Poage Bankshares, Inc. - FORM 10-Q

Attached files

file	filename
XML - IDEA: XBRL DOCUMENT - Poage Bankshares, Inc.	R9999.htm
EX-32 - EXHIBIT 32 - Poage Bankshares, Inc.	v417553_ex32.htm
EX-31.1 - EXHIBIT 31.1 - Poage Bankshares, Inc.	v417553_ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - Poage Bankshares, Inc.	v417553_ex31-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended June 30, 2015

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

For transition period from ______________________ to___________________

Commission File Number 001-35295

Poage Bankshares, Inc.

(Exact Name of Registrant as Specified in Charter)

Maryland		45-3204393
(State of Other Jurisdiction		(I.R.S Employer
Of Incorporation		Identification Number)

1500 Carter Avenue, Ashland, KY 41101		41101
(Address of Principal Executive Officer)		(Zip Code)

606-324-7196

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

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

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

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

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	x

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

As of August 13, 2015, the number of shares of the Registrant’s common stock, par value $.01 per share, was 3,948,244.

POAGE BANKSHARES, INC.

Form 10-Q Quarterly Report

Table of Contents

	PART I. FINANCIAL INFORMATION

ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS – POAGE BANKSHARES, INC.	3

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	29

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	39

ITEM 4.	CONTROLS AND PROCEDURES	39

	PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	40

ITEM 1A.	RISK FACTORS	40

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	40

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	41

ITEM 4.	MINE SAFETY DISCLOSURES	41

ITEM 5.	OTHER INFORMATION	41

ITEM 6.	EXHIBITS	41

SIGNATURES		42

PART I

ITEM 1. FINANCIAL STATEMENTS

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2015			2014
	(in thousands)
ASSETS
Cash and due from financial institutions	$	15,812		$	16,967
Securities available for sale		67,862			65,262
Loans held for sale		-			712
Loans, net of allowance of $2,073 and $1,911		317,487			302,012
Restricted stock, at cost		3,276			2,921
Other real estate owned, net		1,459			1,858
Premises and equipment, net		10,789			9,257
Company owned life insurance		6,850			6,760
Accrued interest receivable		1,366			1,347
Goodwill		1,277			1,082
Other intangible assets, net		1,536			1,470
Deferred tax asset		2,590			2,341
Other assets		2,141			2,713
Total Assets	$	432,445		$	414,702

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing	$	50,198		$	49,646
Interest bearing		290,218			273,492
Total deposits		340,416			323,138
Federal Home Loan Bank advances		14,948			17,952
Subordinated debenture		2,729			2,697
Accrued interest payable		123			47
Other liabilities		3,711			2,717
Total liabilities		361,927			346,551

Commitments and contingent liabilities		-			-

Shareholders' equity
Common stock, $.01 par value, 30,000,000 shares authorized, 3,952,944 and 3,876,455 issued and outstanding at June 30, 2015 and December 31, 2014 respectively		40			39
Additional paid-in-capital		38,611			37,978
Retained earnings		33,815			31,933
Unearned Employee Stock Ownership Plan (ESOP) shares		(2,192	)		(2,259	)
Accumulated other comprehensive income		244			460
Total shareholders' equity		70,518			68,151
Total liabilities and shareholders' equity	$	432,445		$	414,702

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
	(in thousands)				(in thousands)
Interest and dividend income
Loans, including fees	$	4,180	$	4,275	$	8,389	$	6,844
Taxable securities		243		388		504		780
Tax exempt securities		105		146		207		271
Federal funds sold and other		36		34		70		60
		4,564		4,843		9,170		7,955
Interest expense
Deposits		450		439		897		797
Federal Home Loan Bank advances and other		102		114		205		211
		552		553		1,102		1,008

Net interest income		4,012		4,290		8,068		6,947

Provision for loan losses		394		-		485		-

Net interest income after provision for loan losses		3,618		4,290		7,583		6,947

Non-interest income
Service charges on deposits		491		489		932		727
Other service charges		11		7		21		13
Gains on mortgage banking activity		257		126		416		220
Net gains on sales of securities		-		294		-		294
Income from company owned life insurance		45		49		90		116
Bargain purchase gain		1,555		-		1,555		-
Other		2		5		47		8
		2,361		970		3,061		1,378
Non-interest expense
Salaries and employee benefits		1,870		2,172		3,713		3,447
Occupancy and equipment		394		476		791		778
Data processing		548		507		1,097		867
Federal deposit insurance		55		58		120		87
Loan processing and collection		90		92		161		121
Foreclosed assets, net		63		58		169		87
Advertising		42		51		80		91
Professional fees		251		413		437		784
Other taxes		87		58		182		117
Director fees and expenses		57		55		110		112
Amortization of intangible assets		80		74		161		74
Early termination fee and conversion costs		418		53		418		872
Other		294		470		565		744
		4,249		4,537		8,004		8,181

Income before income taxes		1,730		723		2,640		144

Income tax expense		14		212		338		58

Net income		1,716		511		2,302		86

Basic and dilutive earnings per common share:
Net income, basic	$	0.48	$	0.14	$	0.64	$	0.03
Basic weighted average shares outstanding		3,535,210		3,551,976		3,526,613		3,304,102

Net income, dilutive	$	0.48	$	0.14	$	0.64	$	0.03
Diluted weighted average shares outstanding		3,535,210		3,551,976		3,526,613		3,304,102

Dividend per share	$	0.06	$	0.05	$	0.11	$	0.10

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014

Net income	$	1,716		$	511		$	2,302		$	86

Other comprehensive income (loss):
Unrealized holding gains (losses) on available for sale securities		(561	)		1,068			(327	)		1,825
Reclassification adjustments for (gains) losses recognized in income		-			(294	)		-			(294	)
Net unrealized holding gains (losses) on available for sale securities		(561	)		774			(327	)		1,531
Tax effect		191			(263	)		111			(520	)
Other comprehensive income (loss):		(370	)		511			(216	)		1,011

Comprehensive income	$	1,346		$	1,022		$	2,086		$	1,097

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

													Accumulated
				Additional						Unearned			Other			Total
	Common			Paid-In			Retained			ESOP			Comprehensive			Shareholders'
	Stock			Capital			Earnings			Shares			Income (Loss)			Equity
	(in thousands)
Balances, January 1, 2015	$	39		$	37,978		$	31,933		$	(2,259	)	$	460		$	68,151
Net income		-			-			2,302			-			-			2,302
Issuance of 166,221 common shares, net of issuance costs		2			1,673			-			-			-			1,675
Stock repurchasing, 89,193 shares repurchased		(1	)		(1,338	)		-			-			-			(1,339	)
Dividends paid ($0.11/share)		-			-			(420	)		-			-			(420	)
ESOP compensation earned		-			36			-			67			-			103
Stock based compensation expense, net of 539 forfeited shares		-			262			-			-			-			262
Other comprehensive income (loss)		-			-			-			-			(216	)		(216	)

Balances, June 30, 2015	$	40		$	38,611		$	33,815		$	(2,192	)	$	244		$	70,518

See notes to unaudited consolidated financial statements.

POAGE BANKSHARES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended
	June 30,
	2015			2014
	(in thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net income	$	2,302		$	86
Adjustments to reconcile net income (loss) to net cash from operating activities:
Bargain purchase gain		(1,555	)		-
Depreciation		335			268
Provision for loan losses		485			-
ESOP compensation expense		103			95
Stock based compensation expense		262			265
Gain on sale of securities		-			(294	)
Loss on sale of other real estate owned		84			65
Gain on sale of repossessed assets		(1	)		-
Amortization of core deposit intangible		161			74
Accretion of fair value adjustments related to loans		(581	)		(214	)
Accretion of fair value adjustments related to deposits		(33	)		(21	)
Amortization of fair value related to subordinated debenture		32			-
Net amortization on securities		265			700
Deferred income tax benefit		(9	)		(75	)
Net gain on mortgage banking activities		(416	)		(220	)
Origination of loans held for sale		(2,642	)		(3,061	)
Proceeds from loans held for sale		3,770			3,427
Increase in cash value of life insurance		(90	)		(115	)
Change in asset and liabilities, net assets and liabilities acquired:
Accrued interest receivable		38			185
Other assets		591			43
Accrued interest payable		61			116
Other liabilities		772			351
Net cash from operating activities		3,934			1,675

CASH FLOW FROM INVESTING ACTIVITIES:
Securities available for sale:
Proceeds from sales		-			19,721
Proceeds from calls		1,000			7,265
Proceeds from maturities		405			120
Purchases		(8,030	)		-
Principal payments received		3,433			2,814
Purchase of FHLB stock		(56	)		-
Cash paid for acquisition, net of cash acquired		2,355			1,445
Loan originations and principal payments on loans, net		(574	)		(5,755	)
Proceeds from the sale of other real estate owned		353			-
Proceeds from the sale of repossessed assets		55			-
Purchase of properties and equipment		(534	)		(202	)
Net cash from (used in) investing activities		(1,593	)		25,408

CASH FLOW FROM FINANCING ACTIVITIES
Net change in deposits		1,908			(1,389	)
Proceeds from Federal Home Loan Bank borrowings		23,000			26,000
Payments on Federal Home Loan Bank borrowings		(28,320	)		(28,362	)
Cash dividend paid		(420	)		(363	)
Proceeds from issuance of common stock, net of costs		1,675			-
Stock repurchases		(1,339	)		(331	)
Net cash used in financing activities		(3,496	)		(4,445	)

CHANGE IN CASH AND CASH EQUIVALENTS		(1,155	)		22,638

Cash and cash equivalents at beginning of year		16,967			6,684

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	15,812		$	29,322

Additional cash flows and supplementary information:
Cash paid during the year for:
Interest on deposits and advances	$	1,026		$	892
Income taxes		350			-
Stock issued for consideration paid in acquisition, net of issuance costs	$	-		$	7,836
Real estate acquired in settlement of loans	$	38		$	292

See notes to unaudited consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements of Poage Bankshares, Inc. (the “Company”) and its wholly owned subsidiary Town Square Bank (which was formerly operated under the name “Home Federal Savings and Loan Association”) (the “Bank”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates used in the preparation of the financial statements are based on various factors including the current interest rate environment and the general strength of the local economy. Changes in the overall interest rate environment can significantly affect the Company’s net interest income and the value of its recorded assets and liabilities. Actual results could differ from those estimates used in the preparation of the financial statements.

