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Note 3 - Investment Securities Available for Sale

12 Months Ended

Dec. 31, 2015

Investments, Debt and Equity Securities [Abstract]

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

3.	INVESTMENT SECURITIES AVAILABLE FOR SALE

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

		December 31, 2015
(Dollar amounts in thousands)		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value

U.S. government agency securities		$	21,655			$	245			$	(271	)		$	21,629
Obligations of states and political subdivisions:
Taxable			1,989				134				-				2,123
Tax-exempt			91,940				3,402				(175	)			95,167
Mortgage-backed securities in government-sponsored entities			24,480				316				(272	)			24,524
Private-label mortgage-backed securities			2,079				184				-				2,263
Total debt securities			142,143				4,281				(718	)			145,706
Equity securities in financial institutions			750				64				-				814
Total		$	142,893			$	4,345			$	(718	)		$	146,520

		December 31, 2014
(Dollar amounts in thousands)		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value

U.S. government agency securities		$	23,035			$	311			$	(450	)		$	22,896
Obligations of states and political subdivisions:
Taxable			2,953				226				-				3,179
Tax-exempt			91,916				3,803				(553	)			95,166
Mortgage-backed securities in government-sponsored entities			29,150				475				(234	)			29,391
Private-label mortgage-backed securities			2,672				247				-				2,919
Total debt securities			149,726				5,062				(1,237	)			153,551
Equity securities in financial institutions			750				33				-				783
Total		$	150,476			$	5,095			$	(1,237	)		$	154,334

The amortized cost and fair value of debt securities at December 31, 2015, 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		$	1,139			$	1,153
Due after one year through five years			10,790				10,890
Due after five years through ten years			19,172				19,830
Due after ten years			111,042				113,833

Total		$	142,143			$	145,706

Investment securities with an approximate carrying value of $68.8 million and $61.9 million at December 31, 2015 and 2014, respectively, were pledged to secure deposits and other purposes as required by law.

Proceeds from the sales of securities available for sale and the gross realized gains and losses for the years ended December, 31 are as follows (in thousands):

		2015				2014				2013
Proceeds from sales		$	15,686			$	8,383			$	25,088
Gross realized gains			440				306				186
Gross realized losses			(117	)			(58	)			(175	)

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.

		December 31, 2015
		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		$	3,818			$	(57	)		$	10,872			$	(214	)		$	14,690			$	(271	)
Obligations of states and political subdivisions
Tax-exempt			1,268				(9	)			9,394				(166	)			10,662				(175	)
Mortgage-backed securities in government-sponsored entities			8,725				(86	)			6,685				(186	)			15,410				(272	)
Total		$	13,811			$	(152	)		$	26,951			$	(566	)		$	40,762			$	(718	)

		December 31, 2014
		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		$	-			$	-			$	15,734			$	(450	)		$	15,734			$	(450	)
Obligations of states and political subdivisions
Tax-exempt			2,406				(10	)			18,232				(543	)			20,638				(553	)
Mortgage-backed securities in government-sponsored entities			-				-				16,774				(234	)			16,774				(234	)
Total		$	2,406			$	(10	)		$	50,740			$	(1,227	)		$	53,146			$	(1,237	)

There were 46 securities that were considered temporarily impaired at December 31, 2015.

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 accounting literature requires the Company to assess whether the unrealized loss is other than temporary. For equity securities where the fair value has been significantly below cost for one year, the Company’s policy is to recognize an impairment loss unless sufficient evidence is available that the decline is not other than temporary and a recovery period can be predicted.

The Company has asserted that at December 31, 2015 and 2014, the declines outlined in the above table represent temporary declines and the Company does not intend to sell and does not believe it will be required to sell these securities before recovery of their cost basis, which may be at maturity. The Company has concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or company-specific rating changes that are not expected to result in the non-collection of principal and interest during the period.

Debt securities issued by U.S. government agencies, U.S. government-sponsored enterprises, and state and political subdivisions accounted for more than 97.9% of the total available-for-sale portfolio as of December 31, 2015, and no credit losses are expected, given the explicit and implicit guarantees provided by the U.S. federal government and the lack of significant unrealized loss positions within the obligations of state and political subdivisions security portfolio. The Company evaluates credit losses on a quarterly basis. 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:

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

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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.

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

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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.

The entire disclosure for investments in certain debt and equity securities.

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