Note 7 - Investments

The following tables summarize the Bank's holdings for both securities held-to-maturity and securities available-for-sale as of June 30, 2012 and December 31, 2011 (amounts in thousands):


		Amortized	June 30, 2012 Gross Unrealized
		Costs			Gains		(Losses)				Fair Value
Held-to-Maturity
US agency obligations	$	3,087		$	350		$	-		$	3,437

Available-for-Sale
US agency obligations	$	27,172		$	404		$	(10	)	$	27,566
Mortgage-backed securities		2,860			-			(61	)		2,799
Municipals		22,063			559			(11	)		22,611
Other		2,678			27			(7	)		2,698
	$	54,773	$		990	$	(89		)	$	55,674


			December 31, 2011 Gross Unrealized
		Amortized	December 31, 2011 Gross Unrealized
		Costs		Gains	(Losses)						Fair Value
Held-to-Maturity
US agency obligations	$	8,133	$	400			$	-		$	8,533

Available-for-Sale
US agency obligations	$	25,416	$	117		$	(48		)	$	25,485
Mortgage-backed securities		3,938		5				(4	)		3,939
Municipals		19,062		241			(389		)		18,914
	$	48,416	$	363	$		(441		)	$	48,338

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, 2012 and December 31, 2011 (amounts in thousands):


		Less than 12 months				More than 12 months			Total
June 30, 2012		Fair Value	Unrealized Losses			Fair Value	Unrealized Losses		Fair Value			Unrealized Losses
Description of securities
U.S. agency obligations	$	4,045		$	10	$ -	$	-	$	4,045	$	10
Mortgage-backed securities		2,799			61	-		-		2,799		61
Municipals		1,728			11	-		-		1,728		11
Other (corporates)		1,647			7	-		-		1,647		7
Total	$	10,219	$		89	$ -	$	-	$	10,219	$	89


		Less than 12 months			More than 12 months			Total
December 31, 2011		Fair Value		Unrealized Losses	Fair Value	Unrealized Losses		Fair Value			Unrealized Losses
Description of securities
U.S. agency obligations	$	13,593	$	48	$ -	$	-	$	13,593	$	48
Mortgage-backed securities		985		4	-		-		985		4
Municipals		12,852		389	-		-		12,852		389
Total	$	27,430	$	441	$ -	$	-	$	27,430	$	441

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, 2012, 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, 2012, the Bank owned 9 securities that were being evaluated for other than temporary impairment. Two of these securities were S&P rated AAA and 7 were S&P rated AA. As of June 30, 2012, 5 of these securities were obligations of government sponsored entities, 2 were municipal issues and 2 were issued by publicly traded US corporations.

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.