In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company’s financial position as of June 30, 2015 and December 31, 2014 and the results of operations and cash flows for the interim periods ended June 30, 2015 and 2014. All interim amounts have not been audited, and the results of operations for the interim periods herein are not necessarily indicative of the results of operations to be expected for the year. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto filed as part of the Company’s 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Effective May 31, 2015, the Company completed its previously reported acquisition of Commonwealth Bank, F.S.B., Mt. Sterling, Kentucky (“Commonwealth”), in a conversion merger transaction. As result of the conversion merger transaction, Commonwealth converted from a mutual to stock institution and merged with and into the Bank, with the Bank as the surviving institution, and the Company issued and sold 166,221 shares of common stock at a price of $12.73 per share to depositor and borrower members of Commonwealth in a subscription offering and to stockholders of the Company and members of the general public in a community offering. Gross offering proceeds totaled approximately $2.1 million. As a result of the stock offering, the Company had approximately 3,952,944 shares of common stock outstanding as of the close of business on May 31, 2015. Commonwealth’s sole office, located in Mt. Sterling, Kentucky, has become a branch office of the Bank.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Newly Issued Not Yet Effective Accounting Standards

In May 2014 the FASB amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer.

These amendments are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. The amendments should be applied retrospectively to all periods presented or retrospectively with the cumulative effect recognized at the date of initial application. The Company is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

Adoptions of New Accounting Standards

In January 2014, the FASB amended existing guidance to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. These amendments clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either: (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure, or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additional disclosures are required.

These amendments are effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2014. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

NOTE 3 - SECURITIES AVAILABLE FOR SALE

The amortized cost and fair value of securities available for sale at June 30, 2015 and December 31, 2014 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
June 30, 2015
States and political subdivisions	$	17,041	$	482	$	(18	)	$	17,505
U.S. Government agencies and sponsored entities		13,248		13		(205	)		13,056
Government sponsored entities residential mortgage-backed:
FHLMC		12,827		132		(15	)		12,944
FNMA		12,867		103		(28	)		12,942
Collateralized mortgage obligations		7,597		13		(66	)		7,544
SBA loan pools		3,912		-		(41	)		3,871
Total securities	$	67,492	$	743	$	(373	)	$	67,862

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
December 31, 2014
States and political subdivisions	$	17,121	$	633	$	(8	)	$	17,746
U.S. Government agencies and sponsored entities		14,247		6		(267	)		13,986
Government sponsored entities residential mortgage-backed:
FHLMC		14,346		251		(7	)		14,590
FNMA		14,207		177		(9	)		14,375
Collateralized mortgage obligations		4,644		-		(79	)		4,565
Total securities	$	64,565	$	1,067	$	(370	)	$	65,262

The proceeds from sales of securities and the associated gross gains and losses are listed below (in thousands):

	Three months ended					Six months ended
	June 30,					June 30,
	2015		2014			2015		2014
Proceeds	$	-	$	19,721		$	-	$	19,721
Gross gains		-		372			-		372
Gross losses		-		(78	)		-		(78	)

The amortized cost and fair value of the securities portfolio at June 30, 2015 are shown in the following table by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately (in thousands):

	June 30,
	2015
	Amortized		Fair
	Cost		Value

Within one year	$	250	$	251
One to five years		12,829		12,870
Five to ten years		14,444		14,566
Beyond ten years		2,766		2,874
Mortgage-backed securities and collateralized mortgage obligations		33,291		33,430
SBA loan pools		3,912		3,871
Total	$	67,492	$	67,862

The following table summarizes the securities with unrealized losses at June 30, 2015 and December 31, 2014, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

	Less Than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
June 30, 2015
States and political subdivisions	$	814	$	(17	)	$	628	$	(1	)	$	1,442	$	(18	)
U.S. Government agencies and sponsored entities		2,985		(15	)		8,560		(190	)		11,545		(205	)
Government sponsored entities residential mortgage backed:
FHLMC		1,561		(15	)		-		-			1,561		(15	)
FNMA		2,739		(28	)		-		-			2,739		(28	)
Collateralized mortgage obligations		2,879		(17	)		2,571		(49	)		5,450		(66	)
SBA loan pools		3,871		(41	)		-		-			3,871		(41	)
Total available-for-sale securities	$	14,849	$	(133	)	$	11,759	$	(240	)	$	26,608	$	(373	)

December 31, 2014
States and political subdivisions	$	1,072	$	(8	)	$	-	$	-		$	1,072	$	(8	)
U.S. Government agencies and sponsored entities		-		-			12,482		(267	)		12,482		(267	)
Government sponsored entities residential mortgage backed:
FHLMC		-		-			1,131		(7	)		1,131		(7	)
FNMA		2,063		(3	)		946		(6	)		3,009		(9	)
Collateralized mortgage obligations		1,652		(13	)		2,913		(66	)		4,565		(79	)
Total available-for-sale securities	$	4,787	$	(24	)	$	17,472	$	(346	)	$	22,259	$	(370	)

Unrealized losses on bonds have not been recognized into income because the issuers of the bonds are of high credit quality, management does not intend to sell and it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates. The fair value is expected to recover as the bonds approach maturity.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

NOTE 4 – LOANS

Loans at June 30, 2015 and December 31, 2014 were as follows (in thousands):

	June 30		December 31,
	2015		2014

Real estate:
One to four family	$	189,537	$	179,480
Multi-family		5,407		5,916
Commercial Real Estate		62,681		62,979
Construction and land		3,708		5,142
		261,333		253,517

Commercial and Industrial		32,418		25,523

Consumer
Home equity loans and lines of credit		8,300		7,973
Motor vehicle		9,321		10,337
Other		8,481		6,774
		26,102		25,084

Total		319,853		304,124
Less: Net deferred loan fees		293		201
Allowance for loan losses		2,073		1,911

	$	317,487	$	302,012

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of June 30, 2015 and December 31, 2014. Accrued interest receivable and net deferred loan fees are not considered significant and therefore are not included in the loan balances presented in the table below (in thousands):

June 30, 2015
	Allowance for Loan Losses								Loan Balances
	Individually		Purchased		Collectively				Individually		Purchased		Collectively
	Evaluated for		Credit-Impaired		Evaluated for				Evaluated for		Credit-Impaired		Evaluated for
Loan Segment	Impairment		Loans		Impairment		Total		Impairment		Loans		Impairment		Total

Real estate	$	23	$	-	$	1,877	$	1,900	$	1,881	$	3,318	$	256,134	$	261,333
Commercial and industrial		2		-		87		89		239		425		31,754		32,418
Consumer		-		-		84		84		-		30		26,072		26,102

Total	$	25	$	-	$	2,048	$	2,073	$	2,120	$	3,773	$	313,960	$	319,853

December 31, 2014
	Allowance for Loan Losses								Loan Balances
	Individually		Purchased		Collectively				Individually		Purchased		Collectively
	Evaluated for		Credit-Impaired		Evaluated for				Evaluated for		Credit-Impaired		Evaluated for
Loan Segment	Impairment		Loans		Impairment		Total		Impairment		Loans		Impairment		Total

Real estate	$	-	$	-	$	1,806	$	1,806	$	324	$	3,633	$	249,560	$	253,517
Commercial and industrial		-		-		43		43		19		439		25,065		25,523
Consumer		-		-		62		62		-		10		25,074		25,084

Total	$	-	$	-	$	1,911	$	1,911	$	343	$	4,082	$	299,699	$	304,124

The following table presents information related to impaired loans by class of loans as of June 30, 2015 and December 31, 2014.

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
June 30, 2015
With no related allowance recorded:
Commercial	$	275	$	193	$	-	$	106	$	-	$	-
Commercial real estate:						-
Construction		-		-		-				-		-
Other		425		399		-		299		-		-
Residential real estate:
Nontraditional		-		-		-		-		-		-
Other		1,202		886		-		506		-		-
Subtotal	$	1,902	$	1,478		-	$	911		-		-

With an allowance recorded:
Commercial	$	46	$	46	$	2	$	23	$	-	$	-
Commercial real estate:
Construction		-		-		-		-		-		-
Other		596		596		23		298		-		-
Residential real estate:
Nontraditional		-		-		-				-		-
Other		-		-		-				-		-
Subtotal		642		642		25		321		-		-

Total	$	2,544	$	2,120	$	25	$	1,232	$	-	$	-

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
December 31, 2014
With no related allowance recorded:
Commercial	$	19	$	19	$	-	$	5	$	-	$	-
Commercial real estate:
Construction		-		-		-		-		-		-
Other		199		199		-		50		-		-
Residential real estate:
Nontraditional		-		-		-		-		-		-
Other		125		125		-		31		-		-
Subtotal		343		343		-		86		-		-

With an allowance recorded:
Commercial		-		-		-		-		-		-
Commercial real estate:
Construction		-		-		-		-		-		-
Other		-		-		-		-		-		-
Residential real estate:
Nontraditional		-		-		-		-		-		-
Other		-		-		-		-		-		-
Subtotal		-		-		-		-		-		-
Total	$	343	$	343	$	-	$	86	$	-	$	-

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. For purposes of this disclosure, the unpaid balance is not reduced for partial charge-offs.

