,566	$	1,410,079	$	-	$	1,308,355	$	34,429		$	1,231,453		$	35,533
Commercial Real Estate - Investor		1,141,996		1,141,996		-		1,299,025		558			1,301,107			558
Commercial Real Estate - Owner Occupied		-		-		-		-		-			-			-
Residential Real Estate - Investor		1,560,094		2,168,388		-		1,955,625		11,055			1,967,136			22,257
Residential Real Estate - Owner Occupied		2,972,223		3,434,589		-		3,227,439		115,631			3,269,029			121,891
Home Equity Line of Credit		146,055		209,570		-		178,850		-			179,629			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		18,246		-		9,384		-			9,517			-
With an allowance recorded:
Commercial & Industrial		-		-		-		-		-			-			-
Commercial Real Estate - Investor		-		-		-		-		-			-			-
Commercial Real Estate - Owner Occupied		-		-		-		-		-			-			-
Residential Real Estate - Investor		-		-		-		-		-			-			-
Residential Real Estate - Owner Occupied		-		-		-		-		-			-			-
Home Equity Line of Credit		-		-		-		-		-			-			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		-		-		-		-			-			-
Total:		7,077,934		8,382,868		-		7,978,678		161,673			7,957,871			180,239
Commercial & Industrial	$	1,257,566	$	1,410,079	$	-	$	1,308,355	$	34,429		$	1,231,453		$	35,533
Commercial Real Estate		1,141,996		1,141,996		-		1,299,025		558	-		1,301,107	-		558
Residential Real Estate		4,532,317		5,602,977		-		5,183,064		126,686			5,236,165			144,148
Home Equity Line of Credit		146,055		209,570		-		178,850		-			179,629			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		18,246		-		9,384		-			9,517			-
	$	7,077,934	$	8,382,868	$	-	$	7,978,678	$	161,673		$	7,957,871		$	180,239

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The following table presents information with respect to impaired loans, which include loans acquired with deteriorated credit quality that have current period charge-offs, as of December 31, 2014 and for the three and six months ended June30, 2014:

		At December 31, 2014						For the Three Months Ended June 30, 2014				For the Six Months Ended June 30, 2014
				Unpaid				Average		Interest		Average		Interest
		Recorded		Principal		Related		Recorded		Income		Recorded		Income
		Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial & Industrial	$	957,080	$	1,155,553	$	-	$	1,118,445	$	24,174	$	1,139,407	$	49,132
Commercial Real Estate - Investor		662,280		668,287		-		303,593		589		304,130		1,193
Commercial Real Estate - Owner Occupied		165,984		165,984		-		663,454		-		675,334		-
Residential Real Estate - Investor		1,063,643		1,658,389		-		889,289		3,301		895,010		6,661
Residential Real Estate - Owner Occupied		3,250,548		3,853,959		-		2,967,624		36,412		3,016,870		71,296
Home Equity Line of Credit		320,329		404,347		-		317,878		-		318,506		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		524,158		67,269		524,158		112,865
Consumer & Other		-		19,034		-		10,111		-		10,245		-
With an allowance recorded:
Commercial & Industrial		-		-		-		-		-		-		-
Commercial Real Estate - Investor		-		-		-		1,999,853		125,510		2,002,139		145,499
Commercial Real Estate - Owner Occupied		-		-		-		-		-		-		-
Residential Real Estate - Investor		-		-		-		-		-		-		-
Residential Real Estate - Owner Occupied		-		-		-		-		-		-		-
Home Equity Line of Credit		-		-		-		-		-		-		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		-		-		-		-
Consumer & Other		-		-		-		-		-		-		-
Total:		6,419,864		7,925,553		-		8,794,405		257,255		8,885,799		386,646
Commercial & Industrial	$	957,080	$	1,155,553	$	-	$	1,118,445	$	24,174	$	1,139,407	$	49,132
Commercial Real Estate		828,264		834,271		-		2,966,900		126,099		2,981,603		146,692
Residential Real Estate		4,314,191		5,512,348		-		3,856,913		39,713		3,911,880		77,957
Home Equity Line of Credit		320,329		404,347		-		317,878		-		318,506		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		524,158		67,269		524,158		112,865
Consumer & Other		-		19,034		-		10,111		-		10,245		-
	$	6,419,864	$	7,925,553	$	-	$	8,794,405	$	257,255	$	8,885,799	$	386,646

In addition to monitoring the performance status of the loan portfolio, the Company utilizes a risk rating scale (1-8) to evaluate loan asset quality for all loans.  Loans that are rated 1-4 are classified as pass credits.  Loans rated a 5 (Watch) are pass credits, but are loans that have been identified as warranting additional attention and monitoring.  Loans that are risk rated 5 or higher are placed on the Company's monthly watch list.  For the pass rated loans, management believes there is a low risk of loss related to these loans and, as necessary, credit may be strengthened through improved borrower performance and/or additional collateral.  Loans rated a 6 (Special Mention) or higher are considered criticized loans and represent an increased level of credit risk and are placed into these three categories: 

6 (Special Mention) - Borrowers exhibit potential credit weaknesses or downward trends that may weaken the credit position if uncorrected.  The borrowers are considered marginally acceptable without potential for loss of principal or interest.

7 (Substandard) - Borrowers have well defined weaknesses or characteristics that present the possibility that the Company will sustain some loss if the deficiencies are not corrected.

8 (Doubtful) - Borrowers classified as doubtful have the same weaknesses found in substandard borrowers; however, these weaknesses indicate that the collection of debt in full (principal and interest), based on current conditions, is highly questionable and improbable.

In the normal course of loan portfolio management, relationship managers are responsible for continuous assessment of credit risk arising from the individual borrowers within their portfolio and assigning appropriate risk ratings.  Credit Administration is responsible for ensuring the integrity and operation of the risk rating system and maintenance of the watch list.  The Officer's Loan

20

Committee meets monthly to discuss and monitor problem credits and internal risk rating downgrades that result in updates to the watch list.

The following table provides information with respect to the Company's credit quality indicators by class of the loan portfolio as of June 30, 2015:

		Risk Rating
		Pass		Special Mention		Substandard		Doubtful		Total
Commercial & Industrial	$	29,577,832	$	1,659,553	$	1,597,761	$	-	$	32,835,146
Commercial Real Estate - Investor		95,690,428		4,231,900		2,373,430		-		102,295,758
Commercial Real Estate - Owner Occupied		46,855,623		7,352,632		2,671,329		-		56,879,584
Residential Real Estate - Investor		35,023,717		1,985,969		8,263,713		-		45,273,399
Residential Real Estate - Owner Occupied		85,735,353		-		3,753,923		-		89,489,276
Home Equity Line of Credit		33,784,792		-		456,401		-		34,241,193
Land		2,523,309		206,350		2,062,238		-		4,791,897
Construction		18,607,079		77,571		89,198		-		18,773,848
Consumer & Other		1,072,436		-		-		-		1,072,436
Total	$	348,870,569	$	15,513,975	$	21,267,993	$	-	$	385,652,537

The following table provides information with respect to the Company's credit quality indicators by class of the loan portfolio as of December 31, 2014:

		Risk Rating
		Pass		Special Mention		Substandard		Doubtful		Total
Commercial & Industrial	$	30,150,745	$	1,530,547	$	1,772,988	$	-	$	33,454,280
Commercial Real Estate - Investor		93,113,185		5,837,107		2,997,304		-		101,947,596
Commercial Real Estate - Owner Occupied		42,898,246		6,864,098		7,004,614		-		56,766,958
Residential Real Estate - Investor		39,109,937		2,804,857		8,793,359		-		50,708,153
Residential Real Estate - Owner Occupied		84,796,122		-		4,869,760		-		89,665,882
Home Equity Line of Credit		35,088,028		-		629,954		-		35,717,982
Land		3,850,748		-		2,006,127		-		5,856,875
Construction		17,848,675		81,234		122,378		-		18,052,287
Consumer & Other		881,179		-		-		-		881,179
Total	$	347,736,865	$	17,117,843	$	28,196,484	$	-	$	393,051,192

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Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. 

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of June 30, 2015.  Purchased credit impaired (“PCI”) loans are excluded from this aging and nonaccrual loans schedule.

		Accrual Loans
		30-59		60-89		90 or More
		Days		Days		Days		Total				Nonaccrual		Total
		Past Due		Past Due		Past Due		Past Due		Current		Loans		Loans
Commercial & Industrial	$	-	$	-	$	-	$	-	$	30,784,863	$	406,002	$	31,190,865
Commercial Real Estate    - Investor		-		-		-		-		90,210,278		1,278,898		91,489,176
Commercial Real Estate    - Owner Occupied		-		-		-		-		50,822,326		-		50,822,326
Residential Real Estate    - Investor		-		-		-		-		34,735,629		1,560,094		36,295,723
Residential Real Estate    - Owner Occupied		-		599,502		-		599,502		84,988,531		1,862,835		87,450,868
Home Equity Line of Credit		247,122		187,945		-		435,067		32,944,456		146,055		33,525,578
Land		-		-		-		-		2,729,660		-		2,729,660
Construction		-		-		-		-		18,280,532		-		18,280,532
Consumer & Other		288		434		-		722		1,071,714		-		1,072,436
Total	$	247,410	$	787,881	$	-	$	1,035,291	$	346,567,989	$	5,253,884	$	352,857,164
PCI loans														32,795,373
Total Loans													$	385,652,537

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2014.  PCI loans are excluded from this aging and nonaccrual loans schedule.

		Accrual Loans
		30-59		60-89		90 or More
		Days		Days		Days		Total				Nonaccrual		Total
		Past Due		Past Due		Past Due		Past Due		Current		Loans		Loans
Commercial & Industrial	$	-	$	-	$	-	$	-	$	31,093,411	$	338,202	$	31,431,613
Commercial Real Estate    - Investor		159,786		-		-		159,786		88,920,589		608,084		89,688,459
Commercial Real Estate    - Owner Occupied		-		-		-		-		48,755,651		165,984		48,921,635
Residential Real Estate    - Investor		312,422		-		-		312,422		39,508,857		1,063,643		40,884,922
Residential Real Estate    - Owner Occupied		924,608		550,604		-		1,475,212		83,255,355		2,741,114		87,471,681
Home Equity Line of Credit		456,248		24,199		-		480,447		34,205,968		320,329		35,006,744
Land		-		-		-		-		2,448,388		-		2,448,388
Construction		-		-		-		-		17,380,581		-		17,380,581
Consumer & Other		-		500		-		500		880,679		-		881,179
Total	$	1,853,064	$	575,303	$	-	$	2,428,367	$	346,449,479	$	5,237,356	$	354,115,202
PCI loans														38,935,990
Total Loans													$	393,051,192

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Troubled Debt Restructurings

The restructuring of a loan constitutes a troubled debt restructuring, or TDR, if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider in the normal course of business.  A concession may include an extension of repayment terms which would not normally be granted, a reduction of interest rate or the forgiveness of principal and/or accrued interest.  If the debtor is experiencing financial difficulty and the creditor has granted a concession, the Company will make the necessary disclosures related to the TDR.  In certain cases, a modification may be made in an effort to retain a customer who is not experiencing financial difficulty.  This type of modification is not considered to be a TDR.  Once a loan has been modified and is considered a TDR, it is reported as an impaired loan.  All TDRs are evaluated individually for impairment on a quarterly basis as part of the allowance for credit losses calculation.  A specific allowance for TDR loans is established when the discounted cash flows, collateral value or observable market price, whichever is appropriate, of the TDR is lower than the carrying value.  If a loan deemed a TDR has performed for at least six months at the level prescribed by the modification, it is not considered to be non-performing; however, it will generally continue to be reported as impaired, but may be returned to accrual status.  A TDR is deemed in default on its modified terms once a contractual payment is 30 or more days past due.

The following table presents a breakdown of loans that the Company modified during the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015					Three Months Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial & Industrial	2		78,575		78,575	-	$	-	$	-
Commercial Real Estate - Investor	1		213,387		213,387	-		-		-
Commercial Real Estate - Owner Occupied	-		-		-	-		-		-
Residential Real Estate - Investor	1		2,437		2,437	-		-		-
Residential Real Estate - Owner Occupied	-		-		-	-		-		-
Home Equity Line of Credit	-		-		-	-		-		-
Land	-		-		-	-		-		-
Construction	-		-		-	-		-		-
Consumer & Other	-		-		-	-		-		-
Totals	4	$	294,399	$	294,399	-	$	-	$	-
	Six Months Ended June 30, 2015					Six Months Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial & Industrial	2		78,575		78,575	1	$	85,397	$	85,397
Commercial Real Estate - Investor	1		213,387		213,387	-		-		-
Commercial Real Estate - Owner Occupied	-		-		-	-		-		-
Residential Real Estate - Investor	1		2,437		2,437	-		-		-
Residential Real Estate - Owner Occupied	-		-		-	-		-		-
Home Equity Line of Credit	-		-		-	-		-		-
Land	-		-		-	-		-		-
Construction	-		-		-	-		-		-
Consumer & Other	-		-		-	-		-		-
Totals	4	$	294,399	$	294,399	1	$	85,397	$	85,397

For the six months ended June 30, 2015, there were four loans modified as TDRs.  The restructuring of a C&I loan consolidated two loans into one and termed out the remaining balance over 7 years at an interest rate lower than the current rate for new debt with similar risk.  This C&I TDR was onnonaccrual status at June 30, 2015.  The restructuring of a Commercial Real Estate – Investor loan deferred all payments of principal and interest until the sale of the existing collateral as well as additional collateral that was provided.  This Commercial Real Estate – Investor loan was on nonaccrual status at June 30, 2015.  The restructuring of the

23

Residential Real Estate – Investor loan termed out the balance owed over 7 years with a forgiveness of debt at the end of the term, if all payments are made as agreed.  This Residential Real Estate – Investor loan was on nonaccrual status at June 30, 2015.

For the six months ended June 30, 2014, there was oneC&I loan modified as a TDR.  The restructuring of the loan included an extension of loan maturity date at an interest rate lower than the current rate for a new debt with similar risk.  This TDR was on non-accrual status at June 30, 2015.

None of the loans modified as a TDR during the previous 12 months were in default of their modified terms at June 30, 2015.  At June 30, 2015 and December 31, 2014, the Bank had $2,973,205 and $2,347,989, respectively, in loans identified as TDRs of which $959,436 and $1,192,481, respectively, were on nonaccrual status.

NOTE 6 – ACCOUNTING FOR CERTAIN LOANS ACQUIRED IN A TRANSFER

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired.  Evidence of credit quality deterioration as of the purchase date may include information such as past due and nonaccrual status, borrower credit scores and recent loan to value percentages.  Purchased credit-impaired loans are initially measured at fair value, which considers estimated future loan losses expected to be incurred over the life of the loan.  Accordingly, an allowance for loan losses related to these loans was not carried over and recorded at the acquisition date.  The Company monitors actual loan cash flows to determine any improvement or deterioration from those forecasted as of the acquisition date.

The following table reflects the carrying amount of purchased credit impaired loans, which are included in the loan categories in Note 5 – Loans and Allowances for Loan Losses:

		June 30, 2015		December 31, 2014
Commercial & Industrial	$	1,644,282	$	2,022,667
Commercial Real Estate		16,863,840		20,104,460
Residential Real Estate		11,016,082		12,017,432
Home Equity Line of Credit		715,616		711,238
Land		2,062,238		3,408,487
Construction		493,315		671,706
Total Loans	$	32,795,373	$	38,935,990

The contractual amount outstanding for these loans totaled $41,344,168 and $47,678,935 at  June 30, 2015 and December 31, 2014, respectively.

The following table reflects activity in the accretable yield for these loans for the three and six months ended June 30, 2015 and 2014:

		Three months ended				Six months ended
		June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
Balance at beginning of period	$	2,123,690	$	1,722,818	$	2,095,891	$	1,991,662
Acquired through Slavie Acquisition		-		416,317		-		416,317
Reclassification from nonaccretable difference		454,249		818,080		1,119,505		1,634,448
Accretion into interest income		(422,854)		(1,887,779)		(903,175)		(2,969,882)
Disposals		(713,147)		-		(870,283)		(3,109)
Balance at end of period	$	1,441,938	$	1,069,436	$	1,441,938	$	1,069,436

The following table reflects activity in the allowance for loan losses for these loans for the three and six months ended June 30, 2015 and 2014:

		Three months ended				Six months ended
		June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
Balance at beginning of period	$	-	$	-	$	-	$	-
Reclassification to TDR		-		-		-		-
Charge-offs		(87,323)		-		(228,663)		-
Recoveries		691		-		691		(4,040)
Provision for loan losses		86,632		132,724		227,972		136,764
Balance at end of period	$	-	$	132,724	$	-	$	132,724

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NOTE 7 – REAL ESTATE ACQUIRED THROUGH FORECLOSURE

The following table reflects activity in real estate acquired through foreclosure for the three and six months ended June 30, 2015 and 2014:

		Three months ended June 30,			Six months ended June 30,
		2015		2014	2015		2014
Balance at beginning of period	$	1,501,135	$	1,529,334	1,480,472	$	1,290,120
New transfers from loans		1,100,674		547,500	1,231,583		973,265
Sales		(869,666)		(433,596)	(959,665)		(468,697)
Write-downs		(120,692)		(122,629)	(140,939)		(274,079)
Balance at end of period	$	1,611,451	$	1,520,609	1,611,451	$	1,520,609

NOTE 8 – CORE DEPOSIT INTANGIBLE ASSETS 

The Company's core deposit intangible assets at June 30, 2015 had a remaining weighted average amortization period of approximately 2.80 years.  The following table presents the changes in the net book value of core deposit intangible assets for the six months ended June 30, 2015 and 2014:

		Six months ended June 30,
		2015		2014
Balance at beginning of period	$	3,478,282	$	3,993,679
Additions from the Slavie Acquisition		-		477,563
Amortization expense		(458,653)		(492,742)
Balance, June 30	$	3,019,629	$	3,978,500

The following table presents the gross carrying amount, accumulated amortization, and net carrying amount of core deposit intangible assets at  June 30, 2015 and December 31, 2014:

		June 30, 2015		December 31, 2014
Gross carrying amount	$	5,578,211	$	5,578,211
Accumulated amortization		(2,558,582)		(2,099,929)
Net carrying amount	$	3,019,629	$	3,478,282

The following table sets forth the future amortization expense for the Company’s core deposit intangible assets at June 30, 2015:

Periods ending December 31:		Amount
2015	$	395,444
2016		649,939
2017		490,847
2018		402,243
2019		368,806
Subsequent years		712,350
Total	$	3,019,629

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NOTE 9 – DEPOSITS

The following table presents the composition of deposits at June 30, 2015 and December 31, 2014:

		2015		2014
Noninterest-bearing deposits	$	97,646,931	$	91,676,534
Interest-bearing deposits:
Checking		50,621,682		54,844,855
Savings		38,096,532		36,233,369
Money market		89,778,076		82,651,992
Total interest-bearing checking, savings and money market deposits		178,496,290		173,730,216
Time deposits below $100,000		47,957,528		50,313,096
Time deposits $100,000 or above		60,350,704		72,110,286
Total time deposits		108,308,232		122,423,382
Total interest-bearing deposits		286,804,522		296,153,598
Total Deposits	$	384,451,453	$	387,830,132

The following table sets forth the maturity distribution for the Company’s time deposits at June 30, 2015:

	Amount
Maturing within one year	$	62,867,151
Maturing over one to two years		20,015,678
Maturing over two to three years		6,162,290
Maturing over three to four years		10,939,222
Maturing over four to five years		8,166,836
Maturing over five years		157,055
Total Time Deposits	$	108,308,232

Interest expense on deposits for the six months ended June 30, 2015 and 2014 is as follows:

		2015		2014
Interest-bearing checking		28,375		53,684
Savings		22,137		20,186
Money market		137,015		146,756
Total interest-bearing checking, savings and money market deposits		187,527		220,626
Time deposits below $100,000		302,830		85,320
Time deposits $100,000 or above		458,214		304,282
Total time deposits		761,044		389,602
Total Interest Expense	$	948,571	$	610,228

The Company’s deposits include brokered deposits obtained through the Promontory Interfinancial Network, which consist of Certificate of Deposit Registry Service (“CDARS”) balances included in time deposits, and insured cash sweep service (“ICS”) balances included in money market deposits.  At June 30, 2015, CDARS and ICS deposits were $0.8 million and $9.7 million, respectively.  At December 31, 2014, CDARS and ICS deposits were $4.1 million and $4.8 million, respectively. 

In April 2014, the Bank announced its exit from the Individual Retirement Account (“IRA”) product line.  At the time, as a result of the announcement, the Bank stopped offering IRAs to new customers and resigned as custodian for its existing IRAs.  IRA deposit balances of $24 million or 6% of total deposits were either transferred to new IRA custodians or disbursed to customers by May 23, 2014.  The IRA exit increased second quarter other income $2.4 million, resulting from the recognition of the remaining interest rate mark-to-market adjustment on IRA deposits.

The aggregate amount of time deposit accounts (including certificates of deposits) in denominations that meet or exceed the FDIC insurance limit of $250,000 at June 30, 2015 totaled $11.4 million dollars.

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NOTE 10 – SHORT-TERM BORROWINGS  

Short-term borrowings at June 30, 2015 and December 31, 2014 consisted of the following:

Federal Home Loan Bank Advances		June 30, 2015		December 31, 2014
Due January, 2015, Fixed Rate  0.24%	$	-	$	8,000,000
Due July 2015, Fixed Rate 0.19%		17,000,000
Due July 2015, Fixed Rate 0.18%		5,300,000		-
Due December, 2015, Daily Rate 0.355%		10,700,000		14,000,000
Atlantic Central Bankers Bank Advances
Due November, 2015, Fixed rate 4.50%		150,000		150,000
Total	$	33,150,000	$	22,150,000

Interest expense on FHLB advances and Atlantic Community Bankers Bank (“ACBB”) advances for the six months ended June 30, 2015 was $23,644. The Company had no long-term borrowings at June 30, 2015.

NOTE 11 – STOCK-BASED COMPENSATION  

The Jefferson Bancorp, Inc. 2010 Stock Option Plan (the “Jefferson Plan”) was adopted by the Jefferson Board of Directors in September 2010 and approved by Jefferson’s stockholders in April 2011.  The Jefferson Plan provides for the granting of incentive stock options intended to comply with the requirements of Section 422 of the Internal Revenue Code and non-qualified stock options (collectively “Awards”).  Awards were available for grant to officers, employees and non-employee directors, independent consultants and contractors of Jefferson and its affiliates, including the Bank.

The Jefferson Plan authorized the issuance of up to 577,642 shares of common stock adjusted for the post-merger exchange ratio of 2.2217 and had a term of 10 years.  In general, options granted under the Jefferson Plan have an exercise price equal to 100% of the fair market value of the common stock at the date of the grant and have a 10-year term.  Options relating to a total of 522,518 shares of common stock were outstanding as of June 30, 2015.  As a result of the Merger, the Jefferson Plan is now administered by Bay Bancorp, Inc.’s Board of Directors. 

The Bay Bancorp, Inc. 2015 Equity Compensation Plan (the “2015 Equity Plan” and, together with the Jefferson Plan and the 2007 Equity Plan, the “Plans”) was approved at the 2015 annual meeting of stockholders of Bay Bancorp, Inc. and reserve 100,000 shares of common stock for issuance pursuant to the grant of stock options, stock awards and other equity-based awards.  No awards were outstanding under the 2015 Equity Plan as of June 30, 2015.

The following table summarizes changes in the Company’s stock options outstanding and exercisable for the six months ended June 30, 2015 and December 31, 2014.

	Stock Options Outstanding		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
Outstanding, December 31, 2014	743,015	$	4.99	6.85 years
Exercised	(16,597)		4.50
Outstanding, June 30, 2015	726,418	$	5.00	6.2 years
Exercisable at June 30, 2015	653,671	$	4.96	6.0 years

Stock-based compensation expense is recognized on a straight-line basis over the vesting period of the stock options and is recorded in noninterest expense.  For the six months ended June 30, 2015 and 2014, stock-based compensation expense applicable to the Plans was $49,652 and $218,843, respectively.  Unrecognized stock-based compensation expense attributable to non-vested options was $121,178 at June 30, 2015.  This amount is expected to be recognized over a remaining weighted average period of approximately 1.8 years.

Restricted Stock Awards

On June 26, 2013, the Company’s Board of Directors revised its director compensation policy to provide for an annual grant to each non-employee director of an award of shares of restricted common stock having a fair market value of $10,000 that will vest one year after the date of the grant.  At December 31, 2014 and June 30, 2015, grants relating to 16,256 and 15,296shares of unvested restricted common stock were outstanding, respectively.  A total of 15,296 shares of restricted common stock were granted to the eight

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eligible directors on May 27, 2015.  Total stock-based compensation expense attributable to the shares of restricted common stock was $39,990and $41,665for the six months end June 30, 2015 and 2014, respectively.  The total unrecognized compensation expense attributable to the shares of restricted common stock was $73,332 at June 30, 2015.

NOTE 12 – DEFINED BENEFIT PENSION PLAN

The Carrollton Bank Retirement Income Plan (the “Pension Plan”) provides defined benefits based on years of service and final average salary.  Effective December 31, 2004, all benefit accruals for existing employees were frozen and no new employees were eligible for benefits under the Pension Plan.

The components of net periodic pension benefitare as follows:

		Six months ended June 30,
		2015		2014
Service cost	$	39,500	$	30,369
Interest cost		221,500		221,975
Expected return on plan assets		(314,500)		(299,171)
Amortization of net gain		-		(37,896)
Net periodic pension benefit	$	(53,500)	$	(84,723)

401(k) Plan

The Company has a 401(k) profit sharing plan covering substantially all full-time employees.  At this time, the Company has elected not to match employee contributions as defined under this plan.  Therefore, the expense associated with this plan during the three and six months ended June 30, 2015 and 2014 was $0.

NOTE 13 – INCOME TAXES

The differences between the statutory federal income tax rate of 34% and the effective tax rate for the Company are reconciled as follows:

	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
Income tax expense at federal statutory rate	34.0%	34.0%	34.0%	34.0%
Increase (decrease) resulting from:
Amended returns refund claims for pre-acquisition tax periods	0.0%	-12.6%	0.0%	-13.0%
Reversal of valuation allowance attributable to future built-in losses	0.0%	-	0.0%	-4.2%
Non-taxable income	-1.6%	-1.3%	-1.5%	-1.3%
State income taxes, net of federal income tax benefit	5.6%	5.8%	5.6%	5.8%
Incentive stock options	0.6%	1.8%	0.6%	1.7%
Other nondeductible expenses	-1.7%	0.4%	0.7%	0.4%
Effective income tax rate	36.9%	28.1%	39.4%	23.4%

The effective tax rates for the three and six months ended June 30, 3015 were 36.9% and 39.4%, respectively.  In accordance with ASC 740-270, Accounting for Interim Reporting, the provision for income taxes was recorded at June 30, 2015 and 2014 based on the current estimate of the effective annual rate.

The effective tax rate of 28.1% for the three months ended June 30, 2014 includes the impact of a $482,000 reduction in tax expense for the refunds claimed on the filing of amended income tax returns.  The effective tax rate of 23.4% for the six months ended June 30, 2014 includes the second quarter 2014 $482,000 refunds claimed as well as the impact of the $157,000 partial reversal of a valuation allowance attributable to estimated future built-in losses that were recorded in 2013.

NOTE 14 - NET INCOME PER COMMON SHARE

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Basic earnings per common share is derived by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period and does not included the effect of any potentially dilutive common stock equivalents.  Diluted earnings per share is derived by dividing net income available to common stockholders by the weighted-average number of shares outstanding, adjusted for the dilutive effect of outstanding common stock equivalents.  There is no dilutive effect on earnings per share during a loss period.

The calculation of net income per common share for the three and six months ended June 30, 2015 and 2014 are as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2015		2014		2015		2014
Basic earnings per share:
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Weighted average shares outstanding		11,020,044		10,123,162		11,017,296		9,753,511
Basic net income per share	$	0.05	$	0.27	$	0.08	$	0.29
Diluted earnings per share:
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Weighted average shares outstanding		11,020,044		10,123,162		11,017,296		9,753,511
Dilutive potential shares		177,122		48,734		183,715		40,880
Total diluted average shares outstanding		11,197,166		10,171,896		11,201,011		9,794,391
Total diluted net income per share	$	0.05	$	0.27	$	0.08	$	0.29
Anti-dilutive shares		260,995		289,280		297,331		263,752

NOTE 15 - COMMITMENTS AND CONTINGENT LIABILITIES 

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business.  These financial instruments include loan commitments, unused lines of credit, standby letters of credit and mortgage loan repurchase obligations.  The Company uses these financial instruments to meet the financing needs of its customers and provide a source of fee income.  Financial instruments involve, to varying degrees, elements of credit, interest rate and liquidity risk.  These do not represent unusual risks and management does not anticipate any losses which would have a material effect on the accompanying consolidated financial statements.

Outstanding loan commitments, and lines and letters of credit obligations at June 30, 2015 and December 31, 2014were as follows:

		June 30, 2015		December 31, 2014
Loan commitments	$	8,377,625	$	5,021,857
Unused lines of credit		72,365,054		64,761,646
Standby letters of credit		2,984,948		1,632,927

Loan commitments and unused lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  The Company generally requires collateral to support financial instruments with credit risk on the same basis as it does for on-balance sheet instruments.  The collateral requirement is based on management's credit evaluation of the counter party.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Since many of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.  Each customer's creditworthiness is evaluated on a case-by-case basis.

Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

In the ordinary course of business, the Company has various outstanding contingent liabilities that are not reflected in the accompanying consolidated financial statements.  In the opinion of management, after consulting with legal counsel, the ultimate disposition of these matters is not expected to have a material adverse effect on the financial condition of the Company.

Mortgage Loan Repurchase Obligations:  The Company originates and sells mortgage loans, primarily to other financial institutions, and provides various representations and warranties related to, among other things, the ownership of the loans, the validity

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of the liens, the loan selection and origination process, and the compliance to the origination criteria established by the purchasing institution.  In the event of a breach of our representations and warranties, we may be obligated to repurchase the loans with identified defects or to indemnify the buyers.  The Company’s contractual obligation arises only when the breach of representations and warranties are discovered and repurchase is demanded.  The loans balances subject to repurchase were $13.8 million and $10.1 million at June 30, 2015 and December 31, 2014, respectively.  Management does not expect losses resulting from repurchase requests to be material to reported financial results.

NOTE 16 – FAIR VALUE

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  In accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is best determined based upon quoted market prices.  However, in many instances, there are no quoted market prices for the Company’s various financial instruments.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.  Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions.  If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate.  In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment.  The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

The Fair Value Hierarchy

In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.  Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market.  Valuations are obtained from readily available pricing sources for market transactions involving identical assets and liabilities.

Level 2 - Valuation is based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  The valuation may be based on quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 

Assets Recorded at Fair Value on a Recurring Basis

The following methods and assumptions were used by the Company to measure certain assets recorded at fair value on a recurring basis in the consolidated financial statements:

Investment Securities Available for Sale

The fair value of investment securities available for sale is the market value based on quoted market prices, when available (Level 1).  If listed prices or quotes are not available, fair value is based upon quoted market prices for similar assets or, due to the limited market activity of the instrument, externally developed models that use significant observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3).  It includes model

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pricing, defined as valuing securities based upon their relationship with other benchmark securities and market information from third party sources.  In the absence of current market activity, securities may be evaluated either by reference to similarly situated bonds or based on the liquidation value or restructuring value of the underlying assets.  There were no transfers between Level 1 and Level 2 and no change in valuation techniques used to measure fair value of securities available for sale for the six-month ended June 30, 2015.

The tables below present the recorded amount of assets measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014:

		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
June 30, 2015
U.S. government agency	$	5,793,308	$	-	$	5,793,308	$	-
U.S. treasury securities		5,929,230		-		5,929,230		-
Residential mortgage-backed securities		19,439,018		-		19,439,018		-
State and municipal		4,592,237		-		4,592,237		-
Corporate obligations		4,046,280		-		4,046,280		-
Equity securities		22,468		22,468		-		-
	$	39,822,541	$	22,468	$	39,800,073	$	-

		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
December 31, 2014
U.S. government agency	$	7,778,271	$	-	$	7,778,271	$	-
Residential mortgage-backed securities		20,870,927		-		20,870,927		-
State and municipal		4,654,146		-		4,654,146		-
Corporate obligations		2,030,000		-		2,030,000		-
Equity securities		16,545		16,545		-		-
	$	35,349,889	$	16,545	$	35,333,344	$	-

Assets Recorded at Fair Value on a Nonrecurring Basis

On a nonrecurring basis, the Company may be required to measure certain assets at fair value in accordance with U.S. GAAP.  These adjustments to fair value usually result from application of lower of cost or fair value accounting or write-downs of individual assets due to impairment.

The following methods and assumptions were used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the consolidated financial statements:

Loans held for sale

Loans held for sale are recorded at the lower of cost or estimated market value on an aggregate basis.  Market value is determined based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale.  As such, the Company records any fair value adjustments on a nonrecurring basis.  No nonrecurring fair value adjustments were recorded on loans held for sale during the three and six months ended June 30, 2015 or the year ended December 31, 2014.

Impaired Loans

Loans for which it is probable that payment of principal and interest will not be made in accordance with the contractual terms of the loan are considered impaired.  Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310, using the present value of expected cash flows, the loan’s observable market price, or the fair value of collateral (less selling costs) if the loan is collateral dependent.  A specific allowance for loan loss is then established or a partial charge-off is recorded if the loan is collateral dependent and the loan is classified at a Level 3 in the fair value hierarchy.  Appraised collateral values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the borrower’s business.  Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the factors identified above.  Valuation techniques are consistent with those applied in prior periods.

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Real Estate Acquired Through Foreclosure

Real estate acquired through foreclosure (“REO”) is adjusted to fair value upon transfer of the loan to REO and is classified at Level 3 in the fair value hierarchy.  Subsequently, the REO is carried at the lower of carrying value or fair value.  The estimated fair value for REO included in Level 3 is determined by independent market based appraisals and other available market information, less estimated costs to sell, that may be reduced further based on market expectations or an executed sales agreement.  If the fair value of REO deteriorates subsequent to the period of transfer, the REO is also classified at a Level 3 in the fair value hierarchy.  Valuation techniques are consistent with those techniques applied in prior periods.

The tables below present the recorded assets measured at fair value on a nonrecurring basis at June 30, 2015 and December 31, 2014:

June 30, 2015:		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Impaired loans	$	456,601	$	-	$	-	$	456,601
Real estate acquired through foreclosure		1,231,584		-		-		1,231,584
	$	1,688,185	$	-	$	-	$	1,688,185

December 31, 2014:		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Impaired loans	$	374,459	$	-	$	-	$	374,459
Real estate acquired through foreclosure		983,276		-		-		983,276
	$	1,357,735	$	-	$	-	$	1,357,735

Fair Value of Financial Instruments

The Company discloses fair value information about financial instruments, for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheets.  Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists.

Quoted market prices, where available, are shown as estimates of fair market values.  Because no quoted market prices are available for a significant part of the Company's financial instruments, the fair values of such instruments have been derived based on the amount and timing of estimated future cash flows and using market discount rates.

Present value techniques used in estimating the fair value of many of the Company's financial instruments are significantly affected by the assumptions used.  In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate cash settlement of the instrument.  Additionally, the accompanying estimates of fair values are only representative of the fair values of the individual financial assets and liabilities and should not be considered an indication of the fair value of the Company.

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The following disclosure of estimated fair values of the Company's financial instruments at June 30, 2015 and December 31, 2014 is made in accordance with the requirements of ASC Topic 820:

			June 30, 2015				December 31, 2014
	Level in Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	Level 1	$	19,417,756	$	19,417,756	$	16,857,325	$	16,857,325
Time deposits with banks	Level 2		-		-		34,849		34,849
Investment securities available for sale (debt)	Level 2		39,800,073		39,800,073		35,333,344		35,333,344
Investment securities available for sale (equity)	Level 1		22,468		22,468		16,545		16,545
Investment securities held to maturity (debt)	Level 2		1,277,799		1,282,364		1,315,718		1,324,797
Restricted equity securities	Level 2		2,153,595		2,153,595		1,862,995		1,862,995
Loans held for sale	Level 2		16,832,511		16,832,511		7,233,306		7,233,306
Loans, net of allowance	Level 3		384,219,991		392,492,157		391,756,216		401,651,659
Accrued interest receivable	Level 2		1,276,005		1,276,005		1,306,111		1,306,111
Financial liabilities:
Deposits	Level 3		384,451,453		384,875,368		387,830,132		388,705,645
Short-term borrowings	Level 2		33,150,000		33,150,000		22,150,000		22,150,000
Accrued interest payable	Level 2		26,715		26,715		25,350		25,350

The following methods and assumptions were used to estimate the fair value of each category of financial instruments for which it is practicable to estimate that value:

Cash and due from banks, federal funds sold and overnight investments.  The carrying amount approximated the fair value.

Time deposits with banks.  The carrying amount of time deposits with banks approximated fair value.

