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Note 3 - Investment Securities Available for Sale
3 Months Ended
Mar. 31, 2012
Marketable Securities [Table Text Block]
3.        INVESTMENT SECURITIES AVAILABLE FOR SALE

Investment securities available for sale consisted of the following as of the dates indicated (in thousands):

   
March 31, 2012
 
         
Gross
   
Gross
   
 
 
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
   
Cost
   
Gains
   
Losses
   
Value
 
                         
Municipal securities
  $ 43,530     $ 1,069     $ (46 )   $ 44,553  
Corporate debt securities
    7,000       1       (90 )     6,911  
U.S. Government sponsored agency securities
    11,999       25       --       12,024  
                                 
Total
  $ 62,529     $ 1,095     $ (136 )   $ 63,488  

   
December 31, 2011
 
           
Gross
   
Gross
         
   
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
   
Cost
   
Gains
   
Losses
   
Value
 
                                 
Municipal securities
  $ 35,590     $ 1,033     $ (10 )   $ 36,613  
Corporate debt securities
    6,000       --       (190 )     5,810  
U.S. Government sponsored agency securities
    19,589       65       --       19,654  
                                 
Total
  $ 61,179     $ 1,098     $ (200 )   $ 62,077  

The following tables summarize the gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired (“OTTI”) (in thousands), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

    March 31, 2012  
   
Less than 12 Months
   
12 Months or More
   
Total
 
   
Fair
   
Unrealized
   
Fair
   
Unrealized
   
Fair
   
Unrealized
 
   
Value
   
Losses
   
Value
   
Losses
   
Value
   
Losses
 
                                     
Municipal securities
  $ 4,543     $ 46     $ --     $ --     $ 4,543     $ 46  
Corporate debt securities
    3,910       90       --       --       3,910       90  
                                                 
Total
  $ 8,453     $ 136     $ --     $ --     $ 8,453     $ 136  

    December 31, 2011  
   
Less than 12 Months
   
12 Months or More
   
Total
 
   
Fair
   
Unrealized
   
Fair
   
Unrealized
   
Fair
   
Unrealized
 
   
Value
   
Losses
   
Value
   
Losses
   
Value
   
Losses
 
                                     
Municipal securities
  $ 1,812     $ 10     $ --     $ --     $ 1,812     $ 10  
Corporate debt securities
    3,810       190       --       --       3,810       190  
                                                 
Total
  $ 5,622     $ 200     $ --     $ --     $ 5,622     $ 200  

On a quarterly basis, management conducts a formal review of securities for the presence of OTTI.  Management assesses whether an OTTI is present when the fair value of a security is less than its amortized cost basis at the balance sheet date.  For such securities, OTTI is considered to have occurred if the Company intends to sell the security, if it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis or if the present values of expected cash flows is not sufficient to recover the entire amortized cost.

The unrealized losses are primarily a result of increases in market yields since the time of purchase.  In general, as market yields rise, the fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired.  Additionally, the unrealized losses are also considered temporary because scheduled coupon payments have been made, it is anticipated that the entire principal balance will be collected as scheduled, and management neither intends to sell the securities nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount.

The Company has pledged investment securities available for sale with carrying values of approximately $1.2 million at March 31, 2012 and December 31, 2011, respectively, as collateral for certain deposits in excess of $250,000.  In addition the Company has pledged investment securities available for sale with carrying values of approximately $12.0 million and $8.9 million at March 31, 2012 and December 31, 2011, respectively, as collateral at the Federal Reserve Bank to secure transaction settlements.

The scheduled contractual maturities of debt securities at March 31, 2012 are shown below (in thousands). Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

   
March 31, 2012
 
   
Amortized
   
Fair
 
 
 
Cost
   
Value
 
             
Within one year
  $ 280     $ 281  
Due from one year to five years
    24,905       24,868  
Due from five years to ten years
    17,758       17,974  
Due after ten years
    19,586       20,365  
                 
Total
  $ 62,529     $ 63,488  

As of March 31, 2012 and December 31, 2011, investments with amortized cost of approximately $46.9 million and $48.5 million, respectively, have call options held by the issuer, of which approximately $19.1 million and $26.6 million, respectively, are or were callable within one year.