Note 2 - Investment Securities

3 Months Ended

Mar. 31, 2015

Disclosure Text Block Supplement [Abstract]

Investments in Debt and Equity Instruments, Cash and Cash Equivalents, Unrealized and Realized Gains (Losses) [Text Block]

2.	Investment Securities

Debt and equity securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at March 31, 2015 and December 31, 2014 are summarized as follows:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

March 31, 2015
Securities available for sale:
Agency mortgage-backed securities	$	31,857	$	397	$	27	$	32,227
Agency CMO		12,705		83		60		12,728
Other debt securities:
Agency notes and bonds		21,226		60		5		21,281
Municipal obligations		31,904		1,263		57		33,110
Subtotal - debt securities		97,692		1,803		149		99,346

Mutual funds		95		0		0		95

Total securities available for sale	$	97,787	$	1,803	$	149	$	99,441

Securities held to maturity:
Agency mortgage-backed securities	$	6	$	0	$	0	$	6

Total securities held to maturity	$	6	$	0	$	0	$	6

December 31, 2014
Securities available for sale:
Agency mortgage-backed securities	$	32,135	$	240	$	79	$	32,296
Agency CMO		14,461		74		150		14,385
Other debt securities:
Agency notes and bonds		18,136		32		48		18,120
Municipal obligations		32,178		1,242		78		33,342
Subtotal - debt securities		96,910		1,588		355		98,143

Mutual funds		2,083		0		0		2,083

Total securities available for sale	$	98,993	$	1,588	$	355	$	100,226

Securities held to maturity:
Agency mortgage-backed securities	$	6	$	0	$	0	$	6

Total securities held to maturity	$	6	$	0	$	0	$	6

Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations (CMO) include securities issued by the Government National Mortgage Association (GNMA), a U.S. government agency, and the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal Home Loan Bank (FHLB), which are government-sponsored enterprises.

The amortized cost and fair value of debt securities as of March 31, 2015, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty.

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

Due in one year or less	$	1,074	$	1,080	$	0	$	0
Due after one year through five years		19,274		19,405		0		0
Due after five years through ten years		20,009		20,537
Due after ten years		12,773		13,369		0		0
		53,130		54,391		0		0
Mortgage-backed securities and CMO		44,562		44,955		6		6

	$	97,692	$	99,346	$	6	$	6

Information pertaining to investment securities available for sale with gross unrealized losses at March 31, 2015, aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows:

	Number of Investment Positions		Fair Value		Gross Unrealized Losses
(Dollars in thousands)

Continuous loss position less than twelve months:
Agency notes and bonds		1	$	996	$	3
Agency CMO		1		35		1
Agency mortgage-backed securities		1		1,165		2
Muncipal obligations		9		2,680		15

Total less than twelve months		12		4,876		21

Continuous loss position more than twelve months:
Agency notes and bonds		1		1,001		2
Agency CMO		9		6,997		59
Agency mortgage-backed securities		4		4,617		25
Muncipal obligations		5		2,353		42

Total more than twelve months		19		14,968		128

Total securities available for saleW		31	$	19,844	$	149

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recover in fair value.

At March 31, 2015, the 31 U.S. government agency debt securities, including agency notes and bonds, mortgage-backed securities and CMO, and municipal obligations in a loss position had depreciated approximately 0.7% from the amortized cost basis. All of the U.S. government agency securities and municipal obligations are issued by U.S. government agencies, government-sponsored enterprises and municipal governments, or are secured by first mortgage loans and municipal project revenues. These unrealized losses related principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold the debt securities until maturity, or the foreseeable future if classified as available for sale, no declines are deemed to be other-than-temporary.

While management does not anticipate any credit-related impairment losses at March 31, 2015, additional deterioration in market and economic conditions may have an adverse impact on credit quality in the future.

The Company did not sell any securities during the three months ended March 31, 2015 or March 31, 2014.

In June 2014, the Company acquired an additional 31,750 shares of common stock in another financial institution, in addition to the 100,000 shares acquired in December 2013, representing approximately 9% of the outstanding common stock of the entity, for a total investment of $711,000. The investment is accounted for using the cost method of accounting and is included in other assets in the consolidated balance sheet.