Investment securities.  The fair value of debt securities is based upon quoted prices for similar assets or externally developed models that use significant observable inputs.  The fair value of equity securities is based on quoted market prices.

Restricted equity securities.  Since these stocks are restricted as to marketability, the carrying value approximates fair value.

Loans held for sale.  The carrying amount approximates the fair value.

Loans.The fair value of loans, except for purchased credit impaired loans that are collateral-dependent, was estimated by computing the discounted value of estimated cash flows, adjusted for probable credit losses, for pools of loans having similar characteristics.  The discount rate was based upon the current market rate for a similar loan.  The fair value of purchased credit impaired loans that are collateral-dependent was determined based on the estimated fair value of collateral less estimated costs to sell.  Nonperforming loans have an assumed interest rate of 0%.

Accrued interest receivable and payable. The carrying amount approximated the fair value of accrued interest, considering the short-term nature of the instrument and its expected collection.

Deposit liabilities.  The fair value of demand, money market savings and regular savings deposits, which have no stated maturity, were considered equal to their carrying amount, representing the amount payable on demand.  The fair value of time deposits was based upon the discounted value of contractual cash flows at current rates for deposits of similar remaining maturity.

Short-term borrowings.  The carrying amount of fixed rate FHLB advances and ACBB borrowings approximated fair value due to the short-term nature of the instrument.  The carrying amount of variable rate FHLB advances and ACBB borrowings approximated the fair value.

Off-balance sheet instruments.  The Company charges fees for commitments to extend credit.  Interest rates on loans, for which these commitments are extended, are normally committed for periods of less than one month.  Fees charged on standby letters of credit and other financial guarantees are deemed to be immaterial and these guarantees are expected to be settled at face amount or expire unused.  It is impractical to assign any fair value to these commitments.

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NOTE 17 – REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. 

In July 2013, federal bank regulatory agencies issued final rules to revise their risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act (“Basel III”).  On January 1, 2015, the Basel III rules became effective and include transition provisions which implement certain portions of the rules through January 1, 2019.  Under the final rules, the effects of certain accumulated other comprehensive items are not excluded; however, banking organizations like the Company and the Bank that are not considered “advanced approaches” banking organizations may make a one-time permanent election to continue to exclude these items.  With the submission of the Call Report for the first quarter of 2015, the Company and the Bank made this election in order to avoid significant variations in the level of capital that can be caused by interest rate fluctuations on the fair value of the Bank’s available for sale securities portfolio and by fluctuations in the net periodic pension benefit/obligation attributable to the Bank’s defined benefit pension plan.

In addition, the OCC requires that FSBs, like the Bank, maintain a minimum level of Tier 1 capital to average total assets excluding intangibles.  This measure is known as the leverage ratio.  The current regulatory minimum for the leverage ratio for institutions to be considered “well capitalized” is 5%, but an individual institution could be required to maintain a higher level.  In connection with the Merger, the Bank entered into an Operating Agreement with the OCC (the “Operating Agreement”) pursuant to which the Bank agreed, among other things, to maintain a leverage ratio of 10% for the term of the Operating Agreement.  The Operating Agreement will remain in effect until it is terminated by the OCC or the Bank ceases to be an FSB.

The following table summarizes capital ratios and related information in accordance with Basel III as measured at June 30, 2015 and pre-existing rules at December 31, 2014.  For disclosure regarding changes resulting from Basel III see Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Financial Condition, Capital Resources, Basel III.  The Bank was classified in the well capitalized category at both June 30, 2015 and December 31, 2014 under the regulatory capital rules in effect at each date.  Since June 30, 2015, no conditions or events have occurred, of which the Company is aware, that have resulted in a material change in the Bank's regulatory risk category other than as reported in this Quarterly Report on Form 10-Q.

Actual capital amounts and ratios for the Bank are presented in the following tables (dollars in thousands):

										To Be Well
										Capitalized Under
						To Be Considered				Prompt Corrective
		Actual				Adequately Capitalized				Action Provisions
As of June 30, 2015:		Amount	Ratio			Amount	Ratio			Amount	Ratio
Common Equity Tier 1 Capital	$	63,206	17.00	%	$	16,726	4.50	%	$	24,160	6.50	%
Tier I Risk-Based Capital Ratio	$	63,206	17.00	%	$	22,302	6.00	%	$	29,736	8.00	%
Total Risk-Based Capital Ratio	$	64,639	17.39	%	$	29,736	8.00	%	$	37,170	10.00	%
Tier 1 Leverage Ratio	$	63,206	13.23	%	$	19,106	4.00	%	$	23,882	5.00	%
As of December 31, 2014:
Common Equity Tier 1 Capital		N/A	N/A			N/A	N/A			N/A	N/A
Tier I Risk-Based Capital Ratio	$	61,448	16.31	%	$	15,066	4.00	%	$	22,599	6.00	%
Total Risk-Based Capital Ratio	$	62,743	16.66	%	$	30,132	8.00	%	$	37,665	10.00	%
Tier 1 Leverage Ratio	$	61,448	12.94	%	$	18,988	4.00	%	$	23,735	5.00	%

Banking regulations also limit the amount of dividends that may be paid without prior approval by an FSB's regulatory agencies.  In addition to these regulations, the Bank agreed in the Operating Agreement that it would not declare or pay any dividends or otherwise reduce its capital unless it is in compliance with the Operating Agreement, including the minimum capital requirements.  Due to these restrictions and the Bank’s desire to preserve capital to fund its growth, the Company currently does not anticipate paying a dividend for the foreseeable future.  In addition to these regulatory restrictions, it should be noted that the declaration of dividends is

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at the discretion of the Company’s Board of Directors and will depend, in part, on the Company’s earnings and future capital needs.  Accordingly, there can be no assurance that dividends will be declared in any future period.

The Bank is required to maintain reserves against certain deposit liabilities which was satisfied with vault cash and balances on deposit with the Federal Reserve Bank of Richmond during the reserve maintenance periods that included June 30, 2015 and December 31, 2014.

Under current Federal Reserve regulations, the Bank is limited in the amount it may lend to the parent company and its nonbank subsidiaries.  Loans to a single affiliate may not exceed 10%, and loans to all affiliates may not exceed 20% of the Bank’s capital stock, surplus, and undivided profits, plus the allowance for loan and lease losses.  Loans from the Bank to nonbank affiliates, including the parent company, are also required to be collateralized according to regulatory guidelines.  At June 30, 2015, there were no loans from the Bank to any nonbank affiliate, including the parent company.

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NOTE 18 – OTHER COMPREHENSIVE INCOME

Comprehensive income is defined as net income plus transactions and other occurrences that are the result of non-owner changes in equity.  For financial statements presented by the Company, non-equity changes are comprised of unrealized gains or losses on available for sale debt securities and any minimum pension liability adjustments.  These items do not have an impact on the Company’s net income.  The following table presents the activity in net accumulated other comprehensive income for the periods indicated:

		Unrealized Gains on Investments Available for Sale		Defined Benefit Pension Plan		Total
Balance at December 31, 2014	$	211,294	$	1,452,220	$	1,663,514
Other comprehensive loss:
Other comprehensive income (loss) before    reclassification adjustments		48,366		(1,535,489)		(1,487,123)
Amounts reclassified from comprehensive loss		(47,168)		-		(47,168)
Other comprehensive loss		1,198		(1,535,489)		(1,534,291)
Balance at June 30, 2015	$	212,492	$	(83,269)	$	129,223
		Unrealized Gains (losses) on Investments Available for Sale		Defined Benefit Pension Plan		Total
Balance at December 31, 2013	$	(190,971)	$	1,304,888	$	1,113,917
Other comprehensive income		393,823		-		393,823
Balance at June 30, 2014	$	202,852	$	1,304,888	$	1,507,740
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the three Months Ended June 30, 2015
Other comprehensive loss:
Unrealized gain on AFS debt securities:
Net AFS debt securities loss	$	(248,743)	$	95,959	$	(152,784)
Other comprehensive loss	$	(248,743)	$	95,959	$	(152,784)
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the three Months Ended June 30, 2014
Other comprehensive income:
Unrealized gain on AFS debt securities	$	366,670	$	(144,690)	$	221,980
Other comprehensive gain	$	366,670	$	(144,690)	$	221,980
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the Six Months Ended June 30, 2015
Other comprehensive loss:
Unrealized gain on AFS debt securities:
Net AFS debt securities gain	$	79,471	$	(31,105)	$	48,366
Reclassification adjustments		(77,490)		30,322		(47,168)
Net income recognized in other comprehensive loss		1,981		(783)		1,198
Defined benefit pension plan adjustments:
Net actuarial losses		(2,535,693)		1,000,204		(1,535,489)
Net loss recognized in other comprehensive loss		(2,535,693)		1,000,204		(1,535,489)
Other comprehensive loss	$	(2,533,712)	$	999,421	$	(1,534,291)
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the Six Months Ended June 30, 2014
Other comprehensive income:
Unrealized gain on AFS debt securities	$	650,473	$	(256,650)	$	393,823
Other comprehensive income:	$	650,473	$	(256,650)	$	393,823

The Company reflects the funded status of defined benefit pension plan liabilities on the balance sheet, which for the six months ended June 30, 2015 resulted in a $1.5 million charge to equity through a reduction of accumulated other comprehensive income.  The loss was primarily due to the use of an updated mortality table issued by the Society of Actuaries in October 2014, which reflects longer life expectancies compared to previous mortality assumptions.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

As used in this Quarterly Report, the term “the Company” refers to Bay Bancorp, Inc. and, unless the context clearly requires otherwise, the terms “we,” “us,” and “our,” refer to Bay Bancorp, Inc. and its consolidated subsidiaries.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  All statements included or incorporated by reference in this Quarterly Report on Form 10-Q, other than statements that are purely historical, are forward-looking statements.  Statements that include the use of terminology such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “estimates,” and similar expressions also identify forward-looking statements.  The statements in this report with respect to, among other things, our plans and strategies; objectives and intentions and the anticipated results thereof; the impact of the  Slavie Acquisition; the impact of regulations on our business; our potential exposure to various types of market risks, such as interest rate risk and credit risk; anticipated funding of commitments to extend credit and unused lines of credit; potential losses from off-balance sheet arrangements, taking advantage of opportunities emerging as the business environment improves and leads to increased loan demand in the future; the recovery of fair value of available for sale securities; the allowance for loan losses; liquidity sources and the impact of the outcome of pending legal proceedings are forward-looking.  These forward-looking statements are based on our current intentions, beliefs, and expectations and are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict.  Actual results may differ materially from these forward-looking statements because of, among other things:

· unexpected changes or further deterioration in the housing market or in general economic conditions in our market area, or a slowing economic recovery;

· unexpected changes in market interest rates or monetary policy;

· the impact of new governmental regulations that might require changes in our business model;

· changes in laws, regulations, policies and guidelines impacting our ability to collect on outstanding loans or otherwise negatively impacting its business;

· higher than anticipated loan losses or the insufficiency of the allowance for credit losses;

· changes in consumer confidence, spending and savings habits relative to the services we provide;

· continued relationships with major customers;

· competition from other  financial institutions in originating loans, attracting deposits, and providing various financial services that may affect our profitability;

· the ability to continue to grow our business internally and through acquisition and successful integration of bank entities while controlling our costs; and

· changes in competitive, governmental, regulatory, accounting, technological and other factors that may affect us specifically or the banking industry generally, including as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”).

These and other risks are discussed in detail in the periodic reports that Bay Bancorp, Inc. files with the Securities and Exchange Commission (the “SEC”) (see Item 1A of Part II of this report for further information).  Except as required by applicable laws, we undertake no obligation to update or revise the information contained in this report whether as a result of new information, future events or circumstances, or otherwise.  Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q.  Past results of operations may not be indicative of future results.

GENERAL 

Bay Bancorp, Inc., a Maryland corporation organized in 1990, is a savings and loan holding company headquartered in Columbia, Maryland.  Until November 1, 2013, the Company operated under the name Carrollton Bancorp.  Effective November 1, 2013, the Company’s name was changed to Bay Bancorp, Inc.

On April 19, 2013, the Company completed its merger with Jefferson Bancorp, Inc. (“Jefferson”) with the Company as the surviving corporation (the “Merger”).  The Merger was accounted for as a reverse acquisition, which means that for accounting and financial reporting purposes, Jefferson was deemed to have acquired the Company in the Merger even though the Company was the legal successor in the Merger, and the historical financial statements of Jefferson have become the Company’s historical financial statements.  Consequently, the assets and liabilities and the operations that are reflected in the historical consolidated financial statements prior to the Merger are those of Jefferson, and the historical consolidated financial statements after the Merger include the assets and liabilities of Jefferson and the Company, historical operations of Jefferson and operations of the combined Company after April l9, 2013.

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The Merger has strengthened our market position geographically, enhanced our retail delivery channel, allowed us to provide extraordinary customer service while delivering a fuller range of services and products, and lessened our dependence on net interest income by adding fee-based sources of revenue including a mortgage origination division and electronic banking division.

Prior to the Merger, the Company had one bank subsidiary, Carrollton Bank, and Jefferson had one bank subsidiary, Bay Bank, FSB (the “Bank”).  The Bank commenced operations on July 9, 2010 when it bought certain assets and assumed certain liabilities of Bay National Bank (“Bay National”) from the Federal Deposit Insurance Corporation (the “FDIC”).  As part of the Merger, Carrollton Bank merged with and into the Bank, with the Bank as the surviving bank subsidiary of the Company.  The Bank is a federal savings bank (“FSB”) that provides a full range of financial services to individuals, businesses and organizations through its branch and loan origination offices and its automated teller machines.  Deposits in the Bank are insured by the FDIC.  The Bank has five subsidiaries: Bay Financial Services, Inc. (“BFS”); Carrollton Community Development Corporation (“CCDC”); and three limited liability company subsidiaries. 

In April 2014, the Bank announced its exit from the Individual Retirement Account (“IRA”) product line.  At that time, as a result of the announcement, the Bank stopped offering IRAs to new customers and resigned as custodian for its existing IRAs.  IRA deposit balances of $24 million or 6% of total deposits were either transferred to new IRA custodians or disbursed to customers by May 23, 2014.

On May 15, 2014, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Financial Services Partners Fund I, LLC (“FSPF”), and seven directors and executive officers of the Company (collectively, the “Investors”). Pursuant to the Purchase Agreement, the Company agreed to sell an aggregate of 1,422,764 shares of the Company’s common stock, par value $1.00 per share, to the Investors at a purchase price of $4.92 per share, which was the closing bid price of a share of common stock on May 14, 2014 as reported on The NASDAQ Capital Market. The closing of this transaction occurred on May 15, 2014, and the Company received aggregate gross proceeds of $7,000,000 from the transaction. The Company contributed these proceeds to the Bank, to bolster its regulatory capital and provide funds for future acquisitions and general working capital purposes.

On May 30, 2014, the Bank acquired certain assets and assumed substantially all deposits and certain other liabilities (the “Slavie Acquisition”) of Slavie Federal Savings Bank (“Slavie”), which was closed on May 30, 2014 by the Office of the Comptroller of the Currency (the “OCC”). The Slavie Acquisition was completed in accordance with the terms of the Purchase and Assumption Agreement All Deposits, with the FDIC. The Bank did not acquire any of Slavie’s other real estate owned. Additionally, the Bank did not at closing commit to purchase any owned or leased bank premises of Slavie; however, the Bank was granted an option to elect following closing to purchase any or all of the banking premises owned by Slavie except for Slavie’s former headquarters building in Bel Air, Maryland, or in the case of leased banking premises, to assume the lease.

We are focused on providing superior financial and customer service to small and medium-sized commercial and retail businesses, owners of these businesses and their employees, to business professionals and to individual consumers located in the central Maryland region, through our network of 11 branch locations.  We attract deposit customers from the general public and use such funds, together with other borrowed funds, to make loans.  Our results of operations are primarily determined by the difference between interest income earned on our interest-earning assets, primarily interest and fee income on loans, and interest expense on our interest-bearing liabilities, including deposits and borrowings.

Our mortgage division is in the business of originating residential mortgage loans and then selling them to investors.  The mortgage banking business is structured to provide a source of fee income largely from the process of originating residential mortgage loans for sale in the secondary market.  Mortgage banking products include Federal Housing Administration and Federal Veterans Administration loans, conventional and nonconforming first and second mortgages, and construction and permanent financing.  Loans originated by the mortgage division are generally sold into the secondary market but may be considered for retention by us as part of our balance sheet strategy.

The Bank’s three limited liability company subsidiaries manage and dispose of real estate acquired through foreclosure.

CCDC was created to promote, develop, and improve the housing and economic conditions of people in Maryland.  CCDC generates revenue through the origination of loans, but did not originate any loans during 2014 or 2015 and is in the process of being dissolved.

AVAILABILITY OF INFORMATION

We make available through the Investor Relations area of our website, at www.baybankmd.com, annual reports on Form 10-K, quarterly reports on Form 10-Q, news releases on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.  In general, we intend that these reports be available as soon as

38

practicable after they are filed with or furnished to the SEC.  The SEC maintains a website (www.sec.gov) where these filings are also available through the SEC’s EDGAR system.  There is no charge for access to these filings through either our site or the SEC’s site.

MARKET AREA

We consider our core markets to be the communities within the Baltimore Metropolitan Statistical Area, particularly Baltimore City and the Maryland counties of Baltimore, Anne Arundel, Howard and Harford, as well as south along the Baltimore-Washington corridor. Lending activities are broader, including the entire State of Maryland, and, to a limited extent, the surrounding states.  All of our revenue is generated within the United States.

COMPETITION

Our principal competitors for deposits are other financial institutions, including other savings institutions, commercial banks, credit unions, and local banks and branches or affiliates of other larger banks located in our primary market area.  Competition among these institutions is based primarily on interest rates and other terms offered, service charges imposed on deposit accounts, the quality of services rendered, and the convenience of banking facilities.  Additional competition for depositors' funds comes from mutual funds, U.S. Government securities, insurance companies and private issuers of debt obligations and suppliers of other investment alternatives for depositors such as securities firms.  Competition from credit unions has intensified in recent years as historical federal limits on membership have been relaxed.  Because federal law subsidizes credit unions by giving them a general exemption from federal income taxes, credit unions have a significant cost advantage over banks and savings associations, which are fully subject to federal income taxes.  Credit unions may use this advantage to offer rates that are highly competitive with those offered by banks and thrifts.

Current federal law allows the acquisition of banks by bank holding companies nationwide. Further, federal and Maryland law permit interstate banking. Recent legislation has broadened the extent to which financial services companies, such as investment banks and insurance companies, may control commercial banks. As a consequence of these developments, competition in our principal market may increase, and a further consolidation of financial institutions in Maryland may occur.

STRATEGY

We operate on the premise that the consolidation activities in the banking industry have created an opportunity for a well-capitalized community bank to satisfy banking needs that are no longer being adequately met in the local market.  Large national and regional banks are catering to larger customers and provide an impersonal experience, and typical community banks, because of their limited capacity, are unable to meet the needs of many small-to-medium-sized businesses.  Specifically, as a result of bank mergers in the 1990s, many banks in the Baltimore metropolitan area became local branches of large regional and national banks.  Although size gave the larger banks some advantages in competing for business from large corporations, including economies of scale and higher lending limits, we believe that these larger, national banks remain focused on a mass market approach which de-emphasizes personal contact and service.  We also believe that the centralization of decision-making power at these large institutions has resulted in a lack of customer service.  At many of these institutions, determinations are made at the out-of-state “home office" by individuals who lack personal contact with customers as well as an understanding of the customers' needs and scope of the relationship with the institution.  We believe that this trend is ongoing, and continues to be particularly frustrating to owners of small and medium-sized businesses, business professionals and individual consumers who traditionally have been accustomed to dealing directly with a bank executive who had an understanding of their banking needs with the ability to deliver a prompt response.

We attempt to differentiate ourselves from the competition through personalized service, flexibility in meeting the needs of customers, prompt decision making and the availability of senior management to meet with customers and prospective customers.

OVERVIEW

The Merger and Slavie Acquisition strengthened our market position geographically and continued to enhance our delivery channels, allowing us to provide extraordinary customer service while delivering a fuller range of products and services and lessened our dependence on net interest income by adding fee-based sources of revenue including a mortgage origination division, and electronic banking division.  Amid the growth, our focus is on a high quality balance sheet, expense efficiency and improved profitability.

The Bank’s relationship management activities resulted in the growth of new loans in the Bank’s originated portfolio by a 21.3% annualized pace in the first six-months of 2015.  Deposit mix changes were favorable, with declines in certificate of deposit balances offset by noninterest-bearing deposit growth, as the Bank recorded annualized growth of over 13% for this deposit type during the period.  The Company has a very strong capital position and capacity for future growth with total regulatory capital to risk weighted assets of 17.4%as of June 30, 2015.  The Bank has a proven record of success in acquisitions and acquired problem asset resolutions and, at June 30, 2015, had $12.3 million in remaining net purchase discounts on acquired loan portfolios.

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At June 30, 2015, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was 17.00% at June 30, 2015 as compared to 16.22% at March 31, 2015, 16.31% at December 31, 2014 and 15.70% at June 30, 2014.  Liquidity remained strong due to managed cash and cash equivalents, borrowing lines with the FHLB of Atlanta, the Federal Reserve and correspondent banks, and the size and composition of the investment portfolio.

Net income for the three- and six-month periods ended June 30, 2015 was $0.55 million and $0.89 million, respectively, compared to net income of $2.76 million and $2.84 million, respectively,for the same periods of 2014.  With the changes to net income primarily the result of 2014 bargain purchase gain attributable to the Slavie Acquisition and the 2014 recognition of the remaining interest rate mark-to-market adjustment of $2.4 million related to the exit of our IRA business, the 2015 results are less comparable to prior periods.

The return on average assets for the three- and six-month periods ended June 30, 2015 was 0.46% and 0.37%, respectively, as compared to 2.47% and 1.32%, respectively, for the same periods of 2014.  The return on average equity for the three- and six-month periods ended June 30, 2015 was 3.26% and 2.66%, respectively, as compared to 18.35% and 9.89%, respectively, for the same periods in 2014.

Total assets were $489 million at June 30, 2015, an increase of $9.0 million, or 1.79%, when compared to December 31, 2014.  Investment securities increased by $4.4 million or 12.1% for the six-month period, while loans held for sale increased by $9.6 million or 133%.  These increases were partially offset by a $7.4 million or 1.9% decline in loans held for investment.Total deposits were $384 million at June 30, 2015, a decrease of $3.4 million, or 0.9%, when compared to December 31, 2014.  The decrease was primarily due to managed declines in certificates of deposits and seasonal deposit fluctuations, offset by a $6 million or 6.5% increase in non-interest bearing deposits.  The decrease in deposits resulted in an $11 million increase in short-term borrowings when compared to December 31, 2014 over the prior period.

Net interest income decreased to $10.8 million for the six months ended June 30, 2015 from the $11.0 million recorded for the same period of 2014.  The decrease was the result of a $51.6 million growth in average interest-earning assets largely due to the Slavie Acquisition, offset by a $1.19 million decline in net discount accretion of purchased loan discounts recognized in interest income and a $0.66 million decrease in the fair value amortization on deposits.  Excluding the impact of the fair value accounting, net interest income increased by $1.74 million when compared to the six months ended June 30, 2014.  The net interest margin for second quarter of 2015 decreased to 4.89%from 4.67% for the first quarter of 2015.  The net interest margin for the six months ended June 30, 2015 decreased to 4.81% from5.48% for the same period of 2014 due to the decline in discount accretion on loans and deposits.  As of June 30, 2015, the remaining net loan discounts on the Bank’s loan portfolio, including loans acquired in the Slavie Acquisition, totaled $12.3 million.

Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and real estate acquired through foreclosure, decreased to $13.29 million at June 30, 2015 from $15.61 million at March 31, 2015 and from $14.87 million at December 31, 2014.  The decreases were driven by related decreases in nonaccrual loans of $1.84 million and $0.80 million from March 31, 2015 and December 31, 2014 respectively.  Nonperforming assets represented 2.73%of total assets at June 30, 2015, which was down from 3.22% at March 31, 2015 and from 3.10% at December 31, 2014.

Stockholders’ equity was $66.1 million at June 30, 2015 compared to $65.7 million at March 31, 2015, $66.6 million at December 31, 2014, and $65.0 million at June 30, 2014.  The second quarter 2015 increase related to corporate earnings partially offset by net market value adjustments on bank owned investment securities.  The decrease over the first six months of 2015 related to an increase in the Bank’s retirement income plan liability due to changes in actuarial assumptions, offset by related deferred taxes.  The book value of Bay’s common stock was $5.99 per share at June 30, 2015 compared to $5.96 per share at March 31, 2015 and $6.01 per share at June 30, 2014.

Recent Events

On May 27, 2015, Bay announced the election of two new members of its Board of Directors.  Pierre Abushacra is a resident of Montgomery County, Maryland and the founder and CEO of Firehook Bakery, a retail and wholesale bakery with 10 locations in the broader Washington, D.C. market.  Michael Chiaramonte is the founder and former President of the Southern Maryland Healthcare System based in Prince George’s County, Maryland before its sale to MedStar.

On July 1, 2015, the Bank announced that it moved its corporate headquarters to Columbia, Maryland, where it also opened a new full service branch on April 27, 2015.  This is the Bank’s first branch in Howard County, Maryland.  The headquarters and branch are located at 7151 Columbia Gateway Drive.  The headquarters change resulted in 14 associates relocating to Columbia and 13 associates remaining in the Lutherville sales offices.

On July 30, 2015, the Company announced that the Board of Directors has authorized the repurchase of up to 250,000 shares of its common stockover a 12-month period. The repurchase program does not obligate the Company to acquire any shares, but

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permits the Company to repurchase the shares in open market and/or privately negotiated transactions in amounts, at prices and at times determined by the Company’s President and the Chief Executive Officer. The timing and amount of any share repurchases will depend on a variety of factors, including the trading price of the Company’s common stock, securities laws restrictions, including but not limited to compliance with blackout periods, regulatory requirements, potential alternative uses for capital, and market and economic conditions.  The Company intends to fund any repurchases through its consolidated earnings and borrowings under its holding company credit facility.  Repurchased shares will be cancelled and returned to unissued but authorized status. The repurchase program may be modified, suspended or discontinued at any time, at the Company’s discretion.

CRITICAL ACCOUNTING POLICIES 

Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”).  All intercompany transactions are eliminated in consolidation and certain reclassifications are made when necessary in order to conform the previous year’s financial statements to the current year’s presentation.  In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities as of the dates of the balance sheets and revenues and expenditures for the periods presented.  Therefore, actual results could differ from these estimates.  Our financial condition and results of operations are sensitive to accounting measurements and estimates of matters that are inherently uncertain.  When applying accounting policies in areas that are subjective in nature, management must use its best judgment to arrive at the carrying value of certain assets.  The most critical accounting policies applied relate to treatment of the allowance for loan losses, accounting for acquired loans, valuation of the securities portfolio, and accounting for income taxes.

Allowance for Loan Losses

The allowanceinvolves a higher degree of judgment and complexity than other significant accounting policies.  The allowance is calculated with the objective of maintaining a reserve level believed by us to be sufficient to absorb estimated probable loan losses.  Our determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio and other relevant factors. However, this evaluation is inherently subjective as it requires material estimates, including, among others, expected default probabilities, expected loan commitment usage, the amounts and timing of expected future cash flows on impaired and purchased credit impaired loans, value of collateral, estimated losses on consumer loans and residential mortgages and general amounts for historical loss experience. The process also considers economic conditions and inherent risks in the loan portfolio.  All of these factors may be susceptible to significant change.  To the extent actual outcomes differ from our estimates, an additional provision for loan losses may be required that would adversely impact earnings in future periods. See the section of this document titled, “Allowance for Loan Losses and Credit Risk Management.”

Accounting for Acquired Loans

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired.  Evidence of credit quality deterioration as of the purchase date may include information such as past due and nonaccrual status, borrower credit scores and recent loan to value percentages. Purchased credit impaired loans are initially measured at fair value, which considers estimated future credit losses expected to be incurred over the life of the loan.  Accordingly, an allowance related to these loans was not carried over and recorded at the acquisition date.  We monitor actual loan cash flows to determine any improvement or deterioration from those forecasted as of the acquisition date.  Our acquired loans with specific credit deterioration are accounted for in accordance with Financial Accounting Standards BoardAccounting Standards Codification (“ASC”)310-30.  Certain acquired loans, those for which specific credit related deterioration subsequent to origination is identified, are recorded at fair value reflecting the present value of the amounts expected to be collected.  Income recognition on purchased credit impaired loans is based on a reasonable expectation about the timing and amount of cash flows to be collected.

Valuation of the Securities Portfolio

Securities are evaluated periodically to determine whether a decline in their value is other than temporary.  The term “other than temporary” is not intended to indicate a permanent decline in value.  Rather, it means that the prospects for near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of an investment.  We review other criteria such as magnitude and duration of the decline, as well as the reasons for the decline, to predict whether the loss in value is other than temporary.  Once a decline in value is determined to be other than temporary, the value of the security is reduced and a corresponding charge to earnings is recognized. 

Accounting for Income Taxes

We use the liability method of accounting for income taxes.  Under the liability method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities (i.e., temporary differences) and are measured at the enacted rates in effect when these differences reverse.  Deferred tax assets are

41

reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  We exercise significant judgment in the evaluation of the amount and timing of the recognition of the resulting tax assets and liabilities.  The judgments and estimates required for the evaluation are updated based upon changes in business factors and the tax laws.  If actual results differ from the assumptions and other considerations used in estimating the amount and timing of tax recognized, there can be no assurance that additional expenses will not be required in future periods.  Realization of deferred tax assets is dependent on generating sufficient taxable income in the future.

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RESULTS OF OPERATIONS

Net Interest Income

The following tables sets forth, for the periods indicated, information regarding the average balances of interest earning assets and interest bearing liabilities, the amount of interest income and interest expense and the resulting yields on average interest earning assets and rates paid on average interest bearing liabilities.  No tax equivalent yield adjustments were made, as the effect thereof was not material.

		Three Months Ended June 30, 2015					Three Months Ended June 30, 2014
		Average Balance		Interest	Yield/Rate		Average Balance		Interest	Yield/Rate
ASSETS
Interest-earning assets:
Interest bearing deposits with banks and federal funds sold	$	14,451,962	$	5,768	0.16%	$	36,312,239	$	18,660	0.21%
Investment securities available for sale		34,097,160		237,726	2.80%		36,926,555		238,980	2.62%
				-
Investment securities held to maturity		1,289,302		7,476	2.33%		-		-	0.00%
Restricted equity securities		1,007,866		13,060	5.20%		716,161		6,124	3.43%
Total cash and investments		50,846,290		264,030	2.08%		73,954,955		263,764	1.43%
Loans held for sale		14,323,912		132,180	3.69%		4,290,289		46,208	4.31%
Loans, net
Commercial & Industrial		34,515,068		515,296	5.99%		41,501,240		577,421	5.58%
Commercial Real Estate		158,913,063		2,215,799	5.59%		157,965,096		2,864,126	7.27%
Residential Real Estate		135,407,834		2,084,860	6.16%		90,346,295		1,484,073	6.57%
HELOC		33,789,108		378,393	4.48%		34,105,116		521,395	6.12%
Construction		18,189,384		336,873	7.43%		13,049,442		269,068	8.27%
Land		5,058,748		29,922	2.37%		1,695,389		40,662	9.62%
Consumer & Other		1,111,774		24,533	8.85%		1,053,709		23,086	8.79%
Total loans, net (1)		386,984,979		5,585,676	5.79%		339,716,287		5,779,831	6.82%
Total earning assets		452,155,181	$	5,981,886	5.31%		417,961,531	$	6,089,803	5.84%
Cash		3,615,702					3,645,888
Allowance for loan losses		(1,017,648)					(1,071,188)
Market valuation		548,989					190,909
Other assets		25,363,041					27,588,262
Total non-earning assets		28,510,084					30,353,871
Total Assets	$	480,665,265				$	448,315,402
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing checking and savings	$	85,494,267	$	24,539	0.12%	$	77,921,913	$	23,327	0.12%
Money market		89,070,924		63,846	0.29%		81,423,376		73,123	0.36%
Certificates of deposit		121,029,573		375,785	1.25%		126,748,585		204,719	0.65%
Total interest-bearing deposits		295,594,764		464,170	0.63%		286,093,874		301,169	0.42%
Borrowed funds:
Federal funds purchased		263,736		604	0.92%		-		-	-
FHLB advances		13,438,462		9,868	0.29%		-		-	-
Total borrowed funds		13,702,198		10,472	0.31%		-		-	-
Total interest-bearing funds		309,296,961		474,642	0.62%		286,093,874		301,169	0.42%
Noninterest-bearing deposits		99,691,591		-	-		98,908,254		-	-
Total cost of funds		408,988,552	$	474,642	0.47%		385,002,128	$	301,169	0.31%
Other liabilities and accrued expenses		4,536,782					3,074,606
Total Liabilities		413,525,334					388,076,734
Stockholders' Equity		67,139,931					60,238,668
Total Liabilities and Stockholders' Equity	$	480,665,265				$	448,315,402
Net interest income and spread (2)			$	5,507,244	4.69%			$	5,788,634	5.42%
Net interest margin (3)					4.89%					5.56%

(1) Non-accrual loans are included in average loans.

(2) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(3) Net interest margin represents net interest income as a percentage of average interest-earning assets.

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		Six Months Ended June 30, 2015					Six Months Ended June 30, 2014
		Average Balance		Interest	Yield/Rate		Average Balance		Interest	Yield/Rate
ASSETS
Interest-earning assets:
Interest bearing deposits with banks and federal funds sold	$	18,383,183	$	16,380	0.18%	$	31,231,742	$	32,028	0.21%
Investment securities available for sale		34,054,116		474,287	2.81%		36,840,255		479,819	2.63%
				-
Investment securities held to maturity		1,298,728		14,987	2.33%		-		-	0.00%
Restricted equity securities		1,124,906		26,424	4.74%		690,222		12,634	3.64%
Total cash and investments		54,860,933		532,078	1.96%		68,762,219		524,481	1.54%
Loans held for sale		10,456,539		193,691	3.70%		6,265,823		132,009	4.21%
Loans, net
Commercial & Industrial		34,803,418		1,010,428	5.85%		37,123,431		1,152,787	6.26%
Commercial Real Estate		159,531,430		4,338,565	5.48%		157,796,676		5,467,329	6.99%
Residential Real Estate		136,722,783		4,228,273	6.19%		81,935,915		2,564,052	6.26%
HELOC		34,027,606		757,301	4.45%		33,278,865		1,021,562	6.14%
Construction		18,434,973		580,603	6.35%		15,421,327		575,987	7.53%
Land		5,280,508		128,878	4.92%		1,694,597		90,679	10.79%
Consumer & Other		1,066,113		49,395	9.34%		1,283,346		47,821	7.51%
Total loans, net (1)		389,866,831		11,093,443	5.74%		328,534,157		10,920,217	6.70%
Total earning assets		455,184,303	$	11,819,212	5.24%		403,562,199	$	11,576,707	5.78%
Cash		3,552,813					3,946,900
Allowance for loan losses		(1,199,545)					(959,936)
Market valuation		558,957					94,755
Other assets		25,283,449					26,461,151
Total non-earning assets		28,195,674					29,542,870
Total Assets	$	483,379,977				$	433,105,069
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing checking and savings	$	84,624,553	$	47,387	0.11%	$	72,628,620	$	42,770	0.12%
Money market		87,309,782		136,350	0.31%		82,683,730		145,857	0.36%
Certificates of deposit		126,387,940		764,834	1.22%		123,354,473		421,601	0.69%
Total interest-bearing deposits		298,322,275		948,571	0.64%		278,666,823		610,228	0.44%
Borrowed funds:
Federal funds purchased		132,597		604	0.92%		-		-	-
FHLB advances		14,789,503		23,644	0.32%		-		-	-
Total borrowed funds		14,922,100		24,248	0.33%		-		-	-
Total interest-bearing funds		313,244,374		972,819	0.63%		278,666,823		610,228	0.44%
Noninterest-bearing deposits		98,934,379		-	-		93,868,296		-	-
Total cost of funds		412,178,753	$	972,819	0.48%		372,535,119	$	610,228	0.33%
Other liabilities and accrued expenses		3,691,495					2,708,267
Total Liabilities		415,870,248					375,243,386
Stockholders' Equity		67,509,729					57,861,683
Total Liabilities and Stockholders' Equity	$	483,379,977				$	433,105,069
Net interest income and spread (2)			$	10,846,393	4.61%			$	10,966,479	5.34%
Net interest margin (3)					4.81%					5.48%

Net interest income, the amount by which interest income on interest-earning assets exceeds interest expense on interest-bearing liabilities, is the most significant component of our earnings.  Net interest income is a function of several factors, including the volume and mix of interest-earning assets and funding sources, as well as the relative level of market interest rates.  While management’s policies influence some of these factors, external forces, including customer needs and demands, competition, the economic policies of the federal government and the monetary policies of the Federal Reserve also affect net interest income.

