INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2013

INVESTMENT SECURITIES [Abstract]

INVESTMENT SECURITIES

9. INVESTMENT SECURITIES

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at September 30, 2013 are summarized as follows:

(in thousands)	Amortized cost		Unrealized gains		Unrealized losses			Estimated fair value
Investment securities available-for-sale:
U.S. Treasury securities	$	999	$	2	$	—		$	1,001
Securities of U.S. government agencies and corporations		60,025		26		(1,151	)		58,900
Obligations of states and political subdivisions		27,182		568		(433	)		27,317
Collateralized mortgage obligations		5,845		20		(4	)		5,861
Mortgage-backed securities		93,751		601		(424	)		93,928
Total debt securities	$	187,802	$	1,217	$	(2,012	)	$	187,007

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 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	$	997	$	8	$	—		$	1,005
Securities of U.S. government agencies and corporations		28,200		105	—­­­				28,305
Obligations of states and political subdivisions		27,226		1,563		(3	)		28,786
Collateralized mortgage obligations		8,156		123		(1	)		8,278
Mortgage-backed securities		116,855		1,524		(262	)		118,117
Total debt securities	$	181,434	$	3,323	$	(266	)	$	184,491

There were no proceeds from sales of available-for-sale securities for the nine-month and three-month periods ended September 30, 2013 and September 30, 2012.  Gross realized gains from calls of available-for-sale securities were $4 and $0 for the nine-month and three-month periods ended September 30, 2013, respectively. Gross realized gains from calls of available-for-sale securities were $1 and $0 for the nine-month and three-month periods ended September 30, 2012, respectively.  There were no gross realized losses from sales of available-for-sale securities for the nine-month and three-month periods ended September 30, 2013 and September 30, 2012.

The amortized cost and estimated market value of debt and other securities at September 30, 2013, by contractual and expected maturity, are shown in the following table.

(in thousands)	Amortized cost		Estimated fair value
Due in one year or less	$	14,628	$	14,666
Due after one year through five years		126,760		126,636
Due after five years through ten years		39,930		39,212
Due after ten years		6,484		6,493
	$	187,802	$	187,007

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.  Securities due after one year through five years included mortgage-backed securities with expected maturities totaling $91,963,000.  The maturities on these securities were based on the average lives of the securities.

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of September 30, 2013, 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	$	47,358	$	(1,151	)	$	—	$	—		$	47,358	$	(1,151	)
Obligations of states and political subdivisions		10,243		(433	)		—		—			10,243		(433	)
Collateralized mortgage obligations		1,880		(4	)		—		—			1,880		(4	)
Mortgaged-backed      securities		38,556		(402	)		801		(22	)		39,357		(424	)
Total	$	98,037	$	(1,990	)	$	801	$	(22	)	$	98,838	$	(2,012	)

No decline in value was considered “other-than-temporary” during 2013.  Seventy-four securities, all considered investment grade, which had a fair value of $98,037,000 and a total unrealized loss of $1,990,000 have been in an unrealized loss position for less than twelve months as of September 30, 2013.  One security, considered investment grade, which had a fair value of $801,000 and a total unrealized loss of $22,000 had been in an unrealized loss position for more than twelve months as of September 30, 2013.  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, 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	$	1,262	$	(3	)	$	—	$	—	$	1,262	$	(3	)
Collateralized mortgage obligations		1,198		(1	)		—		—		1,198		(1	)
Mortgage-backed securities		29,779		(262	)		—		—		29,779		(262	)
Total	$	32,239	$	(266	)	$	—	$	—	$	32,239	$	(266	)

Investment securities carried at $29,482,000 and $32,227,000 at September 30, 2013 and December 31, 2012, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.