Note 4 - Securities

A summary of the amortized cost and fair value of securities, with gross unrealized gains and losses, follows:


	December 31, 2012
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Held-to-maturity
U.S. agency obligations	$ 3,075	$ 342	$ -	$ 3,417

Available-for-sale
U.S. agency obligations	$ 22,980	$ 184	$ (95)	$ 23,069
Mortgage-backed securities	1,805	7	-	1,812
Municipals	22,099	780	(75)	22,804
Corporates	2,548	61	-	2,609

	$ 49,432	$ 1,032	$ (170)	$ 50,294

	December 31, 2011
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Held-to-maturity
U.S. agency obligations	$ 8,133	$ 400	$ -	$ 8,533

Available-for-sale
U.S. 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

Temporarily Impaired Securities

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 December 31, 2012 and 2011:

December 31, 2012	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses

U.S. agency obligations	$ 9,116	$ 95	$ -	$ -	$ 9,116	$ 95
Municipals	1,879	75	-	-	1,879	75

Total temporarily impaired securities	$ 10,995	$ 170	$ -	$ -	$ 10,995	$ 170

December 31, 2011	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses

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 temporarily impaired securities	$ 27,430	$ 441	$ -	$ -	$ 27,430	$ 441

U.S. agency obligations. The unrealized losses on the 5 investments in U.S. agency obligations at December 31, 2012 were caused by interest rate increases. The contractual terms of those investments do no permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2012. Each of these 5 investments carries an investment grade rating of AA.

Municipals. The unrealized losses on the 4 investments in municipal obligations at December 31, 2012 were caused by interest rate increases. The contractual terms of those investments do no permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2012. Each of these 4 investments carries an investment grade rating of AA or above.

The amortized costs and fair values of securities at December 31, 2012, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held-to-Maturity		Available-for-Sale
	Amortized	Fair	Amortized	Fair
	Cost	Values	Cost	Values

Due in one year or less	$ -	$ -	$ -	$ -
Due after one year through five years	-	-	979	980
Due after five years through ten years	2,062	2,369	12,063	12,264
Due after ten years	1,013	1,048	36,390	37,050

	$ 3,075	$ 3,417	$ 49,432	$ 50,294

The Bank sold $24,665 of securities available-for-sale in 2012. Gross realized gains amounted to $725 and gross realized losses amounted to $51. The Bank sold $44,671 of securities available-for-sale in 2011. Gross realized gains amounted to $1,228 and gross realized losses amounted to $46.

The amortized costs of securities pledged as collateral for public deposits and other short term borrowings were approximately $7,680 and $19,334 (fair value of $8,126 and $19,806) at December 31, 2012 and 2011, respectively.