Net interest income decreased by $0.28 million for the quarter ended June 30, 2015, when compared to the same period of 2014.  The decrease was driven by a $0.80 million decline in net discount accretion of purchased loan discounts recognized in interest income offset by a $0.31 million decrease in the amortization of mark to market adjustments on deposits.  The net interest margin for the three months ended June 30, 2015 decreased to 4.89% from 5.56% for the same period in 2014 due to the decline in discount accretion on loans and deposits.

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Total interest income decreased by $0.11 million, or 1.77%, for the three months ended June 30, 2015, when compared to the same period of 2014.  Interest income on loans decreased by $0.19 million, or 3.36%, for the three months ended June 30, 2015, when compared to the same period of 2014.  The average balance of loans increased by $47.3 million primarily due to the Slavie Acquisition, but was offset by a 1.03% decrease in average loan yield, when compared to the same period of 2014.  The decrease in loan yield was due to both the decline in net discount accretion on purchased loan discounts and a decline in the core loan portfolio yield as rates on new loan production trailed the rates on principal payments received.  The average balance of loans held for sale increased by $10.0 million due to overall growth in the mortgage banking line of business, but was offset by a 62 basis point decline in the interest rates on originated loans, when compared to the same period of 2014.  Interest income on investment securities and interest-bearing deposits in banks and federal funds sold was essentially unchanged for the three months ended June 30, 2015 when compared to the same period of 2014. 

Total interest expense increased by $0.17 million, or 57.6%, for the three months ended June 30, 2015 when compared to the same period of 2014. Average interest bearing liabilities increased by $23.2 million for the three months ended June 30, 2015 when compared to the same period of 2014.  The total cost of interest-bearing liabilities increased to 0.62% for the three months ended June 30, 2015, as compared to 0.42% for the same period of 2014.  The increase in interest expense related to a $0.31 million decline in the amortization of mark to market adjustments on deposits, when compared to the same period of 2014.  Average noninterest-bearing deposits increased by $0.78 million for the three months ended June 30, 2015 when compared to the same period in 2014, primarily due to the Slavie Acquisition.

Net interest income decreased by $0.12 million for the six months ended June 30, 2015 when compared to the same period of 2014.  The decrease was driven by a $1.22 million decline in net discount accretion of purchased loan discounts recognized in interest income offset by a $0.66 million decrease in the amortization of mark to market adjustments on deposits. The net interest margin for the six months ended June 30, 2015 decreased to 4.81% from 5.48% for the same period in 2014 due to the decline in discount accretion on loans and deposits.

Total interest income increased by $0.24 million, or 2.09%, for the six months ended June 30, 2015 when compared to the same period of 2014.  Interest income on loans increased by $0.17 million, or 1.59%, for the six months ended June 30, 2015, when compared to the same period of 2014.  The average balance of loans increased by $61.3 million primarily due to the Slavie Acquisition, but was offset by a 0.96 basis point decrease in average loan yield, when compared to the same period of 2014.  The decrease in loan yield was due to both the decline in net discount accretion on purchased loan discounts and a decline in the core loan portfolio yield as rates on new loan production trailed the rates on principal payments received.The average balance of loans held for sale increased by $4.2 million due to overall growth in the mortgage banking line of business, but was offset by a 51 basis point decline in the interest rates on originated loans, when compared to the same period of 2014.  Interest income on investment securities and interest-bearing deposits in banks and federal funds sold was essentially unchanged for the six months ended June 30, 2015 when compared to the same period of 2014. 

Total interest expense increased by $0.36 million, or 59.4%, for the six months ended June 30, 2015, when compared to the same period of 2014. Average interest bearing liabilities increased by $34.6 million for the six months ended June 30, 2015, when compared to the same period of 2014.  The total cost of interest-bearing liabilities increased to 0.63% for the six months ended June 30, 2015, as compared to 0.44% for the same period of 2014.  The increase in interest expenses related primarily to a $0.66 million decline in the amortization of mark to market adjustments on deposits, when compared to the same period of 2014.  Average noninterest-bearing deposits increased by $5.07 million for the six months ended June 30, 2015 when compared to the same period in 2014, primarily due to the Slavie Acquisition.

Provision for Loan Losses

The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level which, in management's best estimate, is necessary to absorb probable losses within the existing loan portfolio.  On a monthly basis, management reviews all loan portfolios to determine trends and monitor asset quality.  For consumer loan portfolios, this review generally consists of reviewing delinquency levels on an aggregate basis with timely follow-up on accounts that become delinquent. In commercial loan portfolios, delinquency information is monitored and periodic reviews of business and property leasing operations are performed on an individual loan basis to determine potential collection and repayment problems.  See the section captioned “Allowance for Loan Losses” elsewhere in this discussion for further analysis of the provision for loan losses.

The provision for loan losses for the three and six months ended June 30, 2015 was $297,000 and $572,000, respectively, compared to $141,000 and $360,000, respectively, for the same periods of 2014.  The increases for the 2015 periods were primarily the result of increases in loan originations.  As a result, the allowance for loan losses was $1.43 million at June 30, 2015, representing 0.37% of total loans, compared to $1.35 million, or 0.35% of total loans, at March 31, 2015 and $1.29 million, or 0.33% of total loans, at December 31, 2014.  Management expects both the allowance for loan losses and the related provision for loan losses to increase in the future due to the gradual accretion of the discount on the acquired loan portfolios and an increase in new loan originations.

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Noninterest Income

The following tables reflect the amounts and changes in noninterest income for the three and six months ended June 30, 2015 and 2014:

		Three Months Ended June 30,				2015 vs 2014
		2015		2014		$ Change	% Change
Electronic banking fees	$	626,056	$	676,353	$	(50,297)	-7%
Mortgage-banking fees and gains		604,065		195,388		408,677	209%
Net gain on sale of real estate acquired through foreclosure		40,077		27,096		12,981	48%
Service charges on deposit accounts		70,714		111,432		(40,718)	-37%
Bargain purchase gain		-		524,432		(524,432)	-100%
Other income		245,821		2,903,359		(2,657,538)	-92%
Total Noninterest Income	$	1,586,733	$	4,438,060	$	(2,851,327)	-64%

		Six Months Ended June 30,				2015 vs 2014
		2015		2014		$ Change	% Change
Electronic banking fees	$	1,202,246	$	1,316,347	$	(114,101)	-9%
Mortgage banking fees and gains		997,707		508,063		489,644	96%
Net gain on sale of real estate acquired through foreclosure		39,449		28,925		10,524	36%
Service charges on deposit accounts		149,731		203,945		(54,214)	-27%
Bargain purchase gain		-		524,432		(524,432)	-100%
Gain on redemption of securities		77,490		-		77,490	-
Other income		357,330		3,109,720		(2,752,390)	-89%
Total Noninterest Income	$	2,823,953	$	5,691,432	$	(2,867,479)	-50%

Noninterest income for the three and six months ended June 30, 2015 was $1.59 million and $2.82 million, respectively, representing a decrease of $2.85 million and $2.87 million, respectively, when compared to the same periods in 2014.  The decreases for the three months ended June 30, 2015 was primarily the result of the decrease in the bargain purchase gain of $0.50 million and other income of $2.66 million which reflects the $2.4 million reversal of the remaining interest rate mark to market adjustment on IRA deposits upon exiting the IRA product line, offset by an increase of $0.41 million in mortgage banking fees and gains resulting from an increased number of loans originated and sold.  The decrease for the six months ended June 30, 2015 was primarily the result of the decrease in the bargain purchase gain of $0.50 million, other income of $2.75 million which reflects the $2.4 million reversal of the remaining interest rate mark to market adjustment on IRA deposits upon exiting the IRA product line and electronic banking fees of $0.11 million, offset by an increase of $0.49 million in mortgage banking fees and gains resulting from an increased number of loans originated and sold.

46

Noninterest Expenses

The following table reflects the amounts and changes in noninterest expense for the three and six months ended June 30, 2015 and 2014:

		Three Months Ended June 30,				2015 vs 2014
		2015		2014		$ Change	% Change
Salary and employee benefits	$	3,143,816	$	3,159,029	$	(15,213)	0%
Occupancy expenses		656,426		784,831		(128,405)	-16%
Furniture and equipment expenses		245,171		282,825		(37,654)	-13%
Legal, accounting and other professional fees		369,151		338,105		31,046	9%
Data processing and items processing services		283,207		217,187		66,020	30%
FDIC insurance costs		97,072		134,977		(37,905)	-28%
Advertising and marketing related expenses		66,555		145,560		(79,005)	-54%
Foreclosed property expenses		169,100		191,029		(21,929)	-11%
Loan collection costs		111,867		105,724		6,143	6%
Core deposit intangible amortization		204,108		218,447		(14,339)	-7%
Merger and acquisition related expenses		-		128,965		(128,965)	-100%
Other expenses		585,525		549,023		36,502	7%
Total Noninterest Expenses	$	5,931,998	$	6,255,702	$	(323,704)	-5%

		Six Months Ended June 30,				2015 vs 2014
		2015		2014		$ Change	% Change
Salary and employee benefits	$	6,062,935	$	6,524,461	$	(461,526)	-7%
Occupancy expenses		1,376,258		1,534,110		(157,852)	-10%
Furniture and equipment expenses		520,572		594,954		(74,382)	-13%
Legal, accounting and other professional fees		737,179		732,225		4,954	1%
Data processing and item processing services		625,880		492,337		133,543	27%
FDIC insurance costs		203,383		202,686		697	0%
Advertising and marketing related expenses		95,304		184,965		(89,661)	-48%
Foreclosed property expenses		229,463		390,392		(160,929)	-41%
Loan collection costs		199,377		152,903		46,474	30%
Core deposit intangible amortization		458,653		492,742		(34,089)	-7%
Merger and acquisition related expenses		-		240,288		(240,288)	-100%
Other expenses		1,122,878		1,053,312		69,566	7%
Total Noninterest Expenses	$	11,631,882	$	12,595,375	$	(963,493)	-8%

Noninterest expense reduction is a key focus for 2015 net income improvement.  For the three and six months ended June 30, 2015, noninterest expense was $5.9 million and $11.6 million, respectively, representinga decrease of $0.32 million and $0.96 million, respectively, when compared to the same periods in 2014.  The primary contributors to the decrease when comparing the second quarters of 2015 and 2014 were decreases of $0.13 million in occupancy expense, $0.08 million in advertising and marketing related expenses and $0.13 million in merger and acquisition related expenses, offset by an increase of $0.07 million in data processing and item processing services.  The primary contributors to the decrease when comparing the six-month periods ended June 30, 2015 and 2014 were decreases of $0.46 million in salary and employee benefits, $0.16 million in occupancy expenses, $0.16 million in foreclosure property expenses and $0.24 million in merger and acquisition related expenses, offset by an increase of $0.13 in data processing and item processing services.

Income Taxes

The effective tax rates for the three and six months ended June 30, 3015 were 36.9% and 39.4%, respectively.  In accordance with ASC 740-270, Accounting for Interim Reporting, the provision for income taxes was recorded at June 30, 2015 and 2014 based on the current estimate of the effective annual rate.

The effective tax rate of 28.1% for the three months ended June 30, 2014 includes the impact of a $482,000 reduction in tax expense for the refunds claimed on the filing of amended income tax returns.  The effective tax rate of 23.4% for the six months ended

47

June 30, 2014 includes the second quarter 2014 $482,000 refunds claimed as well as the impact of the $157,000 partial reversal of a valuation allowance attributable to estimated future built-in losses that were recorded in 2013.

FINANCIAL CONDITION 

Total assets were $489 million at June 30, 2015, an increase of $9 million, or 1.79%, when compared to December 31, 2014.  Investment securities increased by $4.4 million or 12.1% for the six-month period, while loans held for sale increased by $9.6 million or 133%.  These increases were partially offset by a $7.4 million or 1.9% decline in loans held for investment.

Total deposits were $384 million at June 30, 2015, a decrease of $3.4 million, or 0.9%, when compared to December 31, 2014.  The decrease was primarily due to managed declines in certificates of deposits and seasonal deposit fluctuations, offset by a $6 million or 6.5% increase in non-interest bearing deposits.  The decrease in deposits resulted in an $11 million increase in short-term borrowings over the prior period.

Stockholders’ equity decreased to $66.1 million at June 30, 2015 from $66.6 million at December 31, 2014.  The decrease related to an increase in the Bank’s retirement income plan liability due to changes in actuarial assumptions, offset by related deferred taxes and the Company’s net income for the six months ended June 30, 2015 of $0.89 million.  

Investment Securities

Our investment policy authorizes management to invest in traditional securities instruments in order to provide ongoing liquidity, income and a ready source of collateral that can be pledged in order to access other sources of funds.  The investment portfolio consists of available for sale and held to maturity securities.  Available for sale securities are those securities that we intend to hold for an indefinite period of time but not necessarily until maturity.  These securities are carried at fair value and may be sold as part of an asset/liability management strategy, liquidity management, interest rate risk management, regulatory capital management or other similar factors.  Held to maturity securities are securities we have the intent and ability to hold until maturity.  These securities are carried at amortized cost.

The investment portfolio consists primarily of U.S. Government agency securities, U.S. Treasury securities, residential mortgage-backed securities, corporate bonds and state and municipal obligations.  The income from state and municipal obligations is exempt from federal income tax.  Certain agency securities are exempt from state income taxes.  We use the investment portfolio as a source of both liquidity and earnings.  Management continues to evaluate investment options that will produce income without assuming significant credit or interest rate risk and to look for opportunities to use liquidity from maturing investments to reduce our use of high cost time deposits and borrowed funds.

Investment securities increased $4.4 million, or 12.1%, to $41.1 million at June 30, 2015, from $36.7 million at December 31, 2014.  This increase was primarily the result of purchases of $7.9 million of treasury and corporate bonds, offset by principal pay downs and redemptions of $3.4 million.

Restricted Equity Securities

Restricted equity securities increased $0.3 million, or 15.6%, to $2.2 million at June 30, 2015, from $1.9 million at December 31, 2014.  This increase was the result of net purchases of FHLB stock required as a result of increased borrowings from the FHLB.

Loans Held for Sale

Loans held for sale were $16.8 million at June 30, 2015, compared to $7.2 million at December 31, 2014.  The increase in loans held for sale was due to new originations outpacing loan sales during the first six months of 2015.  Loans originated for sale to third-party investors generally remain on our balance sheet for an average of 45 days.

Loans

Loans, net of deferred fees and costs, decreased by $7.4 million to $385.7 million at June 30, 2015from $393.1 million at December 31, 2014, primarily due to pay downs outpacing originations.

Loans are placed on nonaccrual status when they are past-due 90 days as to either principal or interest or when, in the opinion of management, the collection of all interest and/or principal is in doubt.  Placing a loan on nonaccrual status means that we no longer accrue interest on such loan and reverse any interest previously accrued but not collected.  Management may grant a waiver from nonaccrual status for a 90-day past-due loan that is both well secured and in the process of collection.  A loan remains on nonaccrual

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status until the loan is current as to payment of both principal and interest and the borrower demonstrates the ability to make payments in accordance with the terms of the loanand remain current. 

A loan is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Impaired loans are measured based on the fair value of the collateral for collateral dependent loans and at the present value of expected future cash flows using the loans’ effective interest rates for loans that are not collateral dependent.

At June 30, 2015, we had 258 impaired loans totaling $39.9 million (including purchase credit impaired, or PCI, loans of $32.8 million).  Of this amount, 83 impaired loans totaling $6.1 million were classified as nonaccrual loans.  At June 30, 2015, troubled debt restructurings, or TDRs, included in impaired loans totaled $1.9 million, 16 loans of which were included in nonaccrual loans having a total balance of $0.96 million.  Borrowers under all other restructured loans are paying in accordance with the terms of the modified loan agreement and have been placed on accrual status after a period of performance with the restructured terms. 

The following table presents details of our nonperforming loans and nonperforming assets, as these asset quality metrics are evaluated by management, at the dates indicated:

	June 30, 2015		December 31, 2014
Nonaccrual loans excluding PCI loans	$	5,253,884	$	5,237,356
Nonaccrual PCI loans		805,016		1,620,710
TDR loans excluding those in nonaccrual loans or past due 90+ days		2,013,768		1,155,508
Accruing PCI loans past due 90+ days		3,605,135		5,380,847
Total nonperforming loans		11,677,803		13,394,421
Real estate acquired through foreclosure		1,611,451		1,480,472
Total nonperforming assets	$	13,289,254	$	14,874,893

Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and real estate acquired through foreclosure, decreased to $13.29 million at June 30, 2015 from $14.87 million at December 31, 2014.  The decrease was primarily due to  a $1.78 million decrease in accruing PCI loans past due 90+ days.Nonperforming assets represented 2.73% of total assets at June 30, 2015, which represents a 0.37% decrease from the 3.10% recorded at December 31, 2014. 

Potential problem loans consist of loans that are performing under contract but for which credit problems have caused us to place them on our list of criticized loans.  These loans have a risk rating of 6 (Special Mention) or higher, and exclude all nonaccrual loans and accruing loans past due 90+ days.  As of June 30, 2015, these loans totaled $36.8 million and consisted primarily of Commercial Real Estate loans and Residential Real Estate loans which had balances of $16.6 million and $14.0 million, respectively.  Difficulties in the economy and the accompanying impact on these borrowers, as well as future events, such as regulatory examination assessments, may result in these loans and others being classified as nonperforming assets in the future.

Allowance for Loan Losses and Credit Risk Management

The allowance for loan losses is established to estimate losses that may occur on loans by recording a provision for loan losses that is charged to earnings in the current period.  The allowance is evaluated on a quarterly basis by management and is based upon management’s periodic review of the collectability of the loans in light of historic experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions.  This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.  Measured impairment and credit losses are charged against the allowance when management believes the loan or a portion of the loan’s balance is not collectable.  Subsequent recoveries, if any, are credited to the allowance.

The allowance consists of specific and general components.The specific component relates to individual loans that are classified as impaired.A loan is impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due (principal and interest) according to the contractual terms of the loan agreement and primarily includes nonaccrual loans, troubled debt restructurings, and purchased credit impaired loans where cash flows have deteriorated from those forecasted as of the acquisition date.For those loans that are classified as impaired, an allowance is established when the discounted cash flows, collateral value, or observable market price, whichever is appropriate, of the impaired loan is lower than the carrying value of the loan.For collateral-dependent impaired loans, any measured impairment is properly charged-off against the loan and allowance in the applicable reporting period.The specific component may fluctuate from period to period if changes occur in the nature and volume of impaired loans.

The general component covers pools of similar loans, including purchased loans that did not have deteriorated credit quality and new loan originations, and is based upon historical loss experience of the bank or peer bank group if the bank’s loss experience is deemed by management to be insufficient and several qualitative factors.These qualitative factors address various risk characteristics

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in the Bank’s loan portfolio after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss data. Management will continue to evaluate the appropriateness of the peer group data used with each quarterly allowance analysis until such time that the Bank has sufficient loss experience to provide a foundation for the general reserve requirement.The general component may fluctuate from period to period if changes occur in the mix of the Bank’s loan portfolio, economic conditions, or specific industry conditions.

A test of the adequacy of the allowance, using the methodology outlined above, is performed by management and reported to the Board of Directors on at least a quarterly basis.The complex evaluations involved in such testing require significant estimates.Management uses available data to establish the allowance at a prudent level, recognizing that the determination is inherently subjective, and that future adjustments may be necessary, depending upon many items including a change in economic conditions affecting specific borrowers, or in general economic conditions, and new information that becomes available.However, there are no assurances that the allowance will be sufficient to absorb losses on nonperforming loans, or that the allowance will be sufficient to cover losses on nonperforming loans in the future

The allowance was $1,432,546 at June 30, 2015, compared to $1,294,976 at December 31, 2014.  The allowance as a percentage of total portfolio loans was 0.37% at June 30, 2015 and 0.33% at December 31, 2014.  Management expects continued gradual increases in our allowance for loan losses due to the gradual runoff of the discount on the acquired loan portfolio and an increase in new loan originations.

For non-impaired loans acquired by the Bank from Bay National Bank on July 10, 2010 without evidence of deteriorated credit quality, there was a net unamortized discount of $0.7 million both at June 30, 2015 and December 31, 2014, which represented 3.8% and 3.3%, respectively, of the related loan balance at those dates.  For non-impaired acquired legacy Carrollton Bank portfolio loans without evidence of deteriorated credit quality, there was a net unamortized discount of $1.2 million and $1.3 million at June 30, 2015 and December 31, 2014, respectively, which represented 1.1% and 1.0%, respectively, of the related loan balance at those dates.  For non-impaired acquired legacy Slavie portfolio loans without evidence of deteriorated credit quality, there was an unamortized discount of $2.0 million and $2.2 million at June 30, 2015 and December 31, 2014, respectively, which represented 4.1% and 3.9%, respectively, of the related loan balance at those dates.  As the total combined remaining discount exceeded the indicated total required reserve for these loan pools, no additional reserves were recorded. 

During the three and six months ended June 30, 2015, we recorded net charge-offs of $218,003 and $434,239, respectively, compared to net recoveries of $17,252 and net charge-offs $111,198, respectively  during the same periods of 2014. 

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The following table reflects activity in the allowance for loan losses for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
		2015		2014		2015		2014
Balance at beginning of year (period)	$	1,353,849	$	941,715	$	1,294,976	$	851,000
Chargeoffs:
Commercial & Industrial		(80,869)		-		(80,869)		-
Commercial Real Estate		(45,573)		(89,165)		(45,573)		(136,956)
Residential Real Estate		(45,479)		-		(291,106)		(37,478)
Home Equity Line of Credit		(54,639)		-		(54,639)		(63,984)
Land		-		-		-		-
Construction		-		-		-		-
Consumer & Other		(1,389)		-		(2,389)		-
Total charge-offs		(227,949)		(89,165)		(474,576)		(238,418)
Recoveries:
Commercial & Industrial		-		-		-		-
Commercial Real Estate		-		101,614		-		101,614
Residential Real Estate		1,391		3,683		31,782		5,542
Home Equity Line of Credit		7,000		1,000		7,000		9,844
Land		-		-		-		-
Construction		-		-		-		-
Consumer & Other		1,555		120		1,555		10,220
Total recoveries		9,946		106,417		40,337		127,220
Net charge-offs		(218,003)		17,252		(434,239)		(111,198)
Provision for loan loss		296,700		140,679		571,809		359,844
Balance at end of period	$	1,432,546	$	1,099,646	$	1,432,546	$	1,099,646
Net charge-offs annualized as a percentage of average loans		(0.23%)		0.02%		(0.22%)		(0.07%)

Deposits

The following deposit table presents the composition of deposits at the dates indicated.

	June 30, 2015			December 31, 2014				2015 vs 2014
		Amount	% of Total		Amount	% of Total		$ Change	% Change
Noninterest-bearing deposits	$	97,646,931	25%	$	91,676,534	24%	$	5,970,397	7%
Interest-bearing deposits:
Checking		50,621,682	13%		54,844,855	14%		(4,223,173)	-8%
Savings		38,096,532	10%		36,233,369	9%		1,863,163	5%
Money market		89,778,076	23%		82,651,992	21%		7,126,084	9%
Total interest-bearing checking, savings and money market deposits		178,496,290	46%		173,730,216	46%		4,766,074	3%
Time deposits under $100,000		47,957,528	13%		50,313,096	13%		(2,355,568)	-5%
Time deposits of $100,000 or more		60,350,704	16%		72,110,286	19%		(11,759,582)	-16%
Total time deposits		108,308,232	29%		122,423,382	31%		(14,115,150)	-12%
Total interest bearing deposits		286,804,522	75%		296,153,598	76%		(9,349,076)	-3%
Total Deposits	$	384,451,453	100%	$	387,830,132	100%	$	(3,378,679)	0%

Total deposits were $384 million at June 30, 2015, a decrease of $3 million, or 1%, when compared to December 31, 2014.  Within the deposit base, noninterest bearing demand account balances increased $6 million, or 7%, interest bearing savings account balances increased by $2 million, or 5%, money market balances increased $7 million, or 9%, and time deposit balances decreased by $14 million, or 12%, when compared to the amounts at December 31, 2014.

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The ratio of noninterest bearing deposits to total deposits was 25% as of June 30, 2015, 100 basis points higher than at December 31, 2014. Included in our deposit portfolio are brokered deposits through the Promontory Interfinancial Network (the “Network”). Through this deposit matching network, which includes Certificate of Deposit Registry Service (“CDARS“) and Insured Cash Sweep service (“ICS”) deposits, we have the ability to offer our customers access to FDIC-insured deposit products in aggregate amounts exceeding current insurance limits.  When we place funds through the Network on behalf of a customer, we typically receive matching deposits through the network’s reciprocal deposit program.  At June 30, 2015, we had $10.5 million in deposits through the Network compared to $8.9 million at December 31, 2014.  We can also choose to place deposits through the Network without receiving matching deposits.  At June 30, 2015, we had placed $0.2 million of deposits through the Network for which we received no matching deposits, compared to $0.3 million at December 31, 2014.

Borrowings

Borrowings at June 30, 2015 consisted of $33 million in FHLB advances and $0.2 million in Atlantic Community Bankers Bank advances, compared to $22 million and $0.2 million, respectively,  at  December 31, 2014.

CAPITAL RESOURCES

Ample capital is necessary to sustain growth, provide a measure of protection against unanticipated declines in asset values and safeguard the funds of depositors.  Capital also provides a source of funds to meet loan demand and enables us to manage assets and liabilities effectively.

At June 30, 2015, our total stockholders’ equity was $66.1 million, a decrease from the $66.6 million recorded at December 31, 2014.  The decrease was attributable to a $1.5 million net unrealized loss on our defined benefit pension plan which more than offset the retention of $0.9 million of corporate earnings.

The Bank is subject to various regulatory capital requirements administered by federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

In July 2013, federal bank regulatory agencies issued a final rule that revises their risk based capital requirements and the method for calculating risk weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”) and certain provisions of the Dodd-Frank Act.  The rule was applicable to the Bank effective January 1, 2015.  However, the rule does not apply to the Company since it is a small bank holding company with less than $500 million in total consolidated assets.

The rule imposes higher risk based capital and leverage requirements than those in place at the time the rule was issued.  Specifically, the rule imposes the following minimum capital requirements to be considered adequately capitalized

· A new common equity Tier 1 risk based capital ratio of 4.5%;

· A Tier 1 risk-based capital ratio of 6% (increased from the previous 4% requirement);

· A total risk-based capital ratio of 8% (unchanged from previous requirements); and

· A leverage ratio of 4%.

The rule also includes changes in what constitutes regulatory capital, some of which are subject to a transition period.  These changes include the phasing out of certain instruments as qualifying capital.  In addition, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital.  Certain deferred tax assets over designated percentages of common stock are required to be deducted from capital, subject to a transition period.  Finally, common equity Tier 1 capital includes accumulated other comprehensive income (which includes all unrealized net gains and losses on available for sale debt and equity securities and all unrealized net gain or loss on defined benefit pension plan), subject to a transition period and a one-time opt-out election.  The Bank elected to opt-out of this provision.  As such, accumulated comprehensive income is not included in determining the Bank’s regulatory capital ratios.

The rule also includes changes in the risk weights of assets to better reflect credit risk and other risk exposures.  These include a 150% risk weight (up from 100%) for certain high volatility commercial real estate acquisitions, development and construction loans and non-residential mortgage loans that are 90 days past due or otherwise on nonaccrual status, a 20% (up from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not

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unconditionally cancellable, a 250% risk weight (up from 100%) for deferred tax assets that are not deducted from capital and increased risk weights (from 0% to up to 600%) for certain equity exposures.

Finally, the rule limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% (once fully phased in) of common equity Tier 1 capital to risk weighted assets in addition to the amount necessary to meet its minimum risk based capital requirements.

The final rule became effective on January 1, 2015, and the requirements in the rule will be fully phased-in by January 1, 2019.  While the ultimate impact of the fully phased-in capital standards on the Company and the Bank is currently being reviewed, we currently do not believe that compliance with Basel III will have a material impact once fully implemented.

Regulatory Capital and Other Requirements

The Bank is required to meet regulatory capital requirements that include several measures of capital.  As permitted by the regulatory capital regulations in effect as of March 31, 2015, the Bank made a one-time election to exclude all of the components of accumulated other comprehensive income (loss) from its regulatory capital calculation.

For regulatory capital purposes as of March 31, 2015, deferred tax assets that arise from net operating loss and tax credit carryforwards (net of any related valuations allowances and net of deferred tax liabilities) are excluded from regulatory capital, in addition to certain overall limits on net deferred tax assets as a percentage of common equity Tier 1 capital.  At June 30, 2015, $2.3 million of the Bank’s net deferred tax asset was included in common equity Tier 1, Tier 1 and total regulatory capital.  We will continue to evaluate the realizability of our net deferred tax asset on a quarterly basis for both financial reporting and regulatory capital purposes.  This evaluation may result in the inclusion of a deferred tax asset in regulatory capital in an amount that is different from the amount determined under GAAP.

In addition, the OCC requires that FSBs, like the Bank, maintain a minimum level of Tier 1 capital to average total assets excluding intangibles.  This measure is known as the leverage ratio.  The current regulatory minimum for the leverage ratio for institutions to be considered adequately capitalized is 4%, but an individual institution could be required to maintain a higher level.  In connection with the Merger, the Bank entered into an Operating Agreement with the OCC pursuant to which the Bank agreed, among other things, to maintain a leverage ratio of at least 10% for the term of the Operating Agreement.  The Operating Agreement will remain in effect until it is terminated by the OCC or the Bank ceases to be an FSB.

Actual capital amounts and ratios for the Bank are presented in the following table (dollars in thousands):

										To Be Well
										Capitalized Under
						To Be Considered				Prompt Corrective
		Actual				Adequately Capitalized				Action Provisions
As of June 30, 2015:		Amount	Ratio			Amount	Ratio			Amount	Ratio
Common Equity Tier 1 Capital	$	63,206	17.00	%	$	16,726	4.50	%	$	24,160	6.50	%
Tier I Risk-Based Capital Ratio	$	63,206	17.00	%	$	22,302	6.00	%	$	29,736	8.00	%
Total Risk-Based Capital Ratio	$	64,639	17.39	%	$	29,736	8.00	%	$	37,170	10.00	%
Tier 1 Leverage Ratio	$	63,206	13.23	%	$	19,106	4.00	%	$	23,882	5.00	%
As of December 31, 2014:
Common Equity Tier 1 Capital		N/A	N/A			N/A	N/A			N/A	N/A
Tier I Risk-Based Capital Ratio	$	61,448	16.31	%	$	15,066	4.00	%	$	22,599	6.00	%
Total Risk-Based Capital Ratio	$	62,743	16.66	%	$	30,132	8.00	%	$	37,665	10.00	%
Tier 1 Leverage Ratio	$	61,448	12.94	%	$	18,988	4.00	%	$	23,735	5.00	%

The OCC is required to take certain supervisory actions against an undercapitalized FSB, the severity of which depends upon the FSB’s degree of capitalization.  Failure to maintain an appropriate level of capital could cause the OCC to take any one or more of a number of discretionary supervisory actions, including the issuance of a capital directive and the replacement of senior executive officers and directors. 

Banking regulations also limit the amount of dividends that may be paid without prior approval by an FSB's regulatory agency.  In addition to these regulations, the Bank agreed in the Operating Agreement that it would not declare or pay any dividends

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or otherwise reduce its capital unless it is in compliance with the Operating Agreement, including the minimum capital requirements.  Due to the Bank’s desire to preserve capital to fund its growth, we currently do not anticipate paying a dividend for the foreseeable future.  In addition to these regulatory restrictions, it should be noted that the declaration of dividends is at the discretion of our Board of Directors and will depend, in part, on our earnings and future capital needs.

LIQUIDITY

Liquidity describes our ability to meet financial obligations, including lending commitments and contingencies, which arise during the normal course of business.  Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of the Company’s customers, as well as to meet current and planned expenditures.  Management monitors the liquidity position daily.

Our liquidity is derived primarily from our deposit base, scheduled amortization and prepayments of loans and investment securities, funds provided by operations and capital.  Additionally, liquidity is provided through our portfolios of cash and interest-bearing deposits in other banks, federal funds sold, loans held for sale, and securities available for sale.  While scheduled principal repayments on loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and rates offered by the Bank’s competition. 

The borrowing requirements of customers include commitments to extend credit and the unused portion of lines of credit, which totaled $83.7 million at June 30, 2015.  Management notes that, historically, a small percentage of unused lines of credit are actually drawn down by customers within a 12-month period.

Our most liquid assets are cash and assets that can be readily converted into cash, including interest-bearing deposits with banks and federal funds sold, and investment securities.  As of June 30, 2015, we had $8.0 million in cash and due from banks, $11.4 million in interest-bearing deposits with banks and federal funds sold, and $39.8 million in investment securities available for sale.

The Bank also has external sources of funds through the Federal Reserve Bank and FHLB, which can be drawn upon when required.  The Bank has a line of credit totaling approximately $97.4 million with the FHLB of which $64.4 million was available to be drawn on June 30, 2015 based on outstanding advances and qualifying loans pledged as collateral.  In addition, the Bank can pledge securities at the Federal Reserve Bank and FHLB and, depending on the type of security, may borrow approximately 50% to 97%, of the fair market value of the securities.  The Bank had $17.5 million of securities pledged at the FHLB, $0.1 million of securities pledged at the Federal Reserve Bank, and an additional $22.8 million of unpledged securities.  Using all securities as collateral, the Bank could borrow approximately $29.3 million as of June 30, 2015.  Additionally, the Bank has unsecured federal funds lines of credit totaling $8.0 million with two institutions and a $4.0 million secured federal funds line of credit with another institution.  The secured federal funds line of credit with another institution would require the Bank to transfer securities currently pledged at the FHLB or the Federal Reserve Bank or to pledge unpledged securities to this institution before it could borrow against this line.  At June 30, 2015, the Bank had $33.0 million of FHLB advances outstanding.

To further aid in managing liquidity, the Bank’s Board of Directors has an Asset/Liability Management Committee (“ALCO”) to review and discuss recommendations for the use of available cash and to maintain an investment portfolio.  By limiting the maturity of securities and maintaining a conservative investment posture, management can rely on the investment portfolio to help meet short-term funding needs.

We believe the Bank has adequate cash on hand and available through liquidation of investment securities and available borrowing capacity to meet our liquidity needs.  Although we believe sufficient liquidity exists, if economic conditions and consumer confidence deteriorate, this liquidity could be depleted, which would then materially affect our ability to meet operating needs and to raise additional capital.

MARKET RISK AND INTEREST RATE SENSITIVITY 

Our primary market risk is interest rate fluctuation.  Interest rate risk results primarily from the traditional banking activities in which the Bank engages, such as gathering deposits and extending loans.  Many factors, including economic and financial conditions, movements in interest rates and consumer preferences affect the difference between the interest earned on our assets and the interest paid on liabilities.  Our interest rate risk represents the level of exposure we have to fluctuations in interest rates and is primarily measured as the change in earnings and the theoretical market value of equity that results from changes in interest rates.  The ALCO oversees our management of interest rate risk.  The objective of the management of interest rate risk is to maximize stockholder value, enhance profitability and increase capital, serve customer and community needs, and protect us from any material financial consequences associated with changes in interest rate risk.

Interest rate risk is that risk to earnings or capital arising from movement of interest rates.  It arises from differences between the timing of rate changes and the timing of cash flows (repricing risk); from changing rate relationships across yield curves that affect bank activities (basis risk); from changing rate relationships across the spectrum of maturities (yield curve risk); and from interest rate related options embedded in certain bank products (option risk).  Changes in interest rates may also affect a bank’s underlying

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economic value.  The value of a bank’s assets, liabilities, and interest-rate related, off-balance sheet contracts is affected by a change in rates because the present value of future cash flows, and in some cases the cash flows themselves, is changed. 

We believe that accepting some level of interest rate risk is necessary in order to achieve realistic profit goals.  Management and the Board have chosen an interest rate risk profile that is consistent with our strategic business plan.

The Company’s board of directors has established a comprehensive interest rate risk management policy, which is administered by our ALCO.  The policy establishes limits on risk, which are quantitative measures of the percentage change in net interest income (a measure of net interest income at risk) and the fair value of equity capital (a measure of economic value of equity or “EVE” at risk) resulting from a hypothetical change in U.S. Treasury interest rates.  We measure the potential adverse impacts that changing interest rates may have on our short-term earnings, long-term value, and liquidity by employing simulation analysis through the use of computer modeling.  The simulation model captures optionality factors such as call features and interest rate caps and floors imbedded in investment and loan portfolio contracts.  As with any method of gauging interest rate risk, there are certain shortcomings inherent in the interest rate modeling methodology we employ.  When interest rates change, actual movements in different categories of interest-earning assets and interest-bearing liabilities, loan prepayments, and withdrawals of time and other deposits, may deviate significantly from assumptions used in the model.  Finally, the methodology does not measure or reflect the impact that higher rates may have on adjustable-rate loan customers’ ability to service their debts, or the impact of rate changes on demand for loan and deposit products.

