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Investments
 6 Months Ended
Jun. 30, 2011
Investments  
Investments

Note 8 - Investments

The following tables summarize the Bank's holdings for both securities held-to-maturity and securities available-for-sale as of June 30, 2011 and December 31, 2010 (amounts in thousands):

 

 

 

 

June 30, 2011

 

 

 

 

Amortized

Costs

Gross Unrealized

Fair Value

 

 

 

 

Gains

(Losses)

Held-to-Maturity

 

 

 

 

 

US agency obligations

$     9,196

$        342

$              -

$     9,538

 

 

 

 

 

 

 

 

Available-for-Sale

 

 

 

 

 

US agency obligations

$     17,696

$        51

$       (97)

$     17,650

 

Mortgage-backed securities

20,300

46

(90)

20,256

 

Municipals

11,127

270

(132)

11,265

 

 

 

 

$    49,123

$       367

$         (319)

$    49,171

 

 

 

 

 

December 31, 2010

 

 

 

 

Amortized

Costs

Gross Unrealized

Fair Value

 

 

 

 

Gains

(Losses)

Held-to-Maturity

 

 

 

 

 

US agency obligations

$     14,297

$        304

$               -

$     14,601

 

 

 

 

 

 

 

 

Available-for-Sale

 

 

 

 

 

US agency obligations

$     14,758

$          24

$       (441)

$     14,341

 

Mortgage-backed securities

18,057

1

(296)

17,762

 

Municipals

5,787

15

(337)

5,465

 

Other

1,033

-

(15)

1,018

 

 

 

 

$     39,635

$          40

$   (1,089)

$    38,586

The following tables show the gross unrealized losses and fair value of the Bank's investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2011 and December 31, 2010 (amounts in thousands):

 

 

Less than 12 months

More than 12 months

Total

 

Fair

Value

Unrealized

Losses

Fair

Value

Unrealized

Losses

Fair

Value

Unrealized

Losses

June 30, 2011

Description of securities

 

 

 

 

 

 

U.S. agency obligations

$ 8,891

$        97

$            -

$             -

$       8,891

$          97

Mortgage-backed securities

10,431

90

-

-

10,431

90

Municipals

2,718

132

-

-

2,718

132

Total

$22,040

$       319

$           -

$             -

$     22,040

$          319

 

 

Less than 12 months

More than 12 months

Total

 

Fair

Value

Unrealized

Losses

Fair

Value

Unrealized

Losses

Fair

Value

Unrealized

Losses

December 31, 2010

Description of securities

 

 

 

 

 

 

U.S. agency obligations

$11,808

$441

$         -                

$        -                     

$11,808

$441

Mortgage-backed securities

16,740

296

-

-

16,740

296

Municipals

3,178

303

590

34

3,768

337

Corporates

-

-

1,018

15

1,018

15

Total

$31,726

$1,040

$1,608

$49

$33,334

$1,089

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and may do so 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, (3) the intent of Financial, if any, to sell the security; (4) whether Financial more likely than not will be required to sell the security before recovering its cost; and (5) whether Financial does not expect to recover the security's entire amortized cost basis (even if Financial does not intend to sell the security).

At June 30, 2011, the Company did not consider the unrealized losses as other-than-temporary losses due to the nature of the securities involved. As of June 30, 2011, the Bank owned 16 securities that were being evaluated for other than temporary impairment. 14 of these securities were S&P rated AAA and 2 were S&P rated AA. As of June 30, 2011, 12 of these securities were obligations of government sponsored entities and 4 were municipal issues.

Based on the analysis performed by management as mandated by the Bank's investment policy, management believes the default risk to be minimal. Because the Bank expects to recover the entire amortized cost basis, no declines currently are deemed to be other-than-temporary.