INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2014

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 March 31, 2014 are summarized as follows:

(in thousands)	Amortized cost		Unrealized gains		Unrealized losses			Estimated fair value
Investment securities available-for-sale:
Securities of U.S. government agencies and corporations	$	49,909	$	16	$	(907	)	$	49,018
Obligations of states and political subdivisions		27,492		628		(241	)		27,879
Collateralized mortgage obligations		4,920		20		(4	)		4,936
Mortgage-backed securities		84,506		647		(362	)		84,791
Total debt securities	$	166,827	$	1,311	$	(1,514	)	$	166,624

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at December 31, 2013 are summarized as follows:

(in thousands)	Amortized cost		Unrealized gains		Unrealized losses			Estimated fair value
Investment securities available-for-sale:
Securities of U.S. government agencies and corporations	$	53,960	$	8	$     (1,283­­		)	$	52,685
Obligations of states and political subdivisions		27,528		409		(550	)		27,387
Collateralized mortgage obligations		5,359		46		—			5,405
Mortgage-backed securities		87,486		718		(412	)		87,792
Total debt securities	$	174,333	$	1,181	$	(2,245	)	$	173,269

There were no proceeds from sales of available-for-sale securities for the three-month period ended March 31, 2014 and March 31, 2013.  Gross realized gains from calls of available-for-sale securities were $0 and $4 for the three-month periods ended March 31, 2014 and March 31, 2013, respectively. There were no gross realized losses from sales of available-for-sale securities for the three-month periods ended March 31, 2014 and March 31, 2013.

The amortized cost and estimated market value of debt and other securities at March 31, 2014, by contractual and expected maturity, are shown in the following table.

(in thousands)	Amortized cost		Estimated fair value
Due in one year or less	$	12,626	$	12,630
Due after one year through five years		115,462		115,411
Due after five years through ten years		34,376		34,072
Due after ten years		4,363		4,511
	$	166,827	$	166,624

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 and collateralized mortgage obligations with expected maturities totaling $87,635,000.  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 March 31, 2014, 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	$	19,397	$	(348	)	$	17,543	$	(559	)	$	36,940	$	(907	)
Obligations of states and political subdivisions		7,976		(211	)		472		(30	)		8,448		(241	)
Collateralized mortgage obligations		1,592		(4	)		—		—			1,592		(4	)
Mortgaged-backed      securities		17,631		(82	)		12,373		(280	)		30,004		(362	)
Total	$	46,596	$	(645	)	$	30,388	$	(869	)	$	76,984	$	(1,514	)

No decline in value was considered “other-than-temporary” during 2014.  Thirty-seven securities, all considered investment grade, which had a fair value of $46,596,000 and a total unrealized loss of $645,000 have been in an unrealized loss position for less than twelve months as of March 31, 2014.  Twenty-two securities, considered investment grade, which had a fair value of $30,388,000 and a total unrealized loss of $869,000 had been in an unrealized loss position for more than twelve months as of March 31, 2014.  The declines in fair value were 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, 2013, follows:

	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized losses			Fair Value		Unrealized losses			Fair Value		Unrealized losses
Securities of U.S. government agencies and corporations	$	46,654	$	(1,283	)	$	—	$	—		$	46,654	$	(1,283	)
Obligations of states and political subdivisions		11,871		(550	)		—		—			11,871		(550	)
Mortgage-backed securities		19,155		(243	)		6,932		(169	)		26,087		(412	)
Total	$	77,680	$	(2,076	)	$	6,932	$	(169	)	$	84,612	$	(2,245	)

Investment securities carried at $27,915,000 and $28,773,000 at March 31, 2014 and December 31, 2013, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.