We prepare a current base case and eight alternative simulations at least once a quarter and report the analysis to the board of directors.  In addition, more frequent forecasts are produced when the direction or degree of change in interest rates are particularly uncertain to evaluate the impact of balance sheet strategies or when other business conditions so dictate.

The statement of condition is subject to quarterly testing for eight alternative interest rate shock possibilities to indicate the inherent interest rate risk.  Average interest rates are shocked by +/ - 100, 200, 300, and 400 basis points (“bp”), although we may elect not to use particular scenarios that we determine are impractical in the current rate environment.  It is our goal to structure the balance sheet so that net interest-earnings at risk over a 12-month period and the economic value of equity at risk do not exceed policy guidelines at the various interest rate shock levels.

At June 30, 2015, the simulation analysis reflected that the Bank is in a slightly asset sensitive position.  Management currently strives to manage higher costing fixed rate funding instruments, while increasing assets that are more fluid in their repricing.  An asset sensitive position, theoretically, is favorable in a rising rate environment since more assets than liabilities will re-price in a given time frame as interest rates rise.  Similarly, a liability sensitive position, theoretically, is favorable in a declining interest rate environment since more liabilities than assets will re-price in a given time frame as interest rates decline.  Management works to maintain a consistent spread between yields on assets and costs of deposits and borrowings, regardless of the direction of interest rates.

OFF-BALANCE SHEET ARRANGEMENTS 

We enter into off-balance sheet arrangements in the normal course of business.  These arrangements consist primarily of commitments to extend credit, lines of credit, and letters of credit issued by the Bank.  Credit commitments are agreements to lend to a customer as long as there is no violation of any condition to the contract.  Loan commitments generally have interest rates fixed at current market amounts, fixed expiration dates, and may require payment of a fee.  Lines of credit generally have variable interest rates.  Such lines do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time.  Letters of credit are commitments issued to guarantee the performance of a customer to a third party. 

Our exposure to credit loss in the event of nonperformance by the borrower is the contract amount of the commitment.  Loan commitments, lines of credit, and letters of credit are made on the same terms, including collateral, as outstanding loans.  Management is not aware of any accounting loss that we would incur by funding these commitments.

Mortgage Loan Repurchase Obligations:  The Company originates and sells mortgage loans, primarily to other financial institutions, and provides various representations and warranties related to, among other things, the ownership of the loans, the validity of the liens, the loan selection and origination process, and the compliance to the origination criteria established by the purchasing institution.  In the event of a breach of our representations and warranties, we may be obligated to repurchase the loans with identified defects or to indemnify the buyers.  Our contractual obligation arises only when the breach of representations and warranties are discovered and repurchase is demanded.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a “smaller reporting company” and, as such, disclosure pursuant to this Item 3 is not required.

ITEM 4.    CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in Bay Bancorp, Inc. reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the SEC, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in those rules and forms, and that such information is accumulated and communicated to management, including Bay Bancorp, Inc.’ principal executive officer (“PEO”) and its principal accounting officer (“PAO”), as appropriate, to allow for timely decisions regarding required disclosure.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

An evaluation of the effectiveness of these disclosure controls as of June 30, 2015 was carried out under the supervision and with the participation of management, including the PEO and the PAO.  Based on that evaluation, management, including the PEO and the PAO, has concluded that the Company’s disclosure controls and procedures are, in fact, effective at the reasonable assurance level. 

During the quarter ended June 30, 2015, there were no changes in the Company’s internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in various legal actions arising from the normal business activities.  In management’s opinion, the outcome of these matters, individually or in the aggregate, will not have a material adverse impact on the results of its operations or financial condition.

ITEM 1A. RISK FACTORS

The risks and uncertainties to which the Company’s financial condition and results of operations are subject were discussed in Bay’s Annual Report on Form 10-K for the year ended December 31, 2014.  Management does not believe that any material changes in these risk factors have occurred since they were last disclosed.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

56

ITEM 6. EXHIBITS

The exhibits filed or furnished with this quarterly report are listed in the exhibit index that immediately follows the signature hereto, which list is incorporated herein by reference.

SIGNATURES

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

BAY BANCORP, INC

Date	August 14, 2015	By:	/s/Joseph J. Thomas
			Joseph J. Thomas
			President and Chief Executive Officer
			(Principal Executive Officer)
Date	August 14, 2015	By:	/s/ Larry D. Pickett
			Larry D. Pickett
			Executive Vice President and Chief Financial Officer
			(Principal Accounting Officer)

57

EXHIBIT INDEX

Exhibit No.	Description
10.1	Bay Bancorp, Inc. 2015 Equity Compensation Plan (incorporated by reference to Appendix A of the Registrant’s definitive proxy statement on Schedule 14A filed on April 15, 2015)
31.1	Rule 13a-14(a) Certification by the Principal Executive Officer (filed herewith)
31.2	Rule 13a-14(a) Certification by the Principal Accounting Officer (filed herewith)
32.1	Certification by the Principal Executive Officer of the periodic financial reports, required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certification by the Principal Accounting Officer of the periodic financial reports, required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101	Interactive Data Files pursuant to Rule 405 of Regulation S-T (filed herewith)

58

EX-31.1

Exhibit 31.1

Certification of principal executive officer (exchange act rule 13-a-14(a)

I, Joseph J. Thomas, certify that:

(1)I have reviewed this quarterly report on Form 10-Q of Bay Bancorp, Inc.;

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

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

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

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

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

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

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

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

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

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

Date:  August 14, 2015   /s/  Joseph. J. Thomas Joseph J. Thomas
President and Chief Executive Officer

    (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of principal Financial officer

I, Larry D Pickett, certify that:

(1)I have reviewed this quarterly report on Form 10-Q of Bay Bancorp Inc.;

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

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

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

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

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

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

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

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

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

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

Date:  August 14, 2015   /s/ Larry D. Pickett Larry D. Pickett Chief Financial Officer

    (Principal Accounting Officer)

EX-32.1

Exhibit 32.1

Certification of principal EXECUTIVE officer

In connection with the quarterly report of Bay Bancorp, Inc. on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof, I, Joseph J. Thomas, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

  (1) such Form 10-Q for the period ended June 30, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  (2) the information contained in such Form 10-Q for the period ended June 30, 2015, fairly presents, in all material respects, the financial condition and results of operations of Bay Bancorp, Inc.

/s/ Joseph J. Thomas

Joseph J. Thomas
President and Chief Executive Officer
(Principal Executive Officer)

August 14, 2015

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and is not being filed as part of the Form 10-Q or as a separate disclosure document, and may not be disclosed, distributed or used by any person for any reason other than as specifically required by law. 

EX-32.2

Exhibit 32.2

Certification of principal Financial officer

In connection with the quarterly report of Bay Bancorp, Inc. on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof, I, Larry D. Pickett, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

  (1) such Form 10-Q for the period ended June 30, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  (2) the information contained in such Form 10-Q for the period ended June 30, 2015, fairly presents, in all material respects, the financial condition and results of operations of Bay Bancorp, Inc.

/s/ Larry D. Pickett

Larry D. Pickett
Chief Financial Officer (Principal Accounting Officer)
August 14, 2015

This certification is made solely for the purpose of 18 U.S.C. Section 1350, and is not being filed as part of the Form 10-Q or as a separate disclosure document, and may not be disclosed, distributed or used by any person for any reason other than as specifically required by law. 

XML

Fair Value (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value [Abstract]

Assets Recorded At Fair Value On A Recurring Basis

		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
June 30, 2015
U.S. government agency	$	5,793,308	$	-	$	5,793,308	$	-
U.S. treasury securities		5,929,230		-		5,929,230		-
Residential mortgage-backed securities		19,439,018		-		19,439,018		-
State and municipal		4,592,237		-		4,592,237		-
Corporate obligations		4,046,280		-		4,046,280		-
Equity securities		22,468		22,468		-		-
	$	39,822,541	$	22,468	$	39,800,073	$	-

		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
December 31, 2014
U.S. government agency	$	7,778,271	$	-	$	7,778,271	$	-
Residential mortgage-backed securities		20,870,927		-		20,870,927		-
State and municipal		4,654,146		-		4,654,146		-
Corporate obligations		2,030,000		-		2,030,000		-
Equity securities		16,545		16,545		-		-
	$	35,349,889	$	16,545	$	35,333,344	$	-

Assets Recorded At Fair Value On A Nonrecurring Basis

June 30, 2015:		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Impaired loans	$	456,601	$	-	$	-	$	456,601
Real estate acquired through foreclosure		1,231,584		-		-		1,231,584
	$	1,688,185	$	-	$	-	$	1,688,185

December 31, 2014:		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Impaired loans	$	374,459	$	-	$	-	$	374,459
Real estate acquired through foreclosure		983,276		-		-		983,276
	$	1,357,735	$	-	$	-	$	1,357,735

Estimated Fair Values Of Financial Instruments

			June 30, 2015				December 31, 2014
	Level in Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	Level 1	$	19,417,756	$	19,417,756	$	16,857,325	$	16,857,325
Time deposits with banks	Level 2		-		-		34,849		34,849
Investment securities available for sale (debt)	Level 2		39,800,073		39,800,073		35,333,344		35,333,344
Investment securities available for sale (equity)	Level 1		22,468		22,468		16,545		16,545
Investment securities held to maturity (debt)	Level 2		1,277,799		1,282,364		1,315,718		1,324,797
Restricted equity securities	Level 2		2,153,595		2,153,595		1,862,995		1,862,995
Loans held for sale	Level 2		16,832,511		16,832,511		7,233,306		7,233,306
Loans, net of allowance	Level 3		384,219,991		392,492,157		391,756,216		401,651,659
Accrued interest receivable	Level 2		1,276,005		1,276,005		1,306,111		1,306,111
Financial liabilities:
Deposits	Level 3		384,451,453		384,875,368		387,830,132		388,705,645
Short-term borrowings	Level 2		33,150,000		33,150,000		22,150,000		22,150,000
Accrued interest payable	Level 2		26,715		26,715		25,350		25,350

XML

Loans And Allowance For Loan Losses (Impaired Loans) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
Recorded Investment, With an allowance recorded	$ 7,077,934		$ 7,077,934		$ 6,419,864
Unpaid Principal Balance, With an allowance recorded	8,382,868		8,382,868		7,925,553
Average Recorded Investment, With an allowance recorded	7,978,678	$ 8,794,405	7,957,871	$ 8,885,799
Interest Income Recognized, With an allowance recorded	161,673	257,255	180,239	386,646
Recorded Investment	7,077,934		7,077,934		6,419,864
Unpaid Principal Balance	8,382,868		8,382,868		7,925,553
Average Recorded Investment	7,978,678	8,794,405	7,957,871	8,885,799
Interest Income Recognized	161,673	257,255	180,239	386,646
Commercial And Industrial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	1,257,566		1,257,566		957,080
Unpaid Principal Balance, With no related allowance recorded	1,410,079		1,410,079		1,155,553
Average Recorded Investment, With no related allowance recorded	1,308,355	1,118,445	1,231,453	1,139,407
Interest Income Recognized, With no related allowance recorded	34,429	24,174	35,533	49,132
Recorded Investment	1,257,566		1,257,566		957,080
Unpaid Principal Balance	1,410,079		1,410,079		1,155,553
Average Recorded Investment	1,308,355	1,118,445	1,231,453	1,139,407
Interest Income Recognized	34,429	24,174	35,533	49,132
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	1,141,996		1,141,996		828,264
Unpaid Principal Balance	1,141,996		1,141,996		834,271
Average Recorded Investment	1,299,025	2,966,900	1,301,107	2,981,603
Interest Income Recognized	558	126,099	558	146,692
Commercial Real Estate - Investor [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	1,141,996		1,141,996		662,280
Unpaid Principal Balance, With no related allowance recorded	1,141,996		1,141,996		668,287
Average Recorded Investment, With no related allowance recorded	1,299,025	303,593	1,301,107	304,130
Interest Income Recognized, With no related allowance recorded	558	589	558	1,193
Average Recorded Investment, With an allowance recorded		1,999,853		2,002,139
Interest Income Recognized, With an allowance recorded		125,510		145,499
Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded					165,984
Unpaid Principal Balance, With no related allowance recorded					165,984
Average Recorded Investment, With no related allowance recorded		663,454		675,334
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	4,532,317		4,532,317		4,314,191
Unpaid Principal Balance	5,602,977		5,602,977		5,512,348
Average Recorded Investment	5,183,064	3,856,913	5,236,165	3,911,880
Interest Income Recognized	126,686	39,713	144,148	77,957
Residential Real Estate - Investor [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	1,560,094		1,560,094		1,063,643
Unpaid Principal Balance, With no related allowance recorded	2,168,388		2,168,388		1,658,389
Average Recorded Investment, With no related allowance recorded	1,955,625	889,289	1,967,136	895,010
Interest Income Recognized, With no related allowance recorded	11,055	3,301	22,257	6,661
Residential Real Estate - Owner Occupied [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	2,972,223		2,972,223		3,250,548
Unpaid Principal Balance, With no related allowance recorded	3,434,589		3,434,589		3,853,959
Average Recorded Investment, With no related allowance recorded	3,227,439	2,967,624	3,269,029	3,016,870
Interest Income Recognized, With no related allowance recorded	115,631	36,412	121,891	71,296
Home Equity Line Of Credit [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment, With no related allowance recorded	146,055		146,055		320,329
Unpaid Principal Balance, With no related allowance recorded	209,570		209,570		404,347
Average Recorded Investment, With no related allowance recorded	178,850	317,878	179,629	318,506
Recorded Investment	146,055		146,055		320,329
Unpaid Principal Balance	209,570		209,570		404,347
Average Recorded Investment	178,850	317,878	179,629	318,506
Construction [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment, With no related allowance recorded		524,158		524,158
Interest Income Recognized, With no related allowance recorded				112,865
Interest Income Recognized, With an allowance recorded		67,269
Average Recorded Investment		524,158		524,158
Interest Income Recognized		67,269		112,865
Consumer And Other [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	18,246		18,246		19,034
Average Recorded Investment, With no related allowance recorded	9,384	10,111	9,517	10,245
Unpaid Principal Balance	18,246		18,246		$ 19,034
Average Recorded Investment	$ 9,384	$ 10,111	$ 9,517	$ 10,245

XML

Investment Securities (Securities With Unrealized Losses By Length Of Impairment) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Fair Value - Less than 12 months	$ 2,544,541	$ 2,788,730
Unrealized Losses - Less than 12 months	(28,304)	(15,342)
Fair Value - 12 months or longer	4,851,629	6,917,869
Unrealized Losses - 12 months or longer	(177,576)	(269,822)
Fair Value - Total	7,396,170	9,706,599
Unrealized Losses - Total	$ (205,880)	$ (285,164)
U.S. Government Agency [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value - 12 months or longer
Unrealized Losses - 12 months or longer
Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value - Less than 12 months	$ 1,794,721	$ 791
Unrealized Losses - Less than 12 months	(26,737)	(3)
Fair Value - 12 months or longer	4,829,161	6,901,324
Unrealized Losses - 12 months or longer	(121,292)	(207,613)
Fair Value - Total	6,623,882	6,902,115
Unrealized Losses - Total	(148,029)	(207,616)
State And Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value - Less than 12 months	749,820	757,939
Unrealized Losses - Less than 12 months	$ (1,567)	$ (3,621)
Fair Value - 12 months or longer
Unrealized Losses - 12 months or longer
Fair Value - Total	$ 749,820	$ 757,939
Unrealized Losses - Total	$ (1,567)	(3,621)
Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value - Less than 12 months		2,030,000
Unrealized Losses - Less than 12 months		$ (11,718)
Fair Value - 12 months or longer
Unrealized Losses - 12 months or longer
Fair Value - Total		$ 2,030,000
Unrealized Losses - Total		(11,718)
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value - Less than 12 months	$ 2,544,541	2,788,730
Unrealized Losses - Less than 12 months	(28,304)	(15,342)
Fair Value - 12 months or longer	4,829,161	6,901,324
Unrealized Losses - 12 months or longer	(121,292)	(207,613)
Fair Value - Total	7,373,702	9,690,054
Unrealized Losses - Total	(149,596)	(222,955)
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value - 12 months or longer	22,468	16,545
Unrealized Losses - 12 months or longer	(56,284)	(62,209)
Fair Value - Total	22,468	16,545
Unrealized Losses - Total	$ (56,284)	$ (62,209)

XML

Short-Term Borrowings (Federal Home Loan Bank Advances) (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Short-term Debt [Line Items]
Federal Home Loan Bank Advances	$ 33,150,000		$ 22,150,000
Federal Home Loan Bank Advances Due January 2015, Fixed Rate 0.24% [Member]
Short-term Debt [Line Items]
Federal Home Loan Bank Advances			8,000,000
Interest rate		0.24%
Federal Home Loan Bank Advances, Due July 2015 Fixed Rate .19% [Member]
Short-term Debt [Line Items]
Federal Home Loan Bank Advances	$ 17,000,000
Interest rate	0.19%
Federal Home Loan Bank Advances Due July 2015, Fixed Rate .18% [Member]
Short-term Debt [Line Items]
Federal Home Loan Bank Advances	$ 5,300,000
Interest rate	0.18%
Federal Home Loan Bank Advances Due December 2015, Daily Rate 0.355% [Member]
Short-term Debt [Line Items]
Federal Home Loan Bank Advances	$ 10,700,000		14,000,000
Interest rate		0.355%
Atlantic Central Bankers bank Advances Due November, 2015, Fixed rate 4.50% [Member]
Short-term Debt [Line Items]
Federal Home Loan Bank Advances	$ 150,000		$ 150,000
Interest rate	4.50%

XML

Loans And Allowance For Loan Losses (Credit Quality Indicators By Class Of The Loan Portfolio) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	$ 385,652,537	$ 393,051,192
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	348,870,569	347,736,865
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	15,513,975	17,117,843
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	21,267,993	$ 28,196,484
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	32,835,146	$ 33,454,280
Commercial And Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	29,577,832	30,150,745
Commercial And Industrial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	1,659,553	1,530,547
Commercial And Industrial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	1,597,761	$ 1,772,988
Commercial And Industrial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Commercial Real Estate - Investor [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	102,295,758	$ 101,947,596
Commercial Real Estate - Investor [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	95,690,428	93,113,185
Commercial Real Estate - Investor [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	4,231,900	5,837,107
Commercial Real Estate - Investor [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	2,373,430	$ 2,997,304
Commercial Real Estate - Investor [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	56,879,584	$ 56,766,958
Commercial Real Estate - Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	46,855,623	42,898,246
Commercial Real Estate - Owner Occupied [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	7,352,632	6,864,098
Commercial Real Estate - Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	2,671,329	$ 7,004,614
Commercial Real Estate - Owner Occupied [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Residential Real Estate - Investor [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	45,273,399	$ 50,708,153
Residential Real Estate - Investor [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	35,023,717	39,109,937
Residential Real Estate - Investor [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	1,985,969	2,804,857
Residential Real Estate - Investor [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	8,263,713	$ 8,793,359
Residential Real Estate - Investor [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Residential Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	89,489,276	$ 89,665,882
Residential Real Estate - Owner Occupied [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	85,735,353	84,796,122
Residential Real Estate - Owner Occupied [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	3,753,923	$ 4,869,760
Residential Real Estate - Owner Occupied [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Home Equity Line Of Credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	34,241,193	$ 35,717,982
Home Equity Line Of Credit [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	33,784,792	35,088,028
Home Equity Line Of Credit [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	456,401	$ 629,954
Home Equity Line Of Credit [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	4,791,897	$ 5,856,875
Land [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	2,523,309	3,850,748
Land [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	206,350
Land [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	2,062,238	$ 2,006,127
Land [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	18,773,848	$ 18,052,287
Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	18,607,079	17,848,675
Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	77,571	81,234
Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	89,198	$ 122,378
Construction [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating
Consumer And Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	1,072,436	$ 881,179
Consumer And Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating	$ 1,072,436	$ 881,179
Consumer And Other [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Risk Rating

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Commitments And Contingent Liabilities (Outstanding Loan Commitments, Unused Lines Of Credit, And Letters Of Credit) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Mortgage loan repurchase obligations	$ 13,800,000	$ 10,100,000
Loan Commitments [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet commitments and contingent liabilities	8,377,625	5,021,857
Unused Lines Of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet commitments and contingent liabilities	72,365,054	64,761,646
Letters of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet commitments and contingent liabilities	$ 2,984,948	$ 1,632,927

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Investment Securities (Narrative) (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2015 USD ($) security	Dec. 31, 2014 USD ($) security
Schedule Of Investment Securities [Line Items]
Aggregate unrealized losses	$ 205,880	$ 285,164
Debt securities as a percentage of stockholders' equity, threshold	10.00%
Number of securities subject to write-down due to credit related other-than-temporary impairment | security	0	0
Amortized cost of securities pledged	$ 17,573,505	$ 20,035,812
Fair value of securities pledged	17,870,257	20,358,237
Equity Security Deemed Impaired [Member]
Schedule Of Investment Securities [Line Items]
Aggregate unrealized losses	$ 56,284	$ 62,209
Number of securities with unrealized losses | security	1	1
Debt Securities [Member]
Schedule Of Investment Securities [Line Items]
Aggregate unrealized losses	$ 149,596	$ 222,955
Number of securities with unrealized losses | security	9	11

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Short-Term Borrowings (Tables)

6 Months Ended

Jun. 30, 2015

Short-Term Borrowings [Abstract]

Federal Home Loan Bank Advances

Federal Home Loan Bank Advances		June 30, 2015		December 31, 2014
Due January, 2015, Fixed Rate  0.24%	$	-	$	8,000,000
Due July 2015, Fixed Rate 0.19%		17,000,000
Due July 2015, Fixed Rate 0.18%		5,300,000		-
Due December, 2015, Daily Rate 0.355%		10,700,000		14,000,000
Atlantic Central Bankers Bank Advances
Due November, 2015, Fixed rate 4.50%		150,000		150,000
Total	$	33,150,000	$	22,150,000

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Fair Value (Assets Recorded At Fair Value On A Recurring Basis) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 39,822,541	$ 35,349,889
Quoted Prices (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	22,468	16,545
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 39,800,073	$ 35,333,344
Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
U.S. Government Agency [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 5,793,308	$ 7,778,271
U.S. Government Agency [Member] | Quoted Prices (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
U.S. Government Agency [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 5,793,308	$ 7,778,271
U.S. Government Agency [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 5,929,230
US Treasury Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 5,929,230
US Treasury Securities [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 19,439,018	$ 20,870,927
Residential Mortgage-Backed Securities [Member] | Quoted Prices (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
Residential Mortgage-Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 19,439,018	$ 20,870,927
Residential Mortgage-Backed Securities [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
State And Municipal [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 4,592,237	$ 4,654,146
State And Municipal [Member] | Quoted Prices (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
State And Municipal [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 4,592,237	$ 4,654,146
State And Municipal [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
Corporate Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 4,046,280	$ 2,030,000
Corporate Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	4,046,280	$ 2,030,000
Corporate Obligations [Member] | Quoted Prices (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
Corporate Obligations [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 4,046,280	$ 2,030,000
Corporate Obligations [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 22,468	$ 16,545
Equity Securities [Member] | Quoted Prices (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value	$ 22,468	$ 16,545
Equity Securities [Member] | Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale, at fair value

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Defined Benefit Pension Plan (Narrative) (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2015 USD ($) employee	Dec. 31, 2014 USD ($)
Defined Benefit Pension Plan [Abstract]
Number of new employees eligible for benefits under Defined Benefit Pension Plan	0
Expense associated with 401(k) | $	$ 0	$ 0

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Loans And Allowance For Loan Losses (Troubled Debt Restructurings) (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2015 USD ($) loan	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan		4	1
Pre-Modification Outstanding Recorded Investment	$ 294,399	$ 294,399	$ 85,397
Post-Modification Outstanding Recorded Investment	$ 294,399	$ 294,399	$ 85,397
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan	2	2	1
Pre-Modification Outstanding Recorded Investment	$ 78,575	$ 78,575	$ 85,397
Post-Modification Outstanding Recorded Investment	$ 78,575	$ 78,575	$ 85,397
Commercial Real Estate - Investor [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan	1	1
Pre-Modification Outstanding Recorded Investment	$ 213,387	$ 213,387
Post-Modification Outstanding Recorded Investment	$ 213,387	$ 213,387
Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Residential Real Estate - Investor [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan	1	1
Pre-Modification Outstanding Recorded Investment	$ 2,437	$ 2,437
Post-Modification Outstanding Recorded Investment	$ 2,437	$ 2,437
Residential Real Estate - Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Home Equity Line Of Credit [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Land [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Construction [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Consumer And Other [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | loan
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment

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Income Taxes (Reconciliation Of Federal Income Tax Rate To Effective Tax Rate) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Taxes [Abstract]
Income tax expense at federal statutory rate, Percentage of Pretax Income	34.00%	34.00%	34.00%	34.00%
Amended returns refund claims for pre-acquisition tax periods, Percentage of Pretax Income	0.00%	(12.60%)	0.00%	(13.00%)
Reversal of valuation allowance attributable to future built-in losses, Percentage of Pretax Income	0.00%		0.00%	(4.20%)
Non-taxable, Percentage of Pretax Income	(1.60%)	(1.30%)	(1.50%)	(1.30%)
State income taxes, net of federal income tax benefit, Percentage of Pretax Income	5.60%	5.80%	5.60%	5.80%
Incentive stock options, Percentage of Pretax Income	0.60%	1.80%	0.60%	1.70%
Other nondeductible expenses, Percentage of Pretax Income	(1.70%)	0.40%	0.70%	0.40%
Total income tax expense and effective tax rate, Percentage of Pretax Income	36.90%	28.10%	39.40%	23.40%

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Fair Value (Estimated Fair Values Of Financial Instruments) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Time deposits with banks		$ 34,849
Investment securities available-for-sale (debt)	$ 39,800,073
Investment securities held-to-maturity (debt)	1,282,364
Quoted Prices (Level 1) [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	19,417,756	16,857,325
Investment securities available-for-sale (equity)	22,468	16,545
Quoted Prices (Level 1) [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	19,417,756	16,857,325
Investment securities available-for-sale (equity)	22,468	16,545
Significant Other Observable Inputs (Level 2) [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Time deposits with banks		34,849
Investment securities available-for-sale (debt)	39,800,073	35,333,344
Investment securities held-to-maturity (debt)	1,277,799	1,315,718
Restricted equity securities	2,153,595	1,862,995
Loans held for sale	16,832,511	7,233,306
Accrued interest receivable	1,276,005	1,306,111
Short-term borrowings	33,150,000	22,150,000
Accrued interest payable	26,715	25,350
Significant Other Observable Inputs (Level 2) [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Time deposits with banks		34,849
Investment securities available-for-sale (debt)	39,800,073	35,333,344
Investment securities held-to-maturity (debt)	1,282,364	1,324,797
Restricted equity securities	2,153,595	1,862,995
Loans held for sale	16,832,511	7,233,306
Accrued interest receivable	1,276,005	1,306,111
Short-term borrowings	33,150,000	22,150,000
Accrued interest payable	26,715	25,350
Significant Other Unobservable Inputs (Level 3) [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	384,219,991	391,756,216
Deposits	384,451,453	387,830,132
Significant Other Unobservable Inputs (Level 3) [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans, net of allowance	392,492,157	401,651,659
Deposits	$ 384,875,368	$ 388,705,645

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Net Income Per Common Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net Income Per Common Share [Abstract]
Net income	$ 545,915	$ 2,755,255	$ 889,168	$ 2,836,990
Weighted average shares outstanding	11,020,044	10,123,162	11,017,296	9,753,511
Basic net income per share	$ 0.05	$ 0.27	$ 0.08	$ 0.29
Weighted average shares outstanding	11,020,044	10,123,162	11,017,296	9,753,511
Dilutive potential shares	177,122	48,734	183,715	40,880
Total diluted average shares outstanding	11,197,166	10,171,896	11,201,011	9,794,391
Diluted net income per common share	$ 0.05	$ 0.27	$ 0.08	$ 0.29
Antidilutive shares	260,995	289,280	297,331	263,752

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Stock-Based Compensation (Narrative) (Details)			6 Months Ended
	May. 27, 2015 item shares	Jun. 26, 2013 USD ($)	Jun. 30, 2015 USD ($) shares	Jun. 30, 2014 USD ($)	Dec. 31, 2014 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options outstanding			726,418		743,015
Stock-based compensation expense applicable to the Plans | $			$ 49,652	$ 218,843
Unrecognized stock-based compensation expense | $			$ 121,178
Period for recognition of stock-option compensation expense			1 year 9 months 18 days
Jefferson Bancorp, Inc. 2010 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock of the company authorized for issuance			577,642
Ratio of common stock shares to be received per share of acquiree			2.2217
Options excercise price as a percentage of fair market value			100.00%
Term of options			10 years
Stock options outstanding			522,518
2015 Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options outstanding			0
Common stock reserved for issuance			100,000
Revised Director Compensation Policy [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense applicable to the Plans | $			$ 39,990	$ 41,665
Unrecognized stock-based compensation expense | $			$ 73,332
Fair market value of annual grant of restricted stock | $		$ 10,000
Vesting period		1 year
Number of directors | item	8
Non-vested restricted shares outstanding			16,256		15,296
Shares of common stock granted to certain directors and officers	15,296

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Other Comprehensive Income

6 Months Ended

Jun. 30, 2015

Other Comprehensive Income [Abstract]

Other Comprehensive Income

NOTE 18 – OTHER COMPREHENSIVE INCOME

Comprehensive income is defined as net income plus transactions and other occurrences that are the result of non-owner changes in equity.  For financial statements presented by the Company, non-equity changes are comprised of unrealized gains or losses on available for sale debt securities and any minimum pension liability adjustments.  These items do not have an impact on the Company’s net income.  The following table presents the activity in net accumulated other comprehensive income for the periods indicated:

		Unrealized Gains on Investments Available for Sale		Defined Benefit Pension Plan		Total
Balance at December 31, 2014	$	211,294	$	1,452,220	$	1,663,514
Other comprehensive loss:
Other comprehensive income (loss) before    reclassification adjustments		48,366		(1,535,489)		(1,487,123)
Amounts reclassified from comprehensive loss		(47,168)		-		(47,168)
Other comprehensive loss		1,198		(1,535,489)		(1,534,291)
Balance at June 30, 2015	$	212,492	$	(83,269)	$	129,223
		Unrealized Gains (losses) on Investments Available for Sale		Defined Benefit Pension Plan		Total
Balance at December 31, 2013	$	(190,971)	$	1,304,888	$	1,113,917
Other comprehensive income		393,823		-		393,823
Balance at June 30, 2014	$	202,852	$	1,304,888	$	1,507,740
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the three Months Ended June 30, 2015
Other comprehensive loss:
Unrealized gain on AFS debt securities:
Net AFS debt securities loss	$	(248,743)	$	95,959	$	(152,784)
Other comprehensive loss	$	(248,743)	$	95,959	$	(152,784)
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the three Months Ended June 30, 2014
Other comprehensive income:
Unrealized gain on AFS debt securities	$	366,670	$	(144,690)	$	221,980
Other comprehensive gain	$	366,670	$	(144,690)	$	221,980
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the Six Months Ended June 30, 2015
Other comprehensive loss:
Unrealized gain on AFS debt securities:
Net AFS debt securities gain	$	79,471	$	(31,105)	$	48,366
Reclassification adjustments		(77,490)		30,322		(47,168)
Net income recognized in other comprehensive loss		1,981		(783)		1,198
Defined benefit pension plan adjustments:
Net actuarial losses		(2,535,693)		1,000,204		(1,535,489)
Net loss recognized in other comprehensive loss		(2,535,693)		1,000,204		(1,535,489)
Other comprehensive loss	$	(2,533,712)	$	999,421	$	(1,534,291)
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the Six Months Ended June 30, 2014
Other comprehensive income:
Unrealized gain on AFS debt securities	$	650,473	$	(256,650)	$	393,823
Other comprehensive income:	$	650,473	$	(256,650)	$	393,823

The Company reflects the funded status of defined benefit pension plan liabilities on the balance sheet, which for the six months ended June 30, 2015 resulted in a $1.5 million charge to equity through a reduction of accumulated other comprehensive income.  The loss was primarily due to the use of an updated mortality table issued by the Society of Actuaries in October 2014, which reflects longer life expectancies compared to previous mortality assumptions.

