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SECURITIES

6 Months Ended

Jun. 30, 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:
June 30, 2012:
U.S. Treasury and Government agencies		$	14,404			$	207				-			$	14,611
Mortgage-backed securities			66,759				1,024				(56	)			67,727
State and political subdivisions			15,458				1,369				(10	)			16,817
Money Market Mutual Fund			3,359				-				-				3,359
Equity securities			23				-				-				23

		$	100,003			$	2,600			$	(66	)		$	102,537

						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 June 30, 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		$	301				301
Due after one year through five years			1,656				1,721
Due after five years through ten years			8,192				8,433
Due after ten years			19,713				20,973
			29,862				31,428

Mortgage-backed securities, money market mutual funds & equity securities			70,141				71,109

Totals		$	100,003			$	102,537

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $48.5 million at June 30, 2012 and $52.8 million at December 31, 2011. The securities delivered for repurchase agreements were $20.6 million at June 30, 2012 and $21.0 million at December 31, 2011.

Gross gains of $1.9 million and gross losses of $0.02 million, resulting from sales of available-for-sale securities were realized during the three and six month period ending June 30, 2011. The tax expense for net security gains for the three and six month periods ending June 30, 2011 was $0.6 million. There were no realized gains or losses from sales of available-for-sale securities for the three and six month periods ending June 30, 2012.

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 $6.8 million at June 30, 2012 and $12.7 million at December 31, 2011, which was approximately 7 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 June 30, 2012 and December 31, 2011 are as follows ($’s in thousands):

June 30, 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:
Mortgage-backed securities			5,248				(19	)			670				(37	)			5,918				(56	)
State and political subdivisions			347				(8	)			501				(2	)			848				(10	)

		$	5,595			$	(27	)		$	1,171			$	(39	)		$	6,766			$	(66	)

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, are 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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