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Note 2 - Securities
 9 Months Ended
Sep. 30, 2012
Investment [Text Block]
2.     SECURITIES

The amortized cost and approximate fair value of securities is as follows:

   
As of September 30, 2012
 
   
Amortized
   
Unrealized
         
Fair
 
   
Cost
   
Gains
   
Losses
    OTTI    
Value
 
   
(In thousands)
 
Securities available-for-sale
                             
Debt Securities
                             
U.S. Treasury and other U.S. government corporations and agencies
  $ 75,457     $ 466     $ (10 )   $
─
    $ 75,913  
Obligations of state and political subdivisions
    12,849       552    
─
   
─
      13,401  
Corporate
    6,086       266                       6,352  
Mortgage-backed securities and collateralized mortgage obligations:
                                       
Government issued or guaranteed
    65,585       1,847    
─
   
─
      67,432  
Privately issued residential
    775       309       (5 )     (402 )     677  
Asset backed securities
    196       122    
─
      (175 )     143  
Equity Securities
                                       
Investment in CRA funds
    13,964       400    
─
   
─
      14,364  
Total available-for-sale securities
  $ 174,912     $ 3,962     $ (15 )   $ (577 )   $ 178,282  
                                         
Securities held-to-maturity
                                       
Obligations of state and political subdivisions
  $ 4,046     $ 726     $
─
    $
─
    $ 4,772  
Total held-to-maturity securities
  $ 4,046     $ 726     $
─
    $
─
    $ 4,772  
                                         
Other investments
                                       
FHLB/Federal Reserve Bank stock (1)
  $ 4,691     $
─
    $
─
    $
─
    $ 4,691  
Investment in subsidiary trust (1)
    1,083    
─
   
─
   
─
      1,083  
Total other investments
  $ 5,774     $
─
    $
─
    $
─
    $ 5,774  

   
As of December 31, 2011
 
         
Unrealized
       
   
 
Amortized
Cost
   
 
Gains
   
 
Losses
   
 
OTTI
   
 
Fair
Value
 
   
(In thousands)
 
Securities available-for-sale
                             
Debt securities
                             
U.S. Treasury and other U.S. government corporations and agencies
 
$
91,660
   
$
546
   
$
(7
)
 
$
—
   
$
92,199
 
Obligations of state and political subdivisions
   
5,467
     
279
     
(40
)
   
—
     
5,706
 
Corporate
   
6,102
     
57
     
(18
)
   
—
     
6,141
 
Mortgage-backed securities and collateralized mortgage obligations:
                                       
Government issued or guaranteed
   
52,594
     
1,160
     
(15
)
   
—
     
53,739
 
Privately issued residential
   
900
     
232
     
(23
)
   
(442
)
   
667
 
Asset backed securities
   
231
     
56
     
—
     
(185
)
   
102
 
Equity securities
                                       
Investment in CRA funds
   
13,700
     
135
     
—
     
—
     
13,835
 
                                         
Total available-for-sale securities
 
$
170,654
   
$
2,465
   
$
(103
)
 
$
(627
)
 
$
172,389
 
                                         
Securities held-to-maturity
                                       
Obligations of state and political subdivisions
 
$
4,046
   
$
490
   
$
—
   
$
—
   
$
4,536
 
                                         
Total held-to-maturity securities
 
$
4,046
   
$
490
   
$
—
   
$
—
   
$
4,536
 
                                         
Other investments
                                       
FHLB /Federal Reserve Bank stock(1)
   
5,401
     
—
     
—
     
—
     
5,401
 
Investment in subsidiary trust(1)
   
1,083
     
—
     
—
     
—
     
1,083
 
                                         
Total other investments
 
$
6,484
   
$
—
   
$
—
   
$
—
   
$
6,484
 

(1) Represents securities with restrictions and limited marketability which are carried at cost.

The following table displays the gross unrealized losses and fair value of securities available-for-sale as of September 30, 2012 for which other-than-temporary impairments (“OTTI”) has not been recognized, that were in a continuous unrealized loss position for the periods indicated.  There were no securities held-to-maturity in a continuous unrealized loss position as of September 30, 2012 or December 31, 2011.

   
September 30, 2012
 
   
Less Than 12 Months
   
Greater Than 12 Months
   
Total
 
   
Fair
Value
   
Gross
Unrealized
Losses
   
Fair
Value
   
Gross
Unrealized
Losses
   
Fair
Value
   
Gross
Unrealized
Losses
 
   
(In thousands)
 
Securities available-for-sale
                                   
Debt securities
                                   
Obligations of state and political subdivisions
 
$
9,953
   
$
(10
)
 
$
—
   
$
—
   
$
9,953
   
$
(10
)
Mortgage-backed securities and collateralized mortgage obligations:
                                               
Government issued or guaranteed
   
—
     
—
     
111
     
(5
)
   
111
     
(5
)
                                                 
Total available-for-sale securities
 
$
9,953
   
$
(10
)
 
$
111
   
$
(5
)
 
$
10,065
   
$
(15
)

