Note 2 - Investment Securities

9 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

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 September 30, 2013 and December 31, 2012, are as follows:

(Dollars In Thousands)	September 30, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U. S. Government agency securities	$	27,437	$	352	$	(372	)	$	27,417
Mortgage-backed securities		16,277		195		(136	)		16,336
Municipal securities		16,373		123		(640	)		15,856
	$	60,087	$	670	$	(1,148	)	$	59,609

(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 16 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 September 30, 2013.

Mortgage-backed securities. The unrealized losses on 9 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 September 30, 2013.

Municipal securities. The unrealized losses on 31 of the Company’s 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 September 30, 2013.

The following tables demonstrate the unrealized loss position of securities available for sale at September 30, 2013 and December 31, 2012.

	September 30, 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	$	9,192	$	(366	)	$	996	$	(6	)	$	10,188	$	(372	)
Mortgage-backed securities		6,419		(128	)		507		(8	)		6,926		(136	)
Municipal securities		10,884		(621	)		216		(19	)		11,100		(640	)
	$	26,495	$	(1,115	)	$	1,719	$	(33	)	$	28,214	$	(1,148	)

	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 were 56 debt securities with fair values totaling $28.2 million considered temporarily impaired at September 30, 2013.  As of September 30, 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 $116 thousand for the first nine months of 2013 compared to $127 thousand for the same period last year.

The amortized cost and estimated fair values of investment securities available for sale at September 30, 2013, by contractual maturity are as follows:

(Dollars In Thousands)	Amortized Cost		Estimated Fair Value
One year or less	$	-	$	-
Over one through five years		790		802
Over five through ten years		9,917		9,859
Greater than 10 years		49,380		48,948
	$	60,087	$	59,609