The following table sets forth an analysis of our allowance for loan losses for the three and six months ended June 30, 2015 and 2014 (in thousands):

Three Months Ended				Commercial
June 30, 2015	Real Estate			and Industrial		Consumer			Unallocated		Total

Allowance for loan losses:
Beginning balance	$	1,878		$	72	$	63		$	-	$	2,013
Provision for loan losses		279			7		108			-		394
Loans charged-off		(266	)		-		(99	)		-		(365	)
Recoveries		9			10		12			-		31
Total ending allowance balance	$	1,900		$	89	$	84		$	-	$	2,073

Three Months Ended				Commercial
June 30, 2014	Real Estate			and Industrial			Consumer			Unallocated		Total

Allowance for loan losses:
Beginning balance	$	1,767		$	11		$	41		$	48	$	1,867
Provision for loan losses		(109	)		4			16			89		-
Loans charged-off		(116	)		(8	)		(7	)		-		(131	)
Recoveries		17			-			4			-		21
Total ending allowance balance	$	1,559		$	7		$	54		$	137	$	1,757

Six Months Ended				Commercial
June 30, 2015	Real Estate			and Industrial			Consumer			Unallocated		Total

Allowance for loan losses:
Beginning balance	$	1,806		$	43		$	62		$	-	$	1,911
Provision for loan losses		278			61			146			-		485
Loans charged-off		(318	)		(52	)		(146	)		-		(516	)
Recoveries		134			37			22			-		193
Total ending allowance balance	$	1,900		$	89		$	84		$	-	$	2,073

Six Months Ended				Commercial
June 30, 2014	Real Estate			and Industrial			Consumer			Unallocated		Total

Allowance for loan losses:
Beginning balance	$	1,818		$	8		$	52		$	30	$	1,908
Provision for loan losses		(106	)		(11	)		10			107		-
Loans charged-off		(172	)		(8	)		(12	)		-		(192	)
Recoveries		19			18			4			-		41
Total ending allowance balance	$	1,559		$	7		$	54		$	137	$	1,757

There were $3.6 million and $5.4 million of purchased credit impaired loans which were acquired in a business combination completed on March 18, 2014 at June 30, 2015 and 2014, respectively. There were $94,000 of purchased credit impaired loans which were acquired in a business combination completed on May 31, 2015 at June 30, 2015. Impaired loans averaged $1.2 million and $0 for the six months ended June 30, 2015 and 2014, respectively.

Nonaccrual loans and loans past due 90 days still on accrual consist of smaller balance homogeneous loans that are collectively evaluated for impairment.

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

	June 30, 2015				December 31, 2014
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
	Nonaccrual		Still Accruing		Nonaccrual		Still Accruing
Real estate:
One to four family	$	2,687	$	-	$	2,223	$	-
Multi-family		-		-		-		-
Commercial real estate		931		-		578		-
Construction and land		46		-		103		-
Commercial and industrial		303		-		396		-
Consumer:
Home equity loans and lines of credit		23		-		1		-
Motor vehicle		8		-		21		-
Other		27		-		31		-

Total	$	4,025	$	-	$	3,353	$	-

The following table presents the aging of the recorded investment in past due loans as of June 30, 2015 and December 31, 2014 by class of loans. Non-accrual loans of $4.0 million as of June 30, 2015 and $3.4 million at December 31, 2014 are included in the tables below and have been categorized based on their payment status (in thousands).

	30 - 59		60 - 89		Greater than				Purchased
	Days		Days		89 Days		Total		Credit-Impaired		Loans Not
	Past Due		Past Due		Past Due		Past Due		Loans		Past Due		Total
June 30, 2015
Real estate:
One to four family	$	1,151	$	511	$	1,706	$	3,368	$	1,233	$	184,936	$	189,537
Multi-family		-		-		-		-		-		5,407		5,407
Commercial real estate		216		-		732		948		1,818		59,915		62,681
Construction and land		-		-		13		13		267		3,428		3,708
Commercial and industrial		253		1		209		463		425		31,530		32,418
Consumer:
Home equity loans and lines of credit		-		12		23		35		6		8,259		8,300
Motor vehicle		6		-		8		14		-		9,307		9,321
Other		2		-		-		2		24		8,455		8,481
Total	$	1,628	$	524	$	2,691	$	4,843	$	3,773	$	311,237	$	319,853

	30 - 59		60 - 89		Greater than				Purchased
	Days		Days		89 Days		Total		Credit-Impaired		Loans Not
	Past Due		Past Due		Past Due		Past Due		Loans		Past Due		Total
December 31, 2014
Real estate:
One to four family	$	2,028	$	488	$	1,259	$	3,775	$	1,262	$	174,443	$	179,480
Multi-family		-		-		-		-		-		5,916		5,916
Commercial real estate		1,102		124		38		1,264		2,031		59,684		62,979
Construction and land		-		-		103		103		340		4,699		5,142
Commercial and industrial		245		46		257		548		439		24,536		25,523
Consumer:
Home equity loans and lines of credit		86		23		-		109		7		7,857		7,973
Motor vehicle		102		4		20		126		-		10,211		10,337
Other		33		20		16		69		3		6,702		6,774
Total	$	3,596	$	705	$	1,693	$	5,994	$	4,082	$	294,048	$	304,124

Troubled Debt Restructurings:

The Company had a recorded investment in four troubled debt restructurings which totaled $332,000 and two troubled debt restructurings which totaled $218,000, at June 30, 2015 and December 31, 2014, respectively. A less than market rate and extended term was granted as concessions for these troubled debt restructurings. No additional charge-off or provision has been made for the loan relationships. No additional commitments to lend have been made to the borrower.

The modification of the terms of such loans performed during the six and twelve month periods of June 30, 2015 and December 31, 2014, included a permanent reduction of the recorded investment in the loans. There were no interest rate concessions or term extensions during the six months ended June 30, 2015. The modification of the commercial real estate performed during the year ended December 31, 2014 included an extension of the maturity date at a stated rate of interest lower than the current market rate.

CREDIT QUALITY INDICATORS:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes all non-homogeneous loans, such as commercial and commercial real estate loans. The analysis for residential real estate and consumer loans primarily includes review of past due status. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

	Pass		Special Mention		Substandard		Doubtful		Not Rated

June 30, 2015
One to four family	$	181,162	$	3,144	$	5,231	$	-	$	-
Multi family		5,407		-		-		-		-
Commercial real estate		60,006		160		2,515		-		-
Construction and land		3,012		-		696		-		-
Commercial and industrial		30,248		1,461		709		-		-
Home equity loans and lines of credit		8,255		-		45		-		-
Motor vehicle		9,271		11		39		-		-
Other		8,420		8		53		-		-

Total	$	305,781	$	4,784	$	9,288	$	-	$	-

	Pass		Special Mention		Substandard		Doubtful		Not Rated

December 31, 2014
One to four family	$	171,324	$	3,794	$	4,362	$	-	$	-
Multi family		5,916		-		-		-		-
Commercial real estate		60,250		54		2,675		-		-
Construction and land		4,402		52		688		-		-
Commercial and industrial		22,162		2,332		1,029		-		-
Home equity loans and lines of credit		7,935		30		8		-		-
Motor vehicle		10,299		22		16		-		-
Other		6,740		-		34		-		-

Total	$	289,028	$	6,284	$	8,812	$	-	$	-

The Company holds purchased loans without evidence of credit quality deterioration and purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected. A summary of non-impaired purchased loans and credit-impaired purchased loans with the carrying amount of those loans is as follows at:

June 30, 2015	Non-impaired		Credit-impaired
	Purchased		Purchased
(in thousands)	Loans		Loans
Real estate mortgage loans:
Residential:
1-4 Family	$	43,704	$	1,233
Multi-family		2,775		-
Construction & Land		1,343		267
Farm		5,753		18
Nonresidential		24,396		1,800
Commercial non-mortgage loans		9,171		425
Consumer loans		4,280		30
Total loans	$	91,422	$	3,773

December 31, 2014	Non-impaired		Credit-impaired
	Purchased		Purchased
(in thousands)	Loans		Loans
Real estate mortgage loans:
Residential:
1-4 Family	$	36,256	$	1,300
Multi-family		3,237		-
Construction & Land		2,391		340
Farm		6,299		23
Nonresidential		25,545		1,970
Commercial non-mortgage loans		11,073		439
Consumer loans		4,363		10

Total loans	$	89,164	$	4,082

For those purchased loans disclosed above, the Company did not increase the allowance for loan losses for the six months ended June 30, 2015.

The following table presents the composition of the acquired loans at June 30, 2015:

	Contractual		Unaccreted			Amortized
(in thousands)	Amount		Discount			Book Value
Real estate mortgage loans:
Residential:
1-4 Family	$	46,144	$	(1,207	)	$	44,937
Multi-family		2,818		(42	)		2,776
Construction & Land		1,634		(23	)		1,611
Farm		5,892		(121	)		5,771
Nonresidential		27,136		(940	)		26,196
Commercial non-mortgage loans		12,490		(2,895	)		9,595
Consumer loans		4,378		(69	)		4,309
Total loans	$	100,492	$	(5,297	)	$	95,195

The following table presents the purchased loans that are included within the scope of ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality as of June 30, 2015. Loans purchased during the six months ended June 30, 2015 of $164,000 are included in the contractually-required principal and interest payments with a fair value of $94,000.

(in thousands)

Contractually-required principal and interest payments	$	7,686
Non-Accretable difference		(3,431	)
Accretable yield		(482	)
Fair value of loans	$	3,773

The Company adjust interest income to recognize $38,000, $149,000, $85,000 and $85,000 of accretable yield on credit-impaired purchased loans for the three and six months ended June 30, 2015 and 2014, respectively.

NOTE 5: FEDERAL HOME LOAN BANK ADVANCES

Advances from the FHLB at June 30, 2015 and December 31, 2014 were as follows (in thousands):

	June 30,		December 31,
	2015		2014

Maturities July 2015 through June 2025, fixed rate at rates from 0.17% to 6.70%, weighted average rate of 1.59% at June 30, 2015 and 1.55% at December 31, 2014	$	14,948	$	17,952

Payments contractually required over the next five years are as follows (in thousands):

June 30,
2016	$	9,887
2017		2,013
2018		1,629
2019		915
2020		95
Thereafter		409
Total	$	14,948

NOTE 6: FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

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

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

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

Securities: The fair values for securities are determined by quoted market prices, if available (Level 1). If quoted market prices are not available, fair values are based on quoted market prices of similar securities (Level 2). This includes the use of “matrix pricing” used to value debt securities absent the exclusive use of quoted prices. For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows (Level 3).

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying such loans. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.