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Loans And Allowance For Loan Losses (Narrative) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) loan	Jun. 30, 2014 USD ($) loan	Dec. 31, 2014 USD ($)
Information On Loans [Line Items]
Loans, net of deferred fees and costs	$ 385,652,537		$ 385,652,537		$ 393,051,192
Remaining unamortized discount	4,894,745		4,894,745		5,281,192
Accretion interest recognized			$ (97,280)	$ (117,644)
Number of days past due for loan to be in default			30 days
Number of Contracts | loan			4	1
Impaired loans	7,077,934		$ 7,077,934		6,419,864
Interest income recognized on impaired loans	161,673	$ 257,255	180,239	$ 386,646
Troubled debt restructurings	2,973,205		2,973,205		2,347,989
Nonaccrual [Member]
Information On Loans [Line Items]
Troubled debt restructurings	959,436		959,436		1,192,481
Commercial Real Estate [Member]
Information On Loans [Line Items]
Loans, net of deferred fees and costs	159,175,342		159,175,342		158,714,554
Impaired loans	1,141,996		1,141,996		828,264
Interest income recognized on impaired loans	558	126,099	558	$ 146,692
Commercial Real Estate - Owner Occupied [Member]
Information On Loans [Line Items]
Loans, net of deferred fees and costs	$ 56,879,584		$ 56,879,584		56,766,958
Number of Contracts | loan
Commercial Real Estate - Investor [Member]
Information On Loans [Line Items]
Loans, net of deferred fees and costs	$ 102,295,758		$ 102,295,758		101,947,596
Number of Contracts | loan	1		1
Commercial And Industrial [Member]
Information On Loans [Line Items]
Loans, net of deferred fees and costs	$ 32,835,146		$ 32,835,146		33,454,280
Number of Contracts | loan	2		2	1
Number of loans consolidated | loan			2
Number of loans after consolidation | loan			1
Term to repay balance owed			7 years
Impaired loans	$ 1,257,566		$ 1,257,566		957,080
Interest income recognized on impaired loans	34,429	24,174	35,533	$ 49,132
Residential Real Estate [Member]
Information On Loans [Line Items]
Loans, net of deferred fees and costs	134,762,675		$ 134,762,675		140,374,035
Term to repay balance owed			7 years
Impaired loans	4,532,317		$ 4,532,317		4,314,191
Interest income recognized on impaired loans	126,686	$ 39,713	144,148	$ 77,957
Residential Real Estate - Owner Occupied [Member]
Information On Loans [Line Items]
Loans, net of deferred fees and costs	$ 89,489,276		$ 89,489,276		89,665,882
Number of Contracts | loan
Residential Real Estate - Investor [Member]
Information On Loans [Line Items]
Loans, net of deferred fees and costs	$ 45,273,399		$ 45,273,399		$ 50,708,153
Number of Contracts | loan	1		1

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Organizational (Details)	Jun. 30, 2015 item
Organizational [Abstract]
Number of full-service branches	11

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Taxes [Abstract]
Statutory federal income tax rate	34.00%	34.00%	34.00%	34.00%
Actual effective income tax rate	36.90%	28.10%	39.40%	23.40%
Reduction in tax expense for refunds claimed on amended tax returns		$ 482
Partial reversal of valuation allowance				$ 157

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Net Income Per Common Share (Tables)

6 Months Ended

Jun. 30, 2015

Net Income Per Common Share [Abstract]

Calculation Of Net Income Per Common Share

		Three Months Ended June 30,			Six Months Ended June 30,
		2015		2014		2015		2014
Basic earnings per share:
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Weighted average shares outstanding		11,020,044		10,123,162		11,017,296		9,753,511
Basic net income per share	$	0.05	$	0.27	$	0.08	$	0.29
Diluted earnings per share:
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Weighted average shares outstanding		11,020,044		10,123,162		11,017,296		9,753,511
Dilutive potential shares		177,122		48,734		183,715		40,880
Total diluted average shares outstanding		11,197,166		10,171,896		11,201,011		9,794,391
Total diluted net income per share	$	0.05	$	0.27	$	0.08	$	0.29
Anti-dilutive shares		260,995		289,280		297,331		263,752

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Loans And Allowance For Loan Losses (Activity In The Allowance for Credit Losses By Portfolio Segment) (Details) - USD ($)		3 Months Ended				6 Months Ended
		Jun. 30, 2015		Jun. 30, 2014		Jun. 30, 2015		Jun. 30, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		$ 941,715		$ 1,353,849		$ 1,294,976		$ 851,000
Charge-offs		(227,949)		(89,165)		(444,185)		(238,418)
Recoveries		9,946	[1]	106,417	[2]	9,946	[1]	127,220	[2]
Provision		296,700		140,679		571,809		359,844
Allowance for loan losses, Ending Balance		1,432,546		1,099,646		1,432,546		1,099,646
Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		167,400		221,103		200,510		167,400
Charge-offs		(80,869)				(80,869)
Provision		29,686		11,964		50,279		11,964
Allowance for loan losses, Ending Balance		169,920		179,364		169,920		179,364
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		324,080		692,775		554,585		324,080
Charge-offs		(45,573)		(89,165)		(45,573)		(136,956)
Recoveries	[2]			101,614				101,614
Provision		94,620		170,714		232,810		218,505
Allowance for loan losses, Ending Balance		741,822		507,243		741,822		507,243
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		170,954		68,267		203,413		80,239
Charge-offs		(45,479)				(260,715)		(37,478)
Recoveries		1,391	[1]	3,683	[2]	1,391	[1]	5,542	[2]
Provision		117,199		(57,719)		197,289		68,615
Allowance for loan losses, Ending Balance		141,378		116,918		141,378		116,918
Home Equity Line Of Credit [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		129,203		188,657		166,733		129,203
Charge-offs		(54,639)				(54,639)		(63,984)
Recoveries		7,000	[1]	1,000	[2]	7,000	[1]	9,844	[2]
Provision		33,103		11,661		55,027		66,801
Allowance for loan losses, Ending Balance		174,121		141,864		174,121		141,864
Land [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		6,918		10,590		8,687		6,918
Provision		2,597		117		4,500		117
Allowance for loan losses, Ending Balance		13,187		7,035		13,187		7,035
Construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		135,416		164,788		153,089		135,416
Provision		18,437		3,639		30,136		3,639
Allowance for loan losses, Ending Balance		183,225		139,055		183,225		139,055
Consumer And Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance		7,744		7,669		7,959		7,744
Charge-offs		(1,389)				(2,389)
Recoveries		1,555	[1]	120	[2]	1,555	[1]	10,220	[2]
Provision		1,058		303		1,768		(9,797)
Allowance for loan losses, Ending Balance		$ 8,893		$ 8,167		$ 8,893		$ 8,167

[1] Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

[2] Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

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Deposits (Maturity Distribution Of Time Deposits) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Deposits [Abstract]
Maturing within one year	$ 62,867,151
Maturing over one to two years	20,015,678
Maturing over two to three years	6,162,290
Maturing over three to four years	10,939,222
Maturing over four to five years	8,166,836
Maturing over five years	157,055
Total time deposits	$ 108,308,232	$ 122,423,382

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Real Estate Acquired Through Foreclosure (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Real Estate Acquired Through Foreclosure [Abstract]
Balance at beginning of period	$ 1,501,135	$ 1,529,334	$ 1,480,472	$ 1,290,120
New transfers from loans	1,100,674	547,500	1,231,583	973,265
Sales	(869,666)	(433,596)	(959,665)	(468,697)
Write-downs	(120,692)	(122,629)	(140,939)	(274,079)
Balance at end of period	$ 1,611,451	$ 1,520,609	$ 1,611,451	$ 1,520,609

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Investment Securities (Summary Of Investment Securities) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	$ 39,471,714	$ 35,001,043
Available For Sale - Unrealized Gains	556,707	634,010
Available For Sale - Unrealized losses	(205,880)	(285,164)
Available For Sale - Estimated Fair Value	39,822,541	35,349,889
Held-to-Maturity - Amortized Cost	1,277,799	1,315,718
Held-to-Maturity - Estimated Fair Value	1,282,364
U.S. Government Agency [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	5,622,011	7,561,238
Available For Sale - Unrealized Gains	171,297	217,033
Available For Sale - Estimated Fair Value	5,793,308	7,778,271
US Treasury Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	5,912,117
Available For Sale - Unrealized Gains	17,113
Available For Sale - Estimated Fair Value	5,929,230
Residential Mortgage-Backed Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	19,249,664	20,679,345
Available For Sale - Unrealized Gains	337,383	399,198
Available For Sale - Unrealized losses	(148,029)	(207,616)
Available For Sale - Estimated Fair Value	19,439,018	20,870,927
Held-to-Maturity - Amortized Cost	1,277,799	1,315,718
Held-to-Maturity - Gross Unrealized Gains	$ 4,565	9,079
Held-to-Maturity - Gross Unrealized Losses
Held-to-Maturity - Estimated Fair Value	$ 1,282,364	1,324,797
State And Municipal [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	4,575,983	4,639,988
Available For Sale - Unrealized Gains	17,821	17,779
Available For Sale - Unrealized losses	(1,567)	(3,621)
Available For Sale - Estimated Fair Value	4,592,237	4,654,146
Corporate Bonds [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	4,033,187	2,041,718
Available For Sale - Unrealized Gains	13,093
Available For Sale - Unrealized losses		(11,718)
Available For Sale - Estimated Fair Value	4,046,280	2,030,000
Debt Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	39,392,962	34,922,289
Available For Sale - Unrealized Gains	556,707	634,010
Available For Sale - Unrealized losses	(149,596)	(222,955)
Available For Sale - Estimated Fair Value	39,800,073	35,333,344
Equity Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available For Sale - Amortized Cost	78,752	78,754
Available For Sale - Unrealized losses	(56,284)	(62,209)
Available For Sale - Estimated Fair Value	$ 22,468	$ 16,545

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Basis Of Presentation

6 Months Ended

Jun. 30, 2015

Basis Of Presentation [Abstract]

Basis Of Presentation

NOTE 2 – BASIS OF PRESENTATION

The consolidated financial statements include the accounts of BayBancorp, Inc., the Bank and the Bank’s consolidated subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation. The investment in subsidiary is recorded on Bay Bancorp’s books on the basis of its equity in the net assets of the Bank.  

In management’s opinion, the accompanying unaudited consolidated financial statements, which have been prepared in conformity with U.S. GAAP for interim period reporting, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial position at June 30, 2015 and December 31, 2014, the results of operations for the three and six months ended June 30, 2015 and 2014, and the statements of cash flows for the six months ended June 30, 2015 and 2014.  The results of the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015 or any future interim period.  The unaudited consolidated financial statements and accompanying notes should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes to consolidated financial statements included in the Company’s Annual Report on 10-K for the year ended December 31, 2014.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ materially from those estimates.

Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses (the “allowance”); the fair value of financial instruments, such as loans, investment securities, and derivatives; measurement and assessment of intangible assets and other purchase accounting related adjustments; benefit plan obligations and expenses; the valuation of deferred tax assets; real estate acquired through foreclosure; and the estimate of expected cash flows for loans acquired with deteriorated credit quality.

Recent Accounting Pronouncements and Developments

In January 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-04, Receivables-Troubled Debt Restructuring by Creditors (Subtopic 310-40), clarifying that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, uponeither (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement.  Additionally, the guidance  requires interim and annual disclosure of  the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014and did not have an impact on the consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will supersede the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the ASC.  The amendments in this update affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets unless those contracts, including leases and insurance contracts, are within the scope of other standards.  The amendments establish a core principle requiring the recognition of revenue to depict the transfer of goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services.  The amendments also require expanded disclosures concerning the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers.While the ASU as originally issued was scheduled to be effective for all annual and interim periods beginning January 1,2017, in July 2015, the FASB agreed to defer the effective date by one year, but will provide entities the option to adopt it as of the original effective date. The amendments in the ASU may be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of adoption recognized in equity at the date of initial application.  Management is currently evaluating the impact of adoption.

In June 2014, the FASB issued ASU No. 2014-11, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.The new guidance aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as repurchase financings with the accounting for other typical repurchase agreements.  Going forward, these transactions would all be accounted for as secured borrowings.  The guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting.  The amendments in the ASU require a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction.  The amendments in the ASU also require expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.  The amendments in this ASU are effective for public companies for the first interim or annual period beginning after December 15, 2014.  In addition, for public companies, the disclosure for certain transactions accounted for as a sale is effective for the first interim or annual reporting periods beginning on or after December 15, 2014, and the disclosure for transactions accounted for as secured borrowings is required to be presented for annual reporting periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015.  As of December 31, 2014 and June 30, 2015, all of the Company's repurchase agreements were typical in nature (i.e., not repurchase-to-maturity transactions or repurchase agreements executed as a repurchase financing) and are accounted for as secured borrowings.  As such, the amendments in this update did not have an impact on the consolidated financial statements and no change to the current disclosure was required.

In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.  The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.  A reporting entity should apply existing guidance in ASC Topic 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards.  The performance target should not be reflected in estimating the grant-date fair value of the award.  However, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered.  If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period.  The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest.  The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved.  The amendments in this ASU are effective for interim or annual reporting periods beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments in this ASU either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter.  As of June 30, 2015, the Company did not have any share-based payment awards that included performance targets that could be achieved after the requisite service period.  As such, the adoption of ASU No. 2014-12 is not expected to have a material impact on the Company's consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.  The objective of this guidance is to reduce diversity in practice related to how creditors classify government-guaranteed mortgage loans, including FHA or VA guaranteed loans, upon foreclosure.  Some creditors reclassify those loans to real estate consistent with other foreclosed loans that do not have guarantees; others reclassify the loans to other receivables.  The amendments in this guidance require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met:  (1) the loan has a government guarantee that is not separable from the loan before foreclosure; (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed.  Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor.  ASU No. 2014-14 is effective for interim and annual reporting periods beginning after December 15, 2014.  The adoption of ASU No. 2014-14 in the first quarter of 2015 did not have an impact on the Company's consolidated financial statements.

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis, which rescinds the deferral ofvariable interest entity (“VIE”) consolidationguidance for reporting entities with interests in certain investment funds and provides a new scope exception to registered money market funds and similar unregistered money market funds. The ASU makes several other amendments including (1)the elimination of certain criteria previously used for determining whether fees paid to a decision maker represent a variable interest; (2) revising the consolidation model for limited partnerships and similar entities which could be variable interest entities or voting interest entities; (3) excluding certain fees paid to a decision maker from the risk and benefit test in the primary beneficiary determination if certain conditions are met; and (4)  reducing the application of the related party guidance for VIEs. The ASU will be effective for all annual and interim periods beginning January 1, 2016 and the guidance can be applied either retrospectively or by recording a cumulative effect adjustment to equity with early adoption permitted. Management is currently evaluating the impact of adoption.

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Core Deposit Intangible Assets (Changes In Net Book Value Of Core Deposit Intangible Assets) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Balance at beginning of period	$ 3,478,282	$ 3,993,679
Amortization expense	(458,653)	(492,742)
Balance at end of period	$ 3,019,629	3,978,500
Slavie Federal Savings Bank [Member]
Finite-Lived Intangible Assets [Line Items]
Additions from the Slavie Acquisition		$ 477,563

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Business Combinations (Narrative) (Details) - USD ($)		3 Months Ended	6 Months Ended		12 Months Ended
	May. 30, 2014	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Business Acquisition [Line Items]
Bargain purchase gain		$ 524,432		$ 524,432
Merger and acquistion related expenses		128,965	$ 0	240,288
Slavie Federal Savings Bank [Member]
Business Acquisition [Line Items]
Bargain purchase gain	$ 317,544		$ 524,432		$ 317,544
Bargain purchase gain	$ 524,432
Merger and acquistion related expenses		128,965		240,288
Total revenue, net of interest expense if the Merger had been completed at beginning of year		10,500,000		18,500,000
Net (loss) income from continuing operations available to common stockholders if the Merger had been completed at beginning of year		$ 2,400,000		$ 2,700,000
Basic and diluted earnings per share if Merger had been completed at beginning of year		$ 0.23		$ 0.28

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Accounting For Certain Loans Acquired In A Transfer (Tables)

6 Months Ended

Jun. 30, 2015

Accounting For Certain Loans Acquired In A Transfer [Abstract]

Carrying Amount Of Certain Loans Acquired In A Transfer

		June 30, 2015		December 31, 2014
Commercial & Industrial	$	1,644,282	$	2,022,667
Commercial Real Estate		16,863,840		20,104,460
Residential Real Estate		11,016,082		12,017,432
Home Equity Line of Credit		715,616		711,238
Land		2,062,238		3,408,487
Construction		493,315		671,706
Total Loans	$	32,795,373	$	38,935,990

Activity In Accretable Yield Of Certain Loans Acquired In A Transfer

		Three months ended				Six months ended
		June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
Balance at beginning of period	$	2,123,690	$	1,722,818	$	2,095,891	$	1,991,662
Acquired through Slavie Acquisition		-		416,317		-		416,317
Reclassification from nonaccretable difference		454,249		818,080		1,119,505		1,634,448
Accretion into interest income		(422,854)		(1,887,779)		(903,175)		(2,969,882)
Disposals		(713,147)		-		(870,283)		(3,109)
Balance at end of period	$	1,441,938	$	1,069,436	$	1,441,938	$	1,069,436

Activity In The Allowance For Loan Losses For Certain Loans Acquired In A Transfer

		Three months ended				Six months ended
		June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
Balance at beginning of period	$	-	$	-	$	-	$	-
Reclassification to TDR		-		-		-		-
Charge-offs		(87,323)		-		(228,663)		-
Recoveries		691		-		691		(4,040)
Provision for loan losses		86,632		132,724		227,972		136,764
Balance at end of period	$	-	$	132,724	$	-	$	132,724

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Loans And Allowance For Loan Losses (Tables)

6 Months Ended

Jun. 30, 2015

Loans And Allowance For Loan Losses [Abstract]

Major Classifications Of Loans

		June 30,		December 31,
		2015		2014
Commercial & Industrial	$	32,835,146	$	33,454,280
Commercial Real Estate		159,175,342		158,714,554
Residential Real Estate		134,762,675		140,374,035
Home Equity Line of Credit		34,241,193		35,717,982
Land		4,791,897		5,856,875
Construction		18,773,848		18,052,287
Consumer & Other		1,072,436		881,179
Total Loans		385,652,537		393,051,192
Less: Allowance for Loan Losses		(1,432,546)		(1,294,976)
Net Loans	$	384,219,991	$	391,756,216

Activity In The Allowance for Credit Losses By Portfolio Segment

The following table provides information on the activity in the allowance for loan losses by the respective loan portfolio segment for the three months ended June 30, 2015:

Three Months Ended June 30:		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	221,103	$	692,775	$	68,267	$	188,657	$	10,590	$	164,788	$	7,669	$	1,353,849
Charge-offs		(80,869)		(45,573)		(45,479)		(54,639)		-		-		(1,389)		(227,949)
Recoveries		-		-		1,391		7,000		-		-		1,555		9,946
Provision		29,686		94,620		117,199		33,103		2,597		18,437		1,058		296,700
Ending balance	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546

Six Months Ended June 30:		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	200,510	$	554,585	$	203,413	$	166,733	$	8,687	$	153,089	$	7,959	$	1,294,976
Charge-offs		(80,869)		(45,573)		(260,715)		(54,639)		-		-		(2,389)		(444,185)
Recoveries		-		-		1,391		7,000		-		-		1,555		9,946
Provision		50,279		232,810		197,289		55,027		4,500		30,136		1,768		571,809
Ending balance	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546

The following table provides information on the activity in the allowance for loan losses by the respective loan portfolio segment for the three months ended June 30, 2014:

Three Months Ended June 30:
		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	167,400	$	324,080	$	170,954	$	129,203	$	6,918	$	135,416	$	7,744	$	941,715
Charge-offs		-		(89,165)		-		-		-		-		-		(89,165)
Recoveries (1)		-		101,614		3,683		1,000		-		-		120		106,417
Provision		11,964		170,714		(57,719)		11,661		117		3,639		303		140,679
Ending balance	$	179,364	$	507,243	$	116,918	$	141,864	$	7,035	$	139,055	$	8,167	$	1,099,646

Six Months Ended June 30:
		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	167,400	$	324,080	$	80,239	$	129,203	$	6,918	$	135,416	$	7,744	$	851,000
Charge-offs		-		(136,956)		(37,478)		(63,984)		-		-		-		(238,418)
Recoveries(1)		-		101,614		5,542		9,844		-		-		10,220		127,220
Provision		11,964		218,505		68,615		66,801		117		3,639		(9,797)		359,844
Ending balance	$	179,364	$	507,243	$	116,918	$	141,864	$	7,035	$	139,055	$	8,167	$	1,099,646

Loans And The Related Allowance For Credit Losses

The following table presents loans and the related allowance for loan losses, by loan portfolio segment, as of June 30, 2015:

		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: collectively evaluated for impairment		169,920		741,822		141,378		174,121		13,187		183,225		8,893		1,432,546
Totals	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546
Loans:
Ending balance: individually evaluated for impairment	$	1,257,565	$	1,141,996	$	4,532,318	$	146,055	$	-	$	-	$	-	$	7,077,934
Ending balance: collectively evaluated for impairment		29,933,299		141,169,506		119,214,275		33,379,522		2,729,659		18,280,533		1,072,436		345,779,230
Ending balance: loans acquired with deteriorated credit quality		1,644,282		16,863,840		11,016,082		715,616		2,062,238		493,315		-		32,795,373
Totals	$	32,835,146	$	159,175,342	$	134,762,675	$	34,241,193	$	4,791,897	$	18,773,848	$	1,072,436	$	385,652,537

(1) Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

(2) Consists of loans acquired with deteriorated credit quality that do not have current period charge-offs or specific reserves.

The following table presents loans and the related allowance for loan losses, by loan portfolio segment, as of December 31, 2014:

		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: collectively evaluated for impairment		200,510		554,585		203,413		166,733		8,687		153,089		7,959		1,294,976
Totals	$	200,510	$	554,585	$	203,413	$	166,733	$	8,687	$	153,089	$	7,959	$	1,294,976
Loans:
Ending balance: individually evaluated for impairment	$	957,080	$	828,264	$	4,314,191	$	320,329	$	-	$	-	$	-	$	6,419,864
Ending balance: collectively evaluated for impairment		30,474,533		137,781,830		124,042,412		34,686,415		2,448,388		17,380,581		881,179		347,695,338
Ending balance: loans acquired with deteriorated credit quality(2)		2,022,667		20,104,460		12,017,432		711,238		3,408,487		671,706		-		38,935,990
Totals	$	33,454,280	$	158,714,554	$	140,374,035	$	35,717,982	$	5,856,875	$	18,052,287	$	881,179	$	393,051,192

(1) Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

(2) Includes loans acquired with deteriorated credit quality of $104,460 that have current period charge-offs.

Impaired Loans

The following table presents information with respect to impaired loans, which include loans acquired with deteriorated credit quality that have current period charge-offs, at  June 30, 2015 and for the three and six months ended June 30, 2015:

		At June 30, 2015						For the Three Months Ended June 30, 2015					For the Six Months Ended June 30, 2015
				Unpaid				Average		Interest			Average			Interest
		Recorded		Principal		Related		Recorded		Income			Recorded			Income
		Investment		Balance		Allowance		Investment		Recognized			Investment			Recognized
With no related allowance recorded:
Commercial & Industrial	$	1,257,566	$	1,410,079	$	-	$	1,308,355	$	34,429		$	1,231,453		$	35,533
Commercial Real Estate - Investor		1,141,996		1,141,996		-		1,299,025		558			1,301,107			558
Commercial Real Estate - Owner Occupied		-		-		-		-		-			-			-
Residential Real Estate - Investor		1,560,094		2,168,388		-		1,955,625		11,055			1,967,136			22,257
Residential Real Estate - Owner Occupied		2,972,223		3,434,589		-		3,227,439		115,631			3,269,029			121,891
Home Equity Line of Credit		146,055		209,570		-		178,850		-			179,629			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		18,246		-		9,384		-			9,517			-
With an allowance recorded:
Commercial & Industrial		-		-		-		-		-			-			-
Commercial Real Estate - Investor		-		-		-		-		-			-			-
Commercial Real Estate - Owner Occupied		-		-		-		-		-			-			-
Residential Real Estate - Investor		-		-		-		-		-			-			-
Residential Real Estate - Owner Occupied		-		-		-		-		-			-			-
Home Equity Line of Credit		-		-		-		-		-			-			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		-		-		-		-			-			-
Total:		7,077,934		8,382,868		-		7,978,678		161,673			7,957,871			180,239
Commercial & Industrial	$	1,257,566	$	1,410,079	$	-	$	1,308,355	$	34,429		$	1,231,453		$	35,533
Commercial Real Estate		1,141,996		1,141,996		-		1,299,025		558	-		1,301,107	-		558
Residential Real Estate		4,532,317		5,602,977		-		5,183,064		126,686			5,236,165			144,148
Home Equity Line of Credit		146,055		209,570		-		178,850		-			179,629			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		18,246		-		9,384		-			9,517			-
	$	7,077,934	$	8,382,868	$	-	$	7,978,678	$	161,673		$	7,957,871		$	180,239

The following table presents information with respect to impaired loans, which include loans acquired with deteriorated credit quality that have current period charge-offs, as of December 31, 2014 and for the three and six months ended June30, 2014:

		At December 31, 2014						For the Three Months Ended June 30, 2014				For the Six Months Ended June 30, 2014
				Unpaid				Average		Interest		Average		Interest
		Recorded		Principal		Related		Recorded		Income		Recorded		Income
		Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial & Industrial	$	957,080	$	1,155,553	$	-	$	1,118,445	$	24,174	$	1,139,407	$	49,132
Commercial Real Estate - Investor		662,280		668,287		-		303,593		589		304,130		1,193
Commercial Real Estate - Owner Occupied		165,984		165,984		-		663,454		-		675,334		-
Residential Real Estate - Investor		1,063,643		1,658,389		-		889,289		3,301		895,010		6,661
Residential Real Estate - Owner Occupied		3,250,548		3,853,959		-		2,967,624		36,412		3,016,870		71,296
Home Equity Line of Credit		320,329		404,347		-		317,878		-		318,506		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		524,158		67,269		524,158		112,865
Consumer & Other		-		19,034		-		10,111		-		10,245		-
With an allowance recorded:
Commercial & Industrial		-		-		-		-		-		-		-
Commercial Real Estate - Investor		-		-		-		1,999,853		125,510		2,002,139		145,499
Commercial Real Estate - Owner Occupied		-		-		-		-		-		-		-
Residential Real Estate - Investor		-		-		-		-		-		-		-
Residential Real Estate - Owner Occupied		-		-		-		-		-		-		-
Home Equity Line of Credit		-		-		-		-		-		-		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		-		-		-		-
Consumer & Other		-		-		-		-		-		-		-
Total:		6,419,864		7,925,553		-		8,794,405		257,255		8,885,799		386,646
Commercial & Industrial	$	957,080	$	1,155,553	$	-	$	1,118,445	$	24,174	$	1,139,407	$	49,132
Commercial Real Estate		828,264		834,271		-		2,966,900		126,099		2,981,603		146,692
Residential Real Estate		4,314,191		5,512,348		-		3,856,913		39,713		3,911,880		77,957
Home Equity Line of Credit		320,329		404,347		-		317,878		-		318,506		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		524,158		67,269		524,158		112,865
Consumer & Other		-		19,034		-		10,111		-		10,245		-
	$	6,419,864	$	7,925,553	$	-	$	8,794,405	$	257,255	$	8,885,799	$	386,646

Credit Quality Indicators By Class Of The Loan Portfolio

The following table provides information with respect to the Company's credit quality indicators by class of the loan portfolio as of June 30, 2015:

		Risk Rating
		Pass		Special Mention		Substandard		Doubtful		Total
Commercial & Industrial	$	29,577,832	$	1,659,553	$	1,597,761	$	-	$	32,835,146
Commercial Real Estate - Investor		95,690,428		4,231,900		2,373,430		-		102,295,758
Commercial Real Estate - Owner Occupied		46,855,623		7,352,632		2,671,329		-		56,879,584
Residential Real Estate - Investor		35,023,717		1,985,969		8,263,713		-		45,273,399
Residential Real Estate - Owner Occupied		85,735,353		-		3,753,923		-		89,489,276
Home Equity Line of Credit		33,784,792		-		456,401		-		34,241,193
Land		2,523,309		206,350		2,062,238		-		4,791,897
Construction		18,607,079		77,571		89,198		-		18,773,848
Consumer & Other		1,072,436		-		-		-		1,072,436
Total	$	348,870,569	$	15,513,975	$	21,267,993	$	-	$	385,652,537

The following table provides information with respect to the Company's credit quality indicators by class of the loan portfolio as of December 31, 2014:

		Risk Rating
		Pass		Special Mention		Substandard		Doubtful		Total
Commercial & Industrial	$	30,150,745	$	1,530,547	$	1,772,988	$	-	$	33,454,280
Commercial Real Estate - Investor		93,113,185		5,837,107		2,997,304		-		101,947,596
Commercial Real Estate - Owner Occupied		42,898,246		6,864,098		7,004,614		-		56,766,958
Residential Real Estate - Investor		39,109,937		2,804,857		8,793,359		-		50,708,153
Residential Real Estate - Owner Occupied		84,796,122		-		4,869,760		-		89,665,882
Home Equity Line of Credit		35,088,028		-		629,954		-		35,717,982
Land		3,850,748		-		2,006,127		-		5,856,875
Construction		17,848,675		81,234		122,378		-		18,052,287
Consumer & Other		881,179		-		-		-		881,179
Total	$	347,736,865	$	17,117,843	$	28,196,484	$	-	$	393,051,192

Classes Of The Loan Portfolio Summarized By Aging Categories Of Performing Loans And Nonaccrual Loans

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of June 30, 2015.  Purchased credit impaired (“PCI”) loans are excluded from this aging and nonaccrual loans schedule.

		Accrual Loans
		30-59		60-89		90 or More
		Days		Days		Days		Total				Nonaccrual		Total
		Past Due		Past Due		Past Due		Past Due		Current		Loans		Loans
Commercial & Industrial	$	-	$	-	$	-	$	-	$	30,784,863	$	406,002	$	31,190,865
Commercial Real Estate    - Investor		-		-		-		-		90,210,278		1,278,898		91,489,176
Commercial Real Estate    - Owner Occupied		-		-		-		-		50,822,326		-		50,822,326
Residential Real Estate    - Investor		-		-		-		-		34,735,629		1,560,094		36,295,723
Residential Real Estate    - Owner Occupied		-		599,502		-		599,502		84,988,531		1,862,835		87,450,868
Home Equity Line of Credit		247,122		187,945		-		435,067		32,944,456		146,055		33,525,578
Land		-		-		-		-		2,729,660		-		2,729,660
Construction		-		-		-		-		18,280,532		-		18,280,532
Consumer & Other		288		434		-		722		1,071,714		-		1,072,436
Total	$	247,410	$	787,881	$	-	$	1,035,291	$	346,567,989	$	5,253,884	$	352,857,164
PCI loans														32,795,373
Total Loans													$	385,652,537

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2014.  PCI loans are excluded from this aging and nonaccrual loans schedule.

		Accrual Loans
		30-59		60-89		90 or More
		Days		Days		Days		Total				Nonaccrual		Total
		Past Due		Past Due		Past Due		Past Due		Current		Loans		Loans
Commercial & Industrial	$	-	$	-	$	-	$	-	$	31,093,411	$	338,202	$	31,431,613
Commercial Real Estate    - Investor		159,786		-		-		159,786		88,920,589		608,084		89,688,459
Commercial Real Estate    - Owner Occupied		-		-		-		-		48,755,651		165,984		48,921,635
Residential Real Estate    - Investor		312,422		-		-		312,422		39,508,857		1,063,643		40,884,922
Residential Real Estate    - Owner Occupied		924,608		550,604		-		1,475,212		83,255,355		2,741,114		87,471,681
Home Equity Line of Credit		456,248		24,199		-		480,447		34,205,968		320,329		35,006,744
Land		-		-		-		-		2,448,388		-		2,448,388
Construction		-		-		-		-		17,380,581		-		17,380,581
Consumer & Other		-		500		-		500		880,679		-		881,179
Total	$	1,853,064	$	575,303	$	-	$	2,428,367	$	346,449,479	$	5,237,356	$	354,115,202
PCI loans														38,935,990
Total Loans													$	393,051,192

Troubled Debt Restructurings

	Three Months Ended June 30, 2015					Three Months Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial & Industrial	2		78,575		78,575	-	$	-	$	-
Commercial Real Estate - Investor	1		213,387		213,387	-		-		-
Commercial Real Estate - Owner Occupied	-		-		-	-		-		-
Residential Real Estate - Investor	1		2,437		2,437	-		-		-
Residential Real Estate - Owner Occupied	-		-		-	-		-		-
Home Equity Line of Credit	-		-		-	-		-		-
Land	-		-		-	-		-		-
Construction	-		-		-	-		-		-
Consumer & Other	-		-		-	-		-		-
Totals	4	$	294,399	$	294,399	-	$	-	$	-
	Six Months Ended June 30, 2015					Six Months Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial & Industrial	2		78,575		78,575	1	$	85,397	$	85,397
Commercial Real Estate - Investor	1		213,387		213,387	-		-		-
Commercial Real Estate - Owner Occupied	-		-		-	-		-		-
Residential Real Estate - Investor	1		2,437		2,437	-		-		-
Residential Real Estate - Owner Occupied	-		-		-	-		-		-
Home Equity Line of Credit	-		-		-	-		-		-
Land	-		-		-	-		-		-
Construction	-		-		-	-		-		-
Consumer & Other	-		-		-	-		-		-
Totals	4	$	294,399	$	294,399	1	$	85,397	$	85,397

XML

Loans And Allowance For Loan Losses (Classes Of The Loan Portfolio Summarized By Aging Categories Of Performing Loans And Nonaccrual Loans) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	$ 247,410	$ 1,853,064
60-89 Days Past Due	787,881	575,303
Total Past Due Loans	1,035,291	2,428,367
Current	346,567,989	346,449,479
Nonaccrual Loans	5,253,884	5,237,356
Total	352,857,164	354,115,202
Purchased credit impaired loans	32,795,373	38,935,990
Total Loans	385,652,537	393,051,192
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	30,784,863	31,093,411
Nonaccrual Loans	406,002	338,202
Total	31,190,865	31,431,613
Purchased credit impaired loans	1,644,282	2,022,667
Total Loans	32,835,146	33,454,280
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Purchased credit impaired loans	16,863,840	20,104,460
Total Loans	159,175,342	158,714,554
Commercial Real Estate - Investor [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due		159,786
Total Past Due Loans		159,786
Current	90,210,278	88,920,589
Nonaccrual Loans	1,278,898	608,084
Total	91,489,176	89,688,459
Total Loans	102,295,758	101,947,596
Commercial Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	50,822,326	48,755,651
Nonaccrual Loans		165,984
Total	50,822,326	48,921,635
Total Loans	56,879,584	56,766,958
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Purchased credit impaired loans	11,016,082	12,017,432
Total Loans	134,762,675	140,374,035
Residential Real Estate - Investor [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due		312,422
Total Past Due Loans		312,422
Current	34,735,629	39,508,857
Nonaccrual Loans	1,560,094	1,063,643
Total	36,295,723	40,884,922
Total Loans	45,273,399	50,708,153
Residential Real Estate - Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due		924,608
60-89 Days Past Due	599,502	550,604
Total Past Due Loans	599,502	1,475,212
Current	84,988,531	83,255,355
Nonaccrual Loans	1,862,835	2,741,114
Total	87,450,868	87,471,681
Total Loans	89,489,276	89,665,882
Home Equity Line Of Credit [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	247,122	456,248
60-89 Days Past Due	187,945	24,199
Total Past Due Loans	435,067	480,447
Current	32,944,456	34,205,968
Nonaccrual Loans	146,055	320,329
Total	33,525,578	35,006,744
Purchased credit impaired loans	715,616	711,238
Total Loans	34,241,193	35,717,982
Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,729,660	2,448,388
Total	2,729,660	2,448,388
Purchased credit impaired loans	2,062,238	3,408,487
Total Loans	4,791,897	5,856,875
Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	18,280,532	17,380,581
Total	18,280,532	17,380,581
Purchased credit impaired loans	493,315	671,706
Total Loans	18,773,848	18,052,287
Consumer And Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	288
60-89 Days Past Due	434	500
Total Past Due Loans	722	500
Current	1,071,714	880,679
Total	1,072,436	881,179
Total Loans	$ 1,072,436	$ 881,179

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Business Combinations (Slavie Acquisition) (Details) - USD ($)		3 Months Ended	6 Months Ended		12 Months Ended
	May. 30, 2014	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Business Acquisition [Line Items]
Total bargain purchase gain, after tax		$ 524,432		$ 524,432
Slavie Federal Savings Bank [Member]
Business Acquisition [Line Items]
Cash and Cash Equivalents	$ 30,341,150
Time deposits with banks	1,546,718
Investment securities available for sale, at fair value	197,311
Restricted equity securities, at cost	1,253,600
Loans, net of deferred fees and costs	82,914,607
Accrued interest receivable	347,772
Core deposit intangible	477,563
Total assets acquired	117,078,721
Deposits	110,833,046
Accrued expenses and other liabilities	3,266
Total liabilities assumed	110,836,312
Net assets acquired	6,242,409
Transaction cash consideration paid	(5,717,977)
Total bargain purchase gain, before tax	524,432
Tax expense	(206,888)
Total bargain purchase gain, after tax	$ 317,544		$ 524,432		$ 317,544

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Real Estate Acquired Through Foreclosure (Tables)

6 Months Ended

Jun. 30, 2015

Real Estate Acquired Through Foreclosure [Abstract]

Activity In Real Estate Acquired Through Foreclosure

		Three months ended June 30,			Six months ended June 30,
		2015		2014	2015		2014
Balance at beginning of period	$	1,501,135	$	1,529,334	1,480,472	$	1,290,120
New transfers from loans		1,100,674		547,500	1,231,583		973,265
Sales		(869,666)		(433,596)	(959,665)		(468,697)
Write-downs		(120,692)		(122,629)	(140,939)		(274,079)
Balance at end of period	$	1,611,451	$	1,520,609	1,611,451	$	1,520,609

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Core Deposit Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2015

Core Deposit Intangible Assets [Abstract]

Changes In Net Book Value Of Core Deposit Intangible Assets

		Six months ended June 30,
		2015		2014
Balance at beginning of period	$	3,478,282	$	3,993,679
Additions from the Slavie Acquisition		-		477,563
Amortization expense		(458,653)		(492,742)
Balance, June 30	$	3,019,629	$	3,978,500

Gross Carrying Amount, Accumulated Amortization And Net Carrying Amount Of Core Deposit Intangible Assets

		June 30, 2015		December 31, 2014
Gross carrying amount	$	5,578,211	$	5,578,211
Accumulated amortization		(2,558,582)		(2,099,929)
Net carrying amount	$	3,019,629	$	3,478,282

Future Amortization Expense For The Company's Core-Deposit Intangible Assets

Periods ending December 31:		Amount
2015	$	395,444
2016		649,939
2017		490,847
2018		402,243
2019		368,806
Subsequent years		712,350
Total	$	3,019,629

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Organizational

6 Months Ended

Jun. 30, 2015

Organizational [Abstract]

Organizational

NOTE 1 – ORGANIZATIONAL

Nature of Business

Bay Bancorp, Inc. is a savings and loan holding company.  Through its subsidiary, Bay Bank, FSB, (the “Bank”), a federal savings bank (an “FSB”), Bay Bancorp, Inc. serves the community with a network of 11 branches strategically located throughout the Baltimore Metropolitan Statistical Area, particularly Baltimore City and the Maryland counties of Baltimore, Anne Arundel, Howard, and Harford.  The Bank serves local consumers, small and medium size businesses, professionals and other valued customers by offering a broad suite of financial products and services, including on-line and mobile banking, commercial banking, cash management, mortgage lending and retail banking.  The Bank funds a variety of loan types including commercial and residential real estate loans, commercial term loans and lines of credit, consumer loans and letters of credit.

As used in these notes, the term “the Company” refers to Bay Bancorp, Inc. and, unless the context clearly requires otherwise, its consolidated subsidiaries.

