INVESTMENT SECURITIES (Tables)

6 Months Ended

Jun. 30, 2012

Reconciliation of amortized cost to fair value

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at June 30, 2012 are summarized as follows:

(in thousands)	Amortized cost		Unrealized gains		Unrealized losses			Estimated fair value

Investment securities available-for-sale:
U.S. Treasury securities	$	2,046	$	12	$	-		$	2,058
Securities of U.S. government agencies and corporations		27,359		201	__				27,560
Obligations of states and political subdivisions		26,419		1,301		(58	)		27,662
Collateralized mortgage obligations		5,285		24		(5	)-		5,304
Mortgage-backed securities		119,547		1,236		(37	)		120,746

Total debt securities	$	180,656	$	2,774	$	(100	)	$	183,330

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 2011 are summarized as follows:

(in thousands)	Amortized c ost		Unrealized gains		Unrealized losses			Estimated fair value

Investment securities available-for-sale:
U.S. Treasury securities	$	2,294	$	20	$	-		$	2,314
Securities of U.S. government agencies and corporations		36,820		203		(9	)		37,014
Obligations of states and political subdivisions		19,735		894		(12	)		20,617
Mortgage-backed securities		100,130		586		(420	)		100,296

Total debt securities	$	158,979	$	1,703	$	(441	)	$	160,241

Amortized cost and estimated market value of debt and other securities by contractual maturity

The amortized cost and estimated market value of debt and other securities at June 30, 2012, by contractual maturity, are shown in the following table.

(in thousands)	Amortized cost		Estimated fair value

Due in one year or less	$	16,999	$	17,111
Due after one year through five years		120,908		122,099
Due after five years through ten years		32,210		32,986
Due after ten years		10,539		11,134

	$	180,656	$	183,330

Gross unrealized losses on available-for-sale securities portfolio segment, by maturity date

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of June 30, 2012, follows:

	Less than 12 months					12 months or more				Total
(in thousands)	Fair Value		Unrealized losses			Fair Value		Unrealized losses		Fair Value		Unrealized losses

Obligations of states and political subdivisions		4,354		(58	)		-		-		4,354		(58	)

Mortgaged-backed securities		4,941		(37	)		-		-		4,941		(37	)

Collateralized Mortgage Obligations		2,794		(5	)		-		-		2,794		(5	)


Total	$	12,089	$	(100	)		-		-	$	12,089	$	(100	)

No decline in value was considered "other-than-temporary" during 2012. Twelve securities that had a fair value of $12,089,000 and a total unrealized loss of $100,000 have been in an unrealized loss position for less than twelve months as of June 30, 2012. The declines in fair value were primarily attributable to changes in interest rates. As the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities prior to their anticipated recovery, these investments are not considered other-than-temporarily impaired.

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2011, follows:

	Less than 12 months					12 months or more					Total
(in thousands)	Fair Value		Unrealized losses			Fair Value		Unrealized losses			Fair Value		Unrealized losses

Securities of U.S. government agencies and corporations	$	4,034	$	(9	)	$	-	$	-		$	4,034	$	(9	)

Obligations of states and political subdivisions		506		(10	)		167		(2	)		673		(12	)

Mortgage-backed securities		47,861		(420	)		-		-			47,861		(420	)


Total	$	52,401	$	(439	)	$	167	$	(2	)	$	52,568	$	(441	)