Other Real Estate Owned : Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (OREO) are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements at
	June 30, 2015 Using:
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)

Financial Assets
Securities:
States and political subdivisions	$	17,505	$	-	$	17,505	$	-
U.S. Government agencies and sponsored entities		13,056		-		13,056		-
Mortgage backed securities: residential		25,886		-		25,886		-
Collateralized mortgage obligations		7,544		-		7,544		-
SBA loan pools		3,871		-		3,871		-
Total securities	$	67,862	$	-	$	67,862	$	-

	Fair Value Measurements at
	December 31, 2014 Using:
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)

Financial Assets
Securities:
States and political subdivisions	$	17,746	$	-	$	17,746	$	-
U.S. Government agencies and sponsored entities		13,986		-		13,986		-
Mortgage backed securities: residential		28,965		-		28,965		-
Collateralized mortgage obligations		4,565		-		4,565		-
Total securities	$	65,262	$	-	$	65,262	$	-

For the periods ended June 30, 2015 and December 31, 2014, there were no transfers between Level 1 and Level 2.

Assets measured at fair value on a non-recurring basis are summarized below (in thousands):

	Fair Value Measurements at
	June 30, 2015 Using:
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)

Impaired loans
Commercial, net	$	44	$	-	$	-	$	44
Commercial real estate, net		573		-		-		573

Other real estate owned
Commercial real estate, net	$	115	$	-	$	-	$	115

Fair Value Measurements at

December 31, 2014 Using:

Significant

Quoted Prices in

Other

Significant

Active Markets for

Observable

Unobservable

Carrying

Identical Assets

Inputs

Value

(Level 1)

(Level 2)

(Level 3)

Other real estate owned

One to four family, net

Commercial real estate, net

115

Commercial and residential real estate properties classified as OREO are measured at fair value, less costs to sell. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Appraisals for real estate properties classified as other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Bank’s management. The appraisal values are discounted to allow for selling expenses and fees, and the discounts range from 5% to 10%.

At June 30, 2015, impaired loans recorded at fair value had a net carrying amount of $617,000 made up of outstanding balance of $642,000, net of a valuation allowance of $25,000. There were no impaired loans recorded at fair value at December 31, 2014 or June 30, 2014. There were write-downs of $200,000 for three and six months ended June 30, 2015. There were no write-downs for the three and six months ended June 30, 2014.

At June 30, 2015, OREO recorded at fair value had a net carrying amount of $115,000 made up of the outstanding balance of $167,000, net of a valuation allowance of $52,000. There were no write-downs for the three and six months ended June 30, 2015. At December 31, 2014, OREO recorded at fair value had a net carrying amount of $187,000 made up of the outstanding balance of $244,000, net of a valuation allowance of $57,000. At June 30, 2014, OREO recorded at fair value had a net carrying amount of $311,000 made up of the outstanding balance of $454,000, net of a valuation allowance of $143,000, which resulted in a write-down of $54,000 for the six months ended June 30, 2014.

The carrying amounts and estimated fair values of financial instruments at June 30, 2015 and December 31, 2014 are as follows (in thousands):

			Fair Value Measurements
	Carrying
June 30, 2015	Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	15,812	$	15,812	$	-	$	-	$	15,812
Securities		67,862		-		67,862		-		67,862
Restricted stock		3,276		N/A		N/A		N/A		N/A
Loans held for sale		-		-		-		-		-
Loans, net		317,487		-		-		333,361		333,361
Accrued interest receivable		1,366		-		313		1,053		1,366
Financial liabilities
Deposits	$	340,416	$	182,104	$	157,312	$	-	$	339,416
Federal Home Loan Bank advances		14,948		6,000		9,167		-		15,167
Subordinated debenture		2,729		-		2,729		-		2,729
Accrued interest payable		123		-		123		-		123

				Fair Value Measurements
		Carrying
December 31, 2014		Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	16,967	$	16,967	$	-	$	-	$	16,967
Securities		65,262		-		65,262		-		65,262
Restricted stock		2,921		N/A		N/A		N/A		N/A
Loans held for sale		712		-		712		-		712
Loans, net		302,012		-		-		316,493		316,493
Accrued interest receivable		1,347		-		293		1,054		1,347

Financial liabilities
Deposits	$	323,138	$	159,384	$	165,190	$	-	$	324,574
Federal Home Loan Bank advances		17,952		9,000		9,171		-		18,171
Subordinated debenture		2,697		-		2,697		-		2,697
Accrued interest payable		47		-		47		-		47

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

Cash and Cash Equivalents:

The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Restricted Stock:

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

Loans:

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

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

Deposits:

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are by definition equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Federal Home Loan Bank advances and subordinate debenture:

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued Interest Receivable/Payable:

The carrying amounts of accrued interest approximate fair value and are classified by level consistent with the level of the related assets or liabilities.

NOTE 7 - ESOP PLAN

Employees participate in an Employee Stock Ownership Plan (“ESOP”). The ESOP borrowed from the Company to purchase 269,790 shares of the Company’s common stock at $10 per share. The Company makes discretionary contributions to the ESOP, and pays dividends on unallocated shares to the ESOP, and the ESOP uses funds it receives to repay the loan. When loan payments are made, ESOP shares are allocated to participants based on relative compensation and expense is recorded. Dividends on allocated shares increase participant accounts. Participants receive the shares at the end of employment.

There were no contributions to the ESOP for the six months ended June 30, 2015 or 2014.

Shares held by the ESOP at June 30, 2015 and December 31, 2014 were as follows (dollars in thousands):

	June 30,		December 31,
	2015		2014
Allocated to participants	$	43,457	$	29,967
Released, but unallocated		-		-
Unearned		225,952		239,442

Total ESOP shares		269,409		269,409

Fair value of unearned shares	$	3,464	$	3,561

NOTE 8 – EARNINGS PER SHARE

The factors used in the earnings per share computation for the three and six months ended June 30, 2015 and 2014, were as follows (in thousands):

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Basic
Net income	$	1,716		$	511		$	2,302		$	86
Less: Net income attributable to participating securities		32			18			49			3
Net income available to common shareholders		1,684			493			2,253			83

Weighted average common shares outstanding		3,842,894			3,897,688			3,845,905			3,664,046
Less: Average unallocated ESOP shares		(235,436	)		(239,439	)		(237,427	)		(239,439	)
Average participating shares		(72,248	)		(106,273	)		(81,865	)		(120,505	)
Weighted average common shares outstanding for basic earnings per common share		3,535,210			3,551,976			3,526,613			3,304,102

Basic earnings per common share	$	0.48		$	0.14		$	0.64		$	0.03

Diluted
Net income available to common shareholders	$	1,684		$	493		$	2,253		$	83

Weighted average common shares outstanding for basic earnings per common share		3,535,210			3,551,976			3,526,613			3,304,102
Add dilutive effects of potential additional common stock		-			-			-			-

Average shares and dilutive potential common shares		3,535,210			3,551,976			3,526,613			3,304,102

Earnings per common share assuming dilution	$	0.48		$	0.14		$	0.64		$	0.03

There were no potentially dilutive securities outstanding at June 30, 2015. Stock options of 295,000 and 320,000 shares of common stock were not considered in computing diluted earnings per common share for 2015 or 2014 because they were antidilutive.

NOTE 9 – STOCK BASED COMPENSATION

On January 8, 2013, the shareholders of Poage Bankshares, Inc. approved the Poage Bankshares, Inc. 2013 Equity Incentive Plan (the “Plan”) for employees and directors of the Company. The Plan authorizes the issuance of up to 472,132 shares of the Company’s common stock, with no more than 134,895 of shares as restricted stock awards and 337,237 as stock options, either incentive stock options or non-qualified stock options. The exercise price of options granted under the Plan may not be less than the fair market value on the date the stock option is granted. The compensation committee of the board of directors has sole discretion to determine the amount and to whom equity incentive awards are granted.

On April 16, 2013, the compensation committee of the board of directors approved the issuance of 134,895 shares of restricted stock to its directors and officers. In addition, on May 10, 2013, the compensation committee of the board of directors approved the issuance of 300,000 stock options to its directors and officers. An additional 20,000 stock option shares were issued on March 19, 2014 as a result of the acquisition of Town Square Financial Corporation by Poage Bankshares, Inc. An additional 5,000 stock option shares were issued on May 31, 2015 to employees. All stock options and restricted stock awards vest ratably over five years. Stock options expire ten years after issuance. Apart from the vesting schedule for both stock options and restricted stock, there are no performance-based conditions or any other material conditions applicable to the awards issued.

The following table summarizes stock option activity for the six months ended June 30, 2015:

				Weighted Average
	Options			Exercise Price

Outstanding - December 31, 2014		299,500		$	14.94
Granted		5,000			15.44
Exercised		-			-
Forfeited		(5,000	)		14.86
Outstanding - June 30, 2015		299,500		$	14.95
Fully vested and exercisable at June 30, 2015		121,000
Expected to vest in future periods		178,500

The fair value for each option grant is estimated on the date of grant using the Black-Scholes-Merton option pricing model that uses the following assumptions. The Company uses the U.S. Treasury yield curve in effect at the time of the grant to determine the risk-free interest rate. The expected dividend yield is estimated using the projected annual dividend level and recent stock price of the Company’s common stock at the date of grant. Expected stock volatility is based on historical volatilities of the Company’s common stock. The expected term of the options is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable.

The weighted-average assumptions used in the Black-Scholes-Merton option pricing model to determine the fair value of options granted was as follows:

	Six months ended
	June 30, 2015

Risk-free interest rate		1.86	%
Expected dividend yield		1.55	%
Expected stock volatility		12.94
Expected life (years)		7
Weighted average fair value of options granted	$	2.01

Stock options are assumed to be earned ratably over their respective vesting periods and charged to compensation expense based upon their grant date fair value and the number of options assumed to be earned. 55,500 options vested during the six months ended June 30, 2015. Stock-based compensation expense for stock options included in salaries and benefits for the three and six months ended June 30, 2015 was $31,000 and $61,000, respectively. Stock-based compensation expense for stock options included in salaries and benefits for the three and six months ended June 30, 2014 was $32,000 and $61,000 respectively. Total unrecognized compensation cost related to non-vested stock options was $325,000 at June 30, 2015 and $386,000 at December 31, 2014 and is expected to be recognized over a period of 4-5 years.

