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SECURITIES
 9 Months Ended
Sep. 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:                
September 30, 2012:                
U.S. Treasury and Government agencies $12,874  $239  $-  $13,113 
Mortgage-backed securities  64,221   1,242   (10)  65,453 
State and political subdivisions  16,892   1,579   (1)  18,470 
Money Market Mutual Fund  4,188   -   -   4,188 
Equity securities  23   -   -   23 
                 
  $98,198  $3,060  $(11) $101,247 

 

     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 September 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 $420  $420 
Due after one year through five years  5,586   1,678 
Due after five years through ten years  4,262   5,713 
Due after ten years  19,498   23,772 
   29,766   31,583 
         
Mortgage-backed securities, money market mutual funds & equity securities  68,432   69,664 
         
Totals $98,198  $101,247 

 

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $52.3 million at September 30, 2012 and $52.8 million at December 31, 2011. The securities delivered for repurchase agreements were $17.1 million at September 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 nine month period ending September 30, 2011. The tax expense for net security gains for the nine month period ending September 30, 2011 was $0.6 million. There were no realized gains or losses from sales of available-for-sale securities for the three and nine month periods ending September 30, 2012 or the three month period ending September 30, 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 $3.3 million at September 30, 2012 and $12.7 million at December 31, 2011, which was approximately 3 and 11 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 September 30, 2012 and December 31, 2011 are as follows ($’s in thousands):

 

September 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 $2,379  $(5) $654  $(5) $3,033  $(10)
State and political subdivisions  -   -   252   (1)  252   (1)
                         
  $2,379  $(5) $906  $(6) $3,285  $(11)

 

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.