Investment Securities

9 Months Ended

Sep. 30, 2012

Investment Securities [Abstract]

Investment Securities

NOTE 5  INVESTMENT SECURITIES:

The amortized cost and estimated fair value of securities (all available-for-sale) are as follows:

				Gross		Gross		Approximate
		Amortized		Unrealized		Unrealized		Fair
(Dollars are in thousands)		Cost		Gains		Losses		Value
September 30, 2012
U.S. Government Agencies	$	25,602	$	258	$	21	$	25,839
Taxable municipals		853	2		5		850
Tax-exempt municipals		-	-		-		-
Mortgage backed securities		21,638	233		1		21,870
Total Securities AFS	$	48,093	$	493	$	27	$	48,559
December 31, 2011
U.S. Government Agencies	$	21,405	$	238	$	10	$	21,633
Taxable municipals		1,465	89		2		1,552
Tax-exempt municipals		1,043	11		-		1,054
Mortgage backed securities		8,144	67		16		8,195
Total Securities AFS	$	32,057	$	405	$	28	$	32,434

The following table details unrealized losses and related fair values in the available-for-sale portfolio.  This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2012 and December 31, 2011.

		Less than 12 Months				12 Months or More				Total
(Dollars are in thousands)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2012
U.S. Government Agencies	$	2,911	$	21	$	-	$	-	$	2,911	$	21
Taxable municipals		280		5		-		-		280		5
Mtg. backed securities		743		1		-		-		743		1
Total Securities AFS	$	3,934	$	27	$	-	$	-	$	3,934	$	27
December 31, 2011
U.S. Government Agencies	$	5,592	$	10	$	-	$	-	$	5,592	$	10
Taxable municipals		572		2		-		-		572		2
Mtg. backed securities		4,055		16		-		-		4,055		16
Total Securities AFS	$	10,219	$	28	$	-	$	-	$	10,219	$	28

At September 30, 2012, the available-for-sale portfolio included five investments for which the fair market value was less than amortized cost.  At December 31, 2011, the available-for-sale portfolio included eleven investments for which the fair market value was less than amortized cost.  Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial conditions and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  No securities had an other than temporary impairment.

The amortized cost and fair value of investment securities at September 30, 2012, by contractual maturity, are shown in the following schedule.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

						Weighted
(Dollars are in thousands)		Amortized		Fair		Average
Securities Available for Sale		Cost		Value		Yield
Due in one year or less	$	-	$	-		-%
Due after one year through five years	1,503		1,510		1.01%
Due after five years through fifteen years		12,274		12,403		1.73%
Due after fifteen years		34,316		34,646		2.15%
Total	$	48,093	$	48,559		2.01%

Investment securities with a carrying value of $18.9 million and $15.7 million at September 30, 2012 and December 31, 2011, were pledged to secure public deposits, overnight payment processing and for other purposes required by law.

The Bank, as a member of the Federal Reserve Bank and the Federal Home Loan Bank, is required to hold stock in each. These equity securities are restricted from trading and are recorded at a cost of $2.8 million and $3.6 million as of September 30, 2012 and December 31, 2011, respectively.