The following table summarizes non-vested restricted stock activity for the six months ended June 30, 2015:

Balance - December 31, 2014	100,624
Granted	-
Forfeited	(539	)
Vested	(31,573	)
Balance - June 30, 2015	68,512

The fair value of the restricted stock awards is amortized to compensation expense over the vesting period (generally five years) and is based on the market price of the Company’s common stock at the date of the grant multiplied by the number of shares granted that are expected to vest. Stock-based compensation expense for the restricted stock included in salaries and benefits for the three and six months ended June 30, 2015 was $101,000 and $201,000, respectively. Stock-based compensation expense for the restricted stock included in salaries and benefits for the three and six months ended June 30, 2014 was $102,000 and $204,000, respectively. Unrecognized compensation expense for non-vested restricted stock awards was $1.1 million at June 30, 2015 and $1.3 million at December 31, 2014 and is expected to be recognized over a weighted-average period of 4-5 years.

NOTE 10 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table is changes in Accumulated Other Comprehensive Income (Loss) by component, net of tax for the three and six months ended June 30, 2015.

	Unrealized Gains and Losses on Available-for-Sale Securities
(in thousands)	Three months ended			Three months ended			Six months ended			Six months ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
Beginning balance	$	614		$	(351	)	$	460		$	(851	)

Other comprehensive income (loss), net of tax before reclassification		(370	)		705			(216	)		1,205

Amounts reclassified from accumulated to other comprehensive income for gains on sale of securities, net of tax expense of $0, $100, $0 and $100 respectively.		-			(194	)		-			(194	)

Net current period other comprehensive income (loss)		(370	)		511			(216	)		1,011

Ending Balance	$	244		$	160		$	244		$	160

NOTE 11 – BUSINESS COMBINATION

Effective May 31, 2015, the Company completed its previously reported acquisition of Commonwealth Bank, F.S.B., Mt. Sterling, Kentucky (“Commonwealth”), in a conversion merger transaction. The Company’s primary reason for undertaking the conversion merger is to fill-in its existing footprint along the Interstate 64 corridor between its main office in Ashland, Kentucky (Boyd County) and its Nicholasville branch office (Jessamine County). Montgomery County, where Commonwealth Bank is located, lies in between Boyd, Greenup and Lawrence Counties (to the northeast of Montgomery County) and Jessamine County (to the southwest of Montgomery County). As result of the conversion merger transaction, Commonwealth converted from a mutual to stock institution and merged with and into the Bank, with the Bank as the surviving institution, and the Company issued and sold 166,221 shares of common stock at a price of $12.73 per share, which reflected a 15% discount on the 30 day average price as prescribed in the merger agreement. The shares were offered to depositor and borrower members of Commonwealth in a subscription offering and to stockholders of the Company and members of the general public in a community offering. Gross offering proceeds totaled approximately $2.1 million. As a result of the stock offering, the Company had approximately 3,952,944 shares of common stock outstanding as of the close of business on May 31, 2015. Commonwealth’s sole office, located in Mt. Sterling, Kentucky, has become a branch office of the Bank.

Acquisition costs of $617,000 are included in the Company’s consolidated statement of operations for the six months ended June 30, 2015. These costs include $418,000 in early termination fees and $199,000 in professional fees for attorneys, accountants and consultants. The Company has determined that the acquisition constitutes a business combination as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their estimated fair values as required by the accounting guidance. Fair values were determined based on the requirements of ASC Topic 820, Fair Value Measurements.

In many cases, the determination of these fair values required management to make estimates about discount rates, future expected cash flows, market conditions and other future events which are highly subjective in nature and are subject to change. The assets acquired and liabilities assumed in the transaction are presented at estimated fair value on the acquisition date. These fair value estimates are considered preliminary, and are subject to change as additional information relative to acquisition date fair values becomes available. Given the short period of time between the closing date and the Form 10-Q filing date, we have not yet completed our evaluation of fair values. We continue to work to finalize these estimates.

The Company recorded the following assets and liabilities as of May 31, 2015. The discounts and premiums resulting from the fair value adjustments will be accreted and amortized over the anticipated lives of the underlying excess fair value of assets and liabilities. The excess fair value of assets acquired over liabilities assumed, resulted in an estimated $1.6 million bargain purchase gain. The bargain purchase gain is recorded in non-interest income in the Company’s consolidated statement of income for the three and six months ended June 30, 2015.


(in thousands)	May 31, 2015
Recognized amounts of identifiable assets acquired and liabilities assumed
Fair value of assets acquired
Cash and due from banks	$	2,355
Restricted stock		299
Loans		14,898
Premises and equipment, net		1,333
Accrued interest receivable		57
Prepaid expenses and other assets		17
Deferred federal income taxes		325
Core deposit intangible		227
Total assets acquired	$	19,511

Fair value of liabilities assumed
Deposits		15,403
FHLB advances		2,316
Accrued interest payable		22
Other liabilities		215
Total liabilities assumed	$	17,956

At the acquisition date, the Company recorded $14.6 million of loans without evidence of credit quality deterioration and $95,000 of purchased credit-impaired loans subject to nonaccretable difference of $64,000. The acquired loans were deemed impaired at the acquisition date if the Company did not expect to receive all contractually required cash flows due to concerns about credit quality. Fair values for loans were based on discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting current market rates for new originations of comparable loans adjusted for the risk inherent in the cash flow estimates. Certain loans that were determined to be collateral dependent were valued based on the fair value of the underlying collateral. These estimates were based on the most recently available real estate appraisals with certain adjustments made based on the type of property, age of appraisal, current status of the property and other related factors to estimate the current value of the collateral.

	Non-impaired Purchased Loans		Credit-impaired Purchased Loans
Real estate mortgage loans:
Residential:
1-4 Family	$	13,663	$	72
Nonresidential and land		438		-
Consumer Loans		702		23
Total Loans	$	14,803	$	95

The composition of the acquired loans at May 31, 2015 follows:

	Contractual Amount		Fair Value Adjustments			Fair Value
Real estate mortgage loans:
Residential:
1-4 Family	$	13,892	$	(266	)	$	13,626
Nonresidential and land		450		(12	)		438
Consumer Loans		841		(7	)		834
Total Loans	$	15,183	$	(285	)	$	14,898

Loans purchased in the acquisition are accounted for using one of two following accounting standards:

ASC Topic 310-20 is used to value loans that have not demonstrated post origination credit quality deterioration and the acquirer expect to collect all contractually required payments from the borrower. For these loans, the difference between fair value of the loan at acquisition and the amortized cost of the loan would be amortized or accreted into income using the interest method.

ASC Topic 310-30 is used to value loans with post origination credit quality deterioration. For these loans, it is probable the acquirer will be unable to collect all contractually required payments from the borrower. Under ASC 310-30, the expected cash flows that exceed the initial investment in the loan (fair value) represent the “accretable yield,” which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. The excess of the loan’s contractual principal and interest over the expected cash flows is the nonaccretable difference.

The following table presents the purchased loans that are included within the scope of ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality as of May 31, 2015.

Contractually-required principal and interest payments	$	165
Non-Accretable difference		(64	)
Accretable yield		(6	)

	$	95

The following table presents pro forma information as if the acquisition had occurred January 1, 2014.

	Three months ended				Six months ended
	June 30,				June 30,
(in thousands, except per share data)	2015		2014		2015		2014

Net Interest Income	$	4,122	$	4,473	$	8,343	$	7,300

Net Income before tax	$	2,172	$	728	$	3,015	$	(530	)
Income tax expense		230		227		573		(140	)

Net Income	$	1,942	$	501	$	2,442	$	(390	)

Basic earnings per share	$	0.52	$	0.13	$	0.65	$	0.11
Diluted earnings per share	$	0.52	$	0.13	$	0.65	$	0.11

To determine pro forma information, the Company adjusted its three and six months ended June 30, 2015 and three and six months ended June 30, 2014 historical results to include the historical results for Commonwealth for the period January 1, 2014 to May 31, 2015 and the three and six months ended June 30, 2014.

The pro forma information includes adjustments for interest income on loans acquired, amortization of intangibles arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, and the related income tax effects.

Expenses related to the acquisition including professional fees and integration costs are excluded from the period in which the amounts were recognized and included in earlier periods as if the acquisition occurred on January 1, 2014. During the three and six months ended June 30, 2015 and 2014, acquisition related expenses amounted to $634,000, $789,000, $65,000 and $74,000, respectively.

The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.

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

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in the Annual Report on Form 10-K for Poage Bankshares, Inc. for the year ended December 31, 2014, as filed with the Securities and Exchange Commission.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements, which can be identified by the use of such words as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may,” and similar expressions. These forward-looking statements include, but are not limited to:

statements of our goals, intentions and expectations;

statements regarding our business plans and prospects and growth and operating strategies;

statements regarding the asset quality of our loan and investment portfolios;

estimates of our risks and future costs and benefits;

statements about the benefits of the acquisition of Town Square Financial Corporation and Town Square Bank and the acquisition of Commonwealth Bank, including future financial and operating results, cost savings, enhancements to revenue and accretion to reported earnings that may be realized from the acquisition; and

statements about the financial condition, results of operations and business of Poage Bankshares.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Quarterly Report.

