Investment Securities

12 Months Ended

Dec. 31, 2011

Investments, Debt and Equity Securities [Abstract]

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

4. Investment Securities

A summary of investment securities at December 31, 2011 and 2010 follows:

	2011				2010
	Carrying		Fair		Carrying		Fair
(In thousands)	Amount		Value		Amount		Value
Available-for-sale securities	$	25,051	$	25,051	$	31,683	$	31,683
Held-to-maturity securities		25,292		25,670		15,334		15,104
Total investment securities	$	50,343	$	50,721	$	47,017	$	46,787

At December 31, 2011, the composition of the investment portfolio was as follows:

	Amortized		Gross Unrealized					Fair
(In thousands)	Cost Basis		Gains		Losses			Value
Available-for-sale securities:
U.S. Government and agency obligations
From one through five years	$	1,014	$	54	$	-		$	1,068
Government guaranteed mortgage-backed securities		13,919		844		-			14,763
Government guaranteed collateralized mortgage obligations		1,711		10		-			1,721
Private label collateralized mortgage obligations		352		-		(97	)		255
Total debt securities		16,996		908		(97	)		17,807
Money market preferred stocks		8,000		-		(756	)		7,244
Total available-for-sale securities	$	24,996	$	908	$	(853	)	$	25,051
Held-to-maturity securities:
Government guaranteed mortgage-backed securities	$	25,292	$	387	$	(9	)	$	25,670
Total held-to-maturity securities	$	25,292	$	387	$	(9	)	$	25,670

At December 31, 2010, the composition of the investment portfolio was as follows:

	Amortized		Gross Unrealized					Fair
(In thousands)	Cost Basis		Gains		Losses			Value
Available-for-sale securities:
U.S. Government and agency obligations
From one through five years	$	1,022	$	65	$	-		$	1,087
Government guaranteed mortgage-backed securities		19,093		867		-			19,960
Government guaranteed collateralized mortgage obligations		2,272		31		(3	)		2,300
Private label collateralized mortgage obligations		434		-		(58	)		376
Total debt securities		22,821		963		(61	)		23,723
Money market preferred stocks		8,200		-		(240	)		7,960
Total available-for-sale securities	$	31,021	$	963	$	(301	)	$	31,683
Held-to-maturity securities:
Government guaranteed mortgage-backed securities	$	15,334	$	26	$	(256	)	$	15,104
Total held-to-maturity securities	$	15,334	$	26	$	(256	)	$	15,104

For the year ended December 31, 2011, the Company realized gross gains of $86,000 and no gross losses compared with gross gains of $231,000 and gross losses of $220,000 for the year ended December 31, 2010 and gross gains of $426,000 and gross losses of $37,000 for the year ended December 31, 2009 on sales of investment securities.

During the year ended December 31, 2011, the Company recognized $20,000 of credit related losses on a private label collateralized mortgage obligation. The Company estimated the portion of loss attributable to credit using a discounted cash flow model. Significant inputs for privately issued collateralized mortgage obligations include the estimated cash flows of the underlying collateral based on key assumptions, such as default rate, loss severity and prepayment rate. Assumptions used can vary widely, and are influenced by such factors as loan interest rate, geographic location of the borrower, borrower characteristics and collateral type. The present value of the expected cash flow were compared to the Company’s holdings to determine the credit-related impairment loss.

All investment securities which have unrealized losses have undergone an internal impairment review. Management’s review for impairment generally entails identification and analysis of individual investments that have fair values less than amortized cost, including consideration of the length of time the investment has been in an unrealized loss position and the expected recovery period; discussion of evidential matter, including an evaluation of factors or triggers that could cause individual investments to qualify as having other-than-temporary impairment and those that would not support other-than-temporary impairment; and documentation of the results of these analyses. As a result of the reviews, management believes that all remaining unrealized losses are temporary and are the result of changes in market interest rates and market conditions over the past several years.

At December 31, 2011 and 2010, securities with amortized costs of $12,642,000 and $17,590,000, and fair values of $12,925,000 and $17,438,000, respectively, were pledged as collateral to secure municipal deposits and reverse repurchase agreements. 

Unrealized losses on investment securities at December 31, 2011

The following is a summary of the fair values and related unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Securities in Continuous Unrealized
	Loss Position Less Than 12 Months
	Number of		Market		Unrealized
(Dollars in thousands)	Securities		Value		Loss
Government guaranteed mortgage-backed securities		2	$	4,244	$	(9	)
Total securities in unrealized loss position		2	$	4,244	$	(9	)

	Securities in Continuous Unrealized
	Loss Position 12 or More Consecutive Months
	Number of		Market		Unrealized
	Securities		Value		Loss
Private label collateralized mortgage obligations		1	$	256	$	(97	)
Money market preferred stocks		2		1,644		(756	)
Total securities in unrealized loss position		3	$	1,900	$	(853	)

Unrealized losses on investment securities at December 31, 2010

The following is a summary of the fair values and related unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Securities in Continuous Unrealized
	Loss Position Less Than 12 Months
	Number of		Market		Unrealized
(Dollars in thousands)	Securities		Value		Loss
Government guaranteed mortgage-backed securities		5	$	14,028	$	(256	)
Government guaranteed collateralized mortgage obligations		1		182		(3	)
Total securities in unrealized loss position		6	$	14,210	$	(259	)

	Securities in Continuous Unrealized
	Loss Position 12 or More Consecutive Months
	Number of		Market		Unrealized
	Securities		Value		Loss
Private label collateralized mortgage obligations		1	$	376	$	(58	)
Money market preferred stocks		2		2,160		(240	)
Total securities in unrealized loss position		3	$	2,536	$	(298	)