NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at December 31, 2012 and 2011 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
December 31, 2012
Corporate debt	$	4,429	$	—	$	64	$	4,365
State and municipal		2,006		—		20		1,986
Issued by U.S. government-sponsored entities and agencies:
Mortgage-backed securities—residential		1,399		87		—		1,486
Collateralized residential mortgage obligations		9,698		117		13		9,802

Total	$	17,532	$	204	$	97	$	17,639


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
December 31, 2011
Issued by U.S. government-sponsored entities and agencies:
Mortgage-backed securities—residential	$	1,475	$	198	$	—	$	1,673
Collateralized residential mortgage obligations		16,655		204		16		16,843

Total	$	18,130	$	402	$	16	$	18,516

There was no OTTI recognized in accumulated other comprehensive income for securities available for sale at December 31, 2012 or 2011.

The proceeds from sales of securities and the associated gains in 2012 and 2011 are listed below.


	2012		2011		2010
Proceeds	$	2,144	$	12,219	$	13,632
Gross gains		143		353		468
Gross losses		—		—		—
Tax effect—expense	$	—	$	—	$	159

The amortized cost and fair value of debt securities at year-end 2012, by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	Amortized Cost		Fair Value
Due in one year or less	$	50	$	50
Due after one year through five years		6,385		6,301
Mortgage-backed securities		1,399		1,486
Collateralized mortgage obligations		9,698		9,802

Total	$	17,532	$	17,639

Fair value of securities pledged was as follows:


	2012		2011
Pledged as collateral for:
FHLB advances	$	4,707	$	9,336
Public deposits		2,199		2,820
Customer repurchase agreements		—		3,557
Interest-rate swaps		1,511		1,464

Total	$	8,417	$	17,177

At year-end 2012 and 2011, there were no holdings of securities of any one issuer, other than U.S. government-sponsored entities and agencies, in an amount greater than 10% of stockholders’ equity.

The following table summarizes securities with unrealized losses at December 31, 2012 and December 31, 2011 aggregated by major security type and length of time in a continuous unrealized loss position.


December 31, 2012	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Corporate debt	$	4,365	$	64	$	—	$	—	$	4,365	$	64
State and municipal		1,936		20		—		—		1,936		20
Issued by U.S. government-sponsored entities and agencies:
Collateralized mortgage obligations		1,673		13		—		—		1,673		13

Total temporarily impaired	$	7,974	$	97	$	—	$	—	$	7,974	$	97


December 31, 2011	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Issued by U.S. government-sponsored entities and agencies:
Collateralized mortgage obligations	$	2,882	$	16	$	—	$	—	$	2,882	$	16

Total temporarily impaired	$	2,882	$	16	$	—	$	—	$	2,882	$	16

The unrealized losses in Corporate debt and State and Municipal Securities in 2012 are related to multiple securities. Because the decline in fair value is attributable to changes in market conditions, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2012. The unrealized loss at December 31, 2012 and December 31, 2011 in Collateralized Mortgage Obligations is related to two Ginnie Mae collateralized mortgage obligations. These securities carry the full faith and credit guarantee of the U.S. government. Because the decline in fair value is attributable to changes in market conditions, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2012.