The following factors, among others, could cause the actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

our ability to manage our operations under the current adverse economic conditions (including real estate values, loan demand, inflation, commodity prices and unemployment levels) nationally and in our market area;

adverse changes in the financial industry, securities, credit and national local real estate markets (including real estate values);

significant increases in our loan losses, including as a result of our inability to resolve classified assets, and management’s assumptions in determining the adequacy of the allowance for loan losses;

credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for loan losses and provision for loan losses;

our ability to successfully enhance internal controls;

our business may not be integrated successfully with the businesses of Town Square Financial Corporation and Commonwealth Bank, or such integration may take longer to accomplish than expected;

the growth opportunities and cost savings from the acquisitions of Town Square Financial Corporation and Commonwealth Bank may not be fully realized or may take longer to realize than expected;

our ability to manage increased expenses following the acquisitions of Town Square Financial Corporation and Commonwealth Bank, including salary and employee benefit expenses and occupation expenses;

operating costs, customer losses and business disruption following the acquisitions of Town Square Financial Corporation and Commonwealth Bank, including adverse effects of relationships with employees, may be greater than expected;

competition among depository and other financial institutions;

our success in increasing our originations of adjustable-rate mortgage loans;

our success in increasing our commercial business and commercial real estate;

our ability to improve our asset quality even as we increase our commercial business, commercial real estate and multi-family lending, including as a result of the acquisitions of Town Square Financial Corporation and Commonwealth Bank;

our ability to retain customers and name recognition in the communities we serve as a result of changing our name to “Town Square Bank”;

our success in introducing new financial products;

our ability to attract and maintain deposits, including depositors of the former Town Square Bank and former depositors of Commonwealth Bank;

decreases in our asset quality;

changes in interest rates generally, including changes in the relative differences between short term and long term interest rates and in deposit interest rates, that may affect our net interest margin and funding sources;

fluctuations in the demand for loans, which may be affected by the number of unsold homes, land and other properties in our market areas and by declines in the value of real estate in our market area;

changes in consumer spending, borrowing and savings habits;

declines in the yield on our assets resulting from the current low interest rate environment;

risks related to a high concentration of loans secured by real estate located in our market area;

the results of examinations by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for loan losses, write down assets, change our regulatory capital position, limit our ability to borrow funds or maintain or increase deposits, or prohibit us from paying dividends, which could adversely affect our dividends and earnings;

changes in laws or government regulations or policies affecting financial institutions, including the Dodd-Frank Act and the JOBS Act, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements (particularly the new capital regulations), regulatory fees and compliance costs and the resources we have available to address such changes;

changes in the level of government support of housing finance;

our ability to enter new markets successfully and capitalize on growth opportunities

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

changes in our organization, compensation and benefit plans and our ability to retain key members of our senior management team;

loan delinquencies and changes in the underlying cash flows of our borrowers;

the failure or security breaches of computer systems on which we depend;

the ability of key third-party providers to perform their obligations to us; and

changes in the financial condition or future prospects of issuers of securities that we own.

Comparison of Financial Condition at June 30, 2015 and December 31, 2014

At June 30, 2015, the Company’s assets totaled $ 432.4 million, an increase of $17.7 million, or 4.3%, from $414.7 million at December 31, 2014. The increase was primarily attributed to the acquisition of Commonwealth, growth in deposit accounts resulting from the migration of customers from a competitor in the Louisa, Kentucky market following their acquisition and new accounts and increased balances for city governments in Flatwoods and Ashland, Kentucky. See Footnote 11 under “Item 1: Financial Information” for information on the Commonwealth acquisition.

Cash and Cash equivalents decreased by $1.2 million, or 6.8%, to $15.8 million at June 30, 2015 from $17.0 million at December 31, 2014. The decrease was attributable to the purchase of $8.0 million in available for sale securities and decrease in outstanding FHLB advance balances of $3.0 million offset by the increase in deposits.

Loans held for sale decreased $712,000, or 100%, to $0 at June 30, 2015 from $712,000 at December 31, 2014.

Loans receivable, net, increased $15.5 million, or 5.1%, to $317.5 million at June 30, 2015 from $302.0 million at December 31, 2014. The increase was primarily attributable to the acquisition of Commonwealth. Real estate secured loans increased $7.8 million, commercial loans increased $6.9 million and consumer loans increased $1.0 million during the six month period ending June 30, 2015. Non-performing loans increased $672,000, or 20.0%, to $4.0 million at June 30, 2015 from $3.4 million at December 31, 2014. The loans acquired from Commonwealth consist primarily of smaller one to four family residential mortgages.

Securities available for sale increased by $2.6 million, or 4.0%, to $67.9 million at June 30, 2015 from $65.3 million at December 31, 2014. This increase is due to $8.0 million in purchases, offset by $5.4 million in calls, regular maturities and principal payments.

Deposits increased $17.3 million, or 5.3%, to $340.4 million at June 30, 2015 from $323.1 million at December 31, 2014. The increase was primarily attributable to the Commonwealth acquisition and new accounts and increased balances for city governments in two markets we serve.

Federal Home Loan Bank advances decreased $3.0 million, or 16.7%, to $14.9 million at June 30, 2015 from $17.9 million at December 31, 2014. This decrease in borrowings was primarily due to regular principal payments and maturities offset by advances as a result of the Commonwealth acquisition.

Other borrowings increased by $32,000 to $2.7 million at June 30, 2015 from $2.7 million at December 31, 2014 due to the amortization of the fair value related to the subordinated debenture assumed in conjunction with acquisition of Town Square Financial Corporation. In December 2006, Town Square Statutory Trust I, a trust formed by Town Square Financial Corporation, closed a pooled private offering of 4,124 trust preferred securities with a liquidation amount of $1,000 per security. The subordinated debt of $2.7 million is shown as a liability because the Company is not considered the primary beneficiary of the Trust. The investment in common stock of the trust is $124,000 and is included in other assets. The subordinated debt has a variable rate of interest equal to the three month London Interbank Offered Rate (LIBOR) plus 1.83%, which was 2.11% at June 30, 2015.

Total shareholders’ equity increased by $2.4 million, or 3.5%, to $70.5 million at June 30, 2015, compared to $68.2 million at December 31, 2014. The increase resulted primarily from shares issued in the offering, completed in connection with the Commonwealth acquisition and net income of $2.3 million for the six months ended June 30, 2015, offset by the repurchase of common stock totaling $1.3 million, the payment of a cash dividends totaling $420,000 and a decrease in other comprehensive income of $216,000.

Average Balance and Yields

The following tables set forth average balance sheets, average yields and costs, and certain other information at the dates and for the periods indicated. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the tables as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income. Interest income and rates exclude the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis due to immateriality.

The average balance, interest and dividends paid and received, and yield/cost of assets and liabilities include assets and liabilities acquired through the Town Square and Commonwealth acquisitions. Because the Town Square acquisition was consummated on March 18, 2014, the information for the three and six months ended June 30, 2015 and three months ended June 30, 2014 reflects the accretive benefits and costs from the transaction, but the information for the six months ended June 30, 2014 only partially reflects the benefits and costs from the transactions. Because the Commonwealth acquisition was consummated on May 31, 2015, the information for the three months ended June 30, 2015, only partially reflects the benefits and costs from the transaction.

	For the Three Months Ended June 30,
	2015								2014
	Average Balance		Interest and Dividends			Yield/ Cost			Average Balance		Interest and Dividends			Yield/ Cost
	(Dollars in thousands)
Assets:
Interest-earning assets:
Loans	$	309,397	$	4,180			5.40	%	$	304,264	$	4,275			5.62	%
Investment securities		69,400		348			2.01	%		87,234		534			2.45	%
FHLB stock		2,823		27			3.83	%		2,681		27			4.03	%
Other interest-earning assets		17,736		9			0.20	%		13,251		7			0.21	%
Total interest-earning assets		399,356		4,564			4.57	%		407,430		4,843			4.75	%

Noninterest-earning assets		26,293								26,476
Total assets		425,649								433,906

Liabilities and equity:
Interest bearing liabilities:
Interest bearing deposits:
NOW, savings, money market, and other		126,326		55			0.17	%		123,754		52			0.17	%
Certificates of deposit		159,441		395			0.99	%		165,651		387			0.93	%
Total interest bearing deposits		285,767		450			0.63	%		289,405		439			0.61	%

FHLB advances		15,663		64			1.63	%		33,958		92			1.08	%
Subordinated Debenture		2,720		38			5.59	%		2,665		22			3.30	%
Total interest bearing liabilities		304,150		552			0.73	%		326,028		553			0.68	%

Non-interest bearing liabilities:
Non-interest bearing deposits		47,878								38,723
Accrued interest payable		185								157
Other liabilities		5,193								3,080
Total non-interest bearing liabilities		53,256								41,960
Total liabilities		357,406								367,988

Total equity		68,243								65,918
Total liabilities and equity		425,649								433,906

Net interest income				4,012								4,290
Interest rate spread							3.84	%							4.08	%
Net interest margin							4.02	%							4.21	%
Average interest-earning assets to average interest-bearing liabilities				131.30	%							124.97	%

	For the Six Months Ended June 30,
	2015								2014
	Average Balance		Interest and Dividends			Yield/ Cost			Average Balance		Interest and Dividends			Yield/ Cost
	(Dollars in thousands)
Assets:
Interest-earning assets:
Loans	$	305,732	$	8,389			5.49	%	$	250,364	$	6,844			5.47	%
Investment securities		68,213		711			2.08	%		85,122		1,051			2.47	%
FHLB stock		2,752		54			3.92	%		2,387		49			4.11	%
Other interest-earning assets		17,036		16			0.19	%		11,857		11			0.19	%
Total interest-earning assets		393,733		9,170			4.66	%		349,730		7,955			4.55	%

Noninterest-earning assets		26,216								23,571
Total assets		419,949								373,301

Liabilities and equity:
Interest bearing liabilities:
Interest bearing deposits:
NOW, savings, money market, and other		122,223		111			0.18	%		112,024		90			0.16	%
Certificates of deposit		160,240		786			0.98	%		140,389		707			1.01	%
Total interest bearing deposits		282,463		897			0.64	%		252,413		797			0.63	%

FHLB advances		16,361		130			1.59	%		29,175		186			1.28	%
Subordinated Debenture		2,712		75			5.53	%		1,510		25			3.31	%
Total interest bearing liabilities		301,536		1,102			0.73	%		283,098		1,008			0.71	%

Non-interest bearing liabilities:
Non-interest bearing deposits		45,819								25,192
Accrued interest payable		164								151
Other liabilities		4,279								2,903
Total non-interest bearing liabilities		50,262								28,246
Total liabilities		351,798								311,344

Total equity		68,151								61,958
Total liabilities and equity		419,949								373,302

Net interest income				8,068								6,947
Interest rate spread							3.93	%							3.84	%
Net interest margin							4.10	%							3.97	%
Average interest-earning assets to average interest-bearing liabilities				130.58	%							123.54	%

Liquidity and Capital Resources

Our primary sources of funds are deposits and the proceeds from principal and interest payments on loans and investment securities. We also utilize Federal Home Loan Bank advances. While maturities and scheduled amortization of loans and securities are predicable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. We generally manage the pricing of our deposits to be competitive within our market and to increase core deposit relationships.