   
As of December 31, 2011
 
   
Less Than 12
Months
   
Greater Than 12
Months
   
Total
 
   
Fair
Value
   
Gross Unrealized
Losses
   
Fair
Value
   
Gross Unrealized
Losses
   
Fair
Value
   
Gross Unrealized
Losses
 
   
(In thousands)
Securities available-for-sale
                                               
Debt securities
                                               
U.S. Treasury and other U.S. government corporations and agencies
 
$
4,993
   
$
(7
)
 
$
—
   
$
—
   
$
4,993
   
$
(7
)
Obligations of state and political subdivisions
   
1,580
     
(40
)
   
—
     
—
     
1,580
     
(40
)
Corporate
   
3,017
     
(18
)
   
—
     
—
     
3,017
     
(18
)
Mortgage-backed securities and collateralized mortgage obligations:
                                               
Government issued or guaranteed
   
8,786
     
(15
)
   
10
     
—
     
8,796
     
(15
)
Privately issued residential
   
—
     
—
     
168
     
(23
)
   
168
     
(23
)
                                                 
Total available-for-sale securities
 
$
18,376
   
$
(80
)
 
$
178
   
$
(23
)
 
$
18,554
   
$
(103
)

As of September 30, 2012, management did not have the intent to sell any of the securities classified as available-for-sale in unrealized loss positions and believes it is not more likely than not that the Company will have to sell any such securities before a recovery of the cost. However, if strategic opportunities arise, the Company may consider selling selected securities.  Any unrealized losses on such selected securities would be charged to earnings.

The unrealized losses are largely due to increases in the market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such securities decline. Management does not believe that any of the unrealized losses above are due to credit quality. Accordingly, management believes the $15,000 of unrealized losses as of September 30, 2012 is temporary and the remaining $577,000 of OTTI as of September 30, 2012 represents an unrealized loss for which an impairment has been recognized in other comprehensive income.

Other-Than-Temporary Impairments (OTTI)

The following table presents a rollforward for the three and nine months ended September 30, 2012, of the credit loss component of OTTI losses that have been recognized in income related to debt securities that the Company does not intend to sell.

   
Impairment related to credit losses
 
   
Three Months Ended
September 30, 2012
   
Nine Months Ended
September 30, 2012
 
   
(In thousands)
 
Credit losses at beginning  of period
 
$
1,672
   
$
1,595
 
Additions to OTTI that were previously recognized when there is no intent to sell and no requirement to sell before recovery of amortized cost basis
   
5
     
51
 
Transfers from accumulated other comprehensive income to OTTI related to credit losses
   
2
     
33
 
Credit losses at end of period
 
$
1,679
   
$
1,679
 

For the nine months ended September 30, 2012, credit-related losses of $72,000 on seven non-agency residential mortgage-backed securities and $13,000 on one asset-backed security were recognized. There were no noncredit impairments included in accumulated other comprehensive income (loss) for the nine months ended September 30, 2012.

To measure credit losses, external credit ratings and other relevant collateral details and performance statistics on a security-by-security basis were considered. Securities exhibiting significant deterioration are subjected to further analysis. Assumptions were developed for prepayment speed, default rate, and loss severity for each security using third party sources and based on the collateral history. The resulting projections of future cash flows of the underlying collateral were then discounted by the underlying yield before any write-downs were considered to determine the net present value of the cash flows (“NPV”).  The difference between the cost basis and the NPV was taken as a credit loss in the current period to the extent that these losses have not been previously recognized. The difference between the NPV and the quoted market price is considered a noncredit related loss and was included in other comprehensive income (loss).

Other Securities Information

The following sets forth information concerning sales (excluding calls and maturities) of available-for-sale securities (in thousands).  There were no sales or transfers of held-to-maturity securities for the nine months ended September 30, 2012 or 2011.

   
Nine Months Ended
September 30,
 
   
2012
   
2011
 
Amortized cost
 
$
—
   
$
7,973
 
Proceeds
   
—
     
7,927
 
Gross realized gains
   
—
     
94
 
Gross realized losses
   
—
     
(140
)

At September 30, 2012, future contractual maturities of debt securities were as follows (in thousands):

   
Securities
Available-for-sale
   
Securities
Held-to-maturity
 
   
Amortized
Cost
   
Fair
Value
   
Amortized
Cost
   
Fair
Value
 
Within one year
 
$
706
   
$
725
   
$
—
   
$
—
 
Within two to five years
   
8,083
     
8,357
     
—
     
—
 
Within six to ten years
   
74,247
     
74,816
     
—
     
—
 
After ten years
   
11,552
     
11,911
     
4,046
     
4,772
 
Mortgage-backed securities and collateralized mortgage obligations
   
66,360
     
68,109
     
—
     
—
 
Total debt securities
 
$
160,948
   
$
163,918
   
$
4,046
   
$
4,772
 

The Company holds mortgage-backed securities which may mature at an earlier date than the contractual maturity due to prepayments. The Company also holds certain securities which may be called by the issuer at an earlier date than the contractual maturity date.