XML 61 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Note 6 - Investment Securities Available For Sale
 6 Months Ended
Jun. 30, 2013
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 6 - INVESTMENT SECURITIES AVAILABLE FOR SALE


The amortized cost and fair values of securities available for sale are as follows:


   

June 30, 2013

 

(Dollar amounts in thousands)

 

Amortized

Cost

   

Gross

Unrealized

Gains

   

Gross

Unrealized

Losses

   

Fair

Value

 
                                 

U.S. government agency securities

  $ 27,020     $ 343     $ (775 )   $ 26,588  

Obligations of states and political subdivisions:

                               

Taxable

    5,367       344       (6 )     5,705  

Tax-exempt

    84,455       2,273       (2,715 )     84,013  

Mortgage-backed securities in government-sponsored entities

    58,557       809       (953 )     58,413  

Private-label mortgage-backed securities

    3,895       393       -       4,288  

Total debt securities

    179,294       4,162       (4,449 )     179,007  

Equity securities in financial institutions

    750       -       -       750  

Total

  $ 180,044     $ 4,162     $ (4,449 )   $ 179,757  

   

December 31, 2012

 
   

Amortized

Cost

   

Gross

Unrealized

Gains

   

Gross

Unrealized

Losses

   

Fair

Value

 
                                 

U.S. government agency securities

  $ 24,485     $ 566     $ (91 )   $ 24,960  

Obligations of states and political subdivisions:

                               

Taxable

    6,888       738       -       7,626  

Tax-exempt

    80,391       4,683       (104 )     84,970  

Mortgage-backed securities in government-sponsored entities

    69,238       1,929       (65 )     71,102  

Private-label mortgage-backed securities

    4,553       511       -       5,064  

Total debt securities

    185,555       8,427       (260 )     193,722  

Equity securities in financial institutions

    750       -       -       750  

Total

  $ 186,305     $ 8,427     $ (260 )   $ 194,472  

The amortized cost and fair value of debt securities at June 30, 2013, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


(Dollar amounts in thousands)

 

Amortized

Cost

   

Fair

Value

 
                 

Due in one year or less

  $ 2,781     $ 2,835  

Due after one year through five years

    4,125       4,331  

Due after five years through ten years

    22,550       22,894  

Due after ten years

    149,838       148,947  
                 

Total

  $ 179,294     $ 179,007  

Proceeds from the sales of securities available-for-sale and the gross realized gains and losses for the three and six months ended June 30 are as follows:


   

For the Three Months Ended June 30,

   

For the Six Months Ended June 30,

 
   

2013

   

2012

   

2013

   

2012

 

Proceeds from sales

  $ 533     $ 21,804     $ 8,135     $ 21,804  

Gross realized gains

    -       308       204       308  

Gross realized losses

    (10 )     (12 )     (29 )     (12 )

Investment securities with an approximate carrying value of $70.4 million and $62.5 million at June 30, 2013 and December 31, 2012, respectively, were pledged to secure deposits and other purposes as required by law.


The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.


   

June 30, 2013

 
   

Less than Twelve Months

   

Twelve Months or Greater

   

Total

 

(Dollar amounts in thousands)

 

Fair

Value

   

Gross

Unrealized

Losses

   

Fair

Value

   

Gross

Unrealized

Losses

   

Fair

Value

   

Gross

Unrealized

Losses

 
                                                 

U.S. government agency securities

  $ 17,131     $ (775 )   $ -     $ -     $ 17,131     $ (775 )

Obligations of states and political subdivisions

  $ 21,713     $ (2,721 )   $ -     $ -     $ 21,713     $ (2,721 )

Mortgage-backed securities in government-sponsored entities

    34,542       (953 )     -       -       34,542       (953 )

Total

  $ 73,386     $ (4,449 )   $ -     $ -     $ 73,386     $ (4,449 )

   

December 31, 2012

 
   

Less than Twelve Months

   

Twelve Months or Greater

   

Total

 
   

Fair

Value

   

Gross

Unrealized

Losses

   

Fair

Value

   

Gross

Unrealized

Losses

   

Fair

Value

   

Gross

Unrealized

Losses

 
                                                 

U.S. government agency securities

  $ 9,938     $ (91 )   $ -     $ -     $ 9,938     $ (91 )

Obligations of states and political subdivisions

    9,240       (104 )     -       -       9,240       (104 )

Mortgage-backed securities in government-sponsored entities

    12,353       (65 )     -       -       12,353       (65 )

Total

  $ 31,531     $ (260 )   $ -     $ -     $ 31,531     $ (260 )

There were 84 securities considered temporarily impaired at June 30, 2013.


On a quarterly basis, the Company performs an assessment to determine whether there have been any events or economic circumstances indicating that a security with an unrealized loss has suffered other-than-temporary impairment (“OTTI”). A debt security is considered impaired if the fair value is less than its amortized cost basis at the reporting date. The Company assesses whether the unrealized loss is other-than-temporary.


OTTI losses are recognized in earnings when the Company has the intent to sell the debt security or it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis. However, even if the Company does not expect to sell a debt security, it must evaluate expected cash flows to be received and determine if a credit loss has occurred.


An unrealized loss is generally deemed to be other than temporary and a credit loss is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the debt security. As a result the credit loss component of an OTTI is recorded as a component of investment securities gains (losses) in the accompanying Consolidated Statement of Income, while the remaining portion of the impairment loss is recognized in other comprehensive income, provided the Company does not intend to sell the underlying debt security and it is “more likely than not” that the Company will not have to sell the debt security prior to recovery.


Debt securities issued by U.S. government agencies, U.S. government-sponsored enterprises, and state and political subdivisions accounted for more than 97% of the total available-for-sale portfolio as of June 30, 2013 and no credit losses are expected, given the explicit and implicit guarantees provided by the U.S. federal government and the lack of prolonged unrealized loss positions within the obligations of state and political subdivisions security portfolio. The Company’s assessment was concentrated mainly on private-label collateralized mortgage obligations of approximately $3.9 million for which the Company evaluates credit losses on a quarterly basis. The gross unrealized gain position related to these private-label collateralized mortgage obligations amounted to $393,000 on June 30, 2013. The Company considered the following factors in determining whether a credit loss exists and the period over which the debt security is expected to recover:


 

• 

 

The length of time and the extent to which the fair value has been less than the amortized cost basis.

 

     

 

• 

 

Changes in the near term prospects of the underlying collateral of a security such as changes in default rates, loss severity given default and significant changes in prepayment assumptions;

 

     

 

• 

 

The level of cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities; and

       

 

• 

 

Any adverse change to the credit conditions and liquidity of the issuer, taking into consideration the latest information available about the overall financial condition of the issuer, credit ratings, recent legislation and government actions affecting the issuer’s industry and actions taken by the issuer to deal with the present economic climate.


For the six months ended June 30, 2013 and 2012, there were no available-for-sale debt securities with an unrealized loss that suffered OTTI.