Securities

6 Months Ended

Jun. 30, 2011

Securities [Abstract]

SECURITIES

NOTE 2 — SECURITIES

The amortized cost and estimated fair values of securities available-for-sale were as follows:

June 30, 2011

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Costs		Gains		Losses			Value
U.S. Government and agency obligations	$	37,318	$	998	$	(4	)	$	38,312
State and municipal obligations		10,514		332		(22	)		10,824
Mortgage-backed securities		20,574		1,154		—			21,728
Total	$	68,406	$	2,484	$	(26	)	$	70,864

The amortized cost and estimated fair values of securities held-to-maturity were as follows:

	Adjusted		Gross		Estimated
	Amortized		Unrealized		Fair
	Cost		Gains		Value
Collateralized Debt Obligations	$	1,267	$	633	$	1,900

December 31, 2010

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Costs		Gains		Losses			Value
U.S. Government and agency obligations	$	29,510	$	599	$	(123	)	$	29,986
State and municipal obligations		12,153		193		(84	)		12,262
Mortgage-backed securities		26,290		1,059		—			27,349
Total	$	67,953	$	1,851	$	(207	)	$	69,597

The amortized cost and estimated fair values of securities held-to-maturity were as follows:

	Adjusted		Gross		Estimated
	Amortized		Unrealized		Fair
	Cost		Gains		Value
Collateralized Debt Obligations	$	1,313	$	367	$	1,680

Credit Losses Recognized on Investments

The following table provides information about debt securities for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income for the six month periods ended June 30, 2011 and 2010.

Accumulated Credit Losses:

	Six Months Ended
	June 30,
	2011		2010
Credit losses on debt securities held
Beginning of period	$	3,924	$	2,621
Additions related to other-than-temporary losses not previously recognized		92		1,030
Reductions due to sales		—		—
Reductions due to change in intent or likelihood of sale		—		—
Additions related to increases in previously recognized other-than-temporary losses		—		—
Reductions due to increases in expected cash flows		—		—
End of period	$	4,016	$	3,651

The table below indicates the length of time individual securities have been in a continuous unrealized loss position at June 30, 2011 and December 31, 2010:

June 30, 2011

	(Less than 12 months)							(12 months or longer)										Total
Description of	Number of		Fair		Unrealized			Number of		Fair		Unrealized		Number of		Fair		Unrealized
Securities	investments		value		losses			investments		value		losses		investments		value		losses
U.S. Government and agency obligations		1	$	1,078	$	(4	)		—	$	—	$	—		1	$	1,078	$	(4	)
State and municipal obligations		4		1,729		(22	)		—		—		—		4		1,729		(22	)
Mortgage-backed securities and other		—		—		—			—		—		—		—		—		—
Total securities		5	$	2,807	$	(26	)		0	$	0	$	0		5	$	2,807	$	(26	)
December 31, 2010
	(Less than 12 months)							(12 months or longer)										Total
Description of	Number of		Fair		Unrealized			Number of		Fair		Unrealized		Number of		Fair		Unrealized
Securities	investments		value		losses			investments		value		losses		investments		value		losses
U.S. Government and agency obligations		10	$	9,904	$	(123	)		—	$	—	$	—		10	$	9,904	$	(123	)
State and municipal obligations		9		3,575		(84	)		—		—		—		9		3,575		(84	)
Mortgage-backed securities and other		—		—		—			—		—		—		—		—		—
Total securities		19	$	13,479	$	(207	)		0	$	0	$	0		19	$	13,479	$	(207	)

The unrealized losses on the Corporation’s investments in U.S. Government and agency obligations, state and political subdivision obligations and mortgage-backed securities were caused primarily by changes in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Corporation does not intend to sell the investments and it is not more likely than not the Corporation will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Corporation does not consider those investments to be other-than-temporarily impaired at June 30, 2011 or December 31, 2010.

The Corporation’s unrealized loss on investments in collateralized debt obligations relates to an original investment of $8,000 in pooled trust securities. The company evaluates those investments on a quarterly basis for other-than-temporary impairment and other unrealized losses due to temporary market factors. The unrealized losses were primarily attributed to: declines in the performance of the underlying collateral due to weakness in the economy, and a lower than investment grade rating by industry analysts.

Credit losses on these securities are calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. Because the Corporation does not intend to sell the investment and it is not more likely than not the Corporation will be required to sell the investment before recovery of its new, lower amortized cost basis, which may be maturity, it does not consider the remainder of the investment in the securities to be other-than-temporarily impaired at June 30, 2011.

Substantially all mortgage-backed securities are backed by pools of mortgages that are insured or guaranteed by the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) or the Federal Home Loan Mortgage Corporation (“FHLMC”).

At June 30, 2011, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity other than the pooled trust securities as noted above.

The amortized cost and estimated fair value of all debt securities at June 30, 2011, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

	Available-for-sale				Held-to-maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	—	$	—	$	—	$	—
Due from one to five years		19,219		19,565		—		—
Due from five to ten years		18,896		19,686		—		—
Due after ten years		9,717		9,885		1,267		1,900
Mortgage-backed and related securities		20,574		21,728		—		—
Total	$	68,406	$	70,864	$	1,267	$	1,900

Securities with a fair value of $65,803 at June 30, 2011 were pledged to secure public deposits and other obligations.