Note 2 - Investment Securities

3 Months Ended

Mar. 31, 2013

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 2. Investment Securities

The amortized cost and fair value of securities available for sale as of March 31, 2013 and December 31, 2012, are as follows:

(Dollars In Thousands)	March 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U. S. Government agency securities	$	30,358	$	1,013	$	(47	)	$	31,324
Mortgage-backed securities		19,805		424		(23	)		20,206
Municipal securities		13,403		653		(133	)		13,923
	$	63,566	$	2,090	$	(203	)	$	65,453

(Dollars In Thousands)	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U. S. Government agency securities	$	28,825	$	1,049	$	(32	)	$	29,842
Mortgage-backed securities		21,533		486		(35	)		21,984
Municipal securities		10,965		698		(23	)		11,640
	$	61,323	$	2,233	$	(90	)	$	63,466

U.S. Government and federal agency securities. The unrealized losses on 9 of the Company’s investments in obligations of the U.S. government were caused by increases in market interest rates over the yields available at the time the securities were purchased.  The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2013.

Mortgage-backed securities. The unrealized losses in 5 of the Company’s investments in government-sponsored entity mortgage-backed securities were caused by increases in market interest rates over the yields available at the time the securities were purchased. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2013.

Municipal securities. The unrealized losses on the Company’s 14 investments in obligations of municipal securities were caused by increases in market interest rates over the yields available at the time the securities were purchased. All municipal securities are investment grade. Because the decline in market value is attributable to changes in interest rates, credit spreads, ratings and not credit quality, and because the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2013.

The following tables demonstrate the unrealized loss position of securities available for sale at March 31, 2013 and December 31, 2012.

	March 31, 2013
	Less than 12 months				12 months or more					Total
(Dollars In Thousands)	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized Loss
U. S. Government agency securities	$	–	$	–	$	5,629	$	(47	)	$	5,629	$	(47	)
Mortgage-backed securities		–		–		3,909		(23	)		3,909		(23	)
Municipal securities		–		–		5,498		(133	)		5,498		(133	)
	$	–	$	–	$	15,036	$	(203	)	$	15,036	$	(203	)

	December 31, 2012
	Less than 12 months				12 months or more					Total
(Dollars In Thousands)	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized Loss
U.S. Government agency securities	$	–	$	–	$	3,400	$	(32	)	$	3,400	$	(32	)
Mortgage-backed securities		–		–		3,701		(35	)		3,701		(35	)
Municipal securities		–		–		1,595		(23	)		1,595		(23	)
	$	–	$	–	$	8,696	$	(90	)	$	8,696	$	(90	)

There are 28 debt securities with fair values totaling $15.0 million considered temporarily impaired at March 31, 2013.  As of March 31, 2013, the Company does not consider any bond in an unrealized loss position to be other than temporarily impaired.

The Company realized gains on sales of securities of $2 thousand for the first three months of 2013 compared to none for the same period last year.

The amortized cost and estimated fair values of investment securities available for sale at March 31, 2013, by contractual maturity are as follows:

(Dollars In Thousands)	Amortized Cost		Estimated Fair Value
One year or less	$	—	$	—
Over one through five years		641		661
Over five through ten years		10,616		10,848
Greater than 10 years		52,309		53,944
	$	63,566	$	65,453