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Deposits (Tables)

6 Months Ended

Jun. 30, 2015

Deposits [Abstract]

Composition Of Deposits

		2015		2014
Noninterest-bearing deposits	$	97,646,931	$	91,676,534
Interest-bearing deposits:
Checking		50,621,682		54,844,855
Savings		38,096,532		36,233,369
Money market		89,778,076		82,651,992
Total interest-bearing checking, savings and money market deposits		178,496,290		173,730,216
Time deposits below $100,000		47,957,528		50,313,096
Time deposits $100,000 or above		60,350,704		72,110,286
Total time deposits		108,308,232		122,423,382
Total interest-bearing deposits		286,804,522		296,153,598
Total Deposits	$	384,451,453	$	387,830,132

Maturity Distribution Of Time Deposits

	Amount
Maturing within one year	$	62,867,151
Maturing over one to two years		20,015,678
Maturing over two to three years		6,162,290
Maturing over three to four years		10,939,222
Maturing over four to five years		8,166,836
Maturing over five years		157,055
Total Time Deposits	$	108,308,232

Interest Expense On Deposits

		2015		2014
Interest-bearing checking		28,375		53,684
Savings		22,137		20,186
Money market		137,015		146,756
Total interest-bearing checking, savings and money market deposits		187,527		220,626
Time deposits below $100,000		302,830		85,320
Time deposits $100,000 or above		458,214		304,282
Total time deposits		761,044		389,602
Total Interest Expense	$	948,571	$	610,228

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Regulatory Matters (Capital Amounts And Ratios) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Regulatory Matters [Abstract]
Tier 1 Common Equity Capital, Actual Amount	$ 63,206,000
Tier 1 Common Equity Capital, Actual Ratio	17.00%
Tier 1 Common Equity Capital for Capital Adequacy Purposes, Amount	$ 16,726,000
Tier 1 Common Equity Capital for Capital Adequacy Purposes, Ratio	4.50%
Tier 1 Common Equity Capital to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 24,160,000
Tier 1 Common Equity Capital to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	6.50%
Total Risk-Based Capital, Actual Amount	$ 64,639,000	$ 62,743,000
Total Risk-Based Capital, Actual Ratio	17.39%	16.66%
Total Risk-Based Capital For Capital Adequacy Purposes, Amount	$ 29,736,000	$ 30,132,000
Total Risk-Based Capital For Capital Adequacy Purposes, Ratio	8.00%	8.00%
Total Risk Based Capital To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 37,170,000	$ 37,665,000
Total Risk Based Capital To Be Well Capitalized Under Prompt Corrective Action Provisions. Ratio	10.00%	10.00%
Tier I Risk-Based Capital, Actual Amount	$ 63,206,000	$ 61,448,000
Tier I Risk-Based Capital, Actual Ratio	17.00%	16.31%
Tier I Risk-Based Capital For Capital Adequacy Purpose, Amount	$ 22,302,000	$ 15,066
Tier I Risk-Based Capital For Capital Adequacy Purpose, Ratio	6.00%	4.00%
Tier 1 Risk-Based Capital To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 29,736,000	$ 22,599,000
Tier 1 Risk-Based Capital To Be Well Capitalized Under Prompt Corrective Action Provisions, To Be Well Capitalized Ratio	8.00%	6.00%
Leverage Capital, Actual Amount	$ 63,206,000	$ 61,448,000
Leverage Capital, Actual Ratio	13.23%	12.94%
Leverage Capital For Capital Adequacy Purpose, Amount	$ 19,106,000	$ 18,988,000
Leverage Capital For Capital Adequacy Purpose, Ratio	4.00%	4.00%
Leverage Captial To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 23,882,000	$ 23,735,000
Leverage Captial To Be Well Capitalized Under Prompt Corrective Action Provisions, To Be Well Capitalized Ratio	5.00%	5.00%

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Regulatory Matters (Tables)

6 Months Ended

Jun. 30, 2015

Regulatory Matters [Abstract]

Capital Amounts And Ratios

										To Be Well
										Capitalized Under
						To Be Considered				Prompt Corrective
		Actual				Adequately Capitalized				Action Provisions
As of June 30, 2015:		Amount	Ratio			Amount	Ratio			Amount	Ratio
Common Equity Tier 1 Capital	$	63,206	17.00	%	$	16,726	4.50	%	$	24,160	6.50	%
Tier I Risk-Based Capital Ratio	$	63,206	17.00	%	$	22,302	6.00	%	$	29,736	8.00	%
Total Risk-Based Capital Ratio	$	64,639	17.39	%	$	29,736	8.00	%	$	37,170	10.00	%
Tier 1 Leverage Ratio	$	63,206	13.23	%	$	19,106	4.00	%	$	23,882	5.00	%
As of December 31, 2014:
Common Equity Tier 1 Capital		N/A	N/A			N/A	N/A			N/A	N/A
Tier I Risk-Based Capital Ratio	$	61,448	16.31	%	$	15,066	4.00	%	$	22,599	6.00	%
Total Risk-Based Capital Ratio	$	62,743	16.66	%	$	30,132	8.00	%	$	37,665	10.00	%
Tier 1 Leverage Ratio	$	61,448	12.94	%	$	18,988	4.00	%	$	23,735	5.00	%

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Loans And Allowance For Loan Losses (Loans And The Related Allowance For Credit Losses) (Details) - USD ($)	Jun. 30, 2015		Mar. 31, 2015	Dec. 31, 2014		Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	$ 1,432,546			$ 1,294,976
Allowance for credit losses: Total	1,432,546		$ 941,715	1,294,976		$ 1,099,646	$ 1,353,849	$ 851,000
Loans: Ending balance: individually evaluated for impairment	7,077,934			6,419,864	[1]
Loans: Ending balance: collectively evaluated for impairment	345,779,230			347,695,338
Loans: Ending balance: loans acquired with deteriorated credit quality	32,795,373	[2]		38,935,990
Total Loans	385,652,537			393,051,192
Loans acquired with deteriorated credit quality	0			0
Loans acquired with deteriorated credit quality that have current period charge-offs or specific reserves				104,460
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	169,920			200,510
Allowance for credit losses: Total	169,920		167,400	200,510		179,364	221,103	167,400
Loans: Ending balance: individually evaluated for impairment	1,257,565			957,080	[1]
Loans: Ending balance: collectively evaluated for impairment	29,933,299			30,474,533
Loans: Ending balance: loans acquired with deteriorated credit quality	1,644,282	[2]		2,022,667
Total Loans	32,835,146			33,454,280
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	741,822			554,585
Allowance for credit losses: Total	741,822		324,080	554,585		507,243	692,775	324,080
Loans: Ending balance: individually evaluated for impairment	1,141,996			828,264	[1]
Loans: Ending balance: collectively evaluated for impairment	141,169,506			137,781,830
Loans: Ending balance: loans acquired with deteriorated credit quality	16,863,840	[2]		20,104,460
Total Loans	159,175,342			158,714,554
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	141,378			203,413
Allowance for credit losses: Total	141,378		170,954	203,413		116,918	68,267	80,239
Loans: Ending balance: individually evaluated for impairment	4,532,318			4,314,191	[1]
Loans: Ending balance: collectively evaluated for impairment	119,214,275			124,042,412
Loans: Ending balance: loans acquired with deteriorated credit quality	11,016,082	[2]		12,017,432
Total Loans	134,762,675			140,374,035
Home Equity Line Of Credit [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	174,121			166,733
Allowance for credit losses: Total	174,121		129,203	166,733		141,864	188,657	129,203
Loans: Ending balance: individually evaluated for impairment	146,055			320,329	[1]
Loans: Ending balance: collectively evaluated for impairment	33,379,522			34,686,415
Loans: Ending balance: loans acquired with deteriorated credit quality	715,616	[2]		711,238
Total Loans	34,241,193			35,717,982
Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	13,187			8,687
Allowance for credit losses: Total	13,187		6,918	8,687		7,035	10,590	6,918
Loans: Ending balance: collectively evaluated for impairment	2,729,659			2,448,388
Loans: Ending balance: loans acquired with deteriorated credit quality	2,062,238	[2]		3,408,487
Total Loans	4,791,897			5,856,875
Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	183,225			153,089
Allowance for credit losses: Total	183,225		135,416	153,089		139,055	164,788	135,416
Loans: Ending balance: collectively evaluated for impairment	18,280,533			17,380,581
Loans: Ending balance: loans acquired with deteriorated credit quality	493,315	[2]		671,706
Total Loans	18,773,848			18,052,287
Consumer And Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Allowance for credit losses: Ending balance: collectively evaluated for impairment	8,893			7,959
Allowance for credit losses: Total	8,893		$ 7,744	7,959		$ 8,167	$ 7,669	$ 7,744
Loans: Ending balance: collectively evaluated for impairment	1,072,436			881,179
Total Loans	$ 1,072,436			$ 881,179

[1] Includes loans acquired with deteriorated credit quality of $104,460 that have current period charge-offs.

[2]

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Stock-Based Compensation (Changes In Company's Stock Options Outstanding) (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Stock-Based Compensation [Abstract]
Stock Options Outstanding at beginning of period	743,015
Stock Options Exercised	(16,597)
Stock Options Outstanding at end of period	726,418	743,015
Weighted Average Exercise Price, Outstanding	$ 5.00	$ 4.99
Weighted Average Exercise Price, Stock Options Exercised	4.50
Weighted Average Exercise Price, Stock Options Outstanding at end of period	$ 5.00	$ 4.99
Weighted Average Remaining Contractual Life, Outstanding	6 years 2 months 12 days	6 years 10 months 6 days
Exercisable Stock Options Outstanding	653,671
Weighted Average Exercise Price, Exercisable	$ 4.96
Weighted Average Remaining Contractual Life, Exercisable	6 years

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Consolidated Balance Sheets - USD ($)	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 8,021,913	$ 7,062,943
Interest bearing deposits with banks and federal funds sold	11,395,843	9,794,382
Total Cash and Cash Equivalents	19,417,756	16,857,325
Time deposits with banks		34,849
Investment securities available for sale, at fair value	39,822,541	35,349,889
Investment securities held to maturity, at amortized cost	1,277,799	1,315,718
Restricted equity securities, at cost	2,153,595	1,862,995
Loans held for sale	16,832,511	7,233,306
Loans, net of deferred fees and costs	385,652,537	393,051,192
Less: Allowance for loan losses	(1,432,546)	(1,294,976)
Loans, net	384,219,991	391,756,216
Real estate acquired through foreclosure	1,611,451	1,480,472
Premises and equipment, net	5,216,009	5,553,957
Bank owned life insurance	5,548,022	5,485,377
Core deposit intangible	3,019,629	3,478,282
Deferred tax assets, net	4,213,522	3,214,100
Accrued interest receivable	1,276,005	1,306,111
Prepaid expenses	942,914	925,288
Accrued taxes receivable	2,134,635	3,122,885
Defined benefit pension asset		680,668
Other assets	849,345	285,547
Total Assets	488,535,725	479,942,985
LIABILITIES
Noninterest-bearing deposits	97,646,931	91,676,534
Interest-bearing deposits	286,804,522	296,153,598
Total deposits	384,451,453	387,830,132
Borrowings	33,150,000	22,150,000
Defined benefit pension liability	1,704,352
Accrued expenses and other liabilities	3,102,767	3,319,567
Total Liabilities	422,408,572	413,299,699
STOCKHOLDERS' EQUITY
Common stock - par $1.00 per share, authorized 20,000,000 shares, issued and outstanding 11,031,114 and 11,014,517 shares as of June 30, 2015 and December 31, 2014, respectively	11,031,114	11,014,517
Additional paid-in capital	43,341,343	43,228,950
Retained earnings	11,625,473	10,736,305
Accumulated other comprehensive income	129,223	1,663,514
Total Stockholders' Equity	66,127,153	66,643,286
Total Liabilities and Stockholders' equity	$ 488,535,725	$ 479,942,985

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Business Combinations (Loans Acquired In The Acquisition) (Details) - Slavie Federal Savings Bank [Member]	May. 30, 2014 USD ($)
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required principal and interest at acquisition	$ 95,672,614
Contractual cash flows not expected to be collected	(11,001,864)
Expected cash flows at acquisition	84,670,750
Interest component of expected cash flows	(1,756,143)
Basis in purchased loans at acquisition - estimated fair value	82,914,607
Purchased Credit Impaired Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required principal and interest at acquisition	26,970,809
Contractual cash flows not expected to be collected	(7,018,601)
Expected cash flows at acquisition	19,952,208
Interest component of expected cash flows	(1,114,951)
Basis in purchased loans at acquisition - estimated fair value	18,837,257
Purchased Non-Impaired Loans [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required principal and interest at acquisition	68,701,805
Contractual cash flows not expected to be collected	(3,983,263)
Expected cash flows at acquisition	64,718,542
Interest component of expected cash flows	(641,192)
Basis in purchased loans at acquisition - estimated fair value	$ 64,077,350

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Consolidated Statements Of Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Dec. 31, 2013	$ 9,379,753	$ 36,357,001	$ 7,703,597	$ 1,113,917	$ 54,554,268
Net income			2,836,990		2,836,990
Other comprehensive income (loss)				393,823	393,823
Issuance of restricted common stock	16,256	(16,256)
Stock- based compensation		260,508			260,508
Issuance of common stock	1,422,764	5,577,236			7,000,000
Balance at Jun. 30, 2014	10,818,773	42,178,489	10,540,587	1,507,740	65,045,589
Balance at Dec. 31, 2013	9,379,753	36,357,001	7,703,597	1,113,917	54,554,268
Other comprehensive income (loss)					393,823
Balance at Dec. 31, 2014	11,014,517	43,228,950	10,736,305	1,663,514	66,643,286
Net income			889,168		889,168
Other comprehensive income (loss)				(1,534,291)	(1,534,291)
Stock- based compensation		54,303			54,303
Issuance of common stock under stock option plan	16,597	58,090			74,687
Balance at Jun. 30, 2015	$ 11,031,114	$ 43,341,343	$ 11,625,473	$ 129,223	$ 66,127,153

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Accounting For Certain Loans Acquired In A Transfer (Activity In Accretable Yield Of Certain Loans Acquired In A Transfer) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Balance at beginning of period	$ 2,123,690	$ 1,722,818	$ 2,095,891	$ 1,991,662
Reclassification from nonaccretable difference	454,249	818,080	1,119,505	1,634,448
Accretion into interest income	(422,854)	(1,887,779)	(903,175)	(2,969,882)
Disposals	(713,147)		(870,283)	(3,109)
Balance at end of period	$ 1,441,938	1,069,436	$ 1,441,938	1,069,436
Slavie Federal Savings Bank [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Acquired through Slavie Acquisition		$ 416,317		$ 416,317

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Defined Benefit Pension Plan (Tables)

6 Months Ended

Jun. 30, 2015

Defined Benefit Pension Plan [Abstract]

Components Of Net Periodic Benefit Cost And Other Amounts Recognized In Other Comprehensive Income

		Six months ended June 30,
		2015		2014
Service cost	$	39,500	$	30,369
Interest cost		221,500		221,975
Expected return on plan assets		(314,500)		(299,171)
Amortization of net gain		-		(37,896)
Net periodic pension benefit	$	(53,500)	$	(84,723)

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Deposits (Narrative) (Details) - USD ($)	2 Months Ended	3 Months Ended
	May. 23, 2015	Jun. 30, 2014	Jun. 30, 2015	Dec. 31, 2014
IRA deposit balances transferred to new custodians or disbursed to customers	$ 24,000,000
IRA deposit balances as a percentage of total deposits	6.00%
Recognition of the remaining interest rate mark-to-market adjustment on IRA deposits		$ 2,400,000
Time deposit accounts			$ 108,308,232	$ 122,423,382
CDARS Balances [Member]
Brokered deposits		4,100,000	800,000
ICS Deposits [Member]
Brokered deposits		4,800,000	$ 9,700,000
Exceeding FDIC Limit Of $250,000 [Member]
Time deposit accounts		$ 11,400,000

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Commitments And Contingent Liabilities

6 Months Ended

Jun. 30, 2015

Commitments And Contingent Liabilities [Abstract]

Commitments And Contingent Liabilities

NOTE 15 - COMMITMENTS AND CONTINGENT LIABILITIES 

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business.  These financial instruments include loan commitments, unused lines of credit, standby letters of credit and mortgage loan repurchase obligations.  The Company uses these financial instruments to meet the financing needs of its customers and provide a source of fee income.  Financial instruments involve, to varying degrees, elements of credit, interest rate and liquidity risk.  These do not represent unusual risks and management does not anticipate any losses which would have a material effect on the accompanying consolidated financial statements.

Outstanding loan commitments, and lines and letters of credit obligations at June 30, 2015 and December 31, 2014were as follows:

		June 30, 2015		December 31, 2014
Loan commitments	$	8,377,625	$	5,021,857
Unused lines of credit		72,365,054		64,761,646
Standby letters of credit		2,984,948		1,632,927

Loan commitments and unused lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  The Company generally requires collateral to support financial instruments with credit risk on the same basis as it does for on-balance sheet instruments.  The collateral requirement is based on management's credit evaluation of the counter party.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Since many of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.  Each customer's creditworthiness is evaluated on a case-by-case basis.

Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

In the ordinary course of business, the Company has various outstanding contingent liabilities that are not reflected in the accompanying consolidated financial statements.  In the opinion of management, after consulting with legal counsel, the ultimate disposition of these matters is not expected to have a material adverse effect on the financial condition of the Company.

Mortgage Loan Repurchase Obligations:  The Company originates and sells mortgage loans, primarily to other financial institutions, and provides various representations and warranties related to, among other things, the ownership of the loans, the validity of the liens, the loan selection and origination process, and the compliance to the origination criteria established by the purchasing institution.  In the event of a breach of our representations and warranties, we may be obligated to repurchase the loans with identified defects or to indemnify the buyers.  The Company’s contractual obligation arises only when the breach of representations and warranties are discovered and repurchase is demanded.  The loans balances subject to repurchase were $13.8 million and $10.1 million at June 30, 2015 and December 31, 2014, respectively.  Management does not expect losses resulting from repurchase requests to be material to reported financial results.

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2015

Income Taxes [Abstract]

Reconciliation Of Federal Income Tax Rate To Effective Tax Rate

	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
Income tax expense at federal statutory rate	34.0%	34.0%	34.0%	34.0%
Increase (decrease) resulting from:
Amended returns refund claims for pre-acquisition tax periods	0.0%	-12.6%	0.0%	-13.0%
Reversal of valuation allowance attributable to future built-in losses	0.0%	-	0.0%	-4.2%
Non-taxable income	-1.6%	-1.3%	-1.5%	-1.3%
State income taxes, net of federal income tax benefit	5.6%	5.8%	5.6%	5.8%
Incentive stock options	0.6%	1.8%	0.6%	1.7%
Other nondeductible expenses	-1.7%	0.4%	0.7%	0.4%
Effective income tax rate	36.9%	28.1%	39.4%	23.4%

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Regulatory Matters

6 Months Ended

Jun. 30, 2015

Regulatory Matters [Abstract]

Regulatory Matters

NOTE 17 – REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. 

In July 2013, federal bank regulatory agencies issued final rules to revise their risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act (“Basel III”).  On January 1, 2015, the Basel III rules became effective and include transition provisions which implement certain portions of the rules through January 1, 2019.  Under the final rules, the effects of certain accumulated other comprehensive items are not excluded; however, banking organizations like the Company and the Bank that are not considered “advanced approaches” banking organizations may make a one-time permanent election to continue to exclude these items.  With the submission of the Call Report for the first quarter of 2015, the Company and the Bank made this election in order to avoid significant variations in the level of capital that can be caused by interest rate fluctuations on the fair value of the Bank’s available for sale securities portfolio and by fluctuations in the net periodic pension benefit/obligation attributable to the Bank’s defined benefit pension plan.

In addition, the OCC requires that FSBs, like the Bank, maintain a minimum level of Tier 1 capital to average total assets excluding intangibles.  This measure is known as the leverage ratio.  The current regulatory minimum for the leverage ratio for institutions to be considered “well capitalized” is 5%, but an individual institution could be required to maintain a higher level.  In connection with the Merger, the Bank entered into an Operating Agreement with the OCC (the “Operating Agreement”) pursuant to which the Bank agreed, among other things, to maintain a leverage ratio of 10% for the term of the Operating Agreement.  The Operating Agreement will remain in effect until it is terminated by the OCC or the Bank ceases to be an FSB.

The following table summarizes capital ratios and related information in accordance with Basel III as measured at June 30, 2015 and pre-existing rules at December 31, 2014.  For disclosure regarding changes resulting from Basel III see Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Financial Condition, Capital Resources, Basel III.  The Bank was classified in the well capitalized category at both June 30, 2015 and December 31, 2014 under the regulatory capital rules in effect at each date.  Since June 30, 2015, no conditions or events have occurred, of which the Company is aware, that have resulted in a material change in the Bank's regulatory risk category other than as reported in this Quarterly Report on Form 10-Q.

Actual capital amounts and ratios for the Bank are presented in the following tables (dollars in thousands):

										To Be Well
										Capitalized Under
						To Be Considered				Prompt Corrective
		Actual				Adequately Capitalized				Action Provisions
As of June 30, 2015:		Amount	Ratio			Amount	Ratio			Amount	Ratio
Common Equity Tier 1 Capital	$	63,206	17.00	%	$	16,726	4.50	%	$	24,160	6.50	%
Tier I Risk-Based Capital Ratio	$	63,206	17.00	%	$	22,302	6.00	%	$	29,736	8.00	%
Total Risk-Based Capital Ratio	$	64,639	17.39	%	$	29,736	8.00	%	$	37,170	10.00	%
Tier 1 Leverage Ratio	$	63,206	13.23	%	$	19,106	4.00	%	$	23,882	5.00	%
As of December 31, 2014:
Common Equity Tier 1 Capital		N/A	N/A			N/A	N/A			N/A	N/A
Tier I Risk-Based Capital Ratio	$	61,448	16.31	%	$	15,066	4.00	%	$	22,599	6.00	%
Total Risk-Based Capital Ratio	$	62,743	16.66	%	$	30,132	8.00	%	$	37,665	10.00	%
Tier 1 Leverage Ratio	$	61,448	12.94	%	$	18,988	4.00	%	$	23,735	5.00	%

Banking regulations also limit the amount of dividends that may be paid without prior approval by an FSB's regulatory agencies.  In addition to these regulations, the Bank agreed in the Operating Agreement that it would not declare or pay any dividends or otherwise reduce its capital unless it is in compliance with the Operating Agreement, including the minimum capital requirements.  Due to these restrictions and the Bank’s desire to preserve capital to fund its growth, the Company currently does not anticipate paying a dividend for the foreseeable future.  In addition to these regulatory restrictions, it should be noted that the declaration of dividends is at the discretion of the Company’s Board of Directors and will depend, in part, on the Company’s earnings and future capital needs.  Accordingly, there can be no assurance that dividends will be declared in any future period.

The Bank is required to maintain reserves against certain deposit liabilities which was satisfied with vault cash and balances on deposit with the Federal Reserve Bank of Richmond during the reserve maintenance periods that included June 30, 2015 and December 31, 2014.

Under current Federal Reserve regulations, the Bank is limited in the amount it may lend to the parent company and its nonbank subsidiaries.  Loans to a single affiliate may not exceed 10%, and loans to all affiliates may not exceed 20% of the Bank’s capital stock, surplus, and undivided profits, plus the allowance for loan and lease losses.  Loans from the Bank to nonbank affiliates, including the parent company, are also required to be collateralized according to regulatory guidelines.  At June 30, 2015, there were no loans from the Bank to any nonbank affiliate, including the parent company.

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Deposits (Interest Expense On Deposits) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Deposits [Abstract]
Interest-bearing checking			$ 28,375	$ 53,684
Savings			22,137	20,186
Money market			137,015	146,756
Total interest-bearing checking and savings			187,527	220,626
Time deposits below $100,000			302,830	85,320
Time deposits $100,000 or above			458,214	304,282
Total certificates of deposit			761,044	389,602
Total Interest Expense	$ 464,170	$ 301,169	$ 948,571	$ 610,228

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Consolidated Statements Of Cash Flows - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Cash flows from operating activities:
Net income	$ 545,915	$ 2,755,255	$ 889,168	$ 2,836,990
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of premises and equipment			348,228	478,225
Stock-based compensation			54,303	260,508
Amortization of investment premiums and discounts, net			97,280	117,644
Accretion of net discounts on loans			(1,937,927)	(3,153,066)
Amortization of core deposit intangibles	204,108	218,447	458,653	492,742
Amortization of deposit premiums			29,622	(633,037)
Bargain purchase gain		(524,432)		(524,432)
Provision for loan losses	296,700	140,679	571,809	359,844
Increase in cash surrender value of bank owned life insurance			(62,645)	(64,406)
Gain on redemption of securities			(77,490)
Loss on sale of premises and equipment				4,431
Write down of real estate acquired through foreclosure			140,939	274,079
Net gain on sale of real estate acquired through foreclosure	(40,077)	(27,096)	(39,449)	(28,925)
Origination of loans held for sale			(68,822,588)	(34,622,106)
Proceeds from sales of loans held for sale			61,119,076	41,276,373
Gains on sales of loans held for sale			(1,895,693)	(1,022,821)
Deferred income taxes				1,020,335
Net decrease (increase in accrued interest receivable			30,106	(203,140)
Net decrease (increase)in accrued taxes receivable			988,250	(624,564)
Net decrease in defined pension plan liability			(150,674)	(84,723)
Net increase in prepaid expenses and other assets			(581,424)	(749,465)
Net decrease in accrued expenses and other liabilities			(216,798)	(222,279)
Net cash (used in) provided by operating activities			(9,057,254)	5,188,207
Cash flows from investing activities:
Acquisition, net of cash acquired				24,745,504
Purchases of investment securities available for sale			(7,910,986)
Net decrease in time deposits with banks			34,849	1,046,718
Redemptions and maturities of investment securities available for sale securities			3,417,318	1,487,391
Redemptions and maturities of investment securities held to maturity			41,124
Net (purchase) redemption of restricted equity securities			(290,600)	1,343,500
Net decrease in loans			7,670,760	12,152,723
Proceeds from sale of real estate acquired through foreclosure			999,114	497,622
Purchases of premises and equipment			(10,280)	(169,791)
Proceeds from sale of premises and equipment				38,749
Net cash (used in) provided by investing activities			3,951,299	41,142,416
Cash flows from financing activities:
Net decrease in deposits			(3,408,301)	(52,176,674)
Net increase in short-term borrowings			11,000,000
Proceeds from issuance of common stock				7,000,000
Issuance of common stock on stock option exercise			74,687
Net cash provided by (used in) financing activities			7,666,386	(45,176,674)
Net increase in cash and cash equivalents			2,560,431	1,153,949
Cash and cash equivalents at beginning of period			16,857,325	23,273,060	$ 23,273,060
Cash and cash equivalents at end of period	$ 19,417,756	$ 24,427,009	19,417,756	24,427,009	$ 16,857,325
Supplemental Disclosures Of Cash Flow Information:
Interest paid on deposits and borrowings			941,832	1,246,842
Income taxes paid			(411,059)	816,413
Non Cash activities:
Transfer of loans to real estate acquired through foreclosure			$ 1,231,583	973,265
Transfer of loans held for sale to loan porfolio				$ 1,101,700

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Consolidated Balance Sheets [Abstract]
Common stock, par value	$ 1.00	$ 1.00
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	11,031,114	11,014,517
Common stock, shares outstanding	11,031,114	11,014,517

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Short-Term Borrowings

6 Months Ended

Jun. 30, 2015

Short-Term Borrowings [Abstract]

Short-Term Borrowings

NOTE 10 – SHORT-TERM BORROWINGS  

Short-term borrowings at June 30, 2015 and December 31, 2014 consisted of the following:

Federal Home Loan Bank Advances		June 30, 2015		December 31, 2014
Due January, 2015, Fixed Rate  0.24%	$	-	$	8,000,000
Due July 2015, Fixed Rate 0.19%		17,000,000
Due July 2015, Fixed Rate 0.18%		5,300,000		-
Due December, 2015, Daily Rate 0.355%		10,700,000		14,000,000
Atlantic Central Bankers Bank Advances
Due November, 2015, Fixed rate 4.50%		150,000		150,000
Total	$	33,150,000	$	22,150,000

Interest expense on FHLB advances and Atlantic Community Bankers Bank (“ACBB”) advances for the six months ended June 30, 2015 was $23,644.  The Company had no long-term borrowings at June 30, 2015.

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 10, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2015
Entity Registrant Name	Bay Bancorp, Inc.
Entity Central Index Key	0000859222
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,062,665

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

Stock-Based Compensation [Abstract]

Stock Based Compensation

NOTE 11 – STOCK-BASED COMPENSATION  

The Jefferson Bancorp, Inc. 2010 Stock Option Plan (the “Jefferson Plan”) was adopted by the Jefferson Board of Directors in September 2010 and approved by Jefferson’s stockholders in April 2011.  The Jefferson Plan provides for the granting of incentive stock options intended to comply with the requirements of Section 422 of the Internal Revenue Code and non-qualified stock options (collectively “Awards”).  Awards were available for grant to officers, employees and non-employee directors, independent consultants and contractors of Jefferson and its affiliates, including the Bank.

The Jefferson Plan authorized the issuance of up to 577,642 shares of common stock adjusted for the post-merger exchange ratio of 2.2217 and had a term of 10 years.  In general, options granted under the Jefferson Plan have an exercise price equal to 100% of the fair market value of the common stock at the date of the grant and have a 10-year term.  Options relating to a total of 522,518 shares of common stock were outstanding as of June 30, 2015.  As a result of the Merger, the Jefferson Plan is now administered by Bay Bancorp, Inc.’s Board of Directors. 

The Bay Bancorp, Inc. 2015 Equity Compensation Plan (the “2015 Equity Plan” and, together with the Jefferson Plan and the 2007 Equity Plan, the “Plans”) was approved at the 2015 annual meeting of stockholders of Bay Bancorp, Inc. and reserve 100,000 shares of common stock for issuance pursuant to the grant of stock options, stock awards and other equity-based awards.  No awards were outstanding under the 2015 Equity Plan as of June 30, 2015.

The following table summarizes changes in the Company’s stock options outstanding and exercisable for the six months ended June 30, 2015 and December 31, 2014.

	Stock Options Outstanding		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
Outstanding, December 31, 2014	743,015	$	4.99	6.85 years
Exercised	(16,597)		4.50
Outstanding, June 30, 2015	726,418	$	5.00	6.2 years
Exercisable at June 30, 2015	653,671	$	4.96	6.0 years

Stock-based compensation expense is recognized on a straight-line basis over the vesting period of the stock options and is recorded in noninterest expense.  For the six months ended June 30, 2015 and 2014, stock-based compensation expense applicable to the Plans was $49,652 and $218,843, respectively.  Unrecognized stock-based compensation expense attributable to non-vested options was $121,178 at June 30, 2015.  This amount is expected to be recognized over a remaining weighted average period of approximately 1.8 years.

Restricted Stock Awards

On June 26, 2013, the Company’s Board of Directors revised its director compensation policy to provide for an annual grant to each non-employee director of an award of shares of restricted common stock having a fair market value of $10,000 that will vest one year after the date of the grant.  At December 31, 2014 and June 30, 2015, grants relating to 16,256 and 15,296shares of unvested restricted common stock were outstanding, respectively.  A total of 15,296 shares of restricted common stock were granted to the eight eligible directors on May 27, 2015.  Total stock-based compensation expense attributable to the shares of restricted common stock was $39,990and $41,665for the six months end June 30, 2015 and 2014, respectively.  The total unrecognized compensation expense attributable to the shares of restricted common stock was $73,332 at June 30, 2015.

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Fair Value (Assets Recorded At Fair Value On A Nonrecurring Basis) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Nonrecurring fair value adjustment	$ 0	$ 0
Impaired loans	456,601	374,459
Real estate acquired through foreclosure	1,231,584	983,276
Total recorded assets measured at fair value on a nonrecurring basis	1,688,185	1,357,735
Significant Other Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	456,601	374,459
Real estate acquired through foreclosure	1,231,584	983,276
Total recorded assets measured at fair value on a nonrecurring basis	$ 1,688,185	$ 1,357,735

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Consolidated Statements Of Income - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest income:
Interest and fees on loans	$ 5,585,676	$ 5,779,831	$ 11,093,443	$ 10,920,217
Interest on loans held for sale	132,180	46,208	193,691	132,009
Interest and dividends on securities	258,262	245,104	515,698	492,453
Interest on deposits in banks and federal funds sold	5,768	18,660	16,380	32,028
Total Interest Income	5,981,886	6,089,803	11,819,212	11,576,707
Interest expense:
Interest on deposits	464,170	301,169	948,571	610,228
Interest on Fed Funds Purchased	604		604
Interest on short-term borrowings	9,868		23,644
Total Interest Expense	474,642	301,169	972,819	610,228
Net Interest Income	5,507,244	5,788,634	10,846,393	10,966,479
Provision for loan losses	296,700	140,679	571,809	359,844
Net interest income after provision for loan losses	5,210,544	5,647,955	10,274,584	10,606,635
Noninterest income:
Electronic banking fees	626,056	676,353	1,202,246	1,316,347
Mortgage-banking fees and gains	604,065	195,388	997,707	508,063
(Loss) gain on sale of real estate acquired through foreclosure	40,077	27,096	39,449	28,925
Service charges on deposit accounts	70,714	111,432	149,731	203,945
Bargain purchase gain		524,432		524,432
Gain on redemption of securities			77,490
Other income	245,821	2,903,359	357,330	3,109,720
Total noninterest income	1,586,733	4,438,060	2,823,953	5,691,432
Noninterest Expenses:
Salary and employee benefits	3,143,816	3,159,029	6,062,935	6,524,461
Occupancy expenses	656,426	784,831	1,376,258	1,534,110
Furniture and equipment expenses	245,171	282,825	520,572	594,954
Legal, accounting and other professional fees	369,151	338,105	737,179	732,225
Data processing and items processing services	283,207	217,187	625,880	492,337
FDIC insurance costs	97,072	134,977	203,383	202,686
Advertising and marketing related expenses	66,555	145,560	95,304	184,965
Foreclosed property expenses	169,100	191,029	229,463	390,392
Loan collection costs	111,867	105,724	199,377	152,903
Core deposit intangible amortization	204,108	218,447	458,653	492,742
Merger and acquistion related expenses		128,965	0	240,288
Other expenses	585,525	549,023	1,122,878	1,053,312
Total Noninterest Expenses	5,931,998	6,255,702	11,631,882	12,595,375
Income (loss) before income taxes	865,279	3,830,313	1,466,655	3,702,692
Income tax expense (benefit)	319,364	1,075,058	577,487	865,702
Net income	$ 545,915	$ 2,755,255	$ 889,168	$ 2,836,990
Basic net income per share	$ 0.05	$ 0.27	$ 0.08	$ 0.29
Diluted net income per common share	$ 0.05	$ 0.27	$ 0.08	$ 0.29

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Loans And Allowance For Loan Losses

6 Months Ended

Jun. 30, 2015

Loans And Allowance For Loan Losses [Abstract]

Loans And Allowance For Loan Losses

NOTE 5 – LOANS AND ALLOWANCE FOR LOAN LOSSES

The fundamental lending business of the Company is based on understanding, measuring, and controlling the credit risk inherent in the loan portfolio.  The Company's loan portfolio is subject to varying degrees of credit risk.  These risks entail both general risks, which are inherent in the lending process, and risks specific to individual borrowers.  The Company's credit risk is mitigated through portfolio diversification, which limits exposure to any single customer, industry or collateral type.  The loan portfolio segment balances are presented in the following table:

		June 30,		December 31,
		2015		2014
Commercial & Industrial	$	32,835,146	$	33,454,280
Commercial Real Estate		159,175,342		158,714,554
Residential Real Estate		134,762,675		140,374,035
Home Equity Line of Credit		34,241,193		35,717,982
Land		4,791,897		5,856,875
Construction		18,773,848		18,052,287
Consumer & Other		1,072,436		881,179
Total Loans		385,652,537		393,051,192
Less: Allowance for Loan Losses		(1,432,546)		(1,294,976)
Net Loans	$	384,219,991	$	391,756,216

At June 30, 2015 and December 31, 2014, loans not considered to have deteriorated credit quality at acquisition had a total remaining unamortized discount of $4,894,745 and $5,281,192, respectively.

Portfolio Segments:

The Company currently manages its credit products and the respective exposure to loan losses by the following specific portfolio segments, which are levels at which the Company develops and documents its systematic methodology to determine the allowance for loan losses.  The Company considers each loan type to be a portfolio segment having unique risk characteristics.

Commercial & Industrial

Commercial & Industrial (“C&I”) loans are made to provide funds for equipment and general corporate needs.  Repayment of these loans primarily uses the funds obtained from the operation of the borrower's business.  C&I loans also include lines of credit that are utilized to finance a borrower's short-term credit needs and/or to finance a percentage of eligible receivables or inventory.  Of primary concern in C&I lending is the borrower's creditworthiness and ability to successfully generate sufficient cash flow from their business to service the debt.

Commercial Real Estate

Commercial Real Estate loans are bifurcated into Investor and Owner Occupied types (classes).  Commercial Real Estate - Investor loans consist of loans secured by non-owner occupied properties and involve investment properties for warehouse, retail, apartment, and office space with a history of occupancy and cash flow.  This commercial real estate class includes mortgage loans to the developers and owners of commercial real estate where the borrower intends to operate or sell the property at a profit and use the income stream or proceeds from the sale(s) to repay the loan.  Commercial Real Estate - Owner Occupied loans consist of commercial mortgage loans secured by owner occupied properties and involves a variety of property types to conduct the borrower's operations.  The primary source of repayment for this type of loan is the cash flow from the business and is based upon the borrower's financial health and the ability of the borrower and the business to repay.  At June 30, 2015 and December 31, 2014, Commercial Real Estate – Investor loans had a total balance of $102,295,758 and $101,947,596, respectively.  At June 30, 2015 and December 31, 2014, Commercial Real Estate – Owner Occupied loans had a total balance of $56,879,584 and $56,766,958, respectively.

Residential Real Estate

Residential Real Estate loans are bifurcated into Investor and Owner Occupied types (classes).  Residential Real Estate - Investor loans consist of loans secured by non-owner occupied residential properties and usually carry higher credit risk than Residential Real Estate – Owner Occupied loans due to their reliance on stable rental income and due to lower incentive for the borrower to avoid foreclosure.  Payments on loans secured by rental properties often depend on the successful operation and management of the properties and the payment of rent by tenants.  At June 30, 2015 and December 31, 2014, Residential Real Estate – Investor loans had a total balance of $45,273,399 and $50,708,153, respectively.  At June 30, 2015 and December 31, 2014, Residential Real Estate – Owner Occupied loans had a total balance of $89,489,276and $89,665,882, respectively.

