STOCK BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2015

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The risk-free rate is based on the expected term of stock options and the applicable U.S. Treasury yield in effect at the time of grant.

Expected

Risk Free

Expected

Dividend

Average

Grant period ended

Life

Interest Rate

Volatility

Yield

Fair Value

March 31, 2015

6.5 years

1.49

23.04

3.11

1.06

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

A summary of stock option activity as of March 31, 2015, and changes during the three months then ended are presented below:

				Weighted
				Average
		Weighted		Remaining
		Average		Contractual
		Exercise		Term	Aggregate
March 31, 2015	Shares	Price		(Years)	Intrinsic Value

Outstanding beginning of period	566,945	$	8.75

Granted	-		-
Exercised	(4,000)		5.00
Forfeited	(10,750)		9.35
Expired	(76,395)		14.77

Outstanding end of period	475,800	$	7.81	5.34	316,430

Exercisable end of period	334,000	$	8.90	4.22	107,180

A summary of stock option activity as of March 31, 2014, and changes during the three months then ended are presented below:

				Weighted
				Average
		Weighted		Remaining
		Average		Contractual
		Exercise		Term	Aggregate
March 31, 2014	Shares	Price		(Years)	Intrinsic Value

Outstanding beginning of period	625,495	$	9.53

Granted	-		-
Exercised	-		-
Forfeited	-		-
Expired	(39,600)		14.04

Outstanding end of period	585,895	$	9.19	5.20	265,650

Exercisable end of period	323,345	$	11.91	3.40	51,520

Schedule of Nonvested Share Activity [Table Text Block]

A summary of the status of the Company’s non-vested options as of March 31, 2015 and 2014 and changes during the three months then ended, are presented below:

	March 31, 2015				March 31, 2014
			Weighted				Weighted
			Average				Average
	Shares		Fair Value		Shares		Fair Value

Non-vested beginning of period		178,600	$	0.65		296,650	$	0.47

Granted		-		-		-		-
Vested		(33,400)		0.56		(34,100)		0.56
Forfeited		(3,400)		0.24		-		-

Non-vested end of period		141,800	$	0.68		262,550	$	0.46

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

The following table summarizes RSU activity during the three months ended March 31, 2015 and 2014:

	March 31, 2015
				Weighted
				Average
		Weighted		Remaining
		Average		Contractual
	Shares	Grant Price		terms (in years)

Outstanding, January 1, 2015	61,233

Granted	44,966	$	6.75
Converted	(5,032)

Outstanding end of period	101,167			1.9

	March 31, 2014
				Weighted
				Average
		Weighted		Remaining
		Average		Contractual
	Shares	Grant Price		terms (in years)

Outstanding, January 1, 2014	50,024

Granted	11,444	$	6.46
Forfeited	-

Outstanding end of period	61,468			1.9

Employee Stock Option [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

The Company accounts for stock based compensation in accordance with GAAP, which requires measurement of compensation cost for all stock-based awards based on grant date fair value and recognition of compensation cost over the service period of each award.

Stock-based compensation expense
(Unaudited)
(Dollars in Thousands)

Three months ended March 31, 2015	Before Tax		Tax Effect		Net of Tax

Recognized compensation expense	$	8	$	4	$	4

Three months ended March 31, 2014	Before Tax		Tax Effect		Net of Tax

Recognized compensation expense	$	10	$	3	$	7

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

	March 31,		March 31,
	2015		2014

Future compensation expense (1)	$	108	$	70

Weighted Average Remaining Contractual Term (Years)		1.6		1.7

(1) related to non-vested stock options

Restricted Stock Units (Rsus) [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

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

	March 31, 2015		March 31, 2014

Future compensation expense (1)	$	104	$	221

(1) related to non-vested RSU's

PACIFIC FINANCIAL CORP 10-Q