Liquidity management is both a daily and long-term responsibility of management. We adjust our investments in liquid assets based upon management’s assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and investment securities, and (iv) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning overnight deposits, federal funds sold, and short and intermediate-term investment securities. If we require funds beyond our ability to generate them internally we have additional borrowing capacity with the Federal Home Loan Bank of Cincinnati. At June 30, 2015, we had $14.9 million in advances from the Federal Home Loan Bank of Cincinnati and an additional borrowing capacity of $87.0 million.

Poage Bankshares, Inc. is a separate legal entity from Town Square Bank and must provide its own liquidity to pay dividends, repurchase stock and to fund other general corporate activities. Poage Bankshares, Inc.’s primary source of liquidity is dividend payments from Town Square Bank. The ability of Town Square Bank to pay dividends is subject to regulatory requirements. At June 30, 2015, Poage Bankshares, Inc. (on an unconsolidated basis) had liquid assets of $5.2 million.

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the Office of the Comptroller of the Currency (“OCC”). Failure to meet the minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that if undertaken, could have a direct material effect on the Bank and the consolidated financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.

The Bank's capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

On July 9, 2013, the Federal Reserve and the FDIC approved rules that implement the “Basel III” regulatory capital reforms, as well as certain changes required by the Dodd-Frank Act. The rules include a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets, which is in addition to the Tier 1 and Tier 2 risk-based capital requirements. The capital conservation buffer will be phased in over four years beginning on January 1, 2016, with a maximum buffer of 0.625% of risk-weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter. Failure to maintain the required capital conservation buffer will result in limitations on capital distributions and on discretionary bonuses to executive officers. Based on the Company’s current capital composition and levels, management does not presently anticipate that the rules present a material risk to the Company’s financial condition or results of operations.

As of June 30, 2015, the capital of the Bank exceeded all required regulatory guidelines.

The following table reflects the current regulatory capital levels in more detail, including comparisons to the regulatory minimums at June 30, 2015 and December 31, 2014. December 31, 2014 ratios and requirements are being presented based on current regulatory requirements rather than those in effect at December 31, 2014.

	Actual					Required					Excess
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2015:

Risk-based capital:
Common equity tier 1 capital	$	63,026		22.22	%	$	12,763		4.50	%	$	50,263		17.72	%
Tier 1 capital		63,026		22.22	%		17,018		6.00	%		46,008		16.22	%
Total capital		65,124		22.96	%		22,690		8.00	%		42,434		14.96	%
Tier 1 leverage ratio		63,026		14.90	%		16,924		4.00	%		46,102		10.90	%

	Actual					Required					Excess
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2014:

Risk-based capital:
Common equity tier 1 capital	$	62,068		23.61	%	$	11,832		4.50	%	$	50,236		19.11	%
Tier 1 capital		62,068		23.61	%		10,057		4.00	%		46,292		17.61	%
Total capital		64,002		24.34	%		21,034		8.00	%		42,968		16.34	%
Tier 1 leverage ratio		62,068		15.07	%		16,477		4.00	%		45,591		11.07	%

Off-Balance Sheet Arrangements. In the normal course of operations, we engage in a variety of financial transactions that, in accordance with U.S. generally accepted accounting principles, are not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit. These arrangements are not expected to have a material impact on the Company’s financial condition or results of operations.

Comparison of Operating Results for the Three and Six Months Ended June 30, 2015 and June 30, 2014

General. Net income increased $1.2 million to $1.7 million for the three months ended June 30, 2015 from net income of $511,000 for the three months ended June 30, 2014. The increase in net income reflected a gain on the Commonwealth business combination of $1.6 million for the three month period ending June 30, 2015 with no such gain for the three month period ending June 30, 2014, a decrease in non-interest expense of $288,000 to $4.2 million for the three months ended June 30, 2015 from $4.5 million for the three months ending June 30, 2014, and a decrease in federal income tax expense of $198,000 to $14,000 for the three months ending June 30, 2015 from $212,000 for the 3 months ending June 30, 2014, offset by a decrease in net interest income of $278,000 to $4.0 million for the three months ended June 30, 2015 from $4.3 million for the three months ended June 30, 2014, a decrease in non-interest income of $164,000 to $806,000 for the three months ended June 30, 2015 from $970,000, for the three months ended June 30, 2014, an increase in provision for loan losses of $394,000 to $394,000 for the three months ended June 30, 2015 from no provision for the three months ended June 30, 2014.

Net income increased $2.2 million to $2.3 million for the six months ended June 30, 2015 from net income of $86,000 for the six months ended June 30, 2014. The increase in net income reflected a $1.6 million gain on the Commonwealth business combination for the six month period ending June 30, 2015 with no such gain for the six month period ending June 30, 2014, an increase in net interest income of $1.1 million to $8.1 million for the six months ended June 30, 2015 from $6.9 million for the six months ended June 30, 2014, an increase in non-interest income of $128,000 to $1.5 million for the six months ended June 30, 2015 from $1.4 million, a decrease in non-interest interest expense of $177,000 to $8.0 million for the six months ended June 30, 2015, from $8.2 million for the six months ended June 30, 2014, offset by an increase in provision for loan losses of $485,000 to $485,000 for the six months ended June 30, 2015 from no provision for the six months ended June 30, 2014 and an increase in income tax expense of $280,000 to $338,000 for the six months ended June 30, 2015 from $58,000 for the six months ended June 30, 2014.

Interest Income. Interest income decreased $279,000, or 5.8%, to $4.6 million for the three months ended June 30, 2015 from $4.8 million for the three months ended June 30, 2014. The average balance of interest-earning assets decreased $8.1 million, or 2%, from $407.4 million to $399.3 million. Because the Commonwealth acquisition was consummated on May 31, 2015, the information for the three months ended June 30, 2015 and 2014 does not reflect the accretive benefits from the transaction.

Interest income increased $1.2 million, or 15.3%, to $9.2 million for the six months ended June 30, 2015 from $8.0 million for the six months ended June 30, 2014. Because the Town Square Financial Corporation acquisition was consummated on March 18, 2014, the information for the six months ended June 30, 2015 reflects the accretive benefits from the transaction, but the information for the six months ended June 30, 2014 only partially reflects the benefits from the transactions.

Interest income on loans decreased $95,000, or 2.2%, to $4.2 million for the three months ended June 30, 2015 from $4.3 million for the three months ended June 30, 2014. The average yields on loans decreased 22 basis points to 5.40% for the three months ended June 30, 2015, compared to 5.62% for the three months ended June 30, 2014. The average balance of loans increased $5.1 million, or 1.7%, to $309.4 million for the three months ended June 30, 2015 from $304.3 million for the three months ended June 30, 2014. Interest income on investment securities decreased $186,000, or 34.8%, to $348,000 for the three months ended June 30, 2015 from $534,000 for the three months ended June 30, 2014. The average yield on securities decreased 44 basis points to 2.01% for the three months ended June 30, 2015, compared to 2.45% for the three months ended June 30, 2014. The average balance of investment securities decreased $17.8 million, or 20.4%, to $69.4 million for the three months ended June 30, 2015 from $87.2 million for the three months ended June 30, 2014 due to the sale of $19.7 million in investment securities during the three months ended June 30, 2014.

Interest income on loans increased $1.5 million, or 22.6%, to $8.4 million for the six months ended June 30, 2015 from $6.8 million for the six months ended June 30, 2014. The average yields on loans increased 2 basis points to 5.49% for the six months ended June 30, 2015, compared to 5.47% for the six months ended June 30, 2014. The average balance of loans increased $55.4 million, or 22.1%, to $305.7 million for the six months ended June 30, 2015 from $250.4 million for the six months ended June 30, 2014. The increase in interest income is attributable to the acquisition of Town Square Financial Corporation on March 18, 2014. Interest income on investment securities decreased $340,000, or 32.4%, to 711,000 for the six months ended June 30, 2015 from $1.1 million for the six months ended June 30, 2014. The average yield on securities decreased 39 basis points to 2.08% for the six months ended June 30, 2015, compared to 2.47% for the six months ended June 30, 2014. The average balance of investment securities decreased $16.9 million, or 19.9%, to $68.2 million for the six months ended June 30, 2015 from $85.1 million for the six months ended June 30, 2014 due to the sale of $19.7 million in investment securities during the six months ended June 30, 2014.

Interest Expense. Interest expense decreased $1,000, or 0.2%, to $552,000 for the three months ended June 30, 2015 from $553,000 for the three months ended June 30, 2014. The decrease reflected a decrease of $3.6 million, or 1.2%, in the average balance of interest bearing deposits to $285.8 million for the three months ended June 30, 2015 from $289.4 million for the three months ended June 30, 2014, offset by an increase of 2 basis points in the average interest rate paid on interest bearing deposits to 0.63% from 0.61% for the same periods. Interest expense on Federal Home Loan Bank advances and subordinated debentures decreased $12,000, or 10.5%, to $102,000 for the three months ended June 30, 2015 from $114,000 for the three months ended June 30, 2014. This decrease was the result of an $18.3 million decrease in the average balance of Federal Home Loan Bank advances, offset by an 55 basis point increase in the average rate paid on these Federal Home Loan Bank advances to 1.63% from 1.08% as short-term borrowings with lower interest rates matured and a 229 basis point increase in the average rate paid on subordinated debentures to 5.59% from 3.30% resulting from the amortization of fair value.

Interest expense on certificates of deposit increased $79,000, or 11.2%, to $786,000 for the six months ended June 30, 2015 from $707,000 for the six months ended June 30, 2014. The average balance on certificates increased to $160.2 million from $140.4 million, and the average rate paid on certificates of deposits decreased to 0.98% for the six months ended June 30, 2015 from 1.01% for the six months ended June 30, 2014. Interest expense on money market deposits, savings, and NOW and demand deposits increased $21,000, or 23.3%, to $111,000 for the six months ended June 30, 2015 from $90,000 for the six months ended June 30, 2014. The increase was due to an increase in the average balance on money market deposits, savings, and NOW and demand deposits to $122.2 million from $112.0 million for the same periods. The increase in deposits is primarily attributable to the acquisition of Town Square Financial Corporation and deposit growth in the Louisa, Flatwoods and Ashland markets.