Home Equity Line of Credit

Home Equity Lines of Credit (“HELOCs”) are a form of revolving credit in which a borrower's primary residence serves as collateral.  Borrowers use HELOCs primarily for education, home improvements, and other significant personal expenditures.  The borrower will be approved for a specific credit limit set at a percentage of the home's appraised value less the balance owed on the existing first mortgage.  Major risks in HELOC lending include the borrower's ability to service the existing first mortgage plus proposed HELOC, the Company's ability to pursue collection in a second lien position upon default, and overall risks in fluctuation in the value of the underlying collateral property.

Land

Land loans are secured by underlying properties that usually consist of tracts of undeveloped land that do not produce income.  These loans carry the risk that there will be inadequate demand to ensure the sale of the property within an acceptable time.  As a result, land loans carry the risk that the builder will have to pay the property taxes and other carrying costs of the property until an end buyer is found.

Construction

Construction loans, which include land development loans, are generally considered to involve a higher degree of credit risk than long-term financing on improved, occupied real estate.  Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property's value at completion of construction and estimated costs of construction, as well as the property’s ability to attract and retain tenants.  Loan funds are disbursed periodically as pre-specified stages of completion are attained based upon site inspections.  If the Company is forced to foreclose on a building before or at completion due to a default, it may be unable to recover all of the unpaid balance of and accrued interest on the loan as well as related foreclosure and holding costs.

Consumer & Other

Consumer & Other loans include installment loans, personal lines of credit, and automobile loans.  Payment on these loans often depends on the borrower's creditworthiness and ability to generate sufficient cash flow to service the debt.

Allowance for Loan Losses

To control and monitor credit risk, management has an internal credit process in place to determine whether credit standards are maintained along with in-house loan administration accompanied by oversight and review procedures.  The primary purpose of loan underwriting is the evaluation of specific lending risks that involves the analysis of the borrower's ability to service the debt as well as the assessment of the underlying collateral.  Oversight and review procedures include the monitoring of the portfolio credit quality, early identification of potential problem credits and the management of the problem credits.  As part of the oversight and review process, the Company maintains an allowance for loan losses to absorb estimated and probable losses inherent in the loan portfolio. 

For purposes of calculating the allowance, the Company segregates its loan portfolio into segments based primarily on the type of supporting collateral.  The Commercial Real Estate and Residential Real Estate segments, which both exclude any collateral property currently under construction, are further disaggregated into Owner Occupied and Investor classes for each.  Further, all segments are also segregated as either purchased credit impaired loans, purchased loans not deemed impaired, troubled debt restructurings, or new originations.

The analysis for determining the allowance is consistent with guidance set forth in U.S. GAAP and the Interagency Policy Statement on the Allowance for Loan and Lease Losses.  Pursuant to Bank policy, the allowance is evaluated quarterly by management and is based upon management's review of the collectability of loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrowers' ability to repay, estimated value of any underlying collateral and prevailing economic conditions.  The allowance consists of specific and general reserves.  The specific reserves relate to loans classified as impaired primarily including nonaccrual loans, troubled debt restructurings, and purchased credit impaired loans where cash flows have deteriorated from those forecasted as of the acquisition date.  The reserve for these loans is established when the discounted cash flows, collateral value, or observable market price, whichever is appropriate, of the impaired loan is lower than the carrying value.  For impaired loans, any measured impairment is charged-off against the loan and allowance for those loans that are collateral dependent in the applicable reporting period.  

The general reserve covers loans that are not classified as impaired and primarily includes purchased loans not deemed impaired and new loan originations.  The general reserve requirement is based on historical loss experience and several qualitative factors derived from economic and market conditions that have been determined to have an effect on the probability and magnitude of a loss.  Since the Bank does not have its own sufficient loss experience, management also references the historical net charge-off experience of peer groups to determine a reasonable range of reserve values, which is permissible per Bank policy.  The peer groups consist of competing Maryland-based financial institutions with established ranges in total asset size.  Management will continue to evaluate the appropriateness of the peer group data used with each quarterly allowance analysis until such time that the Bank has sufficient loss experience to provide a foundation for the general reserve requirement.  The qualitative analysis incorporates global environmental factors in the following trends: national and local economic metrics; portfolio risk ratings and composition; and concentrations in credit.

The following table provides information on the activity in the allowance for loan losses by the respective loan portfolio segment for the three and six months ended June 30, 2015:

Three Months Ended June 30:		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	221,103	$	692,775	$	68,267	$	188,657	$	10,590	$	164,788	$	7,669	$	1,353,849
Charge-offs		(80,869)		(45,573)		(45,479)		(54,639)		-		-		(1,389)		(227,949)
Recoveries		-		-		1,391		7,000		-		-		1,555		9,946
Provision		29,686		94,620		117,199		33,103		2,597		18,437		1,058		296,700
Ending balance	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546

Six Months Ended June 30:		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	200,510	$	554,585	$	203,413	$	166,733	$	8,687	$	153,089	$	7,959	$	1,294,976
Charge-offs		(80,869)		(45,573)		(260,715)		(54,639)		-		-		(2,389)		(444,185)
Recoveries		-		-		1,391		7,000		-		-		1,555		9,946
Provision		50,279		232,810		197,289		55,027		4,500		30,136		1,768		571,809
Ending balance	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546

The following table presents loans and the related allowance for loan losses, by loan portfolio segment, at June 30, 2015:

		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: collectively evaluated for impairment		169,920		741,822		141,378		174,121		13,187		183,225		8,893		1,432,546
Totals	$	169,920	$	741,822	$	141,378	$	174,121	$	13,187	$	183,225	$	8,893	$	1,432,546
Loans:
Ending balance: individually evaluated for impairment	$	1,257,565	$	1,141,996	$	4,532,318	$	146,055	$	-	$	-	$	-	$	7,077,934
Ending balance: collectively evaluated for impairment		29,933,299		141,169,506		119,214,275		33,379,522		2,729,659		18,280,533		1,072,436		345,779,230
Ending balance: loans acquired with deteriorated credit quality		1,644,282		16,863,840		11,016,082		715,616		2,062,238		493,315		-		32,795,373
Totals	$	32,835,146	$	159,175,342	$	134,762,675	$	34,241,193	$	4,791,897	$	18,773,848	$	1,072,436	$	385,652,537

(1) Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

The following table provides information on the activity in the allowance for loan losses by the respective loan portfolio segment for the three and six months ended June 30, 2014:

Three Months Ended June 30:
		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	167,400	$	324,080	$	170,954	$	129,203	$	6,918	$	135,416	$	7,744	$	941,715
Charge-offs		-		(89,165)		-		-		-		-		-		(89,165)
Recoveries (1)		-		101,614		3,683		1,000		-		-		120		106,417
Provision		11,964		170,714		(57,719)		11,661		117		3,639		303		140,679
Ending balance	$	179,364	$	507,243	$	116,918	$	141,864	$	7,035	$	139,055	$	8,167	$	1,099,646

Six Months Ended June 30:
		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Beginning balance	$	167,400	$	324,080	$	80,239	$	129,203	$	6,918	$	135,416	$	7,744	$	851,000
Charge-offs		-		(136,956)		(37,478)		(63,984)		-		-		-		(238,418)
Recoveries(1)		-		101,614		5,542		9,844		-		-		10,220		127,220
Provision		11,964		218,505		68,615		66,801		117		3,639		(9,797)		359,844
Ending balance	$	179,364	$	507,243	$	116,918	$	141,864	$	7,035	$	139,055	$	8,167	$	1,099,646

The following table presents loans and the related allowance for loan losses, by loan portfolio segment, at December 31, 2014:

		Commercial		Commercial		Residential		Home Equity						Consumer
		& Industrial		Real Estate		Real Estate		Line of Credit		Land		Construction		& Other		Total
Allowance for loan losses:
Ending balance: individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Ending balance: collectively evaluated for impairment		200,510		554,585		203,413		166,733		8,687		153,089		7,959		1,294,976
Totals	$	200,510	$	554,585	$	203,413	$	166,733	$	8,687	$	153,089	$	7,959	$	1,294,976
Loans:
Ending balance: individually evaluated for impairment	$	957,080	$	828,264	$	4,314,191	$	320,329	$	-	$	-	$	-	$	6,419,864
Ending balance: collectively evaluated for impairment		30,474,533		137,781,830		124,042,412		34,686,415		2,448,388		17,380,581		881,179		347,695,338
Ending balance: loans acquired with deteriorated credit quality(2)		2,022,667		20,104,460		12,017,432		711,238		3,408,487		671,706		-		38,935,990
Totals	$	33,454,280	$	158,714,554	$	140,374,035	$	35,717,982	$	5,856,875	$	18,052,287	$	881,179	$	393,051,192

(1) Excludes cash payments received on loans acquired with deteriorated credit quality with a carrying value of $0.

(2) Includes loans acquired with deteriorated credit quality of $104,460 that have current period charge-offs.

The following table presents information with respect to impaired loans, which include loans acquired with deteriorated credit quality that have current period charge-offs, at  June 30, 2015 and for the three and six months ended June 30, 2015:

		At June 30, 2015						For the Three Months Ended June 30, 2015					For the Six Months Ended June 30, 2015
				Unpaid				Average		Interest			Average			Interest
		Recorded		Principal		Related		Recorded		Income			Recorded			Income
		Investment		Balance		Allowance		Investment		Recognized			Investment			Recognized
With no related allowance recorded:
Commercial & Industrial	$	1,257,566	$	1,410,079	$	-	$	1,308,355	$	34,429		$	1,231,453		$	35,533
Commercial Real Estate - Investor		1,141,996		1,141,996		-		1,299,025		558			1,301,107			558
Commercial Real Estate - Owner Occupied		-		-		-		-		-			-			-
Residential Real Estate - Investor		1,560,094		2,168,388		-		1,955,625		11,055			1,967,136			22,257
Residential Real Estate - Owner Occupied		2,972,223		3,434,589		-		3,227,439		115,631			3,269,029			121,891
Home Equity Line of Credit		146,055		209,570		-		178,850		-			179,629			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		18,246		-		9,384		-			9,517			-
With an allowance recorded:
Commercial & Industrial		-		-		-		-		-			-			-
Commercial Real Estate - Investor		-		-		-		-		-			-			-
Commercial Real Estate - Owner Occupied		-		-		-		-		-			-			-
Residential Real Estate - Investor		-		-		-		-		-			-			-
Residential Real Estate - Owner Occupied		-		-		-		-		-			-			-
Home Equity Line of Credit		-		-		-		-		-			-			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		-		-		-		-			-			-
Total:		7,077,934		8,382,868		-		7,978,678		161,673			7,957,871			180,239
Commercial & Industrial	$	1,257,566	$	1,410,079	$	-	$	1,308,355	$	34,429		$	1,231,453		$	35,533
Commercial Real Estate		1,141,996		1,141,996		-		1,299,025		558	-		1,301,107	-		558
Residential Real Estate		4,532,317		5,602,977		-		5,183,064		126,686			5,236,165			144,148
Home Equity Line of Credit		146,055		209,570		-		178,850		-			179,629			-
Land		-		-		-		-		-			-			-
Construction		-		-		-		-		-			-			-
Consumer & Other		-		18,246		-		9,384		-			9,517			-
	$	7,077,934	$	8,382,868	$	-	$	7,978,678	$	161,673		$	7,957,871		$	180,239

The following table presents information with respect to impaired loans, which include loans acquired with deteriorated credit quality that have current period charge-offs, as of December 31, 2014 and for the three and six months ended June30, 2014:

		At December 31, 2014						For the Three Months Ended June 30, 2014				For the Six Months Ended June 30, 2014
				Unpaid				Average		Interest		Average		Interest
		Recorded		Principal		Related		Recorded		Income		Recorded		Income
		Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial & Industrial	$	957,080	$	1,155,553	$	-	$	1,118,445	$	24,174	$	1,139,407	$	49,132
Commercial Real Estate - Investor		662,280		668,287		-		303,593		589		304,130		1,193
Commercial Real Estate - Owner Occupied		165,984		165,984		-		663,454		-		675,334		-
Residential Real Estate - Investor		1,063,643		1,658,389		-		889,289		3,301		895,010		6,661
Residential Real Estate - Owner Occupied		3,250,548		3,853,959		-		2,967,624		36,412		3,016,870		71,296
Home Equity Line of Credit		320,329		404,347		-		317,878		-		318,506		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		524,158		67,269		524,158		112,865
Consumer & Other		-		19,034		-		10,111		-		10,245		-
With an allowance recorded:
Commercial & Industrial		-		-		-		-		-		-		-
Commercial Real Estate - Investor		-		-		-		1,999,853		125,510		2,002,139		145,499
Commercial Real Estate - Owner Occupied		-		-		-		-		-		-		-
Residential Real Estate - Investor		-		-		-		-		-		-		-
Residential Real Estate - Owner Occupied		-		-		-		-		-		-		-
Home Equity Line of Credit		-		-		-		-		-		-		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		-		-		-		-
Consumer & Other		-		-		-		-		-		-		-
Total:		6,419,864		7,925,553		-		8,794,405		257,255		8,885,799		386,646
Commercial & Industrial	$	957,080	$	1,155,553	$	-	$	1,118,445	$	24,174	$	1,139,407	$	49,132
Commercial Real Estate		828,264		834,271		-		2,966,900		126,099		2,981,603		146,692
Residential Real Estate		4,314,191		5,512,348		-		3,856,913		39,713		3,911,880		77,957
Home Equity Line of Credit		320,329		404,347		-		317,878		-		318,506		-
Land		-		-		-		-		-		-		-
Construction		-		-		-		524,158		67,269		524,158		112,865
Consumer & Other		-		19,034		-		10,111		-		10,245		-
	$	6,419,864	$	7,925,553	$	-	$	8,794,405	$	257,255	$	8,885,799	$	386,646

In addition to monitoring the performance status of the loan portfolio, the Company utilizes a risk rating scale (1-8) to evaluate loan asset quality for all loans.  Loans that are rated 1-4 are classified as pass credits.  Loans rated a 5 (Watch) are pass credits, but are loans that have been identified as warranting additional attention and monitoring.  Loans that are risk rated 5 or higher are placed on the Company's monthly watch list.  For the pass rated loans, management believes there is a low risk of loss related to these loans and, as necessary, credit may be strengthened through improved borrower performance and/or additional collateral.  Loans rated a 6 (Special Mention) or higher are considered criticized loans and represent an increased level of credit risk and are placed into these three categories: 

6 (Special Mention) - Borrowers exhibit potential credit weaknesses or downward trends that may weaken the credit position if uncorrected.  The borrowers are considered marginally acceptable without potential for loss of principal or interest.

7 (Substandard) - Borrowers have well defined weaknesses or characteristics that present the possibility that the Company will sustain some loss if the deficiencies are not corrected.

8 (Doubtful) - Borrowers classified as doubtful have the same weaknesses found in substandard borrowers; however, these weaknesses indicate that the collection of debt in full (principal and interest), based on current conditions, is highly questionable and improbable.

In the normal course of loan portfolio management, relationship managers are responsible for continuous assessment of credit risk arising from the individual borrowers within their portfolio and assigning appropriate risk ratings.  Credit Administration is responsible for ensuring the integrity and operation of the risk rating system and maintenance of the watch list.  The Officer's Loan Committee meets monthly to discuss and monitor problem credits and internal risk rating downgrades that result in updates to the watch list.

The following table provides information with respect to the Company's credit quality indicators by class of the loan portfolio as of June 30, 2015:

		Risk Rating
		Pass		Special Mention		Substandard		Doubtful		Total
Commercial & Industrial	$	29,577,832	$	1,659,553	$	1,597,761	$	-	$	32,835,146
Commercial Real Estate - Investor		95,690,428		4,231,900		2,373,430		-		102,295,758
Commercial Real Estate - Owner Occupied		46,855,623		7,352,632		2,671,329		-		56,879,584
Residential Real Estate - Investor		35,023,717		1,985,969		8,263,713		-		45,273,399
Residential Real Estate - Owner Occupied		85,735,353		-		3,753,923		-		89,489,276
Home Equity Line of Credit		33,784,792		-		456,401		-		34,241,193
Land		2,523,309		206,350		2,062,238		-		4,791,897
Construction		18,607,079		77,571		89,198		-		18,773,848
Consumer & Other		1,072,436		-		-		-		1,072,436
Total	$	348,870,569	$	15,513,975	$	21,267,993	$	-	$	385,652,537

The following table provides information with respect to the Company's credit quality indicators by class of the loan portfolio as of December 31, 2014:

		Risk Rating
		Pass		Special Mention		Substandard		Doubtful		Total
Commercial & Industrial	$	30,150,745	$	1,530,547	$	1,772,988	$	-	$	33,454,280
Commercial Real Estate - Investor		93,113,185		5,837,107		2,997,304		-		101,947,596
Commercial Real Estate - Owner Occupied		42,898,246		6,864,098		7,004,614		-		56,766,958
Residential Real Estate - Investor		39,109,937		2,804,857		8,793,359		-		50,708,153
Residential Real Estate - Owner Occupied		84,796,122		-		4,869,760		-		89,665,882
Home Equity Line of Credit		35,088,028		-		629,954		-		35,717,982
Land		3,850,748		-		2,006,127		-		5,856,875
Construction		17,848,675		81,234		122,378		-		18,052,287
Consumer & Other		881,179		-		-		-		881,179
Total	$	347,736,865	$	17,117,843	$	28,196,484	$	-	$	393,051,192

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. 

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of June 30, 2015.  Purchased credit impaired (“PCI”) loans are excluded from this aging and nonaccrual loans schedule.

		Accrual Loans
		30-59		60-89		90 or More
		Days		Days		Days		Total				Nonaccrual		Total
		Past Due		Past Due		Past Due		Past Due		Current		Loans		Loans
Commercial & Industrial	$	-	$	-	$	-	$	-	$	30,784,863	$	406,002	$	31,190,865
Commercial Real Estate    - Investor		-		-		-		-		90,210,278		1,278,898		91,489,176
Commercial Real Estate    - Owner Occupied		-		-		-		-		50,822,326		-		50,822,326
Residential Real Estate    - Investor		-		-		-		-		34,735,629		1,560,094		36,295,723
Residential Real Estate    - Owner Occupied		-		599,502		-		599,502		84,988,531		1,862,835		87,450,868
Home Equity Line of Credit		247,122		187,945		-		435,067		32,944,456		146,055		33,525,578
Land		-		-		-		-		2,729,660		-		2,729,660
Construction		-		-		-		-		18,280,532		-		18,280,532
Consumer & Other		288		434		-		722		1,071,714		-		1,072,436
Total	$	247,410	$	787,881	$	-	$	1,035,291	$	346,567,989	$	5,253,884	$	352,857,164
PCI loans														32,795,373
Total Loans													$	385,652,537

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31, 2014.  PCI loans are excluded from this aging and nonaccrual loans schedule.

		Accrual Loans
		30-59		60-89		90 or More
		Days		Days		Days		Total				Nonaccrual		Total
		Past Due		Past Due		Past Due		Past Due		Current		Loans		Loans
Commercial & Industrial	$	-	$	-	$	-	$	-	$	31,093,411	$	338,202	$	31,431,613
Commercial Real Estate    - Investor		159,786		-		-		159,786		88,920,589		608,084		89,688,459
Commercial Real Estate    - Owner Occupied		-		-		-		-		48,755,651		165,984		48,921,635
Residential Real Estate    - Investor		312,422		-		-		312,422		39,508,857		1,063,643		40,884,922
Residential Real Estate    - Owner Occupied		924,608		550,604		-		1,475,212		83,255,355		2,741,114		87,471,681
Home Equity Line of Credit		456,248		24,199		-		480,447		34,205,968		320,329		35,006,744
Land		-		-		-		-		2,448,388		-		2,448,388
Construction		-		-		-		-		17,380,581		-		17,380,581
Consumer & Other		-		500		-		500		880,679		-		881,179
Total	$	1,853,064	$	575,303	$	-	$	2,428,367	$	346,449,479	$	5,237,356	$	354,115,202
PCI loans														38,935,990
Total Loans													$	393,051,192

Troubled Debt Restructurings

The restructuring of a loan constitutes a troubled debt restructuring, or TDR, if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider in the normal course of business.  A concession may include an extension of repayment terms which would not normally be granted, a reduction of interest rate or the forgiveness of principal and/or accrued interest.  If the debtor is experiencing financial difficulty and the creditor has granted a concession, the Company will make the necessary disclosures related to the TDR.  In certain cases, a modification may be made in an effort to retain a customer who is not experiencing financial difficulty.  This type of modification is not considered to be a TDR.  Once a loan has been modified and is considered a TDR, it is reported as an impaired loan.  All TDRs are evaluated individually for impairment on a quarterly basis as part of the allowance for credit losses calculation.  A specific allowance for TDR loans is established when the discounted cash flows, collateral value or observable market price, whichever is appropriate, of the TDR is lower than the carrying value.  If a loan deemed a TDR has performed for at least six months at the level prescribed by the modification, it is not considered to be non-performing; however, it will generally continue to be reported as impaired, but may be returned to accrual status.  A TDR is deemed in default on its modified terms once a contractual payment is 30 or more days past due.

The following table presents a breakdown of loans that the Company modified during the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30, 2015					Three Months Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial & Industrial	2		78,575		78,575	-	$	-	$	-
Commercial Real Estate - Investor	1		213,387		213,387	-		-		-
Commercial Real Estate - Owner Occupied	-		-		-	-		-		-
Residential Real Estate - Investor	1		2,437		2,437	-		-		-
Residential Real Estate - Owner Occupied	-		-		-	-		-		-
Home Equity Line of Credit	-		-		-	-		-		-
Land	-		-		-	-		-		-
Construction	-		-		-	-		-		-
Consumer & Other	-		-		-	-		-		-
Totals	4	$	294,399	$	294,399	-	$	-	$	-
	Six Months Ended June 30, 2015					Six Months Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial & Industrial	2		78,575		78,575	1	$	85,397	$	85,397
Commercial Real Estate - Investor	1		213,387		213,387	-		-		-
Commercial Real Estate - Owner Occupied	-		-		-	-		-		-
Residential Real Estate - Investor	1		2,437		2,437	-		-		-
Residential Real Estate - Owner Occupied	-		-		-	-		-		-
Home Equity Line of Credit	-		-		-	-		-		-
Land	-		-		-	-		-		-
Construction	-		-		-	-		-		-
Consumer & Other	-		-		-	-		-		-
Totals	4	$	294,399	$	294,399	1	$	85,397	$	85,397

For the six months ended June 30, 2015, there were four loans modified as TDRs.  The restructuring of a C&I loan consolidated two loans into one and termed out the remaining balance over 7 years at an interest rate lower than the current rate for new debt with similar risk.  This C&I TDR was onnonaccrual status at June 30, 2015.  The restructuring of a Commercial Real Estate – Investor loan deferred all payments of principal and interest until the sale of the existing collateral as well as additional collateral that was provided.  This Commercial Real Estate – Investor loan was on nonaccrual status at June 30, 2015.  The restructuring of the Residential Real Estate – Investor loan termed out the balance owed over 7 years with a forgiveness of debt at the end of the term, if all payments are made as agreed.  This Residential Real Estate – Investor loan was on nonaccrual status at June 30, 2015.

For the six months ended June 30, 2014, there was oneC&I loan modified as a TDR.  The restructuring of the loan included an extension of loan maturity date at an interest rate lower than the current rate for a new debt with similar risk.  This TDR was on non-accrual status at June 30, 2015.

None of the loans modified as a TDR during the previous 12 months were in default of their modified terms at June 30, 2015.  At June 30, 2015 and December 31, 2014, the Bank had $2,973,205 and $2,347,989, respectively, in loans identified as TDRs of which $959,436 and $1,192,481, respectively, were on nonaccrual status.

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Investment Securities

6 Months Ended

Jun. 30, 2015

Investment Securities [Abstract]

Investment Securities

NOTE 4 – INVESTMENT SECURITIES

Investment securities are accounted for according to their purpose and holding period.  Trading securities are those that are bought and held principally for the purpose of selling them in the near term.  The Company held no trading securities at June 30, 2015 or December 31, 2014.  Available-for-sale investment securities, comprised of debt and mortgage-backed securities, are those that may be sold before maturity due to changes in the Company's interest rate risk profile or funding needs, and are reported at fair value with unrealized gains and losses, net of taxes, reported as a component of other comprehensive income.  Held-to-maturity investment securities, comprised of debt and mortgage-backed securities, are those that management has the positive intent and ability to hold to maturity and are reported at amortized cost.

Realized gains and losses are recorded in noninterest income and are determined on a trade date basis using the specific identification method.  Interest and dividends on investment securities are recognized in interest income on an accrual basis.  Premiums and discounts are amortized or accreted into interest income using the interest method over the expected lives of the individual securities.

At June 30, 2015 and December 31, 2014, the amortized cost and estimated fair value of the Company’s investment securities portfolio are summarized as follows:

		Amortized		Gross Unrealized				Estimated
Available for Sale		cost		Gains		Losses		Fair Value
June 30, 2015
U.S. government agency	$	5,622,011	$	171,297	$	-	$	5,793,308
U.S. treasury securities		5,912,117		17,113		-		5,929,230
Residential mortgage-backed securities		19,249,664		337,383		(148,029)		19,439,018
State and municipal		4,575,983		17,821		(1,567)		4,592,237
Corporate bonds		4,033,187		13,093		-		4,046,280
Total debt securities		39,392,962		556,707		(149,596)		39,800,073
Equity securities		78,752		-		(56,284)		22,468
Totals	$	39,471,714	$	556,707	$	(205,880)	$	39,822,541
		Amortized		Gross Unrealized				Estimated
Held-to-Maturity		cost		Gains		Losses		Fair Value
June 30, 2015
Residential mortgage-backed securities	$	1,277,799	$	4,565	$	-	$	1,282,364
		Amortized		Gross Unrealized				Estimated
Available for Sale		cost		Gains		Losses		Fair Value
December 31, 2014
U.S. government agency	$	7,561,238	$	217,033	$	-	$	7,778,271
Residential mortgage-backed securities		20,679,345		399,198		(207,616)		20,870,927
State and municipal		4,639,988		17,779		(3,621)		4,654,146
Corporate bonds		2,041,718		-		(11,718)		2,030,000
Total debt securities		34,922,289		634,010		(222,955)		35,333,344
Equity securities		78,754		-		(62,209)		16,545
Totals	$	35,001,043	$	634,010	$	(285,164)	$	35,349,889
		Amortized		Gross Unrealized				Estimated
Held-to-Maturity		cost		Gains		Losses		Fair Value
December 31, 2014
Residential mortgage-backed securities	$	1,315,718	$	9,079	$	-	$	1,324,797

At  June 30, 2015 securities with unrealized losses segregated by length of impairment were as follows:

		Less than 12 months				12 months or longer				Total
Available for Sale		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2015		Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	-		-	$	-	$	-	$	-	$	-
U.S. treasury securities		-		-		-		-		-		-
Residential mortgage-backed securities		1,794,721		(26,737)		4,829,161		(121,292)		6,623,882		(148,029)
State and municipals		749,820		(1,567)		-		-		749,820		(1,567)
Corporate		-		-		-		-		-		-
Total debt securities		2,544,541		(28,304)		4,829,161		(121,292)		7,373,702		(149,596)
Equity securities						22,468		(56,284)		22,468		(56,284)
Totals	$	2,544,541	$	(28,304)	$	4,851,629	$	(177,576)	$	7,396,170	$	(205,880)

At December 31, 2014, securities with unrealized losses segregated by length of impairment were as follows:

		Less than 12 months				12 months or longer				Total
Available for Sale		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2014		Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	-	$	-	$	-	$	-	$	-	$	-
Residential mortgage-backed securities		791		(3)		6,901,324		(207,613)		6,902,115		(207,616)
State and municipals		757,939		(3,621)						757,939		(3,621)
Corporate		2,030,000		(11,718)		-		-		2,030,000		(11,718)
Total debt securities		2,788,730		(15,342)		6,901,324		(207,613)		9,690,054		(222,955)
Equity securities		-		-		16,545		(62,209)		16,545		(62,209)
Totals	$	2,788,730	$	(15,342)	$	6,917,869	$	(269,822)	$	9,706,599	$	(285,164)

At June 30, 2015, unrealized losses in the Company’s portfolio of debt securities of $149,596 in the aggregate were related to 9 securities and caused by increases in market interest rates, spread volatility, or other factors that management deems to be temporary.  Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired.

At June 30, 2015, unrealized losses in the Company’s portfolio of equity securities of $56,284 was related to one security and considered temporary.  Since management believes that it is more likely than not the Company will not be required to sell these equity positions for a reasonable period of time sufficient for recovery of fair value, the Company does not consider these equity securities to be other-than-temporarily impaired.

At December 31, 2014, unrealized losses in the Company’s portfolio of debt securities of $222,955 in the aggregate were related to 11 securities and caused by increases in market interest rates, spread volatility, or other factors that management deems to be temporary.  Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired.

At December 31, 2014, unrealized losses in the Company’s portfolio of equity securities of $62,209 were related to one security and considered temporary.  Since management believes that it is more likely than not the Company will not be required to sell these equity positions for a reasonable period of time sufficient for recovery of fair value, the Company does not consider these equity securities to be other-than-temporarily impaired.

At June 30, 2015, the outstanding balance of no single issuerexceeded 10% of stockholders’ equity.  At December 31, 2014, no single issuer exceeded 10% of stockholders’ equity, except for U. S. Agency securities.

No investment securities held by the Company at  June 30, 2015 or December 31, 2014 were subject to a write-down due to credit related other-than-temporary impairment.

Contractual maturities of debt securities at June 30, 2015 are shown below.  Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held-to-Maturity
		Amortized		Fair		Amortized		Fair
		Cost		Value		Cost		Value
Within one year	$	622,397	$	624,985	$	-	$	-
Over one to five years		10,004,142		10,121,944		-		-
Over five to ten years		7,517,179		7,612,846		-		-
Over ten years		1,999,580		2,001,280		-		-
Residential mortgage-backed securities		19,249,664		19,439,018		1,277,799		1,282,364
Totals	$	39,392,962	$	39,800,073	$	1,277,799	$	1,282,364

The Company’s residential mortgage-backed securities portfolio is presented as a separate line within the maturity table, since borrowers have the right to prepay obligations without prepayment penalties.

At June 30, 2015, securities with an amortized cost of $17,573,505 (fair value of $17,870,257) were pledged as collateral for potential borrowings from the Federal Home Loan Bank of Atlanta (the “FHLB”) and the Federal Reserve Bank.  At December 31, 2014, securities with an amortized cost of $20,035,812 (fair value of $20,358,237)  were pledged as collateral for potential borrowings from the FHLB of Atlanta and the Federal Reserve Bank.

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Fair Value

6 Months Ended

Jun. 30, 2015

Fair Value [Abstract]

Fair Value

NOTE 16 – FAIR VALUE

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  In accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is best determined based upon quoted market prices.  However, in many instances, there are no quoted market prices for the Company’s various financial instruments.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.  Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

The fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions.  If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate.  In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment.  The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

The Fair Value Hierarchy

In accordance with this guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.  Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market.  Valuations are obtained from readily available pricing sources for market transactions involving identical assets and liabilities.

Level 2 - Valuation is based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  The valuation may be based on quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 

Assets Recorded at Fair Value on a Recurring Basis

The following methods and assumptions were used by the Company to measure certain assets recorded at fair value on a recurring basis in the consolidated financial statements:

Investment Securities Available for Sale

The fair value of investment securities available for sale is the market value based on quoted market prices, when available (Level 1).  If listed prices or quotes are not available, fair value is based upon quoted market prices for similar assets or, due to the limited market activity of the instrument, externally developed models that use significant observable inputs (Level 2) or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3).  It includes model pricing, defined as valuing securities based upon their relationship with other benchmark securities and market information from third party sources.  In the absence of current market activity, securities may be evaluated either by reference to similarly situated bonds or based on the liquidation value or restructuring value of the underlying assets.  There were no transfers between Level 1 and Level 2 and no change in valuation techniques used to measure fair value of securities available for sale for the six-month ended June 30, 2015.

The tables below present the recorded amount of assets measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014:

		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
June 30, 2015
U.S. government agency	$	5,793,308	$	-	$	5,793,308	$	-
U.S. treasury securities		5,929,230		-		5,929,230		-
Residential mortgage-backed securities		19,439,018		-		19,439,018		-
State and municipal		4,592,237		-		4,592,237		-
Corporate obligations		4,046,280		-		4,046,280		-
Equity securities		22,468		22,468		-		-
	$	39,822,541	$	22,468	$	39,800,073	$	-

		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
December 31, 2014
U.S. government agency	$	7,778,271	$	-	$	7,778,271	$	-
Residential mortgage-backed securities		20,870,927		-		20,870,927		-
State and municipal		4,654,146		-		4,654,146		-
Corporate obligations		2,030,000		-		2,030,000		-
Equity securities		16,545		16,545		-		-
	$	35,349,889	$	16,545	$	35,333,344	$	-

Assets Recorded at Fair Value on a Nonrecurring Basis

On a nonrecurring basis, the Company may be required to measure certain assets at fair value in accordance with U.S. GAAP.  These adjustments to fair value usually result from application of lower of cost or fair value accounting or write-downs of individual assets due to impairment.

The following methods and assumptions were used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the consolidated financial statements:

Loans held for sale

Loans held for sale are recorded at the lower of cost or estimated market value on an aggregate basis.  Market value is determined based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale.  As such, the Company records any fair value adjustments on a nonrecurring basis.  No nonrecurring fair value adjustments were recorded on loans held for sale during the three and six months ended June 30, 2015 or the year ended December 31, 2014.

Impaired Loans

Loans for which it is probable that payment of principal and interest will not be made in accordance with the contractual terms of the loan are considered impaired.  Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310, using the present value of expected cash flows, the loan’s observable market price, or the fair value of collateral (less selling costs) if the loan is collateral dependent.  A specific allowance for loan loss is then established or a partial charge-off is recorded if the loan is collateral dependent and the loan is classified at a Level 3 in the fair value hierarchy.  Appraised collateral values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the borrower’s business.  Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the factors identified above.  Valuation techniques are consistent with those applied in prior periods.

Real Estate Acquired Through Foreclosure

Real estate acquired through foreclosure (“REO”) is adjusted to fair value upon transfer of the loan to REO and is classified at Level 3 in the fair value hierarchy.  Subsequently, the REO is carried at the lower of carrying value or fair value.  The estimated fair value for REO included in Level 3 is determined by independent market based appraisals and other available market information, less estimated costs to sell, that may be reduced further based on market expectations or an executed sales agreement.  If the fair value of REO deteriorates subsequent to the period of transfer, the REO is also classified at a Level 3 in the fair value hierarchy.  Valuation techniques are consistent with those techniques applied in prior periods.

The tables below present the recorded assets measured at fair value on a nonrecurring basis at June 30, 2015 and December 31, 2014:

June 30, 2015:		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Impaired loans	$	456,601	$	-	$	-	$	456,601
Real estate acquired through foreclosure		1,231,584		-		-		1,231,584
	$	1,688,185	$	-	$	-	$	1,688,185

December 31, 2014:		Carrying Value (Fair Value)		Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Impaired loans	$	374,459	$	-	$	-	$	374,459
Real estate acquired through foreclosure		983,276		-		-		983,276
	$	1,357,735	$	-	$	-	$	1,357,735

Fair Value of Financial Instruments

The Company discloses fair value information about financial instruments, for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheets.  Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, if one exists.

Quoted market prices, where available, are shown as estimates of fair market values.  Because no quoted market prices are available for a significant part of the Company's financial instruments, the fair values of such instruments have been derived based on the amount and timing of estimated future cash flows and using market discount rates.

Present value techniques used in estimating the fair value of many of the Company's financial instruments are significantly affected by the assumptions used.  In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate cash settlement of the instrument.  Additionally, the accompanying estimates of fair values are only representative of the fair values of the individual financial assets and liabilities and should not be considered an indication of the fair value of the Company.

The following disclosure of estimated fair values of the Company's financial instruments at June 30, 2015 and December 31, 2014 is made in accordance with the requirements of ASC Topic 820:

			June 30, 2015				December 31, 2014
	Level in Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	Level 1	$	19,417,756	$	19,417,756	$	16,857,325	$	16,857,325
Time deposits with banks	Level 2		-		-		34,849		34,849
Investment securities available for sale (debt)	Level 2		39,800,073		39,800,073		35,333,344		35,333,344
Investment securities available for sale (equity)	Level 1		22,468		22,468		16,545		16,545
Investment securities held to maturity (debt)	Level 2		1,277,799		1,282,364		1,315,718		1,324,797
Restricted equity securities	Level 2		2,153,595		2,153,595		1,862,995		1,862,995
Loans held for sale	Level 2		16,832,511		16,832,511		7,233,306		7,233,306
Loans, net of allowance	Level 3		384,219,991		392,492,157		391,756,216		401,651,659
Accrued interest receivable	Level 2		1,276,005		1,276,005		1,306,111		1,306,111
Financial liabilities:
Deposits	Level 3		384,451,453		384,875,368		387,830,132		388,705,645
Short-term borrowings	Level 2		33,150,000		33,150,000		22,150,000		22,150,000
Accrued interest payable	Level 2		26,715		26,715		25,350		25,350

The following methods and assumptions were used to estimate the fair value of each category of financial instruments for which it is practicable to estimate that value:

Cash and due from banks, federal funds sold and overnight investments.  The carrying amount approximated the fair value.

