Note 7 - Investments

The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of March 31, 2014 and December 31, 2013 (amounts in thousands):


		March 31, 2014
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$ 2,535	$ 202	$ -	$ 2,737

Available-for-Sale
US Treasuries	$ 3,909	$ -	$ (210)	$ 3,699
US agency obligations	21,093	7	(1,653)	19,447
Mortgage-backed securities	4,928	44	(143)	4,829
Municipals	15,782	81	(471)	15,392
Other (corporates)	2,011	-	(42)	1,969
	$ 47,723	$ 132	$ (2,519)	$ 45,336

		December 31, 2013
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$ 3,537	$ 203	$ -	$ 3,740

Available-for-Sale
US Treasuries	$ 3,907	$ -	$ (296)	$ 3,611
US agency obligations	22,544	-	(2,436)	20,108
Mortgage-backed securities	5,450	11	(150)	5,311
Municipals	15,845	35	(742)	15,138
Other (corporates)	2,011	-	(88)	1,923
	$ 49,757	$ 46	$ (3,712)	$ 46,091

Note 7 – Investments (continued)

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 March 31, 2014 and December 31, 2013 (amounts in thousands):


	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
March 31, 2014	Value	Losses	Value	Losses	Value	Losses
Description of securities
US Treasuries	$ 3,699	$ 210	$ -	$ -	$ 3,699	$ 210
U.S. agency obligations	10,141	752	7,081	901	17,222	1,653
Mortgage-backed securities	1,903	143	-	-	1,903	143
Municipals	5,059	211	6,170	260	11,229	471
Other (corporates)	491	2	1,478	40	1,969	42
Total	$ 21,293	$ 1,318	$ 14,729	$ 1,201	$ 36,022	$ 2,519

	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
December 31, 2013	Value	Losses	Value	Losses	Value	Losses
Description of securities
US Treasuries	$ 3,611	$ 296	$ -	$ -	$ 3,611	$ 296
U.S. agency obligations	14,087	1,473	5,021	963	19,108	2,436
Mortgage-backed securities	4,830	150	-	-	4,830	150
Municipals	11,163	574	1,479	168	12,642	742
Other (corporates)	1,923	88	-		1,923	88
Total	$ 35,614	$ 2,581	$ 6,500	$ 1,131	$ 42,114	$ 3,712

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 March 31, 2014, the Company did not consider the unrealized losses as other-than-temporary losses due to the nature of the securities involved. As of March 31, 2014, the Bank owned 41 securities that were being evaluated for other than temporary impairment. Eleven of these securities were S&P rated AAA, 29 were S&P rated AA, and one was S&P rated A. As of March 31, 2014, 15 of these securities were direct obligations of the U.S. government or government sponsored entities, 23 were municipal issues, and three were investments in domestic corporate issued securities.

Note 7 – Investments (continued)

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.