Net Interest Income. Net interest income decreased $278,000, or 6.47%, to $4.0 million for the three months ended June 30, 2015 from $4.3 million for the three months ended June 30, 2014. The decrease in net interest income was due to a decrease in our interest rate spread to 3.84% from 4.08%, offset with an increase in the ratio of our average interest earning assets to average interest bearing liabilities to 131.30% from 124.97%. Our net interest margin decreased to 4.02% from 4.21%. The decrease in the interest rate spread and net interest margin for the three months ended June 30, 2015 decreased due to the lower yields on loans combined with higher costs on deposits and other borrowings the three months ended June 30, 2015 as compared the three month period ending June 30, 2014.

Net interest income increased $1.1 million, or 15.9%, to $8.1 million for the six months ended June 30, 2015 from $6.9 million for the six months ended June 30, 2014. The increase in net interest income was due to an increase in our interest rate spread to 3.93% from 3.84%, combined with an increase in the ratio of our average interest earning assets to average interest bearing liabilities to 130.58% from 123.54%. Our net interest margin increased to 4.10% from 3.97%. The increase in the interest rate spread and net interest margin for the six months ended June 30, 2015 increased due to the higher yields on loans assumed in the acquisition of Town Square Financial Corporation.

Provision for Loan Losses. We recorded $394,000 for the provision for loan losses for the three months ended June 30, 2015 and no provision for loan losses for the three months ended June 30, 2014. The provisions for each period were based on management’s quarterly calculations and reflect the minimal levels of nonperforming loans and charge-offs, net of recoveries, during the periods. The increase in the provision for three months ended June 30, 2015 is primarily attributable to $257,000 in charge-offs, net of recoveries, for commercial and residential real estate and $87,000 in charge-offs, net of recoveries, on consumer loans. Although most of the non-owner occupied investment real estate loans, originated in the regular course of business, are performing, evidence of weakened or inadequate cash flow continues to exist and a few of the larger relationships have evidenced further deterioration.

We recorded $485,000 for the provision for loan losses for the six months ended June 30, 2015 and no provision for loan losses for the six months ended June 30, 2014. The provisions for each period were based on management’s quarterly calculations and reflect the minimal levels of nonperforming loans and charge-offs, net of recoveries, during the periods. The increase in the provision for six months ended June 30, 2015 is primarily attributable to $184,000 in charge-offs, net of recoveries, for commercial and residential real estate, $15,000 in charge-offs, net of recoveries, for commercial and industrial and $124,000 in charge-offs, net of recoveries, on consumer loans. Although most of the non-owner occupied investment real estate loans, originated in the regular course of business, are performing, evidence of weakened or inadequate cash flow continues to exist and a few of the larger relationships have evidenced further deterioration.

Noninterest Income. Noninterest income increased $1.4 million, or 143.4%, to $2.4 million for the three months ended June 30, 2015 from $970,000 for the three months ended June 30, 2014. The increase in noninterest income was primarily attributable to the bargain purchase gain of $1.6 million on the acquisition of Commonwealth on May 31, 2015 and the increase in gains on mortgage banking activity of $131,000, to $257,000 or 104.0%, for the three months ending June 30, 2015, from $126,000 for the three months ended June 30, 2014, offset by the decrease in net gains on sales of securities of $294,000, or 100.0%, to $0 for the three months ended June 30, 2015 from $294,000 for the three months ended June 30, 2014.

Noninterest income increased $1.7 million, or 122.1%, to $3.1 million for the six months ended June 30, 2015 from $1.4 million for the six months ended June 30, 2014. The increase in noninterest income was primarily attributable to the bargain purchase gain of $1.6 million on the acquisition of Commonwealth on May 31, 2015, an increase in service charges on deposits of $205,000, or 28.2%, to $932,000 for the six months ended June 30, 2015 from $727,000 for the six months ended June 30, 2014, and an increase in mortgage banking activities of $196,000, or 89.1%, to $416,000 for the six months ended June 30, 2015 from $220,000 for the six months ended June 30, 2014, offset by the decrease in net gains on sales of securities of $294,000, or 100.0%, to $0 for the three months ended June 30, 2015 from $294,000 for the three months ended June 30, 2014. The increase in service charges on deposits income reflects the monthly account service fees, overdraft charges and cardholder activity fees collected on deposit accounts attributable to the acquisition of Town Square Financial Corporation. The increase in mortgage banking services is attributable to the addition of two loan originators from the acquisition of Town Square Financial Corporation. Other income increased $39,000, or 487.5%, for the six months ended June 30, 2015 from $8,000 for the six months ended June 30, 2014 due to insurance claims received of $41,000 representing a reimbursement of $30,000 for a settlement related to Town Square Financial Corporation and a $10,000 claim for a bank vehicle totaled during icy weather.

Noninterest Expense. Noninterest expense decreased $288,000, or 6.3%, to $4.2 million for the three months ended June 30, 2015 from $4.5 million for the three months ended June 30, 2014. This decrease was due largely to a decrease in salaries and employee benefits of $302,000 or 13.9%, to $1.9 million from $2.2 million, a decrease professional fees of $162,000 or 39.2%, to $251,000 from $413,000, offset by an increase in early termination fees and conversion costs associated with the Commonwealth acquisition of $365,000 or 688.7%, to $418,000 from $53,000.

Noninterest expense decreased $177,000, or 2.2%, to $8.0 million for the six months ended June 30, 2015 from $8.2 million for the six months ended June 30, 2014. This decrease was due largely to a decrease in data processing early termination fees and conversion costs of $454,000, or 52.1%, associated with the acquisition of Town Square Financial which resulted in a termination fee of $877,000 paid in the six month period ending June 30, 2014 and Commonwealth acquisition which resulted in $418,000 early termination fees paid in the six month period ending June 30, 2015. Professional fees decreased $347,000 or 44.3% to $437,000 from $784,000 primarily due to lower costs associated with the Commonwealth acquisition as compared to the Town Square Financial acquisition.

These decreases were offset by increases in employee costs of $266,000 or 7.7% to $3.7 million from $3.4 million, data processing costs increased $230,000 or 26.5%, to $1.1 million from $867,000, increased foreclosed asset related costs of $82,000, or 94.3%, to $169,000 from $87,000, Kentucky state taxes increased $65,000 or 55.6% to $182,000 from $117,000, increased amortization expense of intangible assets associated with the Town Square Financial acquisition of $87,000 or 117.6% to $161,000 from $74,000, for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014.

Income Tax Expense. The provision for income taxes was $14,000 for the three months ended June 30, 2015 compared to a $212,000 tax expense for the three months ended June 30, 2014. Our effective tax rate, excluding bargain purchase gain, for the three months ended June 30, 2015 was 8%, which is attributable to an $88,000 increase in non-taxable income from the previous quarter. Our effective tax rate for the three months ended June 30, 2014 was 29.3%.

The provision for income taxes was $338,000 for the six months ended June 30, 2015 compared to $58,000 for the six months ended June 30, 2014. Our effective tax rate for the six months ended June 30, 2015 was 31.2%, excluding Bargain Purchase Gain. Our effective tax rate for the six months ended 2014 was 40.3% as a result of non-deductible acquisition costs related to the acquisition of Town Square Financial Corporation.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosures of quantitative and qualitative market risk are not required by smaller reporting companies, such as the Company.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by the report, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities and Exchange Act of 1934, as amended). Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

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

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various legal actions that are considered ordinary routine litigation incidental to the business of the Company, and no claim for money damages exceeds ten percent of the Company’s consolidated assets. In the opinion of management, based on currently available information, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s results of operations.

ITEM 1A. RISK FACTORS

Disclosures of risk factors are not required by smaller reporting companies, such as the Company.

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

(a)

None.

(b)

Not applicable.

(c)

Issuer repurchases. The following table sets forth information in connection with repurchases of the Company’s common stock for the period April 1, 2015 through June 30, 2015. On May 30, 2014, the Board of Directors authorized the repurchase of up to 195,244 shares of Poage Bankshares common stock, of which 91,392 shares remained available for repurchase on June 28, 2015. All shares indicated below were purchased pursuant to this repurchase authorization.

On June 29, 2015, the Board of Directors terminated the May 30, 2014 stock repurchase program and authorized a new stock repurchase program. The new repurchase program authorizes the repurchase of up to 200,000 shares, which represents approximately 5% of the shares currently outstanding. The new repurchase program was effective upon adoption.

The Company’s stock repurchases pursuant to the repurchase programs are dependent on certain factors, including but not limited to, market conditions and prices, available funds and alternative uses of capital. The repurchase program may be carried out through open-market purchases, block trades, negotiated private transactions and pursuant to a trading plan adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Any repurchased shares will be treated by the Company as authorized but unissued shares.

					Shares		May Yet be
					Purchased		Purchased
	Total				as Part of		Under
	Number of		Average		Publicly		Publicly
	Shares		Price Paid		Announced		Announced
	Purchased		Per Share		Plan		Plan

April 1 - April 30, 2015		2,029		15.50		2,029		91,392
May 1 - May 31, 2015		-		-		-		91,392
June 1 - June 30, 2015		-		-		-		200,000
Total		2,029	$	15.50		2,029

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit
number		Description

31.1		Certification of President, and Chief Executive Officer, Pursuant to Rule 13a-14(a) and Rule 15-d-14(a).

31.2		Certification of Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1		Certification of President and Chief Executive Officer, and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following material from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Operations, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited Consolidated Statement of Shareholders’ Equity, (v) Unaudited Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements.

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.

	Poage Bankshares, Inc.
Date: August 14, 2015

	/s/ R. E. Coffman, Jr.
	R. E. Coffman, Jr.
	President & Chief Executive Officer

	/s/ Jane Gilkerson
	Jane Gilkerson
	Chief Financial Officer

Attached files

Poage Bankshares, Inc. Reports

Also read