Time deposits with banks.  The carrying amount of time deposits with banks approximated fair value.

Investment securities.  The fair value of debt securities is based upon quoted prices for similar assets or externally developed models that use significant observable inputs.  The fair value of equity securities is based on quoted market prices.

Restricted equity securities.  Since these stocks are restricted as to marketability, the carrying value approximates fair value.

Loans held for sale.  The carrying amount approximates the fair value.

Loans.The fair value of loans, except for purchased credit impaired loans that are collateral-dependent, was estimated by computing the discounted value of estimated cash flows, adjusted for probable credit losses, for pools of loans having similar characteristics.  The discount rate was based upon the current market rate for a similar loan.  The fair value of purchased credit impaired loans that are collateral-dependent was determined based on the estimated fair value of collateral less estimated costs to sell.  Nonperforming loans have an assumed interest rate of 0%.

Accrued interest receivable and payable. The carrying amount approximated the fair value of accrued interest, considering the short-term nature of the instrument and its expected collection.

Deposit liabilities.  The fair value of demand, money market savings and regular savings deposits, which have no stated maturity, were considered equal to their carrying amount, representing the amount payable on demand.  The fair value of time deposits was based upon the discounted value of contractual cash flows at current rates for deposits of similar remaining maturity.

Short-term borrowings.  The carrying amount of fixed rate FHLB advances and ACBB borrowings approximated fair value due to the short-term nature of the instrument.  The carrying amount of variable rate FHLB advances and ACBB borrowings approximated the fair value.

Off-balance sheet instruments.  The Company charges fees for commitments to extend credit.  Interest rates on loans, for which these commitments are extended, are normally committed for periods of less than one month.  Fees charged on standby letters of credit and other financial guarantees are deemed to be immaterial and these guarantees are expected to be settled at face amount or expire unused.  It is impractical to assign any fair value to these commitments.

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Defined Benefit Pension Plan

6 Months Ended

Jun. 30, 2015

Defined Benefit Pension Plan [Abstract]

Defined Benefit Pension Plan

NOTE 12 – DEFINED BENEFIT PENSION PLAN

The Carrollton Bank Retirement Income Plan (the “Pension Plan”) provides defined benefits based on years of service and final average salary.  Effective December 31, 2004, all benefit accruals for existing employees were frozen and no new employees were eligible for benefits under the Pension Plan.

The components of net periodic pension benefitare as follows:

		Six months ended June 30,
		2015		2014
Service cost	$	39,500	$	30,369
Interest cost		221,500		221,975
Expected return on plan assets		(314,500)		(299,171)
Amortization of net gain		-		(37,896)
Net periodic pension benefit	$	(53,500)	$	(84,723)

401(k) Plan

The Company has a 401(k) profit sharing plan covering substantially all full-time employees.  At this time, the Company has elected not to match employee contributions as defined under this plan.  Therefore, the expense associated with this plan during the three and six months ended June 30, 2015 and 2014 was $0.

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Other Comprehensive Income (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period			$ 1,663,514	$ 1,113,917	$ 1,113,917
Other comprehensive income (loss) before reclassification adjustments			(1,487,123)
Amounts reclassified from comprehensive income (loss)			(47,168)
Other comprehensive income (loss)	$ (152,784)	$ 221,980	(1,534,291)	393,823	393,823	$ 393,823
Balance at end of period	129,223	1,507,740	129,223	1,507,740	1,663,514	1,113,917
Net AFS debt securities income, Net of Tax	(152,784)	221,980	48,366
Reclassification adjustment for securities gains included in income			(47,168)
Net effect on other comprehensive income (loss)	(152,784)	221,980	1,198	393,823	393,823
Net actuarial losses			(1,535,489)
Net effect on other comprehensive income			(1,535,489)
Unrealized Gains On Investments Available For Sale [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period			211,294	(190,971)	(190,971)
Other comprehensive income (loss) before reclassification adjustments			48,366
Amounts reclassified from comprehensive income (loss)			(47,168)
Other comprehensive income (loss)			1,198	393,823
Balance at end of period	212,492	202,852	212,492	202,852	211,294	(190,971)
Net AFS debt securities income Before Tax	(248,743)	366,670	79,471		650,473
Reclassification adjustments Before Tax			(77,490)
Unrealized income on AFS debt securities: Net income recognized in other comprehensive loss, Before Tax			1,981
Net actuarial losses Before Tax			(2,535,693)
Defined benefit pension plan adjustments: Net loss recognized in other comprehensive loss Before Tax			(2,535,693)
Other comprehensive gain (loss) Before Tax	(248,743)	366,670	(2,533,712)		650,473
Defined Benefit Pension Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period			1,452,220	1,304,888	1,304,888
Other comprehensive income (loss) before reclassification adjustments			(1,535,489)
Other comprehensive income (loss)			(1,535,489)
Balance at end of period	(83,269)	1,304,888	(83,269)	$ 1,304,888	1,452,220	$ 1,304,888
Net AFS debt securities income Tax	95,959	(144,690)	(31,105)		(256,650)
Reclassification adjustments, Tax			(30,322)
Unrealized income on AFS debt securities: Net gain recognized in other comprehensive gain, Tax			(783)
Net actuarial losses, Tax			1,000,204
Net loss recognized in other comprehensive loss, Tax			1,000,204
Other comprehensive gain (loss), Tax	$ 95,959	$ (144,690)	$ 999,421		$ (256,650)

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Core Deposit Intangible Assets

6 Months Ended

Jun. 30, 2015

Core Deposit Intangible Assets [Abstract]

Core Deposit Intangible Assets

NOTE 8 – CORE DEPOSIT INTANGIBLE ASSETS 

The Company's core deposit intangible assets at June 30, 2015 had a remaining weighted average amortization period of approximately 2.80 years.  The following table presents the changes in the net book value of core deposit intangible assets for the six months ended June 30, 2015 and 2014:

		Six months ended June 30,
		2015		2014
Balance at beginning of period	$	3,478,282	$	3,993,679
Additions from the Slavie Acquisition		-		477,563
Amortization expense		(458,653)		(492,742)
Balance, June 30	$	3,019,629	$	3,978,500

The following table presents the gross carrying amount, accumulated amortization, and net carrying amount of core deposit intangible assets at  June 30, 2015 and December 31, 2014:

		June 30, 2015		December 31, 2014
Gross carrying amount	$	5,578,211	$	5,578,211
Accumulated amortization		(2,558,582)		(2,099,929)
Net carrying amount	$	3,019,629	$	3,478,282

The following table sets forth the future amortization expense for the Company’s core deposit intangible assets at June 30, 2015:

Periods ending December 31:		Amount
2015	$	395,444
2016		649,939
2017		490,847
2018		402,243
2019		368,806
Subsequent years		712,350
Total	$	3,019,629

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Accounting For Certain Loans Acquired In A Transfer (Activity In The Allowance For Loan Losses For Certain Loans Acquired In A Transfer) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accounting For Certain Loans Acquired In A Transfer [Abstract]
Charge-offs	$ (87,323)		$ (228,663)
Recoveries	691		691	$ (4,040)
Provision for loan losses	$ 86,632	$ 132,724	$ 227,972	136,764
Balance at end of period		$ 132,724		$ 132,724

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Accounting For Certain Loans Acquired In A Transfer

6 Months Ended

Jun. 30, 2015

Accounting For Certain Loans Acquired In A Transfer [Abstract]

Accounting For Certain Loans Acquired In A Transfer

NOTE 6 – ACCOUNTING FOR CERTAIN LOANS ACQUIRED IN A TRANSFER

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired.  Evidence of credit quality deterioration as of the purchase date may include information such as past due and nonaccrual status, borrower credit scores and recent loan to value percentages.  Purchased credit-impaired loans are initially measured at fair value, which considers estimated future loan losses expected to be incurred over the life of the loan.  Accordingly, an allowance for loan losses related to these loans was not carried over and recorded at the acquisition date.  The Company monitors actual loan cash flows to determine any improvement or deterioration from those forecasted as of the acquisition date.

The following table reflects the carrying amount of purchased credit impaired loans, which are included in the loan categories in Note 5 – Loans and Allowances for Loan Losses:

		June 30, 2015		December 31, 2014
Commercial & Industrial	$	1,644,282	$	2,022,667
Commercial Real Estate		16,863,840		20,104,460
Residential Real Estate		11,016,082		12,017,432
Home Equity Line of Credit		715,616		711,238
Land		2,062,238		3,408,487
Construction		493,315		671,706
Total Loans	$	32,795,373	$	38,935,990

The contractual amount outstanding for these loans totaled $41,344,168 and $47,678,935 at  June 30, 2015 and December 31, 2014, respectively.

The following table reflects activity in the accretable yield for these loans for the three and six months ended June 30, 2015 and 2014:

		Three months ended				Six months ended
		June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
Balance at beginning of period	$	2,123,690	$	1,722,818	$	2,095,891	$	1,991,662
Acquired through Slavie Acquisition		-		416,317		-		416,317
Reclassification from nonaccretable difference		454,249		818,080		1,119,505		1,634,448
Accretion into interest income		(422,854)		(1,887,779)		(903,175)		(2,969,882)
Disposals		(713,147)		-		(870,283)		(3,109)
Balance at end of period	$	1,441,938	$	1,069,436	$	1,441,938	$	1,069,436

The following table reflects activity in the allowance for loan losses for these loans for the three and six months ended June 30, 2015 and 2014:

		Three months ended				Six months ended
		June 30, 2015		June 30, 2014		June 30, 2015		June 30, 2014
Balance at beginning of period	$	-	$	-	$	-	$	-
Reclassification to TDR		-		-		-		-
Charge-offs		(87,323)		-		(228,663)		-
Recoveries		691		-		691		(4,040)
Provision for loan losses		86,632		132,724		227,972		136,764
Balance at end of period	$	-	$	132,724	$	-	$	132,724

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Real Estate Acquired Through Foreclosure

6 Months Ended

Jun. 30, 2015

Real Estate Acquired Through Foreclosure [Abstract]

Real Estate Acquired Through Foreclosure

NOTE 7 – REAL ESTATE ACQUIRED THROUGH FORECLOSURE

The following table reflects activity in real estate acquired through foreclosure for the three and six months ended June 30, 2015 and 2014:

		Three months ended June 30,			Six months ended June 30,
		2015		2014	2015		2014
Balance at beginning of period	$	1,501,135	$	1,529,334	1,480,472	$	1,290,120
New transfers from loans		1,100,674		547,500	1,231,583		973,265
Sales		(869,666)		(433,596)	(959,665)		(468,697)
Write-downs		(120,692)		(122,629)	(140,939)		(274,079)
Balance at end of period	$	1,611,451	$	1,520,609	1,611,451	$	1,520,609

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Deposits

6 Months Ended

Jun. 30, 2015

Deposits [Abstract]

Deposits

NOTE 9 – DEPOSITS

The following table presents the composition of deposits at June 30, 2015 and December 31, 2014:

		2015		2014
Noninterest-bearing deposits	$	97,646,931	$	91,676,534
Interest-bearing deposits:
Checking		50,621,682		54,844,855
Savings		38,096,532		36,233,369
Money market		89,778,076		82,651,992
Total interest-bearing checking, savings and money market deposits		178,496,290		173,730,216
Time deposits below $100,000		47,957,528		50,313,096
Time deposits $100,000 or above		60,350,704		72,110,286
Total time deposits		108,308,232		122,423,382
Total interest-bearing deposits		286,804,522		296,153,598
Total Deposits	$	384,451,453	$	387,830,132

The following table sets forth the maturity distribution for the Company’s time deposits at June 30, 2015:

	Amount
Maturing within one year	$	62,867,151
Maturing over one to two years		20,015,678
Maturing over two to three years		6,162,290
Maturing over three to four years		10,939,222
Maturing over four to five years		8,166,836
Maturing over five years		157,055
Total Time Deposits	$	108,308,232

Interest expense on deposits for the six months ended June 30, 2015 and 2014 is as follows:

		2015		2014
Interest-bearing checking		28,375		53,684
Savings		22,137		20,186
Money market		137,015		146,756
Total interest-bearing checking, savings and money market deposits		187,527		220,626
Time deposits below $100,000		302,830		85,320
Time deposits $100,000 or above		458,214		304,282
Total time deposits		761,044		389,602
Total Interest Expense	$	948,571	$	610,228

The Company’s deposits include brokered deposits obtained through the Promontory Interfinancial Network, which consist of Certificate of Deposit Registry Service (“CDARS”) balances included in time deposits, and insured cash sweep service (“ICS”) balances included in money market deposits.  At June 30, 2015, CDARS and ICS deposits were $0.8 million and $9.7 million, respectively.  At December 31, 2014, CDARS and ICS deposits were $4.1 million and $4.8 million, respectively. 

In April 2014, the Bank announced its exit from the Individual Retirement Account (“IRA”) product line.  At the time, as a result of the announcement, the Bank stopped offering IRAs to new customers and resigned as custodian for its existing IRAs.  IRA deposit balances of $24 million or 6% of total deposits were either transferred to new IRA custodians or disbursed to customers by May 23, 2014.  The IRA exit increased second quarter other income $2.4 million, resulting from the recognition of the remaining interest rate mark-to-market adjustment on IRA deposits.

The aggregate amount of time deposit accounts (including certificates of deposits) in denominations that meet or exceed the FDIC insurance limit of $250,000 at June 30, 2015 totaled $11.4 million dollars.

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Core Deposit Intangible Assets (Future Amortization Expense For The Company's Core-Deposit Intangible Assets) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Core Deposit Intangible Assets [Abstract]
2015	$ 395,444
2016	649,939
2017	490,847
2018	402,243
2019	368,806
Subsequent years	712,350
Net carrying amount	$ 3,019,629	$ 3,478,282

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Deposits (Composition Of Deposits) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Deposits [Abstract]
Noninterest-bearing demand	$ 97,646,931	$ 91,676,534
Interest-bearing checking	50,621,682	54,844,855
Savings	38,096,532	36,233,369
Money market	89,778,076	82,651,992
Total interest-bearing checking and savings	178,496,290	173,730,216
Time deposits under $100,000	47,957,528	50,313,096
Time deposits $100,000 or more	60,350,704	72,110,286
Total time deposits	108,308,232	122,423,382
Total interest-bearing deposits	286,804,522	296,153,598
Total deposits	$ 384,451,453	$ 387,830,132

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Core Deposit Intangible Assets (Gross Carrying Amount, Accumulated Amortization And Net Carrying Amount Of Core Deposit Intangible Assets) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Core Deposit Intangible Assets [Abstract]
Gross carrying amount	$ 5,578,211	$ 5,578,211
Accumulated amortization	(2,558,582)	(2,099,929)
Net carrying amount	$ 3,019,629	$ 3,478,282

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Stock-Based Compensation [Abstract]

Changes In the Company's Stock Options Outstanding

	Stock Options Outstanding		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life
Outstanding, December 31, 2014	743,015	$	4.99	6.85 years
Exercised	(16,597)		4.50
Outstanding, June 30, 2015	726,418	$	5.00	6.2 years
Exercisable at June 30, 2015	653,671	$	4.96	6.0 years

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Loans And Allowance For Loan Losses (Major Classifications Of Loans) (Details) - USD ($)	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 385,652,537		$ 393,051,192
Less: Allowance for Credit Losses	(1,432,546)	$ (941,715)	(1,294,976)	$ (1,099,646)	$ (1,353,849)	$ (851,000)
Loans, net	384,219,991		391,756,216
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	32,835,146		33,454,280
Less: Allowance for Credit Losses	(169,920)	(167,400)	(200,510)	(179,364)	(221,103)	(167,400)
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	159,175,342		158,714,554
Less: Allowance for Credit Losses	(741,822)	(324,080)	(554,585)	(507,243)	(692,775)	(324,080)
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	134,762,675		140,374,035
Less: Allowance for Credit Losses	(141,378)	(170,954)	(203,413)	(116,918)	(68,267)	(80,239)
Home Equity Line Of Credit [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	34,241,193		35,717,982
Less: Allowance for Credit Losses	(174,121)	(129,203)	(166,733)	(141,864)	(188,657)	(129,203)
Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	4,791,897		5,856,875
Less: Allowance for Credit Losses	(13,187)	(6,918)	(8,687)	(7,035)	(10,590)	(6,918)
Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	18,773,848		18,052,287
Less: Allowance for Credit Losses	(183,225)	(135,416)	(153,089)	(139,055)	(164,788)	(135,416)
Consumer And Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,072,436		881,179
Less: Allowance for Credit Losses	$ (8,893)	$ (7,744)	$ (7,959)	$ (8,167)	$ (7,669)	$ (7,744)

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Net Income Per Common Share

6 Months Ended

Jun. 30, 2015

Net Income Per Common Share [Abstract]

Net Income Per Common Share

NOTE 14 - NET INCOME PER COMMON SHARE

Basic earnings per common share is derived by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period and does not included the effect of any potentially dilutive common stock equivalents.  Diluted earnings per share is derived by dividing net income available to common stockholders by the weighted-average number of shares outstanding, adjusted for the dilutive effect of outstanding common stock equivalents.  There is no dilutive effect on earnings per share during a loss period.

The calculation of net income per common share for the three and six months ended June 30, 2015 and 2014 are as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2015		2014		2015		2014
Basic earnings per share:
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Weighted average shares outstanding		11,020,044		10,123,162		11,017,296		9,753,511
Basic net income per share	$	0.05	$	0.27	$	0.08	$	0.29
Diluted earnings per share:
Net income	$	545,915	$	2,755,255	$	889,168	$	2,836,990
Weighted average shares outstanding		11,020,044		10,123,162		11,017,296		9,753,511
Dilutive potential shares		177,122		48,734		183,715		40,880
Total diluted average shares outstanding		11,197,166		10,171,896		11,201,011		9,794,391
Total diluted net income per share	$	0.05	$	0.27	$	0.08	$	0.29
Anti-dilutive shares		260,995		289,280		297,331		263,752

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Business Combinations (Tables) - Slavie Federal Savings Bank [Member]

6 Months Ended

Jun. 30, 2015

Business Acquisition [Line Items]

Purchase Price And Amounts Of Acquired Identifiable Assets And Liabilities Assumed

Assets acquired at fair value:
	Cash and Cash Equivalents		$    30,341,150
	Time deposits with banks		1,546,718
	Investment securities available for sale, at fair value		197,311
	Restricted equity securities, at cost		1,253,600
	Loans, net of deferred fees and costs		82,914,607
	Accrued interest receivable		347,772
	Core deposit intangible		477,563
		Total assets acquired	$  117,078,721
Liabilities assumed at fair value:
	Deposits		$  110,833,046
	Accrued expenses and other liabilities		3,266
		Total liabilities assumed	$  110,836,312
Net assets acquired at fair value:				$    6,242,409
Transaction cash consideration paid				(5,717,977)
Total estimated bargain purchase gain, before tax				524,432
Tax expense				(206,888)
Total estimated bargain purchase gain, after tax				$       317,544

Loans Acquired In Acquisition

		Purchased Credit Impaired Loans		Purchased Non-Impaired Loans		Total Purchased Loans
Contractually required principal and interest at acquisition	$	26,970,809	$	68,701,805	$	95,672,614
Contractual cash flows not expected to be collected		(7,018,601)		(3,983,263)		(11,001,864)
Expected cash flows at acquisition		19,952,208		64,718,542		84,670,750
Interest component of expected cash flows		(1,114,951)		(641,192)		(1,756,143)
Basis in purchased loans at acquisition - estimated fair value	$	18,837,257	$	64,077,350	$	82,914,607

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Investment Securities (Contractual Maturities Of Debt Securities) (Details)	Jun. 30, 2015 USD ($)
Investment Securities [Abstract]
Available for sale, Amortized Cost - Within one year	$ 622,397
Available for sale, Amortized Cost - Over one to five years	10,004,142
Available for sale, Amortized Cost - Over five to ten years	7,517,179
Available for sale, Amortized Cost - Over ten years	1,999,580
Available for sale, Amortized Cost, Mortgage-backed securities	19,249,664
Available For Sale - Amortized cost	39,392,962
Available for sale, Fair Value - Within one year	624,985
Available for sale, Fair Value - Over one to five years	10,121,944
Available for sale, Fair Value - Over five to ten years	7,612,846
Available for sale, Fair Value - Over ten years	2,001,280
Available for sale, Fair Value - Mortgage-backed securities	19,439,018
Available For Sale - Fair value	$ 39,800,073
Held to maturity, Amortized Cost - Over ten years
Held to maturity, Amortization Cost - Mortgage-backed securities	$ 1,277,799
Held To Maturity - Amortized cost	$ 1,277,799
Held to maturity, Fair Value - Over ten years
Held to maturity, Fair Value - Mortgage-backed securities	$ 1,282,364
Held To Maturity - Fair value	$ 1,282,364

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Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2015

Other Comprehensive Income [Abstract]

Activity In Net Accumulated Other Comprehensive Income (Loss)

		Unrealized Gains on Investments Available for Sale		Defined Benefit Pension Plan		Total
Balance at December 31, 2014	$	211,294	$	1,452,220	$	1,663,514
Other comprehensive loss:
Other comprehensive income (loss) before    reclassification adjustments		48,366		(1,535,489)		(1,487,123)
Amounts reclassified from comprehensive loss		(47,168)		-		(47,168)
Other comprehensive loss		1,198		(1,535,489)		(1,534,291)
Balance at June 30, 2015	$	212,492	$	(83,269)	$	129,223
		Unrealized Gains (losses) on Investments Available for Sale		Defined Benefit Pension Plan		Total
Balance at December 31, 2013	$	(190,971)	$	1,304,888	$	1,113,917
Other comprehensive income		393,823		-		393,823
Balance at June 30, 2014	$	202,852	$	1,304,888	$	1,507,740
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the three Months Ended June 30, 2015
Other comprehensive loss:
Unrealized gain on AFS debt securities:
Net AFS debt securities loss	$	(248,743)	$	95,959	$	(152,784)
Other comprehensive loss	$	(248,743)	$	95,959	$	(152,784)
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the three Months Ended June 30, 2014
Other comprehensive income:
Unrealized gain on AFS debt securities	$	366,670	$	(144,690)	$	221,980
Other comprehensive gain	$	366,670	$	(144,690)	$	221,980
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the Six Months Ended June 30, 2015
Other comprehensive loss:
Unrealized gain on AFS debt securities:
Net AFS debt securities gain	$	79,471	$	(31,105)	$	48,366
Reclassification adjustments		(77,490)		30,322		(47,168)
Net income recognized in other comprehensive loss		1,981		(783)		1,198
Defined benefit pension plan adjustments:
Net actuarial losses		(2,535,693)		1,000,204		(1,535,489)
Net loss recognized in other comprehensive loss		(2,535,693)		1,000,204		(1,535,489)
Other comprehensive loss	$	(2,533,712)	$	999,421	$	(1,534,291)
		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
For the Six Months Ended June 30, 2014
Other comprehensive income:
Unrealized gain on AFS debt securities	$	650,473	$	(256,650)	$	393,823
Other comprehensive income:	$	650,473	$	(256,650)	$	393,823

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Consolidated Statements Of Comprehensive (Loss) Income - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Consolidated Statements Of Comprehensive (Loss) Income [Abstract]
Net income	$ 545,915	$ 2,755,255	$ 889,168	$ 2,836,990
Other comprehensive income (loss) items:
Unrealized gain on investment securities available for sale	(152,784)	221,980	1,198	393,823
Unrealized loss on defined benefit plan			(1,535,489)
Other comprehensive (loss) income	(152,784)	221,980	(1,534,291)	393,823
Comprehensive (loss) income	$ 393,131	$ 2,977,235	$ (645,123)	$ 3,230,813

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Business Combinations

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Business Combinations

NOTE 3 – BUSINESS COMBINATION

The Company has accounted for the Slavie Acquisition (defined below) under the acquisitionmethod of accounting in accordance with ASC Topic 805, Business Combinations, whereby the acquired net assets and assumed liabilities were recorded by the Company at their estimated fair values as of their acquisition dates.  Fair value estimates were based on management’s assessment of the best information available as of the acquisition dates.

In accordance with the framework established by ASC Topic 820,” Fair Value Measurements and Disclosure,” the Company used a fair value hierarchy to prioritize the information used to develop assumptions to calculate estimates in determining fair values.  These fair value hierarchies are discussed in Note 16.

Slavie Acquisition

On May 30, 2014, the Bank acquired certain assets and assumed substantially all deposits and certain other liabilities (the “Slavie Acquisition”) of Slavie Federal Savings Bank (“Slavie”), which was closed on May 30, 2014 by the Office of the Comptroller of the Currency (the “OCC”).  The Slavie Acquisition was completed in accordance with the terms of the Purchase and Assumption Agreement All Deposits, with the Federal Deposit Insurance Corporation (the “FDIC”).  The Bank did not acquire any of Slavie’s other real estate owned.  Additionally, the Bank did not at closing commit to purchase any owned or leased bank premises of Slavie; however, the Bank was granted an option to elect following closing to purchase any or all of the banking premises owned by Slavie, or, in the case of leased banking premises, to assume the lease.  The Bank terminated the lease for Slavie’s Bel Air location in October 2014 and extended its current lease at the Overlea branch.

The following table presents the allocation of the consideration received to the acquired assets and assumed liabilities in the Slavie Acquisition as of the acquisition date.  The allocation resulted in an after-tax bargain purchase gain of $317,544 recorded in 2014.

Assets acquired at fair value:
	Cash and Cash Equivalents		$    30,341,150
	Time deposits with banks		1,546,718
	Investment securities available for sale, at fair value		197,311
	Restricted equity securities, at cost		1,253,600
	Loans, net of deferred fees and costs		82,914,607
	Accrued interest receivable		347,772
	Core deposit intangible		477,563
		Total assets acquired	$  117,078,721
Liabilities assumed at fair value:
	Deposits		$  110,833,046
	Accrued expenses and other liabilities		3,266
		Total liabilities assumed	$  110,836,312
Net assets acquired at fair value:				$    6,242,409
Transaction cash consideration paid				(5,717,977)
Total estimated bargain purchase gain, before tax				524,432
Tax expense				(206,888)
Total estimated bargain purchase gain, after tax				$       317,544

In many cases, determining the fair value of the acquired assets and assumed liabilities requires the Company to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest.  The most significant of these determinations related to the valuation of acquired loans. 

The following is a summary of the loans acquired in the Slavie Acquisition:

		Purchased Credit Impaired Loans		Purchased Non-Impaired Loans		Total Purchased Loans
Contractually required principal and interest at acquisition	$	26,970,809	$	68,701,805	$	95,672,614
Contractual cash flows not expected to be collected		(7,018,601)		(3,983,263)		(11,001,864)
Expected cash flows at acquisition		19,952,208		64,718,542		84,670,750
Interest component of expected cash flows		(1,114,951)		(641,192)		(1,756,143)
Basis in purchased loans at acquisition - estimated fair value	$	18,837,257	$	64,077,350	$	82,914,607

In connection with the Slavie Acquisition and the Company’s April 19, 2013 merger (the “Merger”) with Jefferson Bancorp, Inc. (“Jefferson”), the Company incurred acquisition and merger related expenses.  These expenses were primarily related to professional services, system conversions and integration of operations, termination of existing contractual arrangements to purchase various services, initial marketing and promotion expenses designed to introduce the Bank to the former Slavie Bank customers, and other costs of completing the transaction.  For the three months and six months ended June 30, 2015, there were $0 merger and acquisition related costs incurred.  For the three months and six months ended June 30, 2014, there were $128,965 and $240,288, respectively, merger and acquisition related costs incurred.

Pro Forma Condensed Combined Financial Information

The following pro forma information combines the historical results of Slavie and pre-Slavie Acquisition Bay Bancorp, Inc.  The pro forma financial information does not include the potential impacts of possible business model changes, current market conditions, revenue enhancements, expense efficiencies, or other factors.  The pro forma results exclude the impact of the bargain purchase gain of $524,432 and Slavie Acquisition-related expenses of $240,288.  While adjustments were made for the estimated impact of certain fair value adjustments, the following results are not indicative of what would have occurred had the Slavie Acquisition taken place on indicated dates.

If the Slavie Acquisition had been completed on January 1, 2014, total revenue would have been approximately $10.5 million and $18.5 million, respectively, for the three and six-month periods ended June 30, 2014.  Net income would have been approximately $2.4 million and $2.7 million, respectively, for the same periods.  Basic and diluted earnings per share would have been $0.23 for the three months ended June 30, 2014 and $0.28 for the six months ended June 30, 2014.

The disclosure of Slavie’s post-Slavie Acquisition total revenue, net of interest expense, and net income is not practicable due to the integration of operations shortly after the Slavie Acquisition.

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Accounting For Certain Loans Acquired In A Transfer (Carrying Amount Of Certain Loans Acquired In A Transfer) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Purchased credit impaired loans	$ 32,795,373	$ 38,935,990
Contractual amount oustanding	41,344,168	47,678,935
Commercial And Industrial [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Purchased credit impaired loans	1,644,282	2,022,667
Commercial Real Estate [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Purchased credit impaired loans	16,863,840	20,104,460
Residential Real Estate [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Purchased credit impaired loans	11,016,082	12,017,432
Home Equity Line Of Credit [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Purchased credit impaired loans	715,616	711,238
Land [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Purchased credit impaired loans	2,062,238	3,408,487
Construction [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Purchased credit impaired loans	$ 493,315	$ 671,706

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Regulatory Matters (Narrative) (Details)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Regulatory Matters [Abstract]
Regulatory minimum of leverage capital to be well capitalized	5.00%	5.00%
Leverage ratio required for term of Operating Agreement	10.00%
Maximum percentage of loans to a single affiliate under regulations	10.00%
Maximum percentage of loans to affiliates to capital stock	20.00%

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Short-Term Borrowings (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2015
Short-Term Borrowings [Abstract]
Interest expense on FHLB advances	$ 23,644
Long-term borrowings		$ 0

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2015

Investment Securities [Abstract]

Summary Of Investment Securities

		Amortized		Gross Unrealized				Estimated
Available for Sale		cost		Gains		Losses		Fair Value
June 30, 2015
U.S. government agency	$	5,622,011	$	171,297	$	-	$	5,793,308
U.S. treasury securities		5,912,117		17,113		-		5,929,230
Residential mortgage-backed securities		19,249,664		337,383		(148,029)		19,439,018
State and municipal		4,575,983		17,821		(1,567)		4,592,237
Corporate bonds		4,033,187		13,093		-		4,046,280
Total debt securities		39,392,962		556,707		(149,596)		39,800,073
Equity securities		78,752		-		(56,284)		22,468
Totals	$	39,471,714	$	556,707	$	(205,880)	$	39,822,541
		Amortized		Gross Unrealized				Estimated
Held-to-Maturity		cost		Gains		Losses		Fair Value
June 30, 2015
Residential mortgage-backed securities	$	1,277,799	$	4,565	$	-	$	1,282,364
		Amortized		Gross Unrealized				Estimated
Available for Sale		cost		Gains		Losses		Fair Value
December 31, 2014
U.S. government agency	$	7,561,238	$	217,033	$	-	$	7,778,271
Residential mortgage-backed securities		20,679,345		399,198		(207,616)		20,870,927
State and municipal		4,639,988		17,779		(3,621)		4,654,146
Corporate bonds		2,041,718		-		(11,718)		2,030,000
Total debt securities		34,922,289		634,010		(222,955)		35,333,344
Equity securities		78,754		-		(62,209)		16,545
Totals	$	35,001,043	$	634,010	$	(285,164)	$	35,349,889
		Amortized		Gross Unrealized				Estimated
Held-to-Maturity		cost		Gains		Losses		Fair Value
December 31, 2014
Residential mortgage-backed securities	$	1,315,718	$	9,079	$	-	$	1,324,797

Securities With Unrealized Losses By Length Of Impairment

At  June 30, 2015 securities with unrealized losses segregated by length of impairment were as follows:

		Less than 12 months				12 months or longer				Total
Available for Sale		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2015		Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	-		-	$	-	$	-	$	-	$	-
U.S. treasury securities		-		-		-		-		-		-
Residential mortgage-backed securities		1,794,721		(26,737)		4,829,161		(121,292)		6,623,882		(148,029)
State and municipals		749,820		(1,567)		-		-		749,820		(1,567)
Corporate		-		-		-		-		-		-
Total debt securities		2,544,541		(28,304)		4,829,161		(121,292)		7,373,702		(149,596)
Equity securities						22,468		(56,284)		22,468		(56,284)
Totals	$	2,544,541	$	(28,304)	$	4,851,629	$	(177,576)	$	7,396,170	$	(205,880)

At December 31, 2014, securities with unrealized losses segregated by length of impairment were as follows:

		Less than 12 months				12 months or longer				Total
Available for Sale		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2014		Value		Losses		Value		Losses		Value		Losses
U.S. government agency	$	-	$	-	$	-	$	-	$	-	$	-
Residential mortgage-backed securities		791		(3)		6,901,324		(207,613)		6,902,115		(207,616)
State and municipals		757,939		(3,621)						757,939		(3,621)
Corporate		2,030,000		(11,718)		-		-		2,030,000		(11,718)
Total debt securities		2,788,730		(15,342)		6,901,324		(207,613)		9,690,054		(222,955)
Equity securities		-		-		16,545		(62,209)		16,545		(62,209)
Totals	$	2,788,730	$	(15,342)	$	6,917,869	$	(269,822)	$	9,706,599	$	(285,164)

Contractual Maturities Of Debt Securities

	Available for Sale				Held-to-Maturity
		Amortized		Fair		Amortized		Fair
		Cost		Value		Cost		Value
Within one year	$	622,397	$	624,985	$	-	$	-
Over one to five years		10,004,142		10,121,944		-		-
Over five to ten years		7,517,179		7,612,846		-		-
Over ten years		1,999,580		2,001,280		-		-
Residential mortgage-backed securities		19,249,664		19,439,018		1,277,799		1,282,364
Totals	$	39,392,962	$	39,800,073	$	1,277,799	$	1,282,364

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Defined Benefit Pension Plan (Components Of Net Periodic Pension Benefit) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Defined Benefit Pension Plan [Abstract]
Service cost	$ 39,500	$ 30,369
Interest cost	221,500	221,975
Expected return on plan assets	(314,500)	(299,171)
Amortization of net loss/(gain)		(37,896)
Net periodic pension benefit	$ (53,500)	$ (84,723)

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Commitments And Contingent Liabilities (Tables)

6 Months Ended

Jun. 30, 2015

Commitments And Contingent Liabilities [Abstract]

Outstanding Loan Commitments, Unused Lines Of Credit And Letters Of Credit

		June 30, 2015		December 31, 2014
Loan commitments	$	8,377,625	$	5,021,857
Unused lines of credit		72,365,054		64,761,646
Standby letters of credit		2,984,948		1,632,927

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Income Taxes

6 Months Ended

Jun. 30, 2015

Income Taxes [Abstract]

Income Taxes

NOTE 13 – INCOME TAXES

The differences between the statutory federal income tax rate of 34% and the effective tax rate for the Company are reconciled as follows:

	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
Income tax expense at federal statutory rate	34.0%	34.0%	34.0%	34.0%
Increase (decrease) resulting from:
Amended returns refund claims for pre-acquisition tax periods	0.0%	-12.6%	0.0%	-13.0%
Reversal of valuation allowance attributable to future built-in losses	0.0%	-	0.0%	-4.2%
Non-taxable income	-1.6%	-1.3%	-1.5%	-1.3%
State income taxes, net of federal income tax benefit	5.6%	5.8%	5.6%	5.8%
Incentive stock options	0.6%	1.8%	0.6%	1.7%
Other nondeductible expenses	-1.7%	0.4%	0.7%	0.4%
Effective income tax rate	36.9%	28.1%	39.4%	23.4%

The effective tax rates for the three and six months ended June 30, 3015 were 36.9% and 39.4%, respectively.  In accordance with ASC 740-270, Accounting for Interim Reporting, the provision for income taxes was recorded at June 30, 2015 and 2014 based on the current estimate of the effective annual rate.

The effective tax rate of 28.1% for the three months ended June 30, 2014 includes the impact of a $482,000 reduction in tax expense for the refunds claimed on the filing of amended income tax returns.  The effective tax rate of 23.4% for the six months ended June 30, 2014 includes the second quarter 2014 $482,000 refunds claimed as well as the impact of the $157,000 partial reversal of a valuation allowance attributable to estimated future built-in losses that were recorded in 2013.