5. Securities

The amortized cost and fair value of securities were as follows:


	September 30, 2012
	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In Thousands)
Available for Sale:
U.S. Government agencies	$6,999	$43	$-	$7,042
States and political subdivisions	55,445	3,249	(2)	58,692
Corporate obligations	9,041	341	-	9,382
Mortgage-backed securities- government sponsored entities	70,292	1,869	(39)	72,122
	141,777	5,502	(41)	147,238
Equity securities-financial services	374	27	-	401
	$142,151	$5,529	$(41)	$147,639
Held to Maturity:
States and political subdivisions	$172	$3	$-	$175


	December 31, 2011
	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In Thousands)
Available for Sale:
U.S. Government agencies	$13,268	$130	$-	$13,398
States and political subdivisions	54,106	2,640	-	56,746
Corporate obligations	8,733	130	(54)	8,809
Mortgage-backed securities-government sponsored entities	68,886	2,081	(2)	70,965
	144,993	4,981	(56)	149,918
Equity securities-financial services	239	109	(3)	345
	$145,232	$5,090	$(59)	$150,263
Held to Maturity:
States and political subdivisions	$171	$6	$-	$177

The following tables show the Company's investments' gross unrealized losses and fair value aggregated by length of time that individual securities have been in a continuous unrealized loss position (in thousands):


	September 30, 2012
	Less than 12 Months 12 Months or More __Total_____
	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
States and political subdivisions	2,161	(2)	-	-	2,161	(2)
Mortgage-backed securities-government sponsored agencies	13,062	(39)	-	-	13,062	(39)
	$15,223	$(41)	$-	$-	$15,223	$(41)


	December 31, 2011
	Less than 12 Months 12 Months or More Total
	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses	Fair Value	Unrealized Losses
Corporate obligations	$4,152	$ (54)	$-	$-	$4,152	$ (54)
Mortgage-backed securities-government sponsored agencies	2,495	(2)	-	-	2,495	(2)
Equity securities-financial services	34	(2)	15	(1)	49	(3)
	$6,681	$ (58)	$15	$(1)	$6,696	$(59)

At September 30, 2012, the Company has 14 debt securities in an unrealized loss position in the less than twelve months category and no debt securities in the twelve months or more category. In Management's opinion the unrealized losses less than twelve months principally reflect changes in interest rates subsequent to the acquisition of specific securities. The Company holds a small amount of equity securities in other financial institutions. As of September 30, 2012, there were no unrealized losses on equity securities. Management believes that the unrealized loss represents temporary impairment of the securities as the Company does not have the intent to sell the security and it is more likely than not that it will not have to sell the securities before recovery of their cost basis.

The amortized cost and fair value of debt securities as of September 30, 2012 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.


	Available for Sale Held to Maturity
	Amortized Cost	Fair Value	Amortized Cost	Fair Value
	(In Thousands)

Due in one year or less	$7,586	$7,676	$-	$-
Due after one year through five years	12,691	12,996	172	175
Due after five years through ten years	21,165	22,223	-	-
Due after ten years	30,043	32,221	-	-

Mortgage-backed securities-government sponsored agencies	70,292	72,122	-	-
	$141,777	$147,238	$172	$175

Gross realized gains and gross realized losses on sales of securities available for sale were as follows (in thousands):


	Three Months		Nine Months
	Ended September 30,		Ended September 30,
	2012	2011	2012	2011
Gross realized gains	$631	$548	$1,318	$776
Gross realized losses	___-	(4)	___-	(8)
Net realized gain	$631	$544	$1,318	$768
Proceeds from sales of securities	$15,549	$17,390	$23,265	$27,734