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SECURITIES

3 Months Ended

Mar. 31, 2012

Investments, Debt and Equity Securities [Abstract]

Marketable Securities [Text Block]

Note C - Securities

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

						Gross				Gross
$'s in thousands		Amortized				Unrealized				Unrealized				Approximate
		Cost				Gains				Losses				Fair Value
Available-for-Sale Securities:
March 31, 2012:
U.S. Treasury and
Government agencies		$	23,412			$	176				(58	)		$	23,530
Mortgage-backed securities			67,305				891				(49	)			68,147
State and political subdivisions			15,268				1,241				(3	)			16,506
Money Market Mutual Fund			2,397				-				-				2,397
Equity securities			23				-				-				23

		$	108,405			$	2,308			$	(110	)		$	110,603

						Gross				Gross
$'s in thousands		Amortized				Unrealized				Unrealized				Approximate
		Cost				Gains				Losses				Fair Value
December 31, 2011:
U.S. Treasury and
Government agencies		$	25,238			$	186			$	-			$	25,424
Mortgage-backed securities			67,056				761				(119	)			67,698
State and political subdivisions			15,586				1,210				(3	)			16,793
Money Market Mutual Fund			2,040				-				-				2,040
Equity securities			23				-				-				23

		$	109,943			$	2,157			$	(122	)		$	111,978

The amortized cost and fair value of securities available for sale at March 31, 2012, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Available for Sale
		Amortized				Fair
$'s in thousands		Cost				Value

Within one year		$	384				383
Due after one year through five years			1,695				1,768
Due after five years through ten years			10,318				10,554
Due after ten years			26,283				27,331
			38,680				40,036

Mortgage-backed securities, money market mutual funds & equity securities			69,725				70,567

Totals		$	108,405			$	110,603

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $57.2 million at March 31, 2012 and $52.8 million at December 31, 2011. The securities delivered for repurchase agreements were $21.2 million at March 31, 2012 and $21.0 million at December 31, 2011.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments was $16.3 million at March 31, 2012 and $15.2 million at December 31, 2011, which was approximately 15 and 14 percent, respectively, of the Company’s available-for-sale investment portfolio at such dates. Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

Securities with unrealized losses, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2012 and December 31, 2011 are as follows ($’s in thousands):

March 31, 2012		Less than 12 Months								12 Months or Longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Available-for-Sale Securities:
U.S. Treasury and Government agencies		$	6,738			$	(58	)		$	-			$	-			$	6,738			$	(58	)
Mortgage-backed securities			8,201				(14	)			819				(35	)			9,020				(49	)
State and political subdivisions			504				(3	)			-				-				504				(3	)

		$	15,443			$	(75	)		$	819			$	(35	)		$	16,262			$	(110	)

December 31, 2011		Less than 12 Months								12 Months or Longer								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Available-for-Sale Securities:
Mortgage-backed securities		$	11,321				(56	)		$	844			$	(63	)		$	12,165			$	(119	)
State and political subdivisions			501				(3	)			-				-				501				(3	)

		$	11,822			$	(59	)		$	844			$	(63	)		$	12,666			$	(122	)

The total unrealized losses on the mortgage-backed securities portfolio, all of which are residential mortgage-backed securities, is derived mainly from three private label senior tranche CMO securities. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concern warrants 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 of the Company to not sell the investment and whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost. Management has determined there is no other-than-temporary-impairment on these CMO securities. The total unrealized loss on the municipal security portfolio is due to the holding of several municipal securities, all with individually insignificant losses.

Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets.

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