NOTE 3 - SECURITIES

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



	December 31, 2013
				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
		Cost		Gains		Losses		Value
	(In Thousands)
AVAILABLE FOR SALE:
U.S. Government agencies	$	34,471	$	-	$	(1,058)	$	33,413
States and political subdivisions		60,174		650		(1,794)		59,030
Corporate obligations		3,667		84		(40)		3,711
Mortgage-backed securities-
government sponsored entities		63,467		81		(1,898)		61,650
Equity securities-financial services		293		50		(15)		328
	$	162,072	$	865	$	(4,805)	$	158,132
HELD TO MATURITY:
States and political subdivisions	$	174	$	3	$	-	$	177



	December 31, 2012
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
Available for Sale:
U.S. Government agencies	$	13,076	$	36	$	(20)	$	13,092
States and political subdivisions		55,864		2,995		(73)		58,786
Corporate obligations		8,521		347		-		8,868
Mortgage-backed securities-government
sponsored entities		63,397		1,041		(113)		64,325
Equity securities-financial services		292		27		-		319
	$	141,150	$	4,446	$	(206)	$	145,390
Held to Maturity:
States and political subdivisions	$	173	$	4	$	-	$	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):



	December 31, 2013
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	32,481	$	(990)	$	932	$	(68)	$	33,413	$	(1,058)
States and political subdivisions		26,281		(1,415)		4,228		(379)		30,509		(1,794)
Corporate obligations		1,145		(40)		-		-		1,145		(40)
Mortgage-backed securities-government sponsored entities		47,014		(1,524)		7,478		(374)		54,492		(1,898)
Equity securities-financial services		170		(15)		-		-		170		(15)
	$	107,091	$	(3,984)	$	12,638	$	(821)	$	119,729	$	(4,805)



	December 31, 2012
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	7,056	$	(20)	$	-	$	-	$	7,056	$	(20)
States and political subdivisions		5,821		(73)		-		-		5,821		(73)
Mortgage-backed securities-government sponsored entities		17,199		(113)		-		-		17,199		(113)
	$	30,076	$	(206)	$	-	$	-	$	30,076	$	(206)

The Company has 123 debt securities and one equity security in the less than twelve month category and 17 debt securities in the twelve months or more category as of December 31, 2013. In management’s opinion, the unrealized losses on securities reflect changes in interest rates subsequent to the acquisition of specific securities. No other-than-temporary-impairment charges were recorded in 2013. Management believes that all other unrealized losses represent temporary impairment of the securities, 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 securities as of December 31, 2013 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		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In Thousands)
Due in one year or less	$	799	$	803	$	174	$	177
Due after one year through five years		15,837		15,646		—		—
Due after five years through ten years		38,543		37,740		—		—
Due after ten years		43,133		41,965		—		—
		98,312		96,154		174		177

Mortgage-backed securities - government sponsored entities		63,467		61,650		—		—
	$	161,779	$	157,804	$	174	$	177

Gross realized gains and gross realized losses on sales of securities available for sale were $908,000 and $27,000, respectively, in 2013, compared to $1,419,000 and $0, respectively, in 2012, and $983,000 and $10,000, respectively, in 2011. The proceeds from the sales of securities totaled $42,348,000, $40,914,000 and $32,146,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

Securities with a carrying value of $94,352,000 and $71,497,000 at December 31, 2013 and 2012, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.