Investment Securities

12 Months Ended

Dec. 31, 2012

Investment Securities [Abstract]

Investment Securities

NOTE 5 - Investment Securities

The carrying values and approximate fair values of investment securities at the periods indicated are presented below:

(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2012
Securities available for sale
U.S. Treasury and government sponsored entities	$	123,959	$	455	$	-	$	124,414
Municipal securities		21,124		613		9		21,728
U.S. Agency mortgage-backed securities		35		1		-		36
Corporate bonds		52,951		1,081		50		53,982
Preferred stock		3,524		234		-		3,758
Total securities available for sale	$	201,593	$	2,384	$	59	$	203,918
Securities held to maturity
Municipal securities	$	2,749	$	229	$	-	$	2,978
Total securities held to maturity	$	2,749	$	229	$	-	$	2,978
December 31, 2011
Securities available for sale
U.S. Treasury and government sponsored entities	$	160,529	$	625	$	50	$	161,104
Municipal securities		16,260		675		-		16,935
U.S. Agency mortgage-backed securities		52		2		-		54
Corporate bonds		43,767		343		1,119		42,991
Preferred stock		996		3		-		999
Total securities available for sale	$	221,604	$	1,648	$	1,169	$	222,083
Securities held to maturity
Municipal securities	$	3,819	$	258	$	-	$	4,077
Total securities held to maturity	$	3,819	$	258	$	-	$	4,077

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2012 and 2011 were as follows:

		Less Than 12 Months				More Than 12 Months				Total
(In Thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
2012:
Securities Available for Sale
Municipal Securities	$	1,265	$	9	$	-	$	-	$	1,265	$	9
Corporate Bonds		9,541		50		-		-		9,541		50
Total	$	10,806	$	59	$	-	$	-	$	10,806	$	59
2011:
Securities Available for Sale
U.S. Treasury and government sponsored entities	$	35,873	$	50	$	-	$	-	$	35,873	$	50
Municipal Securities		-		-		-		-		-		-
Corporate Bonds		34,476		1,119		-		-		34,476		1,119
Total	$	70,349	$	1,169	$	-	$	-	$	70,349	$	1,169

The unrealized losses on investments in government sponsored entities, corporate bonds and municipal securities in both periods were caused by changes in interest rates.  At December 31, 2012 and 2011, there were six and twelve available-for-sale securities in an unrealized loss position of $59,000 and $1,169,000, respectively.  The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment.  Because it is more likely than not that the Company will hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

The amortized cost and fair values of debt securities at December 31, 2012, are distributed by contractual maturity as shown below.  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.  Although preferred stock has no stated maturity, it is aggregated in the calculation of weighted average yields presented below in the category of investments that mature in ten years or more.

(In  Thousands)	Amortized Cost		Fair Value		Weighted Average Yield
US Treasury and government sponsored entities
Within 1 year	$	33,386	$	33,545	0.67	%
1-5 years		90,573		90,869	0.62	%
Total	$	123,959	$	124,414	0.63	%
U.S. Agency mortgage-backed securities
5-10 years	$	35	$	36	4.45	%
Total	$	35	$	36	4.45	%
Corporate bonds
Within 1 year	$	2,000	$	2,003	0.85	%
1-5 years		50,951		51,979	2.29	%
Total	$	52,951	$	53,982	2.24	%
Preferred stock
Over 10 years		3,524		3,758	5.57	%
Total	$	3,524	$	3,758	5.57	%
Municipal securities
Within 1 year	$	2,368	$	2,389	1.79	%
1-5 years		12,436		12,683	1.77	%
5-10 years		9,069		9,634	4.71	%
Over 10 years		-		-	0.00	%
Total	$	23,873	$	24,706	2.89	%

The proceeds and resulting gains and losses, computed using specific identification, from sales of investment securities for the years ending December 31, 2012 and 2011, respectively, are as follows: 

(In Thousands)	Proceeds		Gross Gains		Gross Losses
2012
Available for sale securities	$	35,466	$	336	$	-
2011
Available for sale securities	$	21,382	$	419	$	-
2010
Available for sale securities	$	28,667	$	649	$	-

A summary of interest income for the years ending December 31, 2012 and 2011 on available for sale investment securities is as follows:

(In Thousands)		2012		2011
US Treasury and government sponsored entities	$	941	$	1,637
U.S. Agency mortgage-backed securities		2		3
Other		1,280		951
Total taxable interest income	$	2,223	$	2,591
Municipal securities	$	573	$	506
Total tax-exempt interest income		573		506
Total	$	2,796	$	3,097