NOTE 3 – SECURITIES

The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at September 30, 2013 and December 31, 2012 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
September 30, 2013
Corporate debt	$	4,378	$	5	$	10	$	4,373
State and municipal		1,933		-		7		1,926
Issued by U.S. government-sponsored entities and agencies:
Mortgage-backed securities - residential		1,053		56		-		1,109
Collateralized mortgage obligations		3,079		57		-		3,136

Total	$	10,443	$	118	$	17	$	10,544


			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 mortgage obligations		9,698		117		13		9,802

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

There was no other-than-temporary impairment recognized in accumulated other comprehensive income (loss) for securities available for sale at September 30, 2013 or December 31, 2012.

The proceeds from the sales of securities for the three and nine months ended September 30, 2013 are listed below.



		Three months ended				Nine months ended
		September 30,				September 30,
	2013		2012		2013		2012
Proceeds	$	-	$	-	$	-	$	2,144
Gross gains		-		-		-		143
Gross losses		-		-		-		-

Tax effect-expense	$	-	$	-	$	-	$	-

The amortized cost and fair value of debt securities at September 30, 2013 are shown 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.



		September 30, 2013
		Amortized		Fair
		Cost		Value
Due in one year or less	$	-	$	-
Due from one to five years		6,311		6,299
Mortgage-backed securities		1,053		1,109
Collateralized mortgage obligations		3,079		3,136

Total	$	10,443	$	10,544

Fair value of securities pledged was as follows:



	September 30,		December 31,
	2013		2012
Pledged as collateral for:
FHLB advances	$	2,401	$	4,707
Public deposits		1,265		2,199
Interest-rate swaps		558		1,511
Total	$	4,224	$	8,417

At September 30, 2013 and December 31, 2012, 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 September 30, 2013 and December 31, 2012 aggregated by major security type and length of time in a continuous unrealized loss position.





September 30, 2013	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	$	1,244	$	10	$	-	$	-	$	1,244	$	10
State and municipal		1,926		7		-		-		1,926		7
Issued by U.S. government-sponsored entities and agencies:
Collateralized mortgage obligations		-		-		-		-		-		-
Total temporarily impaired	$	3,170	$	17	$	-	$	-	$	3,170	$	17



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

The unrealized losses in Corporate debt and State and municipal securities at September 30, 2013 and December 31, 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 did not consider these securities to be other-than-temporarily impaired at September 30, 2013 and December 31, 2012.

There was no unrealized loss in Collateralized mortgage obligations at September 30, 2013. The unrealized loss at December 31, 2012 is related to one Ginnie Mae collateralized mortgage obligation. This security carries 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 this security and it is likely that it will not be required to sell this security before their anticipated recovery, the Company did not consider this security to be other-than-temporarily impaired at December 31, 2012.